The Authorities Are Telling Everyone In Alaska To Shelter In Place After An Earthquake Struck Near The City Of Anchorage; Marriott Hotels Says Its Massive Guest Reservation System Has Been Breached; It's A Fairly Unhappy Family Photo At The G-20. Trump, Putin and Saudi Crown Prince Exchange Pleasantries at G20 Summit; Marriott Reveals Data Breach of 500 Million Starwood Guests; DJ Khaled, Floyd Mayweather Jr. Charged with Crypto Fraud; Facebook Defends Sandberg Amid Soros Accusation; Dow Rises on Optimism About Trump-Xi Meeting
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: We are in the last hour of trading on Wall Street. At the end of a week and look at where the market has moved up and down throughout the course of the day. Now a strong, good, maybe not too strong, but a rally is well under way. This is just about the best of the day. And it's not just confined to the narrow 30. The S&P is also up, the NASDAQ which again had been bouncing up and down throughout the session. That's now positive. We may end up at 7,300 may arrive on the NASDAQ. If you need to understand, this is what's been moving the markets. Marriott shares are down after one of the biggest data breaches in history. It's a fairly unhappy family photo at the G-20. Investors are waiting for trade talks, which will take place in the next few days. And Facebook is defending Cheryl Sandberg after a new twist in their spat with George Soros. We are live in the world's financial capital, New York City on Friday, November 30th. I'm Richard Quest. I mean business. Good evening. Before we bring you the business news of the day, there are chaotic scenes in the US state of Alaska right now. The authorities are telling everyone there to shelter in place after an earthquake struck near the city of Anchorage. One of CNN's affiliates was knocked off the air when its ceiling came down. A declaration of disaster has been issued by the governor of Alaska. This is what the moments of terror were like in a nearby courthouse as the earth shook. Power lines down, roads are closed, flights have been disrupted. This is security camera footage. As you can see, there you go, shows a family and her dogs scrambling for cover. One witness tells CNN it was unlike anything they'd seen before.</s>UNIDENTIFIED FEMALE: It shook like I have never felt anything shake before. I mean, it was -- it just didn't stop. It just kept going and it got louder and then louder and then things just fell everywhere. Just everything off my dresser, off my bookcases, my kitchen cupboards. There was broken glass everywhere, photos off-the-walls. Very violent feeling.</s>QUEST: Nick Watts has the latest and the report that I saw, Nick, said that the police in Alaska said that there was infrastructure damage.</s>NICK WATTS, CORRESPONDENT, CNN: That's right, Richard. They told us a little while ago major infrastructure damage. They have teams out. The transportation have teams out trying to assess just how bad that damage is. And we are getting the first reports coming in now. Apparently there is a road in downtown damaged by a sinkhole. There is a road near the airport that shutdown due a partial collapse of the roadway. There's another highway closed at Potter's Marsh in Anchorage due a rock slide. Another highway that I'm thinking is about 30 or 40 kilometers from the epicenter also closed down. Power outages of course across much of the city, phone lines down. But we have heard from the two major hospitals in Anchorage, Richard. They say that they have some isolated damage, some water leaks, some cracks in walls and floors, but nothing major and their emergency rooms are still open. But listen, we have had at least eight aftershocks after the initial 7.0 quake which hit just before 8:30 this morning in Anchorage when of course, this time of year, it is still dark. And we hear from seismologists her at CalTech that after an event like this, these aftershocks can go on for months perhaps even years. We've had one so far that's been about a 5.8. That will apparently be about the average power of the aftershock that we're going to see in the wake of this event. So Richard, no deaths or injuries to human beings, to people reported so far. But as we said there are reports of major infrastructure damage, which is still being assessed and of course planes that were flying on their way to Alaska have been turned around. Any planes bound for Alaska that were still on the tarmac elsewhere have been grounded. There is a stop order on that, but the one sliver of good news, Richard, there was a tsunami warning in effect earlier today. That has now been lifted and of course, a tsunami can often be the devastating thing after an event like this.</s>WATT: The tsunami warning has been lifted, but the damage still very much being assessed. Cheers, Richard.