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QUEST MEANS BUSINESS
ISIS Executioner Identified; Push to Monitor Passenger Data; Standard Chartered Shakes Management; Dow Flat; NASDAQ Near Highest Level Since 2000; Apple Could Give Details of New Watch; European Stocks Up; Make, Create, Innovate: Memristor May Revolutionize Computing
Aired February 26, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
POPPY HARLOW, HOST: The Dow takes a dip from its record high on Wall Street. It is Thursday, the 26th of February.
Tonight, officials say they have identified Jihadi John. Why Europe struggles to track the foreign fighters of ISIS.
Also, a major shakeup at Standard Chartered. The chairman and CEO of the bank on their way out.
Also, riding the ruble rally. Vladimir Putin's approval ratings go even higher.
I'm Poppy Harlow, and this is QUEST MEANS BUSINESS.
Good evening and welcome to the program. Tonight, a name at last for the man seen wielding the knife in grisly ISIS videos. US officials, also
congressional sources telling us here at CNN that this is Mohammed Emwazi, and he has been filmed beheading Western hostages.
"The Washington Post" says Emwazi is British and grew up in London, although he was born in Kuwait. This house in West London is where he is
thought to have lived. A human rights group in London says that British security services have been tracking Emwazi for years.
It may be Emwazi's name that is emerging into the light today, but we want to make sure to focus on the victims, the victims of ISIS who were
brutally murdered. Among those murdered in the horrific videos, there was aid workers, there were journalists, also others who just wanted to relieve
the suffering of millions of people in Syria.
Those beheaded by ISIS since last August include US journalists James Foley and Steven Sotloff. Also, British aid worker David Haines, Alan
Henning, a British taxi driver. Also, American aid worker Abdul-Rahman Kassig, also known as Peter, and Japanese journalist Kenji Goto and his
friend, Haruna Yukawa.
A roll call of murder, and reports about the supposed killer say he was educated and from a middle class family. Max Foster takes a look at
what we know about Mohammed Emwazi.
MAX FOSTER, CNN INTERNATIONAL CORRESPONDENT (voice-over): He's earned the reputation as the chief executioner for ISIS. Clad in black, only his
eyes visible, this notorious killer has become as Jihadi John, arguably one of the world's most wanted men.
PAUL CRUICKSHANK, CNN TERRORISM ANALYST: Jihadi John is definitely a marked man. The world's intelligence agencies would love to get to him.
FOSTER: He first appeared on YouTube on August the 19th in an ISIS video that showed the beheading of American journalist James Foley. It was
his distinctive accent that would give him away.
MOHAMMED EMWAZI, "JIHADI JOHN": Any attempt by you, Obama, to deny the Muslims their rights of living in safety under the Islamic caliphate
will result in the bloodshed of your people.
FOSTER: More killings would follow. American journalist Steven Sotloff on September the 2nd. British aid worker David Haines on September
the 13th. Alan Henning, another British aid worker, on October the 3rd. American aid worker Abdul-Rahman Kassig on November the 16th.
EMWAZI: This is Peter Edward Kassig, a US citizen of your country.
FOSTER: And here, in one particularly gruesome clip, he stands central in a mass execution of more than a dozen men the militants claim
are Syrian pilots. Voice recognition experts identified him as a Londoner.
PAUL KARSWELL, LINGUISTIC EXPERT: This is a guy who's spent most of his formative years in and around London, I would say. He may well have
been born in another country. He may well have another language as his first language.
JOHN OLSSON, LINGUISTIC EXPERT: He comes from a well-educated professional class family, which some people might find very shocking.
FOSTER: For two months, Jihadi John went quiet, but appeared to return in January in a video demanding a ransom for Japanese hostages Kenji
Goto and Haruna Yukawa. Again, that distinctive accent.
EMWAZI: You now have 72 hours to pressure your government in making a wise decision.
FOSTER: The US revealed in October they knew Jihadi John's identity, but refused to name him, leaving him behind his mask.
Max Foster, CNN, London.
HARLOW: So, what else have we learned about Emwazi today? Our Nic Robertson joins us live this evening from London, police headquarters at
New Scotland Yard. Nic, thank you for being with me. What do we know at this point? I know it's early going.
NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: It is. And there are no details coming from the Metropolitan Police, who are in charge
of counterterrorism here in London, and upon whose radar Emwazi must have been at some point. They're saying that they have an active terror
They've asked people to avoid speculation about naming Jihadi John. There is a hope within the British authorities that ultimately Jihadi John
would be brought back to Britain for trial for the crimes that he is accused of. The British prime minister says he wants justice done and
wants this man brought to justice.
What we have learned from the CAGE organization, whom Emwazi contacted, first beginning in 2009, they say, is a narrative, really, of a
man who apparently feels under pressure from the British intelligence organizations, from counterterrorism officials.
And the narrative that they put forward is that ultimately he couldn't get a stable and steady life here because of that and left to go to Syria.
They described him as being a very pleasant and nice young man. At a complete and utter variance with what we've seen in Syria, these brutal
HARLOW: I wanted to ask you about that, Nic, because we did have this representative from CAGE come out and speak to the media today, describing
Emwazi as a polite and, quote, "beautiful young man," also saying British authorities, quote, "harassed him." I wonder what you make of that
narrative that is being painted.
