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Quest Means Business
Google's Paris Office Raided by Police; Tech and Banks Lead U.S. Stock Rally; Monsanto Rejects Bayer Bid; Disagreement on EgyptAir Flight's Final Moments; Egypt Deploys Submarine in Flight 804 Search; Survey: 92 percent of Passengers Want Wi-Fi On Flights; Trump Defends Fundraising Efforts for Veterans; Adele Inks Lucrative Deal with Sony; Swift CEO: Hackers Will Strike Again. Aired 4-5p ET
Aired May 24, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] RICHARD QUEST, CNN ANCHOR: Closing bell is ringing on Wall Street. Dow jones industrials opened strongly out of the gate and never
looked back. A gain of more than 1 percent, 211 points. I've got a good feeling about the closing bell. And I was wrong. It was a sort of
mediocre gavel, on Tuesday, the 24th of May.
Tonight, Google gets served. The Paris headquarters are raided at dawn. Consider it dishonest and disgusting. Donald Trump says to the media for
questioning his charity work. One hundred forty characters never felt so big. Twitter's giving you more room to tweet. Stretching the tweet. I'm
Richard Quest. We have an hour together. And I mean business.
Good evening. It was the early morning in Paris when French police raided Google's headquarters office in search of possible evidence of money
laundering and tax evasion. The French government reportedly believes Google owes them $1.8 billion in unpaid taxes. An investigation into
matter launched about a year ago. Google says it complies fully with French laws and is cooperating with the authorities. The company's not a
stranger to this type of scrutiny. Google's has agreed to pay $105 million to the U.K. after an audit showed unpaid taxes since 2005. And has agreed
to pay extra taxes thereafter. To put this in some perspective, Christian Malard, International Diplomatic Consultant. He joins me live from Paris,
Paul la Monica is here with me in New York to give us the Google slide. From the French side, this was very unusual, Christian, a dawn raid on a
major company like Google.
CHRISTIAN MALARD, INTERNATIONAL DIPLOMATIC CONSULTANT: Well, through the political mess, we are getting through in this country at the economic,
political level as you know. You have to expect everything. It's not the first time the French globally have a problem with money. And they have a
problem with all these digital giants like Google, Yahoo and some others getting billions of dollars.
And of course, in a situation of where we are economically, the French tried to get as much as they can from income taxes, which would not have
been paid in the past. You have 1.8 billion of euro but doing the same as the British and the Italian claiming for more money and it is very, very
French. The raid, a very -- I would say raiding headquarters can happen for Google as it happened, but it happens also, we have it through
political headquarters, right-wing front national, the extreme right party. We are used to it now in France. It's very usual.
QUEST: Right. Paul la Monica is with me. What are they looking for here, Paul?
PAUL R. LA MONICA, CNN MONEY CORRESPONDENT: They are looking for evidence that Google may not have paid as much in taxes as they should. Google
somewhat controversially has its European headquarters set up in Ireland. And there are some who feel that the company is underpaying other parts of
the EU, other members, because of that status it has in Ireland, which has lower taxes. Google is not only American company that's come under fire
also. You've had Apple come under the gun and Starbucks as well. Many European nations want their fair due of taxes from American multinationals.
QUEST: Right. We'll look at the wider issue. Christian, in Paris, I mean, this sort of -- to raid the offices, sort of creates an anti-
capitalist, anti-U.S. feeling about these large companies, doesn't it?
MALARD: I agree with you. I totally agree with you. You remember when Hollande running for president four years and an and a half ago he said,
"My problem is with money. My problem is with the big banks." So it's true that the socialist in power here hate capitalism in certain way. But
at the same time they need it, because if we want to have a better shaped economy definitely we need money. We need dollars. We need euro and good
all around the world with companies and digital giants as Google. So they have to change them as it's a state of mind problem in this country.
QUEST: Google, Paul la Monica, says it pays all the taxes it's legally obliged to pay. But this is about a wider issue. I want to show some
numbers. Google's one of the tech companies keeping billions of dollars offshore.
[16:05:04] We got the number just last week, didn't we? Apple has -- Apple keeps the most, which is $200 billion, Microsoft 96, Cisco 57, Oracle 45,
Google 43. This is the first time that the top five companies on the offshore liquidity list are tech companies.
LA MONICA: Yes. Pretty astonishing. They are all Silicon Valley giants.
QUEST: Tell us why that money is offshore.
LA MONICA: They realize that keeping it offshore means that they are likely to pay lower taxes on that. And you have had executives even in
Capitol Hill in the United States saying that if there were changes to the U.S. tax code then maybe they would bring some of those gargantuan numbers
of cash back here, repatriated. But right now there's no economic incentive for Apple, a Google, a Microsoft to take money that's sitting in
a bank account in Ireland and bring it back to the United States as long as the tax situation remains as it is.
