Return to Transcripts main page
QUEST MEANS BUSINESS
OPEC to Keep Oil Output High; Oil Boom Goes Bust in North Dakota; State of the Oil Industry; US Stocks on Roller Coaster Ride; Malaysia Airlines Set for Major Overhaul; Nigeria Arrests Top; Bankers in Currency Scam; Prince Ali on FIFA Scandal; Footballers Apologize for Orgy, Racist Comments
Aired June 1, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:59:55] (NEW YORK STOCK EXCHANGE CLOSING BELL)
MAGGIE LAKE, HOST: Markets start the month with some modest gains on Wall Street. It's Monday the 1st of June.
Tonight, let the battle commence. OPEC and the United States are on a collision course over oil.
Starting from scratch. The new Malaysia Airlines CEO says the company is bankrupt.
And ready for controversy. The ad that sparked protest in London has reached New York City.
I'm Maggie Lake, this is QUEST MEANS BUSINESS.
Good evening. Tonight, OPEC signals that it's holding firm with its plan to keep oil production in a bid to force US drillers out of the game.
It's the latest move in a raging battle whose prize is influence over global oil supply. As OPEC members come together in Vienna, we'll take you
to the front lines of that fight.
It's six months since OPEC's heavyweights, led by Saudi Arabia, took a gamble. Oil prices were in free fall and OPEC's influence was waning.
OPEC leaders decided to keep oil output unchanged. The hope was that OPEC nations could ride out the low oil prices, while US producers would be
forced out of the market.
It was an unpopular decision even within OPEC, as most of the cartel's member nations struggled to balance their books on the back of cheap oil.
So far, though, OPEC's gamble is paying off. Oil prices are on the rise again, and the number of oil rigs operating in the US has fallen by more
than half in the last year.
One of the hardest-hit areas is Williston, North Dakota. One year ago, there were 178 oil rigs operating in the area. Today, that's down to
77. Richard Quest traveled to Williston to find out how residents are coping now that the boom has gone bust.
RICHARD QUEST, CNN INTERNATIONAL (voice-over): They raise them tough in Williston, with tests of Herculean strength, this fight is to become
North Dakota's strongest man and woman. It's fierce.
And just as tough are the real-life challenges for Williston itself as its energy-rich economy slows. Oil and Williston go a long way back. The
first wells date back to 1951.
QUEST (on camera): This is historic oil. It is crude from the number one discovery well, called Clarence Iverson, named after the landowner upon
whose farm it was found.
QUEST (voice-over): Drilling for oil was profitable. And then, came fracking. The controversial technique of fracturing rock miles below the
Earth's surface to unleash trapped crude, it truly put Williston on the map.
MONTE BESLER, OIL CONSULTANT: My name is Monte Besler, and I'm known as the Frackinator.
QUEST: The Frackinator was there from the start.
BESLER: You see how the wells are lined up here.
QUEST: Monte Besler helped frack that very first horizontal well in the Williston basin in the 1990s.
BESLER: We had always been kind of the backward stepchild of the oil business. And now all of a sudden we were developing a technology and
doing things that nobody else had ever done and being successful.
QUEST: Williston became Boom Town, USA, growing at double digit rates. Oil workers were coming from across the country to strike it rich.
The lack of housing so acute, many were forced to sleep in trailers and vans.
It couldn't continue at that pace, and it didn't. The world was pumping too much oil. OPEC refused to cut production. As oil prices
plunged, the number of drilling rigs in North Dakota fell from nearly 200 to less than 90 today.
One company forced to make deep cutbacks is Canary, the oilfield services company, whose chief executive, Dan Eberhart, said the future of
his firm depended on him taking fast action.
DAN EBERHART, CEO, CANARY, LLC: We've reduced our headcount approximately 20 percent.
QUEST (on camera): Wow, that's quite a lot.
EBERHART: It's quite sever, and it's been relatively painful, yes. We've lost something like 13,000 to 15,000 direct jobs in the past six
months here in North Dakota, and the indirect number's going to be much, much higher.
JERRY PAGE, TRUCK DRIVER: I really gave it some thought before I came up here.
QUEST (voice-over): One of those without work is Jerry Page, who came to Williston from his native state of Mississippi, and he's living in his
van to save money.
PAGE: And I built a box to put all my stuff up underneath it, that way I don't have it all in the way. A lot of people are looking at, I want
to be comfortable, I want to be in luxury. To hell with luxury. Give me the money. I can deal with this.
[16:05:04] North Dakota still has promise, but before it was unlimited. It was full steam ahead. But it's a big drop-off from last
year to now.
QUEST: Despite the slowdown, projects begun in better times continue. Main Street is being dug up for repairs and upgrades. Housing projects are
under construction right across town, even as the price of rentals fall.
Paying for these projects while the economy slows down is the challenge for the mayor, Howard Klug, who over a chili dog at Hedrick's, he
reminded me the slowdown may be to the city's advantage.
QUEST (on camera): The perception is, it was boom and now it's bust.
