Return to Transcripts main page
Quest Means Business
The British House Of Commons Voted Resoundingly To Reject Theresa May's The Prime Minister's Brexit Deal For A Second Time; Why The FAA And United States Have Decided Not To Ban Boeing 737 MAX 8; College Coaches, CEOs, And Celebrities All Caught Up In A Stunning Cheating Scandal In The United States.. Aired: 5-6p ET
Aired March 12, 2019 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is CNN Breaking News.
RICHARD QUEST, ANCHOR, CNN: A very busy night with breaking news. A warm welcome on a cold night in London. I'm Richard Quest just outside the
Houses of Parliament where we begin with the breaking news that the crucial Brexit vote that just took place at Westminster.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: The 'ayes' to the right, 242; the 'no's' to the left, 391.
(END VIDEO CLIP)
QUEST: A short time ago, the British House of Commons voted resoundingly to reject Theresa May's the prime Minister's Brexit deal for a second time.
Struggling to speak after nearly losing her voice, the Prime Minister addressed lawmakers afterwards when she said still believes an agreement is
possible. The opposition leader is making it clear, her time is up.
(BEGIN VIDEO CLIP)
THERESA MAY, BRITISH PRIME MINISTER: I am passionate about delivering the result of the referendum, but I equally passionately believe that the best
way to do that is to leave in an orderly way with a deal, and I still believe that there is a majority in the House for that cause of action.
JEREMY CORBYN, LEADER, LABOUR PARTY: The government has been defeated again by an enormous majority and they must now accept their deal, their
proposal, the one the Prime Minister has put is clearly dead and does not have the support of this House. And quite clearly, no deal must be taken
off the table. We have said that before and we'll say that again. But it does mean the House has got to come together with a proposal that could be
negotiated.
(END VIDEO CLIP)
QUEST: So, Parliament is going to vote again on Wednesday and that will decide if it wants to leave without any deal at all, somehow, the European
Council President says it is now more likely, a team of reporters -- Bianca is of course with me here at Westminster. Nina dos Santos is in Downing
Street, Erin McLaughlin is with us in Brussels for the European perspective. Now stay with me, Bianca. I am going to go first of all to
Brussels. Briefly, let's get a feel from everybody please, a feel for where we stand now that this vote and decision has been taken. Bad news
from Brussels. They are basically saying, Erin McLaughlin, there's no more.
ERIN MCLAUGHLIN, CORRESPONDENT, CNN: Yes, that's right, Richard. They're saying that they regret the vote. The E.U. institutions, E.U. leaders very
much wanted to see this hard negotiated deal that they all fought for, get across the line tonight at Westminster, obviously, that is not the case.
It wasn't entirely unexpected, this outcome.
They're saying they regret that, but that the U.K. can no longer look to the E.U. for answers. The ball is firmly in Westminster's court. We heard
from the chief Brexit negotiator, Michel Barnier take to Twitter essentially just that, let me just pull up the tweet and read to you what
he had to say.
He said, "The E.U. has done everything it can to help get the withdrawal agreement over the line. The impasse can only be solved in the U.K. Our
no-deal preparations are now more important than ever before." As you mentioned, the President of the European Council, Donald Tusk saying the
likelihood of that no-deal has gone up. The Commission, however is saying the likelihood of a no-deal scenario has gone up, but also the likelihood
of the no Brexit scenario.
Also chatter among E.U. leaders about the possibility of an extension if that vote goes through on Wednesday in which the MPs rule out the
possibility of that no-deal scenario, saying they don't want that. Then there's another deal on Thursday in which they could potentially move to
request an extension from the E.U. That's very much on the mind of leaders and officials here in Brussels.
We heard, Mark Rutte, the Dutch Prime Minister today tweet out, saying that any request will need to have a purpose and take into consideration the
effects on E.U. institutions, namely Parliamentary elections expected in May -- Richard.
QUEST: Stay with me, Erin McLaughlin. Nina dos Santos is in Downing Street. Give me an overview, a brief overview of the situation as seen
from Number 10.
NINA DOS SANTOS, CORRESPONDENT, CNN: Well, the Prime Minister is obviously extremely weakened here. We have seen one pro-Brexit newspaper say it's
probably time for her to go. Obviously, she faced a no confidence vote about ten months ago. So that means she can't be challenged until the back
end of this year, but the real question is, what's next? Are we heading towards potentially an early general election?
[17:05:10]
DOS SANTOS: Which she has to - if she is trying to negotiate, a deal from Brussels, put her deal to the people in a second referendum, because
realistically, to get a substantial delay on the cards, she would have to come up and ask the E.U. for something substantial like enough time for
another concrete like a referendum or another general election, so a weakened Prime Minister, of course, we've seen her soldier on after this
kind of defeats. Today's wasn't a historic defeat like the last time, but 75 members of her own Party still voted against her, and that's a
significant challenge.
And I should also say, Richard, we saw the Prime Minister exit by the back door of Number 10, which meant that we didn't really see her and there was
no triumphant return either. The only person of any great significance we have seen return to Number 10 Downing Street publicly is the Chancellor
Philip Hammond and he has his spring statement, the budget which he has to deliver soon.