ROBERTSON: Well, the CAGE Organization has represented people who've been detained in Guantanamo Bay. They've come to represent the concerns of
other young men like Emwazi. They've said -- hundreds, they've said, who feel that they're being sort of unfairly questioned and threatened, they
say, by the British authorities.
I've talked to young men in East Africa, in Nairobi, where they -- some of them have come, fled Somalia. They say there that they've been
questioned by British intelligence officials and they've felt threatened by them, questioned as Emwazi has apparently told CAGE, that they should work
for the British intelligence authorities.
But this is also an organization who reached out and published a lengthy interview with Anwar al-Awlaki, the radical Yemeni cleric who
inspired the attacks here in London in 2005, killed 54 people, who inspired the Fort Hood shooter, Major Hasan Nidal, killed 13 people, and inspired
the underpants bomber in 2008 --
ROBERTSON: -- who tried to blow up a plane over Detroit. So, the people that they've championed in the past have also had a questionable
track record, and certainly they apparently have vastly misjudged --
ROBERTSON: -- the character of Emwazi.
HARLOW: And no question, also an organization that has been calling for the release from US prison of a woman imprisoned here, Aafia Siddiqui,
nicknamed Lady al Qaeda. So, a lot of questions about what CAGE has come out and said today about Emwazi. Nic Robertson, live for us this evening
in London, thank you very much, Nic. We appreciate it.
We are going to have a quick break. We'll be back in just a moment.
HARLOW: Authorities around the globe trying to stop foreign travelers from joining ISIS in their fight. Three men arrested in New York City
yesterday planning on hijacking a flight from JFK to Istanbul.
In Britain, three teenaged girls are believed to have flown to Turkey, then traveled into Syria, also in attempt to join ISIS. On Monday, French
authorities confiscated the passports of six suspected ISIS recruits. As you can see, this is a global fight.
Now, despite widespread concern about would-be fighters heading to trouble spots, there is still no Europe-wide system to let governments know
who is flying where. Lawmakers trying to get airlines to disclose more passenger information and to work in a coordinated fashion, but this is an
area where data privacy concerns are still clashing with security.
Timothy Kirkhope is a member of the European Parliament who is trying to get a new measure passed into law, possibly within one year. I asked
him how much he thinks it could help investigators.
TIMOTHY KIRKHOPE, BRITISH MEMBER, EUROPEAN PARLIAMENT: It would help enormously. First of all, because we are looking in Europe now at measures
that are going to apply throughout all 28 of the European Union countries, they're going to be measures that will be standardized in terms of the
nature of the questions, the nature of the data that we need to have.
And we will be making sure that our law enforcement authorities, our intelligence agencies, are able to exchange information between them more
readily than has been the case beforehand.
HARLOW: Are you seeing an increased urgency to this following the attacks in Paris?
KIRKHOPE: I think it certainly concentrates the mind of legislators. But this has been something that I have had on the way for the last two or
three years, now. Of course, terrorism is a very important issue, specific attacks that take place, like the atrocities in Paris, but you have to look
in a slightly longer term.
And from my point of view, whether or not those atrocities had occurred recently, this was still a very important tool that should be
available to the intelligence agencies and the security services generally.
I think looking at the PNR agreement we concluded with the United States -- I was very much involved in that, too -- all of these things are
vitally important in terms of trying to deal with terrorism and to try and deal with major criminals.
HARLOW: But at the same time, are you also facing increased push back from lawmakers that do not support this because of privacy concerns and an
increase in their concern about data sharing like this?
KIRKHOPE: Certainly. That's absolutely correct. There is a heightened interest, now, in the whole question of protecting individual
data, the privacy of citizens. And that has actually come about a lot because of the enormous increase in activity on social media, for instance.
There are concerns about the use of data, whether it be data being used by police authorities, intelligence agencies or, indeed, by commercial
organizations. There is a general concern. But my view about this is that we have to balance those freedoms and the protections available on data
with the need to offer security to our citizens. And at the moment --
HARLOW: So, let's --
KIRKHOPE: -- the world is a very dangerous place.
HARLOW: But are you of the mind, sir, that in the world today as it stands with the global threat of terrorism that, frankly, it's your opinion
that some privacy protections may have to be given up for there to be broader protection globally?
KIRKHOPE: Sure. There's a balance to be drawn all the time. I mean, this is what -- I'm very conscious of this. I used to be a minister in the
UK and in the Home Department, and as far as I'm concerned, we've always had to take a balance when we've been dealing with criminals and
There's always a need for us to try to protect freedoms. We can't throw those away. But at the same time, it is the terrorists or the major
criminals that are going to deny us those freedoms. Sometimes they deny them permanently to people when they actually kill them.
It is that serious. We have to really get this right, and I don't believe that as a legislator, my responsibility primarily has to be to
secure the lives and livelihoods of the people I represent.
HARLOW: Meantime, there has been a serious shakeup at one of the top British banks. We're talking about, of course, Standard Chartered. It is
replacing its CEO and chairman after issuing three profit warnings last year and seeing its share price cut in half since 2010.
