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QUEST MEANS BUSINESS
Hurricane Impact Triggers U.S. Job Losses; Catalan Banking Giant Move Headquarters; Politicians Drop Weinstein Donations Amid Scandal; Russian Trolls Stoke Tensions in Texas; New Film Uncovers Scale of Human Trafficking. Aired 4-5p ET
Aired October 6, 2017 - 16:00 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 HOST: The closing bell ringing on Wall Street. PepsiCo ringing the bell in honor of manufacturing day. Down day
for the Dow and the S&P 500, but there is a record close for the Nasdaq. Oh, look at that. Excellent, sir. On manufacturing day trading is over on
Friday, October the 6th.
Tonight, natural disasters push the U.S. jobs market into reverse.
Catalonia's biggest bank is on the move as Parliament gets ready to declare independence.
And politicians are ditching donations from Harvey Weinstein. Now it's Hollywood's turn for soul searching.
I'm Richard Quest live from the world's financial capital, New York City. Where of course, I mean business.
Good evening. Tonight, a seven-year streak of U.S. jobs growth has been interrupted and with it a week-long string of market records comes to a
halt. The U.S. economy lost 33,000 jobs in September. The first monthly drop since 2010. Economists had expected a bad jobs report after
hurricanes Harvey, Irma and Maria. They just didn't expect it to be quite this bad.
And to show you exactly how things are allow me to introduce you to our new quest meets business trading post. This is the part of our studio where we
are going to show you what happened during the day, the market reaction, and where you will be continually updated with the number of records that
the markets, the Dow, the S&P, the Nasdaq, and indeed in Europe, the FTSE, the DAC and the CAC have run up.
But first, let's show you what happened today on Friday the sixth. The S&P undid its longest record of wins or records in 20 years. The Dow closed
off just three points. We did wonder at some point whether it was going to eke out a small gain, but it didn't. It's only the Nasdaq that managed to
gain. Which means that the Nasdaq is at a record. It's a record high, which takes the Nasdaq to its 55th record high so far, this year.
The reason and the market movements it was of course related to the hurricanes. The hurricanes had in September the overall effect with the
number of jobs down was by 33,000. Some sectors did benefit, insurance claims adjusters, obviously, building supply stores. Overall though U.S.
unemployment remains the lowest since 2001 at 4.2 percent. And if you look underneath the numbers, and that may be why the market reaction was more
muted, wage growth participation was high, as indeed was participation. Put it all together and you see the other thing will be looking at. The
market, the CNNMoney fear and greed index still firmly in the level of greed.
Even so, there is red around the studio because the markets were lower. Joining me now to discuss this, Anthony Chan, chief economists and managing
director at Chase. I know, Anthony, that we cannot exactly dismiss this number by hurricanes. But we can certainly explain it.
ANDY CHAN, CHIEF ECONOMIST AND MANAGING DIRECTOR, CHASE: That's right, Richard. What you saw was that close to 1.5 million people were unable to
get to work because of inclement weather. When that happens, you realize that the hurricanes did have an impact. When you look at the fact that
leisure and hospitality component lost 111,000 workers. That's precisely the area such as Florida that were impacted by the hurricane. We saw
similar things during other hurricanes. I've tracked them. Typically, you get loss of jobs in the beginning, right after Hurricane Katrina. In fact,
in the two months after the hurricanes, on a cumulative basis, relative to the baseline month when the hurricane hit. You had about a 241,000-
relative decline in employment. Relative to the base of a gain of 196,000.
QUEST: Does that mean we should expect if you like, a bounce back in the next month's numbers that will not only ease the losses, but would add
further to the gains?
[16:05:04] CHAN: I think you can expect a bounce back. Obviously, one of the things to keep in mind is that when you have a very tight labor market,
such as Katrina, the bounce back in employment takes a little bit longer. You've got hurricane Sandy that took place in 2012. The unemployment rate
was 7.8 percent. The bounce back was a lot stronger. In fact, in the two months after, what you saw was a cumulative gain relative to the base when
the hurricane hit of an additional 84,000. As you mentioned in your show, Richard, 4.2 percent unemployment rate. Not a lot of flexibility out
there. But there is good news. And that is the wage number. The wage number, we have upward revisions in prior months. I am not as excited
about the five tenth of a percent gain this month. If you see a lot of people in leisure and hospitality losing their jobs, on a relative basis
their wages are a little bit lower. So that pushes average hourly earnings higher. So that number you can discount too.
