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Quest Means Business
Sepp Blatter to Step Down as FIFA President; Looking Back at Blatter's Career; Blatter's Allies and Enemies; Desperate Search After Chinese Ship Disaster; FIFA Sponsors Welcome Blatter Resignation; Prince Ali: There for Those Who Want to Change; U.S. Oil Drillers Adapt to Survive; Gurria: E.U. is Rebuilding Itself. Aired 4-5p ET
Aired June 02, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:59:55] (NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: The bell is ringing, the market is down around 27 points, but if you look at the graph, you can see it really was one of
those days that was a bit all over the place. The lady rang --
(GAVEL POUNDS)
QUEST: Oh, good grief! That is a wimpy gavel close from Quantum on Tuesday, it's the 2nd of June.
But tonight, this is the end. Sepp Blatter announced he will quit as FIFA president. The sponsors are celebrating. We had the first reaction from
FIFA's major partners. And the replacements are already warming up. Prince Ali of Jordan throws his hat back into the ring.
I'm Richard Quest. I mean business.
Good evening. When I was with you on Friday, it seemed like a done deal and it was all over, including the shouting. Sepp Blatter had been
reelected as president of FIFA. Tonight, though, a major new development as Sepp Blatter announces he will resign as FIFA president.
Just four days into a fifth term, and Mr. Blatter says he no longer feels the support of football's world, and it's time to end his career as
football's top man.
(BEGIN VIDEO CLIP)
SEPP BLATTER, OUTGOING PRESIDENT OF FIFA (through translator): FIFA needs a profound overhaul. While I have a mandate from the membership of FIFA, I
do not feel that I have a mandate for the entire world of football: the fans, the players, the clubs, the people who live, breathe, and love
football as much as we all do at FIFA.
(END VIDEO CLIP)
QUEST: Blatter called for fresh elections, and that means FIFA will elect its first new president in nearly two decades. We need help understanding
what took place, and for that, "World Sport's" Don Riddell is at the CNN Center.
I read the statement, Don. He says he had the support of FIFA, but he didn't have the support of the fans, the clubs, the this, that, and the
other. But he knew that on Friday.
DON RIDDELL, CNN SPORTS CORRESPONDENT: Yes, absolutely, Richard. I mean, something quite spectacular must have happened in the last 96 hours to
persuade him that something quite significant had changed. Because this is just an absolutely extraordinary U-turn.
On Friday, he was not only jubilant, but he was utterly, utterly defiant. And now we have this spectacular announcement today. And it came about in
farcical circumstances, Richard. This press conference was called at the last minute.
It was on, then it was off. He was due to speak, then he wasn't due to speak, and then all of a sudden, he was there in front of barely a dozen
journalists. Talk about going out via the back door. This is surely not how Sepp Blatter would have wanted to end his reign as FIFA president.
QUEST: All right. Help -- let's just dive straight into this, Don. Was it the "New York Times" article and these allegations about the $10 million
that the South Africans were going to give to the Caribbean to develop football where the waters of corruption are lapping ever higher?
RIDDELL: Well, you do get the sense, don't you, that the walls are closing in. It may have been this most recent accusation that one of his closest
allies, the secretary general, Jerome Valcke, knew about or was aware of this $10 million bribe that was paid as a part of the successful South
Africa bid for the 2010 World Cup.
We're not sure if it's that or not, but certainly you get a sense that Sepp Blatter finally realizes that him remaining as the FIFA president is bad
for FIFA and bad for football. But of course, it may be much more serious than that, and he may now have a sense that he himself might have --
QUEST: Right.
RIDDELL: -- a case to answer.
QUEST: And finally, Don, all those confederations that voted for him, that ignored the warnings of Ali and of UEFA, and of all the sponsors, all those
confederations, they look ridiculous today.
RIDDELL: Well, they absolutely do. One hundred and thirty-three federations voted for Sepp Blatter last Friday, and anybody who thinks that
Blatter stepping down is the end of it and that FIFA is now reformed needs to think again.
FIFA needs to be structurally dismantled and rebuilt if they're to avoid appointing someone who's basically just going to follow in Sepp Blatter's
footsteps.
[16:04:57] It's a huge development that Sepp Blatter is going to go, but football's world governing body needs to spend the next seven or eight
months figuring out a way where they can go forward with more transparency, more integrity, and have a president who is fit not just to run FIFA, but
the world game in a more honest way.
QUEST: Thank goodness we've got you, Don, to guide us through this. I can imagine for you in sporting and the business world, this must be a day like
you've never seen anything quite like it before.
(LAUGHTER)
QUEST: Don --
RIDDELL: Yes.
QUEST: Good to see you, sir. Thank you very much.
Now, Sepp Blatter says FIFA needs deep-rooted and structural change. These were the very words he used. Look at them. "Deep-rooted structural
change." The earliest he says he will stand down is to December of this year. That's because there needs to be a four month period before
elections so that people can nominate and all that.
