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Tropical Storm Andrea to Drench East Coast; NSA Has Access to Servers; Obama Faces Backlash over Surveillance; Obama Promises Transparency; Economy Added 175,000 Jobs in May; NSA Data-Mining Targets Familiar Firms; Critical Zimmerman Hearing Today

Aired June 07, 2013 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JOHN BERMAN, CNN ANCHOR: CNN NEWSROOM with Christi Paul begins right now. Have a great weekend.

CHRISTI PAUL, CNN ANCHOR: Happening now in the "NEWSROOM," liberty versus security. The government is not so secretly now mining your data from Yahoo!, Google, Microsoft. Your phone conversations, status updates, photos, basically your life online. Ahead, we asked how private is private anymore.

Also, millions of Americans getting soaked by Tropical Storm Andrea as it moves up the eastern coastline. Flash flooding from Florida to Virginia. We're live with the forecast.

And jobs, jobs, jobs, and numbers are out. We've got the breakdown. And so what it means for you and your family. Is our economic recovery stalling?

CNN NEWSROOM starts right now.

Take a nice deep breath. You've made it to Friday. I'm Christi Paul in today for Carol Costello. Thank you for keeping me company here.

You know, millions of you are under a flash flood warning right now as Tropical Storm Andrea moves up the Eastern Seaboard. Want to show you some live pictures here. This is from Tybee Island. It's off the coast of Georgia. The storm knocked out power. We know the parts of that area.

And in Holden Beach, North Carolina, want to show you the white caps that are rolling in there. Now there are some areas where emergency officials are warning residents, winds could be so strong, people in mobile homes need to consider relocating during the storm.

Nick Valencia is in Wrightsville Beach, North Carolina.

OK, so, Nick, how have you seen the storm evolve, say, over the last couple of hours?

NICK VALENCIA, CNN CORRESPONDENT: Yes, we've been out here since the early morning hours, Christi. And we've seen the wind pick up. We've seen the waves come in. We've seen that wind create these angry waves behind us, but so far, there hasn't been much rain. There hasn't been too big of a problem here for residence. In fact as I'm speaking to you now there's a handful of residents surrounding us right now. Enjoying a leisurely stroll on the beach. I just spoke to the police chief for Wrightsville Beach, North Carolina. He tells me that the worst of the storm has passed, at least for this area. You have to remember, to put this into perspective for our viewers, that this is an area that's very accustomed to hurricanes, very accustomed to severe weather.

I've spoken to residents who aren't budging one bit this weekend. They don't want to have their weekend plans ruined at all by this severe weather. It may make the weekend a little bit unpleasant but this storm, Christi, is moving up the Eastern Seaboard, and it's heading towards the northeast, the New York area, but right now, things are calming down as the winds pick up here.

Things are calming down so far. The sun is starting to poke its head out. And so far, residents don't seem to be very -- they don't seem to be very unnerved by what's happening here right now -- Christi.

PAUL: I'm always amazed that the people we see out there trying to surf and stuff like that. But we mentioned power outages. We know utility companies are prepared for power outages, I hope you can still hear me. But how expansive have power outages been there, do you know?

VALENCIA: Well, we know that there hasn't been much of an issue right now. The biggest concern for local officials are the rip current. In fact, there's no evacuation order issued for this area. It was expected to be one of the hardest hit areas in the state of North Carolina. Between 1 to 3 inches of rain. You know, it's a good news for the residents here. That it didn't -- it wasn't as bad as we were anticipating, it wasn't as bad as we're expecting.

As I mentioned, you know, the chief of police saying that the worst of the storm has passed. Having said that, Christi, the storm could of course pick up momentum as it goes up the Eastern Seaboard and it's going to cause some problems for the states that are in the eye of the storm in the coming hours and coming days -- Christi.

PAUL: All right. Yes, I think I see the sun peaking out there behind you, Nick. You and the crew, and everybody there on the beach watching it, take good care. We're glad everybody is all right.

