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Quest Means Business
White House Hits Back On Comey Revelation; Trump Reconsidering TPP Trade Deal; Western Powers Strike Syria Targets after Suspected Chemical Attack; Palestinian Officials Say At Least One Person has Died, 960 Injured in Gaza Protests; Trump Pardons Ex-Cheney Aide Convicted of Perjury in CIA Case; Roma Faces Liverpool, Bayern Faces Madrid in Champions League Semi- Finals. Aired 4-5p ET
Aired April 13, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] RICHARD QUEST, CNN HOST: So, now, even on Wall Street, Dow Jones Industrials, well, it started up and then it went down and it
remained, we're off the lows of today and now, come along now to the business.
Sorry, that was a wimpy gavel on Friday, it's the 13th of April. Tonight, the mafia boss and the slime ball, this is Donald Trump and James Comey
trading harsh words at a crucial time for the White House.
Still calling at the comeback, some of the countries are worry of Donald Trump's TPP plans. I will Australia's former Prime Minister about whether
it is possible and Wall Street woes, big bank stocks falling and this is despite record results.
I am Richard Quest, live from the spring New York City where it is 78 degrees Fahrenheit, gorgeous day in the big apple and where I mean
business.
Good evening. Tonight, President Trump is engaged in an extraordinary war of words with the man he fired as the FBI Director General, James Comey.
In the last hour, the White House Press Secretary, Sarah Sanders tore into Comey saying his new book on the Trump administration has no credibility.
(START VIDEO CLIP)
SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: The American people see right through the blatant lies of a self-admitted leaker. This is
nothing more than a poorly executed PR stunt by Comey to desperately rehabilitate his tattered reputation and enrich his own bank account by
peddling a book that belongs in the bargain bin of the fiction section, instead of being remembered as a dedicated servant in the pursuit of
justice like so many of his other colleagues at the FBI, Comey will be forever known as a disgraced partisan hack that broke his sacred trust with
the President of the United States, the dedicated agents of the FBI and the American people he vowed to faithfully serve.
One of the President's greatest achievements will go down as firing Director James Comey.
(END VIDEO CLIP)
QUEST: While President Trump raged Comey on Twitter early on Friday and called him a weak and untruthful slime ball. Admitting, it was a great
honor to fire him. It followed Comey's first TV interview promoting his tell-all book. He was asked about lurid allegations in the infamous
dossier of material that Comey supposedly he compiled on Donald Trump.
(START VIDEO CLIP)
UNIDENTIFIED FEMALE: Did you believe his denial?
JAMES COMEY, FORMER FBI DIRECTOR: I honestly never thought these words would come out of my mouth, but I don't know whether the President of
United States was with prostitutes peeing on each other in Moscow in 2013, it's possible, but I don't know.
(END VIDEO CLIP)
QUEST: Well, but then again, he has never expected to hear that on a business program or indeed on any program.
But beyond the salacious details, Comey's book lands blow after blow on the 45th President. Even comparing him to a mob boss. Now, hear what it says,
" The silent circle of assent. The boss in complete control. The loyalty oaths. The us-versus-them worldview. The lying about all things, large
and small, in service to some code of loyalty and so forth and so on. But morality above the truth."
Now, Trump's inner circle is now under considerable legal pressure. Just look who we've got. We've got Michael Cohen, the personal lawyer under
criminal investigation and his offices have been raided along with his hotel room.
Jared Kushner, his son in law, faces a probe by federal prosecutors. Paul Manafort, probably in the most serious trouble of all at the moment
indicted on several counts of money laundering that could send him to prison pretty much for the rest of his life.
And Michael Flynn, former lieutenant general and former of course, National Security Adviser for a very short period of time who has pleaded guilty to
lying to the FBI and is now believed to be cooperating with the counsel.
Somewhat extraordinary that you and I are talking in such terms. Asha Rangappa is a former FBI special agent, CNN's legal and national security
analyst. All right, I don't even know where we begin to parse this mess and let's look first of all at the allegations in the Comey book, the
serious allegations in the Comey book that the President is untethered from the truth and unethical.
But the President says, the man is a slime ball.
[16:05:16] ASHA RANGGAPA, LEGAL AND NATIONAL SECURITY ANALYST, CNN: Yes, you know, I think what we need to understand is that Comey is now speaking
as a civilian, and he is giving his own clearly you know, unedited impressions of his interactions with the President. Obviously, had he
still been in the FBI, this is not something that he could have ever said or written, and what he is trying to do is give a character assessment, a
behavioral profile if you will and this is his way of interpreting the words, the actions that he observed in his interactions.
I think that the downside to this is that many people still see Comey as almost speaking for the FBI, so to the extent that there is this pushback
or that it feels political then, there is a danger that that will be projected on to the FBI as an institution.
QUEST: So, if we take that as the political side and look at the legal side, and you look at all the people who are now in trouble. I mean, I
guess, you know, we are almost white waterish in the sense of what started as a land deal, ends up in an entire variety of other allegations and
criminal activity, and that seems to be the same thing here.
