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Quest Means Business
Electronics Banned from Mideast Flights to U.S.; FBI Confirms Probe into Trump-Russia Ties; Live; Arianna Huffington on Uber's Future; Debate Night in France Ahead of Crucial Elections; WTTC Chief: Trump Travel Ban is "Misguided". Aired 5-6p ET
Aired March 20, 2017 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] PAULA NEWTON, CNN ANCHOR: It's Monday, March the 20th. Tonight, electronics are banned from the cabin of Middle Eastern flights to
the United States and security fears are to blame.
Help him, hurt her. The FBI confirms that investigating how Russia tried to sway the U.S. election. And as top executives abandon Uber, the
company's director Ariana Huffington will be live here in the studio.
I'm Paula Newton and this is QUEST MEANS BUSINESS.
Now we want to bring you some breaking news here at CNN. We're hearing the U.S. is imposing new restrictions on passengers carrying almost all
electronic devices on certain flights from countries in the Middle East and Africa. We're told the phones will probably be OK but a U.S. official is
telling CNN these items must be checked in the hold. What we're talking about here are laptops and iPads. The official said there is a security
concern and more than a dozen airlines will be affected and we'll bring you more on this when we get it.
Meantime, the White House is standing by the President's evidence-free claims of wiretapping by the Obama administration, even as those claims are
publicly smacked down in no uncertain terms by the heads of both the FBI and NSA. It was of course, an extraordinary hearing on Capitol Hill. I
know we say that a lot, but you really got to see this. James Comey said he had no evidence to back up the President's assertion that President
Obama ordered wiretapping of Trump Tower. It was the first time Comey had made those comments publicly.
Now adding to the political damage, Comey confirmed the FBI's investigating Russia's interference in the U.S. election and potential collusion between
the Trump campaign and the Russian government. Now the FBI director said the Russian government's political preference was absolutely clear.
(BEGIN VIDEO CLIP)
VOICE OF MIKE CONAWAY, US. HOUSE REPUBLICAN: The conclusion that active measures were taken specifically to help President Trump's campaign, you
had that by early December, you already had that conclusion?
JAMES COMEY, FBI DIRECTOR: Correct. That they wanted to hurt our democracy, hurt her, help him. I think all three, we were confident in at
least as early as December.
(END VIDEO CLIP)
NEWTON: That was pretty categorical. You heard him right there. Help him, hurt her. There were three areas of focus in the hearings. Each has
major implications for the Trump presidency and U.S. national security. First, Russia's influence on the U.S. election itself and the Trump
campaign's links to Russia now second, Trump's unfounded claims that President Obama wiretapped him, and third, the angle Republicans focused
on, leaks of classified information like the leak that led to the resignation of then-national security adviser Michael Flynn.
Joining me now, Philip Mudd who served as CIA counterterrorism official, now a CNN analyst. Phil, I'm really curious to learn as you were listening
to this hearing, we know some called it a bombshell that Comey even came out and said, yes, we're investigating this. You tell me, what do you
think?
PHILLIP MUDD, FORMER CIA COUNTERTERRORISM OFFICIAL: I don't think it was a bombshell. Anybody in Washington who has looked at these issues as I have
from a national security seat could have given you these two months ago. Number one, we knew the Russians were engaged in the election and the
information on that was pretty solid. The fact that the FBI then has to investigate themselves to determine the depth of Russian involvement, no
surprise. The only surprise is the FBI director is talking about it. He rarely does that.
Issue two, the second issue which was significant, obviously, the President of the United States accusing his predecessor of ordering a wiretapping of
Trump Tower. That in this country would be bigger than Watergate. The FBI director took that one off the table. The third issue mentioned I think is
a nonissue. You've got to be kidding me, a politician is telling me they're concerned about leaks in Washington, D.C.? That's every politician
since the beginning of time. That is a smoke screen. What the White House is trying to do is say, focus on the leaks. Because they don't want to
talk about the other issues.
NEWTON: Didn't they do something already in terms of a clever maneuver? They're saying don't concentrate in perhaps our links to Russia,
concentrate on wiretapping instead. Do you not think they took a little bit of the air out of the argument in terms of people coming out and
saying, look, there's no evidence the president had anything to do with colluding with Russia?
[16:05:00] MUDD: I don't think they took the air the out of the argument. Because if you look at a couple of things going forward, first, we still
have to get significant answers about Russian involvement in the election, not only because of what happened before, but because within two years
we'll have another round of elections in this country.
The director of the FBI can't stay silent on this. People like me, a voter, are going to say, what do you know and do we have to be worried
about the next election? The second thing and significantly is a question, forget about this case, about presidential credibility. Going forward when
the president speaks about political or national security issues, in contrast to President Bush or President Obama, this is not partisan.
People like me are going to say, when he tweets a fact, is it a fact? This is about credibility. It's not about the Russians, it's not about leaks,
it's about credibility for a president who's got only two months in office.
