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Quest Means Business
Heiress Convicted of Tax Fraud; Report Says HSBC Helped Clients Hide $100 Billion; US Stock Markets Close Lower; European Stocks Down; Leadership Crisis Emerges at Volkswagen; Four "Game of Thrones" Episodes Leaked; Apple Sells Nearly One Million Watches; Steve Jobs Legacy; London Jewel Heist: How They Did It
Aired April 13, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:59:55] (NEW YORK STOCK EXCHANGE CLOSING BELL)
MAGGIE LAKE, HOST: Stocks take a late tumble to start the week. It's Monday, the 13th of April.
The Swissleaks scandal sees its first conviction. The heiress to the Nina Ricci fortune will spend one year in prison.
HBO puts up its best defense, but pirates still get beyond the wall.
And in just half an hour, Elon Musk's SpaceX company will have one more attempt at a bold rocket landing.
I'm Maggie Lake, this is QUEST MEANS BUSINESS.
Good evening. Tonight, the HSBC tax evasion scandal claims its highest-profile victim to date. Arlette Ricci has been convicted of hiding
some $20 million from French tax authorities using HSBC accounts. Ricci is part of the Nina Ricci perfume and fashion dynasty.
A Paris court sentenced her to three years in prison, two of them suspended. The court also seized two properties and ordered Ricci to pay a
million-dollar fine. Ricci is the first of around 50 French nationals facing similar trials. Her lawyer said the trial was an attempt to get the
others to settle their cases.
(BEGIN VIDEO CLIP)
JEAN-MARC FEDIDA, ARLETTE RICCI'S LAWYER (through translator): The goal and the maneuver are very clear: it was all about conducting a trial
as exemplary as possible with the most noticeable and shiny figure and the most shiny name.
(END VIDEO CLIP)
LAKE: The allegations all stem from one man, Herve Falciani. Some call him a whistleblower, others a thief. The former HSBC employee leaked
documents showing the bank helped its clients hide more than $100 billion.
The client list reportedly included around 3,000 French nationals and a host of Middle Eastern dictators, including Hosni Mubarak, Bashar al-
Assad, and Tunisia's Ben Ali.
The leak was the biggest in Swiss banking history, and it took Falciani on a trip across Europe and the Middle East. It began in 2008
when he allegedly tried to sell the information in Lebanon. After Swiss authorities questioned him, he fled to France. There, he handed the data
over to authorities, who launched an investigations.
In 2012, he was arrested and jailed for five months in Spain. He returned to France after Spanish authorities refused a Swiss extradition
request. Swiss authorities haven't given up, though. They still have a warrant out for his arrest. Earlier, I spoke with Falciani, and I asked
him how he felt about the fact that no bankers have been jailed.
(BEGIN VIDEOTAPE)
HERVE FALCIANI, HSBC WHISTLEBLOWER: That's part of the problem, part of the -- well, the challenge we are all facing. It's about whistleblower
protection law. You do not have such law in Europe, unfortunately, but of course, after all is done, you're realizing that this is only a political
problem, not really a legal one.
LAKE: HSBC says that it has made big changes to the way that it handles private clients. Based on what you know to be the culture there,
do you believe that there has been change?
FALCIANI: When you organize complexity in your back office, in your way of managing your business, it's really hard to change. And the last
news we were receiving that were published in "The Guardian" were just presenting that even themselves, even executives, directors, were not
convinced they were able to change anything.
LAKE: Now, you've actually -- in your current life, now, run for political office. You didn't win that election. Do you plan on doing so
again in the future? Is that the path you'd like to take?
FALCIANI: Politics is just a way to occupy the central place of the chess game. It's -- and this place is media, it's the attention on the
subject you want to defend. So, of course, I'm still in contact and continuing to work with politicians in Europe, in Greece, in of course
Spain, France, Italy. We are -- and Belgium.
We have many, many countries and politicians where we are working together. It's about putting more pressure. And of course, politics is a
way to put pressure.
LAKE: You have said in the past that you've had security with you, you expressed concerns about your own welfare. Do you still have those
fears, and who do you think it is that wants to harm you?
[16:05:03] FALCIANI: Banks is teaching you that you have to manage risk, right? And of course, my safety, my spot of risk I have to take into
account. And fortunately, of course, I have support. But it's hard. It's also about your day-to-day living. When you want to have a professional
activity, maybe consultant or just employee, it's very hard. But I get help. It's an ongoing process.
LAKE: And are you working now? Have you found it difficult to find employment since coming forward?
FALCIANI: Sure. Sure. Especially because I didn't want and I still don't want to just let it go. I don't want to not go until the end of the
story, having everyone clearly understand and got all the information required to change or to have a chance to change what is ongoing in finance
and in one pretty opaque finance.
(END VIDEOTAPE)
LAKE: Time to take a look at the US markets. The Dow spent half the day up and half the day down. In the end, stocks in the United States
closed lower. Cristina Alesci is here with me now. What happened?
CRISTINA ALESCI, CNN BUSINESS CORRESPONDENT: All the sectors were in the red, actually, except for one, but we'll get to that. I just want to
highlight industrials because they were led down by GE.