RANGGAPA: It seems like it, but I would be a little careful. Remember that white water was run by independent counsel, Kenneth Starr and that was
under a statute which expired in 1999 which gave him broad leeway. Actually, in response to his runaway train approach, that is why the
authority reverted to the Department of Justice to create guidelines for a special counsel, which actually is much narrower and requires approval to
go forward.
So, I think that we don't know right now how all of these things are related, but I think that they have to be in order for Rosentein to keep
approving them.
QUEST: Okay, but if you just - as I have it in front of me, you have got Michael Cohen. I mean, the allegations against him, we don't really know,
but the fact that a lawyer's office is raided, one assumes looking for - because the only evidence that will be able - that would not be privilege
would be evidence of a crime to some extent.
We have got the son-in-law, you've got Manafort and you've got Flynn who has already pleaded guilty. I guess, people want to know are the waters
starting to lap ever closer to the Oval Office?
RANGGAPA: I think they clearly are. I mean, once you have hit your personal lawyer, that is in your inner sanctum and I think just to go to
your earlier question, the question is how do these all fit together?
All of these people by the way have had contacts and interactions and dealings with various people in Russia, which gets to heart of Mueller's
mandate and various kinds of crimes including financial crimes, campaign finance violations, and other kinds of cooperation with foreign
intelligence could find their way into violations of criminal activity. We won't know until we see the indictment.
QUEST: Right, but let's be fair to the President in all of this at the moment, but in both sides, so far there is no - there is plenty of
allegations, but there is no evidence, there is no indictment, to use the President's words, there is no evidence of collusion. Nothing has been
brought forward on these substantive issue of election meddling.
RANGGAPA: That's true, and I think there you see the complication of the difference between a counter intelligence investigation and a criminal
investigation. So, when I was in the FBI, I was a counterintelligence agent, and there you are monitoring foreign intelligence activity.
Actually, very few of those cases ever see the inside of a courtroom. One reason is that you don't want to disclose sensitive methods and sources,
but then the other reason is that a lot of what spies do at least in the United States doesn't necessarily break the law.
So, what you see I think in Mueller's investigation is the way, I describe it is, if someone just showed you four scenes from a movie and then asking
you to make sense of the whole movie, you know, a lot of what is happening behind the scenes you won't see.
QUEST: Right. Thank you. Have a good weekend. Thank you very much. Now, as we continue this, all of these events, a White House source says
President Trump's mood has got to so bad, he is becoming unmanageable and he is lashing out. Kaitlan Collins is in Washington, which is a reversal
from the better mood that was said to be in as he is firing Tillerson and others and replacing them with his own people.
But this word, Kaitlan, unmanageable. This is dangerous.
[16:10:16] KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Well, and that's essentially been the President's state of mind for so long now,
which is why we have seen several top staffers leave the White House including, now that we have a separate Chief of Staff from who first began
with originally here, Richard.
But yes, this does seem to be the President's mood ever since those FBI agents raided the office and home and hotel room of his personal attorney,
Michael Cohen, someone who the White House still cannot say whether or not he actually still represents the President. Of course, he is now under
criminal investigation the Department of Justice says, but yes, we have seen the President incredibly angry about this, increasingly frustrated.
He has made that very clear on Twitter, in public in that rant he had with those senior military leaders here at the White House just this week, which
was supposed to be focused on how the administration is going to respond to Syria.
But instead, focus on the President's anger at that raid and anger at his Deputy Attorney General and Attorney General and the Special Counsel.
So, we certainly have seen that mood change here, Richard and has even been evident just as recently as today.
QUEST: Kaitlan, thank you very much indeed. Kaitlan Collins who is at the White House. Now, Donald Trump's musings on potentially joining the
Transpacific Partnership have brought back to reality, and it happens, it's a stunning reversal. We are talking here of course about the TPP, which
incidentally is now known as the CPTPP, but for the purposes of our discussion, let's stick with TPP.
In some regards, the horse has already vaulted. Eleven Pacific-rim countries have signed their own deal. The CPTPP. Now, it's without the
United States which was the TPP. In other words, thinking it has been the TPP, or the 11 minus the US, you get the idea. It's a real mess.
New Zealand's Prime Minister says, it won't be easy for Washington to simply go on to the CPTPP.
(START VIDEO CLIP)
JACINDA ARDERN, PRIME MINISTER, NEW ZEALAND: The CPTPP now is in the process of ratification. My sense is that we just continue and proceed.
If the United States, it turns out, do genuinely wish to rejoin, that triggers a whole new process.
(END VIDEO CLIP)
QUEST: Now, the 11 countries in the revised account, the Transpacific Partnership is much easier than the CPTPP. It accounts for about 13% of
the global economy. So you've got obviously Australia and New Zealand. You've got the Asia Pacific countries. You've got those on the west and
you've got Mexico and Canada.
Several members have responded cautiously to the apparent U-turn by the United States. Japan says, it will be extremely difficult to renegotiate
their existing deal. Australia's trade minister, Steven Ciobo says, "Washington's interest is welcome, but reopening talks to bring the US into
the club isn't a priority."
Now, we speculated exactly this point with Steven Ciobo back in February where I asked the minister whether it would be possible for the US just to
run back on again to the agreement.
(START VIDEO CLIP)
QUEST: How easy would it be for the US to rejoin?
