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Quest Means Business
Trump Slams Media Over Russian Intel Report; Trump to Transfer Empire to Family; Pharma Stocks Drop After Trump Warning; Government Ethics Office Slams Trump Conflicts Plan; Tillerson Breaks with Trump on Key Issues;
Aired January 11, 2017 - 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: The ringing bell on Wall Street is just about to ring. There it goes. Bringing trading to a close. The Dow
in the positive but still 20,000 from -- UDR ringing the bell. Seemed very pleased with himself. Let's see what they do with the gavel. Well I think
it was a mediocre gavel. Whatever it was trading is over. It's Wednesday. It's January 11th.
Tonight, Donald Trump targets CNN over our report on Russian intelligence. You're going to hear Carl Bernstein's reaction in just a moment.
Trump is keeping it in the family. The President-elect chooses not to selloff his empire. His sons will run it instead.
And a big warning to big Pharma. Trump says, you're getting away with murder. The stock market is falling as a result.
I'm Richard Quest. It's been an extraordinarily busy day and I mean business.
Good evening, what a day. Absolutely extraordinary and it culminated with an unprecedented attack on the press, including CNN, from the future
president of the United States. Donald Trump held his first news conference since the election. And it came 18 hours after CNN had revealed
that U.S. intelligence chiefs had presented Mr. Trump with claims of Russian efforts to compromise him.
Now, CNN wrote its report after speaking to multiple U.S. officials, all of whom had direct knowledge of the Trump briefing.
The online news site BuzzFeed followed up with our reporting, but BuzzFeed released the 35-page dossier of the unverified claims that CNN deliberately
did not release.
Why? Because CNN has not corroborated those claims in the memos and therefore we did not publish them. Even so, the President-elect lashed out
at both news organizations.
(BEGIN VIDEOTAPE)
DONALD TRUMP, U.S. PRESIDENT-ELECT: As far as BuzzFeed, which is a failing pile of garbage, writing it, I think they're going to suffer the
consequences. They already are. And as far as CNN going out of their way to build it up -- and by the way, we just found out I was coming down.
Michael Cohen -- I was being -- Michael Cohen is a very talented lawyer. He's a good lawyer in my firm. It was just reported that it wasn't this
Michael Cohen they we're talking about.
JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Since you're attacking us, can you give us a question? Mr. President-elect --
TRUMP: Go ahead.
ACOSTA: Mr. President-elect, since you are attacking our news organization...
TRUMP: Not you.
ACOSTA: Can you give us a chance?
TRUMP: Your organization is terrible.
ACOSTA: You are attacking our news organization, can you give us a chance to ask a question, sir? Sir, can you...
TRUMP: Quiet. Quiet.
ACOSTA: Mr. President-elect, can you say...
TRUMP: Go ahead. She's asking a question, don't be rude. Don't be rude.
ACOSTA: Can you give us a question since you're attacking us? Can you give us a question?
TRUMP: Don't be rude. No, I'm not going to give you a question. I'm not going to give you a question.
ACOSTA: Can you state categorically...
TRUMP: You are fake news. Go ahead.
ACOSTA: Sir, can you state categorically that nobody -- no, Mr. President- elect, that's not appropriate.
(END VIDEOTAPE)
QUEST: Now, Mr. Trump probably by accident then did go ahead and call on CNN reporter Jeremy Diamond, who was also in the news conference.
CNN has released a statement responding to the President-elect. I'm going to read you the statement in full.
"CNN's decision to publish carefully sourced reporting about the operations of our government is vastly different than BuzzFeed's decision to publish
unsubstantiated memos. The Trump team knows this. They are using BuzzFeed's decision to deflect from CNN's reporting, which has been matched
by the other major news organizations.
We are fully confident in our reporting. It represents the core of what the First Amendment protects, informing the people of the inter-workings of
their government; in this case, briefing materials prepared for President Obama and President-elect Trump last week. We made it clear that we were
not publishing any of the details of the 35-page document because we have not corroborated the reports allegations.
Given that members of the Trump transition team have so vocally criticized our reporting, we encourage them to identify, specifically, what they
believed to be in accurate."
Now, as I say, extraordinary the way the day unfolded.
[16:05:00] Carl Bernstein was one of the four people who wrote CNN's report. Carl Bernstein, of course, also famous for Woodward and Bernstein,
the two journalists who were behind the Watergate revelations that led to the downfall of President Nixon many decades ago. And I mentioned that
because as you'll hear Carl Bernstein talk about it, he draws certain parallels in terms of presidential power and the relationship to the press.
But we began by talking about the significance of the President-elect's response to the CNN report.
