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EARLY START

New Provocations in North Korea Standoff; Suspected Chemical Attack in Syria; McConnell Starts Clock on Nuclear Option; Companies Dump Ads On "The O'Reilly Factor". Aired 4:30-5a ET

Aired April 5, 2017 - 04:30   ET

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


(COMMERCIAL BREAK)

[04:30:17] CHRISTINE ROMANS, CNN ANCHOR: A White House official says all options are on the table with North Korea. And Pyongyang launches a new projectile anyway. We have the details and unusual response from the secretary of state.

DAVE BRIGGS, CNN ANCHOR: There's growing anger around the world after a suspected chemical attack that left dozens dead in Syria. With the blame game escalating, why is the White House pointing the finger at President Obama. A huge foreign policy week for President Trump.

Welcome back to EARLY START. I'm Dave Briggs.

ROMANS: And I'm Christine Romans. It is about 31 minutes past the hour.

Let's begin with North Korea. The White House facing renewed threats on two fronts this morning from two of the world's most serious trouble spots. A new missile launch from North Korea and suspected chemical attack targeting civilians in Syria.

First, North Korea, which fired a big projectile into the waters off its coast. The U.S. believe it was most likely a ballistic missile, this just ahead of President Trump's Florida summit with Chinese President Xi.

BRIGGS: Mr. Trump's top agenda item for the meeting is persuading China to curb Pyongyang's nuclear ambitions. The launch came after a senior White House official issued a dire warning about North Korea's nuclear program declaring, quote, "The clock has now run out and all options are on the table."

For the latest, we want to bring in CNN's Matt Rivers live for us in Beijing.

Matt, any reaction from Beijing yet and how does this launch differ from those we've seen in the past?

MATT RIVERS, CNN CORRESPONDENT: Well, we got a quick response from the Chinese, very standard what we usually hear from them about an hour ago. They said that this test clearly violates U.N. sanctions. They urge all sides to remain calm. And they reject the notion that the test has anything to do with the upcoming summit between President Xi and Trump scheduled for later this week.

But U.S. and South Korean defense officials are saying that this was an intermediate range ballistic missile, the kind that has been tested once already this year so far. This is the second test this year. And these tests are a little bit different than we saw last year because of how these missiles are launched. They use solid fuel and launched from the back of trucks. That means, of course, that the missiles are mobile, they can be more easily hidden and therefore harder to track because they can be launched at short notice.

That said we should note this is not a missile that can reach the Continental United States and this was not the test that many experts were expecting. Some were saying there was going to be a nuclear test ahead of this summit because of satellite imagery that came out. That, though, is not the case at this point, Dave.

BRIGGS: All right. What about the U.S. reaction? We told you earlier about the clock has run out statement from a senior White House official. What do you make of the latest U.S. reaction?

RIVERS: Well, this is a very, very short statement from the State Department basically saying they didn't want to respond they talked enough about North Korea in the past. It's a different response from the Trump administration, compared to what we've heard in the past. And I talked to one expert who said, look, because the North Koreans launched this missile before, perhaps this is the administration's way of not taking the bait.

Two senior U.S. officials told CNN that the short statement wasn't meant to be provocative. It was just saying that they're not going to respond every single time North Korea does something they've done before.

That said, this response was vague. It gives us no further indication of what the Trump administration want to do on North Korea. And to many people following this tense situation, that is troubling. They want more details, Dave, but they're not getting them, at least so far.

BRIGGS: Now, usually, we have to paraphrase but just 27 words in that statement.

Matt Rivers live in Beijing, thank you.

ROMANS: Let's discuss the latest developments in North Korea. Dr. Peter Layton joins us live via Skype from Brisbane, Australia. He's a visiting fellow at the Griffith Asia Institute.

Good morning, sir. Good evening to you halfway around the world for us.

