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QUEST MEANS BUSINESS
Record Toxic Loans Settlement; Dow Tops 17,0000; McDonald's Shuttered in Moscow
Aired August 21, 2014 - 16:17 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(SIMULCAST OF CNN USA)
MAGGIE LAKE, HOST: Good evening, we have been watching CNN USA in the wake of the Pentagon briefing that took place on the situation with ISIS and in
This is QUEST MEANS BUSINESS, I'm Maggie Lake in New York.
Tonight, a $17 billion warning shot to Wall Street. Bank of America had reached an agreement to pay out the biggest settlement in history. The
bank admits it misled investors about the quality of loans packaged up in what turned out to be toxic mortgage-backed bonds. Although no executives
have been charged, US attorney general Eric Holder left the door open to criminal lawsuits.
(BEGIN VIDEO CLIP)
ERIC HOLDER, US ATTORNEY GENERAL: I want to be very clear. The size and the scope of this multibillion-dollar agreement goes far beyond the cost of
doing business. This outcome does not preclude any criminal charges against the bank or its employees, nor was it inevitable over these last
few weeks that this case would be resolved out of court.
(END VIDEO CLIP)
LAKE: Of that $16.6 billion, nearly $10 billion will end up in government coffers. The remaining $7 billion will go to homeowners affected by the
bank's actions. Bank of America lawyers say they are being unfairly punished for the sins of Merrill Lynch and Countrywide. It bought those
firms in 2008 allegedly under pressure from government officials.
Whoever you think was responsible for those toxic assets, we all know what the consequences were: hundreds of thousands of foreclosures, millions of
jobs gone, and billions in investor losses. Even today, the scars are still clearly visible in a global economy struggling to recover.
And in America's towns and cities, homes long-abandoned sit vacant and deteriorating. Blighted neighborhoods are dragging down property values
for those who are standing on.
William Cohan spent 17 years as an investment banker. He's now a columnist for "Bloomberg View" and the author of a new book, "The Price of Silence,"
and he joins me now. Bill, it is great to see you. Thank you so much for joining us. You've been very critical of the government's handling of
WILLIAM COHAN, SPENT 17 YEARS AS INVESTMENT BANKER: Well, I have, Maggie, because the American people end up not finding out what they're entitled to
find out, which is who did what at these banks, why they did them, and why the individuals who are responsible for what went wrong here -- because
don't forget, these are individuals who took wrong actions despite warnings -- why none of these people are being prosecuted.
And that's what these settlements do, unfortunately. They protect individuals from being prosecuted while allowing the CEOs of these firms to
use billions of dollars of their shareholders' money to settle these claims and make them go away.
LAKE: I --
COHAN: That doesn't do anybody any good.
LAKE: I know you've called this the Holder doctrine after the US attorney general, but there's also the Anderson Effect, isn't there. Arthur
Anderson very much in people's minds. They went after them criminally around the Enron scandal, the firm failed, thousands of people lost their
jobs, there were unintended consequences. Do you not buy that rationale?
COHAN: Oh, I do buy that rationale. I'm not talking about indicting Bank of America or JPMorgan Chase. I'm talking about indicting the people at
these banks, or charging civilly the people at these banks who wrote these e-mails, who knowingly packaged up mortgages that should never have been
packaged up, and sold them off in securities all around the world.
Those people got rewarded with millions of dollars of bonuses, Maggie, and have not faced any personal prosecution whatsoever, and I just feel that's
LAKE: Absolutely. Eric Holder left the door open for future criminal prosecution, but do you think they'll follow through? These are typically
not easy cases to win, are they?
COHAN: No, they're not easy cases to win. The bar is high, especially for criminal prosecution. That's probably why they don't bring them. They do
leave the door open for filing criminal charges. I don't think anybody on Wall Street things criminal charges are in the offing against people on
Wall Street from the federal government.
LAKE: Bill, I guess the question at the end of the day is, even though they didn't go after them criminally, they have shaken them down for an
awful lot of money. Do you think that has done anything to change the culture on Wall Street? Is anything different from those dark days when
you and I saw the global economy teeter on the edge of this? Or is it business as usual?
COHAN: I wish I could say things have changed, Maggie, but they have not. Eric Holder tried to make the argument that this is not business as usual,
this is not the price of doing business, but when you can use your shareholders' money to settle these billions of dollars in claims and
nobody is held personally accountable, I think business as usual is what continues to happen.
