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Quest Means Business
U.S. Proposes New Sanctions on North Korea; Apple Asks Court to Reseverse Unlocking Order; UN: Civilians "Facing Abyss" on Eve of Ceasefire; Court; Hlaf of Calais Migrant Camp to be Demolished; Greece Recalls Ambassador Over Migrant Crisis; Tensions over Migrants Put Strain on E.U.; Halliburton Cuts 5,000 Jobs; Energy Executives Meet at CERAWeek Conference; GE: "Digital Transformation" for Energy Sector; Zimbabwe Evicts Diamond Miners; Is a Psychic Behind the Biggest Con in History?. Aired 4-5p ET
Aired February 25, 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]
(BELL RINGING)
RICHARD QUEST, HOST: We are up more than 200 points as trading comes to an end. I've got a good feeling about this one. I think we're going to have a
firm robust - ahh look at that, that's one way of doing it. Trading is brought to an end on Thursday, it is the 25th of February.
(BEGIN VIDEO CLIP)
QUEST: Tonight, Apple launches its legal fight back against the FBI. Court documents have just been released, we will be reading them. OPEC's
president tonight tells us $50 oil not far away. You'll hear our exclusive interview on this program. And the psychic who's the face of one of
history's biggest scams; a CNN Money special investigation we have for you tonight.
(END VIDEO CLIP)
QUEST: I'm Richard Quest, we have an hour to together and of course I mean business.
Good evening. Tonight, Apple is demanding that a U.S. Court throw out the government's order that told the company to break into an iPhone used by
one of the San Bernardino terrorists. The company's motion filed just a few moments ago, and a copy of which we've got here, some 60 odd pages long.
According to the motion, it says this is not - in fact the first line -- the very first line of the motion says this is not a case about an isolated
iPhone.
(BEGIN VIDEO CLIP)
QUEST: Rather this is a case about the Department of Justice and the FBI seeking through the courts a dangerous power the congress and the American
people have withheld. The finding gives a glimpse of how the company will defend its position.
(END VIDEO CLIP)
QUEST: Apple is to argue that the code is protected first of all by its First Amendment right to free speech and then by its Fifth Amendment, Right
Against Liberty.
The Director of the FBI and Apple's General Counsel are to testify before congress on March the 1st.
As CNN Money's Laurie Segall and Jose Pagliery have been covering this in some detail.
Let's start with the legal side from you even though we were talking technology more than normal. What do you make of this? We always knew they
were going to have a rebuttal to the claim but from your quick and early reading of it?
JOSE PAGLIERY, CNN MONEY CORRESPONDENT: Sure, so we knew that Apple was going to argue that this ancient law, "The All Writs Act" wasn't going to
apply, that it was never meant to be used in a technology case. But what's interesting about this filing is that Apple is saying that the government
can't conscript, I love this language, conscript and commandeer Apple as a company to work on behalf of the government. And so it's claiming a Fifth
Amendment right that it doesn't have to be forced to do that. Alternatively, it's also saying it has a First Amendment right that code is
free speech and Apple's code says something about the company, it expresses security and the government can't take that away.
QUEST: Right, just to our viewers who may not be familiar, the First Amendment of course is the right to free speech in the United States, and
the Fifth Amendment we usually think of being as against the right against self-incrimination but it is actually also the amendment that deals with
due process and prohibiting the government to compel you to do something self-incrimination or indeed liberty.
PAGLIERY: Right, and so what's interesting here is which argument is going to hold up. Courts before have said that code can be free speech but I mean
this is -this is a really bulky heavy argument here.
LAURIE SEGALL, CNN MONEY CORRESPONDENT: And going off the Fifth Amendment right, I mean they're saying essentially I was just on a call with Apple
executives and they say in this case, it would be developing software that would undermine their own security mechanism so that would be in violation.
They also on this call made a very interest reference to what they calling and this is software they want to build they're calling it "government os"
"gov os". So they're almost putting kind of a technical name and saying that this would be almost an FBI lab at Apple where they would have to do
this. And then they talk about the technical burden of this in this filing. They say that because this isn't one isolated case, that this would be
multiple cases and how many --
QUEST: The burden of repeated requests. The novelty of the government requests. The process of -- they've even got an Affidavit here of somebody
who is a code writer. I have been writing computer code for 30 years this person writes. "Writing code is an exceedingly creative and expressive
process requiring a choice of language."
PAGLIERY: Now expressive as it might be, there's an interesting little detail in this court filing which said that actually Apple can do what the
FBI's asking. It would take six to ten engineers 2 to 4 weeks to pull off.
QUEST: That's not very long.
PAGLIERY: No, it's not.
QUEST: That's not very long at all.
PAGLIERY: No it's not.
SEGALL: But it's the fact that how many other cases will there be. You know, I thought it was pretty interesting, I want to actually read you part
of what they said in the filing because I feel it is important. They said "Apple will continue to support the efforts of law enforcement in pursuing
justice against terrorists.
