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Smerconish
Pandemic Gets Political As Democrats And Republicans React Differently To State Reopenings; Will Either Party's National Convention Be Virtual?; As Students Continue The College Experience Through Digital Channels, Will COVID Change Higher Education In America Forever?; The Shooting Of 25-Year-Old Ahmaud Arbery; Hackers Target A-List Law Firm. Aired 9-10a ET
Aired May 16, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(COMMERCIAL BREAK)
MICHAEL SMERCONISH, CNN HOST: The pandemic gets political. I'm Michael Smerconish in Philadelphia and this week I want to know is the partisan fight over when and how to reopen helping President Trump's re-election? That's this week's survey question. Go to my website at Smerconish.com. Cast your ballot. I'll give you the result later in the program.
In just 171 days, the nation will elect its next president. That contest will largely be determined by the outcome in three states where Trump won by narrow margins in 2016 -- Wisconsin, Michigan and Pennsylvania. Maybe not coincidentally, each is now the front line for an increasingly partisan battle over when and how to reopen.
As noted by "The New York Times," "Democratic governors in Wisconsin, Michigan and Pennsylvania, backed by public health experts, have urged caution before reopening. Republican legislatures in the states have pushed in the opposite direction, citing economic necessity and personal freedom."
On Wednesday, a divided Wisconsin Supreme Court voted four to three siding with Republican lawmakers when it found Democratic Governor Tony Evers' extension of the stay-at-home order unconstitutional. This is the same court that recently overturned Evers' decision to postpone the Wisconsin primary.
Just one day later in Michigan, protests in front of the State Capitol against Democratic Governor Gretchen Whitmer's stay-at-home order turned physical. Few protesters wore masks or practiced social distancing protocol. Some were armed. Many wielded homemade signs calling for the end of Whitmer's, quote-unquote, "tyranny." Of course on the heels of earlier protests in the Great Lakes State, President Trump tweeted support for protesters.
Meanwhile in Pennsylvania, President Trump made a trip to a Lehigh Valley Medical Supply Company amidst rising tensions between state lawmakers and the Commonwealth's governor over the pace of reopening.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: You have to get your governor of Pennsylvania to start opening up a little bit.
(END VIDEO CLIP)
SMERCONISH: Yesterday, folks gathered outside of Harrisburg's State Capitol to protest. They had signs saying, "Beware of the wolf in sheep's clothing," and "Wolf," as in Governor Wolf, "attacks families." One man interviewed said he didn't understand why small businesses had to remain shuttered while Walmart and Kohl's cashed in on the crisis.
That the pandemic is now partisan is obvious, so which side benefits? Somewhere James Carville is saying, "It's the economy, stupid." A new CNN survey shows Joe Biden ahead of Donald Trump nationally, 51-46, but when you parse the data, you find that in 15 battleground states it is Trump who leads Biden by 7 percentage points, 52 to 45. Trump's biggest advantage over Biden? His handling of the economy. Most voters, 54 percent, say they trust the president to better handle the nation's economy, while 42 percent say they prefer Biden.
There's a narrative taking hold here, that Republicans favor a more immediate reopening of the economy even to the detriment of public health, while Democrats seek to protect public health even to the detriment of the economy and perhaps nothing will epitomize these differences more than the party nominating conventions later this summer.
Democrats are scheduled to be in Milwaukee for three days beginning August 17. Republicans gather in Charlotte, North Carolina one week later. This week, President Trump told the "Washington Examiner"'s Salena Zito, "We'll have a convention," calling himself a traditionalist. He also accused Democratic North Carolina Governor Roy Cooper of playing politics with the reopening of the state and said it would be, quote, "bad for them" if the state were to delay the start of the Republican National Convention in Charlotte.
Meanwhile, the Democratic Party's Rules and Bylaws Committee took the initial steps this week for a contingency plan that would enable delegates to, quote, "participate in the convention in person or by means that allow for appropriate social distancing."