So of course, that's one of the reasons why we have seen him come in and out with his official paper work. But now, the question is going to be,
where do they go from here? They have got to reassure the business community, they have got to hold that vote on a no-deal scenario tomorrow
and then another vote potentially asking for a delay, but of course crisis reigns inside Number 10 and also inside the House of Commons after this
second defeat, Richard.
QUEST: All right, stay with me as well. Bianca is here. You just heard Nina dos Santos saying chaos is reigning. It's hard to disagree with her.
BIANCA NOBILO, CORRESPONDENT, CNN: It is. I think you are asking for the sense of where we all are. I feel a sense of political disembodiment.
Nobody knows what is going on. The most learned and experienced members of Parliament and retired MPs I speak to say that they do not recollect a
situation like this where they just don't know who - they almost can't see their hand out in front of them. That's the kind of situation we are in
politically.
But in terms of immediately where we are, there's jubilation over there, the fact that the vote failed in a way that it did because it presents hope
for some people that there could actually be light at the end of this Brexit tunnel. For them, they're hoping for a second referendum.
QUEST: Erin, does the E.U. even want the Brits to -- I mean, I may be a bit weird to suggest this, but because of the failure tonight and the way
the votes are going to go, it's highly likely that there will be now an extension of Article 50. That may go on for another year, possibly two,
because nobody's going to -- so don't the Europeans just wish the thing gone?
ERIN MCLAUGHLIN, CORRESPONDENT, CNN: Yes is the short answer to that question, Richard, based on conversations I have been having with a senior
E.U. officials as well as diplomats. They want to see this whole process done and dusted. They want to move ahead with their agenda. There are
those that continue to hold out hope that the U.K. will remain in the E.U.
E.U. officials and leaders have long said that they regret this decision. They see it as a historic mistake, but I think it's difficult, perhaps
impossible to find a single E.U. leader who says that they don't want this deal to get through Westminster. They don't want to see Brexit happen at
this point.
QUEST: Okay, all right. Erin, you stay there, along with Nina in Downing Street. We'll be back to you in just a moment. I do need to go to Julia
Chatterley who is in the city. It's not just the pound, is it? I pound is at its most simple, whether it bounces up and down one and a half a cent or
so. It's the gut feeling that I need from you, please, tonight.
JULIA CHATTERLEY, ANCHOR, CNN: Well, Richard, as you quite rightly point out, just the gyrations on sterling over the last 24 to 48 hours don't tell
the whole story here. There's still, as you guys have been discussing, a great deal of uncertainty. If you take a great big step back though here,
there's a whole lot that we don't know. The question is what can we place in terms of probabilities on what perhaps we do know here?
And for the big investors that I have spoken to, and I'll keep reiterating this -- they've looked at this and said actually, the only thing that they
ultimately believe that Parliament can agree on at this stage is to rule out a no-deal exit, and of course that comes in the vote that we get
tomorrow and I've spoken to some big investors that have actually put money. They have gone long sterling here and said, look, we believe that
ultimately Parliament will decide to take the worst-case scenario off the table here, which is that the no-deal exit and if we do see that happen
tomorrow, then actually, we could see sterling rally.
But Richard, your point, and it is exactly the right point to be making here, the U.K. businesses who have dealt with the uncertainty over the last
several months -- in fact, the last two plus years, the uncertainty continues.
[17:10:08]
CHATTERLEY: They're still stymied over making business decisions, investment decisions both in the short and the medium term and I think for
a lot of people here, pretty much like voters as well, they have their head in their hands. All they want is clarity, whether it's a deal or a no-deal
or a decision to extend here, they would like a greater deal of clarity.
Right now, we don't have it and I think the only thing we can really expect as far as sterling is concerned is a measure of sentiment is greater
volatility here, sadly -- Richard.
QUEST: Okay, but Julia, I've got Bianca with me to get both the political and the financial side of this. Julia, what will give that certainty?
First of all, to you, Julia, what gives it -- because that does that certainty come, for instance, if there's an extension? Let's face it, a
three-month extension, a six-month, extension, a one-year extension, what would the city say then? Does that just buy them time?
CHATTERLEY: You know, it's interesting. It doesn't give a greater deal of uncertainty, but again, I take it back to the probabilities here, Richard
and I think most of conversations we are having is the longer the extension that you get here, the likelihood that we ultimately see perhaps fresh
elections, perhaps we go as far as seeing a further people's vote, another referendum here.
So I think, perhaps the calculus here is if it's a short-term extension, do they try to thresh out some kind of alternative deal? Please, don't ask me
or anyone else really at this stage what that might look like, but if we see a much longer extension here, then the probabilities of ultimately
Parliament going, "Look, we can't simply handle this. We can't come up with a solution and we have to throw it back to the people."
It's not an easy solution and we have discussed that the permutations here -- and there are many of them, but I think the calculus here for investors
will be, the longer the extension here, the likelihood is that Theresa May kind of indicated today that Brexit itself might ultimately be off the
table, but we are pushing a long way out there, Richard. There are so many permutations here. It's tough to say.
NOBILO: And your question is what would give us political certainty at this point?
