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Trump Celebrates Tax Overhaul; Bitcoin Exchange Goes Bust After Hacks; EU Court Deals a Blow to Uber; Poland Faces EU Action Over Rule of Law; Africa's Richest Woman Faces Corruption Probe. Aired 4-5p ET
Aired December 20, 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: That massive fist pump there marks the end of yet another trading day on Wall Street. It sort of feels -- I've
got to say, it sort of feels like Groundhog Day. Because yesterday Republicans were salivating over the prospect of tax reform and then the
Dow ended the day flat. Here we are again, one day later, the Dow ending the day flat, as well. And the idea is that investors have really baked in
their enthusiasm for the prospect of tax reform, because they have been expecting it pretty much all year. But the bigger news is that the
corporate tax rate in this country, in America, is going to be going from 35 percent to 21 percent. We'll discuss what that mean for businesses.
All right, my friends, it is Wednesday, December 20th. President Trump's long-awaited tax bill has cleared its final hurdle. There the President
there is with a scene of jubilation at the South Lawn of the White House just moments ago. The Chamber of Commerce told me what businesses will do
with that massive windfall.
Also, ahead, a bitcoin exchange declares bankruptcy after an attack for the second time. Cyber security experts warn the exchanges have actually been
far too slow to respond to cyberthreats.
And Uber runs into a major roadblock. Europe's top court rules that it must be regulated like a taxi company, not as a tech company.
All right. I'm Zain Asher, and this, my friends, is QUEST MEANS BUSINESS.
All right. Welcome, everyone, to all of you at home. I'm Zain Asher. Tonight, for the president it really is mission accomplished. Because
president Trump gets his Christmas gift. His Christmas present he was hoping for, for all Americans, that he has been promising for the past two
or three months as he celebrates the overhaul of taxes in this country. A historic day for the U.S. economy that will see business rates slashed.
Corporate taxes rolled back from 35 percent to 21 percent, as I was just saying, and tax cuts for everybody, at least in the short-term. Individual
tax cuts expire in the year 2025.
There was also a mood of triumph as president Trump made it official just a few minutes ago at the White House. Although the actual signing of the
bill in terms of when it reaches the President's desk will actually come later. This is the first time -- the first time the past 31 years since
1986 that Congress has passed major tax reform. Donald Trump said it will bring even more jobs back to the United States.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Ultimately, what does it mean? It means jobs. Jobs, jobs, jobs. So, it's going to be really a
very special period of time. We're in a very special period of time. And it's going to be even more so. I want to thank everybody behind me.
(END VIDEO CLIP)
ASHER: All right. Stephen Collinson joins us live from Washington. So, Steven, you saw the president basically celebrating there. And this is,
yes, his first I guess major legislative win so far, this year. But it's not over, because he does have to sell this to the American people, and not
all of them are on board
STEPHEN COLLINSON, CNN WHITE HOUSE REPORTER: That's right, Zain. This is a very unpopular bill. The majority of Americans oppose it, according to a
CNN poll this week. But one of the reasons the Republicans had to pass this is because, as you say, they have done absolutely nothing so far in a
major legislative way with their monopoly on power in Washington. And with having Donald Trump, a Republican, in the White House. So, they needed to
do this to sort of boost their own support among their political base.
Now the question is, this is a defining moment for the Trump presidency. It's defining moment for the politics of the Trump era, as well. Democrats
are going to try and brand this bill as a huge give-away to the rich as a sort of poke in the eye of the middle class. They're going to say that the
president ignored what he used to call the forgotten Americans on the campaign trail, and sided with traditional Republicans who basically want
to give big tax breaks to corporations. That's the terrain of the politics of this that are going to go -- that are going to sort of unfold next year,
running into the midterm elections. And I think it's going to be a theme that's actually going to prevail all the way until Donald Trump's re-
election race in 2020.
QUEST: So, Stephen, how does this tax bill benefit the President himself?
COLLINSON: Well, there's a lot of speculation. We don't know exactly, because as you know, the president has refused to release his tax returns.
He refused to do that, as is traditional during the campaign, and hasn't done so since. So, a lot of this is speculation. But what we can see in
the bill, there's a lot of mechanisms that are being introduced into the corporate side of the bill that appear to sort of help Donald Trump, that
help real estate investors, a sort of cut back of the estate tax, for example, which will help Donald Trump's heirs.
So, you know, I think there is clear evidence that this is a bill that is weighted towards corporations. The theory of the Trump administration is
that those corporations are going to bring their profits back from overseas.
[16:05:00] They're going to use the money that they're getting back through a massive cut in the corporate tax rate to invest in jobs, to invest in
production and capacity that's going to eventually help those Donald Trump voters who helped put him into office. And voted for him specifically
because they were in sort of a depressed economic area. So, there's high pressure on that to actually, you know, unfold, as I said, for the
president's political fate.
ASHER: Yes. And the incentive, to be fair -- the incentives are actually there. But there are no guarantees, as you just mentioned. All right,
Stephen Collinson, live for us there, thank you so much.
But there are some companies that are already promising new investments now that this tax bill I agreed. AT&T which is trying to buy -- this important
disclosure for you -- trying to buy CNN's parent company Time Warner. Just announced it will actually invest an extra $1 billion in the United States.
