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Quest Means Business

F.B.I. Investigating Twitter After It Loses Control To Hackers; U.S., U.K. And Canada Accuse Russia Of Hacking COVID-19 Research; Another 1.3 Million U.S. Workers File New Jobless Claims. Aired 3-3:30p ET

Aired July 16, 2020 - 15:00   ET

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

[15:00:00]

RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: All the major indices are lower. The Dow, as you can see has been down for the whole

session. It's currently off the best part of 270 points, down just one percent.

But it is a consistent down red day and that means the Dow could close lower for the first time in a week.

The markets and how they're trading and the reasons why. The F.B.I. is now investigating Twitter's worst ever security breach. Russian hackers are

accused of going after vaccine makers. I'll speak to Johnson & Johnson's Chief Financial Officer.

And Chinese GDP is back in the black seven months from the start of the pandemic.

Live from London on Thursday. It's July the 16th. I'm Richard Quest and yes, a busy day and I mean business.

Good evening. We are talking a great deal about hacking tonight. In its various ways, it's become the news of the day. First with Twitter, where

several top high profile celebrities and government officials found themselves hacked in Twitter's worst ever attack.

The Twitter reputation is firmly on the line, and the F.B.I. is now leading the investigation.

A stunning hack of high profile accounts, Joe Biden, Barack Obama, Bill Gates, Apple. Now at the best case scenario, this was a Bitcoin scam.

People were asked to send Bitcoins on the promise of getting double back. On a worst case scenario, they accessed private data and direct messages.

It revealed Twitter's inability to secure its own platform, which is significant, because Twitter is now an essential service for breaking news

and government policy.

The Twitter share price has recovered from its lows of three percent. As to what Twitter says, a social engineering attack. However, it means employees

were targeted or involved and they lost control of their internal system.

Donie O'Sullivan is in New York. So, first of all, I mean, what was the purpose of this? Because if it was a sort of scam revenue raising, they

didn't get much, or was this something more sinister?

DONIE O'SULLIVAN, CNN BUSINESS REPORTER: That's the real question here, Richard. You know, if this was just a Bitcoin scam, a way to make a quick

buck on cryptocurrency, you know, I think that's Twitter. That's everybody getting off really lucky.

But these hackers really had the keys to the kingdom. I mean, if Biden had just got hacked, you know, his account, just one account, it would be a

story of the day. We'd be talking about it right now. It's in an election year.

But to have all these accounts hacked, and basically how it happened was that a Twitter employee or at least one employee was in some way

compromised.

Twitter is saying social engineering, which means that an employee was either tricked or bribed or convinced in some way to hand over their

credentials. So meaning that Biden and Obama didn't just get hacked, Twitter actually got hacked and then that access was what allowed the

hackers to do what they did.

Was the Bitcoin stuff a cover for something else? We just don't know yet. Twitter has a ton of questions answer.

QUEST: Donie, thank you. Donie O'Sullivan. We will keep it brief. We have a shortened program tonight, Donie.

Michael Coates is with me, Twitter's former Chief Information Security Officer. Michael joins me from San Francisco. This is a big problem,

obviously, stating the obvious for Twitter. How there was -- this wasn't somebody hacking the person. They hacked Twitter, how did it happen?

MICHAEL COATES, FORMER CHIEF INFORMATION SECURITY OFFICER, TWITTER: Yes, the information we have so far really does stem around the social

engineering attack, as you said, and I really do need to applaud Twitter in their transparency and speed.

If you look at other data breaches that have happened, they're not reported on as quickly and you have no idea of the inside on what's happened. So it

is great that they've come forward and shared what they have so far.

But to that regard, yes, social engineering attack. This could be any number of techniques being used from phishing e-mails, from some sort of

bribery or other -- and really targeting the internal employees.

The thing to remember about this is this is a very prevalent attack method across numbers of companies, especially those platforms that have such

impact on the world through their social platforms.

QUEST: But these platforms, Twitter has had problems in the past with an employee and Facebook has had problems with an employee. They've all

recognized that you're only as strong as your weakest link, and the weakest link is often an employee.

So here surely, the question will be why there weren't layers of protection? Or maybe they were, and they too, were defeated?

[15:05:26]

COATES: Yes, that's what we really need to get to the bottom of because while I certainly can't speak to internal controls inside the company, I

can confirm there are many layers of controls. There's analysis, there's logging, there's data science analysis, minimum privilege. All of these

things that you would expect in these systems.

And then the question does come to mind of when all is said and done, how did this attack get through those items? I do think that based on the

prominence of these platforms, that it is a continual area of more security investment.