QUEST: Anthony, if we look at the graph of the Dow over the course of the day, the sheer amount of red that we see on the graph sort of suggests that
it was a truly awful day. You know, it was down heavily and -- but the reality is, if we actually look at our trading post, we can see clearly
that actually the Dow is only off now only 1.7 points. The Nasdaq is barely 1/10 of a percent off. The Nasdaq gained. The S&P is virtually
unchanged. Putting this all together, the market is remarkably sanguine about these numbers. And still it's priming itself for gains.
CHAN: And I think the market is correct. Because what you see is, underlying strength. I think most people would agree that the weakness,
the 33,000 that you mentioned, decline in payrolls. That was virtually all due to the effects of the hurricane. With wages. Not so much the gains
this month, because I'm discounting those. But the upper revisions in the prior month. All that tells me, that there is good underlying momentum.
And then don't lose sight of the fact, Richard, in the household survey, which they conduct using a telephone survey, you actually had a gain of
906,000 jobs. That's an impressive number.
QUEST: And we look forward to having you, sir, back here in the studio to sit next to me to talk about these things in the future. Thank you. Good
to see you. Have a good weekend.
CHAN: My pleasure, Richard.
QUEST: European loss now a reminder of where we stand in Europe. The FTSE had 17 record highs so far, this year. The DAC 15 and the CAC lagging
behind with five. But almost all of them closed in the red amidst the political uncertainty in Spain. And there was disappointing U.S. numbers.
The oils, the mines dipped, once again, everyone following tropical storm Nate as it heads off into the Gulf of Mexico.
Same with heavy financial news and markets. The British pound is set for its heaviest weekly drop in a year after reports of the Prime Minister,
Teresa May, could face a vote of no confidence. The former chairman of the Conservative Party has gone public with opposition to Teresa May's
leadership. It follows what can only be described as an accident-prone speech By Teresa May at the Conservative Party conference on Wednesday.
Now, Teresa May is now saying that the U.K. needs calm and clear leadership. She says this at the same time as 30 lawmakers, Tory
lawmakers, are calling for her to go. The pound tumbled around 2.5 percent this week. Remember, currencies don't usually move much more than a
fraction of that. So, this is significant. Carol Walker, apolitical analyst, joins me now from London. Carol, let's dissect this. We do the
politics first. I mean, the critics say it was a dreadful speech. A mishap speech. It was a talisman for a premiership that's well and truly
off the rails. And yet some other people do pointed out none of what went wrong was her fault.
CAROL WALKER, POLITICAL ANALYST: Well, that's right. But Richard, it was frankly agonizing sitting there in the hall as Teresa May's speech was
interrupted. First of all, by a prankster. Then she had this terrible cough, which just went on and on. She struggled to get her words out. And
then the final straw was the key slogans falling off the wall behind her. None of that was her fault. But even before that speech, which was
frankly, the most disastrous conference speech I've seen a leader give in more than 20 years of going to these occasions. A lot of people in her
party were very concerned indeed, that she was simply failing to provide the authority that her party needs and the vision and drive to win back
voters who already seem to be being tempted by a resurgent Labour Party.
[16:10:00] QUEST: Now, this is interesting, because as I write in the QUEST MEANS BUSINESS Newsletter -- nothing like promoting your own work --
the reality is, Carol, that they keep her because the others who may take over are either dubious or dull. And at the end of the day, the opposition
could make gains. So, it's not a case of anybody but Teresa. It's Teresa, because there's nobody else.
WALKER: Well, yes, it's fascinating, Richard, the cabinet, the senior ministers are effectively circling the wagons around Teresa May. Because
they really don't want a leadership contest at the moment. They fear that if there was to be one, those divisions over Brexit would all be unleashed.
The party would tear itself apart. That virtual process of Brexit negotiations, which are already facing huge problems, would be delayed,
perhaps for months. Could be, in fact, derailed completely. And they fear that there could be a general election up against a Labour Party with a
resurgent leader. And there is no huge figure waiting in the wings that everyone is looking to and saying, well, if only he or she were leading the
party, things would be very different.
QUEST: Carol, as you know, you studied this for more than one or two election cycles. So, give me your assessment. How much of the crisis is
this? How serious and deep is it?
WALKER: She is living on borrowed time, the British Prime Minister. There have been so many difficulties. As I said, even before the speech, people
were really concerned that she simply seem to lack the grit, the drive, the authority that needs at this very difficult time for the party and for the
country. And I think if there were to be one more disaster, one more mishap, one more foot put wrong, then those who are for the moment staying
loyal to her might decide, well, look, we just simply can't go on like this. Which is the phrase that Grant Chaps, the former party chairman
who's leading the current rebellion, has used. She's there for the time being. But I think very few people expect her to lead the Conservative
Party into the next general election.
QUEST: Carol, thank you. Have a good weekend.
Now the Catalan government has released the official results from last Sunday's referendum. 90 percent were voted in favor to secede from Spain.
