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QUEST MEANS BUSINESS
Food and Beverage Merger Sends Stocks Soaring; VW Investigating Emission Tests on Monkeys; David Beckham Speaks About His New Miami Team; President of Zimbabwe Won't Campaign for Gay Rights;
Aired January 29, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] STEPHANIE SY, CNN HOST: All right, and there is the closing bell. Boy, we haven't seen this in a while. Trading comes to an end on
Wall Street, and it is the Dow's worst single day in months. It is Monday, January 29th, there is the gavel.
The sweet taste of soda and coffee, a $21 billion deal brings together Keurig and Dr. Pepper.
The Beetle and the monkeys, German automakers are in trouble again over emissions and animal testing.
And this was David Beckham in 1996. Now he's got a team of his own. We'll hear from him this hour.
I'm Stephanie Sy. This is QUEST MEANS BUSINESS.
Good evening, we are seeing more consolidation in the food and drink industry as company's trying to beef up their market power. Today, Dr.
Pepper Snapple agreed to merge with Keurig Green Mountain, the combined company will have annual sales of more than $11 billion. Investors are
loving the taste of this. Shares in Dr. Pepper Snapple skyrocketed on this news. So, Dr. Pepper Snapple and 7-up are among the best-known brands in
the drinks business. Now they're going to be under the same roof as these brands. Including Peet's Coffee pots and Krispy Kreme. I'm getting a
sugar rush just looking at that shelf of goods. Paul La Monica joins me now to discuss what's going on. Hey, Paul. So. what is the strategy
behind this deal?
PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: Yes, I think this is a fascinating deal, Stephanie. What you have here are two companies in
different beverage businesses linking up. We've seen diversification helping Dr. Pepper's big rivals. Obviously, Pepsi has a thriving snack
food business. Coke is trying to do more with water in order to rely less on sugary soft drinks.
SY: That's interesting, because, right, they're going with water. How does it benefit Keurig to get into big soda? I mean, is that really a
trend we're seeing in the U.S.?
LA MONICA: Yes, it is a bit curious considering there's a lot of backlash against some of these sugary drinks, but Dr. Pepper Snapple also owns
Snapple, obviously. So, you've got the juice side of the business. They also bought a company called Buy Brands last year which has antioxidant
drinks. People might remember the funny Super Bowl ad last year, Justin Timberlake watching Christopher Walken recite, "bye, bye, bye."
SY: It's like one of those vitamin drinks.
LA MONICA: Yes, vitamin, antioxidant drink. So, it's not as if Dr. Pepper is all about the sugary soda drinks, but of course, all the beverage giants
trying to rely less on big sugar.
SY: So. JAB has acquired a bunch of companies recently, Panera, Au Bon Pain, -- by the way, my first job was barista at Au Bon Pain. A few
different companies -- is this part of a larger play by JAB to really build a food and beverage Empire brand to build a food, the likes of which could
one day rival Coca-Cola or Pepsi?
LA MONICA: It's possible. They've been very inquisitive over the past couple years, you mentioned some of the deals. They also bought Peet's and
Stumptown. So, they've been very, very aggressive with the beverage and food area. Whether or not JAB winds up becoming a household name like
something like a Starbucks or McDonald's, I think that remains to be seen. But it is fascinating they are just gobbling up all these companies. One
company that there was rumor about last year was Dunkin brands. Whether or not they would go after them. Dunkin brands stock actually fell a bit
today. I think people might be realizing, all right, maybe they're not the next takeover target.
SY: OK, so, we saw the stock price for Snapple go up. What are investors in the soft drink company getting out of this? They seem happy.
LA MONICA: Yes, they obviously get a big boost to the stock price. The shareholders are getting about $107 in cash as a dividend for their stock.
And they're also going to have 17 percent of the combined company. So, it's not as if they are giving up the total ownership of the new firm.
Interestingly, Mondeleze, the big company that own Oreo and Cadbury, they have a stake in JAB's coffee business through a deal they did a few years
ago. Now all of a sudden, they're going to have about a 13 percent to 14 percent stake in new combined company as well.
SY: They're calling it the total beverage solution. I heard the CEO of Keurig say that earlier this morning. Paul La Monica, thanks so much.
LA MONICA: Thank you.
SY: The merger wasn't enough to pull U.S. stocks out of a Monday slump. Markets just suffered their worst day since September with all three major
indices ending in the red there. Apple was among the day's worst performers. Its market value has dropped by tens of billions of dollars in
the past week. Investors are concerned about reports that production of iPhone X is being cut due to low demand. It's a slow start to a busy week
for U.S. traders.
[16:05:00] On Tuesday, Donald Trump, of course, delivers his first State of the Union address. It is Janet Yellen's final meeting as chair of the Fed
on Wednesday. U.S. jobs numbers are out on Friday. And all week, we're getting blockbuster earnings from companies including Apple, Facebook,
Amazon, and more.