Based on the role they play in the world, we just need to keep bolstering that security to no end.

QUEST: Does it sound like it was private individuals or a group of private individuals or state sponsored?

COATES: Well, based on what we're seeing from the attack actually leveraging, you know, a Bitcoin scam. There is a question in your mind of

is that really all they did with the accounts? Could there have been something more sinister?

And looking at past attacks that have happened on the platform where a prominent account has been compromised? It is often just what you see.

We've seen very prominent accounts be compromised just to spew vulgarities and you think well, wow, you could have done so much more with that

account. Thank goodness you didn't.

In this situation, the same sort of thoughts come to mind. So I do think that points to an individual where their MO is to extract money through a

Bitcoin scam.

QUEST: Which of course begs the question why anybody would ever spend money on a get rich quick scheme that supposedly came from a famous person.

But that -- but the gullibility to one side -- actually, no, the gullibility is the crucial part because if you now start hacking Donald

Trump or Joe Biden and start putting false statements, serious statements, geopolitical statements, then you could be hitting gullible people with

true fake news.

COATES: There's certainly a threat in the information that comes across those channels and the importance of protecting them. There's also the

other issue of, you know, politician that choose to use those for their official press statements, which I think is another issue to be discussed.

But yes, in this situation in particular, we are fortunate that it looks like a Bitcoin scam. While there was money lost from those that are

gullible, it appears to be from the outside, you know, the main attack approach used here.

QUEST: Good to see you, sir. I appreciate it. Thank you. We'll stay with hacking at the moment. There was another major event.

The U.K., the US and Canada are all accusing Russia of carrying out cyberattacks, this time on vaccine and pharmaceutical companies trying to

get information and proprietary data on tests being done on COVID-19.

The warning details of the activities by the group APT 29. It goes by then Cozy Bear. We've seen this a lot before. They're the same group believed to

have hacked servers of the D.N.C. in 2016. Kremlin is denying any knowledge of this of course.

A moment ago or two ago, I spoke to the Chief Financial Officer of Johnson & Johnson. The company had released its second quarter earnings. However,

obviously, the earnings we talked about, but I was most keen to know about this hacking and whether Johnson & Johnson has never been the victim of

such an attack that they knew about.

(BEGIN VIDEOTAPE)

JOE WOLK, CHIEF INVESTMENT OFFICER, JOHNSON & JOHNSON: Cybersecurity is an investment that we've been making in an increasing rate. It's something

that our management is very focused on and we have more than annual reviews with our Board of Directors on our preparedness for a cybersecurity attack.

What I will say is innovation is really the lifeblood of our company, that innovation is tied from a financial perspective on the balance sheet to the

intellectual property as an asset. So, we're very guarded and protective of that security.

QUEST: What about the vaccine? And I mean, we've talked to Paul about when it's likely to be and trials likely to take place. How much money are you

actually putting into the R&D on the vaccine?

WOLK: Yes, so the R&D and manufacturing capacity that we're building, which is more than what we have today is going to total about $1.4 billion

before investments from other parts. It's like government organizations.

So BARDA here in the U.S. has agreed to $450 million of funding. We haven't received other funding at this point, but we are in very good conversations

with the E.U., the Gates Foundation and other major countries to ensure that should the science bear out, and we're moving as fast as we can there

responsibly, that we've got the manufacturing capacity to put as many vaccine regimens onto the market as soon as possible.

[15:10:27]

QUEST: You've already got the U.S. government saying we want some. You've got the E.U. saying we want some. As the money man, what is your role? What

are you saying?

WOLK: Yes, so we've kind of taken that part of the discussion off the table. Given the urgency as you've noted, Richard, I think about the

vaccine in three components. It's the science which Dr. Paul Stoffels and you have talked about on a number of occasions. It's the scale of J&J.

So the clinical trials that we are running on platforms that are proven will be ranging from ages 18 to beyond age of 65, the most vulnerable

population, and it will include all ethnicities.

And then lastly, it's about access. And so when we identified our lead candidate on March 30th, we, at the same time announced that we would be

distributing that at not for profit pricing. We have conviction. We're standing by that pledge.

In fact, we're going to be very transparent as to how those costs are derived and have it audited by one of the public accounting firms that are

well known.

QUEST: So let's be clear, because this is the first time and I'm so glad that I'm talking to you because these are issues that I can't really talk

about with others, because they go to the financing -- first, J&J is saying, you know, you want to recover your costs of a coronavirus, but

you're not in it to make money. Is that what you're saying?

WOLK: That is exactly what we're saying related to the vaccine during the emergency period -- we realize the urgency, the need across the globe, and

it's important for all businesses, not just J&J businesses, for all businesses that we are part of the solution here.