Mobile launchers with solid fuel, that is the concern of military experts who have been watching carefully the development of this program, its missile program. How concerning is that to you? PETER LAYTON, GRIFFITH ASIA INSTITUTE: Certainly very much so. The

mobile rockets are one thing. However, on the other hand, there was this talk earlier this week about the North Koreans possibly advancing into hydrogen bomb weapons. Certainly, hydrogen weapons are a step above A-bombs and that would be extremely worrying for everybody.

BRIGGS: So, in an interview with the "Financial Times" earlier this week, President Trump suggested that if China won't help us with North Korea, we'll go it alone. Short of military action, what are realistic options for the U.S. to stop this nuclear program?

LAYTON: OK. I think that as President Kim Jong-un is proceeding with his missile and his nuclear program to ensure his survival. I think we need to turn that around and say that he has to stop his missile and his nuclear program or else he will not survive.

[04:35:08] If you like, that his survival depends on him stopping, focus on Kim Jong-un. Now --

BRIGGS: I'm sorry to interrupt. Are you suggesting politically survival or talking assassination here?

LAYTON: Excellent point. I'm not talking about regime change here. I'm talking about leadership change, and in particular a palace coup if you like.

From an American viewpoint, I would say use the military assets to flood North Korea with an anti-Kim message, talk directly to the people, forcefully call for Kim to be replaced. There's a number of ways about this, about replacing TV and radio transmissions, using cyber for those and using cyber for the people on the internet and intranet.

But the aim would be to separate Kim from the regime and get other ambitious people to replace him, if you like, leverage off the people in North Korea.

ROMANS: So, propaganda or public relations campaign to unsettle him, unseat him. Why wouldn't the Chinese already be doing that? I mean, they are their neighbor?

LAYTON: I think the Chinese find North Koreans are very useful instrument, very useful tool, if you like. They can signal and bargain with the United States. I imagine that when President Xi Jinping sits down with President Trump, he will say something like, we will help you with this problem as long as you do the following for us.

So, the Chinese have a vested interest in making sure North Korea remains an irritant for as long as they possibly can.

ROMANS: Which is why the president said, you can fix it, if you don't, we will because he thinks there's more the Chinese can definitely do.

Thank you so much. Peter Layton, nice to talk to you this morning. Great perspective there.

So, North Korea, the top story overnight. Now to Syria, our other top story, where a suspected chemical weapon attack killed dozens of people, at least 70 at this count and that number is rising. Many of them are children.

We're going to show you some pictures here that are incredibly difficult to look at. This is your chance to look away, back away if you don't want to see these pictures. But we're showing them to you because we think at CNN, it's incredibly important for the world to know what's happening on the ground.

Overnight, Russia backed up Syria's claim the rebels are responsible for this despite global leaders blaming the Assad regime. Russia sides with the Assad regime. Much of the rest of the world says this has the hallmarks of Bashar Assad. The U.N. Security Council takes up the massacre in an emergency session today.

For the very latest on what happened, I want to bring in CNN's Muhammad Lila from Istanbul, Turkey.

And again, I want to reiterate that warning that's our position at CNN. We want to show those pictures, Muhammad, but we want to give people warning.

MUHAMMAD LILA, CNN INTERNATIONAL CORRESPONDENT: Yes, Christine. The international outrage over yesterday's incident just continues to grow. A short time ago, the U.N. secretary general came out very forcefully, condemning the attack, stopping short of blaming eater side, but pointing that what happened yesterday was a war crime, a violation of international human rights law and international violation of international law. But saying it was a war crime and a violation of international law use of chemical weapons in a war zone.

We know that this morning, the U.N. Security Council is meeting in an emergency session. There's already talk of a draft resolution that's in place that's going to demand that the government of Bashar al Assad open up an international investigation, that he allow monitors into the country to determine the facts on the ground. Those facts on the ground, by the way, are simply horrific, at least as you said, 70 people dead, including women and children. Several hundred possibly still wounded.