Remember, that stock popped on Friday after the company announced that it would sell its real estate business, something that investors have been
wanting to do for -- wanting the company to do for a while. Today, there may have been some profit-taking, and the stock took a little bit of a
pullback, a little bit of a hit.
But as I mentioned, there was one bright spot, which was financials. They've been beat up these past couple of years, and now it looks like
there may be some kind of revival. Maybe investors are looking forward and saying the legal troubles are behind them.
JPM and Wells Fargo report tomorrow, JPM specifically. I think investors are waiting to see what their trading revenue does. Maybe that
comes back just a little bit. But for the most part, if you look forward, investors are really in a wait-and-see pattern.
They want to see these first quarter earnings results from companies. They want to see how they weathered the choppy macro-economic data that
we've been getting.
And personally, I'm paying attention to retail sales, which come out this week. A lot of economists have said that retail sales should be good
because people are saving money at the pump and spending that in the stores, but we haven't seen that come back.
So, I think personally if retail sales numbers do not blow it out of the water or at least beat expectations by a little bit, I think that's
going to be a big drag on the market.
LAKE: Yes, and of course, a lot of people worried about the strong dollar, too, and how that's going to hit the multinationals --
(CROSSTALK)
ALESCI: How it impacts, absolutely.
LAKE: All right, Cristina, thank you so much.
ALESCI: Thanks.
LAKE: Well, stocks in Europe took a breather after last week's rally. Disappointing export sales, data from China added to concerns about growth.
The FTSE 100 in London and the Xetra DAX in Frankfurt each fell around three-tenths of one percent. The SMI Zurich fell further, over four-tenths
of a percent. And the CAC 40 ticked up about a quarter of a percent, so it's the one standout.
Europe's largest car maker, meanwhile, has driven full speed into a leadership crisis. Shares in Volkswagen lost 1.8 percent after chairman
Ferdinand Piech said he's lost confidence in the CEO, Martin Winterkorn. Wolfgang Porsche is Piech's cousin and the chairman of Porsche, and he put
his support behind Winterkorn. As Clare Sebastian reported, the infighting at VW is quite the family affair.
(BEGIN VIDEOTAPE)
CLARE SEBASTIAN, CNN PRODUCER (voice-over): Volkswagen CEO Martin Winterkorn appeared relaxed Monday as he greeted the German chancellor and
Indian prime minister at a Hanover trade fair. Behind the pleasantries, his future is in doubt.
In an interview in German news magazine "Der Spiegel" Friday, Volkswagen's chairman, Ferdinand Piech said, quote, "I have distanced
myself from Winterkorn."
ARNDT ELLINGHORST, HEAD OF GLOBAL AUTOMOTIVE RESEARCH, EVERCORE: We're amazed to see such a public punishment of a CEO by his chairman at a
company with over 600,000 employees, more than $2 billion revenue.
SEBASTIAN: The third player in the corporate opera, Wolfgang Porsche --
(AUDIO GAP)
SEBASTIAN: -- Ferdinand --
(AUDIO GAP)
SEBASTIAN: -- cousin of the --
(AUDIO GAP)
SEBASTIAN: -- "Dr. Piech's comments reflect his own opinion, which both in substance and fact have not been agreed with the family."
The Porsche-Piech family owns 50.7 percent of Volkswagen, and Ferdinand Piech has the company in his blood.
(AUDIO GAP)
SEBASTIAN: -- the first Beetle for Adolf Hitler in 1938.
SEBASTIAN (on camera): The CEO of this company not only has to navigate these dynastic ties, he also occupies a tricky spot in the
corporate family tree.
[16:10:00] Right at the top here, we have the 20-member supervisory board led, of course, by Ferdinand Piech. Under him, the CEO himself,
Martin Winterkorn, and under him, the 12 Volkswagen brands, each with their own boards and managers.
SEBASTIAN (voice-over): On the surface, Martin Winterkorn has risen to the challenge. The share price is up 35 percent in 2015 alone, and
Volkswagen is now rivaling Toyota for the title of world's biggest car maker.
ELLINGHORST: Yes, VW has grown very fast. They're very successful in China. They've done some major acquisitions. But the integration of these
acquisitions and also growth and profitability in other regions of the world are pretty poor.
SEBASTIAN: Volkswagen declined to comment on the spat. Their CEO, Martin Winterkorn, may now be preparing to fight for his job.
Clare Sebastian, CNN, London.
(END VIDEOTAPE)
LAKE: Well, if family feuds and power struggles are your thing, the new season of "Game of Thrones" is here, and that means piracy is coming.
Four episodes have been leaked online, and HBO says it thinks it knows who did it.
(COMMERCIAL BREAK)
LAKE: HBO has failed to stop pirates getting hold of its hit show "Game of Thrones." The first four episodes of the latest season appeared
on pirates sites on Sunday morning before the premier. HBO has launched new measures to try to cut down on piracy. The show premiered at the same time
in 170 countries, and HBO launched an online-only service called HBO Now.
Brian Stelter is CNN's senior media correspondent, and he joins us now. HBO can not be very happy about this, Brian. Do we know what's
behind it?
BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: They are figuring that out. In fact, they said when this happened, it appears that it came from a
group approved by HBO to received the episodes.