STEVEN CIOBO, TRADE MINISTER, AUSTRALIA: Very straightforward. I mean, the original architecture stays in place, so the United States could come
back to the agreement, not a problem.
(END VIDEO CLIP)
QUEST: Kevin Rudd is the former Prime Minister of Australia and is now President of the Asian Society, he joins me from Harvard. Kevin, let's -
please, let's not waste too much time with all of the nice platitudes of all the countries saying we would welcome the United States back in again.
This would be a great thing for free trade in the future, blah-blah and all of that infinitum.
Let's concentrate instead on the reality of getting the US into the CPTPP?
KEVIN RUDD, FORMER PRIME MINISTER OF AUSTRALIA: Well, here is the bottom line, since the TPP 12 including American became the TPP 11 which is
without America, a few things have happened.
Number one, the original agreement has been changed. Not hugely, but about two-thirds of the chapters of the original agreement remain the same. One
third have changed, that includes a number of specific provisions which were then a fundamental concern for the United States relating to acute
forms of intellectual property protection, plus investor dispute resolution mechanisms. So, that's the number one problem. That is the text of what
we are talking about back then which was then judged to be unacceptable to both Republicans and Democrats.
Foreign American perspective has been weakened further. That's point number one. Point number two, the TPP 11 already know what a profound pain
the derriere it is to get these things ratified in your home countries and that is what they are all doing at the moment and thirdly, this thing, the
TPP 11 enters into force when six of the 11 states ratify that should be done by the end of this year.
So, the mechanical question is how do you get the Americans back in. I think there is a political way to do it, but they are the mechanical
problems we face.
[16:15:16] QUEST: You've got to admit, on the political side, it was a stunning reversal out of nowhere to suddenly say on a random Thursday in
April, yes, I am going to investigate, renegotiating. When every country has said, we are not prepared to renegotiate?
RUDD: Well, I think the understandable conservatism by the TPP 11 is this. They know that President Trump has shall we say, an unpredictable style.
He floated the TPP reentry possibility once at Davos and now again, but this has been the complete shock and surprise of Ambassador Lighthizer and
the trade hawks in the White House.
So, what the TPP 11 are waiting to see is, is this a thought bubble or is it real before they start to even think about constructing a process around
it. I think that's number one concern.
QUEST: And if you were in office and I am sure you are being consulted publicly and privately on this, is it your gut feeling that the US will in
reasonable order rejoin the TPP 11 or do you think this is just smoke?
RUDD: Look, you're asking me a question of deep politics about the White House which we were discussing in some depth in your previous and very
colorful interview, Richard.
I can't go there. I can't predict what is going to happen out of that, but what I can say to you is, the TPP 11 agreement is already a big global
agreement in global terms. It is 500 million people, 13% of global trade. It's a high quality trade agreement with big advances in intellectual
property protection, the treatment of state-owned enterprises, opening up government procurement to foreign provision, et cetera.
And therefore, if United States now wants to join, the battle in capitals in these TPP 11 capitals will be this. This is a huge political pain in
the you know where for us, but in geopolitics and geo-economics we want America back in the free trade world, so they will try and find a way
through, but the political difficult bar in those countries has been raised considerably by what has happened in the last 12 months.
QUEST: A suitably colorful answer from yourself, sir for which we are very grateful on a Friday evening. Thank you very much. Good to see you.
When we come back, two of the US banks report rising earnings and Wall Street's reaction. It went up, then it went down. We need to understand
why didn't the street like or at least reward, I should say what it saw from the markets.
[16:20:15] They are in the credit and profits of two of the biggest US banks, it wasn't enough to keep investors happy, and yet, think about it,
JP Morgan, Wells Fargo all did have a quality of numbers and overall pointed better earnings than a year ago and the shares all closed down.
For Wells Fargo, the reason was easy to spot. Possibly a billion dollar fine after it scammed money out of hundreds of thousands of customers.
That much we could say.
Guru La Monica is with me, and come on, explain how can you knock it out the ballpark and your share price goes down and the XPE is down.
PAUL LA MONICA, CNN CORRESPONDENT: Yes, this doesn't really make too much sense. I think the argument is that maybe when you look at JP Morgan
Chase, it's a bank that people knew was going to do probably really well. The market volatility has helped it. It also has not had the scandals that
Wells Fargo has. Jamie Dimon is well respected.
So, it's not a huge surprise they beat results and maybe, they just didn't beat by enough, which is always a silly reason to sell a stock in my
opinion. The same thing with Citigroup. The numbers were pretty good. Not a lot to be too concerned about. This is what we are going to get for
earnings for the next few weeks. This is pretty solid. People are expecting nearly 20% profit growth year over year. That should be good
enough.
QUEST: And if we look underneath those earnings numbers in the banks, where is the money being made? I mean, is it retail? Is it the investment
banking? The M&A stuff. Is money more difficult doing on the trading fund?
LA MONICA: Right, definitely. The volatility is a blessing and a curse. People do tend to trade more. We didn't want to have too much volatility
and get people scared out of the market. Consumer banking side is strong at both JP Morgan Chase and Citi, so that is I think an encouraging sign
for the average American that may distrust big banks because they think they are all part of the Wall Street machine.
