Return to Transcripts main page
Quest Means Business
US Senate Blocks Keystone XL Pipeline; US Oil Imports Falling; Oil Industry Blasts Keystone XL Vote; Opposition to Pipeline; Bill Cosby Show on Hold; Fed Worries About US Stock Market; Modest Losses on Wall Street; Six Dead in US Snowstorm; Harsh Winter Hit Q1 US GDP; Extreme Weather and the Economy
Aired November 19, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
MAGGIE LAKE, HOST: A flat finish on Wall Street as traders react to the latest Fed minutes. It's Wednesday, November the 19th.
Tonight, America's energy future hangs in the balance as the Keystone Pipeline falters. We're hear from both sides of a bitter debate.
TV networks cut ties with Bill Cosby amid allegations of sexual abuse.
And journalists strike back against Uber. We speak to the reporter targeted by one of its executives.
I'm Maggie Lake, this is QUEST MEANS BUSINESS.
Good evening. Tonight, the US Senate's failure to approve a new pipeline through the American heartland will have consequences from
Milwaukee to Moscow to Manila. A bill to authorize the controversial Keystone XL project fell one vote short of being passed in the upper house.
The pipeline would bring oil from Canada's Tar Sands to the US Gulf of Mexico.
Mary Landrieu, the Democratic senator from Louisiana has championed the project. She says she won't give up.
(BEGIN VIDEO CLIP)
SEN. MARY LANDRIEU (D), LOUISIANA: It makes sense for jobs here, jobs in Canada, jobs in Mexico, and it makes sense for us to stand against the
tyrants of this world, which would be Putin, and the leaders of China in some ways, and others that would force us to negotiate or trade in ways
that are not in America's interests.
(END VIDEO CLIP)
LAKE: Almost half the Keystone project is already complete. It's the nearly 2,000-kilometer section from Hardisty, Alberta to Nebraska, that
still needs approval from US lawmakers. Supporters say the project would create jobs, reduce America's dependence on oil from unfriendly countries,
and lead to lower oil prices.
Opponents say not many permanent jobs would actually be created. They say the pipeline would make the US dependent on a particularly dirty source
of oil and discourage cleaner alternatives. And they say oil spills could damage sensitive environmental areas.
You heard Mary Landrieu saying building the pipeline would hurt leaders like Vladimir Putin. Only around a third of the US oil comes from
abroad. Imports have actually fallen sharply over the past decade. Russia is responsible for a tiny fraction of the imports, some 42,000 barrels a
day last year.
Eight countries, mostly in Latin America, supply between 100,000 and a million barrels a day. Only Saudi Arabia and Canada are more important
than that in sales to the US.
The oil industry's lobbying group has blasted the Senate's failure to approve the pipeline. The American Petroleum Institute says the vote
"defies the will of the American people." I spoke with the group's leader, Jack Gerard, and asked whether the project makes sense in an era of low oil
prices.
(BEGIN VIDEOTAPE)
JACK GERARD, PRESIDENT AND CEO, AMERICAN PETROLEUM INSTITUTE: Well, it clearly makes economic sense, Maggie, otherwise there would not be $8
billion proposed to be invested, capital investment to build the pipeline.
Think about the -- our critics and what they're saying about this pipeline. They're saying, well, these jobs are temporary. Well, since
when was a temporary job a bad job? That's the very nature of construction or infrastructure in terms of being temporary.
So, there's 42,000 jobs that were cited. That's the Obama administration's State Department that says those jobs will be created.
Those were good-paying jobs. That's the type of job we need here in America today to put our economy back on track.
There's broad bipartisan support for this pipeline, and we believe it's just a matter of time now when four new votes come to the US Senate,
to take us over the top to put this on the president's desk.
LAKE: Jack, to be fair, it's not a zero-sum game, though. Temporary jobs are better than no job, but not if you could create other industries
where those jobs would be permanent. I think that's the point they're making, and if there is a cost, are those temporary jobs worth it? Let me
ask you, though, from an industry point of view --
GERARD: Please.
LAKE: -- the economics of this. This is some of the most expensive oil, oil analysts tell us, to get out of the ground. The economics seemed
a lot more clear to them when trading was above $100 a barrel. Does it make sense, now? Is it as economically attractive if we're looking at a
situation where oil remains maybe not as low as today, but remains near these prices?
GERARD: Well, those that are making the decisions that they're prepared to put their capital at risk have concluded that it does make
economic sense. And thus the money is still there, the $8 billion to build this pipeline.
But Maggie, I think what's important here is this is a fundamental philosophical dynamic or discussion that's taking place. Let the private
sector decide if those dollars should be expended or not.
Why would we put the government in the middle of making decisions to decide well, the dollar should be better spent here or there? Let's take
the taxpayer's money out of play, let's not put it at risk.
Let's let the private sector decide what should and shouldn't be built, and I'll guarantee it'll be a lot more efficient system, and it
benefits the American people, just like the lower price of crude benefits them today because we're producing a lot more oil right here in the United
States.
(END VIDEOTAPE)
LAKE: Joining me now from Washington, Peter Welch is a Democratic congressman who voted against the project in the House before it came to a
vote in the Senate.
Representative Welch, thanks so much for being with us today. You heard the view there from the American Petroleum group, let the private
sector decide. What's wrong with that?
