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QUEST MEANS BUSINESS

Jared Kushner Speaks Exclusively To CNN About What He's Telling Donald Trump And The Saudi Crown Prince; A German Lawmaker Wants To Take Berlin's Action One Step Further Calling For Germany To Stop All Business With McKinsey After A "New York Times" Report Suggested Riyadh Used Research From The Management Consulting Firm To Target Critics On Social Media; President Trump Addresses The Press En Route To Texas; Trump Threatens to Cut Off Foreign Aid Over Migrant Caravan; Trump Says He's Not Satisfied With Explanation From Saudi Crown Prince Over Khashoggi's Death; Australian PM Apologizes For Institutional Child Abuse; One Activist Says He Spoke to Khashoggi About Saudi Clampdown; New Report Suggests Saudi Government Targets Critics on Social Media; U.S. Stocks Fall Ahead Of Earnings Week; Chinese Stocks Rise Amid Stimulus Hopes; Tobacco Giant Launches Controversial Ad; Richard Quests Visits Kenya; Dow, S&P 500 Fall Before Closing Bell. Aired: 3-4p ET

Aired October 22, 2018 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT: It is an abundance of caution on the markets today. One of those bounced today. They say, it's

going to be like this for the rest of the month, this was what was driving the day on Monday, October 22nd.

Saudi Arabia's allies weigh up whether to stop arms sales. Jared Kushner speaks exclusively to CNN about what he's telling Donald Trump and the

Saudi Crown Prince. Chinese stocks had their best day in years as the government steps in to help. And the men behind Marlboro tell their

customers to stop smoking and it's the cancer charities that are fuming. I'm Paula Newton and this is QUEST MEANS BUSINESS.

And good evening. Tonight, President Trump says he has spoken to Saudi Arabia's Crown Prince as new evidence of an attempt to cover up the killing

of journalist, Jamal Khashoggi comes to light. Meanwhile, Trump's son-in- law tell CNN the administration has its eyes wide open on Saudi Arabia. Jared Kushner says he is urging the Saudi Crown Prince to be fully

transparent about the incident. His government has changed its story repeatedly about what's happened after abandoning its original denial of

all knowledge of Khashoggi's fate.

Now, Jared Kushner spoke exclusively as we were saying to CNN's Van Jones who asked him if the episode had shaken his faith in Mohammed Bin Salman.

(BEGIN VIDEO TAPE)

JARED KUSHNER, SENIOR ADVISER TO THE PRESIDENT OF THE UNITED STATES: Once we have all the facts then we'll make an assessment, but again, I think

that our administration has made a lot of gains in our fights against terrorism. We have to deal with the long term ideology of extremism and

Saudi Arabia is a critical partner in that, I mean, they are the custodian of the two Holy sites which is very significant in the relation of Islam

and a lot of the reforms they have been making there to help us track down the tariff financing.

And then also to push back against people who are perverting the religion had been very historic over the last year, so we are hopeful we can keep

pushing forward with a lot of the initiatives that further American interest and that pushback against Iran's aggression. And so we are going

to stay focused on that.

VAN JONES, CNN HOST: Has anything happened in the past several weeks that causes a reconsideration of relying on the Saudis as allies? Is there any

adjustment that you think might be worth considering and then also, what punishment do you think is appropriate for the Saudis if they did it, just

trying to understand going forward, is there a punishment that makes sense and is a readjustment going to make sense?

KUSHNER: Yes, so I wouldn't say our strategy in the Middle East relies on Saudi Arabia. I'd say our strategy in the Middle East relies on what are

America's interest, what are our strategic interests and then how do we utilize all the things that are available to us to try to push those

forward. If we have people who share those interests, we will work with them. If we have people who are working against those interests, we will

work against them.

And so I would say that things are not really static. They are always fluid and dynamic, and so we're always readjusting and reassessing and we

will continue to do so and to your second questions, we will really see what the facts come back as and what we do and then we'll make a

determination.

(END VIDEOTAPE)

NEWTON: OK, so Jared Kushner there still taking a wait and see attitude. Meantime, Kushner's comments come as European governments reassess their

business towards Saudi Arabia. Germany's Chancellor said on Sunday she was suspending arms sales to the Kingdom and called on Berlin's allies to do

the very same thing.

(BEGIN VIDEO CLIP)

ANGELA MERKEL, CHANCELLOR OF GERMANY (Through a translator): First, we condemn this act in the strongest terms as we made clear yesterday.

Second, there is an urgent need to clarify what happened. We are far from this having been cleared up and those responsible held to account.

Thirdly, I agree with all of those who say that arms exports, albeit already limited can't take place in the current circumstances.

(END VIDEO CLIP)

NEWTON: Now, Britain has resisted pressure so far and to cut its business ties with Riyadh. Brexit Minister Dominic Raab called it a terrible case.

He said thousands of British jobs rely on doing business with Saudi Arabia. Now, France's position remains unclear, as to Paris would heed Berlin's

call to suspend weapon sales. The French Foreign Minister said any decision must wait until the full truth about Jamal Khashoggi's murder is

established.

Our Alex Marquardt joins us now from Washington. You know, everyone keeps saying the same thing. They are waiting, and yet so much revealed today

including a CNN exclusive, you know, that showed surveillance video that the Saudis actually had a body double waiting in order to stage Jamal

Khashoggi's exit from that Turkish consulate.

