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Quest Means Business
Pope: Trump "Is Not Christian"; Trump: Pope has No Right to Question My Faith; Vance: Investigators Must Access Digital Data; Farage: EU-UK Deal Would Be "Shameful"; Farage: "Pathetic" For U.K. to Make EU Deal; Farage: Staying in EU is "Lose, Lose, Lose"; Farage: EU is Like "A Burning Building"; Farage: We've Lost Control of Borders; Pope Suggests Trump is "Not Christian"; Hospital Pays Ransom in Bitcoins; Hospital Pays Bitcoin Ransom; Hospital Pays $17,000 Malware Ransom; Crude Prices Slide; Oil Prices Slide as U.S. Stockpiles Build; Iran Supports But Doesn't Commit to Oil Freeze; S&P Downgrades Saudi Arabia on Oil Slump; Oil Exporting Countries Hit by Downgrades; Canada Hit Hard By Plunging Oil Price; DOW Closes 40 Points Lower; Bond's Car Dazzles at Auction; James Bond's Aston Martin Fetches $3.5 Million. Aired 4-5p ET
Aired February 18, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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PAULA NEWTON, CNN HOST: It is okay. You can look. It's a loss but really the markets meandered to the first losses of the week and wasn't so bad.
It's Thursday, the 18th of February.
(BEGIN VIDEO CLIP)
NEWTON: Tonight, the long arm of the law lashes out at Apple. Manhattan's district attorney tells me Apple must open up its locked phone.
Not so happy families were waiting for news from the crucial E.U. Summit on Britain's European future.
And how to hack a Hollywood hospital. Online crooks get away with a five- figure ransom.
(END VIDEO CLIP)
NEWTON: I'm Paula Newton and this is "Quest Means Business."
Good evening. Tonight, the legal fight between Apple and the FBI spreads to New York. Manhattan's district attorney says in order to crack cases in
this day and age law enforcement authorities have to have access to suspects' digital communications.
(BEGIN VIDEO CLIP)
NEWTON: Now, at an NYPD news conference a little earlier, Cyrus Vance, slammed Apple for acting in his words like teenagers. The tech company is
refusing to help the FBI search the iPhone of one of the San Bernardino shooters. Vance said Apple and Google together had turned the world of
technology into a lawless badland.
CYRUS VANCE, MANHATTAN DISTRICT ATTORNEY: This has become, ladies and gentlemen, the wild west in technology. Apple and Google are their own
sheriffs. There are no rules. And for this one person's opinion, when you are dealing with matters that have such consequence an so you ubiquitous,
in terms of the use of electronic devices, this is a decision where to draw the line between public safety and privacy that needs to be made by
independent players, the legislature and the courts. Not by two companies who have drawn the line coincidentally at a place which coincides with the
economic self-interest.
(END VIDEO CLIP)
NEWTON: Now, just a few minutes ago I spoke to Cyrus Vance and I asked him why law enforcement insists on cracking these phone despite the impact it
could have on privacy.
VANCE: We all have moved off of paper and on to cell phones. You keep your notes on your computer or on your cell phone. It's all moved to digital.
It's just the same for criminals. There are no more ledger books. There are no more files with schemes laid out in them. Criminals are using the
devices to communicate with each other and to store information that is relevant and often proof of their crime. So, in this era, if you're going
to actually be able to prove cases in courts of law, you're going to have to have access to the digital communications.
NEWTON: OK, I'm going to stop you there. You say you have to have access. That's actually not true. You can prove a lot of these cases without that
evidence. It's not crucial evidence. It's a nice to have. Is it a have to have if it infringes on civil liberties?
VANCE: Well, Paula, if you were the victim of a crime and your prosecutor came to you and said, you know, I'm not going to be able to get on to the
phone of the guy who we think did it. And to see what he communicated but don't worry because we think the evidence is okay. You would probably as a
victim really not understand why if evidence that might prove this individual committed a crime against you that the prosecutor couldn't get
his or her hands on it.
And what Apple has done is made the iPhone 6 with its operating systems 8 or 9 about the only device that I'm aware of that is impenetrable to a
judicially ordered search warrant. These aren't decisions that a prosecutor is making alone to access a single phone. It's a presentation to a judge
who evaluates whether there's probable cause, phone by phone. And if there is, the judge orders that phone to be unlocked.
Apple decided in September of 2014 that they were going to no longer permit that to happen and so they engineered the phones so that they could not be
accessed by Apple even with a search warrant.
NEWTON: You are saying that now criminals know this? They know that if they do something that's illegal on these phones that they know that they're
going to get away with it because you can't crack these?
VANCE: Well, I'm going to read you from page 11 in a report that we issued in November about smartphone encryption. And it quotes an individual who's
in Rikers Island on a case that we're handling.
NEWTON: Rikers Island we should say is a Federal penitentiary.
VANCE: No it's a State.
NEWTON: It's a state penitentiary here -- very close to here.
VANCE: And the individual on the inside is talking to his cohort on the outside and he's saying to the cohort on the outside, these are recorded
phone calls, they all are at prison. I need you to go out and open your iPhone and go on the operating system. If it's an operating system 8, an io
8, they can't get into the phone because when we switched to T-Mobile, we upgraded, right? And at the end of the conversation he says, go find out if
our phones are running ios8 because if they are it could be another gift from god. Now --
[16:05:15]
NEWTON: A gift from god.
VANCE: From god.