HOWARD KLUG, MAYOR OF WILLISTON: No, it's not boom and bust. It was boom unmanageable. It was overnight. It was just -- it was like they
opened the door, and as some people say, it's kind of like drinking out of a fire hose. We were inundated by people. And now, it's calmed down,
we're going to catch up, and everything is coming back toward the center of this oil play.
QUEST (voice-over): So, any idea that Williston is down and out is simply not true. Just like North Dakota's strongest men and women.
QUEST: Williston's residents believe their city has the stamina to carry on.
Richard Quest, CNN, Williston, North Dakota.
LAKE: Now, oil prices fell around 1 percent on Monday, with investors looking ahead to this week's OPEC meeting. But one barrel of crude is now
worth around $65. That's down from $73 during the last OPEC meeting in November. But as you can see from the chart over here, it is significantly
up from those lows we hit in January.
Joining me now, Fereidun Fesharaki is chairman and CEO of Energy Consultancy FACTS Global Energy. He joins me now. Thank you very much for
being with us, sir.
You know, in the lead-in to this, we were saying that that gamble by OPEC paid off in terms of squeezing the US producers. But did it really?
A lot of people thought that there would be massive bankruptcies and a collapse of US production, and there hasn't been.
FEREIDUN FESHARAKI, CEO, FACTS GLOBAL ENERGY: Well, that's absolutely right. The industry has more resilience than everybody expected. They've
cut costs, they've become more efficient. It's like losing weight, it makes you healthier.
FESHARAKI: And so, I think that the prices the way they are today is not going to drive everybody out of business. There'll be some
corrections, but there'll be lots of survivors in the business.
LAKE: There will be. And the pain has been spread around. There are members within OPEC very unhappy, struggling with oil prices at this level.
Saudi Arabia decided to grab for market share, but it seems at the expense of cohesion within OPEC. Does OPEC matter anymore?
FESHARAKI: It doesn't really. Actually, Saudis had no choice. If they didn't do this, OPEC would lose more and more market to the US
producers, so this had to be done. And it's a painful rebalancing. It takes a year, a year and a half, maybe two years for the balance to come
back. But until that time, people have to get more efficient and just do a better job, that's all it takes.
LAKE: And I'm assuming getting more efficient means investment. There are some forecasts that say that oil will remain under $100 a barrel,
perhaps for decades. Do you agree with that? And if so, what does that mean for oil producing nations?
FESHARAKI: We've got to go back. You see, the $100 was a fake number by itself. We shouldn't look at that as a number that we should strive to.
Whenever the price of oil is stable, somebody is fixing it, and that few years of high prices should not be our benchmark.
Real market is what we have today. The prices are going to stay, and I believe, below $100 for 10, 15 years. And indeed, it is more than likely
that the prices would fall further, and then move back to $50, $60 range. I think the $100 oil is a figment of the past, and we should not think
about it anymore.
LAKE: So, you mentioned, as the industry goes through adjustment, there will be survivors. Will there be casualties? Who doesn't survive?
FESHARAKI: I think lots of people entered the market that they shouldn't have. We know people who at $80 a barrel lose money. We know
people who at $30 a barrel still make money. So, those who came in at an unfortunate time and they thought that the $100 will give them the cover,
those are the guys who have to move out.
[16:09:56] But there is a whole process of cost-cutting, readjustment, rebalancing which is taking place, and I think the industry
will come out stronger. The old adage that if it doesn't kill you it makes you stronger, I think that will survive -- ensure the survivors in the
business, and a lot of people will still remain. Next year from now, there will be a lot of people still in the business.
LAKE: And where do the US producers fall in that? Do you think they have the ability to adapt to the times, and will the US become an exporting
nation? Do you think that's in the cards?
FESHARAKI: I think there is no scenario that the US ever will become a net exporter. I don't see anybody ever claiming that. But the US can
export and import. Opening the exports in the US, I think within the next year or two is very likely.
But the US crude is not something that the markets want. It's too light, it's not really suitable for the international markets. So, even if
tomorrow the Congress or the president gives the market opening to export, I don't think much US oil will go outside. It just connects to the US to
the outside and makes the US prices internally somewhat higher.
But there is no scenario that the US ever can become a net exporter of oil. On the gas side, yes, indeed, the US is already a net exporter of
LAKE: An industry going through a lot of changes, which leaves much to discuss at this week's OPEC meeting. Fereidun, thank you very much for
joining us this evening. Appreciate it.
Well, we'll have much more on oil over the coming days across CNN. Our exclusive series, Oil Battle: The Crude Showdown continues tomorrow as
our Richard Quest tells us more about the state of the US fracking industry.
Meanwhile, it was a roller coaster day on Wall Street. The Dow managed to eke out a small gain. CNN's Paul La Monica joins us now to
discuss it. Paul, we spoke at the very beginning of the session, and things looked pretty good. It looked like we were going to have a rebound.
We see a lot of volatility. What about the markets? What are investors focused on?
PAUL LA MONICA, CNN MONEY DIGITAL CORRESPONDENT: I think investors are still just trying to figure out what's going to be going on with the US
economy and what the Fed is going to do in relation to that. Volatility is definitely back. So, June's off to a decent start, and one day we're --
LAKE: It's all relative.