NEWTON: To your point, many people are saying, look, when will this investigation end? When will we get to the bottom of it? In your
experience, I can see you already got a smirk on your face about this, some people are talking about the fact that there won't be an end to this
investigation and that there is no other shoe to drop here. Because a lot of the evidence they have may not even be admissible to lead to criminal
charges.
MUDD: I think there's two questions here. One is whether there are criminal charges. I agree, we may not hear much more on that issue. But
there has to be a question going forward about how do we secure American officials who decide to run for office in 2018 or 2020? We can't drop
that, we can't simply say, we don't have evidence of collusion. We've got to come up with a conclusion that says, what is the responsibility of the
federal government given what we learned in the last election to protect people going forward? I don't believe the FBI in the coming four, six
months can stay silent on this. They're going to have to speak again.
NEWTON: OK. So, Trump supporters and others will say, big deal. Are we talking about media literacy here? Look, there is no evidence to say that
any of the electoral systems were tampered with. We're talking about perhaps, perhaps, a premeditated plan to really influence the election.
But why is that the concern of the intelligence agencies at this point?
MUDD: There are a couple of things that are huge deals here. Number one, the concern of the intelligence agencies is to track the Russians going
forward and make sure this doesn't happen again. The second is, we missed one major piece. We've judged in the past four minutes there may not be
another shoe to drop on the technicalities of the investigation. Who was involved, whether there was collusion. That's a judgment, that's not a
fact. You've got to believe the FBI is still out there trying to ensure that nobody affiliated closely or distantly with the Trump campaign ever
discussed with the Russians the election itself or ever discussions undermining policies of the Obama administration. We don't have an answer
to that yet.
NEWTON: OK, I've got a quick one for you here, Phil. Honestly, as on intelligence expert to two others sitting there in the hearing, what did
you zero in on?
MUDD: I zeroed in on the fact that the FBI director, who serves in the executive branch under the President of the United States, went directly
toe to toe with the president and said he fabricated something in a response to the President live tweeting stuff that wasn't true.
Unbelievable.
NEWTON: OK, Phil, we're going to leave there for now, thanks so much. As we continue on here, remember Phil was just talking about it as well, the
wiretapping controversy began two weeks ago, with a tweet from President Trump. But absolutely no supporting evidence. The White House has refused
to back down even as lawmakers and former officials cast doubt on the allegations. Remember, we just told you today that it was smacked down by
the FBI and the NSA. Today the rebuttals came to a head.
(BEGIN VIDEO CLIP)
COMEY: I have no information that supports these tweets, and we have looked carefully inside the FBI. The Department of Justice has asked me to
share with you that the answer is the same for the Department of Justice and all its components. The department has no information that supports
those tweets.
ADMIRAL MIKE ROGERS, NSA DIRECTOR: Again, my view is the same as Director Comey. I've seen nothing on the NSA side that we engaged in any such
activity, nor that anyone ever asked us to engage in such activity.
ADAM SCHIFF, U.S. HOUSE DEMOCRAT: Now, the British allies, our British allies have called the President's suggestion that they wiretapped him for
Obama nonsense and utterly ridiculous. Would you agree?
ROGERS: Yes, sir.
(END VIDEO CLIP)
NEWTON: Altogether now, utterly ridiculous. President Trump will be speaking in Louisville, Kentucky this evening. CNN's Ryan Nobles is there.
He joins me now. And I know that you heard Sean Spicer right after all of that saying, OK, big deal, we've not heard it all yet, we're still going to
-- really, he was categorical in saying, no, we haven't heard, there are still other agencies investigating. They're not accepting what was just
said about the wiretapping.
RYAN NOBLES, CNN CORRESPONDENT: Yes, Paula, it is pretty remarkable that you've got the FBI director, the National Security Agency director, you
have both Republican leaders of the House and Senate Intel Committees, and then a whole host of Democrats who have said that there's just no evidence
to back up the president's wiretapping claims.
[16:10:00] Yet the White House itself continues to hold on to this notion that at some point, some piece of evidence is going to come out that's
going to validate that claim. And they tried to attempt to provide some sort of bob and weave I guess you could call, of when they brought up the
point that at one point during the hearing, they were asked if President Obama was ever briefed on the Michael Flynn situation, the former national
security adviser. And basically, Comey punted on that and said he couldn't comment on that. That doesn't necessarily mean that there's some there.
But the White House is seizing on just about every little morsel they can to try and validate this claim, even though it seems that the walls are
closing in around them and there just isn't any evidence to back up what the President tweeted a couple of Saturdays ago.
NEWTON: To a certain extent, Ryan, we could have written the script days ago. The White House is not backing down. What do you expect to hear from
President Trump in a few hours? We have to say he's already been quite active on Twitter.
NOBLES: Well you know, Paula, we talk a lot about how the intelligence communities are not lined up behind the President on this issue, about how
the media in large part is not lined up behind the President on this issue, certainly his political opponents are. But the people that will be in this
arena tonight certainly are behind him. And they believe when he says that he was wiretapped by President Obama. They believe there's some truth to
that.
