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Quest Means Business
Turkey: Terror Attack Kills 28; White House: FBI Not Seeking iPhone "Back Door"; Cook: Government Asking U.S. to Hack Our Own Users; Pope to Visit U.S.-Mexican Border; NIKE Drops Pacquiao Over Anti-Gay Comment; Snowden Defends Apple in FBI Fight; EFF: FBI's Request Undermines Security; Official: Phone May Hold Shooting Clues; Trump: Apple Must Unlock Shooter's Phone; Tusk: "No Guarantee" on U.K. Deal at Summit; EU Prepares for Summit Over U.K. Deal; U.K. Seeking New Deal with the EU; Airbus: Cheap Oil Doesn't Impact Us; Airbus CEO: We're Not Immune to a Slowdown; Hot Flavored Drinks Sold at Major Chains Contain Excessive Levels of Sugar
Aired February 17, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00]
PAULA NEWTON, HOST: Three straight days of triple digit gains as trading comes to an end. Has it made a market believer out of you yet, on Wednesday
the 17th of February.
(BEGIN VIDEO CLIP)
NEWTON: Tonight it's Apple versus the FBI. Tim Cook says he won't let the government force Apple to hack its phones.
Out for the count. Nike drops boxing legend Manny Pacquiao after he insults gay people. And oil prices surge, taking stock markets with them.
I'm Paula Newton, and this is "Quest Means Business."
(END VIDEO CLIP)
NEWTON: Good evening. We'll have the day's business news in just a moment. First, though, Turkey's President says the country will respond following a
deadly explosion in Ankara.
(BEGIN VIDEO CLIP)
NEWTON: The government says at least 28 people have been killed and dozens wounded. The Turkish military says it was an act of terrorism. It says the
blast hit three military vehicles that had stopped at a traffic light. And we have new video that appears to show the moment of the explosion.
Now, according to DHA T.V. that's who got access to that video that you are looking at right there. Now the images from a security camera show an urban
street and a bus stopped on the side of the road and then look, you see it right there, that flash. Everything goes white. Now, apparently it was then
followed by smoke, you know, it really rocked people in Ankara because they could see and it feel it.
Our senior international correspondent Arwa Damon joins me now live from Istanbul.
(END VIDEO CLIP)
NEWTON: I mean Arwa, you have that sense of dread whenever this comes over the news wires. I mean I was reading that the explosives in this truck
really, the impact it must have had. Ankara is a government city. This was very close to government buildings. How do authorities think this happened?
ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, clearly, there are always security breaches that can easily be exploited by the various
different terrorist organizations that have been targeting Turkey, especially over the last year or so.
(BEGIN VIDEO CLIP)
DAMON: That being said, the area where this happened is very close to parliament buildings, it's very close to the Turkish general staff building
and other military housing as well. And the target -- the fact that this convoy rolled to a stop at a stoplight, and that is the exact moment when
this vehicle laden with explosives detonated indicates as the authorities have said this was a fairly well-planned attack.
Now emergency services did respond very quickly as they do in many of these instances with ambulances on scene. Now tasked with the very grim job of
having to identify exactly who was killed, who their identities were, how many of them were military personnel, how many of them were civilians. And
bearing in mind, too, that it was only back in October that Ankara saw the deadliest attack in Turkey's modern day history where two twin suicide
bombers targeted a peace rally in the heart of the capital killing over 100 people.
And then of course you had attacks before that that happened along the Syria/Turkey border during the summer. And then most recently, you had the
attack back in January that happened here in Istanbul, in the heart of the city's historic district where a suicide bomber again detonated targeting
this time tourists.
So in these past cases the Turkish government has blamed ISIS for this attack. That said they are facing multiple threats from multiple different
terrorist organizations, Paula. But you can just imagine how this does reverberate not just among the population in Ankara but really amongst the
population across the country as a whole.
(END VIDEO CLIP)
NEWTON: I'm sure it's been incredibly unsettling. Arwa Damon will continue to keep an eye on it. Thanks Arwa, I appreciate that update.
Now tonight, the world's most valuable company is taking on the U.S. government. Apple is opposing a judge's order to help the FBI break into an
iPhone.
(BEGIN VIDEO CLIP)
NEWTON: And it's not just any iPhone. The device in question belonged to this man, Sayeed Farook. He and his wife killed 14 people in a terrorist
attack in San Bernardino, California. Now, the U.S. Attorney for the Central District of California said police need to know what information
was held on that phone. Apple says unlocking devices for investigators would create a dangerous precedent.
In an open letter, Apple's CEO Tim Cook wrote "the implications of the government's demands are in his words, chilling. We feel we must speak up
for the face of what we see as an overreach by the U.S. Government."
(END VIDEO CLIP)
NEWTON: Now the White House insists asking for access to one phone doesn't mean the government wants access to all phones.
(BEGIN VIDEO CLIP)
JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: They are not asking Apple to redesign its product or to create a new back door to one of their products.
They are simply asking for something that would have an impact on this one device.
[16:05:10]
EARNEST: And you know, again, for the merits of that argument, and why the Department of Justice has concluded that that's important, I'd refer you to
them. Obviously, the Department of Justice and the FBI can count on the full support of the White House as they conduct an investigation to learn
as much as they possibly can about this particular incident. The President certainly believes that that is an important national priority.