His successor will inherit an organization -- and I don't use these words lightly -- in total crisis. You think I'm being a bit of hyperbole? Look
at what they are facing.
The US investigation. The Department of Justice, which is looking into allegations of corruption and bribery concerning television rights. The
South African games. The Qatar -- sorry, South Africa -- yes, World Cup. The Qatar and Russia awarding.
Then you've got the Swiss investigation. That specifically going into the 2018 and 2022 World Cups. Then you've got the FA chairman, Greg Dyke,
saying if I was Qatar, I wouldn't be feeling confident. Is that a reference that perhaps it may be taken off them?
If this wasn't enough -- and this is the legal stuff -- the financial, hit them where it hurts, in the pocket. The sponsors are calling for action
and transparency with the likes of Adidas, Visa, McDonald's and Coca-Cola welcoming the fact Blatter's going.
And then, you now have this power struggle with the first change in leadership in some 17 years. This is an extraordinary amount of issues for
one organization.
Joining me now on the line from Merseyside in England is Mark Palios, the former FA chief executive. Let me ask you, sir, the same question I asked
Don Riddell: what happened, do you think, between Friday and now?
MARK PALIOS, FORMER CEO, FA (via telephone): Well, I think you'll get the exact same answer that Don gave you. Something seismic. Because Sepp
Blatter is a man who would not go without a fight.
And what we saw on Wednesday when the law enforcement agencies first made their appearance and -- well, they didn't incarcerate, but picked up
several of the FIFA guys, you saw a response that was defiant.
And he refused to acknowledge requests for a delay in the process because that would have given people time -- the logic was, give people time to
really understand the significance of these arrests. He ran roughshod over that. He went through the process with you, it's going to be another
procession.
And when he actually came out of that again, as Don as, he was defiant in his victory speech, et cetera. And as a consequence, to see him turn
around today, one can only assume something seismic has happened.
And if you looked at the Agents for Change when you analyze this, one was possibly UEFA, but they realistically were never really going to change
anything.
QUEST: Right.
PALIOS: And if they were, it wasn't going to be in the short term. So, one can then look at the sponsors. I don't know what's --
QUEST: Right.
PALIOS: -- been said there, but it sounds like what they're saying now is a bit after the event. So that then leads you to the conclusion that
something must be bubbling underneath the surface as regards the law enforcement investigations.
And again, this morning, when you fine Jerome Valcke, who's very close to Sepp Blatter, is implicated, and it is alleged that he knew about the $10
million that was paid. It'll be --
(CROSSTALK)
QUEST: Right. Mark --
PALIOS: -- back to the World Cup.
QUEST: Let me --
PALIOS: When actually, it may well have come close to home that's been the thing that his made him move.
QUEST: Let me jump in here, Mark, just quickly, to ask you, within those confines, who takes over? Prince Ali has said on CNN -- he started off by
saying "I'm thinking about it," and then he came back and said, "Well, I'm thinking about it very seriously, and yes, if enough people want me to do
it, I'll stand again." I mean, was he just a stalking horse, and now the real candidates come out of the woodwork?
PALIOS: I don't think he was a stalking horse in that respect. I think he was, if you like, the candidate that could possibly garner in the
circumstances the most votes against Sepp Blatter. Of course, with Sepp Blatter going, a whole host of candidates may appear out of the woodwork,
and you'll get certain factions in there.
And so, one of the strengths of Sepp Blatter was that he was seen by the Asians, the Africans, and the rest of the world that he actually had
loosened the stranglehold of the Europeans and the South Americans on world football.
[16:10:08] So, there will be guys who will still be coming from that camp, and they may well seek a candidate that will actually be looking to their
interests. And I would think that any European may have a difficult shout in this --
QUEST: All right.
PALIOS: -- because they will actually be going back to what the rest of the world was trying to get away from. So, there's lots of politics that
will have to play out, but the key thing is, if the job is to get trust back in FIFA, it is about root and branch change on the governance side,
then these guys --
QUEST: Right.
PALIOS: -- have to show credibility in that. And we will have for the first time a proper debate, hopefully, and a proper election rather than a
procession.
QUEST: Mark, you'll help us as it goes through, I hope, as December comes around and the new year and we look forward to you giving us your guidance.
I appreciate it, sir. Thank you very much.
Sepp Blatter had been there for 17 years, and in that time -- and we saw it in this vote -- the allies and the enemies were clearly defined. Who were
they? We'll talk about the allies and the enemies --
(RINGS BELL)
QUEST: -- after the break.
(COMMERCIAL BREAK)
QUEST: Our top story tonight, and it's the resignation of the FIFA president, Sepp Blatter. Since taking the helm of football's world
governing body in 1998, Sepp Blatter has overseen a simply massive growth in the revenues and the popularity of football. Don Riddell looks back at
the Blatter career.