And, of course, when you're infected with some sort of toxic or poisonous gas we can expect the death toll to go up, because one of the worst ways, unfortunately, to die is being exposed to toxic gas, simply because it doesn't always happen immediately. If you get a small amount, for example, into your mouth or into your lungs it could take several hours for that poisonous gas to take its toll and for people to lose their lives.

So, we are expecting that death toll to go up. We know, for example, that Russia has denied that Syria was behind this. But the international community stems have a consensus, whether it's the United States, the U.K., France, NATO, the U.N. secretary-general all very straightforward and very strongly seemingly pointing the blame right now at the Syrian government for being behind this.

ROMANS: Seven years of this. You know, yesterday, we told the story of a mother and her three kids all dead and she kept them alive for seven years of civil war. And to have this happened, just the world is outraged and should be. Muhammad Lila, thank you for that.

BRIGGS: All right. With more insight into how Russia and Syria have been cooperating over the course of this civil war, let's bring in CNN senior international correspondent Matthew Chance.

[04:40:00] Matthew, good morning to you.

What exactly is Russia's role in this Syrian war and their role alongside the Assad regime?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, the Russians for the last couple of years have been backing the Assad regime. Bashar al Assad is a long time Russian ally, primarily with air power. They've been backing up his forces and the forces of his other allies, like the Iranians, on the ground in Syria, to enable them to make, not just to fortify their own positions because they were in danger of collapsing to a rebel advance, but also to take territory across the whole of Syria, most recently, of course, the end of last year, Aleppo with the help of Russian air power, the Syrian forces took back that biggest commercial center of Syria, Aleppo. So, they made major territorial advances, the Syrians have, thanks to Russian support.

And they also have provided diplomatic support as well for the past seven occasions when there's Security Council resolutions against Syria at the U.N. in New York, the Russians and on some occasions the China as well have intervened. They've used their veto. They've got that veto because they are permanent members of the Security Council, to protect the Syrian regime from sanctions from the United Nations. And the expectation is they are preparing to do that again later on today.

BRIGGS: And while we blame clearly the Assad regime, the Russians say who is at fault here?

CHANCE: For this latest atrocity, so many people killed and injured as a result of the poisonous gas, the Russians are saying that chemical came from weapons that were held by the rebels on the ground in southern Idlib, that's the province in northern Syria where these appalling scenes took place. They say that the Syrian air force did attack a factory unit but it was a factory, it was manufacturing by the rebels chemical weapons and it's because they attacked that factory that the chemicals caused so much bloodshed effectively.

BRIGGS: Matthew Chance live in Moscow -- thank you.

ROMANS: President Trump placing some of the blame for the Syrian attack on his predecessor, President Obama. In a statement, President Trump called the attack on civilians, including women and children reprehensible, but he added this. But he added this, "These heinous actions by the Bashar al-Assad

regime are a consequence of the past administration's weakness and irresolution. President Obama said in 2012 that he would establish a red line against the use of chemical weapons and then did nothing."

This comes during a high stakes week of diplomacy by this administration. The Syrian attack all but certain to come up when Jordan's King Abdullah visits the White House today.

And the clock is ticking down that could change the Senate forever. Democrats in a last-ditch effort to stop the nuclear option. Details on that.

Live pictures, by the way.

BRIGGS: Live pictures.

ROMANS: From the floor. It's still going at it.

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[04:47:13] ROMANS: All right. Good morning, everybody.

The president speaking at a CEO town hall, says bankers around the country are petrified and he is going to do something to change that.

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DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The regulators are running the bank. So, we're going to do a major hair cut on Dodd- Frank. We want strong restrictions. We want strong regulation. But not regulation that makes it impossible for the banks to loan to people that are going to create jobs.

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ROMANS: Dodd-Frank is a law passed after the financial crisis. The president frequently rips it as overbearing and unneeded.