Imagine the optics if Democrats meet virtually to nominate Joe Biden and are followed by Republicans in relatively close quarters nominating Donald Trump. That juxtaposition would itself define the competing approaches to COVID-19 and would shape voters' perceptions as the fall election gets underway.
That is why I want you to go to my website and answer this week's survey question at Smerconish.com. Is the partisan fight over when and how to reopen helping President Trump's re-election?
Joining me now is Democratic National Committee Chair Tom Perez. Mr. Secretary, welcome back. What's your reaction to my survey question?
[09:05:00]
TOM PEREZ, CHAIRMAN, DEMOCRATIC NATIONAL COMMITTEE: Michael, good to be with you. Well, you know, Michael, we always follow the science in the Democratic Party and I think that's really important. I'm looking forward to having a convention in Milwaukee in August, I'm looking forward to highlighting Joe Biden in his values and the values of the Democratic Party, but we're going to follow the science and what we did this past week is to pass a resolution that gives our convention team the flexibility to follow what is going on at the time in Milwaukee.
We postponed our convention by five weeks so that we could buy more time. I'm hopeful that we're going to be able to have some form of an in-person convention. We may not have everybody there. It's not an either-or. It's not you either have everyone or you have no one. We will -- we will follow the science. We will listen to the public health professionals. We will respect the wishes of the people in Milwaukee and that's what we're going to continue to do.
Donald Trump's damn the torpedoes approach, you know, public health be damned, you know, I think the American people understand that this pandemic is very real and that's the difference between Democrats and Republicans.
We actually follow the science and I think it's really important. If we want to grow this economy, we have to fix the public health problem first. It's a false choice to suggest you either open the economy or you protect public health. You open the economy by protecting public health.
SMERCONISH: You'd agree, though, that the former vice president can ill afford to be perceived as overly cautious to the detriment of the economy? I mean, how else to explain the battleground data that says that Trump is winning?
PEREZ: Well, actuallym if you look at the poll of polls in the battlegrounds, Michael -- no disrespect to CNN. I love CNN, but when you look at the polling in the battleground states, the vice president's doing quite well. The most recent poll I saw in Michigan had the vice president up 8 points. A gold standard poll in Wisconsin from Marquette had the vice president up 4 points.
We're up in not just those three states, but you look down in Florida and the vice president's ahead. In Texas, it's a dead heat. In Ohio, a dead heat. Our battlegrounds continue to increase, Michael. We know it's going to be a close election this November, but what we also know is the American people want a leader who is competent, a leader with integrity, a leader who can get us out of this economic mess. This comes down to trust. Who can voters trust to dig us out of this most difficult mess of our lifetime?
This president got us into this mess. He didn't cause the coronavirus, but his absolutely incompetent response has cost lives and it's cost jobs and he has no plan to get us out of it. He pits states against states.
That's not how you do it. Joe Biden is a steady hand at the tiller and that's why you see the American people trusting him on healthcare, trusting him to get us out of this crisis and the American people want leaders with integrity and empathy and compassion and this president's utter --
SMERCONISH: I get it --
PEREZ: -- absence of empathy and compassion, I don't think that's going to work in November --
SMERCONISH: Mr. Secretary, I --
PEREZ: -- for the American people.
SMERCONISH: I understand, but I think -- I think that your standard bearer has a really tough dynamic insofar as he's quarantined and somehow needs to get a message out that, as between the two of them, he's the one to get the economy back on track and unless he can convince in that regard, Wisconsin, Michigan, Pennsylvania are states that he runs the risk of losing.
PEREZ: Well, listen, he's been out there virtually. His videos have gotten over 100 million views this week. He's been on a number of morning shows. He's been on late shows. He did a town hall the other night.
Very active and, you know, what's important to understand, and we saw this in Wisconsin, people consume news differently. You know, we won the Wisconsin Supreme Court race because we out-hustled the other side on the virtual front. We had our virtual clipboards out and we were talking to voters, making sure they voted absentee. The Republicans were asleep at the switch.