LA MONICA: -- not lower, so that's a good thing. But clearly, I think, everyone just wants to know when the Fed is finally going to raise
LAKE: That's right. And we do have a big jobs number coming on Friday, so there's probably going to be a lot of trepidation ahead of that.
We have -- we continue to see, though, in this low-interest rate environment, it's very friendly to mergers and acquisitions, a lot of
people taking the opportunity, perhaps, before rates go up, to get those deals done. And we saw one in the chips base today, at long last.
LA MONICA: Yes, at long last, Intel finally announcing that it was buying Altera. This is a deal that could boost Intel's Cloud business.
Intel is a company that is still wedded, I think, to the PC business, and that's to its detriment. A lot of investors want to see Intel
But you're right, Maggie, there are a lot of companies that probably are going to continue shopping. We've had more rumors, Humana, the big
health care insurer, on Friday, stocks shot up on reports that it hired Goldman Sachs to look for a buyer. So, I don't think we're done with this
M&A mania just yet.
LAKE: No. And strangely, in a lot of cases, both stocks are going up. A lot of investors like some of the combination they're seeing, which
probably means we have a little bit more to go before the deals start getting some mixed reviews. That's always a sign --
LA MONICA: Exactly.
LAKE: -- at the top, isn't it, Paul? Paul La Monica for us, thanks so much.
LA MONICA: Thank you.
LAKE: Well, fresh pain for Malaysia Airlines. The CEO makes a frank admission about the financial state of the carrier. We'll tell you his
tough plan to fix it, next.
[16:15:15] LAKE: The new CEO of Malaysia Airlines says the carrier is technically bankrupt. Those blunt words came from Christoph Mueller
Monday. He's known for his tough turnaround measures at Air Lingus and Lufthansa. He's even called the Terminator by some in the media after
earning a reputation for making job cuts.
Now Mueller is not shying away from layoffs at Malaysia Airlines: 6,000 jobs will go under a new restructuring plan. It may also include
rebranding, Mueller hinting at a new livery and possibly a new name. And there could be changes to the airline's routes as well. It may become a
regional carrier only.
This obviously comes in the wake of Malaysia Airlines twin disasters last year. The company is still dealing with the devastating loss of MH370
and MH17. Let's discuss all of this with aviation export David Gleave. He's from the University there in London and joins us now. Thank you so
much for being with us, David.
This is -- he's known as a turnaround person. He certainly has a lot of experience, but this is one tough case he's taking. What do you think
his chances are?
DAVID GLEAVE, AVIATION EXPERT, LOUGHBOROUGH UNIVERSITY: I think his chances are very good. He's got an excellent reputation, he doesn't shy
away from what needs to be done. We can already see the declaration of bankruptcy and, effectively, ditching a lot of the assets that they don't
want for the new rebrand.
And at the end of the day, the corporate culture in Malaysia, it means that we have to bring a Westerner in who can take all the blame and take
all the pain, be around for a couple of years, rebuild everything and be thrown out, and then all the pain is associated with him, but he's quite
taking that job title.
LAKE: Yes. It means 6,000-job layoff. What strength are they levering? It's very easy to talk about the weaknesses. Why not just close
it down, if it's going to be such a struggle? What can they leverage that gives them hope that they can rebuild this?
GLEAVE: Well, it's the primary feed for the Malaysian tourist industry. So, the government has a natural requirement to ensure that
tourists can get there very easily, which generally has been why they've been propping up their flag carrier for many years.
It's beginning to lose some of the attractions that it had in the past of being roughly halfway between Europe and Australia. A lot of that
connecting traffic is starting to go through the Middle East. But it's still there as a major regional carrier, but it just has to recover from
the misfortunes it's had recently.
LAKE: And those misfortunes really known around the world. These are stories that captivated the global audience. We talk about one of the
tasks, rebranding, talk maybe of changing the name. Can you recover from the year that they've had in terms of a brand? What can you do to reassure
GLEAVE: Well, I think the first thing that's going to happen is the Malaysia 17 report will be out. The Dutch investigators have finished
writing that. And they'll be pointing towards that, saying we didn't do anything wrong. It was just unfortunate. We happened to be the one that
was shot down. And it doesn't matter who did it, but we suffered for it. And that will start to rebuild the image there.
But yes, there will be a major rebranding exercise. And I think the Chinese market is lost for a while until they finally find the airplane and
recover it, and that's not going to be for a considerable while now that it's winter period in the southern oceans.
So, they have to ride through that, which is why I think the recovery plan is going to be the two-year rather than just a simple rebrand,
relaunch, spend lots of money on advertising and start again.
LAKE: That's right. It's going to take a big marketing push, no doubt. David Gleave, aviation expert, joining us tonight. Thank you so
Well, six executives at Nigeria's central bank have been arrested for stealing billions of naira. Nigeria's anti-corruption agency accuses them
of stealing around $40 million worth of damaged naira notes that were meant to be destroyed.
Let's get the details now with Christian Purefoy, he's live for us in Lagos tonight. Christian, we talked during the election, the president
taking office, the new president, that there was going to have to be a crackdown on corruption. It seems they've wasted no time.