QUEST: Christian, finally to yourself, will there be any sympathy for Google's position claiming that they're paying all the taxes? There are
already several investigations at the European Commission level. So does Google have any friends in France?
MALARD: There might be some sympathy because the French people, public opinion, start realizing as long as the taxes will be so high in France, we
will discourage the biggest companies from United States, from all over the world, to get investment in France. And this is what the socialists, the
left-wing party and Mr. Hollande did not understand until now. They have to change their way of doing. No doubt on that.
QUEST: Christian Malard in Paris, thank you. Good to see you, sir. Paul, you still have duty to do with me here. Look at the DOW and how the DOW
actually moved. Up 213 points. At the open, straight out of the gate, look. Straight up. Never looked back. A bit of a wobble over here. What
was going on?
LA MONICA: You'd be hard pressed to find any losers today. I think a lot of it, you know, there was a bit of selling we had in the past week,
finally getting this little bit of a rebound. There were some pretty solid numbers about April home sales that I think is reassuring some investor
that is the American consumer may not be tapped out. Maybe they're not going to target, but they are going to buy new homes and I think we are
seeing really strong numbers from the home builders, from companies like Home Depot and Lowe's that tops it out as well.
QUEST: Monsanto said goodbye -- or not goodbye -- no to Bayer's.
LA MONICA: I don't think it's good-bye.
QUEST: No, no, no, you're right.
LA MONICA: I think it's come back and see me later with more money.
QUEST: Right, but Monsanto said not now to Bayer's $62 billion bid. Is this posturing? Is the deal there going to be done?
LA MONICA: I think it's definitely posturing. Monsanto after getting turned away from Syngenta, I think, really now they're in play. And once a
company is put in play it is hard to convince Wall Street that you shouldn't sell, but they're trying to get a higher price and we know that
there's a lot of cash sitting at Bayer to be had.
QUEST: Looking forward to it. Thank you, Paul la Monica.
LA MONICA: Thank you.
QUEST: Now with the issue of Google is what heads the newsletter, CNN Money newsletter, "The Profitable Moment," sign up. "Google, The Tax Man
Cometh," it's "The Profit Moment." The newsletter is what you need to read to brief you on everything that happened in the course of the business day.
It arrives in the mailbox as the New York trading ends and before Asia begins. CNN money.com/quest to subscribe.
European stock markets also rallied on Tuesday. It was led by gains in the financial shares. The euro fell against the dollar interestingly enough.
The governor of the Bank of England, Mark Carney, angrily denied that he's spreading propaganda for the British government. Governor Carney was made
to defend the bank's analysis in two with various reports that a Brexit would do harm to the British economy. It came after a conservative MP,
Jacob Rees-Mogg, accused the governor of becoming politically involved and supporting the stay campaign. Mark Carney says he's not supporting either
side. He's supporting low, stable and predictable inflation.
(BEGIN VIDEO CLIP)
MARK CARNEY, GOVERNOR, BANK OF ENGLAND: And by our actions, by our commentary, which may be inconvenient for you, may be inconvenient for you,
by our actions, comment, we have made it more likely that we will bring inflation back to target whatever the outcome of the referendum, sooner and
more sustainably. And that will be a better economic outcome. That's our contribution to better economic outcome for the British people. And to
suggest otherwise is to try to undermine that.
JACOB REES-MOGG, BRITISH PARLIAMENT MEMBER: I do stress otherwise.
CARNEY: And so you try to undermine that.
[16:10:00] REES-MOGG: I think you have become politically involved in a way -- quite clearly said you would not in a general election. You've
given Jeremy Corbett an important speech on economics a few days ago. Have to see it's not given a view on whether his new economics is a good or bad
idea. And ask you weren't.
CARNEY: I mean, am I allowed to talk.
REES-MOGG: I don't think it's worth a reply.
(END VIDEO CLIP)
QUEST: A testy discussion between the governor and the committee. As we continue tonight, the crash of EgyptAir flight 804 has claimed 66 lives.
Now officials are providing conflicts reports about the plane's final moments.
(COMMERCIAL BREAK)
QUEST: Egyptian and Greek officials are at odds over the final moments of EgyptAir flight 804. The head of Egypt's National Air Navigation Service
has refuted reports that the plane swerved before plunging into the sea. As a search continues in the Mediterranean, an official with the Cairo
morgue, has told CNN, it cannot yet say there was an explosion on board the aircraft. Now at the same time the families of the victims have begun and
almost completed providing DNA samples that will help identify remains as and when they are recovered. Speaking to CNN earlier today, the vice
chairman of EgyptAir said it was way too soon to draw conclusions.