That's what the Biden campaign is doing everywhere now. We have digital organizers in all the key battleground states. We've had them there for some time. We're handing the vice president the most muscular infrastructure that a party has ever handed a non-incumbent president. We've trained 7,000 digital organizers in the last six weeks alone and so the vice president has been very active out there.
He had a virtual day in Arizona earlier this week, doing virtual days everywhere and as the situation permits, and we will follow the advice of public health professionals, he will then get out there in reality, in person when the situation permits. And I'll tell you --
SMERCONISH: Quick --
PEREZ: -- watching Donald Trump and what he's doing, he keeps digging his hole deeper and deeper.
[09:10:02]
SMERCONISH: Quick final question. I know that in the end public health is going to guide your decision as to whether there will be a conventional convention, for lack of a better description. Will you nevertheless take into consideration the potential competing optics of you being virtual and Trump gathering the Republican fold together in Charlotte? Will that be a consideration?
PEREZ: It's important, Michael, to understand that this is not a binary choice. You don't either have everybody there or nobody there and what we've done through what we -- through our resolutions is give flexibility to the team. So if 100 instead of 200 people from state X come to Milwaukee because that's what the public health situation dictates, then we will follow the public health. It's not an either/or.
SMERCONISH: OK.
PEREZ: We can do a lot of things remotely and frankly, we've reimagined this convention and we're going to be doing -- I'm really excited because we're going to be able to highlight our vice president in so many ways, shapes and forms and we're going to do it smart and safe.
SMERCONISH: Thank you, Mr. Secretary. Appreciate you coming back.
PEREZ: Always a pleasure, Michael.
SMERCONISH: All right. We know how Tom Perez is voting. Make sure you're going to Smerconish.com and casting your ballot on the survey question. From Facebook, here's some reaction. What do we have, Catherine? "Also, the inability to hold rallies is helping Joe. Controlled stage messaging from his bunker is still full of bumbles. How will he look out on the stump?"
Well, everything that he says that is -- that is a bit off-key you know is exacerbated, but there is an argument to be made. I've talked about it here previously that maybe the status quo suits Joe Biden. If you are one of those who's very critical of the president's response to coronavirus, let Trump be Trump and let Joe just settle himself in quarantine in Wilmington.
Go vote at Smerconish.com on this week's survey question. Can't wait to see the way in which this one turns out. Is the partisan fight over when and how to reopen helping President Trump's re-election? Meaning those economic numbers.
Up ahead, COVID drove American college students home and to online courses. Will they go back to campus this fall and if not, will they still pay the same tuition? NYU Business School professor Dr. Scott Galloway is here to discuss his provocative theory that the virus has permanently altered the economics and future of higher education in America.
[09:15:00]
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SMERCONISH: What if the American college system as we know it is never coming back? When the pandemic hit, colleges and universities around the country sent everyone home and scrambled to finish spring semester online. Now it looks like the fall semester is also in jeopardy. Testifying before the Senate this week, here's what Dr. Anthony Fauci had to say.
(BEGIN VIDEO CLIP) ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: The idea of having treatments available or a vaccine to facilitate the reentry of students into the fall term would be something that would be a bit of a bridge too far.
(END VIDEO CLIP)
SMERCONISH: That same day, the Chancellor of the California State University System announced that most of its more than 770,000 students will probably not be on campus this fall. If the remote model of education continues, will students and their families still be willing to pay the full freight of tuition or rack up huge debt when the texture of that education is downscaled drastically and will this scenario crush all but the wealthiest institutions moving forward?
Well, this week, "New York Magazine" published this interview with my next guest, "The Coming Disruption -- Scott Galloway predicts a handful of elite cyborg universities will soon monopolize higher education." Joining me now is Dr. Galloway.
He's a clinical professor of marketing at New York University's Stern School of Business and he hosts a "VICE" TV show based on his blog called "No Mercy / No Malice." So Dr. Galloway, you predicted in the future we're going to see linkage between, say, MIT and Google or Facebook and Harvard. By the way, I'm hoping for Tesla and Penn, but what would be in it for each side? Why would they do that?
