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Quest Means Business
ISIS Hostage Kayla Mueller's Family Says She Has Died; ISIS Sympathizers Hack Newsweek's Twitter Account; Humanitarian Need in Syria; Breaking News: Kayla Mueller's Family Speaks; Anonymous Wages Online War Against ISIS; Obama to Create Cyber Security Agency
Aired February 10, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
PAULA NEWTON, HOST: And a good day on Wall Street. Some stocks were high, but the momentum was there. That strong session on Wall Street rose
as did the hopes that there will be a deal to avert catastrophe in Greece. It's Tuesday, the 10th of February.
Tonight, fighting for the legacy of Kayla Mueller. As the world mourns her death, US senators call for action on Syria's humanitarian
crisis.
Cyber vigilantes take on the terrorists. Anonymous takes on ISIS over social media.
And the naked truth about DSK. Topless protesters greet Dominique Strauss-Kahn as he goes to court.
I'm Paula Newton and this is QUEST MEANS BUSINESS.
Good evening. First tonight, a family's worst fears are realized as they learn their daughter has lost her life while being held by ISIS. Now,
the family of 26-year-old American Kayla Mueller say they received a private message from the Islamic terror group containing proof their
daughter is dead.
Now, they're not saying more than that, but they did release a statement saying, "Kayla was a compassionate and devoted humanitarian.
Kayla had gone to Syria to help refugees from the civil war that's been raging for nearly four years"
Any moment now, we are expecting a statement from some of her family members in her hometown of Prescott, Arizona. We'll bring that to you live
when it gets underway.
Now, Mueller was kidnapped in Aleppo. It's one of the most dangerous places in Syria, and the US has spent about $3 billion on humanitarian aid
to Syria. Now, last year, the United Nations issued a call for the world to send $6 billion worth of aid.
Joining me now from Washington is US Senator Bob Casey. He has visited the Syrian refugee camps and has, of course, called for Washington
and others to do more to help. Senator Casey, thanks so much for joining us. I don't know if you can hear me, there.
We know that you have been to the refugee camps there and have visited and have seen the conditions firsthand. Just wondering at this point, now,
if you describe for us how critical is the humanitarian situation?
(SILENCE)
NEWTON: I don't know if Senator Casey can hear me? We'll be back to him just in a moment as soon as we can get our technical issues sorted.
Now meanwhile, the Twitter account of the US magazine Newsweek has been hacked by a group calling itself the Cyber Caliphate and claiming to
be affiliated with ISIS. Now, the hackers posted death threats to Michelle Obama and the Obamas' daughters and have also displayed images of documents
they say were confidential material taken from the Pentagon and other agencies.
Now, the hacking group known as Anonymous has promised to take down ISIS online. It claims to have attacked 800 ISIS Twitter accounts so far.
Now, CNN found that most of these accounts were showing messages saying they were suspended or simply not available. In a YouTube video released
last week, Anonymous sent a warning to ISIS.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: ISIS, we will hunt you, take down your sites, accounts, e-mails, and expose you. From now on, no safe place for you
online. You will be treated like a virus, and we are the cure. We own the internet now.
(END VIDEO CLIP)
NEWTON: And we do have Senator Bob Casey back with us, now, from Washington. Senator Casey, we were talking about the fact that you had
visited the Syrian refugee camps, you've seen them firsthand. How critical is the need?
SEN. BOB CASEY (D), PENNSYLVANIA: Well, there's no question that the refugee situation as it relates to Syria has been a crisis for many years
now, or I should say the last several years. So, this was a huge problem going back a while.
I was at one of the camps that the Turkish government operated, and that was a camp where the security was good, the quality of life seemed to
be good. Other places, though, since that time -- this is going back more than a year -- have gotten much, much bigger and much more difficult to
manage.
So, it's a huge issue already, and it's only going to get worse in the context of not just a movement of people into camps, but also the obviously
military aspects of this and the devastation that ISIS is now responsible for.
NEWTON: The family of Kayla Mueller has given us some insight into why this young woman decided it was so urgent to act. Anyone who sees
anecdotally online and otherwise what these families are going through day to day, it's really heartbreaking.
How do you get over that donor fatigue? And let's face it, whether you're the country trying to host these people, and it's in Turkey or
Jordan, or whether you're the donor countries, that fatigue has set in. What do you think, Senator, can be done to try and really mitigate that?
CASEY: Well, I think we have to continue to highlight the stakes. If we don't continue the effort to keep a 60-nation coalition together to
bring the fight to ISIS, then I think we're all going to be less secure in the long run. So, making sure that people understand the stakes.
But also remembering that even as we're debating the use of force, and we're hoping to have a good debate in the Senate about that soon, but even
as we're trying to get the military aspects of this strategy right, we've got to make sure that we have maximum efforts on humanitarian relief
efforts and other political and diplomatic efforts at the same time.