(END VIDEO CLIP)
NEWTON: Now Apple's drive to offer a greater level of encryption was largely driven by Edward Snowden's revelations about spying conducted by
the U.S. Government. And here's how it works.
Apple doesn't have a key to unlock iPhones that the owner has locked. Only someone who knows the password can do that. This looks familiar to many
people. Now as some iPhone owners had discovered very much the hard way, if you try to make too many failed attempts on that keypad, right there, your
phone gets wiped forever.
The FBI wants to change that. Now a judge has ordered Apple to provide reasonable technical assistance in unlocking those devices, that includes
developing software that would let investigators try for an unlimited number of pass codes without wiping the entire phone.
Now Apple says the government is asking it to create a so-called back door which would undermine decades of security and put everyone's phone at risk
of attack from cyber criminals. Now Cedric Leighton served as the NSA's Deputy Director for Training. He is
now a CNN military analyst and he joins me now from Washington. You know, I don't even have to give you the arguments that are going to disagree with
you here. Make your best case to me right now as to why the government needs to get into this phone this way.
CEDRIC LEIGHTON, CNN MILITARY ANALYST: Sure Paula. Well, the biggest thing that we have to look at is what is necessary for investigative powers to be
used in a case like this? So in the case of the San Bernardino terrorist attack, the shootings in San Bernardino, you have a one device that is
necessary for investigators to look at.
(BEGIN VIDEO CLIP)
LEIGHTON: They want to look at it because they are doing something called call chaining. When that means is they are looking at where that device
was, how it was used, who did the people talk to, Sayeed Farook in particular, and are these people part of another terrorist cell or are they
just innocent people who happen to have been contacts and friends of his?
(END VIDEO CLIP)
LEIGHTON: So it is very useful from an investigative perspective in this particular case to have access to that phone and the types of things that
that phone did. And that's really what it is.
NEWTON: It might be useful. Everyone can understand how you would want that piece of investigation. But sometimes as an investigator that information
just isn't available to you. Are you not worried that this really opens the door for authoritarian countries like China, like Russia that might put
this kind of a back door to a different type of use in their countries?
LEIGHTON: Oh, certainly and I think that's a very legitimate concern. You have to look at it in the way that, you know, who could use this as in the
worst case scenario, who could use it for totalitarian purposes?
(BEGIN VIDEO CLIP)
LEIGHTON: And obviously you don't want a country like China, Russia, or any other country that has very stringent rules on and controls over their
citizens. You wouldn't want them to be able to do this.
The problem that you have is because these techniques have now become such public knowledge, it is something that is discussed in a way that makes it
very difficult for companies to cooperate with the government without there being repercussions for those companies.
(END VIDEO CLIP)
LEIGHTON: So Apple is taking a stand basically saying we want to protect the integrity of our services because we don't want to be known as being
the country that helps the U.S. Government.
NEWTON: But it sounds like you are blaming Apple, like as if they should have been more covert in their cooperation with government.
LEIGHTON: Well, they have no choice. No I'm not blaming Apple. I think they have absolutely no choice in the matter because we live in a very
public world where things that were once secret such as you know back in World War II Western Union provided reams of data on the Japanese as they
were sending secret messages back to Tokyo just before the start of Pearl Harbor.
So there is historical precedent for this kind of cooperation between private companies and the federal government. And not to say that Apple
hasn't cooperated. It's just that if they do that kind of cooperation now it's going to become public knowledge. So they are boxed into a corner.
They can't help without it adversely affecting their business interests overseas especially.
So that's the difficulty. From an investigative standpoint though you need access to this kind of data in very specific cases in order the make extra
sure there is nobody out there planning another terrorist attack who's connected to Sayeed Farook or similar people who are working out there.
[16:10:00]
NEWTON: Well that certainly is the government's plan of attack laid out. Thanks for joining us. We'll continue to following the story as I'm sure
you will as well.
And in the meantime, something just in to CNN. Apple plans to file an opposition brief as early as next week. That's according to an industry
source speaking to CNN. We are covering this from every angle.
Laurie Segall, is CNN's money tech correspondent and Jose Pagliery, is the man who covers our cyber security beat. Not a moment too soon. They're
obviously going to file this in court.
Everyone is expecting this to be a Supreme Court case. Jose, I want you to explain to us in terms of this backdoor mechanism, how crucial is it, and
are they right that you know look, we can't unsee this, we can't uninvent it, once it's out there it's out there. It's like they've kind of set up a
Hollywood movie plot here with something. You know it's like they built the Frankenstein of all cyber security programs.
JOSE PAGLIERY, CNN MONEY CORRESPONDENT: There is a huge difference between policy and morality and what's technical. Right? So morally, we want to
figure out what's on that phone. Policy -- any politician will say we need to figure out what the terrorist had so we can prevent other cells in the
condition.
But technically speaking, if Apple creates a key, a way to get in to this device they have created a way to get into any device. And so it really
opens Pandora's Box. And that's what I'm hearing from hackers, computer scientists, cryptographers. Any installer who deals with this issue, is
that if Apple is forced to create a way in then this is a huge precedent, because then the FBI can return to ask for that again.
Which is why we have to ask ourselves; Is this a onetime thing or will the FBI ask for this again?