That money would go towards 7,000 hard hat jobs. The White House hopes that other companies will follow. But, again, as I mentioned to our
Stephen Collinson, there are no guarantees. Something the White House adviser, Gary Cohen found out when a room full of CEOs was asked about it
last month.
(BEGIN VIDEO CLIP)
JOHN BUSSEY, ASSOCIATE EDITOR, THE WALL STREET JOURNAL: If the tax reform bill goes through, do you plan to increase investment, capital investment
Just a show of hands, if the tax reform goes through. OK.
GARY COHEN, WHITE HOUSE ADVISOR: Why aren't the other hands up? Why aren't the other hands up?
(END VIDEO CLIP)
ASHER: Not very many hands up there. There are plenty of other things companies could end up doing with that money, according to a Bank of
America survey. Most executives say they would use the money to actually pay down debt. Others prefer share buybacks, mergers. Only 35 percent
said capital expenditure investments were likely. So, no guarantees that this money is actually going to be going towards investing in jobs and
wages.
The US Chamber of Commerce, though, says this law will actually grow the economy and will help families and businesses alike. Its senior vice
president told me there is no doubt about what happens next. Take listen.
(BEGIN VIDEOTAPE)
NEIL BRADLEY, SENIOR VICE PRESIDENT, U.S. CHAMBER OF COMMERCE: Well we're pretty convinced, talking to business leaders from large, medium and small
enterprises that this is actually going to boost growth that's going to allow them to invest, create more jobs. More jobs means more taxpayers.
They're going to raise wages. Higher wages mean more income taxes. An I think what we expect to see, looking at the economics of this, is that the
greater economic growth that the bill is going to create is going to offset most, if not all of the revenue loss.
ASHER: When you look at the U.S. economy, just in terms of jobs, as you mentioned, the U.S. is pretty much at full employment. Wages, on the other
hand, have remained stagnant for quite some time. Does this idea that these tax cuts -- a lot of people think they're not really going to benefit
workers in terms of wage growth. That it's simply going to benefit corporations, shareholders in terms of dividends, and stock buybacks and
profits. Essentially, in other words, making the rich richer. Why do you disagree with that?
BRADLEY: Well, because businesses are always going| put the income, the money that they have to its best possible use. And under the current tax
code, the old tax code, they were punished every time they made an investment in a plant in America. Where they located their headquarters in
America. It was always more competitive from a tax standpoint to be located somewhere else. This bill that's about to become law is going to
change that. The incentives will be to put your headquarters here. To put your manufacturing here. To locate your R&D here. And, you know, when
that happens, naturally, you're going to have greater competition for talent. That's going to help raise wages. Productivity is going to
increase because of the investments in new technology. That's also going to raise wages.
So, you know, we've seen this before. This is not like it's an untried system. If you go back to John F. Kennedy and the 1960s or Ronald Reagan
in the 1980s, certainly different political parties. But the same conclusion that having a competitive tax code lifts the economy and
ultimately lifts wages and jobs. And by the way, you don't have to take my word for it, I mean, look at how officials in China are responding.
They're going through planning exercises right now, regarding the comparative advantage that America is going to get from this tax reform
effort. Similarly, countries in Europe are doing the same thing. So, you know, they're seeing something that we're also seeing, which is this is
going to mean America is back open for business.
ASHER: You were right about one thing, and that is companies in the U.S. who have parked their money overseas will be incentivized. They will be
incentivized to bring that money back to the U.S. but that is not the same as guaranteeing they're going to put their savings from this tax cut
towards wage hikes. You can't guarantee that in any way, shape or form.
BRADLEY: Certainly, no one can guarantee they're going to do that. But no one can guarantee they're not going to do that, either. So, here's what we
know. Businesses make decisions about whether to open a plant or raise wages based on do they think it's going to help their business grow and
make more money. One of the things every business has to take into consideration when they make that decision is what's the tax consequences
for this business move. And under the old tax system, the tax consequences were pretty high. Which meant that you were incentivized not to do those
things.
[16:10:00] Under the new tax code, the tax consequences are going to be fairly low, and you're going to have a greater reason, a greater incentive,
to build that plant, hire those workers and raise those wages.
(END VIDEOTAPE)
ASHER: And interestingly enough, despite the prospect of tax reform, the U.S. stocks actually ended the d slightly down. Down about 28 points or
so. So, pretty much flat, I guess. But tech and health stocks were some of the worst affected. Paul La Monica has been following the numbers.
Paul, I don't get it. The Dow has risen 5,000 points this year. There's been so much excitement about a prospect of tax reform. And on the day, we
come closer to tax reform the Dow is flat. Why?
PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: It's the proverbial case of selling the news. The market has already enjoyed a stellar year. And even
when we've had setbacks politically for President Trump this year, there still was that hope, we're going to get a corporate tax cut, and we finally
got it. But everyone knew it was coming.
ASHER: They expected it.
LA MONICA: Yes.
ASHER: So now that it's come, it's like, well, we knew it was going to happen, so it's fine. We're not really excited about it because we saw
this coming anyway.