But this -- we've learned a lot in the last couple of days about the horror that the Jordanian people have suffered, and now we have our own
example of an American being killed. But the Jordanians have lived through this, now, for several years.
They've had the equivalent in Jordan of the United States having tens of millions of refugees, because it's such a small country. And when they
have a million refugees or more, it becomes so difficult. So, we have to remember that the overall strategy has to have a major component part be
humanitarian efforts.
NEWTON: And do -- are you encouraging something more to be done materially, other -- sorry, Senator Casey, I thank you for joining us. We
are now going to go to Arizona and the friends and family of Kayla Mueller in Prescott, Arizona.
KATHLEEN DAY, FRIEND, HEAD OF UNITED CHRISTIAN MINISTRY AT NORTHERN ARIZONA UNIVERSITY: Kayla was a student at Northern Arizona University
campus ministry, among all the different organizations that she was involved in. And since then, I've kept up with her and know her and her
family.
And they've asked some of us to come and give you a few words of ways that we know Kayla, maybe words that aren't quite so scripted. So, if I
can get through it, I think about two minutes, they said, for each of us.
As far as Syria goes, I -- when Kayla was at campus ministry, she was part of a just peace group, and we would talk about peace through justice,
that you can't have peace without justice.
And we met -- we'd have a simple dinner, and we would read books and talk about articles through a variety of lenses. And together, a group of
us traveled to Guatemala to hear their stories and just keep that conversation going.
So, when Kayla was in Syria, I tried to follow what she was doing, and I would read her posts, and it was really like keeping vigil, because it
was so difficult to read about the horror that was happening in Syria and to see the pictures that she would post.
And I have a few words from some of the things that she posted last -- in March of 2013. And she said, "I want to tell the world about the
situation in Syria. There's no fuel, there's no electricity, there's no food. This is the situation. There's shelling, explosions, gunfire,
violence.
"No one's working, there's no jobs. People are just surviving day to day, living for the sake of living. Every human being should act. They
should stop this violence. People are fleeing, we can't bear this, it's too much." And she says, "I hope you can tell the entire world what I have
said here and what I've seen."
And that's what we're doing, we're telling the whole world. Kayla asked us. And I think you saw one of her quotes when they said where is
the world? And that we can say, we're right here, Syria. We've heard. We've seen your suffering reflected in Kayla's eyes. We've seen it, and we
intend to do something about it.
And then, when I watched those posts, when we were thinking about having an attack, and many of us were writing Kayla saying, what do you
think about this military suggestion? And there was no word from Kayla. And I had just seen her in May when she was home.
And then we got word that she had been kidnapped. And so, we've taken that long journey with her, where we were forced to hold our breath.
All these stories about Kayla, and she sounds so extraordinary, but what was so extraordinary about Kayla is she did ordinary things to
extraordinary measures. She gave people food. She gave people water. She looked for clothes, she looked for houses.
One of her posts said, "I have a family of eight and they need to stay somewhere for a month. I need $191 and not one NGO can give that to me.
Can you believe that?" And she talked that the Syrian refugees were giving Syrian refugees money.
And so, when we find that post, when we find her resilience, it's not that she was so angelic. It's that she just saw things and did whatever
she could with whatever she could. It was just her heart her mind, her guitar --
(LAUGHTER)
DAY: -- her pen, her computer.
And then in prison, what we've seen from that letter is that she just continued to be free. And I thought I'd share with you a couple funny
things we heard, if you can believe, in prison. Some people told us that Kayla tried to teach the guards crafts, to make origami little cranes,
little peace cranes.
And that they told each other stories and they sang each other songs, that they tried to exercise in that small space, and that Kayla would stand
on her head.
(LAUGHTER)
DAY: And we just, those of us who know her and know what a free little spirit she was, we just delight in that, that Kayla remained Kayla.
And you know, they tried to silence her. They locked her up. They kept us silent out of fear. But now she's free. And she says that she found
freedom even in captivity, and that she is grateful.
And so her light shines, and we thank you for shining your light not on Kayla, but shine your light on the suffering that Kayla saw, and let's
tell Syria, we hear you, and we're going to do something.
ERYN STREET, CHILDHOOD FRIEND OF KAYLA: Hi. My name is Eryn Street, and I'm here to talk about Kayla Mueller. Kayla was my closest friend and
my kindred spirit. I'm going to miss her more deeply than words can express.
(CRYING)
STREET: Kayla was joy. And with her life was always fun. A memory that always makes me laugh is when our car broke down half a mile from my
mom's house. We could have easily walked that half a mile and found someone to tow the car, but what fun would that be?
So, instead, we turned on Bob Marley full blast on the radio, and with the car in neutral, we started pushing that golden-brown chariot home, only
pausing a few moments to take some of our most silly pictures.
