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QUEST MEANS BUSINESS
U.S. Winter Travel Chaos; New US Flight Rules Blamed; Airline Winter Readiness; US Markets Rally; European Markets Up; JPMorgan Madoff Settlement; Samsung Profit Decline; Consumer Electronics Show; Connectivity in Electronics; Turkey Police Purge
Aired January 7, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
MAGGIE LAKE, HOST: It is the first rally of 2014. US markets are up. You're watching the closing bell on Wall Street. It's Tuesday, the 7th of January.
A brutal blast of arctic air freezes flights, travel plans, and brings dangerously cold weather to North America.
Ericsson's chief executive tells us now that we are all connected, it's time our cars are, too.
And a police force purge. Turkey removes hundreds of officers from their post.
I'm Maggie Lake, this is QUEST MEANS BUSINESS.
Good evening. An arctic blast sweeping across the United States is wreaking travel chaos, grounding more than 2,000 flights across the country. Travelers have been left stranded on roads, on trains, and in airports as freezing cold temperatures bring transportation grinding to a halt.
It has been a perfect storm for US airlines. The brutally freezing weather comes three days after the introduction of controversial new pilot rules. Let's get the latest on just how bad things are out there. Zain Asher is live for us at LaGuardia Airport. Nobody wants to be at an airport right now, Zain. What are we seeing?
ZAIN ASHER, CNN BUSINESS CORRESPONDENT: Maggie, yes. We just got off a phone call with JetBlue. They're telling us that, listen, passengers are actually still stranded, especially in the Caribbean, but they are adding more sections, which basically means more non-scheduled flights to bring back passengers to the northeastern United States.
They're saying that they also hope to have a majority of their passengers rebooked by the end of the week. But JetBlue really wanting to explain to us why this particular winter storm has proven so difficult for them.
What they're saying is, listen, 80 percent of their flights originate or touch down in New York City or Boston. And so, when you have a massive winter storm in the northeast, it does affect them disproportionately. They also mention that JFK was closed for several hours for crews to remove snow from the tarmac, so that made things a little bit trickier as well.
But also, these new FAA rules requiring pilots to have additional rest time. That made things trickier because the new rules went into effect on Saturday, and so they had to implement these new rules right smack bang in the middle of a winter storm. But JetBlue really saying that they are so sorry and they're focused on retaining customer loyalty. Maggie?
LAKE: Zain, it's true they just went into effect, but they've known they've been coming, so I'm sure that's not going to be the end we've heard of it. Meanwhile, what about the passengers --
ASHER: Two years.
LAKE: Yes, two years they've had to -- what about the passengers who have been stuck there. Some of them have been trying to travel for days, haven't they? How are they holding up?
ASHER: Right. So, I was just at a JetBlue check-in counter, I was talking to customers, I've been talking to passengers all morning and just hearing their stories, one many saying to me that his flight was actually rescheduled four different times.
Another elderly couple sharing with me their travel story saying that they were originally scheduled to leave from LaGuardia, and then last minute, JetBlue switched it to JFK. So that really threw a wrench in their plans.
But one woman also saying to me that it was very difficult to actually get a live person on the phone when she was calling JetBlue. She said she had to actually call 30 different times before she got a hold of someone. Take a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEUNIDENTIFIED MALE: So, we had a flight at 10:00 and found out it was canceled. And we tried to call JetBlue, they wouldn't answer, they kept hanging up on his. They said "your call's going to end now," they hang up, they hang up.
Thirty calls later, I just gave up, and then we finally tried one time last night around 7:00, and then they finally answered the phone, but it was an hour and a half wait on the phone.
(END VIDEO CLIP)
ASHER: JetBlue also emphasizing like with that phone call that, listen, they have had a little bit of trouble with their automated system. So if you are rebooking, do not do it by the automated system. Wait no matter how long it takes until you get hold of a live person.
They're also saying that they are going to be refunding passengers as well, and they've got this new compensation plan whereby if you incurred extra expenses because your flight was canceled so many times, they will be trying their best to reimburse you for those as well. Maggie?
LAKE: I hope that eases the pain a little bit. All right, Zain, thank you so much.
Well, as Zain mentioned, JetBlue is claiming new rules for pilots have made this disruption even worse. Now, what exactly are those rules? Well, the Federal Aviation Authority now demands that pilots take ten hours of rest between shifts, allowing for eight hours of uninterrupted sleep.
Now, in the past, they could be given a minimum eight hours to rest, travel to and from the airport, shower, eat, and sleep, everything in those eight hours.
The pilots will be limited to flying eight or nine hours maximum, depending on their start times, and they must also have 30 consecutive hours of rest each week. That's 25 percent more than previous requirements.
Well, the website Flightaware has been monitoring the situation. Its CEO, Daniel Baker, joins us from Houston, Texas tonight. Daniel, thank you so much for being with us.
Listen, we heard what JetBlue had to say. Without sort of dwelling on that particular incident too much, what are these airlines -- I mean, it is an extraordinary situation, but it's also the winter. We get winter storms. You would think at this point they would anticipate this. What are some of the challenges they have to deal with that would lead to this sort of problem?
DANIEL BAKER, CEO, FLIGHTAWARE: Well, the airlines are used to winter storms, and I think that it has gotten better over the last few years. Airlines have started to say look, the weather's going to be really bad, let's go ahead and cancel flights 18, 24, 36 hours in advance. Which at least lets passengers know ahead of time by e-mail maybe instead of going to the airport.