</s>QUEST: Thank you, Nick. As we continue now, let's turn once again to our business agenda. Tonight, it could be the biggest financial hack ever. Marriott Hotels says its massive guest reservation system has been breached. Here's what we know, it goes to their Starwood Division, which of course they bought in 2016, Starwood Hotels. Five hundred million guests may have been exposed. It includes their names, phone numbers, e- mail addresses, passport numbers, dates of arrival, arrival departures. It could all have been taken and in some cases credit card numbers and expiration dates were also potentially compromised. They don't know whether codes - CVS codes - were taken as well. This affects the Starwood Group of hotels which Marriott purchased in 2016. St. Regis, Westin, Sheraton, and W Hotels. Marriott says the hackers had access to the Starwood system going all the way back to 2014. The company learned though only last week, and the New York Attorney General wasted no time and is opening an investigation. Marriott stock fell literally out of bed when trading began. It's now down some 6%. The CEO, Arne Sorenson said in a statement, "We fell short of what our guests deserve and what we expect of ourselves." Anna Stewart is in London. It's a very wide breach, and you were telling me earlier on "The Express," this is potentially the largest of such breach.</s>ANNA STEWART, REPORTER, CNN: The scale is incredible, not just due to the number of customers potentially breached, half a billion and that would be the second after Yahoo which was three billion in 2013, but also because of the duration of it. Since 2014 up until September 2018 and as you said the level of detail in there, which was huge. It's people's names, their passport information, and their date of birth. It's everything you would need to commit identity fraud, Richard.</s>QUEST: So Marriott is basically doing what everybody seems to be doing now which is provide some form of reference agency, identity theft agency, but is there anything more they can and should be doing do the experts think?</s>STEWART: Yes, I mean, there's a call center, there's a fantastic website I've been on that gives you a lot of information. There's all sorts of helpful tips about changing your passwords and stuff. But Richard, I think what is going to interesting is what kind of finds will be coming up. You mentioned the New York Attorney General opened up an investigation or will be. The British data regulator, the ICO has now said, it will now launch an investigation, and this falls under the new GDPR regulations and that means potentially mega fines, up to 4% of global annual turnover.</s>QUEST: Anna Stewart in London, thank you. As we head into the holiday busy holiday season, as if you needed to worry more about this, it's clear. No matter where we travel cyber security is in jeopardy. It could be the book tripped with a Yahoo e-mail. Yahoo revealed last year that three billion of its accounts were stolen or perhaps somewhere in Asia. Well, the breach at Cathay Pacific revealed last month put nine million passengers' details in jeopardy. British Airways and Delta already disclosed hacks earlier this year, and now the hotels themselves Starwood spans the globe, probably the largest hotel group, and now half a billion guests have been compromised in the past four years. Larry Clinton is the President of the Internet Security Alliance, he's in Washington. The Marriott breach is serious because by the time these events are happening, companies should be more alert, more on guard. It's not as if we haven't known about this for the past few years.</s>LARRY CLINTON, PRESIDENT, INTERNET SECURITY ALLIANCE: Absolutely. We've known about it for at least 20 years, as long as the Internet Security Alliance has been operating and even before that. The problem Richard is that the system is inherently insecure. So there's much, much more that organizations ought to be doing in order to address these issues on the front end. What we were just talking about is all the things they can do on the back end, put up call centers and stuff like that, but there's much more that needs to be done. And what the board needs to be focusing on is the front end. How do we prevent these? How do we do better internal research on what's going on in our networks? Not just on the perimeter, but internally.</s>QUEST: Okay, so Larry, let's agree on one thing, that no company, least of all a consumer facing company like Marriott or British Airways or Delta Airlines, would ever willingly wish to have something like this happen to them, or indeed would ever think of themselves as being negligent. They think they're doing the best they can. So where are they failing?</s>CLINTON: Well, we have to understand at the beginning, Richard, the system itself is inherently insecure. It was built to be in an insecure system. There's lots of things that we need to be doing in order to protect not just the individual company, frankly individual companies can't protect themselves.