SCOTT GALLOWAY, PROFESSOR, NYU STERN SCHOOL OF BUSINESS: So, Michael, first off, good to be with you, but I appreciate the promotion. I just have an MBA, not a PhD. I'm not a doctor, but thank you -- thank you regardless.
SMERCONISH: OK.
GALLOWAY: So what's in it for each side? The universities have to dramatically expand their enrollment in what will be a product that is forced to reduce its prices because it'll be a severely diminished product and in order to recapture the gross margin dollars they'll need to cover those fixed costs of expensive university buildings and tenured professors, they're going to need to dramatically expand enrollment and the way they'll do that is with technology, both small and big tech, and we're already seeing that.
And so it's going to be a fantastic time to be on the waiting list of a great university. They will dramatically expand their enrollment, but that's going to force the tier two schools to go into their waiting list, which will force the tier threes to go into their waiting list and tier three schools don't have a waiting list. So the top tier schools want to expand their enrollments.
And quite frankly, big tech, what do they get out of it? A company like Apple, a company like Google, a company like Facebook that have anywhere between $60 billion and $150 billion in revenues and have to double that revenue base over the next five years, there are few sectors they can go into that are large enough and one of the most disruptable industries in the world that's raised its prices 1,400 percent in the last 40 years, sticking its chin out -- higher education. So this is a marriage made in a -- in a pandemic, if you will.
SMERCONISH: Isn't it going to dilute the brand of the elite institutions?
[09:20:00]
I mean, you know, part of it is a scarcity model. Only a handful get to go to Harvard, MIT, Stanford, et cetera, but now if you're opening that process up, what are we going to do? Have an asterisk for those who received their education online versus those who came to Cambridge?
GALLOWAY: Not among the top universities. The Harvard admissions director has publicly stated that he could double the freshman class and not sacrifice any quality. We're talking about schools that in many instances, as Stanford has done, turn away 92 percent of their applicants, have seen their applications triple in the last 30 years despite not increasing their freshman seats such that they could raise prices so fast.
I believe a lot of these universities have lost the script and no longer see themselves as public servants, but as luxury brands. People brag that they would never get into the school they went to today which means most likely their kids aren't getting in. So every middle- class unremarkable kid has been somewhat downgraded in terms of the prestige of the college they can get into, but the top tier could double or triple their freshmen seats without sacrificing any quality of student.
SMERCONISH: I know that many are watching this, parents and they're saying, OK, what about price? What's going to happen to price in the future?
GALLOWAY: Well, I think a lot of universities are in a state of denial. They use terms like we're in this together and we're committed to coming back to campus, but if you have certification and then you have the experience and then you have the education, the certification of a world-class university is still there and to be honest, that's the primary value add, but if the experience is substantially diminished, people are no longer going to pay $58,000 a year for a substantially diminished experience at a tier two brand.
So you're going to see what department stores are to retail. We're about to see kind of liberal arts, expensive, tier two brand universities become to -- come to education. You could see hundreds, if not thousands of universities start this Death March that would have just unprecedented implications in terms of the recession or the economics of college towns, but bottom line, and I know you have college-age children, Michael, we're all rethinking the amount of money we're willing to pay for a substantially impaired product that has become exceptionally expensive over the last 30 years.
SMERCONISH: I have -- I have -- my wife and I have three suddenly back under our roof, each taking Zoom courses, frankly, at great institutions in various parts of the house. I need to ask about this. I worry about the loss of the experience that I had, the experience that you had. by the way, Scott, we would have been great roommates. put up on the screen what I'm referring to.
"I personally worry about how a little shit like me will experience what I did at UCLA. I tested my limits freshman year. I drank too much, threw up too often. I joined crew and pushed myself harder physically than I ever imagined possible. I fell in love for the first time. I gained resilience when I had my heart broken. I met people from different economic backgrounds who gave me a sense of empathy." How do we lose those types of experiences?