(BEGIN VIDEOTAPE)
RIDDELL (voice-over): The FIFA boss, Sepp Blatter, is a polarizing figure. In some parts of the football world, he is reviled. But these pictures
tell a very different story. In the wake of his fifth presidential election triumph in Zurich, he was revered as if he was a rock star,
delegates lining up to congratulate and be pictured with him, all wanting to bask in the glory with the most powerful man in world football.
BLATTER: I like you. I like my job. And I like to be with you. I'm not perfect. Nobody's perfect. But we will do a good job together, I'm sure.
RIDDELL: Even before Wednesday's announcement that FIFA and its members were the subject of two criminal investigations, the organization had been
compared to the Mafia and a dictatorship.
Whatever your point of view, FIFA is an organization made in Blatter's image. He spent more than half his life there. In 1975, he was the
director of development programs. Then, from 1981, the general secretary. And since 1998, he's been the president, winning five consecutive
elections, standing unopposed in both 2007 and 2011.
And in that time, FIFA has made a fortune. From sponsorship, marketing deals and television contracts, FIFA boasted revenues of $5.7 billion
leading up to and including the last World Cup, with cash reserves of $1.5 billion.
But who is the man behind the presidential cloak?
BLATTER: Crosswords are very important for me because I think it is the best memory technique training.
RIDDELL: In 2006, Blatter gave CNN special access to FIFA's opulent new headquarters in Zurich, and he gave us a sense of what mattered most to
him.
[16:15:00] BLATTER: What is important for me is to have a clock somewhere in order to know the time, time is very important in my management style.
So, this is something very special. There was always a wish that we should have somewhere a corner where silence shall prevail. And here it is for
meditation when I want to be really alone, no noise, and just think about the problems.
RIDDELL: But he's no stranger to adversity. In 2004, he was severely criticized for his remarks on women's football, saying, "Let the women play
in more feminine clothes," adding, "The could, for example, have tighter shorts."
And responding to concerns about Qatar's laws on homosexuality, he said gay fans at the 2022 World Cup should "refrain from any sexual activities."
Blatter later apologized for both comments.
He was an amateur player once in his native Switzerland. At FIFA, a leader and a survivor. And by his own admission, a Machiavellian master.
BLATTER: I was first a runner, then a scorer, and later, I'm a schemer.
(END VIDEOTAPE)
QUEST: That sums it up. Despite some celebrations on social media, Sepp Blatter has plenty of support across the world. The opposition came mainly
from Europe, where Europe generally opposed reelection. UEFA president asked Blatter to quit. Some countries, like France and Spain, still voted
for him even though UEFA itself was very much opposed to his reelection.
Africa was a staunch supporter of Blatter, having been the recipient of many funds over -- and development funds over many years. Asia also came
out in support of Blatter. The Asian associations opposed any delay to the election process, even though there had been arrests and criminal
investigations. They wanted the vote to continue.
In South America, it's more divided. Countries like Brazil, implicated in the US investigation, and the US ultimately opposed Blatter's reelection.
And it was the US Department of Justice which, of course, brought the charges.
Joining me now is Chris Eaton, FIFA's former head of security, director of sport integrity at the International Centre for Sports Security. Chris,
you were with us last week. So, let me begin by asking you what I've asked others: what happened between Friday and now, do you believe?
CHRIS EATON, FORMER HEAD OF SECURITY, FIFA (via telephone): Well, I cannot believe that there's not been some motivation that does not -- that we
don't know about. To change his mind in three days is unbelievable, quite frankly, and I'm sure that's not just a general reflection on the
situation. I think there's been some incident, some revelation that we will know about in the future, I'm sure.
QUEST: That's suggesting -- what you're skating towards thinner ice on is the question of whether he is implicated or stands to be implicated in any
allegations that are already out there of corruption and bribery.
EATON: Well, he could be cooperating, too. There's all sorts of scenarios. But the point is, I am certain there is something behind this
that has not been yet revealed.
QUEST: And you're glad he's gone?
EATON: Well, I think it gives an opportunity. Let's be positive. It gives an opportunity for FIFA to rebuild and actually be the model of a
sport governing body that it should be. It's the richest and most well- played and well-supported sport in the world. It ought to have the model of behavior. It doesn't.
QUEST: Right. But you'll be aware from your roles, any chief exec or president coming into this role will have to have world-class skills. If
they -- of management, of transparency, of being able to effect change. If they go for a has-been, an also-ran, or a never-ran, then things won't
change.
EATON: Well, that's clearly the caution. The caution is two things: the transition period between this -- well, it's not really a resignation, it's
an announcement that he will not run again at the new election.
So, this period between that decision and the new -- election of the new president is a crucial period for the protection of the organization's
records, et cetera, while that transition period transpires.
And then after the new president is elected, I think it's -- the why in which the resignation -- let's call it the resignation -- took place --
QUEST: Right.