REP. PETER WELCH (D), VERMONT: Well, in fact, there's two things he said that I agree with. One, those are good jobs. In that -- I think we
have to acknowledge that. And number two, if it's private capital at risk, they're going to take the risk if this turns out to go bust because of the
changing market conditions.
But the big concern I have is this: there's a process in place. This is a big deal. It's 1200 miles of pipeline through some very sensitive --
environmentally-sensitive areas. We've got a process in place.
Should Congress really be bypassing that and turning itself into the environmental review board? I don't think we should. We should let the
process work. And it's not lawmakers who decide on Project A or B, there is a process in place. That's number one.
Number two, this is totally political at this point. We've got this contested Senate race, we've got a House candidate, Bill Cassidy from
Louisiana against the incumbent senator Mary Landrieu, and both are trying to use this to the advantage of their campaign.
So, the combination of bypassing the process and then getting a US Senate race in the mix I think is in appropriate.
LAKE: Yes. And so, let's say that this is going to come up for a vote again, because it will. Politics aside, would you be -- if the
reviews come in and you feel confident on the environmental front, would you be in favor of voting for this? Is this just a timing issue for you,
or do you doubt some of the premises put forward by the proponents that say this would be good for the economy?
WELCH: Well, I have some serious questions about the Tar Sands oil and what the environmental impacts of just producing that oil are. And I
also have some significant questions about the economic benefits. But if we have the full study, then we're going to be able to make that answer.
But the bottom line here is when you have a process in place, I think it's really dangerous for Congress to be doing an end-run around that
process. And that's really the major concern that I think we should have in Congress at this point.
LAKE: I think a lot of us feel like a lot of things happening in Washington end-running around processes are dangerous at this point,
Representative Welch. What about this argument about energy independence. That seems to be swinging.
And I think a lot of people fear even when the study's done, there's going to be a little bit for everybody in there, and we're going to have to
make a decision on this thing. What about that argument?
Because I think that is resonating with voters, who themselves seem unsure, but in polls sometimes suggest that they're willing. That idea of
not being reliant, not getting pulled into wars because of energy seems to be very enticing.
WELCH: Well, it is enticing. And as you were stating, the energy production in this country is at its -- almost its highest level in
history. It's a combination of oil production that has been increased dramatically, and of course, natural gas in the fracking processes. So,
the US is now a net exporter.
So, this issue of energy independence doesn't rise or fall on what happens with Keystone, particularly when, as we know, that oil would simply
come down the pipeline, be refined, and then sent into the world market.
LAKE: It's certainly a complicated issue, but one that's very important to the country. Representative Welch, we appreciate you taking
the time today. Thank you so much.
WELCH: Thank you. Thank you.
LAKE: Now, new allegations of sexual assault against Bill Cosby are putting the comedian's comeback on hold. We'll have the latest, next.
(COMMERCIAL BREAK)
LAKE: Bill Cosby's comeback is on hold. The NBC network says a sitcom it was working on with the comedian is no longer in development.
And Netflix says it's dropping plans to release a standup comedy special with the comedian the day after Thanksgiving. This follows new sexual
assault allegations against the 77-year-old entertainer.
Our senior media correspondent Brian Stelter has been following the story, and he joins me now. And Brian, it is a story that seems to be
developing a lot of momentum.
BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: It sure does. Every day brings new developments. It's a little strange to call it a fall from
grace, but it's worth thinking back to where Cosby was at his peak in the 1980s, so I put that together, we can take a look.
(BEGIN VIDEOTAPE)
STELTER (voice-over): NBC and Netflix distancing themselves from comedian Bill Cosby amid multiple allegations of rape. NBC saying, quote,
"We can confirm that the Cosby project is no longer in development."
This comes less than a day after Netflix postponed their new Bill Cosby special, telling CNN in a statement, "At this time, we are postponing
the launch of the new standup comedy special, 'Bill Cosby 77.'"
What a shift in a storied career. Think back to 1987. It was the most successful year for the mega-hit "Cosby Show." And the center of it
all, Cosby himself, made $57 million that year.
"Forbes" magazine called him the top-earning entertainer in America. And even after the sitcom faded away, the money kept coming. Tens of
millions from the show's syndication. And there were those famous Jello sponsorships. And standup routines, books, movies, and so much more.
Money makes power. And power is why the women, now back in the news, accusing Cosby of sexual assault, say their claims were not more widely
believed years ago. Money also makes people targets, and some Cosby fans say that's exactly what's going on here.
When Cosby went on NPR promoting his new donations to an art exhibit, he was confronted about the sex allegations and had nothing to say.
SCOTT SIMON, NPR: I have to ask the question. Do you have any response to those charges? Shaking your head no.
STELTER: And that just made the story even bigger. Accuser Joan Tarshis spoke out the next day.
JOAN TARSHIS, BILL COSBY ACCUSER: I really have nothing to gain by doing this except to hopefully give some credibility to the women that came
before me and to let certain people, who might believe it, take another look at Mr. Cosby.
STELTER: All of this is happening while Cosby was having a career renaissance. He still makes millions from "Cosby Show" repeats, but in
Hollywood, this is being called a PR nightmare, a conundrum, ultimately because a lot of money is on the line.
(END VIDEOTAPE)
STELTER: Cosby himself has still not commented on any of this, but his representatives have gotten more assertive in the last couple of days.