LAKE: All right, William Cohan, author of "Price of Silence," so great to see you, Bill. Thank you so much for being on.
COHAN: Thank you, Maggie.
LAKE: Well, turning to the markets, the moment investors have been waiting for is finally here. The Dow has topped 17,000 for the first time in
nearly a month. Not to be outdone, the S&P 500, the broader measure, hit a record high. Investors are cheering strong corporate earnings and US
economic data. Jobless claims came in lower than expected and home prices rose at the fastest pace in 9 months.
When McDonald's first opened in Russia 25 years ago, it was a welcome element of westernization. Now, the restaurant has been shuttered as
Russia begins to close its doors on the West. That is next.
LAKE: Russia's consumer watchdog has announced it will make unscheduled spot-checks on McDonald's restaurants to investigate food standards. Four
McDonald's have already been temporarily shut down for sanitary violations. Some think the closures are related the rising tension between Russia and
the West over the conflict in Ukraine. The regulator is denying the closures are politically motivated.
Now, McDonald's first opened in Moscow's Pushkin Square 25 years ago, and look at the lines! Look at what it looked like back then. It was 1990,
the Soviet Union had fallen, and Russians were eager for a taste of the West on a sesame seed bun.
The local advertisements read, "If you can't go to America, come to McDonald's in Moscow." It influenced Thomas Friedman's famous McDonald's
Theory. He said no countries with the golden arches had ever gone to war.
It was a sign of a nation's integration into the global economy. Russia has become one of McDonald's seven major markets. It was the official
restaurant of the Sochi Winter Olympics and a likely sponsor at the 2018 World Cup in Russia.
Now there are fears Russian companies and food producers could lose out. McDonald's in Russia sourced most of their ingredients locally, and some
companies rely on the chain's business to survive. Our senior international correspondent Matthew Chance went down to the flagship
McDonald's in Moscow to see for himself.
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, you can see the golden arches have been dimmed, and these doors over here are firmly
closed. We're here at the flagship McDonald's in the center of Moscow in Pushkin Square, a place that's become the latest target in an apparent
crackdown on the American fast food chain.
A number of McDonald's across Russia have been closed, with officials citing sanitation reasons. The suspicion, though, is that all of this is
political, a Kremlin ploy in its ongoing dispute over Ukraine. Moscow's already banned some food imports from Western countries. This may be yet
And what a symbol of Western consumerism to pick. This was once the biggest McDonald's in the world. When it opened its doors in 1990, it
became the first fast food restaurant in what was then the Soviet Union. Thousands lined up here for hours at a time to get a taste of its burgers,
its fries, and its milkshakes, many Muscovites. It was far more than just a restaurant. It was a symbol of freedom.
Well, a spokesperson for McDonald's told us earlier that it hopes that this and the other closures will be temporary. The company has a big Russian
workforce and a network of suppliers.
It also has a total of 440 restaurants across the country, including more than 100 in Moscow alone. So if the closures become more widespread, it
could hurt not just the company, but the many Russians who depend on it.
Matthew Chance, CNN, at McDonald's in Moscow.
LAKE: After the break, how James Foley's fate might have been different if he hadn't been American. The stark differences between the US and Europe
when it comes to ransom payments.
LAKE: Welcome back, I'm Maggie Lake, this is CNN. Time now for an update of the news headlines. The US defense secretary has admitted that ISIS is
more sophisticated than any other terrorist organization they have seen before.
In a press conference at the Pentagon, he offered his condolences to the family of James Foley, the American journalist brutally murdered this week.
And he said the US will find a longterm strategy to help Iraq.
(BEGIN VIDEO CLIP)
CHUCK HAGEL, US DEFENSE SECRETARY: The United States and the international community will increase support for Iraq in tandem with political progress.
The president, the chairman, and I are all very clear-eyed about the challenges ahead. We are pursuing a longterm strategy against ISIL because
ISIL clearly poses a longterm threat. We should expect ISIL to regroup and stage new offenses.
(END VIDEO CLIP)
LAKE: It has emerged the captures of James Foley demanded a ransom of more than $132 million for his release. That is according to a news
organization that Foley was working with when he was kidnapped in Syria two years ago.