But this storm was particularly unique. You're right, winter storms are common, particularly in the northeast, and certainly in the midwest as well. But we're used to seeing meteorologists saying here's what the winds are going to be, here's how many inches or feet of snow are going to come.
And the airlines and airport operators are able to take that information and figure out on average what the impact is going to be, what time of day it's going to hit, and cancel flights accordingly.
This one was unique in that a lot of the conditions were due to very low temperatures and due to a storm that kind of hit multiple times in the course of a week. There were essentially two storm systems coming through.
And there wasn't basically this one monumental event where for a day or two ahead of time, everyone had notice that there was going to be, maybe, feet of snow on the ground. So it just made it a lot more difficult to anticipate.
But airlines did cancel a lot of flights ahead of time. And the problem is just that things didn't recover as quickly as anticipated, so --
LAKE: Right. And of course, this coming during the holiday season --
BAKER: -- that's where things started to get a little bit surprising.
LAKE: -- when so many people are traveling as well. It is kind of the perfect storm. A lot of talk about these new FAA rules about the new minimums for sleep for pilots. Given what we've seen -- and yes, JetBlue grounded its entire fleet. Other airlines, though, many of them have canceled flights. Does it seem like we need more personnel?
BAKER: Well, I think that there are going to be more pilots that are working. Basically, all of the US passenger airlines are hiring and making more of their reserve pilots available because basically you can't operate the same operation and require more rest from the crew. So, that's coming into effect.
I think it was really bad because the airlines are trying to optimize that and meet the rules and make sure that the pilots get the appropriate amount of rest without going overboard and wasting everyone's money, which would basically be money passed onto the passengers in fares.
However, this hit at a time -- when a storm hits, you need every man-hour you can get. So, it's very difficult for the airlines to try and both optimize crew but then get every last man-hour out of the crew when they don't know how long these flights are going to be delayed.
So, I think they ran into a lot of trouble where they weren't sure how long is it going to take to get this plane out of the gate? How long is this flight going to hold due to the weather while they plow the runway?
And all of that is counting towards duty time. And with the pilots requiring more rest, which is an important safety measure, it yielded even more cancellations, unfortunately.
LAKE: A new system that we're all going to have to get used to. Daniel Baker from Flightaware, thank you so much for joining us today.
Well, Alison Kosik joins us live, now, from the New York Stock Exchange. Alison, you and I had the very wise idea to go with the turtlenecks. It's absolutely freezing today.
LAKE: But a nice, warm, fuzzy feeling on Wall Street, finally, I understand.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Oh, yes, Wall Street, Maggie, finally saying happy New Year about seven days late. The Dow popped right out of the gate this morning, it held with the Dow ending 105 points higher. The S&P, NASDAQ also ending higher.
After so many down days, there's bound to be a gain. And it's really been a slow start for stocks. But despite the rally today, analysts say trading is still cautious. We're of course waiting on the big jobs report on Friday.
Some focus was on JPMorgan today. The bank settled with the DA office here in Manhattan to pay $2 billion for those settlement. Prosecutors accused the bank of ignoring red flags about Bernie Madoff's crimes. We did see JPMorgan shares end a little over 1 percent down. Maggie?
LAKE: Triple-digit gain, we'll take that. Alison, thank you so much. Now, European markets ended the day up with bank stocks rallying, actually. Shares and the euro clawed higher end of season. Southern Europe did especially well.
Now, International Airlines, the parent company of British Airways, was also flying high after it unveiled upbeat traffic figures. It rose 3.4 percent in London.
Well, JPMorgan Chase has agreed to pay $1.7 billion to settle criminal charges relating to its dealings with Bernard Madoff, as Alison just mentioned. US authorities say they'll use the funds to compensate victims of Madoff, the convicted mastermind of the biggest Ponzi scheme in history.
Federal prosecutors had accused JPMorgan of ignoring red flags about Madoff's crimes and allegedly turning a blind eye to his massive fraud while acting as his banker.
(BEGIN VIDEO CLIP)
PREET BHARARA, US ATTORNEY: Today's charges have been filed because in this regard, JPMorgan as an institution failed and failed miserably. In part because of that failure, for decades, Bernie Madoff was able to launder billions of dollars in Ponzi proceeds essentially through a single set of accounts at JPMorgan.
(END VIDEO CLIP)
LAKE: Paul La Monica, assistant managing editor of CNN Money, has been following this story for us. He joins me now live. Paul, this is interesting. JPMorgan did come out and say, listen, we could have done better. But they also struck a little bit of a defensive tone, saying we missed this, we were misled, but so were thousands of other people. Don't they have a point?
PAUL LA MONICA, CNN MONEY ASSISTANT MANAGING EDITOR: I think there is a certain validity to that. Obviously, JPMorgan was not the only entity that was duped by Bernard Madoff. But JPMorgan's probably getting tired of being always in the spotlight for having to settle and pay billions of dollars in fines, so I'm sure they're defensive for that very reason as well.
LAKE: Yes. That -- listen, I think the total bill is above $20 billion right now for the various things, some of them related to the financial crisis, some of this to Madoff. Does this, any of this -- they can afford it, that's clear -- does any of this have a lasting impact on the bank's reputation or Jamie Dimon, the CEO?
