BUSINESS-01
Thing"; Clinton Foundation to Limit Donations; Lochte Apologizes Over Gas
Station Incident; Controversial U.S. Swimmers Return from Rio; Lochte
Sponsors Monitoring Rio Controversy; Viacom CEO to Quit as Saga Draws to
Conclusion; IEX Started Operating Friday; IEX is Taking on NYSE and NASDAQ;
CDC Issues Zika Warning Over Miami Travel; Bolt to Race for Triple-Triple;
General Electric Continues Olympic Connection; Collectors Look for Brexit
Bargains; Malat: Fall in Pound has Boosted Art Market; London Underground
Begins 24 Hour Service. Aired 4-5p ET - Part 1>
Brennan, Brian Stelter, Cristina Alesci, Don Riddell, Richard Quest >
of a traditional candidate. Trump admitted that at times he said the wrong
things and expressed regret. If Hillary Clinton becomes president, the
Clinton Foundation says it will restrict the type of donations it receives.
The foundation says if Hillary wins it will no longer accept foreign
donations or corporate funding. It started as a late night ruckus at a gas
station and then it became an international incident. Now Olympic swimmer
Ryan Lochte has apologized for not being candid about what really happened.
Lochte's sponsors are trying to make sense of this. Today Polo Ralph
Lauren says it's reviewing the situation and will work with the U.S.
Olympic Committee. The saga of who takes control of Viacom, the company
behind channels like MTV and Nickelodeon, may final be over. The CEO,
Philippe Daumen, is stepping down after talks with chairman emeritus,
Sumner Redstone. Now the New York Stock Exchange and NASDAQ have some new
competition from an upstart, IEX. It aims to take the advantage away from
high speed traders. Pregnant women are being told to reconsider if they
are traveling to Miami. Five locally transmitted cases of the Zika virus
have been discovered in Miami Beach. Usain Bolt is aiming to match his
achievement of claiming gold in the 100-meters, 200-meters, and 4x100-meter
relay at both Beijing 2008 and London 2012. All that stands in his way in
Rio is the 4x100-meters final. Amid the controversies at the Rio games,
the vice chairman of General Electric says the company still loves
sponsoring the Olympics. Jean Malat, the director of the London Opera
Gallery, says the cheap pound means business is booming for painting. The
night train has arrived in London with economic benefits on board. It has
been a long and twisting route for the night tube.>
Latin America; Crime; Media; Stock Market; Art; Transportation; London>
[16:00:00] MAGGIE LAKE, CNN ANCHOR: These guys are used to the sound of bells ringing. Came the big show and The Miz from WWE are ringing the closing bell on Wall Street. Looks like stocks are out for the count. It's Friday, August 19th.
Donald Trump has regrets. The Republican presidential nominee changes his tone as another campaign chief calls it quits.
Ryan Lochte has regrets and he could have more if sponsors drop him.
And after a night of things they might regret later, Londoners have a new way to get home. I'm Maggie Lake. This is QUEST MEANS BUSINESS.
Good evening. Tonight another major staffing change for Donald Trump's presidential campaign less than three months before America heads to the polls. Campaign chairman Paul Manafort has resigned. The move comes just days after Manafort was sidelined in a staff shake-up. Manafort has also been on the defensive amid concerns about his extensive lobbying in Ukraine.
In recent days we've seen Trump's tone shift more in the direction of a traditional candidate. Trump admitted that at times he said the wrong things and expressed regret. On Friday the candidate traveled to Louisiana to tour areas that have been ravaged by flooding. CNN's political senior digital correspondent, Chris Moody, joins us live from Washington. Chris, is this really a new Donald Trump we're seeing once again?
CHRIS MOODY, CNN POLITICS SENIOR DIGITAL CORRESPONDENT: Maggie, throughout this entire campaign we've been told that there's going to be a pivot here, a pivot there. He's going to shed his old ways and move forward and be a new candidate that can appeal to a general election audience, to all of Americans, the Democrats, independents. And then he gives one speech and it's really good. And he reads Teleprompter. And then the next day he says something that blows all of that up.