(BEGIN VIDEO CLIP)
AHMED ADEL, VICE CHAIRMAN EGYPTAIR: As of now, this was all speculation, sir. We have been very clear in the media that we have an accident
investigation committee that's doing its work now in gathering the evidence. And the search and rescue -- recovery operation is still
undergoing. We're collecting all the pieces of the puzzle and everything will be done in transparency. We have collaborations with the French
government and the team has been assembled. Accident investigation. So let's not jump to conclusions at the time.
(END VIDEO CLIP)
QUEST: With those salient words ringing in our ears, Nic Robertson is CNN's international diplomatic editor. He's in Alexandria for us tonight.
The providence of this allegation of swerving really only comes from the Greek minister, who said it once in an interview just the day after. And
we've never heard anything more about this allegation of swerving 90 degrees left and 360 right, have we, Nic?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: We haven't. What we heard were interpretations from experts who said that could be from the
disintegration of the aircraft. We know that Egyptian authorities have requested of the Greek authorities all communications and all data they
have on the passage of the flight through their air space. The Greeks said they'll hand it over Wednesday. So the Egyptians who are heading the
investigation, would therefore be able to see what the Greeks are talking about.
[16:15:00] However, experts have also weighed in on this discrepancy and said, look, there are two types of radar, primary and secondary. One type
of radar, the type that the Greeks may have been using here, potentially can show what looks like swerves as part as the plane separating in
different parts of the plane. Moving in a secondary radar that perhaps the Egyptians are using. And we don't know because the Egyptians are quite
tight lipped about this. It could just show the disappearance of the plane, no swerving, it didn't break up. It disappeared more precise so to
speak.
QUEST: And then we have the distressing information from the morgue. I mean, essentially, basically, at this point, they're dealing with human
remains, not in identifiable form as a body as such. And that leads them to take certain conclusions or not as the case may be.
ROBERTSON: What they've said, and the officials at the morgue are really saying, look, essentially they've got more work to do. The forensic
officials there. What the most important thing the government has said here all along to try to get some solace and help the families identify
their loved ones and doing the DNA portion of that. So the forensic technicians focusing on the DNA and the identification. What they have
said is no evidence of explosion so far. But they also say that that requires further testing for explosive residue, fragments possibly embedded
in material. So that would be other tests. And they say those tests will be harder because all these pieces have been in the sea.
QUEST: We're not getting regular press conferences from the Egyptian authorities. So it's very hard for those of us watching to gauge how this
operation is being conducted. Now, the French relatives are very concerned. From your gauging, you're there, Nic, does it seem to be a
well-ordered, well-mannered, if you like, crudely put, do they know what they're doing?
ROBERTSON: They certainly say that they're well intentioned. Look, here's the bottom line. Out at sea behind me is a massive area, an area the size
of Connecticut according to the vice president of EgyptAir. He's speaking to CNN earlier today. An area the size of Connecticut. They're still
searching that. The plane could be at the bottom of the sea somewhere below that. We have talked to experts who know details about the submarine
that the Egyptians have out there and a questioning how valuable it can be in the depth of water that there is.
The French who have put a patrol vessel out there that have got specialist divers. A submarine and the acoustic detection system says too early to
put the acoustic detection equipment in the water to listen for the transmissions coming from the pingers that are attached to the black boxes.
So from where we stand here impossible to judge on how much information the Egyptians have already. But what is emerging from here is a picture that
is such a long way from getting the black boxes. Remembering the batteries on them are running as we speak. Such a long way from getting that
critical and key information. Anyone who has any concerns about the direction this investigation is going in, is going to have to wait a long
time to get answers, Richard. That's the bottom line as we see it at the moment. A massive area, they just don't know where the plane is in it yet.
QUEST: Nic Robertson who is in Alexandria, in Egypt for us tonight.
Communications, as Nic was talking about, from the plane are giving only a very rough idea of the plane's final location. But there's a lot of ways
in which the plane can communicate. If you join me at the super screen, you'll see what I'm talking about.
So, first of all, we have the pilots who communicate mainly over land. You have the VHF, Very High Frequency and the UHF, Ultrahigh Frequency. Those
UHF are over much wider distances particularly over oceans. But very difficult and crackly and pilots don't like using UHF and hearing that much
of it. Then you have prime radar and two types of radar, primary radar and secondary. The primary literally is just sends out the beam and beep it
comes back as a trace. That's it. You don't know who it is. You don't know where or really know much more about its altitude, its intentions,
nothing.
Secondary radar, on the other hand, interrogates the plane and the plane sends back information. The transponder and the like is part of the
secondary radar systems. It will also give the aircraft identity, the altitude. Neither of these radar, of course, work over the ocean. It's
far too far at sea.