His personal publicist and his attorney, Marty Singer, a new allegation involving Janice Dickinson, the super model, claiming she was raped by
Cosby has been vigorously denied by Marty Singer.
The attorney said this: "Documentary proof and Miss Dickinson's own words show that her new story about something that she claims -- she now
claims happened back in 1982 is a fabricated lie."
The attorney there is referring to past statements and quotes that Janice Dickinson had given describing her interactions with Bill Cosby and
not going anywhere near as far as she's gone in these new interviews.
But Janice Dickinson just the latest woman to come forward and tell a very scary story about relations with Bill Cosby.
LAKE: And that's the problem, isn't it, Brian? That there is not just one, it's not just two, there are more than a dozen women, now, I --
STELTER: And until today, all the attorneys were declining to comment entirely.
LAKE: Exactly.
STELTER: They would say these are discredited, decades-old allegations and that doesn't make them true.
LAKE: And this is a big deal. I'm glad you called it a renaissance. We were calling it a comeback, but this man is a comedic legend.
STELTER: Sure is.
LAKE: Well-known around the world. Do we know -- because most of them date back -- why this is coming up again now?
STELTER: I think a lot of it has to do with something you and I talked a lot about, which is social media. Which is really the public
speaking in ways we can now hear on Twitter and Facebook. It also has to do with those new projects that until recently were in development with
NBC, for example.
And because he was experiencing that renaissance, I think there was more attention around him and opportunities for these women to come
forward. Women who have said they spoke out before, but were mostly ignored.
Well, this time is different. This time they're not being ignored. This time, the press is taking their allegations more seriously. And that
may also speak to the broader culture. The culture has changed in the United States so much from the 1960s and 70s, 80s, until now.
Even in the past ten years, I would say there's been a change in how willing and open people are to listen and to take victims' claims
seriously.
LAKE: Yes, and this is --
STELTER: That is a change.
LAKE: And this is the time when we're having a vigorous debate about abuse, about treatment of women right now in the country.
STELTER: In the NFL and elsewhere --
LAKE: Right.
STELTER: -- and so this hits a chord that's already out there.
LAKE: It certainly does. All right, Brian sniffs down the story for us. Thank you so much.
STELTER: Thanks.
LAKE: Extreme winter weather in the eastern US brings out the National Guard. We'll look at the human cost of a killer snowstorm and how
it might even chill the economic recovery.
(COMMERCIAL BREAK)
LAKE: The US Federal Reserve is paying attention to recent volatility on Wall Street. That's according to the minutes of the Fed's October
meeting. The central bank ended its nearly six-year-long bond-buying program at the meeting three weeks ago. Now, investors are focusing on how
soon they will start raising interest rates. It will be our obsession.
Here's how Wall Street ended the day, and you can see, some very modest losses. It was awfully close there at the settle, but we did end it
down about two points.
Now, at least six people have died in a vicious snowstorm that's blasted the eastern United States. Buffalo in upstate New York is one of
the hardest-hit cities. Much of the city is buried under almost two meters of snow. And more is expected on Thursday.
Buffalo's international airport is open, but good luck getting there. A driving ban is in effect in the southern part of the city. And Buffalo
is not alone. The rest of the US is dealing with below-freezing temperatures, even Hawaii and Florida.
Well, CNN's Martin Savidge has been braving the extreme weather for many hours. He filed this report for us a short time ago.
(BEGIN VIDEOTAPE)
MARTIN SAVIDGE, CNN CORRESPONDENT (voice-over): As Buffalo tries to dig out from an avalanche of snow, even more is on the way. The lake
effect blizzard hammered southern areas of the city Tuesday, dropping nearly six feet. Yes, feet.
GOV. ANDREW CUOMO (D), NEW YORK: I believe when all is said and done, this snowfall may break all sorts of records.
SAVIDGE: Of the 42 square miles that make up Buffalo, only 10 were impacted. But they're overwhelmed with snow the likes of which rarely --
maybe even never -- seen before. The impact was so specific to South Buffalo, even the airport just three miles away got only 6.5 inches.
A break in the weather Wednesday allowed emergency crews to start the big dig. More snow is expected Wednesday night into Friday, which could
add a couple more feet on top of what they already have.
BYRON BROWN, MAYOR OF BUFFALO: Please do not be fooled by the beautiful sunshine. There is still tremendous amounts of snow on the
ground in South Buffalo. If you don't have to drive, if you don't have to go out to work in other parts of the city as well, stay home.
SAVIDGE: Driving bans are still in effect in South Buffalo, where snow left many stranded on the New York freeway, including the Niagara
University women's basketball team, who got stuck on I-90 for 24 hours. That team was finally rescued. But calls keep coming in from those still
stranded, and in many cases, rescues like this one last night were carried out on foot.
KIMBERLY BEATY, DEPUTY POLICE COMMISSIONER: This morning since 6:00 AM, we had 12 new calls. So those people right now, they should be OK, but
officers last night were responding on foot.
SAVIDGE: EMS and firefighters have been depending on volunteers with snowmobiles to get into hardest-hit areas. The death toll from this brutal
storm has climbed to six so far. Some from cardiac arrest shoveling, and others trapped in the snow.
SCOTT PARTONIK, CHIEF, ERIE COUNTY SHERIFF'S DEPARTMENT: Sadly, we have to announce we found an individual today, a 46-year-old male in the
town of Alden. His car was buried under approximately 12 to 15 feet of snow, and he was found deceased.