NEWTON: We both know it is not a one-time thing and it is a game changer and that's why so many people are worried about it. I mean Laurie, just
dealing with Tim Cook's note here. You know he says, look, this is dangerous. He said it was chilling. He's asking us -- the government is
asking us to hack our own users. Equally as dramatic was the FBI's response you know, saying the victims and the families deserve nothing less. We told
them we would leave no stone unturned. Laurie, what is the tech posture on this right now?
LAURIE SEGALL, CNN TECHNOLOGY CORRESPONDENT: You know there's been so much tension between Washington and Silicon Valley. And you mentioned this
before. A lot of it has to do about the Snowden revelations back in the day and you had a lot of people upset about the amount of government oversight.
How much they were able to access from tech companies.
So you have tech companies historically since then taking a big stance against you know collecting private information. I think what we're seeing
now though, because of all of these instances is we are seeing Silicon Valley's hand forced. Right? They're having to come forward and talk about
it. So far we've had politicians talk about encryption, talk about this debate, we've seen the government talk about it. But Silicon Valley has
been shy about this. I think Tim Cook has been the one person that's been outspoken.
You had a month ago top Silicon Valley officials meet with Washington officials and I'm told that Tim Cook went on this ten minute soliloquy
about the power of encryption and why we need it. I think now you're seeing Apple come out with a very hard stance because a lot - I mean this
particular case is fascinating because it really encompasses everything. And it will set major precedent if this moves forward.
NEWTON: Absolutely, quickly, Laurie. Some of the implication here is that companies haven't been silent, that they have cooperated in this way, and
that it's Tim Cook that's basically the first guy going public about it but that other companies have cooperated.
SEGALL: You know, I think people do cooperate. They're a little bit more - you know they're not exactly screaming from the mountain tops this is the
information we have handed over. I mean Apple has cooperated quite a bit in this particular case with this this particular phone that they're talking
about they've actually - you know they were able to hand over location tracking data. They were able to get information. I think it's this
particular cause that is sensitive. This is the one where a lot of people and a lot of Silicon Valley people are coming out and you know you just had
the What's App founder just posted about an hour ago in Facebook, he's coming out to support Tim Cook. I think you're going to hear more folks in
Silicon Valley speak a little bit more openly about this. It's a really tough topic and a lot of people stand on different sides of it.
NEWTON: Yes, they want to protect their users. So is there any way to protect users though? Can we move the technology forward at all or is it
once the gene's out of the bottle that's it? You've created the hacking device?
PAGLIERY: Do you know what gets at the heart of this issue. That we can't talk about this as security versus privacy. That's the wrong angle, that's
the wrong way to look at it. It's security versus security. Because what Apple and Google and all these companies have done is that they've
increased the security of our phones so that hackers can't get in but neither can law enforcement. That's an incidental. Right?
What the FBI wants is to lower that bar of security so they can get in. And here -- that's where we have to pose a deep question, which is are we
willing to lower the security to let the FBI in which simultaneously opens the possibility of having Chinese hackers, Russian hackers, criminal mafia
hackers that want to steal your information, corporate secrets in as well.
NEWTON: And governments who perhaps want to get into your business as well.
PAGLIERY: Absolutely.
NEWTON: Guys, thanks so much for coming in. I'm sure we're going to hear a lot more from you guys on this program. But also we have lots more on this
story coming up in the next half hour including reaction from Edward Snowden and Donald Trump.
(BEGIN VIDEO CLIP)
NEWTON: And as always, you can find much more on this I assure you on cnnmoney.com/tech. Please go onto that website, I went on it myself, lots
of information on this story.
(END VIDEO CLIP)
[16:15:05]
NEWTON: Nike is breaking with one of the most popular sportsmen in world saying it's taking a stand against discrimination.
(BEGIN VIDEO CLIP)
(END VIDEO CLIP)
(COMMERCIAL BREAK)
NEWTON: Nike has cut its ties with Manny Pacquiao a few days after the boxing legend said guy people are in his words worse than animals.
(BEGIN VIDEO CLIP)
NEWTON: He has apologized on social media asking forgiveness from those he hurt. World Sports Christina MacFarlane joins us now live from London.
(END VIDEO CLIP)
NEWTON: I mean Christina, an incredibly unfortunate incident for those who had to hear these comments from him, and Nike just deciding what, this is
just too much for us we're out?
CHRISTINA MACFARLANE, CNN WORLD SPORT: Yes, that's right, Paula. We were wondering what the fallout might be to this incident. And now we know.
(BEGIN VIDEO CLIP)
MACFARLANE: In the last half an hour Nike have released a statement. They have said "we find Manny Pacquiao's comments to be abhorrent. Nike strongly
opposes discrimination of any kind and has a long history of supporting and standing up for the rights of the LGBT community."
Of course, this is in response as you mentioned to those comments he made on Monday where he called gay people worse than animals, comments that
understandably caused outrage. But he apologized immediately after this, on Wednesday.
Interestingly, he tweeted a picture of himself wearing a Nike top, and saying he was sorry for causing offense. But of course by then the damage
had been done. Now Pacquiao has been an Ambassador for Nike since 2006.
But honestly, Paula, I think this was a pretty easy decision for Nike to make. Not only are these controversial statements, controversial
circumstances, but Pacquiao is due to compete in his last fight in April of this year, after which his career will be over. So you can kind of see why
they've made this decision.