LA MONICA: I think at this point, it almost seems safe to say that the answer is no. JPMorgan shares did fall today while the broader market rose, but the stock hit an all-time high yesterday, not a 52-week high, an all- time high. So, it's completely recovered from the worst of the financial crisis in 2008 and 2009.
Jamie Dimon still has the backing of shareholders to be both chairman and CEO. I think Dimon probably is no longer the golden boy of banking the way he used to, but clearly he's not going anywhere anytime soon. I don't think he has that much to worry about.
LAKE: Yes, investors looking past it, looking toward the recovering economy, really, and the fate of banks there. Of course, the regulators, Preet Bharara's office, they want to get money back, give it to the victims. But part of this is also to change the behavior of banks, make sure they do things differently in the future.
Do we think that's going to happen? Can we assume that they are operating differently, that they're going to ask for a lot more information, they're going to be looking a lot more closely at their dealings with clients after this? Or is that wishful thinking?
LA MONICA: It might be wishful thinking. One would hope that that is the case. I think as a consumer, most consumers know that banks did learn their lesson from the credit crisis in 2008 and anyone trying to take out a mortgage loan knows that it's a lot tougher to do so now than it was when all you probably needed was a maybe valid social security number and a pulse.
LA MONICA: Maybe not even a pulse.
LAKE: Maybe, yes.
LA MONICA: Pulse might not even have been required to get a mortgage back in 2006. So hopefully the banks will be as critical looking at some of their clients, big-name clients as they are with consumers.
But I'm not 100 percent sure that the banks are going to change their behavior completely. Just look at the way that many of the banks are able to try and skirt behind some of the regulations like Dodd-Frank.
LAKE: That's the thing --
LA MONICA: Look at the London Whale. No --
LA MONICA: -- it wasn't a trading lose, it was a hedge.
LAKE: And there will always be individuals, bank executive point out, that are going to go the wrong side of the law. Can banks make money if they're playing by the rules? This is the existential question now, what the business of banking is.
If they play by the rules, if they do it the way they're supposed to do it, if they get back to the business of lending, is that going to give us the kind of returns we saw when they were involved in some of these more exotic markets? When they were maybe not looking as closely at their dealings?
LA MONICA: Probably not. The -- any investor that thinks that the banks are going to be like tech stocks, which they essentially were in the mid 200s, those days are probably done.
But I think as long as banks operate in a normal -- even though it's boring, plain vanilla way of lending out money at a certain rate and taking in deposits at another rate, it's not the end of the world. That's how bank stocks got by for decades.
And when you look at how the stocks have roared back to life, I think investors are happy about the fact that most of the legal settlements are now in the rear-view mirror.
LA MONICA: They're not that worried about regulation. Because the other thing is that most of the banks are now financially healthy, they're starting to pay dividends again, they're raising them.
LAKE: I was just going to say, utilities that pay dividends aren't such a bad thing --
LA MONICA: Yes.
LAKE: -- a session's going to --
LA MONICA: Utilities aren't sexy --
LAKE: -- blow up the financial.
LA MONICA: Exactly.
LAKE: Global financial system.
LA MONICA: Utilities are boring stocks, but there are worse sins in this market than being a boring, income-producing stock when bond rates are still near historical lows.
LAKE: Exactly. Something that pays you every quarter is not a bad thing. All right, Paul, thank you so much.
LA MONICA: Thank you.
LAKE: Well, we are at the Consumer Electronic Show in Las Vegas. Ericsson CEO Hans Vestberg tells us how his company is going to improve our time behind the wheel. We'll also have a special guest joining us live in a few moments.
LAKE: Samsung is on track to report a lower operating profit for the first time in more than two years. The company expects a profit of $7.8 billion for the last quarter of 2013. That is down 18 percent from Q3. The numbers are preliminary. Samsung will release an official report later this month.
Meanwhile, the annual Consumer Electronic Show is underway in Las Vegas. Samuel Burke has a very special guest with him right now. And Samuel, we recognize this face. What's going on?
SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: Well, I'm here with 50 Cent, Curtis Jackson, what do I call you? 50 or Curtis?
50 CENT, RAPPER: Whatever you're comfortable with.
BURKE: All right, I'll call you 50, because that's how I know you. You're here promoting some new headphones. But before we get to those, this isn't your first time investing --
50 CENT: Right.
BURKE: -- in headphones, is it? You had a failure before? Can I call it that?
50 CENT: Well, it depends on how you view it. For me, it was learning experience. I worked with a small company, like -- I partnered in some company.
BURKE: And you invested your own money in that company --
50 CENT: Right.
BURKE: -- called Sleek Audio, right?
50 CENT: Along with other investors, like TBG and other guys that put finances into the actual project. And I -- on the marketing, of course, when everything doesn't -- evolve the way you actually thought it would --
50 CENT: -- that you would see the person is the visible person publicly as an actual loser in the situation. But --
BURKE: But you learn from that situation --
50 CENT: Yes, yes.
BURKE: -- and you're not giving up on headphones because here you are --
50 CENT: Oh, no.
BURKE: -- again at CES. We've seen you here years before. So, you learned from that situation, and you're here pushing these headphones --
50 CENT: Yes. Since that situation, I have acquired a whole -- new company, Kona Audio, and launched SMS Audio. And I've had the success that I've had to this point. We've launched in 58 countries.
BURKE: And it's called -- the line is called The Street by 50 Cent.
50 CENT: The Street by 50 Cent.
BURKE: These are the headphones. What are the price ranges?