QUEST: Yes, well, Julia has just nicely outlined what the investors would like to see as an element of certainty for the future. What do politicians
see as an element of certainty?
NOBILO: I think it's probably more important to ask first is what would the people want to see as an element of certainty? And what polling is
showing us and just general sentiment, I am sure you've picked up, too, is they just want to move on from this. Yes, there are people that want to
see a second referendum, but overall, there's a sense of apathy coupled with frustration.
That's why Theresa May has said that voting for her deal is the only way to get that certainty, to be able to move on to the next stage and start those
discussions on the future relationship. That's why business groups have begrudgingly said, vote for the Prime Minister's deal because at least that
gives business as well as politics that sense of certainty and then, you can focus minds within Westminster, within Parliament on what happens next.
QUEST: You're getting the idea and now that we have the full coverage for you this evening, whether it's Bianca here who is our political expert, or
you've got Erin in Brussels, Nina is just across in Downing Street with the Prime Minister's residence and Julia is in the city pulling together the
strands of exactly what it means in the financial world and we will continue because the country is on the abyss. Two more votes to go.
Now, one by one, countries around the world are banning the Boeing 737 MAX 8 aircraft, at least temporarily, there is one exception, and a major one,
the United States. We need to understand why the FAA and United States have decided not to ban in it, in just a moment. This is CNN.
(COMMERCIAL BREAK)
[17:15:00]
(BEGIN VIDEO CLIP)
THERESA MAY, BRITISH PRIME MINISTER: Let me be clear -- voting against leaving without a deal and for an extension does not solve the problems we
face.
(END VIDEO CLIP)
QUEST: The end of the road for the British Prime Minister Theresa May's Brexit deal, or at least it seems that way. Only an hour ago by a huge
majority, the House of Commons voted to reject Theresa May's last-ditch revised agreement with the European Union. Union
Days of setbacks with the Prime Minister. Yet, two major votes before the end of the week, including tomorrow, Wednesday, whether to leave the E.U.
without a deal. That's widely expected to go down. If lawmakers reject that, then the option of the vote on Thursday to request a deadline
extension. And the Prime Minister said if that wins, then she will go for the E.U. If they vote no on that, then U.K. is officially in uncharted
territory. Other stories now.
A global crisis over Boeing's 737 MAX 8, an aircraft that's been involved in the two deadly crashes over the past few months, as recently as Sunday
in Ethiopia. And a growing list of carriers are grounding the plane.
Whilst France, Germany and the U.K. are some of the authorities and countries banning it from their air space temporarily. The United States
has not taken any action against the MAX 3. The U.S. says -- and the plane manufacturer Boeing says, "Safety is number one priority," and Boeing says,
"We have full confidence in the safety of the MAX based on the information currently available. We do not have any basis to issue new guidance to
operators."
CNN's Tom Foreman explains why the aircraft has become so controversial.
TOM FOREMAN, CORRESPONDENT, CNN (voice over): Facing serious safety questions and brutal political head winds, the Boeing 737 MAX 8 is being
grounded around the globe. In the United Kingdom, the European Union,. Much of Asia, Australia and more.
In some cases, even other variants of the MAX line are being parked as many airlines say they won't use the plane until they have additional
information about the fatal crash in Africa and the one last fall in Indonesia. All of that is creating an uproar in Washington where the U.S.
stands nearly alone in allowing the MAX 8 to fly.
(BEGIN VIDEO CLIP)
SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: Certainly, this is very early in the process, so we're going to be in constant contact through the
Department of Transportation and FAA to make determination at the appropriate time.
(END VIDEO CLIP)
FOREMAN (voice over): A growing list of lawmakers is urging caution, if not by Federal agencies, then by the airlines.
(BEGIN VIDEO CLIP)
SEN. RICHARD BLUMENTHAL (D-CT), SENATE JUDICIARY COMMITTEE: Every one of these planes should be grounded right away. They are accidents waiting to
happen. I've advised my family members to switch airlines because these planes are unsafe at any speed right now.
(END VIDEO CLIP)
FOREMAN: Still, the Federal Aviation Administration and U.S. Airlines that use the MAX 8 are standing by it. The Southwest Pilots Association,
extremely confident in the plane which is still flying domestically despite concerns from other aviation professionals such as the flight attendants
unions.
A software update is in the works for the aircraft, but Boeing says, "Even now, we have full confidence in the safety of the MAX." But in Africa, as
searchers scour the crash sites, Ethiopian Airlines is reporting initial details from the pilot of the doomed plane that seemed eerily suggestive of
a software problem which some analysts believe can make these planes uncontrollable.
(BEGIN VIDEO CLIP)
TEWOLDE GEBREMARIAM, GROUP CHIEF EXECUTIVE OFFICER, ETHIOPIAN AIRLINES: So, he was having difficulties with the flight control of the airplane.
So, he asked to return back to base and clearance was given to him.
(END VIDEO CLIP)
[17:20:05]
FOREMAN (voice over): He never made it. And that is clearly on the minds of some U.S. travelers who have found themselves somewhat alone in the
world aboard Boeing MAX 8 planes.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I prayed a little bit more than usual, I think, but it is out of my hands. So, I had to make it on the plane.