NEWTON: Meaning they're going to get away from this?
VANCE: Meaning that they understand that we cannot access their cell phones if they don't back up to the cloud and if they don't share their password
with anybody.
NEWTON: OK, I want to -- you're saying that look to try and crack into these things, we're going to get, in your words, from an editorial earlier
in the year, unlocked phones pursuant to lawful transparent judicial orders. The problem is Mr. Vance, if you use those judicial orders in the
United States, that means China can use those judicial orders in China, Russia can use the judicial orders in Russia. And you and I both know that
right now what they are doing in their jurisdictions is questionable on certain things like human rights. Apple is saying why open the door to
that?
VANCE: Well, I don't necessarily agree with the premise. If I want as a prosecutor to get evidence in a foreign country because it's an
international event, I typically go through letters rogatory or what's called an (inaudible).
NEWTON: But, it's not about you doing that it's about the Russian and Chinese authorities being able to use the same judicial powers that you
have here, they use those judicial powers in their countries to perhaps do things --
VANCE: Well, it would be perfectly within our rights to say that they cannot access the contents of those phones except for going through process
through the United States. Now, we both know that if a government or a spy agency wants to get on your phone, they can do it. They may send you a
phishing e-mail, they may find other ways to do it. But I just disagree that with the premise because America decides that it is going to apply 200
years of constitutional law that permits reasonable searches and seizures to gather evidence that we should throw that out the window because there's
another set of laws in another country.
NEWTON: Now, the battle lines as you heard there are being drawn in this legal fight between Apple and the FBI. Apple CEO Tim Cook has said if it
does what the FBI is demanding it could put the privacy of all of its customers in jeopardy.
Now major tech companies are now backing Apple's stance. Google, What's App and Microsoft. Now Google's chief executive tweeted that hacking into
customer devices could be in his words a troubling precedent. What's App CEO wrote that he admires Cook's efforts to protect data. And Microsoft has
praised the public debate now ongoing on the issue.
(BEGIN VIDEO CLIP)
NEWTON: Now Apple users gathered in San Francisco on Wednesday night to stage a mass appeal for privacy on the devices. Now many high-profile
politicians, Republicans, including the Presidential candidate, Donald Trump, are siding with the FBI on this one.
Tom Cotton, the senator from Arkansas, wrote that "Apple is becoming the company of choice for terrorists, drug dealers and sexual predators." Now
the former CEO of General Electorate, Jack Walsh tweeted, that he hopes Apple, in his words "comes to its senses."
(END VIDEO CLIP)
Laurie Segall is our CNN money tech correspondent. You have a lot of sense we know that and you're going to try and you know really get into the heart
of this debate for us and see where the tech companies are at. You know what really was startling about what Mr. Vance told me, was that look, he
is saying literally not even veiling it, Apple is in this because it makes good economic sense to them. In short, he's saying putting their business
interests ahead of the interests of victims and criminal cases.
LAURIE SEGALL, CNN MONEY TECH CORRESPONDENT: Look. I mean, first and foremost, sure, Apple markets privacy and protection. This is what they
talk about and how they're better than competitors. There whole thing is oh, you buy an Apple -- you buy an iPhone, it's much more secure.
(BEGIN VIDEO CLIP)
SEGALL: But what, I think the heart of the issue is in what Tim Cook has said is what the FBI is specifically asking for here is something that is
not already built in. They would actually have to use code to build it.
Now that's really important and that's different than all the cases in the past because Apple has helped out the FBI multiple times in the past but
they've used data extraction, that was on an older operating system. This new operating system, they baked in a security that makes it impossible for
them to do this.
Now, could they do this? Perhaps if they built that code.
(END VIDEO CLIP)
SEGALL: Now I think the issue is, if they do build that code, what happens to it? Sure, they can keep it in the Apple app. The FBI says, well we
don't want it. But what precedent does that set? And you better - you better bet if they do build that capability China will be watching, Russia
will be watching. All sorts of folks will be watching.
I want to read you Apple's customer privacy guidelines in 2014 when they updated to ios8 because they did this in part so they could avoid part of
these requests.
(BEGIN VIDEO CLIP)
SEGALL: They said "our commitment to customer privacy doesn't stop because of a government information request. On devices running ios 8, your
personal data is placed under the protection of the passcode. Unlike our competitors, Apple cannot bypass your passcode, and therefore cannot access
this data."
(END VIDEO CLIP)
[16:10:05]
SEGALL: So I think when you look at Apple, they built in these security measures. So sure, this is marketing privacy and protection. There's a lot
- there's this multi-billion company -- dollar company, but it's also security.
NEWTON: Quickly Laurie, do you get the sense that there is a compromise that will be found here or absolutely no way we're going to court we'll see
you in court?
SEGALL: Well, this is a tough one. This is a fascinating case because the precedent it will set will affect every tech company in Silicon Valley. And
so one privacy expert says, does the law give the government the ability to force Apple to create code?
(BEGIN VIDEO CLIP)
SEGALL: If so, if this is the way this case goes, that will be unprecedented. And you're going to see a lot of folks in Silicon Valley who
haven't spoken out really begin to come forward and talk about this. Because we have heard from the government, we have heard from politicians
and now we're beginning to hear from Silicon Valley because now's the time for them to speak.
(END VIDEO CLIP)
NEWTON: And we will continue to stay on top of it. Laurie, thanks so much, appreciate it.