Our last road trip together was January of 2010. I was moving from Illinois to Arizona and she joined me and my two cats as our traveling
companion. It was a difficult journey, as I was leaving my family halfway across the country. But her friendship and support eased my pain and
brought joy to the adventure.
Kayla had such great empathy, and that is -- it's hard to find that in this world. It's really rare. And it was her greatest strength. She had
this amazing ability to share in another person's suffering and still add a little happiness to it, and she could always find that silver lining.
I want to share with you a part of a journal entry that Kayla wrote. It was right before we took that road trip. All right. This is Kayla.
"For anyone who might be wondering why I'm in Illinois, let me explain. A dear friend of mine is packing her belongings up and moving
out west to her beloved state of Arizona. I'm just along for the road trip, back to share a few giggles and make sure nobody falls asleep at the
wheel. I can try a hand at changing a tire or something, but no guarantees of that one.
"There have been many long good-byes and a release of tears that have been residing in deep places over these last two days. It has been
interesting to observe the bitter of the sweet that is the situation. I have been reflecting on how I will do the same thing very soon.
"Good-byes have never been too hard for me. They don't seem to be something in need of being made difficult or complicated. Sometimes I get
a feeling that tells me if I will or will not see a person again, making it easier and sometimes harder.
"But moving on and away through things is as much a part of life as breathing. It is an integral renewing and necessary venture for growth and
discovery. Good-byes come with the package. Although good-bye is really just a see you later. Later might be a while, but as the French say, c'est
la vie."
I'm not yet sure how to live in a world without Kayla, but I do know that we're all living in a better world because of her.
(CRYING)
STREET: So, I'm going to end on a quote that reminds me of her. "Peace is not something you wish for. It's something you make. It's
something you do. It's something you are. And it's something you give away." Thank you.
LORI LYON, KAYLA MUELLER'S AUNT: Hi. I'm Lori.
TERRI CRIPES, KAYLA MUELLER'S AUNT: I'm Terri.
LYON: I'm Marsha's sister, we're Kayla's aunts. And this is a statement from Kayla's aunts, uncles, and cousins.
(CRYING)
LYON: First we would like to thank the media for your patience. Second, we would like to thank the FBI agents that have been working with
Marsha, Carl, Eric and the family. They have been amazing. We want to thank everyone for their love, support, and prayers at this difficult time.
It has been a stressful time for our family, and also for the world.
What can we tell you about Kayla? Kayla was a combination of Marsha and Carl. She was generous, caring, compassionate like our sister Marsha.
She was strong, driven, and passionate like our brother-in-law Carl. She was the best of both of them.
(CRYING)
LYON: She had a quiet, calming presence. She was a free spirit, always standing up for those who were suffering and wanting to be their
voice. Even as a little girl, Kayla was a bright, inquisitive, kind little girl. At a very young age, Kayla knew her passion. She knew her calling.
A lot of people never have the opportunity to say that.
Kayla's calling was to help those who were suffering, whether in her hometown of Prescott or on the other side of the world. She has done more
in her incredible 26 years than many people can ever imagine doing in their lifetime. My daughter said to me, things that were important to Kayla are
finally getting the attention that they deserve.
(CRYING)
LYON: Kayla has touched the heart of the world. The world grieves with us. The world mourns with us.
(CRYING)
LYON: The world wants to be more like Kayla. And if that is her legacy and the footprint that she leaves on the world, then that is a
wonderful thing.
In Kayla's letter to Marsha and Carl, she wrote, "I have come to see there is good in every situation. Sometimes we just have to look for it."
And right now, that's what we're all trying to do.
(CRYING)
NEWTON: And there we were just listening to the comments, obviously, incredibly wrought with grief. Those were the aunts of Kayla Mueller,
there, obviously talking about what a wonderful niece they had and saying that they knew that Kayla had touched the heart of the world, that "the
world mourns with us and the world grieves with us."
And they made it very clear that this was a young woman who was there to try and help the Syrian people, and that in doing that, they felt there
could be something more redeeming that has come from her death at the hands of ISIS.
It should be said that earlier, one of the people who were -- one of her friends and from a charity that made it clear that for so many months
now that they had been silenced about what had gone on with what they knew about Kayla's captivity in Syria. She said they would be silent no longer.
We'll have much more right after the break.
(SILENCE)
(COMMERCIAL BREAK)
NEWTON: The hacking group known as Anonymous has promised to take down ISIS online. Now, it claims to have attacked 800 ISIS Twitter
accounts so far, and our business correspondent Samuel Burke joins us now.
You know, Samuel, we just watched that incredibly heartbreaking press conference from Kayla Mueller's family. There are so many people who look
at what ISIS is doing and saying, this is beyond criminal, something has to be done. But it's highly controversial for a group like Anonymous to try
and take them on online or otherwise, isn't it?
SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: Yes, as I was watching that press conference in Prescott, Arizona, about Kayla Mueller, I thought, boy,
anybody sitting at home might think that it's great news that Anonymous is going after ISIS. Do whatever they can do, they might think.
But ISIS -- rather, Anonymous is claiming that they took down almost 800 ISIS accounts, what they deem to be ISIS accounts, on Twitter and
Facebook. And on the one hand, that might sound positive.
But do we really want to put our trust in a hacking group that has done things that many people consider to be very negative? Do we want them
to be the cyber vigilantes, taking down content all across the web?
I think that might be a very dangerous power to give them, because, of course, they don't have to answer to the public, they don't have to answer
to stockholders the way that Twitter and Facebook might.
But it does come in the wake of a leaked memo from Dick Costolo saying the following -- he's of course the CEO of Twitter. And he said, quote,
"I'm frankly ashamed of how poorly we've dealt with this issue during my tenure as CEO. It's absurd. There's no excuse for it. I take full
responsibility for not being more aggressive on this front. It's nobody else's fault but mine, and it's embarrassing."
Now to be clear, he was answering a question -- this is a leaked internal memo -- about dealing with bullies and trolls on Twitter. So, my
question, when I read this was, if they can't deal with bullies and trolls, how are they going to deal with the terrorists?
NEWTON: Yes, and you wonder what is their place in all this. I was speaking with Canadian researchers out of BRAVO, they are tracking ISIS
online. They say that, in fact, Twitter in recent weeks But they really do a shout out to Facebook saying they've been incredibly successful.
Samuel, social media's an arsenal -- it's a weapon in the arsenal of ISIS. Is -- do you have confidence that these companies do have the power
and the will, quite frankly, to do something about it?
BURKE: Well, I don't have confidence, quite frankly, in their power to do it, especially based after that quote that we just saw with Dick
Costolo.
Now, to Facebook, I think Twitter might want to take a page out of Facebook's book in this case, because Facebook, we've seen, according to
the experts who monitor this very closely, have been very aggressive at fighting bullying online, being able to pull down the terrorist content.
So, they need to invest more and have more people -- Twitter needs to invest more and have more people the way that Facebook does.
NEWTON: That's a story that definitely we'll continue to watch, as we say, as more ISIS presence builds online. Thanks, Samuel, appreciate it.
Now, as Anonymous tries to fight ISIS online, the United States is beefing up its cyber security measures. We'll have more on that right
after this.
(COMMERCIAL BREAK)
NEWTON: The Obama administration says it's creating a new agency to coordinate intelligence on cyber crime and defeat the hackers. David
DeWalt is the CEO of security firm FireEye. The company has been invited to speak alongside President Obama at a cyber security summit this Friday.
Thanks so much for joining us, we appreciate it. We know that at times, the government turns to your firm to understand exactly what's going
on. I want to know -- we've heard about a lot of hacks in the last few months. I want to know which was the game-changer for you? What let you
know that, look, this is going to continue to build as a serious problem?
DAVID DEWALT, CEO, FIREEYE: Yes, Paula, it's a good question. And what we've seen is a series of pretty egregious attacks and pretty
egregious breaches over the last 12, 18 months, really culminating in the biggest single breach in American history, certainly, and that was of Sony.
We've seen elements of various levels of threat and danger happening in the cyberspace, everything from cyber crime with the Home Depots and
JPMorgans and Targets, to really cyber espionage, where we really called out the Chinese, 3PLA.
To now, really, a new era where we're seeing not just sabotage, but really almost a terroristic type of cyber attack in the form of Sony. So,
I would say that would be the number one, and we're starting to see that as a harbinger for the future. And clearly, the cyber domain is really a very
dangerous domain right now on a number of levels.
NEWTON: OK. So, the question is, we say it's a dangerous domain, but are we getting to a point where, look, if we're driving at high speeds, we
now have seat belts and airbags? We've been on top of this, now, we hope, for quite a few years. Do we have the capability to make the internet
safer?
DEWALT: I think we do. And I think you bring up a good point. This is the maturation of the internet, and we have to make it a safer place.
But if you look at some of the variables that are involved with it, we have this tremendous cycle of innovation that is really spectacular, it's really
fun to watch.
New mobile devices nearly every few months from Apples and Googles of the world and Samsungs of the world, new social networks that we can
access, inter-internet that's really at another level of speed and access.
And you put on top of that very little governance models, just about anybody can register domains, you can do it anonymously. And then you
throw on there the commerce element. It's really easy for criminals and really easy for nation-states to use that domain for bad purposes as well
as the good purposes.
So, we have to evolve this, and it's really important. The creation of the agency that President Obama was putting forward is a great first
step for that. I think creating an information-sharing agency that allows public and public, and public and private to work together is absolutely
critical. It's like that safety belt or seat belt. For the very first time, we're putting it on.
And that is a needed ingredient. But we need more than that. We need airbags, we need a safer car, we need safer highways. And when you think
about the internet, there's a lot of things that we have to do to improve upon, and that's just one step.