(END VIDEO TAPE)
QUEST: Tom Foreman reporting there. The U.S. President has now spoken with the Chief Executive of Boeing after Donald Trump's tweet about
aviation technology. We will have detailed report from Washington on what the President said to the CEO about planes and whether they should be
grounded.
(COMMERCIAL BREAK)
QUEST: The evidence of just how serious this is for Boeing, a crisis of confidence, in that the plane maker's share price fell quite sharply again
in the 5% or 6% and that dragged down the rest of the Dow Jones during the course of the day.
As more and more airlines are deciding to ground 737 MAX 8s. Here is just a few of them from several countries. You're talking about the U.K.,
Germany, France, and even banning the planes from their air space. But the country Boeing calls home has yet to make the move, the United States.
President Trump is stirring controversy after his latest comments about aviation technology. Hours ago he tweeted that airplanes are becoming far
too complex to fly.
Jim Acosta is in Washington at the White House. Plenty there for us to get our teeth into, that the President should wade into this. Who knew he was
an expert on aviation, but Jim, first of all, what about this conversation he had with the Boeing CEO?
JIM ACOSTA, CHIEF WHITE HOUSE CORRESPONDENT, CNN: That's right, Richard. I mean, as you said, President Trump, he may have inadvertently undermined
confidence in the U.S. aviation system when he tweeted that. He thinks the commercial airliners are too technologically advanced.
The President's tweet certainly got a reaction out of Boeing's CEO who called the White House after Mr. Trump's comments. I was told a few
moments ago by a spokesperson over at Boeing that that that call did in fact happen after the President issued that tweet and that in this phone
call, Dennis Muilenburg, the Boeing CEO expressed to the President that he believes that this MAX aircraft, this MAX 8 aircraft is safe, and he
communicated that to the President.
But the President's tweet, I think, underscores the real concern that can be had, especially in the corporate world, and now in the civil aviation
world, when the President tweets about something, the whole world pays attention.
(BEGIN VIDEO TAPE)
ACOSTA (voice over): With countries around the world except for the U.S. grounding the use of Boeing 737 MAX 8 jets after the crash of an Ethiopian
Airlines plane over the weekend, President Trump weighed in, even though the investigation into what happened is barely under way. Tweeting,
"Airplanes are becoming far too complex to fly. Pilots are no longer needed, but rather computer scientists from MIT. I see it all the time in
many products, always seeking to go one unnecessary step further when often older and simpler is far better. Split-second decisions are needed and the
complexity creates danger, all of this for great cost, yet, very little gain. I don't know about you, but I don't want Albert Einstein to be my
pilot."
That tweet prompted a phone call from Boeing's CEO to the President about his remarks. The White House later expressed caution about the cause of
the crash.
[17:25:07]
(BEGIN VIDEO CLIP)
SANDERS: Certainly, this is very early in the process. I think the first place we have to start is by offering our condolences.
(END VIDEO CLIP)
ACOSTA (voice over): Acting Defense Secretary Patrick Shanahan, a former Boeing executive was whether the company's planes are safe.
(BEGIN VIDEO CLIP)
PATRICK SHANAHAN, ACTING DEFENSE SECRETARY: These situations as you well know are very serious and let's let the FAA and others take command of the
situation and trust that part of the process.
UNIDENTIFIED FEMALE: Sir, do you think the flights should be grounded right now, sir, the airplanes?
SHANAHAN: Thank you very much. Okay, good to see everybody.
UNIDENTIFIED FEMALE: Thank you, guys.
(END VIDEO CLIP)
ACOSTA (voice over): The White House is also back on its heels in response to a new book, "Kushner, Inc." which alleges the President wanted Jared
Kushner and Ivanka Trump out of the White House.
The "New York Times" quotes the President in the book saying, "Get rid of my kids. Get them back to New York." Ivanka Trump is quoted as defending
her father's response to the white supremacist violence in Charlottesville saying, quote, "My dad is not a racist and he didn't mean any of it."
The President's handling of Charlottesville is clearly a sore subject at the White House.
(BEGIN VIDEO CLIP)
ACOSTA (on camera): The President --
SANDERS: Sorry, Jim, April, go ahead.
ACOSTA: ... after Charlottesville saying that there are very fine people on both side in Charlottesville, essentially suggesting that there are very
fine people in the Nazis.
SANDERS: That's not at all what the President was stating, not then, not at any point.
(END VIDEO CLIP)
ACOSTA (voice over): Press Secretary Sarah Sanders said about the new book, "It's sad, but not surprising the media would spend time promoting a
book based on shady anonymous sources and false information."
The White House is also doing damage control after former Vice President Dick Cheney blasted President Trump for his past comments criticizing the
alliance.
The "Washington Post" reported it happen over the weekend at a private retreat during a discussion between Cheney and Vice President Pence.
Cheney told Pence, "We are getting into a situation when our friends and allies around the world that we depend upon are going to lack confidence in
us. A spokesman for Pence says he defended the President, saying, quote, "The Vice President reaffirmed the U.S.' unwavering commitment to the
alliance, and also offered an unapologetic defense for requiring our allies to live up to the commitments they made for our collective security."