Then you have ADSB. Now that's Automatic Dependent Surveillance Broadcast. This is broadcasting all the time, all the time the information about the
plane. The plane gets its location from the satellites. The plane then transmits this to any and everybody over the ADSB network, but it doesn't
work over the oceans either. Not yet anyway. There are satellites going up. Finally, we have the ACARS system. The ACARS system uses radio
sometimes. It also uses satellites. This is basically always transmitting information about the aircraft, the performance, the direction, the flight
pattern.
[16:20:00] Sometimes basic like maintenance to the ground. Airlines use it to send messages upwards and downwards. Now after the disappearance of
MH370, engineers used satellite data from ACARS to narrow down the aircraft's final position. Rupert Pearce is Inmarsat's chief executive.
Rupert joins me now. Good to see you, sir. I always feel when I see you on these sorts of stories we should talk on happier circumstances, but you
have to admit that the mere fact that we are scurrying around an ocean to find a plane and to then get data, which you will tell me I have no doubt,
you can stream.
RUPERT PEARCE, CEO, INMARSAT: That's very true, Richard. In this case, we didn't have the equipment on the plane in question but it was the case with
MH370. But when you have Inmarsat broadband on the plane, yes, you have a two-way connectivity to the plane. You have immediate situational
awareness and you can stream off the plane any information about it including voice cockpit recorders and flight data recorders in real-time.
Meaning, you're right. You don't in situations of emergency have to go riddling around trying to find the black box.
QUEST: But why, I mean, why are we even -- this is the Mediterranean in some of the heaviest air space in Europe. Why do we not have a better
location of where that plane -- we know, for example, where the radar track stopped. And we know from MH370 the sort of circumference level that you -
- the plane can fall out of the sky.
PEARCE: Well, there are gaps between ground radar and over the oceans and even over the seas. So there isn't a pervasive situational awareness for
planes crossing large areas of oceans and seas.
QUEST: Right. You talk about the ability in both yourselves and your competitors put out, do put the ability to stream and better location
services, so why aren't the airlines buying it? Is it because of cost?
PEARCE: Well, it's a combination of factors. Cost is one of them. Although the satellite industry globally dramatically reduced the cost of
delivering services and moving data around the world. So they have become very much -- reduced they're cost to the level of terrestrial mobile
services today in most cases. But it's also the issue of delivering a safety level service, levels of security, levels of reliability that
require a number of things put in place. But most of all it requires the adoption of consistent safety standards across the entire industry. And
I'm afraid in this very, very safety conscious industry that does take a listening time. Sometimes years.
QUEST: One of the fascinating parts about this discussion that we're having is, you know, we actually originally invited you to talk to us
because one of the things you have just done a survey about, is the way in which passenger's value in-flight Wi-Fi. The ability to remain in touch.
It seems as if airlines are valuing that perhaps more than streaming the data.
PEARCE: Well, we're living in an area or moving into an area of what I would call, digital disruption on board planes, whether it's in the cabin
or whether it's in the cockpit or whether it's for operational services or e-commerce or supporting systems and subsystems on aircraft. So the era of
the fully connected aircraft is just around the corner. You're right, today we announced the fruits of one of the widest surveys ever taken of
passengers asking them questions about connectivity, more than 9,000 passengers in 27 countries. And to a man and a woman they said they wanted
connectivity, they would choose a connected aircraft over an unconnected aircraft. In fact, more than half of the respondents said that they would
actually choose connectivity over an in-flight meal. So connectivity is something that people want. But I would stress, Richard, that airlines are
embracing next generation connectivity in the cockpit, as well. Next generation broadband services making aircraft safer, more efficient, and
more in contact than ever before.
QUEST: I hear what you say, sir. I hear what you say. But as the submarines go down to try and find this plane, again, it seems a different
kettle. Good to see you, sir. Thank you.
PEARCE: Nice to see you. OK.
QUEST: Now investigators confirm that terrorism caused the crash of 804. It'll be the third incident involving Egyptian aviation in six months.
Tourism accounts for 13 percent of Egypt's economy and it is suffering. Arrivals are down sharply since MetroJet was taken out of the sky in
October. Look at the numbers. Tourist arrivals hardly surprising. At one point they do actually -- these are monthly arrivals. At one point Egypt
well up there towards 12, 13 million. But now at the lowest point since 2013. Rivals peak at just over here at you can see that number just over
1.5 million. So you're getting towards 14 million, 15 million a year. Now you're way down here at under half a million.
[16:25:00] Just days before the crash of 804, the U.N. World Tourism Organization gave Egypt a major vote of confidence. Announcing plans at
those two meetings in Lexa later this year. Joining me now, Taleb Rifai, the head of the U.N. WTO. My good friend, Taleb. Look, sir. We clearly
know the difficulty that Egypt now faces, but the issue is what to do to rebuild the tourism industry that, frankly, is now on its knees.