Seven civilians have died in an Israeli airstrike meant to target members of the Hamas military wing, Qassam Brigade. Three senior members of the
organization were killed in the attack. Two American missionaries who caught Ebola in Liberia have recovered and have been released from a U.S.
hospital. One of the aid workers said he was thrilled to be alive. The outbreak has killed more than 1,300 people in West Africa with many of the
deaths occurring in Liberia.
Bank of America has agreed to pay a record $17 billion to U.S. authorities. The bank was found to have misled investors about the quality of loans it
sold in what turned out to be toxic mortgage-backed bonds.
A complex effort to rescue James Foley and other ISIS hostages earlier in the summer was flawless except that the captives were not there, that's
according to the secretary of defense and a U.S. general who spoke moments ago about the brutal killing of the journalist. About two years before the
murder, ISIS militants demanded more than $130 million in ransom for his release. That's according to the chief exec of the "GlobalPost" which
Foley was working for when he was kidnapped. The United States government refused to pay, sticking to its strict policy of refusing to negotiate with
terrorists. American companies and individuals are also forbidden from paying up and face charges of funding terrorism if they do so.
The U.K. will not make deals with extremist groups. However, the British government has turned a blind eye when businesses and individuals paid
ransoms. "GlobalPost" CEO Philip Balboni says Foley's captors demanded the ransom from his company and the journalist's family.
PHILIP BALBONI, CEO, "GLOBALPOST": We never took the $100 million figure seriously and we learned from the - as you know - there were a number of
Western journalists, European journalists who were subsequently released by them starting in April of this year. And the amount of money paid in those
ransoms was dramatically less, and our focus was on attempting to raise a sum of money that would be in the range of what they had taken for the
other Western hostages.
LAKE: In contrast, many European nations like France, Italy and Spain have a history of paying ransoms. A "New York Times" investigation shows al-
Qaeda has made $125 million from ransoms in the past six years. A significant portion was from European governments. Brian Todd joins me
from Washington now with more on this. And, Brian, interesting when you were listening to the CEO, he said they never quite took it seriously.
What do we know about the details surrounding the ransom that was asked?
BRIAN TODD, CNN CORRESPONDENT WITH "THE SITUATION ROOM": Well, Maggie, they never took it seriously because they said that the hostage-takers
never really negotiated their demands. And to reiterate what Philip Balboni just said in that sound bite, he is the chief executive as you know
of "GlobalPost." He told CNN the company never did take that $132 million ransom/100 million Euro demand very seriously because in his word, ransoms
paid for other hostages held by ISIS were "dramatically less." Now, Balboni, as you saw, did not say whether - you know, what those lower
amounts were, but he said that there was an attempt to raise money that was more in line with those lower amounts.
CNN national security analyst Peter Bergen also feels the ransom demand for James Foley was so excessive, it couldn't be considered a serious demand.
Balboni said there was never any real negotiation again between his news outlet "GlobalPost" and Foley's captors because they never really
negotiated their demands, they just kind of put it out there, said they wanted this and didn't say anything else, Maggie. So, you know, this was
kind of an interesting contrast from what some other countries as you reported have done here.
We also know about this negotiation process or the process of them holding him and communicating with others on the outside including his employer and
his family that there was an attempt by the family to make sure that James Foley was indeed alive. They sent very specific questions through channels
to the captors, specific questions that they knew only James Foley could answer - presumably questions about the family background. They got the
answers back that were very specific, so they knew he was alive at some point, Maggie, but obviously very tragically now we know neither - that
these exchanges - did any good to free him nor did that American Delta Force/Navy Seal Team Six raid in Raqqa, Syria recently.
LAKE: Which - and that makes it all the more chilling to hear these details, Brian. Of course we know, and our thoughts are with those
hostages that remain there.
LAKE: Brian Todd for us in Washington - thank you.
TODD: Thank you.
LAKE: Well ISIS may not be as well organized as an extremist group like al-Qaeda but it does have a steady stream of revenue for its terror
activities as our emerging markets editor, John Defterios explains, militants make millions of dollar off Iraq's so-called black gold on the
JOHN DEFTERIOS, CNN'S EMERGING MARKETS EDITOR AND ANCHOR OF "GLOBAL EXCHANGE": ISIS popped up on the global radar in June with its attack on
Mosul. And in the span of just two months has created its own black market for Iraqi crew.
THEODORE KARASIK, INSTITUTE FOR NEAR EAST AND GULF MILITARY ANALYSIS The scale is actually sizeable in the sense that they were able to export up to
$3 million a day of oil. Now this is probably going to rise in the coming months because winter's coming.