SAVIDGE: One of the biggest struggles: simply clearing streets. Plows aren't enough. They need front-end loaders, hauling the snow away
using hundreds of dump trucks.
Rescuers from as far away as Nevada have contacted Buffalo officials to offer their help, and the city says its most urgent need is for anything
that can dig up and haul away the seemingly unending mountain of snow.
(END VIDEOTAPE)
LAKE: And Martin joins us now, live from Buffalo. Martin, this is an area that is used to getting snow, but this is beyond anything they're used
to seeing. And if I'm -- if my eyes don't deceive me, it is snowing again.
SAVIDGE: Yes, absolutely, it is snowing again. And you're right. This is above and beyond what Buffalo is accustomed to. In fact, it is
possible that before this week is out, they will have seen an entire season -- entire winter's worth of snowfall come from a single snow event, this
one. It's still ongoing, as you can see, and that was the concern today.
They only had a short window of opportunity where they could try and go out and clear streets. This area where we are right here is in front of
a fire station. It's considered a critical path, so that's why it looks as plowed as it is.
However, I should point out, this also is not the heart of the hardest-hit area. It's actually still about a half mile down that way, add
another foot or more to what you're seeing around here and that's the kind of landscape they have. People are surrounded and literally held hostage
by snow. Maggie?
LAKE: Martin, we're seeing some intrepid people look like they're trying to move around you a little bit, and it's not that easy getting
around. What are the conditions like? We've seen pictures earlier today of snow literally collapsing some people's windows, there's so much of it.
I know a lot of people have the gear, but do they have electricity? Are they able to get food? Are supplies going to be a concern for some of
these hardest-hit areas?
SAVIDGE: Well, for the most part, it depends. Buffalo folks are hearty people and they are accustomed to having to stock up, so they knew
that was an issue. But then also, the other problem that they've been facing, power you mentioned. There have been some power outages. And
those have been dealt with rather quickly.
But the overall issue of resupplying, people have been going out on foot, walking to the corner market. We saw people carrying a sleigh. So,
they're going out to get the things they need for as long as they can.
The big thing here, it's going to warm up this weekend, if you can believe it. Might be 60 by Monday, I'm talking Fahrenheit. If that's the
case, all this snow is suddenly going to melt. You can imagine what the next problem's going to be, flooding.
LAKE: From one mess to another. Martin, those people are made of tougher stuff than I am, I can tell you. You stay warm out there. Thank
you so much.
Well, the big freeze is more than just a problem for commuters. Extreme winter weather has the potential to drag down economic growth, just
like it did, if you'll remember, in the first quarter of this year. Seems like a long time ago, but take a look at some of these numbers.
The US output contracted at an annual rate of 2.9 percent over January, February, and March, the first quarterly decline in three years.
Here's how it breaks down: spending falls, blizzards keep shoppers away from malls, restaurants and car dealers.
The icy winter weather also shipped -- delayed shipments of both domestic goods domestically and abroad. And as a result, US exports
declined. Even utilities like heating suffer, because the rise of cost of production was greater than the increase in demand. Everything just grinds
to a halt.
Meteorologist Tom Sater joins us from the World Weather Center with more. And Tom, the thing is, this isn't just an issue of snow, the extreme
show we're seeing in Buffalo. We've got very cold temperatures, and we know what that frigid air can do. It also can bring things to a halt,
can't it?
TOM SATER, AMS METEOROLOGIST: It's really amazing, Maggie, the relationship between adverse weather conditions that last a long period of
time and the economy. We've seen this happen. What typically occurs -- this is the second arctic wave we've had. We had one last week.
There's a short burst of surge shopping. You run out, you buy your milk, your eggs, your bread, medication, to get ready for the cold. And
this is the coldest November -- and we're just past the midway point -- since 1976, and there's another wave on the way.
It's really something that when you look at the snow maps, and you can see most of this is a nuisance snow, but again, it does keep people
indoors, 50 percent of the US. But what's really interesting is to see where we are now in this month of November compared to the first quarter.
This is a look at how it is now, all right? Notice all of the colors of blue and purple. This is where the temperature anomalies are extremely
low. Notice from the front range of the Rockies, you get extremely warm conditions. And that, of course, goes hand-in-hand with the drought.
That's the other part of the equation with the economy.
Now, the first quarter, almost no change. If you look at the first quarter, our temperatures were unseasonably cold. The Great Lakes almost
completely freezing over, 92 percent of the Great Lakes, so transportation shut down. That was a record since 79. But with the drought areas out
west, again, a good 40, 50 percent of the produce is just cut off and null and void.
If you break it down -- this is the first quarter, now -- we've got January through March. And if you look at the numbers, and I'll point them
out, it gives you a ranking. Blue is the cold.
So, Illinois, their fourth coldest winter last year first quarter. Indiana the third, and so on and so forth. This is out of 120 years. So,
120 means California ranks that was the warmest. In 120 years of California. And in Arizona. So, it's not just the cold that can play a
role in the economy.
And unfortunately, we've got another round moving in. And here it comes. This is the second wave moving through. And if you think that this
is the coldest since 76, we're just halfway through the month, we could really be seeing records.
I don't think Minneapolis, which hasn't been above freezing since the 9th of November, is going to get up. Maybe this weekend. But another
round and another blow to the economy, Maggie.
