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EARLY START

NSA Under Fire; Diplomatic Disaster; The Fed will Taper; Rodman Returns to North Korea

Aired December 19, 2013 - 05:00   ET

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


CHRISTINE ROMANS, CNN ANCHOR: Another big blow to the NSA. A White House task force demanding big changes to the agency's controversial spying program. Why some say this program is ripe for abuse.

JOHN BERMAN, CNN ANCHOR: A diplomatic disaster on two continents this morning. A diplomat arrested and strip-searched here. So was she mistreated or does she think she is above the law? The very latest as the White House tries to calm there this morning.

ROMANS: Speaking of diplomacy, Dennis Rodman returning to North Korea this morning, just days after a bloody family feud shook up the country's government. We are live.

BERMAN: Good morning, everyone. Welcome to EARLY START. Great to see you this morning. I'm John Berman.

ROMANS: I'm Christine Romans. It's Thursday, December 19th. It's 5:00 a.m. in the East.

BERMAN: And we're going to begin this morning with the startling advice being given to the White House over the NSA spying programs. That advice -- stop it, at least stop doing it like you are.

A panel of outside experts hand-picked by the White House is urging the president to rein in the NSA's wide-ranging data dragnet and restructure how the NSA is collecting logs of phone calls. All told, there are 46 recommendations in their report.

Chief national security correspondent Jim Sciutto has a look at what the panel said and the potential impact.

(BEGIN VIDEOTAPE)

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, John and Christine, the headline here is one of the panel members told me is accountability and that is accountability for the NSA to Congress, to the White House, and to the public.

And you see that reflected in these 46 recommendations. For instance, they recommend that Congress pass legislation to move all of that phone metadata from the NSA's hands back to the phone companies to private hands where the NSA can access it when they need to, but they don't hold it all the time.

In terms of the White House, they recommend that at the highest there level, there must be approval whenever the NSA is listening to the conversations of foreign leaders.

You remember the outrage when it was discovered that the NSA was listening to Chancellor Angela Merkel's conversations in Germany.

And in terms of the American public, a number of recommendations. One of them is that the NSA should be had heed next time by a civilian and send the message not as a military leader running it but a civilian there is more public oversight, but also that the NSA restate its mission which is collect foreign intelligence on foreign targets, so refocus there so not this impression that they are listening to Americans calls.

Now, the issue here is, though, the president doesn't have to take all of these recommendations. He's going to look at them now, decides which ones he wants to take and which ones he doesn't want to take.

A senior administration official told me he's going to look at them and make his decision probably by January. But we already know one of the recommendations he has not accepted and that is from this panel, they recommended that the NSA be split from the military cyber command. The White House has already rejected that one.

But that said, the senior administration official told me the White House is aware, they have a trust gap here with the American public but also the foreign public and they want to address that. The president is going to really listen to these recommendations, make some changes and I'm told it's likely in January, he is going to make a speech to the American public explaining his decision -- John and Christine.

(END VIDEOTAPE)

ROMANS: All right. On Wall Street, that taper tragedy turned into a triumph, a token taper as one of my sources called it. Ben Bernanke announcing Wednesday the Federal Reserve would reel back its bond buying program, by only slightly, by $10 billion a month. At the same time, assuring investigators the Fed was in no hurry rate to raise the interest rates down the road.

Big rally on Wall Street because of that, the best of both worlds really for stocks. You've got the Fed still with a lot of stimulus in the system and acknowledging the economy is strong. These are what the markets look like overnight. The European markets rising this morning in London, Frankfurt and in Paris.

On Wall Street, where investors worried about the taper for months, they're now embracing it. Both the Dow and the S&P 500 hitting records. The markets taking the Fed announcement as a nod of approval for the economy as I said. If you look at the big picture, yesterday's rally was even more impressive. There it is, John. For the year, the Dow is up 23 percent, the NASDAQ up 35 percent, the S&P 500 is up 27 percent.

It was Ben Bernanke's last Fed press conference. His term expires at the end of January. He's the man who started the Fed's massive, near $4 trillion support program for the economy. It's fitting he is also at the helm when the Fed starts to pull back ever so slightly.

(BEGIN VIDEO CLIP)

BEN BERNANKE, FED RESERVE CHAIRMAN: Our modest reduction in the pace of asset purchases reflects the committee's belief that progress toward these economic objectives will be sustained. If the economy data broadly support the committee's outlook for employment and inflation, we will likely reduce the pace of securities purchases in further measured steps at future meetings.