Now, over in Europe, the markets didn't fare much better. London's FTSE was the only one of the major indices that closed higher thanks to a
falling pound. In Germany, the Dax was down just a fraction. Despite some bad news for some of Germany's biggest and best-known companies.
Volkswagen has promised to deal promptly with its latest PR problem after it confirmed the company commissioned researchers who used monkeys to test
the effects of breathing in diesel fumes.
"The New York Times" reported that the tests were commissioned by three giant German firms VW, Daimler, and BMW. And that the monkeys, well they
were made to watch cartoons to keep calm while breathing exhaust gases. It says the VW beetle used was rigged to cheat emissions tests. Volkswagen's
stock price has recovered after the revelations in autumn of 2015 that it had deployed software in diesel cars to deliver fake readings and
government exhaust tests. John German is with the International Council on Clean Transportation. His research helped to unmask VW's systemic cheating
in 2015. Earlier, he told me he was not surprised by the latest.
JOHN GERMAN, SENIOR FELLOW, INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION (via Skype): Actually, there's probably nothing about it that surprises
me. Certainly, there has been a lot of contention about what -- how large the impact of vehicle pollutants are on public health. Very little dispute
that there is an impact, but the scope of it. There's been a lot of research over time, and I don't think this was necessarily a typical
research. The other thing that doesn't surprise me is that VW cheated on the test. That just fits a pattern of what they've been doing for years.
SY: So, besides the ethical issues of testing diesel emissions on cartoon- watching monkeys and apparently, it's also been reported on human beings, these were actually not real tests they were fake tests. They actually
didn't even test the emissions in a real VW vehicle.
GERMAN: Yes, that's exactly correct. When these VW vehicles are run in the real world, their emissions are 10 to 40 times higher than they are
under the conditions in which the monkeys were subjected to.
SY: So why do you think that VW would have wanted this type of scientific research, if you can call it that, why, and how might they have used this
GERMAN: There were studies as far back as 2011 in Europe showing that diesels in it the real world get high emissions. And so, this -- if you
did this campaign, you could then take the data and go out and say, well, it has no health impacts.
SY: He is a hotel magnate, a casino kingpin and a powerful force in Washington. But right now, Steve Wynn's reputation and his business empire
are in serious jeopardy. The "Wall Street Journal" published a bombshell report, detailing sexual misconduct allegations against the billionaire
that stretch back years. Those allegations have already cost him hundreds of millions of dollars as investors sell from his international hotel
empire. Now, in his hometown, Las Vegas, the gaming commission is investigating the claims.
Shares of Wynn Resorts are down nearly 9 percent. The company's biggest money spender is in China. It gets 70 percent revenue from Wynn Macau.
Shares in that company 6.5 percent. In Boston, regulators are reviewing a Wynn project currently under in construction. And in Washington, Wynn has
resigned as finance chair of the Republican Party. I'm joined now by Rick Velotta. He's gaming reporter at the "Las Vegas Review Journal. " Rick,
thanks for joining us. What can you tell us about the investigation that's under way and its timeline? And is this going to be an uphill battle for
RICK VELOTTA, GAMING AND TOURISM REPORTER, LAS VEGAS REVIEW JOURNAL: I would think it's going to be an uphill battle because certainly he is
denying across the board that anything actually happened. Of course, that's what the investigations are all about. The board of directors of
Wynn Resorts has named three people from within their board, all independent members of the committee, and they're going to have some
independent counsel that will assist them in their investigation. As far as the regulatory side is concerned, there has been confirmation that the
Massachusetts Gaming Commission is going to looking at this. And in all likelihood, the Nevada Gaming Control Board will look at it as well.
Although, we haven't received any confirmation that that's going to happen.
SY: OK. You're in Vegas. He owns not just Wynn Resorts, but he built several of the other large hotels there on the strip. Do you think there
will be a significant loss of business to the hotels and his resorts because of this?
[16:10:00] VELOTTA: I think it's too early to tell at this point. Because some of the early -- some of the early reservation numbers seem to indicate
that there hasn't been a drop-off immediately, but, of course, the news was brand-new as of Friday. I think probably the bigger question is what's
going to happen to some of Mr. Wynn's big development plans? He's looking to expand the Wynn Las Vegas property with a new tower. And he also
announced at his earnings call last week that he's going to develop land across the street from Las Vegas Boulevard and build another resort over
SY: How key is Steve Wynn to the success of Wynn Resorts and its future if he is fired by the board? If the end of the investigation is Steve Wynn
must leave this company, is he a replaceable talent?
SY: Well, there are some proteges waiting in the wings, but the fact of the matter is his name is on the side of the building, on the company. And
there are a number of analysts who have indicated to me that they don't believe that his lack of presence there would become a big problem for the
company to carry on. There are some of those people that are waiting to see what the outcome of these investigations are to determine what the next
move is going to be.
SY: And what about his political influence in Washington? As we mentioned, he has resigned as the finance chair of the Republican National
Committee. What does that potentially portend for the gaming industry?