LA MONICA: Right. But that being said, even though we had the broader market flat, even a company like FedEx today saying that they are going to
potentially have a $1.5 billion boost to profits next year, because of lower taxes. FedEx shares actually did rise 3 percent on that news. So, I
think, Zain, what's going to be very interesting is come January, when all these companies are reporting their fourth-quarter and 2017 results, are
you going to see more firms really give a hard number on how much they expect to really have a boost to their profits. And if that happens, then
you'll see those individual stocks go up. I think the broader market, we all know lower taxes are good for corporate America.
ASHER: Yes.
LA MONICA: But until we see more evidence of just how good, maybe the broader market is flat.
ASHER: How good and also where they end up spending their money, too. I'm curious to see that. Paul, always good to see you, my friend.
LA MONICA: Thank you.
ASHER: Merry Christmas, if I don't see you.
LA MONICA: Same to you, as well.
ASHER: Nice to have you on the show.
A century-long association with the New York Stock Exchange has actually come to an end. As one of America's biggest brands moves its listing to
the Nasdaq Stock Exchange instead. All good news for the Nasdaq's president, who actually spoke to our Maggie Lake, a short time ago.
(BEGIN VIDEOTAPE)
NELSON GRIGGS, PRESIDENT, NASDAQ STOCK EXCHANGE: It's a great day here. It's been a great year. We have had $260 billion in market cap transfer to
Nasdaq. Pepsi is obviously a very special one for us. And I think they look at the overall value they get from the exchange. Including all the
ways we help companies target investors, our brand support, the indexes that are available at Nasdaq, as well as a better cost structure. So, it
was a nice win for us.
MAGGIE LAKE, CNNMONEY CORRESPONDENT: It certainly was, we know this is hyper competitive. I'm sitting here at the New York Stock Exchange. They
tell me they've had 32 of the biggest ones of the last three years. You know, you use different metrics. I want to ask you, though, what about the
U.S. attractiveness in general You're competing against each other but also competing against the rest of the world. We have an increasingly active
Asia, the Hong Kong exchange. Do you feel that the U.S. is the place where global leaders still want to list?
GRIGGS: We do. We do. It is very, very competitive throughout the globe. I do feel that U.S. investor community is unique. The liquidity pool is
very deep in the U.S. Certainly for high growth companies, the U.S. is still seen as the most attractive marketplace. But as you mentioned, it's
very competitive.
LAKE: You know, this has been an extraordinary year for stock markets. And we see a lot of milestones. The Nasdaq looking square in the face of
7,000. Do you see that as a sign of confidence, or do you worry that people are getting a little bit too exuberant?
GRIGGS: No, we do feel it is a sign of confidence. Most of the companies have reported their third quarter numbers and 75 percent have been above
consensus. 65 percent being the top line, which is better than normal. So, you do have companies doing well. I think there is a regulatory
environment that is more conducive to growth. And then you do have news like today with the tax bill driving some pause and momentum. So, it
certainly has moved pretty quickly. The markets are up quite a bit this year. But we do feel there is a reason for it and we're optimistic about
2018.
LAKE: You know, it strikes me on a day we see PepsiCo listing, that, you know, old habits die hard and some people still -- I still see it referred
to as the tech-heavy Nasdaq. How do you feel about the nature of companies listing, and do we need to think about it in a different way?
GRIGGS: Yes. I think you do. We are very, very proud of our technology heritage. The top five largest companies of the world today are on Nasdaq,
which is a surprise to some people. And those are all technology companies.
[16:15:00] But as an overall exchange, we have a very diversified portfolio of companies from American Airlines, Kraft-Heinz. Just yesterday had Xcel
Energy, a $26 billion company out of Minnesota, utility, decided to transfer from New York to Nasdaq. So, we have become very diversified. We
do love our innovation, our growth, our technology heritage.
(END VIDEOTAPE)
ASHER: All right. Still to come he on QUEST MEANS BUSINESS, Uber suffers a heavy blow. What is going on with that company? They really cannot get
a break.
A court's ruling in the EU could have big implications in the way it operates around the world. That story with our Samuel Burke, coming up
after this quick break.
(COMMERCIAL BREAK)
ASHER: All right. Welcome back here, everybody. I want to bring you some breaking news that we got about 10, 15 minutes ago. Downing Street has
indeed confirmed to CNN of resignation of one of Theresa May's closest allies. I'm talking about the man you see on your screen, Damian Green.
It follows an investigation into files found on his parliamentary computer. Our Bianca Nobilo joins us live now from London. So, Bianca, essentially
what we're dealing with here is that Damian Green was found with pornography on his work compute which isn't exactly going to end well, is
it?
BIANCA NOBILO, CNN WESTMINSTER: No, it isn't. The reasons that the Prime Minister has explained, asking the First Secretary of State, Damian Green,
to resign, are that he gave misleading comments about being aware of the indecent material on his parliamentary computer ten years ago. That is one
of the reasons. Another one of the reasons outlined in the letter which Downing Street has just released from the Prime Minister to Damian Green,
is the fact that a definitive conclusion on the behavior of Damian Green towards a journalist, Kate Maltby, which was described by her as indecent
and an unwanted advance, couldn't be confirmed. So that's also an important part of why he has been asked to resign.