One of America's top bankers also speaking about the president and his plan at a separate event yesterday. J.P. Morgan Chase CEO Jamie Dimon says this, quote, "When you get on the airplane, you better be rooting for the success of the pilot. I'm a patriot. I will do what I can to help the United States of America. That includes helping whoever is president."

Dimon says he received a lot of complaints for joining the president's CEO advisory council.

Meantime, one of the top bankers at the Federal Reserve abruptly stepping down. Jeffrey Lacker was a top official at the Fed, and has been the president of the Federal Reserve Bank of Richmond for the past 13 years. You've heard us quote him many times about what he thinks about the economy and interest rates. He resigned after admitting he shared confidential information with a financial firm, a private financial firm back in 2012. He's been questioned by several law enforcement agencies but no

charges are expected. Very rare to see this kind of a scandal at a Fed bank. Lacker apologized in a statement issued by his lawyer.

BRIGGS: Meanwhile, Senate Majority Leader Mitch McConnell starting the clock on the nuclear option. The showdown over Supreme Court nominee Neil Gorsuch. Right now, Democrats have 41 votes they need to filibuster or block a full vote on the Gorsuch nomination.

Now, Senator McConnell has now scheduled a vote for Thursday to test that filibuster. If Democrats hold the line, McConnell plans to delayer filibuster of Supreme Court's nominees can be stopped with 51 votes instead of 60.

ROMANS: McConnell needs a majority of the Senate support to make that happen. So, Vice President Mike Pence standing by to break a potential tie if not all 52 Senate Republicans support the nuclear option. McConnell says he's confident he has enough support make the change. A full Senate vote is expected Friday.

BRIGGS: Still going at this hour, Democratic Senator Jeff Merkley of Oregon who started talking at 4:00 p.m. It is 4:49 a.m. Eastern Time, doing all they can to make one last stand to try and stop the nomination of Neil Gorsuch, the confirmation, rather, to the highest court in the land. What an intriguing fight.

Another fight over health care is back on the front burner. Vice President Pence meeting again later today with members of the House Freedom Caucus. That's the group that blocked the first White House effort to repeal and replace Obamacare.

[04:50:04] Freedom Caucus Chairman Mark Meadows so optimistic about the progress being made he's in favor of cancelling the upcoming house recess to get an agreement.

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REP. MARK MEADOWS (R-NC), HOUSE FREEDOM CAUCUS CHAIRMAN: There's a concern on my part that if we're making real progress that going home sends the wrong message, and, you know, it is certainly important that if we're close to a deal, that we should, you know, work it out over the next few days to make sure we get here even if it means we have to cancel a few plans to get that done.

REPORTER: How close do you feel --

(END VIDEO CLIP)

BRIGGS: Meadows say it's up to the House leadership to cancel the recess, a move that would spare Republican lawmakers from those angry town halls in their home districts.

ROMANS: The revised health care overall being discussed with Freedom Caucus will allow states to opt-out, states to opt out of two key Obamacare provisions, essential health benefits like prescriptions or maternity care or emergency services, ambulatory care, paying for the ambulance for example that takes to you the hospital and what's called community rating, which prevents carriers from charging more based on medical history.

That means Americans with pre-existing conditions could be charged much higher premiums by insurance companies and that's a violation of repeated promises by President Trump to protect those Americans. Those are two key things on the table we're told right now.

BRIGGS: And you wonder if they get the House Freedom Caucus onboard with that, how do they told moderate Republicans taking out pre- existing conditions or allowing states to opt-out. That's a heavy- lift let alone getting that through the Senate.

ROMANS: We'll see how they do.

All right. Twenty-one companies pulling out from the O'Reilly Factor as FOX News deals with the advertiser blowback following those reports of sexual harassment settlements involving Bill O'Reilly. Our senior media correspondent Brian Stelter joins us next.