And to a certain extent the president holds these rallies as a way to sustain him. He feeds off the energy of those folks that still
passionately support him. And there's a good crop of Americans that still do, somewhere in the 35 percent to 40 percent range. You can bet tonight
he'll attack the media, he'll attack anybody that he can to try and get this crowd going. And it will likely be received very well.
NEWTON: OK. And we are expecting that speech in less than a couple of hours. Ryan Nobles there with the president, appreciate it.
We want to return to our breaking news story. Cabin restrictions on the use of electronic devices on certain flights from the Middle East and
Africa. Rene Marsh is in Washington, Philip Mudd has joined us again. We can't get enough of Philip, unfortunately on these stories today. Rene,
first to you, I know you've been tailing the story for a while now. What exactly do we know, and what I really want to dig into here, is it threat-
specific?
RENE MARSH, AVIATION AND GOVERNMENT REGULATION CORRESPONDENT: So, we're just getting bits and pieces of this information right now. We're putting
it all together. Here's what we can tell you. A U.S. official has confirmed to me that the Trump administration is getting ready to announce
some security restrictions for very specific flights. We're talking about passengers who are boarding flights from very specific countries, including
some in the Middle East as well as in Africa, and those flights are bound directly for the United States. So, nonstop flights from those areas to
the United States.
The new security posture would be that anyone on board those flights would not be allowed to carry into the cabin of the aircraft any electronic that
is larger than a cell phone. Again, that is what we're hearing from U.S. officials here. This is all due to some sort of security concern regarding
flights leaving from countries, again, in the Middle East as well as Africa, not limited to those but mostly from those countries.
On the record, the Department of Homeland Security, not saying a lot about this topic. Only saying, we have no comment on the potential security
precautions, we'll provide any update as appropriate. One other item of news, all this came to our attention based on a tweet. It came from a
tweet from Royal Jordanian airlines. They essentially tweeted out that started tomorrow, and you're looking at that tweet there, they will not
allow any electronics in the cabin of their aircraft for any flight that's destined for North America. Again, that's starting tomorrow. That
particular airline serves New York's JFK, Chicago O'Hare, Montreal, as well as Detroit. And then after doing a bit of digging we found out from
sources that this is again all due to security concerns for flights coming from those areas.
NEWTON: OK, Rene Marsh, thank you and I know you'll continue to follow that story. We're bringing back in Philip. Give us some insight into
what's going on here. And you know what everybody's thinking. Does this mean that I'm not going to be able to bring my iPad or laptop on the planes
soon? How threat-specific do you think this is?
MUDD: I would say pretty threat-specific for. For people in my old position to put this kind of imposition on a traveler is insignificant. I
travel once a week, I've got my laptop and iPad. My first question is, I better not have to pay $25 to put them in checked baggage. The second
question is appropriate, what's the backdrop here? Let me give you a snapshot. Back at 9/11 we're talking about box cutters. Starting a few
years ago, you started to see reports that terrorists, and this is a very small sliver of the world of terrorism, were getting sophisticated enough
so they could take an electronic device, think laptop, and alter it so not only could it serve as a trigger but maybe by hollowing out pieces you
could put explosive material in there. Think of two or three people together checking in and putting that kind of device next to the wall of an
aircraft. You can see, I'm not certain what the specifics of this threat are, but you can see by that scenario what they might be thinking of.
[16:15:00] NEWTON: Yes, and Unfortunately, Phil and I have seen up close something this small, the kind of hole it can create in an aircraft is
quite scary. Rene Marsh from Washington and Philip Mudd doing double duty for us yet again, appreciate it, thank you both.
After the break, Uber's turmoil takes another dramatic twist with the resignation of the company president, Jeff Jones. We are glad to be
hearing from Uber board member Ariana Huffington about the company's string of problems after the break. You don't want to miss it.
(COMMERCIAL BREAK)
NEWTON: Uber is heading unfortunately straight into another crisis. Its president Jeff Jones has quit. He had only been on the job about six
months, citing concerns about the management culture. Now he wrote, "The beliefs and approach to leadership that have guided my career are
inconsistent with what I saw and experienced at Uber."
Now in three months Uber has been hit with public relations nightmares, one after another, that would be enough to sink some companies. There was the
delete Uber campaign in January after surge pricing was turned off at New York City airports. Taxi drivers there were protesting a President Trump's
travel ban so the company was accused of undermining their campaign.
February saw allegations of very serious sexual assault -- sexual harassment, pardon me, from a former engineer, Susan Fowler, who detailed
the claims in her blog. Uber promised an urgent investigation, that's ongoing as we speak. Four days later google said it was suing Uber over
its self-driving car technology. Google accused Uber of stealing trade secrets. Uber calls the claims baseless.
On February 28th, -- we're still at it here -- the CEO Travis Kalanick apologized and admitted needing to grow up in his words. That's after
Bloomberg released in-car surveillance video of him arguing with his Uber driver who challenged him about driver rates. March 3rd Uber confirms it
used a tool to deceive authorities in cities which had banned the app over trying to restrict its use.