VELOTTA: Well, for the gaming industry, it's interesting because Mr. Wynn and a number of different casino operators up and down the strip contribute
heavily to political campaigns on both sides of the aisle. So, the fact that he's no longer the chief fundraiser is going to be important because
of the fact he's so influential among the Nevada community. Not just Las Vegas, but across the state. And for that matter, in many locations across
the country. So, the fact that that fundraiser is not going to be in place anymore, that certainly takes something out of the team that the
Republicans have in place.
SY: And I know Las Vegas has a rather itinerant community there when it comes to central Las Vegas. But what's been the reaction among the people
VELOTTA: I think it's mostly shock. Shock on both sides, actually. Shock that this even got found out in the first place. Shock that it was and
found out sooner. Shock that somebody in Mr. Wynn's high level in the casino industry would take a chance if, in fact, he did what is alleged to
SY: Rick Velotta, thanks so much, Rick, for those insights. Appreciate it.
VELOTTA: Thank you for having me
SY: One of Saudi Arabia's richest men has been freed and investors are elated. Shares in Kingdom Holdings jumped 2 percent today. They have
risen strongly since Saudi authorities released the company's CEO from detention on Saturday. President Al-Waleed was detained nearly three
months ago. And since then there have been unconfirmed reports claiming he was mistreated under interrogation. Now Al-Waleed says it was just a big
(BEGIN VIDEO CLIP)
PRINCE AL-WAKEED BIN TALAL, CHAIRMAN, KINGDOM HOLDING: Exercise, stretch, I swim, I walk, and, you know, I have my own food, so everything's fine.
It's like home. And I call my family every day. I'm like my office here. I'm in touch with my office every day.
(END VIDEO CLIP)
SY: Now the terms of Prince Al-Waleed's release have not been announced. CNNMoney's John Defterios reports.
JOHN DEFTERIOS, CNNMONEY EMERGING MARKETS EDITOR: The release of the highest profile commercial player in Saudi Arabia, certainly lifts a cloud
of uncertainty. Perception of how the corruption crackdown was proceeding, hinged on the handling of Prince Al-Waleed bin Talal. A camera team was
invited into the Ritz-Carlton to show he was alive and well. During the appearance with Reuters, he did not state settlement terms, nor did he
admit guilt calling it all, a quote/unquote, misunderstanding.
He did however, make reference to a CNN report in January on his biggest project, the world's tallest tower in Judah. Saying it is on track albeit
at a slower pace. With a number of releases this weekend, after netting, what the government says is at least $100 billion in fines. The man behind
the crackdown, Crown Prince Mohammed bin Salman, seems eager to wind down the overall investigation to avoid further damage to the Saudi economy.
Growth is projected to be below 2 percent according to the IMF. And a closely watched indicator, cash reserves had been tumbling. Before the oil
crisis, they stood at nearly $.75 trillion. Now they're below $.5 trillion but stabilized with the recent oil recovery. With the looming IPO for
state energy giant Saudi Aramco, the government said they will start a road show next month to help close a chapter on what was an unusual crackdown at
a five-star resort in Riyadh. John Defterios, CNNMoney, London.
[16:15:04] SY: Coming up, running into trouble, a seemingly innocent feature on an app that was meant to help keep users healthy has major
ramifications for security forces. We explain, after the break.
SY: A big surprise at the FBI. Deputy Director, Andrew McCabe, abruptly stepped down effective today. McCabe has been a target of President
Trump's anger over the FBI's investigation into possible collusion with Russia. The White House says it had nothing to do with his sudden
(BEGIN VIDEO CLIP)
SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: The president wasn't part of this decision-making process, and we would refer you to the FBI.
The president stands by his previous comments, but in terms of the situation today, as I just said, we've seen the reports just as all of you
have. We don't have any specific comments.
(END VIDEO CLIP)
SY: Stephen Collinson is a CNN White House reporter joining me now from Washington. Stephen, what are your sources telling you about the
conditions which surrounded McCabe suddenly deciding to leave his post today after being a career FBI agent?
STEPHEN COLLINSON, CNN WHITE HOUSE REPORTER: It was a surprise that McCabe had decided to leave today. He was expected to retire in March when he
would be able to get his full pension allocation. But what is interesting is although the White House said it had no role in McCabe's departure.
McCabe has been one of a number of FBI and Justice Department officials who have come under intense pressure sometimes from the president, himself,
related to questions of whether there is this deep state of officials within both those entities who are biased against him. And this is, of
course, coming at a time of the Russia investigation which has the president very exercised.
So, it's clear that there are going to be questions, notwithstanding Sarah Sander's statement there that the White House had nothing to do with this.
Whether this is yet another example of the orchestrated campaign by the White House, Trump's aides on Capitol Hill and pro-Trump media in the
United States to cast doubt on the probity of the investigation by special counsel, Robert Mueller.