We saw it after the convention when he said they'll be a pivot. We saw it after the primaries. Now her hearing it again. We did hear his speech last night where he said for the first time really, this campaign, that he essentially apologized to people who he may have hurt along the way. That was something we really had never heard before. The question is can he stay on message, can he stay on task for another week, not just another week, but for 80 more days. That's something that a lot of pundits, a lot of reporters, and the Clinton campaign are pretty skeptical that he'll be able to do.
LAKE: Right, which is why I asked, is it the new Donald Trump once again? Because we feel like we have been here before. But he does have new people who are helping run the campaign. But this is interesting, because it's kind of like a two-headed beast. Isn't it? On the one hand you have the sort of moderate voice of getting him back on message while letting him be authentic, Conway. But then you have Bannon, who to some is sort of, you know, going to promote that outrageous Donald Trump. Can they coexist in an effective way?
MOODY: That's a great question. I think what was clear was that Manafort might have been really good as getting down to the nitty-gritty campaign stuff that need to happen during the primaries to make sure that he won that primary and became the nominee. To do all the strong arming that was required on the floor of the convention in Cleveland, but not necessarily fit for the general election, especially given all the distractions, as it's been called, with his lobbying work for pro-Putin forces in Ukraine. That was something that a lot of reporters were honing in on. The last thing you want is for your aide to be the story and not your message as the candidate to be the story going forward.
Now with something that's very interesting about Bannon, this new person that is joining the campaign. He is the head of this website called breitbart.com, which some might call it a conservative website. It's more of a nationalist/populist website that has been promoting Donald Trump the entire time. He does point to signs that they will be embracing this message of populism. And we also saw it in the latest ad that Donald Trump ran that focused on immigration and keeping America safe. The question really is can Donald Trump focus on those issues instead of maybe saying something that will overshadow the news cycle that everyone focuses on. And not only overshadow the news cycle but some of the controversies of his Democratic opponent, Hillary Clinton.
LAKE: It seems the one area where he might get away with being outrageous is when it comes to attacking Clinton. This is going to get ugly fast, isn't it, Chris.
MOODY: You better believe it will. But the risk is overreaching in attacking Hillary Clinton. This is something that conservatives have done for a long time. There are legitimate issues with Hillary Clinton and her past that need to be discussed and pointed out. But oftentimes there is an overreach, where some have called it the Clinton derangement syndrome. But often times in this campaign Donald Trump has shifted the focus away from her.
[16:05:00] Sometimes he just needs to maybe take a step back and let her be the focus. But he seems kind of incapable of doing that. He always wants the media attention even if it is not good for him in the end. When it comes to a lot of these issues regarding the emails or Clinton foundation, at some point you have to sit back and let that play out and attack here and there instead of always being out front and center. Because that exposes yourself, as has happened with Donald Trump throughout the campaign.
LAKE: That's right, and he does have a lot of ground to make up with. A lot of different groups --
MOODY: A lot of ground.
LAKE: -- a grounds organization that some people feel is still lacking. Chris, will talking about that next week. We'll see how he does over the weekend and circle back with you. Thank you so much.
MOODY: Thank you.
LAKE: If Hillary Clinton becomes president, the Clinton Foundation says it will restrict the type of donations it receives. The foundation says if Hillary wins it will no longer accept foreign donations or corporate funding. The Clintons have faced criticism over foreign donations to her husband's charity while she was Secretary of State. Joe Johns has more.
(BEGIN VIDEOTAPE)
JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT (voice-over): Former president Bill Clinton trying to avoid the appearance of conflicts before his wife's presidential campaign hits the home stretch. Announcing he will resign from the board of the Clinton Foundation if the former Secretary of State wins in November. He has already stopped giving paid speeches and his spokesman says he'll keep it that way if she's elected. And the foundation announcing it will no longer accept corporate or foreign donations. The Clintons have amassed a whopping $155 million combined from paid speeches since leaving the White House in 2001.
DONALD TRUMP, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: The book "Clinton Cash" by Peter Schweizer, documents how Bill and Hillary used the State Department to enrich their family at Americans' expense. She gets rich making you poor.