As you know, we are waking up this morning to the realization that our government may know far more about our electronic communications than we ever could have imagined. Our phone records, our e-mail, our pictures, our status updates. Both "The Washington Post" and "The Guardian" say NSA, the National Security Agency, has access to the central servers to some of the top U.S. technology firms through a program prism.

Those firms being Microsoft, Google, Yahoo, Facebook, AOL, Skype, Paltalk, and YouTube, some of which started, as you know, back in 2007. Now Glenn Greenwald, one of the reporters for "The Guardian" to first detail this program says the goal is to make all interaction accessible to the government. (BEGIN VIDEO CLIP)

GLENN GREENWALD, REPORTER, THE GODFATHER: There is a massive apparatus within the United States government that -- with complete secrecy. It has been building this enormous structure that has only one goal, and that is to destroy privacy and anonymity, not just in the United States but in the world. That is not hyperbole. That is their objective. To make it so that every single form of human communication, human interaction, human behavior can never be beyond their reach. And they have developed extraordinary sophisticated technologies and enormously expensive mechanisms in order to make that happen.

(END VIDEO CLIP)

PAUL: Now many of those companies -- just so you know -- are denying the government has that access. But the director of National Intelligence says this program is just part of a strategy to protect the United States from terrorist threats.

James Clapper also says this collection is broad because narrowing the scope would limit its ability to screen for and identify terrorism communications. Clapper also insists, by the way, phone calls are not recorded and Congress has been fully and repeatedly briefed on the program.

So you can imagine, right, the shock and outrage over big brother. A former Bush administration official told CNN's Anderson Cooper this is an extension of what Obama campaigned against.

(BEGIN VIDEO CLIP)

ARI FLEISCHER, FORMER WHITE HOUSE PRESS SECRETARY: It's like George Bush is having his fourth term. And I praise President Obama for it. Now I think he's a hypocrite. He campaigned against President Obama. He said it was a violation of the Constitution. He campaign against President Bush. Said it was a violation of the Constitution to do these things, but I think he's learned. This is what is necessary to protect the country and he's wise to do it.

(END VIDEO CLIP)

PAUL: There's always a debate. Security versus privacy, of course. In the latest CNN/TIME/ORC poll, taken two weeks after the Boston marathon bombing, about half of those asked were not willing to give up some civil liberties to curb terrorism. But 4 out of every 10 were. So needless to say these legal searches of phone and Internet records have the ability to overshadow anything the White House wants to get done.

White House correspondent Dan Lothian joining us now.

So does the president have any plans to address this latest scandal, Dan? Do we know?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: We don't know. Yesterday a White House spokesman told me that, you never know, the president might bring it up in some of his speeches, yesterday in North Carolina and then he had a couple of fundraisers, but the president did not touch on this topic at all.

This is a White House that really has been trying to move beyond all the controversies to focus on the economy, to push the president's second-term agenda but it seems as if every day there is a new revelation. Now while some here in Washington believe that when you look at all the domestic terror threats this is a way to protect Americans, but others are very concerned. They think this kind of information gathering is going too far.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): This morning, President Obama is waking up in California as a political firestorm over the government's collection of phone and Internet data intensifies.

SEN. BERNIE SANDERS (I), VERMONT: The bottom line is that the United States government now has phone records and all the records of tens and tens and tens and tens of millions of Americans who have nothing. Absolutely nothing to do with terrorism.

LOTHIAN: The political fallout after news that the NSA was collecting Americans' phone records from Verizon was quick. Public outrage over privacy rights already taking form online.

UNIDENTIFIED MALE: And can you hear me now?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Yes, we can.

UNIDENTIFIED MALE: Can you hear me now?

OBAMA: Yes, we can.

UNIDENTIFIED MALE: Can you hear me now?

OBAMA: Yes, we can.

LOTHIAN: A stinging editorial in "The New York Times" proclaims President Obama's dragnet. And says the administration has now lost all credibility. And the letter to Attorney General Eric Holder from the author of the Patriot Act, Representative Jim Sensenbrenner, who writes he's extremely disturbed by what appears to be an overboard interpretation of the act.

Even the president's liberal base pilled on. The "Huffing Post" ran a photo on its cover page showing Obama morphing into George W. Bush. But the program has its defenders.

