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QUEST MEANS BUSINESS
Dow Closes at New Record; Gray out of Running for Treasury Secretary; Russia Says Relations with U.S. at Rock Bottom; U.K. Economy to See Slower Growth, .U. Confronts Brexit, Trump Presidency; Prosecutors Raid Samsung Offices; Security at Mar-a-lago; Trump Sidesteps Conflict of Interest Questions
Aired November 23, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN HOST: The Dow Jones is at another record as indeed is the S&P 500. Over 19,000 for the Dow. No record for the Nasdaq. And a
good strong gavel to bring trading on Wall Street to a close. It is Wednesday, it's November the 23rd.
QUEST (voice-over): Tonight, a billionaire's row on Pennsylvania Avenue. Donald Trump adds a mega donor to his cabinet.
The leaves are changing color and so are Britain's growth forecasts. The chancellor's autumn statement in the red.
And police raid Samsung headquarters as a corruption scandal spirals ever deeper.
I'm Richard Quest, live in the world's financial capital, New York City. And I mean business.
QUEST: Good evening.
Before we get to Donald Trump and his transition and the latest movements, I do need to update you on the markets. As I said at the beginning, there
are records in some, not so in others. But it was still a bullish day as you will see if you will join me at the big board over here.
The markets started the day down and it tootles through the morning. Not quite sure why it remains low in those early hours but then it picks up
steam in the afternoon. And we get the Fed minutes and those minutes show that interest rates are going up but the market takes it in its stride.
The Dow was up some 58 points at 19,082. Only question whether 91 is on the horizon. The S&P is also at a record. That eked out just barely a
small record for the broader market. But the Nasdaq slipped back just a tad.
And I think what you're looking at here is just a certain profit-taking and a bit of book balancing with the Nasdaq.
Now as I mentioned about the Fed minutes, from the last Fed meeting, most committee members now think that rates could rise relatively soon. That is
the word that the chair of the Fed, Janet Yellen, said.
And if you look at what the Fed minutes say, that is borne out by most voting members, which seems to be, of course, suggesting that a rate rise
in December. I think it's something like 80 percent of Fed economists or those economists who follow the Fed now believe that rates will go up a
quarter of a point at the December Fed meeting.
Not a done deal but certainly as you heard from Stan Fischer on this program earlier in the week, the numbers certainly make it justifiable.
The other news we're following tonight, as Donald Trump begins his Thanksgiving holiday, his administration is taking shape. The transition
team has confirmed two new additions to the Trump cabinetry. We already know Reince Priebus is the chief of staff, Steve Bannon is the chief
strategist. Neither of those need to be confirmed by the Senate. They are in the gift of Donald Trump himself.
However, he did announce Governor Nikki Haley of South Carolina for the ambassador of the United Nations, the first woman to join the cabinet and
the first member of a minority. She's Indian by descent, has joined.
Interestingly the appointment of Nikki Haley, she has no foreign policy background really to speak of and she traded insults with Donald Trump in
the past. And she didn't support him in the nomination process.
But she did get the -- she will be before the Senate to be ambassador to the United Nations.
A few hours later, Betsy DeVos has been announced, she's a billionaire and a school choice activist. She has accepted the post of Education Secretary
and that has been somewhat controversial because she is a large donor to the Trump campaign.
She is a billionaire in her own right and the question becomes whether or not this is truly revolutionary change and draining the swamp, if you
appoint large donors.
Other announcements expected: an announcement is supposed to be forthcoming that Ben Carson, who was a strong contender during the primary
process, is to be announced as the housing secretary. He wrote that he can contribute to making inner cities great for everyone.
And as for the U.S. Treasury Secretary, that's one of the big five, there it is likely to be Steve Mnuchin is the Treasury Secretary. Apparently
he's the only person that's on the short list after Jonathan Gray of Blackstone ruled himself out and served --
QUEST: -- but Steve Mnuchin served as the Treasury -- served as the campaign finance chairman and therefore is in pole position.
CNN's Jim Acosta is at the White House, our senior -- beg your pardon, Jim, you're with me here in New York.
JIM ACOSTA, CNN SR. WHITE HOUSE CORRESPONDENT: Yes, sir.
QUEST: But you are still the White House correspondent but you are in New York -- you should be in Florida. You missed the ticket.
ACOSTA: I tell you.
Well, you know, this was one flight I did not want to catch. I'm trying to get home for Thanksgiving for at least one day off.
QUEST: Right and well deserved, if I may say. All right. So we have got these two. Nikki Haley, no experience of foreign policy. Betsy DeVos, a
billionaire, a major contributor to Donald Trump.