</s>CLINTON: They're interconnected to hundreds and even thousands of other companies. We need a system wide effort to protect us. This is not as easy as just coming up with a set of regulations and saying everybody meet these minimum standards. That doesn't work in the cyber security space. The system itself is too vulnerable. We need a comprehensive effort that deals with education of people, that deals with much more aggressive government policy, and I mean economic government policy. And we need much better law enforcement. We successfully capture 1% of cyber criminals. So the criminals are going to continue to attack because they never get caught.</s>QUEST: Right ...</s>CLINTON: So we need a much more comprehensive effort.</s>QUEST: ... but that's because they're out of jurisdictions. They're in jurisdictions where there's no extradition treaties or where there's different legal backgrounds, you can't get them. So look, if I understand you right you're saying there's inevitability in all of this. I mean, and all of this nonsense about getting me to change my password every three days or every five minutes an added letter, and another this and a capital that, does it do any good?</s>CLINTON: Well, passwords are kind of skeleton keys at this stage. It's a good thing to do, but it's not going to protect you. We need much more sophisticated activity. And yes you're right about the legal systems not being in place but we're also not funding our law enforcement agencies, we're not training them enough. We're not doing a lot of things.</s>QUEST: Larry, listening to you speak remind me of listening to the IMF and the World Bank when they tell countries what they should do to make their economies structurally sound. Everybody knows it's never going to happen until a crisis befalls. And that's what you're saying here, that frankly the really hard stuff of structural reform, it ain't going to take place.</s>CLINTON: Well, I think it's beginning to take place. So there are advances being made. We're doing much better in terms of how we do cyber risk assessment. The Department of Homeland Security here in the US has just started a sophisticated program on economics of cyber security, which is where we need to attack this on a structural level. And even, Richard, I have to point out to you, even when we have catastrophes, we don't seem to do enough. We need to be doing things on a much more ongoing basis. We already had Yahoo several years ago, now we're having Windham, we're going to have more until we get serious about solving this.</s>QUEST: It'll probably keep you on the job that you rather wish under those circumstances. So I mean, there's --</s>CLINTON: A good side to everything.</s>QUEST: A good sight, right, yes, absolutely. All right, good to see you, Larry. Thank you very much indeed. And now, one trade deal is already signed. It's between the United States, Canada and Mexico. It's NAFTA reducts. What more is possible if President Xi and President Trump can find an agreement and they are doing it at Argentina.</s>QUEST: So the leaders are gathered of a fashion in the Buenos Aires G-20. It's properly under way now, and the heads of US, Canada and Mexico have already signed their own agreement. The USMCA. While Wall Street is waiting for Saturday's high stakes meeting dinner between President Trump and President Xi. It's a packed schedule. However, as you can see it's often not so much not about the meetings that do take place but those that do not. And anyway the G-20 at the moment could hardly, hardly be described as happy families. I mean, let's just look at some of the rifts that are taking place. You've got Donald Trump and Justin Trudeau over tariffs on aluminum and steel. Donald Trump who's not going to be meeting Vladimir Putin because of Putin's actions over with Ukraine. Donald Trump with the Crown Prince of Saudi Arabia over the murder of Jamal Khashoggi. Well if that was simple enough, so be it. But then you've also got of course the President of Turkey, President Erdogan, again with his problems with the Crown Prince of Saudi Arabia. You've got Theresa May with Macron and with Jean-Claude Juncker. Wherever you look - and by the way missing in all of this is Angela Merkel because her plane as you know had problems. So as you can see, there's just a wealth of issues, conflicts, potential disagreement, oh, of course, I forgot the other big one. President Trump and President Xi of China. Latest in Buenos Aires, Nic Robertson is there. Wherever I look, Nic Robertson, on my chart I just see disagreement, dispute and conflict.