Investors had long been calling for CEO Peter Sands and chairman John Peace to leave the bank, and now that they are going, Standard Chartered
shares kicked up close to 5.5 percent on the day in London. Jim Boulden joins me now from London.
Jim, let me ask you this. It's interesting when you look at CEO Peter Sands, he had told investors in Asia as recently as November that he wasn't
going anywhere. So, why now?
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Yes, that's right. He has been there for nine years, Poppy, which is extraordinarily long in this
day and age for a big retail bank. And he did say he was going to stick around.
But a lot of shareholder pressure on the board. There was even talk that there was pressure put on some board members at Davos in January,
saying it's time for him to go.
Many CEOs come into the banks the last few years and try to clean up the mess of the previous lot. Well, he's been the one there through all of
the scandals, through all of the problems that all of the major banks around the world have had.
I think it's interesting, Bill Winters is coming, and he, as you know, former JPMorgan executive, real high-level American banker, very well known
in investment bank. He's very well-liked here in the UK.
So, I think the reason you see the pop in the shares is because I don't think investors were expecting somebody at his level to come in. He
doesn't have experience necessarily in Asia, he doesn't have retail experience, but there are things that Standard Chartered have to do, like
raise capital levels, which might mean asset selling, it might mean putting new shares on the market.
BOULDEN: So, he's going to come in and make some decisions that possibly investors thought that Mr. Sands wasn't willing to make, and
that's why we've seen this switch today.
HARLOW: But Jim, do you get the sense that bringing in, yes, this big name heavyweight from JPMorgan really means a new beginning, a new image
for Standard Chartered? Because it was not long ago, and investors and the public certainly haven't forgot, the huge controversy surrounding business
dealings with Iran.
BOULDEN: Yes, but the interesting thing about him is that he was very well-liked here. And when Standard Chartered was not one of the banks that
had to be bailed out in the UK, and Bill Winters was actually put on some of the advisory panels by the government during the economic crisis because
he's very well-regarded, 53 years old.
He's going to live in London and run this bank, which is actually Asia-focused. So, I think what they're looking at here is definitely
looking for new blood. He'll take over in June, and then we'll have a new chairman next year. So, I think investors -- most of them seem to be very
I did see one quote that said, hey, he doesn't know Asia at all, and that's where the focus is. So, maybe he'll be looking at maybe doing some
things to bring a little of the focus away from Asia. We'll have to see.
HARLOW: Right, and that has been a big market for the bank in the past, a big name --
BOULDEN: Oh, yes.
HARLOW: -- coming in there to replace a major exit. Jim Boulden for us, live in London. Thank you, Jim, we appreciate it very, very much.
Stocks here in the United States ended the day mostly flat. The Dow Jones Industrial Average easing back a bit after setting that new record on
Wednesday, closing down just 16 points.
Take a look at the NASDAQ. The tech-heavy NASDAQ very close to the record high we saw set some 15 years ago in 2000. We're talking about just
a few points away from hitting that key 5,000 mark. Our Paul La Monica joins us now from CNN Money.
So, we're going to talk about the NASDAQ in a moment, Paul, but Apple stock. Apple stock was down for the day until inspections -- invitations,
rather -- came to this special event the company sent out, coming up in just a short time.
There you see it, a very sort of cryptic invitation, says "Spring forward," not a lot of details on it. It will be held March 9th in San
Francisco. It is widely anticipated that they will be revealing details of the Apple Watch. Paul, what is your take? Is it definitely the watch?
PAUL LA MONICA, CNN MONEY DIGITAL CORRESPONDENT: I think it's a safe assumption to say that it's the watch. The language of "Spring Forward,"
it's coming one day after we all have to set our clocks ahead in the US. So, I think there is definitely a little tongue-in-cheek reference to that
there. Obviously, Apple could announce other things as well.
LA MONICA: Because Tim Cook has now got that almost one-more-thing- like magic that Steve Jobs used to have. So people will be expecting that. But investors clearly are excited to hear more details.
HARLOW: If it is indeed the watch, I guess I wonder what your take is on how big of -- how much that can move the needle, because the iPhone 6
was such a phenomenon, and people such as Carl Icahn saying Apples stock can go nowhere but up from here. It seems like there are very few
naysayers. But I don't know, will the watch catch on in that big a way, do you think?
LA MONICA: I'm not sure. It's going to be very interesting to see if people will want to wear smart watches. Clearly there are a lot of
companies already making them out there, Pebble making records on Kickstarter. You've got Samsung, Motorola. So, there are a lot of people
out there already in the smart watch wearable market.
LA MONICA: I don't think anyone believes that it will be something that supplants the phone. It's kind of an addition to the phone.
LA MONICA: So, it may not move the needle that much, but it's something that -- remember, a lot of people thought that who would want a
tablet. Who'd want --
HARLOW: Oh, there you go.
LA MONICA: -- an actual smartphone, and Apple validated these markets.
HARLOW: Let's talk about the NASDAQ before I let you go. Look, Apple's playing into this, right?
LA MONICA: Yes, definitely.
HARLOW: I mean, that's another heavyweight playing into what we're watching. But then, a lot of us look at it and we get a little queasy
thinking about, OK, are we going back to what we saw in 2000. Do you think that this is a totally different scenario?