EATON: -- really means that it is inevitable that deep-seated reform must take place. Whether it's the president alone, or it's a presidential team,
a team of people that he appoints, the fact is, no also-ran can avoid the reality today that they must institute fundamental, deep-seated
transparency reform in the organization.
QUEST: Looking at the sponsors. Visa: "We're encouraged by the recognition that FIFA has extensive and fundamental reform is needed."
[16:20:03] McDonald's: "We're hopeful that the changes being implemented will be the first step. Adidas: "We welcome FIFA's commitment. Today
marks a step in the right direction." Coca-Cola: "We believe this decision will help FIFA transform itself."
Do you think the sponsors were weak-willed and lily-livered, or went as far as they could over many years?
EATON: I think many organizations, many people many luminaries, many sponsors, simply wanted to have a FIFA that was supporting them and they
were able to support and make them money. This was a money-making machine supported by money makers.
So, I'm a bit ashamed that organizations supported the organization in its current form and didn't support a transition to deep-seated reform earlier.
The fact is, everyone's jumping the bandwagon now. Let's go back three months and see who was supporting him three months ago.
QUEST: Chris, as this election process comes along, I'm going to need your good help and offices to help me wend our way through it, so we look
forward to talking to you again. Thank you, sir.
EATON: Thank you, Richard.
QUEST: Now, it's been a quite desperate search for survivors. The rescue efforts are continuing. It was a tourist ship, and it had hundreds of
people onboard, and then it capsized. It happened in China, and we're going to be there.
(COMMERCIAL BREAK)
QUEST: More of the day's business agenda in a moment. We must, though, bring you up to date with the awful situation in China, where rescuers are
racing to get hundreds of people feared trapped inside a sunken passenger ship in the Yangtze River.
The Eastern Star capsized late on Monday. It was stormy weather. There were 400 people or so, 460 people onboard. So far, 15 people have found
alive. The rescue divers say they spotted someone trapped inside the wreckage.
(BEGIN VIDEO CLIP)
GUAN DONG, RESCUE DIVER (through translator): I swum back and forth three times, and by the third time, I felt somebody was there above me. As soon
as I got out of the water, I noticed a trapped victim. It was pitch dark with just him inside the cabin and nobody else.
(END VIDEO CLIP)
QUEST: CNN is one of the few international broadcasters who's at the scene, and our David McKenzie is the correspondent who's in Jianli County
in central China. David, the -- well, you tell me what the current situation is at this hour, where I believe it's early in the morning, 4:30
or so in the morning. What is the situation? How many people do they believe are still potentially rescuable?
DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Well, hundreds, Richard. It's certainly a terrible situation, because we haven't seen the successes
that we saw earlier in the day where a few people were pulled out of that ship.
And so now, there's certainly more activity going on overnight, and more people believed to be trapped inside. And so, China's waiting on edge to
see what exactly will happen next. But it's been more than 24 hours, so the hope is fading fast, Richard, those air pockets that might have been
there that led to several being pulled out, that hope is diminishing quickly.
And I have to say, the weather's also played a huge part. It's been raining steadily, sometimes furiously, on and off through the whole time
we've been here, and that's certainly hampering rescue efforts as well, Richard.
QUEST: And the pictures that I've been seeing where you witness rescuers on the hull tapping, tapping, tapping, hoping to hear a tap coming back
from inside. It's pitiful.
[16:25:09] MCKENZIE: Well it is pitiful, but it is one of the best ways, they've said, to be able to see if there's a proof of life. And it's
really just extraordinary. Those rescuers standing on the hull of this ship, upturned in the Yangtze River. You also have to realize, this is a
very murky -- famously murky -- river, and fast-flowing. So, that's made the job of the rescue divers extremely challenging and dangerous.
And so far, as I've said, they've had very few successes. This is a big military operation. Right now, there are military trucks kind of passing
back and forth from our position. They put a pretty severe cordon around the outer area. They're not even letting some volunteers who wanted to try
and help into the scene, because what they need is specialist help.
And I have to say, the families that are waiting in other parts of China for mostly elderly passengers who onboard that ship, they certainly, very
tense times, some of them angry, wanting more answers. But frankly, as the time ticks on, it's a very grim situation, indeed, here in China, Richard.
QUEST: David McKenzie, middle of the night where you are by the Yangtze River. Thank you, sir.
This is CNN. We'll be back in a moment.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest, and there is, of course, more QUEST MEANS BUSINESS in just a moment when we'll talk about FIFA's major sponsors. How
did they react? What role did they play, and to cause the news that Sepp Blatter will quit as FIFA president?
And then, the head of the OECD also tells us why Europe and Greece will reach a deal.
Before all of that, this is CNN, and on this network, the news always comes first.
Sepp Blatter said today he would resign as the president of FIFA's football governing body. It comes only days after he was reelected for his fifth
term. FIFA's been engulfed in a growing corruption scandal, with several officials arrested last week. Swiss officials have made it clear that they
are not investigating Mr. Blatter.