(END VIDEO CLIP)
NEWTON: Yes, and definitely at that point when you see someone saying those kind of controversy remarks in terms of him being a sporting legend
it would kind of tarnish it a bit.
I mean it seems very opportunistic that he would apologize so quickly with that Nike brand and wearing it so prominent loo. Is this really - is this
really going to hurt him and his brand going forward?
MACFARLANE: Well, I think one thing you have to be aware of Paula is that Manny Pacquiao is currently a politician back in his home country of the
Philippines.
(BEGIN VIDEO CLIP)
MACFARLANE: And he's actually - he's actually competing for a place in the parliamentary senate. An election is due to take place in May. So there is
something in the fact that maybe he thought this would be damaging to his image and his reputation as you can imagine. But the reality is that he is
such a hero back home, he's such a superman, that it's unlikely to have any effect back in the Philippines.
However, on a global scale, this certainly will have damaged his reputation. Up to now he's been seen as one of the greatest boxers to ever
walk on the face of the planet even though he lost to Floyd Mayweather last year of course.
(END VIDEO CLIP)
MACFARLANE: So it certainly will have taken a hit and it will be interesting to see if other sponsors follow suit and do as Nike have done
and terminate their contracts too.
NEWTON: Yes, they certainly left the door open to that. Christina Macfarlane, thanks so much, appreciate your time. There live for us from
London.
Now oil and stocks rally on hopes for an agreement to cap crude output.
(BEGIN VIDEO CLIP)
NEWTON: Whether it will succeed in the end and end that oversupply is very much in doubt.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
[16:21:33]
NEWTON: Markets here in the United States and Europe are staging a strong rally and trying to put, I say trying to put those big losses at the start
of the year behind them. I want you at that take a look at this. It looks good, doesn't it?
U.S. stocks finished the session as you can see the Dow up 257 points and that's a triple digit gain for the third straight day in a row. Now the S&P
and the NASDAQ also ended the day higher. The good news of course is that this was a broad based rally. The Dow has regained a lot of the losses that
it suffered over the last month.
But this is the problem, it's still down about 6% from where it closed in 2015.
Now over in Europe there was an even larger rally. London FTSE, and the CAC in Paris closed up nearly 3%. The markets are rallying of course on oil
prices that are now surging.
Brent Crude jumped 6% reversing losses earlier in the day. U.S. Crude spiked more than 7%.
Now Iran's oil minister says his country supports a deal between Saudi Arabia and Russia to freeze production, that's part of the reason that we
saw the jump in stocks and in oil. He made that statement after a meeting of top oil producers in Tehran aimed at convincing Iran to cap its output
as well.
But it's far from clear so far if Iran will agree to hold back. In fact, Iran has defended its right to raise its oil output. Before the talks to
Iran's OPEC envoy said it was illogical for Iran to freeze production at this stage.
As CNN Money's emerging markets editor, John Defterios, told me, Iran is unlikely to play ball on that issue with the rest of OPEC, take a listen.
JOHN DEFTERIOS, CNN MONEY EMERGING MARKETS EDITOR: There was never going to be a simple sell. That is for sure. Iran just came back onto the market in
the last month it's added about 300,000 barrels a day to production. It wants to add another 700,000 by the end of 2016. So this is very early in
the game for Iran but they are making their presence known already. They loaded up about 7 million barrels of crude going to France, Spain, and
China this week. So they want to make a statement they are back in the market.
But at the same time minister Zaginione was suggesting he welcomes a move by OPEC and non-OPEC producers to stabilize the market and go ahead with a
freeze.
The other thing I would add here, politically it would have been very difficult for the moderates of Iran including the minister Zaginione to
agree to such a proposal put forward in reality by Saudi Arabia, its archrival here in the region.
Saudi Arabia's at near record production, so is Russia. How could Iran sign on to not going ahead with its output production increase at the time when
the sanctions were just lifted a month ago. It would have been very difficult for them to do that.
NEWTON: So John, where does this leave any kind of a production deal. We had Venezuela apparently on side, Saudi Arabia, Russia. Where is everyone
on this now?
DEFTERIOS: Well I would be very surprised, Paula, if the deal hinges on Iran because of the statement that they made six months ago and holding
that line. They could not be party to a freeze or an output cut going forward.
We know now that Kuwait and the UAE for example, are willing to go ahead with the freeze, but again they're right near their record output. I spoke
to a ministerial source in Baghdad today who suggested that Iraq would go along with a cut or a freeze, but it would need the participation of the
major OPEC, and non-OPEC producers.
So this is a very complicated process. Remember the last time they came together between OPEC and non-OPEC back in 2001, it took a real crisis to
do so.
[16:25:05]
DEFTERIOS: The statement from Saudi Arabia yesterday, from Ali Al-Naimi was very telling. They aren't looking to rally prices or basically see a
recovery like we did three years ago to $100 a barrel. They want to stabilize the market, and remove volatility at the same time serve the
customers. That's the translation for market share. But will this work going forward? I'm not sure.
Goldman Sachs put out a statement to its clients last night saying that a freeze will do nothing in the market because they don't think all the
members can come together in the very near future.
