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Quest Means Business
Top Senator Compares Equifax to Enron; U.K. Foreign Minister Makes Irma Pledge; South African Protesters Help Bring Down Bell Pottinger; U.K. Told to Look to Norway's Example After Brexit; Honeymoon Hoopla for U.S. Treasury Secretary. Aired 4-5p ET
Aired September 14, 2017 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] ZAIN ASHER, CNN HOST: I love seeing so much excitement. The gentleman behind there pointing at his company's logo. Let me tell you how
the market stood because get this, we actually closed at another record high. Third day in a robe by the way. Slightly higher than we were
yesterday. Up about 53 points or so. Oil price really pushing the market higher this time. Also, you have Boeing, that stock, that company rather,
saying that they are going to increase production of their 787 Dreamliner jet by 17 percent.
It is Thursday, the 14th of September. Tonight, a 21 century Enron. A top U.S. Senator sends a warning straight to the top of Equifax. And Britain
tells its Caribbean territory, we want our foreign aid budget to help you recover from Irma. In the backlash that brought down Bell Pottinger, now
South African protesters are just getting started.
Hello, everyone, I'm Zain Asher and this my friend, is QUEST MEANS BUSINESS.
Tonight, a story that we have brought you for the past few days over a week in fact, Equifax, is in crisis and the situation there is pretty much just
getting worse. Top U.S. Senators now say the company's management should pay the price after a massive data breach compromised the personal
information of more than 143 million Americans. The company's shareholders are already paying. Let's take a look at Equifax stock. Their stock fell
as much as 10 percent on Wall Street today before recovering. In the five- day since the hack was revealed, it has fallen around 30 percent. So, what we're talking about is $5 billion of its market value has been wiped out.
And we are learning more information about this hack that pretty much only makes things worse for the company. A company called Apache -- let's take
a look here. A company called Apache said the hackers actually exploited a bug in their software to steal the data. But there's been a back-and-
forth. Because Apache actually blames Equifax. They say the blames squarely on them. They say that Equifax had two months to install a patch
that it provided. They simply did not do it. They simply did not install that software update.
We've also learned that the FTC, the Federal Trade Commission, is investigating. The FTC rarely discusses ongoing probes in public. A
spokesperson though, said that the intent public interest, the fact that we -- and you guys at home are talking about this is actually forcing them to
speak out. And meantime on Capitol Hill -- let's talk about Congress. On Capitol Hill, the Equifax CEO has been formally called to testify at
hearings and in the House of Representatives are expected the first week of October. Chuck Schumer, the top Democrat in the Senate, compared the
breach to Enron. He said the executives should step down if they don't shape up soon. Take a listen.
(BEGIN VIDEO CLIP)
SEN. CHUCK SCHUMER, U.S. SENATE MINORITY LEADER: Let me tell you, folks, if the joe public, the average citizen did anything close to what the
corporate leaders of Equifax did that led to this data breach and the awful response to it, that average citizen would be fired immediately. It only
right that the CEO and board step down if they can't reach this modicum of corporate decency by next week.
(END VIDEO CLIP)
And joining me now, good friend Paul La Monica and Jose Pagliery. So, you just went there. They're calling for possible the Equifax CEO to step
down. This is not the first time, guys, that we've seen a massive data breach. How is it worked out previously for other companies like Target,
Yahoo, those sorts of companies that have had massive data breaches like this one in terms of executives being forced to resign.
PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: Target their CEO did step down. You had a new CEO come in. Yahoo was lucky because they were in the midst
of getting bought or some might charitably say bailed out by Verizon and that deal still went through. So, it might have been a much different
story for Yahoo if it was a public company that wasn't in the process of a buyout. But Marissa Mayer no longer at Yahoo.
ASHER: And Jose, you and I were talking about this earlier.
[16:05:00] This idea, in terms of this back and forth between Apache and Equifax, this idea that they may have -- I don't know if it's forgotten but
maybe it slipped their mind not to update the software. But if that's found out to be true, walk us through the possible ramifications.
JOSE PAGLIERY, CNN INVESTIGATIVE REPORTER: Companies can't forget. All software has bugs. Everything has bugs. It always needs to be improved.
And as hackers and researchers find problems they tell companies like Apache, hey, fix this. And Apache issues a fix. As it turns out Apache
issued a fix the very same week this happened.
ASHER: So why didn't Equifax install the fix? Why didn't they --?
PAGLIERY: That's the question. Why didn't they install the fix? They could have. This is equivalent to Equifax discovering that the front door
had a broken lock and didn't change the lock. They were told to and didn't do it. And the real issue now -- and this is a real issue in terms of
cybersecurity and privacy -- what happens now? What responsibility does Equifax have? Because this is a company that tracks the data of everyone
and we are not the customer. We are the product. They are selling our data and access to our data. What responsibility does Equifax have to
protecting it?