What will political Washington make of those appointments?
ACOSTA: Keep in mind, Richard, Republicans will say Bill Clinton was the governor of Arkansas, he didn't have a wealth of foreign policy experience,
he was elected president. George W. Bush was governor of Texas, did not have a wealth of foreign policy experience, was elected President of the
So sending Nikki Haley to the U.N. is obviously less than being President of the United States and keep in mind the Trump transition team was looking
for somebody who could send a message, not only to the United States but the rest of the world that Donald Trump can get outside of his comfort zone
and even bring into his inner circle somebody who is a harsh critic.
And Nikki Haley, as you said, she's the daughter of Indian immigrants, also sends some diversity not only into this cabinet level position but to
represent the United States around the world.
And so they're very excited inside the Trump transition team about this pick; they say that's sort of a pressure reliever for a lot of Americans,
who were very concerned about Donald Trump being president.
QUEST: Now as for Betsy DeVos, the Education Secretary, the criticism I've seen today -- it was quite quick out of the gate, he's appointed a major
ACOSTA: That's right. There is that. And so whatever happened to drain the swamp, as Donald Trump and his crowds like to say over and over again.
And also keep in mind -- and this gets a bit wonky -- Betsy DeVos used to be linked to Jeb Bush.
Jeb Bush was a champion of what they call Common Core standardized testing here in the United States. If you have children in public schools in the
United States, this is something that makes you want to pull your hair out. They do so much standardized testing in the public schools now, that is
linked to this Common Core push.
Betsy DeVos had to put out a tweet today, Richard, saying that she is not in favor of Common Core testing. That is going to be a relief to people
inside the Trump transition because Donald Trump, time and again out on the campaign trail, railed against Common Core, saying that he was going to get
rid of it.
And so she presents a couple of different complications for Donald Trump. But those complications are not expected to get in the way of her
QUEST: So both of them likely to be confirmed?
ACOSTA: Absolutely, yes. And I think this also sets the stage for a potential Mitt Romney selection as secretary of state. If Donald Trump is
willing to go to a harsh critic for his U.N. ambassador and bring somebody to the Education Department who may not line up with him on all of his
views, that might portend something coming with Mitt Romney.
QUEST: Jim Acosta, Jim, have a lovely Thanksgiving and allow me to take -- thank you, sir, on this Thanksgiving, for all the hard work you do here on
QUEST MEANS BUSINESS for us. We appreciate it.
ACOSTA: Thank you.
QUEST: Thank you, Jim Acosta.
Now, CNN's learned that the short list for Treasury Secretary, the name is down to one. As I showed you, Steve Mnuchin is believed to be the only
remaining candidate for America's top economic post.
He worked for Goldman Sachs for 17 years, he became a film producer. The only name on the list was Jonathan Gray, the head of global real estate at
the private equity firm, Blackstone. He said it was an honor to be considered but he still has much work to do at Blackstone.
CNN's Joe Johns is in Washington.
Joe, as much as these things ever are, where we're reading tea leaves, is it Mnuchin?
JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Yes, I got to tell you, that name is a difficult one to pronounce. And the way I've gotten it is
QUEST: As in minutia.
JOHNS: Right. OK. So a lot of people have had problems with that. But he starts to sound like the last man standing in the competition though we
don't have anything official. Treasury Secretary, big job, as you said, one of the top four, top five.
He's a colorful character as well, the principal investor in One West Bank, which was formed after he purchased the failed subprime lender, IndyMac,
back in 2009. He's since sold that bank.
And Mnuchin most importantly, I think you already mentioned, was Trump's national finance chairman during the campaign. But importantly before
that, he spent 17 years at Goldman Sachs, then started his own --
JOHNS: -- hedge fund. And most interestingly, I think, he's a real player in Hollywood, bankrolled movies including "American Sniper," "Suicide
Squad," "The Lego Movie" and as you said, the reason why we have him prominently mentioned is because other top candidates, like Jonathan Gray,
the head of real estate for Blackstone, has said they're not leaving their jobs.
QUEST: But if Mnuchin gets the nod and gets the job, is Trump going to be accused, well, here is another insider, here's another one; even worse, he
comes from the evil squid, he comes from Goldman Sachs?
But, Joe, you've got to balance experience and knowing your way around and there are only so many people who can do these jobs.
JOHNS: That's absolutely right. And if some of the people on the very top of your top list don't want to do it, then you have got a real problem.