But in a strange twist, the White House is standing by House Speaker Nancy Pelosi who revealed she's not in favor of impeaching the President without
overwhelming evidence of wrongdoing.
(BEGIN VIDEO CLIP)
SANDERS: I think Nancy Pelosi is clearly already starting to lose control of her Party. I'm glad that she sees what the rest of us see and that
there's no reason, no cause for impeachment.
(END VIDEO TAPE)
ACOSTA (on camera): Now, there may be other legal trouble brewing for the President as the New York Attorney General issued subpoenas for bank
records detailing how Mr. Trump secured large loans in recent years. The subpoena has come after the President's former personal attorney, Michael
Cohen accused Mr. Trump of inflating his assets in order to obtain loans from Deutsche Bank.
So Richard, more questions about the President and his activities before he came into office are swirling here in Washington -- Richard.
QUEST: Jim Acosta who is at the White House. Jim, thank you. Staying with the Boeing issue, let's go CNN's safety analyst and former FAA safety
inspector, David Soucie who is with me.
Right, really simple question. Why do you think the FAA is reluctantly not grounding the MAX fleet when other reputable serious, senior authorities
have done so?
DAVID SOUCIE, SAFETY ANALYST, CNN: Richard, I think there's really two answers to that question -- one is, the FAA over the last 20 years has
gotten out of the role of being the safety system. They have become the safety regulator, which is their role.
The safety system itself belongs to each airline, and those safety management systems that are in place manage risk within the airline, so
every airline handles these risks differently. Obviously Southwest and American are very confident in their safety management system. They
believe that they have mitigated the risk of the MAX air and of the AOA sensor failures. They have done a lot of testing. They have replaced any
that were faulty. They've changed the way they've tested it and they have changed the operating system.
So I believe that they believe that their safety management system has produced this safe aircraft and it's safe to fly.
The other side of the question is, the regulator was responsible for certifying this aircraft to go into service. So at this point, they would
be very reluctant to then later come down and say, "Oops, we made a mistake. The aircraft is not ready for service. We are going to taking it
back out of service." So they are taking it much closer to heart than would external agencies who had nothing to do with certification of the
airplane would.
They are going to sit back and say, "Hey, we are not ready to fly this airplane yet," whereas Boeing and the FAA together are saying, "No, we
built this aircraft. We have confidence in it." They have ownership. They've got all of their -- they're all in on their pot. They are pot-
committed, as you say. So what that means is they are in the boat and they're not going to go back on it unless they have actual facts and
evidence saying that that is what happened.
[17:30:06]
QUEST: You do end up with this bizarre situation with so many regulators grounding the plane and the U.S. not grounding it -- yet -- which begs the
question for passengers, what do I do?
SOUCIE: Well, I'll tell you what I'm doing, Richard, and that's the only frame of reference I can do, and that is that if I have an option, I'm
going look at that aircraft model to see what model it is that I'm flying on and for right now, at least for the next few weeks until Boeing comes
out with the fixes, the software fixes that are promised, until that happens I'm going to try to avoid flying on a MAX 8. Would I do it if I
was in a pinch and had to fly, probably would. But I know for certain, I would not put my granddaughter on that flight and I wouldn't put my family
on that flight. I would wait to see what happens.
QUEST: David Soucie. David, thank you. Our safety analyst. As we now continue, a day of drama. There's really no surprises in the result from
the British Parliament as the fate of the U.K. gets ever more complicated as nobody knows what comes next.
(BEGIN VIDEO CLIP)
CORBYN: The government has been defeated again by an enormous majority and they must now accept their deal, their proposal, the one the Prime Minister
has put is clearly dead.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
QUEST: If you have been following Brexit at all, you have probably heard a great deal about the backstop. You may know it has something to do with
the border between the Irish Republic and the United Kingdom. That's about as far as perhaps many understand it, so what exactly is it? And why have
some lawmakers been so afraid of getting stuck with the backstop?
Bianca explains.
(BEGIN VIDEO TAPE)
NOBILO: This is the Republic of Ireland and this is Northern Ireland, part of the U.K. The 499 kilometer border that separates the two countries is a
sticking point that could derail plans for a so-called orderly Brexit. After Brexit day, this line will effectively become a border between the
European Union and the U.K.
To avoid jeopardizing trade and the peace process, both sides say they don't want a hard border here. That's a border where people and goods are
stopped and inspected. The agreement that was reached between the U.K. and Europe in November includes a controversial emergency measure called the
backstop to prevent the return of that hard border.
[17:35:04]
NOBILO: Here is how and when it would work. Under the terms of the agreement, the whole of the U.K. would stay in the European customs
territory during a transition period. This would run from Brexit day until the end of 2020.
During that time, a new trade deal would be negotiated and people and goods could continue to cross the border as they do now. If a trade deal that
avoids the need for a hard border hasn't been reached by the end of the transition period, the backstop would then kick in.
That means from January 2021, the U.K. would automatically remain in the European customs territory and would have to comply with existing single
market regulations. Now comes the controversial part. The U.K. Attorney General says once the backstop is activated, the U.K. could only leave this
arrangement with permission from Brussels.
