60 Minutes - Sunday, May 29, 2016

Episode Date: May 30, 2016

Scott Pelley sits down with CIA Director John Brennan to discuss whether there could be an ISIS attack on American soil. To learn more about listener data and our privacy practices visit: https://www.audacyinc.com/privacy-policy Learn more about your ad choices. Visit https://podcastchoices.com/adchoices

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You're expecting an attack in the United States? I'm expecting them to try to put in place the operatives, the material or whatever else that they need to do. The man who is supposed to stop that attack is John Brennan, the director of the CIA. Tonight, in a rare interview, we talk to Brennan about a world of trouble. Does ISIS have chemical weapons? We have a number of instances where ISIL has used chemical munitions on the battlefield.

I'm no expert, but from what I know, what happened and the things that were torn up in there, it had to be like an atomic explosion. He's talking about the explosion that killed 29 coal miners in a mine run by the man known as the King of Coal, who became the first CEO of a major American company convicted of a workplace safety crime. This was a coal mine at a company that was, it's not an exaggeration to say, run as a criminal enterprise. This can be likened to a drug organization, and the defendant was the kingpin. I'm going to give you $1,000. Oh, you're keeping it to $100. Thank you very much. God bless you.

If you want to see the future of money, go to the slums of Nairobi. So wonderful. What's happening today in Kenya is a banking breakthrough right up there with the invention of the credit card and the ATM. It is often referred to as Kenya's alternative currency. banking breakthrough right up there with the invention of the credit card and the ATM. It is often referred to as Kenya's alternative currency, but safer and more secure. You're texting money. You are effectively texting money.

I'm Steve Croft. I'm Leslie Stahl. I'm Anderson Cooper. I'm Bill Whitaker. I'm Scott Pelley. Those stories tonight on 60 Minutes. When you're running your own business, you're bound to be busy. Too busy.

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biggest terrorist threat to the United States is not like al-Qaeda. ISIS is wealthy, agile, sophisticated online, and operates freely in a vast territory of its own. It prefers to be called the Islamic State. The U.S. government calls it ISIL. Reporters tend to call it ISIS for the Islamic State in Iraq and Syria. But whatever the name, it has the manpower, means, and ruthlessness to attack the U.S. The man who is supposed to stop that attack is John Brennan, the director of the CIA. And tonight, in a rare interview first broadcast in February, we hear from Brennan about a world of trouble. And we start with the most pressing danger. Is ISIS coming here? I think ISIL does want to

eventually find its mark here. You're expecting an attack in the United States? I'm expecting them to try to put in place the operatives, the material or whatever else that they need to do, or to incite people to carry out these attacks, clearly. So I believe that their attempts are inevitable. I don't think their successes necessarily are. Can you explain to the folks watching this interview why these people want to kill us? How does attacking the United States further their interests? I think they're trying to provoke a clash between the West and the Muslim world, or the world that they are in, as a way to gain more adherence, because what they are claiming is that the United States is trying to take over their countries, which is the furthest thing from the truth.

Paris was a failure of intelligence. All but one of the eight terrorists were French citizens, trained by ISIS in Syria. They returned unnoticed and attacked six locations, killing 130 people. What did you learn from Paris? That there is a lot that ISIL probably has underway that we don't have, obviously, full insight into. We knew the system was blinking red. We knew just in the days before that ISIL was trying to carry out something.

But the individuals involved have been able to take advantage of the newly available means of communication that are walled off from law enforcement officials. You're talking about encrypted Internet communication. Yeah, I'm talking about the very sophisticated use of these technologies and communication systems. After Paris, you told your people what? We've got to work harder. We have to work harder.