GALLOWAY: It's a tragedy. It's like whenever big tech goes into anything, as I think they will into education. There will be some winners here. We will offer more decent education to more people. I think all of those things would have happened for me and for you without the college experience, but they wouldn't have happened in such a safe, joyous place.
So that's the correct question. When we take -- when we insert big tech into teaching, do we lose humanity? Do we lose a sense of empathy? Do we lose a safe place for our children to mature, to learn about others, to learn about people who come from different economic backgrounds?
So there's just no getting around it. Like any -- like any sector -- look at social -- look at media. When big tech came in, we're more social, but we're less connected and I think that's going to happen in education.
This is a tragedy not only economically, but in terms of the vision of the liberal arts education and that is enlightenment and a wonderful time of life when you're open to evidence and argument and exploration. So there's just no getting around it. This is --
SMERCONISH: The piece -- the piece --
GALLOWAY: You and I had something wonderful.
SMERCONISH: Yes. Absolutely. The piece is excellent. I've tweeted it out again this morning. I want people to read it, but among the many takeaways, right now as we speak, there are hundreds, if not thousands of colleges and universities that are on the bubble. On one hand, many are now going to get access potentially to elite institutions that heretofore they couldn't, but right now there are many that may not survive.
GALLOWAY: Yes. That's 100 percent correct. There'll be unintended winners. There's never been a better time to be on the waiting list of a top-tier university.
SMERCONISH: Right.
GALLOWAY: There's never been a worse time to be a professor at a second-tier university.
SMERCONISH: Scott Galloway, doctor or not, thank you for being here.
GALLOWAY: Thank you, Michael.
SMERCONISH: I love a guy who says you've inflated my CV. I better set the record straight. Right?
[09:25:02]
Let's see what you're saying on my Smerconish Twitter and Facebook pages. What do we have from Facebook? "The social experience of college is most important."
Jeff, look, like my brother before me, I lived in fraternity for three years. You know, that was part and parcel of the experience and when I put on the screen Scott Galloway summing up his experience at UCLA, it sounded exactly like my experience at Lehigh University and I worry, you know, would I have had those types of experiences maybe spread out over more than than four years? Yes. Seven years of college down the drain. Isn't that what Belushi said?
I want to remind you to make sure that you're answering the survey question at Smerconish.com. It's a great one. Is the partisan fight over when and how to reopen helping President Trump's re-election?
Up ahead, new developments, stunning new developments in the Ahmaud Arbery case and tributes like this mural just part of the outpouring of emotion following the release of a video of the killing of the 25- year-old. I'll break down the videotape with legendary criminal defense attorney Mark O'Mara.
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[09:30:26]
SMERCONISH: New developments in the shooting of Ahmaud Arbery. Please be advised. This is disturbing footage. We need to show it to discuss what happened that day.
As you've probably seen this video from February 23rd appears to show the 25-year-old Arbery jogging in a neighborhood outside of Brunswick, Georgia near a pickup truck with two armed men. Then there's a physical confrontation between Arbery and one of the men. Three gunshots are heard before Arbery falls to the ground.
Several months later after the video was leaked to a local radio station, two men in the truck, Gregory McMichael, 64, and his 34-year- old son Travis were arrested and charged with felony murder and aggravated assault. The lawyers for both men have said not to rush to judgment and that more information is going to come out.
In the days since the video of the encounter security camera videos have surfaced from a nearby construction site of individuals on the site. In only one instance, this video from the day of the shooting has the family confirmed it is Arbery. The property owner says nothing was taken. Now, CNN has obtained this text message from the lawyer for the owner of the construction site. The message sent by a police officer, informs the owner, that his neighbor, Greg McMichael happens to be a retired member of the police force and it reads McMichael is available day or night, if he gets any action on his security camera.
Joining me now to discuss is defense attorney and CNN Legal Analyst, Mark O'Mara. You may remember his defense of George Zimmerman in the Trayvon Martin case.
Mark, thank you for being here. React to the latest news on the case.
