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Quest Means Business
U.S. Unemployment at 17-year Low; Twitter Makes Changes After Trump Deleted; iPhone X on Sale in U.S. for $999; Maduro Wants to Restructure Venezuela's Debt; Finnair Ask Unusual Question to Passengers;
Aired November 03, 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] ZAIN ASHER, CNN HOST: Waving at his friends there at the stock exchange. That sound marks the end of yet other trading day on Wall
Street. Take a look here. We actually managed to eke out ever so slightly another record high. The Dow up 22 points or so. It doesn't really take
much these days. The markets were, still dragged by, two major stocks, IBM and Intel. Although Apple, by the way I should mention, also closed at a
record high as well. We are also going to be digging into the jobs report as well. The numbers came in at 261,000.
It is Friday, November the 3rd. Tonight, U.S. unemployment hits its lowest level in 17 years to cap off a milestone week for the Trump economy. In
Twitter makes changes to make sure it never deletes the president's account again. And Apple's brand-new iPhone wants again has them lining up all the
way around the block. The stock, as I mentioned, just hit another record high. Hello everyone, I'm Zain Asher and this is QUEST MEANS BUSINESS.
You can actually see here we've had 56 record highs so far is year. Pretty good news for the Trump economy. And some other new numbers are in as well
after a rough ride in September, America's job market is certainly back on its feet. The U.S. economy added 261,000 jobs in October. Little bit less
than economists had been predicting, they had been expecting. The pace of hiring is also slowing down as well, compared to last year. But the
highlight is that unemployment actually ticked lower to 4.1 percent, the lowest in 17 years. We are actually going to be digging in a little bit
later on in the show -- in a few minutes rather -- as to what that means, what that 4.1 percent actually means.
The solid jobs number comes one day after Republicans, of course, unveiled their tax plan. It's certainly controversial. It has a lot of detractors
as well. But Mr. Trump has promised that it will pass by Christmas. And it has other fans well as the president Broadcom, an iPhone chipmaker, has
said they'll be relocating to the United States from Singapore. Saying that the tax plan will actually make it easier to do business in United
States. President Trump is certainly happy about that.
Trump is also making his mark on monetary policies as well. He nominated Jerome Powell to replace Barack Obama's pick, Janet Yellen, to lead the
Federal Reserve. Wall Street is giving it all a thumbs up, all the three major indices, as we just mentioned, are all at record highs. Paul
Mortimer-Lee, is chief economist at BNP Panbas. He joins us live now. So, Paul, so much to dig into here with the job numbers. One thing I'm
interested in is how much attention should we begin the October numbers given the hurricane we saw in September. Should we be focusing on the
October numbers or just the broader trend overall?
PAUL MORTIMER-LEE, CHIEF ECONOMIST NORTH AMERICA, BNP PANBAS: Broader trend overall. If you look at October, as you said, a bit less than the
market expected. But there were 90,000 of upward revisions to previous months. If you take it all told that's 350, that's better than the
economists were looking for 310. And the real thing is that the unemployment rate went down to only 4.1. Which is a very low level.
ASHER: Lowest level since year 2000.
MORTIMER-LEE: Yes, I mean, and before that you have to go back to the late '60s, we rarely get below four. And it looks to me that we'll go below
four because this is reaccelerated since the middle of last year.
ASHER: How does Trump celebrate these numbers when wage growth is still so disturbingly low?
MORTIMER-LEE: Wage growth lags the overall economy and you got to remember that one of the reasons that wages are low is because inflation's low. So,
corrected for inflation, wages are going up by about 1 percent. Doesn't und much, but it's a bit more than productivity. And generally, the two
things have to go together. And that's what's important about the tax plan. The key question is will it increase productivity by increasing
investment. If it does, we'll get the good solid wage growth.
ASHER: Do you buy what Republicans say about this tax plan actually implementing wage growth in the positive direction?
MORTIMER-LEE: I think it will do but the question is how much and how quickly. Because the world is changed. One of the reasons we got low
inflation is globalization, global value change and the competition from the Internet economy. Online retailers are killing some of the bricks and
mortar guys and keeping prices down.
ASHER: What's the solution for retailers? Do you have one? Do you have a remedy?
MORTIMER-LEE: No, because it looks as though that competition is going to get more and more intense and we can all compare prices. We go look into
retail stores and then we go back home, and we buy it online. Right?
[00:05:00] That's tough time for retailers and the retail industry is shedding jobs. The retail pay is increasing more slowly than payers hoped.
ASHER: Overall though, when you think about wage growth, not raising as fast as it should, it doesn't really influence whether or not the Fed is
going to raise rates in December. A lot of people think they will no matter what raise rates in December.
MORTIMER-LEE: I think they will, yes. They'll upgraded their growth forecast this week, their assessment, from moderate to solid. In that
says, it's pretty solid and were going to get a rate hike in December. What they're looking at is particularly the unemployment rate. Because
they think it's just a matter of time. If you push unemployment this low, eventually wages and prices will pick up. And it's probably something in
that it's a question of when. It's clearly happening more slowly than they expected. But that's their briefly and they're going to keep on tightening
while the economy and the labor market keeps on tightening.
ASHER: Yes, is there room to keep on adding jobs at this pace, 4.1 percent, 261,000 jobs added in October? Is there room to keep this pace
up?
