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Target Announces Hackers Compromised Customer Credit Card Numbers; Panel Recommends Changes to NSA Spying Program; Lottery Winner Comes Forward; Lottery Winner Couldn't Believe it; John Kerry Regretful of Indian Diplomat's Treatment

Aired December 19, 2013 - 07:00   ET

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

UNIDENTIFIED MALE: This is NEW DAY with Chris Cuomo, Kate Bolduan, and Michaela Pereira.

CHRIS CUOMO, CNN ANCHOR: Good morning. Welcome back to NEW DAY. It's Thursday, December 19th, 7:00 in the east. There is breaking news this morning. Target now says 40 million credit and debit cards may have been exposed by hackers. If you have shopped there lately, put the coffee, the toothbrush or the child down and listen to this, because your information and your money may be at risk. The Secret Service is now investigating the breach. So let's bring in chief business correspondent Christine Romans. What do we understand?

CHRISTINE ROMANS, CNN ANCHOR: We understand Target is now confirming there's been a massive breach of your information. Here's what happened. The magnetic strip on your credit card or debit card through the reader at the Target stores could have been breached. Some 40 million people this could affect.

Here's what Target is saying about it. They say they've resolved this issue. They say they've resolved this issue, and their first priority is to preserve the trust of you, the guests, they moved swiftly to address it. They're working with federal law enforcement and also all of the banks so that they can get this resolved.

Here's what we're talking about -- 40 million credit and debit card accounts from November 27th to December 15th. You had to shop in the store, and that's when that magnetized information on the back of your card was breached. They're working with an accounting forensics team to try to get to the bottom of it.

Target giving us a phone number this morning. If you suspect unauthorized activity on your card with call this number. Here's what could happen you guys. They could make a counterfeit credit card out of that information and start doing purchases. Watch very carefully your credit statements. They could also do ATM withdrawals if they were able to read your pin if you used your debit card when you were shopping at Target, again, from November 27th to December 15th.

KATE BOLDUAN, CNN ANCHOR: Right in the heart of holiday shopping.

ROMANS: Absolutely.

CUOMO: So you know you have to check your staples, do it daily. Make sure there's nothing unusual. However, is this also a window into neglect by Target and other big retailers because we see this, it seems, too often?

ROMANS: I think it's a window into the aggressiveness of cybercriminals. They are very aggressive. Every day this is happening, school information, HMOs, insurance companies, retailers, wherever your information is stored, there are cybercriminal trying to get it. You information at any given time is in something like 5,000 different places in this -- your financial life is out there for someone to try to grasp.

So I think the real important thing here, companies have to do more. We also have to do more to make sure we really watch every transaction. Target wants you to call them. I want you to closely watch what's on your credit card statement, on your debit, call the bank and Target right away if you see unauthorized activity.

BOLDUAN: Pay attention and do it now.

ROMANS: If you are shopping in stores, not online. This does not affect online shopping black Friday and after for Target.

BOLDUAN: Thanks, Christine.

ROMANS: You're welcome.

BOLDUAN: Sweeping change recommended now for the controversial spy programs run by the NSA. A panel appointed by President Obama is calling for an end to the collection of Americans' phone records and tougher standards for spying on foreign allies. But will the White House take the recommendations, put them into place? Let's talk about it with CNN's Jim Acosta. Hey, Jim.

JIM ACOSTA, CNN WHITE HOUSE CORRESPONDENT: Good morning, Kate. That is the question. What is most striking about this report put out there by this review panel that was appointed by the president is that that board has made recommendations Mr. Obama may not accept.

(BEGIN VIDEOTAPE)

ACOSTA: The recommendations issued by a group of national security experts appointed by the president could lead to the most sweeping changes ever proposed for the NSA.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We felt it was important to allow people to see the full report to draw their own conclusions.

ACOSTA: Aimed squarely at the NSA's domestic and foreign surveillance activities revealed by the agency's former contractor and fugitive Edward Snowden, the group's report doesn't hold back, stating "The government should not be permitted to collect and store mass undigested, nonpublic personal information about U.S. persons."

Among the proposals, end the practice of collecting data on nearly every phone call made, appoint a new public interest advocate to protect personal privacy, and new higher standards before any surveillance on foreign leaders, an obvious nod to the firestorm over U.S. spying on German Chancellor Angela Merkel among other heads of state.