LAKE: We thought we put that polar vortex behind us --
(LAUGHTER)
SATER: Right.
LAKE: Good thing we learned all about it last year, Tom.
SATER: That's right.
LAKE: Thank you so much for bringing us right up to date.
Well, the battle for taxi supremacy takes a menacing turn, and there is an indignant reaction to some of the tactics they're using at Uber.
We'll hear from the journalist targeted by the company's executives after the break.
(COMMERCIAL BREAK)
LAKE: Welcome back, I'm Maggie Lake, this is CNN, and on this network, the news always comes first.
Six people have died in one of the worst snowstorms to hit upstate New York. More snow has fallen on South Buffalo in the last 24 hours than the
city usually gets in an entire year. Heavy snow and record low temperatures have engulfed much of the US.
France says it has identified two of the jihadists seen in an ISIS propaganda video. Prosecutors say they have identified Michael Dos Santos
and Maxime Hauchard. They were featured in the same video that showed the aftermath of Peter Kassig's murder.
US president Barack Obama says he will unveil a plan to reform immigration in a televised address on Thursday. In a video posted on
Facebook, the president said everybody agreed immigration system was broken. His measures could lift the threat of deportation for millions of
undocumented immigrants.
Two men have been arrested in connection with the death of a Honduran beauty queen and her sister. The woman disappeared nearly a week ago.
Police say the boyfriend of one of the victims was arrested, along with another man.
Uber executive has spent the last few days mired in controversy. Now a journalist targeted by the company tells CNN Uber is like a house of
cards. It all begs the question how long can that house stand? On the one hand, users simply love the service. Uber has an undeniable global success
and it's currently operating in 37 countries. On the other hand, there are serious privacy concerns emerging. Uber employees are apparently able to
use the feature that they call 'God view.' It tracks individual customer activity and has apparently been used to keep tabs on journalists. In a
2012 blog post on the company's website called "Rise of Glory," the Uber team boasts they're able to track customers' patterns of car use so well
they can identify people who use Uber after a one-night stand. And while Uber is valued at $17 billion, and high-profile investors like Aston
Kutcher is rushing to defend it, there are also social media campaigns calling for people to boycott the service. CNN's Laurie Segall has been
talking to the journalist who was said to be targeted. And, Laurie, this story gets more controversial and in many ways a lot more intriguing. You
spoke to this woman at the center of it. What did she have to say?
LAURIE SEGALL, TECHNOLOGY CORRESPONDENT FOR CNNMONEY: I did, and putting it into context, everyone was at a dinner and an Uber executive
name Emil Michael was talking on what he thought was off the record, about digging up personal dirt on journalists. And he was very specific about
Sarah Lacy and some of her coverage. So she was pretty shocked to hear this as you can imagine. I spoke to her about her reaction and also the
growing concerns about Uber. Listen to this.
SARAH LACEY, JOURNALIST: What was scary about this which were three things. First of all, it was the specifics of the budget - the 'head
count' that was going to be put on me, the fact that the tactic was go after people's families - that's their vulnerability which it is my
vulnerability, and that it was to be done in a way where no fingerprints would come back to Uber. I've covered powerful tech companies for a long
time, and I've never heard a plan like that detailed before. And we should say this was a proposed plan as far as we know. But certainly the
specifics around it were such that this was not a guy spouting his mouth off at a dinner.
SEGALL: Why are you so hard on Uber? What is it about the company culture that really has you stewing?
LACEY: I've been really concerned since about 2012 of an escalating culture of bad behavior in Uber that never gets checked. And the board and
investors seem to be scared of Travis Kalanick. They - you know - no one really holds this company accountable. And that includes things like when
women have said they've been attacked in the back of cars and we've called the company for comment, they have tried to shame those women as being
provocatively dressed or drunk. That's pretty horrifying behavior. Travis referring to the company as "Boober," tracking their users' one-night
stands and, you know, giving guys props for that. And then the last straw for me, and it let to my article that got them so angry, was about this
campaign that was essentially encouraging men taking Uber in France to treat female drivers like escorts.
I think there is an escalating and scary pattern of both misogyny and frankly taking people out who disagree with them.
(END VIDEOCLIP)
SEGALL: You know, what she talks about quite a bit is really this boy culture in Silicon Valley and how, you know, it's very apparent in how Uber
has reacted with the press.
LAKE: Laurie, this is a company that has a massive valuation, there are a lot of people looking at this as being sort of heralded as a great
success story for Silicon Valley. What are we hearing from them? I did notice today that we are starting to see high-profile people come out, but
some of it was surprising, wasn't it?
SEGALL: Sure. I mean, at first you see Ashton Kutcher who's an investor in Uber tweet this morning , 'You know, what's wrong with going
after shady journalists?' And of course, you know, people on the Web were very upset, -- he kind of retracted that statement. But you've seen that
is a little bit of a tone deaf nature, but people are beginning to come out and say, 'This is a great company - it's been very disruptive but we need
to look at the culture and how things are handled because, you know, they haven't been doing a good job lately of dealing with the press and dealing
with some of these more sensitive issues. And you see that this very aggressive culture - when applied towards journalists, when applied toward
how they handle their business is something that people are really beginning to look at.