MORTIMER-LEE: There is. We all like to look at the unemployment rate, but one thing if you look at the proportion of people, particularly 25 to 54-
year old's who are now working, it's a couple of points lower than it was at the beginning of the recession. So, the theory is that's one of the
reasons wages haven't picked up. Because of a load of people who've dropped out of the labor market. If we keep adding jobs, they will come
in. But as they come in they're holding everybody else's wages down. So, it says yes, there is more room to create jobs in this economy.
ASHER: All right. Paul Mortimer-Lee, have a great weekend. Thank you so much.
MORTIMER-LEE: Thank you.
ASHER: For coming into us on a Friday afternoon, thank you so much. Appreciate that.
All right. At a time when the U.S. president has called for protectionism, the CEO of Dutch giant, Philips, says globalization is a force for good.
Frans van Houten transformed his company by moving away from lightning and focusing on health technology. Investors are delighted. The company's
value has jumped more than 60 percent in three years. Van Houten spoke to our Richard Quest and told him how Philips will manage Brexit.
(BEGIN VIDEOTAPE)
FRANS VAN HOUTEN, CEO, PHILIPS: We do manufacture in the U.K. and we support NHS and private customers in the U.K. So, the U.K. is an important
country for us. Uncertainty for business is never good. We would like to see that there is a smooth transition. I would also like to say that for
Europe, Britain is very important, and we need to stick together. So, Brexit is an awful term. Because we really should hang together as a
region and help each other.
RICHARD QUEST, CNNMONEY CORRESPONDENT: If we look at the U.S. -- and again, it's legitimate because you do business in all these countries in
the world. Are you concerned at what you see, whether it's the U.S., whether it's NAFTA, where again, you do business in these countries? Are
you concerned at the rising tide of nationalism or protectionism?
VAN HOUTEN: Yes, that does concern me because I do believe that the world has become a better place thanks to globalism. Hundreds of millions of
people in Asia have become into middle class thanks to also the global collaboration. Millions of Americans have gotten, let's say, access to
less expensive products thanks to let's say global scale. And I think we all need to respect the benefits of that while also understanding that
people are concerned in other areas.
QUEST: It can't be easy as the chief executive to turn a company around. To bet on a new way. Even if you're sure you're right, even if you're the
board is convinced it's the way forward, do you ever have that moment of, God, we'd better get this right? We better be right on this.
VAN HOUTEN: Well that moment I have had. But it's a little bit in the past. Because I'm now seven years the CEO --
QUEST: Right. But this transition, you know --
VAN HOUTEN: But we took a very courageous decision to transform Philips to a focused health technology --
QUEST: There's no going back now, though.
VAN HOUTEN: But it is working.
QUEST: There's no going back.
VAN HOUTEN: No, but it doesn't need to be. It's working. I don't need to be worried. I know we're on the right path. Our customers tell us we're
on the right path. We're attracting a lot of talent. The share prices is way up. Yesterday I was able to ring the bell here for 30 years listing at
the New York Stock Exchange. So, I believe, you know, it's now in our own hands to grow 4 percent to 6 percent a year, to improve profitability, to
continue to expand through innovation and then occasionally we also do a good acquisition.
(END VIDEOTAPE)
ASHER: Richard Quest there speaking to the Philips CEO.
And as I mentioned, the U.S. markets end the day at record high. But let's take a look at how the European markets did. They ended the day in the
green. Thanks to some very pleasant corporate earnings. The FTSE closed higher for a second day after that rate rise by the Bank of England on
Thursday.
[16:10:00] Those U.S. job numbers also lent a helping hand to stocks as well.
President Trump is on his way to Hawaii as I speak. Now from there he'll begin his first trip to Asia as commander-in-chief. I want to bring in
Ryan Nobles who joins us from the beautiful Honolulu. Lucky you, Ryan. He's got 12 days away in Asia. He's got so many issues to deal with. A
lot of people are talking about the fact that the main concern is, of course, going to be North Korea. But isn't his mind, Ryan, going to be a
little bit elsewhere because of all the issues at home with the Russian investigation?
RYAN NOBLES, CNN CORRESPONDENT: I think that's a fair question, Zain, especially when you see how the president has conducted himself over the
past 24 hours. He spent a lot of his time attending to undermine the special counsel investigation. Trying to divert attention to what he views
as misdeeds by Hillary Clinton and the Democrats and their fundraising apparatus. Instead of focusing on this trip. He hasn't talked a whole lot
about this trip.
This is a very, very important trip. Not just for the United States but for everyone in the Asia/Pacific region. He's going to be meeting with
leaders from Japan, from China, from South Korea, from the Philippines, Vietnam. These are all crucial players in dealing with Kim Jong-un and his
administration and also, they're obviously, countries that are most potentially at risk if Kim Jong-un were to do something that would alter
the landscape of this region. The president on his flight right now. He already tweeted several times. He's only talked about this trip on one
occasion. Instead talking about Bernie Sanders. And talking about the decision by a court to not send Bowe Bergdahl, a former army soldier who
deserted his post, not going to jail. There doesn't seem to be a whole lot of focus on this trip right now. But perhaps that changes after he lands
here in Honolulu.
ASHER: There is one interesting thing I would say is that he's going to be seated across the table from Chinese President Xi Jinping, and Xi Jinping
is, of course, consolidated his power. And so, it seem as though the Chinese President and the U.S. president seem to be in very different
positions politically.
