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QUEST MEANS BUSINESS
Officials: Israeli Intel Given to Russia By Trump; U.S. Ponders Next Move for Laptop Airline Threat; Ford to Cut 10 Percent of Global Staff; Hackers Hold Disney Blockbuster Hostage; Russia: Intel Story is "Nonsense". Aired 4-5p ET
Aired May 16, 2017 - 16:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] RICHARD QUEST, CNN ANCHOR: The market is trying to eke out a small day on the Dow Jones. The reality is it can't do it or doesn't look
like it. It will be a small lot. The bell rings and the man hits the gavel. Come along, hit the gavel. Oh, dear. That was a very wimpy gavel
for a company like ADM. But it did bring trading to an end. It is Tuesday, the 16th of May.
Tonight, disclosures, denials, and damaged limitations. The White House is defending giving Israeli intelligence to Russia. U.S. authorities say this
won't change their timeline for tackling threats to airliners. But what is that threat and when will changes be made? And Ford gears up to cut tens
of thousands of jobs worldwide.
I'm Richard Quest at the world's financial capital in New York. I mean business.
Good evening. The White House continues under siege, defending the president's handling, this time of classified information, as Washington
insiders begin to openly question whether Mr. Trump is up to the job. The latest crisis has ramifications for the presidency, the intelligence
communities and America's allies.
The White House continues to insist the president was acting within his rights when he reportedly shared classified information with Russian
officials during an oval office meeting. The first few moments, we've learned some of that that intelligence apparently came from Israel. A
short time ago, the president would only say he had a very successful meeting with the Russians. Meanwhile, the president's national security
adviser insisted the interaction that took place and the information that was handed over was wholly appropriate.
(BEGIN VIDEO CLIP)
H.R. MCMASTER, U.S. NATIONAL SECURITY ADVISOR: It is wholly appropriate for the president to share whatever information he thinks is necessary to
advance the security of the American people. That's what he did. As to your question on had that information been shared previously, I'm not sure
UNIDENTIFIED REPORTER: When did he make the decision to share the information?
MCMASTER: When did he make the decision?
UNIDENTIFIED REPORTER: When did he make the decision to share the information?
MCMASTER: He made the decision in the context of the conversation.
(END VIDEO CLIP)
QUEST: The White House has refused to confirm that Israel was the source of the intelligence. The National Security Adviser said the president
didn't know the source when he shared it.
(BEGIN VIDEO CLIP)
MCMASTER: And I should make maybe the statement here that the president wasn't even aware, you know, of where this information came from. He
wasn't briefed on the source or method of the information either. So, I'm sorry, this is going to have to be the last question because we do have the
president of Turkey coming.
(END VIDEO CLIP)
QUEST: The White House is struggling to contain the damage. CNN's Michelle Kosinski is in Washington at the State Department. I want to
focus with you, Michelle, if I may, on this relationship with the allies, the so-called -- that McMaster was talking about, that I heard Nancy Pelosi
talking about last night in the town hall. What are you hearing from allies about their concern that this information, whether it came from
Israel as we're now being told, or otherwise, what are our allies saying?
MICHELLE KOSINSKI, CNN SENIOR DIPLOMATIC CORRESPONDENT: Well, they're stunned by this. They're stunned by the dynamic, how this all came to be,
how it was released in this meeting by the president himself. And then the information that comes out now. I think that exchange you just played by
the National Security Adviser is mind-blowing and it just encapsulates where we are right now fully.
He says with a little chuckle, "I'll tell you right now, the president didn't even know where that information came from." So that raises more
questions. Allies are looking at this with great concern. But what they're saying behind the scenes to us right now is, well, the relationship
is strong, it's not going to change the relationship, but of course within the intelligence community and beyond, everybody is worried about this
jeopardizing down the road sources of information.
QUEST: To be clear, when the president tweeted this morning that he has an absolute right to divulge whatever information, and by that of course
declassify, he is technically correct. Nobody is suggesting he doesn't have the right. As I understand it, it's not a question of right, it's
whether he should.
KOSINSKI: Exactly. And McMaster, the National Security Adviser, was right to say that. But it's interesting, when you look at the big picture of
this, that's the only space that they have in which to mitigate this. To say that the president was within his right and it wasn't against the law.
[16:05:00] But as you point out, the story, the reason why people are still so involved with this, and watching it with such interest, is because there
is so much more there. It's the judgment. Then that question we go back to again that we just mentioned, why didn't the president even know how
sensitive this information could be, nor the source of it?