Citigroup and JP Morgan Chase obviously, lend a lot of money to average consumers in form of credit cards, in mortgages and student loans and other
personal credit.
QUEST: Are all the banks making money the good old fashioned way? Bank charges? Interest on loans? You know, in a low interest environment or
are they doing it through financial comingling of the Wall Street business?
LA MONICA: It doesn't seem as if there is much of the finagling if you want to call it that, the Wall Street side of the business. The revenue
growth is there and these banks because some of some of the regulations put in place after the crisis, they have been forced to do more bread and
butter, vanilla banking and that's where you make your money, when you can lend out at one rate and take it into positive enough and pop it up the
screen.
QUEST: Take a look at the markets, take a look at the way the Dow traded and let's analyze this too. So, what happened over the course of the day?
I mean, we started off very good, and I mean, literally, out of the get go, that's the result. It evaporates by 10 o'clock.
LA MONICA: Yes, quite a strange day. JP Morgan Chase is in the Dow, that's obviously one of the reasons why...
(CROSSTALK)
QUEST: Boeing is off as well.
LA MONICA: Boeing is off as well. Goldman Sachs also in the Dow. They report next week, so that dragged down you know, the average as well. I
don't really know if there's much rhyme or reason to this one particular day of trading outside of the bank earnings. It seemed like a relatively
blissfully quiet day on the political front, despite some of the news later that A, you know, what's going on with the Trump administration, who knows.
QUEST: Nice to see you, sir. Have a good weekend.
LA MONICA: Thank you. You too.
QUEST: The European markets rally at the end of a week in expectation of strong US earnings, good to markets all above the flat line. Germany
faired the best of all as you could see, but that's still not hugely, but that's because again, let's see what was happening in New York and they
haven't really got much of an idea of the way things work and we're going to go pear shaped towards the close.
Now, there was change of thought. What do these things have in common? We need to just analyze it. What do they have in common? Well, you have the
personal check torn from the checkbook back in 1919. You have the humble post card - nice to see you. You have a handwritten letter and this one
was written by Abraham Lincoln and this. That part of a credit card where your signature goes. They are all under forms of writing, and they are on
the way out.
From today, in America, American Express, Discover and Mastercard in the US will no longer require a scribble on a slip when you pay the bill. Look, I
realized that Visa will do away with it tomorrow. I realized for most of you watching you are thinking, hang on, who on earth still signs a credit
card slip when you've got - you put your PIN number in.
In the United States the somewhat archaic, antique, prehistoric banking mechanisms of the credit card system means it's still up to the stores to
decide whether they want to see it. Now, it seems the signatures are no deterrent, so farewell to another bit of handwriting that slows down when
you have to sign in the middle of a store.
[16:25:16] Now, when we come back on "Quest Means Business" joining me to discuss come on, sir. The head of (inaudible) is going to discuss all
matters of criminality or something like that.
And I am Richard Quest, there is more "Quest Means Business" in just a moment. One of the director of (inaudible) is here, we will watch maybe
his final interview or we will be actually, as Europe's top police chief and Nordstrom is staring down its own Armageddon with a gleaming new
department store just a few hundred feet from where I am sitting. Why on earth would anybody want to build a brand new store in the heart of
Manhattan in the age of the digital retailing revolution. You will find out. This is CNN and on this network, the facts always come first.
QUEST: A US official says the tests have found chlorine and the sarin-like nerve agent in biological samples from Syria where a chemical attack took
place last Saturday. US State Department says Washington believes that Syrian government was behind the assault.
The White House says discussions about Syria are ongoing and western powers made the case for military action earlier at the UN. Our senior
international correspondent Nick Paton Walsh is in Northern Syria.
(VIDEO CLIP STARTS)
NICK PATON WALSH, CNN CORRESPONDENT: Richard, we're getting a much clearer picture now exactly what substance the US, UK and France believe was behind
all of this. I am hearing from one western official and my colleague, Ryan Brown at the Pentagon as hearing from a US official. They believe a sarin-
like substance was mixed in with chlorine and perhaps other chemicals according to samples that have been tested.
And we know from Nikki Haley, the US envoy to the United Nations that the United States, the United Kingdom and France have all separately tested
samples from Douma's attack over the weekend and concluded a chemical weapon was used. In fact, she went further to say that they have counted
in the United States 50 separate occasions in which Syria has used chemical weapons during the course of this war.
Quite a startling tally here and part of the body of evidence but France initially alluded to a couple of days ago to try and build momentum towards
what appears increasingly to be a likely military response, so we know the window is tight ahead of tomorrow's arrival of UN chemical weapons
investigators, the OPCW saying they'll be on the ground working from tomorrow.
I have to say, the optics don't look good if you're launching military strikes as the UN are investigating. A small window really of tonight
until they reach that potential conflict of optics there, Richard.
[16:30:00] QUEST: Lashing out at a former -- Nick Paton Walsh who is in Northern Syria, thank you Nick. The U.S. President is lashing out at a
former FBI Director James Comey over his new tell-all book on the Trump administration.
President Trump says Mr. Comey is a proven lead criminal liar. The book land blow after blow on Mr. Trump, even comparing him to a mob boss.