NOBLE: They do, but what's been interesting, Zain, is how good their relationship seems to be at this point. And different than the
relationship with Chinese leaders and American leaders of the past. You recall the President Xi came to the United States and the president took
him to Mar-a-Lago. They had a very good time there. They seem to hit it off. So, in terms of the interpersonal relationship between these two very
powerful men it seems to be a positive one.
But you're right, on the global stage there are many differences of opinions between the Chinese and the Americans as to how to address these
issues. Specifically, when it comes to North Korea. But President Trump has often said that he believes that he can break through with President Xi
and come up with some sort of a solution. We'll see if they come up with some sort of framework of an agreement as to how to deal with North Korea
during this trip.
ASHER: My burning question, quickly, is how long you're going to be spending in Honolulu?
NOBLE: Zain, I've got to fly out here Sunday night. I've got to get back to cover the burning race for governor in the commonwealth of Virginia back
in the United States.
ASHER: You've still got two days.
NOBLE: So, I can't be here forever. But someone had to draw the tough assignment, Zain. I was willing to go take on that challenge.
ASHER: You've still got two days. And the water behind you looks very, very warm, Ryan. Thank you, Ryan. Appreciate that.
Some people found it hilarious, but serious questions remain about how a disgruntled Twitter employee -- have you heard about this story -- managed
to deactivate the president's account? That story next.
[16:15:00] (COMMERCIAL BREAK)
ASHER: So, if you tried logging on to Donald Trump's Twitter account yesterday you might have seen this. The dreaded blue screen of death
saying, sorry, that page does not exist. The president's personal Twitter feed was taken down apparently by an employee on their last day. Twitter
actually restored the account 11 minutes later. It said -- let me read for you their statement here.
We have implemented safeguards to prevent this from happening again. We won't be able to share all details about our internal investigation or
updates to our security measures, but we take this seriously and our teams are on it.
Let's talk more about this with Kurt Wagner from "Recode" who joins us live from San Francisco. Kurt, thank you very much for being with us.
Initially I think a lot of people thought it was an accident but turns out it wasn't an accident at all. It turned out to be an employee who wanted
to go out with a bang.
KURT WAGNER, SENIOR EDITOR, RECODE: Yes, and talk about going out with a bang. I think this person was the hero of a lot of folks on Twitter
yesterday for about ten minutes or 11 minutes I guess. There were a lot of people very excited to see the president's account come down. And
obviously, at the time we didn't really know what was going on, the fact that it ended up being a disgruntled employee is surprising. And I think,
joking aside, the fact that some people did have some fun with this, it is kind of serious that the most powerful Twitter users on the planet and one
of the most powerful people on the planet, they can have kind of this microphone that they've been using so regularly removed just like that.
And clearly, Twitter reacted very quickly. But it is also has to now kind of think about how it's going to protect these users moving forward.
ASHER: Yes, because that is the very tricky question. If you were running Twitter, what -- obviously, employees have to be able to suspend accounts
if necessary. But if you were running Twitter, how would you make sure that some employee doesn't end up go rogue?
WAGNER: I think it's actually relatively simple, which is that you set up a kind of two factor authentication here. Write. One employee can say,
hey, we think this account needs to be taken down and it requires the approval of a second employee. I don't think that that would be too hard
to implement, and you could even do that for just high profile, maybe verified accounts if you wanted to. That would clearly seems that unless
there were two people involved, Twitter has said it's just one, it doesn't seem like that's in place right now. That to me seems like the easiest
fix.
ASHER: All right, Kurt Wagner, life for us there. I believe you froze, which is unfortunate -- we have you back. OK. He's gone. Thank you so
much, Kurt. If you can hear me, I appreciate that.
So clearly, as Kurt was just mentioning -- it wasn't a great day for Twitter. But it was an awesome one for Apple. Its shares closed at a
record high. Thanks to strong results in the third quarter. Shares are up by a healthy 2.5 percent today and it's on track to become -- get this --
the first trillion-dollar company. It's market value actually briefly topped the $900 billion mark for the first time during trading.
Investors are also delighted by these images. Take a look here. What you're seeing is long lines, long lines and cues for the launch of the
iPhone X. Some customers actually -- I never understand this, by the way, but some customers camped on the sidewalk for days waiting for the iPhone
10 to be released. They apparently wanted to be the first. Let's talk more about this with Rachel Crane. So, the question is this phone is worth
how much? $1,000.
RACHEL CRANE, CNN CORRESPONDENT: Right. $1,000.
ASHER: Is it worth it? I don't know personally if I would spend that much money on a phone.
CRANE: Well, Zain, full disclosure, I did have my husband being one of those crazy people waiting in line this morning because unfortunately this
is just a demo phone for me.
ASHER: When I was joking there, I was mocking your husband, I'm so sorry.
CRANE: That's OK, but he did not camp out. But I will tell you, I saw people starting to camp out outside of the Apple store in the meat packing
district here in New York, starting on Wednesday. They had their tents. They had their generators. Apple yesterday --
ASHER: Took days off work, clearly.
CRANE: Seriously. Butt on their earnings call yesterday, they're betting big on this. Because they said that they expect the quarterly earnings for
the holiday season to be around $84 billion. Now of course, the iPhone X is not completely responsible for that number. But of course, a big part
of it.