NEWTON: Yes, sobering to hear you say that it's the first step. And that happens on Friday. We look forward to following what happens there
with the president. Appreciate your time, Mr. DeWalt. Thank you.
DEWALT: Thank you. Thanks.
NEWTON: Now, Greece wants to go 70-30 with its EU partners on a debt deal. We'll explain all that right after the break.
(COMMERCIAL BREAK)
NEWTON: Welcome back, I'm Paula Newton and here are the top news stories we're following this hour.
Relatives and friends of Kayla Mueller have just been speaking publicly about their loss saying the 26-year-old aid worker was an ordinary
woman and just wanted to help people who were suffering in Syria. Earlier they announced they'd received a private message from ISIS over the weekend
which proved Kayla had died. U.S. President Barack Obama is promising the people responsible will be hunted down. Kayla Mueller was kidnapped in
Syria in 2013.
Syrian President Bashar al-Assad says he is being kept informed about airstrikes the international coalition against ISIS is carrying out in his
country. Mr. Assad said in an interview with the BBC he is being notified by a third party - not directly by the U.S. or its allies. On another
front he denied dropping so-called barrel bombs on rebel-controlled areas.
The cost for Russia will rise. With those words, U.S. President Barack Obama urged Russia to agree to a peace deal over Eastern Ukraine.
Now the White House says Mr. Obama called Vladimir Putin earlier to address Russia's support for separatist rebels.
Greek stocks skyrocketed Tuesday. The mood lifted on hopes that Athens could get - agree - with the E.U. officials to keep the country
afloat so to speak before its bailout reaches the end of the term - its term - in just a few weeks. Now the main Athens share index soared almost
8 percent, climbing back from heavy losses on Monday. Now, Panicos Demetriades has insight on Greece's predicament and we will tell you why he
was the governor of the Bank of Cyprus when the country had to resort to an international bailout, and that was just two years ago.
Does anyone know what Greece is feeling like right now? It has got to be you. Do you sometimes look at what Greece is doing and saying and
thinking we wish we would have driven a harder bargain at the table?
PANICOS DEMETRIADES, FORMER GOVERNOR, CENTRAL BANK OF CYPRUS: I would like to say I think that the situation in Cyprus was rather different from
what it is right now in Greece. And I think that what was achieved in Cyprus during that time was actually reasonably good in the sense that we
did manage to restructure the banking system and we did manage to stabilize the economy, prevent Euro exit which was really on the cards (ph) at the
time, perhaps more so than it is in Greece today.
So I don't think the two situations are comparable. The Greek situation is much more of a fiscal issue while the Cyprus difficulties had
to do with the large banking system and exposure to all that banking system to Greece itself.
NEWTON: What it does expose though is the fact that many people are pointing to the problem as being a European problem and first and foremost
now this new government in Greece. Do you agree with that?
DEMETRIADES: In deed. I mean, there is obviously very important European element in this and there is also a Greek element - a Greek
aspect. This is a new government. It has lot of - it has made lots of promises to the electorate, some of which seem to be rather not consistent
with the program, and as you already mentioned, the negotiations seem to be - seems to be progressing and that's why we've seen the Athens stock
exchange rise today.
There seems to be agreement on 70 percent of the program already which is quite a shift I think from the Greek government's original position
which was they wanted to tear the whole thing apart and start again. So they are now saying that they are accepting 70 percent of the program and
they want to change 30 percent of it and they don't want the fiscal situation to go off track, they are insisting on 1 and 1/2 percent surplus
compared to 3 percent surplus in the program. And they are insisting on addressing the humanitarian crisis. But I think their position is
beginning to look perfectly reasonable and it would be really hard to see how they're not going to get agreements in the next few days -
NEWTON: How far, how far -
DEMETRIADES: -- in Euro group (ph).
NEWTON: -- we've come. All of a sudden this decision is reasonable. And yet you have the European leaders saying it was absolutely not doable
just a few days ago.
DEMETRIADES: But - yes, indeed, indeed. And I think a lot of it has been down to language actually. If you notice what they were saying about
the troika - they didn't want the troika in Greece, yet they have been talking to the IMF, they have been talking to the ECB and they have been
talking to the commission. But what they explain to them is that they don't want the technical level teams - so middle level bureaucrats who
visit and have no ability to negotiate over the program.
And I have to say I sympathize with that, because we were - we were also at the receiving end of those sort of missions and they did not have
the ability to negotiate. They always had to go back to their bosses in Frankfurt or in Brussels, etc. So that actually frustrated the
negotiations although they were very good teams. I mean, I take my hat off to them -
NEWTON: I think - I think - I think what -
DEMETRIADES: -- they were very good people, very good (inaudible).