2.3 million voted. In all 43 percent of the population or the turnout. Catalonia is now facing mounting corporate pressure as companies plan to
move out. One of Spain's largest bank, CaixaBank, decided on Friday to relocate its headquarters. Atika Shubert is with me now from Barcelona.
Atika, will do this in two parts. Let's do, first of all, the result. The Catalonian government can legitimately say more than 90 percent of the
people voted in favor. It's not our fault if other people chose not to vote.
ATIKA SHUBERT, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, that's certainly what the Catalonian government is saying. What the Spanish
national government is saying is that the vote is invalid. And, you know, there is a lot to be said for the fact that these where clearly not good
conditions to vote in. We had police cracking down on people as they were trying to cast their ballots. You know, and it's interesting, the police
reaction seems to have changed a lot of people's minds, even as they were voting. I spoke to one woman who said, you know, she tried to vote three
times. She had the intention of voting blank. But then by the third time after being prevented by police, she said, I'm voting for independence.
And that happened in the midst of the vote. So, you know I think that there's a lot of emotion. And today is really the first day there's been a
lull in that. And both the Catalonian government and the Spanish national government have been able to step back and survey the aftermath of the
QUEST: So, on this -- we are business program, so we need to skate immediately to the business agenda. The banks moving out. Is this
tokenism? Bearing in mind -- because let's face it if there was to be secession, which is still a long way off, Catalonia wouldn't be part of the
EU. How serious is this threat or this promise now of the banks to move to other parts of the regions of Spain?
SHUBERT: It's clearly serious enough so that the two of the biggest banks here have decided to move their legal home. And it now looks like other
businesses as well. There are some reports that the Spanish utility, Gas Natural, may also have been moving to another part of the country. And all
of this is just to try and protect themselves from further political uncertainty. Frankly, nobody knows what's going to happen on Monday or
Tuesday when this Catalonian plenary session is expected. And that is when we think possibly that the Catalonian president, Carles Puigdemont, may
declare independence. Nobody knows if that will happen. But if it does, these businesses are saying, listen we need to get ourselves prepared. We
don't know what the repercussions of something like that would be.
[16:15:00] Atika Shubert, who is in Barcelona for us tonight, thank you.
As we continue on QUEST means business, Puerto Rico's struggle after hurricane Maria it seems never ending. Most of the island is still without
electricity. The governor is turning to Twitter asking for help.
QUEST: Puerto Rico's government wants to talk to Elon Musk about fixing Puerto Rico's power grid. Two weeks after Maria 90 percent of Puerto
Ricans are still living in the dark. And the estimate, several months before the Electric Power Authority can completely restore power across the
U.S. territory. Now, the reasons of course are well known and documented. The grid, the existing grid or the former grid, it is a shamble to begin
with and needed replacing. The new grid would help Puerto Rico and its reliance on imported oil to generate electricity. Nick Valencia is with us
now in San Juan. Nick, let's get straight to the somewhat extraordinary offer by Elon Musk that the governor is taking seriously. Solar panels,
but would this make a big difference? And how quickly anyway would it take place?
NICK VALENCIA, CNN CORRESPONDENT: Well, we are on an island here and that's very evident and obvious. And just how slow the help has been to
come here. There are federal workers here that are helping out to try to reestablish the national grid. Of course, power, electricity access to
that state-run power is just virtually -- it is very difficult, 90 percent of people still do not have access to that grid. Yesterday it was 9
percent. Today it's jumped to just over 10 percent. We don't know really how big of a solar panel field. We know that it was wrecked, but we don't
know how many people really that that is helping power their electricity. We know it's very dependent here on gas and oil. And that something that's
in very short supply here on the island -- Richard.
QUEST: And even if Musk says he can solve the situation, what you see there, I mean this is dire. Isn't it? The power plants are old --
VALENCIA: It is. It is.
QUEST: The grid is decrepit. There is no money for investment. Are the emergency workers having an effect there? Are people feeling the benefit?
VALENCIA: Well, the fact of the matter here, Richard, and you know this more than anyone is that this infrastructure and the economy here was a
mess to begin with. And has been for perhaps more than the last decade. It goes without saying, it was something that was brought up by President
Trump, just how much out of whack, he says, that Puerto Rico has made the U.S. budget. It is difficult though. You know, I mentioned that help is
here. It's just not fast enough. It was earlier that we were out in one of these communities that was pretty hard hit here around San Juan. And we
had a woman come up to us that people here, the local government, are not helping us out. The federal government is not helping us out. They're
taking matters into their own hands because really there tired of complaining and there tired of waiting.