Thousands of rescuers are continuing to search for survivors after a cruise ship carrying more than 450 people capsized on China's Yangtze River. It's
now more than a day since the ship overturned after being struck by a tornado. Many of those onboard were elderly and are believed to have been
trapped inside.
Iraq's prime minister is urging the world to do more in the fight against ISIS, saying it's in everyone's interest to see the terror group defeated.
At a meeting of coalition partners in Paris, Mr. al-Abadi said his forces urgently need more weapons, ammunition, and intelligence help.
[16:30:09] The acting head of the United States Transportation Security Administration, the TSA, has lost his job after dozens of American airports
failed undercover tests of their security ratings. In 95 percent of cases, mock explosives and weapons were able to get past screeners undetected.
The government says procedures will now be fully reviewed.
(MUSIC PLAYING)
QUEST: Last week, FIFA's embattled president warned his sponsors, you need FIFA as much as FIFA needs you. Well, today, after the FIFA's chief
surprise resignation, the stock -- the top sponsors made it clear they don't need Sepp Blatter after all.
Coca-Cola, which last week was one of the most vocal sponsors pushing for reform, called the resignation "a positive step."
Coca-Cola says this decision, "This decision will help FIFA transform itself rapidly into a much needed 21st century structure and innovation."
From Adidas, similar tidings: "Today's news marks a step to establish and follow transparent, compliant standards. Now Visa was one of the most
hardcore in calling for change and basically threatening if it didn't see change, then they would pull out.
Visa says, "We're encouraged by the recognition that fundamental reform is needed." And then of course more work lies ahead.
Finally, McDonald's, which is a World Cup sponsor, calls the resignation "a big first step in gaining back trust from fans worldwide."
What an extraordinary reaction from the corporate world to the resignation.
Joining me now, let's go and meet Peter Shankman.
We need to talk more about this, sir.
PETER SHANKMAN, BRANDING AND SOCIAL MEDIA CONSULTANT: Good to see you again, sir.
QUEST: Good to see you. Thank you. You were on with us last week. Branding consultant and the author of the book, "Zombie Lawyers." I'm
asking everybody who might know what happened?
SHANKMAN: Well, you notice that none of the sponsors said we're happy with this. I mean, none of them closed down. They all said this is a good
first step. What does that tell you? That tells you that there's a lot more going on behind the scenes that they want to see changed.
QUEST: But how did election take place on Friday to be -- I mean, what happened over the weekend? What did he learn?
SHANKMAN: I obviously wasn't there but here's my take. My belief is that on Thursday before the election, when it first broke that DOJ was
investigating and arrested people, some of the big sponsors went to Blatter and went to FIFA and said, hey, if he is reelected, don't get him
reelected.
If he is reelected, we're going to have a problem. We don't want him there. But they wanted to give him the benefit; they wanted to have him
save face. They wanted to let him save face and they wanted to say, OK, you know what, if you don't get elected, you've had a great run. You can
go out on a high note.
But he did get elected. And he didn't get elected as easy as he has in the past. This wasn't a cake walk for him. There was a second election. He
won that one. As soon as that happened, those sponsors came back and they said, OK, we tried to do this nicely. Take him out. Take him out --
(CROSSTALK)
SHANKMAN: -- take him out or we're going to pull our money -- yes. Because it -- look, money speaks louder than anyone, even Blatter.
QUEST: And the way Blatter put it -- I'm just looking for some of the quotes -- the way Blatter put it, saying he had the confidence of FIFA.
The mandate of FIFA, but not of football, the fans, the clubs and everybody else.
SHANKMAN: Look, you know, I could start a great company and fill it with 50 people and have the confidence of all 50 people. But if I'm not selling
anything and making any money, that company's not going to last that long.
QUEST: I found the piece of paper that I'm looking for. Here we go, Coca- Cola.
Of all of these, who do you think was the strongest? Coca-Cola, Adidas, McDonald's or Visa, who has the whip hand?
SHANKMAN: Well, I think Visa because Visa, A, has a lot of money and they're a financial institution. And so right there, they are very afraid
of DOJ coming in and saying, you know, you're a partner; let's see your books.
McDonald's after that, because they have the largest brand in the world and then followed by Budweiser, Adidas and the rest of them. But I think that
-- I think that they got together without question. They got together, all the VPs of marketing had a serious phone call probably Thursday. And they
said, you know, guys, we have to take a united stand on this. And if they don't get rid of him, we have to do it.
QUEST: I find it fascinating -- and it speaks volumes for the confederations and the federations that voted for him, that they didn't see
the writing on the wall, that...
SHANKMAN: Which -- well, you know, it tells me -- it also tells me that there's just a lot -- it's all about money. And there's a lot of
corruption there. You know, and these people who did vote him back in had probably had promises made to them.