(END VIDEO CLIP)
NEWTON: Now today's spike in prices will be unfortunately very little relief for people whose lives depend on the oil industry in places like
Calgary, Canada, and it's a city that of course lives and dies by the price of crude. I'm telling you spend any time in that city and people know the
price of oil most hours in a day. As I found out OPEC's efforts to take down American shale producers is causing collateral damage already north of
that U.S. border.
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NEWTON: You may not see oil rigs or wells or pipelines, but in this city the financial heart of Canada's oil patch each blow to the price of oil has
slashed thousands of jobs, billions in investment, and now barrel after barrel of production.
(LARRY GRAHAM): More buyers, more sellers.
NEWTON: The aftermath is already showing up in (Larry Graham's) auction yard.
(GRAHAM) : It is a 360 hoe. And it's between $400,000 and $500,000 new.
NEWTON: As production is cut, heavy equipment, drilling equipment, oil patch service vehicles and trucks, trucks, and more trucks are being sold
off.
(GRAHAM): They've got to get rid of it so auctions are the quickest and fastest answer by far to do that.
NEWTON: While global oil production has barely budged, Canada's production is showing the first signs of buckling. One recent Canadian study found
drilling was down nearly 50% this year alone.
MARTIN KING, FIRST ENERGY CAPITAL: Our cost structure is still definitely higher than in the U.S. And certainly the oil sands are making no money on
any barrels being produced.
NEWTON: But the Saudis will get what they want.
KING: The Saudi's will get what they want in the end.
NEWTON: Saudi Arabia strategy flood the market with cheap oil to drive down North American production. In Canada it's working. The reasons each barrel
of oil here especially from Canada's oil sands costs more to produce and is sold to basically one customer.
NAHEED NENSHI, CALGARY MAYOR: Our only customer has become our biggest competitor. And so whatever Saudis and others are attempting to do to the
shale production in the U.S., we are kind of the unwilling victim of all of this.
NEWTON: Calgary's mayor says his city and his country needs a new energy strategy, including building Canadian pipelines to exported oil to new
customers. Here he makes the point on a recent appearance on a Canadian comedy show.
NENSHI: How safe and clean it is. So I'm just going to put it into the end of the pipeline here in Alberta. And here i just take it out and it comes
out as money, wow.
NEWTON: Making this reality will take years. In the meantime, Larry is limbering up for the equipment auction this week. Is there anything about
this one that feels a bit different to you right now?
GRAHAM: It may be before it's done the worst one they've ever had.
NEWTON: With decades in the business, (Larry) says his auctions will help people hang on and survive the oil bust as they wait and hope for another
oil boom.
(END VIDEO CLIP)
NEWTON: An oil boom that no one is sure will ever come. We'll have more for you from Calgary tomorrow.
In the meantime, Apple is staring down the FBI. And it has another enemy, Donald Trump says unlocking phones for investigators is a matter of common
sense.
(BEGIN VIDEO CLIP)
(END VIDEO CLIP)
[16:30:00]
(COMMERCIAL BREAK)
PAULA NEWTON, CNN ANCHOR: Hello, I'm Paula Newton. Coming up in the next half hour of "QUEST MEANS BUSINESS." Who do you think you are? Donald
Trump says Apple should do as it's told. And would you order up a White Chocolate Mocha Whipped Cream Grande with 15 spoonful of sugar. Coffee
chains are being slammed for hiding their drinks true sugar content. Before that the news headlines this hour.
Turkey's Deputy Prime Minister says at least 28 people are dead following a terrorist attack in Ankara. The Turkish military says it was an act of
terrorism. It says the blast hit three of its vehicles that had stop at a traffic light. No group has claim responsibility for the attack as of yet.
The White House has deigned that the FBI is looking for a so called "back door" into your iPhone. The FBI says it cannot unlock the phone that
belong to the San Bernardino terrorist, Syed Farook. Apple CEO Tim Cook says he'll challenge a court order that would force Apple to find a way to
beat the phone's security lock. The White House says it is only looking for access to that one phone.
Humanitarian aid convoys beginning to reach some of the most isolated towns and Syria. Trucks rolled out of Damascus earlier after the UN negotiated
access to seven key areas. One convoy has now entered the suburb of the capital. Mobile clinics have arrive in the town of Madaya.
Pope Francis is wrapping up his tour of Mexico with the trip to the border with the United States. He is currently in Juarez where he spoke at a
notorious prison. Later he will celebrate mass just a few meters from the border.
Nike has dropped its sponsorship of Manny Pacquiao after the Filipino boxer said, "Gay people were worse than animals." He later apologized. Nike
says it found his comments abhorrent, and that it has a long history of opposing discrimination towards the LGBT community.
Edward Snowden has called on Google to join forces with Apple in its faceoff with the FBI. Now the former NSA contractor Tweeted, "This in his
most important tech case in a decade. Silence means Google picked a side, but it's not the publics."
The Electronic Frontier Foundation has also stepped in to defend Apple the EFF says the U.S. government's request to Apple opens the door to the
abuses of power. Nate Cardozo is the staff attorney at the Electronic Frontier Foundation and he joins me now.
Obviously this has been a highly controversial case just in the last 24 hours. I mean the comments about this really run the gamut. Explain to
people why the tech industry believes this is a dangerous precedent. Why it's dangerous to their civil liberties.