CHRISTIAN PUREFOY, CNN INTERNATIONAL CORRESPONDENT: Well, actually, this arrest happened before this new president, so people are still waiting
to see what he uncovers, Maggie. Because this is really quite an extraordinary case.
Yes, six senior officials in the Central Bank of Nigeria have been charged with stealing $40 million worth of naira notes. Now, how did they
do it? Basically, the central bank, when a naira note or dollar or pound sterling gets defaced, mutilated, or is torn up somehow, they take it out
of the system and they put it in a cardboard box and it's destroyed.
[16:20:06] What these central bank officials were doing is they were cutting out newspapers in the shape of a naira note. Here's a naira note.
They were cutting out a shape in that, and then replacing the old, mutilated, defaced naira notes with newspaper, so the newspaper, Maggie,
would get burnt, and then the old naira notes would be put back into circulation.
And 16 other commercial bankers have been charged with conspiring with these people, because you have to get rid of these old notes back into the
system. It's the EFCC, the Economics Financial Crimes Commission say that this basically is a systemic problem that's been going on for years. But
after investigation, it is an isolated incident, Maggie.
But that doesn't mean that it doesn't affect the whole country. The central bank is supposed to regulate the money, and this has an effect on
inflationary pressures. So basically, these people were stealing from the whole of Nigeria, Maggie.
LAKE: And very bold, as well. It's so simple, one has to wonder how they were able to get away with it at all.
So, this happened before the president took office, but this has got to shake the people's faith and sort of reinforce the idea that there's
rottenness right up to the very top levels and core. Is it going to make his job harder or put more pressure on him to continue down this road and
try to restore confidence?
PUREFOY: Well, the problem is is that this is really quite small-fry for some of the scams that are going on in Nigeria, and I think the new
president's going to have to concentrate on things much bigger. You've got the problems with the fuel crisis, we've talked recently about the problem
of the fuel subsidy in Nigeria, which is also -- it's a billion-dollar scam. There's investigation that's been going on into that, but you still
haven't had any arrests.
And Maggie, the challenge facing this new president, Muhammadu Buhari, is not so much chasing down these isolated incidents, but yes, there's two
things. One is strengthening the institutions so that they can fight these problems of corruption.
But that in turn means that giving people's trust back in these security agencies that has basically been completely eroded because of the
big scams, but also because of these small scams.
LAKE: Such a difficult job changing that culture at the very top, because you're right, he certainly has his work cut out for him. Christian
Purefoy for us.
Well, Prince Ali has landed back in Jordan. He spent the last few months devoted to unseating FIFA's top man. He speaks to CNN and has harsh
words in defeat, after the break.
LAKE: Jordan's Prince Ali bin Al-Hussein tells CNN he would have, quote, "immediately resigned" if he was FIFA president Sepp Blatter.
Prince Ali failed in his attempt to unseat Blatter as the head of FIFA last Friday after a week when top executives were indicted on corruption
charges. Christiane Amanpour spoke to Prince Ali. He told her Sepp Blatter is responsible for what happened during his watch.
PRINCE ALI BIN AL-HUSSEIN, JORDAN: He was reelected, but he's responsible, and I hope that at some stage, he actually does take
responsibility for actions. Because he is the president of a governing body of the most popular sport in the world. The main critical problem is
that there is such a loss of confidence in this organization. And it's a real pity that it's being dragged on in this way.
[16:05:05] CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: There are those who say that he cannot survive if the money
starts to seep away in a big way. You've already heard of some sponsors saying they might reconsider their position, and some have said it's no
longer about the reputation of some of these sponsors associated with this organization now, but actually they also could be implicated in the
investigations that are going on.
So, do you think that sponsors, as Prince William has said, need to reconsider their sponsorship of FIFA under the current circumstances?
Coca-Cola and all the others?
PRINCE ALI: Unfortunately, even our national associations, they have all suffered under this situation of present leadership, because FIFA acts
in a way sort of like a company rather than a service organization, which it is. It's supposed to be a non-profit.
And also, they sort of drip feed aid to countries, but without helping them and giving them their dignity and helping them progress in the world
of football. And I think that eventually, the only way forward is to have a real change as a collective. It was never about one person, and it
should never be about one person.
AMANPOUR: Of course, it is about one person, because this is the person at the head of the organization that so many people now say has, at
the very least, responsibility for what's happening in the organization. Were you surprised by the indictments last Wednesday? Do you think Sepp
Blatter should have immediately resigned?
PRINCE ALI: Well, I was obviously totally surprised. And I think it's sad for the world of football, because there are so many great people
out there working for the benefit of the sport.
But for sure, obviously, if I was in Sepp Blatter's position, I would have immediately resigned. And probably more so ages ago. Because at the
end of the day, this happened under his watch.
LAKE: Viewers in Europe can see that interview in full in around 40 minutes from now on "Amanpour." That's right after this program.