We need to have the capabilities, the technical capabilities, the human sources. We need to be able to have advanced notice about this so that we can take the steps to stop them. Believe me, intelligence and security services have stopped numerous attacks. Operatives that have been moved from maybe the Iraq-Syria theater into Europe, they have been stopped and interdicted and arrested and detained and debriefed because of very, very good intelligence. But the failure in Paris allowed ISIS to attack with bombs and assault rifles. And Brennan told us there's more in their arsenal. Does ISIS have chemical weapons? We have a number of instances where ISIL has used chemical munitions on the battlefield. Artillery shells? Sure. No.

ISIS has access to chemical artillery shells? There are reports that ISIS has access to chemical precursors and munitions that they can use. The CIA believes that ISIS has the ability to manufacture small quantities of chlorine and mustard gas. And the capability of exporting those chemicals to the West? I think there's always a potential for that. This is why it's so important to cut off the various transportation routes and smuggling routes that they have used. Are there American assets on the ground right now hunting this down?

The U.S. intelligence is actively involved in being a part of the effort to destroy ISIL and to get as much insight into what they have on the ground inside of Syria and Iraq. John Brennan has worked at the CIA for most of 36 years, ever since he saw a want ad while he was in graduate school. And he was a high-ranking executive here during the recent controversies. Iraq's phantom weapons of mass destruction and 9-11. Do you think of waterboarding as a dark time in the history of your agency? Sure. Waterboarding was something that was authorized. It was something that I do not believe was appropriate. It is something that is not used now and, as far as I'm concerned, will not be used again. You were in management here at the time. You didn't stop it.

No. I had expressed to a few people my misgivings and concerns about it. But no, I did not, you know, slam my fist on a desk. I did not go in and say we shouldn't be doing this. I think long and hard about what I maybe should have done more of at the time. But it was a different time. The ashes of World Trade Center were still smoldering. We knew that other waves of attacks were planned and some that were underway. In the year or so before 9-11, the CIA had a covert action plan to attack al-Qaeda in Afghanistan. The administration at that time said, don't do that. We have time. We'll deal with this later. And then 9-11 happened. Is this administration making the same mistake now?

Well, you know, there are a lot of options that are presented to this administration as well as to previous administrations. And the president has pursued what he believes is appropriate for us to do in order to protect the citizens of this country. What do you think our policy would be after an ISIS-directed attack in the United States? If there was a major attack here and we had ISIS fingerprints on it, certainly this would encourage us to be even more forceful in terms of what it is that we need to do. If our policy after an attack in the United States would be to be more forceful,

why isn't that our policy now, before an attack? Well, I think we're being as forceful as we can be and making sure that we're being surgical, though, as well. What we don't want to do is to alienate others within that region and have any type of indiscriminate actions that are going to lead to deaths of additional civilians. The CIA Brennan leads from Langley, Virginia, looks nothing like the agency

he joined. It's grown significantly, but the numbers are secret. CIA fights with its own ground troops and has an air force of drones. The complexity of the threats today is unprecedented. Hacking, the emergence of a more aggressive China, North Korea, Russia, and Iran, and countries failing all across the Middle East. In addition to Syria, you are now dealing with failed states in Libya, Somalia, Yemen. How do you develop intelligence in all of these countries where the U.S. has no presence? We need to be able to operate in areas that are denied to us. We find a way to have our eyes and ears there so that we can inform our policymakers.

I do think, though, that this is going to be more and more a feature of the future. And we here at CIA are looking at how we need to enhance our expeditionary capabilities and activities because we need to be on the front lines. Well, do you imagine setting up CIA bases, covert bases in many of these countries? I see CIA needing to have a presence as well as an ability to collect intelligence and interact with the locals, and we are, in fact, doing that in a number of those areas. Who around here has the authority to okay a drone strike? I know there are a lot of reports about CIA's role and involvement on that, and I think, as you can understand, I'm not going to address any of those reports

about CIA's covert action activities. Do you have to accept the deaths of civilians when making a decision about using these weapons? Do you have to say there are likely to be civilians killed here, but it's worth it? Well, you know, in war, there is what's called the law of armed conflict that allows for proportional collateral, collateral being civilian deaths. I must tell you that the U.S. military and the U.S. government as a whole does an exceptionally, exceptionally strong job of minimizing to the greatest extent possible any type of collateral damage. But it isn't necessarily a shooting war that worries Brennan most. His CIA is facing a new front in cyber. And to focus on it, he set up the agency's first new directorate in more than 50 years.