(BEGIN VIDEO CLIP)
SEGALL: They go on to say but the unprecedented order requested by the government finds no support in the law and would violate the constitution."
I mean this is really unprecedented that a tech company is taking this this far.
(END VIDEO CLIP)
[16:05:08]
QUEST: Yes, but I mean it was inevitable wasn't it? This was - this was a fight that was going to happen at some point. Now we know Microsoft has had
other fights. Microsoft has had fights in other parts of the world, Google has had fights in China. This was a fight that was going to happen.
SEGALL: it was absolutely a fight that was going to happen and it's been years in the making. Ever since the Snowden revelation you know you had
tech companies and the government kind of going in opposite directions. I do think another part of the filing that was interesting is they said that
this will be bad for American companies, it will be bad for competition, if this, in fact, does happen. And you'll have adversaries going overseas to
encrypted devices.
PAGLIERY: The question - the question we have now, and this is something we see in the filing, is whether or not this is going to be something that's
determined in a court, a judge, a single judge, or a few judges will determine this, as opposed to congress, as opposed to having politicians
who represent --
QUEST: It's going to end up in a court, I mean it's in a court at the moment. And by advancing these constitutional issues, it's got every
prospect of ending up at the U.S. Supreme Court.
PAGLIERY: Absolutely.
SEGALL: That's the point here. I will say it, that was a big part of the filing. They say this should not be decided in individual courts, this
should be decided in congress.
QUEST: All right, thank you very much indeed. What a day it was on the markets. The U.S. stocks rose very sharply.
(BEGIN VIDEO CLIP)
QUEST: And if you take a look at the Dow Jones Industrials. It's really quite impressive. Having tootled along not doing pretty much for most of
the day then all of a sudden, they're boosted by a rise in oil prices, a rise in durable goods orders. Point to recovery in manufactures and the
market roars up 212 points at the close.
(END VIDEO CLIP)
QUEST: In fact I'm looking at the graph and that is the best of the day. There's a glut of oil in the market. That much you know. But OPEC says it's
time for a freeze. And even sees crude prices perhaps doubling by the end of the year.
(BEGIN VIDEO CLIP)
QUEST: The President of OPEC speaks exclusively to CNN. Quest Means Business.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
QUEST: The never ending saga of oil prices continues as once again they went up. They're headed up over the period of time a message from OPEC's
President who said speaking exclusively to CNN, Mohammed Bin Saleh Al-Sada predicted that oil could hit $50 a barrel within a year.
(BEGIN VIDEO CLIP)
QUEST: And he said prices would benefit from a freeze in output. And the fact that some oil producers obviously a reference to the United Sates,
being pushed out of the market. Now if you look at the way oil prices have moved. Well obviously you know we were up over the last year $60 but then
it comes right the way down, that's its low point, it's recent low point down at about $26, $27 and change.
But back up again, 2% on Thursday. Overall, give or take, if you take today's rate at $30, $32, it's lost about 50% in the past year alone.
(END VIDEO CLIP)
QUEST: Now low oil prices have already put major finances of the oil producers at risk and deepened the divisions between the various OPEC
members. So let's look at who stands where at the moment.
(BEGIN VIDEO CLIP)
QUEST: Five OPEC members have agreed a freeze. Now remember, we're not talking about a cut, we're talking about just freezing at existing levels.
You've got Venezuela, Saudi Arabia, UAE, Qatar, and Kuwait, and Russia has signed onto this as well.
[16:10:06]
QUEST: Significant amounts of oil we are talking about here. But it is a freeze, it's not a cut. And Saudi Arabia has led the opposition to reducing
output. They'll freeze but they won't reduce. The problem is those two producers who actually want to raise output. And here you're talking about
Iran, who has called the freeze ridiculous and Iraq, coming back into the market after sanctions were lifted. Iraq is also trying to boost production
to rebuild the economy. That's the scenario. And in this environment, it's not surprising that the market, the market believes production remains at
very high levels.
(END VIDEO CLIP)
QUESTL Mohammed Bin Saleh Al-Sada is the President of OPEC and Qatar's Energy Minister.
He spoke to CNN's emerging markets editor John Defterios who asked whether Saudi, the OPEC member most opposed to production would back down.
(BEGIN VIDEO CLIP)
MOHAMMED BIN SALEH AL-SADA, PRESIDENT OF OPEC: At the moment, the best possible feasible proposal is to freeze at the level of production of
January, but I'm sure Saudi Arabia like any other country is watching the market closely and of course they would act appropriately.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: But you have four players that have agreed, plus another two, Kuwait and the UAE firmly committed, but I
don't see any producers stepping up and saying we support your efforts to freeze.
AL-SADA: In fact the meeting in Doha was extremely successful where we had that agreement of getting a proposal put on the table of everybody's like
OPEC and non OPEC. (inaudible) and we think that it will gather more and more approval because it is to the interest of all parties.
DEFTERIOS: Is it really fair to ask Iran, which was out of the market for four years because of sanctions, to be a signatory to a freeze
realistically?