LAKE: Yes, and I thought her point about the fact that there was so much detail, really spoke to this idea that they're (audio gap) was a one
off comment and so, this will be to serious questions about that. I did also hear, although Ashton came out with that comment, I heard a lot of
other very high-profile investors say this is unacceptable. If I were an investor, I would be in there and there would have to be changes made. So
I don't think we're at nearly at the end of this story yet. The question is, do they seize this opportunity, and do they do it well. And if not,
are they going to be a victim of their own success? Because it is - you know - these are some serious allegations.
SEGALL: Absolutely, I think you're right. I think now's the time where the spotlight really is on them. They have everything going for
them. They've got the traction evaluation. You know, this is where investors are saying this can affect a valuation if you do not do this
better. And I think it - and what Sarah also said to me, she said you know, oftentimes investors haven't held them accountable. Now journalists
and close-up people are deleting their app. Maybe that will hold them accountable.
LAKE: Right, right. And we of course have reached out to them. They are welcome to come on our air and give us, you know, their comments and
side of the story and tell us how they plan to deal with this. Thank you, Laurie.
SEGALL: Yes.
LAKE: Well, Graham - we're going to stay with this story - Graham Hales is the global chief marketing officer at Interbrand and he joins us
now from London. Graham, thanks so much for being with us. You just heard the discussion we had about some of the details involved - involving -
this. Do you think this is going to damaging to Uber's reputation long term? Where are we with their - in relation to their brand at this point
in the story?
GRAHAM HALES, GLOBAL CHIEF MARKETING OFFICERS, INTERBRAND: Oh, it's certainly going to cause some problems. I mean, as your piece before was
showing earlier, you know, Uber came to a market, it disrupted a market, people felt very positively about the business. Hence you end up with the
valuation you've got. But it's allowed itself to have this Achilles heel, if you like. Uber itself should recognize it's living in an age of
transparency. And your culture on the inside of a company is pretty quickly going to become evident outside the company. And, you know, we
need to feel good about the brands that we consume. And not just in terms of the consumption, but also that they're the right kind of brand for us.
And Uber's let itself fall short.
LAKE: And, Graham, I think when you're talking about a company that's in the space that Uber is, privacy is such an important issue. What would
you r advice - and it seems to be one that is in question here if we believe what the journalist was just telling us - what would your advice be
to this company. They haven't made much of a comment. A tweet here, but they haven't come out full corps press and address these allegations,
address the problems. What should they do?
HALES: Well, I think, you know, when anything goes wrong inside an organization, and within the age of transparency, we can see that, you
know, things do go wrong. The organization has to put its hand up, it has to say, 'Look, we've got this wrong, it needs to explain the context as to
why they've got it wrong, and they've got to communicate about it to the point of satisfaction of their customers so that everyone knows that the
problem has been dealt with and the company's dealt with it properly. This sort of drip-feed effect of, you know, some Twitter comments every now and
then which, you know, don't necessarily seem to address the issue head on just won't stop the story from going away. And, to a degree, it's also
been slightly naive to, you know, imagine that, you know, going to war with the journalists who are the people who create the news in the first place,
is ever going to be, you know, anything else and a bit of a false tactic.
LAKE: Yes. We know this is a young company. Young companies have growing pains, founders - you know, we've seen this before - they, you
know, sometimes find themselves in a situation. But this is also a company that has lots of drivers, it has lots of customers. How important is the
CEO role here?
HALES: Well, you know, it's a company that has succeeded very quickly certainly and sometimes you consign the - you know - perhaps that sense of
success builds a sense of confidence that, you know, might be misplaced or might be slightly naive or lacking experience. But it's a company with
responsibilities as well, so, you know, with a valuation this large, you have the duty to continue to run that business properly and not leave it
vulnerable to these sort of situations. So, you know, yes there's some work to do, and there's a response that's required that has got to be
impactful and deal with this situation.
LAKE: Impactful and I would also add authentic. Because you're right, --
HALES: Indeed.
LAKE: -- culture matters and in Silicon Valley, they say culture trumps strategy. So one would - one would think - that they need to move
rather swiftly. Thank you so much for being - go ahead, what -
HALES: Well, this is where we say that, you know, companies are on the outside what they are on the inside, and you know, this reflection is
only becoming more evident to Uber at the moment.
LAKE: Graham, thank you so much for being with us. I so appreciate it. Well, forget the fluffy towels, next on "Quest Means Business,"
threatening the guests is probably the wrong way for a hotel to get good reviews. We'll ask someone who knows all about the hospitality industry by
handling dissatisfied customers.
(COMMERCIAL BREAK)
LAKE: Time for today's "Business Traveler Update." Right now I am taking you to the front lines of a battle - hotels versus dissatisfied
customers and how the tussle is playing out on the internet. In Northern England at the Broadway Hotel in Blackpool, reviewers on Trip Advisor give
it an average of two stars out of five. Many reviews describe it as terrible. When one couple called the hotel a filthy hotel on a travel
review website, they discovered that the hotel later billed them more than a $150 to their credit card. To put this into perspective, I am joined by
Jackie Grech, policy director for the British Hospitality Association. Jackie, thank you so much for being with us today. This sound
extraordinary. How is it that the hotel was able to charge these people for expressing your opinion?
JACKIE GRECH, BRITISH HOSPITALITY ASSOCIATION: Well, the policy that they did put in place was not actually upheld. They sound out from their
local trading standards authority that they shouldn't have such a policy in place, and it wouldn't be effective to charge a fine against the
customers.
