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Quest Means Business
Sarkozy Fights Back Against Allegations of Corruption; U.S., U.K. to Step Up Airport Security
Aired July 02, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: The New York Stock Exchange. That's why they're at Cedar fair which is an amusement park, and that's why
they're ringing the closing bell. It all seems a bit strange - oh, look! A rollercoaster to add to the strangeness. It's Wednesday, it's July the
2nd. Tonight, a public denial. Nicolas Sarkozy fights back against suggestions of corruption. U.S. skeptics wage war on Strasbourg. I'll ask
Olli Rehn if he can bridge the divide. And in the past hour, the U.S. and U.K. say they're stepping up airport security. I'm Richard Quest, croaky
with a sore throat, but of course I still mean business.
Good evening. My apologies. It's all a bit croaky this evening, but tonight the former French President Nicolas Sarkozy has strongly denied he
acted corruptly in his five years in office. Sarkozy's been placed into formal investigation to establish whether he abused his office. He says
the move was an attempt to humiliate him. The investigators want to know if Sarkozy used his position to obtain information from magistrates on
legal cases against him. In an interview with the broadcaster TF1 and Europe 1, the former president said he never betrayed the trust of the
French people.
(BEGIN VIDEOCLIP)
NICOLAS SARKOZY, FORMER FRENCH PRESIDENT, VIA TRANSLATOR: I will tell -- I want to talk to those who'd listen and watch me and I want to tell that I
have never betrayed the trust of those who are watching me. And I have never committed an act that is contrary to the principals and laws of our
Republic. It is for me to talk and to convince and show the importance of that. So -
(END VIDEOCLIP)
QUEST: That's the former French president. Our senior international correspondent Jim Bittermann is with us from Paris. Barely has he been
questioned and he's already giving interviews. So either he feels the need to speak or he's in very deep trouble.
JIM BITTERMANN, CNN's SENIOR EUROPEAN CORRESPONDENT BASED IN PARIS: I think he wanted to get his version out there right away, Richard, and one
of the things he was clearly very angry at the way he was treated. He pointed out that he was hauled before the police, spent 15 hours being
questioned by police and then at midnight last night, was taken to the three investigating judges who told him that he was under official judicial
investigation for the various charges that they're looking into. They haven't charged him with anything, and what really irritated him and he
pointed this out at the interview is that the police took down 45 pages of notes and the judges were already ready to lay the allegations on him even
without looking at the notes. At least that's what he implied in his interview.
It was truly a combative interview, he's coming right out and laying it on the line the way he feels his version of the story should go. Now, I'd
like to bring into the picture here, Richard, Joelle Garriaud-Maylam, who is a senator in the French senate from Nicolas Sarkozy's party. And let me
just begin generally, Joelle, -- Did - how do you think that the president - the former president - did tonight? Was he - was he - combative or -
JOELLE GARRIAUD-MAYLAM, MEMBER OF FRENCH SENATE: Yes.
BITTERMANN: -- did he make his case?
GARRIAUD-MAYLAM: He was extremely combative. That's him, that's his personality - someone who's never going to let himself go down and he's a
fighter. He stated very clearly he will fight.
BITTERMANN: And at the end he said that he was reflecting on the idea of running for president again. What about your party - his party? Do you
think they would support him for president again with all this going on?
GARRIAUD-MAYLAM: I mean, he has a tremendous following. People love him - lots of people love him. He had a tremendous result in the election
although he didn't win it. I'll just say it's a bit too early to talk about that, because there will be a primary election and there will be
other candidates, so we don't know and he didn't say for sure that he will run although everybody thinks he will - especially now. Especially after
such a humiliating treatment. I mean, this is unheard of. I mean, (inaudible) public, nobody was treated like worse (ph).
BITTERMANN: One of the points that he made was that he thought that this was politically-motivated. Do you agree with that?
GARRIAUD-MAYLAM: I totally agree with it. You know, I really feel that we a state of countries in. You know, we have 48 billion euros more debt.
(Inaudible) at least 500,000 more unemployed people since Hollande got in. I mean, you know, in a way, it hurts people not thinking about the issues
and the economic issues which are so important in France at the moment. There are reforms to be made, the president is not doing that, and it's so
much easier to have a scapegoat.
BITTERMANN: The investigating judges say, look, he broke the law, he shouldn't be above the law. If he broke the law, he should be
investigated.
GARRIAUD-MAYLAM: He certainly shouldn't be above law. There should be some investigations, and justice has to do its job. And obviously we take
the research (ph) into account. I respect justice. But I must say with what happened today, and what has happened in the last weeks and months,
I'm starting to wonder whether justice is as independent as we would like it to be.
BITTERMANN: Well do you think something should be changed in the judicial system after this? I mean, are there some general principles here you
think should - need - to be changed?
GARRIAUD-MAYLAM: There is one general principle - there are several principles obviously - but one of them is this independence of justice and
that someone should be presumed innocent. And that obviously hasn't been respected and hasn't been taken into account. And it infuriates me. I
mean, so many things went wrong. How come were his phone conversations taped? I mean, this is something very serious. Phone conversations with
his lawyer. You know, I believe in Eastern Europe and Eastern Europe we expect that, but not in a democratic country like France.