Fuming tens of violent Friday along the Israeli-Gaza border where Israeli soldiers used tear gas and live ammunition to break up Palestinian
protests.
At least one protester has died and close to a thousand people have been injured. It's the first trade week of Friday protests against Israel's
sealing of the Gaza border.
Donald Trump; U.S. president has pardoned Scooter Libby; the ex-chief of staff of the former vice president Dick Cheney. Libby was convicted of
perjury and obstruction of justice in 2007 in the investigation into the leak of a CIA officer's identity.
Roma will face Liverpool in the semi-finals of the Champions League after a stunning victory over Barcelona, Bayern Munich will play Real Madrid in the
other semi-final. Those teams, they face in less than two weeks.
Welcome back. The battle between the -- Donald Trump and the former FBI chief James Comey has twist the role of intelligence services into a
spotlight. It coincides with the change regarding Europe's criminal intelligence agency.
Rob Wainwright is stepping down as executive director of Europol. During his nine years in charge, Europol has become a leading force at fighting
cyber crime. It's a pioneer, it's in data technology to counter terrorist threats and fight money laundering across the world.
Now in the sixth week as Europol director, Rob Wainwright, good to see you.
ROB WAINWRIGHT, CHIEF EXECUTIVE OFFICER, EUROPOL: Hi, Richard --
QUEST: Thank you --
WAINWRIGHT: Glad to see you.
QUEST: When you look back on the nine years, what do you consider to be the achievement that you've done at Europol?
WAINWRIGHT: Just to make the organization more relevant, more able to help national authorities around Europe, indeed in the United States as well.
Fight a much more dangerous security threat.
You know we're processing exchanging nine times as much intelligence across our platforms than when we were ten years ago. Five times as many
operations than the level of complexities that I think are having an impact on helping institutions, governments fight cyber crime and terrorism for
example.
So you know, we've made some efforts, we've done some things that worked, others that did not, but I'm happy about the contribution that we've made.
QUEST: And dealing with the political realities of all the different members, all the different governments, the different forces involved. It
makes you a diplomat more than a policeman.
WAINWRIGHT: Well, that's a major part of my job, absolutely. And dealing with the political community, as you know, 28 different countries in the
European Union, trying to get them to understand from the police chief up to the prime minister, the importance of countering what is a much more
globalized threat of terrorism and cyber crime by exchanging more information and using platforms to run better operations to hit the
criminal organizations that are working against us.
QUEST: You can only do that if you have confidence in the forces in which you're cooperating with, don't you?
WAINWRIGHT: Yes, it's about trust. You know, it's about building trust over a period of time.
QUEST: So let me talk about cyber crime. When you started, yes, cyber crime, people have heard of and think, but it was nothing like what it is
today.
WAINWRIGHT: Today, just the latest operation finally got the guy we think was the head of a very aggressive cyber criminal organization, stolen a
billion dollars from a hundred financial institutions over a four-year period.
Using a level of social engineering, a malware for example that we haven't seen before in terms of really getting inside some of the major banks,
remote controlling the bank transfer payment systems, even the ATM networks.
That's a Hollywood movie stuff, Richard, that was happening.
QUEST: Right --
WAINWRIGHT: And that's the level we're dealing with now.
QUEST: Who is responsible in the sense, obviously the criminal is responsible. But you're left with the thing of the bank not having
sufficient -- the security protocols in place. Police forces not having intelligence on who may be committing these sort of things.
I mean, I'm not trying to do a blame game here, I'm trying to understand, are we inevitably going to have more of this?
WAINWRIGHT: I think we're seeing more of it, but we -- and the response to it. You name all of those people as the actors, the response to it is to
bring them together in more concerted community.
And actually, the level of engagements we have with banks right now is off the scale compared to what it was, as well as this -- the tech sector as
well. So one of the things we're most pleased about is the way we brought government's private sector law enforcement together --
QUEST: What -- if you need more of, because God, let's face it, bro, you are on your way out, how long have you got left?
WAINWRIGHT: Two and a half weeks, Richard.
QUEST: Now, I agree in the case of the U.S., they did manage to fire somebody on his last day, so he didn't get his pension. But that's not
likely to happen to you.
WAINWRIGHT: Well, please don't say that.
QUEST: So in your last interview here, have a go. What is it you want more? There's the camera, you can talk straight to your bosses, what do you
want more of?
[16:35:00] WAINWRIGHT: I'm not -- I'm not going to leave government services and talk about that, Richard. I'm just going to say what I've
always said. The value of international collaboration. Let's use platforms like Europol to exchange more information.
Let's bring the community of the willing venture into our institution to make sure that we hit the largest criminal organizations. That's my
message, always has been, always will be. And thank you for offering me the platform to say that.
QUEST: Do you need more money?
WAINWRIGHT: You always ask me that question?
QUEST: Yes, and the reason I ask you that is because when I interviewed the former head of Interpol, the guy who turned it all around, he always
said -- he once said to me, Richard, I need a billion dollars and they're not going to give me.
WAINWRIGHT: I don't -- we don't need that. You know, we all -- all we have done is interconnect the community of a thousand agency. So actually,
we're a relatively small institution, but we're sitting at the hub of an enormous community.
We need to trust reputation, credibility and opportunity far more than money.