QUEST: This might seem a naive question, but viewers watching around the world may be suggesting, are we all making too much of this? He gave away
a fact that was probably fairly obviously known by the Russians anyway, that it didn't need to be a rocket scientist to put one and one together to
come up with two. Is this just the liberal left wing media having another bash because we can't find anything else to go at?
KOSINSKI: I think that's a great question. And some Republicans now who were confused by this, having a wait and see attitude, that's what they're
kind of hooking onto, to say I think it's overblown. But then you have these sources from within the intelligence community, both current people
who were formally in the administration and in the intelligence community saying, no, you have to look at the bigger picture here. In the
possibility that people's lives could be at risk. Especially when you're giving this information to somebody who is not an ally of the United
States. You're giving this information to Russia, and what they could try to figure out with the detail that the president gave, what were the
sources of this information, and the big unknown is, how does this affect operations against ISIS? How does this affect the valuable sources that
the U.S. carefully cultivates and carefully protects long term?
QUEST: Good to talk to you, Michelle, thank you, at the State Department.
Now, the White House. It lurches from crisis to crisis, or so it would appear from watching. After all, bear in mind, please, it's only been one
week since President Trump fired Jim Comey, the FBI director. Let's just look at a timeline over the last week.
Tuesday, the president fires the director of the FBI. On Wednesday, we have this meeting in the Oval Office. And remember, there were no U.S.
photographers or western photographs. This picture was the only one that was taken, by a Russian photographer who was in the Oval Office, everybody
else was excluded.
On Thursday, Donald Trump undercuts the press team and specifically says that he was thinking of Russia, of the Russia investigation when he fired
Jim Comey. And he also, by the way, says in that interview he had been intending to fire him anyway, which further undercuts the reason that was
officially given, that it was because of the assistant attorney general's memo on Comey and the Clinton emails.
Then you get this threat or veiled threat to Jim Comey, hoping that he doesn't have tapes of the Comey meeting, thus implying Comey was lying
about his account. Move on to Monday of this week. And you get the revelation that classified information has been shared with the Russians.
An extraordinary series of events that has Republican senators like Senator Collins of Maine pleading for a crisis-free day. We need real experience
and help here, John King is the man to turn to, CNN's chief U.S. correspondent. John, this idea, fundamentally a learning curve of a novice
in the White House, was to be expected as he learns about the levers and gears of government and the presidency. But is that what we are seeing, or
are we seeing a man whose character and temperament is not suited to this job?
JOHN KING, CNN CHIEF U.S. CORRESPONDENT: Richard, the defining question that's being asked not only across Washington, not only among the
president's Democratic critics but also among serious and sober-minded Republicans. But also now as the president prepares -- consider the timing
-- to take his first big overseas trip. Now being asked in capitals around the world especially in places like Saudi Arabia as he moves on to Israel,
as he moves on to see the G7 and the NATO allies. Places that share sensitive information with the United States government every single day
and now have to ask is it safe to do that with this president.
People who are trying to develop relationships with this president. Those relationships as you know, you don't get a Thatcher/Reagan, you don't get a
Bush/Blair, unless those leaders develop trust with each other. The ability to tell a secret and be confident it will not it will not be told
when the president goes into the next meeting.
These are defining questions. And that very question of competence is being asked more and more. Because you mentioned, he is new to government.
Give him some grace. He's never done this, right? Never been in the military. Never been a government. Most of his senior staff has never
worked in government. But we are now 117 days in. There have been a series of these blunders, debacles, boondoggles, call them what you will.
And so now, the fundamental question is, is this president capable of learning from his mistakes.
[16:10:00] On the intelligence question, one last point, the very serious point you're getting, from people in the intelligence community, even from
people, Richard, who support this president, there is worry that he doesn't understand the gravity of the position, and that he has to do his homework.
He needs to study the information more. He needs to read more deeply into the intelligence, and he needs to know, when you walk into a meeting with
the Russians, these are the things I can say and these are the things under zero circumstances will I ever say.
QUEST: Right, but on this particular case, this information -- I mean, the scenarios I've heard expressed are, he's sitting in the meeting, he gives
something away to try to encourage them to work with him on this terrorist threat of against airlines. I mean, to that extent, from your experience
of previous presidents, they learn so much information, how do they sift mentally in the heat of the moment, that which they cannot say and that
which they may?
KING: A fundamental question of style, management, and judgment here that you just raised. In the sense that normally, if you were going to do that,
if you are going to say, we're going to try to hit the reset button. We are going to send the president to this meeting, he's going to demand the
Russians do more in Syria. The Russians right now are propping up Assad in Syria. They're not helping the United States with the fight against ISIS.