Ariana Huffington joined the board last April. The cofounder of the "Huffington Post" was credited by CEO Travis Kalanick as having the
emotional intelligence to do the job. The pair, we should say, are also personal friends. Ariana Huffington joins me now. You are also on the
subcommittee for Uber's COO search and you're chairing the company's investigation into the sexual harassment claims. And also, just all of the
culture around it. I can see you want to get a word out, so just get it out. That was breathless. That was absolutely breathless in terms of what
I've gone through there in the last few months.
[16:20:00] ARIANA HUFFINGTON, UBER BOARD MEMBER: It has been a hard start to this year, unquestionably. But you know, that whether you're an
individual or a company, change very rarely happens without a catalyst. And often a very painful catalyst. And that's exactly what's happened at
Uber right now. Fundamental change is under way. Travis and everyone else has acknowledged that the skills that have brought Uber to where it is now,
growing as fast as it is growing, last year Uber grew incredibly fast. Doubled its size. This year it's growing even faster. So, the skills that
brought the company to this point, transforming cities, transforming the way we move around, are different than the skills we need for the future.
NEWTON: But does that growth mean it's absolutely outpaced the abilities of Mr. Kalanick to lead here? I mean, come on, you have his president
saying, if you read between the lines, he couldn't stay there because it was either unethical or immoral for him to stay in the job.
HUFFINGTON: Oh well, listen, everybody likes Jeff. The truth is that right now there is a search for a COO who as Travis has said is going to be
his partner in writing Uber's next chapter. And that's terribly important. Founders often need a partner. It happened with Mark Zuckerberg bringing
in Sheryl Sandberg. Let's also face the fact that we would not be where we are without Travis. The ride-sharing industry and Uber itself would not be
here without him.
NEWTON: An innovator, a disrupter, I totally agree. That does not mean he can run this company, as you said, that has had extraordinary growth.
HUFFINGTON: Right, but he's made it very clear by bringing in a COO who will complement his strengths, they'll be able to take Uber to the next
chapter in Uber's history. And what is amazing now is that everybody's on the same page. The board, management, and an amazing group of talent of
employees. I have spent a lot of time --
NEWTON: Some who will continue to leave. Some people say they're just hanging on to get the stock options --
HUFFINGTON: They've already got the bonuses. So, that's not true, bonuses have already been handed out. I think what's happening right now is that
behind the headlines are thousands of talented, committed employees who believe in Uber's mission. And it's really been moving for me to spend a
lot of time talking to them. I spoke to dozens of them in person on the phone, I've made myself available for anyone to come to me who has a great
new head of HR, Leon Hornsey, who's been instituting changes.
One of the things that happened at Uber is that 61 percent of managers, because of the growth, are first-time managers. Now new systems are put in
place for their training. New systems are put in place to not accept at Uber what I call brilliant jerks. People who are top performers but were
not aligned with big-culture values of Uber.
NEWTON: Talking about those cultural values, you're going through this investigation. At what point will you be satisfied you can actually advise
a young woman to go into that environment and work in that environment?
HUFFINGTON: Right now, right now.
NEWTON: Absolutely, you --
HUFFINGTON: Absolutely.
NEWTON: You think they will have no problems walking into that environment, which we've been told people have said is toxic, is not an
environment that was conducive to a woman being treated as an equal?
HUFFINGTON: I have talked to hundreds of women and the head of HR has had over 120 listening sessions with women and men at Uber about the changes
they want to see. Yes, there were some bad Apples. Unquestionably. But this is not a systemic problem. And what is important is that the
structures that were not in place are now being put in place to make sure that women, minorities, everyone, feels completely comfortable at Uber.
Not only that, but actually works to create the most-admired workplace to work in. The ambitions that we have for the future are not just to be
better than Uber has been, but really be at the leading edge of changes in the workplace.
NEWTON: And not taking anything away from that Uber's already accomplished but there are low barriers to entry in this industry, a lot of competition.
What makes you think this is the company that you would bet on, whether it comes to self-driving or any kind of driving app?
HUFFINGTON: First of all, the key to Uber's success is product innovation. And that really where Travis has put his heart and soul. And I know, every
board meeting is all about the latest product innovations. Uber brought in new techniques now, new products that make it easier to navigate your way,
that put where you are going first which is kind of a more natural way to look at the app, so product innovation is the key differentiator.
NEWTON: But they are product innovations that can be copied, have been copied. Some have accused Uber of copying their innovations. How
confident are you that they can withstand that competition in the middle of all this turmoil going on in the company?
[16:25:00] HUFFINGTON: Look at the numbers. Last week more people rode with Uber than any other week before. And Uber is now in 450 cities in 74
countries. So, the presence of Uber everywhere, the ubiquity, is there for all to see. Product innovation is an ongoing challenge and an ongoing
priority.
NEWTON: Is there anything, whether it's the investigation into sexual harassment or anything else that would convince you Mr. Kalanick is not the
right person to head this organization?
HUFFINGTON: The investigation into sexual harassment and any other diversity and inclusion areas is being conducted, as you know, by Eric
Holder. I'm on the board of committee overseeing that investigation. It's completely independent. It's thorough. It will conclude itself at the end
of April. And Travis is completely aligned with all the changes that need to be made. You know, leaders evolve. I've spent a lot of time with
Travis over the last month. I've seen his evolution. And I have told him that I'm going to hold his feet to the fire.