(BEGIN VIDEOTAPE)
CARL BERNSTEIN, CNN POLITICAL ANALYST: The significance is the President- elect set up a straw man to an attack that doesn't exist. Which is to say, we reported that a two-page synopsis of a larger body of material from an
investigator -- 35-page dossier, in essence -- boiled down to a two-page synopsis. The President-elect got a two-page synopsis from the four senior
most intelligence officials of the United States of America.
QUEST: He didn't disagree with that, or seemingly not.
BERNSTEIN: It's hard to tell what he did. He then conflated that with the underlying dossiers. With the underlying investigative reports and which
we very carefully did not use. We simply said that this to page synopsis was vaguely about personal and financial vulnerabilities that Russian
sources had alleged to a Western intelligence -- former intelligence agent -- that's what we reported and is absolutely accurate.
QUEST: It was left to others who decided on their own bat -- BuzzFeed -- to put it all out there. Because they said the American people should make
up their own mind.
BERNSTEIN: Well, I don't think -- look, I think it's irresponsible to put raw investigative files. I've seen enough of them in 50 something years of
being a reporter. I think it's wrong to put them out there. Because they're unproven allegations. Some are for -- I mean generally they are.
I'm not talking just about this case. Raw investigative files tend to have sometimes some good information in it, some questionable information in
them, some wrong information in them. We don't know the accuracy of the underlying documents.
What we know is that it is the judgment of the FBI and the three other chief intelligence officers in the United States of America that whatever
is there is sufficient enough to warrant an investigation. And they wanted the President-elect of the United States to know that think it warrants
investigation. That's why they put it there.
QUEST: Because there is the potential -- if this information is correct -- that Russia has, for want of a better word, disparaging, downright
disgusting information, if correct and true -- big if -- about the President-elect.
BERNSTEIN: And again, if hypothetically what's in there, kind of runs the gamut, suppose one thing in it were true, and 27 of them were wrong. The
point is its investigative work, but they thought it sufficient to do a synopsis so he would know and stand on notice that this was going on.
QUEST: As a journalist who has come up against presidential power, obviously, famously some years ago, but throughout your career you've come
up against presidential power. How stressed, worried -- how concerned were you at what was an extremely vitriolic relationship that this President-
elect is going to have, particularly with our own network.
BERNSTEIN: It's always very uneasy making to have the leader of the free world attack you and the institution you work for and your work. And the
object certainly when we confronted it with Richard Nixon and Watergate -- and I don't want to make a comparison between this and Watergate -- with
the one exception. And that is that the President-elect today chose to make the conduct of the press the issue. Not to deal truthfully with what
was in front of him.
We did not run the documents that he accused us of running, BuzzFeed did. We assiduously avoided doing it. So, he is making, very deliberately, the
conduct of CNN the issue, not what occurred with the senior intelligence officials giving him that synopsis.
QUEST: No, but he has a point when he says -- let's assume he was presented with this two-page document for that, but this fact of him being
presented was leaked. And from his point of view --
[16:10:00] BERNSTEIN: Stop right there. He said leaked by the intelligence community. I'm not sure what leads him to that conclusion.
Also, the whole use of the word "leak" is something in this business -- I don't know about yourself -- that's always bothered me. I wish I got more
leaks. That some faucet went off in these things dripped into a glass and suddenly I had a great story.
It doesn't happen very often. At least it hasn't in the years I've been in the business. That you work very hard to pry information from people. And
in this case, is not necessarily the case that it even came initially from the intelligence people. These documents have been floating around all
over the place.
Now, is a possible in the course of them reporting things out, to learn through hard work, what was presented in a meeting, I think that is
possible. And also, it's not as if intelligence chiefs work in a vacuum either. They talk to people in other institutions. And here's the point
that I want to make. Kellyanne Conway, I mean she got up again this morning and started talking about leaks. She comes to people in the press
all the time and tries to leak them information. She's a propaganda minister. Then she goes on and says, that is news. It was reported on
Breitbart today. Boom, that's news.
We go out and try to really report a story and its leaks.
(END VIDEOTAPE)
QUEST: Carl Bernstein. Now, Donald Trump at his news conference used piles of files to show his weighty business empire and how he was going to
deal with potential conflicts of interest. You see the manila envelopes and files just to the left of the podium there.
His attorney says, the Trump organization runs into hundreds of entities. Now, there is a plan to remove Trump from the business, whilst at the same
time protecting it. This is what they're planning to do. Instead of selling or divesting his interest, he will transfer them into a trust. And
he'll do this ahead of Inauguration Day, which of course is a week on Friday, January 20. So, he won't sell, but it'll go into a trust. And
that includes outfits like 40 Wall Street and Trump Tower.
Now, Donald Trump will be given reports on the overall profits of the Trump organization, but he won't be involved in the day-to-day management.