And in a challenge to the culture of the NSA and its director General Keith Alexander, the group urges the appointment of civilians, not military leaders, to run the agency. The White House says it understands reforms are needed.

CARNEY: We need to make sure that we're not gathering intelligence solely because we can but because we must, because we need it in order to achieve the objective of protecting the United States, protecting the American people, and protecting our allies.

ACOSTA: The question is what the president will decide. In a recent interview he suggested the NSA could better police itself.

BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES: I'll be proposing some self-restraint on the NSA and to initiate some reforms that can give people more confidence.

ACOSTA: According to a source familiar with this week's meeting between top tech executives and the president, Mr. Obama repeated his goal of self-restraint but indicated he may allow the collection of phone data to continue but with more oversight and transparency. That may not be enough for members of Congress across the political spectrum.

SEN. PATRICK LEAHY, (D) SENATE JUDICIARY COMMITTEE CHAIRMAN: NSA, you've gone too far. The bulk collection of Americans' data by the U.S. government has to end.

SEN. RAND PAUL, (R) KENTUCKY: We do have a right to privacy and we'll continue to fight this.

(END VIDEOTAPE)

ACOSTA: Now, the president is expected to release his own proposals for reforming the NSA sometime next month. But if he does not adopt all of this review group's findings in the coming weeks, expect a big confrontation on Capitol Hill with members of Congress who want to go much farther in terms of protecting the privacy of Americans. Kate?

BOLDUAN: Jim, thanks for laying it out for us. Let's bring in CNN national security analyst and former homeland security adviser to the Bush administration, Fran Townsend. Fran is a lot a member of the CIA external advisory board. So Fran, a lot in these recommendations. What do you make of them?

FRANCES TOWNSEND, FORMER BUSH HOMELAND SECURITY ADVISER: I think in essence this is a lot of process put around to maintain a program that the administration finds very useful, actually across two administrations.

The interesting thing here is that the report suggests that there isn't really a direct link between disruption and this program. But I will tell you, having sat on inside when you're following a plot, you want to disrupt it, you learn interesting and useful information. It certainly generates leads. If they can't tie it directly to disruptions, it does sort of give you information that allows you to target the investigation in a way that you don't without it.

BOLDUAN: So if -- we don't know what the president will do with these recommendations -- if the president, let's say, puts all of these recommendations into place at the NSA, would probably also involve congressional approval, some of them, but do you think that would hinder, hurt our national security?

TOWNSEND: The real thing is you have to ask yourself the question, will it slow it down, will it impede the process? Because speed, the ability to move with an investigation with real speed is the key here to being successful. So I'm a little -- some of this is kind of smoke and mirrors to me. There's lots of recommendations, split NSA from cyber-command. To what end? Some of this is process for process sake to me so they can say they're doing something. But I must tell you I'm not sure it's all substantive.

MICHAELA PEREIRA, CNN ANCHOR: That is really interesting. So what do you think needs to be done then if you agree that something's got to change?

TOWNSEND: Sure. I do think the most important piece to this, Michaela, is giving the American people confidence that this is not abused, so process is important. Oversight is important. I think you have to balance that against, does it impede the usefulness of the program? So that worries me.

One of the recommendations is there should be more civilian leadership at NSA. We haven't been talking about is the deputy right now is a civilian, Chris Inglis is a career official. So you've got a lot of civilian leadership there. That's why I say some of the recommendations as you walk through them, it seems more kind of words than substance.

CUOMO: People from your community are contacting saying don't let the pendulum swing the other way. This isn't stop and frisk, this is spying on terrorism. Let me ask you something -- Greenwald and Snowden, are they starting to be looked at differently through the lens of analysis as we learn more about the programs and what needs to change and that there are big problems?

TOWNSEND: I think that -- the answer depends on who you ask.

CUOMO: I'm asking you, Fran Townsend.

TOWNSEND: My opinion of Snowden hasn't changed. I think what he did is a crime. I think he ought to pay the consequences of that. I understand that there's a community of people out there who believe he's a hero. I do think, in fairness, Chris, when you see the president ask for and get a report with 46 recommendations as a result of the leaks of Snowden, has there been consequences to that leak and consequences on the community? Absolutely.

BOLDUAN: Do you think he'll face, from a political perspective, because this has become quite a political football, do you think if he doesn't adopt a majority of these recommendations that he's going to face blowback?