DEFTERIOS: Kurdish regional government president Massoud Barzani confirmed that figure which he said is generated through a combination of oil sales
and extortion. Now, this may be a small sum by global oil standards, but if left unchecked, ISIS could earn more than a billion dollars a year from
its oil operations in Iraq amid that charge June 10th into Mosul and now has four oil facilities in Mosul. And if you go down to Kirkuk which has
big deposits but they have three smaller operations, it has a total of 80,000 barrels of capacity per day.
What ISIS lacks is refining capacity - unable to wrestle control of the strategic Baiji refinery south of Mosul. Energy strategists say ISIS is
selling the Iraqi crude at $25 to $60 a barrel - a deep discount on the global benchmark of $100 a barrel. But black market distribution even for
basic crude in this part of the world is well established.
ROBIN MILLS, MIDDLE EAST ENERGY ANALYST: In Northern Iraq of course people have been stealing and smuggling oil and tapping off from pipelines for
years in small volumes. So there's already that kind of infrastructure and those middle men who know how to trade the stuff.
DEFTERIOS: Islamic militants plied their energy trade in eastern Syria, seizing oil and gas assets for the past few years. In early June under the
banner of ISIS, they took control of Syria's biggest field in the Deir Ezzor Province.
LUAY J. AL-KHATTEEB, FOUNDER AND EXECUTIVE DIRECTOR OF IRAQ ENERGY INSTITUTE: This is not a nascent experiment, it is something I would call
a -- at least three years of experience and they've been supported by various cartels that they have interest in this black market economy.
DEFTERIOS: Opposition Turkish parliamentarian Mehmet Ali Ediboglu based in the country's south border in Syria, claims "$800 million worth of oil that
ISIS obtained is being sold in Turkey."
AL-KHATTEEB: We're talking about the sophisticated network that stretch between - predominantly between - three countries. That's Iraq, Turkey and
DEFTERIOS: With U.S. military intervention, strategists say the Kurds have kept ISIS out of Kirkuk's super oil field, capping (ph) for now the group's
new-found wealth. John Defterios, CNN Abu Dhabi.
LAKE: Air traffic in Tel Aviv was not disrupted Thursday despite warnings from Hamas to steer clear of Ben Gurion Airport. John Vause has more from
JOHN VAUSE, ANCHOR AND CORRESPONDENT FOR CNN: But despite that threat coming from Hamas to international carriers to stop all take-offs and
landings here at Ben Gurion, it's been pretty much business as usual here - today passengers coming and going. So to all flights, not just Israeli
airlines, but international carriers as well. There seems to have been at least one cancellation earlier in the day with a Royal Jordanian flight
reportedly canceled out of security concerns. But that's been pretty much it.
It seems Hamas was trying to repeat what happened last month when a Hamas rocket landed not far from here and that then meant that the FAA - the U.S.
Federal Aviation Authority decided to ban U.S. carriers from landing here at Ben Gurion and then the Europeans quickly followed. That only lasted a
day and a half, but it was hugely controversial here in Israel. The Israeli government thought it was a massive overreaction and then that ban
was lifted. But Hamas claimed it as a strategic victory. The Israelis did say it was blow both economically and symbolically because 90 percent of
everybody who arrives in Israel comes through this airport. But despite that new threat coming from Hamas, it seems that everything here is pretty
much normal. John Vause, CNN, Ben Gurion Airport, Tel Aviv.
LAKE: Richard Branson made global headlines yesterday after he offered to help solve the conflict between Russia and Ukraine, and maybe the Russian
business leaders joining him who are making the bravest statement. I speak to one of those businessmen next.
LAKE: Russia's controversial aid convoy has arrived on Ukrainian soil and is now being checked by Ukrainian authorities. The 260 white trucks
carrying water, food and medicine to warn-torn Eastern Ukraine labeled as humanitarian relief had been stalled on the border for nearly a week.
Ukrainians fear the Russians could be using it as a way to smuggle military aid to pro-Russian rebels.
Yesterday on the program we spoke to Richard Branson who pinned an open letter with a group of business leaders who want to end the conflict
between Russia and Ukraine. One of the signatories of that letter is Sergei Petrov. He is the founder and owner of ROLF Groups of Companies, the
biggest seller of foreign cars in Russia. I asked him if he's concerned about retribution from the Russian government for his actions.