U.K. could, therefore, be forced to abide by E.U. regulations indefinitely without having any say in shaping them. U.K. and E.U. leaders have said
that the backstop is a measure of last resort, that neither side has any intention of activating. But for some U.K. lawmakers, regardless of their
Party, the risk of being beholden to Brussels with no way out is a Brexit that they refuse to back. Bianca Nobilo, CNN, London.
(END VIDEO TAPE)
QUEST: Now, we are going to get reaction around the United Kingdom. Anna Stewart is in Edinburgh tonight. Anna, remind us. Scotland voted to
remain -- largely voted to remain in the E.U. and Scotland's sort of view is that they're being dragged off the E.U. kicking and screaming.
ANNA STEWART, REPORTER, CNN: Quite. Kicking and screaming. Every single area of Scotland voted to remain, so it was a really overwhelming vote.
Here in Edinburgh, the capital of Scotland, they voted by 74% to remain. Which there is little surprise, everyone I spoke to today not only voted to
remain, most don't want a second referendum and I have to say a lot of them feel they haven't been listened to and that's kind of what we heard from
the First Minister today who said that the government clearly has not compromised, they haven't listened to other parties. They've sacrificed a
lot trying to get their hard lined Brexiteers on board at the risk of losing the vote all together.
I am sorry, I may blow off this rooftop, Richard, I think it's the winds of Brexit change, perhaps.
QUEST: And before I leave you, though, the first Minister of Scotland has been extremely firm tonight in her criticism of what happened, but let's be
blunt, Scotland can't unilaterally stay, and even if they were able to leave, they still wouldn't automatically be able to join the E.U.
STEWART: Yes, I mean, plenty of the hurdles ahead there. You're right. Nicola Sturgeon, the First Minister did say that the U.K. government and
Theresa May herself should be hanging their heads in shame tonight. She said that this defeat was a long time coming. They could have done many
things to avoid it.
In terms of a Scottish independence referendum because of course we had one many years ago -- I don't think there's the appetite to go for it yet.
Some Scottish nationalist activists are saying they should take the opportunity for Westminster turmoil to push that through, of course, for
anything to be legally binding in terms of another independence vote, they would need Westminster's sanctioning. So far, the First Minister says it's
unlikely to happen any time soon, Richard.
QUEST: Right. Anna Stewart is in scotland, whilst Carole Walker is with me. It's cold, though, isn't it?
CAROLE WALKER, POLITICAL COMMENTATOR: It is getting a bit colder now.
QUEST: A bit fresher.
WALKER: A bit fresher and even many of the crowds who have been keeping us entertained all afternoon have quieted down.
QUEST: Let's spend a moment just thinking about this backstop. The Prime Minister agreed it was part of -- what she said in her December agreement,
December of 2017 that there would be no border down Northern Ireland, that there would be an open border. But did she have to go all the way and put
into the final withdrawal agreement and protocol such a backstop?
WALKER: Well, I think the Prime Minister signed up to it at the time suggesting there was no huge significance to it, but it was further down
the line that for example, the Brexit Secretary at the time, David Davis, I think woke up to the huge significance of it and of course, it has then
assumed a far greater importance.
It was the Irish of course who wanted it there to prevent a hard border between Ireland and the Northern Ireland.
QUEST: The Attorney General tonight or today gave a piece of advice, a legal advice, that basically said that last night's negotiations in
Strasbourg did not fundamentally change the ability to leave the E.U. unilaterally.
[17:40:08]
WALKER: What he said was the U.K. had got important new legal obligations and safeguards. The obligation on both the U.K. and the E.U. to try to
find alternative arrangements to prevent a border in Ireland, but also that the only opportunity for the U.K. to get out of that unilaterally was if
the E.U. was negotiating in bad faith and if the negotiation simply broke down, then yes, the U.K. could still be trapped in this backstop
arrangement.
QUEST: Did he knife the Prime Minister? In doing that, I mean, because everybody thought -- even now people are saying, look, the PM should not
have come out of that negotiation in Strasbourg without having a very good idea what the Attorney General would make of it.
WALKER: Geoffrey Cox is a lawyer and he decided it was more important to give accurate, as he saw it, advice as a lawyer, and to give that advice
honestly and openly than to try to give Theresa May greater cover. He came out, he answered questions in the Commons. He said that he felt that the
risk of the U.K. being trapped in this arrangement was very low.
That the political judgment should be that people should support the Prime Minister, but what he failed to do was set aside those principles as a
lawyer in order to save the Prime Minister's skin and that has now left her running out of road to where she goes next.
QUEST: Shambles. Shambles.
WALKER: It is a complete political crisis. Even senior Cabinet Ministers have simply no idea what is going to happen next.
QUEST: Right, Carole, thank you very much indeed. Carole Walker, thank you. Now, two American actresses are among 50 people charged in an
elaborate scheme involving college admissions. Amara Walker has the details on operation Varsity Blues. They are coming up next.