AL-SADA: We met with the Iranian minister and he was very supportive of any measures to stabilize the market though they asked for special
consideration with regard to their situation.
DEFTERIOS: Special consideration means that they don't want to be participating. He actually said the proposal is ridiculous in his words, so
does he get the special dispensation to stay out?
AL-SADA: That is their position of course and we respect their position and of course it will be -- it's a sovereign decision and it's looked at by
other countries, OPEC and non-OPEC.
DEFTERIOS: Isn't the wild card that demand will drop? We've all been focused on the over supply but if China goes pear-shaped in the second half
of the year it changes the game.
AL-SADA: Although this may affect the demand but the level of demand will continue increasing at least 1.2 million barrel a day. That increase we
need to plan for it, we need to think rationally and responsibly to meet it and we need a fair price so that we are able to meet such a demand.
DEFTERIOS: At this level that we're at today, February 2017, could we actually see a $50 floor through this natural falling out of non-OPEC
production because of the low price?
AL-SADA: I would not be surprised if this is the situation and we even cross the $50 price per barrel then.
DEFTERIOS: Because of the 600,000 barrels that's coming out of the higher cost production, it's forcing the players out?
AL-SADA: Yes. I agree, that the drop is going to be sharper and becoming a few months because the credit lines open for many companies, smaller
companies, is not there anymore and they cannot sustain losses for long. And by the way, the current price is not sustainable for conventional oil,
let alone non-conventional oil, so the situation is absolutely not a sustainable one.
(END VIDEO CLIP)
DEFTERIOS: So Richard, Mohammad Al-Sada believes that a freeze alone can get the price of crude to $50 or higher this time next year, but clearly
challenges remain with Iran coming back into the market. Back to you.
QUEST: John Defterios in the Gulf. Now Russia is heavily dependent on the income it gets on producing and exporting oil. And the crash in crude
prices is forcing the Russian government to make major adjustments to its budget and with that to its spending plans. Russian workers are certainly
feeling the pain. Phil Black shows us the human face of this oil crisis in Russia.
(BEGIN VIDEO CLIP)
[15:15:00]
PHIL BLACK, CNN CORRESPONDENT: (inaudible) like most Russian cities openly wears evidence of its Soviet past. These local communists still yearn for
it largely because of the boom/bust economic cycle that's followed. Russia's latest recession means people here are once again struggling
financially.
Its future was built on one industry, one product, the Lada, an enormous source of Soviet pride. Simple affordable cars that didn't really change
for decades. The latest Lada's are still being made here but now along with models from Nissan and Renault foreign producers invested heavily in Russia
during rosier economic times because they saw huge potential. But that's proving elusive. Last year the Russian market shrunk 36%.
The churning hum of productivity can only be heard at this sprawling complex four days a week now with Russia's oil dependent economy in crisis,
new car sales have plummeted so workers here have had their hours slashed.
25-year-old (Leona) works at the car plant as a mechanic. That's where he met his wife, (Natalia). They're expecting a child. They say the new four-
day working week will reduce their income by more than 20%.
He says his monthly wage was 20,000 rubles. Now it's around 15,000. That's less than $200. This couple was in trouble even before the huge forced pay
cut. They couldn't afford rent so they moved into a two-bedroom apartment with three other relatives. They say their income covers food and
utilities, that's it. (Inaudible) says service businesses like cafes are closing, young people are moving to find work in other cities, and
apartments sit empty. While crime is up and people are drinking more. He says the city's economic and social decay is blamed on something beyond
their control.
"People only talk about oil in this country," he says. "It feels like our country is nothing but one big oil pipeline."
Economists have long warned Russia's economy is dangerously reliant on oil exports. Today's cheap prices are a key part of Russia's economic storm.
Sanctions over Ukraine, a tumbling ruble, high inflation, especially on food, the result is a shrinking economy that's yet to bottom out.
(inaudible) future remains bleak. Fewer people buying cars. More people like (Leona and Natalia) carefully counting out coins just to get by.
Phil Black, CNN Money, Russia.
(END VIDEO CLIP)
QUEST: There's a big day upcoming for the beautiful game. The body in charge of world football is to choose a new leader on Friday.
(BEGIN VIDEO CLIP)
QUEST: Why FIFA is hoping for a fresh start.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
QUEST: As Apple fights the U.S. Government for the right not to break into a locked iPhone, it's also taking part in meetings held by the justice
department on other anti-terrorism initiatives where they can cooperate with the U.S.
(BEGIN VIDEO CLIP)
QUEST: It's been called a Madison Valleywood Project and it's a meeting of minds from Madison Avenue. It includes publicists and Adelman from Silicon
Valley. You've got Apple, Google, Microsoft, and Facebook, and from Hollywood, you have MTV, hence the Madison Wood.
[16:20:16]
(END VIDEO CLIP)
QUEST: News of this meeting was first reported by Jim Acosta. Jim tonight is in Texas for the CNN Republican debate. But Jim, first of all,
congratulations for bringing us that story on the talks. How much - how much common ground is there between government, Madison Avenue, Hollywood
and Silicon Valley?
JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, I think they're trying to find that common ground right now Richard. We know from looking
at this issue for several months now going into the terrorist attacks in Paris and San Bernardino, there's been a frustration inside the White
House. They have felt for a while now that these social media networks and the companies and the high-tech executives who run those companies just
have not been doing enough to thwart these lone wolf attacks by making sure that ISIS messaging is not getting across through places like twitter and
Facebook and Apple, and Snap Chat, and so forth. And so what they've tried to do is bring these companies together.
And what we saw yesterday happening at the justice department, to my knowledge, this is the largest gathering of high-tech executives,
counterintelligence officials, justice department officials, White House officials, and so on to take on this subject. And it is obviously as you
know Richard, something that has to be dealt with because ISIS is Al Qaeda with very effective social media. They've been able to inspire lone wolf
attackers in the United States through social media. And because of the proliferation of this technology now you have Snap Chat involved. You have
all of these other social media apps and websites that the Obama administration and future White Houses I would imagine are going to
continue to be concerned about this.
QUEST: Jim, at tonight's debate, would you expect anything in the Apple arena to come up? I mean is there any blue water between the Republican
candidates on this particular issue? We know Donald Trump basically says open - to Apple, get on with it and open the phone. Is there any other
views that are likely to be expressed?
ACOSTA: That's right. I mean it was striking that Apple was involved in this yesterday. They say that the meeting yesterday and their participation
was solely about this issue about social media. And as you know Apple is essentially saying through Tim Cook that you know what they're going to try
to make this as difficult as possible for the U.S. Federal government to get through this encryption.
As you mentioned Richard, Donald Trump has been hitting this issue hard. We follow Donald Trump everywhere he goes and he goes after Mexico. He goes
after China. But this is sort of a new target for Donald Trump in this campaign. He's been saying Apple needs to open up these iPhones and allow
federal investigators to get at this information. I suspect he'll probably talk about it again tonight because it's very much in the news. And Donald
Trump, as we all know, has shown sort of an adeptness for being able to rip news from the headlines and inject it right into his campaign rhetoric and
create headlines of his own.
(BEGIN VIDEO CLIP)
ACOSTA: So I suspect you'll hear more of that tonight. And I think on the law and order front, you know Ted Cruz is very much in the same vein as
Rand Paul was. He's very much a libertarian, a constitutional guy first, and so I think he would be very much - I would imagine he would be very
much against some of what the federal is trying to do.
(END VIDEO CLIP)
ACOSTA: Primarily because he has been saying that American privacy rights should be respected. So you're going to have perhaps both ends of the
spectrum tonight.
QUEST: Jim Acosta at the debate which we'll be watching closely tonight. Jim, thank you sir.
Now that debate starts in just over three hours from now. Wolf Blitzer is the moderator, and you can see it all at 1:30 on Friday morning in London.
There's a special program, "America's Choice." We'll have all the highlights at noon time in London.
Tonight on the eve of another eagerly awaited election, this time it's taking place in Zurich and it's FIFA that's hoping for a fresh start.
Finally members of the world's football governing body to choose their new leader.
(BEGIN VIDEO CLIP)
QUEST: These are the five men all standing for the job of leading FIFA. Not just out of its immediate crisis but putting and setting it on a road to
the future.
One of the favorites of course is Gianni Infantino and has been telling CNN that unlike some of the people who have steered the FIFA ship in the past,
he will never be arrested or suspended. Our Clare Sebastian has pieced together what has to be, by any definition, a terrible saga.
CLARE SEBASTIAN, CNN MONEY REPORTER: In the series Homeland this is how the CIA unravels the most complex of cases. The scandal engulfing FIFA is just
as complex.
[VIDEO CLIP]
[16:25:03]
SEBASTIAN: Racketeering, wire fraud.
We need to start on May 27, 2015 in New York, the day everything came to a head. We'll trace the strands back to this point in a moment. They
corrupted the business of worldwide soccer.
[VIDEO CLIP] This really is the world cup of fraud.
SEBASTIAN: The web of alleged corruption spanned the globe from the sports marketing companies in Miami, and the British Virgin Islands which pleaded
guilty to accepting kickbacks for the marketing rights to tournaments to the allegation Jack Warner, the former ahead of CONCACAF FIFA's
confederation in the Americas accepted a $10 million payment for backing South Africa's 2010 World Cup bid. Warner denies this allegation and the
news plunged FIFA into turmoil.
SEPP BLATTER, SUSPENDED FIFA PRESIDENT: I will call in extraordinary congress and put at disposal my function.
SEBASTIAN: To understand how we got to this point, we need to go back to 2010 and the announcement that Russia would host the 2018 World Cup and
Qatar the 2022 tournament.
Accusations of foul play had already started to swirl. By May of 2011, Jack Warner and Mohammed Bin-Hammam, a candidate for the FIFA presidency had
both been suspended over alleged corruption in the awarding of those bids. Both denied any wrongdoing. Both have now been banned from football related
activities for life.