That's what every single person involved tells us.
If the president decided he was going to blow that up by sharing some top- secret wow piece of intelligence, Richard, that's normally a process -- they knew this meeting was going to take place for weeks. That's normally
a process takes days, and weeks, sometimes months, to the State Department, to the National Security Agencies, to the Pentagon, ton this case back to
Israel, may we share a piece of your prized intelligence with the Russians because we're going to throw deep here. We're going to try to have a
gambit to shake things up. Instead this president brought it up spontaneously. He's winging it.
QUEST: Right, now that's crucial for us to understand, John. Because the way it's factored, this information is so important that it's not just like
I had a cup of tea for breakfast this morning. This was a piece of information that was so crucially different, qualitatively and
quantitatively, that he should have known. Is that what you're saying?
KING: Yes, this is information that is not widely shared throughout the United States government. Information the United States has not shared in
any detail with the U.K., with France, with Germany. And the president on his own dropped it on the Russians in the middle of a meeting.
QUEST: Back to where we began in this debate or discussion, I'm not laughing, I'm sort of more aghast, the American people, and to that extent
the world, I mean, we've got President Trump for the next three years, eight months, you know, all things being equal. How can this country lurch
from crisis to crisis as it has since January the 20th and still stay in one piece metaphorically?
KING: It certainly can't get any big things done. The reasons Republicans are getting more publicly critical, the reasons Republicans are seeking
more and more distance from the president, who let's be honest, began the week with a 39 percent approval rating, we can only expect it's not gone up
anyway. As Republicans now fundamentally believe the Trump brand is infecting the Republican brand, and that they are about to get wiped out of
the party because they spent the last election cycle telling the American people, give us a president and the Congress and we will govern. We will
get things done. Nothing is getting done in this town because every day as Senator Collins, a Republican, or Senator Corker, another Republican and a
different kind of Republican, says, we're in this constant drama, what Senator Corker calls a downward spiral of chaos.
QUEST: John, very glad you made time to talk to us. Thank you, sir, we appreciate it.
King: Thank you, my friend.
QUEST: John King, our chief national correspondent.
We've given you the political side of the equation. We've given you the State Department with the allies. We've given you the national political.
Now to the financial. Look at the Dow Jones, it's bouncing around. The losses and gains are fairly small, closed down two points overall. The
NASDAQ actually closed as a record high. To some extent, that's what I want to focus on with my good friend Paul La Monica, guru La Monica. Paul,
you were listening I'm sure.
PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: Yes.
QUEST: Especially to John King and Michelle Kosinski. Why is the market not reacting? Why am I only seeing a 2-point fall on the Dow?
LA MONICA: It really is stunning that the market has not reacted. It's a broken record at this point, but Wall Street, I don't know if they're
amused by this circus, this soap opera, whatever you want to call it, bemused by it, but they are still holding out hope that there will
eventually -- even if it's not a 2017 story, the tax reform, the stimulus. But also, you talk about tech. Five giant tech companies are helping to
lead this market higher, Apple, Facebook, Amazon, Google, and Microsoft. They're all doing well despite what's happening in Washington.
[16:15:00] QUEST: They are the companies -- they are the products we are all using on a daily basis.
LA MONICA: Exactly, and businesses are spending them. Consumers are spending on them. We're still showing signs of confidence even though
there is a big headache going on in Washington right now.
QUEST: Just this last thing. Can this confidence level -- because the FTSE hits a record high as well, that's got Brexit on its problems. The
Dax hit a record high. I can understand that because of the election over the weekend and of course the euro looks a lot better. The dollar is
weakening at the same time.
LA MONICA: And that's going to be great news for big multinational companies like Boise and IBM.
QUEST: But it's a small week. It's very small.
LA MONICA: It's true. I think the amazing thing here is that President Trump was dealt a very good hand. The dollar is starting to weaken which
he's actually rooted for in some respects. And that would help him. But let's be honest, for all the talk about how bad the economy is and the
market's inflated, he's now happy that the market is doing well. The economy, while not going gangbusters, is good enough to keep people
spending, both businesses and consumers. Then you mentioned Europe and then also China, they are both improving. President Trump is fortunate in
QUEST: Ford. Now, Ford is to announce a very sizable number of job losses. We haven't got a number on them, I don't believe, yet. A large
percentage of the global workforce. 20,000 is the number that's being talked of. Is this Ford's problem, uniquely to Ford, or is it emblematic?