NATE CARDOZO, ATTORNEY, ELECTRONIC FRONTIER FOUNDATION: Well the FBI chose this particular case very carefully. They chose a high profile case. The
tragedy in San Bernardino was awful. And the entire American public their sympathies are with the victims in San Bernardino. However, what the FBI
is asking for puts ordinary Americans at risk. If Apple were to backdoor this one phone, and make no mistake the FBI is asking for a backdoor.
Regardless of what ever words they use. If Apple were to backdoor this phone it would open the floodgates. It would give the FBI unprecedented
power to compromise our security in the name of surveillance.
[16:35:00] NEWTON: Now in terms of the level of security that each and every iPhone owner expects, why protect that right to privacy? Would this
be different let's say, and you know this happens Mr. Cardozo. You have authorities trying to crack into these tech devices to try and track down
pedophiles to save children who are in abusive situations. Would you supported in that case?
CARDOZO: Well before Apple instituted the high-security on current iPhones almost 1 in 10 smart phone theft resulted in identity theft. Fraudsters,
mobsters, pedophiles, terrorists had access to our communications and Apple step their game up, and they lock down our devices to protect us. To
protect human rights workers around the world. To protect the Red Cross, Red Crescent in Syria. To protect LGBT organizers around the world. To
protect democracy activists in China. And it's that security feature that the FBI is asking Apple to disable. And if they disable it in this one
phone, we could be guaranteed that China is going to be asking for the same capability, as is Russia.
This is about whether we have the right to a secure device. The FBI says no. The FBI says it can compel Apple to compromise all of our security for
this one investigation. And remember in the San Bernardino case, we know the shooters were. Encryption doesn't prevent us from knowing who they
talk to or their entire social graph. This case was picked to set a precedent to permit the FBI to demand backdoors going forward.
NEWTON: And in fact the FBI has really tried to square off the rights of the victims and their families with the rights of the tech companies to say
no. Is there a dirty little secret in Silicon Valley? I mean Mr. Snowden was quite clear, Google has been silent. Where does Google stand now?
CARDOZO: You know I'm still quite optimistic that Google is going to come around and support Apple on this. Google has not been quite as outspoken
as Apple. I heard just recently that the CEO of WhatsApp, which is now owned by Facebook, came out in support of Apple. So I wouldn't be
surprised if Silicon Valley rallies behind Apple, and behind ordinary Americans, behind our security. This isn't about security versus privacy.
This is about our security versus the government overreaching surveillance capabilities.
NEWTON: Well this may be an argument in the end that gets fought in really the Supreme Court. We will wait to see, because there will be more news on
this in the coming days. And we appreciate your time there.
CARDOZO: Thank you.
NEWTON: One side of the debate there's Apple, Edward Snowden and the Electron Frontier Foundation. On the other side the Department of Justice
and Donald Trump. Speaking on Fox News the Republican front runner gave Apple a classic Trump scolding.
(BEGIN VIDEO CLIP)
DONALD TRUMP: We have to be very careful. We have to be very vigilant. But to think that Apple won't allow us to get into her cell phone. Who do
they think they are? No, we have to open it up.
(END VIDEO CLIP)
NEWTON: CNN Politics Reporter, Sara Murray is at a Donald Trump event in Walterboro, South Carolina. Sara, he's weighed in on this, you know. He
was asked to put in his opinion. Why do you think he's come down so hard on Apple? Why has he put his oar in the water on this one at all?
SARA MURRAY, CNN POLITICS, REPORTER: Well I think is less so about this issue in particular and more about being tough on national security issues
broadly. And that's what Donald Trump has tried to build in part of his brand. And remember this isn't the first time he's come down hard on
something like this. He's the same guy that said we should close off parts of the Internet. Unclear what that means or how you do it, to stop ISIS
from spreading. So he's come down on this issue before.
I also think we need to remember the backdrop of the race we're in right now. We're in the middle of the Republican primary in South Carolina.
This is a very national security have each state. The battle here is always about who is prepared to be Commander-in-Chief. That's because
there are number of military installations here. There is a large active military population. There is a large veteran's population. So this is
been known as kind of the state that tests the mantle of where candidates stand on national security issues, and I think Donald Trump as he has done
before doesn't want anyone to outfox him on been the toughest on national security. And I think that's what we're seeing in this statement.
NEWTON: Yes, Sara, I have to point out that he is agreeing with the Obama administration with his position there. But one thing he's kind of going
against is the grain of the party. I mean Republicans really don't want the government in their face. They don't want the government in their
private.
This whole issue of eminent domain and the government being able to take away private property. This is a huge issue in the Republican Party. Why
do you think he's able to really straddle that line in the party itself?
MURRAY: while I think the interesting thing when you talk to Trump supporters, and of course over the months we talked to a number of them.
These are not people who adhere strictly to the orthodoxy of the Republican Party.
[16:40:00] Yes, they are conservative and they have a number of conservative views either on social issues or economic issues, or you know,
pick your favorite here. But these aren't people are just straight up and up party conservatives. And even if Donald Trump breaks with them on an
issue or two they are so much more forgiving of him as a candidate than we've seen of voters in the past. You know they're very aware that Trump
was a businessman first and now is a politician, and may not always be on the same side as they are.
NEWTON: Yes, not to mention the fact that in a general election if he becomes a nominee, the independents will certainly like a lot of these
stands. Sara, thanks so much I see that the event there is about to get underway. It looks pretty well attended. And I'm sure we'll hear more
from you on the campaign trail. Appreciate it.