That cyber environment can pose a very, very serious and significant attack vector for our adversaries if they want to take down our infrastructure, if they want to create havoc in transportation systems, if they want to do great damage to our financial networks, there are safeguards been put in place. But that cyber environment is one that really is the thing that keeps me up at night. Do other countries have the capability of turning the lights off in the United States? Having the capability, but then also having the intent are two different things. I think fortunately right now those who may have the capability do not have the intent. Those who may have the intent right now, I believe, do not have the capability because if they had the capability, they would deploy and employ those tools.

A few months ago, your personal e-mails were hacked. What did you learn from that, Director? It shows that there are ways that individuals can get into the personal emails of anybody. Is privacy dead? No, no. Privacy should never be dead. I know it shouldn't be, but is it in fact with these hacktivists, with these nation-state actors, with all the things that we've learned about government snooping all around the world? Isn't it effectively dead?

You know, it's interesting that people always point to the government or others in terms of the invasion of privacy. Any government. Yeah, but individuals are liberally giving up their privacy, you know, sometimes wittingly and sometimes unwittingly as they give information to companies or to sales reps or they go out on Facebook or the various social media. They don't realize, though, that they are then making themselves vulnerable to exploitation. When your secure phone rings in the middle of the night, what's your first thought? It's usually one of two things. One, it's bad news that something tragic has happened to a CIA officer or to U.S. personnel, or there's been a terrorist attack somewhere of significance. And so when I reach for the phone, I say a short prayer that it's not that.

The other option is that I'm being asked to make a decision in the middle of the night on something that may have life and death implications. It could be something related to a COVID action program. Have officers died on your watch? Yes. Yes. Not long after I came to the agency, we had an officer, a former army ranger, went back out to Afghanistan. And middle of the night, he heard an explosion at the compound next to his where his Afghan compatriots were sleeping. He grabbed his gear,

he went over there, another explosion took place. Rather than taking cover, he went right to the middle of the fight and started to drag his wounded Afghan partners out of harm's way. He was hit twice, continued to fire. Then, as he was continuing to protect his colleagues and comrades, a hand grenade landed not too far from him, and he was mortally wounded. Brennan told us that he has gone to Dover, Delaware, to receive the remains of his fallen. But he can only go when he won't be seen, so no one will connect the body under the flag with the CIA. At headquarters, anonymous stars are carved for the dead, 113 in all, 31 since 9-11.

And Brennan presides over an annual memorial for the families. We have family members of agency officers who died in the 1950s whose grandchildren, grandnieces and nephews, come back here in order to feel a part of this agency. So it's a great, great honor to be a part of this organization where, again, selfless men and women of the agency have done their absolute best. Have we made mistakes? Yeah, we have. Do we need to be held to account for them?

Yeah. But let's not forget the sacrifices that have been made in the name of CIA. Rocket Mortgage by Quicken Loans proudly supports 60 Minutes. Rocket Mortgage brings the mortgage approval process into the 21st century. Fast, powerful, and completely online, Rocket Mortgage Thank you. Check out Rocket Mortgage today at quickenloans.com slash 60 minutes. Equal housing lender licensed in all 50 states. NMLSconsumeraccess.org number 3030. In December, for the first time in U.S. history, a CEO of a major company was convicted of a workplace safety crime. His name is Don Blankenship, and he was once known as the King of Coal. As we first reported earlier this year, the company he ran, Massey Energy, owned more than

40 mines in central Appalachia, including the Upper Big Branch Mine located in Mont Coal, West Virginia, a state where coal is the dominant industry. In 2010, the Upper Big Branch mine was the site of the worst mining disaster in the U.S. in 40 years, the kind of accident that isn't supposed to happen anymore. It was just after three o'clock on April 5th when a massive explosion tore through miles of underground tunnels, killing 29 miners. Prosecutors accused Don Blankenship of ignoring mine safety laws and fostering a corporate mentality that allowed the disaster to occur. It was tremendous. You know, I'm no expert, but just from what I know of what happened and the things that were torn up in there, it had to be like an atomic explosion. Stanley Stewart worked at the Upper Big Branch mine for 15 years.