The name Jamie Dimon was kicked around for a while and, like Gray, both apparently big Hillary Clinton fans nonetheless, Gray, it sounded like,
gave it some serious consideration before he decided he was going to stick around at Blackstone.
But right, there are only so many people who have managed billions and billions of dollars and have a general idea of who the inside players are
and how it all works. So Donald Trump has a limited list of people to choose from.
QUEST: Joe Johns, we wish and you happy Thanksgiving with your family, if you're lucky enough to be able to spend time with them in this transition
JOHNS: Thank you.
QUEST: Thank you.
JOHNS: Thank you, Richard.
QUEST: Now as we continue, Russia says it's hoping to put relations with the U.S. on a constructive course. A Kremlin spokesman says relations are
at the bottom, so it's hard to make them worse.
Andrey Kostin is the chairman of VTB, Russia's second largest bank at the APEC summit in Peru. He tells CNN's Shasta Darlington that Russia and the
U.S. can reset their relationship.
ANDREY KOSTIN, CHAIRMAN, VTB: Well, Mr. Putin I think always stated that that's up to the American people whom they would elect. And like Mr.
Putin, Mr. Trump was very reserved in his statement. I think he was very pragmatic. He was saying as we believe in Russia that restore relationship
between Russia and the United States would benefit the whole world, the people of the whole world and people with Russia and America and that he
thought that he could do business with Putin on a different very important issues like Syria and Ukraine and others.
And I think that it's very much in line with Russia literature (ph) Mr. Putin thinks. But whether -- we think that we have a chance that our
countries can really reset our relationship. But whether this chance will be used or not, that's a completely different question.
SHASTA DARLINGTON, CNN INTERNATIONAL CORRESPONDENT: But there is also a hope that it could be an end of U.S. sanctions and broader sanctions on
KOSTIN: Well, sanctions, of course, are important but they are not (INAUDIBLE) think the core things. As in the core thing is that our
relationship really became very bad.
I personally think that it's a Cold War and I think it's much more dangerous than even economic sanctions. There is a political and military
conflict possible conflicts maybe that we start to talk about disarmament, that we start preparation many securities issues and we don't cooperate
even very much on anti-terrorists for example (INAUDIBLE).
So I think that that is very, very important. The world might be and became less dangerous place to live when Russia and America are on bad
DARLINGTON: But on economic terms, there is the issue of sanctions. But there is also the issue of isolationism, protectionism, expectations that
the United States will be more protectionist and even expand oil and gas production under President Donald Trump. Analysts say that that is a
negative for Russia.
KOSTIN: The repercussions, the of oil price is still very difficult to assess from now. We don't understand whether necessarily the -- there's a
Trump policy will lead to a cheap oil price. At the moment, we come from the original forecast of the World Bank, for example.
The price will be around, let's say, $52 per barrel next year or something like this.
DARLINGTON: We are here at the APEC summit and there seems to be a lot of talk about China trying to position itself to fill a void that might be
left by a more protectionist, isolationist United States.
What are your feelings on that?
KOSTIN: Well, there is definitely competition in the APEC region between China and the United States. And the transpacific agreement for example is
one example when the agreement was signed without China or Russia actually. So we see during the last decade a substantial growth -- even less
(INAUDIBLE) of influence of Chinese --
KOSTIN: -- in the region, though America is still probably very strong here. So we expect that it will continue to be competition between these
two leading economic powers and so that is why I think the American side would be very cautious and very wise in dealing with this issue not to give
advantage to the Chinese in this competition.
QUEST: Andrey Kostin talking there.
The U.K. Chancellor of the Exchequer submitted his first autumn statement today.
QUEST: And the first comprehensive report on Britain's economy since the vote to leave the European Union. You'll hear the chief secretary -- the
economic secretary to the Treasury after the break. QUEST MEANS BUSINESS. Good evening to you.
QUEST: British Chancellor of the Exchequer says the economy is, in his words, "confounding expectations." The first official estimate of what is
happening in Britain since the Brexit vote which took place just five months ago today.
The growth forecasts were cut for this year and quite sharply cut for next year. The government borrowing will be higher than previously forecast,
quite considerably so.
Nina dos Santos was watching the events at Westminster.
NINA DOS SANTOS, CNNMONEY EUROPE EDITOR (voice-over): The autumn leaves may be falling in Westminster but inside the houses of Parliament, the
government was keen to talk up the prospects for Britain.
UNIDENTIFIED MALE: Chancellor Philip Hammond.
DOS SANTOS (voice-over): Delivering his first economic report since June's Brexit vote, Chancellor Philip Hammond had a clear message.