SY: McCabe, of course, was briefly in charge of the agency after his boss, James Comey, was fired unceremoniously by the U.S. President. How are FBI
agents and the agency in general reacting to this resignation?
COLLINSON: Well, what we've seen throughout the first year of the Trump administration is consternation within many areas of the FBI. The pressure
that is being put on the Bureau by the White House. Normally, in normal presidential administrations, there's this firewall between the White House
and the FBI and the Justice Department to avoid any sense that there is political interference in the neutral administration of justice.
[16:20:00] What we've seen from the president time and time again is pushing up against those constraints on his power. For example, he
complained that Attorney General Jeff Sessions recused himself from the Russia investigation. And said that had he known that would happen, he
wouldn't have picked him for the job in the first place.
We saw the firing of James Comey, the FBI director, which you mentioned, which the president later said was partly motivated by the fact that he was
angry about the Russia investigation. So, there's clearly a great deal of concern in Washington inside the FBI, the Justice Department, career
officials and outside. The way that the president is pushing apparently against the constraints of his office and that question is a central part
of the investigation by Robert Mueller into whether the president has committed obstruction of justice.
SY: Yes, by the way, we're going to get into that topic more with our guest, David Frum, later in the show. What about Chris Wray, the FBI
director, has there been response him? And do we know anything about his relationship with Andrew McCabe?
COLLINSON: So far, we've not had response from Chris Wray, the FBI director, specifically to the firing. We understand that Wray and another
official who's been under fire from Trump, Rod Rosenstein, the Deputy Attorney General, were in the White House today on another matter. There's
some suggestion that McCabe was told by Wray that given that he was a member of the team that was around Comey, that he wasn't in the agency's
plans top management going forward. But it's clear that Robert Wray, the head of the FBI, has got a seriously difficult -- Christopher Wray, the
head of the FBI, has a seriously difficult job as he tries to navigate this pressure on the Bureau from the White House.
SY: All right. Stephen Collinson, I think I messed you up with the name there, because I said it wrong first. Apologize for that. It is
Christopher Wray, the head of the FBI. Thank you.
U.S. Central command is scrambling to refine privacy policies after experts revealed potential security risks to forces around the world and it's all
because of a fitness tracking app called Strava. Experts say its heat map feature shows where users exercise. And it turns out a lot of U.S. troops
are using it on secret military bases. Samuel Burke is in London. Samuel, just to be clear, this isn't a hacking story. Someone figured out that
U.S. troops are using this app, freely uploading data onto this map and that it could be used against them, right?
SAMUEL BURKE, CNN TECH, TECHNOLOGY AND BUSINESS CORRESPONDENT: That's right, Stephanie. This has all of the trappings of a technology company
doing something because they can, not necessarily because they should. Strava is not a wearable device, it's not a tracking device per se. It is
an app that pulls from your wearable device, that pulls from your telephone, perhaps, just your telephone in your pocket. But what Strava
decided to do here, which is somewhat puzzling, they decided to publish a map of all of that information. The routes that all of its users who have
not turned on the privacy settings and publish that map to the world. So, not only does it show us what people are doing around military bases, maybe
where U.S. soldiers are going to take a run every day, but even the movements of those soldiers inside a military base.
Now, I want to share with you what Strava is saying. And I think that to a certain degree it's fair what they're saying. It's accurate, certainly,
what they are saying.
Quote, our global heat map represents an aggregated and anonymized -- that's the key word -- anonymized view of over a billion activities
uploaded to our platform. It excludes activities that had been marked as private and user defined privacy zones.
Stephanie, they actually just e-mailed me to update this and they say they're now committed to working with military officials as well as
government officials to address sensitive areas that might appear. Listen, we might want to know where Stephanie Sy goes jogging in Central Park and
where Samuel Burke goes jogging in Hyde Park here in London. But do we really need to know where people at U.S. Military bases are running?
SY: Well, first of all, I don't jog --
BURKE: You run.
SY: No, not that either. But I think Strava has a point here. And I wonder if this story has been overblown. Because we know that there are
troops in Niger. Is this a real time tracking device that shows where a certain U.S. soldier is at any given time? Is that what we're talking
about here? And is that what is public? Or like the company says, is this an aggregate where, you know, where if you really wanted to target a
soldier, every time they have a smartphone device, that's a GPS tracker, anyway.
[16:25:00] BURKE: Well, I won't run from your question. Because I think that you have a great point there. There have been no allegations that
anything serious, that some type of nefarious act has occurred as a result of this, Stephanie, as a result of this map being published. But what it
does show is that even U.S. military may not be aware of what their devices are doing. I just want to show you a map. This is from the same map.
These are Russian military bases. But what it shows, no redlines -- look at that. Take a look at this. This is a Russian military base. No
redlines, no orange lines.
So, what does it mean? Well, either these devices or these tracking apps aren't as popular outside the West with bases like the Russian military
base and Iranian bases. We don't see orange and red lines on there either, or it shows those countries are smarter than letting their troops share
this type of information. And to really answer your question. OK, so we could already see what's going on outside a military base. You're 100
percent right. We already know where they are on Google Maps. But to know exactly where people are going inside routes, it just makes all of us aware
that, yes, wearables are tracking us. But are we always track our wearables?