What does that mean? Well, it probably means either a TV critic or a production entity or an international distributor, some sort of group that
was allowed to have these copies ahead of time, leaked them onto these pirate sites. We don't know if that was on purpose or if it was
accidental, but HBO says, "We are actively assessing how this breach occurred."
I have a feeling they will figure out how. Whenever I've gotten embargo copies of episodes, they are watermarked. There's some sort of way
to know exactly who is getting to see them. So, I have a feeling they will get to the bottom of this. Whether they can take legal recourse or not is
-- remains to be seen.
LAKE: Oh, I'm sure they're going to try. Because this is a jewel for them.
STELTER: Yes.
LAKE: And -- we've raised this question all the time. Even air an individual, this can happen. But can they really prevent this kind of
piracy? We're not just talking about four episodes leaked, we're talking about new ways to get it out there, too. Not just pirate sites.
STELTER: Right.
LAKE: There was some talk about these sort of live streaming as well.
STELTER: Yes.
LAKE: Is this something they can prevent, even though they don't like it?
STELTER: Well, even the word "leaked" implies now. We all deal with leaks in our home. There's always different ways things are able to get
out, whether its water or TV shows.
LAKE: Right.
STELTER: With "Game of Thrones," there's such high interest. In some ways, that's a compliment. This show is so hotly-anticipated that it gets
on the Internet ahead of time.
I don't know how damaging it actually is to HBO, given that most people watch it legally. But we do know over time, this has been one of
the most pirated TV shows in all the world.
LAKE: Listen, compliments don't help your bottom line, do they? As flattering as it is, and maybe it does create buzz, but I'm sure that they
want to clamp down on it.
STELTER: Well, especially now that they're selling an Internet version of HBO.
LAKE: Aha, yes!
STELTER: That's the real key here.
[16:14:57] LAKE: Exactly. And does this raise the question -- the idea, when you're trying to get the pirates and you introduce service like
that, if people had a reasonable option, they wouldn't pirate it. They'd actually much rather do it legally. That's the argument we hear. Does
this throw cold water on that? If people can get it for free, will they think twice about signing up for a subscription like that?
STELTER: That's an argument going back to Napster, right?
LAKE: Right.
STELTER: To the dawn of digital music that I people could pay they would. We saw that partly become true through iTunes and now Spotify, et
cetera. Partly untrue, however. These pirate sites continue to reach millions and millions of people even though there are legal ways to buy
episodes of shows like HBO on iTunes, for example.
Now that HBO is selling its version of its service the Internet, HBO Now, came out last week, it's even more imperative for HBO to crack down on
these illicit options. Because they want to convert non-paying subscribers, or even password sharers, into paying subscribers, into that
universe. That's the whole idea of HBO Now. And that's why the company takes these leaks very seriously.
LAKE: Yes. You just sat down with the CEO -- which by the way falls under the umbrella of our parent.
STELTER: Right.
LAKE: You sat down. Does not seem like somebody who's going to suffer something like piracy lying down. Very intense, very -- up for the
challenge presented by Netflix. Did you guys talk about piracy, and what is he really focused on?
STELTER: You know, I asked him about password sharing. He said it's not a big concern. Piracy did not come up. He did say, though, that "Game
of Thrones," obviously their biggest hit in their history, even bigger than "The Sopranos" ever was, he says a lot of life left in the franchise, that
he wants it to be the storytellers ultimately have to decide, he says. He was very clear about that.
(LAUGHTER)
STELTER: But of course they see a lot of life left in this franchise. And this season that premiered last night is expected to be even bigger
than the last season. This is a show that's actually growing as it goes along, partly because people can catch up On Demand. It's just that HBO
wants you to catch up the legal way and not the illegal way.
And by the way, Time Warner, which owns HBO and CNN, one of many media companies that is active in Washington with lobbyists trying to have
stricter, more severe efforts to curb piracy. This is something that we've seen as a lobbying priority for big media companies before.
LAKE: All right. That's an investigation we're going to keep an eye on. Brian, thank you so much.
STELTER: Thanks.
LAKE: Meanwhile, Apple may have sold almost a million smart watches on the very first day they were available. That is according to retail
research firm Slice Intelligence -- 957,000 pre-orders were place for the Apple Watch on Friday. More good news for Apple: the same report suggests
each customer spent more than $500 on the average order.
Now, the watch is Apple's first major product release since Steve Jobs unveiled the iPad in 2010. I spoke to the two authors of a new biography
on the late CEO, "Becoming Steve Jobs." Brent Schlender and Rick Tetzeli told me part of the Steve Jobs genius was a management style that allowed
Apple to continue innovating after his death.
(BEGIN VIDEOTAPE)
RICK TETZELI, CO-AUTHOR, "BECOMING STEVE JOBS": What changed over the course of his life was he had that brilliance and that peripheral vision
when he was young, but he learned how to do it over the long haul, and he learned how to bring along an excellent group of people. And he empowered
them to do the best work of their lives.
And so, one of the things about the book is that, it sort of kills off this solitary genius idea. Why is Apple still in good shape three or four
years after Steve's death if he's not there? It's because of the way they run that company and the way they manage, which is all stuff that he had
learned over time, and he has bequeathed to Apple.