Now the President of the European Council says the risk of an E.U. break-up is real.
(BEGIN VIDEO CLIP)
NEWTON: At this hour E.U. leaders are trying to find a formula that will quell anti-European sentiment in Britain.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
NEWTON: Tonight, it's crunch time in Brussels. At this hour, European leaders are locked away.
(BEGIN VIDEO CLIP)
NEWTON: They're trying to hammer out a deal that will convince British voters to stay with the E.U. They're aiming for the perfect balance. Is
there really a perfect balance? A deal that's attractive enough for the U.K. without compromising fundamental principles and obviously offending
the E.U. Now the British Prime Minister, David Cameron, has said he will reflect -- reject any deal that doesn't give him what he needs.
DAVID CAMERON, BRITISH PRIME MINISTER: Well, we've got some important work to do today and tomorrow an it's going to be hard. I'll be battling for
Britain. If we can get a good deal, I'll take that deal. But I will not take a deal that doesn't meet what we need. I'm -- I think it's much more
important to get this right than to do anything in a rush. But with goodwill, hard work we can get a better deal for Britain.
(END VIDEO CLIP)
Nina dos Santos is CNN Money's European editor and she is in Brussels for us tonight. I'm sure many people there Nina, would describe this as torture
at this point in time. You know David Cameron is saying it's going to take a lot of hard work. I have heard that perhaps they're moving in the right
direction. What signs have you seen of any progress?
NINA DOS SANTOS, CNN MONEY EUROPEAN EDITOR: Well, it is about 10:15 p.m. here in Brussels and that means that in their working dinner, the 28 heads
of the state have probably moved on to the mousse - the mango mousse with a caramelized topping which is on the menu and David Cameron will probably be
hoping that that will be at least in some way able to try to sweeten the indigestible elements of this reform proposal that they have on the table.
That's proving particularly difficult and unpalatable for some countries.
In particular what we've got is four Eastern European countries including the likes of Poland that are particularly sensitive to his plans to try and
curb welfare, curb benefits, working benefits, also child credit benefits for people who are from countries like that but living inside the U.K. So
they're particularly sensitive about that.
And then we also have France on the other corner that again is holding out against any sort of explicit talk of the Euro not being the defacto
currency of the single currency of the European Union. What David Cameron wants is safeguards for other countries that aren't part of the Eurozone
and that are part of the E.U.
So everybody want's something different from the particular deal and it's their job to come together and try and get some kind of deal that then
David Cameron can sell to his own people.
(BEGIN VIDEO CLIP)
[16:15:15]
SANTOS: This is what the head of the European Council that convenes this meeting, Mr. Donald Tusk, had to say just a moment ago before going into
it.
DONALD TUSK, HEAD EUROPEAN COUNCIL: As you know, we are in the middle of still very difficult and sensitive negotiations on the U.K. question. And
one thing is clear to me, though. This is a make or break summit.
(END VIDEO CLIP)
SANTOS: It's a make or break summit for all sides here, Paula. On the one hand this is domestic British politics at play. This is one of the biggest
gambles of David Cameron's political career. Three years ago before being reelected for a second term, he promised the British people a chance to
decide on their future in Europe if he was re-elected and now he has to deliver upon that.
But I must point out, there's often one common misconception that you hear outside of the U.K. and it is this idea that David Cameron, Britain's Prime
Minister, wants the U.K. out of the E.U. That is not the case here. What he's saying is that he wants the U.K. inside the E.U. because that's the
best option for all sides but inside an E.U. that is reformed in a way that it works best in Britain's interests.
Now, the real concern here among leaders in this room behind me is that that opens a whole Pandora's Box of issues for other countries that may
well demand special treatment themselves.
(BEGIN VIDEO CLIP)
SANTOS: That may well put the screws on the European Union to get their own concessions and that's why whatever happens here sets a precedent for E.U.
relations not just with the U.K. but other countries in this block.
(END VIDEO CLIP)
NEWTON: Yes, thank you, Nina, for really outlining that for us. At the end, a lot of people want to see that E.U. reform that is also on the table
here. Nina dos Santos, will continue to follow these negotiations through to tomorrow.
Appreciate that. Now a British exit from the E.U. would have a profound effect on trade, security and politics. Now officials across the E.U. worry
that it could set off a domino effect.
In France, a Brexit could boost the fortunes of the far right national front party. There are elections next year and the National Front's Marine
Le Pen, has said if she wins the presidency, she will push for a so-called Frexit.
There is no end to these acronyms. Italy, too, could demand a new deal support for Europe is declining there. And polls show 1 in 3 Italians
believe they would be better off outside of the E.U.
And then there's Poland. Now unease over immigration and discontent among younger voters is growing there. Those were two of the factors that helped
bring the Euro skeptic law and justice party to power in last October's election.
Now, if the European project were to collapse entirely, unthinkable for some, they warn that the consequences for Britain could be far worse than
staying in the union. Now, the head of the OECD says the word "Brexit" isn't even in his vocabulary. I don't know where he's been but Gurria told
CNN that staying in the E.U. was the right choice for Britain and the world.
(BEGIN VIDEO CLIP)
ANGEL GURRIA, SECRETARY GENERAL, OECD: Before Jean Claude Juncker said it was the way -- they didn't have a plan "b." I said "Brexit" was not in our
vocabulary. It may be hyperbole but it shows we all are absolutely committed to making sure that the U.K. stays in the union. It's better for
the U.K., it's better for the U.K. citizens, it's certainly better for the union. It's better for the world.