BITTERMANN: Thank you very much, Senator Joelle Garriaud-Maylam from - Nicolas Sarkozy's party. Richard.
QUEST: Jim, is this a quest - is this a case - of me think the lady doth protest too much?
BITTERMANN: (LAUGHTER). Well, perhaps, perhaps. I think it certainly in - if you're talking about the fact that Nicolas Sarkozy a lot, I think in
fact it may be some time before we know how this plays out -
QUEST: Right.
BITTERMANN: -- whether people buy into his - buy into his argument. Richard.
QUEST: Jim Bittermann who's in Paris tonight. Jim, we thank you. Now, in the French city of Strasbourg today, Eurosceptics went on the warpath in
the first session of the European Parliament. It was a bitter, brutal attack. France's Marine Le Penn who shocked Europe with her party's
success in recent elections, was in Strasbourg to make clear her opposition to more European integration. The leader of the French National Front told
lawmakers there was change in the air.
(BEGIN VIDEOCLIP)
MARINE LE PEN, PRESIDENT, FRENCH NATIONAL FRONT, VIA TRANSLATOR: Nobody is blinder than those who don't want to see. Whether you like it or not,
Ladies and Gentlemen, a new wind is blowing over this room. This is not thanks to you, Mr. Schulz. A new wind is blowing over this room, a wind of
freshness, freedom and revolt against a European Union that is getting more and more inefficient, anti-democratic, brutal, disconnected and more than
ever questioned by people across Europe.
(END VIDEOCLIP)
QUEST: Now, dealing with these divisions is part of Olli Rehn's problem. He's been voted in as one of the Parliament's vice presidents. It comes
down as he steps down as the European Commission's vice president and head of economics. A good friend of "Quest Means Business," Mr. Rehn now joins
me from Strasbourg in his first interview since changing roles. Mr. Rehn, straight out of the frying pan and into the fire - from the Commission with
its controversies right into the Parliament, which is going to be the fighting ground for Eurosceptics and Euro integrationists. Where do you
stand?
OLLI REHN, VICE PRESIDENT, EUROPEAN PARLIAMENT: Indeed, it is quite intense here in Brussels - here in Strasbourg at the European Parliament.
I believe that populism is a favor meter of the society and its problems. But populism essentially means nearly summate. It doesn't solve anything,
and that's why we need a politi -- coalition of political forces that we let constructively be able to provide solutions to the economic and social
ills of Europe. Which means that we have to now focus really on the reinforcing the economic recovery which is currently underway for the sake
of sustainable growth and job creation.
QUEST: But you can do that as much as you like, but the two sides are implacably opposed to each other. Nigel Farage versus Martin Schulz - it
is a recipe for a parliament that is going to have internecine warfare.
REHN: It is certainly a more political parliament than before. But that's actually the essence of parliamentary democracy, and I'm actually very glad
to be here in order to work for the evolving European democracy - work for the European values. And I'm very much looking forward to engaging in the
political debates with all the members of the European Parliament.
QUEST: The Parliament is much more powerful now post-Lisbon treaty than it was before. The Parliament had a victory on the question of the Commission
president. So how does the Parliament now flex its muscles and how will you play your part?
REHN: I believe that it is essential for the European Union in order to solve its economic and social problems that we have a - first of all - a
broad-based political coalition in the European Parliament reflected in the policy priorities of next European Commission and in the conversation of
the Commission. And thus we can ensure that we can have a consistent forward looking and stable policies provided by good cooperation -
QUEST: Right.
REHN: -- between Commission and the European Parliament.
QUEST: So, finally, how do you prevent Europe from becoming obsessed and to some extent becoming sclerotic by the question of the U.K.'s referendum
in two or three years' time. It seems to be every issue eventually has one party or the other or somebody saying, you know, the U.K. in, the U.K. out.
How do you prevent everything? I suppose, Mr. Rehn, how do you prevent paralysis by the U.K.'s referendum?
REHN: I think it's important that the European Union really moves on now to tackle the economic and social tensions that we are facing. It requires
a close cooperation between both the European Union and the member states. And by providing solutions to our citizens every day, we can win the public
trust back, and that's going to be the main mission of this European Parliament. As far as the U.K. is concerned, I believe that it's much
better that United Kingdom is - rather I say - playmaker in the midfield than shouting from the sidelines from the benches. You never score a goal,
sir, from the benches.
QUEST: Oh, a nice World Cup analogy. Olli Rehn, please as always you have an invitation to join us for our nightly conversation of business and
economics and it's good to see you, sir. Thank you. And in your new roll and -
REHN: Thank you.