TOWNSEND: I think the president, having asked for the report and gotten 46 recommendations, he's going to have to implement a fair amount of these. If he doesn't he's going to have to make compromise to view sort of the other recommendations as having taken some action.

BOLDUAN: Definitely explain himself.

TOWNSEND: Yes.

BOLDUAN: Thanks, Fran, great to see you.

TOWNSEND: Good to see you.

PEREIRA: All right, 10 minutes after the hour. Let's take a look at our headlines at this hour. Up to half the prisoners at Guantanamo Bay could be heading back to the countries they came from. Congress reaching a bipartisan deal easing most of the restrictions on transferring detainees overseas. This measure is part of a big defense bill awaiting final passage in the Senate this week. It's viewed as a win for President Obama in his bid to ultimately close down the prison.

It is still burning, but California fire crews believe they finally have the upper hand on Big Sur wildfire. It is about 74 percent contained. Officials believe they could have it fully under control by as early as this evening. The Big Sur blaze burned some 800 acres and destroyed more than a dozen homes.

Former NBA star Dennis Rodman back in North Korea this morning. It's his third trip to Pyongyang at the invitation of Kim Jong-un. He says he's there to help the national team to play basketball and renew his friendship with the North Korean leader. Rodman insists he will not talk politics nor human rights despite political tensions surrounding the recent execution of Kim's uncle.

Some dramatic surveillance video to show you out of Seattle. Prosecutors say it shows 19-year-old Travante Brown terrorizing bus passengers last month, stealing cellphones at gun point. But when he reaches the front of the bus and points the gun at a man's face, that man fights back. Other passengers join in and subdue him. Brown faces robbery and attempted robbery charges. He's being held on $350,000 bail. How terrifying.

BOLDUAN: Not only brazen but the reaction from that one passenger.

PEREIRA: They all kind of got together and decided --

BOLDUAN: Look at him. Gun in his hand, he's walking through --

CUOMO: Picked the wrong guy in a suit.

PEREIRA: Look, again, law enforcement would say this is not the right thing to do because you just don't know how these people are going to react.

CUOMO: When somebody sticks a gun in your face and you realize your life may be about to end, sometimes people do what they feel they have to do in the moment.

PEREIRA: Absolutely.

BOLDUAN: Thanks, Michaela.

CUOMO: Amazing. All captured for everybody to see and think about.

BOLDUAN: Let's get back over to Indra and get another check of the weather.

INDRA PETERSONS, AMS METEOROLOGIST: We're watching a couple storms coming our way. Of course we know the one up side to it. It is going to be warming up significantly. I love this. You know I have a big smile on my face, it will be warm over the weekend on the east coast. We're talking 71 degrees in D.C. by Sunday. Look at New York City, almost 70, 69. I'm taking it. Down in Atlanta, same thing, some 70s earlier for you, though by Saturday.

Keep in mind, it is warm but it is also stormy at the same time. We're talking about heavy rain in the southeast by the weekend. Let's talk about how we're going to get here from where we are today. We'll take you back to the west where there's a storm out there today making its way into the Midwest. Pay attention if you're in Wisconsin, back through Missouri. Some icing conditions are expected overnight tonight. Some freezing rain, we'll be watching out for that. Same system, dies out and dissipates, making its way to the northeast by tomorrow.

Now let's go to the big guy I just showed you bringing all that heavy rain. Here it goes. It's farther to the south. It moves into the area where all that warm air is. You have that moisture coming in out of the gulf. That's not it. The jet stream also in the exact same position. Every time you see that lineup, we know we have a threat for severe weather. That is the concern if and of itself east this weekend.

Look at Saturday, we're talking about Kentucky back through Texas in through Sunday, same system shifting east. We're talking about the Carolinas, still early all around the gulf, heavy rain, flooding concerns there. And the higher north you are, you have the threat of icy conditions. Look at that temperature difference. That means instead of rain, you're talking about icy conditions and snow. Hard to believe, 21 in Burlington, 64 in Roanoke, the exact same system. A little bit of a problem there. That's a biggie. I prefer to be on the upside, warmer.

CUOMO: It's 64?

PETERSONS: Maybe down there. I switched my direction there.

BOLDUAN: Thanks, Indra.

PETERSONS: Sure.