So that was an early commitment made by our CEO, Alex Gorsky and we stand by that today.

QUEST: How close are you?

WOLK: I would say we're moving as fast as we can 24/7. Paul Stoffels and his team have met, quite frankly exceeded every deadline that's been given

to them. We will have a preclinical data published in a significant and prominent scientific journal in the coming weeks.

We will start human testing next Wednesday, and we're also in discussions with the N.I.H. to see if we can start Phase 3, so measuring the efficacy

of the vaccine in late September. So that's an accelerated timeline as well.

Again, we're going to move very quickly, prove out the science, but we're going to do it ensuring that safety and tolerability remain of paramount

importance.

QUEST: If I look at for example, consumer health, one would have thought that would have done okay because people were buying more disinfectants,

more house products, more bathroom products, except for the skin health and beauty care because they weren't going out.

WOLK: It's a tale of two cities. So in over the counter medicines and oral care, where you think about germs and reducing fevers, those businesses did

really well growing two to three times faster than what they grew in 2019.

But the skin and beauty, if you think about people staying at home a little bit more, not using some of the cosmetic products, sun care, right? We're

taking less vacations, spending less time outdoors, and that has an impact on our business.

So we're very bullish about the long term for our skin health beauty unit, but that was obviously a consequence of the pandemic.

(END VIDEOTAPE)

QUEST: The Chief Financial Officer of Johnson & Johnson.

And when we come back after the break, the number of Americans filing for first claim jobless claims is stuck at 1.3 million. It's a very high

number, but it does beg the question whether the situation is getting better. It's not getting -- it is worse, but after the break, we'll see

just how it moves forward.

(COMMERCIAL BREAK)

[15:16:44]

QUEST: It is Thursday so we got the numbers on U.S. jobless claims and a further 1.3 million Americans filed for initial unemployment last week.

Now, the weekly numbers have steadily declined over a couple of months, but they do seem to be stuck at around 1.3 million. The latest weekly number

showed the smallest decline just about 10,000. And that's perhaps not including the shutdowns -- the renewed shutdowns -- which could send the

number back up again.

Alain Dehaze is the CEO of the Adecco Group. He is with me from Biarritz in France. Alain, it is good to have you.

Do you believe this number is stalled at 1.3 million and that the next direction will be higher?

ALAIN DEHAZE, CEO, ADECCO GROUP: Now, what we have always said is that, first of all, the lockdown was quite massive. Eighty percent of the world

population has been locked down, that's 2.7 billion people worldwide. Also in the U.S.

And so we see and we anticipate a recovery that will be slow and gradual. And for sure, today, many governments, including the U.S. one have some

temporary unemployment scheme. They will come to an end and we expect an increase of unemployment, especially after the summer.

QUEST: Right. So this is crucial because in the U.K., it's the job retention scheme. France has its own scheme. Germany has an extremely

generous scheme. The U.S. is PPP and of course, unemployment -- $600.00 a week unemployment.

It's your understanding when these schemes come to an end, as they must that unemployment will go up.

DEHAZE: They will go up, but what all the governments have been doing is somehow copying what Germany has been doing in 2008-2009 because we have

seen that this recipe of temporary unemployment scheme has been very helpful for a fast rebound.

And what many governments in the world are expecting is the kind of -- the same kind of outcome, and the question is how long can they push this

scheme with the recovery of the economy to avoid mass they off and restart the economy?

QUEST: Alain, the problem is, in previous times, business had actually picked up. After the great financial recession, for example, there was a

more organic creation or allowing people to go back to work. Here, the likelihood of businesses picking up is more remote. There aren't going to

be the jobs for people to go back to.

DEHAZE: I think it's too early to say this. The big difference, it has been the way governments have designed it to put all the companies or the

economy in lockdown. That's the biggest differences with 2008-2009 during the financial crisis.

So the lockdown has been extremely broad and fast and we will see with the time how the economies will rebound based on the new support scheme they

have put in place, and everybody is really hoping that it will come in the same way that Germany has done in 2008-2009.

[15:20:28]

DEHAZE: Unfortunately, today, it's a little bit too early to say many countries are still in partial lockdown or full lockdown. The COVID-19 is

not behind us. And there is always this open question of the second wave. Will we get a second wave especially in September-October when the fall

will come back? So very difficult to predict at this stage.

QUEST: Alain, thank you. I appreciate you giving us time tonight. He is joining us from France.

Now, if you believe the numbers well China has skirted a recession. The country is now back in growth for the second quarter having seen a fall of

GDP in Q1. Now, it's reporting a 3.2 percent rise in GDP in the second quarter. CNN's David Culver is in Beijing.