ASHER: They are selling our data but yet the responsibility in terms being forced to protect our data, that responsibility isn't aggressively there in
terms of being forced to protect our data.
PAGLIERY: That's correct. And not only that, their solution now is why don't you give us more data so that we can track you some more and keep an
eye on the first six digits of your social.
ASHER: But Paul, the FTC, we know is investigating this. In terms of who Jose said about responsibility, what are they going to be looking at?
LA MONICA: I think the word malfeasance obviously is going to come up. And the FTC is going to have to look, I think not just look at Equifax but
whether or not this is something prevalent throughout the industry. As anyone that tries to get a loan knows, Equifax is just one of the three
credit scores that consumers usually get. You have other companies, Experian, basically you have Trans Union at well. We have no evidence at
this time that those two companies have anything along the lines of what happened at Equifax. But I'm sure --
ASHER: But I'm sure they are taking Notes and learning from this.
PAGLIERY: Experian in the past also had a business deal that went awry when one of the businesses that tapped into Experian data, lost data on
millions of Americans as well. So, this is actually not new. The question now is -- and this is coming from researchers and also economists, what's
the incentive to change? What is incentive?
ASHER: Well, on said question, Jose, what is the incentive to change? Why should we create an incentive for them to change?
PAGLIERY: So, Bruce Schneier, one privacy and cybersecurity expert says that the market has failed. There's no market force that's going to force
Equifax to change this. The answer now is government regulation. Now others have said, well, think what the incentives are? Because again,
these companies, who are the customers? It's not us. And so, how can we somehow incentivize them? If the board gets sacked -- right? I beg you to
check the price of the stock, six months or a year from now. Because if it's fully recovered or greatly improved, then is the company really
learning its lesson?
LA MONICA: It's all going to depend on what forces the -- if you wind up having the stock improve because you do have a new board, then the
ramifications are that clearly you make a mistake and you lose your job. We can't have this cycle of, OK, you sack the board. A new management team
comes in and then years later we find out, oops, they did it again. Like Britney spears. You can't just have this happen over and over again.
ASHER: Of course. Their share price is down about 35 percent since last week.
LA MONICA: Right.
ASHER: Typically, I mean I know that every situation and every case is different. But typically, if you compare with what you're seeing with
Equifax, with what happened with Target as well. How long does it usually take for the share price to recover? Is it as simple as, OK, we're getting
rid of the CEO? Now investors are happy again.
LA MONICA: You need to have action, first and foremost and I don't think an op-ed in the "USA Today" and some of the things that Equifax has done to
reverse mistakes that they arguably shouldn't have made in the first place are going to be enough. What we really still need to see is whether or not
there is going to be pressure. Is there going to be a corporate activist investor that comes in and starts forcing or asking -- we haven't seen that
yet. Analysts, even though they've downgraded the stock in mass, you're still not seeing too many of paths for people to get rid of management.
PAGLIERY: But let's consider something. New management -- right? New management. They're still sitting at the top of an organization that
tracks us without our consent and is still in a position to lose that data. Because the fact of the matter is anyone who has data has crowned jewels
and they can be stolen.
ASHER: So, things like testing vulnerability. Things like making sure there are software update in time. Surely, if new management comes in,
that will be a priority. They are knocking to make those same mistakes again.
PAGLIERY: The whole cybersecurity community will tell you, it's only a matter of time that hackers will get in and steal things. Not once but
over and over again.
ASHER: Yes, I'm sure we'll have this discussion a year from now and it will be another company. OK, guys, pleasure having both of you here.
LA MONICA: Thank you.
[16:10:00] ASHER: Thank you both so much.
Let's take a look now and see how Wall Street ended. Another record close for the Dow. As I mentioned, it's the third consecutive day in a row. It
makes it the 39th close record high this year. The Nasdaq and the S&P 500 inched lower. Inflation moved a bit come on what's wrong with you more
than expected and that's boosting the odds of possibly another rate hike from the Federal Reserve before the end of the year.
Let's talk about politics now. And I guess immigration as well. Donald Trump has an ultimatum for Washington. Fund a wall on the border with
Mexico or he'll become an obstructionist president. Mr. Trump has been working on a deal with Democrats on immigration status of undocumented
children. The so-called Dreamers, 800,000 of them live in the United States. He says the deal stops if the wall isn't funded soon.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Ultimately, we have to have the wall. If we don't have the wall, we're doing nothing. At some point,
they're going to have to. They cannot obstruct the wall. The wall to me is vital. If I don't get the wall then we will become the --
UNIDENTIFIED MALE: What has to come first? Wall?
TRUMP: We have to have an understanding that whether it's in the budget or some other vehicle in a fairly short period of time, the wall will be
funded. Otherwise, we're not doing anything else.