QUEST: -- and congratulations and good luck as a parliamentarian. Now I'm going to do this - apology many times during the course of the program, if
have joined me tonight, little bit throaty this evening. European markets closed today unchanged, give or take. Look at the numbers -- barely
budging except for the French CACARON which was down a 3rd of a percent when all was said and done. We had a strong jobs numbers, a speech from
Janet Yellen and still the Dow cannot crack 17,000. We'd have some brand new records though. Alison's at the stock exchange.
ALISON KOSIK, BUSINESS CORRESPONDENT FOR CNN BASED IN NEW YORK: Hello, Richard. So, yes, we saw the Dow and S&P not yet new records but no 17,000
yet, I have to say you predicted would happen today, I predict it's going to happen tomorrow - who was right? Just kidding. Anyway, so today was
all about the waiting. We saw stocks really trade in a very narrow range. You know, you're seeing the Dow sort of wait cautiously for that jobs
report. We did get a precursor though possibly. The ADP jobs report showing that 281,000 private sector jobs were created last month. That
report coming in better than expected. It's raising hopes that it could be a strong sign of hiring ahead of tomorrow's government report coming up,
once again, tomorrow. Richard.
QUEST: Alison Kosik at the New York Stock Exchange, thank you for that. And I still - well - 17,000 didn't happen today, but there's still time
before the end of the week. Still on "Quest Means Business," guarding against threats in the skies. The Obama administration says it's taking
extra precautions, the U.K. says it's going to do the same. What precautions and against whom? (RINGS BELL).
(COMMERCIAL BREAK)
QUEST: In the past hour, news has broken. U.S. Department of Homeland Security says it is stepping up security measures at airports. Now, not
airports in the U.S., and not flights going out of the U.S., but in overseas destinations where there are direct flights back to the U.S. In
the last few moments, the British authorities say they're also stepping up precautionary measures. Evan Perez has the story and joins us from CNN
Washington. First things first, where has this come from? What is the threat?
EVAN PEREZ, CNN JUSTICE REPORTER: Well, Richard, the concern for a long time has been about the al-Qaeda affiliate in Yemen - al-Qaeda in the
Arabian Peninsula - and the fact that it is known to U.S. intelligence and British intelligence, frankly, that they're working on new types of hard-
to-trace explosives. Bombs made with hard-to-trace explosives. And so the real concern is that this could get passed through some of the current
screening procedures. We have a statement from the Homeland Security Secretary Jeh Johnson in which he says, "I have directed TSA to implement
enhanced security measures in the coming days at certain overseas airports with direct flights to the United States. We will work to ensure these
necessary steps pose as few disruptions to travelers as possible. We are sharing the recent and relevant information with our foreign allies and are
consulting with the aviation industry."
Now, Richard, this is likely going to take the form of additional screenings, there are going to be additional machines - these explosive
trace machines that are going to be deployed at some of these airports. You might get your electronics and your shoes checked one more time before
you get on your flight, Richard.
QUEST: Which airports? Obviously now the U.K. says it's going to be doing it, we can assume they're part of it, and the U.K. has more flights to the
United States than any other --
PEREZ: That's right.
QUEST: -- country - 17 flights - dozens of flights every day. But, Evan, what other countries?
PEREZ: You know, they're not saying. The U.S. is not saying because they don't want to tip off - they say they don't want to tip off - the bad guys.
But we do know from sources that we're talking about airports in the Middle East, some airports in Europe that they feel could use some of these
enhanced procedures. But they're not saying just yet, Richard, simply because they think that if you - if you're - specific, then they'll, you
know, just go somewhere else.
QUEST: Right. Look, I have to say it is quite remarkable the announcement that's just come out and the announcement from the U.K. I mean, we know
that they were looking at these things, but to now actually say they are upping this level, they're making it sound like everything's OK and don't
panic, don't panic. But it's quite remarkable what they've done.
PEREZ: Right, and you now, it's very - it's - they've been talking about this. They've been discussing here in Washington - they've been discussing
this for several weeks. And one of the key things they don't want to do is they don't want to have people cancel their flights, they don't want to
freak out the flying public. And that is also one reason why they're not changing what you're allowed to bring onboard your flights. If you
remember last summer when there was a concern about the Sochi Olympics, they did ban certain liquids and so on - toothpaste for instance - on
flights, you know, in and out of Russia. So that was what was the concern then. In this case, they're not doing any of those things and not changing
what you can bring on your flight. They're just upping the amount of screening that goes on to try to prevent a bomb from getting through,
Richard.
QUEST: When you find out more, come back and report to us, please, Evan.
PEREZ: (Inaudible).
QUEST: Thank you very much indeed. Now, the U.S. football team was knocked out of the World Cup last night (RINGS BELL) - that much you know.
In the process, won a host of new fans and record TV ratings. Let's (inaudible). This is "Quest Means Business," good evening to you.
(COMMERCIAL BREAK)
QUEST: I need to attend to my duties. The United States flag obviously comes out because it happened after the program last night. This is what
we've got left. We'll put this to here for one second. Now, while the U.S. have dropped out of the World Cup, one American player has never
enjoyed so much acclaim. Last night the goalkeeper Tim Howard broke the record for most saves in a World Cup match. There's one, and another one.