NEWTON: What does that mean? Do you think at some point he should go?
HUFFINGTON: No, absolutely not. I think Travis is the heart and soul of Uber. And if he had not acknowledged mistakes, if he had not been willing
to make changes, would have been another story. But we cannot judge people by their worst moments. None of us would want to be judged --
NEWTON: Many of us are, we're fired all the time for our worst moments.
HUFFINGTON: None of us would want to be charged by our worst moments, provided we learn, we grow, and we evolve. And he has shown very clearly
that he is changing, he is evolving and he's excited to bring about the changes that need to be brought about at Uber.
NEWTON: One more quick question. We're not going to do serve this in the time we have left. There has been a lot going on in the President's first
few weeks in office. Have you had any contact with him and is there anything that surprised you about his first few weeks in office?
HUFFINGTON: I'm happy to say that I'm now running Thrive Global, to change the way we work and live to avoid burnout and stress. I think the White
House needs some help in that respect.
NEWTON: Are you offering your services?
HUFFINGTON: Absolutely, if the president stopped tweeting in the middle of the night and got more sleep, we might all be better off.
NEWTON: Do you think he's going to be picking up the phone to call you about that? When was the last time you talked to him?
HUFFINGTON: He can call anybody he wanted as long as he realizes that leaders need to refuel themselves. When they're running on empty they say
things like, President Obama wiretapped my phone. Or things that have absolutely no basis in fact.
NEWTON: You're making it sound very simple. Ariana Huffington, thank you so much. Appreciate you coming. Thank you.
Now from Capitol Hill to the White House and back again, President Trump's spin on the FBI director's testimony makes its way back to the hearing and
earns a public rebuke from James Comey. That's next.
(COMMERCIAL BREAK)
[16:30:15] NEWTON: Hello, I'm Paula Newton. Coming up in the next half hour of QUEST MEANS BUSINESS, it's debate night in France as a new
candidate moves into poll position. We'll be live in Paris with the very latest.
The head of the World Tourism and Travel Council tells me Donald Trump's travel ban is misguided.
First though, these are the top news headlines we're following this hour.
A U.S. official tells CNN that almost all electronic items are now banned from cabins on some Middle Eastern and African flights to the United
States. The official says the temporary security measure will impact more than a dozen airlines flying into the U.S. the Department of Homeland
Security said it has no comment at present.
FBI director, James Comey has now confirmed his bureau is investigating whether there was any collusion between the Trump campaign and Russia
during last year's election campaign. Comey also told the House Intelligence Committee he had no information to support President Trump's
claims that he was wiretapped by former President, Barack Obama.
Dramatic video out of Peru as a man attempts to cross the Canete River during some of the worst flooding the region has seen in decades. State
media reports at least 72 people are dead and more than 500,000 people have been affected by the flooding. The heavy rains in Peru started earlier
this month, and unfortunately are expected to continue right through April.
Prime Minister Theresa May will trigger article 50 next Wednesday, officially starting Britain's two-year divorce from the European Union.
The British government has notified the EU of its plan. The EU could take up to six weeks to hammer out a negotiating position before beginning
Brexit talks with the U.K.
U.S. authorities say two of American football player Tom Brady's Super Bowl jerseys have been found in Mexico. At the home of an international media
professional. Brady noticed his jersey was missing -- I'm not sure you guys remember this after this year's championship super bowl game. The
other had been missing since the 2015 Super Bowl.
It was the first major revelation to come from today's hearing on Capitol Hill. The FBI director confirmed the existence of an investigation into
ties between the Trump campaign and Russia during the U.S. election. Now the White House put its own spin on that in this tweet.
"The NSA and FBI tell Congress that Russia did not influence the electoral process." That tweet now made its way back in the hearing. We'll call it
a boomerang. The FBI director's response? Not so fast.
(BEGIN VIDEO CLIP)
COMEY: We've offered no opinion, have no view, have no information, on potential impact, because it's never something that we looked at.
JIM HIMES, U.S. HOUSE DEMOCRAT: OK. So, it's not too far of a logical leap to conclude that the assertion that you have told the congress that
there was no influence on the electoral process is not, quite right?
COMEY: Right, it certainly wasn't our intention to say that today because we don't have any information on that subject.
(END VIDEO CLIP)
NEWTON: Exhibit A is the U.S. accusations against Russia are the hack and release of emails from the Democratic National Committee. FireEye is a
cyber security firm that worked with the DNC after the hack. Joining me now, Laura Galante, FireEye's director of global intelligence. Thank you
so much. I have to kind of put something to rest right now. I mean, the Trump administration accuses the DNC of basically rebuffing the FBI when
they found out there was any kind of a hack. What do you know about that?