(END VIDEO CLIP)

ROMANS: Further measured steps, that's what Wall Street really likes about it. What's helped Bernanke? The economy has been performing better. The job market is improving. I mean, it's far from great, but it is improving. GDP is stronger. Housing in the midst of a big rebound. Auto sales are strong.

For consumers, the Fed news means mortgage rates are likely go up, but gradually, same for car loans. The Fed is in no hurry to see a rates rise quickly enough. The reason for this token taper as one of my sources calls it, or taper light. Savings rates will eventually go up, too. That would be a good thing for consumers and a best thing a growing economy is also good for job and income prospects.

BERMAN: They really seem to hit the sweet spot there. There was A lot of concern and a lot of worry, but they seemed to nail it, as far as investors are concerned.

ROMANS: You know, we've never been here before. So, no one knew how you're going to start to withdraw that $4 trillion. You know, we've never done this before. So, it's all -- it is unchartered territory.

BERMAN: And it probably makes Janet Yellen's job a little bit easier.

ROMANS: It does. It was a good news.

BERMAN: All right. Five minutes after the hour.

And all that's needed now was President Obama's signature. The Senate approving a compromise budget deal that cover spending into 2015 and avoids a possible government shutdown next year. Nine Senate Republicans joined every single Democrat to get this done. The House overwhelmingly approved the plan last week.

The bipartisan deal negotiated by Republican Congressman Paul Ryan and Democratic Senator Patty Murray eliminates some of the forced spending cuts while reducing the deficit by more than 20 billion over a long period of time.

ROMANS: As many as half the prisoners at Guantanamo Bay may be heading back to the countries they came from. As many as half, Congress reaching a bipartisan deal, lifting most of the restrictions on transferring detainees overseas. The measure is part of a broader defense bill awaiting final passage in the Senate this week. It's seen as a victory for President Obama in his bid to shut down the prison.

BERMAN: The White House is planning to tap a new U.S. ambassador to China, Senator Max Baucus. The Montana Democrat would take over a role at a time of growing tension between the two countries following the recent dispute with Japan over air space rights. Baucus has served in the Senate since 1987, and has not known for his expertise in China. He has commented on the nomination.

Now, there are a lot of possible political reasons for this. Baucus was set to retire from the Senate next year. This could boost Democrat's chances of keeping that seat, though it's still a tough hold for the Democrats. And also, Senator Baucus has been quite critical lately about the Obamacare rollout. So, this gets a vocal critic far away like China, far away.

ROMANS: Yes. That's going to be one of the most important jobs, though, I think. Governmental job there is.

All right. Secretary of State John Kerry is trying to calm the fury over the treatment of an Indian diplomat in New York, expressing his regret to a senior official from that nation over the arrest of Devyani Khobragade. The deputy consul general was taken into custody last week and charged with visa fraud and paying her housekeeper a fraction of the minimum wage.

Her lawyer told Piers Morgan police went too far.

(BEGIN VIDEO CLIP)

DANIEL ARSHACK, ATTORNEY FOR DEVYANI KHOBRAGADE: She was handcuffed and put in a cell with other people and treated like an ordinary U.S. citizen charged with the crime. The fact she isn't an ordinary U.S. citizen, she's a diplomat, with immunity and she should have never been treated this way.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Thus far, all indications are that standard procedures were followed, but because we recognize that this is a very sensitive issue in India, we are continuing to review exactly what happened in this case.

(END VIDEO CLIP)

ROMANS: The U.S. attorney in New York says Khobragade was given additional courtesies. He says she was even allowed to make multiple phone calls.

India's foreign minister is pledging to bring Khobragade back to India, in his words, restore her dignity.

BERMAN: Hugely sensitive between the two countries right now.

It is eight minutes after the hour. Let's get a sense of what the forecast looks like for today.

Indra Petersons is here.

Good morning.

ROMANS: Good morning.

INDRA PETERSONS, AMS METEOROLOGIST: Good morning.

Yes, little chilly in the Northeast, but slowly getting better for like a couple of days. A couple of systems are going to be making their way in. We're going to track them.

Here comes the first one. Of course, everything comes from the West. Notice we're going to see a system from the West and make its way across to the Midwest and then eventually over the lakes and, by Friday. So, tomorrow, some light rain into the Northeast, and possibly some icing to the north. We're going to take a look depending on where you are, what you're expecting.