And Zain, it's also telling that he's been asked to resign. Often cabinet ministers, when they're put into a situation where they need to resign,
have the opportunity to resign themselves. In the note, which Damian Green sent to the Prime Minister, he outlines he has been asked to resign by the
Prime Minister, that significant too. But a huge blow to Theresa May. This is her closest political ally, somebody she brought into cabinet. The
de facto Deputy Prime Minister of the United Kingdom. It doesn't look good for Theresa May, and Damian Green this evening.
ASHER: And also, some people might say even though, you know, pornography, you know, being found on your work computer, obviously, is not a good idea.
The fact is it was found almost 10 years ago, back in 2008. What has Damian Green actually come out and said about that?
NOBILO: Damian Green the entire time denied the knowledge of the pornography on that computer and said that he hadn't downloaded it. The
salient point here that the Prime Minister and cabinet office are making in the results of this investigation, is the fact that Damian Green recently,
as recently as this year, made misleading comments about his knowledge of those pornographic images that were on the parliamentary computers in his
office ten years ago.
[16:20:00] So even though those details, the images that we're referring to, those were on computers reportedly ten years ago. It is the fact that
the First Secretary of State, Damian Green, said -- gave misleading comments about the possession or knowledge of those images. Which is
causing this resignation today, along with this issue of supposed sexual harassment of a journalist, Kate Maltby.
And it is significant, because as we said, Damian Green a long time political ally of the Prime Minister. They worked closely together in the
Home Office. In fact, she even says in the letter she writes to him about the resignation, I am extremely sad to be writing this letter. We have
been friends and colleagues throughout our political lives. This is certainly going to be a blow to Theresa May after a somewhat buoyant ending
to the parliamentary season with having made progress in the Brexit negotiations.
ASHER: Bianca Nobilo, live for us there. Thank you so much.
Let's get you caught up to speed on some tech news. Is it a tech firm or a taxi firm? Uber's reason for existence was called into question today by
Europe's top court. The judges ruled that the taxi firm was actually just that, a taxi firm. And not a tech firm, as Uber claims. Samuel Burke is
in London for us. He's been following this story. So, Samuel, it just feels like every time Uber catches its breath, there is another scandal.
And Travis Kalanick is an even at the top any more.
SAMUEL BURKE, CNN TECH BUSINESS AND TECHNOLOGY CORRESPONDENT: To be or not to be. That is no longer the question here. You are hundred percent
right. For years Uber has been saying we are a transportation company and once again, they have been proven wrong. At least here in the EU. And
I've got to say, it's quite interesting, because Uber is trying to downplay this and say, well it really only affects one part of our business. Which
is true to a certain extent. But you don't go all the way to the European Court of Justice if it's not important to you. Now at the end of the day,
people are probably wondering, how does this affect me? Well, if you're in the European Union it could be that taxes could go out for Uber. Because
now in places like the U.K. the government could say, how come the drivers are paying the VAT? That's your job. You're a transportation company, so
you need to pay that. That's a tax bill of $270 million, according to one law firm. That means next time you're visiting me here in London, Zain,
you'll have to pay 20% more if indeed they have to pay higher taxes. So, a headache not just for the bosses but maybe also for us, the consumers.
ASHER: I'm going to take that as an invitation to come visit you in London, Samuel. I'll hop on a plane this weekend. How about that? You
mentioned it's bad news for consumers like you and I, because obviously taxes might increase. But isn't it good news, possibly, for drivers just
because they might end up getting benefits that they lacked in the past?
BURKE: Well, that's certainly their argument, that especially other drivers who are already at taxi companies that have always known they were
taxi companies. They want to be on a level playing field. And it could mean some changes in regulations that they could be getting overtime. But
it's not 100 percent clear yet. And I think probably what's most complicated for Uber is this means they can be subjected to the
transportation laws, which are different in every country here in the EU. It's not uniform. And they're different from city to city. So, it's
definitely not a lot of clarity and they'll probably have a lot more paperwork. It's interesting. They just got a new chief operating officer
today. And boy is he going to have a lot of work to do all around the world.
ASHER: So, could this ruling, though, Samuel, have a ripple effect beyond Uber and actually just on the wider general gig economy that we have seen
sort of popping up all across the world.
[16:25:00] BURKE: We have lots of tech companies out there that say, no, I'm not a transportation company. I'm not a hotel. I'm just an app. This
decision was about Uber, but certainly if you're any of these other companies, include Deliveroo, which is very popular here in Europe for
delivering food. You might be taking a second look today and wondering just how much of a tech company you are. One person put it to us in a
great way. They said for so long, tech has said it's a brave new world. And today this ruling makes it clear. It's not quite as brave and quite as
new as many would have thought -- Zain.
ASHER: I like how you put that at the end there. All right, Samuel Burke, live for us, thank you so much. We appreciate that.
Still to come here on QUEST MEANS BUSINESS, Donald Trump says that he's managed to succeed where his predecessors failed. President Obama's top
economist is actually going to be joining me right here in the studio to discuss tax reform that Donald Trump is about to sign into law. That
story, next.
[16:30:00] (COMMERCIAL BREAK)
ASHER: Hello, everyone, I'm Zain Asher. More QUEST MEANS BUSINESS in just a moment. When Polish government cries foul as the EU threatened the
country with unprecedented punishment. And Africa's richest woman is being investigated for corruption. Isabel dos Santos tells me how exactly she
made her money. Before that, though, these are the headlines at this hour.