I mean, you know, you're talking about countries that -- again ,let's just go back to the fact that Qatar is hosting the World Cup in what is
essentially 145-degree oven, which is not necessarily the smartest thing in the world. So there's money floating here. It comes from a financial --
(CROSSTALK)
QUEST: Right. But then to take Visa's thing, "more work lies ahead;" McDonald's, "first positive" --
(CROSSTALK)
[16:35:00] SHANKMAN: None of them checked out.
QUEST: But what I found interesting is that means that many more are going to have to go at all levels.
SHANKMAN: I'm seeing a very large house cleaning. And I guarantee, DOJ's (INAUDIBLE) either. You don't just -- the Department of Justice isn't
done, either. You don't just get rid of DOJ and say, OK, you've arrested seven; thank you. No, they stick around and they're going to come back in.
This isn't over.
QUEST: You'll be here to help us during the election.
SHANKMAN: My pleasure.
QUEST: Thank you, sir.
Now news into CNN: the U.S. Senate has approved a bill to reform the National Security Agency surveillance programs. Now you'll be aware, of
course, that the various metadata bills expired over the weekend. In some shape or form, the NSA had stopped bulk collection of phone calls, emails
and the like.
Well, the final tally was 67-32. And it's called now the USA FREEDOM Act, the responsibility to hold call records will now fall to the phone
companies, not the government. The government investigators will be able to get warrants through a special court overseeing these programs if they
need the information and what to search.
(MUSIC PLAYING)
QUEST (voice-over): When we come back, Prince Ali stood against Blatter. He managed to push it to a second vote and then withdrew. But will the
prince be in for the recount when the voting takes place today?
(COMMERCIAL BREAK)
(MUSIC PLAYING)
QUEST: Prince Ali of Jordan has told CNN if he is asked, he will run to replace Sepp Blatter as the next president of FIFA. Speaking to Christiane
Amanpour on the phone from Amman, Christiane asked him if he thinks the 2022 World Cup will ultimately be held as planned in Qatar.
(BEGIN VIDEO CLIP)
PRINCE ALI BIN HUSSEIN OF JORDAN: ... every national association has the right to host the World Cup wherever it is. But they have to respect human
rights. And when you have somebody like Sepp Blatter, who has not exactly been very forceful on this issue, then there is a problem.
I have worked very hard with other colleagues, with Michael van Praag, the head of the Dutch Football Association, to try and bring this to the table.
And we have to continue in that way. We have a responsibility to the whole world.
AMANPOUR: I've heard what you said to each time I've asked you about yourself standing for election again, if the national association gives
your backing -- their backing to you, would you like to stand again?
Will you stand again if they do so?
HUSSEIN: Look, it has been a very difficult campaign for many, many reasons. But I am at the disposal of all the national associations who
want to change, including many of them who were afraid to do so before this day. But I'm there.
[16:40:04] I'm there for them. And I think we need to salvage the situation. We have to help football and we have to help the world as a
whole.
(END VIDEO CLIP)
QUEST: Prince Ali, talking to Christiane.
Now a battle that has pitted Saudi Arabia against North Dakota is next. OPEC is preparing its oil strategy for the next six months. And we're
going to show you how North American frackers are adapting to survive.
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QUEST: There's a battle raging in the world of oil and the spark is over supply and low prices. The prize is influence over the global oil market.
All this week, OPEC will reveal its battle plan for the next six months. OPEC's strategy of keeping production high in the face of falling prices,
it's a strategy that's already paying off.
While oil producers around the world are feeling the squeeze in the U.S. the oil companies are struggling to keep the taps open. And the problem,
the core difficulty as you can see for the non-OPEC producers, it's much more difficult and expensive in the United States to squeeze oil from shale
formations, much more expensive than it is from the -- pumping it from the Saudi Arabian vast deposits.
North Dakota is one of the centers of U.S. shale drilling. It's also known as fracking. The heart of the fracking operation is the formation known as
the Bakken. I traveled to the Bakken and I found how the drillers in the Badlands have adapted to survive against the Saudis.
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QUEST (voice-over): These are the Badlands of North Dakota, a breathtaking, desolate corner of the United States. Here, trucks kick up
dirt and cattle have the right of way.
QUEST: Nobody really knows just how much oil and gas is beneath me here in the Bakken in North Dakota. But if the estimates are even partly accurate,
this part of the country will be producing oil and gas for decades and giving the Saudis a run for their money.
QUEST (voice-over): The Bakken's one of the few parts of the world producing more than a million barrels of crude a day. Here, the oilmen,
who live in the man camps, head to the rigs for long days of work.
UNIDENTIFIED MALE: I'm going to work 18 hours.
QUEST (voice-over): They can make a good six-figure salary. The work is demanding. It leaves a mess from head to toe. And Mother Nature rarely
cooperates.
QUEST: I'm being bombarded by hail. It's the middle of May; the temperature's dropped. We're expecting snow tomorrow night. And in North
Dakota, there's nothing pleasant about the weather at this point. Ow!