[15:05:07]

ALEX MARQUARDT, CNN SENIOR NATIONAL CORRESPONDENT: Right, the U.S., Paula, has been very reluctant when I said the US, I mean, the Trump

administration very reluctant to make any sort of calls as to what actually took place here, what the role -- possible role of the Crown Prince,

Mohammed Bin Salman was.

As you mentioned, President Trump has just spoken to reporters, we will find out shortly whether he was asked about this attempted -- this latest

attempt to cover up and that new video that CNN released exclusively, but if you listen to Jared Kushner who really is as close to the President as

anyone can get, he really does exemplify that cautious line that the administration is taking.

From the get go, it's been let's wait and see what the facts are. Let's wait and see what the investigations say. Now, of course, the Saudi's have

said that they need 30 more days for an investigation. Kushner was very specific to say that they are getting information from all sorts of

different areas, not just from the Saudi investigation.

As you noted, he said that they are going in with eyes wide open, but really, what struck me in those comments from Kushner is the same kind of

things that the Secretary of State, Mike Pompeo and the President said where he talks about the strategic objectives of the United States rather

than the alleged murder that took place. It's about standing up against Iran in Syria, in Yemen and Palestine and in Lebanon.

It's as if the repeated insistence about the importance of this special relationship is more important than the murder of Jamal Khashoggi and that

is something that Capitol Hill disagrees with vehemently, not just Democrats but Republicans as well and it's really striking to watch

Republican senators on Capitol Hill really split with this Republican White House. No one in the White House has come close to tying Mohammed Bin

Salman, the Crown Prince, to this murder of Khashoggi whereas senators across party lines; most notably Senator Bob Corker of Tennessee said that

it certainly looks like MBS was involved.

Earlier today, Senator Rand Paul from Kentucky said nothing happens in Saudi Arabia without the Crown Prince's approval so it's laughable to think

that he was not involved in this. So it really does seem when you look at the diverging reactions here in Washington. We're used to division here in

Washington, but rarely among Republicans.

It does seem that Capitol Hill certainly is willing to sacrifice this special relationship in favor of human rights, Paula.

NEWTON: And the bottom line is whether or not all of those arms sales, which a lot of defense contractors in the United States depend on whether

those will be the sticking point here and why the US administration continues to take that wait and see approach. Alex in Washington, thanks

so much as we wait for the President's comment there.

In the meantime, a German lawmaker wants to take Berlin's action one step further calling for Germany to stop all business with McKinsey after a "New

York Times" report suggested Riyadh used research from the US management consulting firm to target critics on social media.

Now, McKinsey denies it did any such research for the Saudi government. It says the document in question was a brief overview of publicly available

information looking at social media usage. "We are horrified by the possibility, however remote, that it could have been misused in any way."

Our Samuel Burke is here with us in London. You know, interesting here because throughout all of this, a lot of the social media companies are

front and center, suspect number one. We can put it that way. Is Twitter right? What are they doing and what are they saying?

SAMUEL BURKE, CNN BUSINESS AND TECHNOLOGY CORRESPONDENT: Well, it's really interesting, Paula because the Jamal Khashoggi scandal is essentially

dragging Twitter through the mud on multiple fronts. On the one hand, they have a network of bots they had to take down that appeared to be pushing a

pro-Saudi message when it came to the Khashoggi then disappearance when these tweets were going out, of course, it was his death.

And on another front, you even have this "New York Times" report alleging that there was a mole inside Twitter -- a Twitter employee who had been

persuaded by Saudi intelligence to access accounts of dissidents. What these all does is just put square in the picture for us so that we can see,

it's not just Russia.

We talk so often about Russia, Paula and we would be naive to think that they would be the only one certainly in the wake of 2016 elections, other

countries seeing what they are doing. But it also calls into question the whole authenticity of everything that we see on social media is the person

commenting on your story or engaging in supposed dialogue with you really a person or is it a bot?

A pro-Saudi bot that's really just saying the same message over and over again in multiple accounts, the exact same message and the exact same

hashtag at the exact same time automated across the Twitter network. That's not good for investors. They want to know that these are real

people and that people are going and having authentic conversations around this social network.

A lot of times, we've seen this with Facebook. This scandal has showed how it's happening on Twitter. Twitter has not had any comment about the

allegations from the "New York Times" report about a mole inside the network or "The Times" report that that person was fired in 2015.

[15:10:10]

NEWTON: Yes, and so chilling really to think about how governments are using and abusing those social media spaces. I want to go now to the

President ...

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: -- and they did nothing for us. Nothing. They did nothing for us. So we give them tremendous amounts

of money. You know what it is. You cover it all the time. Hundreds of millions of dollars, they like a lot of others do nothing for our country.

UNIDENTIFIED MALE: Have you spoken to (inaudible), Mr. President?

TRUMP: I have. I spoke to the Crown Prince. We have people over in Saudi Arabia now. We have top intelligence people in Turkey and we're going to

see what we have. I'll know a lot tomorrow. They'll be coming back either tonight or tomorrow morning, but we have people in Saudi Arabia and people

in Turkey.

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: I think it's a long time. He said they want a month, that's a long time. There's no reason for that (inaudible) ...

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: We're looking at it. We have a lot of different concepts right now. They have a lot of different things happening with respect to

transgender right now, you know that, as well as I do and we're looking at it very seriously.

UNIDENTIFIED FEMALE: What about (inaudible) ...