</s>NIC ROBERTSON, INTERNATIONAL DIPLOMATIC EDITOR, CNN: You see diplomacy on steroids, aren't you? Look, one of the biggest disagreements and conflicts that's going on behind the scenes here is the very nature of what the G-20 is all about which is getting a joint communique, getting everyone here to agree to something which is sustainable growth and development in the economy and jobs and in the planet, of course. Now, that was addressed by President Macri, the Argentinian President who opened the session here by calling for a dialogue, dialogue, dialogue. He called for the leaders here to act the same way they did at the G-20 in 2008. And of course, we all remember the energy that went into that because the global economic crisis, he is calling them to do that. And pardon away, this was chastising what we are hearing behind the scenes, President Trump wants a final communique that doesn't involve the use of free trade. He wants fair trade. He doesn't want to hear about the global climate accord or about controlling emissions. These are things he doesn't want in that final communique. So why is this so important to the Argentinian President? Yes, it's on his territory. Yes, he's hosting this G-20. The last two big global summits APEC just a few weeks ago and the G- 7 Summit didn't get a final communique in part because President Trump taking the same positions he seems to be on track to take here. So, yes, you can look at all these different little meetings here and then the overarching one isn't agreement yet it appears about the communique that may or may not, we're always in suspense about that, coming out of the end of this, Richard.</s>QUEST: Nic, thank you. Thank you very much for setting that picture for us. So lots of meetings and none of them taking place or somehow, but the meeting we're watching most closely is that between President Trump and President Xi. The US and China, where of course trade has been so much an issue. And in this case the trade war room, our map table has gone. Instead the dinner table. Yes, come and have dinner. Oh and by the way, not only President Xi and President Trump, but there is a third seat or another seat for Peter Navarro whose hard line trade stance makes him an awkward dinner guest, at least as far as the Chinese are concerned. Now, in all of this, we need to think about what they're actually going to be eating. Well, we have a menu on hand that may might like to follow. The menu - they've already had the appetizers, by the way. Billions of dollars' worth of tariffs on either side has hastened the appetite and the digestion. So now they need to agree on the main course. According to Goldman Sachs, in the research note out today, escalation is the most likely coming into this summit. That's because the blend of tit for tats so you can have a rise in the ...</s>QUEST: ... tariff rates from 10 to 25, you can now tariff all of China's goods. That could b be - that is likely be the most obvious choice for the main course. The second option, of course, negotiation. Now, if that happens escalation stays back in the kitchen, ready to come out if negotiation fails to please or goes sour. And finally, potentially, agreement. A harmonious fusion of east and west. Donald Trump says he might pick this. A Chinese official speaking to Reuters says his country is leaning that way, too, leaning towards agreement. And that's how it lifts stocks on Wall Street. Of course, there's always the possibility that they'll just rip up the menu and ask the chef to come up with something else. Joining me now, Greg Autry, who co-authored "Death By China" with Peter Navarro. Greg is now a professor at the Marshall School of Business in California. You heard my menu choices. Which do you think they're going to go for?</s>GREG AUTRY, PROFESSOR MARSHALL SCHOOL OF BUSINESS IN CALIFORNIA: Well, I love the dramatization, but in the end I don't think reaching an agreement with an entity, the Chinese Communist Party and Dictator Xi that has never lived up to a previous commitment is a particularly useful thing to do, so I'm inclined to expect that escalation will be the outcome. But it's always good to talk. I think in the end we need to see behavioral change, not words or documents.</s>QUEST: And reading your latest article on exactly this point, you have great difficulty with the idea of reaching agreement with the Chinese, which in your - you basically say as you just said they've never kept an agreement, but in your recent writings you say they're incapable of keeping to an agreement.</s>AUTRY: Honestly, the Chinese Communist Party is a system which is designed to promote whomever the best back stabber and liar is to the top of the heap. You know, he can call himself President Xi but I don't know when that election took place. So we don't have a system that allows for people who are honest and forthright to get into leadership in China. Consequently, we've got brutalization censorship and the need to rewrite history and the truth in every possible way. So I am not looking forward to seeing any handshakes or documents.</s>QUEST: So put aside, if you will, for just one second your dislike of the regime in Beijing and your philosophical disagreements. They have to do a deal at some point. Now the question is, how much pain do you believe the Chinese economy will be prepared to suffer? I am talking about realpolitik not theoretical, before Xi would either give in to the US President or make significant concessions?