(END VIDEO CLIP)
ASHER: Donald Trump actually made those comments in Florida. He was actually touring the destruction and some of the devastation there in the
aftermath of hurricane Irma. That is where we find our very own, Jim Acosta. So, Jim, just walk us through -- I've seen the president sort of
Change His Mind on Dreamers. Just walk us through what he actually believes in terms of protecting these 800,000 young people.
JIM ACOSTA, CNN WHITE HOUSE CORRESPONDENT: Well, if you go all the way back to the campaign in 2015, Zain, the President then candidate Donald
Trump was saying that he thought the Dreamers as well as the rest of the undocumented immigrants in this country had to go back to their country of
origin. He has obviously soften that in recent days. And he's working on a deal with Democrats to allow those Dreamers to stay in the U.S.
And what caused a huge uproar in Washington in the last 24 hours is that last night, the Democrats who met with President Trump at the White House,
the Minority Leader in the House, Nancy Pelosi, Minority Leader in the Senate, Chuck Schumer, were essentially telling reporters that they crafted
a deal with the president to allow the Dreamers to stay in this country. And as a part of that deal, the wall on the border would be put off to a
later date. Now the President this morning jumped on Twitter. He said, no, there is no deal at this point. And you heard House Republican --
Speaker of The House, Paul Ryan, saying essentially, no, there was no deal. There was just a discussion.
And part of the problem is that as soon as the president came out and indicated and the White House indicated that they were close to an
agreement, the president's conservative base, members of it just went ballistic. If you look at the very right- leaning "Breitbart" website,
they dubbed the president, quote, amnesty don. Amnesty, of course, is a reference to what a lot of conservatives believe will be the case, if the
President allows those Dreamers to stay in the country, that essentially, he's giving them amnesty. Not requiring them to go back to their country
of origin, not penalizing them for being brought across the border as young children. That's a very hard line immigration position in this country.
But the conservative base that that helped elected President Trump is very serious about holding him to his past commitments.
In so what you heard throughout the course of the day as the White House and the President contradicting one another. The president saying that he
wasn't considering a path of legalization and citizenship for those Dreamers. And the White House spokeswoman on Air Force One telling
reporters, well, that the path to citizenship may be part of the conversation. And so, they've got a way to go before they work out an
agreement on this issue. Mainly because, Zain, there's so much disagreement inside the Republican Party on this point of just what to do
about these young, undocumented immigrants who were brought to the country when they were little children.
ASHER: And as the debate continues, as you have this debate going back and forth, you have these young people that you mentioned being kept in the
middle, 800, 000 of them. But Jim, I want to switch gears slightly. Because in the past few minutes, President Trump once again spoke about his
reaction to the Charlottesville unrest. And I want to play our audience what he said.
(BEGIN VIDEO CLIP)
TRUMP (audio): I think especially in light of the advent of Antifa, if you look at what's going on there. You know, you have some pretty bad dudes on
the other side also. And essentially that's what I said. Now because of what has happened since then with Antifa, you look at really what has
happened since Charlottesville. A lot of people are saying -- in fact, a lot of people have actually written, gee, Trump might have a point. I said
you had some very bad people on the other side also, which is true.
ASHER: And Jim, this conversation about -- this idea of both sides or bad people on the other side, I mean, this is something that really continues
to haunt him and he won't let it go.
[16:15:00] ACOSTA: He won't let it go in part, Zain, because this is a president who just does not admit he ever makes a mistake. In that is just
what he did today. He was essentially saying -- you heard him there stay, a lot of people are saying that I had a point. He's trying to make a point
that his comments about what happened in Charlottesville, that there were very fine people on both sides, referring to the Nazis and white
supremacists as well as the protesters who say you don't belong in America. You are not a part of what it means to be an American.
That created such a firestorm, the president is now trying to say, well, he was referring to Antifa, those very radical counter protesters, anti-white
supremacists protesters that you see at rallies across the country. The president is saying, well, I was just referring to that and saying that
there are bad people on both sides. But of course, it just doesn't clean up the fact and make up for the fact -- and I think we'll see this in the
coming days -- that the president once said -- and I was there at the press conference in Trump Tower. I asked the question when he made that comment,
very fine people on both sides, that is just not a comment that is acceptable to the vast majority of Americans. And the president
essentially was doubling down on that comment talking to reporters on Air Force One earlier today -- Zain.
ASHER: Yes, as we just heard. Jim Acosta live for us there, thank you so much.
After the break, hurricane Irma is gone but the brutal aftermath is laid bare across the Caribbean. Will be live in St. Martin to see just how
extensive the devastation is. That's next.
(COMMERCIAL BREAK)
ASHER: Welcome back, everybody. The British foreign secretary says that he will make sure the U.K.'s foreign aid budget can be used to help British
territories hit by hurricane Irma. Boris Johnson is back in London after traveling to the British territory of Tortola and to witness the
devastation firsthand. There he is surrounded by journalists and locals. He says the government is working around rules that the overseas aid budget
cannot go to the Caribbean because the islands are too wealthy. Take a listen.