(CROSS TALK)
NEWTON: -- I think what you're saying though, I think what you're saying is, you know, this whole negotiation has gotten everyone's attention
in Europe and in the matter of the deal, they may have gotten a much better deal for the people of Greece in the meantime. Sorry we have to leave it
there, but thank you so much for your insight. This story we'll obviously -
DEMETRIADES: Thank you.
NEWTON: -- continue to watch. Thank you.
DEMETRIADES: Thank you.
NEWTON: Now once he was the top of the IMF and orchestrated Greece's previous bailout. Now Dominique Strauss-Kahn is facing the possibility of
a decade in prison and million-dollar fines. Today at a court in France, he gave evidence that his defense against charges of aggravated pimping.
Jim Bittermann has the details on an incredibly dramatic day both inside and outside the courtroom.
(BEGIN VIDEOCLIP)
(WOMEN SCREAMING)
JIM BITTERMANN, CNN'S SENIOR EUROPEAN CORRESPONDENT BASED IN PARIS: Bare-breasted women were throwing themselves at Dominique Strauss-Kahn when
his car arrived at the courthouse, but it was out of protest, not for his pleasure.
Police bundled the women up and took them away, but they could not cover the fact that former head of the International Monetary Fund has come
to symbolize what many see here as the country's duplicitous attitude toward prostitution. In France, prostitution is not illegal, but pimping,
encouraging or organizing sex with prostitutes is.
Strauss-Kahn is charged with aggravated pimping. If found guilty, he could face a ten-year jail sentence and a 1.5 million euro fine. He has
never denied that he took part in the sex parties, but he repeated in court that he was not aware that the women involved were prostitutes.
A biographer of Strauss-Kahn believes his story and points out that in France prostitution is legal but pimping is not.
MICHAEL TAUBMAN, AUTHOR, "THE TRUE NOVEL OF DSK": If he knew that the girls were prostitutes, I think he wouldn't have made them come to
Washington and he wouldn't have a picture with one of them in his office.
BITTERMANN: But if the court does not believe the former director of the IMF and he's found guilty of the charges, Strauss-Kahn could be
sentenced up to ten years in jail and fined 1 and half million euros. In the years since his New York arrest, Strauss-Kahn has spent much of his
time trying to clear his name. He's tried to revive his reputation and start a new career by creating an economic consultancy, taking on both
private and governmental clients. Clients which according to his biographer he needs to pay his legal bills. Taubman does not believe
Strauss-Kahn can or will ever be directly involved in politics or policy- making again.
TAUBMAN: Strauss-Kahn is now 66, he's a father, he's a grandfather, he has suffered a lot, his family has suffered a lot and I don't think he
would have the energy and the will to come back in policy, you know?
BITTERMANN: Long before the trial in Lille, Strauss-Kahn said almost as much in an interview with CNN's Richard Quest.
DOMINIQUE STRAUSS-KAHN, FORMER FRENCH ECONOMY MINISTER: I made this mistake to believe that you could have a public life doing what you had to
do in the public life and nobody never said me - against me something in the public life - and that you can have your private life. And my mistake
was certainly to believe that you can have those two things together without any connection between was wrong. It was wrong and the way you say
because people are not expecting this kind of paradox/behavior from somebody having a public responsibility.
BITTERMANN: Jim Bittermann, CNN Paris.
(END VIDEOCLIP)
NEWTON: Now you scratch our back, we'll bail you out - maybe. You never know. A leading economist tells me why he believes that is Moscow's
real message to Athens.
(COMMERCIAL BREAK)
NEWTON: Russia says it needs to slash government spending further, even after it made deep budget cuts in response to a worsening economy.
Finance Minister Anton Siluanov says he needs to find a way to save billions of dollars.
Now, here's how it all breaks down -- $9 billion in new cuts required according to the finance minister. He says that's on top of cuts already
agreed which reduce spending across most government departments by 10 percent. Now the finance minister quoted by Reuters News Agency says
defense items won't be touched by any potential cuts.
Now President Putin is of course looking for allies even as Russia's economy struggles amid Western sanctions. A currency crisis and of course
lower oil prices, Moscow hasn't ruled out possibly bailing out Greece. Could it happen? I asked leading economist Guriev.
(BEGIN VIDEOCLIP)
SERGEI GURIEV, ECONOMICS PROFESSOR, SCIENCES PO: I think it's a very important question and it makes economic sense although it doesn't look
like this. The reason is that Greece has a vote in European Union and sanctions are lifted or expanded by a consensus.
So if Russia helps Greece in exchange for Greece bending (ph) or veto in next round of E.U. sanctions against Russia, that would make perfect
economic sense for Russia. Although the Greeks - Greece - economic problems are so large that Russia at the moment probably is not able to
help Greece - just cannot find enough funds to bailout Greece at this particular time.