PHILIP HAMMOND, CHANCELLOR OF THE EXCHEQUER: The OBR report today confirms the underlying strength and resilience of the British economy. This autumn
statement responds to the challenge of building on that strength while also heeding the warnings in the OBR's figures as we begin writing this new
chapter in our country's history.
It restates our commitment to living within our means and it sets out our first choice to invest in our future. It sends a clear message to the
world that Britain is open for business.
DOS SANTOS (voice-over): But when it came to the details of how Brexit might work, it seems the protesters outside were more vocal in their
opinions than the chancellor.
The government has been clear that it won't reveal too much until Brexit negotiations start in earnest. And Mr. Hammond stuck to the script.
The dire predictions of recession and an economic collapse after the Brexit vote may not have happened but that doesn't mean that the chancellor has an
easy job. The U.K. economy is shrinking. Growth forecasts were slashed by a third to 1.4 percent and the government will have to borrow more money to
make up the shortfall.
All that means that, in this budget, there was little room for giveaways.
The chancellor did manage some headline-grabbing initiatives.
DOS SANTOS (voice-over): More than $28 billion on infrastructure and a new fund for research and development. More money was allocated to build
affordable new homes. And extra help was granted for the so-called JAMS, the Just About Managing families, in the form of tax changes and a boost to
the national wage.
HAMMOND: Mr. Speaker, the announcements I have made today, lower taxes on working people, boost wages, bank savers and bear down on bills.
DOS SANTOS: So in his first autumn statement, Philip Hammond struck a reassuring tone on the state of the U.K. economy and offered help for those
on low incomes. But with uncertain times ahead and a lack of clarity on how exactly Brexit will pan out, he knows that he's probably got plenty
more work do -- Nina dos Santos, CNNMoney, London.
QUEST: So the U.K. government has to defend its economic position whilst at the same time recognizing that the storm winds of Brexit will increase
in the weeks and months and years ahead, especially once the negotiations get underway.
I spoke to the Economic Secretary to the Treasury and I put it to him that the government necessarily hasn't given up all hope of remaining part of
the single market.
SIMON KIRBY, BRITISH ECONOMIC SECRETARY TO THE TREASURY: Well, Brexit presents risks but also opportunities. And here in the U.K., we've always
been an outward facing, globally minded, open-for-business country and none of that changes.
I'm confident that we still remain a very good place to invest. We are a global financial center. That won't change. And I think there are
opportunities not only with our negotiations with Europe but also with the rest of the world. So I'm confident about the future.
QUEST: Right. But all that confidence and all those opportunities are at least two years away because, obviously, you can put pieces of the jigsaw
in place but you can't start making the jigsaw until the negotiations are over.
So the opportunities may be there but what we're seeing today in these numbers and in this statement are the risks, aren't we?
KIRBY: Yes, that's true. But it's also true that the U.K. has in the G7 this year the strongest economy in the world. We're looking next year at
reduced growth, 1.4 percent. But that growth is still in excess of Germany or France, for instance, and other countries around the world.
So actually the U.K. is in a strong position; the chancellor set out some very sensible fiscal decisions. We've extended the fiscal roles to take
into account the new situation and I think he has got the balance right between providing investment in infrastructure, in housing, in R&D, in
communications technologies, 23 billion pounds extra, 170 billion pounds in total over the period of this Parliament.
So there is a lot of investment in productivity, investment in jobs, investment to share the economy with everyone, all businesses. And I think
we remain in the U.K. in a very strong position.
QUEST: If hard Brexit is the way and passporting for the city does not happen -- and there are some very anti-passporting noises being made by
your European counterparts -- then, frankly, none of these figures will make any sense.
KIRBY: Yes, I think it's worth saying that financial services in the U.K. employs over 1 million people; two-thirds of those are outside of London.
There is some 67 billion pounds of tax raised through financial services. And the government is very much aware of the need of the city to retain its
access to Europe.
But it's one of the many factors. I don't think it's appropriate -- we haven't even got started the negotiations -- for me to provide a running
commentary but we're very much aware of the importance. And as I say, I'm confident that it's in everyone's interests for London to continue to be
the great place to live and work, the great place to invest that it is and has always been.
QUEST: And that is the Economic Secretary to the U.K. Treasury.
Adam Marshall joining me now, the director general of British Chamber of Commerce. He's in Washington.
Director General, the minister says the U.K. is in a strong position. But the deficit is going to be $155 billion more over the next five years.