TALEB RIFAI, SECRETARY-GENERAL, U.N. WORLD TOURISM ORGANIZATION: Well, I think Egypt is doing the best that it could under the circumstances. Egypt
has been tested so many times and it's always come out of it in a strong way. It's tested in 2012, 2014 and again now in 2016. A few times as you
mentioned. I think they just have to keep doing what they're doing, keeping insisting to rebuild and recover. We need to help them do that.
QUEST: How do you help? Because it seems -- I mean, first of all you have MetroJet, which was a bomb that got on board seemingly at Sharm el-Sheikh.
Then you have the hijacking of a plane. All right, it was a fake bomb vest, but the mere fact to get through and now you have this. So, surely
by definition it's going to be almost impossible to rebuild in the short term, Taleb.
RIFAI: I disagree with you, Richard. I think Egypt has proven over and again they can come back and bounce back again. What we need to do is be
consistent as an international community. As we said over and over again, Richard, on your program and many other forums, we can't penalize any
destination twice. Once that would sit and another time that we isolate that destination. We need to open our arms and embrace them and shared
experiences and we need to help them. We can't keep issuing the travel advisories left right and center. We can't keep saying this is Egypt's
problem. I keep saying this and I keep insisting on it. Egypt will come back again. And we need to help Egypt. This is not Egypt's problem. This
is our problem, Richard. A problem of each and every one of us.
QUEST: We know that obviously that help can be given. Tell me the practical help, Taleb, that you believe. Obviously, you've got Kenya, and
you got travel advisories. And in fact you and I we were just at a U.N. WTO conference just last week. And one of the biggest round of applause
was when a panelist, a minister, specifically said, get rid of these travel advisories. But you can understand governments wanting to keep them if
they still perceive there to be a lack of safety.
RIFAI: Correct, Richard. I can understand why governments want to do travel advisories. But when travel advisories become a political means,
not real factual thing on the ground and not something that you would work with the country with to try to make them work, I mean, look. Travel
advisories should be done in consultation and cooperation with the destination that's targeted. They cannot be just used as -- you go do it
and then come become and when you have a clean record we say yes or no. This is not an attitude. And unfortunately many of the travel advisories
that have been issued lately are of that nature.
But more than that, really, Richard, if you really look at what terrorism happened in the latest episode of the airplane, first of all we don't know
whether -- I completely agree with Egyptian minister of civil aviation saying let's not speculate. I mean, look, things like this need to be
dealt with the proper and correct way. And they have come across now this time, I must admit, as very credible, very honest and very correct so let's
help them be correct. Let's not push them into trying to speculate and take positions that are not really conducive at all.
[16:30:00] QUEST: Good to see you, sir. Taleb Rifai, joining us, the Secretary-General of the United Nations World Tourism Organization.
As we continue our evening discussion tonight, Donald Trump fires back at media reports that are questioning his efforts to distribute money he
raised for veterans. We'll talk about that after the break. It's QUEST MEANS BUSINESS and it is a Tuesday. Good to have you.
QUEST: Hello. I'm Richard Quest. Of course there's more QUEST MEANS BUSINESS in just a moment. When the chief executive of the Swift system is
warning hackers could bring down a major bank, we'll talk about that. And there's no stopping Adele. Now even the record deals may be breaking
records. Before any of that, this is CNN. And on this network, the news will always come first.
An official at a Cairo morgue says it's still too soon to determine if there's an explosion on board EgyptAir 804. Investigators are still
searching for the flight data recorders. Meanwhile, the families of the victims have begun providing DNA samples to help identify the remains.
The United Nations has tens of thousands of families trapped in the city of Fallujah may be at risk as Iraqi forces move in to claim the city back from
ISIS. While residents of the city have been encouraged to leave. Activists say ISIS has stopped people from doing so. The U.N. spokesman
called on the Iraqi military to protect those in danger.
(BEGIN VIDEO CLIP)
RUPERT COLVILLE, SPOKESMAN, UNITED NATIONS OHCHR: We also urge the government of Iraq to ensure that the protection of civilians is paramount
in the offensive on Fallujah. And we call on all parties to adhere to adhere strictly to international humanitarian law including the principles
of distinction and proportionality in the conduct of hostilities.
(END VIDEO CLIP)
QUEST: Death toll from the recent flooding in Sri Lanka has now reached more than 100. According to the country's disaster management center. A
100 further people are missing. And 100,000 people have been forced into temporary shelters because of the flooding and landslides.