CUOMO: You know who's not worried about the weather, the people who won the lottery, and one of the mega millions winners has stepped forward to claim her share of the $648 million jackpot. This morning, the other winner or winners still remains a mystery. So let's get a little bit more on this with CNN's Sara Ganim.

(BEGIN VIDEOTAPE)

SARA GANIM, CNN CORRESPONDENT: And 56-year-old Ira Curry was driving listening to the radio when she heard the winning mega ball number was the lucky seven, the very number she had picked when she decided at the last minute Friday to buy a lotto ticket. Curry quickly called her daughter who checked the rest of the numbers. They matched!

DEBBIE ALFORD, GEORGIA LOTTERY CHIEF EXECUTIVE: I asked her how did she keep from veering off the road? And she said I was in a state of disbelief. I still didn't believe it when my daughter told me.

GANIM: The draw was a combination of family birthdays and the lucky number seven, a set of numbers the curry family has played before. This time, Curry bought just one ticket at this mall newsstand in Atlanta. One was all it took. The family won half of the second largest mega millions jackpot ever, electing to take a lump sum of just more than $173 million. After taxes, that's about $120 million in cash.

ALFORD: Different family members all checked the numbers and they came down, even as we checked the numbers I don't think that Miss Curry believed she won.

GANIM: The other winning lotto ticket was sold in San Jose, California, the winner there is still a mystery.

UNIDENTIFIED FEMALE: I don't know who it is. I don't know where they're from.

GANIM: The California store owner got $1 million just for selling the winning ticket.

UNIDENTIFIED MALE: Today very good day. I'm so excited.

GANIM: And for the rest of the country, 20 people across the nation won $1 million by matching all numbers except the mega ball. With 21 back-to-back drawings without a winner, call Tuesday's win lucky 22.

Sara Ganim, CNN, Atlanta.

(END VIDEOTAPE)

BOLDUAN: Lucky 22. Thanks so much, Sara.

Coming up next on NEW DAY, a lot on the line today when Secretary of State John Kerry speaks with officials in India. It comes after a controversial arrest of an Indian diplomat. We're going to be joined by that diplomat's lawyer to hear her side. CUOMO: And prosecutors aren't going to quit until that teen who drove drunk and killed four people is behind bars. But will their legal strategy work? Do they even have one? We'll unpack it.

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CUOMO: Welcome back to NEW DAY. A conversation between Secretary of State John Kerry and Indian officials is expected today. It may calm the waters of a full-on international grudge match.

The uproar started when an Indian consular official was arrested in New York on serious charges related to her nanny. Prosecutors and police say they did nothing wrong; no one is above the law. Things, however, turned dangerous when India removed security around our embassy there out of protest.

So what started this? Let's get more on what has turned into an international controversy here with attorney Daniel Arshack. He is the attorney for the consular official, Dr. Devyani Khobragade.

So thank you for joining us, appreciate it.

DANIEL ARSHACK, ATTORNEY FOR INDIAN CONSULAR OFFICIAL: My pleasure, Chris.

CUOMO: This story got ahead of itself. That is my opinion. Let's back up and understand why this all happened in the first place.

So the allegation is -- I got the complaint here -- the allegation is Dr. Khobragade cut a deal with her nanny that said one thing in the visa but was different when the nanny got here. And when the nanny tried to negotiate with her, she wouldn't -- she felt threatened, and she went for help. And that is what started the investigation and the ultimate arrest here.

What is your reckoning of the facts?

ARSHACK: Well, that is what the allegation is, and that allegation has really nothing to do with what the actual facts are. Dr. Khobragade assisted in getting a visa for her domestic worker to come with her from India to work here in the United States.

She entered into a contract with her and that contract was submitted to the consulate in India before she came. She abided by the terms of that contract. There was no fraud. There was no misstatements. All of the documents that have been submitted were accurate and were abided by.

CUOMO: So fair point, this comes down to whose story is true about the nature of the agreement between this woman, the nanny, and the household, right, the visa, the fraud, the international?

ARSHACK: Not really.

CUOMO: How not? ARSHACK: Because the documents speak for themselves. The issue here is whether the domestic worker received the amount of money that she that was supposed to receive. That's the only issue.

CUOMO: Right.

ARSHACK: And in the United States, when someone says `I'm supposed to get paid more than I got paid,' that's a civil action. That's somebody saying you owe me some money. And that's where this should have been resolved.