At times he was the only thing keeping his team alive. And the response on social media has been spectacular. There are people calling for him to be
put on the dollar bill or even make a run for the White House. He spoke earlier to CNN and clearly the impact of Team USA's performance has had
back home has not been lost on Howard.
(BEGIN VIDEOCLIP)
TIM HOWARD, USA GOALKEEPER: We felt it down here, we've seen all the highlights and all of our friends have sent those videos. We've seen
YouTube and all the bars and the restaurants and the parks have been sold out. It's pretty special, and that's been part of this amazing journey.
Playing at the World Cup is special, but also being able to captivate the imagination and the hopes of dreams of a nation is really certainly part of
that ride.
(END VIDEOCLIP)
QUEST: Straight out of central casting, isn't he? Yesterday fans rallied for the Team USA across the United States. At Soldier Field in Chicago
where they normally pay American football - whatever that is - 28,000 people cheered the team on. The question now - can Americans be persuaded
to come out every week to watch football, not just every four years? Attendance at Major League Soccer games is low - around 18,000 on average.
I'll put that in perspective - in England, the Premier League typically crowd of 36,000. Major League Soccer - MLS - will be looking to capitalize
on the enthusiasm. For Team USA at the World Cup, joining me now is the president of MLS - Mark Abbott. Sir, I have a cold so I won't shake your
hand --
MARK ABBOTT, PRESIDENT, MAJOR LEAGUE SOCCER: OK.
QUEST: -- this afternoon. The first test is going to be whether the crowds watching, turning up at sports bars for the rest of the World Cup -
obviously it won't be as maintained now the U.S. is out of it, but we'll be looking to see how it's maintained for the rest of the tournament.
ABBOTT: Sure. Well at the last World Cup 25 million people watched the final in the United States. Wasn't in the final in 2010, so we're quite
confident that the viewership for the World Cup will continue to be very high in the United States.
QUEST: But you - can you quantify how much enthusiasm so far has been because there's a home team still participating versus what happens when
it's this lot that is just going to be playing against each other?
ABBOTT: Well, I think there's two things. The World Cup itself has always been a tremendously popular tournament in television terms in the United
States.
QUEST: Right.
ABBOTT: What was the breakthrough moment was the popularity of the United States' national team which had a moment of relevance that we've never
experienced.
QUEST: You have been asked a gazillion times about how you capitalize for the MLS from this new enthusiasm so that it doesn't just become a - not a
new sport, but a sport for more of an immigrant population, a Latino population, but not a home-grown middle America Sport?
ABBOTT: Well, it's changed a lot, so -
QUEST: Has it? Has it?
ABBOTT: It has. So, the World Cup was here in 1994. And so people in their mid-20s now - the millennial generation - they were five or six years
old when the World Cup was here. The league began in 1996, and so we have now the first generation that's grown up with the sport as it's been
mainstreaming the United States.
The second thing - the key to our strategy - is that the players that were playing on the U.S. National Team - the Clint Dempseys from the Seattle
Sounders, the Michael Bradleys from Toronto FC - the very players that America's been watching for the last two weeks are now going to be
returning and playing in the league. So, for example, on July 13th, the same day as the World Cup final, our Seattle Sounders will host the
Portland Timbers in Seattle. Clint Dempsey will be there, DeAndre Yedlin will be there and 67,000 fans will be there.
QUEST: Now there's no doubt the demographics are in your favor.
ABBOTT: I would agree with that.
QUEST: I mean, the question would be that for a younger population, an influx of immigrant population and a shift in Latino interest from the
south upwards?
ABBOTT: Sure.
QUEST: But how - what can you to sort of promote it within the heartland of America?
ABBOTT: Well it's already in the heartland. So, for example, our team in Kansas City has sold out every game over the last two years.
QUEST: What numbers though?
ABBOTT: But the stadium only holds 20,000 and they sell out 20,000. So when you said the attendance is low, -
QUEST: Right.
ABBOTT: -- the capacity's at 90 percent of our stadium capacity. We built stadiums and it was a key part of our strategy - purpose built stadiums for
soccer. So when we had the World Cup here, there were no soccer stadiums in America. We played in NFL stadiums. But now over the last 15 years,
we've been in stadiums that are the homes of these teams. It's great for the fans, it's great for the players -
QUEST: What do you need more now? What's the one thing you need more?
ABBOTT: We continue to need to execute our strategy which is to expose the American public to the fact that the very players that they fell in love
with over the last two weeks play in our league, and they literally can come see them play next week.
QUEST: Thank you very much, sir.
ABBOTT: Thank you.
QUEST: You're out of competition but you can have the flag anyway.
ABBOTT: Thank you very much.
QUEST: Now, when we come back after the break, he says it's treatable and he says he will continue working. JPMorgan's boss reveals he has cancer.
Jamie Dimon says the outlook's promising and he's not giving up the top job. "Quest Means Business."