More than a decade after he was first accused of sexual misconduct, Bill Crosby is to go to trial. A judge has said there's sufficient evidence to
try the 78-year-old comedian on three counts of felony indecent assault. Gloria Allred, the attorney who represents for more than 30 women who have
accused Crosby, described the proceedings as unusual.
(BEGIN VIDEO CLIP)
[16:35:00] GLORIA ALLRED, ATTORNEY: Mr. Cosby's presented a vigorous defense today. I might add that in my experience, 40 years of practicing
law, I found it to be very unusual. That such a defense was presented at the preliminary hearing stage in the way that it was. Some might speculate
because the defense was attempting to have an impact on the potential jury pool.
(END VIDEO CLIP)
QUEST: Democratic candidate Bernie Sanders has called for a recanvas of the Kentucky primary election. His opponent Hillary Clinton narrowly won
the vote earlier this month. A senior adviser to Sanders says the campaign does not suspect a miscount but wants to check, because the race is so
close.
Donald Trump is swinging back at the media for questioning how money raised to benefit veterans is being distributed. Republican candidates' attorney
told CNN the money distributed to worthy causes. Mr. Trump said he's disgusted by any claims to the contrary.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: I raised almost $6 million for the veterans including putting up $1 million of my own money.
I had no obligation to do anything or to do so. And I get nothing but bad press from the dishonest media. It is absolutely disgraceful.
(END VIDEO CLIP)
David Gregory is CNN political analyst and host of the "David Gregory Show Podcast" joining me from Washington via Skype. Are you part of the
disgraceful, disgusting cartel that Mr. Trump is talking about, David? What is he talking about?
DAVID GREGORY, CNN POLITICAL ANALYST: Well, I'm certainly part of it in the larger sense but not on this particular instance. Look, this is Trump
being Trump. Lashing out at the media and about questions of his finances, of his worth, of where his money's gone. He's under a lot more pressure
now, particularly from Hillary Clinton to release his tax returns. What I suppose could shed some light on what these distributions were. What the
contributions were. I think that Trump has found that he is most effective when he's on offense, even when he claims he's counter punching. In this
case he is on the offense with self-righteousness about whether or not he's given this kind of money. And again, the way he's doing it, through social
media, is a way to bypass other media streams and reach his supporters most directly.
QUEST: The issue, David, is whether it makes any difference. Because the inability of any of these issues to lay a finger on him in the eyes of the
electorate seems to be almost absolute.
GREGORY: Well, but we don't know that for sure, Richard. We certainly know that from the point of view of the primaries. That his opponents were
not able to really land a glove on him in a way that was lasting. They didn't do it for a long period of time and very often they kind of got in
the mix of trading insults with him. I think about Marco Rubio. What you see in Hillary Clinton and her team starting to do, at least attempting to
do, is what Barack Obama did to Mitt Romney back in 2012. Which is to really go to his greatest strength, that of a business leader, successful
business man and start to chip away at that qualification. In the case of Romney, it was Bain Capital. How much money made there and the Bain
Capital the forerunner in creating offshore call centers in India and in China.
It became kind of an economic values argument that undermined his net worth, undermined his business acumen. Here, you have Clinton saying of
Trump, look, we don't know whether he's really successful. He's been bankrupt before. We just don't know. And this is the thing, this is a guy
who is saying that he's going to make great deals for America because of his business background. And this may be a sweet spot if they can do it
for a long enough period of time and that's why he is answering so aggressively.
QUEST: On the wider issue, the Republicans are making nice with each other and attempting to unify, whether successfully or not, we'll leave it to
others to judge. But the Democrats, I mean, Hillary Clinton when arguably she should be trading firepower fully on Trump is still mired in a primary
battle that surely can only ultimately harm the Democrats.
GREGORY: Well, but let's remember. There's no question that it's messy. And she is succeeding in spite of the fact that this is such an
unconventional year that really benefits the outsider. Right, you don't get more of an outsider than Donald Trump. Or Bernie Sanders for that
matter. No matter how long he's been in the U.S. Senate, he certainly represents that unconventional outsider vibe to his supporters. But the
Democrats are likely to come together, but it's not going to be easy.
[16:40:00] Her problem is that she is pretty unpopular among supporters of Bernie Sanders and that's an issue for her. Look, back in 2008, a lot of
her supporters, Hillary Clinton's supporters not so hot on Barack Obama, but they were a little warmer toward him than Sanders supporters are toward
her. So she's got a big job to do. But let's also remember that she too, in 2008, took the race all the way to California. The difference is that
she as it got later pledging to behind Obama, and here you have more of a schism between Sanders and the party infrastructure.
QUEST: In a word, is it at all likely, possible, feasible or even remotely on the way to Mars that a Bernie Sanders supporter would go to Trump rather
than stick with the Democrat Hillary Clinton?