NEWTON: You know extraordinary though, and I know that Russia's sovereign fund position is actually quite health. But extraordinary that
they're not willing to restructure Ukraine's debt - what Ukraine owes Russia, but they're willing to try and bail out Greece.
GURIEV: Well, Ukraine's debt indeed is very small by ration standards. We're talking about $3 billion that Russia lent Ukraine in the
last months of Yanukovych regime, Greek problems are much larger but I think a lot of things which are going on right now in Russian economy are
driven by politics and by foreign policy since Russia chose to take, so in that sense, we shouldn't really find only economic logic in Russian - in
Russian policymaking. I think many things are driven by politics rather than by economic rationale.
NEWTON: Yes and that's an important lesson that's been learned the hard way by many Western leaders, including right now where Europe is
holding on more sanctions, looking to see if Russia comes to the table on Wednesday and comes to a peace deal on Ukraine. Do you think that economic
issues will figure at all into Russia's calculation about whether or not they actually do what they're going to say and tone things down in Ukraine?
GURIEV: I think economic sanctions matter quite a bit and in these days when oil price is low, the sanctions actually are especially painful.
Russia would want to borrow -- both Russian corporation banks and Russian government would want to borrow -- to live through this period of oil
prices which are low, but sanctions are very painful in not allowing to do so. And in that sense Russia would like to see sanctions lifted.
And in that sense, sanctions do bite and we do see that Russia has been less aggressive on East Ukraine than it has been on Crimea. Would
like to remind you that Russia acknowledges East Ukraine to remain part of Ukraine unlike Crimea when Russia seemed to annex Crimea which is now de
facto a part of Russia.
And in that sense economic sanctions matter, and in that sense - in that sense - Russia is afraid of next round of sanctions being introduced
this week by the E.U. heads of states which meets this week. And that's not surprising Russia wants to prevent new round of sanctions and probably
Russia will be at the table and will discuss new opportunities to prevent further escalation in East Ukraine.
(END VIDEOCLIP)
NEWTON: Now as we've been talking about oil prices have tumbled over the past six months and some experts are saying they still have farther to
fall. Coming up, why the U.S. president's economic advisor says cheap oil is a net benefit but thousands of job losses.
(COMMERCIAL BREAK)
NEWTON: Oil prices over $100 a barrel aren't coming back any time soon. That's the message from the International Energy Agency. It says
supply will grow more slowly than previously expected as oil producers invest less and demand driven in recent years by China's high-speed
expansion will also undershoot expectation.
Now the IEA said that will keep oil prices near about $55 a barrel this year. Now, they'll rise they say slightly in 2016 and by the end of
the decade, they could hit $73.
Now it's important to point out that's still 50 percent below the peak in 2008. Now, low prices will create new winners and losers. The IEA
predicts the U.S. will continue to gain market share.
Russia, already facing a host of economic problems as we were just saying, will continue to lose ground, and OPEC will keep its place in the
market but lose crucial influence.
Now researchers at Citigroup are even more downbeat on prices. They're saying - wait for it - that a barrel of U.S. light sweet crude
could get as cheap as $20 this year and they say OPEC is unlikely to ever regain the influence it once had.
Now earlier, I spoke with Antoine Halff. He heads the oil industry and markets division at the IEA, and I asked him if Citi's forecast is at
all unrealistic.
(BEGIN VIDEOCLIP)
ANTOINE HALFF, CHIEF OIL ANALYST, INTERNATIONAL ENERGY AGENCY: At $20, you know, I can't say whether it's going to happen or not, but what's
clear is that there's downward pressures on prices which will continue in the first few months of this year because the investment cuts on production
will now translate into lower production just yet.
The reductions in supply are small for the time being. The real production cuts are going to take effect in the second half of this year.
In the meantime, we're likely to see further stock deals and therefore further renewed pressure on prices.
NEWTON: How much should consumers/producers be worried about the geopolitical impact of this? I mean look, it's known that certainly Saudi
Arabia, the leading member in OPEC, --
HALFF: Right.
NEWTON: -- doesn't mind oil at $40/$50 a barrel. Maybe $20s a bit extreme. What they're trying to do is throw production off in other parts
of the world. If you look at it just on basic analysis, will this happen, will they win the bet at the end?
HALFF: Yes, they will drive out the high-cost production, there's no doubt. In our view, you know, light side (ph) so U.S. productions will
come out first - come back after when the price rebounds.
What's going to stay up for a longer time is the big ticket items - the big ticket, high-priced, you know, high-cost production - deep water,
West Africa, some of the other deep water projects - really expensive production. That's going to stay out for a longer period of time, so they
will succeed we think.
NEWTON: And, you know, finally do you worry that when we're looking at that oil landscape though five years down the road, that quite opposite
to what's going on right now, that we could end up again with, you know, the volatility? And everyone has said that the problem with the price of
oil is volatility not necessarily one absolute price.