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more "Quest Means Business" in just a moment. This is CNN and on this network, the news always comes
first. Violent clashes broke out in Jerusalem after the body of a Palestinian teenager was discovered. Palestinians say he was kidnapped and
murdered by Jewish settlers in an apparent revenge attack after three Israeli teenagers were murdered. Israeli authorities are investigating any
possible link, urging all sides to exercise restraint.
Iraq's Prime Minister Nouri al-Maliki says he's offering an amnesty to all Sunni tribesmen who fought against the government, except those who have
killed Iraqi troops. The government's fight against Islamist insurgence is continuing. The Air Force released this video of jets striking targets in
central and western Iraq today.
U.S. government is now in possession of 600 metric tons of chemical weapons removed from Syria. The job of transferring the material to a U.S.
container vessel from a Danish cargo ship was completed a short time ago at a port in Italy. The ship will head into international waters where the
weapons will be destroyed.
U.S. Department of Homeland Security says it's tightening security at some overseas airports. It comes amid concern that terrorists are developing
explosives that might not be detected by safety checks. The U.K. also says it's stepping up security in line with the U.S. measures.
Former French President Nicolas Sarkozy has denied he acted corruptly during his five years in office. In an interview with two French
broadcasters, Mr. Sarkozy said he did not betray the people's trust. A member of his UMP party told me a short while ago the case has made her
question the French justice system.
(BEGIN VIDEOCLIP)
GARRIAUD-MAYLAM: -- someone should be presumed innocent. And that obviously hasn't been respected and hasn't been taken into account. And it
infuriates me.
(END VIDEOCLIP)
QUEST: One of Wall Street's most powerful bankers has been diagnosed with a curable throat cancer. Jamie Dimon has been diagnosed with a curable
throat cancer. Jamie Dimon says he will continue working as the chief executive of JPMorgan Chase while undergoing radiation and chemotherapy.
In a memo to colleagues, Mr. Dimon describes the prognosis as excellent and said the cancer had been found quickly. JPMorgan say a number of people -
not one individual - will assume greater responsibility during the treatment.
You can see it here among the members of the bank's operating committee. There's Gordon Smith, CEO of Consumer, Danielle Pinto, head of corporate,
Stephen Culter (ph) - Cutler, -- the joint counsel and Marianne Lake, the CFO. CNNMoney's Cristina Alesci joins me now. So, well, we obviously wish
him the very best in his treatment. The way it was announced yesterday - it came after the bell, it came late in the afternoon.
CRISTINA ALESCI, CORRESPONDENT FOR CNNMONEY: And they did a good job in terms of messaging it and pointing to those people as `look, we have a deep
bench of operating committee members - those are the operating committee members you just mentioned. All of which could be, you know, potential
successors either in the short-term, the medium-term or the long-term. Obviously succession is now the topic once again at JPMorgan. What we'll
have to see is whether or not investors are really confident in that pool that the company is pointing out.
QUEST: All right. Let's put investors to one side for a moment. No easy way to ask this question. Do we believe what we're being told about Mr.
Dimon's condition?
ALESCI: It would be really risky for them to mislead people on this point. Because you don't want any surprises, right? You want to be very seamless
about it, and if you're going to tell people that it's curable and there's a chance, you know, that he - there - won't be any disruptions in day-to-
day activities, you kind of got to deliver on that. There's no middle ground.
QUEST: That's really important, isn't it?
ALESCI: Absolutely.
QUEST: Because if you're going to start - because as this - and, again, please God it's a very successful treatment - but as it progresses, you
can't keep coming back again and again -
ALESCI: Say, oops, we're wrong about this -
QUEST: -- trying to rewrite the script.
ALESCI: Exactly. Well, from Jamie's point of view, look, he's going to go through eight weeks of not just radiation but chemotherapy. And the
chemotherapy part of it is what's going to be the roughest part of it. And what they're saying is he can't travel but on a day-to-day basis, he's
going to be as involved as he is now. That of course remains to be seen. Look, it's not necessarily a bad time for the bank. Remember they've
gotten through a lot of the government investigations, they've settled with the government in a lot of these cases and they've also been behind the
London-Wales scenario, and Jamie's built a team now after 18 months of some of his top deputies leaving the bank, so there's some stability there.
QUEST: This man is a giant on Wall Street, isn't he? If there is one name - I mean, I suppose you could argue and say Lloyd Blankfein of Goldman -
ALESCI: Not in the same way. Not in the same way.
QUEST: Really?
ALESCI: It's an - Jamie has the character that speaks to both investment bankers and traders, right? On Wall Street, you can speak to the traders
in kind of a rough way, and then you may not be as polished with the investment bankers. He resonates with both sides of a bank which is really
tough to do, and that's what's made him so charismatic. Not to mention the fact that if you look at what JPM has done through the financial crisis,
they didn't take a loss. And that's what made him such a hero coming out of the financial crisis.
QUEST: Right.
ALESCI: Obviously there were bumps after that.
QUEST: I can honestly say thank you for that. I think further speculation about his health condition is probably unseemly and it's best left -
ALESCI: Probably premature too.