U.S. President Donald Trump flanked by Republicans, celebrated his first major legislative victory after the U.S. House gave final approval for a
major tax overhaul. Mr. Trump thanked congressional leaders for their work, pushing through the bill. It now heads to the President's desk for
signature.
And tough words from the U.S. ambassador to the U.N. ahead of Thursday's general assembly vote on President Trump's recognition of Jerusalem as
Israel's capital. Nikki Haley warned by social media that the U.S. will be taking names of countries that condemn the move.
The European Union initiated article 7.1 proceedings against Poland on Wednesday. Poland's president signed two controversial bills, which
critics say gives the government undue control over the judiciary. Article 7 is a never before used disciplinary procedure, which could lead to Poland
losing its voting rights in the EU.
And the Vatican has confirmed that Cardinal Bernard Law has died at the age of 86. The disgraced former Boston archbishop resigned in 2002 during the
Catholic Church sex abuse scandal. Law will be given a full cardinal's funeral at St. Peter's Basilica on Thursday.
So, the President's critics actually said that it couldn't they said there was no way it was going to happen. Instead, this is actually an historic
victory for administration that has been craving over the past 12 months a massive win. Tax reform is the biggest victory yet. And it helps smooth
the disappointment of actually not replacing Obamacare, which Republicans failed at earlier in the year. As you can see, though, throughout the
year, it's actually been economic issues, where the president has actually made the most progress. I'm talking about withdrawing from the TPP,
obviously tax cuts, withdrawing from the climate pact, as well. Jason Furman was the head of the White House counsel of economic advisors under
president Obama. He joins us live now. So, Jason, we have so much to talk about.
JASON FURMAN, FORMER CHAIRMAN, WHITE HOUSE COUNCIL OF ECONOMIC ADVISORS: Excellent.
ASHER: It was a pretty interesting I have to say. Give us sense of what - - I mean, I know you're what the disadvantages are for the tax cuts. But what are the advantages?
FURMAN: Look, the United States tax code was in need of reform. Our tax rate on corporations had fallen out of step with the rest of the world.
There was more that could have been done to create an incentive for investment. So, I think there was a need for tax reform. The question is
whether this tax reform is a one, or was this one a squandered opportunity And I certainly think it's the latter.
ASHER: OK. But there is one big benefit. And that is this idea that U.S. corporations had parked billions of dollars overseas for a long time now.
A lot of people are saying that he corporate tax rate reduced to 21 percent, we could see a lot of that money coming back. Isn't that a plus
side?
FURMAN: Well, most of that money is actually here in the United States already. It's in American bank accounts that are labeled on the balance
sheets as belonging to the foreign subsidiary. So, Google Ireland has that money, and it may have that money already here in the United States. So, I
don't think we're going to see a big influx of money into the United States. I don't think we're going to see a big set of investment in the
United States as a result of this.
ASHER: OK. The one thing that the President has been talking about is this idea that, you know, it's going to help boost jobs. Which is
questionable, because we're already at pretty much full employment. But he also believes that it's going to help wages. Under President Obama and
under Donald Trump, quite frankly, wages have remained stagnant. If it's not tax cuts that's going to help wage growth, what will?
FURMAN: Look, I think we need more productivity growth in our economy. I think tax reform well-designed would help -- would have helped with
productivity growth. More investments in infrastructure, in research, expanding international trade, investing in education and bringing more
immigrants to this country, who are really innovative and contribute to our productivity. I think those are all the types of steps that would help
raise wages across the board.
ASHER: You know, about -- maybe about an hour or so before I came into the studio, before I anchored the show today, we got some interesting news from
AT&T. They're saying because of the tax cuts, they're saying that they plan to give a special $1,000 bonus -- that's not chump change -- to more
than 200,000 employees. And also, they're going to spend at least $1 billion to create at least 7,000 hard hat jobs. Listen, I don't know if
more companies are going to be following suit, but that's a pretty big deal just from AT&T alone.
FURMAN: Right. Well, think AT&T's -- there's a little bit of a political stunt to that whole thing, too.
ASHER: OK.
FURMAN: And they've been lobbying pretty hard for this tax cut. But I don't know what they invest over a decade. I think it's something like
$100 billion, so 1 percent increase their investment over the next decade, I think that's perfectly possible.
ASHER: But listen, who wouldn't mind getting an extra $1,000 over Christmas, I'm just saying.
FURMAN: That's a great thing that AT&T has done. I'm glad they did a thank you note together.
Jason Furman, thank you so much. Appreciate you coming on the show.
Poland's president has signed controversial bills into law overhauling the judiciary, while dismissing claims his government is attacking the rule of
law. It's prompted a punishment from the European Commission has invoked article 7 saying there is a clear risk of serious breach of the rule of
law.
(BEGIN VIDEO CLIP)
FRANS TIMMERMANS, EUROPEAN COMMISSION FIRST VICE PRESIDENT: The common pattern of all these legislative changes is that the executive or
legislative powers are set up in such a way that the ruling majority can systematically, politically interfere with the composition, the powers of
the administration and the functioning of these authorities. Thereby rendering the independence of the judiciary completely moot.