QUEST: Growth is virtually halved for next year. And the idea of reducing government borrowing is now put off for the foreseeable future. That
doesn't sound very strong to me.
ADAM MARSHALL, DIRECTOR GENERAL, BRITISH CHAMBER OF COMMERCE: Well, undoubtedly there are some challenges ahead for the U.K. economy in a
period of uncertainty and indeed in a period of major change following the Brexit referendum. I think businesses across the country however will have
been reassured that the government is trying to get the fundamentals right at home to give them a bit of space, a bit of headroom to grow and to allow
them to take some risks and invest.
But what of the policies that the chancellor announced today gives them that headroom?
I mean he's trying to avoid the Brexit cliff that the prime minister spoke about earlier in the week. And there is a raft of benefits policies and
raising of the minimum wage.
But why should business be encouraged by what any heard today?
MARSHALL: Well, businesses have to trade through periods of transition and adversity regardless of the politics around them. But when someone is
coming to you and saying we're going to put more money into improving broadband, improving the roads and the railways and to give you a bit more
confidence, that is an important shot in the arm.
Animal spirits in U.K. business are very important right now. I speak to a lot of companies on a regular basis that say they're optimistic about their
immediate term prospects but pessimistic about the prospects for the U.K. economy as a whole.
And what you have to do is allow them to be optimistic about their prospects and act on them, as well.
QUEST: Right. So what they're talking about is the fundamental contradiction that now exists in the U.K. economy between the short-termism
of exporters' benefits because of a lower pound and the long-term worry over Brexit and single market access.
MARSHALL: Well, there is long-term worry over what will be the U.K.'s future relationship with the European Union. That is undeniable and
businesses talk about that ad nauseam in every part of the United Kingdom.
But in the short term, it's not the lower pound being the stimulus for export alone that they're talking about. They're also talking about
getting the fundamentals right. And if Chancellor Philip Hammond can come out and put 23 billion pounds more into those fundamentals, that is a
positive step amidst the uncertainty.
QUEST: Director General, you're in Washington. And, let's face it, the change there dwarfs Brexit in some sense on a global scale.
But are you encouraged or do you believe from your talks in Washington that there will be the potential for a free trade agreement with the United
States for the U.K. under a Trump administration?
MARSHALL: Well, that will be a question for the president-elect's team as he takes office. Obviously he has strong affinity with the United Kingdom;
indeed, family relationships and, of course, investment interests in the United Kingdom as well. We want to see the best possible terms of trade
between the U.K. and the United States.
Bear in mind that the U.S. is the U.K.'s single biggest trading partner if you don't take the European Union as a whole. Businesses have traded
without a free trade agreement for many, many years and done so successfully. We'd like to see that enhanced by the politicians.
QUEST: Yes. Good point. I think we often forget -- we all talk about a free trade agreement, none exists so far and as you point out, of course,
none exists so far with the European Union.
Good to see you, Adam. Thank you for joining us. Thank you.
MARSHALL: Thank you.
QUEST: Now wherever we look in the economic business political world, confronting a new reality is the new norm. The European parliament Brexit
negotiator tells me people are angry with the European Union, not Europe. (INAUDIBLE) is after the break and the headlines.
RICHARD QUEST, CNN HOST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. The European Parliament's top Brexit
negotiator tells me Europe will never compromise with the U.K. over the free movement of labor.
And Ivanka Trump promises she won't mix business with politics.
And before all of that, this is CNN. And on this network, the news will always come first.
QUEST: European Parliament's chief Brexit negotiators told me while a deal is possible with the U.K., they will not compromise on the four freedoms,
the freedoms of movement, goods, services, capital and labor. Inside the European Parliament, Guy Verhofstadt (ph) said Europe is under threat from
what he calls a ring of autocrats, including cronies of the Russian and Turkish presidents and Donald Trump.
(BEGIN VIDEO CLIP)
GUY VERHOFSTADT, EUROPEAN PARLIAMENT CHIEF BREXIT NEGOTIATOR: What I see is that instead of the ring of friends around Europe, I see more and more a
ring of people around Europe who are not only like each other but who have a common point of view; that is that they want to bash and to maybe even
destroy our way of thinking, our values and the European Union representing these values.
(END VIDEO CLIP)
QUEST: The European Union faces a stark new reality in the wake of Brexit and the election of Donald Trump.
I asked Guy Verhofstadt if Brussels was fully aware from where this anger is coming.