LA MONICA: I'm going to sound like I'm drinking the tech Kool-Aid, like many of us did 15 years ago.
LA MONICA: But I think it is different precisely because you have companies like Apple, Google, they are market leaders that are profitable.
You can throw Facebook into the mix there as well. The valuations aren't as crazy as they were 15 years ago.
Where you have to be worried is, I think, with the startups. Apple at $760 billion probably seems reasonable given what their growth rate has
been and what their sales are.
Uber at $40 billion, Snapchat at near $20 billion, that's where you start to scratch your head a little bit and wonder, well these companies
that maybe public one day, are they the things that you have to worry about in terms of a future bubble. That might be the question. Companies that
aren't yet public.
HARLOW: It is -- I think I'm drinking a little of the Kool-Aid with you. And it is always fascinating for us to watch and to cover. Paul La
Monica, thank you very much.
LA MONICA: Thank you.
HARLOW: Of course we'll keep an eye on that upcoming Apple announcement here on the program.
Meantime, stocks in Europe closed higher. Also looking at the Frankfurt index there, ticking up about 1 percent, enough for a fresh all-
time high there. Spain's benchmark index rose 0.8 percent after data showed that the economy expanded at its fastest rate in seven years in the
last quarter of 2014.
After the break, we're going to talk about this: artificial intelligence that can beat professional gamers on Atari. That's next.
HARLOW: Researchers at Google say they have created a computer program that can probably beat you at video games. No big surprise there,
right? The artificial intelligence system can apparently play Atari computer games -- remember those, Atari? -- at the level of a professional
gamer or even better.
The days of Atari may seem ancient compared to today's technology. A small switch called a transistor made the computer revolution in the 50s
and 60s possible, and in this week's Make, Create, Innovate, Nick Glass is in Zurich for a look at the technology that could completely change the
world of electronics again.
NICK GLASS, CNN INTERNATIONAL CORRESPONDENT (voice-over): All our indispensable gadgets -- our smartphones, our computers, our tablets --
none of them would exist or function without a humble piece of electronics, the transistor. It powered the computer revolution of the 1950s and 60s.
GLASS (on camera): Well, here in Switzerland, they're working on the next generation of electronic components: ever smaller, ever faster, ever
more powerful. In effect, we're promised and promised soon a second computer revolution.
JENNIFER RUPP, PROFESSOR, ETH, ZURICH: We are working on Memristor, that will revolutionize our way of computing and bring an end to the
classic silicon era of microchips.
GLASS (voice-over): Jennifer Rupp is a professor of Material Science at ETH in Zurich. At just 34, she's leading researched aimed at
reinventing the entire world of electronics as we know it.
RUPP: It's called electronics, where you had all transistors. And now we have some new circuits based on Memristor, as well as about to come
is what I personally rephrase as Iona (ph).
GLASS: Transistors act like a switch, turning off and on as electricity flows through, one for on, zero for off. Memristors work
differently. As electricity flows, little holes or defects enable ions of information to pass through at much greater speed and efficiency. Way
beyond one and zero, to two, three, and four and so on.
RUPP: So, our whole world lives on computing, many zeros, many ones, yes, by these electronics? The Memristor can have multi levels. We could
have -- allow at a lower power consumption to compute more information and have higher amount of data storage and completely new ways of logics for
GLASS: Rupp leads a small but enthusiastic team, her whiteboards filled with ideas of what a future with Memristors might look like.
RUPP: I believe we will live in a world where we don't live in electronics on silicon plates anymore. It could be like a window glass
with a function. It could be very interesting to have functional window glasses which are transparent, but where you can still have a computing
function or a sending function. So, it could be a textile, it could be a plastic. It could be a coffee cup.
GLASS: Here in the labs, the team combine a little chemistry and engineering to spark the Memristors into life. Computer giant IBM is a
partner with the aim of developing devices for the market, but they aren't alone. Hewitt-Packard plans to launch the first Memristor computer later
GLASS (on camera): This sounds like science fiction.
RUPP: It is. And just think about (inaudible). I think for instance, many inventions we have today were described in (inaudible) book
20, 30 years earlier. And so, I think it's about the imagination of the human brain, of certain individuals to be creative, think about something
unusual, maybe crazy. And I think this is something that drives me and, yes, which makes me happy.
HARLOW: Just ahead on QUEST MEANS BUSINESS, what is driving young people across Europe and the United States to join the ranks of ISIS? Is
it a lack of opportunity and disenfranchisement? Is that at least part of the problem? We'll discuss next.
HARLOW: Hello, I'm Poppy Harlow in this evening for Richard Quest. Coming up in the next half hour, Vladimir Putin's approval ratings are
through the roof. We'll find out why live from Moscow.
Also, President Barack Obama says thank you on Twitter as regulators vote for net neutrality.
Before that, though, here are the top news headlines we're following this hour.
US officials say they have identified the ISIS militant known as Jihadi John. They say he is Mohammed Emwazi, a British man born in Kuwait.