TRUMP: I'm protecting everybody. You know what I'm doing? I'm protecting everybody. I want to protect our country.

UNIDENTIFIED MALE: Mr. President, (inaudible) --

TRUMP: Oh, I think he has. I think it's going to be. I think they wanted to see that I am on his side and that I am 100 percent. We have -- I mean,

you people have been reporting over a hundred thousand people. They lined up two days ago and it's very exciting.

UNIDENTIFIED FEMALE: (Inaudible) ...

TRUMP: Oh, I think Ted will be a big factor tonight. He is going to get up. He is going to make a great speech. I'm going to get up. I'm going

to make a great speech. I hope I will see you going and I'm going. I can't believe it. You're not going to be there tonight. That's terrible.

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: I think Beto O'Rourke is highly over rated. When I heard about him, I figured he must be something a little special. He is not. I

thought he got beaten badly in the debates. I think he's a highly over rated guy.

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: Say again?

UNIDENTIFIED FEMALE: ... have you buried the hatchet with Senator Cruz?

TRUMP: Oh, I have now. Ted and I get along very well, very late into the campaign and I said, don't worry about it. It's only a question of time

and then it became very nasty and then it was over and when it was over, we got along great. I like Ted. You remember, he was the last one that we

really had -- I mean, I went I went very late into the campaign. We actually held a rally together late into the campaign. I said, it will

end. And it did, and then it got back. So we're very close and we've done great on tax cuts. We've done great on regulation cuts. He's been really

terrific.

And if you look at what's happening in Germany, with respect to the pipeline, they want to now start buying our natural gas. This just came

out, so take a look at that.

UNIDENTIFIED MALE: (Inaudible).

TRUMP: I know Texas cares. Ted Cruz and I had a very, very nasty and tough campaign. He had a very competitive with the campaign. Once it

ended, we got together -- and by the way, very late into the campaign, we left. It was done. I said, don't worry. It's only words this time. And

then ultimately what happened, we thought it out. The outcome was obvious and we have worked together very closely. I like him a lot. I actually

like him a lot and he's a very smart guy. He loves the people of Texas, like I do and in fact, right now, I guess, they said it's (inaudible).

It's like a big tailgate. Going for miles, it's over a hundred thousand people.

UNIDENTIFIED MALE: (Inaudible).

TRUMP: I can tell you all, it's just great. And I think our husbands are not much better, they've been worse. I think (inaudible) is a disgrace,

taking marital protection because she doesn't have to talk about corruption. I think she's a disgrace.

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: Look, I can't tell you. I can only tell you this, we can have hundreds of millions of dollars (inaudible) for us.

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: You know what? Maybe it will and maybe it won't, but it certainly doesn't affect us. They can do a lot better job. If you look at the three

countries in Eastern Europe, and I don't know what's going on with Mexico. I guess, it looks like the people are walking right through the middle of

Mexico, so I am not exactly thrilled there either.

UNIDENTIFIED FEMALE: On tax cuts, Mr. President ...

UNIDENTIFIED MALE: (Inaudible).

TRUMP: You know what, (inaudible), I'm very cautious about (inaudible) -- a great group of people, the ...

[15:15:16]

TRUMP: ... right now, and Saudi Arabia -- we will know very soon. We have tremendously talented people and they are going through this very

well. They are coming tonight or tomorrow and I will know it very soon -- and I am not satisfied with whatever ...

UNIDENTIFIED MALE: (Inaudible).

TRUMP: I agree with Rand on a lot of things. I don't want to lose all of that investment that we've made over there. I don't want to lose the

million jobs, I don't want to lose $110 billion in (inaudible), but it's really (inaudible) other than military, so that's very important. So I

think we're going to get to the bottom of it.

UNIDENTIFIED MALE: (Inaudible).

TRUMP: I am really looking to make America great again. That's what I do. I am making America great again. We have been giving so much money to so

many different countries for so long and it's not fair and it's not good and then when we ask them to keep their people in their country, they are

unable to do it, so I'll make America great again.

UNIDENTIFIED FEMALE: Mr. President, your tax cuts, you said you wanted tax cuts by November 1st, how much (inaudible) ...

TRUMP: We're going to be passing that now. We are putting in a resolution sometime in the next week or week and a half, two weeks, we're going to put

in -- we're giving a middle income tax reduction of about 10 percent. We're doing it now for middle income people. This is not for business.

This is for middle -- that's on top of the tax decrease that we've already given.

UNIDENTIFIED FEMALE: Are you signing an Executive Order for that?

TRUMP: No, no. I am going to Congress. We will re-submit -- we won't have time to do the vote. We'll do the vote later. We'll do the vote

after the election.

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: Say again?

UNIDENTIFIED MALE: (Inaudible) confidence about holding on to the House?

TRUMP: I think there's tremendous spirit, maybe like I've never seen other than in '16. You don't remember '16, you're too young. I have never seen

spirit like the spirit that we have right now except the week before the race -- the Presidential race two years ago. I think the Republicans are

going to do very nicely. We're doing very well with the Senate and he was just asking about the race, other than two years ago, the Presidential

race, I have never seen spirit like I see right now. I think the Republicans are going to do very well.

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: People are tired of high taxes. We gave the tax cuts. We've done so much and they want a strong military, they want protection, they want

safety, they want security. We give that. The Democrats do not give that. The Democrats don't know what they are doing, they don't know what they are

giving. I think we are going to do very, very well in the race. Yes?