JOHNS: The foundation has come under scrutiny for its close contact with the State Department while Hillary Clinton was secretary. The Clinton campaign flatly denies any pay-to-play allegations. In fact, the candidate has defended the foundation's work.
HILLARY CLINTON, U.S. DEMOCRATIC PRESIDENTIAL CANDIDATE: We have so much that we're proud of. And I will put that up against any of the innuendo and accusation coming from Donald Trump.
JOHNS: But Republicans jumped on the new announcements. The RNC releasing a statement saying, "If everything was above board while Hillary Clinton ran the State Department as the Clintons have said, then why change a thing?" Clinton today trying to steal Donald Trump's spotlight, who is visiting Louisiana, after calling the governor there. Clinton taking to Facebook to plead for help for the flooding victims, writing, "My heart breaks for Louisiana, and right now the relief effort can't afford any distractions."
All this as new details are emerging on Mrs. Clinton's controversial email server, "The New York Times" reporting that she told the FBI it was Colin Powell, her predecessor at the State Department, who advised her to use personal email. The "Times" sites an excerpt from Joe Conason new book about Bill Clinton, says that at a 2009 dinner party, hosted by former Secretary of State, Madeleine Albright, Powell recommended Clinton use her own email as he had done, except for classified communications, which he sent and received via state department computer.
Today, Powell's office responding in a statement that he had no recollection of such a conversation, but did write Clinton a memo regarding his use of a personal AOL account, saying, "At the time there was no equivalent system within the department. He used a secure estate computer on his desk to manage classified information."
(END VIDEOTAPE)
LAKE: It started as a late night ruckus at a gas station. Then it became an international incident. Now Olympic swimmer Ryan Lochte has apologized for not being candid about what really happened. Police in Rio say Lochte's story about being robbed at gunpoint on Sunday was a lie. They say it was Lochte and his teammates vandalizing a gas station that triggered the trouble. One of them will pay almost $11,000 to charity before leaving Brazil.
Lochte, who is already home now, "I should have been much more responsible in how I handled myself and for that am sorry to my teammates, my fans, my fellow competitors, my sponsors, and the hosts of this great event." What the apology doesn't clear up is the original claim that he was robbed. CNN's Nick Paton Walsh is in Rio. So Nick, it does look like this unfortunate incident is starting to wrap up. But do we really know what transpired? There was a gun at the scene but everybody seems to have a slightly different story.
NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well in short, yes, we know there was urinating behind a place there is a building in that gas station. It was near the toilet. They didn't use the toilet. We don't know why that happened. We know a poster was probably torn off the wall. And then, yes, we get into this confusing scene where Brazilian police say there may have been firearms drawn, but money was handed over voluntarily as compensation by the swimmers to the security guards there for the damage they had done. The U.S. OC says something similar and refers to firearms being on them.
[16:10:00] Lochte, now talks in his statement, probably the most interesting line in it, "It's traumatic to be out late with your friends in a foreign country with a language barrier and have a stranger point a gun at you and demand money to let you leave." That seems sort of suggesting, well I still think I was robbed with people with weapons, but slightly going back away from the idea that it was men dressed as police. They held a gun to his forehead and demanded money, as the original story said. Frankly, the fact that it's taken him for five days for him to put this statement out that begins with the fact he should have been more careful and candid in how he described the incident and begins to detract credibility from what we've been hearing from him. And I have to say sadly now, you know, there are no winners from this.
Mr. Lochte's reputation is taking a severe pounding in the U.S. media and here. Brazil has had a focus on its petty crime program, which often actually is extraordinarily serious. Lives are lost because of petty theft here. And that's also why Brazilians are taking quite an affront to the idea that Mr. Lochte, as his accusers suggest used armed robbery to embellish his alibi. That basically they turned up. They were drunk. They messed around. Were pretty vulgar and then when trying to pay their way out of it, the next morning sort of made the story sound slightly more in their favor.