ASHER: Let's talk about the phone itself. Whether or not this is actually worth it. Whether your husband made a good investment. Let's talk more.
CRANE: Well, he did get one for me too, Zain.
ASHER: So, one of the big things is of course facial recognition.
[16:20:00] CRANE: Right, that's one of the big things. You'll see there is no home button here like you do have on the old phone, also no button,
none of the bezels. So, the screen reaches nearly edge to edge and now because you don't have the home button, the way you open the phone is with
facial recognition. So, I'm going to show you how to set that up. What you do here is you go to the face I.D. I'm going to have to put in the
pass code here to set it up. But we're going to reset it.
ASHER: Let's hope no one saw your pass code.
CRANE: It's one, two, three, four, five, six. Like I said, it's a demo phone.
OK. So, what you do --
ASHER: I'm in your phone.
CRANE: Yes, OK. So, we got -- so you move your head in a circle. So, it can fully scan it. All right. Do it again. And now, it's completed. So
now the way that I would lock my phone -- let's look it. I just look at it directly and it's open.
ASHER: That's it? There's no camera. There is no nothing like that. You just look at it, you unlock it.
CRANE: There's a camera on the front.
ASHER: You don't see the camera.
CRANE: No, you don't see the camera. But there is this little notch. So, there is no longer the bezels, but at the very top there is a little notch
on there. And that's where the camera and new sensors are. Also, that facial ID recognition -- they have this new thing called "Animoji." So,
the emoji's now can get animated off your facial movements.
ASHER: This is one of the things that I remember when they made the massive announcement, the "Animojis." I wouldn't be a fan of "Animojis"
because I'm an adult,
CRANE: You'd be surprised. Wait till you have this in your hand. I can make my pig face move. I can be fox now. You can even be a piece of poop.
ASHER: I was never a Snapchat-er either So in terms of other things that get you excited, what else?
CRANE: For the selfie generation here. OK. The front facing camera also has portrait mode. You can take those beautiful pictures of yourself now,
which, you know, why not? We all want to have the best picture as possible.
ASHER: It's all so millennial.
CRANE: It's true.
ASHER: It's just a millennial phone.
CRANE: But really the screen. When you're watching something without having those bezels here you really, really get this beautiful display when
you're watching something. So, I would say that's the thing that I'm most jazzed about is the screen.
ASHER: Lucky, you. You have this iPhone X waiting for you at home. We got married around the same time. Were both wives now. Rachel, thank you
so much. I appreciate that.
CRANE: Thank you.
ASHER: From market records to major security breaches it has been a huge week for the tech business. I want to bring in Shelly Palmer. He joins us
live now. First of all, since I was just playing with my friend Rachel Crane with the iPhone X -- would you spend $1,000 on a phone? Am I the
only one?
SHELLY PALMER, CEO, THE PALMER GROUP: I was going on box it here with you today, Zain. This one's brand-new.
ASHER: Did you camp in line?
PALMER: No. I did not camp. I had a terrible --
ASHER: You're too well connected for that.
PALMER: No, I had a terrible experience at 3:00 in the morning. But Apple did make up for it. And Verizon actually made up for it. So, we do have
the new phone it's here. I'm very happy to announce. And I'm excited to set it up. Truth be told, we've had the demo units for a while and we've
written about it and very excited about the phone. I think Apple's excited about it too. You know, goofing around $1 trillion worth of value for the
company.
ASHER: Right, so you have all these people who are, you know, camping and staying in line and just can't wait to be the first one to get their hands
on the phone. Does that kind of momentum have staying power?
PALMER: We're almost at the end of hand sets. A little better screen, a little more memory, a little faster processor. We're going get into the
world of augmented reality now. You're going to start to see all kinds of applications where you can hold your phone up --
ASHER: This is an interesting foray into that for Apple.
PALMER: Absolutely. This is the first phone that you're really going to see a lot of augmented reality happen with. Lenovo today announced their
"Star Wars" game where you can put your phone in an augmented reality headset and fight with a lightsaber. We're coming into a whole other level
of using your hands held device for stuff and a whole new Place for handsets. And then ultimately were going to have -- are people really
going to walk around, are they literally going to walk around like this? Like looking through the world like this. This is not a great way for me
to talk to you, so we'll have to have something else.
ASHER: When you talk about Google glass --
PALMER: It didn't work.
ASHER: It didn't work. So, why would this version --
PALMER: Well, Google glass was early. This is not early. We are at a time now where there's enough bandwidth. There is enough local processing
power. The technology and the desire has sort of caught up and software and hardware and bands width are all sort of converged at the right moment.
So, you're going to start to see a lot of augmented reality. And it's going to start with the iPhone X, t actually he 8 plus will give you some
too. Truly the 7 plus can also do it up just not quite as well.
ASHER: Of course, I feel so behind with my measly 6 here.
PALMER: It might be time for an upgrade. That's up to you.
ASHER: You know what's interesting is that, I've always thought to myself that Apple hasn't -- Tim Cook, I should say, has just an unfair amount of
pressure on him to innovate more quickly. Because you have all these iPhones that come out with incremental differences. Do you think that
that's an unfair pressure that the company has?