Now in just over three hours from now CNN will be hosting a special event ahead of that South Carolina primary. All six presidential candidates will
take part in a "TOWN HALL" moderated by Anderson Cooper. If you don't want to stay up late there are options. You can see the replay on Thursday and
Friday at 11 AM in London, noon central time in Europe. That's only on CNN.
Now European leaders are preparing for a crucial summit in Brussels on Thursday. A new deal over the UK's membership is on the table and the
stakes couldn't be higher.
(COMMERCIAL BREAK)
The European Council president is warning there is no guarantee that a new EU deal for Britain will be reached this week. In a letter to leaders
Donald Tusk said talks on Thursday and Friday would be hard. If a deal isn't reached he said this, "It would be a defeat both for the UK and the
European Union, but a geopolitical victory for those who seek to divide us."
The report in Britain's Guardian newspaper says four EU countries have rejected Britain's proposals to limit government benefits from migrant
workers.
Jose Manuel Barroso is the former European Commission President, and he joins me now live from Princeton, New Jersey. You must be happy you can
just hide out in Jersey, sir. Because the kind of work they have ahead of them in Brussels I do not envy anyone. Is this not an impossible
negotiation? I mean, look if it looks like a strong deal for Britain, no one in Europe is going to want it. And if it looks like a strong deal in
Europe no one in Britain is going to vote for. Guide us. In your experience how do they see the end of this?
JOSE MANUEL BARROSO, FORMER EUROPEAN COMMISSION PRESIDENT: You know that in the European Union we are used to this discussions and drama before the
agreements, but usually at the end there is an agreement. Of course is very good difficult. It's a very divisive issue. Some of those matters
are extremely sensitive. But I expect, and I hope, that at the end there will be an agreement on the basis of the proposal put forward by the
President of the European Council, by President Tusk.
And I hope that that agreement will be sufficient for Prime Minister Cameron to go to the British public and to present a positive and confident
proposal for yes in the referendum. So I'm more confident than most people are. Because I know well the way the European Union negotiates these
issues. It's true the European Union likes to live dangerously. But at the end typically there will be some kind of agreement.
NEWTON: When you say there will be some kind of an agreement, which issues do you think they will be able to find that compromise on?
BARROSO: I think the most difficult issue is as you have just said, the issue about benefits for let's say migrants or other European citizens that
go to Britain.
[16:45:00] Because some of the countries involved are very concerned what could happen to their nationals and also from a more or less a fundamental
point of view this is an issue of nondiscrimination. And the principal that exist within the European Union is a nondiscrimination among citizens
of the different countries. So this is the most difficult.
Recently there were some concerns also expressed namely from sources from France and Germany, regarding some kind of guarantees that the British may
like to have for the financial sector, because of the very special position of London as a very important financial place. So let's hope that this
will not derail the overall that's here. Because one thing I know all the other countries very much want Britain to remain in the European Union.
Including some that don't like this kind of agreement, for instance Poland. But they want Britain to be part of the European Union. So if there is
wisdom on all sides a solution can and should be found.
NEWTON: And you make an important point there. It's true that if you went to most of the European countries they would say look we want Britain to
stay in. But they may not want them in at any price. So from the outside looking in this is what your critics want. They say Europe doesn't work.
It can't work. You see a new paradigm for Europe going forward. Even if Britain gets its deal. And even if Britain votes to stay in.
BARROSO: I believe that been doing something very important over those years. Of course is not perfect. I know it from the insides. But
frankly, I mean there was never a time in history of peace in Europe since the European Community existed. And basically it performs all its duties
and the most important achievements in terms of the market, in terms of the guarantees it gives. And so is working. Of course there are problems, but
those problems are not exclusive to the European Union. If there would not be a European Union we'll have also some kind of problems. And that is the
point important in debate, because for instance some of the people are against Europe and European Union, Euro skeptics. They are trying to
present European Union as if it was responsible for some of the problems. Look at the problem of illegal migration and refugees. That is now in fact
I think the most important threat to European unity. But if there was not European Union if there was not the so-called Schengen Agreement, anyone
things there will not be the same problem. Refugees trying to come to Europe, why? They don't go to Russia.
They come to Europe because Europe is basically a good place to live with prosperity and stability. So frankly Europe is not perfect, but for some
reason the countries want to remain and they don't want to leave at least until now, there was no case.
NEWTON: We'll see if anyone in the Westminster or Brussels is listening to your reasonable comments right now, but I stick to my advice. Stay at
Princeton. Stay in jersey. Take cover. It's going to be ugly in the next few days. Thanks so much, we always love hearing from you.
BARROSO: It's my pleasure.
NEWTON: The chief of Europe's largest aerospace company Airbus says air traffic is on the rise and his company has not felt the effects of plunging
oil prices. Bregier told CNN Money's Andrew Stevens that lower prices have not hurt orders for new planes.
(BEGIN VIDEOTAPE)
FABRICE BREGIER, CEO, AIRBUS: We didn't see an impact. First of all the air traffic grew by more than 6 percent last year. And second we got 1,080
net orders, whilst we delivered a total of 635 aircrafts. So the book to build is still well above water.