London police are refusing to confirm or deny that report. Jihadi John has come to symbolize the brutality of ISIS, appearing in gruesome beheading
ISIS has released a propaganda video that shows militants destroying ancient artifacts at a museum in Mosul, Iraq. Some of those statues in the
footage date back to the Assyrian Empire. Syrian Christians have been targeted by ISIS in recent days in Syria.
The estimated death toll from an avalanche in Afghanistan has climbed to at least 168 people. Three days of heavy snow triggered a number of
avalanches there. Rescue efforts are continuing, but officials say no help has reached the worst-affected areas yet.
And a judge in Argentina has dismissed a criminal case against President Cristina Fernandez de Kirchner. She was among those accused of
covering up Iran's role in a terrorist bombing in Buenos Aires in 1994. The prosecutor who filed the complaint was found dead from a gunshot wound
Returning to our top story on "Quest Means Business" tonight, while governments try to stop foreign fighters from joining ISIS, the
International Labor Organization has already warned unrest is likely while youth unemployment is so high.
Last month in Davos at the World Economic Forum the head of the World Bank told Richard that there are clear economic factors behind extremism in
the Middle East.
JIM YONG KIM, WORLD BANK PRESIDENT: What extent is the Middle Eastern problem an economic problem and to what extent is it a religious social
problem. We're going to do everything we can to try to address the economic issues. And the big part of it is jobs for young people -- can we
do something that will create more jobs for young people in places like the Middle East.
HARLOW: All right, let's take a closer look at ISIS recruitment tactics and the impact of unemployment in the Middle East. Peter Neumann
joins me now live here with me in New York. He runs the International Centre for the Study of Radicalisation of Political Violence. Thank you
very much -
PETER NEUMANN, INTERNATIONAL CENTRE FOR STUDY OF RADICALISATION: Thank you, Poppy.
HARLOW: -- for being here, Peter. I appreciate it. This is something I've focused on a lot and something that needs to get a lot of
attention when you talk about the high unemployment rates across Europe for example. (Cage Today) - the research director there - came out and said
many Muslims including Emwazi, known now as `Jihadi John,' feel alienated in their society like outsiders, talk about a lack of opportunity. Do you
believe that that is a significant driver of people into - to join ISIS?
NEUMANN: Well, when people get radicalized, there's typically two things happening. There is a grievance and then there is an ideology that
resonates with the grievance. The grievance can be economic, it can be social. In many cases we've found in our studies of European foreign
fighters, it is that people didn't believe they had a stake in their society. And to some extent that can be because they felt they didn't have
an economic opportunity within their society. But in the case of Jihadi John, that was not actually the case because he was quite middle class -
NEUMANN: -- and he did have jobs and opportunities. He may have had that sense of having those stakes for other reasons. But it always comes
down to thinking that we do not have an opportunity, not have a stake in your society.
HARLOW: OK, let me ask you this - because some hear things like a lack of opportunity, a lack of jobs leading to this, and they scoff at it.
And they say how can you - how can you even say that? Because it is true, a lack of opportunity is no excuse for beheading someone.
NEUMANN: Of course.
HARLOW: For joining a terrorist organization.
NEUMANN: Of course.
HARLOW: But do you think that it is something that needs to be addressed? Do you think that it is causing youth across Europe and the
United States to look towards ISIS, al-Shabaab, etc. for an outlet?
NEUMANN: You're absolutely right. The lack of opportunity itself does not create a terrorist. If it was, then we would be dealing,
unfortunately with a lot more terrorism. What needs to come in is an ideology that makes sense of it. But by tackling the lack of opportunity,
you can reduce the pull of people that are susceptible to that ideology. You can bring down the number of people with whom these messages might
resonate because what the extremist is saying to people - look, join us because this society is against you, this society is at war with you. Just
look at yourself - you're having no opportunity. It's because you're Muslim - you have to choose to not be British and Muslim at the same time.
You should come with us.
If you bring down the pool of people that can be targeted with these messages, you have achieved something.
HARLOW: That's a very good point. Peter Neumann, I wish we had a lot more time to discuss this with you. Thank you for joining me this evening.
NEUMANN: Thank you, Poppy.
HARLOW: I appreciate it. ISIS has been called the richest group of its kind. But there are questions over whether it can continue to really
raise the funds it needs to operate at this level. Nima Elbagir has this story.
NIMA ELBAGIR, CNN SENIOR INTERNATIONAL CORRESPONDENT: Oil, organ trafficking, trading antiquities - all alleged to be sources of ISIS
funding. But how much is ISIS myth-making? They are believed to be the best resourced terror organization in the world. But after months of
coalition airstrikes, how are ISIS' revenue streams really holding up?
Oil was their main source of funding, and in the summer of 2014, ISIS made between 2 and $3 million a day through the sale of smuggled oil. The
major refineries have been high-value targets for coalition strikes and activists on the ground tell us ISIS is increasingly reliant on primitive
refineries that are smaller and easy for them to run like this one in Al- Ikrishi, east of Raqqa.
Sources inside Iraq say their revenue from selling smuggled oil is now down from between $250,000 and half a million dollars. As the airstrikes
began late September, ISIS began diversifying into selling off Syria's priceless cultural heritage.