[16:25:06] PALMER: First of all, when you are almost the most valuable company on earth and you've got a big target on your back. And you've got
that much cash on the balance sheet, you are under pressure. Iteration is a kind of innovation. Making slight incremental improvements that create a
better experience all around is innovation. If you're looking for the new wow factor you might not see it.
But when you put all the tools together in the new iPhone or the new Samsung Note 8, the new generation of phones with this class of processor,
this class of screen, we're getting to a point where the phones can do cool stuff. And they do slightly cooler stuff and slightly cooler stuff.
Again, we're almost at the end of hand sets. If you got a faster computer right now, if I gave you a computer twice as fast as one in front of you,
it wouldn't run Word any faster or PowerPoint any faster or browse the Internet anything any faster. It would just be cooler. So, we're going to
go through that and then whatever the next thing is. But for now, Apple's hit a clear home run, and everybody seemed to be lining up for it.
ASHER: And Shelly, it's been a bit of a busy week for tech.
PALMER: Yes.
ASHER: It's been a busy week, so Google, Twitter, Facebook on Capitol Hill this week. This idea that these tech companies, they're not technically
media companies but they have a lot of power when it comes to information. They have a lot of power. This merge between technology and politics. Do
these tech companies, do you think they're managing their new-found power appropriately?
PALMER: I think society, all of us are at large have a responsibility to understand that the free and open internet has become the paid and closed
internet. That we have a voice now. That everybody can be amplified. That there's all kinds of crazy that's going on. We become more tribal,
confirmation bias now. You sit in a comfort zone in an echo chamber listen only to your friends and unfriend people you don't like this.
ASHER: These companies are not going to pay for fact check and do the investigative journalism that we do.
PALMER: Exactly right.
ASHER: But they take most of the ad dollars.
PALMER: That's also true. These are platforms. They have empowered an entire new class of behaviors. People are now in control of information in
a way that they never have been before, and we are too young as a society and a culture to be using it responsibly. Right now -- if you're asking
Facebook or Google to regulate themselves, you are out of our minds smoking something whacky. It can't be done. If we had more time I would explain
to you in detail, why it can't be done. But I am telling you, that kind of regulation could be imposed but never enforced and it cannot be done.
We as a society are going to have to figure out a better way. Because to say to the tech company, you be the police, I'll give you a super quick
one. So, make a false statement. I don't care what false statement it is and put it in a blog post. Who would you want to be the police that say,
they're the blog police that say, oh, you've conflated two things, you did quite understand it. I'm sorry, you just don't want anyone being that
powerful. And certainly not the people at Google or Facebook.
ASHER: This country values the first amendment and it's just such a tricky --t's a mess. I don't have the solution. I don't know who is.
ASHER: You're right, because this country values the First Amendment and is just such a tricky -- it's a mess basically. I don't have the solution.
I don't know who does
PALMER: Critical viewing, critical listening, think for yourself. Get out of your echo chamber. And by the way, be willing to listen to people with
opposing points of view. That's the start.
ASHER: Do I that every day on this show.
PALMER: There you go.
ASHER: all right, Shelley Palmer, thank you so much. Good to see you. And have a great weekend.
Kevin Spacey is looking more and more isolated. The actor's talent agency and the publicist have dropped him and that a growing number of sexual
assault and harassment claims. We'll talk about it next.
[16:30:00] (COMMERCIAL BREAK)
ASHER: Hello, everyone, I'm Zain Asher. Coming up on the next half hour, a QUEST MEANS BUSINESS, Venezuela's president says he wants to renegotiate
all the country's international debt. And flying to Finland could soon come with an unexpected optional extra. Finnair is asking passengers an
unusual question. But these are the top headlines we are following with you at this hour.
There's word of important victories against ISIS in both Syria and Iraq. Syrian defense officials say the army and allied forces he retain full
control of the city of Deir Ezzor. And the Iraqi prime minister's office says the terror group has been cleared from the town of Qaim near the
Syrian border.
Spain has issued an arrest warrant for ousted Catalan leader, Carles Puigdemont, who right now is in Belgium. The Belgian prosecutor says he
will study the warrants for Puigdemont and his associates and hand them over to the investigating judge by Monday at the latest. Puigdemont
ignored a court order to appear before Spanish judge on Thursday.
President Trump is slamming a military judge's ruling in the case of army sergeant, Bowe Bergdahl. Bergdahl got ad dishonorable discharge and
reduction in rank for abandoning his post in Afghanistan in 2009. But he avoided prison. Trump tweeted the decision was a complete and total
disgrace.
The U.K. Labour Party is suspending parliamentarian Calvin Hopkins. A party campaigner has accused the M.P. of sexually harassing her. The
campaigner tells BBC she complained about Hopkins behavior two years ago and was shocked to learn he was later promoted.
The creator of the hit of Netflix show "House of Cards" says that he knew nothing, he knew absolutely nothing about the alleged inappropriate
behavior by actor Kevin Spacey. But eight people who worked on the show tell CNN that Spacey made the set a toxic environment through a pattern of
sexual harassment and -- and one, former employee tells CNN that Spacey actually sexual assaulted him. CNN entertainment reporter, Chloe Melas,
joins us live now. When you look at this pattern of behavior, this is not just a one off. This is not just a one-time thing. This is somebody whose
behavior could be described as that of a predator.