At the end of the day we are now looking at one U.S. swimmer is possibly still here, Jimmy Feigen. The other lot are back all in the USA now. Mr. Feigen paid $11,000 as part of a settlement really, in court with his lawyers and a judge. A good news story in all of this, that money is going to a training center, a judo training center run by a charity where the real idols from these Olympic Games found some of their training. Rafaela Silva, a Brazilian judo gold medalist here, idolized in the Brazilian media. Someone who works hard all their life to put themselves in that position. It turns out there may be more success stories from that same gym, because of this, frankly, ridiculous 10, 15 minutes' worth of ill behavior by these four swimmers
LAKE: And Nick, thank you for ending the week with the bright spot, and silver lining of something we have had to spend an awful lot of time talking about and not enough of some of the unsung heroes at these Olympic Games. Nick Paton Walsh, for us, thank you.
Now Lochte's sponsors are trying to make sense of this as we all are. Today Polo Ralph Lauren says it's reviewing the situation and will work with the U.S. Olympic Committee. Speedo says it is also following the story. How could it not? It was on the front pages of some tabloids. And in the past few minutes, the mattress maker Airweave says, while it does not allow unlawful behavior, it will keep Lochte as an ambassador.
CNN sports analyst Christine Brennan is in Rio. Christine, thanks for joining us. Do you think this will have a lasting negative effect on Ryan Lochte? It's been such a mess, and clearly some grave mistakes were made. How do you think this will all be remembered?
CHRISTINE BRENNAN, CNN SPORTS ANALYST: Maggie, I think it's going to have a lasting impact on Ryan Lochte, and it's not going to be good. First of all, he's 32 years old and he's certainly on the back end of his swimming career anyway. I just can't imagine any of these sponsors re-upping, if they decide to stay with him. As you mentioned, one has. The other two monitoring the situation. When one says that they're working with the U.S. Olympic Committee.
The U.S. Olympic Committee, I've been reporting, is going to eventually suspend him and the other three. It may well be the U.S. Olympic Committee working in concert with USA Swimming, which is the national governing body for the sport. Bottom line is, if you're working in concert with those two organizations, they're going to suspend Ryan Lochte for some period of time, maybe indefinitely. They're going to suspend the other three swimmers. So that doesn't sound good. It sounds like they may well take their cue from the USOC. And when the USOC suspend them, maybe that's when they will exit that relationship.
LAKE: Yes, Christine, what about the others? Their younger aren't they? Can they bounce back from this? The golden boy at the Olympics, Michael Phelps, has had his struggles. He's apologized. He's owned them. And he has been able to come back. We have seen this before. Do you think they can repair the situation?
BRENNAN: That's a great point, great question. Absolutely. They're very young. Let's say they're suspended for six months or a year. If they're going for the 2020 Olympics, that means they would have another three years or so to get ready. And I think everyone will be rooting for them to make amends. Especially if they continue -- start actually -- to do the right thing. Obviously Feigen with the $11,000 contribution here, the others I would imagine would eventually do that. The apologies that are certain to come, and I think Ryan Lochte's apology was part apology, part explanation. It was not like the Michael Phelps apologies we've seen which were sort and succinct. I think Lochte needs a better apology writer. But if these other three, as we're calling them, the other three, if they do all the right things and serve whatever ban they get.
[16:15:00] I think they will be welcomed back in USA Swimming, and I think they should. Because a big mistake, huge mistake and a big PR nightmare for the U.S. Olympic Committee, but at the end of the day they certainly deserve to have another shot provided they show how serious they are about making amends.
LAKE: Yes, and Christine, I don't mean to downplay the incident at all, but you've covered so many Olympics. These are highly competitive, highly strung athletes who have just had the thing they've been training for, you can imagine they've been let loose. I can only think of what has transpired over the years in Olympic Villages and in local cities. Why do you think this -- and we've heard rumors, I'm not going to repeat them, but why did this rose to the international level it did? Is it because of the security concerns that were behind the scenes and so prevalent in the lead- up to Rio?
BRENNAN: Maggie, it rose to this level because Ryan Lochte talked about it. Which is just unbelieve to me. As you look back over these five or six crazy days, if Ryan Lochte's mother doesn't say something and if Ryan Lochte doesn't say something, we would never have heard of it. Just an unbelievable unforced error by the Lochte family to even bring this up.