</s>AUTRY: That's what it comes down to, and frankly I think they're already pretty desperate. The US economy is hitting on all cylinders, we've got better global growth than any developed country and low unemployment and at the same time China's manufacturing orders are collapsing. Companies are running if the gates to find ways to either change ship or move their production to another country as quick as possible. He knows that, so he doesn't have a lot of time. I think he wants to buy for time, which is consequently why he would be happy to make an agreement or deal and why I think that would be bad policy for the US. Just keep pushing.</s>QUEST: If you look at the companies that will be affected besides Apple, but you look at everything to IO Smith to the various tech companies, to the various manufacturing companies, all the companies that would suffer if this escalates, not least of course Boeing, is it worth it in your view to push this disagreement as far as it's gone?</s>AUTRY: Yes, I mean, I guess you're implying that you think Apple is a US company. I wouldn't understand why you think that since most of their jobs are by far in China and they put their money in Ireland so they don't pay taxes. I don't think that's too relevant to the US economy except for an elite group in San Francisco. For Boeing, I don't think it's a problem because frankly China can't build the planes yet that they need to meet their orders. And if they buy Airbus, then Airbus will have to pull those orders out from people in the Middle East or somewhere else and Boeing will fill those orders. There's way more demand in that market right now than there is supply, so I don't see a problem.</s>QUEST: And if you were - would you wish to be dining with these gentlemen tomorrow night? If so, what would be your choice of dinner?</s>AUTRY: I'd like to be a fly on the wall, frankly. I don't know if I would choose to sit down with Mr. Xi, but my choice would be that the US continue the path until we see behavioral change. Again, there's no point to signing documents or shaking hands with people who are notorious for not honoring their agreements.</s>QUEST: Good to see you, Greg. Thank you for joining us. AUTRY; Thank you.</s>QUEST: The dow is at the best of the day during the final hour of trade. While you and I were talking trade, talking Turkey and China, look at this. Up like - not like a rocket more like a strong performance.</s>QUEST: It's getting a lift from the US Trade representative Robert Lighthizer who predicts success at Saturday's G-20 dinner. As we continue in a moment, more damage control at Facebook. Cheryl Sandberg wanted to know if George Soros was betting against the tech giant, and as for this dinner. Well, I suppose the worst that can happen is that it all ends in disagreement and they blow out the candles eventually. Hello, I'm Richard Quest. A lot more "Quest Means Business" in just a moment. When there's more uncomfortable headlines for Facebook's Cheryl Sandberg. I'll be speaking to the activist who met with her on Thursday to put it into perspective. And if you thought your plans for the festive season was still up in the air, Richard Branson tells us he can get a ship into space or even a spaceship into space if you like, before Christmas. But before all of that, this is CNN and here on this network the facts always come first. We'll start with breaking news. Chaos after a 7.0 earthquake near Anchorage, Alaska. The state's governor is issuing a declaration of disaster as emergency teams deal with significant damage and power outages. Officials are beginning to provide shelters to those who can't reach their homes. Now we have a statement from President Trump on the earthquake in Alaska and he says, "To the great people of Alaska, you've been hit hard by a big one. Please follow the directions of the highly trained professionals who are there to help you. Your Federal government will spare no expense. God bless you all." The class photo at the G-20 that is under way in Buenos Aires and President Trump says nothing was discussed when he briefly spoke to Saudi Arabia's Crown Prince Mohammad Bin Salman. The Crown Prince and the Russian President Vladimir Putin greeted each other with smiles and enthusiastic high fives .. The New York Attorney General is opening an investigation into Marriott after the hotel chain disclosed a massive data breach. The personal information of up to 500 million guests and its starwood brands has potentially been exposed. Marriott says the systems has been compromised since 2014. The music producer DJ Khaled and the boxing champion Floyd Mayweather Jr. have been charged with cyber currency or crypto currency fraud. The Securities and Exchange Commission accused them of breaching federal security laws by not declaring payments. They've reached a settlement with the SEC. Facebook is defending its Chief Operating Officer Sheryl Sandberg. The social media giant confirmed reports that she asked for information about the billionaire George Soros and his financial interest in Facebook stock. Facebook says research was already under way when Sandberg asked if Soros had shorted the stock. The President of the racial justice group Color of Change has met Sheryl Sandberg many times, the latest being on Thursday and before these latest reports emerged. Rashad Robinson was named in the research commissioned by Facebook concerning George Soros becoming -- just before coming on air, I asked him how the meeting went.