He was 300 feet underground and had just started his shift when the explosion occurred. I felt a little breeze of air coming from inside. I said, that's not right. Well, then it got harder, and we just took off running to the outside. And you could see the whoosh just keep coming and coming. It seemed like for somewhere between two and four minutes. And one of the younger guys said, hey, what happened? I said, well, the place blew up.

The explosion occurred 1,000 feet underground and nearly three miles inside the mine. These photos, taken by the Mine Safety and Health Administration, have never been seen before and show the force of the blast. Flames moving at more than 1,500 feet per second shot through more than two and a half miles of underground tunnels. Investigators believe the blast was caused by a spark that ignited methane gas that had built up due to inadequate ventilation. Highly flammable coal dust that had been allowed to accumulate throughout the mine fueled the explosion.

That was an early 1900s type of explosion. Conditions should never have existed for that to take place. Stewart was there when some of the 29 miners he'd worked side by side with for decades were brought to the surface. What kind of condition were they in? Their faces were very black, and it smelled like dynamite. I'll never forget that smell. The miners ranged in age from 20 to 61. Most were fathers. A third were killed instantly. Robert Atkins, a former coal miner, and his wife Shireen lost their son Jason,

who was at the end of his shift and was heading toward the mine entrance when he was overcome by toxic fumes. The coal dust was so bad that it carried, it ignited all the way. It took our son's life. It was almost out of the mat. Gary Quarles, a third-generation coal miner, lost his only child, Gary Wayne, who left behind two children. They lived right beside us, and at times we thought that wasn't a good thing for that to be like that. And then after he got killed, I said, that was a good thing.

Gary says he and his son never talked about safety issues in the mines, but Gary knew all about Massey because he'd worked there as well. I knew how they operated. They didn't know nothing but to lie, cheat, and outlaw. That's the way they'd done things. This was a coal mine and a company that was, it's not an exaggeration to say, run as a criminal enterprise. Assistant U.S. Attorney Steve Ruby led the prosecution against Don Blankenship, along with U.S. Attorney for West Virginia Booth Goodwin. This can be likened to a drug organization, and the defendant was the kingpin.

The defendant, Don Blankenship, had for decades been one of West Virginia's most influential and powerful figures. The CEO of Massey Energy, the largest coal producer in Appalachia, he employed 5,800 people and operated more than 40 mines. Blankenship wouldn't do an interview with 60 Minutes, but prosecutors say for years he condoned and tolerated safety violations for the sake of profit. Right up until the time the Upper Big Branch mine blew up, that was the way that the company ran because everybody understood that was the way Don Blankenship wanted it run. That was the corporate mentality that he instilled in this company. That was the culture that existed.

Profits over safety. Profits over safety. He set the tone. He set the corporate culture. Despite receiving daily reports of the high number of safety violations, prosecutors argued Blankenship did little to correct them because Upper Big Branch was a big moneymaker for Massey, earning more than $600,000 a day, and Blankenship's pay was directly tied to every foot of coal mined. In his last three years at Massey, Blankenship's total compensation was more than $80 million. The men and the women that we talked to who worked in this mine said that it was absolutely understood, it was expected, that if you worked at that mine, you were going to break the law

in order to produce as much coal as possible, as fast and as cheaply as possible. Everything was produce, produce, produce. It didn't make any difference of the dangers. It didn't make any difference if you had to take shortcuts. It was all about put the coal on the belt. Bobby Pauly was the only female miner at Upper Big Branch. She wasn't working the day of the explosion, but her fiancé, Boone Payne, was. He died in the blast.