MARK O'MARA, CRIMINAL DEFENSE ATTORNEY/FORMER PROSECUTOR: That most recent one, that text is very interesting to me, it shows me, or at least brings up the questions of a couple things.
One that law enforcement was involved and aware and for whatever reason seemed to bring in McMichael as a potential source. And I don't know that that's appropriate. He is a non-law enforcement officer at that point. And the idea that they're sort of deferring, call this guy because he lives in the neighborhood, he can help out, that's very troubling to me.
But almost as troubling the insight that it gives me is is this an answer or explanation as to why law enforcement seemed to have done nothing to future the investigation of McMichael and maybe the arrest of him which only happened now since all of this happened? I have to wonder, they had this investment involvement with McMichael from day one.
SMERCONISH: Yes, right. In other words, they're the one who brought him into this dynamic to begin with.
Mark, there's another develop from WSB in Georgia that says it was actually Greg McMichael who released the video to the radio station that has now prompted the arrest of these two men. And what's strange about it is that if the story is accurate and I have no reason to doubt it that his thinking was it would ease racial tensions if only people could see it.
O'MARA: Michael, I don't know how to properly react to it except to say this. McMichael's thought that that video actually explains away what happened, in a way that would reduce the tension, to explain away his and or Travis' behavior to me just suggests a complete ignorance of the social reality that he should be existing in.
He's not in the 1930s Georgia. He's in the 2020 Georgia. But for him to believe that this explains away what I did, Travis only did it for this reason. I was doing it for this reason, evidences to me a harsh lack of connection to a racial reality that we're supposed to be living in today.
SMERCONISH: I want you to Zapruder, if you get the reference, the tape. Run the first clip so that Mark O'Mara can analyze what he sees in it. This is the approach. Go ahead, Mark. O'MARA: Sure. My first concern is who's taking -- who's doing the videoing. And thank God that they were. And then about a second afterwards, I realized wait a minute the guy taking the video is part of this whatever is about to happen and obviously did happen. So, that's my first concern. Thank God we have the tape, but who's taking it?
SMERCONISH: Yes, right. In other words, it seems coordinated. This is the most troubling that I'm now about to show. So another warning to those who are at home. It's the confrontation. Roll the clip.
[09:35:00]
What do you see, Mark?
O'MARA: So, here what I see is Ahmaud who seems to be, I think, jogging down the road now comes upon two guys armed obviously, one outside his door with a shotgun. And he does what I would have done, get to the right-hand side. At least avoid the guy with the shotgun.
And then you can see -- seems to be the guy with the shotgun come out and around Travis McMichael. And I've got to tell you, Michael, you can't outrun a shotgun. So, I see Ahmaud trying to do what I would have done which is disarm him. Get away. Get the shotgun away from him. Horribly troubling. But my real concern when I see this part of it is it was now known to be absolutely planned event, that they were going to accost, they were going to get Ahmaud Arbery no matter what.
SMERCONISH: I want to show it in slow motion. Do the slo-mo. And I want to ask Mark O'Mara, in what circumstances would deadly force be permitted?
O'MARA: Well, here's what the defense is going to say. Here's the only -- first of all, the only time deadly force is allowed is in response to the presumption that deadly force is about to be used against you. You're allowed to respond to deadly force with deadly force. You're not to be the one to start it.
So, here's what the defense has to focus on. At some point, Travis with his shotgun open and carrying in Georgia is OK. He can do that. We don't hear what was said between Travis and Ahmaud, but at some point, when Ahmaud grabs the gun, now it's no longer Travis' gun, unfortunately. It is simply the gun. And whoever ends up with the gun ends up with the use of deadly force potential.
So Travis' lawyers are going to say, once he tried to get my gun, I'm allowed to protect myself from deadly force because he's trying to get my gun from me. And that's gives him a chance with deadly force. And that's going to be the question in this whole case, Michael.
SMERCONISH: I had a radio listener this week, Mark, who said, if the guy had a flat screen TV on his back while he was running down the street, you still can't use deadly force.