GREGORY: I think if it happens it is very small numbers. I think it's possible that they sit out the race rather than vote for Hillary Clinton.
But I think it's very small numbers to actually vote for Trump.
QUEST: Good to see you, David. Thank you as always.
GREGORY: Thank you, Richard.
QUEST: Hundred and forty characters, it never felt so big and now Twitter is tweaking its rules and it says it will soon be easier to fit more into
each tweet. Now take this tweet that I sent to my good friend Arianna Huffington. Now one of the things -- I mean, I have to say, I think it's
one of the least flattering photographs of me. I mean, look like a beached whale. Arianna looks marvelous as always. Wonderful to be with you at the
launch party, "We Agree About Sleep."
In the future, attaching photos and videos will no longer count against the character limit. In this case, it would have saved me 24 characters alone
and my waistline would not have been exposed for all. Also, when replying to a tweet, other people's handles won't count either. In this case,
replying to Arianna would have saved me another 17 characters. Twitter is also adding several often requested features, it includes the ability to
retweet your own replies so they can be reviewed by all of your followers. Seems it's just another layer of complexity in terms of Twitter, which is
already phenomenally complicated and not sure -- I still live in fear, Cristina Alesci, that I'm going to miss-tweet.
CRISTINA ALESCI, CNN MONEY CORRESPONDENT: You mean a pocket tweet someone?
QUEST: I'm going to miss-tweet. It's even -- tell me what this is all about.
ALESCI: Well, this is all about trying to make the product more simple to use. But to your point, I was on the phone with a power user today and it
was like geek speak. Because we were so excited. But we are in the weeds of Twitter every day because we're media professionals. and that's really
who these changes were made for. It comes from the twitter audience that has been pushing for these changes.
So what we came to the conclusion, me and the super user, is that this is really meant as a retention tool, not so much to attract other people from
outside the platform, which twitter obviously needs to do. Because investors didn't like this news today and didn't think the company went far
enough.
QUEST: Right. Which brings to the overarching point. How much trouble is Twitter actually in?
ALESCI: Well, look. I mean, the company's not going anywhere. But the problem is if you're not generating a huge profit, you have to be growing.
So if you're the kind of company that isn't, you know, like I said, generating a huge profit, then you got to get investors excited about
something and that something has to be growth. And there's no growth here. And that is the fundamental problem and at the same time you have start --
look at that. That's pretty pitiful.
QUEST: Since the return of Dorsey.
ALESCI: Exactly, permanent return in October. He was brought on in an interim basis.
QUEST: I forgot what the IPO price was, but it was.
ALESCI: It was about $26.
Yes, in October they reached their IPO price. But here's the saddest part about the Twitter story is that you have up and comers like Snapchat that
are raising rounds of investments privately and they're already valued at $20 billion. And that's because it's a much more rich experience to be on
Snapchat, but it's a lot more simple to use. All you have to do is hit a button and when time runs out time runs out and add it to your story for
the day. It's almost intuitive to use that and you can add filters like vomiting rainbows, and that's what.
QUEST: Lovely. Lovely. Thank you! The biggest problem I have with Twitter is when I try to attach a photo on the app it brings up all my
photos and it's very easy to attach the wrong photo.
ALESCI: Now I kind of want to see the photos you have in your phone. What do you mean by the wrong photo, Richard?
QUEST: By the wrong photo, I mean the photo I wasn't intending to attach. Don't touch the bell.
ALESCI: You know I'm out for it. I'm going to have my hands on it one day.
QUEST: I'm not going to bite.
[16:45:00] Running in the deep. Adele has reportedly signed the biggest ever record deal for a British musician. You'll hear the details after the
break.
(COMMERCIAL BREAK)
QUEST: One of the biggest selling artists in the world could be about to get a record deal to match. Several British newspapers are now reporting
that Adele is leaving the independent label for Sony to the tune of $130 million. Kellie Morgan with more.
(BEGIN VIDEOTAPE)
KELLIE MORGAN, CNN PRODUCER, LONDON (voice-over): Just one or two bars is all it takes to recognize what is unmistakably the voice of Adele. "Hello"
helped the British artist's smash music industry records last year with her third and long awaited album "25." it was the highest selling album of the
year with more than 17 million sales. Dwarfing that of her nearest rivals, Ed Sheeran and Taylor Swift.
The video clip was also the fastest ever to reach 1 billion YouTube views, surpassing this. Gangnam Style was arguably a one-hit wonder, the vast
majority of fans only really wanting to stream or download the single. Adele, however, used her powerful voice to rebel against streaming and
resurrect album sales.
UNIDENTIFIED MALE: If you are in a position where you are successful enough to sell enough records the old-fashioned way to reject streaming,
you are in a position of kind of unimaginable privilege in the music industry.