LAURA GALANTE, DIRECTOR OF GLOBAL INTELLIGENCE, FireEye: So, I don't know the particulars of how the information was handed from the DNC over to
national security. But what is clear is people understood that this had gravity to it. People who were working on the actual matter. It needed to
elevate this and raise flags on it. I think part of the question is what happened after we started putting the forensics together and saw that this
was probably a Russian government-backed group? After that, the implications got a lot bigger.
NEWTON: And yet still many said that the DNC did not act quickly enough. In terms, of what it was you saw firsthand going on there at the DNC, did
they act as they should in all of this? Because the Trump administration said it very clearly today, they didn't invite the FBI in because they had
something to hide.
GALANTE: When an organization is faced with having to disclose their own breach, there's a lot that goes into that decision. It's really hard and
it's easy in hindsight to say, this was clearly something that had national security implications, is the government involved in influencing internal
affairs and the credibility of the election?
[16:35:02] But at the time you're dealing with a firefight to say, do we have security around our email database? What are we looking at here?
It's difficult to gauge that when you're in the midst of an investigation. It's tough to start throwing the blame around of who should have spoken to
whom sooner. Certainly, looking back, the election being targeted, and starting to think what those targets would be emails, the parties, what
have you, it definitely should have been a higher alert across the board.
NEWTON: When you look at the hack itself, as you have, how sophisticated was it, how vulnerable do you think the United States in many different
spheres remains to that kind of hacking?
GALANTE: The actual network breach of the DNC used tools, malware in this case, malicious software, that was pretty widely known, at least in the
security community, that linked back to this group that we've long called apt 28. In 2014, before this was the hottest political issue, we then
thought and assessed that this was the Russian government's group. Now what became the sophisticated piece of this wasn't just the breaking into a
network. That happens a lot. The part that was more consequential was then putting the information out in a way that started to affect the
political dialogue. So, getting the information to WikiLeaks and then releasing it in the time that was really advantageous, back in July. When
that started to change the dialogue, that is when we were able to put together this overall influence campaign as the government's kind of
discussed it or this operation that included both the hack of the network and the dissemination of the actual information.
NEWTON: There are two separate issues here. One, how vulnerable are these systems? B, the other is a simple issue, not simple, the issue of media
literacy. When these things come out, can you scrutinize where they're from and who's gain big having these things in the public domain? Which is
more serious? A lot of people are looking at the hacking and saying, how vulnerable is the electoral process?
GALANTE: I love how you put that. I think both are equally serious. Yes, we need better sense of diligence in the network security realm. We need
the digital equivalent of locks on your doors to be thought through by all sorts of organizations. Your second point of media literacy is great. I
think what people have missed throughout this is by just putting suddenly that something came out on WikiLeaks they feel they've identified the
source. And it's a very different story to read if you're saying, we think a suspected Russian government intelligence operative is leaking this
information as part of the headline, versus information on WikiLeaks says that Debbie Wasserman Schultz didn't like Bernie Sanders. So, caveating
the source, thinking about how is that source characterization playing into the overall storyline, is a really critical piece that was missed in 2016.
NEWTON: Definitely missed. I want to ask you quickly before we go, we had the arrest of one person who was implicated in the Yahoo cyber scheme
there. Then three are still at large in Russia. The justice department has a lot of accusations against them. And yet what was done was really
hacking for hire. How pervasive is that still from what you see every day in your job?
GALANTE: So, there's a criminal element, much of which is in Russia, in former soviet states, and this criminal element is certainly capable and
undertakes a lot of different hacks that we've seen over the years that are typically targeting either financial information or personally identifiable
information like in the Yahoo breach that becomes really useful for sale, potentially. Now where there's consternation over whether you're actually
doing something about the problem is where there's overlap between these criminal elements and the state. That's always a question, something where
there hasn't been good intelligence to put forward to say, the people who go and take critical email accounts and gave them to the state or something
to that effect. So, that logic chain is still not really played out. And I think until we start seeing evidence to that, we should caution putting
those two problems together.
NEWTON: It is interesting and obviously probably what the FBI and justice department are grappling with right now. Laura, thanks so much, appreciate
your insights.
Economic policies and political scandals. It's the first TV debate of the French presidential candidates. We will be live in Paris after the break.
[16:40:00] (COMMERCIAL BREAK)
NEWTON: At this moment, the French presidential candidates are staging their first televised debate of the election season. Record audiences are
expected as the five leading candidates go head to head after weeks of campaign scandal and political infighting. Marie le pen of the far right
national front party is leading the polls along with the independent centrist Emmanuel Macron. Melissa Bell is watching all of it. You've had
a busy few weeks. I cannot believe the jaw-dropping headlines from this campaign. Even this format this early in a campaign for a debate is new.
What are you seeing so far?