REP. MIKE ROGERS (R), HOUSE INTELLIGENCE COMMITTEE CHAIRMAN: This program was used to stop a program -- excuse me. Stop a terrorist attack in the United States. We know that.

LOTHIAN: The White House says these types of orders include data, not phone calls, and have been a critical tool in protecting the nation from terror threats. But some lawmakers want more answers and Attorney General Holder, already under pressure for snooping on reporters, is on the hot seat again.

SEN. MARK KIRK (R), ILLINOIS: Could you assure to us that no phones inside the capital were monitored -- members of Congress?

ERIC HOLDER, ATTORNEY GENERAL: Will all due respect, Senator, I don't think this is an appropriate setting for me to discuss that issue.

(END VIDEOTAPE)

LOTHIAN: The White House is emphasizing that the president has been trying to strike a balance between security and civil liberties, and they insist that there are safeguards in place in order to prevent abuse -- Christi.

PAUL: All right. Again, Dan Lothian from the White House. Dan, thank you so much.

Now remember President Obama claimed that he's committed to transparency and open government. In a memo that's still on WhiteHouse.gov, the White House says, quote, "We will work together to ensure the public trust and establish a system of transparency. Then he directs all government agencies to comply with these directives. "Government should be transparent, government should be participatory and government should be collaborative."

This isn't new. As you know Obama has been campaigning on this and promising transparency for years.

(BEGIN VIDEO CLIP)

OBAMA: The way to make government responsible is to hold it accountable. And the way to make government accountable is make it transparent. Our democracy depends on transparency. We have put in place the toughest ethics laws and toughest transparency rules of any administration in history.

Candy Crowley joining us now. She's our chief political correspondent and anchor of CNN's "STATE OF THE UNION."

So, Candy, good to see you this morning. I'm wondering, has President Obama violated his own promise of transparency, do you think?

CANDY CROWLEY, CNN CHIEF POLITICAL CORRESPONDENT: Well, certainly that are going to be people who say he has on a number of things. And when you look at what's going on with the IRS. And you have one member of the IRS who claiming the Fifth when asked hey, did you have anything to do with this program that targeted conservative groups.

You have meetings that took place to formulate policy, that were not made public. So there are many instances in which critics have said, wait a minute, this is not at all a transparent administration when it -- when it comes to what the government is doing to battle terrorism, I'm not sure anyone expects that the -- FBI or the CIA or the National Security Agency, any of them are going to be transparent about what they're doing to try to catch the bad guys.

So I think it's two different subjects. I think they are problems with these stories coming up, because of the breadth and depth of what seemed to be being collected and certainly you're hearing that from the critics. But I'm not sure this issue is about the transparency of that program. Although we are hearing that -- certainly through Clapper who has already said, a few things about this program that you should know.

There are those who say we should know more about this program. And others who's say the reason it's secret is because we're trying to catch the bad guys.

PAUL: Right. Right. Those are terroristic in nature. "The New York Times," as we've mentioned, I mean, Dan metro -- in his piece. Editorial board wrote, quote, "The administration has now lost all credibility on this issue." Is there any credence to that?

CROWLEY: Well, you played, you know, some of the tapes and we also -- the president was very critical of the Bush administration for having these sorts of monitoring, mechanisms in place. It obviously -- FISA, the act that set up a court to kind of look at what the federal government can do, give approval.

It appears it was sort of rubber stamp nearly everything that was asked of it. But the truth of the matter is that presidents change when they go from campaigner to president. Remember, George Bush at the end of his term, his second term, I had an interview with him, and he had just authorized the bailout of the car companies, at least the first part of it.

And he said this is against every free market principle I ever talked about. I think when presidents get into the office, they're sort of overwhelmed sometimes with the problem that comes at them. And they want to do anything they can to fix it. And that goes for national security.

Having said that, the country still needs to have that conversation. How far are we willing to allow our lawmakers to go? And let's face it, folks on Capitol Hill knew about this program, as well as the White House. So how far is the American public willing to go to protect America when it comes to civil liberties and specifically what civil liberties are Americans willing to give up try to stay safe.