(END VIDEO CLIP)
NEWTON: Joining me now is Sir Martin Sorrell he leads the WPP, and it is the world's largest advertising and marketing group. It is so interesting
that you're willing to come here and speak to us about this issue.
SIR MARTIN SORRELL, CEO WPP: On -- from a personal point of view.
NEWTON: OK, but it doesn't matter. You are influential in Europe and around the world.
SORRELL: My mother would agree with you but nobody else.
NEWTON: Apparently she's a fan. The point being that there is a lot of silence in the British circles in being business, in the halls of power.
Why?
SORRELL: Well, there's not - there's not silence in the sense - I mean publically on CNN there may be silence and apart from this and one or two
others. But I think people are concerned about putting their heads over the power pit. People inside corporations get advised by their PR staff and
legal staff not to take a position. I mean, I feel very strongly personally that staying in the E.U. is the right thing to do and I'm speaking
personally, not on behalf of the 16,000 or 17,000 people in the U.K. who were all indeed trying to influence the 190,000 that we're going to -
(inaudible).
So -- but the reason why is that people disassociate what they say on behalf of their companies from their personal view. And I think to some
extent that's right. As a point of fact, we can't make a contribution as a company to the E.U. campaign one way or the other without getting
shareholder approval. Because political contributions have to be approved. So that's the reason for the sensitivity.
[16:20:02]
SORRELL: Fundamentally, in the corridors, in the quiet corridors, there is in my view and from what I see of my client's very strong feeling to stay
inside from a trade point of view, from a jobs point of view, from an investment point of view, from an influence point of view. All these
things. From a city financial services is a key part of the U.K's economy, accounting for somewhere between 25% to a third of GDP. It's a fundamental
and may be irreparably harmed by exit from -- and there are other political implications. I mean you talked about "Frexit" and similar things.
What we have to face is if we come out the Scots have clearly said that if we come out they will demand another referendum and pull out.
NEWTON: Mr. Martin, you know that when this comes down to a campaign, many will think that it's business interests, fear mongering. That really it is
going to be on the margins economically, it won't matter that bit one way or the other.
SORRELL: That is true. And it happened with the Scottish referendum. If your remember business was pretty quiet. The polls were pretty similar to
now you know even steven. A lot of don't knows. This is really important point. Roughly a third, a little bit more saying we should stay in. A third
or little bit more saying we should come out. The balance, significant balance, almost a third of the electorate are saying they don't know. And
more interestingly, they don't have enough information.
So that campaign which lasts I think for nine weeks or so and can only - I mean, in American terms is extraordinary. We can only put 7 million pounds
or about $10 million into the campaign for either side and it's rigidly policed. That campaign and providing information on the for and against is
going to be absolutely critical.
So at the moment in the polls we are seeing even steven. I think in the end people will vote to stay in. There will be fear mongering as you say. We
already heard one airline company saying you know we'd come out, airline fares will rise. We've had several companies saying jobs. Clients have
said to me, privately, not publicly, that if we do come out, they will move jobs into Europe ironically as a result of Britain coming out. I think
there will be serious short to medium-term consequences which people -- we are going into a black hole. Because we really don't know -- we have never
plumbed this before. We don't know what's going to happen.
NEWTON: And I think that is a point many would agree with you, that we don't know where this is going to leave if they vote that way. Mr. Martin,
we're going to have to leave it there but we invite you to come again.
SORRELL: Thank you. Good.
NEWTON: Appreciate it.
Now, later on in the program we will speak to the head of the U.K. Independence Party, Nigel Farage, and if you want to get a full briefing of
the "Brexit" debacle, as many people are calling it, debate I should say, in less than 90 seconds, you can see Richard's explainer. And I looked at
it today, it is very interesting. As no one else but Richard can explain. It is on Money.com.
(Inaudible)
NEWTON: Just go to our brand new international edition and you will find complete coverage right there at cnnmoney.com/international.
Now Months after an Russian airliner crashed in the Sinai, Egyptian officials say Sharm el-Sheikh airport is new secure and it is time to
resume international flights.
(BEGIN VIDEO CLIP)
(END VIDEO CLIP)
(COMMERCIAL BREAK)
NEWTON: Egypt's tourism industry is still struggling months after a Russian airliner was brought down in the Sinai. Now a government official tells CNN
the airport at Sharm el Sheikh they say is secure and ready to welcome the world. Ian Lee reports.
(BEGIN VIDEO CLIP)
[16:25:00]
IAN LEE, CNN INTERNATIONAL CORRESPONDENT: The remains of Metro Jet 9268. 224 passengers and crew perished in the Egypt Sinai. Russia, the U.S. and
U.K. blamed terrorism. ISIS claimed responsibility. Egypt says the investigation is still under way. Experts scrutinize security at the
departing airport in Sharm el Sheikh. Moscow and London banned flights. Three months later, Egypt's south Sinai governor insists it's time to
resume flights.
"We have completed all the security measures that should be in place at the security and the city" he says. "The ball is now in the court of the
countries to resume flights."
Airport officials say the screening process is more rigorous. Every passenger receives a thorough pat down. Even employees and security
personnel unlike before. 20% of bags receive a random search. Officials doubled the number of security personnel. Bomb-sniffing dogs now patrol
from the entrance to baggage handling. And more cameras monitor every movement. The few passengers still flying expect long lines.