50 CENT: Well, they range from $179.95 to $300 -- $300 in certain actual headsets. But it's the functionality of the actual headset that make it more expensive at different points.
BURKE: So, you're getting a lot more out of these than you get with the headphones that come with your iPhone, for example --
50 CENT: Right.
BURKE: -- or with this Samsung phone. But you're competing against some tough callings, against people like Bose, against Dr. Dre --
50 CENT: Right.
BURKE: -- another rapper who has headphones, Beats. So, what gives you the edge, you think?
50 CENT: Well, Dre's -- he's not even a rapper anymore. He's like an icon, he's a legend.
50 CENT: Beats is a hugely successful company, and the fact that we're put in competition right away is just the way people's minds work. Because our culture is so competitive that they do this. Because he's really my friend. I love him. He gave me one of my biggest records of my career.
BURKE: So, are you trying to model yourself after him and move from rap into more -- into business?
50 CENT: Well, I've always been actively involved in business since I had the opportunity to, when I acquired the finances that allowed me to make investments that interested me.
BURKE: But was that a tough transition, going from the kind of tough image that you had as a rapper and then trying to go into more of the corporate world?
50 CENT: It actually allowed me to go first. See, with Vitamin Water at that point, everything that I was doing was taboo. It was considered as sellout to be connected to a major corporation.
50 CENT: And then for me to connect myself to the company and have equity involvement in it when it sold to Coca-Cola, it changed their viewpoint when they see the finances that come with it.
BURKE: So, who's your business idol, then? Do you look up to Dr. Dre, or is it someone like Russel Simmons? Who's the idol for you in terms of going from music to business?
50 CENT: Well, I have in different places -- like I have hero companies, like Zara, because they produce their own clothing and retail it.
50 CENT: I like the idea of just some of the structure, some of the business structures, the different things the companies do. But it's not a person, it's just each venture, what they decide to do.
BURKE: And can I use some of these headphones to listen to a new album from you anytime soon?
50 CENT: This year.
50 CENT: This year. First quarter, so --
BURKE: When's it coming out?
50 CENT: -- between the end of this month and February, you'll hear something from me.
BURKE: All right. Well, that sounds very interesting. Which one of these are you using?
50 CENT: Well, I use the actual -- the generation right before this.
BURKE: OK. So, you haven't upgraded to the new ones yet?
50 CENT: Yes, I've got to get these.
BURKE: And what type of advantage do you think you have in the actual structure of these? What's something that this set of headphones has that maybe another pair doesn't at this level?
50 CENT: Well, it's actual -- it has water-resistant technology in the actual development of these headsets, so it allows you to train and do different things that you don't actually damage.
BURKE: So, if I get all sweaty and I drop them in water?
50 CENT: They'll be fine.
BURKE: If I try and get a refund, you'll refund me if they don't work?
50 CENT: They'll be fine.
BURKE: All right. Curtis Jackson, 50 Cent, thank you very much. Maggie, back to you.
LAKE: Samuel, before let Curtis Jackson go, I've talked to him before, I know he's a very savvy businessman. Now that he's got the headphones, is there another area of tech that he would consider investing in? Or is there a gadget that he has he can't live without that he's interested in backing?
BURKE: So, we're just wondering, is there a maybe -- our anchor, Maggie Lake, is wondering, is there another area of tech that you'd be interested in investing in after the headphones now? We're here at CES, we have so many companies out here. Is there something that's caught your eye that you think, I might be willing to put my money behind that?
50 CENT: Well, I haven't found anything specific on this trip, but I've -- I've run into a company that I've invested in called Hangwood.
BURKE: And what is that?
50 CENT: And it's actually like -- it's a streaming. It's an application, you download the app, free, and then you can stream for three minutes, six minutes, or nine minutes. So, it's great for me because --
BURKE: Is that streaming music? What type of streaming?
50 CENT: Well, it's video content stream.
50 CENT: So, what you would do on Vine or what you would do on your actual Instagram, a short clip, it's just extending it for three minutes to six minutes, so I can actually come here and do music or actively be out somewhere and show you what the experience is like from my perspective.
BURKE: So, everything from creating music videos to streaming videos on cell phones.
50 CENT: Yes. I like it. Technology is changing the way we live in an extreme way. I would buy my cell phone based on the actual camera.
50 CENT: Because of my attachment to social networking and what I want to do with different things. And then following that, I think Canon should make a phone.
BURKE: You've got some advice for them? Maybe that's --
50 CENT: They're the best cameras, right?
BURKE: Compete against Nokia --
50 CENT: Yes.
BURKE: -- Maggie, with that incredible 40-plus mega pixel camera that they have.
LAKE: Samuel, I think we've put him on the spot. Now that everybody knows he's there and he's looking around, I have a feeling that he's going to get a lot of pitches today. Thank you so much for bringing him to us, Samuel. Thanks so much, and 50 Cent as well.
BURKE: Thank you, 50 Cent.
LAKE: Well, Ericsson and AT&T have announced an agreement to help make technology more accessible in cars. Hans Vestberg, CEO of Ericsson, is at the Consumer Electronic Show, and I asked him why he anticipates growth stemming from the automobile sector.
HANS VESTBERG, PRESIDENT AND CEO, ERICSSON GROUP: I think that that was just one sector that is starting an industry that is seeing a great opportunity to have a connected car, everything from infotainment to drive safe to actually having car diagnostics in order to improve the experience for the driver and also for improving the ways you are conducting your drive.