LAKE: What sticks out in your mind as something unusual or something you learned about Steve or some quirk or some habit he had that you sort of
-- that stays with you in your memory?
BRENT SCHLENDER, CO-AUTHOR, "BECOMING STEVE JOBS": Well, he was really great as an extemporaneous analyst. You'd throw a question at him,
and the guy was amazing how he would twist it, turn it around in his mind, and almost immediately come back with a really cogent answer that takes
into account things you didn't even pose in the question, and makes you look at something completely different.
The only other person I've ever seen who's anything like this is Bill Clinton, who is really remarkable on his feet in answering questions and
dealing with complex ideas and expressing them in a simple way and tying everything together with a neat bow. Steve could do that, too. He just
wasn't a politician.
LAKE: What is it about him that inspired such loyalty? Because we have clearly seen the top executives at Apple very upset by this public
image from previous books, and they were very open with you, many people feel like, in attempt to sort of right that ship, to sort of let people
know a different side of him. What do you -- what inspired such loyalty in people, and what do you make of their openness?
[16:19:58] SCHLENDER: Well, first of all, they did the best work of their life working for him. Technical people, marketing people, you name
it. Because his standards were so incredibly high for what was just good enough to be put into either Apple as a company or its products.
TETZELI: And even the people who he fired, or whose relationships ended badly will tell you that they did the best work of their lives for
him.
LAKE: Why do you think this image has come out of him being difficult to work with, demanding, maybe beyond measure? Because clearly there are
people who provided those insights as well. Do you think that they're false, or do you just think it was one-sided?
TETZELI: No, he could be a very difficult person. He could be rude, he could be a jerk, he could be insufferable. He's anything but a saint.
But two things happened, I think. One is that he cut off access to the press in certain ways after 1987. So the stereotype stuck around -- that
had been established in his youth stuck around.
The second thing is that I think those stories about him being a jerk, it's sort of easier to tap into those stories than it is to document how he
helped somebody out, especially since he wasn't a person who liked to talk about what he had done for other people. That was not interesting to him.
He wanted to talk about what Apple had done for the consumer, and that's about all he wanted to talk about.
LAKE: What do you think his legacy is? There are a lot of people who've weighed on this. What do you think Steve Jobs' legacy is?
SCHLENDER: Well, I think it's so multifaceted, it's really hard to put in a single word. But I would say -- I've said before that Apple the
company will prove whether it is the legacy. But short of that, we're not there yet. We'll find this out in the next five to ten years whether what
he built really has staying power and unique staying power and growing power.
But I do think that there have not been very many people in the history of modern civilization who have affected the entire way of life of
so many people within their own lifetime. Thomas Edison may be one. Henry Ford may be one. There are not very many of them.
And he changed the way we behave just by putting things in our pockets and things on our desks that amplify our own creativity and our own
abilities.
(END VIDEOTAPE)
LAKE: And we will be right back with more QUEST MEANS BUSINESS just after this break.
(COMMERCIAL BREAK)
LAKE: In London, newly released CCTV footage is showing that thieves who carried out a jewel heist earlier this month returned after leaving for
the first time to steal even more. In total, they got away with nearly $300 million worth of precious gems from safety deposit boxes.
Now, as the hunt to find them continues, CNN sat down with a former policeman and a former back robber to look at how they pulled it off.
(BEGIN VIDEOTAPE)
[16:24:58] JIM DIXIE, FORMER DETECTIVE SUPERINTENDENT, MET POLICE: I think there's a good change the police may find some forensics in the vault
area, because they were in there for days rather than hours or minutes, and when you're in that sort of environment, you are going to sweat because of
the stress of it all.
NOEL "RAZOR" SMITH, FORMER BANK ROBBER: If you'll notice, they're wearing white surgical-type masks over their ski masks, and that's
basically to avoid DNA being left. The slightest little bit of DNA will be picked up. And also because the police forensics have now got facial
mapping. I had it in the case in my day 15 years ago.
DIXIE: The lock on the security gate is -- how can I describe it? -- I'd say it's Mickey Mouse. This is so well-organized and so well-planned,
it's highly likely they either had a key or they forced it somehow. And once they're in, if they get challenged, they obviously had a strategy.
SMITH: I think they're a very professional team. They've gone in there and done what they had to do, but they're not the brains. That's
quite obviously. They know the camera's there. You can tell that by the way they keep their heads down as they come through.
DIXIE: I have little doubt that a huge cry has gone out into the criminal underworld, and someone may know who these people are. And either
the police will pay for that information or they'll get the information. And it may well be once they identify at least one member of the gang,
they'll be able to turn that person. By that, I mean, turn him into an informant.
SMITH: This is the kind of job you dream about. This is the job as a criminal, from a criminal's perspective, this is what they call the big
one. This is the one you retire on. So, having got away with it like this, I fancy they won't be seen again, these people.
(END VIDEOTAPE)
LAKE: Next, a rocket that could revolutionize the commercial space industry. The SpaceX launch is just minutes away. You're looking at live
pictures. That's the launch. It's all about the landing, though. We'll tell you why.
(COMMERCIAL BREAK)
LAKE: Hello, I'm Maggie Lake. Coming up in the next half hour of QUEST MEANS BUSINESS, all systems go. SpaceX is ready to launch and make
space travel history. We'll bring you the liftoff live.