The new measures are meant to prevent a bomb like this homemade bomb that ISIS says blew up the Russian plane. Recent reports suggest an airport
employee smuggled in the explosive. "Every employee has been screened and investigated" the governor tells me. "But no one has been arrested. Know
Egyptian has been held responsible for this as has been reported. I completely refute all reports."
Officials say everything now entering the service entrance is scanned, as well. One of the new security measures since the October crash that we
can't show you are the army special forces that not only secure inside the airport but also around it. Russia's minister of transport commented on the
situation Saturday saying, "it depends on the Egyptian side. When they create necessary conditions that will meet the safety requirements, we will
check them, make sure and then resume the flights immediately." Egypt says it's ready to go. Now it needs to convince others to get on board.
Ian Lee, CNN, Sharm el Sheikh, Egypt.
(END VIDEO CLIP)
NEWTON: Out of the E.U. and into the world, that's the message from UKIP leader, Nigel Farage.
(BEGIN VIDEO CLIP)
NEWTON: He says it's time for Britain to get out of what he describes as a burning building.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
NEWTON: Hello, I'm Paula Newton. Coming up in the next half-hour of "QUEST MEANS BUSINESS." The head of the U.K Independence Party, Nigel Farage
tells me Britain is pathetic in its talks with the EU.
And a hospital and hack and a $17,000 ransom. It's the new trend in online extortion. Now before that these are the top news headlines we're
following this hour.
Pope Francis has criticized Donald Trump for his views on immigration. And questioned the frontrunners faith. Trumps says he will build a wall
between the United States and Mexico if he is elected President. The Pope said anyone who thinks about building walls and not bridges is not a
Christian.
Now within minutes of hearing those remarks Trump responded. He said, Pope Francis would wish and pray, in his words, if Trump was president if the
Vatican was attacked by ISIS and that the Pope had no right to question his faith.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: For a religious leader to question a person's faith is disgraceful. I'm proud to be a Christian and
as president I will not allow Christianity to be consistently attacked and weaken unlike what is happening now with our current President. OK,
believe me.
No leader -- very important, and this has just been given out to the press just seconds ago. No leader -- especially a religious leader -- should
have the right to question another man's religion or faith.
(END VIDEO CLIP)
NEWTON: Manhattan's district attorney says that to pursue criminal's law enforcement must have access to suspect's digital data. Cyrus Vance
slammed Apple for refusing to help the FBI searched the iPhone of one of the San Bernardino shooters. Speaking to me on "QUEST MEANS BUSINESS"
earlier, he said tech companies are more concerned about profits than the law.
(START VIDEO CLIP)
VANCE: I don't think Apple and Google owning 96 percent of the smart phone market yet to guide, draw the line between privacy and public safety. Now
they've done it and they've drawn that line way over here, which happens to coincide with their economic self-interest. But when you're dealing with
millions of cases in this country that are handles in state courts like mine, and you are coming up against phone after phone with evidence after
evidence that you're not able to access, what are my choices? Do something or do nothing. I can't do nothing, because I have an obligation to gather
evidence to determine whether I bring a case or I don't
(END VIDEO CLIP)
NEWTON: David Cameron says that he is battling for Britain at this very moment in Brussels trying to bring home a deal on a new relationship with
the EU. Nigel Farage says he sees differently. For him a victory would be a vote for Britain to leave the EU. Time again the leader of UKIP has used
his position as a member of the European Parliament to bash the organization that Britain joined more than 40 years ago. Speaking to me
earlier Farage said any deal that Mr. Cameron comes out with tomorrow, in his words, shameful.
(START VIDEOTAPE)
NIGE: FARAGE, LEADER, U.K. INDEPENDENCE PARTY: If he'd stopped the original Bloom/Beck speech years ago. If this was about a fundamental
renegotiation of Britain's relationship with the European Union and indeed as he said at the time, a fundamental reform of the European Union in
itself. If that's what we were talking about tonight I'd be listening. But what we've got tonight is a British Prime Minister coming to Brussels
to meet 27 other heads of state literally with a begging bowl. Saying please give me some concessions. And the best we're going to get is the
ability to limit migrant benefits for a maximum of four years. And frankly I think it's pathetic and shaming for us as a nation to have sunk to these
depths.
NEWTON: Yet many would say that actually Britain is the one arguing a position here that you're getting the best of both worlds.
[16:35:02] Membership into Europe on Britain's terms.
FARAGE: Well look, you know, what we've got is a British Parliament that we use to call the mother of Parliaments, but now doesn't make our laws.
Seventy-five percent of our laws are now made by the institutions of the European Union. We have our own Supreme Court, which is regularly now
overruled by a court in Luxembourg staffed with people who aren't even judges. Or paying a membership fee of GBP 55 million a day to be part of
this. We lost our territorial waters. And perhaps crucially we are now not allowed to make our own trade deals, our own negotiations on the world
stage. I see this as lose, lose, lose. We are tied up to an institution that has a euro crisis, a migrant crises, and effectively this referendum
for us -- it's rather like being trapped in a burning building but there is a door, and the door is we vote to leave this thing and renegotiate a
genuine free-trade agreement and then get on with our global future.
NEWTON: But the door could also lead to another burning building. As you and I both know, you have said that any kind of Brexit would be fairer
British working people. Is that not being a bit disingenuous? Most of the economic reports say otherwise. And you and I both know Mr. Farage that at
the top end of the economic spectrum will always be fine. But those trying to earn a living wage in Britain might be significantly damaged by a
Brexit, especially in the short term.