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: I don't regret anything. Honestly. It all worked out very nicely.

UNIDENTIFIED MALE: Is California providing over the (inaudible)?

TRUMP: You shouldn't have. Take a look. They want to get out of sanctuary cities. Many places in California want to get out of sanctuary

cities. Yes, it is right in some cases.

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: Who is an (inaudible) ...

UNIDENTIFIED FEMALE: Khashoggi (inaudible) ...

TRUMP: Well, I am going to have to find out. We're going to find out a lot. We're going to find out. We are going to know a lot over the next

few days about the Saudi situation.

UNIDENTIFIED FEMALE: (Inaudible).

TRUMP: You've got to go into the middle of the caravan, take your cameras and search, okay.

UNIDENTIFIED MALE: (Inaudible).

TRUMP: Take your time. Take your cameras, go into the middle and search. You're going to find MS-13, you're going to find Middle Eastern, you're

going to find everything, and guess what? We're not allowing them in our country.

UNIDENTIFIED MALE: (Inaudible) California weapons, sir?

(CROSSTALK)

TRUMP: I think the Republicans are going to (inaudible). It's going to be a big factor with what's happening at the border. What's happening at the

border was caused by the Democrats because they won't let anybody stay (inaudible) that are horrible.

UNIDENTIFIED FEMALE: But the Republicans have control, Mr. President.

TRUMP: (Inaudible).

[15:20:16]

TRUMP: We'll see what happens. We'll know a lot in a few days.

UNIDENTIFIED FEMALE: (Inaudible) are you prepared to build up the US (inaudible) and pull out of the arms deal?

TRUMP: When people come to their senses, we will build it up. Until people come to their senses. Russia has not (inaudible). It should have

been done years ago, until people come to their senses, we have more money than anybody else by far. We'll build it up. Until they come to their

senses, when they do, then we'll all be smart and we'll all stop and by the way, not only stop, we will reduce that's what I'd love to do, but right

now, they have not adhered to the agreement. It's a threat to whoever you want and it includes China, and it includes Russia and it includes anybody

else that wants to play that game. You can't do that. You can't play that game on me.

UNIDENTIFIED FEMALE: Are you actually going to withdraw or (inaudible).

TRUMP: Until they get to (inaudible). They have not adhered to the spirit of that agreement under the agreement itself, Russia. China is not

included in the agreement. They should be included. Until they get smart, there will nobody that's going to be this close to us.

UNIDENTIFIED FEMALE: (Inaudible) our allies?

TRUMP: I have not.

UNIDENTIFIED MALE: (Inaudible).

TRUMP: I don't have the (inaudible) in the agreement because they violated the agreement. I am (inaudible) ...

UNIDENTIFIED MALE: (Inaudible).

NEWTON: All right, you see there the President of the United States, who was truly pacing up and down the White House lawn as he had an impromptu

really what was a press conference there. He is on his way, as you see him there on a rally -- to a rally in Texas for Senator Ted Cruz who is

obviously, running for reelection during those all important American midterms.

The President in fact discussed that migrant caravan right now that is headed apparently to the US border saying that he is going to punish those

countries from where they come cutting off their foreign aid. He also just now was also talking about that missile treaty that he has pulled out of --

with Russia.

The first and foremost, the top news is the fact that the President did say that he did speak to the Crown Prince in Saudi Arabia, that he is not

satisfied and that he right now at this moment has US top intelligence officials in both Saudi Arabia and Turkey and that he expects to get to the

bottom of what happened by tonight or even tomorrow.

Our Stephen Collinson joins me now from Washington and he was also listening in and our Sam Kiley of course there from Riyadh. Sam, I want to

go to you first because the issue here is, if you are in Saudi Arabia and you are in that Royal court right now, what are you thinking? He is

definitely -- the President changed his posture since about Saturday when he had an interview with "The Washington Post" and really seemed quite

impatient with the Saudi explanations thus far.

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, I think there's been growing impatience with every day of revelations that are being

dripped, but it has to be said by unnamed Turkish sources, the most dramatic of course recently being Clarissa Ward's report showing the use of

a body double which shows, if you like, malice or forethought in terms of the future of Mr. Khashoggi just in the last moments while Donald Trump,

the US President was speaking there, showing his latest level of frustrations saying that the Saudis didn't need another month to come up

with a final conclusion as to what happened and expecting an answer much more quickly.

The King issued a statement through the local television here announcing that on Thursday, there would be a national campaign of prayers in memory

of Mr. Khashoggi and this is very much part of the new narrative that's emerged here in Saudi Arabia which is to lord the life and works of Mr.

Khashoggi and show the international community and indeed Saudis that this "Washington Post" -- the late "Washington Post" correspondent was not seen

as a threat to Saudi Arabia, he was not a threat to the state and therefore, in a sense removing any kind of motive for his murder projecting

further the whole idea that it was a rogue element of intelligence officials that overstepped the mark and killed him.

NEWTON: It's interesting that we didn't see that kind of sympathy or outpouring in the hours after his death. You know, Stephen to you now --

our Stephen Collinson joins us now from Washington. I mean, you saw the President there. You and I both know when he's in that kind of mood where

this is going, we had Jared Kushner earlier on CNN saying, look, we are going to take a wait and see approach. That doesn't seem like a wait and

see approach to me. It seems that he has changed -- something has changed there.