(BEGIN VIDEO CLIP)
VERHOFSTADT: The lesson to take from the election of Trump and from the Brexit is not to have soft reforms now in union. Now we have to do the
opposite. We have to put our house in order. We have to develop a vision on the future of the European Union and make Europe --
VERHOFSTADT: -- stronger because it's clear I think that Mr. Trump stands for more protectionism; he stands also for lower involvement on defense
matters, helping the Europeans.
So it's necessary that the European Union takes its responsibility now, become stronger, more effective and takes also a certain number of
initiatives on issues like, for example, the defense area.
QUEST: Except you are and have been (INAUDIBLE) you talk about (INAUDIBLE), the growth of the European center, which you see as being
preferable as a more federal area for Europe.
But the election of Donald Trump and the Brexit result, they go exactly against what you are saying. Those results are more about devolving of
power back to the lowest level of the nation state.
VERHOFSTADT: I don't think that you can say that the election of Trump has something to do with Europe. Brexit is a different story.
QUEST: Well, I don't agree. I'm going to interrupt. I don't agree with you, Guy, because, if you remember, his campaign was putting America first.
Even in his speech, his video released this week, he said putting America first. This is about American jobs, American production, the American
Now that rang true with American voters. Saying Europe first does not ring true to Europe voters.
VERHOFSTADT: Well, the country is through. When you look to the opinion polls, you see very clearly that peoples are in anger not with Europe, they
are in anger with the European Union as it works today.
What they want is, for example, more Europe on issues as migration, more European action on issues as defense, more European action on issues as
external security. That is what people want.
So people are not in anger with Europe, they are in anger with the way the European Union is conducted today. This loose confederation, in fact, of
nation states, based on the unanimity rule, always acting too little and too late, that is the anger of the European citizens.
QUEST: Now you met the Brexit minister, David Davis, you were in the unusual position that everybody is. You had a meeting that wasn't a
meeting of negotiation. I'm sure that was an interesting concept. Let's have a chat about what we're going to have a chat about when we finally
have a chat about it.
But the reality is, you were clear this week: there can be no messing around with the four pillars of the union. But the U.K. still says it's
going to want a U.K. solution, not a Norway or a Switzerland.
Can you do a deal?
VERHOFSTADT: I think it's possible to make a partnership, a new partnership, with United Kingdom. But we will never do it by giving up the
four freedoms of the European Union, the freedom of mobility, of goods and of services, of capitals and of people.
It's impossible to make a distinction between the freedom for goods and services on the one hand and then it's impossible for the people to move
freely inside the European Union.
So we will not give up these four freedoms. So if they want to come in the single market, the United Kingdom, stay in the single market, or in a
customs union, it will be necessary that they accept also this freedom of movement of people and union.
Guy Verhofstadt from the European Parliament.
Ivanka Trump was at her father's side throughout the presidential campaign. Now she's promising to keep her distance as a business woman.
QUEST: Prosecutors are ramping up their investigation into a scandal involving the South Korean president. Officials have carried out at least
two raids as they look into allegations of possible corruption. One is at the offices of the massive Samsung Group. The last thing Samsung needs is
another scandal on its doorstep.
Another is at South Korea's biggest pension fund, the NPS, which is a big shareholder in Samsung.
Starting to smell a bit fishy, like fish that's been around for a week or two.
Pressure is building on President Park to resign. She is suspected of colluding with an adviser, Choi Soon-sil, who is accused of large scale
extortion. Choi's relationship with (INAUDIBLE) Samsung is also under scrutiny. Much more going on.
Jamie Metzl's with me, senior fellow at The Atlantic Council and author of a new book, "Eternal Sonata."
Good to see you, sir.
JAMIE METZL, AUTHOR: Nice to see you.
QUEST: Look, am I right?
This smells to high heaven.
METZL: It is an unbelievable, crazy story but it's really serious and getting more serious by the day.
QUEST: What is it that the president is alleged to have done?
METZL: The president is alleged to have -- her advisers worked with this woman, Choi Soon-sil, who is a childhood friend, and there's a whole other
very complicated story, of President Park to essentially extort Korean megacorporations and cables to give money to a private foundation that was
controlled by Ms. Choi.
So that's the thing. And so it's, in a way, getting influence so they, the corporations were pressured to give money and that's what these raids are
Did they get influence in exchange?
QUEST: Right, but is there any evidence so far, other than allegation and rumor that this happened?
METZL: Oh, absolutely. So there is a criminal investigation that is underway. There are members of the Blue House staff, who have already
essentially admitted that this was the case. And President Park is now officially a suspect in the case. So it's much more than rumor. It's
actually quite serious.