(COMMERCIAL BREAK)
AMARA WALKER, ANCHOR, CNN: Hello, everyone. I'm Amara Walker. College coaches, CEOs, and celebrities all caught up in a stunning cheating scandal
in the United States. Federal authorities have now charged 50 people and accused them of paying and accepting millions of dollars in bribes to get
their children into prestigious schools that includes two American actresses.
Academy award nominee Felicity Huffman and Lori Loughlin, known for her role on a hit TV show "Full House." Our Brynn Gingras is tracking all the
developments. She is joining us now with the latest. I mean, we can't reiterate the fact that is a massive college admissions cheating scandal
with 50 people charged. Talk to us about how this all worked, Brynn.
[17:45:02]
BRYNN GINGRAS, NATIONAL CORRESPONDENT, CNN: Oh, yes, it was a massive operation that took a year to investigate. And one of the people that
helped authorities was the mastermind behind this scam to begin with.
His name is William Singer. He has pleaded guilty to four Federal counts. He walked off the courthouse today and didn't say a single word, but yes,
he is charged and accused of just helping so many people get their children into prestigious schools. We are talking about kids of CEOs, fashion
designers and yes, two Hollywood actresses.
(BEGIN VIDEO TAPE)
GINGRAS (voice over): Oscar nominated actress, Felicity Huffman and actress Lori Loughlin, best known for her role as Aunt Becky on "Full
House" among dozens charged in a cheating scam helping to get students get into a string of prestigious universities.
(BEGIN VIDEO CLIP)
ANDREW LELLING, U.S. ATTORNEY FOR MASSACHUSETTS: Fifty people nationwide, two SAT or ACT administrators, one exam proctor, one college administrator,
nine coaches at elite schools and 33 parents who paid enormous sums to guarantee their children's admission to certain schools ...
(END VIDEO CLIP)
GINGRAS (voice over): According to prosecutors, the scheme involved two kinds of fraud, parents paying a college prep organization to help their
children cheat on SAT or ACT exams and others paying to allegedly bribe college coaches to help admit the students as athletes regardless of their
athletic skill. The prep organization at the center of the scandal was founded by William Singer. He has pleaded guilty to four charges including
money laundering and obstruction of justice.
(BEGIN VIDEO CLIP)
LELLING: Singer also arranged for people to take online high school classes in place of certain students so that those students could submit
higher grades as part of their overall college application packages.
(END VIDEO CLIP)
GINGRAS (voice over): Lori Loughlin and her husband fashion designer, Mossimo Giannulli have been charged with conspiracy to commit mail fraud
and honest services mail fraud.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Hello, everybody. Today, I'm here with my sister, Bella.
(END VIDEO CLIP)
GINGRAS (voice over): For allegedly playing more than $500,000.00 in bribes to get both of their daughters admitted to USC getting them on to a
rowing team, a sport which never of them has ever participated in. Their daughters have not been charged.
An e-mail written by Giannulli in the complaint reads in part, quote, "I wanted to thank you again for your great work with our older daughter. She
is very excited and both Lori and I are very appreciative of your efforts and end result." The cooperating witness responds quote, "With your
younger daughter, please let me know if there's a similar need anywhere so we do not lose a spot." Laoghlin then responds, quote, "Yes, USC for our
younger daughter."
Huffman is also charged with conspiracy to commit mail fraud allegedly paying $15,000.00 to Singer's organization. In a phone conversation
recorded as part of the investigation, Huffman says, "We are going to do like we did with my older daughter." The cooperating witness responds,
"Okay." So cooperating witness two, "We'll take it with her and for her at the Igor's place at the West Hollywood Test Center.
According to the complaint, Huffman did not go through with the plan for her younger daughter. Prosecutors are calling the scam operation Varsity
Blues and includes Georgetown, Stanford, UCLA, USC, University of Texas at Austin, Yale University and several prominent Boston institutions.
The complaint also lays out how Singer allegedly worked with parents to fake athletic credentials to get students onto college athletic teams.
(BEGIN VIDEO CLIP)
LELLING: Singer helped parents take staged photographs of their children engaged in particular sports.
(END VIDEO CLIP)
GINGRAS (voice over): Prosecutors making clear special treatment for the wealthy and elite would not stand.
(BEGIN VIDEO CLIP)
LELLING: For every student admitted through fraud, an honest, genuinely talented student was rejected.
(END VIDEO TAPE)
GINGRAS (on camera): And Singer himself, again, was a cooperating witness in this investigation. He faces up to 65 years in prison. Other people
have pled guilty as well and authorities have not ruled out, Amara if more arrests are coming in the future -- Amara.
A. WALKER: Yes, that definitely seems possible and that's exactly what Singer's attorney mentioned in court as well. Appreciate your reporting,
Brynn Gingras. Thank you for that. Live for us there in Boston. All right, let's dive deeper into this case with CNN legal analyst, Areva
Martin joining me now from Los Angeles.
Areva, I just want to first get your reaction to the fact that -- I mean, rich people thinking that they could buy their kids' way into these
prestigious universities.
AREVA MARTIN, LEGAL ANALYST, CNN: This is such a shocking story on so many levels for me. One, I'm a parent of college-age students. Two, I'm a
parent of a disabled student. So some of the allegations in the complaint is that these people, this scam included saying that students had
disabilities or they that needed additional time on tests so that the scam could be executed.