LA MONICA: I think a lot of it is unique to Ford. Ford clearly has struggled more so than many other big auto companies to meet demand for
what consumers want. Tesla is obviously doing really well and now has a bigger market cap because of surging electric car demand. Ford has a lot
on its plate. GM, Fiat Chrysler, and a lot of European and Asian automakers have a lot to contend with as well.
QUEST: We'll more about the whole issue of Trump and the market. Thank you, sir.
LA MONICA: Thank you.
QUEST: Talks are taking place in Brussels on Wednesday about threats to aviation security. The U.S. is considering an expansion of the airline
electronics ban to Europe. I've talked about it with you last week. We'll have more after the break. QUEST MEANS BUSINESS.
QUEST: The White House briefing room earlier today, the U.S. National Security Adviser, General H.R. McMaster, reiterated several times during a
briefing today, in the words of McMaster, that the president's revelations to the Russians were wholly appropriate. Former intelligence officials
tell CNN they've never seen a president act so carelessly.
[16:20:00] Let's put into perspective what we are talking about in terms of intelligence. The U.S. has quite a few intelligence sharing arrangements
with overseas allies. And it's important to understand none of which involves Russia. The highest level of all is called the five I's, as it
says, it's five countries obviously with a common cultural background. You've got the United States and Canada. You have the United Kingdom. You
have Australia. And you have New Zealand. This in many ways is the gold standard of intelligence sharing. The idea is, when one knows, all know.
The Australian Prime Minister Turnbull says he has great confidence in the alliance.
Then you have the Middle East alliances. Over here which of course, is Jordan, Egypt, Israel, Saudi Arabia, the UAE and Turkey, again significant.
It's believed that this particular piece of intelligence that was revealed to the Russians came from the Turkish. Then we have if you like bilateral
relationships that aren't at the same sort of level. For the U.S., that would be France, Germany, and Japan.
Put them all together and you see that the U.S. has quite a good spread of intelligence alliances, none of which of course involves Russia over there.
Norm Eisen, joins me from Washington. Former U.S. ambassador to the Czech Republic and former White House ethics czar to President Obama. All right
there, Norm, you heard me describe the U.S. intelligence sharing. What will the allies be making of these revelations, particularly the Israelis
from where it's believed this information came?
NORM EISEN, FMR. U.S. AMBASSADOR TO THE CZECH REPUBLIC: Well, Richard, thanks for having me. As you've demonstrated, the intelligence
relationships of the United States are a global web. We need a global set of connections because the threats are global, Richard. And they're
threats to multiple countries at any different time. One thing I can guarantee you today, all of our allies, everybody in that web of
relationship relationships, no matter how close or distant, are saying to themselves can Donald Trump be trusted with anything we share. They're
reevaluating what they share with us. And what that means is danger. Danger to American lives, because we don't have that information.
QUEST: Is that not overstating it to some extent? Because at the end of the day the U.S. as the largest NATO partner by a long way, with the
biggest military and biggest defense and intelligence budget, across the FBI, the CIA, the NSA, nobody's going to turn around and say we're not
going to share information with the U.S.
EISEN: It's not going to be a wholesale refusal to share information, but in a case like this one where we're told this is very sensitive information
that came from a single ally, reports are that it's Israel, in many cases it will only be that other ally with the most sensitive level of
information who knows that it exists. So, in those particular cases, people are thinking twice. And Richard, it's not just this one revelation.
This comes on top of a pattern of bizarre behavior towards Russia that has all of our allies asking, what does Russia possibly have on Donald Trump?
Could it be a financial connection that he's refused to disclose by holding back his tax returns? Could there be something else? How can we explain
it? That is going to have serious consequences. And if even one piece of crucial intelligence is withheld, that could put American lives at risk.
QUEST: Now, the White House says that the president is to file a personal financial disclosure form for last year. He's not obliged to do it until
next year, I believe, you'll correct me if I'm wrong on that. Barack Obama and George Bush released the same form in year one. Mr. Trump still
refuses to release the tax returns. Will this financial disclosure be of importance and relevant or do you think it will be a bit of old
EISEN: We'll need to judge the pig once we open the poke. I do not think that these financial disclosures are meaningful without tax returns,
Richard. Every president, you're right, you're quite right, I may deputize you as the deputy White House ethics czar, you're quite right that every
president has released these annual financial disclosures, they're called a form 278, even though they're not required to do it in their first year in
the White House. That's good news. Let's not be ungenerous towards President Trump. But the problem is you can't make hide nor hair of much
of the information without the taxes.
QUEST: Quickly, a question I asked John King earlier. Are we witnessing mere learning curve difficulties or are we witnessing incompetence and
[16:25:10] EISEN: We're seeing somebody who is fundamentally unsuited by his intellectual habits, his character, and his experience, to the
responsibilities of the most powerful office in the world. This is a learning curve that he cannot climb. It's tragic.