QUEST: And finally, in a post-Brexit world, where the U.K., we've heard lots of talk about, well, the role that the U.K. will play. How essential
is it that the U.K. continues to be integrated into the intelligence network for Europe.
WAINWRIGHT: This is absolutely important that the European community stays together. The U.K. and others as well, that's an important part of the
Brexit process. But you know, I think also there's so many others that have to be involved in this process.
And that's why at 28 years of government service, Richard, nine years in established shop, decided to leave government service and do something with
a fabulous company called Deloitte. So I'm going to be still active in this space, and I want to make sure that therefore we can help industry to
fight cyber crime long into the future.
QUEST: Good to be an expert on cyber crime in the private sector.
WAINWRIGHT: I'm an expert on cyber crime now.
(CROSSTALK)
QUEST: This is my way of just -- no, this is just my way of wheeling you in. Yes, this is just my way of, you know, catching the cop. You're going
to come back and talk about it more with cyber crime.
WAINWRIGHT: I couldn't turn an invitation down from Richard Quest. What can I say?
QUEST: God, the diplomacy, and you just oozes the diplomacy. Good to see you.
WAINWRIGHT: Thank you for having me --
QUEST: And we still have a good retirement, but you're not retiring --
WAINWRIGHT: I'm not retiring, I'm going to work even harder to protect our institutions from cyber crime.
QUEST: He's good, he is good. We'll continue tonight on QUEST MEANS BUSINESS. A Russian court has banned telegram, which is this growing
messaging app favored by cyber criminals and terrorists.
And indeed, help save your officials -- well, definitely seen the officials of the Kremlin. Thirty one "QUEST EXPRESS" Samuel Burke told me why the
ruling against telegram happened.
SAMUEL BURKE, CNN BUSINESS AND TECHNOLOGY NEWS CORRESPONDENT: The FSB, the Russian Security Agency wanted the encryption key to get into the app to
presumably see people's conversations.
But of course, all of these apps will tell you they don't have the keys, only the user at the consumer level has the keys. Courts in Russia didn't
like that answer and they say the app will be banned though.
Right now, it's working. Interestingly, Telegram said in a social media post, they will circumnavigate, circumvent this ban by really using VPN
apps. They say in software that's already built in, but as you know all too well, Richard, we talked about this many times here on "QUEST EXPRESS"
and QUEST MEANS BUSINESS, lots of countries from China to Iran and Russia are cracking down on VPN apps which allow you to use an app as if you were
in another country like the U.S.
So we're going to see that's going to be much more difficult this time around to try and circumvent these bans.
QUEST: So Samuel, explain, the -- it's the same issue with WhatsApp which says it does not have the key, the encryption key, it is end-to-end
encryption. So if they don't have it, I mean the whistling in the wind, the security services asking for it.
If it does not exist, what they're suggesting, that they restructure the apps to create the back door?
BURKE: Exactly. What they would have to ask that they have an asset yet, it's very similar to the situation that we saw with the San Bernardino
terrorist attack, where we saw the U.S. Department of Justice telling Apple we want the key, Apple saying we don't have them.
So we would have to rewrite the entire software, create something new and different for our phones exact same thing that Telegram would have to do if
they want to comply with the Russian government.
So the Russian government is asking for something that doesn't exist right now. There have to be something totally altered.
QUEST: Samuel Burke talking to me earlier. New Zealand may have just killed its oil industry as it moves further away from fossil fuel. You're
going to hear from the head of New Zealand's petroleum association that says the prime minister's big announcement, he described it as a loose
lose.
[16:40:00] (COMMERCIAL BREAK)
QUEST: The oil industry in New Zealand is furious with the national government. Prime Minister Jacinda Ardern took energy companies by
surprise, saying no new offshore permits will be granted to explore for oil and gas.
New Zealand Petroleum Association says a policy shift will threaten jobs and force consumers to pay higher prices. The Chief Executive Cameron
Madgwick joins me via Skype. The Prime Minister says we must take this step as part of our package of measures to tackle climate change.
Why is she wrong?
CAMERON MADGWICK, CHIEF EXECUTIVE OFFICER, PETROLEUM EXPLORATION & PRODUCTION ASSOCIATION OF NEW ZEALAND: Good morning, good morning from New
Zealand that laced it -- it's a state that is actually dying to have no tangible effect on the world's emissions or dashing(ph) and date, not even
in New Zealand.
In fact, it will probably make it worse as the world will continue to produce fabric happens regardless with New Zealand does it, makes --
shipped the production to other parts of the world who have higher emissions in the way they produced them.
QUEST: But at the end of the day, the existing licenses of 22 of them, active offshore licenses, they will be allowed to continue as they
transition to mining permits and they could keep going for another 40 odd years.
So we are really talking about future licenses, aren't you?
MADGWICK: Well, of course, you know, the duration of the license and the hydrocarbons that might be produced from other -- during different burns,
the duration of the license happens in the whole right cycle of activities that might occur including the commissioner.
And so I highly doubt that any one of the existing license is out there, will have a 40-year duration. The reality is, we have ten years of natural
gas reserves in New Zealand today. And with global success rates and new discoveries, there are about tenth of both bank rescind.
