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At This Hour

AirAsia Search Suspended Due to Weather; Why Planes Aren't Tracked Better; Will Money Matter Spoil Jim Webs 2014 Run?; Scalise Gets House Republican Support Amid Scandal; Top Business Stories of 2014.

Aired December 31, 2014 - 11:30   ET

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

CHRISTINE ROMANS, CNN ANCHOR: David, let's talk about these critical black boxes. I mean, it's what we need to have the next piece of this puzzle is finding out what happened in that cockpit and what was happening with the avionics of that craft.

Given the weather conditions and the fact that the underwater locator beacons, those pingers, last only 30 days, what are you expecting? When you look at this terrain and what we're dealing with, are you confident they're going to be able to find them?

DAVID GALLO, OCEANOGRAPHER: I am. I think, you know, there are meetings going on, I'm sure, because so of this at this point is having the right technology, the right teams but more importantly the right leadership and skills to pull everything together and come up with an operational plan that factors into the weather. So there are some smart people out there. There are people from the French NTSB, the BEA from Airbus and others, the U.S. Navy. They'll have a plan together. And things like autonomous vehicles, those are the torpedo- shaped vehicles that you release them from the boat and they go do their own thing where you don't have to be so attentive from the surface might come into play at some point.

ROMANS: Might come in play at some point.

Ken, you have this background in search-and-rescue. And I'm curious. So many people have told us today that their working assumption is that many of those passengers, many of those loved ones are in that aircraft still strapped into their seats. We have seen it before. What in the world -- how do you begin the rescue or the recovery of bodies that are strapped into fuselage?

LT. COL. KEN CHRISTENSEN, AVIATION CONSULTANT & RETIRED U.S. AIR FORCE SEARCH AND RESCUE OPERATIONS: Well, really, this -- I agree with David. It takes solid leadership and a solid plan in order to do this. And the real credit should go to the people going down, the divers, and getting people out of the wreckage and getting them to the surface to be returned to their loved ones, their family members, because that's very tragic for them. Finding the wreckage, if the airplane broke apart in flight or if it broke up after impact of the water, some passengers could be in the seats and some are away from the airplane, so that could be increased difficulty in recovering those bodies. ROMANS: David, you led the successful effort to locate the remains of

the Air France flight 447. That was in, again, much deeper water than we're talking about here. It took two years. What do you see here that is similar in this search operation? What would you advise these crews?

GALLO: Well, I was the co-leader, Christine, on that, on that expedition to find Air France 447. It took many organizations and many teams to do that.

My advice, they already know. The leadership knows, I believe, the ones with experience know that, as Ken just said, you have to have a solid team and a solid plan. Almost as important as anything else because there's a lot of talent out there and they've got to all be operating on the same page. Patience is important but, you know, I'll tell you one thing having been on the other side of the closed doors is that the pressure is building on those teams and on the leadership, the pressure of the families. Seeing that agony is difficult. It lives you with every minute of everyday and night. Then the pressure of the external community that's looking and making a lot of assumptions, do you know what you are doing? Are you doing the right things? Why haven't you produced results? That is probably building. So one bit of advice is to insulate yourself as good as possible from that kind of pressure because, you know, over the days ahead it starts to really take its toll on you.

ROMANS: I can't think of a more difficult job than being somebody in the Indonesian Coast Guard going down in a sling trying to retrieve bodies or a diver in the next few days who may have to go into that plane and try to retrieve evidence and people.

Thank you so much, Lieutenant Colonel Christensen and David Gallo. Thanks for your expertise this morning.

Coming up, there's an app to find your phone, GPS to track your car. So why don't planes come with technology to help locate them with ease?

Then, Apple gets its mojo back while GM takes a hit. A look at the top business stories of the year ahead, @THISHOUR.

(COMMERCIAL BREAK)

ROMANS: It's a question many ask, you can find your iPhone, if you lose it, you can find your car if it's stolen, but why is finding a huge passenger jet, worth a hundred million dollars, so difficult. Technology is available to track a plane every second and stream that info in real time to people on the ground. It's especially helpful, if something goes wrong should be on board.

(BEGIN VIDEO CLIP)

MARY SCHIAVO, CNN AVIATION ANALYST: That kind of information would be tremendous for our country.

(END VIDEO CLIP) ROMANS: Why are few airlines using it?

Cyriel Kronenburg, an executive with Aireon, is somebody developing that technology. He's also a former air traffic controller and flight safety officer.