First, let's talk about the amount of snow we are expecting here. You know, some moderate amount of snow, two to four inches or towards the Midwest, further west, higher amounts about three to five inches. The story really for the East Coast is going to be the temperatures climbing.

I mean, take a look at this beautiful weather as far as the temperatures, 69 degrees. That's how high we are climbing in New York City. Hard to believe we had snow just a few days ago. Same thing for Atlanta, even D.C. expected to get up towards 71 degrees. But this does play into a second system that is going to be moving across the country because take a look when you have those warm conditions, you have a system make its way across.

We do have a threat for severe weather into the south Saturday and Sunday and here in the Northeast, a chance for icing for upstate New York and places like New Hampshire and Vermont as well. So, a lot going on this weekend. It's going to be a busy one.

ROMANS: All right. Thank you so much, Indra.

Wow, 69 degrees.

All right. Target customers be on the lookout for fraudulent charges on your credit and debit cards. This is big, and the Secret Service now investigating whether card information was stolen from Target in what's being called a massive data breach. Reports this morning indicate the breach started Black Friday and may have gone on for weeks. There are worries hackers may have gotten enough data to create counterfeit credit cards.

Folks, please check your statements. The longer you go with a fraudulent charge on there, the harder it's going to be to get it off. Check it right now and keep checking it.

BERMAN: Seems like a bad, bad situation.

Ten minutes after the hour.

Coming up, diplomacy, embarrassment, disaster? No! It's Dennis Rodman in North Korea this morning, just days after a shocking execution there. What on earth is he thinking? We are live with what he has to say about this, this morning.

ROMANS: And, wow. This story is a shocker. The star of one of television's top rated shows suspended and taken off the show for some pretty controversial comments. "The Duck Dynasty" drama, ahead.

(COMMERCIAL BREAK)

BERMAN: All right. Welcome back, everyone.

From the "this is actually happening" file: Dennis Rodman flying this morning from Beijing back to North Korea for his third visit to one of the most oppressive countries in the world. He is official there to help train a team of North Korean basketball players. The thing is, this comes a week after Rodman's so-called friend Kim Jong-un executed his own uncle.

So, why did Rodman go through with this trip? How is it being received? Is this a PR coup for Kim Jong-un?

Ivan Watson is in Beijing with the latest.

Good morning, Ivan.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Good morning, John.

And you're right, this is a lot more about the strange friendship between the reclusive and young North Korean dictator and the former bad boy of the NBA, because Dennis Rodman may become the first real outsider to meet Kim Jong-un since he basically ordered to have his own uncle executed, a man who had been -- one of the top people in the North Korean regime.

So, we asked Rodman about this here at Beijing's international airport, right before he flew out to North Korea. This is what he had to say.

(BEGIN VIDEO CLIP)

DENNIS RODMAN, FORMER NBA PLAYER: It has nothing to do with me. It has nothing to do with me. I mean, whatever his uncle has doe and whoever's done anything in North Korea, I have no control over that. These things have been going on for years and years and years. And whoever want to be a political insider over there for America and someone of the world try to get a hold of it, great. I'm just going over there to do a basketball game and have some fun.

(END VIDEO CLIP)

WATSON: And, John, a lot of analysts are suggesting that Dennis Rodman may be landing in a country, in a middle of a pretty serious purge of a lot of supporters of the former, you know, slain uncle of the current North Korean leader -- John.

BERMAN: You know, an interesting time to go over to a country just to have some fun when apparently a purge is going on there, Ivan.

Also, families of Americans being detained in North Korea, they in past have been very critical of the trips like the one Dennis Rodman is on. What are they saying right now?

WATSON: Well, take a listen to this sound bite from a sister of Kenneth Bae. He's a U.S. missionary who has been charged, sentenced to 15 years of hard labor in North Korea. He's been languishing in a prison there since last year.

Take a listen to her personal appeal to Dennis Rodman.

(BEGIN VIDEO CLIP)

TERRI CHUNG, SISTER OF KENNETH BAE: Mr. Rodman, if you're watching, please do think about this American citizen -- a father, a husband, a son, and a brother, who has been in prison for 13 months in the DPRK. And while you're there, could you think about him and his family waiting for him to come home for Christmas and do everything you can to bring him home?