QUEST (voice-over): Even though they've seen it all, the oil industry was shaken to the core when prices fell by half. Driven by oversupply and the
Saudis' desire to run the American frackers out of business.
[16:45:03] At this windswept drilling rig where crews from Fortis Energy are making repairs, CEO Nathan Conway admits he's spent sleepless nights
worrying as the price of oil fell.
NATHAN CONWAY, CEO, FORTIS ENERGY: No one really knew where the bottom was going to be. Was it going to be $20 a barrel? Was it going to be $3 a
barrel? I mean, we've seen those prices in the past. But until people got comfortable with that, of what the bottom really was, they stopped. They
paused and waited to see where the bottom would be.
QUEST (voice-over): As the industry searched for the bottom, American business did what American business does best -- reinvent itself. The oil
majors scrapped more than $100 billion worth of projects. The fracking industry brutally cut costs by double digits while new technologies led to
more efficient, cheaper drilling.
The end result of all this effort is that fracking in America is now profitable with oil at lower prices.
CONWAY: I think we're going to start seeing a lot more action as the price of oil stabilizes in the $60-$70 range.
QUEST (voice-over): This hot oil machine costs $700,000, a sizable investment for Canary's chief exec, Dan Eberhart. He slashed his workforce
by 20 percent and now he's financially fit for the fight against OPEC.
DAN EBERHART, CEO, CANARY LLC: The Saudis and OPEC have caused us to press fast forward on reducing the cost structure and reducing the cost to do
shale and extract shale from the ground. And this makes us more competitive and faster and leaner moving forward.
QUEST (voice-over): No one's promising growth like the old days anytime soon. But if OPEC believes it can pump its way to prosperity and defeat
the American frackers, the oil consultant Monte Besler (ph) says they are wrong.
QUEST: What's your message to OPEC?
MONTE BESLER (PH), OIL CONSULTANT: Bring it on. I -- we'll find a way. We look at $70 a barrel now. But I've seen oil at $8 a barrel and we were
still here in North Dakota.
QUEST (voice-over): After a year of tough times, the economics has changed and they're standing tall. The oilmen of North Dakota have learned to live
with oil at this lower price, increased efficiencies mean they are now starting to plan to get back into drilling.
Of course, in the grand scheme of things, not much has been settled. There's still OPEC on the one side, with its policy of politics; meanwhile,
here in American, the policy is one of profitability.
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QUEST: So joining me now is Chris Faulkner, the chief exec of Breitling Energy Corporation. He's also known as the frack master.
Sir, when you and I have spoken in the past on this, we've always parried backwards and forwards about the profitability. But as my report makes
clear, North Dakota and the U.S. fracking industry is now profitable at these prices.
CHRIS FAULKNER, CEO, BREITLING ENERGY CORPORATION: Yes, Richard. It's a good point. I think what Saudi has done is put us through a good exercise.
We've driven the cost down. We're doing more with less. We're more efficient in what used to take three rigs we can now do with two. It's
still expensive oil to get out of the ground, nowhere near the cost that you see in the Middle East. But we are doing more with less and we're
actually surviving this thing.
And think about this: we have half the rigs running in this country that we had just eight months ago and we're still producing the same amount of
oil every single day. So we have definitely responded to Saudi's threats if you will.
QUEST: Right. And in responding to that threat, obviously production is -- production still increases. Is it your feeling that the Saudis shot
themselves in the foot? Or has this been a win-win?
FAULKNER: You know, I was in the Middle East two weeks ago and that was my exact message. And it wasn't well received over there. But I do think
that they thought we were going to be down and out. They could drive the cost down. They've got a tremendous amount of cash on hand and then they
could -- we cut supply, the prices go back up and they continue to produce the same amount of oil.
They cut a loss, I think, in the game of chicken if you will because oil prices are beginning to rise; demand is starting to come up. And we're
still here. And now we're producing oil at a much cheaper price.
QUEST: Right. But what's driving that oil price up again?
Is it demand for -- picking up in some places like India or China or the like -- or is it the fact that there has been an equilibrium reached
between -- in the market of fracking and Middle East oil?
FAULKNER: Yes, I think it's some of both. There's a dollar slipped a bit. We've got some demand signals. We've got summer driving season here. So
supply inventory's coming down.
So I think it's a number of different things, Richard.
[16:50:01] But yes, I think it's also the market is driving back equilibrium. But I think we're going to see oil prices in this kind of
area for the very near and midterm as well.
QUEST: Right. So forgive me, I can't go with all of this now. It must be $60-something or so, heading towards --
(CROSSTALK)
FAULKNER: Sixty bucks, yes.
QUEST: -- 60 and change.
Finally, Chris, at 60 bucks and change, does fracking continue to grow in the U.S.?
FAULKNER: I think it does. And if you ask me that question six months ago, I'd tell you $60 is going to be difficult. We've done so much in a
short amount of time. I think, yes, $60 is definitely workable.