If AirAsia had your system, or the current system made by a different company, Flight Air Space Solutions, if they that flight was on board would that plane have been found?

CYRIEL KRONENBURG, VICE PRESIDENT, AIREON, LLC & FORMER AIR TRAFFIC CONTROLLER & FORMER FLIGHT SAFETY OFFICER: You never can say that with certainty Christine. I think there's many factors at play give than there are a lot of uncertainties in this specific situation. That's a tough question to answer. But when you see an aircraft every second or two seconds instead of every 10 minutes or 15 minutes it takes down the time it takes to locate a plane and narrows down the search area significantly.

ROMANS: In this case, it's likely they will find this plane. There have been pieces from this plane, bodies, there's evidence. They will find it no question, it's just when. But when you look at Malaysia Airlines flight 370, it vanished. If that aircraft had this technology, where they were looking would be much tighter range, they might be able to find it more easily. What aren't more airlines adopting it? Is it cost prohibitive?

KRONENBURG: If you compare it to your cell phone, we're all accustomed to the fact that we have cell phone coverage everywhere we go but we forget when we're in a forest or fishing on a lake that cell phone often doesn't work. That's because a lot of these technologies rely on ground-based equipment. They rely on tours on the ground to receive a signal. A satellite is only involved through some kind of a central system so they still rely on those towers. That's the main problem of the tracking of aircraft over large oceans.

We estimate that about 70 percent or more of the earth's surface has no form of tracking at the moment and if they do, it's about every ten minutes, roughly every 15 minutes. So you have to create a system that is able to pick up that signal directly from the sky, so from a satellite, and that's able to relay that information to an air traffic controller on the ground. That's exactly what Aireon will do when we launch our Global Constellation in 2015. Hopefully, by 2017, we'll be able to track every aircraft around the world and give every air traffic controller around the world a full view of their airspace, including areas like mountains, deserts and oceans that currently have no coverage at all.

ROMANS: Here's the thing, though. You know, airlines will tell you they are operating at very slim profit margins. Many airlines were losing money consistently year after year. It takes government intervention to keep them flying. And in some cases, in the United States, for example, lots of fees on your ticket for them to make money. They could argue that it's so rare for a plane to fall out of the sky and need this kind of technology, why add the cost? You have a better chance of winning the lottery then falling out of the sky in an airplane.

KRONENBURG: Well, I don't think that any airline will cut back on safety. I think that's a key issue to them. It's a matter of, is it possible to do it. There's so many airlines out there in the world have that have installed technology that's able to track them but it requires significant investment on the ground as well and that investment is ongoing. There's an increasing number of countries around the world that are installing a system that's called ADSB, which is a new version of radar that's able to track aircraft from the ground. But that takes time. And one of the big problems airlines have is that it not only takes time to install but certain aircraft type are unable to be equipped with certain technology. And that's where what we're trying to do really sort of attaches to that by utilizing an existing technology and just improving it.

ROMANS: Cyriel Kronenburg, thanks so much for joining us. Certainly this has been a year where airlines and location technology has been top of mind. This disaster only adding to that conversation.

Thank you, sir. Best of luck to you and happy New Year.

KRONENBURG: Thank you.

ROMANS: Ahead @THISHOUR, will a money matter spoil Democratic Jim Webb's chances of running for president in 2016? We'll break that down next.

(COMMERCIAL BREAK)

ROMANS: 2014 may be drawing to a close, but political scandals have not taken a holiday, and neither party has managed to escape the heat. Questions swirling around a Democratic prospect for president and payments his wife and daughter got from his political action committee. Federal records show former Virginia Senator Jim Webb's "Born Fighting" PAC paid more than $90,000 to his wife and daughter since 2006 for administrative services. The payments amount to just about 10 percent of what the PAC received in donations. Now, a spokesperson for Webb tells CNN the payments were, quote, "well within the law," and much lower than typical compensation.

On the other side of the aisle, House GOP leaders are rushing to the aide majority whip, Steve Scalise, after he admitted making a speech to a white supremacist group in 2002. House Speaker John Boehner said Scalise had his full confidence even though he made a, quote, "error in judgment" a dozen years ago.

Joining me are political commentators, Democratic strategist, Maria Cardona; and Republican strategist, Kevin Madden.