(END VIDEO CLIP)

WATSON: Now, Rodman said it wouldn't be entirely appropriate for him to mix politics with his friendship with Kim Jong-un. It is worth noting, though, John, he's traveled to North Korea accompanied by a documentary film crew and it's a trip that is being sponsored by an Irish online gambling company -- John.

BERMAN: Ivan Watson in Beijing for us -- thanks so much.

Now, people have fun with this issue but there are lives at stake here. Thanks, Ivan.

ROMANS: And there's politics involved for everyone who has got their hands in it.

All right. We're getting more details of what happened inside a Reno doctor's office when a man with a gun opened fire, killing a doctor and critically injuring another doctor and a patient before turning the gun on himself.

Police say the gunman was carrying a shotgun and fired five rounds. Those who saw him say they knew something was very wrong.

(BEGIN VIDEO CLIP)

VICKI GREEN, EYEWITNESS: He seemed calm, yet agitated at the same time, because of how he took the rifle or shotgun or whatever it was and banged it on the nurse's desk three times. He started swinging the gun and telling everybody in the waiting room, you need to get out, you better get out. You should get out.

MAC VENZON, DEPUTY CHIEF, RENO POLICE: The fact that the shooter went through the first and second floor, made his way to the third floor of the building would indicate to me it's not a random event. (END VIDEO CLIP)

ROMANS: Wow. The gunman's identity has not yet been revealed. Police say they think they knew who he was but they're waiting to confirm that with his family.

BERMAN: Prosecutors announcing a Nevada man who received asylum in the U.S. is under arrest, accused of helping to plot terror strikes in India. Thirty-nine-year-old Balwinder Singh was arrested in Reno. Prosecutors say Singh was supporting two terrorist groups that were fighting to establish an independent Sheik state.

ROMANS: Prosecutors trying again to put a Texas teen in prison for killing four people while driving drunk. Sixteen-year-old Ethan Couch was sentenced last week to 10 years probation after his attorneys argued his wealthy parents spoiled him making it impossible for him to exercise normal judgment in what some are calling a case of affluenza, but D.A. is asking a judge to put Couch away on assault charges stemming from DWI crash still pending before the court.

BERMAN: A Harvard University sophomore has been ordered to stay away from campus, amid accusations that he was behind the bomb scare that shut down the school and cancels final exams for a lot of students. Twenty-year-old Eldo Kim made an appearance in federal court in Boston to face the charges he emailed a threat to police and the student newspaper, claiming there were explosives in four buildings. Nothing, no explosives were found in any of the buildings. Prosecutors say Kim did it to get out of taking a final exam.

His lawyer called his client remorseful and shattered.

(BEGIN VIDEO CLIP)

IAN GOLD, DEFENSE ATTORNEY: It was on the morning of finals. This was someone, a 20-year-old young man under incredibly pressure. That much is clear.

(END VIDEO CLIP)

BERMAN: Kim, for now, will live with a sister in the Boston area. He faces up to five years in prison if convicted.

ROMANS: All right. A "Duck Dynasty" star under fire this morning for some comments about African-Americans and gays. Phil Robertson was asked by "G.Q. Magazine" about what was wrong with the country and blamed it in part on homosexual behaviors, saying gays are sinners who won't get into heaven and equating it with bestiality and prostitution. He also suggested that African-Americans in Louisiana were happier under Jim Crow than they are now.

Robertson has been put on hiatus and saying, quote, "I would never treat anybody with disrespect just because they are different from me. We are all created by the Almighty and like him, I love all of humanity."

BERMAN: Nineteen minutes after the hour. Count Barbara Walters among the people who find Hillary Clinton fascinating. The former secretary of state, senator, and first lady topped the news anchor's most fascinating people list for 2013.

And big news, folks, Clinton claimed she has not yet decided whether to run for president in 2016 and she claimed she plans to make her choice sometime next year.

ROMANS: That's the 999,000 times she's been asked the question, too.

All right. We now know the name of one of the big mega millions winners of Tuesday's near record 648 million dollar jackpot!

Her name is Ira Curry. She is of Stone Mountain, Georgia. A 56-year- old married mother who a lot of people say she picked the winning ticket using a mix of family birthdays and her lucky number seven.