CHLOE MELAS, CNN ENTERTAINMENT REPORTER: It's more That's the way people described him saying, so Monday hours a few hours Anthony Rapp, the actor,
came forward and accused Kevin Spacey of trying to seduce him when he was just 14 years old and Kevin was in his 20s, many years ago. It made me
think I wonder what these hundreds of employees on the set of "House of Cards" know if anything. So, I just started doing some good old-fashioned
reporting and I reached out to over 100 current and former people who work on "House of Cards."
Now the eight people that I spoke to in the story that we are keeping anonymous because they are very fearful of just repercussions in the
industry. Some of them still work on the show, some of them work on other shows and they're worried about being blacklisted and not being hired
again. They all describe to me a pattern of behavior where Kevin Spacey who was not only the star but the executive producer of "House of Cards,"
made this toxic work environment.
Where he would prey on these young men in their early 20s. And that it wasn't just flirting or, you know, maybe crude comments here and there --
which is never OK -- it also involved nonconsensual physical touching. We're talking massages. We're talking touching people's stomachs, in this
took place in front of a lot of people. Tickling people, also grabbing peoples' private areas in front of people. Now I'm sure people are
wondering. Well how did you corroborate this? We spoke to family members and friends and other coworkers. You know, over 20 people who didn't want
to be quoted for this story, told me keep going. Keep digging.
ASHER: It's so upsetting to just even hear. Let alone thinking about what these people, these former employees actually ended up experiencing.
Initially when the first person came out accusing Kevin Spacey of sexual harassment, he said I don't remember. Now that you have eight additional
people coming forward, is he still not remembering?
MELAS: Well, that's the funny thing. He's not responded to any of our requests for comments. And then just a few hours -- just an hour after our
story broke, CAA, his management company and his PR team dropped him. We're not sure if they were planning to do that or if it was because of our
story.
But I do want to circle back, and I just want to tell you that the unnamed male who we've met with a few times who told us his story of sexual assault
by Kevin Spacey, he was a production assistant on an early season of the show. And he was tasked with picking Spacey up offset and bring him back
to set. And he says that the sexual assault happened in a car and that it ended up happening further in his trailer. Kevin Spacey had a trailer on
set. Now the production company, Media Rights Capital, along with Netflix, who is the network for its show, they released very lengthy statements to
me. They both say these allegations are troubling. But in this the production company admitted that there was an incident of sexual misconduct
of 2012 that resolved swiftly that involved Spacey and a crew member.
ASHER: So, they knew.
MELAS: We don't know what they knew, but Netflix says --
ASHER: If it resolved quickly then that means they knew something.
MELAS: OK, but here's the thing. In Netflix's statement they said we didn't know about this incident in 2012 until today. So, there's a
breakdown in communication. What did people know? The creator of the show, like you said, Beau Willimon, released two statements this week, one
before our story broke and one after saying I didn't know about any of this stuff. But you know, I have people telling me that he did know. But
again, it's a he said/she said when it comes to that.
ASHER: It's one of those things where I'm sure a lot of people who are watching the show are thinking, if eight people are coming forward to speak
to you, how likely is it that nobody at the top actually knew what was going on?
MELAS: I can tell you one thing, Zain, that since my story broke, many more people have come forward to me with their stories and I'm continuing
to investigate.
ASHER: Great job. I know you said that you reached out to 100 people, eight of them spoke to you on the phone. Great job. This is so important
and actually seeing it reach the U.K. government. This Weinstein effect -- as we are talking about -- continues to have its repercussions. All right,
Chloe Melas, thank you so much appreciate that.
MELAS: Thank you.
ASHER: Now as I mentioned it's been called the Weinstein effect after the disgraced movie mogul Harvey Weinstein, a spate of sexual harassment
allegations that has cropped up in so many different industries, so many different sectors as I have mentioned, even the U.K. government is
experiencing a fallout right now and the final episode of her series, "Divided We Code," Laurie Segall reports on the dark side of Silicon
Valley.
(BEGIN VIDEOTAPE)
LAURIE SEGALL, CNN SENIOR TECH REPORTER:
ELIZABETH SCOTT, FORMER UPLOADVR EMPLOYEE: Everybody talks about how progressive and forward thinking.
LAURIE SEGALL, CNN SENIOR TECH REPORTER: Silicon Valley promised to code solutions to the world's problems, but it can't seem to fix one of its own.
SCOTT: Gender discrimination, sexual discrimination, harassment.
SEGALL: In May, Elizabeth Scott filed a lawsuit against her former employer, UploadVR, it's a powerful start-up in Silicon Valley and it also
had a reputation for its parties.
DAISY BURNS, FORMER EMPLOYEE OF U0PLOADVR: I thought these are young like me, and we are go-getters.
SEGALL: Daisy Burns is another former employee.
BURNS: I was blown away about what I got myself into.
SEGALL: Young founders, millions in funding, a party culture. It created a perfect storm according to Elizabeth's lawsuit.
SCOTT: One male employee would talk about how he refuses to wear a condom and has sex with over a thousand people. Male employees engage in sexual
conduct in the office.
SEGALL: According to the lawsuit, there was a space called the kink room.
BURNS: We had a kink VR demo in there.
SEGALL: The lawsuit says male employees used the room for sexual intercourse during parties. Screen shots obtained by CNN show internal
chat boards where random sex sessions were joked about.