ANDREW STEVENS, CNN MONEY'S CORRESPONDENT: But you're not immune to a slowdown.
BREGIER: We're not immune, but we will be the last one affected by a drop of a growth.
STEVENS: With oil prices plunging a lot more airlines are keeping their older gas guzzling planes in the air. Is that having an effect on your
order book?
BREGIER: No, it's not what we see, and any way a more efficient aircraft will always be more competitive even with the low fuel price.
STEVENS: Airbus has something like 64 percent, nearly 2/3 of these smaller single aisle airplane market in Asia-Pacific, but you've got two homegrown
competitors emerging, Comac in China, Mitsubishi in Japan. How significant is that competition going to be?
BREGIER: We need to be very cautious about the competition, because Airbus 45 years ago didn't exist. So the first lesson is that you have to remain
humble and innovate faster than others. The very serious one for us is Comac, China. With the weight of China strategy could leave behind them.
[16:50:00] STEVENS: Let's talk about A-380 the super jumbo. Orders have been disappointing. In fact they have now slowed to just a trickle.
What's the future for the 380?
BREGIER: The market is a bit smaller than what we expected. However last year we delivered 27 of these aircraft, and it was the first year in our
aviation history that we broke even financially. I believe that this aircraft will progressively find its way for two reasons. If you fly as a
passenger of the 380 you will want to fly again with this aircraft. Because you have the highest level of comfort, this is smooth, this is
quiet. You feel save. And second, the market overall doubles in size every 15 years.
STEVENS: It's been described at 20 years ahead of its time, but if it's not selling there's not much point in building it.
BREGIER: Well we have sold more than 300 aircraft and Eurasia is by far the biggest customer, but it's not limited to us.
STEVENS: So no discussions though to potentially end the production ramp on the 380.
BREGIER: No, I don't think so.
STEVENS: What about a 380neo? Is that a possibility?
BREGIER: The 380neo is on the drawing board. We don't believe the conditions are met to launch it. Especially as it would bring additional
fuel efficiency, but we have a low level of fuel in the current 380 is extremely competitive.
(END OF VIDEOTAPE)
NEWTON: A new study shows the drink you grab from a coffee shop in the morning may have more sugar than you think. This really would blow your
mind. First a highlight from "MAKE, CREATE, INNOVATE."
(COMMERCIAL BREAK)
NEWTON: Now when you grab a drink from Starbucks on your way to work it's not just about that shot of caffeine that you're getting. A report from a
British group found that nearly all hot flavored drinks sold at major chains in the UK contain excessive levels of sugar. How excessive? They
studied drinks at nine chains. The worst offender Starbucks Hot Spiced Grape Chai. Chai, not even coffee, with 25 teaspoons of sugar, which was
not available at our local store. But that's more sugar than anything else that you see here on this table. CNN Money Correspondent, Cristina Alesci
joins me. I mean Cristina, 25 teaspoons. Now you tell us what the heck this is all about, while I show you what 25 teaspoons is all about.
ALESCI: Just to put this in additional contacts as you do that. That is 99 grams of sugar. The World Health Organization suggested recently that
an average adult should not take more than 25 grams of sugar a day. So you're getting a lot more sugar than you're supposed to be eating in an
entire day in one of the sugary drinks. And I think one of the points that the group was trying to make is that most parents and most people know when
they put up a can of Coke they are going to take a lot of sugar in. But it is not as obvious with the coffee drink, which you don't think would have
as much or twice or three times the amount of sugar that a Coke would.
NEWTON: But I think that's the point here. Now look at this. I'm going to bring this up to 25, all right. Cristina.
ALESCI: I know. You would never let your kid have 25 scoops full of sugar -- teaspoons of sugar.
NEWTON: Right.
[16:55:00] ALESCI: And so what's going on --
NEWTON: I am so depressed as a mother, honestly. Not that they're having Starbucks. But you think it's hidden everywhere.
ALESCI: It is hidden everywhere. And in the U.S. the industry is actually fighting disclosure requirements around these "hidden sugars." And what a
lot of advocates -- including this British -- group want is clearly labeled packaging. Now this doesn't apply to drinks like this because there is no
nutrition information on here. But in a drink like this you would have on here the daily percentage that you're supposed to take in, or how much this
accounts for your daily allotment of sugar. Now the industry has been fighting that disclosure for years. And it looks like the regulatory
agencies right now are going to make it mandatory for the first time in the history. It's got a lot of the soda companies nervous. A lot of the food
companies nervous about what impact is going to have on sales. Because people will have more information.
NEWTON: It will have a great impact on the bottom line at hospitals and doctors' offices all over Europe and the United States. Wow, 25.
Cristina, thanks so much for coming in to explain this. I encourage you to follow Cristina Alesci on CNN Money for these kinds of stories and also
others, but she's got some great information there about all those kinds of nutritional things that unfortunately we didn't know. Twenty-five my
goodness. And will be right back with more of QUEST Means Business in just a moment.
(COMMERCIAL BREAK)
NEWTON: But before we leave you one more check of the markets. On Wall Street the DOW had a third straight session of triple digit gains. You see
the green there. It is the first three day winning streak this year. The DOW is now down by 5.5 percent in 2016. Stocks got a lift from surging oil
prices.
And that's it for me I'm Paula Newton. "QUEST MEANS BUSINESS" is back tomorrow.
END