So, I think they see clear benefits for connecting the car, and that's why we are doing both the Volvo cars that we're doing here, a cooperation with them, but we're also doing a cooperation with AT&T with their AT&T drive studio, understanding what is required from the networks and how you do it.
LAKE: Another thing I thought was interesting at your booth there, you've reconstructed a basketball stadium. Clearly, you're making a big push into sporting events, very critical in a year where we have the Super Bowl coming up, we've got the Olympics, we've got the World Cup coming up. What do you see developing there, and how does Ericsson stand to benefit from it?
VESTBERG: We launched some three months ago a product called the Dot. That's a small radio unit that's sort of carrying 3D, 4D traffic that ultimately also will have wifi. And that is -- we are going to deploy at big stadiums, in residential houses, in order to get the same kind of experience indoor as outdoor.
Because a lot of the traffic is indoor today, and it will continue. So, we have a new solution that is unique for the industry that is called the Dot, and that's why we have this indoor solution, talking about stadiums, how -- because today, the experience in stadium is totally different than 20 years ago. You want to be part of it both virtually and live.
LAKE: That's right. That second screen has become almost as important as the event right in front of you. Right now, a lot of that -- a lot of the way we sort of are mobile, that we're connected on the go, is through our SmartPhones.
Do you see that continuing, or is that going to morph? Because it does seem to have plateaued. Is that going to morph into something else? Is it wearables? Is it another device that we don't know about yet?
VESTBERG: I think that there's going to be so much innovation. If you just go around here at CES, even though it hasn't started, I just arrived here, but you can see that any device, any gadget, consumer electronic, will be connected in some way.
So of course, we want to see much others than SmartPhones, but SmartPhones still are going to be the remote of all the connectivity and will be extremely important. And what we see right now is, of course, an explosion of that spread around the world.
Because many of the markets that we are into, they have very low penetration, of course, of SmartPhones. Ericsson is in 180 countries, and many countries still are in the beginning of getting SmartPhones.
LAKE: In Turkey, hundreds of officers are suddenly removed from their posts. It follows a corruption probe targeting government officials. We'll have the latest from Istanbul next.
LAKE: In Turkey, 350 police officers have been suddenly removed from their positions in what appears to be a government purge. The mass sackings follow an anti-corruption crackdown, which has targeted several government officials. Ivan Watson examines why these officers have been relieved of their duties.
IVAN WATSON, CNN INTERNATIONAL CORRESPONDENT: This appears to be the continuation of a purge of the Turkish police force that began last month.
Now, on Tuesday, this announcement on Turkish state media that at least 350 Turkish police officers from the capital, Ankara, as well as police commanders from at least nine other Turkish cities were all being reassigned -- in other words, demoted -- from positions in key departments that battle terrorism, organized crime, smuggling, to units like traffic patrol.
This has all come after the police targeted a number of individuals with close ties to the government in a series of raids last month as part of a big investigation into corruption. Among those detained were the sons of three senior cabinet minsters, as well as the head of the state-owned Halkbank, who was reportedly found with stacks of cash hidden in shoe boxes in his home.
Now, that forced the Turkish government to reshuffle its government to force the resignation of at least four cabinet ministers, but also the Turkish prime minister, Recep Tayyip Erdogan, has claimed that the corruption investigation is basically an international conspiracy seeking to topple his government. He has claimed that gangs have infiltrated the Turkish state.
What's really at stake here is what appears to be a power struggle between Erdogan and one of the most influential figures in moderate political Islam in Turkey, Fethullah Gulen. He's a reclusive cleric who lives in self- imposed exile in the US state of Pennsylvania.
He's believed to lead a virtual empire of schools, businesses, companies, as well as have influential support within the judiciary. And what I think we're seeing now is Erdogan moving to wipe that influence out from the police force and the judiciary, leaving many here to question the independence of the judiciary in Turkey today.
Ivan Watson, CNN, Istanbul.
LAKE: Eurostar shines. A record number of passengers for last year, and the rail firm's CEO tells me the company can beat that in 2014. Our interview with Nicolas Petrovic next.
LAKE: Welcome back, I'm Maggie Lake. These are the top news headlines we're following this hour. There's been some progress in the effort to seize and destroy a serious chemical weapons arsenal. The U.N. says the first shipment of priority materials has been loaded onto a Danish ship. The Syrian government agreed to hand over its chemical weapons last fall.
The Turkish government has removed 350 police officers from their posts in Ankara. State media report that most of the officers were working in units dealing with organized crime, terrorism and smuggling. The majority have been reassigned to the traffic unit The purge appears to be a form of retaliation for a sweeping corruption probe targeting the Erdogan administration.
America's deep freeze is straining the country's infrastructure and testing people's fortitude. Travel is paralyzed in some parts of the country while those who venture out are cautioned to bundle up. Fifteen deaths are blamed on the cold snap. Temperatures remained well below freezing in about half of the nation with a gradual warm up predicted to begin Wednesday.
Dennis Rodman is in North Korea where he and other former NBA players are preparing for a game on Wednesday. The exhibition match is planned for leader Kim Jong-un's birthday. In an exclusive interview with CNN, Rodman praised the North Korean leader and called his visit to the country a great idea for the world.