There are certain areas that it might be near break-even, but there are so many places now we could still drill at 60. And we think these prices now
are in a new era of oil prices, in the $60-$70 range, are going to be here for the foreseeable future.
QUEST: Next time I am on an oil well, sir, I want you to take me out to a frack in Texas. We'll go out and go a bit of fracking on the wells.
FAULKNER: It's a date.
(LAUGHTER)
FAULKNER: Thanks, Richard.
QUEST: Don't get that sort of offer very often.
Thank you very much, sir. Thank you.
Now to the markets, talking of dates and Wall Street close today, it was largely flat. Well, it was flat at the end, but there was this bit of
hiccup at the morning. And then as a little rally in the afternoon, ah, well, you can see, look, 28 points, not worth us talking more than a second
or two about.
The S&P 500 and the Nasdaq saw smaller declines and in Europe and certain chairmen Greece, once again, weighed on the markets. The Athens composite,
you really do need to have nerves of steel if you're going to be in that market with these sort of gyrations. And the spillover into the Xetra DAX
and the Paris, only London managed to hold itself; Frankfurt closed nearly down 1 percent. The Greek stocks were taking the hit by the time all was
said and done.
So that's despite reports that Greece is edging closer to that deal with its creditors.
Last night a late-night emergency might in Berlin, the leaders of Germany and France, along with the IMF and the ECB and the European Commission,
were all there, hammering out final texts outlining what they want from Greece whilst in Athens the prime minister says his government has
submitted to a realistic plan of its own to international creditors.
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ALEXIS TSIPRAS, GREEK PRIME MINISTER (through translator): We have made concessions because a compromise demands concessions.
We know this will be difficult, but we have submitted a realistic plan for Greece to exit the crisis, a realistic plan with acceptance by the
institutions, our lenders and our partners in Europe will mark the end of the scenario of divisions in Europe.
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QUEST: Now that optimism over a deal was the one that helped to spur the euro interest spike against the dollar. It's only a little spike at the
end of the day, but you can see how swift the reaction was as the day moved on. It's the biggest daily gain in the euro for some months and it came
right at the close.
The OECD, the head of the Organization for Economic Cooperation and Development, is optimistic a deal can be done.
Maggie Lake spoke to Angel Gurria to ask him why optimistic.
(BEGIN VIDEOTAPE)
ANGEL GURRIA, OECD: Well, in my experience, when so many people that are so smart, so important and with so much at stake all try to get a deal,
they do. You know, and I know that there are constraints on both sides.
The secret it, of course, for both sides to understand the constraints of the other and to try reach a convergence. I think now we have better
conditions and we also know that what is at stake is not just a question of the payment or not payment by Greece; we're talking about broader
implications.
So I think we are going to have a deal; maybe it'll take until the 11th hour. These things normally do, just because of their own nature. People
try to extend and try to see if they can get as much as they can.
But in the end, there should be a deal and then we will have to take a look at the medium- and long-term issues of Greece and try to make sure that
they collect taxes, that they fight corruption, that they have more competition and that they have a -- more operational and more functional
public sector.
MAGGIE LAKE, CNN HOST: What is the E.U. doing wrong that some of its challenged members run the risk of falling out and some of its, you know,
more robust members are even considering the option of leaving?
Certainly something must be wrong.
GURRIA: No, the question is this is Europe, building itself. You know, this is Europe reinvesting itself, Europe redesigning itself, Europe
creating new institutions, Europe accommodating its membership, dealing with the particular case of Greece, with the problem that arose many years
ago when they had a rounding problem. They said that they'd have a 5 percent deficit; it was really 15 percent. And ever since, it's been
downhill.
[16:55:07] The adjustment has not happened in full; the question of the debt was not addressed in full. So we're still, in a way, working it out.
In the case of Great Britain, it's because of their negotiations vis-a-vis the whole European issues of management, of administration, of finance, of
the institutions.
So it's really the building of, you know, the rejuvenation, the constant rejuvenation of Europe that we are seeing. In the end, it's noisy and it's
sometimes cacophonic. But they are creating a very admirable edifice.
(END VIDEOTAPE)
QUEST: That's Angel Gurria. We'll have a "Profitable Moment" next.
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QUEST: Tonight's "Profitable Moment": defined by defiance and humiliated out of the back door, the end of the professional career of Sepp Blatter
happened quickly and with great whimper, if such there can be.
Ignominious end to a career that has seemingly been marked by corruption, scandal and tainted by all sorts of abuse. But tonight, of course, the
question is what caused him to go between Friday and today?
And the truth is we don't know. But we will. Because all our guests here said it may be the sponsors; it may be more accusations. Whatever it is,
what we've seen today is a tragedy of Shakespearean proportions. Sepp Blatter, the man who said he wouldn't quit was literally quit out of the
door.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable.
[17:00:03] Let's get together tomorrow.
END