[16:20:00] QUEST: Nick, give me an assessment please, on those criticisms, bearing in mind what the President said, two hurricanes, it's an island
with decrepit infrastructure. That there was an inevitability of ferocity of recovery. Nothing more could have been done even if he sent in the
Calvary and the entire sixth fleet. Nothing more could have been done that would have rescued the situation faster. Is there validity to that point?
VALENCIA: Well, don't tell that to the people here. Because they feel this is the biggest disaster they've ever been a part of. They don't think
that enough was done ahead of time to plan for this. It's sort of the attitude in the culture here in Puerto Rico, they've had tropical storms
that have passed through here. They've had hurricanes pass through here. And you hear the phrase "todo bien," you know, everything is fine. Even
though somebody is standing in front of a destroyed home. You hear people say, "gracias a Dios," a lot. You know, thank God that we're OK. But it
doesn't really begin to frame just how terrible the situation is here. We see Puerto Ricans smiling. We know that they've been through a lot. And
perhaps more could have been done ahead of the storm. But the governor here, he is adamant that they try to warn the residents here with enough
time to have people evacuate. To make sure that they can save lives. But even today were hearing of another death, Richard. It's at 36 now in all
lives of been claimed by hurricane Maria -- Richard.
QUEST: Nick Valencia, is doing sterling work in San Juan, and Puerto Rico. Thank you.
Now fewer than half the landline phones are working in Puerto Rico. Assuming there is -- you don't need power. The cell phone coverage is even
worse. Up to 90 percent of cell phone coverage is gone. The chief executive of the satellite company, Inmarsat, says it trying to get
communications up and running again. The company is also looking at the future of connectivity in the air.
It's a new study with the London School of Economics says airlines could one day make an extra $30 billion from in-flight broadband, according to
the LSE Inmarsat study. Only a handful of airlines even offer today. And yet it will be everywhere by 2035, in-flight broadband. Which of course is
not the same thing as telephony, where you can make calls. Which many airlines believe, as a bastion of Delta said, over my dead body will we
ever allow people to make a telephone call in the middle of a flight.
CEO Rupert Pearce told me his technology is revolutionizing the industry. And if you take examples like Puerto Rico, happen to save lives.
RUPERT PEARCE, CEO, INMARSAT: The use of Inmarsat communications, one of the big uses is during humanitarian disasters and in those sorts of events,
particularly national disasters like hurricanes. Terrestrial networks go down. They're very fragile. And therefore, satellite is often all that
one has. Often for several days if not weeks and that's certainly the case throughout much of the Caribbean. We have thousands of terminals deployed
in the field across Puerto Rico and a number of other Caribbean countries. And we are supporting relief efforts very, very powerfully indeed through
the connectivity that they provide.
QUEST: Now, the question of satellite communications, particularly in the aircraft, which I know you are at the forefront of. You will have seen and
-- as you're aware obviously I've looked into it once or twice myself. The idea now of tracking planes, following on from the IKO report, are planes
now tracked as a matter of course wherever they are so that an MH-370 could never happen again.
PEARCE: Well, the short answer to that is, no they are not. We've got two parallel things going forward. The technology as you know, Richard, is
there. It's always been there. It's been there for at least 10 years, to provide minute by minute tracking of aircraft throughout the world.
However, there are only very few parts of the world, the most congested parts of intercontinental airspace where tracking is mandatory. Most
notably across the Atlantic. So, what's happening in the wake of disasters like MH-370 is the safety agencies aren't getting together and progressing
something that I believe will result in mandatory global tracking. And will put that tracking out of the reach of the cockpit.
QUEST: Would you agree with the ATSB report which came out in the last day or so on MH-370, that it is unacceptable that we have not found that plane?
PEARCE: I understand why they feel that way. And as a human being I feel that way as well. And my heart goes out to the many families and loved
ones of those who were lost on MH-370, because of how difficult it can be to get closure when you don't know what's happen.
[16:25:00] But I also know that the search area is one of the most inhospitable parts of the world. And it's a quite vast area. The seas
there are up to 4 miles deep. And they discovered a mountain as high as Everest, higher than Everest, that they didn't know existed under the seas.
So, it's almost an impossible task to locate an aircraft of this type, which is probably split into small pieces at the bottom of this ocean. So,
it was always a really, really, really challenging task. However, unfortunate it is that we haven't found, the search efforts haven't found
the wreckage. It's not completely surprising.
QUEST: Finally, the whole question of in-flight communications, whether it's free text, some airlines like Delta is doing now. Whether it is
watching stream movies. Are you in favor of telephony on board planes? Do you want people to be able to make telephone calls whether they're using
your services are not? Do you still think, like I do, that the plane is the last vestige of quiet?