FARAGE: No, the people that are being hurt over the last decade or more by our membership of the European Union and by wholly irresponsible open door
to half a billion people, have been ordinary men and women earning average salaries in Britain. Because what happened is that we have a massive
oversupply in the labor market, which has driven down the price of labor. Now I get it. If you're a big employer it's to your wage bills down. I
got that. If you're rich it means, you know, cheaper gardeners, cheaper chauffeurs, cheaper nannies, I get that. But for ordinary British people
they've paid a terrible economic price for this. And socially to see so many market towns and cities in my country change socially almost beyond
recognition. You know some of these arguments actually are about more than economics.
NEWTON: You know that anti-immigration label really sticks. You say that this is an issue about security. Most people say it's actually an issue
about immigration. You just don't want to open any of Britain's doors to deserving immigrants, who yes, may not match up to the point system that
you want to see.
FARAGE: Look, can I just put this to you? We have public health care in the United Kingdom, and not something that America would support. But we
have an open public health care system. You would've thought that was there for 65 million British people. It is not. It is potentially
accessible by 8 million people mainly anybody that comes from within the European Union. We are not allowed to stop anybody of those half a billion
people from coming to Britain. We lost complete control of our borders. I've already said to you that it's driven down wages, but frankly given
what has been happening in the Mediterranean. Given that we know that ISIS and others are saying they will use the migrant crises to get their own
fighters into Europe. My argument is we be safer and more secure not being part of this union, not having open borders, and us determining comes into
Britain or who doesn't.
(END VIDEOTAPE)
NEWTON: As you just heard there Nigel Farage want to pull up a drawbridge. Donald Trump wants to build a wall. Now the Pope says Christians should be
in the business of building bridges not walls. And it was a swipe at the Republican front runner and the Donald responded in classic Trump style.
Rosa Flores is not only outside the Vatican for us at this moment. Rosa, you were also on the airplane where he made these comments. Please let us
listen in and what happened.
ROSA FLORES, CNN CORRESPONDENT: Well you know, I think it's important to include some context here, because Pope Francis had just spent six days in
Mexico. He had been speaking to the youth, he had been speaking to the poor. To people who immigrated to the United States had come back. And so
he had just received all of this knowledge and information. And a lot of emotion from these people. He had just prayed on the border where
immigrants have perished. So that's kind of the background.
Then we get on the papal plane and like every other trip that Pope Francis takes, on the way back he usually holds a press conference. And that's
where this question is posed, Paula. And I think the actual question is important context when you listen to the answer. So the question was, "You
know, Pope Francis you've spoken so eloquently about immigration in Mexico, but you know, across the border in the United States there's a very
important election for the White House going on.
[16:40:04] The GOP front runner Donald Trump wants to build a wall and he also wants to deport 11 million undocumented immigrants back to Mexico and
to other countries." So the question was, "Would you recommend for American Catholics to vote for this man?" And this is where we get that
answer from Pope Francis who says, "So anyone who wants to build walls instead of bridges is not a Christian." And he said it twice. The
exchange, his answer and the question were all in Italian. And you know here we have it. Pope Francis making a lot of news, but as you know Paula,
Pope Francis doesn't shy away from tough topics, and this is just another one.
NEWTON: But a lot of people would be a bit uncomfortable with the fact that he waded into a political campaign like this. And Rosa, Donald Trump
had said even before this, that he thought this was a very political pope. What sense do you get that the pope and the Vatican are comfortable with
this. I have to point out Rosa, he had just been in Cuba and embraced a man that human rights groups say are still incarcerating hundreds of people
in the country. And yet here he is pointing the finger at down Trump for not being a Christian.
FLORES: You know we got some very interesting background the day before we actually hopped on that papal plane and Pope Francis uttered these word and
this was from the Vatican spokesperson, from Father Lombardi. Because a similar question was asked by journalist, and Father Lombardi said, "Look,
a lot of the times people might think that Pope Francis is inserting himself into politics or that his comments are politically motivated or
that their political. But Father Lombardi said, "Look, he always speaks in a pastoral way. He is a moral authority. So he speaks to presidents about
solidarity. About coming together, about opportunity for their countries." He says, "That doesn't mean that he's a politician. That doesn't mean
inserting himself in politics. If the morals of the Catholic Church that he's speaking about." You and I know he spoken about immigration a lot.
When he was in Mexico he was speaking for those immigrants across the border. He was asking his bishops to make contact with the bishops in the
United States to make sure that immigrants are taking care of. So just a little background there, because I think it really sheds some light as to
where Pope Francis is coming from.
NEWTON: Yes, Rosa, I can't tell you how valuable that insight is for us in the context. We thank you for bringing that to us on what has been
incredibly long day for you. Appreciate it, Rosa, as always.
Now on a programming note the part of CNN's Republican Town Hall in South Carolina is just three hours away. Yes, you will hear from Donald Trump.
He will be there as well as John Kasich, and Jeb Bush. All three will be taking voters questions ahead of Saturday's South Carolina primary and you
can catch the replay on Friday at 11 am in London, noon Central European time. That's only here on CNN.
Now a malware attach with a difference. This hospital coughs up 40 bit coins. That's quite a few thousand dollars to hackers who shut down their
computer system. We'll tell you how much exactly that was in dollars when we come back.