Instead, Mr. Trump will resign and he will hand the control of the organization and the empire to his two sons Donald Junior, and Eric.
His daughter, Ivanka, will leave the business, and according to Mr. Trump is moving to Washington, while she will look after the family. Her husband
of course, his son-in-law, is to become a special advisor in the White House -- senior adviser in the White House.
Now, inside the Trump organization this is what they're going to do to make sure that things are run properly. New foreign deals will be banned and
all domestic deals will have to be approved by an ethics advisor on the management board. At his press conference, he said, doing all of this he's
going further than he is legally required to do.
(BEGIN VIDEO CLIP)
TRUMP: I could actually run my business, I could actually run my business and run government at the same time.
I don't like the way that looks, but I would be able to do that if I wanted to. I would be the only one to be able to do that. You can't do that in
any other capacity. But as president, I could run the Trump organization, great, great company, and I could run the company -- the country. I'd do a
very good job, but I don't want to do that.
(END VIDEO CLIP)
QUEST: Ted Deutch is a Democrat who sits on the House Ethics Committee, he joins me now. OK, you've got the family trust. You've got Don and Eric
running things. You got the ethics advisor. Are you happy -- are satisfactory. Maybe not perfect, but a satisfactory construct has been put
in place.
TED DEUTCH, U.S. HOUSE ETHICS COMMITTEE: Well, Richard, you started that report on the most important piece here. He brought a lot of prop today,
but really not sufficient substance to address the conflicts and as a result when Donald Trump is inaugurated next week he will be in violation
of the United States Constitution and no one expected that when they voted for him.
QUEST: You -- except that the law on conflict does not apply to the president. Correct?
[16:15:00] DEUTCH: I accept that technically the Ethics in Government Act does not apply to the presidency. However, every president in modern
times, everyone has acted as if it does, because that's what the American people expect.
QUEST: Wasn't this inevitable though? I mean, in the sense that first of all you have an ultra-wealthy man, who has run for president. Who has one.
He can't just sell 40 Wall Street, the Trump Tower, this was inevitable.
DEUTCH: He can't, but look at what was announced today. It fails every ethics test. The fact that he's not going to do any new international
deals doesn't change anything about all of the deals that he's got around the world. I'm not sure what he's going to do about his deals in Turkey or
Taiwan or the Philippines and what conflicts may exist there. Nothing he said today address that. And Richard, let me just say, this blind trust
that he announced today, is anything but his own lawyer announced, that he will be well aware of everything that happens, because the press is going
to cover it. So, no, I don't think this is what people expected. Just because he's a businessman, doesn't mean that he shouldn't have to comply
with the ethics requirements and the Constitution.
QUEST: And of course, I must confess, it was stretching credulity at a breaking point, this idea that his sons who will be running the company are
not going to discuss whether at Mar-a-Largo or Camp David, hey dad, this has happened.
DEUTCH: Even if they don't, the wall that they tried to create doesn't work. Because it's the Trump organization. This is a guy who's built his
brand on his name. He'll follow everything in the press, if not directly from his sons. That's the problem.
QUEST: I've got bad news for you, Congressman. There is nothing you can do about it.
DEUTCH: Nope. I disagree with that, Richard. I appreciate the suggestion. The fact is, we have an obligation to the American people to
make sure that he complies with the Constitution. This was announced today, but it doesn't address, it doesn't satisfactorily address the ethics
requirements. And so, were going to look for ways to ensure that the American people have a president who will comply with the Constitution.
Everyone expects him to do it and expects us to take action to ensure that he does.
QUEST: You know, his lawyer said, the American people knew what they were voting for. They knew he was a rich man and that conflict of interest --
are you not in danger of shooting yourself in the foot by making something out of this when many Americans will simply say, oh, please. That's why we
wanted him, because he's a successful businessman.
DEUTCH: First of all, I don't think that anyone expected that he would be in violation of the Constitution. But the other point is that it's not
just about being a successful businessman. We've got to make sure that every decision he makes is based first and entirely on the best interest of
the American people. Look at what he did today, Richard, when it comes to his hotels.
We don't know -- because we've never seen his tax returns -- we don't know how much money he owes China or Russia. We know his son told us that
they've got huge investments from Russia. We don't know any of that because we never saw his tax returns.
What did he do? In typical Trump fashion, he said, I'll take the profits from my hotel and I'll deliver it to the treasury. That's just not enough.
No one expected when they voted for Donald Trump that he would come into office and refused to abide by the ethics requirement. It's a crisis that
has to be addressed.
QUEST: Congressman, just one promise from you, sir, that as this moves forward you'll come back again and help us understand where you're going in
all of this.
DEUTCH: I'll be glad to, Richard. Thanks so much.
QUEST: good to see you, sir. Ted Deutch joining us to talk about this.