SY: Apparently, the Pentagon gave out 20,000 of these wearables. But there reviewing all of their protocols now. So, thank goodness for that.
Samuel, thank you so much.
All right. An exchange in Japan that fell prey to what could be a record highest is now under government scrutiny. Coincheck says $530 million
worth of cryptocurrency, NEM, was stolen by hackers. That would be the biggest ever theft of digital currency. Coincheck promised to partially
repay customers but did not say when. Japanese authorities are supervising the response to the theft. Let's get insights from director of research at
CoinDesk, Nolan Bauerle. Nolan, what vulnerabilities this highlight about this specific cryptocurrency exchange and perhaps other exchanges as well?
NOLAN BAUERLE, DIRECTOR OF RESEARCH, COINDESK: Well, I think from the very beginning, was it was one of the ironic things about the decentralized
revolution about cryptocurrencies that they built centralized hubs to act as exchanges. And from the very beginning, the incidents of security
breaches that we've seen have been at these centralized exchanges. So, Mt. Gox, the one that happened in Japan a few years ago that led to about a
year's worth of downturn in the industry, was much the same problem. So, in the case of this currency, what was different was there are some
features in this currency called multi-sig usage. So, it would require two people or three people to sign off on a transaction. They weren't deployed
by the actual exchange. So, they exist at the protocol level. They exist at the level of the blockchain, itself, but in this case, not at the
SY: In that is something that the company could not foresee?
BAUERLE: It's something they could not foresee. They cannot force the exchange. There are so many exchanges. They can't foresee the security
protocols at each and every exchange. They didn't take advantage of the features that were put into the security to allow them to deploy this type
of security method.
SY: So, centralization appears to be a problem. Who are the likely suspects behind a heist like this? And is this the same as trying to find
a bank robber?
BAUERLE: Well, these days if you are a bank robber, you generally do it online. And if you want to do it with cryptocurrencies you do it at the
exchange level. That's really a psychological hurdle that was overcome this year by a lot of people in the cryptocurrency space. They realized
that the breaches are not at the block chain level. They're not at the bitcoin level. They're at the exchange level. And they're still trying to
solve that problem. Multiple exchanges have developed cutting-edge security protocols, so you can do what Xapo does. They're an exchange
that's taken the peak of a Swiss mountain and it's hollowed out and they keep keys there in so-called deep --
SY: Literally they keep keys in the center of a Swiss mountain.
BAUERLE: They sure do.
SY: OK, but you didn't answer my question. Who are potential perpetrators when we're looking at a heist this major?
BAUERLE: In this case it's hard to determine. Because all the wallets that were robbed have been tagged. So, I'm not sure how useful they're
going to be. So, your guess is as good as mine about who could do it. We don't know. The money will be hard to --
SY: Did they find the perpetrators in that other Japan exchange?
BAUERLE: The Mt. Gox one? Absolutely not. We're still looking around. Some have been found. Others are gone.
SY: Nolan Bauerle, the stakes are high. That's a lot of money.
BAUERLE: It sure is. It's less than the -- when Mt. Gox happened, it represented almost 5 percent of the entire cryptocurrency market. This is
a lot smaller. They're going to repay. I think they've announced 81 cents to the coin. Which was about what it was trading at. So, it looks like
the people who lost their funds will get satisfaction from the -- what's been announced. We just don't know when.
SY: I wonder where they're going to get all the money from. All right, Nolan, thanks a lot. We'll leave it there.
BAUERLE: My pleasure.
SY: After the break, U.S. Soccer signs up a major new player we'll hear from football icon David Beckham about plans for a new team in Miami.
[16:30:00] (COMMERCIAL BREAK)
SY: Hello, I'm Stephanie Sy. There's more QUEST MEANS BUSINESS in a moment. When David Beckham gets his own team after a four-year wait, the
football superstar has been speaking with CNN.
And the president of Zimbabwe tells us he won't campaign for gay rights in his country. Before that the headlines this hour.
Deputy FBI Director Andrew McCabe has abruptly stepped down. The departure surprised even those expecting McCabe to retire in March. McCabe has been
a target of President Trump's anger over the FBI's role in the Russia investigation. The White House says Mr. Trump had nothing to do with
Three major German automakers are under fire for commissioning a 2014 study that tested toxic car fumes on monkeys. Volkswagen, BMW, and Daimler were
attempting to use the study to prove new diesel engines were cleaner than older ones. This is the latest fallout from Volkswagen's 2015 emissions
test rigging scandal.
The U.S. Treasury Department it is expected to take the next step Monday on Russia sanctions. Established after its interference in the 2016 election.
Monday is the deadline to implement those sanctions mandated by Congress last year, Russia says the move is a, quote, obvious attempt to interfere
in its own presidential vote.