In the English Premier League, three Leicester City players have apologized after a scandal of their own. A video surfaced showing the
teammates uttering racial slurs while participating in an orgy in Thailand. Leicester owners are from Thailand. Their stadium is named after the
owner's travel company, King Power, and the Thailand Tourism Authority is one of the team's key sponsors.
"World Sport's" Patrick Snell joins us now, live from CNN Center. Patrick, incredible headline, almost hard to believe when you read it. I'm
assuming that the team is in full damage control right now.
PATRICK SNELL, CNN SPORTS CORRESPONDENT: Absolutely. And Leicester City, in fact, coming out very quickly to try and diffuse this,
apologizing, saying that the players themselves have apologized.
This is hugely, hugely embarrassing. Very damaging to the reputation of not just the club, Leicester City, but also the Premier League as an
export as well. More on that in just a moment.
But the club is saying that the three players in question, Maggie, Tom Hooper, James Pearson, and Adam Smith -- and I'll tell you why this is
embarrassing as well. Especially embarrassing, the last name, the surname, of one of those players, James Pearson, his father is actually the head
coach, the manager, of Leicester City, Nigel Pearson, as well.
This is why it's so disappointing to their fans in the Premier League back there in the UK, because they just had a terrific end to the season on
the field of play. They avoided the dreaded relegation, avoided falling into England's championship and taking a huge hit financially.
And then they go on this tour and three players, there, according to Britain's "Daily Mirror," and that video, let's say that rather
uncompromising video, have let the club down big time.
Now, let me get to the club's statement. It's pretty short, it's very much to the point. But it kind of jobs the time, the statement from the
club, "Our players at every level are expected to behave as representatives and ambassadors for our football club, so we treat their conduct extremely
Also reaction as well coming in from the anti-racism education charity, Show Racism the Red Card. It very swiftly condemning as well.
"The content of this footage is deeply troubling, not only because of the use of racist language, but also because of the levels of the misogyny and
privilege on display as well."
And I mention the fact that Premier League clubs over the years, Maggie, they go to Asia in their droves. Traditionally, we've seen the
powerhouse brands, like Manchester United and Liverpool.
This coming summer alone, next month, in fact, we're going to be seeing three Premier League clubs on their way to compete in the Asia Cup,
the 2015 Asia Cup in Singapore. Stoke City, Everton, and the recently re- crowned English FA Cup champions, Arsene Wenger's Arsenal. Maggie?
[16:29:59] LAKE: Yes, and you've got to wonder how that sponsor feels watching them run around with that all over their jerseys. All
right, Patrick, thank you so much. Tough week for football, though couple of weeks for football.
Well, a stark warning from Germany over Greek banks. That's because there's been little progress in Greece's debt talks. We'll bring you up to
[16:31:55] MAGGIE LAKE, BUSINESS ANCHOR AND CORRESPONDENT FOR CNN INTERNATIONAL FILLING IN FOR RICHARD QUEST, "QUEST MEANS BUSINESS" SHOW:
-- their jerseys. All right, Patrick, thank you so much. Tough week for football - couple of weeks for football.
Well a stark warning from Germany over a Greek bank. That's because there's been little progress in Greece's debt talks. We'll bring you up to
LAKE: Hello, I'm Maggie Lake. Coming up in the next half hour of "Quest Means Business," the Supreme Court makes a major ruling on free
speech and Facebook.
And the question that has sparked controversy across the Atlantic - are you beach body ready? I'll speak to the company that makes no apology
for upsetting feminists.
Before that, these are the top news headlines we're following for you this hour.
ISIS is fighting back against a major Iraqi government offensive, launching an attack against police. A suicide bomber drove a tank packed
with explosives into a base south of Samarra, killing at least 34 people officers. Joint Iraqi forces have launched an offensive to retake two
provinces from ISIS after the fall of Ramadi.
The speaker of Iraq's parliament tells CNN that troops were given an order to retreat.
SALIM AL-JABOURI, IRAQI PARLIAMENT SPEAKER, VIA INTERPRETER: The military command who was present was speaking about the collapse in the
morale in the army and made a decision in a clear way to give the order to pull out. And after that, Ramadi fell.
And even the prime minster - and he's the general commander of the armed forces was not aware of the orders dealing with pulling out, and that
was led to the big question marks for us. Who has an interest in a direct way in the army pulling out and not confronting ISIS.
And after that ISIS entered Ramadi and controlled it directly.
Police in Bangladesh have filed murder charges against 42 people over the deadly factory collapse two years ago. The building's owners and
several government officials are among those charged. More than 1,100 people were killed in the disaster.
U.S. lawmakers have failed to stop key surveillance programs from lapsing. The senate was unable to reach a deal on extending major parts of
the Patriot Act that were expiring, including the NSA's collection of phone date. A vote on a compromise bill that would restore those provisions is
expected later this week.
Prince Ali of Jordan says he would have immediately resigned if he had been FIFA president during the ongoing corruption scandal. The prince, who
failed to unseat Sepp Blatter at last Friday's election, says Blatter must take responsibility for the arrests of several FIFA executives.
He told CNN that the ongoing controversy is hurting the world of football.
PRINCE ALI BIN AL-HUSSEIN, JORDAN: I think it's sad for the world of football because there are so many great people out there working for the
benefit of the sport.