LAKE: Yes, I would -
GRECH: But I do understand that -
LAKE: -- I would guess that that would be bad for business (LAUGHTER). Clearly they were upset though, but why - how should they have
handled this situation?
GRECH: We always recommend to our members - and we represent -- the British Hospitality Association represents hotels, restaurants and catering
across the U.K. - and what we recommend is that when a hotel receives a bad recommendation of a restaurant, they should respond to the person. They
should respond to the review and either clarify the point or point out any inaccuracies or simply apologize. And if they received reviews that are
continually pointing to one area of service that's lacking, they should maybe look to themselves a bit, see what they can do to improve their
offering to guests.
LAKE: Yes, it's called feedback in the best of circumstances. Jackie, stay with us for a second - we did get a statement from Trip
Advisor. We want to let you know what it was. They sent us this statement, "It is completely against the spirit and policies of our site
for any business owner to attempt to bully or intimidate reviewers who have had a negative experience." It seems incredible to us, but we have - we
know - that there is with this sort of age of information with the internet - there are some businesses who feel like sometimes they are unfairly
targeted or that one of their competitors perhaps is behind some of the bad reviews. Can you speak to that and, again, what is the best strategy for
handling that if you feel that there's something going on other than just dissatisfied customers leaving their opinion?
GRECH: Well, that is actually a problem and there is a problem right now with - because Trip Advisors and other online platforms have become so
powerful, they're a strong voice to consumers who are looking to make their travel plans. People have taken advantage of that and they do things like
blackmail a restaurant, for example, to say, 'If you don't give us a free bottle of wine, we'll give you a nasty review on Trip Advisor.' And it's
forcing restaurants to either have to give in to that or have to fight the bad review.
But these kinds of reviews, they're not helpful to anyone, they're not helpful to Trip Advisor nor are they helpful to other customers to read
them or hotels. So, Trip Advisor has put in place policies where you can report these kinds of bad reviews and malicious reviews and they'll review
them and take down the posting. That's been helpful, but we are pushing for more of a continued response because as they grow in popularity, these
kinds of bad actors do come out of the woodwork with more frequency, and it is a problem for the industry.
LAKE: It certainly is. But in the best situation, this is an opportunity for everyone to have a learning experience. For those of us
who stay in new hotels, there is something anonymous - it's easy to post an anonymous message about conditions that you didn't like. What should we
think about as travelers? What would be a better approach for us even if we do ultimately leave that review to other people? Because let's face it,
we're all spending our hard-earned money. Should we in person go to a hotel owner or a restaurant owner and complain? I think a lot of us are
worried about what will happen. Will they spit in our food? Will they, you know, rob us of towels? How should we behave as travelers - what
should our expectation be?
GRECH: You should definitely go to the hotel directly. That should be your first point of call for a problem that can be repaired by the hotel
or by the restaurant. If you go to them and you tell them that there was a problem, more often than not, they will work very hard to fix it. If you
think about what the industry is, it's a service industry and they make their money off of providing good service and personality and something
that people walk away with and say, 'This was an excellent use of my money, this is an excellent vacation.' So, yes, you should always, always go
directly to a hotel or the restaurant so that they can try to do better. And if they don't or they don't concede that there's a problem, then
perhaps, yes, it is something that you may think that you'd like to warn other guests about, by using online review sites or perhaps use it to
prompt a change with establishment. And that's not a problem if it's your true opinion.
LAKE: Yes, that's right. I always know myself when I'm looking for opinions, I like to see specific feedback about interaction they had with
the staff and the owners. That always gives me an idea that those people really did sort of engage and see if they could resolve their problem.
Thank you so much for being with us and sharing your views. It's a new era we all have to get used to. Thank you.
GRECH: Yes, thank you.
LAKE: Well, what happens when your hotel - this is a different problem - is targeted by more than barbed comments. Richard spent some
time with the CEO of HMH Hotel Group - Hospitality Management Holdings. The company runs hotels in some very dangerous places, including Iraq and
Sudan. Richard found a story all about holding one's nerve. Take a listen.
(BEGIN VIDEOCLIP)
RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: Inside the grounds, the Coral Hotel is quiet and
refined. Everything you'd expect from a business hotel. But go outside the front doors, on the streets of Baghdad, and a different reception may
await. The Coral is part of HMH Hotel Group. By any standards, one of the gutsiest in the hospitality business. HMH has 17 hotels across Iraq,
Sudan, Saudi Arabia as well as the home in the UAE. The chief executive Lauren Volvenel knows the places where he has his hotels are volatile.
LAUREN VOLVENEL, CEO, HOSPITALITY MANAGEMENT HOLDINGS: I don't always sleep six hours per night, that's for sure. I spent at least 45 to one
hour today just to read the news about all the, you know, the locations where potentially our hotel could be a target. Anytime something is
happening in a hotel, we immediately be informed by the general manager who call us, just because, again, the security of the staff and the security of
our customers is our main priority.
QUEST: This Baghdad hotel is a good example of the strategy. It opened outside the green zone two years ago, when the threat level was
lower than it is today. As the risks have risen, other hotels have stayed away.
VOLVENEL: We just wanted basically to go to some countries where we will have less competition. All these big guys were not as hungry as we
were. These big guys don't need to fight as we have to fight in order to get the business.