(BEGIN VIDEO CLIP)
BORIS JOHNSON, BRITISH FOREIGN SECRETARY: I think anybody who has seen the effects of a hurricane but it's absolutely catastrophic. I've never seen
anything like it. The destruction that you see in images from the first world war and I think anybody with an ounce of compassion would want to see
spending by our government on getting those people back up on their feet and indeed of getting those British -- and I stress it, British Overseas
Territories helped in the long term, and, of course, we are looking now across Whitehall at ways in which we can make sure that our aid budget can
be used in that way. And all my colleagues are looking at how we can do that.
(END VIDEO CLIP)
[16:20:00] ASHER: A situation as just as urgent for those islands not under the control of foreign governments, like Barbuda. The island was one
of the first to feel the full force in the brunt of Irma. And the entire island about 1600 people have been evacuated. Trevor Walker is a former
member of parliament for Barbuda. He joins us live now from a neighboring island of Antigua. Trevor, thank you so much for being with us. You know,
I remember seeing the devastation, the aerial footage that we're looking at right now, across Barbuda. Initially communication was down and then we
first got the first pictures last week of what happened on the island of Barbuda. And everybody was shocked. I mean, just walk us through how much
do you think it would cost to rebuild this island? And where is that money going to come from?
TREVOR WALKER, FORMER MEMBER OF PARLIAMENT, BARBUDA (via phone): Well, first of all, thank you for having me on your show. I really appreciate
it. I think we need as much exposure as we can at this time. You know, last week with hurricane Irma devastated Barbuda. The eye passed over
Barbuda. I can tell you, 90 percent of the houses there are damaged. It's going to take quite a bit to rebuild the island. But my hope is that in
rebuilding the island, that we'll learn from our mistakes in terms of certain infrastructure. And do things in a better way so that we can
mitigate against other storms in the future.
The price tag is going to be quite high. I'm not sure exactly what that is. My understanding is it's going to take about 250 million U.S. Dollars
to get everything back in order and to get our isles back to where they were before. But we're hoping that as much as possible that the
international community will give us at least come to our rescue and give us as much aid as possible.
ASHER: You know, I'm keen to sort of dig a little more on what you said about earning lessons and it's not just about rebuilding. But it's also
about rebuilding to hurricane standards so that the next time a hurricane hits, you guys are ready. Give us more specifics on what you think the
island should be doing in the wake of this disaster to make sure it's ready the next time a hurricane hits.
WALKER: For example, on critical infrastructure, like our electricity supply, I think Barbuda has a population that is manageable enough that we
can go green. We can use green energy. I see no reason why our government should not invest in solar energy or even wind energy going forward for a
population of only about, I would say, less than 2,000 people. I mean, in the short term, we may need to use the generators. But what I'm
recommending is that these generators be moved, at least the power station, be moved to higher ground. Because the power station as it is in Barbuda
is about maybe 500 feet from the coastline. That is a recipe for disaster. And these are the kind of things -- we have a hospital as well, it's about
500 feet from the coastline. So, I mean, storm surge in Irma really devastated those two-particular infrastructures and I'm hoping that we can
learn lessons and move forward so that at the end of the day that we would not have to go through these things again.
ASHER: Right. It's all about learning lessons, as you say. And really thinking about how your infrastructure is built and for it to be right for
the conditions that you guys might one day find yourself in again. Trevor Walker, thank you so much for being with us and sharing your thoughts with
us. I wish you the best of luck.
WALKER: No problem. Thanks for having me
ASHER: Of course.
CNN has reporters all across the entire Caribbean. As we've already mentioned, communication -- I mean, really this is a key issue.
Communication has been one of the biggest challenges for people affected on the island. The island of St. Martin is pretty much unrecognizable. This
was considered paradise on earth. It's a beautiful island that tourists flocked to every year. It's considered unrecognizable after Irma cut a
path right through the Caribbean. Our Clarissa Ward is there for us tonight. So, Clarissa, I'm just looking behind you and I see a building
behind you where the rooftop has literally been blown off. We talk a lot about the devastation and the structural damaged that the island has
suffered. But it's also about medical supplies. I mean, things like disease as well. That could end up being a major problem for the island,
too.
[16:25:00] CLARISSA WARD, CNN SENIOR INTERNATIONAL CORRESPONDENT: That's right, Zain. They've had to evacuate the hospital here, which gives you a
since of just how bad the situation is. All of the pharmacies or drugstores that are still here have been looted and most of them are now
closed. So, if you are sick or do have some kind of a medical emergency, you're pretty much in dire straits. And what the big fear now is,
unsurprisingly -- it's the big fear after many natural disasters -- is that you're looking potentially at some kind of an outbreak. Be it typhoid. Be
it cholera. Be at some other type of similar germ borne disease.