Bobby says she and Boone worried every day the mine was an accident waiting to happen. Everybody knew there were problems. Everybody knew there were safety issues. Absolutely. We all knew. Was there enough air in the mine? Our section never had air. Ventilation is critical to mine safety because fresh air carries explosive coal dust and methane out of the area where miners work.

Without adequate ventilation and proper cleanup, coal dust accumulates and is not only highly flammable, it can cause black lung disease, which most of the miners killed in the explosion were later found to have. A lot of times we wouldn't have any ventilation at all. You couldn't see your hand in front of your face. Really? You could not see your hand in front of your face? Could not see your hand in front of your face.

And that's because there's not fresh air moving through? It's all dust? All dust. This is what's called a dust pump. As part of their case, prosecutors showed jurors the pumps miners were supposed to wear to measure their intake of coal dust. But at Upper Big Branch, Bobby Pauley says they were routinely instructed Showed jurors the pumps miners were supposed to wear to measure their intake of coal dust. But at Upper Big Branch, Bobby Pauly says they were routinely instructed by their bosses to cheat on the test by hanging the pumps in the fresh air.

So your measurements when they were tested came in compliant with the law. Federal mine inspectors visited Upper Big Branch almost daily. But prosecutors say the mine had an illegal advance warning system in place. Security guards at the entrance would relay messages to miners underground, alerting them an inspector was coming. They would use code words. Yeah, bad weather. They would say it's bad weather.

Which means we'll let you know if he's coming your way or going some other way. So you would get word from above that, okay, an inspector's coming, they would use code words, and then you would basically clean up your area to make it look right. Mm-hmm. Yeah. Upper Big Branch was a non-union mine. Inspectors were the only people miners could turn to for help. But they say word was out, they shouldn't be seen talking to inspectors. Was there fear about speaking up? If you wanted a job, you kept your mouth shut. Me, like a lot

of other miners, mining is about the only industry. It's the biggest industry in the state of West Virginia. You have children. You want them to have, You know, you want to provide for them. I was a single mom. You needed that job. I did the best I could. We did the best we could for our families. The guys did as well. Some of the stories that they have to tell are horrifying. Being forced to work without enough fresh air, being forced to work in water

up to their necks, miles underground, being forced to work in areas where the roof and the walls of the mine were falling in around them. Prosecutors say Blankenship was aware of all these safety problems because he was a micromanager who had oversight over every aspect of Massey Mines, personally approving every hire, hourly raise, and capital expenditure. He wanted everybody in that company to know that he was in charge. Do it Don's way. I expect you to do exactly what I tell you to do when I tell you to do it. That was his message to his managers. Absolutely, time and again. And that's on tape. This game is about money.

That message was repeatedly emphasized by Don Blankenship in phone conversations with mine managers he secretly recorded on these machines he installed in his office. I want you to take a deep breath. I want you to listen carefully. You ready? Yes, sir. Being a group president and or someday being a VP of Massey or president of Massey requires that you be focused on dollars. He sent terse handwritten notes and memos to managers, criticizing them for high costs and low coal production. You have a kid to feed, he wrote. Do your job. Pitiful. I could cruise chef you. And in my opinion, children could run these mines better than you all do. The bosses were under pressure.