[16:35:07] But for sure obviously if I was in Sepp Blatter's position, I would have immediately resigned and probably more so ages ago because at
the end of the day this happened under his watch.
LAKE: A top official at Germany's central bank has warned that Greek banks are on the brink of crisis. He told Germany's "Bild" newspaper that
Greek lenders are "five minutes to midnight." (BELL TOLLS).
Athens has four payments due to the IMF over the next three weeks. There's been little progress in securing a deal and the Greek government
has also cancelled the appointment of an economist as the country's representative to the IMF.
That follows opposition from fellow lawmakers. Earlier I spoke to Panos Polyzoidis, a current affairs journalist at Greece's SKAI TV. He
told me it's getting down to the wire for the Greek Prime Minister Alexis Tsipras.
PANOS POLYZOIDIS, CURRENT AFFAIRS JOURNALIST, SKAI TV: Now Tsipras is going to have to tackle the fact that he's promised quite a few people
quite a few things and he's going to try and be all things to all people. That's rather difficult as we all know. And he'll have to deal with some
of the purists within his own party.
Now as of - as for the - selection of the IMF representative, that's slightly different. It was a personal choice by the economic - by the
finance minister Yanis Varoufakis - Elena Panaritis. Frankly, she' snot senior enough to hold that post and what's infuriated many Syriza members
is that Elena Panaritis was part of George Papandreou, who is the former prime minister's, entourage - the one that led the country to the bailouts
and the IMF.
LAKE: All of this is taking place amid the backdrop of political unrest across Europe. Fringe parties had a strong showing over the weekend
in Italy's regional elections and in Spain voters are also turning their backs on the two main parties as part of a backlash against austerity. Isa
Soares has more.
ISA SOARES, CNN ANCHOR AND CORRESPONDENT: It is possible - celebratory words that are ringing out across Spain. For these voters this
marks a sea change in their country's politics.
The two traditional parties who have dominated politics for 40 years are rapidly losing ground here. In the most recent local election, the
ruling party of Popular of Prime Minister Mariano Rajoy has been punished. They still won the most votes with 27 percent, but compared to the last
election in 2011, you can see they have lost key battlegrounds in most areas.
MARIANO RAJOY, SPANISH PRIME MINISTER, VIA INTERPRETER: We have suffered a considerable loss of votes so we cannot be satisfied.
SOARES: Their biggest loss - Madrid. A partido Popular's stronghold since 1991. Barcelona too has gone outside the political establishment,
picking tough-talking anti-austerity activist Ada Colau as its first female mayor.
Their success has been driven in large part by disenchantment of the economic crisis, but above all, by a string of corruption scandals.
According to "El Mundo," 360 politicians have been charged with corruption of which 80 percent come from the two traditional political
Male, VIA INTERPRETER: Discontent has driven voters to other groups to diversify the political scene.
LAKE: Well the fear now is that this new political panorama may rattle Spain's economy which has been reforming and reaping the benefits.
Yes, unemployment is still far too high. Take a look at this. It's actually up 23 percent and that's the only thing. Deficit is also very
high. It's actually 5.8 percent of GDP, and that is one of the highest in the Eurozone.
But the economy has been growing. This is the important part - it's grown not (ph) .9 percent - almost 1 percent in the first quarter of this
year and is expected to expand almost 3 percent of this year. If we look at the IBEX, that too is up 11 percent year to date.
Now with these left-leaning parties gaining ground, the concern is that Spain may face political uncertainty and end up going the way of
Greece. Not so fast, tells me this economist.
ALFONSO GARCIA PASCUAL, CHIEF EUROPEAN ECONOMIST AT BARCLAYS: When you look at the Greek elections when Syriza came in first and nearly
getting a overall majority, I think then the comparison probably is not adequate.
When you look at Pademos, Pademos came in third, and you still have two mainstream partners center right and center left that came ahead of
Pademos and the two together represent well over 50 percent.
[16:40:09] So in that sense, Spain is not Greece, at least not politically.
SOARES: But if they're forced to form a coalition and then bid adios to austerity, Spain may just begin looking a lot like Greece. Isa Soares,
LAKE: It was a fairly flat day for European markets. London's FTSE closed slightly lower. Paris, Frankfurt and Zurich all saw modest gains.
Markets in Athens were closed today for a religious holiday.
Russian and the - Russia, rather - and the European Union are locked in a war of words over a travel ban. Moscow has barred 89 E.U. politicians
and military leaders from entering Russia. E.U. officials slam the ban as unjustified. Now Russia is responding, accusing the E.U. of breaching
confidentiality by revealing the names on the list.
CNN's senior international correspondent Matthew Chance has more from Moscow.
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well a very angry reaction from some of those individuals - the 89 people who found
themselves on that Russian travel ban. List a couple of their remarks here we got from social media.
The Belgian member of the European Parliament, Mark Demesmaeker (AUDIO GAP) tweeted this, "Putin puts me on the blacklist, not welcome in Russia.
Too much honour for me, Mr. Putin." So Mr. Demesmaeker actually proud of the fact he's made the list.