QUEST: Premature, unseemly and it's best left to the doctors.
ALESCI: Absolutely.
QUEST: (Inaudible), many thanks. Now, there is another app to help you cut the cost of travel. It's not just one more website for cheap flight
tickets. I'll chat with the head of BlaBlaCar after the break.
(COMMERCIAL BREAK)
QUEST: Time for today's "Business Traveller" update. And a French startup has hitched a ride on the craze for car sharing - whether it's Zipcar or
Uber. In doing so, it's raised $100 million in funding - a huge amount of money. It's called BlaBlaCar. It works by allowing travelers to share the
cost of trips. It arranges for drivers to sell seats in their car, the company takes 12 percent of the fee which is calculated to let drivers
share their expenses, not to make a profit. These are the trips currently available. They are from London to Paris. As a driver you can even
specify how talkative you are and whether you like music as you drive. Frederic Mazzella is the chief exec of BlaBlaCar. He calls - he joins me
now live from Paris.
Sir, I've got to ask you the name itself is bizarre. It sounds like a low- cost airline that couldn't think of anything original. So where did it come from?
FREDERIC MAZZELLA, CEO, BLABLACAR: It comes actually from the fact that you get to choose how much you'll be talking during the trip, so you can be
either bla, bla-bla or bla bla bla, and that explains the name BlaBlaCar.
QUEST: Where - the idea is that you're going to match cars and drivers with passengers. That's the gist of it. You take a fee, everybody should
be happy, correct?
MAZZELLA: Yes. That's exactly the model. As a driver you will offer your available seats, and as passengers you will just buy the seats and share
the costs with the driver so that the cost of the gas and tolls are offset.
QUEST: And are - who pays the insurance? How does the passenger know that they are insured fully for the trip?
MAZZELLA: Actually since there is no profit made by the driver, it means that the passengers are insured just like they were friend or family
members from the drivers.
QUEST: OK. So you say, but I mean I can see that to be an argument in the future. Secondly, how do you - where is the criticism going to come from
in all of this? Because as I look at it, Uber seemed like a very straightforward situation but suddenly taxi drivers were up in arms. So,
are you prepared for a barrage of criticism and complaints about what you're doing?
MAZZELLA: Well actually what we are doing is really sharing the cost between drivers and passengers, which means there is no way in the
insurance or regulation that we can compete with someone who could complain. So it just means we are actually optimizing the cost of driving
alone. So, we are prepared if something happens -
QUEST: No, no, no, no. Hang on, hang on, hang on. This is glorified hitchhiking. Admit it. It's no different to standing by - it's slightly
different in the sense that you're doing it online, but you're literally online putting you sum out and hitching down the road. What happens if and
when something goes wrong? Whether it be an attack, a crash, anything like that?
MAZZELLA: So the thing is, it has never happened so far and there has been more than ten million people riding all over Europe with our service. It
means right now we are actually not seeing this kind of thing happening, but we will be developing further and see if that happens. The thing is,
today there is no point about it.
QUEST: Right.
MAZZELLA: I'm sorry about the ear.
QUEST: No, I apologize. Thank you very much for joining us. Thank you, sir, I appreciate it for joining us this evening. Now, stay - problems
with the earpiece there. And staying with our "Business Traveller" Update, once you got the best possible value from the passenger seat in your car,
will you squander it at all the shops when you actually do fly? Rosie Tomkins looks at duty-free shopping.
(BEGIN VIDEOCLIP)
ROSIE TOMKINS, SENIOR PRODUCER/REPORTER AT CNN INTERNATIONAL: It's the perfect shopping scenario - traps consumers with big signs screaming duty-
free. Nowhere perhaps is a retail audience more captive or the promise of discounts more enticing.
Female: I think it's `cause you have that bit of holiday feeling in you. (Inaudible) spend some money and you're buying up the lipstick you don't
really want.
TOMKINS: But why is it when we get to the checkout, it's so often a disappointment? For many of us, duty-free has become pretty much
synonymous with airport shopping. A casual phrase for a whole range of different tax-free situations around the world. Now, as the consumer, our
assumption is generally that duty-free equals cheaper. In reality, sadly, that's not always the case.
SIMON CALDER, TRAVEL EDITOR, "THE INDEPENDENT": The travel industry has created this myth that if you buy something at an airport, it's
automatically cheaper than it would be outside. Now, in some cases, it's most definitely the case. But in an awful lot of cases, well, buyer
beware. You can probably pick something up for a similar or a lower price without actually having to travel by air.
TOMKINS: Nevertheless, we're all busy spending. Airports like London's Heathrow with its massive footfall (ph) are reaping the rewards.
KIM GRAY, HEAD OF RETAIL STRATEGY, HEATHROW AIRPORT: Last year we had $1.8 billion in sales which resulted in about 34,000 pounds per square meter of
retail in the airport. We're not a retailer, we're an airport, and still we manage to achieve very good sales.