I've been writing about exactly what I've been talking about to the Congressman. It's in the newsletter, which you can see. "Why Trump's
conflicts plan won't work..." Many of the arguments you just heard me talking about. And the QUEST MEANS BUSINESS newsletter is published as New
York closes, before Asia opens -- a long time before Europe -- something to read over your breakfast or indeed your dinner. CNNMoney.com/Quest.
As we continue, Trump attacked the media and he took aim at high drug prices. Investors responded even as the broader market rose. It's the
power of the presidency, and we saw it full throttle.
[16:20:00] (COMMERCIAL BREAK)
QUEST: Choppy markets. Have a look and see how the Dow went up-and-down, and up-and-down, and up-and-down. We even went negative at one point
during the course of the trading session. Donald Trump moved the markets in this extremely volatile session as everybody was scrutinizing the words
and what he said.
Now, healthcare stocks really sank. Healthcare stocks were absolutely creamed in the market today, and this was the moment when the healthcare
selloff began.
(BEGIN VIDEO CLIP)
TRUMP: Our drug industry has been disastrous. They're leaving left and right. They supply our drugs, but they don't make them here, to a large
extent. And the other thing we have to do is create new bidding procedures for the drug industry because they're getting away with murder.
(END VIDEO CLIP)
QUEST: Getting away with murder. And there is the way the general market fell as he said it. Look at the time. It just works out perfectly. And
the healthcare sector fund also fell. Look at that chart. You can mirror it almost exactly when he said it and then it moves on. They guessed what
was coming just before 11 o'clock. He says it and it moves forward the day. What has the President-elect got in mind, in store for Pharma. CNN's
Paul La Monica is with me.
Paul, he bashed Boeing. He bashed Lockheed Martin. He's bashed General Motors, Ford and one of the Japanese companies --
PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: Toyota.
QUEST: -- Toyota. And far my has been hit now as well. What's his complaint?
LA MONICA: He is concerned about high drug prices. Which is interesting because in that regard he is no different than his opponent back in the
presidential race, Hillary Clinton. A lot of drug and biotech investors were more nervous about her possibly winning, because she was are more
vocal throughout the campaign about drug price hikes and how egregious some of them are. So, I think a lot of industry executives are waking up now
and realizing that Trump is not necessarily a friend of them either. Because let's face it, he is a populist by nature, despite being a
Republican.
QUEST: What can he do? Because ostensibly he's also antigovernment. He doesn't want big government. And the way in which -- and then the car
companies, where there's only four of them. With Pharma, there are many of them over many products in many different markets. How does he intend to
pressure them on this issue?
LA MONICA: It will be interesting to see whether or not he just continues to use press conferences and twitter as bully pulpits to shame companies,
because if you see the market reacting the way it did today, I mean, you put up that chart of the healthcare index, it was even worse for biotech's.
Biotech's stocks fell 3 percent and I think a lot of investors have to be worried that Trump is going to call may be for some more hearings.
We had a lot of Congressional hearings last year. Pharma bad boy --
QUEST: But can he do anything?
LA MONICA: He could possibly shame these companies into doing something. Whether or not he actually is able to force companies to lower prices, or
not necessarily make changes in Medicare and Medicaid, that remains to be seen.
[16:25:00] QUEST: Good to see you, sir. Thank you.
Now, getting away with murder. That's how all Donald Trump described companies that are moving investments beyond America's border. He's been
the President-elect for several months and major companies have already committed to further investment in the U.S. But for Donald Trump, his
position on trade has not wavered, and he repeated again today.
(BEGIN VIDEO CLIP)
TRUMP: What really is happening, is the word is now out, that when you want to move your plant to Mexico or some other place, and you want to fire
all of your workers from Michigan and Ohio and all these places that I won, for good reason, it's not going to happen that way anymore. You want to
move your plant and you think, as an example, you're going to build that plant in Mexico and you're going to make your air conditioners or your cars
or whatever you're making, and you're going to sell it through what will be a very, very strong border -- not a weak border like it is -- we don't even
have a border. It's an open sieve.
But you're going to sell through a very strong border - not going to happen.
You're going to pay a very large border tax.
(END VIDEO CLIP)
QUEST: Ron Kirk is with me, former U.S. trade representative. The ambassador has been in Dallas. All right, you know the nitty-gritty of
this, ambassador. First of all, how feasible is it to inflict a border tax of 30 to 35 percent on imports that have arisen as a result of closure of
U.S. factories?
RON KIRK, FORMER U.S. TRADE REPRESENTATIVE: Richard, it's good to be with you my friend. And this is such a complex area, because of the fact that
the United States has very deep commitments, not only to Mexico and Canada through our agreement with NAFTA, but we also have to balance this against
commitments that we've made to all of the 150 some members of the World Trade Organization. So, a President-elect, and then President Trump, could
invoke the clauses under NAFTA to give notice to Canada and Mexico, for example, with six months that he would intend to withdraw.