QUEST: And the Choi woman's father was a guru to the current President Park's father.
METZL: That's exactly right. In 1974, President Park's father, also President Park, General Park, was assassinated and, after that time, Madame
Choi's father -- Choi came in, contacted her father and her, and said, your mother, your departed mother, has communicated with me and she wants me to
deliver a message to you. And that began this very long relationship.
QUEST: And has there been any allegations besides the corruption and the nastiness that the female president, the current President Park, has had
this relationship with Choi Soon-sil, again, a guru, adviser, a muse relationship?
METZL: Absolutely because it's 100 percent clear that Madame Choi had access to a lot of classified materials; she advised on appointments, on
speeches. So one thing that many people in Korea are concerned about is this level of access when Madame Choi clearance.
QUEST: I guess we can't get into the minutiae and the nitty-gritty of it.
But all that really counts, the core question, will this bring down President Park?
METZL: I don't think it will. I think she has got a little more than a year left in her presidency. There are a lot of reasons why she's going to
want to hold on, one of which is immunity. The opposition doesn't have a clear candidate to replace her. They will need a year.
So I think that it's more likely than not that she will limp forward even if there is some kind of impeachment procedure.
QUEST: Right. But limping forward at a time of greater animosity with North Korea and at a time of a new emboldened President Trump in the White
House, this is a very --
QUEST: -- fertile mixture.
METZL: It's fertile, noxious and extremely dangerous.
QUEST: Dangerous, that was the word I was going for.
METZL: So President-Elect Trump, when he was on his campaign, he basically questioned America's security guarantees to Korea, which has been the
foundation of Korea's security and stability since the end of the Korean War in the 1950s. So that's up in the air.
China is newly emboldened. TPP, the cancellation, essentially, of TPP is putting a lot of things up in the air and you're at a time when Korea needs
strong leadership, it will have for the next year extremely weak leadership.
QUEST: We're glad to see you. sir. Please help us understand this more. Come back with the salacious details.
METZL: I will do it.
QUEST: Thank you very much indeed.
Now we're talking there about President-Elect Trump. He's now in Florida at his Mar-a-lago resort.
QUEST (voice-over): Interestingly, this is a live picture actually of Mar- a-lago where the president-elect currently is. This was once thought of as a possible presidential retreat. The idea didn't catch on until now. And
with the president-elect comes presidential security after a highlight of "Make, Create, Innovate."
QUEST: Like 2.3 million of his fellow Americans, President-Elect Trump has made travel plans for Thanksgiving. The president has decided to abandon
New York. He's traded the freezing weather in the north -- thank you -- for the balmy temperatures of his Mar-a-lago estate.
Now at Mar-a-lago, there is a spa, a beach, a tennis court and, of course, a guard force that is a presidential guard force. Ed Lavandera is there.
ED LAVANDERA, CNN CORRESPONDENT (voice-over): Protecting president-elect Donald Trump is a challenge unlike any other, from Trump Tower in New York
to his private club in Florida.
So we're approaching Mar-a-lago right here.
It's a 20-acre waterfront estate in Palm Beach, secluded from the public but he also shares it with as many as 500 members who are willing to pay
$100,000 to join.
Basically it's a compound. And we have to treat it as such.
Former Secret Service and ATF special agent Rennie Rodriguez (ph) says in many ways, it's ready-made for presidential security.
Behind this natural barrier here -- which I assume there is a fence -- it appears there is a wall back there, a tall wall.
RENNIE RODRIGUEZ (PH), FORMER SECRET SERVICE AGENT: Yes, it's more than 13 feet, I believe, which is great for deterring anyone trying to come on the
LAVANDERA: Behind the wall, Trump keeps a residence that could become the winter White House.
TRUMP: I love Florida. This is my second home.
LAVANDERA: Where presidents spend their vacations is a window --
LAVANDERA: -- into their personalities. George W. Bush liked to spend the hottest month of the year on his ranch in Crawford, Texas.
GEORGE W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: It's a wonderful spot to come up in here and just kind of think about the budget.
LAVANDERA: George Bush Sr. famously enjoyed the peaceful serenity of Kennebunkport, Maine.
Mar-a-lago stretches across an barrier island cut down the middle by a two- lane road, nestled between a stunning stream of multimillion-dollar homes. The best view comes from across the bay.
Rodriguez says Secret Service teams are assessing threats that could come by land, sea and air. And standing outside the club, it doesn't take long
to see the skies above will be a major concern.
That plane is, what, maybe a couple thousand feet over us?
The Palm Beach International Airport is just a few miles west of Mar-a- lago.