Maria, I want to start with you about Jim Webb. We're not talking about a tremendous amount of money, $90,000 over 12 years. His daughter does have a web marketing firm, she redid his web site and helped with some of the web 2016 material. But could these claims derail his presidential ambitions? Given money to close relatives, even if they have businesses, doesn't look good sometimes. MARIA CARDONA, DEMOCRATIC STRATEGIST: I don't think it will derail

it, Christine. I think he'll have to answer more questions about this and from what I have seen that his office has put out, everything that -- all the work that was done by his daughter and his wife is provable that it was legitimate and that it was paid at less than market cost. And so I think Jim Webb's problem is not necessarily this kind of financial issue. His problem right now, frankly, is that he has very little name I.D. nationally and that in Democratic polling for 2016 I think he gets between 1 percent and 3 percent of support compared with all of the other Democratic candidates who might be running. So, frankly, in a weird way, us talking about this, Christine, could help his name I.D. So at the end of the day, this might not be so bad for him in the long run.

ROMANS: Which is why politics is so come founding to me. You can turn something upside down.

Kevin, let me ask you about Speaker Boehner standing behind his majority whip Steve Scalise. Is this the message leadership should be sending at a time when this is so desperate to draw minority voters? We're talking about David Duke, white supremacy, a group called Euro -- to Defend European Heritage in the United States.

KEVIN MADDEN, REPUBLICAN STRATEGIST: I think the message that Speaker Boehner is trying to send has to do with Steve Scalise himself. Steve Scalise's argument was that he did not know about the nature of this group of its agenda when he spoke to them and for everybody who knows Steve Scalise, and I think Speaker Boehner is one of those folks as well as somebody like Cedric Richmond, an African-American Democratic law maker from Louisiana, they are basically offering testimonials to Steve Scalise's character and integrity.

Folks who know him best, folks who have worked with him, whether they're Republicans or Democrats, don't believe he would knowingly speak to a group that promotes intolerance. Steve Scalise is known as a uniter, a very tolerant person, and who has worked very well with members across the aisle, so that I think what they are doing is standing by Steve Scalise, that essentially he has looked them in the eye, told hem-the-didn't know this group was promoting this type of agenda, and this is them standing by him there.

ROMANS: Kevin, it just sounds like -- it sounds like a 20th century political story to be talking about. You know, defending somebody in your party who accidentally spoke to a bunch of white supremacists. It's not the modern conversation in America.

MADDEN: It is definitely a distraction. It's not the type of conversation of a Republican party that wants to be conducting more outreach to African-Americans and Latinos. It's not the conversation that we want but, remember, Cedric Richmond, who is a Democrat and African-American, has also come to Steve Scalise's defense because he knows him very well and he knows his character and his integrity. And I think that that type of defense of Steve Scalise also has to be given some weight when you consider all the evidence.

ROMANS: I know I saw a new incoming congressman also came in quickly and defended him, too.

There's going to be a lot to talk about this as we go forward, both Webb and Scalise and Grimm, for example. That's another interesting twist that Boehner did not support him but is supporting Scalise.

Maria Cardona, Kevin Madden, I wish we could keep talking about it. We are running out of time.

(CROSSTALK)

ROMANS: Happy new year to both of you.

(CROSSTALK)

ROMANS: Ahead @THISHOUR, fast-food workers protested over pay while the Federal Reserve bumped billions in into the economy. Our look at the most compelling business stories of 2014.

(COMMERCIAL BREAK)

ROMANS: We want to bring you some new video just in to CNN from Indonesia. We're showing you this new video, bodies of two more AirAsia flight 8501 victims have arrived on land. They have been transported by these ambulances. We know there have been at least seven bodies recovered so far. A lot more to follow on this story. We know that the Indonesian Coast Guard recovered at least seven bodies, two transported in a very somber ceremony in boxes, wood boxes with the numbers 001 and 002. Now we see two more of those seven victims being moved by emergency workers to the hospital where they will be looked over for identification as they try to move on with the identification process of these bodies. Very somber, clearly, New Year's Day now there in Asia.

52 minutes past the hour here on the east coast.

It is the last day of trading for the year. Quite a good year it's been. The Dow jumped 40 points to climb above 18,000 at the open. Right now, the Dow still holding in there a little bit higher, 18,019, up 36 points for the year. The Dow is up almost 9 percent.

It was a big year when it comes to your money, from jobs rebounding to gas prices dropping. This is your top-10 money countdown.