TOMKINS: While the airport enjoys its optimum conditions, the consumer is often left in the dark. When is it actually a bargain? A little shopping
experiment of our own yields varied results. When comparing prices at the airport with the high street, online and then different destinations. And
if I was leaving the E.U., it'd be 12.99?
Female: It could be, yes.
TOMKINS: Within Europe, there's been no duty-free since 1998. Although here at Heathrow, the airport offers duty-paid. They pay the tax on behalf
of the traveler. But not on apple and cigarettes. Frankly, it's a minefield. Between duty-free, tax-free, duty-paid or no benefits at all,
once you're going from country to continent, it's almost impossible to know where you stand.
The solution? Painfully obvious. Do your research online. One website that is worth knowing about, especially if you're a frequent traveler and
you know what you're after, is Duty Free Addict. If you're planning to buy a specific item, you can compare what it costs across a range of
destinations and plan accordingly. Beyond that and the absence of any secret formula, take heed of advice from an expert.
CALDER: Make sure you now the cost of the item you're interested in - both in the country that you're leaving and in your destination country. Be
aware that when you're traveling, you're in a strange retail mood and do not lose your normal retail sense. Duty-free is a misused term for
journeys in some parts of the world, particularly within the European Union when there is generally no tax advantage traveling from one country to
another. If you're tempted to buy alcohol and if you've got an intermediate flight, then make sure you'll be able to take your purchases
through the security check at the airport along the way. Finally, be aware that airport purchases can make you exceed your cabin baggage allowance.
You might find that your duty-frees cost an awful lot more than you bargained for.
(END VIDEOCLIP)
QUEST: Good old Simon Calder with sensible advice. And I - one thing I've been wondering - every major international airport now has a Burberry, a
Bulgari, an AvMed (ph) shop, Tiffany's. Who on earth decides to go and spend several thousand dollars on a new handbag on a whim while they're
traveling? Tom Sater at the World Weather Center.
TOM SATER, METEOROLOGIST FOR CNN INTERNATIONAL: (LAUGHTER). That's not me.
QUEST: Well it's true. I go - I travel - as I travel around the world and all I do is see these exceptionally expensive shops -
SATER: Yes.
QUEST: -- and I question who suddenly decides they're going to go and spend $1,000 on this, that and the other? Anyway, that's a subject for
another day. You have the weather.
SATER: Yes. Well, it could be those that have long delays - and there may be a few locations. Richard, this is beautiful. Though we just put this
together a little while ago, this is real time images of the world. There're monsoon rains in India, Mumbai inner tropical convergence zone.
Here up to the north - North America - that's Arthur, and we have Douglas off the coast of Mexico.
We're going to talk first about Arthur because as you know, Friday markets are closed with the Fourth of July in the U.S. And this is an image from
the International Space Station. Arthur, with the letter A being first- named storm of the season. It will be drawn northward, up the east coast where millions of Americans will be spending their vacation time. Well,
unless they've changed their plans, a vigorous cold front is going to help draw Arthur up the coastline at possibly hurricane category 1 status. That
most likely will change from just being a tropical storm which it is presently.
As we take a look at this - and, Richard, you may hear the rumble of thunder in just a little while. That same cold front helping steer Arthur
northward is creating severe thunderstorm watch boxes. So from Maine all the way down into the Carolinas, this could cause some delays for your
business travelers. From New York, Boston later on tonight, Philadelphia, Washington, D.C.
But here's the radar picture. We're starting to get a well-defined eye with this, the first system of the year, which typically causes some
concern. And let's everyone review their safety plans. Notice the three- dimensional image here with some good old thunderstorms, God, are really starting to pop up. We're going to watch the sea start to crash, heavy
rainfall, coastal erosion very possible, even at a category 1 status. Now the water temperatures are warm - they're like 28 to 30 degrees, so it's
110 kilometers per hour, the system will lift northward. Most likely, coming near - very near - the coast or making landfall where hundreds of
thousands typically go on the Outer Banks. It quickly moves off the coast, but it is interesting to note here - because there are fireworks displays
and millions turn out for that. I'm not sure what your plans are, Richard, in New York City, but in 48 hours, there is a big fireworks display up
there as well. That may be rained upon as well.
As we take a look at the rainfall totals, this could cause problem, and the threat for everyone to stay off the beaches and well inland as we have the
possibility of flooding rain. So with that, we've got our watches, our warnings in effect for category 1 hurricane.
In Europe, quickly, just wanted to point out London at 20 degrees really will start to warm up in the days ahead. Average highs about 22 and 1/2
degrees, shrouded in some - a thin veil of cloud cover. Rain will hold off for Wimbledon, but they're looking at temperatures at 26 degrees for highs
the next couple of days. Richard.
QUEST: And I'll be in London by the time we get to Saturday. Tom Sater -
SATER: Very well.
QUEST: -- many thanks indeed. In Iraq, Russian Su-24 fighter jets have been arriving in Baghdad. The commander of the Iraq Air Force says they'll
be used against ISIS militants. The jets could be operational later this week. Phil Black spoke to an expert who shared his thoughts on this new
firepower joining the Iraqi Air Force.