SERGEI PETROV, FOUNDER AND OWNER OF THE ROLF GROUP: It's very difficult under such a circumstance as to resist and to tell the truth and to tell
(inaudible) in. But we have to do it. We are on the verge of a big problems. I don't exclude it might be beginning of a trade war and it
might be beginning of a real war.
LAKE: You are there, you are a member of government. Is Vladimir Putin listening to all sides? Does he have a direct dialogue with the business
community? Have you been able to personally express your concerns? Or are decisions being made from a completely political point of view without any
input from business leaders, from economic leaders?
PETROV: Maggie, don't forget our economy is strongly dependent upon government state monopolies - more than from the competitive business. And
of course Mr. Putin have to pay attention for them more than other level of our business society. And of course he dial it (ph), and I never, never
heard from state monopoly business leaders any complaints, any question to us and Mr. (inaudible) President what you are doing and where we are going
to. They tried to show their loyalty more than it need maybe from this really, really dangerous moment.
LAKE: And as the sanctions continue, if the economy then continues to slide, do you expect them to speak out?
PETROV: I think the economy inevitably will be contracting because no reason to start to recover. Our economy depend upon huge pressure from law
enforcement people. It's not a problem with lack of money or lack of attention, lack of demand. It's consequence of a very broad business
climate, and it's very difficult to get out from this situation without a change - deep change of seeing whole our society opinion. It's -- now it's
too premature to predict how this looks like in six months maybe. But now I don't/I can't see any easier - any possibility - how to get out from
this. Maybe we need - we need to - be hungry a few months and then we can be more realistic.
LAKE: Very honest words there. Time for your world's weather forecast. Jenny Harrison is at the CNN International Weather Center and has that for
us. Hi there, Jenny.
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Hello, Maggie. It's a rather cool day I'm afraid across some parts of Europe, in particular the
northwest. We've seen this cool off, actually, in the last couple of days. And these are the current temperatures - so in the double figures still,
thank goodness. But it is August, so you'd expect it to be that way. Thirteen in Glasgow, we've got 12 Celsius though into Dublin, also the same
in Cork, and 15 degrees Celsius in London. Quite cool in Paris right now too with a temperature of just 13 degrees Celsius. Much cooler too when
you consider how warm it is right now across the Southeast Euro - 26 Celsius in Athens and of course they're coming up to the midnight hour.
It's 28 in Madrid. This cool air has been in place the last couple of days. The last couple of low pressures that have come through, they've
ushered in some much, much cooler air and in fact you can see as we go through the weekend, still a few more showers, but again that cooler air is
very much in place. In fact, temperatures could even dip lower.
So, below the average really for this time of year, and of course this weekend it is a holiday weekend certainly in the U.K., so it is fairly
usual that we have some rather unpleasant weather this time of the year. But you can see that by far the heaviest of the rain and maybe even some
strong thunderstorms is going to be across areas in the southeast where we have still got that warm air in place, particularly around the Adriatic as
you can see it there - all those areas in red - is where we could really see some heavy rain, maybe even some damaging hail as well.
And this is showing you the rain in the next 48 hours - becoming quite widespread too certainly on Saturday across many central areas. Certainly
more showery across the northwest - that low moving down. But again, as I say, cooling things off as it does just that. So, temperatures on Friday -
a high of just 19 Celsius in London, 17 Celsius there in Dublin, the same in Copenhagen, so that cool air across into Scandinavia as well, 29 in Rome
and very warm in Athens with a high there of 36.
Meanwhile in the United States, more thunderstorms across the Midwest, eventually pushing towards the east coast and then very hot and humid
across the South. In fact, the temperatures getting above the average for this time of year. But in the North, across the Midwest we've got warnings
We continue through Thursday into Friday, and this is for, again, the chance of some fairly severe thunderstorms. But the heat warnings and
watches -- just advisory really at this stage -- (inaudible) plays across much of the South and the Southeast. This is what we expect to see on
Saturday. Temperatures well above the average - 37 in Jacksonville, Florida, 35 on Saturday in Atlanta. And you can see the highest
temperatures so far this year in most cases have been below that.
But there's been a real difference in the East and the West. And on the whole, from January to July, temperatures in the West have been well above
the average, so much so that of course (inaudible) really quickly, it's just that the drought situation in California is continuing to get worse
and worse and worse. That was in June, in August it actually is even worse, and just look at this, Maggie. Fifty-eight percent of California -
over half of the state - is in exceptional drought. It is going to take a long time before it begins to recover. We need some rain but some good
rain in the months ahead. It doesn't look like it's going to happen.