The Swedish MEP Gunnar Hokmark had this to say about being blacklisted, "Worth to note the Putin regime fears dialogue and freedom of
speech. The #blacklist is not a show of strength but of weakness."
So European officials condemning the list of course, calling for greater transparency from Russia and clarification as to why these
individuals in particular were identified to be sanctioned and not others.
But of course the reason for it is pretty clear. Russian officials have come out and clarified it saying that this is purely a response to the
European blacklist which has 151 Russians on it, preventing them from traveling to Europe and even freezing their assets over their association
with the annexation of Crimea last year and the ongoing conflict in Eastern Ukraine.
So I think we can very much see this as a tit-for-tat move by the Russians - the Europeans have their list, now the Russians can say we've
got ours as well. Matthew Chance, CNN Moscow.
LAKE: A man convicted of threatening his ex-wife on Facebook has been acquitted by the U.S. Supreme Court. He says he's just an artist using rap
music as therapy. CNN legal analyst Danny Cevallos will help break through the legalese.
LAKE: The United States Supreme Court has ruled in favor of a man convicted for posting threatening messages on his Facebook page. Anthony
Elonis wrote violent posts after his wife left him, including comments like, "There's one way to love you but a thousand ways to kill you."
[16:45:09] Elonis claimed he was an artist using rap lyrics to cope with depression. CNN legal analyst Danny Cevallos joins me now.
This is - this was - struck people as controversial so threatening but not threatening enough to be a crime - is that what the Court was saying?
DANNY CEVALLOS, CNN LEGAL ANALYST: You know, Supreme Court, really this is a very narrow ruling and it should not be viewed as a license to go
out and threaten people on Facebook.
Certainly this defendant could have been convicted His chief complaint was that in the statute - and I've read the statute and it is a
little confusing because it only speaks of whoever communicates a threat.
And that raises the question, well, what level of intent is required? Is it - did the defendant intend to communicate a threat or instead is it
how a reasonable person would perceives the words as a threat. It makes a big difference. And the Supreme Court said that when it comes to crimes,
even if there's no mention of intent in the statute, we cannot simply graft on some negligence-type standard.
In other words, we can't just say that if the victim perceived it as a threat, then that is enough to hold him liable. Instead, there is some
level of knowledge required. Basically what the Court's opinion says is that if you're going to be convicted of communicating a threat under this
federal law, you must have at least known that your words would be perceived as a threat.
LAKE: Right. So we need a fuller picture before (AUDIO GAP) because I think when you read this, you're going to understand why domestic -
especially domestic violence - advocates are so alarmed by this. But then many of us think, you know, this is - a posting - reading something is very
different from saying it. If I say, `I'm so mad at you, I'm going to kill you,' nobody's going to take that seriously. But you don't have that same
ability to interpret, I guess if it's on Facebook.
So they're trying to protect free speech as well. So it's a little complicated. Do we need more laws addressing this if the Court was very
narrow about it? Do we need lower courts to be a little bit more specific in filling in what is needed to press charges?
CEVALLOS: As a criminal defense attorney, I'm rarely an advocate for more laws.
CEVALLOS: We are creating laws that these things do not have expiration dates, so that we just keep creating them -
CEVALLOS: -- and creating them. But I will say this that Congress should be very cautious when it crafts a law because the entire problem
with this particular law was the lack of clarity. There were other sections within that same law that had intent requirements, this one simply
And you can see how Congress' minor omission of just a word like intent can create a lot of complexity when it comes to enforcing those
LAKE: And when we're dealing with social media, this is so new. We're really trying to sort of pave the way - the way forward.
Another important ruling I want you to touch on very quickly and that was dealing with religious freedom in the workplace.
CEVALLOS: Yes, yes. So the Supreme Court in this case addressed whether or not an employer discriminated against a female applicant who
claimed that she had a need - an accommodation - based on her desire to wear a headdress, a Muslim headdress.
And the important thing for people to understand about discrimination cases in the United States, I can't tell you how often people come to
lawyers and they say, `I've been discriminated against at work.'
And there's legal discrimination and then there's the kind of discrimination where if we walk down the street and we see a grizzly bear,
well, we all discriminate against grizzly bears because they're dangerous. And that's just an example - we discriminate in every walk of life.
Legal discrimination is an entirely different concept. And you can discriminate against and fail to hire -- or refuse to hire - people for
many, many, many reasons unless it's one of these narrow areas and one of those is based on their religion, based on gender, based on any of these
CEVALLOS: And that's what the law of discrimination is about - that's what this case addresses.
LAKE: And it seems like it's a covering (ph) and so any question about attire related to religious beliefs looks like lawyers are now going
to have now take this into consideration when they go back to their rules for employees.
So it's going be an important one for them as well.
CEVALLOS: Yes, yes, yes. Employers should be cautious about what their motive is, and that's the key to this opinion - what is their motive?
LAKE: All right, big changes today. Again, thank you so much for coming in for us.
CEVALLOS: Thank you.
LAKE: Well, the advert tens of thousands pushed to ban in London has arrived in New York. We'll hear from the man behind it and get the
reaction from some New Yorkers.