O'MARA: You can never use deadly force in protection of property. Every civilization has said property is below a life. That's an easy distinction to make. And it should have been made here. And it wasn't. Even --
SMERCONISH: Mark O'Mara, thank you.
(CROSSTALK)
O'MARA: -- the house which shows (ph) no evidence.
SMERCONISH: Right, right. Understood. Glad that you said it that way. Thank you, Mark.
Let's check in on your tweets and Facebook comments. What do we have, Catherine? From Facebook?
The McMichaels are not in jail because the cops saw the tape. They are in jail because we saw the tape. Tells you everything you need to know.
And, Amy, the idea, this is the breaking news today on this, that we know of the tape because one of the McMichaels thought that it would explain the situation and lessen temperatures and not allow that community to turn into a Ferguson. That's the explanation. Shows a bizarre miscalculation of how it would be interpreted.
One last observation, if I may say this, you know, this happened on February 23rd. And we sit here in mid-May still learning details even in the last 24 hours. It makes me wonder what else we still don't know. I'm just wondering. No matter how it cuts, what else don't we know?
I want you to remind you to answer today's survey question at Smerconish.com.
"Is the partisan fight over when and how to re-open helping President Trump's re-election?"
Now, still to come, hackers hit a law firm filled with A-list celebrity clients. The ransom they're demanding, $42 million. So what options does the law firm have to get the data returned?
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[09:42:53]
SMERCONISH: The firm of prominent entertainment attorney Allen Grubman facing a $42 million ransom demand for stolen files related to celebrity clients. Grubman's clients have included Lady Gaga, Madonna, U2, Bruce Springsteen, Elton John just to name a few.
The hackers are allegedly kicking it up a notch by saying that if the firm doesn't pay, the next person they'll be releasing dirt on is President Donald Trump. Now, important to note there's no proof they have anything on the president. The firm tells CNN they haven't worked with Trump while he was president or anytime before that.
The firm said this in a statement to CNN, "We've been informed by the experts and the FBI that negotiating with or paying ransom to terrorists is a violation of federal criminal law. Even when enormous ransoms have been paid, the criminals often leak the documents anyway."
So, are their hands completely tied? Joining me now to discuss is Richard Clarke. You'll remember he served as the White House counterterrorism adviser to Presidents Clinton, George H.W. Bush and George W. Bush. He's also the co-author of "The Fifth Domain: Defending Our Country, Our Companies, and Ourselves in the Age of Cyber Threats."
Mr. Clarke, welcome back. I know from reading your book that when you get the call for advice by major corporations, people who have been similarly victimized, your advice is often to pay. Why?
RICHARD CLARKE, FORMER WHITE HOUSE COUNTERTERRORISM ADVISER, PRESIDENTS CLINTON, H.W. BUSH, AND W. BUSH: Well, Michael, we have -- while this pandemic is going on, we have an epidemic of ransomware. And most companies, when they're hit, if they want their system back, have to pay. And the reason for that is two-fold.
One, the data has probably been exfiltrated and will be placed on the Web to the company's embarrassment if they don't pay. And two, if they just mount their backup, the backup has probably been encrypted as well. And so if they want to get back into business in a matter of days rather than a matter of weeks they should pay. Now, paying doesn't help the public good because it's money going to criminals.
[09:45:04]
But if the company is looking after its own good and hasn't done a good job on cyber security, it has no choice but to pay.
SMERCONISH: OK. I'm hearing you say they mean it. That they're not bluffing if they say that they will release this information. Do they similarly mean it when they say if you pay us, we won't?
CLARKE: Most of the time, the vast majority of the time, these people, these criminals, these overseas criminals honor their word. And the reason they do is they have a reputation to maintain.
If people believe that they won't decrypt the data, or they won't publish the data then no one is going to pay. And so if you pay them, you get your network back. If you don't pay them, your date appears on the Web.
SMERCONISH: I hope you get my reference to "Butch Cassidy and the Sundance Kid," who are these guys?