PEARCE: Well, it's certainly true that many airlines that rollout in- flight conductivity, turnoff telephony and provide a data only service, because of the issue of air rage. And we've all been next to somebody in
public who is yacking away on their phone and it's incredibly annoying. In the aircraft environment is incredibly important that we have a safe calm
environment. So, I think that is about social responsibility. Other airlines are providing places where you can go and make a phone call,
rather like a phone booth. So that you don't have to annoy your fellow passengers. So, it's more a social issue and a management issue than
QUEST: As we continue tonight on QUEST MEANS BUSINESS. U.S. Democrats are trying to steer clear of Harvey Weinstein. The party donor and Hollywood
producer is facing allegation of sexual harassment. There are folks who are advising Weinstein. Will hear from them after the break.
[16:30:00] QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. Where were going to explore the Russian troll
factory working to stoke racial tensions in Texas. And I'll speak to the screenwriter who uncovered human trafficking on a multibillion-dollar
scale. And the movie that has been created that really brings home the awfulness of the whole business.
Before that, this is CNN and on this network the news always comes first.
The governor of the state of Florida is warning residents not to take chances with a tropical storm that is moving toward the Gulf Coast. Nate
has already killed at least 21 people in Costa Rica, Nicaragua and Honduras. It's expected to become a hurricane when it crosses the Gulf of
Mexico. As you can see on the screen.
New Orleans devastated more than a decade ago by Katrina, has already declared a state of emergency.
A nuclear disarmament group has won this year's Nobel Peace Prize. The International Campaign to Abolish Nuclear Weapons is based in Geneva. The
group released a statement saying if there was ever a moment for nations to oppose nuclear weapons, that moment is now.
Donald Trump continues the guessing game over his cryptic remarks that we could be witnessing "the calm before the storm." He winked and told
reporters, you'll find out. When asked about the comments just a short time ago, the President first made the remarks at a dinner for senior
The cattle on police chief has appeared in a Madrid court on Friday to face accusations of sedition. It's in connection with the ongoing crisis over
Catalonia's banned independence referendum. Spanish authorities don't think the Catalan police did enough to stop Sunday's vote.
A Brazilian city is in seven days of morning after a security guard torched a day care center killing four children. The Brazilian State news said the
man set a light to the facility before setting himself on fire and later died. No word yet on the motive.
U.S. Democrats are trying to distance themselves from this man. Harvey Weinstein is seen seriously important movie mogul in Hollywood producer.
And now he suddenly toxic after the "New York Times" published allegations of sexual harassment that go back apparently over several decades. Several
lawmakers who have received donations from Weinstein are now sending the money back or giving it to charity. And Hollywood stars are left wondering
how they should respond.
For instance, Lena Dunham, the actress said, Hollywood shines light on Catholic Church, sex trafficking -- let's shine it on ourselves and what
While Rose McGowan, who according to the Times, reached a settlement with Weinstein, tweeted, anyone who does business with -- it is complicit.
On this program last night Weinstein's lawyer and an advisor and advisor, if you like, Lisa Bloom, says, he wouldn't push back at the women who say
he's hurt them.
(BEGIN VIDEO CLIP)
LISA BLOOM, LAWYER ADVISING HARVEY WEINSTEIN: I will tell you that as a very real human being today, Harvey takes this very seriously. And that's
why he's issued this very broad statement sincerely apologizing. Offering to meet with any of the women, with me present, if they would like to. If
they want him to go jump in the lake, then that's fine too. He is not going to attack or demean any of his accusers. He's going to try to work
on himself. And I think that's admirable. You might not like all of the things that he has done. I don't like some of the things that are alleged.
But I think what he is trying to do now is a good model for anybody who's been caught up in something like this.
(END VIDEO CLIP)
QUEST: Rebecca Sun is from the "Hollywood Reporter." She joins me from Los Angeles. Let's not delve too deeply into the actual allegations
themselves. Rather the reaction in Hollywood today. Because the Weinstein's are Hollywood royalty by any definition. And suddenly royalty
has been found wanting. What are people saying?
REBECCA SUN, SENIOR REPORTER, THE HOLLYWOOD REPORTER: Well, I think that the big thing is that with Harvey Weinstein this is always been an open
secret in Hollywood. Ashley Judd alluded to that in her quote with the Times saying, that this is something women have been talking about Harvey's
behavior amongst themselves for decades. But it's time to take that conversation public. It's time to sort of expose it and hopefully, you
know, sort of make some changes. So, people in Hollywood are not surprised. But you know, it's like Lena Dunham said, it's like the
Catholic Church. Everybody knew what was going on nobody was doing anything about it.