BURNS: I would every once in while find underwear in that room and make jokes about it in have to clean it up.
SEGALL: But take a second, Daisy you had to clean up underwear from your office space.
BURNS: That was a part of it, start-up life, I guess.
SEGALL: Also, according to the lawsuit, female employees were expected to act as, quote, mommies.
BURNS: Women are viewed as the people who clean up underwear and do the dishes.
SCOTT: That was the breaking point for me mentally.
SEGALL: After seeing Elizabeth's lawsuit, Daisy and other employees sent a letter requesting the founder step down. When they refused, she quit.
Here's what the founders are saying now.
TAYLOR FREEMAN, CO-FOUNDER UPLOADVR: I can totally understand how a young moving to San Francisco and walking into an upload event there are was loud
music and an open bar, I could totally understand how that could feel uncomfortable.
[16:40:00] SEGALL: The very specific claims were more than I was uncomfortable at a party, it was I was uncomfortable because I had to pick
up underwear from the party, I was uncomfortable because there was a male employee talking about having sex with a thousand women and not using a
condom. I want to give you the opportunity to respond to that.
FREEMAN: Yes, I mean I think has realized the party culture nature of the company. We really put a lot of structure. We established an HR
department.
WILL MASON, CO-FOUNDER, UPLOADVR: I don't think we had the experience early on to recognize that shift in tonality that need to happen.
SEGALL: Were women expected to do tasks like the dishes whereas men weren't?
FREEMAN: No.
MASON: No. Certainly not. There are things we were doing that we didn't realize the impact we were having.
SEGALL: But for some women it's not enough.
SCOTT: This has to stop. If it has helped one person, then I know I did the right thing.
SEGALL: The question remains, now what?
(END VIDEOTAPE)
ASHER: That was Laurie Segall reporting there on a very important story. We continue to report on the sexual harassment allegations across various
texts. Venezuela is already in a brutal humanitarian crisis, now it is on the verge of a debt
crisis as well.
Nicholas Maduro says he needs to restructure or his country is going to default. That story next.
(COMMERCIAL BREAK)
ASHER: Most people in Venezuela have been enduring a harrowing crisis. Millions cannot afford basic items. They're desperate for food and
medication as well. Now Venezuela's president has finally admitted that his government can no longer afford its bills with just 10 billion left in
the state's coffers, and owing its lenders many more times that amount, Nicholas Maduro says he has to restructure the debt or there will be a
default.
(BEGIN VIDEO CLIP)
NICHOLAS MADURO, PRESIDENT, VENEZUELA (through translator): I have the money the same way I have money for the imports we need, for food, raw
material and medicine. I have the money to meet this obligation, but after this payment starting today, I order a refinancing and restructuring of the
foreign debt and the quality Venezuelan payments. Our intention is to stop the financial persecution of the banks and the international organizations
against Venezuela.
(END VIDEO CLIP)
ASHER: Patrick Gillespie has been reporting from Venezuela. He joins us live in New York. So, translation, Venezuela as we know is completely
broke. Nichola Maduro says listen, we are going to get through this, when I hear that I don't understand how exactly that is going to happen?
PATRICK GILLESPIE, CNNMONEY ECONOMICS REPORTER: Zain, the math is pretty simple. They owe 65 billion, they only have 10 billion, so the math just
doesn't add up four Maduro.
[16:45:00] And he's -- essentially saying we really hope that investors will take a huge loss and we agree to pay 100 percent of these bonds, we
are probably going to ask for a lot less. That is usually what a restructuring means.
But eventually -- they're going to either default, which would be a disastrous event not only for the government but for the people of
Venezuela and for the humanitarian which I had the chance to see firsthand with our team there in August, the suffering the people are going through.
But in the grand scheme, this is, you know, what looks like the beginning, the harbinger of the collapse of the government, because when you can't pay
your bills, really the steps and the domino affect leads to a change in government.
ASHER: If they end up defaulting, their oil assets get seized and that's it for the country.
GILLESPIE: Important for people to know, oil is the only source of revenue for Venezuela. There is no other.
ASHER: The little food they have in that country, the few medications that are coming on, even though people are starving, the little resources they
have is coming from oil assets.
GILLESPIE: Absolutely. And a lot of that oil is coming here to the United States. So, Venezuela defaults through the rules of these bond contracts,
investors have the right to seize those barrels of oil that are here in the United States and take that as collateral damage for the bonds.
So, then all that money that was going to be use from the sale of oil is now seized in the United States.
ASHER: If they can't restructure debt and they can't really default, is there a way out?
Is there any sort of fire escape for Nicholas Maduro right now?
GILLESPIE: I think that is a corner that he has put himself in. Default is inevitable in the view of many people. He can talk about restructuring
and having meetings. He is having meeting in a couple weeks with bond holders. What we're getting to is default and that's when the music is
going to stop for this government, because you essentially strangle the only money that they're going to have.
ASHER: And I can't imagine any more suffering in what people there are going through.
GILLESPIE: It's hard to imagine, I went to a children's hospital where I witnessed a boy who -- I interviewed a boy who eventually died, it is hard
to imagine it getting much worse, but somehow, not my personal they have managed in the most spectacularly tragic and disheartening way to make
things worse. I know it seems like bonds and investors and children suffering in a hospital are two separate things.
ASHER: They're not.