[15:25:12]

NEWTON: But he also made it very clear that the investments, the Saudi investments in the United States whether it's arms or anything else are as

important as anything to the US administration.

STEPHEN COLLINSON, CNN WHITE HOUSE REPORTER: Right, Paula. I think that's the line that the administration has been walking throughout this and it's

getting more and more difficult just because of the present events. Every revelation or report like Clarissa Ward's report this morning that comes

out that makes the Saudi explanation seem less credible, increases the political pressure back home in Washington for the President.

We had a volley of lawmakers including many prominent Republicans coming out on Sunday casting down on the Saudis' explanations. There is a debate

now in Washington whether the President is not being strong enough towards the Saudis and that is something -- his image and his projection of

strength is something he cares about very deeply.

I think that could also be sort of shifting his position on this, but as you said, the underlying rationale of the administration is to preserve

this relationship with Saudi Arabia, all of these reports are making that more and more difficult so I think that's the sort of political issue we're

seeing unfolding here and that is why the President is being forced to move even while as you say, he is talking about preserving those investments,

preserving those arms deals and fundamentally because Saudi Arabia is the fulcrum of American-Middle East policy under this administration as regards

its pressure campaign against Iran.

NEWTON: Yes, and he may also feel that he has some support from Americans for having some kind of sanctions imposed but not those that hurt certainly

American business and American jobs. Sam, if I can ask you, we're just getting word apparently from Saudi state TV that in fact, the Crown Prince

has met with Secretary Mnuchin -- Treasury Secretary Mnuchin and if that's true, is there any other -- is there any better example of the fact of how

important the economic relationship is to this administration?

KILEY: It's a very good example and we knew that this meeting was likely to go ahead. We didn't know for sure that he would meet the Crown Prince

himself, but given that he is a Cabinet level minister and this is the power in the land, it is inevitable what they are meeting about officially.

At any rate, it's not so much economics; officially, it is part of the meeting about the funding of terrorism because jointly established with the

United States, the Saudis set up a center here, a global center for the tracking of terrorism funding and finance, which is yes, another indication

of just how important in terms of realpolitik, the relationship with Saudi Arabia really is.

If you look back to say the famous printer (ph) bomber case which was intercepted in London, a bomb en route for synagogue in the United States,

that was intercepted as a consequence of intelligence from Saudi Arabia, just one of many examples that Western intelligence agencies over the years

have thanked the Saudis for, but of course, that does not solve this moral catastrophe really that has hit the Kingdom and nor does it answer the

question as to who gave the order.

And I think there's a lot of frustration. We've seen it from Angela Merkel today, from the Canadian Prime Minister and Cabinet today. Donald Trump

saying they didn't have enough, they didn't need a month to do this investigation, a building sense of frustration and no doubt, the Treasury

Secretary will have communicated the level of pressures that his administration is under to get and to extract answers from their close

friends in Saudi Arabia.

NEWTON: Yes, and the audacity really of some of the explanations that the Saudi government has come up with literally by the hour continues to boggle

the mind. Our Sam Kiley there for us in Riyadh and our Stephen Collinson, thanks for joining us there from Washington and we will be right back with

more news in a moment.

(COMMERCIAL BREAK)

[15:30:15] NEWTON: Hello, I'm Paula Newton, coming up in the next half hour of QUEST MEANS BUSINESS, Italy's government still keen on its

controversial budget despite a dead downgrade, and one cancer charity calls it Stunning Hypocrisy.

The world's largest tobacco company launches an ad campaign against smoking. First though, these are the headlines on CNN at this hour. U.S.

President Trump is threatening to cut aid to Honduras, Guatemala and El Salvador, but caravan of migrants need to stop before reaching the U.S.

border.

The total aid plans for those countries next year adds up to more than $180 million. Despite warnings, caravan organized this day right now, more than

7,000 people continue to march north through Mexico. Mr. Trump just said he's spoken to the Saudi Crown Prince and that he is not satisfied with

what he said about the killing of journalist Jamal Khashoggi.

Meanwhile, Turkey's ruling party calls the killing a complicated murder that was monstrously planned. That statement came hours after CNN aired

surveillance video showing an apparent body double, leaving the Saudis Consulate in Istanbul after Khashoggi (INAUDIBLE).

Australia's Prime Minister has delivered an emotional apology to survivors of widespread institutional abuse. Now in a speech before parliament,

Scott Morrison said the nation has failed children, the apology follows a five-year inquiry into the thousands of cases of child abuse that took

place at religious and state-run entities.

Gearing for our top story now, one Saudi dissident says he spoke to Jamal Khashoggi regularly about Riyadh's use of technology to crack down on

critics. He believes those conversations may have been overheard by the Saudis. Omar Abdulaziz joins me now from Montreal and Bill Marczak, Senior

Research Fellow at Citizen Lab. His organization discovered the alleged surveillance of Abdulaziz and others, he joins us now from San Francisco.

Omar, first to you, and I give you our condolences that was -- continues to unfold here in terms of the very bizarre, it's to be believed murder of

your friend.

If you can just explain kind of the character of your conversations because Omar, they went to the very heart of why it appears that your friend was

targeted by Saudi Arabia.