QUEST: Now if that is the case then let's just put Harvey Weinstein to one side or the issue relating to him personally, because the bigger question
goes to one of corporate America and corporations everywhere. It's where people know that wrongdoing is taking place but they're too frightened to
speak up. And that is certainly an example, par excellence in this case.
SUN: This is a great example. Because, you know, there's a lot of different levels here. There is the intimidation factor. You know, one of
the women who spoke on the record with the Times, said, you know, in the balance of power it's me zero, Harvey Weinstein a hundred. And so, this
idea of somebody who is very powerful, very wealthy, very successful in Hollywood, you know, there is gender dynamics at play.
[16:35:00] There is this idea of, you know, will I be blacklisted if I come out against this, you know, really powerful mover and shaker in Hollywood,
is this the end of my career? You know, is a systemic issue that for a long time it seemed like it was impossible to touch him.
QUEST: Without naming names and I realize in saying that I've committed exactly the same mistake -- whatever you want to call it. How many more
people are out there do you believe are at very senior top levels that still have not been made public?
SUN: Gosh, you know, I don't know if it's possible to put a number on that just in the same way that, you know, with what happened with Bill Cosby
accusers or Roger Ailes accusers, or Bill O'Reilly's accusers, you know, you don't know. I mean, certainly I would imagine there's a lot more than
the eight women that he settled with. You know, because again, the reaction around Hollywood when this happened was, you know, people were
saying like, oh finally.
QUEST: OK. So, the same question then in a different way that we asked during the Roger Ailes and the Bill O'Reilly thing. Would you say that the
behavior that Weinstein engaged in was epidemic, and endemic, widespread? I don't mean him personally, to the other executives, other senior
producers, other top people. In other words, does the casting couch still exist?
SUN: There's a reason there is the phrase the casting couch exists. I think absolutely unfortunately. Again, Hollywood, the entertainment
industry being, you know, an industry was such a narrow point of entry, you know, there are a lot of people who, you know, feel, you know, you want to
get a job. You want to make it. You want to get your breakthrough. You know, the sort of horrible indecent proposals have come up. So, yes, I
don't think Harvey Weinstein is unusual, unfortunately, in terms of his behavior as a powerful man particularly in Hollywood.
QUEST: Grateful that you've come in this afternoon to talk to us and give us perspective. We look forward to talking to you again, thank you. Much
QUEST: As we continue tonight and QUEST MEANS BUSINESS, anti-Islamic protests on the streets of Texas orchestrated from an office in Russia.
Sounds remarkable. I promise you when you see the CNN investigation you'll realize how it happened.
[16:40:00] QUEST: New evidence of Russian interference in United States, some of the Russian linked accounts on Facebook sought to sew discord
online, and now we know what happened in the real world as well. CNN's Clare Sebastian is digging into the story.
So, this is not only about digital Facebook and online unsavory behavior?
CLARE SEBASTIAN, CNN MONEY CORRESPONDENT: This speaks to the power of the campaign that we believed was linked to a Russian organization that they
waged on Facebook, on social media, Richard, we know that Facebook told us as soon as they announced this in early September, that the campaign it's
motive was to sew discord to amplify divisions politically and socially.
What we now have understood that in one incident, they didn't just view the ads. You know that 10 million+ people saw them, they just didn't read
these ads, they acted on them. Take a look.
(BEGIN VIDEO CLIP)
SEBASTIAN: A small group of anti-Muslim protesters gathered outside an Islamic center in Houston, Texas in May 2016. A much larger counter rally
forms across the street. Just another example of the struggle for tolerance and understanding in America. And yet this is different.
The anti-Muslim protesters were responding to an event promoted on Facebook called Stop Islamization of Texas. It was organized by a Facebook group
named Heart of Texas. And Heart of Texas according to sources with knowledge of the matter is among 470 fake pages or accounts Facebook turned
over to Congress following its investigation into as generated by Russia.
Ads that Facebook says came from an organization called Internet Research Agency that according to people who have worked there operated out of this
building in St. Petersburg. More than 5000 miles from Texas.
The Houston rally, an example of a Russian effort to have real impact on the ground. While the stated mission of the Heart of Texas was to promote
Texan secessionism, CNN has recovered parts of the account that suggests sewing religious, racial and social discord was also a part of its
playbook. When post asks, since when has this country turned into a liberal cesspool full of all sorts of ethnic and sexual minorities?
Another raises the issue of voter fraud, and another argues against gun control. The Houston rally was small and ended peacefully according to the
Houston Police Department. And yet the Council of American Islamic Relations in Texas, had alerted the FBI after a post on the Facebook event
page threatened to quote, blow this place up.
There are divisions on the streets of Houston engineered in Russia.
(END VIDEO CLIP)
QUEST: So, the protesters were as much as one would say -- want to say innocent bystanders, they were riled up.