Floodwaters in Paris have started to recede. But the city remains on a flood alert. And the river Seine crested at 5.85 meters on Monday. The
levels are expected to fall overnight. During the weekend, the streets were flooded, and the Louvre Museum had to close part of its lower level.
ISIS has claimed responsibility for a deadly raid on an Afghan military compound. Gunmen killed 11 army personnel during the 5-hour siege. Two of
the attackers blew themselves up. Two others were killed by troops and one was captured. This was the fourth deadly attack in Afghanistan in nine
English football icon David Beckham announced plans to establish a major league soccer team in Miami four years ago. He struggled to get the dream
off the ground, but finally, his efforts may be bearing fruit. On Monday, Beckham announced his dream had come true. After MLS granted him an
expansion franchise. CNN's Don Riddell has been speaking with Beckham. Don, that's quite a get. What did Mr. Beckham have to say?
[16:35:00] DON RIDDELL, CNN WORLD SPORT: Well, he had a lot to say, and he was very, very emotional about this. Of course, football fans know that
you have to wait four years for a World Cup to come around, but you know that it will come around. The situation with Miami and the franchise these
guys were pursuing is that it almost went away. And in fact, they were saying that as recently as just two months ago they were ready to walk away
from this, because it wasn't working out.
They had problems finding a location for the stadium. There was problems with the investment team. But they were absolutely determined and finally
got there today becoming the 25th franchise in major league soccer. And Beckham admitted that it was a very emotional day for him personally, and I
asked him about that.
(BEGIN VIDEO CLIP)
DAVID BECKHAM, FORMER ENGLAND FOOTBALL CAPTAIN: I just think it's been a long journey. It's been long, tiring, hard at times, great at times, and
at times we didn't think it was going to happen. So being on stage today, being awarded the franchise officially by Don, the commissioner. Having my
partners and owners up on stage, having our family in the audience, having the fans, it's real and it's happening. And it's been -- it's been an
emotional journey but one I look back on now. There's a reason it's taken this long. There's a reason why we've met different owners and it didn't
work out, and different investors. Because it just wasn't right, and now it's right, so.
(BEGIN VIDEO CLIP)
RIDDELL: So, of course, David Beckham, a very famous and successful football player. He is also a brand, a global icon, and now he is a
football team owner. They can't wait to get started for real.
SI: He is a jack of many trades. Don, I wonder what is left to do when it comes to actually seeing this Miami team play and get off the ground?
RIDDELL: Well, there's a lot of work, still to be done. Of course, they've now got to build the stadium and they've got to recruit a team.
David Beckham also says he's going to be building an academy. Because they don't just want to be luring some of the better players from around the
world, but they also want to build a team from the grassroots up. And have a football team that really does represent the community.
But, of course, this is all going to take a number of years. What we're being told today is that the new Miami team, and we don't know exactly what
they're going to be called yet, that announcement will come in a couple weeks' time. They'll begin playing in the 2020 season. They'll move into
their new stadium in 2021.
And of course, it remains to be seen whether or not they'll be a success. Remember, Miami had a major league soccer team called the Miami Fusion
which didn't really work and ended up going bust and dropped out of the league, of course. And so, people are concerned that maybe Miami was never
the right place for it to work. But major league soccer is booming. Particularly in the southeast, you've got already a team in Orlando. A team in Atlanta, which has been highly
successful in their first year.
There is a team from Nashville coming. Now these guys in 2020. And if it wasn't going to work, how about having David Beckham as the figurehead of
the club? That is certainly going to persuade a lot of people that they want to be involved with this, and he's shown us by sticking with this
project that he's not a quitter and he is determined to make a success of this.
SI: Well, maybe it will be the shot in the arm that the sport finally gets, American soccer. The fact you don't remember the Miami Fusion, shows
what an uphill battle it is. Don Riddell, thanks so much, I know viewers can see a lot more of your interview with David Beckham coming up on 'World
Much more coming up on this show as well, Richard Quest speaks to the president of Zimbabwe who says he will not campaign for gay marriage to be
legalized. That's next.
[16:40:00] (COMMERCIAL BREAK)
SI: The President of Zimbabwe, Emmerson Mnangagwa says he will not campaign to make a gay marriage legal, but he is promising to allow
independent observers to monitor Zimbabwe's next election. He spoke with Richard Quest at Davos.
EMMERSON MNANGAGWA, ZIMBABWEAN PRESIDENT: This new Constitution, in the past, we had no limited terms of leadership in the country. But the
current constitution which will come into effect on 22nd of May 2013, gives the limits. Maximum is two terms for any president. And I will abide by
RICHARD QUEST, CNN HOST: So, let's not count this term, let's say you stand for election, let's say you got another term. You could be president
for the next, what, five, ten years?
MNANGAGWA: It's only ten years. The first term will be five years. Then another term is five years, if I win the elections. There is a business of
how one becomes a leader.