CLARKE: I do. These guys are in the former Soviet Union. They're in Russia, or Ukraine, Moldova. They're in Romania, Vietnam, China. Frequently, Michael, these are guys who are government hackers by day and criminals by night.
SMERCONISH: So how do we protect ourselves? What's the advice that you typically give those who seek your consultation? CLARKE: Well, if you haven't been hacked yet buy cyber insurance, that's a good place to start, number one. Number two, make sure that your backup is more than 60 days old. You want to back something up that has been offline, not connected to anything, in a drawer somewhere for at least a month, preferably, two.
And then do a better job on cyber security. Spend more than 3 percent of your I.T. budget defending your network. Because if you don't, you're going have to spend a heck of a lot more money later. You ought to be spending nine or 10 percent of your I.T. budget on cyber security.
SMERCONISH: And just to circle back to where we began, OK, if you're going to make a payment, in what form does that payment take?
CLARKE: Well, if you have cyber insurance, they'll take care of it. They have experts. And if you have a good law firm, they have experts.
You don't have to do-it-yourself. The insurance company will do it. Or your law firm will do it. And they'll do it using bitcoin.
And to anticipate your next question, no, we cannot trace them. We cannot see where the bitcoin goes or who gets them or intercept it and stop it.
SMERCONISH: Richard Clarke, thank you as always. We really appreciate your expertise.
CLARKE: Be safe, Michael.
SMERCONISH: Still to come, your best and worst tweets and Facebook comments. And we'll give you the final results of the provocative survey question of the week at Smerconish.com.
"Is the partisan fight over when and how to re-open helping President Trump's re-election?"
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[09:52:30]
SMERCONISH: Time to see how you responded to the survey question at Smerconish.com.
"Is the partisan fight over when and how to re-open helping President Trump's re-election?"
Survey says -- 64 percent say no, of close to 15,000 who voted on this. So almost two-thirds of you are saying no, it's not helping him. But I have to say the data and I'm not quoting "Rasmussen." I'm not relying on "Breitbart." I'm looking at CNN's polling data which says that it's 51/46 nationally.
And I think many of us learned our lesson about paying too much attention four years ago to national surveys, the action is in the battleground states. And when you look at the 15 battleground states it flips and it's 52/45 Trump leading right at the time that we see all of the skirmishes in states like Pennsylvania, Wisconsin and Michigan, and it occurs to me this actually might be to his benefit politically speaking.
I'll leave the survey question up for the weekend. What else came in, Catherine? What do we have? It's an interesting one though, isn't it?
You seem to thrive on questions that divide the country even more.
No, Clarabella, I thrive on questions on which there seems to be legitimate debate and intellectual curiosity. I mean, I don't want a survey question that is 90/10 or 95/5. We don't learn anything from that. I'm not stirring the pot, I'm analyzing it.
What's next?
Smerconish, the polarization of the pandemic may or may not help Trump's re-election, but it sure hurts the country.
The polarization hurts the country. Well, polarization generally hurts the country. Look, I happen to think, as I usually do, that the truth on this lies somewhere in between. That we need to protect the most vulnerable among us relying on the data that we now have which -- a lot different than the data that we had at the outset, but at the same time take what steps are necessary not to further cause peril through the economy.
People are dying not only through a formal diagnosis of COVID-19 but also I think through some of the ramifications. Some of the social ramifications that come from it, whether it's depression, opioid addiction, et cetera, et cetera, all of which is exacerbate.
Next? What do we have? I can do this all day. I love this part of the show.
Your piece on the college campus experience was more than disappointing. A child can't get a full college education including the experience of socializing, clubs, fraternities and most important independence on line in my basement.
[09:55:07]
More than disappointment -- well, it may -- yes. But I think it's a pretty interesting insight from Scott Galloway who has credentials in Silicon Valley and now is an NYU professor whose opinions are widely respected.
I predicted at the outset that this was going to change the model and now here he is with his expertise summing up a viewpoint that I've long thought was the case.
Stay safe. Thank you for watching. See you next week.
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