The reason they're particularly concerned in this case is that there's no sanitation on the island. They are working hard to bring back the power.
They're working hard to bring back running water. In some parts of the island there is in fact limited power. But running water is still not
available to people. Bathrooms are not working. At large gathering spaces like the airport, which has been inundated with some 1,500 people a day,
there are no toilet. People are being told to walk outside the building and do their business wherever they can.
Whenever you have a situation like that, Zain, you have a strong potential for some kind of an outbreak of disease. The other thing that we've seen a
lot is trash. It's everywhere. Mountains of it piling up along the sides of the road and residents we spoke to said, listen, we're desperate to get
rid of this stuff. But we're here with a couple of brooms and our bare hand and we simply don't have the resources, the infrastructure or the
sophistication of the aid needed to help eliminate what could become a very nasty problem -- Zain.
ASHER: It's going to be a long road ahead, unfortunately, for all of these islands. Clarissa Ward, thank you so much for sharing that story,
appreciate that.
Still to come here on QUEST MEANS BUSINESS, one of the most infamous -- famous and infamous, PR firms in London is no more. That's it after
creating its own PR crisis in South Africa. We'll have details on Bell Pottinger after the break.
(COMMERCIAL BREAK)
[16:29:19] ASHER: Hello, everyone. I'm Zain Asher. Coming up in the next half hour of 'QUEST MEANS BUSINESS" the head of Europe's Free Trade
Association thinks Britain can learn a thing or two from Norway. He'll join me live from London to discuss.
And the honeymoon period is definitely over for Steve Mnuchin. The question now is who paid for it. First these are the top headlines we are
following for you at this hour.
Metal grills over windows trapped victims inside a Malaysian religious school when a deadly fire that broke out in Malaysia. At least 21 students
and two adults were killed. A government official says the school's license was under review and the school should not have been operating.
[16:30:00] South Korean President Moon Jae-In says Seoul will not deploy nuclear weapons as the north continues to conduct nuclear tests. Mr. Moon
did say South Korea needs to develop its own military capabilities in the face of Pyongyang's nuclear advancement.
U.S. President Donald Trump traveled to Florida where he toured the devastation left by hurricane Irma and met with victims as well. His
message to them, we are there for you 100 percent. Mr. Trump along with the First Lady Melania and the vice president also handed out food under a
hot tent in hard hit Naples.
The fall of one of Britain's most notorious PR companies may indeed just be the beginning as a backlash grows as firms doing business with one of South
Africa's most influential families. The PR firm Bell Pottinger was hired by the Guptas a wealthy migrant family from India which yields a lot of
political influence in South Africa. Bell Pottinger then promoted hash tags including white monopoly capital to allegedly stir up
racial tensions in the country, the hashtag was soon counted by furious protesters in South Africa who started their own hashtag
#bellpottingermustfall.
The PR was eventually expelled by our PR trade body in the UK and is now in administration.
(BEGIN VIDEO CLIP)
FRANCIS INGHAM, DIRECTOR GENERAL OF THE PRCA: The view of our board, the view of the PRCA board was that Bell Pottinger's actions were deliberately
intended to create exactly the result that they did. Stirring up racial hatred in a very sensitive area of the world and that is why we have
expelled them.
Pressure is being put on more companies in South Africa that have ties to the Gupta's family and Jacob Zuma's son. David McKenzie is in
Johannesburg. It's hard to imagine that you have this PR firm stoking up racial tensions in country that has to be honest a very sensitive history
when it comes to race. Walk us through how this story is being covered in South Africa, in the media and how ordinary citizens are reacting?
DAVID MCKENZIE, CNN CORRESPONDENT: Well, certainly there was celebration when Bell Pottinger went into that administration. It's a very rapid and
dramatic fall by this storied PR company that tried to build up and burnish a reputation of many controversial figures over the years. But it was
finally this contract that they won with Oakbay Capital, this firm owned by these Indian businessmen living in South Africa with close ties to the
South African president. That use of racial divisions to try and counteract accusations of corruption was really the nail in the coffin for
that firm, a very dramatic fall.
Now other firms and companies have been tainted, as it were, by the same brush, but maybe not to the same degree just yet. KPMG the global auditing
firm has been accused of overlooking, at the very least, dodgy dealings by that same Oakbay Capital when it comes to the state power utility. KPMG
denies that. But they are investigating.
Now, McKinsey, the global consulting firm, has been tarnished somewhat in South Africa because of its role and local partner's role in a contract
they had with the same power utility, all with links to this firm that have close links to the president involving millions, if not hundreds of
millions of dollars that could be corrupt dealings. It hasn't been proven in the court of law yet but McKinsey told me that they are increasingly
confident that there was no illegality or bribery or corruption in the case but that doesn't mean that they could suffer more reputational damage in
the South African and global marketplace. Zain?