GILLESPIE: But they are very interconnected in the case of Venezuela. This is a country in absolute crisis.
ASHER: Thank you so much. I appreciate you sharing that. It is important to remember that there are real people behind those numbers.
Six weeks after hurricane Maria, most of Puerto Rico still lives in the dark despite the government website showing statistics on the
reconstruction effort. Officials now admit to CNN, they don't really know how many people on the island have power. Leyla Santiago joins us live
from San Juan. You combine these mixed government statistics with the White Fish energy scandal and blame people on in Puerto Rico for not having
faith in their local government?
LEYLA SANTIAGO, CNN CORRESPONDENT: Right. There's a lot of frustration right now and a lot of people feel that bad situation is only getting worse
when it comes to recovery efforts here on the island. You ask the leaders of this island where we stand right now on power restoration and they will
tell you 37.9 but what we found, that number can be misleading, confusing and certainly frustrating for those still in the dark.
What you can't see across the street, people, life without power.
This is the only light that he has, and you can see that it's a little light from like a Christmas tree that looks like and it's powered from a
car battery, which I know it's difficult to see, so I'll actually light it with my cell phone.
Six weeks after hurricane Maria, Luis Rivera now sleeps next to the open window in his home to get through those long hot nights without power.
Satellite images show the island before Maria. After and now, and Puerto Rico's power authority claims there's no way of knowing how many people are
in the dark.
So, we called each municipality, that's 78 of them. We couldn't reach most but of those reached the overwhelming majority say most people do not have
power. Nearly a third say the entire town is in the dark. And yet the power authority and the governor's office insist they're on track when it
comes to power restoration, they say they're at 37 percent on the island but that's the percentage of power generation.
[16:50:00] How much power is being produced, not how much is actual making it to homes and businesses. We noticed government officials changed how
they report the numbers on power initially using, the percentage of clients with power. Something they denied until we reminded them of the tweet by
the governor's mansion retweeted by the power authority listing clients with service two weeks after Maria.
The governor's office said it was a mistake. The tweet was deleted shortly after CNN asked about it when we first approached the governor's office we
were told by both that they've always reported generation.
FERNANDO PADILLA, DIRECTOR OF PROJECT MANAGEMENT OFFICE, PREPA: I'm not sure the fact, but initially, initially what I can state is when we
started restoring critical loads, it's more -- you can identify better. That is as much as I can say, and it was during a very limited period of
time.
SANTIAGO: Since the power authority says those numbers are no longer available, we asked their workers.
Their estimate about 5 percent of customers may have service, not nearly as high as the percentage of generation and Rivera worries a bad situation may
be getting worse as he sees it, politics may now be another reason he and countless Puerto Ricans may not be getting power any time soon.
Let's get back to the politics that many are describing getting in the way here. Many citing that controversial contract with the Whitefish, the
Montana based company that signed a contract with the government here to restore the power of Puerto Rico after Maria. The government has now
announce terminating that contract and the fear among many that are still in the dark tonight is that will continue to delay the process of getting
power back into the homes of the 3.5 million U.S. citizens of this island.
ASHER: A delay is the last thing they need. All right. Leyla Santiago. Thank you so much.
Still to come on "QUEST MEANS BUSINESS," a weighty issue for travelers in Finland. We'll explain why they're facing a weigh in literally having to
wade themselves after check-in. That story next.
(COMMERCIAL BREAK)
ASHER: An airline has started weighing passengers before takeoff. Yes, you heard me correctly. Weighing passengers before takeoff. You see this
passenger here standing on a scale, so Finnair, that's the airline, says it's conducting a trial scheme at the airport because they want to get
accurate data about the weight on flights.
Alanna Petroff joins us live now in London. When I first heard this story I thought to myself, oh, my goodness, they're going to use this information
about peoples' weights to possibly charge them more in terms of ticket prices. Is that what we should be afraid of? Is that what's going on
here?
[16:55:00] ALANNA PETROFF, CNNMONEY CORRESPONDENT: That is not what's going on here. That would be a fear of many people that the larger people
might have higher ticket prices or get kicked off the plane all together. That is not the case. I spoke with Finnair representative and she said,
this is a really business critical thing that they're doing right now.
They need to weigh their passengers to really understand the average weight of the people that fly on Finnair because they need to understand the
weight of the aircraft in general. This helps them know how much fuel they have to put into their planes, how much extra cargo weight the planes can
handle. It helps them calibrate how fast the planes can go and the balance of the plane.
It is a very business critical thing for them. They want to have as exact data as possible. They're even going to be weighing in the winter and the
spring because they'll say that people will have heavier carryon's and more baggage and coats in the winter time, and they want to get a really
accurate picture of peoples' weights.
ASHER: I haven't heard of any other airline doing this.
PETROFF: I mean --
ASHER: Just use the official estimates.
PETROFF: Yes, there are official estimates for Europe, but Finnair says, you know, that research was done back in 2009 and they did their own
research back in the '80s but that is just too old now. Waistlines have changed, people's carryon baggage has changed, and they really want to get
more exact data, so this is what they are doing. And volunteers are going up and doing this. And today they got 180 people to do this.
ASHER: That's impressive. It's voluntary but people are still doing it.
Thank you so much. And that is my friends QUEST MEANS BUSINESS. I'm Zain Asher. See you again next time.
END