Around the same time over in the U.S., the FBI had started to look at this man, Chuck Blazer, then second in command at CONCACAF. His lavish lifestyle
was the stuff of legend. He even famously rented a $6,000 a month apartment in New York's Trump Tower for his cats.
CARLOS GIRON, FORMER CONCACAF STAFFER: He'd walk around with $100 bills, you know, with his pocket literally filled with $100 bills
SEBASTIAN: The IRS was after Blazer for failing to pay his taxes. According to the "New York Daily News," the FBI and the IRS got together and gave him
an ultimatum. Go to prison for tax evasion or help with the FIFA investigation. He opted to help, even reportedly wearing a wire in a car
key chain at the London Olympics in 2012.
Chuck Blazer's evidence was crucial to the FBI. These are court documents dating to 2013 unsealed in June last year. They showed Blazer admitted to
accepting bribes and kickbacks including in relation to South Africa's World Cup bid.
He mentions also that other officials were involved in that. Remember the Department of Justice's allegation about Jack Warner and that $10 million.
We're looking for Jack. CNN tracked Warner down in Trinidad in June. He's still there fighting extradition to the U.S.
RICHARD WEBER, U.S. INTERNAL REVENUE SERVICE: This case has been nothing short of one of the most complex worldwide financial investigations ever
conducted.
SEBASTIAN: 41 individuals and corporations have so far been charged. 14 have pleaded guilty. Investigators say they traced hundreds of millions in
funds through accounts in at least 40 countries. Their work is far from done.
Clare Sebastian, CNN, New York.
(END VIDEO CLIP)
QUEST: The machinations of FIFA.
Britain is on the brink of leaving the E.U. If it votes on June the 23rd to so do. E.U. Ambassadors are embroiled in a bitter dispute over migrants.
And the Europe Union is facing crises on multiple fronts.
(BEGIN VIDEO CLIP)
QUEST: A Former President of the commission, (Jose Marmol Barroso) is next on "Quest Means Business."
(END VIDEO CLIP)
(COMMERCIAL BREAK)
[16:30:00]
(COMMERCIAL BREAK)
[16:31:00] RICHARD QUEST, CNN ANCHOR: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment.
When Austria and Greece are having a diplomatic row over migrants. And I'll speak to the Former Commission President, Jose Manuel Barrosa to ask
how serious the crisis is now facing the E.U. We'll be live in Harare where Zimbabwe's government has shut down a number of diamond mines.
But before all of that this is CNN and on this network the news always comes first.
The U.S. is calling for drastic new sanctions on North Korea. It's unveiled its resolution of the United Nation a short time ago. The
proposed sanctions are a response to recent detonation that Pyongyang said was a test of its nuclear material. Including inspections on all cargo to
and from North Korea for sanctions as well as tighter restrictions on banking activities.
Apple has asked the U.S. court to reverse an order telling the company to unlock an iPhone belonging to one of the San Bernardino shooters. Apple's
filing is a glimpse of how the company will defend its position. Apple will argue its code it's protected by the rights of free speech were tried
in the first amendments to the U.S. Constitution.
UN officials are warning that Syrian civilians are facing the abyss. The alliance could depend on whether a cease-fire actually takes hold. The
abstention of hostilities is due to take effect in a little over 24 hours from now. ISIS and al-Nusra Front and of course they're not a part of any
such deal.
A French court has upheld the decision to demolish half of an informal camp near Calais that's home to thousands of migrants. It's known as the
jungle. French authorities say hundreds of people who live there will be moved from tents to containers on the northern side, so that the southern
side can be torn down. With overcrowding you can expect that others will have to move to different camps.
Tonight diplomatic relations within the European Union are under ever greater stress and strain. Greece is recalling its ambassador to Austria
over the migrant crises. It's just a day after Vienna held a meeting with the Balkan states on the situation, and Athens wasn't invited. Even though
most migrants heading to Europe come through Greece.
Add into the fact into the U.K. the Prime Minister David Cameron is battling hard to keep a written in the E.U. There is a referendum on June
23. Warning that airfares and the cost of basic goods could go up if Britain leaves.
And then you add in the question of Hungary having its own referendum. And Poland with new laws that some are saying goes against the spirit of the
European Union values. Jose Manuel Barroso spent 10 years as president of the commission. He's with me now live from Princeton, New Jersey.
These are extremely serious times, Mr. Barroso. And arguably we're seeing the first fraying, if you like, of the European Union.
JOSE MANUAL BARROSA, FORMER PRESIDENT OF EUROPEAN UNION: It's indeed very difficult, Richard. I said last time I was speaking with you that today we
have a proliferation of cases within the European Union that are making the relations, including among leaders, more difficult. The chemistry, the
atmospherics in the meetings are worse than before. And so far I believe the European Union has demonstrated great resilience. For instance during
the so-called euro crises. But these issues, or instance this initiative of the Austrian authorities was indeed extremely negative, and against the
spirit of the European Union. By going toward unfriendly, un-polite and indeed it's against one of the principles in the treaty. Article 4 of the
treaty that speaks about the principle of sincere cooperation among member states.