(END VIDEO CLIP)
ASHER: Joining me now from London is Helena Chmielewska-Szlaifer. She is an assistant professor at Kozminski University. Helena, I hope I
pronounced your name perfectly. Please correct me if I did not.
HELENA CHMIELEWSKA-SZLAIFER, ASSISTANT PROFESSOR, KOZMINSKI UNIVERSITY: Very well.
ASHER: OK. Just walk us through what exactly this means for democracy in terms of what the Polish government is signing into law.
CHMIELEWSKA-SZLAIFER: Well, this means that the judiciary will be essentially dependent on the executive power, which means the current
government.
ASHER: And just explain to our audience who might not be aware what exactly these two controversial bills actually are.
CHMIELEWSKA-SZLAIFER: Well, one changes the way that the Supreme Court is -- how it functions, and how the members of the Supreme Courts are
selected. And the other one concerns the council of -- the National Judiciary Council, which recommends members of the judiciary. So, there
will be changes in the retirement age of the members of the Supreme Court, which will also apply to the head of the Supreme Court, Malgorzata
Gersdorf.
[16:35:00] And so this is one thing. And this is unconstitutional. This new bill that the president said that he would sign is in this sense
unconstitutional. And the other bill, which concerns council of -- the National Council of the Judiciary will change the way these new members of
the judiciary -- the judges are selected. So, before they were recommended by the judges. And now they will be largely selected by members of the
parliament, which makes the selection basically political.
ASHER: So, in terms of how the EU is responding, obviously, they're not going to let this go quietly. They're basically stripping Poland of voting
rights. I'm just curious. Do you think that this could actually -- this sort of confrontation between the EU and Poland could end up leading to
dialogue? Do you think that Poland could actually back down? What are your thoughts on how this is going to resolve itself?
CHMIELEWSKA-SZLAIFER: Well, we should all keep our fingers crossed that this will happen. But right now, the outlook isn't very bright. The
president said about an hour or two hours ago that he is surprised by the decision, and that this is a completely political decision, and that the
changes in law that he said that he would accept are -- will only enhance the Democratic rule in Poland. So, he has a very different opinion than
the EU.
All right. Ms. Szlaifer, thank you so much for being with us. Appreciate that.
CHMIELEWSKA-SZLAIFER: Thank you.
ASHER: The South Korean bitcoin exchange, UBIT is filing for bankruptcy following a series of hacks. In the latest incident, cyber criminals
actually stole nearly a fifth -- a fifth of its client holdings, about 17 percent, to be exact. It's the second time this year that the exchange has
been raided. In April it lost $35 million.
Luke McNamara is a senior cyber threat intelligence analyst at FireEye. And joins us live now. Thank you so much for being with us.
LUKE MCNAMARA, SENIOR CYBER THREAT INTELLIGENCE ANALYST, FIREEYE: Sure.
ASHER: So obviously, bitcoin is a very volatile crypto currency. It's risen roughly around 2,000 percent so far, this year. It's been on a wild
ride recently. What does that mean in terms of the priorities that we should all have in terms of making it safe and ramping up security
MCNAMARA: Well, I think you're right it's the fact that it has appreciated so much in value this year means that it's attracting a lot of interest
from various cyber criminals. And in this case, we have noticed, you know, starting really this year, North Korean actors that previously we have
linked to the North Korean government, can traditionally carry out cyber espionage and cyber destruction activities actually pivot to start going
after places like cryptocurrency exchanges in South Korea in order to help bring in cash as sanctions have ratcheted up this year.
ASHER: So, what can be done about that then?
MCNAMARA: I think one is user security. Just educating users on proper security methods, using things like two-factor authentication. You're also
seeing just last week the South Korean government came out and instituted some new proposals and regulations. Some of which are going to increase
the security that these crypto exchanges are required to operate under.
ASHER: So why have these exchanges just been so slow to respond to the threat from hackers?
MCNAMARA: I think you can't really necessarily place the -- all the blame on the cryptocurrency exchanges. I think in some cases we're seeing these
same actors going after the traditional financial sector, they are having success there. So, when you're up against an adversary like a nation state
that has resources behind it, it becomes difficult to defend yourself, regardless of who the target is.
ASHER: So, to people at home who might be considering possibly investing in bitcoin, they look at the numbers, they look at the massive jump, and
they're thinking, hmmm, maybe I should get in at some point, what do you think they need to be aware of?
MCNAMARA: I think they need to be aware of these adversaries that are out there. Some of them are more run-of-the-mill cyber criminals. And I think
that the security required to properly manage and secure your private keys, which are necessary to secure your wallet and the funds in that wallet,
that's really paramount in this space. So, using proper security hygiene, that is something that is really essential for users to keep in mind.
ASHER: All right Luke McNamara, thank you so much. Appreciate that.
MCNAMARA: Thank you.
Asher: First, she lost her job. Now she's under investigation there is new trouble for Africa's richest woman. You'll hear from her, next.
[16:40:00] (COMMERCIAL BREAK)
ASHER: Welcome back everybody. One of Africa's richest women is actually under investigation over possible corruption. Isabel dos Santos. She is
denying any wrongdoing after claims she misused funds while she ran Angola's powerful state oil company. Let me tell you little bit about her.