QUEST: That was blunt and to the point. Thank you, sir. I think your pig in the poke beats my flimflammery. Thank you very much for joining us.
Good to see you.
EISEN: Thanks, Richard.
QUEST: The U.S. Department of Homeland Security says it's pushing ahead with plans to expand the airlines electronics ban. On Wednesday U.S.
officials met with European counterparts discussing the threats around aviation with the ban to include flights to and from Europe. The current
ban applies to flights to a number of countries in the Middle East and Africa.
Earlier, the department updated its advisory warning on the potential for home-grown terror, calling it one of the most serious threats in the
environment. The laptop ban is getting worldwide attention. Australia is considering doing something similar on certain international flights.
Malcolm Turnbull, the PM, says they're looking at it very closely. Our aviation analyst, Peter Goetz, joins me from Washington. Peter, simple
question. Do you agree it's a question of when, not if, the U.S. expands the ban?
PETER GOETZ, FMR. MANAGING DIRECTOR, NTSB: I believe you've got it, Richard. It's going to be when. And I think the ban is coming. There
clearly is a great deal of anxiety at the Department of Homeland Security and TSA that the bomb makers have gained a new skill.
QUEST: OK. So why is it then -- this is what I have difficulty with -- why is it then that you don't just have a global ban, you don't -- I mean,
you're picking off certain countries, Europe, and then you're picking off - - the U.S. has already picked off the Middle East. Now it's going to pick off Europe. Why not just simply say on any flight, if the threat is
GOETZ: Of course, you're absolutely right, there should be a global ban. There's such pushback from the air carriers, they compete so heavily at the
front of the plane for the first class and business class passengers, they really don't want a global ban. They're willing to tolerate a European
ban. And it must be the nature of the intelligence. They must know that these terrorist groups are targeting certain air carriers, certain regions
of the world, they want to hurt particularly the United States.
QUEST: If that's right, Peter, does it follow that eventually, flights out of the U.S. to Europe or elsewhere will have to be included in that ban?
Either simply on the basis of reciprocity or because you can't take the risk that eventually I mean, 9/11 happened in this country, there have been
other threats and attacks within, not many I'll grant you. So, you are going to have to ban outbound as well as inbound.
GOETZ: I think that's probably something that's under consideration. But there is a certain arrogance on the part of the U.S. You know, our
screening process is somewhat overrated. It's like our precheck process. That's not a particularly in-depth background check. And the U.S. has
stumbled in creating the checkpoint of the future. It's never occurred. We're still using technology that is years old. And I think this may be
the impetus to put some more money into research, to get better technology that can do multiple tasks at the speed of life, as we're going through.
QUEST: Finally, Peter, obviously, you've been following closely the intelligence debate, the intelligence that's been released or at least has
been revealed about an -- we don't know the strength of it, but to your point originally, it must be serious for the U.S. to be taking these
measures. Is that your feeling?
GOETZ: I believe it must be serious. And, you know, there is a tremendous fear in the United States, after 9/11, where the dots weren't connected.
No one wants to have an investigation after a tragedy and say that the dots were there and that officials did not take the steps to protect American
citizens. So they are always going to act in an overabundance of security.
QUEST: Peter, thank you for that. Don't go too far next week, we'll need you more if this ban comes in to help understand the ramifications. Thank
you as always.
GOETZ: Thank you.
QUEST: Peter Goetz joining me from Washington.
Yet another Trump/Russia story dominating the headlines.
[16:30:00] Officially Moscow calling the reports that Trump shared secret information utter nonsense. We'll be in the Russian capital, we're in
Moscow after the break. It's QUEST MEANS BUSINESS.
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in a moment. Washington reacts to reports that President Trump shared
classified information with Russia. And hackers hold Disney's Pirates of the Caribbean to ransom. This is CNN, where the news always come first.
Diplomatic officials now say Israeli intelligence was the source of the intelligence that President Trump discussed with Russian officials at the
white house last week. President Trump says he had the right to do so.
The Syrian government is denying allegations that it's operating a large crematorium at a prison to get rid of executed detainees. Syrian media
says the U.S. is fabricating lies. On Monday, the U.S. said that the Syrian regime may be killing as many as 50 prisoners a day.
October 15 is the day for a snap parliamentary election in Austria it follows the country's coalition government collapsing, and the far-right
Freedom Party may form part of a new coalition. The presidential candidate lost his bid last December.