You know, you're doing it to keep going with both and keep up with the expression permits.
QUEST: New Zealand's oil and gas is relatively and I use that term advisedly. It's a relatively small producer in global terms, you'd agree.
MADGWICK: Absolutely.
QUEST: In that case, surely making this environmental stand doesn't necessarily harm the macroeconomic position of New Zealand or indeed the
oil and gas industry. But could make a difference on climate control and environmental issues.
MADGWICK: Well, and I knew that unfortunately neither of both sentences -- and macroeconomic has picked up. And New Zealand has built a strong
reputation as a good place to do business that is as low sovereign risks and stable regulatory terms.
And the state of this nature without consultation with industry would appear to put it at risk, so it possibly goes beyond just their own safety.
QUEST: Right --
MADGWICK: It's to the -- is to the story, if you just let me --
QUEST: Sure --
MADGWICK: Adds to the story or reduction of the emissions. It will do nothing to reduce emissions. Indeed, it was likely to raise emissions
boldly and indeed in New Zealand we're willing to involving too from somewhere else.
[16:45:00] QUEST: Finally, Cameron, the -- it is -- I can see that it is worrying to you and to your organization, and indeed to the industry that
frankly, you have no wind of this.
Either you're a lobbyist, we're not lobbying hard enough or the intelligence you had didn't warn you that this was coming down the road. I
mean, this is a fairly dramatic step for you to have had no warning about.
MADGWICK: Well, yes, that's exactly right. And you know, one of our biggest concerns with this is the manner in which the decision was making -
- was taken, sorry. The government has said no for some time as it needs zero emissions by 2050.
So -- and we've been talking to the government for some time about the role of the oil and gas in that, and at no point has a ban on future
explorations being spoken about at all. Indeed, it wasn't even in the pre- election manifesto of our labor party.
So very difficult situation for us to find ourselves in. But of course, you know, we are actively engaging with the government on this very mix-up
and very deeply concerning our options going forward.
QUEST: Sir, thank you for joining us and again, good morning to you in New Zealand where it is of course already --
MADGWICK: Absolutely --
QUEST: Well and truly into a Saturday, thank you sir. Back to reality suits, digital models now in a cocktail bar, now Nordstrom is countering
online retailers, it's got a high tech store of the future. We'll give you a glimpse and it's just a couple of -- and I repeat, from where I'm sitting
and running.
(COMMERCIAL BREAK)
QUEST: So we're all familiar with Amazon's dominance of the retail industry's driven the old self brick and mortar stores into long and steady
decline. Retail chains seem to have a choice, innovate or die.
Nordstrom is betting big (INAUDIBLE) in the future. Clare Sebastian has been looking at their new store in Manhattan.
CLARE SEBASTIAN, CNN: Yes, Richard, it's a pretty bold. This on the face of it is not the time to be opening a full price, full size department
store in the middle of Manhattan. That's prime real estate.
But this is exactly what Nordstrom is doing and the store opened on Thursday. I went down when it opened. There were crowds outside and I
spoke to Jamie Nordstrom; he's the president of stores, about why he thinks this store is so well positioned to survive the digital future.
(BEGIN VIDEOTAPE)
JAMIE NORDSTROM, PRESIDENT OF STORES: You know, we're at 57 on the Broadway which is an iconic address in one of the most iconic cities in the
world. Originally, across the streets, we signed a deal, announced it about five years ago to build a flagship store in New York.
And if there's a category that can live by itself, it's men's, and because it's an existing building, then we could open it sooner, we're opening it
sooner.
SEBASTIAN (voice-over): What do you have in this store in today's retail environment?
[16:50:00] How much are you thinking of it as a gateway to ecommerce?
NORDSTROM: Oh, absolutely. We think about our market and New York is a great example. We don't think about how many customers are shopping in a
store, which is shopping on our website. We think about how can we get more customers to buy clothes from us and maybe less from somebody else.
It's about making the customer experience better. So everything from mobile check-out, we can check out a customer on a mobile device anymore in
the store. We've got a virtual reality suit-sizing experience.
We've got express we tend to even come in and scan your receipt, drop your return in the box and you're out the door. We've got 24-hour crib site
pick-up. If it's 2'oclock in the morning and you realize that you just got in town and you forget your shirt, we can take care of you.
SEBASTIAN (on camera): Twenty four hours?
NORDSTROM: Twenty four hours, we're going to be here all night long and you can go on a mobile app and do a byline pick-up in store, come by, we'll
open the door and we'll hand you your item.
SEBASTIAN (voice-over): Right, a pretty big selling one, I guess you can come in and have a drink while you shop?
NORDSTROM: Yes, I think, you know, if you think about great places where you want to be, and whether that's a great hotel lobby or a restaurant,
places where you want to go meet friends, this is usually a part of that experience.
You want to be in that kind of place --
SEBASTIAN: You don't think life is probably --
(CROSSTALK)
NORDSTROM: Yes --
SEBASTIAN: Building?
NORDSTROM: Yes.
SEBASTIAN: So you can --
NORDSTROM: So --
SEBASTIAN: Shop and drink it.
NORDSTROM: In the dressing room for sure.