But it is a mixed question on whether and how deeply he could raise those tariffs. But the other practical effect of it, let's say, even if he
could, he'd have to go back. We have to renegotiate terms with all the other members. It's almost a certainty in that case, then Canada and
Mexico would reciprocate. And in the case of some of the goods made in Mexico, many of them originate in places like Texas where we have one of
the largest General Motors plants in the country. And cars are shipped to Mexico to have certain things done and they come back. And so, one,
defining what's made in Mexico and made in America is a little bit of a mixed bag.
But the real tragedy, Richard, as you know, all this does is just raise the tax on consumers. You're going to make cars that are now not subject to
the duty free. Subject to a 35 percent tax and who's going to pay that tax? The purchaser of that car. So, that's why you've generally stayed
away in countries, have learned lessons from our Great Depression, that starting a tariff war does nothing but raise the price of goods and
services that all of us need in use in our everyday lives.
QUEST: So, if the President-elect -- we know he can't sort of put a tax on an individual company, it would have to be more on a broad-base of an
industry. But here's my point, ambassador, he seems resolute that is going to do something.
KIRK: He says a lot of things. You know, past and prologue, I mean, I did not get to watch his press conference, but I'm amazed nobody's asked him.
Will then, you know, President-elect Trump, are you going to make all of your clothes in America? Because right now his ties and his clothes are
made in Mexico, and they're made in China. He has business investments all around the world. So, I think to some degree we have to judge him a little
bit by what he's done versus what he says he's going to do. But I still think the door is open. Because he is adept at using language that says
I'm going to make things tougher and easier. And I think he can then turn around, as he did today, and take credit for announcements like Chrysler.
That you heard their CEO say have been in the plans for months and years, and say, see, you know, I crowed and the sun came up.
But one, let's wait and see what happens. Because is a very tricky business. And the one thing that we don't want to do is stall our economic
recovery and hurt those people that the president at least has said he cares the most about. And those are workers all across this country who
are looking for a raise and looking for some relief.
[16:30:00] QUEST: Ambassador, good to see you, sir. Thank you.
KIRK: Richard, always good to be with you.
QUEST: And listen, promise me you'll come back, ambassador, if and when we see any tariffs. Will need you back again.
KIRK: I would love to do it, any time, my friend.
QUEST: Good to see you. Ron Kirk, former U.S. trade representative.
When we come back, David Gregory is going to give us an assessment of just what the day was like. Did he really actually make history today as the
press went up against the president who's not even in office yet.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's a lot more QUEST MEANS BUSINESS in just a moment. We'll get to it, but this is CNN. And here on this
network the news always comes first.
In his first news conference since winning the presidential election, Donald Trump said, I think it was Russia that hacked the Democratic Party
during the campaign. He also strongly denied unsubstantiated reports about his behavior and links to Russia that were published online on Tuesday.
Mr. Trump's pick for secretary of state has come under fire from both Democrats and Republicans during his confirmation hearing on Capitol Hill,
which is still underway. The former Exxon Mobil CEO, Rex Tillerson, is being questioned about climate change, relations with Russia and the
Transpacific Partnership trade agreement.
A judge in Charleston, South Carolina, has formally sentenced Dylan Roof to the death penalty. That was a sentence that was recommended by the jury
that found him guilty of killing nine people at a historically black church in Charleston two years ago.
Several family members of the victims addressed Roof. Some forgiving him. One calling him the worst kind of evil.
Six Volkswagen executives have been indicted in connection with the company's admissions cheating scandal in the United States. It follows
Volkswagen saying, it would agree to pay $4.3 billion in federal fines. The company has allegedly violated the Clean Air Act, which regulates
harmful emissions from cars.
Now before it unraveled into a blockbuster media circus, Donald Trump's press conference was originally intended for him to address issues of
conflicts of interest. Well, he did address some of those. And he confirms several other policies.
[16:35:00] For example, his Supreme Court nominee. They'll be a discussion within two weeks of the inauguration. A name will be sent to the Senate.
Obamacare, his idea that he's going to repeal and replace, he's now pushing this very much harder. That they could possibly have them both in the same
hour, which is contrary to what many in Congress believe, which is that they do a symbolic repeal, but replace may be some years down the road.
And then there was the hacking of the DNC by Russia. Now, on this one, Mr. Trump admitted that the Kremlin was probably responsible.
(BEGIN VIDEO CLIP)
TRUMP: As far as hacking, I think it was Russia. But I think we also got hacked by other countries and other people. And I can say that, you know,
when, when, we lost 22 million names and everything else that was hacked recently, they didn't make a big deal out of that.