HALFF: Well it's very mixed. So on the one hand you have this new shale oil supply which is much more price responsive so that would make for
a more stable market. But the other side of this is what you said before - the geopolitical impact. And some producers need a very high oil price to
balance their budget.
Some have high cash reserves, a big buffer like the Gulf - Persian Gulf countries, Saudi Arabia and others - but others like Venezuela or
Nigeria don't have that buffer and there you have a risk of social instability. When the countries can't pay for the social spending, then
you have an increase in popular dissent/descent (ph) and so on.
But it's both ways because for other countries, having a lower price is an incentive to produce more and to fix some of the problems had been
holding back production. And one case in point is Iraq.
Iraq for years had been held back by the dispute between Baghdad and the KRG over the allocation of export revenue. And suddenly just because
the oil price dropped in our view and also the problem of Islamist violence in the North and the West, they've been able to come to an agreement after
years of deadlock and get production going and rise - get the productions to levels unseen in 35 years.
(END VIDEOCLIP)
NEWTON: Now, although the IEA forecasts a bright future for the U.S. oil industry, the present is still undeniably stormy. Halliburton is the
latest big name in the oil business to announce job cuts up to 8 percent of its workforce. Now earlier I spoke with Jason Furman, he's the chairman of
the President's Council of Economic Advisers and he told me cheap oil is still an overall boost to the U.S. economy.
(BEGIN VIDEOCLIP)
JASON FURMAN, CHAIRMAN, PRESIDENT'S COUNCIL OF ECONOMIC ADVISERS: First of all we should keep our eye on the net picture. And on net it's a
positive for the U.S. economy, it's a positive for the global economy. And that's because every single household in America is getting the equivalent
of a tax cut. It averages $750, and that outweighs the impact it's having on one sector of the economy. So this is good news for the U.S. economy,
it's good news for the global economy.
But you're also making an important point which is the more we import oil, the more vulnerable we are to movements up and to movements down. The
more we can reduce our consumption of oil with things like better fuel efficiency standards for cars, increase our domestic production of oil, the
less vulnerable we are as an economy to fluctuations around the world. That's the direction we've been moving in is reducing our net imports, and
we need to keep doing that to be in a better place to survive any ups or downs in oil going forward.
NEWTON: If you look at the American economy, a great jobs report just came out - good predictions for growth in the coming year. What concerns
you about the American economy?
FURMAN: Well first is what's good about the American economy, and that's the large amount of domestic momentum we have. You see that in the
American consumers through a combination of wage gains, confidence and deleveraging is putting them in a position to spend. You see that with
businesses.
What concerns me is what's going on in the rest of the world and the drag that that could have on the U.S. economy. I think that's a moderate
concern because 87 percent of the U.S. economy is domestic - 13 percent is tied to trade.
There's a number of positives coming from the rest of the world like the falling price of oil and the global reduction in interest rates. But
there's no doubt that the global economy would function a lot better if it was firing on all cylinders, and right now it's not.
NEWTON: You know, consumers, investors, everyone just felt like they were really hit by a brick in 2008, and they feel as if they weren't warned
about what was coming. Do you feel that we now do not have the same inherent risks that we saw before the other financial crisis? Or do you
think a lot of those risks still exist in 2015?
FURMAN: There's always risks. The economy has periodically had all sorts of problems around the world. I think in the United States right
now, we're building our growth on a much more sustainable foundation than we did going into the last crisis.
We see our foreign borrowing down to levels not seen since the 1990s, our consumer indebtedness not - is down to a level last seen in 1980 or
earlier, our businesses have deleveraged back to where they were 15 years ago.
So a lot of the debt and bubbles that the previous expansion has built on aren't present today. So that's why I feel better about where we are
today. But absolutely, we always have to be prepared for the unexpected.
(END VIDEOCLIP)
NEWTON: And we'll be back with more "Quest Means Business" in a moment.
(COMMERCIAL BREAK)
NEWTON: England's Premier League is set to be the second richest sports league in the world after signing a new deal for TV broadcast
rights. Now, two rival networks - Sky and BT - will pay a combined total of $8 billion to show live games over three seasons starting in 2016. Now
only the NFL in the United States makes more money from television rights.
Now the value of the new deal is more than 70 percent higher than one negotiated just three years ago. And get this - the International
Broadcasting rights haven't even been sold yet - unbelievable, stunning numbers.
Now here's how Europe's major stock in the seats finished the day - mostly higher amid hopes of a Greek debt deal with its European creditors.
And now as we've been telling you, the Athens Stock Exchange closed up about 8 percent. It held on to many of those gains throughout the day.
The Greek government -- as you can see live pictures right now -- the Greek government faces a vote of confidence any minute now, and it is now
coming to you live from Athens there in Parliament. We'll be watching to see how the stock market reacts when it opens on Wednesday.
And that's it for "Quest Means Business." I'm Paula Newton. I will see you right here again tomorrow.
END