SEBASTIAN: We assume they thought this was a real group on Facebook that had called for them to come out and protest, and the interesting thing
about this, Richard, there was an element of false information that was used to the group on Facebook in their event page. They said that they
wanted people to protest because there was a new Islamic library at the Islamic center, that they said had been funded by the government. We have
spoken to people who know, it's not true. So, they use false information to get them there.
QUEST: Where did the command and control of Heart of Texas and those like it come from? At the end of the day, what everybody wants to know from
you, Clare, was this Moscow pulling the strings?
SEBASTIAN: Well, the officer of what is called the Internet Research Agency which you believe is the organization, if you can call it that, it
has been called a troll factory that is engineered this entire campaign, that is in St. Petersburg. Actually, Richard, from the digging that we
have been doing, I was recently in Moscow, we know that the Internet Research Agency officially no longer exists as a legal entity. But it's
work appears to continue, there is another legal entity that operates out of the same building, it has the same director general, so clearly, both
online and in real life there is an effort here to avoid detection. But I think we see not only the sophistication in terms of how they used
Facebook's tools, all of them in various different ways.
Not just advertising but events is a crucial way to draw people to these groups. It was extremely popular, it had around 1/4 of a million people
liking it by the time that it was taken down, but also the impact.
QUEST: But was this designed -- let us take the Texas example, was it designed to help Donald Trump, to sort of get the opposition up and running
against Islam, Islamists activities, so therefore they will vote Trump. Or was it, we don't really care, we just want trouble and strife.
SEBASTIAN: I think certainly on the surface it was trouble and strife, you know, we see a lot of other divisive issues as you saw in the piece that
came up in this page. In a way it shouldn't be clever that they used the idea of Texan secessionism which is more of a kind of concept that aligns
with the Republican side of things. To get into other issues like the Second Amendment, like refugees, there was even a post about conspiracy
theory around Anton Scalia --
QUEST: Which would tend to be pro-Trump positions.
SEBASTIAN: Right. But we have not seen any mention of Trump on there.
[16:45:00] It was very interesting the way it was done, just to pick up on these issues that were so divisive already at the time, and throw salt
these existing wounds in American society.
QUEST: Superb reporting, you are going to do more on this, I hope? Certainly, and you can read more of Clare's reporting CNN.com along with
the rest of the coverage on a Russian troll meddling in United States politics.
You have missed any part of tonight's program, or you need to listen again, and why would you not, over the week. A chance to enjoy bits that you
haven't heard or may not have been paying attention about, download our podcast. It is available from all major providers or at cnn.com/podcast.
As part of our ongoing commitment to fighting modern-day slavery, last night I helped introduce the film, "Trafficked" at its premiere here in New
York. The screenwriter joins me after the break.
QUEST: Last year, slave traders made hundred billion dollars. To put that in perspective it's more that Intel, Microsoft, Nike, Google and Starbucks
combined. The claim has come from a new film about human trafficking, which premiered here in New York last night at the United Nations.
The film is based on the reporting of one activist who followed the evil practice around the globe.
SIDDHARTH KARA, SCREENWRITER, "TRAFFICKED": The most challenging aspect of bringing this movie together for me was trying to figure out how to put
into the script as much as I wanted to about the issue of human trafficking. All of the complexity, the nuance without making it sound
pedantic or didactic. And walking that balance, that fine balance between shaking up the audience to the truths and realities of human trafficking,
but not making it so difficult to I said no one wants to see the film.
ELISABETH ROHM, ACTRESS, "TRAFFICKED": I think there is power in numbers, especially when a film is important and art can become a voice for a
movement, and for a change of consciousness.
The statistics that Siddharth has pointed out in this film, I hope that a film like this and films that deal with these issues really enrages people,
so that there is change.
I hope that when people see "Trafficked", I hope that they understand this is a crucial serious issue. We are talking about millions of victims.
KARA: I hope the message they get is human trafficking happens everywhere including in this country, in the United States and rich Western countries.
I hope they realize it is a very sophisticated global business enterprise. And I hope that they realize it generates immense profits, in excess of
$100 billion globally last year.
Finally, I hope they realize destructive, corrosive and dehumanizing impact this phenomenon has on the victims.
[16:50:00] QUEST: And the screenplay writer Siddharth Kara is with me now. The movie is based on his book "Sex Trafficking", and with me in the C
suite. Good to see you.
KARA: Thank you, Richard.
QUEST: Extraordinary movie. Absolutely extraordinary. It was a privilege to be their last night in the United Nations. How much of the movie is a
conglomerate of different stories? How much is a dominant story in all of this? Because it's pretty terrifying stuff. It's pretty horrific stuff.