AMR AL-AZM, ARCHEOLOGY EXPERT: In the spring and summer of 2014, ISIS' involvement in looting antiquities was simply to tax the activities
of existing sort of looters or people who were on the ground essentially looting these sites. They would just come along and take a share of the
profits. But by the end of the summer and into fall and winter of 2014, they were actually doing it for themselves.
If you're going to be investing your own money into something, then there must be a sizeable return for you. Otherwise you wouldn't be doing
ELBAGIR: The U.S. Treasury says foreign donations continue to be an important if comparatively smaller revenue source used to ferry foreign
fighters and fund their expenses to bring them in from the Middle East and North Africa into Iraq and Syria.
Much of those foreign donations are alleged to flow from the Gulf States. In essence, ISIS acts like a mafia - confiscating the land of
accused Iraqi government collaborators, charging protection money, ransoming hostages to an estimated tune of $20 million in 2014.
Bank robberies/bank seizures estimated to bring in $500 million, setting up arbitrary checkpoints - all of these generate revenue. The
claims of organ trafficking though have yet to be substantiated. Revenue from taxes - these can be as high as 20 percent Mosul residents told us.
The Raqqa activists group Raqqa is being slaughtered silently, saying they even tax for the provision of basic services like water and electricity.
They gauge the population in the areas under their control.
All this is reliant on the crucial routes between Raqqa and Mosul, and a clear route from Iraq through Turkey out to international markets. This
is believed to be via the Habur border gate. But while ISIS may be better funded than any terror group before it, it's also the first terror group to
attempt to operate both as a fighting force and as a civilian administration with 6 million people living in a territory the size of
In addition to the tens of thousands of fighters it has to clothe and feed, its outlays are substantial. And a lot of that oil revenue has to
hurt. Nima Elbagir, CNN London.
HARLOW: Thank you very much for that. Coming up - the sight of a smiling Vladimir Putin is a fairly rare thing though his latest approval
ratings are sure to have the Russian president grinning ear to ear. We'll get a report from Moscow when we return.
HARLOW: Welcome back to "Quest Means Business." The crisis in Ukraine is having a very different financial impact in Kiev than it is
having in Moscow. Ukraine's currency currently -- which has a reputation as one of the worst performing in the world - this week fell to a fresh
The Central Bank scrapped plans to implement currency controls just one day after they were announced. Meanwhile, the ruble is gaining
strength again after losing half of its value against the U.S. dollar in the last six months of 2014. Right now it is staging a comeback though it
remain at a historically low level.
It may be one of the reasons by Western sanctions only seem to be making Vladimir Putin more popular with his Russian people. Senior
international correspondent Fred Pleitgen has more for us from Russia.
FREDERIK PLEITGEN, SENIOR INTERNATIONAL CORRESPONDENT BASED IN LONDON: It's been an interesting phenomenon that Vladimir Putin's approval rating
seemed to soar even though there's the ongoing crisis in Eastern Ukraine and of course all of the difficulties that Russia faces with the
So it appears as though not only are sanctions against Russia not working, but they seem to have strengthened the Russian president's
position. We went out here in Moscow and asked people how they rate the performance of Vladimir Putin in office.
"Magnificent" this man says. "Putin is the best president in the world. I'm happy to live in Russia. I like what my president is doing."
And this man adds, "As someone from the young generation, I thank him for bringing our country forward. He's a very strong man."
"I generally feel positive," he says. "The way he explains every steps he takes makes me support him. I totally agree with his policies."
All of this comes against a very difficult economic background here in Russia. On the one hand, you have soaring unemployment rates and you have
a tumbling ruble and difficulties with the oil price as well. So Russia economically is in a very difficult situation. However, people we spoke to
here on the streets of Moscow say they believe all of that was induced by external factors rather than internal problems with Russia's economy.
Male: I think we follow a good policy in Russia, but it's because of influences from outside - from the Western countries.
PLEITGEN: Even with that difficult economic situation, even with the prices in Eastern Ukraine and many Western leaders urging Vladimir Putin to
change course, it seems here at home, that has not hurt his approval at all. Fred Pleitgen, CNN Moscow.
HARLOW: We're also tracking this story - India's President Narendra Modi has continued his plan to overhaul the economy. He has announced more
than $100 billion of funding for the railways and that's not even the main event. That comes this weekend when the full budget will be revealed.
Sumnima Udas reports there are some very high expectations.
SUMNIMA UDAS, CNN CORRESPONDENT: A long Indian highway's a common sight - lines of trucks, idle drivers killing time. Not because they're
lazy but because of crippling bureaucratic hurdles - hurdles many Indians want to see removed in the widely-watched budget over the weekend. The
goods and services tax or GST as it's known here has been touted as the single-most important tax reform in India. Right now every time a truck
full of freight moves from one state to another. It is required to pay some 20 different state and central government taxes.
With the GST, there would be a uniform national tax. We accompanied driver Conishan Sinc (ph) to see just how inefficient the process of moving
goods currently is. He's ferried freight and crowded, potholed roads for decades. But the hardest part of his job, he says, is the waiting.
CONISHAN SINC (ph), INTERPRETED BY UDAS: "At every checkpoint I have to wait an average of five to six hours," he says. Two thirds of India's
freight travels over land by truck, but the World Bank estimates 60 percent of the travel time is wasted at border checkpoints like this. He shows me
the various taxes that had to be paid.