QUEST: And you have already pledged to allow independent monitors from the African Union, from the European Union and from others to come and monitor
MNANGAGWA: Absolutely. I have said that this time around, we're going to have fair, free, and credible elections. And to do so, you must open this
place for people to come and observe, that is our region, the continent, the EU and other member states of the United Nations who applied to come in
to observe for our --
QUEST: I know you're busy with time, and I have a couple areas I just need to dwell on. On the question of human rights, on the question, for
example, of same-sex rights, never mind same-sex marriage or anything like that that might be in the future. For want of a better word, gay rights.
The overturning of laws against homosexuality. Can you promise me today that you will do that?
MNANGAGWA: Currently, I'm a constitutionalist. The current provision in the Constitution forbids same-sex marriages and uphold it until that issue
in our country is not an issue of the political party.
QUEST: Not same-sex marriage I'm talking about same-sex, same-sex relationships. Never mind, we can put marriage off. I'm talking about
same sexual activity.
MNANGAGWA: In our current Constitution, it is banned.
QUEST: Are you going to lead a campaign to overturn --
MNANGAGWA: No, I will not leave a campaign.
QUEST: Why not?
MNANGAGWA: Those people who want that are the people who must canvas for such things. So, that if they are able to win majority, in amending the
Constitution, they'll amend it. But it's not my duty on that issue to say I want to campaign for this, no.
QUEST: Of course, it is. With respect, Mr. President, of course, it's your duty. It's your duty to uphold human rights, as recognized by the
United Nations, and as recognized by other countries.
MNANGAGWA: It is my duty, it's my duty to obey my Constitution.
MNANGAGWA: I will not be dissuaded to violate my Constitution. Currently my Constitution says what I have said. But the Constitution does not
forbid people with different opinions. They must canvas with the opinions that I have.
QUEST: So, I'm asking for your opinion both as a man and as president, are you in favor of changing the Constitution on that issue?
MNANGAGWA: No, I am not. It's never a priority in Zimbabwe to deal with that issue. During 2018, when everybody was able to canvas, those that
canvas for that position, lost. We go by the majority view of our people. And currently the majority view is what I am stating.
QUEST: So, you keep Zimbabwe in a different age. Never mind same-sex marriage. But in an age when the European Union, the United States,
Australia recently, enacted same-sex marriage.
[16:45:00] Pretty much your country is in a very small minority.
MNANGAGWA: I don't think that -- I don't think my priorities today, I would grow my economy, right? Increase the standard of the life of my
people, putting that as a priority. Our priority now of my government is to embrace the international community and to say that Zimbabwe is open for
business. Let people who want to invest in Zimbabwe say this is what they want. These are the constraints they see, and this is what I believe is
necessary for us to catch up with some of the developing countries in our world. In our region.
QUEST: One more on this, I venture to disagree with you Mr. President.
MNANGAGWA: That's democratic.
QUEST: Surely, by changing -- whether it's on women's rights, gay rights, whatever rights it, is human rights, surely by changing those you really
send the true message that you're not just interested in money coming in for dollars for business but creating an equal environment for all. Truly
that's a much more powerful message than just asking for a bit of extra foreign direct investment.
MNANGAGWA: It's not a precedent of having dollars in Zimbabwe, it's a precedent of development. We must have functional railway systems in our
country. We must have functional infrastructure in terms of highways and so on. We must have functional manufacturing sector in the country. I
must modernize and mechanize my agriculture in Zimbabwe. I must develop a mining sector in Zimbabwe. These are the things as far as I'm concerned
are the issues which my people look at for government to address and facilitate for their development so that we catch up with members of the
SI: Richard Quest and his tough questions there with the leader of Zimbabwe.
Windlass Steelcrafts has been making weapons since World War II, and while it makes swords for military and police uses, it's now also the supplier of
some of the most iconic props on TV. Here's the latest from in our series on entrepreneurs reshaping global trade.
UNIDENTIFIED MALE (voice-over): This is the story of how one company in India built a global business making medieval props for the world's most
popular TV show.
Meet Sudhir, his father founded Windlass Steelcrafts in 1943 producing knives for the British Gurkha regiments in India during World War II.
Today the company makes more than $20 million a year. Making swords for the military, movies and memorabilia collectors.
SUDHIR WINDLASS, CHAIRMAN, WINDLASS GROUP: We produce 100,000 swords a year, we sell about 30 000 swords just to the American armed forces every
year. Another 20,000 swords to the Colombian army, police, and many, many other countries. As it regards to movies, these are all props that we
make, and we supply them. What we do is buy the license from the studio and produce those swords. And people buy those swords as artifacts of that
UNIDENTIFIED MALE: From Russell Crowe in "Gladiator" to Kit Harington in "Game of Thrones," the hands of Hollywood greats have all wielded Windlass
swords handmade by team of 400 artisans in their factory in the north of India.