So on so many levels, this is such a disservice to hard working students, poor students, families that don't have access to millions of dollars.
[17:50:00]
MARTIN: The simple question I have as a parent -- like, get a tutor. If your kid is underperforming, there are so many legal ways to improve the
test scores and to improve your student's ability to gain admission to a prestigious college.
And at the end of day, if your kid doesn't go to a prestigious college, that's not the end of world either. But now, these parents are facing
serious jail time, the students although not charged may face disciplinary action including expulsion from these colleges.
We see Lori Loughlin's children have been publicly humiliated as a part of this whole scheme. So everybody loses in this situation.
A. WALKER: You're right though, when you say, "Get a tutor." And exactly what are these parents teaching their children by doing these kind of
things? And like the U.S. Attorney mentioned, for every cheater that got in, a hard working student was rejected.
In terms of I mean, the scheme, because it began way back in 2011 according to what I read, was there any indication as to how this case unraveled and
how they got caught?
MARTIN: Yes, Amara, what we learned from the press conference from the U.S. Attorney is that they are investigating some other crime, some other
crime totally unrelated to this and through that investigation, they got a tip about the scheme that was happening with this Mr. Singer and it was
from that tip, you know investigating that other crime, that they were able to start this investigation.
What's so shocking is not only do they have a cooperating witness like Singer, there are e-mails, there are text messages, there are recorded
conversations. So the evidence that the U.S. Attorney office has seems to be, you know, just an enormous amount of documentary evidence, tape
recordings, and text messages that's going to make it very difficult for these defendants to offer any kind of defense to these very serious felony
charges.
A. WALKER: What about these children? Could they be charged at some point?
MARTIN: That's a good question, because what we heard in the press conference is that some kids were very much aware of the scam. They were
on the phone call as their parents were working with Singer or some of his agents planning --
A. WALKER: Well, if there are some in the testing centers, too and the proctor is giving them answers, they would be in on it, right?
MARTIN: Oh, absolutely. Now, so far none of the students have been charged, but based on this press conference, it's an ongoing investigation.
And the U.S. Attorney did not rule out the possibility of students being charged. He did say they were leaving it or they were leaving it up to the
universities in terms of whether students would be disciplined, expelled or what will happen to them, but I can't imagine that any university is going
to allow those students to remain enrolled in their universities knowing that they got there by cheating.
A. WALKER: And just quickly -- because I have to get going. I mean, again, we have famous people who are charged in this crime, including
Felicity Huffman, known for her role on "Desperate Housewives," a Golden Globe winner and an Oscar Award nominee, Lori Loughlin who I watched all
time in my teens on that popular TV show "Full House." Her husband is a famed fashion designer. He was the creator of Mossimo.
My question to you is, this goes to trial, they get convicted, let's say, could the judge try to make an example of them and hence get treated pretty
harshly?
MARTIN: Oh, absolutely. And the U.S. Attorney made that very clear that just because these people are rich and have a certain status in our
society, they are not going to be given any different treatment. In fact, he said, the reason they are prosecuting this is, one, it is a crime, but
also to send a strong message that you cannot buy your way out of criminality and you can't have a separate justice system -- one for the
poor, and one for the very rich.
So all indications at this point is that all of these individuals that have been charged face very, very serious jail time. Some of these charges
carry up to 20 years. So I don't think they are going to get off easily with this. And again, my heart goes out to the students that didn't know
that their parents were involved in this kind of scam to get them admitted to college.
A. WALKER: Yes, agree with you on that one, but it is enraging on so many levels. Areva Martin, we are going to leave it there. Great to have you
as always, thanks for your time, Areva.
MARTIN: Thank you.
A. WALKER: All right, we are going take a short break. When we come back, U.S.-backed forces in Syria say their fight against ISIS is nearing to an
end, hundreds of ISIS fighters surrendering as the battle for control rages on.
(COMMERCIAL BREAK)
[17:55:00]
A. WALKER: All right, welcome back, everyone. The fall of ISIS in Syria is approaching. That is what the U.S.-backed Syrian Democratic Forces
tweeted Tuesday. SDF officials also said between 1,500 to 2,000 ISIS fighters and their families surrenders in Eastern Syria in just 24 hours.
Shelling between the SDF and ISIS fighters has been going on for days.
Ben Wedeman is near the front lines as the battle intensifies.
(BEGIN VIDEO TAPE)
BEN WEDEMAN, SENIOR INTERNATIONAL CORRESPONDENT, CNN (voice over): Tuesday dawns over Baghouz to the echo of gunfire. Overhead, a war plane on the
prowl. The battle rages on in the junk yard. All that's left of the once- feared so-called Islamic state.
Its black banner flutters in the wind. White phosphorous rains down setting tents on fire and yet, there are still signs of life inside the
camp. For now.
[Gunfire]
Ben Wedeman, CNN, Baghouz, Eastern Syria.
(END VIDEO CLIP)
A. WALKER: All right, we are going take a short break. Richard Quest is going pick up all the breaking news on Brexit when we come back.
(COMMERCIAL BREAK)
[18:00:00]
END