They were under tremendous pressure. To keep mining, keep getting coal. Keep mining rightly. And they carried out his orders to the T. They treated the people under him as he treated them. I mean, he talked to them like they were dogs. They, in turn, talked to the superintendents or the section foreman, whatever, like they were dogs, and kept that pressure applied to force these people to do his will. Blankenship's attorneys called no witnesses at trial

and pointed to safety initiatives their client put in place at Upper Big Branch. Minor after minor after minor who place at Upper Big Branch. Miner after miner after miner who worked at Upper Big Branch took the stand and said that the so-called safety initiatives were a joke. The safety program stops at the entrance to the mine, and once you're underground, your job is to run coal. After two weeks of deliberations, a federal jury came to a landmark decision, finding Don Blankenship guilty of conspiring to willfully violate mine safety laws. There was never enough evidence to justify convicting Mr. Blankenship. But they didn't find him guilty of conspiring to defraud the Mine Safety and Health Administration

or of lying to investors and regulators about safety violations, felony counts which could have sent Blankenship to prison for 30 years. Under the law, jurors aren't allowed to know whether the counts they're considering are misdemeanors or felonies. And jurors told us they were unaware the count they convicted him of was only a misdemeanor, which carries a maximum sentence of a year in prison. I actually thought they were all felony charges. When you realized, when you heard, okay, maybe he'll serve a year in prison, what was your gut? I was surprised. You were surprised, ma'am? In what way? Surprised that it was so low?

Yes. None of us actually knew in terms of what the time was for the charges. I was pretty pissed. Family members of the dead miners who attended the trial every day were also disappointed. Do you think was justice done in this verdict? No. No? No, there was no justice. Judy Peterson lost her brother, miner Dean Jones. As a result of the explosion, 29 people are gone. And that's a misdemeanor.

That's a perversion of justice. Do we think that a one-year sentence for what Don Blankenship has been convicted of is enough? No, we don't. But it's, at least right now, what the law gives us to work with. Don Blankenship and his attorneys issued a statement to 60 Minutes denying he was involved in any conspiracy. They claim the explosion was caused and fueled by a sudden and unexpected surge of natural gas, though three state and federal investigations found the deaths of the 29 miners were preventable and the result of a failure of basic mine safety standards. Don Blankenship has said this was just an act of God that these kind of things happen in coal mining.

Well, you know, Don Blankenship, I'd like to take those words and stuff them right back down his throat because that was not an act of God. That was man-made, 100%. These men, you know, they weren't just 29 people that got killed. They were a lot of good men. And they deserve better than what they got. Yeah, they deserve much better than what they got. Earlier this month, Don Blankenship began serving his one-year sentence at a federal prison in California.

Blankenship's attorneys are appealing his conviction. Welcome to Play It, a new podcast network featuring radio and TV personalities talking business, sports, tech, entertainment, and more. Play it at play.it. Tech giants like Apple and Google are steadily rolling out newfangled services to turn our smartphones into digital wallets, replacing cash and checks. It may seem cutting edge, but as we first reported in November, there's one country that adopted mobile money years ago, Kenya. Here in the U.S., we can use smartphones to pay for things,

but you typically need to be linked to a bank account or credit card. In Kenya, you don't need a bank account. You don't need a credit history or very much money for that matter, making this country in East Africa a giant experimental laboratory defining the future of money. At a bus station in Nairobi, buses were not only loaded with humans and cargo, but with cash. It used to be the only way for people working in the cities to get money to relatives back in their remote villages. You give the cash to the bus driver, and then you

say when you get up to the village in Kakamega, you will see someone at the crossroads, give the money to him. Guess what happens? The money evaporates. Bob Collymore, the CEO of Kenya's largest cell phone provider, Safaricom, says his company sought to solve the problem. While a majority of Kenyans don't have a bank account, eight in ten have access to a cell phone. So in 2007, SafariCom started offering a way to use that cell phone to send and receive cash. They call it M-Pesa. M stands for mobile. Pesa is money in Swahili. It is often referred to as Kenya's alternative currency, but safer and more secure. You're texting money? You are effectively texting money.

How sophisticated is the phone that you use for M-Pesa? Is it a smartphone? No, it's the cheapest phone you can have. It was designed to work at the lowest level of technology. Hello. Hi, how are you? To get this currency, you go to an M-Pesa kiosk. I give the agent 3,000 shillings, about $30 in cash, and she converts it to virtual currency on my account.