Here Lindsey Vonn says an injury to her right knee will keep her from competing in the Sochi Winter Games. She posted on Facebook that she was devastated that she'll miss the Olympics but says despite all her recovery work, her knee is still too unstable.
Eurostar is looking to beat its own record passenger numbers this year after carrying more than ten million people during 2013. Earlier I spoke to the rail firm's CEO Nicolas Petrovic who was in London. I asked him if those passenger numbers were sustainable. Here's what he had to say.
(BEGIN VIDEO CLIP)
NICOLAS PETROVIC, CEO, EUROSTAR: Oh, yes, very much so actually. I expect 2014 to be a -- I would hope just as good in 2013 we could see some real growth in the international market on the back of the Olympics in 2012, and we saw the U.K. economy really lifting out of the gloom of the previous year. So, I'm very confident for 2014.
LAKE: Now, we've heard a lot about expanded routes -- all sort of cities planned or talked about, for anything from Amsterdam to Barcelona. Realistically, what destination will riders be able to enjoy first?
PETROVIC: The first one will extend to will be to the South of France, to Provence as (inaudible) cities. It will be from 2015. We are also extending our network to all Switzerland, so the Swiss Alps during the winter but we are looking at other destinations. Then, in 2016 we'll launch direct service to Amsterdam and Holland in (general), so as you can see, it's coming -- it should be coming quite fast now.
LAKE: Are you confident about those timetables, especially when you're talking about Amsterdam?
PETROVIC: Yes, I'm very much confident about that. We are working partnerships with our Dutch colleagues, and by year of 2016 the service will be in place. By then there will be potentially other destination but that would be for later.
LAKE: Now, the investment that's going to be -- enable -- these expanded routes, is that going to result in higher ticket prices for customers?
PETROVIC: No, not at all. We will price tickets as usual to compete the best we can with airlines. Out of (consortium's) investments we try (them) with the volume of passenger. Our idea is that the more we grow the market, the better money we can make so that we can reinvest in our holding stock or our facilities.
LAKE: That's the way it's supposed to work. You mentioned the lift from the U.K. economy finally emerging from its gloom. What about the expectations for Continental Europe, especially if you are looking to expand to vacation destinations and make them permanent? We've seen the U.K. growing, but the rest of Europe lagging. Do you think that's going to get better in 2014, and are you worried how that will affect your expansion plans?
PETROVIC: What we -- what we saw in 2013 is really a difference between the growth as you said between our friends Belgium and Continental Europe and the U.K. The U.K. really went out of -- you know -- self recession with where they were in a -- I would say -- in a gloomy state. Now it's the opposite, and even though we expect friends in Belgium to get better in 2014, I think there would still be a difference between the U.K. and the rest of Europe. But that shouldn't be a problem for us. We rely on strong markets like the U.K. but if so North America, Asia, South America where the demand is very strong.
(END VIDEO CLIP)
LAKE: Factory workers have released two executives they've been holding hostage at a French tire plant. Goodyear's production manager and human resources manager were kept captive at the Goodyear factory for a total of 30 hours. They were eventually freed by police. Workers are angry about plans to close the loss-making tire center in Northern France. Mickael Wamen, leader of the CGT Union vowed to continue protests despite the setback.
(BEGIN VIDEO CLIP)
Male, VIA INTERPRETER: We are releasing these men with a heavy heart. We're doing it because Goodyear Management doesn't care about these two people. We have to recognize something today -- all the powers of the state are in Goodyear's hands. Goodyear has gotten everything it wanted. We never wanted to use harsh methods. Nevertheless, the Goodyear battle is not over.
(END VIDEO CLIP)
LAKE: In Washington, lawmakers are debating whether to give the benefits back. More than a million Americans who have lost out await their fate.
LAKE: President Obama is calling for the U.S. Congress to do more to help people left behind in the jobs recovery. A bill to extend unemployment benefits for some jobless Americans passed a hurdle in the Senate today. President Obama says the bill is for everyone, unemployed or not.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: These are not statistics. These are your neighbors, your friends, your family members. It could at some point be any of us. That's why we set up a system of unemployment insurance. The notion was everybody is making a contribution because you don't know when the business cycle or an economic crisis might make any of us vulnerable.
(END VIDEO CLIP)
LAKE: Lisa Desjardins is live in Washington right now. Lisa, it passed a hurdle in the Senate but it's by no means a done deal yet, is it?
LISA DESJARDINS, CAPITOL HILL CORRESPONDENT FOR CNN RADIO: Yes, that's right. As many of our viewers know, there's nothing like the U.S. Senate to present more than one hurdle to any controversial or major piece of legislation. So you're right, it got past one hurdle but still there's more to go. And one of the reasons is Republicans overall don't like unemployment insurance. They question how useful it is, and they also think it should be paid for. This bill would cost billions of dollars just to extend that insurance for three months. And as I said, this is philosophical. So listen to how Republican leader Mitch McConnell put it on the Senate floor today -- why he questions unemployment.
(BEGIN VIDEO CLIP)
MITCH MCCONNELL, SENIOR UNITED STATES SENATOR FROM KENTUCKY: It is only when you believe government is the answer to all of your problems that you talk about unemployment insurance instead of job creation. And the minimum wage instead of helping people reach their maximum potential.