(BEGIN VIDEOTAPE)

RICHARD QUEST, CNN CORRESPONDENT (voice-over): Number 10, pressure from protesters. Fast-food workers take to the streets in cities across America demanding higher pay and better rights. It's working. Four states have voted to raise the minimum wage in 2014.

And in the heart of Hong Kong's financial district, pro-democracy activists shut down schools, banks and businesses. That sent the Heng Sang stock index down in only one week.

ROMANS: Number nine, U.S. companies turn in their passports for new headquarters overseas and a lower tax bill. The Treasury Department and President Obama fight back.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It's not fair. It's not right. We don't want to see this trend grow.

ROMANS: The administration issues new rules to stop these so-called inversions to stem the flood of U.S. companies cashing in on the tax loophole. The new regulation slowed some deals already in the works but real tax reform is likely needed to close the loophole.

QUEST: Number eight, IPOs and mergers, they're back. The king of 2014 is China's Alibaba, going public on the New York Stock Exchange and becoming the largest public offering in U.S. history. Nearly 300 other companies went public in 2014. And mergers and acquisitions came back roaring. The two biggest deals for U.S. consumers, AT&T's agreement to buy DirecTV and Comcast merging with Time Warner Cable.

ROMANS: Number seven, the taper is terminated. Federal Reserve Chair Janet Yellen closes the fire hose that pumped billions into the economy through a bond-buying program. That fed stimulus lasted six years. The Fed says the labor and housing markets have improved, risks of inflation have diminished. The big question now? When will the Fed start raising interest rates?

QUEST: Number six, Apple gets its oomph back. A new line of products including record-breaking sales of the iPhone 6, new iPads, the Apple watch and Apple Pay. They all refresh the company's product line. Its stock price hit a record high in 2014. And Apple's chief exec, Tim Cook, becomes the first openly gay CEO of a Fortune 500 company. He wrote in an op-ed, "I'm proud to be gay and I consider being gay among the greatest gifts God has given me."

ROMANS: Number five, jobs are back. The labor market hit two milestones in 2014. First, the economy gained back all the jobs it lost during the recession, 8.7 million jobs. It took four long years to do it. Second, 2014 marks the best year in job creation since 1999, averaging about 240,000 jobs each month. The jobless rate now below 6 percent.

QUEST: Number four, this is the age of the hack. An exclusive "CNN Money" report finds more than half of American adults had their personal details hacked in 2014. Mostly through retailers, including Home Depot, Michaels, Neiman Marcus and Target.

Celebrities became victims as hackers exposed private nude photos. And the year ends with a giant hack in Hollywood. Sony pictures is infiltrated, movie screeners on embarrassing corporate e-mails. They all hit the web.

ROMANS: Number three, an auto safety crisis, GM recalls 30 million vehicles in 2014, the largest issue, faulty ignition switches.

(BEGIN VIDEO CLIP)

UNIDENTIFIED GM CEO: I am deeply sorry.

(END VIDEO CLIP) ROMANS: GM is compensating victims as it tries to revamp its reputation.

Another crisis later in the year, Japanese parts maker Takata ignores calls for a nationwide recall following several incidents of exploding airbags. Initially, one million cars are recalled by five automakers. Federal regulators say that's not enough.

Two words tell this story, record high. The Dow Jones Industrial Average racked up more than 30 of them in 2014. It's even more for the S&P 500. A brief pullback in October couldn't stop the bull run. The market has now gone more than 1,100 days without a pullback. Investors will be looking for one of those in 2015.

QUEST: And number one, the top money story of the year, oil's dramatic drop. After holding steady for the first half of the year, global concerns pressure the oil market and prices plunge. They dropped more than 40 percent from June. In turn, that hit oil- dependent economies like Russia especially hard. Russia cited oil prices as the main reason it slipped into recession. Gas prices follow and gives consumers a break ahead of the holiday shopping season. The national average for a gallon of gas falls a full dollar from the year's peak. And in some areas of the U.S., gas prices dropped below $2 a gallon.

(END VIDEOTAPE)

ROMANS: $1.97 where I am, by the way.

Watch all the top stories of the year. Join Brooke Baldwin at 3:30 eastern for "The Top-10 of 2014" only on CNN.

And tonight, ring in the New Year with Anderson Cooper and Kathy Griffin. Michaela is also joining in on the fun. She'll be down with the crowd. Our special coverage begins at 9:00 eastern.

That's it for me. Have a very happy New Year, everybody.

"LEGAL VIEW" with Jake Tapper starts right now.

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