Why did they do that? If they didn't do it, to your great point, then this would have just gone on and we never would have known. And yes, the athletes have every right to celebrate after their Olympic competition. There's dozens, probably, outside the window right now doing that. But the difference is, first of all, obviously the drunkenness and the misbehavior, but no one would have known had Ryan Lochte not kept it -- not opened his mouth. That is a good question that I promise to ask Ryan someday.
LAKE: I bet you will. And listen, a learning lesson for everyone. I'm sure there are enthusiastic Olympians that are tamping it down a little bit in the wake of that. Christine, it's been great to talk to you throughout the games. Enjoy the very last weekend. Thanks so much.
And later this hour we'll return to Rio where Usain Bolt is just one race away from capturing the coveted triple-triple.
Now, an elderly billionaire, his powerful daughter, and a boardroom drama with billions at stake. The saga at Viacom seems to be heading for a finale. We'll explain next.
(COMMERCIAL BREAK)
LAKE: The saga of who takes control of Viacom, the company behind channels like MTV and Nickelodeon, may final be over. The CEO, Philippe Daumen, is stepping down after talks with chairman emeritus, Sumner Redstone. These two could not agree on who would lead the company. Although things were complicated from the start. Redstone is 93 years old and there have been questions over his health and ability to make decisions. On top of that all, there was his daughter, Shari, Viacom's vice chair. She helped get two of Redstone's girlfriends removed from her father's will and has been accused of trying to manipulate him to doing what she wants with his empire.
[16:20:00] CNNMoney, Brian Stelter, joins me now. Brian, this has captivated people not only because this is a giant of the media world, but it's played out like some sort of -- somebody said, the "Bold and the Beautiful", "Knot's Landing", "Dallas" all rolled into one. It's been extraordinary.
BRIAN STELTER, CNNMONEY SENIOR MEDIA CORRESPONDENT: A Viacom-style reality show. It is all over except for the signing of the contracts. We expected an announcement from Viacom today. Now the markets are closed. It looks like it's not going to be tonight. Maybe it will take until money. This is really just all about the lawyers at this point working out the final details. But Billy Daumen is leaving. He is Tom Dooley is the COO. Will become the interim CEO. Will see if he can hold onto that job permanently or if someone else comes in. Bottom line, the big winners here are the Redstones.
LAKE: Did it solve the question of whether he's mentally competent at this point? Because that's always been in the background here. People thinking that Shari is controlling him and he doesn't really have the capacity to make decisions. Did that factor into any of this? Is this also saying, that yes, he is?
STELTER: Because no court has found him to be incompetent. He is for lack of a better definition, competent.
LAKE: But they weren't forced to prove -- this sort of shielded them from having to go through the public exhibition.
STELTER: Yes, that's probably one of the most important details of this story. The fact that now the lawsuits will be resolved. Now Sumner won't have to show up in court. Doctors won't be called in. Psychiatrists won't be called in. That's what a lot of this has been about. Sumner has been described as a living ghost, as very frail, almost unable to speak. The descriptions have been quite sad. And yet he is, by all accounts, still able to understand what's going on. So that has been an issue for many months. This has gone on for the better part of a year. And now, of course, we're coming up on the end of the third quarter for this company, this beleaguered company. We'll see if Dooley can do any better than his predecessors and try to turn this company around.
LAKE: And what do they need to do? What is the feeling of what's need aside from some clarity about the future and who is running it, what do they need to do to get back to any semblance of the past, I suppose?
STELTER: I don't think I have a great answer to that question and I'm not sure they do either.
LAKE: It's such a changing landscape, by the way, complicated enough, but then put it against the changes going on.
STELTER: These are old line TV executives desperately trying to reorient for a much more digitally oriented world. Some activist investors say, go higher big-name talent. Try to woo back the John Stewart's who have left channels like Comedy Central and MTV. But that's not really the answer to the underlying problems. The underlining answer is that the ground is shifting dramatically beneath Viacom's feet. Viacom might be in the worst position compared to other media companies, but the same challenges is faced by Disney and Time Warner and others. Viacom, though is in uniquely difficult position, because it appeals mostly to young people with its cable channels. And those are the ones that are finding alternatives like Netflix and Snapchat all the time.