ASHER: So, you have these companies suffering in terms of their reputation, as you mentioned, but then what about Jacob Zuma? He seems to
be quite the survivor in that country.
MCKENZIE: Well, certainly that goes without saying. All of these issues with these companies are kind of on the periphery, though it's damaging to
those companies and their employees. Ultimately all roads allegedly lead to President Jacob Zuma and his relationship with the Gupta family, the
millions of dollars that might have exchanged because of that relationship and the ongoing political fallout which, up until now, hasn't resulted in
any direct consequence for President Zuma. It's gotten close several times, both politically and in the court system but as of yet, President
Zuma still denies having corrupt relationships with these businessmen.
[16:35:00] Even today there was yet another long-running court battle which is ongoing that it seemed like President Zuma's lawyers did a strategic
retreat, admitting that possibly earlier corruption allegations could be brought forward toward the president. All of this, though, hasn't resulted
in his ousting as the president of the country despite the rising anger over these endless scandals of corruption that have tainted both the
companies that are involved and, of course, the country and the wider world. -- Zain
ASHER: David McKenzie live for us there, thank you so much.
Let's talk about the market now because in Europe it was a mixed finish to the trading day. The FTSE fell more than one percent after the Bank of
England hinted that higher rates are likely in the coming months. That announcement boosted the pound which gained more than one percent against
the dollar.
It's claimed that a post-Brexit Britain would still get access to the single market if it copied Norway's example. The head of Europe's Free
Trade Association says that Britain could rejoin the club and avoid dealing with European court of justice. Iceland. Lichtenstein and Switzerland and
Norway are part of the EFTA. And excluding Switzerland, its members trade inside the European market while remaining outside of the EU. They sort
out their own trade disputes with their own court and ironically, this is interesting, the U.K. was a founding member.
Now the president of the EFTA says the U.K. could rejoin. Carl Baudenbacher joins me live now from London. Thank you so much for being
with us. You know, one thing that a lot of people in the U.K. who are pro- Brexit, one thing that they want, aside from immigration, is, of course, legal autonomy. It's talked about over and over again. You know, just
explain to us the relationship between the EFTA and the European Court of Justice, and if they joined the EFTA, how would they get that legal
autonomy they so desperately want?
CARL BAUDENBACHER, PRESIDENT EUROPEAN FREE TRADE ASSOCIATION: Well, good evening and let me say this. Legal autonomy is certainly a goal they are
aiming at but at the same time they would like to conclude a partnership agreement with the European Union, which would allow their industry broad
access to the single market. And it is quite clear, in light of what has happened in the last 15 years in the European Union, that if you want to
have access to the single market, you need to accept some sort of a dispute settlement mechanism. And in the latest paper of the Brexit ministry, the
EFTA court, this is the court which I am presiding consisting of three judges, one from Norway, one from Iceland, one from Lichtenstein, the EFTA
court has been mentioned as a possibility.
ASHER: So, would it be better for U.K. to join the EFTA as a possible permanent solution or just in that transition period as it exits its way
out of the EU?
BAUDENBACHER: Well, these are possibilities that are being discussed. I, as a judge, cannot give advice to the British parliamentarians. All I can
do is to explain how the court functions and what its relationship to the court of is.
ASHER: So, in terms of whether it works for the U.K. or not, a lot of people talk about, hey, listen, the Norwegian model has worked for Norway
but it's fair to point out that Norway is a vastly different country than the U.K. It's a lot smaller in size and the U.K. has a much more
diversified economy relying heavily on exports with the EU. Just because it works for Norway, does that necessarily mean it's going to work for the
U.K., do you think?
BAUDENBACHER: Well, again, that's a question which must be answered politicians. What I can do is to explain how the case law is of my court
and there I would like to say a lot of people have said that essentially if the U.K. wants to get rid of the ECJ they cannot take the EFTA court
because it's more or less copy and pasting what the ECJ is deciding. And this is not the case.
[16:40:00] Let me just mention that in most of our cases, we are dealing with new legal questions and that our relationship with ECJ has been pretty
much become a partnership-like relationship. I do not deny that they are much bigger than we are and has many more cases but we, too, have important
cases.
ASHER: All right. Carl, you came on to make your point about the differences between the EFTA and the European Court of Justice, thank you
so much for coming on the show. Appreciate that.
After the break on ''QUEST MEANS BUSINESS'' on the wings of love, the U.S. Treasury Secretary wanted to use a very expensive government jet for his
honeymoon, that request and others may have ended up sparking an investigation, that's next.
(COMMERCIAL BREAK)
ASHER: Welcome back, everybody. Greece's plan to reform its economy continues, the country today finalized a deal to sell its railway operator
to an Italian company as part of its privatization effort. The country's media minister Nikos Pappas is in Washington for talks with U.S. officials,
he joins us live now from Washington, Nicholas, thank you for being with us. So, there's no denying that Greece has, if you will, turned a corner.