This is pretty easy. It's not like opening a bank account. There are over 100,000 agents like her across Kenya, creating a giant grid of human ATMs. For most, this is a side business. So a pharmacy will sell M-Pesa or a roadside spice shop. This barber will give you a shave and M-Pesa. And yes, you can even buy M-Pesa here.

This is bankless banking. You don't need all those branches. You don't need the branches. You don't need the ATM windows. Absolutely not. Scrolling down the options on the phone menu, you can send money, withdraw cash, pay a bill, or buy goods and services.

And everyone uses a PIN number for security. But this is not like paying with your smartphone in the U.S., because our devices are linked to a bank account or credit card. Most Kenyans who use M-Pesa don't have a bank account. The phone is it. That's it. Now you can spend that 3,000 shillings on anything. Shopping in the name of journalism. I like this.

Can I pay you an M-Pesa? If you have it on the phone, you just click the button and it goes. Daniel says Kenyans use it for everything from taxis to taxes. Is it safer for you and for me to use M-Pesa? Yeah, it's very safe. So do you use M-Pesa to buy gas for the car? Absolutely. Do you pay all your bills with M-Pesa? Most of my bills. In fact, I rarely go to the bank nowadays. At my destination, I tried using the phone money. So Daniel, I've never done this before. You're my very first M-Pesa. M-Pesa customer. Yeah. Okay, I'll assist where necessary.

I typed in his mobile phone number and the amount. The fare was 700 shillings, or $7. I'm going to give you $1,000. Oh, you're tipping me $300. Thank you very much. God bless you. God bless you. There we go.

Now my PIN number. PIN number, yeah, yeah. You'll have that. Don't tell me that. No, I'm not going to tell you. There we go. Now my PIN number. Don't tell me that. No, I'm not going to tell you. That is for your top secret. What do I do now? Accept. Accept, okay. Yeah, it has come.

It worked. And now I'm going to go spend some more money. Hello. How are you? I'm great. I love these bags. How much is this one? Next, I buy a bag at Angie's Curio Shop with M-Pesa. Do you use it a lot in the store? Yeah,

it's like having a bank in your pocket. This is really easy. Now that it's the second time I've done it, I've sent it. Wow. So wonderful. My shopping ended with animals. No, I'm not buying a giraffe. But you can use your phone to feed one. Am I giving you your dinner? While most transactions here are still in cash, M-Pesa is used by 23 million Kenyans, over 90% of the adults,

from the well-heeled to the shoe shiner. This technology was actually invented in England, but it is here in Kenya where innovation using M-Pesa is taking off. We visited the iHub in Nairobi, where local technology startups are inventing new ways to use mobile money. And that mobile money system now acts as a terrific platform which a lot of other innovations has used as a springboard. And the new phrase around town is the Silicon Savannah. The Silicon Savannah. Yeah, you have the Silicon Valley, and here is the Silicon Savannah. Today with M-Pesa, Kenyans can get their salary sent directly to their cell phones, and they can open a savings account and earn interest on their cell

phones. We met Mary Tonke, a Maasai dairy farmer who sells milk in M-Pesa, pays her farmhands in M-Pesa, and even got a loan to buy more cows in M-Pesa. And just a couple of buttons, and then you buy a new cow. Yes. Actually, Mary was able to buy two new cows, and she got a much better rate than she would have at a bank. Since the loan transaction was by phone, there was hardly any overhead. So it sounds like you're rapidly increasing your business. Yes, I'm increasing my business. Business is good. Yes, it's good. We were surprised at how

much M-Pesa has changed life for the poor. In a slum called Kanani, south of Nairobi, we met a pig farmer, Stephen Waineno Wanana. Before M-Pesa, like most Kenyans, he had no electricity. He used to rely on a kerosene lamp for light. It gives smokes here. It emitted toxic fumes, could cause fires, and at $200 a year, kerosene wasn't cheap. But Stephen recently upgraded. He got solar power and his first light bulb. Pretty good. It's lighting your room.