And Wall Street versus the White House. I'll ask the head of the American Bankers' Association what he wants from the next US president.
Before that, these are the top news headlines we are following for you this hour.
[16:29:58] This week marks one year since 300 schoolgirls were kidnapped by Boko Haram in Nigeria. Despite an international campaign and
pledges to help, the girls have never been traced and little has been heard of since they were taken from their boarding school.
(BEGIN VIDEO CLIP)
USMAN SHEHU, "BRING BACK OUR GIRLS": For both Muslims and Christians, this is an opportunity for us to reconnect with God, to ask for God to give
us the empowerment to be able to continue with the advocacy, and if possible, to have a divine intervention that will enable the girls to be
brought back as quickly as possible.
(END VIDEO CLIP)
LAKE: Russia has lifted a ban on delivering missiles to Iran after the nuclear deal brokered between Tehran and the P5+1 countries. Russian
President Vladimir Putin canceled the ban on deliveries which has been place since 2010.
Foreign Minister Sergey Lavrov insisted that the missiles could only be used for defense and would pose no threat to Israel.
Florida Senator Marco Rubio is set to become the third Republican to officially announce he is running for president. Rubio told donors he
intends to run in 2016. He's due to make a public announcement to supporters in around 90 minutes from now.
This comes a day after former U.S. Secretary of State Hillary Clinton launched her own bid for the Democratic nomination.
China has released five female activists but with strict bail conditions. One of their lawyers says the women will remain under police surveillance
for a year with their every movement monitored. Their arrest last month drew fierce international condemnation. The women's public campaigns
included efforts to stop sexual harassment. The French state railway company is demanding police take action against
professional cyclists who rode over a level crossing during a road race. This video shows some of the cyclists who rode through the barriers after
they came down. Many riders ignored officials who tried to stop them from crossing as a high-speed TGB train approached.
French officials say the riders are irresponsible and they want police to take action. The cyclists were competing in the Paris to Roubaix one-day
classic race. Elon Musk was hoping to launch a rocket that could revolutionize the
commercial space industry. These are live pictures from Cape Canaveral in Florida at 30 minutes past the hour the Spacex cargo ship is due to head to
the International Space Station. The excitement is not so much on the launch but on the rocket's landing.
Spacex is hoping to land the rocket on a barge in the ocean so it can be reused. Let's take a look at the intended flight path. The problem is
last time it didn't go so well. Here's the moment when the last attempt ended with the rocket crashing on
the barge. Now just an update coming in - unfortunately the bad news for Elon Musk is that the launch has just this moment - last few minutes - been
called off due to weather. Let's bring in CNN aviation analyst Miles O'Brien. He joins us live from
Washington. And, Miles, such is the nature of space that right up until the launch they can pull the plug and cancel it. How challenging does that
make it?
MILES O'BRIEN, CNN AVIATION ANALYST: Well, you know, Florida this time of year is always a challenge, especially at this time of day. And
what we're talking about here are anvil clouds which are towering cumulous cloud. A rocket traveling through an anvil cloud can actually trigger its
own lightening as its plume sort of grounds out with the ground. So you want - you don't want to mess with that. As a matter of fact, Apollo 12 way back in 1969 had huge electrical failures as a result of
that. So the better part of valor here is to wait. Unfortunately, it's only a five-minute window in order to rendezvous with the International
Space Station. And so they won't be able to try until just a little less than 24 hours from now.
LAKE: Yes, it's extraordinarily difficult this business. Miles, it's worth talking about though why we're paying so much attention to these
launches coming from Spacex. Elon Musk is really trying to sort of redefine the space industry by creating a reusable rocket, isn't it?
O'BRIEN: You know reusability, Maggie, is the holy grail in space. Way back in the 60s when they first started designing the space shuttle
system, the idea was to make it 100 percent reusable. But it turned out the upfront cost of that - the research and development aspect -- was too
expensive and the Nixon administration didn't want to put the money down to do that.
And so it became a partially reusable system. The fuel tank got tossed aside, the external rocket boosters were difficult to fish out of the water
and refurbish. It became very expensive - it was more than a billion dollars to launch a space shuttle, and that's just not a way to run a
business in space. [16:35:00] Elon Musk says he could do it for 100 times cheaper by making things reusable. Now that's a bold statement, but he may be on the way to
doing that. It's quite possible if you keep it simple as he has and try to do things this - get back to that barge and see if that works out. You
might be able to do it a lot cheaper. A hundred times cheaper? We'll see.
LAKE: Well he's certainly a risk-taker, we know that that he's willing to do it. And he expects, by the way, for there to be many
setbacks and failures, so I'm sure, you know, fully understanding that the weather and any of these circumstances - everything - has to be perfect to
make it work. Miles, how is this going to translate or why is it important to get to a situation where you start to bring the cost down for space exploration?
O'BRIEN: Well, you know, it's been - Low Earth orbit has been an enticing destination for entrepreneurs, but it's been very difficult,
Maggie, to make the bottom line work. Elon Musk and Spacex are pushing the envelope here quite literally and changing the equation quite a bit.