(END VIDEO CLIP)
DESJARDINS: You know, I think that's such a great sound bite, Maggie, because it really hits on a split in American society here. What government should do and especially what government should do in a jobs crisis like this. So, here's the deal. Here's what's going to happen next -- Democrats don't have a lot of time to do victory dances over today's successful vote. They've got to try and come up with a bill that get enough Republicans to move through the Senate. Now, they might have to come up with $6 billion somehow to pay for it, we're not sure and negotiations continue and then of course if it gets through the Senate, it's got the House which is run by Republicans.
LAKE: And, now, Lisa, that's exactly what I was going to ask you -- I mean, the House is the area where we saw a lot of the really dug-in, extreme partisan brinkmanship going on when we were dealing with the budget, when we were dealing with these other issues. Even if it gets through the Senate, is it an absolute non-starter in the house or is there hope that it could get enough support from Republicans?
DESJARDINS: Right, there are a lot of question marks here and I think nothing is certain, including this idea that it can't get through the House. In fact, House Speaker John Boehner has opened the door. He said, 'Sure, I will consider an unemployment benefit package, but it has to be paid for and I need to see the proposal coming from Democrats.' He said the President specifically. What's interesting here are the politics. It's complicated. It not's not just your straight right versus left because many of these Republican lawmakers have high unemployment in their districts, in their states, they have voters and friends who are personally affected by this money expiring. So, it's something that is kind of beyond party politics -- it's local and national at the same time. Those dynamics are all in play, and meanwhile, we've got more than a million Americans waiting on Congress to see if they will get any rent money this month or not.
LAKE: Yes, and President Obama really taking pains to say, 'Listen, --
LAKE: -- this isn't laziness, these people are not -- they are trying hard to find work.' It's the nature of the hole that we are digging out of which I know it's hard for sort of Republicans to (bat that back). Lisa, is this a sort of environment that's a little less hostile in Washington now? We did see a budget compromise pass and there does seem to be a little bit of thawing in the standoff that really dominated last year.
DESJARDINS: Hey, you're picking up on that, right? Amazing -- some of the coldest weather we've seen and things have gotten a little bit warmer here in the U.S. Capitol in general. We did see that budget deal passed just before Congress went home for Christmas. I think that what happened is after the government shutdown which I know all our viewers will remember and probably groan about -- that happened in the fall. I think both sides went to their corners and realized that all of this bickering and fighting was hurting them, especially Republicans who really got bit by pushing through that shutdown.
LAKE: Americans are sick of it. That is one thing we know for sure.
LAKE: The state of the welfare extension, we don't know, but Americans sick of Washington, all right, Lisa Desjardins. Thank you so much.
DESJARDINS: Thank you.
LAKE: Well those weather analogies bring us perfectly to the next topic on hand, and that is Jenny Harrison at the CNN International Weather Center. Jenny, you can see all of us, whether we're in Washington, here in New York -- we've got our sweaters on, our layers on, and it's absolutely freezing. When is it going to end?
JENNY HARRISON, CNN INTERNATIONAL METEOROLOGIST: Well, you know, this is the good news, Maggie -- by the way, the whole look, seriously, all you girls looking great today, so I wouldn't worry about that. But you know the good news of all this -- it is coming to an end -- it really is a snap. Just a few days of that really, really cold air, but of course as you said it is despicably cold, unbelievably so. Here are some of the temperatures at this morning, International Falls which of course is way up there in the border with Canada -32 Celsius. The average is -21. And again, -32 is the actual air temperature. But you factor in the wind, and it felt like -43. So, this of course has been going on now for, what, the second day really of it truly being so cold.
And just to give you an idea how unusual it is, look at this in Atlanta at -14 Celsius, the overnight low into Tuesday morning with the wind chill feeling at -24, and that is the coldest certainly here since 1996. And then it's a couple of years beyond that in 1994. At Cincinnati there's still temperatures lower than -22 this morning, again with a wind chill, it felt like -36. But as I say, it is actually going to be improving. This high pressure, this really cold air really retreating back up to the north and the east, and certainly becoming much warmer in from the south as we head into the next couple of days. By Thursdays temperatures really should be OK.
What we have got of course is still plenty of snow, really because of this very, very cold air. The warmer water -- as the air travels over the warmer water -- it literally condenses and comes down the other side as some very heavy amounts of snow. And I've got some video to show you -- not of here particularly, but further to the north and the east.
Now, this, believe it or not, is a river. Doesn't look much like it but you can see the flow really, really slow down. And in fact there are flood warnings out because of what they're calling this ice jam for the rising waters in Niagara Falls. So, you can really see certainly what the ice and those really, really cold temperatures do to situations such as this.
So, yes, some serious concerns of course with flooding, but the really good news again with this thaw is that it it's not going to happen very, very quickly. And it's not going to suddenly go, you know, to ridiculously warm temperatures. So, we would actually not have a sudden thaw of that snow in the north and the northeast. But again, to give you an idea, the average, - 1 or the forecast temperature this Tuesday in Anchorage is -1. And look at the temperatures -- -15 in Chicago, -11 in New York, and Atlanta -3. So, colder in every case than what we're seeing up there in Anchorage.
Now, moving on from there, as I say, that cold air retreating, high pressure coming in across the South, and in fact by the weekend, it's actually going to be above the average. So, real temperature changes throughout this weekend. You can feel a little bit of snow across the far south developing snow flurries to the West. And, Maggie, I want to tell you the best story that I have seen so far to do with this very, very cold weather is an inmate in a prison in Kentucky. He escaped and then, guess what, he phoned the police literally hours later asking to be picked up because it was too cold. He couldn't bear the temperatures. I love that story.