The kremlin has dismissed reports that Donald Trump shared secrets with Russia. Matthew Chance is in Moscow. Matthew, they would say that,
MATHEW CHANCE, CNN INTERNATIONAL CORRESPONDENT: They probably would, yes. But I think the comments that we've seen from several Russian officials
over the course of the past day underline just how frustrated they've become at the continuing flow of controversy with Russia at the core of
that controversy in Washington. They've scoffed at it in the past, they've poked fun at the political farce playing out in Washington. But you get
the impression they're not laughing that much anymore, because it has serious consequences, despite all the jokes and the poking of fun. The
kremlin has serious ambitions when it comes to this relationship with the Trump administration. Trump is a candidate who of course spoke about
building a better relationship with Russia. Russia is keen to get the U.S. sanctions on it lifted. But with each of these controversies emerging,
that hope becomes more and more distant. And so I think that's very anguishing and frustrating for the kremlin.
[16:35:00] QUEST: So, the next question is, what does Russia do about it? Because, you know, damned if you do, damned if you don't. If you seem to
be helping the president, you're in trouble, and you don't want an outright dispute with him. What does Russia do next?
CHANCE: I think that genuinely they're in a very hard position. They don't quite know what to do to break out of this problem. The strategy
they're employing at the moment is twofold. On the one hand, you've got the kremlin still saying, we're not going to comment on any of this
nonsense anymore, that's what they're calling it, not what I'm calling it. And you've got the foreign ministry essentially poking a bit of fun, saying
this is all part of an information war and recommending people not to read American newspapers which the spokeswoman earlier today dubbed as
"dangerous." you get the sense they don't really know how to proceed.
QUEST: Matthew Chance, thank you for standing up late, half past 11 at night.
Our investigative reporter for international affairs is with me. So we've got the situation as it stands. What are you hearing?
MICHAEL WEISS, CNN INVESTIGATIVE REPORTER FOR INTERNATIONAL AFFAIRS: Well, I don't know if I necessarily want to know how the Russian foreign ministry
can dismiss whether or not they received classified U.S. intelligence. Russia should not know what the U.S. chooses to classify or declassify.
This is a major scandal.
QUEST: What is the scandal?
WEISS: It's not about revealing sources and methods. It's about bits of information, which we don't know what Donald Trump revealed to Sergei
Lavrov and Sergey Kislyak. If this came from the Israelis, it was so sensitive, the Israelis have a special relationship with the United States
when it comes to intelligence sharing. This is information they did not want shared with other allies whether in the region, Saudi Arabia, Qatar or
whatever, or even in Europe with Britain, Germany, France.
QUEST: You're an expert on intelligence and these issues. Now, McMaster was in the room.
QUEST: Tillerson was in the room.
QUEST: There was a couple of other more junior officials. At the time, if it's true what we hear, they did not see anything wrong in what took place.
It was only afterwards when the NSA officials were reading the minutes that they said, hang on, this shouldn't have been released.
WEISS: And the CIA officials. Look, we really don't know how McMaster and Tillerson reacted. We know how they're portraying this publicly to the
press. McMaster was sent out yesterday to kind of put out this fire. He's the national security adviser. It wasn't some low level White House flunky
sent out to this this, that underscores the seriousness of this. McMaster is a soldier-psychologic soldier-scholar who literally wrote the book about
the commander in chief having moral authority. I don't think he particularly wants to be in this situation. "The New York Times" had this
brilliant profile essentially painting McMaster as a put-upon babysitter put in charge of a child.
QUEST: Thank you, you've walked nicely into my trap here.
WEISS: Oh, good.
QUEST: McMaster, I listen to what he said today, he said it was entirely appropriate. Never mind how he parsed language yesterday, "as reported."
today he left no doubt in his mind that what the president revealed was not inappropriate or wrong.
WEISS: But he also did not say whether or not it was classified.
QUEST: But that's irrelevant. He clearly did not think it was an issue.
WEISS: He didn't think it's an issue because it's already happened, ad what's he going to say, yes, the president of the United States had a major
QUEST: Then McMaster's reputation goes entirely down the toilet.
WEISS: It's in question. Look, all the reporting suggests the president isn't entirely satisfied with McMaster, he think he's a pain in the butt.
McMaster is sitting in these meetings trying to keep the president from doing exactly this. Also, Jake Tapper, this is a final point, pointed out
yesterday that when the media got ahold of this story, they were told by U.S. intelligence and the White House, do not disclose the city in Syria
which is now in control of where this intelligence was gathered because doing so would put people's lives in jeopardy. Now McMaster comes out and
says, actually it's all public information anyway, it's no big deal. That's a contradiction. It's a contradiction predicated on the fact that
there is a press scandal that's brewing and the White House looks like it's in complete disarray.