[16:35:00] QUEST: Now looking at you and listening to you I am detecting a graveness and a seriousness about the situation from you that I've not
heard before.
BARROSA: You are right. Analyzing, you are good at analyzing the psychological reactions, I see. I'm more worried now than before. Because
this refugee crises together with the duration of relationship among the European countries happened more or less at the same time of the referendum
in Britain. It's a very, let's say, explosive cocktail. Sometime ago I was in Oxford -- doing a debate in Oxford -- on the so-called possible
Brexit. And in fact the leader of U.K., the party that wants to leave European Union, they are saying that the chances of them winning will
increase if the issues of refugees become bigger. And so there is that possibility of contamination of the debate of Britain by this situation.
QUEST: It's happening. It's happening because not only are the countries, Poland for example, latching on to the gains or benefits or whatever that
the U.K. may make, but you've got Hungary calling for a referendum on migrants later this year. Which could de facto almost turn into a
referendum on the E.U.
BARROSA: Exactly. There is a combination of many factors. I still believe, and it's not because I'm an optimist by conviction, but because of
my experience of the European Union that at the end things are going to get solved always in incremental, in very polarized terms. You see last time
about the European Summit on Britain, Britain demands. I also said there would be a lot of drama, but at the end they were going to get an
agreement. So I still am confident that we are going to get an agreement, including on the migration issue. By the way, the leadership of Germany
and Merkel is very important. But I agree with you that the situation now is much more challenging than before, and it raises serious concerns.
QUEST: OK, now finally, can President Tusk and Juncker pull this back from the brink. Because really what this is calling for now is extraordinary
leadership.
BARROSA: Yes, but in fact one of the real mistakes of the Austrian authorities was not only did they not invite Greece, with a lack of
solidarity, but also they did not invite European leadership. They didn't invite the president of the commission or the president of the European
Council. And that is not acceptable. But in fact I believe that Juncker and Tusk are doing everything they can. I know their commitment. The
problem is you need also the member states to cooperate. And European Union's not just made in Brussels, it's made also in all the capitals and n
all of our countries and European Union. So of course they will do their part I'm sure, and I'm still confident that there will be an agreement on
the proposals of the European border and Coast Guard put forward by the commission.
But frankly I mean, we need a minimum of cooperation also of the national governments. Because they are the stakeholders of our union. Whatever we
have done together it's not only to ask the leadership from Brussels.
QUEST: Sir, good to see you, sir, thank you. We'll take more about this. Appreciate you time.
Zimbabwe takes a diamond hard line quite literally. It shut down a host of private diamond mining companies. And the minor say it's a move to
nationalize their assets. We're live in Harare after the break. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[16:40:34] QUEST: Halliburton is cutting 5,000 jobs. In a statement the oil services company said the cuts are necessary and what is describing is
a challenging market environment. Falling oil prices has forced Halliburton to cut tens of thousands of jobs.
Steve Bolze is the GE Power. He joins me from CERAWeek energy conference in Houston. Good to see you sir. I know you've been talking a great deal
about the digitization of power at this conference. And this is very much on GE's mind at the moment, but we actually have to start with the fairly
panic situation that's taking place in the energy industry at the moment on all fronts isn't it?
STEVE BOLZE, PRESIDENT, GE POWER: Richard, as you said I'm down here at CERAWeek in Houston, and hey, face it, for the first couple days the talk
and the whole discussion is the dynamic with oil prices. And clearly there is a supply/demand imbalance. This is an industry that's long cycle. And
it's going to take a bit for that to work its way through. But hey, these are long-term industries that require long-term investments. And that's
really the discussions that are going on and the investments that make sense in that industry cycle.
QUEST: When you talk about power generation, we have so many countries around the world, I think of India as one of them. You think of large
sways of Africa, Johannesburg as a city, another one, where there are serious deficiencies, blackouts if you like, gray outs whatever we call
them in power now. What can we do?
BOLZE: Richard, you're exactly right. Still today 1.2 billion people in the world do not have access to any electricity. And another 2 billion
people don't have enough electricity. So those are some of the things you talk about blackouts and brownouts. So by the way, the world in the next
20 years needs 50 percent more electrical generation. And 70 percent of that will go into these developing regions. So I spend a lot of my time
outside the U.S. Some of those areas like Pakistan, we're putting in some of the latest gas powered technology in the world. So the solutions now
are basically across the whole cycle from gas to renewables to distributed generation, and is going to require a full mix to serve the total power
needs of the world.
QUEST: But you put your finger on it. It's going to require all that and more. But where's the investment going to come from? Particularly -- you
just said these are long term projects, and yet we have slow global economy at the moment, getting worse. So you can see the conundrum that makes this
just about impossible at the moment.