She did not appear in a hastily called news conference because lottery officials say she was not ready to speak about it, just yet.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: They were very, very excited about the win. They were, as they said, still in a state of shock. She heard on the radio station that they announced or talking about a number 7 as the mega ball. She realized that was her pick and so she called her daughter. She woke up her daughter. Her daughter checked the winning numbers and, sure enough, they were the big mega millions winner for Georgia.

(END VIDEO CLIP)

ROMANS: Look at that beautiful smile. A lot of reasons to smile. After taxes, Curry and her family will walk away with about $120 million. It should take a couple of weeks before she gets her check.

BERMAN: Call me.

ROMANS: Call me.

Look, It's about growing the money, not spending it and we can get it put in a nice safe place.

BERMAN: Ira, we have a future.

ROMANS: A second winner who bought a ticket in San Jose, California, has not come forward yet.

You know, I always dissed the lottery stuff, because I say, look, you're not going to win. But someone always wins it and it's an awful lot of money and we hope it just brings happiness and not grief.

BERMAN: And I hope we could become very good friends.

Twenty-one minutes after the hour. Coming up, a shocking postgame tirade caught on camera. So what is going to happen to this coach? Andy Scholes has the very latest next in the "Bleacher Report".

(COMMERCIAL BREAK)

BERMAN: Two Eastern Conference power houses, really the only two power houses, met in Miami last night as the Heat took on the Pacers.

ROMANS: Good morning, Andy Scholes. He is here with the highlights of this morning's "Bleacher Report". Hey there.

ANDY SCHOLES, BLEACHER REPORT: Hey, good morning, guys.

Well, you know, only December but it's pretty clear the Heat and the Pacers will play in the Eastern Conference Finals again this year. Last night, they were squaring off the second time this season. Indiana won the first match up, so, you know, the Heat wanted to win last night.

And check out heated exchange between LeBron and Mario Chalmers on the bench. They almost come to blows almost during the game but kiss and make up later. This one would actually come down to the wire. LeBron holding on to Paul George as he takes the three that would have tied the game. No foul was called. Heat, they would go on to win 97-94.

All right. Remember this brutal hit from Sunday? Bengals punter Kevin Huber suffered a broken jaw, a concussion, and cracked vertebrae as a result of the blow delivered by the Steelers Terrance Garvin. The flag wasn't thrown on the play, but the NFL has fined Garvin $25,000 for the hit. Huber is gong to miss the rest of the season due to the injuries he suffered on the play.

All right. Turning on the bleacherreport.com today, the sports rant of the year. Tuesday night, Southern Illinois lost to Murray State. Head coach Barry Hinson was not very happy with his players afterwards.

(BEGIN VIDEO CLIP)

BARRY HINSON, SIU HEAD COACH: I got a bunch of mamma's boys right now -- 2 for 11! How could you go 2 for 11? My wife -- my wife could score more than two buckets on 11 tries because I know my wife will at least shot fake one time. It's a lot like house training with puppy dog. You know what? When a dog does something wrong, bad dog!

(END VIDEO CLIP)

SCHOLES: Guys, that was amazing. My favorite part, my wife would at least shot fake.

ROMANS: Wow.

BERMAN: Wow, I got to tell, if I'm his wife or his puppy or his players, I'm not at all happy with that tirade there.

ROMANS: Or his kid, as a mother of two mamma's boys, I'm offended. Whoa!

BERMAN: Yikes.

SCHOLES: He apologized for the whole thing. He said the only he said the only thing he actually regretted from his little rant, was he did call one player out by name and say he was sorry about that. But the rest he said, you know, it was needed. And the A.D. backed him up and saying, "I agree with everything he said."

ROMANS: Wow. All right. Andy Scholes, thanks.

BERMAN: When we come back, the top headlines and everything you need to know for your day, that's right.

ROMANS: My mamma could read that better than you!

(COMMERCIAL BREAK)

BERMAN: A call for a near total overhaul of U.S. cyber spying from a team hand-picked by the White House. This morning, the big changes they want and how the White House will respond.

ROMANS: All right. Attention target customers: Beware. Black Friday shoppers hit by a major, major credit attack. This could affect millions. The very latest in what to do about it, ahead.

BERMAN: And what is Russia up to this morning? Key high profile prisoners set to be free. So, why the sudden change of heart? Who could be relieved? We're live.

ROMANS: Welcome back to EARLY START. I'm Christine Romans.

BERMAN: And I'm John Berman.

Thirty minutes past the hour this morning.