Yes, it lights the room all over. A company called M-Copa Solar invented a way to provide inexpensive power to the slums using M-Pesa. So where is the panel? Is it up here? Yeah, the panel is up there. Can you show it to me? Yeah, I can. Okay.

It's here up. Let me show you. Here it is. Oh, my goodness. It's little. The unit costs about $180, less than kerosene, but still out of Stephen's price range for a single purchase. But he paid only $35 up front and then 40 cents a day in M-Pesa for a year. And he never has to leave the farm. All he does is click his phone, which activates a chip attached to the panel to turn it on.

When you're finished paying it off... It will be mine, no more cost. The solar panel has changed his life. He can tend to his pigs at night and his children can study indoors without breathing toxic kerosene fumes. Past efforts to introduce solar panels to the slums failed, in part because they were stolen. This has been solved because the same chip that turns the panel on can also disable it. So if you don't pay up, they turn your lights off? They have the ability to turn it off?

This guy, they are excellent, madam. Because once I don't pay, they don't have to come to me. The light just goes off. Providing drinking water is another way M-Pesa is making a difference. Nearly a third of Kenyans do not have access to clean water, often relying on a river or water trucked in by donkey. But the village of Jowini got a new pump for its well. Villagers pay for clean water by texting M-Pesa to this meter box, which unlocks the pump.

A villager can get a full month's worth of water for around $6. For decades, development advocates implored banks to open branches in remote places, but it made little business sense. Nearly half of Kenyans live on just $2 a day or less. Their financial transactions were just too small. People don't buy a packet of cigarettes. They'll buy a cigarette. So we need to be operating at that level.

People don't buy a tube of toothpaste. If you go into the slums, you'll see people buy a squeeze of toothpaste. So you have to operate at that micro level. Now, how can that be viable for you as a company? It's like they have no money. Because we believe that if we have now 19 million people transacting small amounts, making small amounts, it will add up.

For each transaction, there's a small fee. How much money annually does Safaricom make from M-Pesa in Kenya? A quarter of a billion dollars. A quarter of a billion dollars? Yeah. You don't have to be greedy to be successful. And you can be successful if you don't have to build thousands of branches and pay thousands of tellers. Actually, when M-Pesa started, Kenya's commercial banks implored the government to impose regulations to impede its development. But the government decided to take a hands-off approach,

which is pretty unusual. The most effective barrier for the success of mobile money around the world is the banking lobby. The banking lobby in most parts of the world is a very strong lobby. And banks have looked at what's happened in Kenya and have decided that they don't want to see that happening in their own countries. Not in my backyard. Exactly. The banking regulators have been persuaded that this is a threat to the banking industry. And it is, isn't it? Well, you know, we live in a disruptive world. Uber came along and completely disrupted a number of things, not just the taxi industry.

Airbnb has come along and has disrupted. And so we are in a disruptive world. We just need to... This is another one like that. Yes, it is. It is. And so the banking industry isn't crazy. No.

No. And PESA does have drawbacks. There are real concerns of criminal enterprises, scams and money laundering. And while it has been introduced in other countries like India, Egypt, Afghanistan and Romania, it has stubbornly refused to catch on as it has in Kenya. But the head of Safaricom thinks it's just a matter of time. Because mobile phones are becoming so much more ubiquitous, every adult in the world will have a mobile phone.

And if you have that tool in your hands, imagine the things you can do. We found among the Kenyans we met that M-Pesa is igniting a real sense of patriotism. Just ask my cab driver, Daniel. It is one of the best things that has happened to our country. But that makes you feel proud. And now you feel you are Kenyan now. Yeah, you think of Kenya, you don't think of high tech. Innovation, you know. That tells you now in the new world order or anything is possible.