BOLZE: You know, a lot of that investment will still come from the public companies and governments, but definitely more of that financing has to
come from the private markets. So a lot of discussion about how to make this industry more financeable. But one of the areas this year, I've been
coming to CERA of years, the key topic this year is around digitization, which you mentioned earlier. Which is we've seen that play out in the
consumer world, but this is about how do you apply software and data and analytics to existing equipment to get more out of that equipment. And
quite frankly that is a very investable project. And these are very good returns. And this is about really providing more brains to existing
generation in the world.
QUEST: Steve, thank you sir. There's a seat for you sitting in the studio here next time you're in New York to come and join me on the set of QUEST
MEANS BUSINESS.
BOLZE: Great, Richard, thank you very much.
QUEST: Thank you.
BOLZE: Have a great day.
QUEST: Now in Zimbabwe, one of the countries we've been talking about. They've got some other issues including the diamond mining companies that
have been told to shut down. The government said their licenses to operate have not been renewed. CNN Money's Eleni Giokos has been speaking to
Zimbabwe's Minister for Mining as she joins me now from the capital in Harare.
[16:45:00] Eleni, as I read this story they said they had expired. While I'm sure the mining companies didn't willingly allow their licenses to
expire. So are we seeing here just a down right good old fashion expropriation by a government?
ELENI GIOKOS, CNN MONEY AFRICA CORRESPONDENT: Well it depends on who you speak to, Richard. If you're talking to the diamond mining companies, and
we spoke to a couple a few hours ago, they're saying they never really had any mining licenses, because 50 percent of their business was government
owned any way. And according to them they're talking about the fact that government was actually the onus was on them to renew mining licenses to
ensure that business continued. Because 50 percent of their business was owned by the Zimbabwe government.
If you speak to the Mines Minister, Richard, then you got a different story. That mining has expired as far back as 2012, and diamond mining
companies just failed to renew their licenses. Not only that there is a few other issues that come to the fore. The question of revenues, the fact
that that has come under pressure. A big question as to whether there's been illicit outflows out of the country. And this is what the mines
Minister, Walter Chidakwa, told me a little earlier today.
(BEGIN VIDEOTAPE)
WALTER CHIDAKWA, ZIMBABWEAN MINISTER OF MINES: The ground on which their operating has now lost title. But it's now become it reverts back to the
government for the government to do what it wants with it.
GIOKOS: Diamond revenues have been coming under pressure for a long time. Has this been one of the main reasons that we've seen such aggressive
action taken now?
CHIDAKWA: If the companies had been in making profits, declaring dividends, and sending dividends to the government I think it would have
been easy for us to renew the permits. But if you look at the history of the performance of the companies, right across all of them, they've not
made profits. They've not declared dividends. So at the end of the day the joint venture has not serve the government in terms of channeling in
resources to the fiscal, so that the people of Zimbabwe can benefit from the diamonds.
(END VIDEOTAPE)
GIOKOS: And Richard, I also asked the minister if mining companies were to come and say, well we're willing to renew and were willing to then fold our
business under a new company, which is now being labeled as the Zimbabwean Consolidated Diamond Corporation. Would you be willing to give them a
mining licenses back? And he said, categorically no. So there are a few issues at play here. You're worried about revenue. Government wants to
own 50 percent of these companies, and a new mining company, and then create a joint venture for the rest of the companies. So you basically
dilute shareholders as well. So again, mining companies are telling us a very different story on the ground saying that this is a very big shock to
them. And how can possibly all the diamond mining companies together collude to not renew their licenses.
QUEST: Eleni Giokos in Harare this evening with the diamond mines. Keep watching and come back if you find any spare -- I only said spare mines --
spare diamonds let me know.
There are massive scam. Hundreds of millions of dollars gone. People in more than a dozen countries have been affected. It's a CNN Money
investigation. Who is really behind one of the biggest cons in history?
[16:50:00] QUEST: It is one of the biggest scams in history with at least 1.4 million victims in the United States alone. That's more than 60 times
as many victims as Bernie made a Ponzi scheme. The face of the con may surprise you, an elderly French psychic. A CNN money special investigation
goes on the hunt for the mysterious Maria Duval.
(BEGIN VIDEOTAPE)
MELANIE HICKEN, CNN MONEY INVESTIGTIONS: It's a question we've been asking for months.
BLAKE ELLIS, CNN MONEY INVESTIGATIONS: Who was Maria Duval?
HICKEN: Maria Duval, who is Maria Duval?
ELLIS: What the name Maria Duval mean to you?
HICKEN: To some a gifted psychic. Two others the face of one of the biggest cons in history.
UNIDENTIFIED FEMALE: She is fake. She's a bottom feeder:
UNIDENTIFIED MALE: Very cleaver.
UNIDENTIFIED FEMALE: The worst criminal.
UNIDENTIFIED MALE: A world renowned psychic.
UNIDENTIFIED FEMALE: Serious and competent.
UNIDENTIFIED MALE: She was like an actress in a theatre. Always saying I can predict the future.