PAUL: Yes. Good point to make. I always say, you know, when you're campaigning you don't really know what you're up against until you get into the Oval Office because you're not privy to that information. So you can say a lot of things that may come back to haunt you.

Thank you so much. Dandy Crowley, appreciate.

UNIDENTIFIED FEMALE: Thanks. Appreciate it. Still ahead now that we know the government enormous stores of phone records and e-mails and pictures and status updates, we'll talk with a tech expert about how to protect your privacy.

(COMMERCIAL BREAK)

PAUL: So glad to have you with us today.

Hey, the U.S. unemployment rate is up, just barely. The May jobs numbers were released last hour and the Bureau of Labor Statistics reports 175,000 jobs added in May. That's more than analyst expected, more than what was added last month. Officials say 11.8 million people though are still unemployed. And that is a small increase from April.

CNN's Christine Romans is in New York. Stephen Moore, senior economics writer for "The Wall Street Journal" editorial page, in Washington with us now.

So, Christine, let's start with you.

First of all, what's the big takeaway?

CHRISTINE ROMANS, CNN BUSINESS ANCHOR: Well, the big takeaway is more of the same. We've got less firing, but not really robust hiring to go in its place. This number is better than expected; 175,000 is better than Wall Street thought it would be. But it's really not enough to make a meaningful, meaningful debt in employment rate. The unemployment rate actually ticking up slightly, the government calls it essentially unchanged at 7.6 percent.

Let me show you a little bit more about the trend, because this is really important here. The takeaway here: this trend, 176,000, not really enough. Not really enough -- 175,000, not enough to really pull down the unemployment rate, but it is a little bit better.

And you can see -- you want to see above this line. Boy, I would love to see, month, month, month above this line, but you're not -- you know, we're not seeing it quite yet.

PAUL: Well, Stephen, let me ask you. What does this show us about how the U.S. is handling forced spending cuts?

STEPHEN MOORE, SR. ECONOMICS WRITER, WALL STREET JOURNAL EDITORIAL PAGE: Well, actually, you know, I think the economy is picking up steam. This was a decent report. It wasn't great. I agree with Christine, but we see the stock market doing a lot better this year. We see the housing market rebounding. We see these low interest rates that are just a real help to the economy.

So, this is a -- this is a pretty good report. I would agree with Christine, we want to see increases in employment of 250,000 to 300,000 to really bring that unemployment down.

One other statistic that I find kind of troubling is, you know, when you look, Christi, at what you call the real unemployment rate, that's people can't find a full-time job and people just pulled out of the labor force because they have become discouraged, that unemployment rate, closer to 14 percent, and that's a big problem.

PAUL: Yes. All right. Christine Romans, Steven Moore, thank you for walking us through the numbers. Good to see you. Happy Friday.

MOORE: Thank you.

PAUL: Back to the top story on secret data mining by the NSA. Well, take a look at these logos because I bet you know them well. They represent tech firms tied to new revelations of sweeping government surveillance. Chances are all of these or many of them are buttons on your smart phone, home screen.

At least three of the firms deny giving the government, quote, "direct access to their servers." However, what does that mean to your privacy?

I'm joined by Josh Topolsky. He's editor in chief of the technology site, "The Verge." Josh, thanks for taking time to be with us.

You know, we keep throwing around this term data mining. What exactly is that?

JOSH TOPOLSKY, EDITOR IN CHIEF, THE VERGE: Well, people casually throw that around term "data-mining" to say, you know, we're extracting data out of something. Looking at big piles of data and trying to extract patterns from the data and analyzing those patterns.

PAUL: OK. So how is the tech world reacting to this news?

TOPOLSKY: Well, obviously, there is a little bit of shock. And some of that comes from the confusion of not knowing whether the companies that are named in this "Washington Post" report, whether those are -- they're willingly involved in this or involved in a way that is beyond their knowledge.

And so -- so right now, we're trying to figure out what the real story here is.

PAUL: OK. So we were told by the administration that content is not being collected. But that's not what one FBI agent told us specifically after the Boston bombing.