LAKE: Yes, very alarming and of course huge implications for crops and produce as well.
LAKE: Jenny, thank you so much for that. Well road maintenance is a pain for everyone involved. For commuters it causes traffic and detours, for
government it costs and lots of money. One man thinks he's found an answer. We'll introduce you to him next.
LAKE: Earlier this year U.S. President Barack Obama unveiled a plan to repair his country's crumbling roads and bridges at a cost of more than
$300 billion over four years. For governments around the world, repairing and maintaining existing roads and bridges is a huge financial burden. A
Dutch man has created a simple innovation that could dramatically reduce those maintenance costs. It's self-healing asphalt in this week's "Make
Male: Of all the road surfaces, asphalt is the most comfortable to drive on -- full of tiny air holes or pores that absorbs water and noise. And
it's cheaper to build with than concrete. The problem is, durability.
PROFESSOR ERIK SCHLANGEN, DELFT UNIVERSITY: This is a road made of pores (ph) asphalt. Here you can see the type of damage that you get in these
roads. It starts with small stones coming off, but then you get big potholes like you see here - big holes starting. They grow and grow and
after a few weeks or months, they are very big and they have to be repaired.
Male: Erik Schlangen is a professor of micromechanics at Delft University. He's been working with Materials with a capital "M" for 25 years. In 2008
he started to develop a new kind of asphalt.
SCHLANGEN: So we want to make an asphalt which is kind of self-healing, which repairs itself with a little bit of help from outside. So, asphalt
is normally made out of stones which are glued together with bitumen. Bitumen is a thick oil. And what we add to this to make it self-healing is
steel wool. We cut the steel wools into small pieces and that's what's happening below. I will mix that with the asphalt mix. This is a piece of
asphalt with the fibers inside. What happens in the real world, you get small micro cracks, another big crack like this. You get more and more
damage when stones come off.
Now in the lab, we use a microwave. It also creates a magnetic field around the sample which heat up the fibers. But on the road we actually
use a big induction coil. It melts the bitumen which then closes the crack. It's a little bit warm but now it's fixed. So you see, the two
pieces are glued together, there's no crack anymore, so this is proof that it works in the lab. But now we have to go make a real highway then.
Male: In 2010, Schlangen was given a 400-meter section of Dutch Motorway on which to test his new wonder material.
SCHLANGEN: Last week we did our first treatment of the road surface with our induction machine that we specially developed for this purpose. We
heated it up and we hope it will last much longer now after our first week.
Male: Schlangen has the backing of the Dutch government. The anticipate the self-healing asphalt could make motorways last two or three times
longer before resurfacing as needed. The only maintenance is running the induction heater along the road.
SCHLANGEN: They calculate that if you would apply this on all the highways in the Netherlands, then it would save the government about 90 million
Euros each year.
Male: With savings like this, the self-healing asphalt might just have quite an impact. Billions and billions of dollars slashed from the
motorway maintenance bill. My dream for the future is that we use this material in all highways that we have, that the highways will last much
longer - that would be really cool if we can achieve that in the future.
LAKE: This is "Quest Means Business." We'll be right back after the break.
LAKE: Some news just in to CNN. The Vatican has confirmed to CNN that the Pope has called the Foley family today to express his condolences.
Meanwhile, the U.S. defense secretary has also offered his condolences to the family of James Foley. Speaking at a Pentagon briefing a few minutes
ago, Chuck Hagel admitted ISIS is more sophisticated than any other terrorist organization they have seen before and said the U.S. will find a
long-term strategy to help Iraq.
HAGEL: The United States and the international community will increase support for Iraq in tandem with political progress. The President, the
chairman and I are all very clear-eyed about the challenges ahead. We are pursuing a long-term strategy against ISIL because ISIL clearly poses a
long-term threat. We should expect ISIL to regroup and stage new offenses.
LAKE: Just to recap, it has emerged the captors of James Foley demanded a ransom of more than $132 million for his release, that is according to a
news organization that Foley was working for when he was kidnapped in Syria two years ago. And that's "Quest Means Business." I'm Maggie Lake. We'll
have a lot more on this story in the hours ahead. The news continues in just a moment.