[16:40:00] QUEST: From your understanding of the situation in the intelligence world, we've talked about the allies, I've talked about the
political side, we've looked at the markets. Give me the intelligence side. What is the intelligence world saying about it?
WEISS: They're having kittens. This is exactly the kind of thing you don't want to see happen. "BuzzFeed" reported -- remember, the Israelis a
couple of months ago said U.S. intelligence officials from the Obama administration were telling the Israelis, look, be careful what you're
sharing with the Trump administration, we don't know that your sensitive information won't be shared with Moscow which is strategically aligned with
Tehran and Damascus.
Can anyone who has not read into this classified intelligence say to me today that they can guarantee that the information Donald Trump shared with
the Russian foreign minister and the Russian ambassador to the United States is not now in the possession of Iran's revolutionary guard core or
the Syrians or Lebanese? If they can do that, fine, maybe I'm inclined to agree with McMaster. But I have yet to see anyone come forward with that.
Because we don't know. There was a lot of ambiguity with the way this was reported because they're protecting sources and methodology.
QUEST: Good to see you.
WEISS: You too.
QUEST: The Russians have real leverage. That's how Sally Yates is characterizing former under Trump National Security Adviser Michael Flynn.
Yates was serving as acting attorney general. She warned the White House that Flynn had become an easy target for blackmail. 18 days later, and the
information appeared in "The Washington Post." Flynn was fired. Sally Yates sat down with Anderson Cooper in an exclusive television interview.
(BEGIN VIDEO CLIP)
SALLY YATES, FORMER ACTING ATTORNEY GENERAL: I don't know how the White House reached the conclusion that there was no legal issue. It certainly
wasn't from my discussion with them.
ANDERSON COOPER, CNN ANCHOR: Do you think Michael Flynn should have been fired?
YATES: Umm, I think that this was a serious compromise situation that the Russians had real leverage. He also had lied to the vice president of the
United States. You know, whether he's fired or not is a decision for the president of the United States to make. But it doesn't seem like that's a
person who should be sitting in the national security adviser position.
(END VIDEO CLIP)
QUEST: Anderson's full interview and conversation with Sally Yates is in a few hours from now, 8:00 p.m. in New York, that's 1:00 a.m. in London,
2:00 in central Europe.
Now breaking news coming to CNN, a suspect in custody at the White House. The Secret Service says the person jumped over a bike rack that's used as a
barrier on Pennsylvania Avenue, and that sent the White House into lockdown. The Secret Service says the person is now in custody. The
president is in the building.
Life is imitating art at Disney. A movie about a swashbuckling pirate is being held hostage by internet pirates. So, far Bob Iger says he won't
[16:45:00] (COMMERCIAL BREAK)
QUEST: It's a scheme that would make the fictional pirate Jack Sparrow jealous. Hackers have gotten ahold of Disney's next blockbuster, the
latest installment of "Pirates of the Caribbean." they are holding it hostage until the studio pays them a ransom in bitcoins. The movie itself
is due in theaters at the end of this month. The hackers are threatening to release the film in 20-minute increments if Disney doesn't meet their
demands. Chief executive Bob Iger says he won't pay. Dylan Byers is in Los Angeles. This is very interesting, isn't it? I mean, he won't pay.
So, the movie may get released in little bits.
DYLAN BYERS, CNN SENIOR REPORTER FOR MEDIA AND POLITICS: Well, here's what we know. We know Bob Iger, head of Disney, was in a meeting with ABC
staffers in New York ahead, of course, of the up fronts that happen this time of year every year in the television industry. And what he said is
that these hackers had claimed to have stolen a film. He didn't say which film it was but all reporting indicating it's "Pirates of the Caribbean,"
very fitting for the pirated movie to be "Pirates of the Caribbean." he said they have not paid any ransom. That leaves some questions. Among the
questions are, do these hackers actually have the film, or are they making an empty threat. The second question is, what steps is Disney going to
take in order to protect its asset, the "Pirates of the Caribbean" from choice is a major asset for Disney. Where the federal authorities are on
this is unclear.
QUEST: "Orange Is the New Black" got pirated, so there have been cases. In that case, it was a straightforward hack and release, there wasn't a
ransom, you'll correct me if I'm wrong. This is one of the first cases where they've been threatened with a ransom demand. It's difficult for the
company to know what to do. At the same time, if they were to pay, it would be opening them up to all sorts of future threats.