(COMMERCIAL BREAK)
NEWTON: A hospital in Los Angeles has paid a ransom. I said a ransom to hackers who took control of the computer system. The Hollywood
Presbyterian Medical Center says this month malware lockdown parts of its computer network including medical records. Now hackers apparently
demanded 40 bit coins that's currently about $17,000. An official from the hospital says paying the ransom what the easiest way to restore normal
operations quickly. Needless to say the FBI is investigating. We want to bring in CNN Money's Jose Pagliery. I mean in the first instance, how did
this happen, the nuts and bolts for it? I mean ransomware, what the heck is that?
[16:45:00] JOSE PAGLIERY, CNN MONEY, CORRESPONDENT: OK, it's a type of computer virus and it's a really nasty one. And it hits businesses. It
hits government agencies, it hits your grandmother. OK, this malware get into a computer and locks down all the files. All the photos you care
about, the documents, Microsoft Word files, if you're a college student it's your essay. If it's a business like this, a hospital, it's medical
records. It locks that down. And then hackers can say, I'm not going to unlock that until you give me money. And it's locked in such a way it's
encrypted with the same type of encryption that protects our phones. So they can't undo that. You have to pay the ransom.
NEWTON: And we've been talking a lot about that. I want to know when the hospital called the authorities as they say they did. It's extraordinary
that they said, well we have to pay the ransom nobody's going to help us here.
PAGLIERY: Yes, the fact of the matter law enforcement will typically say in this case, don't pay the ransom. You're going to give hackers
incentives to keep doing this. But the fact is I know businesses that have not come forward that pay the ransom in order to get their files back.
Now Bitcoin is an electronic currency, right. It's really hard to trace, because it's not used with names online. It's not regulated in a way that
regular dollars are in banks. And so it's going to be really hard to figure out who exactly this was. It's not impossible but it's going to be
hard.
NEWTON: in terms of -- do you think this will happen again? And how often do you think it's happening? What can anyone do to kind of try and protect
themselves from this?
PAGLIERY: So that's a two part question.
NEWTON: I'm not going to like your answer.
PAGLIERY: No, you're really not, because what protects you is just good hygiene. It's just careful what you click on, don't open up weird files,
don't go to strange websites. It's just that. The people who are being really careful probably aren't to be hit by this. But in terms of who's
getting hit with this, it's everyone. It's local government agencies, but they're not talking about it. Businesses, they're not talking about it.
Because they don't want to admit that some lowly hacker, probably not very smart, managed to hit them with a virus that lockdown their files.
NEWTON: And admit that it works. And that they had to hand over money. And the fact that the authorities couldn't do anything about it.
PAGLIERY: This is a really lucrative black-market business.
NEWTON: That's incredible. OK, thanks again. It was an extraordinary story that when we found and today the hospital spoke and so we can speak
about it today. Appreciate it, thanks.
Oil prices continue their rocky journey. We'll tell you what sending them lower. Next, first a highlight from "MAKE, CREATE, INNOVATE".
(COMMERCIAL BREAK)
NEWTON: Oil price have fallen right on the release of U.S. data showing a rise in crude stockpiles. Brent crude is down about two percent, while the
price of U.S. WTI had dipped more than one percent. Now government data showed the amount of oil in storage in the U.S. grew by more than 2 million
barrels last week, was last week alone. Some oil market watchers were expecting an even bigger increase. Now over in Venezuela -- listen to this
-- low oil prices are actually driving the cost of gas at the pump. The president is cutting the subsidies that have kept prices down for decades.
It means some grades of gas will triple in price, while others will go up 12 fold. And it is in fact the first price rise in 20 years. It will come
as a huge shock to that country I can assure you.
Meantime Iraq is not yet committing to a freeze in production. Like Iran it's playing rather coy with the rest of OPEC and Russia who say they want
to hold output at January levels. Now earlier I asked CNN Money's Emerging Markets Editor, John Defterios, if Iran embraced or rejected the proposal
to cap its oil output.
(BEGIN VIDEO TAPE)
JOHN DEFTERIOS, CNN MONEY EMERGING MARKETS EDITOR: Well it's interesting, Paula. Because there are many interpretations. But the reality is it did
both. It both rejected this idea that its production is on the table, but at the same time wrapping its arms this idea to embrace the collective good
of OPEC and non-OPEC members.
[16:50:00] I would say it's a pretty good job of finessing by the Iranian Oil Minister Bijan Zangeneh on his home turf in Tehran. This could have
turn out much differently. It fact he avoided confrontation with his arch rival Saudi Arabia, the largest exporter, and the largest player of course
within OPEC. But at the same time maintaining market confidence. About if you were to go back to February 3rd we had a spike up in oil prices because
the UAE and other were talking about OPEC and non-OPEC cooperation. Many thought that was going to be a cut in production. The price went lower or
we didn't see a deal. Then we see a freeze after this meeting in Doha. And the market rallied again and we're hovering right near a 2016 high.
In fact the investment houses and research houses who have followed oil carefully, Goldman Sachs and V. M., Maier scratching their heads and
suggesting, look they froze production at near all-time highs and the market's still rallying. What give here? We're at $27 a barrel, a twelve
year low, and now we're hovering in the range of $33 to $35 a barrel with emphasis on the upside. Quite extraordinary considering they did nothing.