MELISSA BELL, CNN PARIS CORRESPONDENT: It's been the most extraordinary debate. It's gone on for an hour and 40 minutes already. The five top
candidates, according to the polls, lots of focus on what Emmanuel Macron and Marine Le Pen, the far-right candidate, would have to say against one
another, since for the time being they're the ones predicted by the polls to around in the second round. The other thing is this is the first-time
France has really had an opportunity to listen to candidates talk about their policy positions. The French in general have an endless appetite for
these sorts of debates about what candidates stand for. This campaign has been very different. Dominated as it has been by the judicial affairs that
have clouded both the campaigns of the Republican can date Francois Fillon and Marie Le Pen. It took an hour and a half for any of those judicial
inquire wearies to be raised, instead lots of debate about what they believed, what they stood for what kind of France they would lead as
president. The first question they would ask is what kind of president they would be? This is what Emmanuel Macron, the independent centrist, had
to say.
(BEGIN VIDEO CLIP)
EMMANUEL MACRON, INDEPENDENT CENTRIST CANDIDATE FOR FRENCH PRESIDENT (translator): The project that I have in mind is a project of deep
Democratic change. With new faces, new practices. It's a project which has faith in its country. In its energy. It's a fair project, an
efficient project, a hopeful project.
(END VIDEO CLIP)
BELL: What was interesting was as well the sort of fire that was turned on in Emmanuel Macron. This is a man who just a few months ago launched his
campaign, was almost laughed at, it was considered so improbable that a man who didn't have an established party behind him might have any hope of
achieving -- of getting as far as he's gone in the polls in this presidential campaign, and yet given the nature of this populist wave that
has now swept France in this very different campaign and the unpredictability of all that's happened, the judicial inquiries facing the
mainstream right-wing candidate, he is now looking to be the one who will take on marine le pen in that second round.
Lots of attention on who he is, who how he would rule, and on what kind of France he would choose to represent. He really has been the one, the most
tested by the campaign, by the debate, in a sense the one who had the most to lose. He seems to have come out fairly unscathed despite the sort of
political heavyweights that are both Marie Le Pen and Jean Luc Melenchon. They've continue actually tried to lay into him and he seems to have come
out fighting, at least.
NEWTON: Well, I can see that it's riveted viewing. We'll let you get back to it. We'll be interested to see how the other candidates now position
around this person, this political novice really coming out of nowhere. Fascinating campaign, appreciate it.
[16:45:00] We have to say in a lot of instances those European markets continue to shrug off a lot of the political turmoil. The CAC and most
major European markets closed in the red. The FTSE bucked that trend, finishing largely in the green after the British government confirmed it
will trigger article 50 next week and officially begin negotiations to leave the European Union. Stocks ended flat, the Dow off 9, the S&P closed
slightly lower, the tech-heavy NASDAQ notched a tiny gain. Markets seeming to meander, not really many places to go. We are plodding out of winter.
Summer vacations are less of a mirage and the world travel and tourism council is highlighting some of the world's hottest travel destinations.
It says Mexico is enjoying a tourism boom. Foreign visitor spending up 24 percent last year. Sunny Cyprus is also on the upswing. Spending in the
eastern Mediterranean island hot spot up 17 percent last year. Visitor spending in Iceland surged by more than 27 percent. It is the new it
destination. Finally, a slight curveball for you. Tourist spending in Azerbaijan shot up by a staggering 71 percent. We have to say it started
low level. Like Mexico tourists have been taking advantage of the weak local currency. And I say can having been there, a lot of the new
construction investment in museums. I spoke to the CEO of the world travel and tourism council. I asked him if the European market is suffering from
that Brexit uncertainty. And recurring terrorist attacks on the continent.
(BEGIN VIDEOTAPE)
DAVID SCOWSILL, PRESIDENT AND CEO, WORLD TRAVEL AND TOURISM COUNCIL: The industry's very, very resilient still. If you look at Turkey and Egypt
particularly, which were down 30 percent, 40 percent year on year, the numbers of people going to those countries, Tunisia was another one, those
countries are going to take some while to recover. Particularly turkey which has had a maelstrom of problems from the war with Syria, the migrant
crisis, a number of terrorist attacks, attack at the airport, the change, almost change politically. So, with all of those things happening it's
going to take turkey some time to recover. What is happening in Europe is people are still continuing to travel, but they're going to locations they
perceive as being more safe. They're going to Spain, Portugal, Malta, Italy, Bulgaria. Overall stable but some countries are hurting very badly
right now.
NEWTON: When we look further out into the horizon, we talk about China and where the Chinese are traveling, where they would like to travel, how much
will this actually skew the entire outlook for tourism in the next five years to come?
SCOWSILL: The center of the industry is moving toward Asia and specifically China. The growth in China is absolutely enormous. If you
think of Chinese New Year, 2.6 billion trips are made inside one week. A city like Beijing has 273 million visitors a year. Of course, the outbound
Chinese market is growing very fast. It's gone from 58 million to 130 million just in five years' time. The Chinese are very big spenders. So,
they're driving a lot of growth for us in travel and tourism through the ASEAN countries and increasing it to other parts of the world the Chinese
are beginning to explore.
NEWTON: And it's so interesting that way in terms of where you look for the new areas of growth. If we looked for places that haven't been able to
grow in the past, the effect of the travel ban has not been perhaps as pronounced as one would think. What is your message though still to the
American government at this time?