SEBASTIAN: I want to offer you that with the economy downright your feet, a lot of people are very happy about the tax cuts, certain, very worried
conversing about a trade war and they're concerned with tariffs. What is your biggest concern?
NORDSTROM: We're not economists, we're very fearless.
SEBASTIAN: But if these tariffs, its latest round did come in, that would hurt your business.
NORDSTROM: Well, I think that there's obviously impacts with importing much of the product that we carry. It's important most of the products we
buy comes -- we buy domestically from suppliers in the U.S., they're going to have to deal with those pricing increases.
While those prices increases will likely get passed on to the customer one form or another. And we'll be mindful of that and we'll deal with that
accordingly. The impact on how we operate the business is hard to say that it'll be meaningful.
(END VIDEOTAPE)
SEBASTIAN: So the U.S. tariffs create an environment where it's pretty difficult for stores just to actually plan. I will say that the National
Retail Federation actually met with the president this week on their request, they said the Fed -- they talked about deregulation and the tax
cut, but I think tariffs certainly have been part of that discussion as well.
QUEST: All right, so Nordstrom makes its name in service, West Coast, San Francisco-originating store. It's positioning is quite good, just off
Columbus, got -- just a few --
SEBASTIAN: Right --
QUEST: Feet from where we are, it doesn't make sense.
SEBASTIAN: So this is a really interesting question because Nordstrom is actually been trying to take itself private over the last few months. It
actually took that off the table. A couple of weeks ago, I asked Jamie Nordstrom if it's still on the table, he said, you know, we're always
looking at that.
But the reason they wanted to do that was so they could make these kinds of investments to compete without the wishful eye of Wall Street, you know,
getting in the way, without the pressure to make a profit.
The investments they put into this men's store, actually did eat into their profits in the last quarter.
QUEST: But you know, yesterday, we had Bed, Bath and Beyond --
SEBASTIAN: Yes --
QUEST: Share price dropped 30 percent because it's not going to make its limits. Now, that's some bargain base really good --
SEBASTIAN: Yes --
(CROSSTALK)
QUEST: Bathroom, kitchen, stuff across the country. You've also had Wal- Mart and that it's announcing new areas. It's too much to say old-style brick and mortar is gone.
SEBASTIAN: It's too much to say, but we are still in transition, Richard. I think they are -- the positive holiday season in front of us still
(INAUDIBLE) us into a bit of a full-term security.
We are not out of the woods, maybe it's just out of the report that retail default spiked in the first quarter of the year to the record. We've just
seen Toys R Us liquidate.
We are still in a moment where if they want to compete, they really have to invest in things that make it easier, quicker, makes the brick and mortar
experience more seem less with the online experience. You had Jamie Nordstrom saying, he doesn't mind where they buy, as long as they buy from
Nordstrom.
So any brick and mortar store has to be a gateway to ecommerce.
QUEST: Busy week. How do you make of the -- what do you make of the week? I'm going to go to look at the markets, it's like what do you make of the
week?
SEBASTIAN: It's another -- Richard, I think this is what we keep saying they're moving within the range, so we end the week not really very
different from where we started it.
They're stuck in this kind of volatile range, just up and down on every new headline.
QUEST: All right, I'm going to go and look at the numbers, thank you, have a good weekend, bye-bye -- get this money. These are the way things are
looking. If you remember how the graph or the chart of the Dow went throughout the course of the day.
In the first 45 minutes, it was heavily positive on the back of the bank numbers. But it literally just dwindled and disappeared, as a result damn
the man in lighting, we'll have red, please, thank you sir.
No records on any market. Dow off 122, not off the low -- it was off the lows of today, S&P down, Nasdaq -- I think we look at the percentages, and
it's interesting, you do get very similar numbers across the three major broader indices.
Interestingly, GE was the best performer on the Dow. The Wall Street journal reports that it was exploring ways to break itself up. Just shows
you it was up something -- it was up 3 percent to 4 percent at one point, finished up about 1.5 percent to 2 percent for GE.
[16:55:00] That's really is a stock where you ask, could it get any worse? And probably not, and then something usually makes it get a great deal
worse. We will have a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, visitors to the United States are always amazed, tourists are astounded. When they go to use their credit
card and they're still asked to sign a little chit of paper instead of using a pin number.
The reality is that the credit card system in this country might be sophisticated at one level but seems to be antiquated and positively
antediluvian compared to the rest of the world.
Only some cards have chips or a value for chips and almost none have pins when it comes to credit cards. And yet, when they moved here four years
ago, the bank said to me don't sign the back of your card, instead was the quest to write 'ask for ID', which I duly did.
I can tell you in the last four years, only one person has ever asked me for my ID as a result of that. And I assure you, I have used that credit
card on more than one occasion.
The reality is the entire premise here is if your card is stolen, you would have stopped it. So much for that which is why credit card fraud is at
record highs and the police forces are all paying for it.
Put it all together, the lack of a credit card signature means nothing. The reality is it was moved to a pin chip and pin system as fast as
possible. And only then can we really say that the U.S. credit card system has entered the 21st century.
And that's QUEST MEANS BUSINESS for tonight, I'm Richard Quest in New York. Whatever you're up to in the weekend ahead, I hope it's profitable.
Please, let's do it again on Monday.
END