(BEGIN VIDEOTAPE)

DAVID CULVER, CNN CORRESPONDENT: Richard, state media here in China is touting this as a major success. The way they're characterizing this is,

China's economy has overcome COVID-19 and when you compare it with what happened here in the first quarter, it was really utter devastation

economically and not surprisingly so.

We saw the original epicenter of the novel coronavirus outbreak being Wuhan, China, Hubei Province and not only a transportation hub, but also

heavy in manufacturing that came to a halt. And then the rest of China came to its own type of lockdown, not as severe as Wuhan, but certainly, many

folks saw their lives really stop economically as well as just in general living.

Now, that's something that's played out in many parts of the world since, but what we have seen here is this rebound according to the Chinese

government.

This is of course where these figures come for this second quarter reporting of 3.2 percent growth compared to this time last year.

Notably, consumer spending is still down. However, anecdotally, I can tell you going around you see people who are increasingly confident, going out

to certain stores, going out to restaurants, and starting to resume their lives with a bit of normalcy knowing though, that a cluster outbreak could

happen at any moment as it did just a few weeks ago here in Beijing.

And the difference between what happened in Wuhan with a citywide lockdown is with the cluster outbreaks, they did compartmentalized lockdowns, only

shutting down parts of the city so as to allow life and perhaps more importantly, at this point, the economy to keep flowing in the other parts

of the city -- Richard.

(END VIDEOTAPE)

QUEST: David Culver in Beijing. It's a fact, the United States currently has a higher daily total of new Coronavirus cases than it's hard at any

time in the crisis; the same for Brazil and a variety of other countries. And yet it is six months on since the first cases were discovered in China.

The reality is that whilst parts of Europe or most of Europe, for example, is doing reasonably well, there are other parts of the world that are still

suffering the worst case numbers that they've seen.

CNN's Nic Robertson has the details.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR (voice over): Brazil's President Jair Bolsonaro announcing he tested positive again for COVID-19

saying he is doing better, but his country isn't. Nearly 40,000 new cases Wednesday.

His anti-lockdown speeches help thrust this Latin American nation to second worst in the world after the U.S., 75,000 dead so far.

Fellow Brit nation, India, also in the worst throes of the pandemic. Third in the global ranking of cases recorded its highest daily infections

Thursday, 32,695. More than 24,000 dead so far, and more than 400 million people there reentered lockdown conditions this week.

And on yet another continent, Africa, South Africa facing rising caseloads overwhelming under resourced hospitals. Some staff short of PPE refusing to

show up, fearing for their lives.

Developing nations are being the hardest hit, Latin America and the Caribbean the worst, 3.5 million infections; 150,000 deaths.

Peru which this week reopened domestic flights, second now to Brazil; 3,744 new cases Tuesday, and Chile some reason for hope, the lowest daily

infections for two months, 1,712.

[15:25:13]

ROBERTSON (voice over): Half a planet away in Japan, fears of a second wave. Tokyo going on to the highest state of alert as hospitalizations

rise.

Elsewhere in Asia, Hong Kong facing a possible third wave, 48 new cases as social distancing measures eased.

Australia's Victoria State, also facing a new wave of infections had its worst daily rise, 317 cases.

Meanwhile, Europe on the downside of its first wave facing rising unemployment, more than 600,000 lost jobs in the U.K. alone, as experts

forecast nearly 120,000 U.K. COVID deaths this winter. Local, not national lockdowns here becoming the norm.

And finally the PM commits to an Independent Inquiry into his handling of COVID-19.

(BEGIN VIDEO CLIP)

BORIS JOHNSON, BRITISH PRIME MINISTER: Of course, Mr. Speaker, we will seek to learn the lessons of this pandemic.

(END VIDEO CLIP)

ROBERTSON (voice over): This, as some leaders facing protests over their handling of COVID-19. For several days, Serbs in Belgrade took to the

streets, angry that their government's handling of lockdown.

And in Israel, PM Benjamin Netanyahu facing protest as a second COVID-19 wave buffets his tiny nation. On Monday, the highest single day of

infections so far 1,681.

In Spain Thursday, the nation paused to remember their COVID-19 losses. As much needed tourists, their nation got drunk, ignored social distancing,

forcing a resort to shut.

Nic Robertson, CNN, London.

(END VIDEOTAPE)

QUEST: And that is QUEST MEANS BUSINESS, a shortened edition for tonight. I am Richard Quest. Whatever you're up to in the hours ahead, I hope it is

profitable. John Defterios with the Global Energy Challenge is next.

This is CNN.

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