There's all kinds of potential businesses up there and the idea that NASA should be delivering astronauts to the Space Station is kind of a waste of
NASA's resources. I'd rather - I for one would rather - see NASA go to Mars and push the horizon even farther down the road.
And leave it to the private sector to come up with ways to make Low Earth orbit work - whether it's material science developing novel materials,
plastics, medicines, that kind of thing or whether it's space tourism. One way or another, we - those of us who care a lot about space - would like to
see business take root and Low Earth orbit is the place to start.
LAKE: That's right and we've got some of the best and brightest out there chasing that dream. Miles, thanks so much for joining us today.
We'll keep a close eye on Spacex's next attempt to get out that window. Miles O'Brien for us tonight.
New entries in the race for the White House. Another contender throws his name into the ring. We look at how the candidates will fund their
campaigns next.
(COMMERCIAL BREAK)
LAKE: The fundraising for the 2016 presidential election in the United States is kicking up a gear. In around one hour from now,
Republican Senator Marco Rubio is publicly to announce that he's running. That follows Hillary Clinton's official announcement on Sunday.
There's a field of candidates that's already looking crowded despite the fact that the election is more than a year away. Joining us now to talk
about the 2016 race is Frank Keating. He is the president and CEO of the American Bankers Association and the former Republican governor of
Oklahoma. He joins us now live from Washington. Frank, in the U.S. is never too - we're in perpetual reelection mode it seems.
FRANK KEATING, PRESIDENT AND CEO, AMERICAN BANKERS ASSOCIATION: It's not going away any time soon, Maggie.
LAKE: No, we better get used to it. What do you make of the field of candidates that's out there already?
KEATING: I think - of course I'm a Republican, but I've got to say when you have one candidate - Mrs. Clinton thus far - that candidate is
going to have a real tough time because every rock, every brick, bat, every tomato is aimed at her. When you've got 20 candidates or 15 or however
many candidates the Republicans will have, that really makes for an interesting race.
[16:40:09] And Republicans really after eight years of a Democratic president need to sell themselves and their agenda, and I think you're
going to see a lot of excitement. You've got a very youthful man obviously in Marco Rubio, very attractive.
Obviously the candidacy everybody's waking - waiting - for is Jeb Bush who's extremely experienced. I happen to believe the best of the Bushes.
And you have somebody like Rand Paul who's very much a Libertarian. Ted Cruz - enormously articulate, very smart guy. I think it's going to be
a fun race. Obviously we Republicans want to win, but it's going to be worth watching.
LAKE: It is. Sometimes when you have a crowded field especially on the Republican side, all that infighting detracts them away from taking on
the opponent. We're not going to get too deep into the issues - I'm curious - fundraising is going to matter.
In the past we've seen in certain elections that the business community likes to hedge their bets. They tend to favor the Republicans, that they
kind of give to each party. Do you get a sense from people you're talking to in the business community, in financial circles, that they are already
looking at one candidate that they'd really like to put their money behind?
LAKE: No, I don't think so, Nattie, as a matter of fact, I think, Maggie, that most of the people I talk to are - they're not hedging their
bets, but they are saying, well let's just see who else is out there. I think on the East Coast and the West Coast, even within the financial
services community that you think is traditionally Republican, they're really traditionally Democrat. You know, in between in flyover country if
you will, I think a lot of those people are saying we know we've got some interesting personalities. Let's see who else muscles up and enters the
race. But between not and a year and a half from now, I think you're going to see a lot of fireworks, a lot of action, a lot of debate and you'll see people
probably begin to rush toward one or two candidates in some months ahead. But right now a lot of people - even as much as they admire Jeb Bush's
record and he was quite truthfully even more conservative as governor of Florida than Ronald Reagan was as governor of California.
You have a lot of people saying I think I'm going to watch for a while and see how it - how it plays out.
LAKE: That's right. You know we already heard from Hillary Clinton and her announcement really staking the claim that she wants to look out
for the middle class that she feels like is left behind. They need a champion as the economy's recovering, they're not participating and
enjoying that anymore. How do you think that message is going to resonate? And Republicans are going to have to respond to that.
KEATING: Well no, I think that's very important because the middle income in the United States traditionally has been a very moveable target -
that people start out with nothing, move into the middle income and then go, in many cases, in one generation to the top rungs. It's not unusual in
America to have somebody with very limited education or whose father or mother first came from a different country, make it to the top in business
industry, finance, law, medicine, whatever it may be. I think that's wonderful news for America, but the middle income people do
feel their opportunities in many areas are stalled out. Much of it is I think difficulty at purchasing homes because of regulation. Much of it I
think is the result of high student loan debt which is afflicting young people trying to make a stab at the first rung of the capitalist ladder -
LAKE: Right.
KEATING: -- but I think there is a lot of uncertainty - is this economy as good as it could be or should be? Answer - no. So I think
people are going to watch what people are saying -
LAKE: Right.
KEATING: -- and what are their ideas - not just say I'm going to help the middle class but what are you going to do actually to make the middle
class more successful?
LAKE: Absolutely. We have a phrase here that we like to say a lot at CNN and it is - the economy, issue number one. And that is certainly going
to be the case as we go through this long process. Thank you so much for joining us and sharing insight. We appreciate it.