(END VIDEO CLIP)
QUEST: Joining me now, David Gregory, CNN political analyst. David, I think you seen over the years one or two testy presidential elections and
conferences. Have you ever seen anything quite like we've seen in the last day or so?
DAVID GREGORY, CNN POLITICAL ANALYST: No, I haven't. I mean, this would just be a continuation of the disruptive and the unconventional. All those
things that are Donald Trump, now President-elect Trump. I mean, everything from being introduced and having Pence speak, and have his press
secretary speak. Having supporters in the room who are clapping. Having all of these documents stacked up to say these represent all the business
deals that I've decided to put into the trust.
And look Trump is a brawler. I mean, let's make very clear, there is no transition to a different kind of presidential style. He refused to allow
CNN to have question. Went after CNN erroneously. So, he's scrappy. He's a brawler. He's bringing all of that into the White House. He still
continues on his tweet storms. Yes, it's unusual. I've never seen anything like it.
QUEST: Is it serious? I mean I can hear viewers saying around the world, well, jolly good theater. And yes, it's a good drama. It's made for
television. Give me an assessment as to why you think it serious?
GREGORY: I don't know how much is serious. I think there's a lot of showmanship. And I think there will be in his presidency in terms of how
he deals publicly. How he deals with the press, for example. I mean, he's going to beat and batter the press, six ways from Sunday. There is nothing
novel in that. Politicians do that. It's both good theater and there is a constituency, particularly his constituency, that doesn't trust big media,
the elite media. Right? I mean, that's what his campaign was about.
Is there an underlying pragmatism? In some areas, I think there is. What you're seeing though on the Russia business is something altogether
different. Yes, he says Russia is behind the hacking, maybe. He doesn't think there's anything very special about that or particularly dangerous
about that. And there's no question that he's taken on the intelligence community for in his mind, politicizing all of this for stacking the deck
to try to question the legitimacy of his election. And he's knocking to stand for that. And so, he's opened a chapter of his presidency now where
he and the intelligence chiefs are at odds. Some of whom will be replaced. Is there political -- some of whom like Jim Comey, who runs the FBI, will
not.
QUEST: He talked about when he's going to start putting his first executive orders, many of which will be to reverse President Obama's
executive orders. From what you're hearing from the transition, should we suspect a sudden slew of activity on the Monday, because he said the
weekend would be spent celebrating. On the Monday after inauguration.
GREGORY: In any new administration, there's usually some set pieces that they put together around regulations that they'd like to roll back. I
remember in the Bush presidency it was about funding Planned Parenthood internationally. In Obama's case, it was too close down Guantanamo Bay.
That was done initially. I think you'll see from President Trump, some financial regulations, maybe there'll be some environmental regulations
that he'll -- so, he'll have a slate of things that he'll do immediately by executive order.
Whether he takes on issues on immigration for example, and deporting people who are here, who are the children of illegal immigrants. I tend to
suspect he's not going to do that right away. I don't think he wants to do something that kind of tears at the social fabric of the country. I don't
understand why he'd want to do that. But he certainly pledged to do things like build the wall and other things. So, I think you'll have some set
pieces that is ready to launch with.
QUEST: Good to see you, sir. Thank you. Will need you post inauguration --
GREGORY: OK.
QUEST: -- to help us understand what it's all going on. Thank you.
Gregory: You bet, Richard.
[16:40:00] QUEST: We are putting together a team like none other of experts, analysts and just people who are going to help us understand in
the weeks and months ahead the significance of the events. Now Donald Trump from went to great lengths today to show what a tangled web his
business is. He said his sons will take over with this single caveat.
(BEGIN VIDEOTAPE)
TRUMP: And I hope at the end of eight years I will come back and I will say, oh, you did a good job. Otherwise if they do a bad job, I will say
you're fired. Goodbye, everybody.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
QUEST: So, we are parsing and presenting exactly what happened in the Trump news conference in the events of the course of the day. And in the
past, few minutes the head of the government ethics office has called Donald Trump's plan that I talked about earlier, the plan to avoid conflict
of interest in their words, wholly inadequate.
Larry Noble is a former general counsel at the Federal election commission, certainly knows about these issues, he joins me now. Larry, what is it
about the Trump plan that is not satisfactory for you?
LARRY NOBLE, FORMER GENERAL COUNSEL, FEDERAL ELECTION COMMISSION: Well, it does not at all separate him from his businesses in a real financial way.
So, he says he is not going to be operating his businesses, he will turn them over to his children but he is still financially invested in them.
So, how they do will affect him directly and that then will lead people to wonder or not he is making decisions that will benefit his businesses. He
also says that he is not going to do any new foreign deals. Now we are not quite sure what that means.