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[04:56:04] ROMANS: All right. A growing advertiser revolt at FOX News along a growing list of companies pulling their commercials from "The O'Reilly Factor" amid a scandal involving its host. It stems from a report claiming there have been five settlements with women who alleged sexual harassment or verbal abuse by O'Reilly. Five settlements of like $13 million r something, "The New York Times" reported.

CNN senior media correspondent, the host of "RELIABLE SOURCES", Brian Stelter, joins us now.

This has been kind of a growing scandal. Earlier yesterday, there were two, BMW and maybe Allstate. By the end of the day, a couple of dozen companies didn't want their ads on the program with Bill O'Reilly.

BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: That's right. And these logos are just companies that we know about publicly. There's even more companies that have called up FOX privately and said, hey, let's get away from the O'Reilly Factor for now. But at least 20 companies have publicly said they're distancing themselves from this show.

ROMANS: And their reason?

STELTER: Their reason, the coverage of this from the "New York Times" over the weekend, the revelations about these settlements, it has a bad stink to it, of course. It's bad for O'Reilly and FOX and for any advertisers associated.

BRIGGS: These advertisers, are they pulling from his program or from the network? How does it change the bottom line?

STELTER: Only from the program. That's the most important point there. They are only moving their ads to other shows on FOX News.

That means FOX is not taking a hit. But O'Reilly is. Certainly, this is a PR nightmare for him, not to say anything about what these women have gone through. These women who settled, they are not able to talk publicly.

However, one woman has not settled, Wendy Walsh, has been speaking out. She had a press conference on Monday, saying that O'Reilly was essentially helping her grow in her career and then when he tried to come on to her and she turned him down, that's when it stopped, that's she says he punished her in the workplace.

ROMANS: And she made a big point of saying she doesn't want any money. She doesn't want a settlement. She never did. She wants a workplace for her daughters that is free of this kind of what she said intimidation.

This isn't happening in a vacuum because you got the Roger Ailes problems before. I mean, FOX has a public relations problem.

STELTER: And sometimes, ad boycotts are short term PR problems. Think about Glenn Beck, for example, advertisers pulled from his show. His show went on for a while at FOX but eventually ended. Rush Limbaugh has been hit by a boycott many years ago. His show is still on radio but it's not as successful financially as it used to be.

And Paula Deen is another example. Paula Deen, advertisers pulled from her show amid a racism scandal. Her show went off the air.

ROMANS: You know, when I heard people say about Paula Deen, Paula Deen, the woman never really makes a big come back but the men do. That's one of the subtext.

BRIGGS: Look, these are different times. These are times in which Billy Bush doesn't have a job and the president of the United States does regardless of what happened with that crude tape. So, can O'Reilly survive?

STELTER: That's probably why I can't figure out an answer to your question. You know, the conventional wisdom in the TV news business is that O'Reilly is the highest rated host on the channel. He's worth hundreds of millions of dollars to FOX's bottom line.

However, we're in a different environment than we were even ten years ago. O'Reilly was able to get through a sexual harassment lawsuit 13 years ago, 2004. He paid $9 million in that settlement. Now we know there were these smaller settlements also involving other women.

So, is the environment, is the climate different now? Are the Murdochs going to tolerate this? Will they, you know, continue through this story and just try to keep their heads down and stay silent or will they do something about it?

ROMANS: It's fascinating to me, too, about just from the shareholder perspective. The shareholders know that there were these payouts, and what that could be, you know, the potential political risk of that or public relations risk of that. Are his ratings are down?

STELTER: Ratings, I would say are either flat or up. He had a huge audience on Monday even after the "New York Times" story. If his viewers care, they don't care enough to change the channel.

BRIGGS: We should have the National Organization of Women calling for him to be fired as well. That is NOW.

Brian Stelter, come back at 5:00.

ROMANS: Come back.

STELTER: Thanks.

BRIGGS: All right. EARLY START continues right now.

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ROMANS: Hours after a stern warning from the White House, North Korea launches what's believed to be another missile.