KEATING: Thank you, Maggie. Appreciate it.
LAKE: British voters will be heading to the polls in just over three weeks. Today Labour leader Ed Miliband focused on the economy as he
unveils his party's manifesto. A recent poll shows Labour could win the election but it's still tipped to
be one of the closest results in decades. CNN's London correspondent Max Foster has more.
(BEGIN VIDEOCLIP)
MAX FOSTER, CNN ANCHOR AND LONDON CORRESPONDENT: A rousing welcome for their leader - the man they want to see in (AUDIO GAP) come May the
7th.
ED MILIBAND, LABOUR PARTY LEADER: Thank you very much.
FOSTER: After a week of fielding personal attacks by David Cameron's Conservative Party, Ed Miliband began week three of the election campaign
amongst the party faithful.
MILIBAND: Thank you very much, friends.
FOSTER: And the Labour leader was on the front foot as he unveiled his party's manifesto. The first page confronting his biggest
vulnerability - criticism that Labour spends more than it afford.
MILIBAND: Absolutely there's a challenge for us to show that we're going to be fiscally credible and get the deficit down. I'm being quite
open about that. I'm being quite open about that and I'll tell you why - because I think there are lots of people at home who are thinking to
themselves `I like Labour values, I like what Labour is putting forward in this election, I want to know it adds up.'
[16:45:04] And today the manifesto today is proof of that. It's proof that it does add up, that every penny - all the commitments we make - are paid
for and costed.
FOSTER: The Conservatives and liberal Democrats were quick to dismiss the claims - David Cameron saying this is not a conversion to
responsibility. It's a con. And the liberal Democrat leader Nick Clegg likened to an alcoholic who drinks a bottle of vodka every day, claiming
they have no plans for additional vodka. But for the first time in this election campaign, Miliband did appear to
gain ground on another issue - his image problem. He faced unfavorable polls in 2014 with one concluding 41 percent considered him weird. But
political commentators on Monday said he finally appeared more statesman- like. Max Foster, CNN London.
(END VIDEOCLIP)
LAKE: Well it seems opinion polls are no closer to predicting who will win. This one from "The Guardian" newspaper shows the Conservatives
with a sizable lead of 6 percent - 39 to Labour's 33. Meanwhile, a YouGov U.K. poll on Sunday put Labour ahead by 3 points. But
keep in mind there is a 3 percent margin of error. Deutsche Bank says in its latest note that Labour is more likely to form a government in the event of a deadline. I spoke to Deutsche Bank's chief
U.K. economist George Buckley. He says the outcome is far from certain.
(BEGIN VIDEOCLIP)
GEORGE BUCKLEY, CHIEF U.K. ECONOMIST, DEUTSCHE BANK: Absolutely, it looks like both major parties are going to fall well short of the number of
seats that they require in the House of Commons and the U.K. Parliament. In order to produce a majority they need 325 seats. It looks more like
they're going to get 50 seats less than that each of them. And so what you need is a number of other parties to come together to support either the Labour Party or the Conservative Party in order to
produce a government. While at the moment it looks a little bit more likely if they were dead equal - the Labour and Conservatives - that Labour
might find it a bit easier to produce that coalition or at least that agreement for a government.
Because they would have the backing of the Scottish Nationalist Party, the Conservatives wouldn't. They might also have the backing of the liberal
Democrats - the current junior coalition partners who are allied with the Conservatives. They really are a little more left-wing than the
Conservatives, so I wouldn't be surprised if they decide to ally with the Labour Party.
LAKE: The fact that we're looking at this scenario and so much is still up in the air, it has to be a little unnerving for the business
community. Who would they like to see lead the next government?
BUCKLEY: Well, I think it's - you've got to think about which is the worst possibility. And if Labour comes to power - if it's a Labour-led
coalition, then you will see less austerity, less fiscal tightening than you would have done under Conservatives.
Now, will that have a material impact on the financial markets? Probably not. But it's a risk. On the other side, if it's a Conservative-led
majority, you possibly get the risk of a referendum on the membership of the U.K. of the European Union.
And of course that probably in my view is a worse event for the markets at least because it might mean the sterling falls, there'll be a lot of
concern about investment, about the rate of growth of the economy, the uncertainty which his being caused by whether - just about what we don't
know whether we will be in a single market in two years' time. So I think the bigger risk to me - to my mind - is that we can an E.U. referendum.
LAKE: When we get down to the final push, sometimes it's all about playing defense. The Conservatives certainly likely to make the argument
listen the economy's recovering - do you really want to take a chance and change that? How much weight will that argument carry?
BUCKLEY: Well I think you have to look at what we're recovering from. The recovery is happening very quickly. We saw for example in 2014 - last
year - 2.8 percent growth. It was the fastest-growing G7 economy. This year it might be very similarly - probably about 2 and a 1/2 percent, maybe
even slightly above that. And the latest economic data has been revised upwards.
But it's worth bearing in mind where we've come from. We are still not that high above the previous peak in GDP. And when you look at household
real incomes, they are actually still probably about 7 percent lower from where the previous peak was.
So you can understand why people are voting with their feet - they're looking at their incomes, they're thinking yes, why it's recovering now but
we're coming from a point at which was terrible and therefore we're not really very encouraged by this.