OMAR ABDULAZIZ, FRIEND OF JAMAL KHASHOGGI: Actually, first of all, I was working with Jamal in some different projects, and I've learned and maybe

at the beginning of the focus that my phone was hacked. So basically, they were listening to every single conversation that we had.

[15:35:00] We were talking about some projects, aiming the trolls in Twitter. We were trying to counter them. We were working on other short

documentaries, and also we were working to do some things for the activists of being imprisoned in Saudi Arabia.

NEWTON: You were actively -- you and Jamal, actively working to try and counter some of what the Saudi Arabian government you alleged was doing to

the both of you as so-called outspoken dissidents.

ABDULAZIZ: Honestly, it's sort of difficult to explain what happened to Jamal, and here's the thing. You know, they did that to Jamal, few months

ago, they tried to do the same thing to me. So it's pretty clear that I do have to say that. MBS has killed Jamal Khashoggi, we have -- we have to

act upon that.

Nothing is going to happen in Saudi Arabia without the green light from MBS. That's why we have to tell the whole world what's really happened to

Jamal Khashoggi. Do not waste our time, please, talking about details, talking about arm deals. We know what happened there, please, let the

world know.

NEWTON: And what the world is starting to find out really, Bill Marczak, in terms of starting to research. You guys started all this research

months before this unfortunate incident. And tell us what you uncovered about the kind of surveillance that was going on with Omar and perhaps

others.

BILL MARCZAK, SENIOR RESEARCH FELLOW, CITIZEN LAB: Well, at Citizen Lab, one of the things that we do is we track nation states spyware. This means

spyware which is used by governments to target anyone. And we for a while, we've been tracking this one company called NSO Group. And they have a

spyware product called Pegasus which they sell to governments.

And when a government buys Pegasus, what they do is they can send a text message to someone's phone, containing a link. And if they convince the

person to click on that link in the text message, then the phone becomes infected and the government can see anything on the phone including

pictures, contacts, listening into calls, watching text messages and even turning on the camera and the microphone to spy on activity in the vicinity

of the phone.

So we've been tracking this for actually since 2016 when another dissident in the UAE got one of these links, Ahmed Monsur(ph), who is now in prison

and forwarded it to us at Citizen Lab and we were able to capture and analyze how this company NSO Group was exploiting flaws in the iPhone.

NEWTON: Is there --

MARCZAK: Now -- sorry --

NEWTON: Is there any debt in your mind that Mr. Khashoggi was also being surveilled this way?

MARCZAK: So it is -- it is a 100 percent clear that he received one of his text messages containing a link. And furthermore, when we were scanning

the internet at Citizen Lab for traces of the spyware. We found a victim in Montreal who is associated with the Saudi operator of the spyware.

And the victim was moving between a university internet service provider in the home ISP at sort of odd hours. And Omar Abdulaziz 's activity exactly

matches what we found in our scans. So we have a very high confidence that he was indeed being spied on by the Saudis at that point in time.

NEWTON: Omar, it's so chilling to hear, I know that Citizen Lab told you even before they completed the research of what was going on. What did you

think, and did you think your family members in Saudi Arabia were in danger?

ABDULAZIZ: Honestly, I had no idea until I received that knowledge from Citizen Lab, from them. But what's happened to my family, what's happened

to my friends is horrible honestly. Because they tried to do the same thing, but when I refused, one month later, they hacked my phone. One

month later, they arrested two of my brothers and a group of my friends.

And we're not talking about only them, you know, we're talking about thousands in Saudi Arabia are arrested because of their own opinions,

because of their -- because of the tweets some times. It's just crazy.

NEWTON: And the point is that the Saudi government is listening in on all of these. I mean, Bill, what responsibility do you think the tech

companies have here in terms of trying to uncover this, or is it really like the wild west at this point and a government can use these social

platforms against dissidents at will.

MARCZAK: Well, pretty much the situation that we see is that governments have access to very sophisticated technology for surveillance. And there's

a global industry of companies like NSO Group and some in Europe as well which are all too happy to sell these products to any government which is

willing to pay.

So, you know, of course, they'll tell you there's an export licensing process, but in practice, the countries worry, seeing this be abused

including Saudi Arabia, including the UAE and other countries with dubious human rights records.

[15:40:00] It's clear that this is -- this is a threat, and that the current state of regulation is not sufficiently addressed in this concern.

NEWTON: Interesting, Bill, we will continue to stay in touch with you as we will with Omar. Thank you so much both of you for giving us new

insights into how this is been done, I appreciate it. Coming up, investors are getting ready for a flurry of corporate reports. U.S. earnings season

starting (ph) to pick.

(COMMERCIAL BREAK)

NEWTON: Yes, we're going to call this market meandering today, I'm not exactly sure what it's doing. Although, right now it's down about a third

of a percent. On Wall Street, both the Dow as you see here and the S&P 500 are down so far for the session, and that was despite a rally in Chinese

stocks.

It was quite an impressive rally. The Shanghai Composite index surging more than 4 percent, the biggest one day gains since March 2016. Over the

weekend, the head of the Central Bank and other senior officials said the economy was doing well and the government would do more to support it.

Now, on Saturday, Beijing announced plans to reduce personal income taxes and boost economic growth. David Dollar is the former U.S. Treasury

emissary to China, he joins us now live from Washington. You know, Dave, that doesn't really do justice in terms of a deep dive you have been doing

on the Chinese economy literally for decades.

In terms of what you see now, is there still another shoe to drop here do you think when it comes to the Chinese economy?