NEWTON: It's interesting. Quite a bit of PR there. And as you mentioned the price going up. Never shy to break up a party. The credit rating
agencies have something else to say.
DEFTERIOS: Yes, in fact, Paula, their suggesting it's too early to pop the corks on the champagne bottles for sure. This was S&P today, suggesting,
look you may see the price creeping up or least a cooperation between OPEC and non-OPEC producers. But at the same time $35 a barrel, even $40 a
barrel does not solve the budget problems for the major oil exporters of the world. And it picked number one again, Saudi Arabia, downgrading them
for the second time in less in six months. Suggesting there going to be a lot of pressure. So the A- rating instead of A+ at this stage for Saudi
Arabia, but they also included Oman, Bahrain, Brazil, and Kazakhstan. So all major oil exporters and those who want to develop even more in the
future. And it's interesting as I was chairing a forum in Dubai today of the CIS countries, the Central Asian countries and the caucuses and many
countries of Eastern Europe. And I spoke to one from Kazakhstan, another major oil producer, seen the downgrade today, and he said, look the best
case scenario for the end of 2016 has price of perhaps $50 to $60 a barrel. He said, John, if you have this conversation with me back in 2003 when oil
was averaging $100 a barrel and you suggested we were going to be at $35 or around that today. And the best case scenario is $50 a barrel. I would
have said you are nuts. But it is a new reality. And why and S&P are looking and suggesting it can't balance your budgets like this not matter
if this freeze stabilizes prices, it doesn't solve the problem to the major exporters right now. Who didn't reform when oil prices where in the triple
digits.
NEWTON: Now to Canada. The Canadian energy industry is also of course being hit by falling prices. Now of the oil produced in Canada is
extracted from oil sands. One of the most expensive ways in the world to get hold of it. Yesterday I looked at the impact on business when oil
prices are low. This the human cost, take a look.
(BEGIN VIDEO TAPE)
NEWTON: (voice over) As a barrel of oil has gotten cheaper in Calgary a handful of food has become much more precious.
UNIDENTIFIED FEMALE: OK, I'll give you five of those, big family there.
NEWTON: (voice over) The Calgary Food Bank is dealing with a spike in demand. On some days more than doubling last year's demand. The reason is
little mystery. Mounting layoffs in the struggling energy industry.
JAMES MCARA, CEO CALGARY FOOD BANK: No one thinks it's going to be them. So when it happens it's a stunning moment for everybody unfortunately.
NEWTON: (voice over) James McAra runs this community owned food bank. And in fifteen years he's rarely seen demands spike like this.
NEWTON: Well what kind of changes have you seen in the past few months?
MCARA: We've seen more people phoning that once I don't think I'd ever need a food bank. I'm OK.
NEWTON: First time users.
MCARA: First time users.
NEWTON: (voice over) The need is real and for now, lasting. Unemployment here in Alberta, Canada's leading energy province is at a 20 year high.
And it's at every crevice in the economy. Jaafar Khani's expertise is in waste management, but in oil fields. He's back sweeping floors at his
student job just to pay for his student loans. With a specialized degree in energy science and an impressive work ethic, he had a job in the oil
patch for a few months. Then oil prices slid.
NEWTON: You have a great degree. Has it surprised you that that hasn't gotten you farther?
JAAFAR KHANI, FORMER OIL INDUSTRY WORKER: I applied everywhere. Looked into different sources, networks, when to events, but it really has been a
struggle.
NEWTON: (voice over) And these days he says he cringes every time he hears the price of oil heads lower.
KHANI: Mysteriously I find is you read these financial reports, like everyone is throwing different numbers, right. Recover from anywhere from
two to five years, to even some of them will say up to eight years.
NEWTON: (voice over) The energy here is used to boom and bust cycles. But this time many say it feels different.
NAHEED NENSHI, CALGARY MAYOR: They're thinking about is this the beginning if something different? Is this the beginning of a new lower carbon world,
maybe it is.
[16:55:10] NEWTON: (voice over) Calgary's Mayor points out despite the energy slide, this city still ranks in global top ten lists of best places
to live and work. But with empty commercial space piling up even downtown, the city has to bring this old clich, to life. And create new
opportunities beyond energy.
NENSHI: I think we've gone beyond the point of just wishing for the price of oil to move to a certain level, to thinking hard about what our future
is.
UNIDENTIFIED FEMALE: Do you want one or two bags.
NEWTON: (voice over) With the food bank with generous donors and volunteer they are meeting demand. They are already planning for 2017.
MCARA: I look at the (inaudible) and then go, how do we get to the other side?
NEWTON: (voice over) No one quite knows.
(END VIDEO TAPE)
NEWTON: Now for the first time for more than a week the trading day has ended on Wall Street without the DOW climbing by triple digits. I want you
to take a look at these final numbers. No so bad. It was a rocky session through. The DOW Jones finished lower about 40 points. And in a moment a
Bond auction with a difference. 007's car has just been sold for a lot more.
(COMMERCIAL BREAK)
NEWTON: James Bonds most recent ride has just been sold at auction and it fetched nearly $3.5 million dollars. And that's much more than expected.
Over a million dollar, now Aston Martin made only about 10 DB10 supercars. Built them especially for James Bond in the latest film Spectre. Now only
one has gone up for auction. Great news, the proceeds will go to Medecins Sans Frontieres.
And that's it for me tonight on "QUEST MEANS BUSINESS." I Paula Newton in New York, thanks for watching.
END