RODRIGUEZ: You can see the path for commercial aircraft.
LAVANDERA: For years Trump has waged a legal battle to keep commercial and private planes from flying over this estate. And now that he's president-
elect, he might have just gotten his way. When he's on the property, Rodriguez says, the airspace over Mar-a-lago will be closed.
RODRIGUEZ: This would be a type of aircraft that an individual would use to drive his plane on to the property.
LAVANDERA: And in the waters around Mar-a-lago, the U.S. Coast Guard is already setting up security zones, some parts completely off limits, other
areas that require permission before entering.
Rodriguez says Secret Service agents will also conduct renewed background checks on every club member and inside the club they can also expect to see
new levels of visible and invisible layers of security.
Are they in for a bit of a rude awakening?
RODRIGUEZ: I think it depends. Some of the neighbors may like it. Others may complain because they don't like the intrusion.
LAVANDERA: But life will change around here for the next four years.
RODRIGUEZ: Yes, it will. Most definitely.
QUEST: Ivanka Trump has written an open letter, promising to put distance between her company and her father. The president-elect is coming under
pressure to distance himself from all the 500 or so family businesses, deals and interests.
CNN's legal analyst (INAUDIBLE) is with me now.
I don't think it's possible to put sufficient distance between them. And, indeed, the president-elect sort of recognized that in his "New York Times"
discussions yesterday. He says the president can't have conflict of interest.
DANNY CEVALLOS, CNN LEGAL ANALYST: Fortunately, there is a law that prevents people from the executive branch, officials, from having a
conflict of interest with their duties. But that same law contains two notable exemptions.
One is the president and the other is the vice president. So when he says that he thinks he can conduct his business and be president, he may be
right, at least as to that criminal law.
QUEST: Right. But he went on and he specifically said, look, I could run the country and I could run my businesses. But I'd like to put in place
some sort of a way to avoid doing that. He doesn't seem to have thought this through.
CEVALLOS: Maybe not but he may be technically right, although he's saying it in a Trumperific way, which is that he may have been aware that he has
exemptions that allow him theoretically to run a business and be president. But at least he's recognizing that that would not be a realistic plan.
QUEST: But what I'm trying to get to is, whatever he does, that conflict is going to remain. Short of selling the business, if he gives it to the
kids, he knows what is in it. If he puts it in a blind trust, it's not really blind, because the children are running it. There is no way that
the perception of a conflict can be removed.
CEVALLOS: Absolutely. And I would say that the legislature that enacted this law put that in for the exact same reason that you're talking about,
which is there will always be a conflict.
Sometimes with a businessman like Trump or Rockefeller, several, several years ago, the conflict is financial or business related. Sometimes it's
something else. But the idea of the legislation had was that these kinds of decisions presidents make every day will necessarily create a conflict
on some level every time.
QUEST: So the worrying part here, if you're right and I think you are, but if you're right, the worrying part here is that even in two weeks of
transition, we've seen two or three examples. Nigel Farage with windmill farms in Scotland, Indian businessmen, Ivanka Trump sitting in with Shinzo
Abe of Japan.
How many more can the system withstand?
CEVALLOS: Well, the real question is how many more of these before someone at least tries to impeach the president or they try to get him under other
law. You know, there are other laws that prevent presidents from --
CEVALLOS: -- taking gifts from foreign leaders. And then of course, if any of these constitute rise to the standard of impeachment level offenses,
then you might see something like that.
But strictly in terms of the existence, as I think the great Richard Quest would say, not just actual impropriety but the appearance of impropriety,
not only does the statute appear to anticipate that, it accepts it.
QUEST: I'm not even going to attempt to say the appearance of impropriety.
CEVALLOS: I failed, frankly.
QUEST: Never, never, sir.
We'll have a "Profitable Moment" after the break.
QUEST: Tonight's "Profitable Moment:" So the U.K. government gave its autumn statement, which showed lower economic growth next year and
considerably higher government borrowings. And the debt-to-GDP ratio going back up again from 84 percent to 90 percent over the next few years.
And much of the blame for all of this can be laid at the door of Brexit. These are extremely dangerous times for the U.K. On the one hand, it's
Brexit on one side of the English Channel, on the other side, there is Donald Trump in the White House. To some extent, the U.K. is in an
It has to negotiate its future economic relationship with both sides pretty much at the same time, all the while the economy is teetering on the edge
of the cliff. Not an easy position to be in.
And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, if you're American, happy
Thanksgiving. I do hope it's profitable. I'm off for the next week.