BYERS: That's absolutely right. And I would guess, and again, only a guess, but I would guess that the federal authorities are suggesting not to
pay any sort of ransom here for precisely the reason you were bringing up. But yes, the issue of hacking, we think about it so often in terms of
politics. We certainly think about it in terms of the financial sector. It's an enormous concern for the entertainment sector. On an even bigger
scale, the hacking of Sony and all the emails that came from the Sony hack and what that did not just for the company but some executives who were
ultimately forced to resign because of information in their private emails which were made public. The talent agency here in Los Angeles, a powerful
talent agency. Everyone in the city, as in the finance industry, as in politics, knows there are going to have to be greater security steps taken
to protect their assets.
QUEST: Thank you, sir.
Now, never mind hacking. If legal downloads are your thing, you can download our show as a podcast. It's available at the usual main providers
such as iTunes and CNN.com/podcast.
Twitter has announced a high profile hire today, Biz Stone has returned. Jack Dorsey has also returned to Twitter. What are they going to do that's
different now the old faces are back? And why have they come back?
[16:50:00] (COMMERCIAL BREAK)
QUEST: Biz Stone is returning to Twitter. Clare Sebastian joins me. Why?
CLARE SEBASTIAN, CNN CORRESPONDENT: We don't know exactly what he's going to be doing yet. He says my top focus will be to guide the company
culture, that energy, that feeling. He also said it's felt outside the company, more soon. It's a little fluffy at the moment but investors like
it, the stock is up 1.3 percent on the day. He says more soon, maybe he will detail what exactly he's going to be doing there.
QUEST: Hang on a second. Let's have a moment of reflection here. So, there was two people, Biz Stone and Jack Dorsey.
SEBASTIAN: Many have used the phrase, the band is getting back together.
QUEST: Dorsey left and founded the thingamajig. Dorsey came back and now Biz Stone is coming back. Am I getting this right?
QUEST: If they come back and don't have anything new to offer, it's just putting the old people back dressed up in new clothes.
SEBASTIAN: Right. This is the argument, many Twitter investors and analysts out there say they want to see something different, that Twitter
doesn't need another kind of visionary. It needs somebody who is going to make money for the company and help them grow the business. They are
adding users, they added 9 million users in the last quarter. They're just not making any more money. They posted their first drop in sales since --
QUEST: Twitter is a very good news agency where when somebody dies, everybody else immediately puts out their tributes on Twitter or somebody
gives a tweet and reacting to some world event. But it's not entirely clear -- and of course it's moving into sports, isn't it?
SEBASTIAN: Right. Live streaming.
QUEST: Live streaming.
SEBASTIAN: That could be a key to their future. They've been doing fairly well in terms of live streaming. Video is really big for all these social
networks, you can monetize that in terms of ads. But Twitter I mean, you're right, it doesn't explain to people who it's really for. You have
point in having all this user engagement unless you start to monetize it. They're still much smaller than the other big social networks, they're
about half the size in terms of active users than Instagram.
QUEST: Let's take Instagram. Instagram has stolen a few more clothes from Snap. Snap is smaller than Twitter, often lumped in the same category.
Facebook with Instagram and others is just like a little bumblebee moving along, taking pollen from where it wishes.
SEBASTIAN: Facebook is almost an entirely different category, I think. I think with Twitter, the real challenge for Biz Stone will be communicating
it to the public. That was kind of part his role before. Maybe he's going to shape the experience internally so it's felt outside the company.
Hopefully that's a good sign.
QUEST: Thank you.
[16:55:00] Now, the newsletter, CNNMoney.com/Quest is where you will subscribe. Today I've been writing about the dollar, which has been
weakening. The dollar index, which is what I talk about there, is down, the index is down from 103 to about 98. In the newsletter, we talk about
why that is. Sign up for the newsletter. It arrives after the markets in New York close, before Asia opens, because this is the only time of the day
when essentially no major market is trading worldwide.
Profitable Moment, next.
QUEST: Tonight's Profitable Moment, when a human being gets kidnapped, the issue of whether to pay a ransom goes to the very heart of deeply felt
emotions. And then you move up the scale and you start talking about when ransomware and should you pay 300 euros to -- or dollars -- to have your
computer decrypted because ransomware has locked everything down. Now "Pirates of the Caribbean" looks like it might have been hacked and Bob
Iger's refusing to pay. The issue is always the same with kidnapping. Do you pay and risk encouraging in the future adore you not pay, stand on your
principles, and you're the loser and you end up suffering? It's the oldest in the book and the issue hasn't changed and the result is always the same.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable.
I'll see you tomorrow.