[16:50:58] LAKE: A controversial ad campaign that was slammed in Britain is being rolled out across New York City. It's for a weight loss
supplement and asks the question, "Are you beach body ready?" Claire Sebastian looks at why it's controversial and gets a reaction from New
CLAIRE SEBASTIAN, CNN PRODUCER: It's not just back, it's bigger than ever. This is the very ad by fitness nutrition company Protein World that
sparked outrage in London, now occupying a giant space just off New York's Times Square.
The star of the ad is model Renee Summerfield celebrated its arrival in New York over the weekend with this tweet captioned, "What's up, Times
New Yorkers seeing the ad for the first time had mixed reactions.
Female: I think it's sad that there's this idea that women should look a certain way in order to feel good about themselves at the beach or
Male: It's saying, `Oh, look like this - this is what the world wants you to look like.' But just - you do you. Make yourself happy.
Female: You don't have to take it. They're not telling you take this or else.
SEBASTIAN: "Are you beach body ready?" the tagline designed to sell a diet supplement had Britain up in arms. More than 70,000 people signed an
online petition to remove the ad and Britain's Advertising Standards Authority eventually did ban them in their current form at the end of April
due to quote, "concerns about a range of health and weight loss claims."
It is still investigating whether they are socially irresponsible. The company itself remains defiant throughout on Twitter, telling one
critic to stop #fit shaming and another to quote, "grow up."
Here in New York Times Square is just the beginning. The company is set to launch a major campaign on New York's subway network later this
month. For them the controversy is all just good exposure. Claire Sebastian, CNN New York.
LAKE: Richard Staveley is the head of marketing at Protein World. He joins me now from London. Richard, this is costly real estate. Are you
concerned that some of the backlash that you experienced in Britain is going to follow you here stateside?
RICHARD STAVELEY, HEAD OF GLOBAL MARKETING, PROTEIN WORLD: The backlash that occurred in the U.K. was really not a concern when planning
this New York campaign. It was a fantastically successful campaign for us in London, and we can only hope that we achieve anywhere near the same
LAKE: Why do you say it was fantastically successful? I mean, people were defacing your billboards.
STAVELEY: We face a global obesity epidemic. I mean, I think the figures are 35 percent of Americans are classified as obese and 20 percent
in the U.K. We're providing a healthy solution to this problem.
And of course it's a great story when there's the outcry, but what obviously doesn't get reported quite so much is how many people we're
helping on a day-to-day basis.
LAKE: I think that -
STAVELEY: Our adverts are also extremely well received.
LAKE: I think some people when they see this are proponents of fitness and health but this strikes them - the particular not only images
but also some of the, you know, some of the text that go with it and some of the catch phrases as not about fitness but sexist and they think it's
body shaming. Do you -- do you not see it that way?
STAVELEY: No, not at all. I mean, just to touch on the sexist issue, our customer base is 84 percent female. It simply wouldn't have made sense
to have had a male model advertising this particular range of supplements. Renee is an ambassador for the brand who's worked with us for many months
now, and we did meticulous levels of research into what our customer base wanted to see.
And Renee was the figure that they found to be most aspirational at this particular time of year when millions of people around the world start
thinking about their summer holidays and what makes them happy and ultimately confident when they hit the beach in July or whenever their
summer holiday is.
[16:55:00] LAKE: You know, you - even if you weren't expecting it, you did get the backlash. There were people who had issues with it and you
heard it just from one of the girls in the piece there who just saw it for the first time. You ran the same ad again in New York. You could have
chosen to take that real estate and sort of address some of those concerns in a constructive way. Instead, you've sort of publicly said thanks for -
and this is, you know, a middle finger to all of you who objected and thanks for paying for our last ad.
You think you're addressing the issues in the most constructive way that you can. Women have enormous purchasing power.
STAVELEY: I think just to reiterate, we consider our U.K. campaign to be an enormous success. Our sales reached an all-time high, our besting-
selling slender blend was one of the most talked about nutritional products or has been the most talked about nutritional product in the U.K. this year
It was also extremely well received. Our sales really did go through the roof, and it's like I say, the offense that we caused to a minority
pales in significance to the amount of happiness we're bringing to people every single day with our range of products.
LAKE: Well we'll see if that is the feeling once the campaign's fully underway here in New York and stateside. Richard, thank you for joining us
Well 35 years ago today, CNN broadcast its first program. We'll show you how the network's first business story is still very much with us
LAKE: On June 1, 1980, the world's first 24-hour cable news network came to life. Over the last 35 years, CNN has brought you the biggest
stories on politics, war and of course economics. CNN's first business story in the network's first hour is one that business programs are still
leading with today. Here's Don Miller.
DON MILLER, FORMER CNN BROADCASTER: An Arab economist says Saudi Arabia plans to hike oil prices and cut back production to stabilize OPEC
prices. After that, Saudi Arabia will try to get OPEC to try to freeze oil prices for the rest of the year.
(END VIDEO CLIP)
LAKE: And that's QUEST MEANS BUSINESS. I'm Maggie Lake.