WINDLASS: When a movie is being made, the studio does a lot of research and then they come up with designs and weapons or whatever. For which they
forward to us very detailed drawings and of course we make out of that
UNIDENTIFIED MALE: The company used to distribute around 6 million catalogs a year. Today, their wares are sold primarily online.
WINDLASS: Our main business is exporting. We export to Europe, we export to U.S.
With people going more into computers and online, the sales are increasing. Even the orders which we get, and the deliveries are faster because of the
web and computers.
UNIDENTIFIED MALE: "Game of Thrones" airs in more than 170 countries and holds the record for the most Emmys ever won by a primetime series. 23
million Americans watched each episode last season. The popularity of sword and sorcery epics spells good news for Windlass, keeping them on the
cutting edge for the foreseeable future.
WINDLASS: Swords have been the weapon which is full of valor and things like that. It's not like firing a gun or pistol. You need strength to
fight with a sword. And we are very passionate in what we do.
[16:50:00] (COMMERCIAL BREAK)
SY: A surprise resignation in Washington, Monday. Andrew McCabe, the Deputy Director of the FBI, stepped down effective immediately. McCabe has
been criticized by President Trump over the FBI's involvement in the Russia investigation. David Frum is the author of "Trumpocracy: The Corruption
of the American Republic," and he says President Trump poses a threat to democratic institutions such as the FBI. David, it is great to have you
with us. By Trumpocracy do you reference theocracy, plutocracy or democracy?
DAVID FRUM, SENIOR EDITOR, "THE ATLANTIC": I reference the suffix in all of those cases comes from the Greek word for a system of power. And that
is what Trumpocracy is. It is a system of power. We are all mesmerized by the gaudy personality of Donald Trump, but as he is showing us today, I
mean, today is a perfect example of what I am so concerned about. He is breaking the institutions of the United States to advance his own power in
order to protect himself from the consequences of his own wrongdoing.
SY: I forgot one of them, autocracy. You've been outspoken about the threat that President Trump poses to democratic institutions. He has
directly attacked his own Justice Department and the FBI, actually, I shouldn't call them his own. They're the American people's. What do you
make of the Deputy Director Andrew McCabe suddenly deciding to leave the FBI? He spent his entire career there. And is that an example of the
power you referenced in your book?
FRUM: Yes, well, Acting Director McCabe was the official. President Trump demanded to know how he had voted. Such a shockingly inappropriate
question. He insult -- in the firing, Donald Trump cruelly insulted Andrew McCabe's wife. You get a sense of the personality of this. The image of
Donald Trump that we sometimes see, someone who's so out of it, so unaware of what's going on that he's not capable of cunningly finding the key
institutions of the United States government and dismantling them in order to protect himself. In this case from investigation of his ties to Russia.
SY: And yet, only a handful of Republicans, especially those that aren't running for office again, have stood up to President Trump on these
matters, David. Why is Trump still getting so much support from conservatives in the Republican Party?
FRUM: Look, Trumpocracy it's not a system of one-man rule. The essence of it, it is a system of power as I said. The essence is complicity with
other parts of the Republican Party. So, House Republicans and Republicans generally look to Donald
Trump to sign pieces of legislation that are otherwise too unpopular to become law and in return
they give Donald Trump protection.
That's what the whole memo bogusness is about. It's about discrediting the FBI as it looks into Trump's wrongdoing, both financial and in national
SY: Let's get out of the philosophy for a second into what he has actually done. Because you've described yourself as a conservative, and he got a
lot of support from the business community as well as from conservatives on his tax policy, and the tax plan.
[16:55:00] Is that an area in which you would agree with President Trump as a conservative?
FRUM: Look, I basically support at least the corporate side of the Republican tax bill. I think we need lower, broader corporate taxes that
would raise more revenue. Yes, those are my politics. The question is how much do I want those things?
And which do I value more? And I think one of the things I'm forced to confront is I care more about living in a country where the police do not
take orders from the president than I do about 21 versus a 35 percent tax rate.
SY: All right. Before I let you go, the president delivers his first State of the Union address tomorrow night. Of course, you were one of
George W. Bush's speechwriters. The president gave a tempered speech at Davos last week, what are your expectations for this address?
FRUM: I'm sure he'll be able to get through it, and then he will get a lot of undeserved compliments. Basically, any time President Trump has an hour
on television and doesn't put a fork in somebody's eye, we hail him for this incredible accomplishment. But Trump at his best is the same as other
presidents at their adequate least.
SY: David Frum, the author of the new book "Trumpocracy." It's a pleasure to have you. Thank you.
FRUM: Thank you.
SY: All right. Let's take a quick check of the Dow. It just wrapped up, by the way, its worst day since September, a three-day rally ended Monday
with all three U.S. Indices in the red. You see down 177 points starting the week. Over in Europe, the markets didn't fare much better. London's
FTSE was the only one of the major indices that closed higher and that was thanks to a falling pound. And you can see the other three
major European indices all in the red.
And that is QUEST MEANS BUSINESS. I'm Stephanie Sy in New York, the news continues here on CNN.