</s>RASHAD ROBINSON, PRESIDENT, COLOR OF CHANGE: First of all, we are pleased that they finally agreed to release the findings of the civil rights audit, which we and many other groups have been demanding for some time, a full audit. And they haven't agreed previously to actually make that information transparent. But the devil will be in the details, and they agreed to release that by the end of the year. Unfortunately, they weaponized an organization called Definers to go against our organization and pitch nasty and horrible stories about us while we were at the negotiating table working with them. And they still --</s>QUEST: So you're accusing --</s>ROBINSON: Yes --</s>QUEST: You're accusing Sheryl Sandberg and Facebook not only of having disreputable policies in the past, but also of duplicity in negotiating with you while still attacking you through this other company?</s>ROBINSON: Well, it was -- it was reported in the "New York Times" and they haven't denied that this group has done this. So in fact, it's not so much an accusation, it's us actually seeing the facts of the matter and then not actually them reporting back what they've done.</s>QUEST: What about this process of Sheryl Sandberg; the COO asking her staff to look into George Soros who had criticized the company, and she wants to know whether he's shortening it and do basically doing negative research?</s>ROBINSON: Well, that's her prerogative. What she then did with the information, what they did with the information and deciding to use that information to accuse my organization, a black civil rights organization of being some sort of puppet of George Soros is very different than deciding whether or not you're going to have a back-and-forth with a critic, and a public back-and-forth with a critic. For months and months, while we were at the negotiating table in good faith talking about civil rights with Facebook, they were behind the scenes going to reporters with this idea that this Jewish boogeyman is secretly controlling this black organization, that we don't have our own ideas about civil rights. That we don't have our own ideas about social justice, that we must be controlled by someone else. And that for us is the deep problem.</s>QUEST: Somewhat extraordinary in this day and age and we're talking about whether Facebook adopted almost racist and-or anti-Semitic policies.</s>ROBINSON: Well, it's crazy to think that, but this is a huge multinational platform that really lacks a moral compass. They have not had the type of regulations that institutions of that size has --</s>QUEST: Well, hang on. Moral compasses usually don't require regulations. Moral compasses --</s>ROBINSON: So but --</s>QUEST: Require moral background.</s>ROBINSON: Absolutely, but without moral compass, you do need regulation and we have regulation because we can't always trust institutions --</s>QUEST: What do you -- what do you want from Facebook now?</s>ROBINSON: Well, what we want from Facebook is to come fully clean around their civil rights policies, and then to put in place real structures to deal with everything from how their algorithms on their platform can allow you to market housing to folks and say I don't want to market housing to black people. How race was weaponized during the 2016 election and truly come clean about that. To stop making a moral equivalency on their platform between conservatives maybe not feeling like --</s>QUEST: Right --</s>ROBINSON: They're heard around --</s>QUEST: So --</s>ROBINSON: Climate, which is not the same as black people or gay people or women being attacked.</s>QUEST: Fundamentally, are you accusing Facebook of being racist? And by that it goes to the senior management?</s>ROBINSON: I'm accusing this platform of being a platform that puts its hand on a scale of a culture that is deeply racist. I'm accusing them of not giving the type of time and attention to the things that bubble up that are clearly racists. I'm accusing Facebook of not living up to its full potential --</s>QUEST: So racism by -- racism by neglect rather than by overt actions?</s>ROBINSON: Yes, because this is not about whether or not Mark Zuckerberg or Sheryl Sandberg are nice people. I've sat with them, I've met with them, they're nice people. This is about whether the structures and systems inside of that institution actually live up to what we need them to live up to, whether they're fully accountable. I don't really care whether or not they're nice people or not, this is about the systems and structures and them being accountable.</s>QUEST: More to come tonight on QUEST MEANS BUSINESS. To boldly go where no tourists has gone before, and soon many things. Sir Richard Branson is making some big promises about space travel. We're inside Virgin Galactic next.