UDAS: He's carrying about 200 kilograms of (salt), and this is all the paperwork he has to submit at every single border. There must be about
at least 30 pages in here. For about an hour, our journey is relatively pleasant. But then another perennial hurdle - corruption.
SINC (ph): "See those cops over there - they're going to stop me and ask me for a bribe, so I'm just going to wait here," he says.
UDAS: State and national authorities don't deny there may be cases of corruption. But if brought to their notice, they say, serious action will
Male, TRANSLATED BY UDAS: "This is India. This is the way it works here," a fellow truck driver says.
UDAS: The way it works may soon change if the goods and services tax is implemented.
RAAJA KANWAR, MANAGING DIRECTOR, APOLLO INTERNATIONAL LTD.: Today the manufacturers are spending 10 to 12 percent on just their largest tax (ph)
costs because of all of this. When there is a GST, we are able to bring that cost down. It's a whole ripple effect that will take place over time.
UDAS: Some of India's most prosperous states oppose the GST, fearing loss of tax control and revenue. If India is to become a manufacturing
powerhouse though and compete with the likes of China, economic roadblocks like these need to be lifted and soon. Sumnima Udas, CNN on one of India's
650 state border checkpoints.
HARLOW: All right, the United States and Israel are at serious loggerheads over how to deal with Iran's nuclear program. This weekend
that will certainly be in focus as national security advisor to the U.S., Susan Rice, also U.N. Ambassador Samantha Power will represent the United
States at the American Israeli Public Affairs Committee Conference that begins on Sunday.
In the past, we have seen some even higher-ranking officials show up, including the President himself. Jon Medved is one executive who will be
there. He is the CEO of the Israeli crowd-funding company Our Crowd. He joins me now in studio. Pleasure to have you on the program.
JON MEDVED, CEO, OURCROWD: It's great to be here.
HARLOW: I know Richard has enjoyed having you on in the past. I'm glad to have you on and I want to talk first about your take. It's
sometimes said, look we need a even higher-ranking official at APAC at this conference. You've got two really big names who are Susan Rice and
Samantha Power. What's your take?
MEDVED: Look, I think that there's great representation at the conference is going to talk about what binds Israel and the U.S. People
have talked about an all-time low in Israel-American relations and I don't believe it. I look at the poll numbers, I see huge support for Israel, I
see the incredible economic bind between Israel and America we ignore. The fact that every major tech company, whether it's Facebook or Google, Cisco
or Intel, are deeply involved with Israel, that there's huge interchange between the people. And I think that there is right now a serious
disagreement about this Iran issue -
MEDVED: -- it's a big issue. In other words, the idea of giving atomic weapons - nuclear weapons - to the worst madmen the world have seen
since the Nazis - that's a real issue.
HARLOW: Was it - I'm not going to get into a debate over that right now, but it's not about giving it to them -
MEDVED: Allowing them to get them.
HARLOW: -- and it's not our policy and it's about these negotiations and whether or not we can get an agreement with Iran.
MEDVED: Absolutely. But the bottom line, it's a real issue. But that shouldn't obscure the fact that we are allies - that Israel and
America are best friends.
HARLOW: So looking at it from a business standpoint - you're an executive going into this, not a politician going to this. Look, your
company, when you look at that crowd funding has really had some historic movements lately. You just completed a $6 million crowd funding round for
an online lender called Borrow, and I wonder if you believe that politics will get in the way of business coordination between our two nations, given
the controversy over Benjamin Netanyahu coming here to address Congress - what's your take?
MEDVED: Never. I mean, it's an all-time high. By the way, in 2014, there was $3.4 billion invested in Israeli startups. There are 70
different M and A acquisitions - $15 billion of activity. It was up 46 percent between 2013 and 2014. And remember, 2014 was the year that we
fought a war - 50 days of missiles. So the reality is there our tech economy is booming.
HARLOW: It is pretty interesting if you look at Israel as a nation and with, you know, all of the words that rage there, right? I mean, it's
not - it's fascinating for me to see how these companies can continue to progress so much. What do you think it is about the tech industry
specifically in Israel?
MEDVED: Because we just have extraordinary technology. Today if you're looking for cybersecurity, if you're looking for the internet of
things, if you're looking for big data or agriculture or clean tech medical technology, -
MEDVED: -- you're going to find it in Israel.
HARLOW: Let me ask you this - when you look bigger picture, we've got the tech-heavy Nasdaq near the highs - in record highs near where we were
in 2000, do you see a potential bubble here? From someone in the tech sector, do you think it's real this time around?
MEDVED: I think it's very real. I think the companies that we're seeing, that we're investing in are very real companies with earnings and
profits. We've got a company that went public called Rewalk which actually is a exoskeleton that allows paraplegics to walk again. It doesn't get
more real than that.
HARLOW: But you -
MEDVED: This is not tech -
HARLOW: -- had a significant increase in the number of IPOS last year -
MEDVED: That's correct.
HARLOW: -- but the companies were not profitable.
MEDVED: There are a lot that were not profitable - a lot are like this company's not profitable yet - but it's promising. You can't say that
an exoskeleton that gets someone out of a wheelchair is like a tech, you know, a dot com.