He has foreign deals already in existence. Does that mean he won't add on to them or is it just absolutely new deals? So, there is a lot of
vagueness there. And what we called for and what I think is a normal thing to do is that he divest himself from these businesses and put the proceeds
into a blind trust. A blind trust is not to have your children involved in it, it is truly a blind trust. He hasn't done any of the things that he
really needs to do.
QUEST: But as his lawyer said, that is unrealistic. Firstly, because he has illiquid assets, buildings and there would have to be a fire sale of
them. And that would come in great financial cost to him and his family. And I can hear you saying, well, he ran for president, so be it. But that
could discourage other wealthy people in the future from running. So, we can't exactly sell the buildings and he can't pretend that he doesn't own
the buildings, so surely, he has done the best you can in an impossible situation.
NOBLE: Well, it is his impossible situation. And it may very well discourage people in the future and his situation from running, but the
reality is if you're going to come into the office of president with all of these conflicts of interest maybe you should not run. And there are an
awful lot of people who forgo government service because they are going to have to sell their businesses, they are going to have to divest themselves
of various financial assets. And they decide it is not worth it.
[16:45:00] Look, the trade-off on this is we have a president who has these conflicts of interest.
QUEST: There is one difference though here. We know what he owns. So, in the sense of a building with Trump on it, a golf course that he manages, if
he takes decisions that will benefit it, ergo it will be obvious to the rest of us.
NOBLE: Well, we actually don't know everything he owns. He has not yet released his tax returns. And I am very familiar with forms he referred to
at the FEC and they don't tell you a lot, they don't give you a lot of detail. So, we actually don't know everything he owns. And beyond that
the fact that he has all these agreements with other buildings with other countries with other developers, we don't know the details of those
buildings. And so, it is a problem.
Look, one of the problems here also is even if he makes a decision as a president that is perfectly reasonable, rational decision for all the best
reasons, when people find out that also happens to affect an investment he has in a foreign country or even in the U.S., they are going to question
that. And that just undermines our faith in democracy.
QUEST: We heard today that UAE company DMAC, a property company in a meeting had put forward the prospect since the election of a $2 billion
property deal with Mr. Trump. Can Mr. Trump rejected it? I mean first of all, it is extraordinary what DMAC thought they were doing, but is this the
sort of thing that we are talking about?
NOBLE: Yes, this is the sort of thing. First of all, the fact that he was proud that he rejected it says something. That should not have even been a
question. He is about to take the office of president. But also, what it does show is that there are a lot of foreign interests that are going to
want to curry favor with him whether it be through his children or directly and if they can't do it directly they will do it through his children. And
there are going to be a lot of business deals that are going to come along.
Now he says he won't do any new foreign business deals, but what about domestic business deals? How is he going to decide what is foreign or
domestic or who is invested in? He has loans with foreign banks.
QUEST: I didn't notice of course whether this trust that he is going to set up is a revocable? Because he said at the end of course, when I come
back in eight-years' time, so clearly it sounds like he's intending, he will be in his 80s by then but that is fair enough. Whether he could come
back and take it all over again.
NOBLE: I think that is a problem and I think you are absolutely right, he did not say it's an irrevocable trust, and sounds like he was thinking that
he would come back to it. So, whatever profits it makes come back to him.
QUEST: Larry, I heard you talking earlier on this, when you pull all of this together, how worried are you?
NOBLE: I am actually very worried. I think what we are in for is a number of years of claims about improper influence. I think he has subjected
himself to people in foreign countries claiming they have offered him deals claiming that he did something because of a financial transaction, and
constant concerns. And also, he may be sued by various businesses who he is involved with. I think we have open ourselves up to a very messy
situation which did not have to be.
He talks about its legal. The direct conflict of interest laws do not apply to the president. But just because it's legal doesn't mean it is the
right thing to do. Every president in recent history prior to him has treated the conflict of interest laws as if they apply to them. And he
doesn't and that is very worrisome.
QUEST: We will need you, sir, in the months ahead as we wind our way through the thicket of all of this. Thank you.
Nine days and Donald Trump becomes President of the United States. The cabinet picks that he picked are going through the vetting process on
Capitol Hill. This is a live picture. The Secretary of State nominee is Rex Tillerson. By my reckoning the former Exxon Mobil chief executive has
been answering questions for nearly 8 hours. He probably has a few more hours to go.
[16:50:00] (COMMERCIAL BREAK)
QUEST: On Capitol Hill, today, Donald Trump's nominee for Secretary of State, Rex Tillerson faces a grilling on his views on key foreign policy
issues. Now somewhat surprisingly the former Exxon Mobil chief broke with Trump on three major points. Firstly, Russia's invasion of Ukraine. Also,
he said he supported the transpacific trade deal even though the President- elect doesn't. And climate change, we will talk about that in a moment.