DAVID DOLLAR, FORMER UNITED STATES TREASURY EMISSARY TO CHINA: Well, remember, the context is that the Shanghai market is still down 25 percent

since January, so even after this bounce. So you know, part of this is just trying to find the bottom to the market.

But I think the good news is President Xi Jinping made a clear statement of unwavering support for the private sector, and that allayed some of the

fears that he's not really serious about market oriented reform. And then the middle income tax cut, that's real and I think that's smart policy.

China has the fiscal space to do it. So the market is reacting to statements from officials, plus real action from the ministry of finance.

NEWTON: You know, it's interesting that the Chinese government had these tools in the toolbox still to come up with. And as you said, it shows

quite a commitment. I have heard different bank CEOs quibble about whether or not there's still another shot coming to that Chinese economy in the

form of debt.

What we actually know about credit markets in China, and that what do you think?

DOLLAR: Well, they have a pretty serious leverage problem. The overall leverage in the economy, particularly in the corporate sector is high. And

probably, they're going to be able to work their way out of this, it's smart they're turning to fiscal stimulus and they're trying to keep the

credits.

[15:45:00] But it gets still somewhat under control. So I think they'll be able to manage the risks. But the risks are real if there's any kind of

additional shock, if the U.S. ramps up the protectionism against China or some other kind of shock, you could have a financial -- some kind of a

financial incident in China.

But I don't think it's the most likely case.

NEWTON: And thinking of things that might be most likely, the elephant in the room, the whole trade negotiation with the United States -- you know,

you worked for the Obama administration, you know, a lot of people say there wasn't enough doddering(ph) in the Obama administration to try and

have a more level-playing field.

And that's why we have the issues now with China, especially on issues of IP. And quite frankly, the U.S. administration feels like it has the upper

hand here. Because that means a lot more short term paying though for China and anyone who has a trading relationship with them.

DOLLAR: Well, I definitely think China should have done more during the Obama administration, I think they missed an opportunity. They actually

let their currency appreciate a lot, so I don't think currency is an issue anymore. But they should have done more about opening up the economy and

reducing these restrictions on investment.

So they really missed an opportunity, that's true. I don't think the Trump administration has any particular leverage over China, China is not going

to cave in to this protectionism that's on the rise, so it's awkward to see how we're going to get out of this mess. But it's not likely to happen by

China making some big concession.

They're more likely to just tough it out.

NEWTON: But awkward can really mean messy and have severe consequences for that Chinese economy. I mean, when you were working in the Obama

administration, how forthright were you guys with the Chinese to say look, you must fix this and you must fix this now.

Are you saying that --

DOLLAR: Well --

NEWTON: Whether it's the Obama administration or the U.S. or the Trump administration, there's no leverage to be had with China?

DOLLAR: No, we definitely have some leverage. I think you have to be careful not to use language like you must do that. This is a big powerful

country, they're going to make their own decisions, but we could have created more incentives for them to reform. I think the Trans-Pacific

Partnership, that was really smart approach.

That was an agreement among countries, not including China that addresses IPR and trade and services, investment protection, and that was creating an

incentive for China to reform and want to join that group. But then at the end, the U.S. bailed out, so we've lost that leverage. I don't think we

have a lot of leverage in this bilateral conflict between the two.

NEWTON: And it will be interesting to see how this plays out in the coming months for sure. David, thanks so much, always appreciate your insights.

Now, up next, can a tobacco company campaign against smoking? Get ready to join us in the votes, that's after the break.

[15:50:00] (COMMERCIAL BREAK)

NEWTON: OK, listen up, we're about to open our question of the day on cnn.com-slash-join, get your phones or computers out and go to this address

today. We're talking about a controversial ad campaign from the world's largest tobacco company.

Philip Morris which is behind cigarette brands like Marlboro has a message for smokers in the U.K., it's saying stop smoking.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: First few steps are the hardest.

UNIDENTIFIED FEMALE: I can do this.

(END VIDEO CLIP)

NEWTON: So this is the whole My Like campaign, yes, you will recognize that it is a lot like mission impossible. Philip Morris says it wants

smokers to give up for 30 days, it spent millions on ads like this one and front-page messages on one of Britain's biggest tabloid newspapers.

But anti-smoking campaigners, they aren't happy. They say it's hypocrisy for Philip Morris to do this and still promote smoking in other parts of

the world. We want you to be part of the debate, our question tonight is, should big tobacco companies run ads that urge people to stop smoking if

they're still promoting cigarettes elsewhere around the world.

Philip Morris says it's surprised by the response of the campaign. I want you to go to cnn.com-slash-join and cast your votes. I'll put your

responses to my next guest George Butterworth is the Senior Policy Manager for Cancer Research U.K. He says it is staggering hypocrisy on the part of

Philip Morris.

So go right to it and tell us what you think their real motivations are.

GEORGE BUTTERWORTH, SENIOR POLICY MANAGER FOR CANCER RESEARCH, UNITED KINGDOM: Well, I think to be frank, it's just a shameless PR system, and

Philip Morris is increasingly starting to talk about themselves being part of the solution to smoking.

They want to get access to government, they want people to think that they've turned over a new leaf. This campaign is really just to do that,

whiles at the same time promoting their own, reduced risk products. So that will be e-cigarettes and their own brand of heating up burns of

tobacco products.