She is believed to be Africa's first female billionaire, she is believed to be the richest woman on the continent. She made her fortune thanks to her
powerful family, and a little bit of her own private investment, as well. She has stakes in several big Angolan and Portuguese companies like Banco,
BPI and the media company NOS. And was also head Sonangol, that's Angola state oil company as well.
It is one of the biggest firms in what is Africa's second biggest oil- producing nation. Dos Santos was actually appointed by her father who was actually president of the country for about 38 years, that's president Jose
Eduardo dos Santos. He gave her the job just before he left office in September after decades in power handing over to the current president.
He did not keep her around for very long. In fact, he removed her from Sonangol just last month. Isabel dos Santos told me her fortune doesn't
depend on her family ties. And when I spoke to her last week she said she actually earned everything herself. Take a listen.
(BEGIN VIDEO TAPE)
ISABEL DOS SANTOS, RICHEST WOMAN IN AFRICA: When you work in private environment like I do, I work in the private sector, I'm an entrepreneur, I
build businesses. It really doesn't matter who your parents are. The question is, are you able to deliver a product or a service of quality and
at the right price.
And can you convince the consumer to buy your product. I mean, nobody is going to buy your product because you're somebody else's child. That's a
ridiculous thought.
ASHER: So, the fact that you believe that, you know, you earned your success, you worked hard for it, you deliver the right product as you say,
and then the current president, you know, waltzes in, essentially removes you from your position from Sonangol, I'm just curious, given that the
current president was basically mentored by your father, groomed by your father, did that feel like being stabbed in the back?
DOS SANTOS: We came into Sonangol -- the new board was appointed in June 2016. For a very specific purpose. The company was in prebankruptcy
stage. It was very much an issue of balance sheet. Let's look at the balance sheet, and let's get that balance sheet more solid, more robust.
And we did that. We had 17 months to do it. Could we have done better if we had 24 months Probably. But I think we left the company in a good
place.
ASHER: OK. You have a sense of achievement. But how did it feel? What was your reaction to the fact that you were just like that removed from
your position, in a position that you so you worked very hard at?
DOS SANTOS: I think at some point, perhaps the vision of transformation changed, and the new government had other priorities, and their priorities
are aligned elsewhere.
[16:45:00] And also, we did lose a shareholder support, and to transform a company without shareholder support is very difficult. In that sense it
was best for the new board to step in and to follow the new vision that the government had going forward.
(END OF VIDEO TAPE)
ASHER: Isabel dos Santos, giving me very diplomatic answers in that interview I conducted a couple days ago. Alex Vines is the head of the
Africa program at Chatham House, he joins us live now.
Thank you so much for being with us. Why do you think the new president of Angola is targeting to dos Santos family so aggressively?
ALEX VINES, AFRICA PROGRAMME HEAD, CHATHAM HOUSE: Well, the new president Joao Lourenco is targeting some really dos Santos family. And Isabel dos
Santos you mentioned in your clip that she had been removed as the Chief Executive Officer of Sonangol, the state oil company. That was for a
simple reason that the Angolan oil production is on a trajectory of decline.
The government last week announced oil production in Angola will have declined by 36 percent by 2023 unless they turn things around. So, Isabel,
in her interview with you, was right to say that she had stabilized the company. But to really build up business confidence and move forward, the
new president, Joao Lourenco, had no choice but to remove her and bring in a new board and a new vision. So, she didn't do badly. The state of the
oil industry in Angola is so serious, it needed new approach.
ASHER: It's interesting though, because, you know, even though I understand the oil prices have fallen and it's had a massive effect not
just on Angola, but also Nigeria, were I am originally from as well, the fact remains that a lot of people thought Joao Lourenco, was going to be a
loyal puppet to the previous president, and he wasn't. He is his own man. And I think that might have caught a lot of people including Isabel
herself, by surprise.
VINES: I'm not sure it really did catch Isabel that much by surprise. There was going to be a change process. Yes, it's had to be quicker, I
think. The Angolan way is usually more gradual. The Angolans have a term, gradualismo. That's how the process would have been about, but the economy
is in such a dire situation that needed to quicken the pace.
Basically, oil is the goose that lays the golden egg. The whole economy revolves around oil. Saving the Angolan oil industry and bringing in new
investment, there was no choice for the new president. He had to do it.
But let's give Isabel dos Santos some credit also. She convinced her father to step down as president after almost 30 years in office. It was
her in particular that convinced him that there needed to be a smart transition. So, I think history will generous to her in some ways, too.
Longer-term, when we write the history of this.
ASHER: Yes, that is interesting, but you know. Also, she has said she believes there is a campaign of defamation against her, those are her
words. But just in terms of the Angolan economy, oil prices have obviously been on a downward trend. What is the Angolan economy to do from this
point forward especially I guess, the president, the brand-new president to turn things around.
VINES: Well, Joao Lourenco as I think approaching it in the right way which is to try and stabilize the economy basically bring back more
investment into the oil industry in the short-term. Get the international oil companies confident in investing in looking for oil and gas so that
their new greenfield developments. Because at the moment it has reached maturity and is on decline as I have already said.