UNIDENTIFIED FEMALE: She is a leech that will suck you dry of all of your money.
UNIDENTIFIED FEMALE: This is a woman who lived her life with a very high level of integrity.
UNIDENTIFIED FEMALE: She was certainly ripping people off.
UNIDENTIFIED MALE: She was breaking the law.
UNIDENTIFIED FEMALE: Shame on you Maria Duval.
ELLIS: But our fascination didn't start there. It started with a pile of junk mail we received. It was all he originally sent to two American
women. One suffering from brain cancer, the other with dementia. In the pile there was a letter from a psychic, Patrick Guerin, from a company
called Destiny Research Center.
We did a little digging. It turned out that self-proclaimed psychics frequently target the elderly and financially desperate all over the world.
In the biggest name in this massive shadow industry, Maria Duval. Although it's unclear if her name and likeness are being exploited by others.
TEXT: I look into the crystal ball, I concentrate.
HICKEN: The scam seems simple. Send in money and in return she'll use her psychic abilities to improve your fortune. The letters double down on
people who respond asking for locks of hair and personal photos. In return people receive things like crystals that supposedly contain cosmic energy.
It's reach is massive. In the U.S. and Canada alone it allegedly raked in over $200 million from nearly 1-1/2 million people.
LORI REINBOLD, USA, DAUGHTER OF VICTIM: My father was responding to junk mail of hers, sending her money. It was close to 400 if not more.
CHRISSIE STEVENS, USA, DAUGHTER OF VICTIM: My mother was 80 years old and suffering with onset Alzheimer's. I came across checks that she was
writing twice a week, and then twice a day. And all of these checks added up to over $2400 in the span of a year.
ELLIS: What was it like for you to see someone take advantage of your mom like this?
STEVENS: Oh, it was so painful.
(END VIDEOTAPE)
QUEST: One can understand the pain. CNN Money's Blake Ellis, Melanie Hicken join me now, thank you. So when I read and I see the excellent work
that you've done here. But Maria Duval, is it a person? Is it one person? Is it a group of people who are all acting in concert? Or is it just a
name that others have glommed onto?
HICKEN: So that's the million dollar question. And that is our investigation is a five-part series. So in the next five weeks were going
to take readers like yourself along this journey of our quest to find out. Is Maria Duval the psychic? Is she real? Is she the one behind this? Is
she a victim herself? Is there a huge group of business people all over the world? And so we can tell you we have found a very large network of
businessmen all of the world that are involved.
ELLIS: As you saw there are pictures of her and video appearances, media appearances all over the world. She's gone to Russia, to Japan, and so
there is a woman out there with blonde hair who says she's Maria Duval, but is she the real Maria Duval? And is she behind it?
HICKEN: And is she an actress? I mean when we first looked at it, maybe she's an actress who's getting paid, you know, $100 to do these
appearances.
ELLIS: But it's bigger than her.
QUEST: It's bigger than one person clearly, but what happens when these people, these poor, these people who are scammed. What happens when they
send the money? Whether by electronic means, or online transfers, or literally by putting a check or money order in the post.
ELLIS: Yes, well that's the saddest thing about this. They get nothing.
QUEST: No, but where does the money go? I mean somebody's picking up this money. Somebody is actually receiving it.
HICKEN: So in the U.S., and we have a lot of great details about how this worked in the U.S., because there is a current government lawsuit. And in
the U.S. it went all over the place. They were told to send the money to mailboxes that had been opened by a company that was in Hong Kong. That
company then sent the money to another company in Long Island. Who then entered their names into a database? And then that company probably sent
money somewhere else.
ELLIS: The investigation is trying to follow the money and figuring out who this money is going to, whether it's going to Maria Duval.
[16:55:00] QUEST: I think we can pretty much know that's there's nobody called Maria Duval.
HICKEN: Well, we don't --
QUEST: Maybe I'm just --
ELLIS: We don't know that. And in fact our five-part series every chapter we get closer and closer to figuring that question out.
HICKEN: We might even go to France. Because she might be in France, right. That's what she claims in the letters.
QUEST: Good to see you, thank you both.
HICKEN: Thank you so much.
ELLIS: Thank you.
QUEST: We are going to watch this and Maria -- for more on the Blake and Melanie's superb investigation you need to go to CNNmoney.com/mariaduval.
They'll have a new chapter releasing online every Thursday. It's part of our continuing extensive investigative coverage.
And we will have a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment. On this program the former president of the European commission Barrosa said he was more worried that before
about the state of the European Union, and he described all the various problems of Austria, the U.K., Hungary, Poland and the like as an explosive
cocktail. There is no question that what the European Union is facing at the moment borders on existential crises. Britain whether it leaves or
not. Hungary what the referendum. Poland with new laws. Austria sticking two fingers up at Greece. Greece bringing back its ambassador. All of
which is going to require leadership, and that at the moment seems to be lacking.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead I hope it's profitable. We
will do this all again tomorrow.
END