It is certainly on much more stable ground. How long until the country becomes fully financially self-sufficient?
NIKOS PAPPAS, MINISTER FOR DIGITAL POLICY AND MEDIA, GREECE: The country is part of the EU and the EU is developing particular mechanisms to assist
the country's return to the markets. So, we're very confident that the decision taken by the euro group will make sure we have a return to the
markets next year in August when the program, the current program is finishing. And in any case, the clear message, as you mentioned, we have
increasing GDP, increasing employment, exports, investment and these all macroeconomic fundamentals suggest we'll be in a position to fully
establish a market taxes that will normalize our ability to service our financial needs.
ASHER: When you think about the economy, though, the unemployment rate being over 20%, you know, Greece has suffered from a brain drain. A lot of
young people who are very smart and hardworking decide to go elsewhere in Europe for jobs. How do you then lure those young people back into the
country because that will be a key part, being able to move forward.
PAPPAS: Well, the first thing that we had to do and we did it immediately was to make sure that the European structural firms are organized in such a
way that can benefit startup companies and so that people can come back to the country, start their own business and try to make a living instead of
going abroad.
[16:45:00] Of course, that is the microeconomic environment but I take the chance to let you know that when the political change took place in 2015,
unemployment was at 27 percent. Now we're just above 21 percent and it seems that the dynamics are that the employment -- unemployment is going to
be even lower in the months to come. Almost 350,000 jobs have been created and these are messages that young people are working outside the country
can really look to and make a decision to come back to the country.
ASHER: And just quickly, Nikos, just walk us through what you're doing in the U.S. In terms of hopes of getting outside investment.
PAPPAS: Well, the U.S. is going to be the biggest in the exhibition next year so we hope to have very, very substantial next year almost. More than
that, it's already the case that American companies have made their decision to invest in Greece in the insurance business, in real estate and
all sorts of other sectors and this is a very, very important message that the U.S. Apart from a security player in the area becomes an economic
player in the country.
ASHER: All right. Nikos, appreciate you joining us this afternoon.
The U.S. President has defended his treasury secretary, describing him as a very honorable man. Steve Mnuchin is facing an investigation after he
asked to use the government plane for his European honeymoon. The treasury inspector general is looking at every time Mnuchin used a government plane
since taking office. He said he wanted the plane for his honeymoon because it has secure communications. It's not the first time his travel has faced
criticism.
His wife Louise Linton was criticized for flaunting her wealth on Instagram during her husband's strip to Ft. Knox to watch the solar eclipse. She
sarcastically replied to one person who attacked her by asking, do you think the government paid for our honeymoon or personal travel? CNN
political reporter Hunter Schwartz joins us live now from Washington. So, Hunter, just walk us through what the inspector general of the U.S.
Treasury Department is actually? It's not just about his use of government planes but also his requests.
HUNTER SCHWARTZ, CNN POLITICAL REPORTER: We are kind of starting to see this pattern of a blurring of their personal lives and their use of these
government jets that's creating problems. So, Secretary Mnuchin and Louise Linton, they were married back in June. President Trump was there, members
of the administration were there, Vice President Pence officiated the wedding. So, they asked for the use of a government jet for their
honeymoon because they said that Secretary Mnuchin needed secure lines of communication.
He's a member of the National Security Council so they said that they needed this and when they found an alternative way to communicate, they
dropped that request. But it is kind of ironic because in that comment you were referring to on Instagram, Louise Linton she did ask the question, do
you think we used the government plane for our honeymoon, and they didn't but it turns out they actually had asked for it.
ASHER: So, his excuse -- so I shouldn't say excuse but his response of saying, you know, we needed the government plane, we thought we needed the
government plane for secure communications, what's been the general response to that?
SCHWARTZ: I mean, you know, it creates some problems. President Trump came to Washington promising to drain the swamp. And so, it creates these
issues where you have a treasury secretary with a background in Goldman Sachs and his wife who has this history of this Instagram post. She tagged
luxury brands on the Instagram post and the woman she responded to was this mother from Oregon who just kind of called her out saying, why are you
posting this and she responded and something that she later walked back, she apologized to this Oregon mom. She called her comments indefensible in
an interview with ''Washington Life'' magazine and creates issues where they are here trying to help the American people but then they're asking
for use of government j et for private funds. So, the government is looking into this and all of their requests and use of this to make sure
that they were doing what they were supposed to be doing.
ASHER: It's part of the problem of having an administration where so many people are new to politics and come from the private sector and they may
give the excuse, listen, we didn't know the rules but we have to leave it there. Thank you so much.
1970, meet 2017. Polaroid is trying to keep analog alive in our digital world.
[16:50:00] The company's new CEO is joining me next. Out with a new hope and new camera, up next.