And the thought that any woman, any person would go through that is quite apart.
KARA: I endeavored to base the characters, the scenarios, the things that happened, the plot line on real things that I have documented around the
world. Fictionalize things here and they are to tell a film story. But I think you're absolutely right, it is appalling and shocking and heart
QUEST: OK, but let's be clear here, what you are saying, but not just about the movie, but in our freedom project work, there are women who are
tied up, shackled and used as sex objects, prostitutes against their will in the world at this moment. In this country at this moment.
KARA: Unquestionably, it happens today, they may be shackled, they may be coerced to other ways, there may be threats against them and their family
members. It happens here in the United States. There is still slavery in this country and it happens all over the world.
QUEST: When you take that -- because I'm not being venal, I am not being unpleasant but we are a business program. The motivating force for this is
KARA: There is no question about it, this is not cruelty for cruelty's sake, the profit motive is the driving force of modern-day slavery, and it
is the driving force of sex trafficking. As I pointed out last night at the event, sex trafficking is the most profitable form of slavery the world
has ever seen, it's not hard to figure it out, do the math. A woman is forcibly sold and raped for money 10 times a day, seven days a week, 365
days a year, year after year. It can get into the hundreds of thousands of dollars in profits per slave per year.
QUEST: OK, there is a difference in a sense of where you break that cycle between a developing country which doesn't necessarily have the law
enforcement infrastructure, where official corruption may be a detriment, to say the EU, the United States or one of the OECD countries, where one
should be easier to deal with this.
KARA: You are quite right depending on where you are in the world, corruption will be a larger factor or not, and certainly in developing
nations with the immensity of poverty and gender bias, gender violence, you have to work on protection, educating young girl so they are not sold off
at the age of 10, 12. Protecting and preserving their dignity. That is how you prevent sex trafficking from even starting in many developing
Let's not lose sight of one important fact, there is a character if you remember from last night, in the United States coming out of the foster
care system. A vulnerable young girl she ages out, and there are no protections in place. And she is trafficked and recruited very quickly,
and that is a common story.
QUEST: How do you prevent something like that, the woman she was put into the care of was supposedly known and vetted. The entire infrastructure of
social services was there and still failed. So, I ask you, how do you prevent the systemic abuse rather than the isolated abuse. Because the
isolated abuse is always going to happen.
KARA: Absolutely, two things, governments have to get more active and expressed more --
QUEST: What does that mean?
KARA: Money, it means money. They need to spend the money it takes to rid the world of slavery once and for all.
QUEST: On what?
KARA: Law enforcement, protection, survivor protection, coming out of foster care protection, vulnerable family dislocated children protection,
and guarding against the exploitation.
QUEST: Why don't they spend that money? I understand money is short by governments, there are many causes. Do you spend it on that protection or
you spend it on someone who needs a heart transplant? Or do you spend it on building a new energy power facility? That is the reality of the hard
KARA: It is a fair question, we are in a resource constrained world and capital is a resource constrained, and if you are politician you are
thinking what do I spend my money on? Defense, antiterrorism, climate change, slavery? I'm not saying we need to spend as much money on slavery
as we do to fight terrorism or protect against climate change. But we do not spend enough.
I will give you one very simple statistic, in this country, the United States, we spend more on defense in one day than we have spent on the last
10 years to fight slavery.
QUEST: What do you hope comes from this movie?
[16:55:00] KARA: Awareness, number one, I hope people will learn and understand the complexity, the nuance, the destructiveness of the human
trafficking journey. And number two they people will be impassioned. Policy makers at the highest levels will be impassioned to say, no more.
Slavery should have been abolished hundreds of years ago. It has to happen now.
QUEST: It was a privilege to see your movie last night. Thank you, sir, for joining us.
And we will have a Profitable Moment after the break.
ASHER: Tonight's Profitable Moment, and I use that phrase what due advice and concern, it is entirely appropriate to talk about human slavery, sex
trafficking, as being perhaps the ultimate Profitable Moment, $100 billion a year is spent on this disgusting trade, of which the film "Trafficked"
looks at in some detail.
The reality is that human trafficking, modern-day slavery, is taking place in every country where you and I are watching and living in. And whether
we do anything about it, really is nothing more than the awareness that you and I have, and the measures that we are prepared to insist our governments
take place. Let me be clear, the freedom project is one of the most important things that we do here at CNN. And modern-day slavery, sex
trafficking remains the dirty little secret that exists in every corner of the world.
And we all have a chance to do something about it. In that chance starts right now with the awareness and the decision that we will not let it
continue. And that is QUEST MEANS BUSINESS for the night, I am Richard Quest in New York, whatever you are up to in the weekend ahead, I hope it
is profitable. I will see you Monday.