QUEST: This is high risk. There are examples a' plenty were hotels and guests have been targeted. In 2008 in Islamabad, the Marriott was
bombed - 54 people were killed. Then later that year, the Taj in Mumbai was attacked, hostages were taken. At least 160 people died. HMH has not
been spared either.
VOLVENEL: We were in Syria, you know we have two beautiful properties over there and two under construction and the hotel was totally destroyed
by the war. When you're running a business in a very difficult situation like our very difficult or sensitive country like Baghdad, you have no
place in the world which is bulletproof. None. If they want to, they can. The only thing that you can do is to make it so difficult for you - not so
difficult for them - to attack you, that certainly they will go to somebody else which is easier because they have less security. Metal detector, bomb
detectors, all the security measure - gates. You name it, we have it over there, you know, and plus.
QUEST: There's one key factor that Volvenel believes has lowered the risk to his hotels. HMH follows strict Islamic principles. No alcohol is
served in any of the Group's hotels.
VOLVENEL: We don't want to have to do anything (inaudible) alcohol, and we also put other customers and our associate at risk because
potentially, you know, it could be perceived as a provocations.
QUEST: Lauren Volvenel has all the problems of any hotelier worldwide. Oh, and one more - sometimes he can't visit his own hotels. We
try to invite them also in Dubai. I just finished a budget meeting for all the hotel, and Baghdad was supposed to come this morning and they had
basically to cancel the flight because of the situation there. So, it's never easy, it's challenging but it is manageable.
(END VIDEOCLIP)
LAKE: "I have nothing to hide," says the wife of Mexico's president. "I have worked all my life and I am an independent woman." Why the first
lady is selling her house - after the break.
(COMMERCIAL BREAK)
LAKE: Mexico's first lady is selling her new mansion and she says it's all in the name of defending her family's integrity. There has been a
growing controversy over the house seen here in one of Mexico City's most expensive neighborhoods. Critics say the company who sold her the house
gave a favorable deal, and coincidentally, it also won a lucrative government contract from her husband, President Enrique Pena Nieto. CNN's
Shasta Darlington joins us now from Mexico City. And, Shasta, this has turned into quite an ordeal for the president and his family, and the
optics are terrible who counts himself as a reformer.
SHASTA DARLINGTON, CNN BRAZIL BUREAU CHIEF: Exactly, Maggie. So it's sort of interesting - the First Lady Angelica Rivera made this announcement
in a televised video speaking to the Mexican people. She said she's willing to sell her mansion -- of course, only after it became the center
of this big scandal involving her husband, and she said that as a TV star, as a soap opera actress, she actually made the money over the years to buy
this mansion herself.
But she really failed to address head on the problem, and that's this possible conflict of interest because she bought it from the subsidiary of
this company Grupo Higa that won multi-million dollar contracts from the state of Mexico when Pena Nieto was the governor of the state. Of course
she did talk openly about her decision to sell it. Take a listen.
(BEGIN VIDEOCLIP)
ANGELICA RIVIERA, FIRST LADY OF MEXICO, VIA INTERPRETER: I want to let you all know that I've taken the decision to sell the rights to the
contract of the house because I do not want this to continue to be a pretext to offend and defame my family.
(END VIDEOCLIP)
DARLINGTON: Now, this is obviously an attempt in some ways to quiet critics at a time that her husband, President Pena Nieto is facing some
very difficult days ahead. Tomorrow we're expecting a big protest march here in Mexico City, organized in part by the families of 43 college
students who disappeared and are presumed by many to be dead. And that's because officials say they have some confessions that indicate these
students were rounded up by police on the order of a local mayor, handed over to a drug cartel, they were killed and their bodies burned.
Now, this is an outrageous crime and yet Mexico is accustomed to a certain level of violence. This time there's anger around the country.
We're expecting a pretty big demonstration here. Pena Nieto is bracing for this, and we're going to hear people not only demanding a thorough
investigation into this particular crime, but also some real answers about impunity and corruption that are clearly entrenched in Mexico as shown by a
number of cases here, Maggie.
LAKE: They are, and they had been working so hard to put corruption and violence out of the headlines, but those persistent problems once again
an issue. Shasta, thank you so much. Shasta Darlington for us. And we will be back with "Quest Means Business" in just a moment.
(COMMERCIAL BREAK)
LAKE: It's new, it's controversial and now it's the Oxford English Dictionary word of the year. "Vape." The dictionary defines it as to
inhale and exhale the vapor produced by an electronic cigarette. The compilers say they chose it now that e-cigarettes have become a mainstream
industry. It's not the first time the word of the year has come from the world of business and economics. Last year's word was "selfie" as the
spread of smartphones got everyone taking pictures of themselves. In 2011, it was "squeezed middle" - a term used in the U.K. to describe those people
most at risk from inflation. And it was British Prime Minister David Cameron's idea of the "big society" which was the choice in 2010 - the
concept of using volunteers and private workers to fill in during times of government austerity. And in 2008, as banks around the world sparked a
financial crisis, the word of the year was with the unforgettable "credit crunch."
U.S. Federal Reserve is paying attention to recent volatility on Wall Street. We know that thanks to the minutes of the Fed's October meeting.
Now investors are focusing on how soon it will start raising interest rates. Here's how Wall Street ended the day - all three of the main
averages were slightly lower at the close. That's it from "Quest Means Business." Whatever you're up to in the hours ahead, I do hope it is
profitable.
END