NEWTON: You --

BUTTERWORTH: So it's just a PR system as well as we consider.

NEWTON: We reached out Philip Morris, they haven't gotten back to us yet, they did tell "Bbc" though that they're spending $4 billion in alternatives

to cigarettes, and that what they really want is a smoke-free world you say?

BUTTERWORTH: Well, it's all well and good to say that, and obviously, in America and in the U.K., smoking rates are coming down and that's because

of decades of tobacco control legislation, anti-smoking campaigns. However, in countries in Africa for example, where Philip Morris are

actively promoting their products, smoking rates are actually going in the opposite direction.

So they might want to see a smoke-free context when they want to sell their products in the U.K., but that does not apply with the same rules to the

developing world.

NEWTON: What's interesting here is, you called it a PR stunt, they're not allowed to advertise in the normal way anymore and in a lot of developed

economies including the U.K. Do you think it was actually an attempt to get their name back in the news and to actually advertise where they're

actually legally not allowed to.

BUTTERWORTH: Well, that's right, people may well associate Philip Morris with the Marlboro brand for example. But getting their name out was really

about gaining access to government and being a part of the conversation about tobacco regulation. And that's what's worrying here.

If they were given access to sit at the table they have done in the past, they've opposed pretty much every successful tobacco control measure in the

U.K., starting from the smoking bans or more recently playing packaging, and they have thrown millions and millions of dollars at stopping those

important measures.

So we're concerned by giving them the legitimacy, that could be the start of them getting access to a seat at the table.

NEWTON: Yes, which is a good point, George, if they're going to have to do it on both end, if you really want a smoke-free world, then obviously, you

don't have to fight these lobbying efforts. In terms of them doing anything though, anything at all, they do have lots of cash on hand, is it

not better for them to actually at least engage.

Because they certainly spent a lot of money on that commercial we just saw, and a lot of money on that ad, I didn't see in the commercial Philip Morris

anywhere. I didn't see Marlboro anywhere, was it branded like a cigarette commercial.

BUTTERWORTH: No, I don't think -- we don't have a problem with the message itself, and the message obviously is for people to stop smoking or if they

don't want to quit completely, they might try -- got like an e-cigarette, that's fine.

I think it's more about having a conversation OK, this company hasn't changed, they're still behaving in ways internationally, they aren't

appropriate, I'm just making that point clear. The smokers aren't in some way duped by the message coming out from the tobacco industry.

NEWTON: OK, so standby, George, just in, according to our voters at cnn.com-slash-join, most people say tobacco companies should be allowed to

run anti-smoking ads. I mean, do you think they feel as if, look, if the message is if there isn't anything inherently wrong with the message,

they're taking the tobacco companies at their word.

[15:55:00] BUTTERWORTH: I think that's fair, I suppose the problem is historically when tobacco companies run anti-smoking campaigns, they tend

it to be rather ineffective at getting the job done, that's what we'll be concerned about. In the U.K., our own government run quite effective

campaigns every year, and that's the one we should be concentrating on because they're actually working to helping people quit.

But let's see if it works. I think it's more just important to raise the issue of how this company is behaving internationally in promoting

cigarettes to countries which can deal with the problem caused by smoking. They have developed health systems and potentially it's the real problem

growing in terms of Africa for example.

NEWTON: Yes, and in fact, in those countries, they haven't even started on campaigns like this really. George, thanks so much for coming in, really

appreciate it. Now, if you're wondering where Richard is this week though, never fear, he has arrived in Kenya and he sent you all this message.

(BEGIN VIDEO CLIP)

RICHARD QUEST, CNN INTERNATIONAL HOST: So I arrived in Kenya in Nairobi, first time I've been to this country, it promises to be an exciting week

ahead, and you'll get the chance to see it all, Thursday and Friday. "THE EXPRESS" and QUEST MEANS BUSINESS live from Nairobi, hope you'll join us.

Send us some thoughts, send us some questions, look forward to seeing you here. Have a profitable week.

(END VIDEO CLIP)

NEWTON: I'll send you a thought, it was your first time in Kenya, I had no idea, so as Richard was saying, QUEST MEANS BUSINESS will be live from

Nairobi on Thursday and Friday with Kenya eyeing opportunities from the east and west. He'll speaking to the CEOs and politicians looking to take

some of Africa's largest economy to that next level. That's at 8:00 p.m. in London, 10:00 p.m. in Nairobi.

Now, it's the final few minutes of trading on Wall Street. We will take a look at that closing bell when we come back.

(COMMERCIAL BREAK)

NEWTON: The board is picking up as you can see there, and it's been that kind of a day -- Christie, that kind of an October, investors are getting

ready for an avalanche of earnings from major U.S. companies against the backdrop of those rising geopolitical tensions including that trade war

with China.

Now, the NASDAQ is higher right now, while both the S&P and the Dow as we were saying are down. Chemical company DowDuPont and Wall Street's very

own Goldman Sachs, the biggest losers right now on the Dow as you can see there. Now, we have been telling you, it is a busy week for earnings.

Some big names to look for in the next few days, Tuesday, McDonald's, Wednesday, Boeing, Ford, Microsoft, Thursday, Alphabet and Amazon. The

Godzillas, and that today is QUEST MEANS BUSINESS --

(BELL RINGING)

We will join that closing bell as we said, a very busy week of earnings that we'll see on QUEST MEANS BUSINESS, we hope you join us.

END