Yes, we'll see if they can -- I guess in addition to big top talent, see if they could get a hotshot manager in there to see if they can right the ship. Brian, thanks --
STELTER: That may not be the solution either.
LAKE: Yes, but certainly they've got to try something. At least the legal stuff is out of the way for the time being.
STELTER: That's right.
LAKE: Brian Stelter, thanks so much.
STELTER: Thanks.
LAKE: U.S. markets closed lower Friday, the Dow lost 46 points as investors worried about whether the Federal Reserve would raise interest rates as early as September. We heard some hawkish comments coming out of Fed officials. That was the picture from the New York stock exchange. Now it has some new competition from an upstart all day IEX. It aims to take the advantage away from advantages of high speed traders. It's a new exchange. It began operating as a national security exchange on Friday. Cristina Alesci sat down with the man behind it.
(BEGIN VIDEOTAPE)
CRISTINA ALESCI, CNN CORRESPONDENT (voice-over): Meet Brad Katsuyama. His business is based on convincing you there's something majorly wrong with the stock market. The heart of American capitalism. He's one of the stars of a Michael Lewis book "Flash Boys" about that very topic. "60 minutes" did a feature on him. He had intense live debates on CNBC.
UNIDENTIFIED COMMENTATOR: It's a yes or no question. Do you believe it or not?
BRAD KATSUYAMA, CEO, IEX GROUP: I believe the markets are right. And I also think that you're a part of the rigging. If you want to do this let's do this.
UNIDENTIFIED COMMENTATOR: I really do.
KATSUYAMA: You know, I had never been on TV until "60 minutes." it's changed my life in both good and bad ways, I guess. But 98 percent of it has been positive, a huge amount of support. I tried to lead a relatively low key life. Having people, you know, hate you is an interesting byproduct.
ALESCI: Now two years after being in the spotlight, his company, IEX, is officially taking on the big players, the New York Stock Exchange and NASDAQ. It got SEC approval to become a national securities exchange and tickers will start trade publicly on August 19th. Why? Because Katsuyama says certain traders in the stock market have an unfair advantage. They have technology that allows them to see prices before everyone else.
[16:25:00] And then the computers they use to trade can act on that data. He says the existing exchanges have a conflict of interest, because they sell products that let these investors conduct faster trades.
KATSUYAMA: The reason we started IEX is because the exchanges themselves are the enablers of what's happening. The exchange is like the referee. And the buyers and the sellers are like the two teams that are playing. The referee should have no bias on whether one team wins over another. They really shouldn't. But in the market, the exchange as the referee is selling an advantage, that they know a certain group of people can utilize versus another. In many ways the referee is biased in the outcome. It hurts the integrity of the game.
ALESCI (on camera): That's only if the high speed trader is using your platform.
KATSUYAMA: That's right. They don't have to. They don't have to if they don't want to.
ALESCI: they can go to the New York Stock Exchange and get a proprietary feed.
KATSUYAMA: And I think one of the big push is to approve IEX was to say that, you know, our model depends on people choosing to use our platform. that our model depends on people choosing to use our platform.
ALESCI: Can Wall Street, do you think, regain the public trust?
KATSUYAMA: I think Wall Street will eventually regain the public's trust. Wall Street -- it's an essential function to the economy. It can't be automated in many ways. A lot of times we come in here and think what we're fighting for is more than just a stock exchange. I think what we're fighting for is a much broader story. It is about regaining trust. It's about more transparent markets. In many ways it's trying to do the right thing.
(END VIDEOTAPE)
LAKE: Well, the competition isn't too happy about this new exchange. In a letter to the Securities and Exchange Commission back in November, the New York Stock Exchange said IEX would be an unfair, complex, and opaque exchange.
Pregnant women are being told to reconsider if they are traveling to Miami. Five locally transmitted cases of the Zika virus have been discovered in Miami Beach, one of the biggest tourist destinations in the United States. Now the Centers for Disease Control says pregnant women and their partners should consider postponing any nonessential travel in the entire Miami-Dade area. Joining me now is the CDC's director, Tom Frieden. Tom, thank you for being with us. How worried are you about this development?