(BEGIN VIDEOCLIP)
PHIL BLACK, MOSCOW-BASED NEWS CORRESPONDENT FOR CNN INTERNATIONAL: Some people call the Su-25 the AK47 of the skies because it's pretty simple -
low tech. But it's considered very reliable and can be devastatingly effective. It's also called a flying tank because it is really heavily
armored. It's designed to fly low and close to enemy ground targets where it can deliver some pretty devastating firepower. And that's why people
who know this plane well say it could be a game-changing factor in the Iraqi government's efforts to battle ISIS.
RUSLAN PUKHOV, DEFENSE ANALYST: Better protectant than any other helicopter, yes? You can hit them, yes? You see and you kill them, yes?
And then you return to the base, you load once again. So qualified pilot, and if the conditions are good, can make up to seven, eight, sorties during
a day.
BLACK: So, who's going to fly it in Iraq? Well, the Iraqi government says it still has experienced pilots. The Su-25 used to be part of the Iraqi
Air Force. But that was some time ago. That was before the U.S. invasion in 2003. Experts say it's pretty likely that pilots could from other
countries that have continued to fly the Su-25.
PUKHOV: They can somehow leave unofficially or officially. The pilots are either from Iran or from (Hera), because those Iraqis who knew how to fly
it I think they're supposed to be either old or out of country or simply dead. Yes, because the Saddam air force was already in a very poor state
even 11 years ago, before the invasion.
BLACK: The Iraqi government turned to Russia because it's still waiting on delivery of American warplanes. And Russia closed the deal quickly. The
first jets were on the ground in Baghdad within days. Analysts say this is yet another message from the Russian government that this country has a big
role to play on the world stage. Phil Black, CNN Moscow.
(END VIDEOCLIP)
QUEST: Still to come on "Quest Means Business," a new art installation in London. It aims to get people thinking inside the box.
(COMMERCIAL BREAK)
QUEST: In London, they're taking a break in the financial district from the dark arts of finance in favor of an arts festival where there's music
and visual arts. And as Jim Boulden found out, things that just simply defy description.
(BEGIN VIDEOCLIP)
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: London at its most Urbane. Londoners taking in the art - outdoor sculptures scattered around the
city's insurance district for the summer months, including some performance arts. Among the 14 art installations here at the city of London or the
Square Mile as it's known is this square box, housing of all things, a deaf metal band. Unfathomable Ruination, they're called, and they will play in
the box on certain afternoons throughout the summer - first with the door open, and then shut. The box is apparently a symbol of those boxy offices
or cubicles all around here. If you can resist saying the artist is thinking inside the box.
JOAO OMOFRE, VISUAL ARTIST: In this corporate architecture, you don't really see what's going on inside. The same happens here in the work. You
see it, but then again, you don't see it when the performance starts.
BOULDEN: You know what's going on in there but you don't get to see it yourself - you don't get to participate, do you?
OMOFRE: No. You'll try to hear it but that is denied to you. So your participation is denied.
BOULDEN: The insurance and property companies are sponsoring all kinds of sculptures, some in plain sight on city sidewalks, some tucked away, some
overhead like these hanging books. But it's metal in the box that is likely to capture the attention of workers leaving their boxes for home.
CARLIN FIER, BROOKFIELD OFFICE PROPERTIES: The box is a really great piece. I think it's really unique to have something that involves a bit of
performance art. So, it gets people more involved than just walking past a sculpture.
BOULDEN: And if you're asking about the lack of oxygen, well that's part of the art. How long can four members of a deaf metal band perform before
running out of air?
BEN WRIGHT, VOCALIST, UNFATHOMABLE RUINATION: We did 20 minutes the first time on the run-through, and then we did 19 minutes today.
BOULDEN: It's loud in there, they tell me, and it's hot, but well worth it for art's sake.
ROSS PIAZZA, GUITARIST, UNFATHOMABLE RUINATION: These are extreme conditions and we play extreme music, so that's a kind of a connection.
BOULDEN: A connection that passersby tried to make listening through the box once the door was shut. Jim Boulden, CNN London.
(END VIDEOCLIP)
QUEST: I don't think I've got anything to say after that. Next is a "Profitable Moment" (RINGS BELL) after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's croaky "Profitable Moment" - it's got a catchy name, it's called BlaBlaCar, and it's got an original and different idea. It's the
online way of getting people to share journeys and cut the costs or at least share the costs. But in reality, all this is no different from
thumbing a lift on the end of a motorway or an interstate, but you're doing it in advance. It's a clever idea. But just like Airbnb, all seems so
simple. And of course, like all these other online mechanisms, anybody who raises an objection - and there are objections to BlaBlaCar, there are
objections to Uber - anybody who raises an objection is seen as a modern- day Luddite. They're seen as somebody who just isn't seeing the light. Bla bla bla to the critics. I promise you this, there'll be trouble before
it's over. And that's "Quest Means Business" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, (RINGS BELL)
- I can't promise I'll be with you tomorrow, but whatever it is, hope it's profitable.
END