SCOWSILL: Well, I think firstly the travel ban is misguided in the sense that the six countries this is targeted against, there hasn't been a single
incident of terrorism committed by a national of one of those countries on U.S. soil for the last 40 years. So, this is not a security thing. You
compare that statistic with the annual killings that go on domestically in the U.S. which average about 11,700 a year. So, the first thing to say is,
the focus is wrong. It should be on domestic rather than people traveling. The second thing is that most terrorist attacks these days are committed by
homegrown terrorists. Not people that get on an airplane and fly into a country to do damage. So again, we don't think that the ban is going to
have an enormous impact right now if we get over it quickly. Either the ban gets implements and withdrawn after 90 days or preferably gets
withdrawn. But the unintended consequence of this is a message has gone out around the world that America's becoming unfriendly again, there may be
a shutting-down as a welcoming nation for business and leisure customers.
(END VIDEOTAPE)
[16:50:00] NEWTON: This weekend, be our guest, thankfully I will not sing that song. The movie-going public took up on the offer. It was a record-
breaking opening for "Beauty and the Beast" including me and Disney's year is just getting started. You will want to hear all about this when we come
back.
(COMMERCIAL BREAK)
NEWTON: Start smiling, everybody, for Disney a tale as old as time is now, yes, more bankable and profitable than ever.
OK, for the second time in a generation you're not going to be able to get that song out of your head. A remake of "Beauty and the Beast" kicked off
the studio's year in the best way possible. It pulled in $350 million at box offices worldwide this weekend alone. It was a record for march. It's
just one of the many petals Disney hopes will bloom on its rose in 2017. Later this year there will be a sequel to the newer franchise" "Guardians
of the Galaxy" and "Pirates of the Caribbean" and a "Star Wars" reboot. "beauty and the beast" cost $160 million to make. Studio chairman Alan
Horn told Richard why he's taking big financial risks on these upcoming films.
(BEGIN VIDEO CLIP)
ALAN HORN, CHAIRMAN, DISNEY STUDIOS: Each of these pictures represents substantial risk because they're so expensive. When we have these sorts of
tentpole movies as we say with size and scope and scale, they cost a lot of money. The audiences become accustomed to spectacular films in the
theater. They expect seamless effects and so on. So, it's really risky just coming in. But we have to take a swing. We have to go for it.
(END VIDEO CLIP)
NEWTON: Go for it they did. Frank Pallota has been following this big venture, our media and entertainment reporter for "CNN Money." as we
showed this isn't the only thing Disney has on the go. I mean, when I was pulled into this movie by my teenage daughter, it was extraordinary the way
you looked at the -- how the movie was presented before in cartoon version, and this reanimation. Is Disney going to be doing more of that, live
action?
FRANK PALLOTA, CNN MONEY MEDIA AND ENTERTAINMENT REPORTER: Yes, they have many films in development, remakes of their classic animated
films, everything from "Dumbo" directed by Tim Burton to "Aladdin" to a reboot of "101 Dalmatians" from the point of view of Cruella De Vil. I
spoke to the president of Walt Disney studios production, Champ Bailey, who said one of the greatest things they can do is have this huge demographic.
It's not only for kids seeing it the first time. I went Saturday night with my friends, I was the youngest person there, and I'm 30.
[16:55:00] [NEWTON: I don't know what that says about your life, Frank.
PALLOTA: Be my guest, go ahead. I enjoyed it. Yes.
QUEST: I enjoyed it as well. As an adult. When you look at in terms of redefining what blockbuster means, how is Disney doing that?
PALLOTA: Look at it this way, last Year Disney had their biggest year ever, $7.6 billion, the first time a studio has crossed the $7 billion
global barrier. This is just beginning this year. They have all those movies you mentioned, "The Last Jedi," "Pirates of the Caribbean,"
"Guardians of the Galaxy." What they're able to do is take these franchises and spin them in a new way. Pixar, Lucas Film, Marvel, brands
we've known a long time, they're taking their own vault, their own animation vault, and changing it up. "Beauty and the Beast," the live
action version, they made it a lot more musical, more eloquent, a lot of dancing, it felt very French.
QUEST: A bit like a Broadway musical.
PALLOTA: It felt very much more the Broadway musical than did the 1991 animated classic.
QUEST: When you look at Disney and what it's able to do, how it's able to take these things out of the vault are in terms of having competitive
advantage at this point, do you have to say they're looking at this and thinking, Yes, we hit every note right, finally our investments paying off?
You know they've gone through a hard time, ESPN and everything else on the table.
PALLOTA: Look at it this way. Of the top seven biggest openings of all- time, Disney has six. They have six of them. The only one in the top seven that's not a Disney-owned property is "Jurassic World," which is
Universal. Their IP is incredible. The way they use their IP is incredible. Then they have parks and merchandising. They surround you.
Anywhere I go I see talking candlesticks now that is just everywhere. That's how it goes.
QUEST: I'm not going to ask if you'll see it again.
PALLOTA: I will.
QUEST: There you go. That's QUEST MEANS BUSINESS. I'm Paula Newton. I'll see you right back here again tomorrow.
END