(COMMERCIAL BREAK)
ASHER: So, it's been 80 years since the first ever, the first ever Polaroid camera was released. Now the company is back with a new instant
camera and this time it actually has a few very modern comforts. Scott Hardy is the CEO of Polaroid, Oscar Smolokowski is the CEO of New Polaroid
Original. They both joined me on set. They were kind of enough to come in to give us a little demo. Guys, thank you so much.
So, we actually have the black version and white version. Walk us through the features because this is a sort of nod at the original but it also has
a few modern features as well.
OSCAR SMOLOKOWSKI, CEO, NEW POLAROID ORIGINAL: So, basically, it's like the simplest, purest essence of instant photography. Big red button and
you get a photo in your hand.
ASHER: Can I take the picture? Is it loaded?
SMOLOKOWSKI: Absolutely.
SCOTT HARDY, CEO, POLAROID: Yes, it is.
ASHER: I haven't used one of these since I was a kid. On my god.
SMOLOKOWSKI: I love it.
ASHER: Taking a picture of you, Scott.
SMOLOKOWSKI: I might have photo bombed that a tiny bit.
HARDY: You take that out and you don 't actually do that.
ASHER: OK.
SMOLOKOWSKI: If you do it too hard, it's bad for the photo. Everyone wants to shake them.
ASHER: How long does it take?
SMOLOKOWSKI: This is going to take another 20 seconds and you can start seeing it.
ASHER: Ah, there you are. Everyone likes to look at photos of themselves.
SMOLOKOWSKI: Love it.
ASHER: Give us a sense of the features because I know it's retro obviously in style and you've got modern as well.
SMOLOKOWSKI: So, we upgraded the original one step. So, this is the one step two. The kind of original rainbow camera that everybody knows it
inspired Instagram and all of that, doesn't have a flash so we added that. We added a self-timer and put a battery into the camera as well which lets
us take it out of the film. The film doesn't actually have a battery. Vintage Polaroid film needs a battery in each film pack which is quite
wasteful, so for the future we wanted to change that. That's why we did this year.
ASHER: So, guys, who is this marketed to? If you could just tell me your ideal customer, who would it be?
SMOLOKOWSKI: Well, the people most interested are like 25, 35.
ASHER: Okay. They like that vintage feel.
HARDY: Gen Y, young professionals.
SMOLOKOWSKI: It' s really about experiencing photography beyond your smartphone and most people don 't get a second camera because the
smartphone is so good. So, you want something different and this is that. You still are going to take hundreds of photos on your smartphone but for
the special moments when you something physical, something in the real world you get this. It's kind of like the opposite experience really.
ASHER: Listen, I probably haven't had a real camera -- maybe it's been like 15 -- I don't know. Maybe ten years if not more.
[16:55:00] So, as we have every single year and your iPhone coming out, actually just a couple of days ago we just had the iPhone 10 and the iPhone
8 coming out. How will you compete? I understand the whole vintage angle. It's about the experience, not just about taking a picture on your
smartphone. It's about much more than that and making it personal.
Still, the question remains how will you compete?
HARDY: Look at Polaroid, we think a photograph isn't a photograph until you actually develop and print it, otherwise it is just pixels on a screen.
There's something about having a real tangible photo in your hand that you can share and that you can experience, that is this analog experience that
we're seeing the Gen Y and Gen Z generations wanting to go to. It's a whole new generation of consumers for us.
ASHER: But, guys, it's not cheap. It's $99, right?
HARDY: $99 retail.
SMOLOKOWSKI: I think the big thing is we're not competing with the smartphone. This lives very comfortably next to the smartphone. It's not
going to make a call. It is always better at all those things, you e-mail photos, everything. It's something that lives comfortably alongside and
now that we're used to taking these smartphone photos, for anyone who wants this experience, you said yourself you didn't buy a camera for ten years
because you don 't have a reason to because the smartphone does it all but it doesn't give you a photo that is in your hands.
ASHER: You talk about a photo in your hand but in the social media age where everyone is constantly tweeting and on Facebook, the digital photo is
extremely valuable, especially for not just millennials but the younger generation. So how does this fit into that whole social media obsession?
HARDY: I know with my own children, they will use this camera and take photographs and get their smartphone out, take a picture of their collage
and share that through social media. So, I think Oscar is right. They co- exist together. This is fantastic at parties, weddings, events where you want to take a picture in the moment and share it as oppose do just upload.
ASHER: And by taking a picture of my crew, who I love so much, guys, smile. There you go. I'll send it to Richard. Thank you, guys, so much.
If you've missed part of tonight's program, you can always download our show as a podcast available from all of the main providers or listen at
cnn.com/podcast.
That is QUEST MEANS Business. I'm Zain Asher. Whatever you're up to in the hours ahead, I do hope that it is profitable. I will be taking
pictures here with my guests.
END