First of all, here is Tillerson making his case to be the next top U.S. diplomat.
(BEGIN VIDEOTAPE)
REX TILLERSON, SECRETARY OF STATE NOMINEE: I have no reservations about my clean break with my private sector life. It was a wonderful 41 1/2-year
career. I am extraordinarily proud of it. I learned an awful lot. But now I'm moving to a completely different responsibility. My love of
country my patriotism is going to dictate that I serve no one's interest but that of the American people in advancing our national security.
(END VIDEOTAPE)
QUEST: Phil Mattingly is with me from Washington. I listen closely, he was very impressive, in the sense that he is obviously a man who has been
around these issues at the very highest levels, but did he impressed the committee?
PHIL MATTINGLY, CNN CORRESPONDENT: Fluent in the language, no question about it, and I think what is most interesting going into this hearing when
you talk to Senators with met with him privately, when you talk to their staff, all come away raving about him. Even those who might end up voting
against him. So. We had that going for him, going in, obviously, the fluency in which he spoke about the issues was also a big positive.
But the problem that he continued to run into frankly, was a man who would be his boss. If he ends up being confirmed, senator after senator both
parties a bipartisan effort really went after him on the issue of Russia. And he had some kind of interesting exchanges including this one, take a
listen.
(BEGIN VIDEOTAPE)
BOB MENENDEZ, SENATOR: I assume to some degree that you have had some discussion about what it is that that worldview is going to be in order to
understand whether you are willing to execute that on behalf of the person you are going to work for?
TILLERSON: In a broad construct in terms of the principles that are going to guide that, yes, sir.
MENENDEZ: And I would've thought that Russia would be at the very top of that considering all of the actions that are taking place?
TILLERSON: That has not occurred yet, Senator.
MENENDEZ: That is pretty amazing.
(END VIDEOTAPE)
MATTINGLY: So, Richard, I think that was something that caught senators off guard, obviously, you heard Senator Menendez say what he had to say
about that. You saw and you noted that he split from the President-elect on a number of issues. That was intentional. When you talk to the team
that was prepping Rex Tillerson for this hearing they wanted to show that he was independent. They wanted to show that when it came to a lot of the
concerns, particularly, Republicans had about this nomination, particularly when it pertains to the President-elect's foreign-policy. There was a
steady hand, maybe and more along the lines of foreign-policy norms that we see in this country. That was the goal today, still, I couple stumbles
here and there that we are going to have to keep an eye on.
QUEST: Phil, you often get congressman and you even get senators coming out for these confirmations, and governors, but this man ran one of the
largest, most powerful companies in the world for many years. How is he going to take orders?
MATTINGLY: Look, I think it is an interesting question and frankly what I have heard from Trump transition officials they are trying to spin this
into a positive. That he is his own man, that he is going to operate his own department. A department that has independence from the White House
more so then maybe Secretary of State John Kerry had in the Obama White House. But there is no question, there is only one leader of the free
world. And he will be the soon to be president Trump. And the relationship is particularly given, and you heard this mentioned a couple
times in the hearing, Rex Tillerson had not met Donald Trump until five weeks ago.
So, this is not a completely flushed out relationship. So, this is something they're deftly going to have to work on going forward.
QUEST: In a word, all we really care about is he going to be confirmed?
[16:55:00] MATTINGLY: One wild card, that is Marco Rubio. The way the committee is set up, Marco Rubio more or less has to vote for Rex Tillerson
for him to move forward. Marco Rubio very tough on Rex Tillerson today. If I had to say it though when he talked to Trump transition officials,
they feel very good about the path forward for Rex Tillerson.
QUEST: I promise you sir we weren't recording that. Thank you very much, Phil Mattingly who is in Washington.
What a day, Profitable Moment right after the break
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment, the head of the U.S. Ethics Office for the government has described Donald Trump's plan to divest himself of
conflict of interest as wholly inadequate. And he is probably right. The plan put forward would create a family trust and let his sons, Donald
Junior and Eric, run the business.
But the Trump family would still own all the assets. Now I'm sorry, but you simply cannot have a situation that is not only remotely close to a
blind trust. Even though Mr. Trump says he won't be involved in the decision-making, and you will just get the annual reports, it beggars
belief and stretches credulity to breaking point to suggest that they won't all be talking about the deals that may or may not be done. And we saw one
example of that, DMAC, the Dubai property developer has already offered a $2 billion deal to Donald Trump's family. It has been rejected.
There will be many more such offers, there will be allegations, and there will be much controversy. Donald Trump's plan simply fails not only the
spirit, the letter but the smell test.
[17:00:00] And that is 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. I will see you tomorrow.
END