HARLOW: A dot com.
MEDVED: You know, it's not the same. And the bottom line is that - what's really interesting now is that people in general are getting
involved in the tech investment through crowd funding, that already there are 7,000 people who are investing at OurCrowd.
MEDVED: We've done 60 companies, we've crossed $100 million dollars in investment already through crowd funding. I think it's up and to the
HARLOW: And also you guys Kickstarter - there's a lot of momentum here. Good to have you in - on - the program.
MEDVED: Thank you.
HARLOW: Have a good time at the conference this weekend.
MEDVED: Thank you so much.
HARLOW: Thank you very much, Jon. Well a historic act designed to promote equal opportunity online has passed in the United States. We'll
explain after the break.
HARLOW: All right, for anyone who freaks out when their Netflix account is running super slowly, the U.S. Federal Communications Commission
has voted for a historic measure this Thursday. It's designed to ensure that internet providers treat all legal content equally.
And the FCC voted in favor of regulating internet services. We now have - we'll pull it up for you here - look at that. Exclusive footage of
that vote. Well we don't actually have that video and we're showing you this because this is exactly the kind of problem that the FCC wants to
address. It says that it will not let service providers give preference to companies to that have a lot of money and that are willing to pay more.
It would also prohibit them from increasing or decreasing transmission speeds as they please. Netflix has been a big advocate of this net
neutrality - that is what it is called. It tweeted that "If the internet was so slow, it downloaded one word at a time, well, don't let Comcast
win." And you can see exactly how they did it in the tweet.
Jose Pagliery from CNNMoney has been covering this throughout. He joins me now. Thank you for being here. This is always something I think
people are little bit scared about because they don't totally understand what net neutrality means or how important it is. So in the simplest way,
break it down for us.
JOSE PAGLIERY, CNN MONEY REPORTER: The simplest way - this is about the freedom of the internet. So, do the companies like Verizon and Comcast
who actually built the structure - the wires, right? That put down the fiber cable. Do they have the right to speed up or slow down what goes on
there? And if they do, does that mean that some people get an advantage? Does that mean that those who can pay to go faster have the privilege to do
HARLOW: And the FCC says no in this tree to two vote down party lines. However, this still faces a court challenge possibly.
PAGLIERY: It does. So here's the news - the real news. This happened today and the internet's not going to feel any different tomorrow
or next week or a month -
HARLOW: Or a month, yes.
PAGLIERY: -- from now, right? And depending on how this plays out, this fight could go on for a year or two. And if we have a Republican
president in 2016, you know, 2017, well then nothing happens because they'll just choose to not have the FCC enforce it.
HARLOW: But this is historic, right? I mean, we've been waiting for this vote for a long time, and I wonder what you make of this - one of the
FCC commissioners who voted against it said, "Expect regulation to ratchet up as time goes on." Their concern is that, look, even though the FCC has
promised in this not to take an overarching approach to this really 1930s act that they're working with here and to tax more, for example, this
commissioner is saying don't believe it.
PAGLIERY: So let's take a look at how they did this. This is isn't so much about what's going on, but how the FCC is doing this. The FCC
wants to make sure we have fair, equal sort of opportunity internet. But to do that, they've reached back into this really old law -
PAGLIERY: -- we're going to drag this over and we're - this was meant for telephone monopolies, you know, 70/80 years ago. We're going to keep,
you know, 5/10 percent of it and we're going to ignore the rest.
PAGLIERY: And so what we're going to watch now is are they keep their promise? Are they only going to keep that little bit of it?
PAGLIERY: Or has this commissioner - the Republican commissioner says - are they going to start overregulating? That's - nobody knows. We have
to wait the next year or two to see.
HARLOW: We'll be watching, you'll be covering it, Jose. Thank you for joining me, we appreciate it. A historic move though here in the
United States. We'll be back with more "Quest Means Business" in a moment.
HARLOW: Well they say that imitation is the highest form of flattery. Lloyd Blankfein didn't even know someone was pretending to be him on
Twitter. When I asked the Goldman Sachs CEO what he thought about it, here's how he replied.
HARLOW: You know that someone created a fake Lloyd Blankfein Twitter account, right?
LLOYD BLANKFEIN, CHAIRMAN CEO, GOLDMAN SACHS: My God.
HARLOW: Recently, and people believed it. And the tweets were pretty boring.
BLANKFEIN: Then how could it have been me? (LAUGHTER).
HARLOW: So I thought if Lloyd Blankfein were to actually get on Twitter, what would you tweet?
BLANKFEIN: Well, first of all I would have to escape numerous people who would be standing by me and saying, `Lloyd, don't do it.'
BLANKFEIN: And then of course - and of course the last thing I'd be told before I - if I ever did do it - they last thing they'd say - `Now
remember, Lloyd, whatever you do, don't be yourself.'
HARLOW: Lloyd Blankfein telling me his handlers wouldn't exactly let him be on Twitter. Much more of my interview with Lloyd Blankfein on
China, on oil prices, on Greece, just go to CNNMoney.com for that. Thank you so much for being with me this evening. That is "Quest Means
Business." I'm Poppy Harlow in New York. We'll see you soon.