So I think both the Conservatives and Labour have a point here. The recovery is happening, it's happening pretty quickly. But it's happening
from a very low base.
(END VIDEOCLIP)
LAKE: Plenty more chances to predict the future in Hanover. We'll say hello to the robots at the world's biggest industrial technology fair,
next.
(END VIDEOCLIP)
(COMMERCIAL BREAK)
[16:51:42] LAKE: Giant robot butterflies, human organs made by 3D printers, and two G20 leaders. Just some of the sights of the world's
biggest industrial technology fair in Hanover, Germany. Chancellor Angela Merkel and India's Prime Minister Narendra Modi were there on day one.
As we kick off a week of special coverage from the fair, Rosie Tomkins spoke to two of the people at the forefront of what some are calling the
fourth industrial revolution.
(COMMERCIAL BREAK)
ROSIE TOMKINS, CORRESPONDENT AND SENIOR PRODUCER FOR CNN INTERNATIONAL: Polishing up for a week on display. The machines behind
the robots that make the robots that make the products. Hanover may not quite be open for business, but it's already very much in motion.
Twenty-four hours before things open and as you can see it's still very much a building site here. It's also absolutely enormous. This is one of
more than 25 halls in total. You need a car to get around this site. Hardly surprising - it is after all the world's biggest industrial fair, a
chance for the great manufacturing minds to exchange ideas and peddle their wares.
Ooh! There it goes. Some have been designed to set your heart aflutter. What does this really have to do with real industry?
Male: The most (innate) intelligence systems where you can learn a lot of technology, compare (ph) it to automation, and on one side you can
make experiments, on the other side, you can also train people on the new technology.
TOMKINS: So this is about learning from nature when it comes to designing your latest technology?
ULRICH SPIESSHOFER, CEO, ABB ROBOTICS: Exactly and you know nature has a lot of excellent ideas like lightweight (AUDIO GAP) lightweight -
technology should be also lightweight. If you look at the car industry - if you transfer problems to the nature - to these bionics, people are more
creative. They are more, let's say, intuitive. They do a lot of things which they will not do if they do just an actuator of automation.
TOMKINS: Butterflies and bionic ants may seem a long way from industry as we know it, but this is about inspiring a new era of
manufacturing. The digitization of industry, or as the German government calls it, industry 4.0.
SPIESSHOFER: Industry 4.0 is very simple because everybody is used to smartphones, everybody is used to tablet P.C.s, so new activities how to
operate with systems and putting these into machines means we get very easy, intelligent machines, new movements, new operations and the new
generation of technology will be transferred into this automation.
TOMKINS: Like the Internet of Things, this is about a smarter, more connected future, one which radically reduces the presence of humans in
factories, making way for more intelligent machines that do the work for us and in some cases alongside us.
SPIESSHOFER: So the robot takes one of (inaudible) per step (ph), the lady takes the next (inaudible) per step (ph) and together they bring out a
very competitive product.
TOMKINS: Humans and robots working together is the focus for robotics company ABB.
SPIESSHOFER: Basically what we're doing is we're bringing industrial automation to the next level. As you can see, the robot is outside of the
cage. It senses, it feels, it touches. So when you get too close as a human being and there's a safe untake (ph) moment, it reacts right away.
You move together with the robot, rather than a sevential (ph), it's a collaborative approach that we have never had before.
[16:55:11] TOMKINS: That collaboration is the core of your strategy (inaudible).
SPIESSHOFER: Absolutely.
TOMKINS: Why is that? People think great automation means less work for humans, but actually -
SPIESSHOFER: No.
TOMKINS: -- it's about working together?
SPIESSHOFER: If you look at the industrial countries with the highest - or with the lowest - unemployment rates, with the highest levels of
employment, these are countries with the highest level of industrial automatic. With humans it really take productivity to the next level.
We make sure we safeguard jobs, we take unpleasant parts of the job today and we let the human being focus - our colleagues focus - on the key
valuated activities.
TOMKINS: So there we have it. Two chief executives from the world of automation with two radically different approaches. Now there is of course
tremendous variety at this event. But there is also one thing that binds every exhibit, and that is this quest for a smarter future, one that brings
together the digital and the industrial worlds. All week we'll be hearing about how different companies are doing just that
because the pressure is on to embrace this direction so they don't get left behind.
(END VIDEOCLIP)
LAKE: When we come back, we'll be remembering Germany's Gunter Grass who's died at 87.
(COMMERCIAL BREAK)
LAKE: He was a Nobel Prize-winning author with a burning passion for politics. Gunter Grass has died at the age of 87. The author of "The Tin
Drum" is one of Germany's most acclaimed writers. But it's one of his final works that won him powerful friends in Greece.
Grass wrote a poem in 2012 called "Europe's Disgrace," criticizing the E.U.'s austerity policy in Athens. He wrote Europe was quote, "Close to
chaos because the market is not just." Now the Greek prime minister has paid tribute. Alexis Tsipras said, "Greece has lost a valuable friend who
did not hesitate to stand next to the Greek people in the time of economic crisis."
[17:00:03] And that's "Quest Means Business." I'm Maggie Lake in New York.
END