LAKE: That tells you everything you need to know about just how painful it is outside, and it certainly is. All right, Jenny, thank you so much for sharing that. When we come back, we are in the Republic of Congo where park rangers carry guns and the poachers attack elephants and men alike.
LAKE: In the Republic of Congo, park rangers are engaged in a dangerous struggle against ivory poachers. As we saw yesterday, these cold-blooded killers also aim their bullets at humans. It won't stop the eco-guards from going in pursuit. Arwa Damon together with photographer (Peter Rudin) and producer Brent Swails join them as they hunt down the hunters.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: (Inaudible)
ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Mathieu Eckel's team isn't wasting any time. He wants to know if there's a more discreet way to get into position. It's the morning after his eco-guards raided elephant poachers' camp. In Odzala National Park they found a cell phone left behind and they are using it to track down suspected poachers that shot at them and escaped the day before.
They are park rangers, by necessity now turned investigators. And you don't think that the authorities will actually investigate properly and go after this guy?
MATHIEU ECKEL, ANTI-POACHING AGENT: No, no, no. They don't have interest in that.
DAMON: Eckel says corruption is rampant in the Congo.
ECKEL: This here come from military.
DAMON: That's military issue?
ECKEL: This one of course.
DAMON: This one? At times they can't even trust themselves. This seized compass is just like those issued to the eco-guards.
ECKEL: You must have contact with the rangers.
DAMON: We wanted to ask the government about the corruption claims. The minister responsible for forest conceded the government needs to clean up its act.
HENRI DJOMBO, MINISTRY OF FOREST ECONOMY, TRANSLATED BY DAMON: Certainly, certainly he told us. Yes, it is true that there are accomplices, this illegal trading of wildlife. That is not easy. He insists the government is committed to fighting corruption.
DAMON: But on this morning, the eco-guard unit is on its own and on the offensive. Using the captured cell phone, they set up a meeting with an infamous bush meat trader whose number was on the phone. It's an ambush. He's cornered and interrogated. It doesn't take him long to give up the name of the owner of the cell phone whom the eco-guards believe is one of the elephant poachers.
Male, TRANSLATED BY DAMON: They are just there, they live there. He's a young guy.
DAMON: An hour later, the eco-guards pick up not one, but two men -- brothers -- and interrogate them back at the unit's checkpoint.
ECKEL, TRANSLATED BY DAMON: The other rifle, where is it, you own which one? Eckel demands.
Male, TRANSLATED BY DAMON: The 4-5-8, one brother responds.
DAMON: He admits that they were at the camp but claims they were just fishing. Both refused to give up the names of those who shot at the eco- guards, and now the eco-guards will have to look for new leads. But there have been some successes. In just the last four months the unit arrested a trafficker ring leader -- Ghislain Ngondjo, better known as "Pepito." We're driving through Pepito's village right now, but we've been advised not to actually get out and shoot because tensions are incredibly high between those who want to protect the park and Pepito's gang. A few days after the two brothers were detained, the unit got a new lead and went after what they suspected was a third gang member. Escaping, he ran over an eco-guard stationed at this checkpoint. While the unit took the seriously-injured guard to hospital, the eco-guards' camp was torched. The government has promised a response. One week later, the eco-guards remain on their own. Arwa Damon, CNN Odzala National Park, Republic of Congo.
(END VIDEO CLIP)
LAKE: Our exclusive series, "Tracking the Ivory Trade," continues tomorrow and the trail leads to a camp housing Chinese construction workers. Join us Wednesday to see how eco-guards follow the evidence of illegal smuggling. Want to bring you this news just in -- four people are believed to have died in a helicopter crash on the east coast of England. U.K. police say a single helicopter came down in the Cley area -- that is a small village in North Norfolk. We'll bring you much more on that as we get it in. And we'll be right back after the break.
LAKE: The city that never sleeps is also the city that never stops, not even for a minor inconvenience like the polar vortex. This was the temperature outside our CNN studios in New York this afternoon -- 8 measly degrees Fahrenheit -- that's negative 13 degrees Celsius. But if you thought that would stop hardy New Yorkers and tourists from going about their business, you'd be mistaken. They added a few extra layers and toughed it out.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: (Inaudible) hands are freezing up. I can't even talk, and my ears are froze.
UNIDENTIFIED MALE: Very hard, very tough. It's -- but it's unfortunately to make a living, I just have to support the family some way.
UNIDENTIFIED MALE: Just drinking a lot of coffee. A lot of hot coffee. And waiting on the spring to come.
UNIDENTIFIED MALE: (Inaudible) sightseeing -- bloody freezing.
UNIDENTIFIED MALE: It's good to get out of Texas for a little bit for a couple days. Just, unfortunately, it's the coldest weather in 100 years.
(END VIDEO CLIP)
LAKE: You got to love that cowboy hat -- in the cold today. We also met what could be the city's most honest business man. He could've jacked up the price for his hats and scarves, but he refused.
UNIDENTIFIED MALE: I sell them all a price -- 5 dollar, 8 dollar, 7 dollar, like that. But some people, they say, well, it's really gold today, they're going to put the price up. I don't do that.
LAKE: Now, that's not a strategy that will make him millions, but it will earn him many loyal customers. Got to love this city. That's "Quest Means Business." I'm Maggie Lake in New York, ready to step out into the polar vortex myself. Have a good night.