Secondly, it's really critical to diversify this economy away from its addiction to oil money. This isn't sustainable. Angolan officials always
talk about diversification, but they don't really have much of a good idea about doing it. And here I think, this is people like Isabel dos Santos
can prove that they truly are good business people, and not relying on family connections. By showing that they grow businesses both of size and
success. That's what Angola needs, particularly outside the oil industry.
ASHER: Alex, thank you so much. Appreciate that.
And by the way, you can actually see more of my interview with dos Santos on "Marketplace Africa" my show that airs this Friday at 5:15 PM
Johannesburg time.
In today's business world ethics and social responsibility dominate the headlines. Sole Rebels is a foot ware company based in Ethiopia. It
success is proven the business and ethics go hand-in-hand. It's the latest in our "TRADERS" segment.
(BEGIN VIDEO TAPE)
UNIDENTIFIED MALE: On to these feet go shoes that have already been on a journey. They belong to Tom Hogan, an ethical consumer. He made the
conscious decision to buy them from a company that profits by fair trade in footwear, made and designed in Ethiopia.
[16:50:00] BETHLEHEM TILAHUN ALEMU, FOUNDER SOLE REBELS: There was nobody to create a product or a service that we had around the village. So, I
started to just try something new. So, I started Sole Rebels to just try something now.
UNIDENTIFIED MALE: 12 years later, Sole Rebels has employed thousands of Ethiopians from all walks of life. From those whose job it is to collect
and to cut recycled car tires to make these shoes, to the marketeers we turn the ground into a global e-commerce success story. Selling shoes
online from Africa across the world.
The company says the comparably high wages it offers in its use of recycled products make it one of Africa's few fair-trade shoe manufacturers.
ALEMU: the story that we have, the story that we tell through the product that we produce touch people. I think Holly wants to engage with a
specific brand is changing.
UNIDENTIFIED MALE: The tradenomics of the ethical economy is a growing influential voice in business. What started as a protest movement in the
1960s is mainstream today. The public has a preference for companies with a green or ethical footprint. And want more information about how their
goods are made. Evidence of ethical trading is expected to drive consumer choices among the millennial generation, with brand trust playing a key
role.
ALEMU: Every year we're growing. We are building a new facility for Sole Rebels and when we finished that we are able to produce 1500 pairs per day.
Not only that, we are going to be able to hire another 350 people to our company.
UNIDENTIFIED MALE: Sole Rebels success, has allowed her to branch out into one of Ethiopia's already famous export products, coffee, it's the product
already worth $1 billion a year to the country's economy.
Across the world, caffeine addicts and connoisseurs drink thousands of Ethiopian brews every day. Many without thinking about where the bean is
from. Or how it made it into their cup. At Alemu's new cafe, The Garden of Coffee, she's hoping to change that.
ALEMU: My passion is not only just great products, but really introducing Ethiopian culture and ethos in products and materials to the rest of the
world.
UNIDENTIFIED MALE: With both the coffee that put a spring in the step and the shoes worn to take a great leap, Alemu is proving that online
businesses can thrive by selling products with sole. And she's hoping to inspire others to follow in her footsteps.
(END OF VIDEO TAPE)
(COMMERCIAL BREAK)
ASHER: It has been a long year, and we saw hurricanes, the quakes and wildfires all leave behind a path of destruction and loss. According to
insurance company Swiss Re, the price tag actually jumped to $306 billion in 2017 far beyond last year's total.
[16:55:00] Clare Sebastian joins us live now. It's interesting, because all of these natural disasters actually happen -- a lot of them happen in
the Americas. Who pays for it? Is it insurance companies?
CLARE SEBASTIAN, CNN CORRESPONDENT: Well, a lot of it is the insurance companies, Swiss Re says $136 billion is the total of insured losses over
the past year. 93 billion of that from those three hurricanes that hit in the US in August and September.
Don't forget this is the first time in 25 years that we saw a category five hurricane make landfall in the U.S. so yesterday insurance companies are
picking up the bulk of it. Swiss Re has in fact made a significant loss in the first nine months of the year itself because of these hurricanes
specifically. But it is also that the government has to do it, FEMA is giving aid, they are kind of an insurer of last resort.
But on top of that people have to get creative. We've even seen crowdfunding, receiving aid agencies have to step in, and I think given the
scale of the disaster, that are covered such a wide geographic area, that it was so many different locations at the same time, so many types of
businesses and homes and property affected, I think individuals and businesses are also out-of-pocket after this.
ASHER: And a lot of people talk about the fact that this could be partly to do with climate change. And if it is, these disasters could become more
frequent.
SEBASTIAN: Well, there is suddenly a debate raging about whether or not these storm-- said -- wildfires aren't happening because of climate change,
but one thing, Zain, that scientists tend to agree on, is that climate change has the power to supercharge the storms when they happen.
So, for example Harvey in the U.S. there was a study out recently that estimated that the rainfall that happened four days of rain after there was
three times more likely to happen in 15 percent more intense because of climate change. So, this is really a problem and Swiss Re's point is the
people have to try to plan ahead, to make contingency plans/
ASHER: So, we don't necessarily know whether it's climate change or not. But we know that things are changing. All right, Clare Sebastian, live for
us there. And that, my friends is QUEST MEANS BUSINESS. I am of course Zain Asher in New York.
The news continues right here on CNN. Don't go away.
END