Do we have that SOT?

(BEGIN VIDEO CLIP)

TIM CLEMENTE, FORMER FBI COUNTERTERRORISM AGENT: I'm talking all digital communications are -- there's a way to look at digital communications in the past. I can't go into detail of how that's done or what done. But I can tell you that no digital communication is secure, and these communications will be found out, conversation will be known, and it's just a question of whether or not Katherine Russell decides to own up to what was said prior to that information being known or after the fact.

(END VIDEO CLIP)

PAUL: Look this is jolting to a lot of people who are hearing that right now. How vulnerable are we, really? TOPOLSKY: Well, I mean, what we heard is that the NSA is looking at metadata, which is call records, what numbers called, what other numbers, time of calls, things like that. They're looking at -- apparently more access to our e-mails, to the data we have stored on servers, whether it's Google's or Apple's.

Being able to tap into a phone and record a conversation has not been brought up here, and certainly to go back in the past and replay a phone call is not -- has not been mentioned in any of the reports we've heard about, the PRISM system. But it's possible. I mean, we didn't know about PRISM yesterday, now we do. Who knows what we'll find out today?

PAUL: Or tomorrow.

TOPOLSKY: Right.

PAUL: Josh Topolsky, thank you so much, Josh.

TOPOLSKY: Thanks.

PAUL: Editor in chief of "The Verge." Good to have you with us.

Well, so, coming up at the bottom hour, Wolf Blitzer is gong to lead a debate on what's more important, national security or your civil liberties?

We're back in just a moment. Stay close.

(COMMERCIAL BREAK)

PAUL: Twenty-five minutes past the hour.

And a critical hearing of the George Zimmerman case continues today. The start of the trial is just three days away at this point. Well, the judge dealt another blow to the Zimmerman defense yesterday, saying three witnesses cannot remain anonymous.

CNN's Martin Savidge is in Sanford, Florida.

So, Martin, I'm wondering, since they can't remain anonymous, is there a fear that perhaps they might lose some witnesses?

MARTIN SAVIDGE, CNN CORRESPONDENT: Yes, I think that's what they are worried, Christie, was that they are witnesses know that a lot of people following this trial, and that emotions are running high, and that by getting on the witness stand and being identified, they would be in fear perhaps of some sort of reaction to what they said.

So the defense want to make sure that everyone speaks exactly what they know. And they thought the anonymity would help, but it was denied.

Today, the big issue is going to be that 911 call. And that, of course, is crucial. That call is going to be introduced, and that witnesses and the jury are going to hear that. It's the interpretation, that's the real issue here. And there is one expert for the prosecution who says that he hears things other people have not heard, specifically Trayvon Martin, begging for his life. Defense sees that as a problem. They think the science involved here is flawed and they are fighting to prevent it.

The emotions, as I point out, very high on this courtroom. Yesterday, we had this unusual circumstance where you had one of the defense attorneys on the witness stand, and you had the prosecution cross- examining him, and it got pretty heated. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: My question is, we would be asking sanctions for you all to wait until the last minute to disclose it to us. You don't think it's a fair trial for both sides?

DON WEST, GEORGE ZIMMERMAN'S ATTORNEY: I'm not laughing because I think this is funny. This is far, far from amusing.

UNIDENTIFIED MALE: Let me ask you this --

WEST: We caught you hiding the information and confronted you about it, and you never gave it to us. And we called a witness today to prove that you hid that information and then misrepresented it to the judge.

UNIDENTIFIED MALE: Sir, with all due --

(END VIDEO CLIP)

SAVIDGE: This is a contention that the defense is making that the prosecution has not given all of the evidence as they are supposed to do in discovery. The judge is yet to rule on that matter.

But the big issue today, Christi, is going to be that 911 tape.

PAUL: All righty. Hey, Martin Savidge, thank you so much for bringing the latest.

And the question today, does the Obama administration need to come clean on this surveillance program, or does national security trump our right to know how our personal communications are accessed? The growing debate over online life, that's coming up next.

(COMMERCIAL BREAK)