MORGAN: for a record company, Adele is as close as it gets to a sure bet. She's one dozens of awards, Grammys, Brits, even in Oscar. The top number
one singer has a legion of followers. More than 26 million on Twitter, almost 12 million on Instagram.
STEVE HARGRAVE, ENTERTAINMENT REPORTER: Adele's appeal, I think, is kind of twofold. There's obviously, kind of fantastic song writing, but really
what I think sells her on another level is the fact that she comes across at least as being a fairly normal north London girl. Being just like your
mate.
MORGAN: illustrated by this recent cameo on "The Late Late Show" with James Corden, where the singer explains how she giving away concert
tickets.
ADELE: In the park with my kid like -- here.
MORGAN (voice-over): But it's a rare public appearance. Adele's success has come from just three albums. She hardly tours and doesn't do lucrative
endorsements. All of which are normally part and parcel of being signed by a big record label.
[16:50:00] HARGRAVE: Adele likes time off. She does these big tours, big albums and will then disappear and do her own thing. And it'll be
interesting to see whether that becomes problematic.
MORGAN (voice-over): when and if that widely reported record deal with Sony is made official. Kellie Morgan, CNN, London.
(END VIDEOTAPE)
QUEST: The chief executive of Swift now calls the theft of $100 million from Bangladesh central bank, a watershed moment and is warning hackers
will strike again.
(COMMERCIAL BREAK)
QUEST: The name of the guy who said, why do people rob banks? Because that's where the money is. Wally -- somebody will remind me. But it
reminds me that Swift, the network that connects the world's largest banks is beefing up security requirements after hackers exposed a flaw in the way
some banks connect to Swift and managed to steal more than $100 million in Bangladesh, Vietnam and Ecuador. In a speech the company's chief executive
says hackers could bring down an entire bank. Jose Pagliery has absolutely no sympathy for Swift.
JOSE PAGLIERY, CNN MONEY CORRESPONDENT: This is unbelievable.
QUEST: This is Billy Sutton by the way, who said, that's where the money is.
PAGLIERY: This is the reality. This is the world we live in today. Major American and European banks spend millions of dollar protecting themselves.
The Federal Reserve in New York will spend millions of dollars or hundreds of thousands of dollars protecting itself. When smaller banks are
connected to the financial global system, then hackers will enter through the smaller banks, access swift and start drawing money out of bigger
banks. So the world we live in right now is that no matter how much money is spent by big players, hackers will always attack the weakest link.
QUEST: Right, so Swift is saying to the smaller banks, you need to get your act together and spend the money. But what else are they going to do,
because at the end of the day Swift can make it as difficult and as complicated and as sophisticated as possible, but if a weak link is still
there.
PAGLIERY: Yes. And the weak link needs to be there because banks need to send money to each other. Banks need to send money to all other banks.
Right? What we have here is a systemic problem, which is that you have this.
QUEST: I don't agree. Because there will always be that weak link at the point of entry to the Swift system.
PAGLIERY: Yes.
QUEST: And what Swift is saying to those banks is, you had better tighten up your entry point.
PAGLIERY: OK, and they will. And by the way, the financial sector is the best at protecting themselves at hackers, but hackers still get in. We saw
it with Nasdaq and that with Bank of America and JPMorgan Chase. And so it's inevitable. What we've got here is a losing battle.
QUEST: What is your suggestion? What you think they need to do?
PAGLIERY: Oh, no, I think Swift is right here in saying that smaller banks need to spend more money to up the security. What I'm trying to say that
what happened recently was that we got a reality check.
[16:55:00] We're realizing that it's only a matter of time before hackers start tapping into banks and stealing not $100,000, not emptying your bank
account or my bank account. It's about stealing $81 million, $200 million out of a bank. And putting it in place that is inaccessible to others.
QUEST: Jose, Good to see you. Thank you.
PAGLIERY: Thanks.
QUEST: We will have a Profitable Moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment. It was Mark Twain who said I apologize for writing you a long letter. I didn't have time to write you a
short one instead. Well, that very idea and philosophy is why I love Twitter. With its 140 characters, it forces me to think about every
character. So I'll write it and go over, and I'll go back and recast it, because I don't really want to go into two or three tweets, that's just
verbal diarrhea over the internet. No, instead you craft your 140 characters so that you get clear and concise. It's like when I started as
a journalist. The best writing was that which was subedited down to the clearest most concise form of vocabulary. And now Twitter wants to extend
and it wants more tweets and more characters. It seems to me the answer is forces people to make proper use of judgment and be concise at what they
say. And I'll continue to tweet with you and me.
That's QUEST FOR BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable. We'll do
it again tomorrow.
END