And before there was ever an arrest of a senior consular officer from the Indian consulate, there might have been, we might have expected, that somebody from the Department of Justice would have called Dr. Khobragade and said, `You know, we have this issue. Why don't we talk about this?'

CUOMO: They say they contacted you about the charges in September. Is that true?

ARSHACK: We -- Dr. Khobragade contacted the State Department in June when this domestic worker disappeared from her house and said she's gone. We don't know where we are -- we she is. And she filed a missing persons report with the New York City Police Department.

CUOMO: Had the nanny, in fact, gone to authorities for help during that period?

ARSHACK: We don't know where she went --

CUOMO: That's what she says.

ARSHACK: -- during that period.

I don't know where she went. Nobody knows where she went during that period.

ARSHACK: That's what the authorities say, that the nanny went in to get help and say, `I'm not getting paid. I'm getting threatened. I don't have leverage here,' and that's what started this.

ARSHACK: That may be. If that's what she's saying (ph), that's what she --

CUOMO: It matters a little bit. It matters a little bit. Here's -- why am I pressing the line of questioning.

Because the situation doesn't make sense, right? The conclusion, you just arrested this consular official for no real reason based on a contract action? Why is the U.S. attorney getting involved in that? That doesn't really seem to make a lot of sense. May be the outcome, but it doesn't make sense.

ARSHACK: I completely agree with you that it doesn't make sense.

CUOMO: But they say it doesn't make sense because that's not what it is. The nanny had two contracts. One was for the purpose of the visa, to make it look nice, but in fact, she was getting hit to a lesser level of servitude essentially and she couldn't do anything about it because she had no power against this woman and this family.

So we are stepping in because that is not allowed here, and we communicated with them and by the way, the arrest is being dramatized. It wasn't that bad. We treat people not as well in many circumstances.

ARSHACK: Well, look, there was one contract that defined how much this domestic worker was supposed to get paid. It defined the amount of paid.

CUOMO: They say there are two contracts.

ARSHACK: The first contract says she'll get paid $9.75 an hour.

CUOMO: Which is the state minimum wage.

ARSHACK: And that's what she got paid.

The second contract was a contract that the domestic worker asked Dr. Khobragade to enter into which would confirm that a portion of the money that she was going to get paid would get sent directly to her husband in New Delhi. And that's what happened. And that's what the documents support.

CUOMO: So there's no second contract that shows it's much less, no proof of less?

ARSHACK: There are two contracts. One says, `Send about $500 a month to my husband in New Delhi.' And the other contract is the original contract, the balance of the money that wasn't sent to New Delhi was paid to her here in New York. All of the records support that, all of them.

CUOMO: It's important because we're trying to understand the situation. So now let's jump to where we are today.

ARSHACK: Sure.

CUOMO: What is Dr. Khobragade's take on whether or not the response by Indian officials is the right one here? Does she believe this is overdone?

ARSHACK: Oh, I don't think anything is overdone at all. We would expect -- and you know on a regular basis when individuals are under investigation or about to be arrested, one thing, a courtesy that can be afforded them and certainly should be afforded to a high level diplomatic employee, is a telephone call.

CUOMO: And that didn't happen here?

ARSHACK: Of course not. Had there ever been a call that said you know what -- from the attorney general's office or from the United States attorney's office saying, `You know what, Dr. Khobragade? We have some concerns. We're going to make an arrest, and if you'd like to come down, we'll process you, no problem.'

We do self-surrenders all the time with defendants in New York, in the southern district of New York, all the time.

CUOMO: Why do you think they handled this way?

ARSHACK: I think they handled it this way because they were trying to humiliate her and flex their muscle and they succeeded in doing that.

CUOMO: Why would they do that?

ARSHACK: They arrested her at her daughter's school; she's dropping off her daughter at a public school on the upper west side of Manhattan. They arrest her there. They bring her to the southern district of New York. They put her in handcuffs. They strip search her. They do a cavity search, and they bring her in hand cuffs into a courtroom where a judge releases her and no money bail. She's released, and she's back with her family now.

CUOMO: They -- the USA disputes some of the circumstances around the detention, but let's put that to the side.

ARSHACK: They don't dispute anything that I just told you.

CUOMO: Well, they said there were no cuffs --

(CROSSTALK)

ARSHACK: They say there was no cuffs on the scene at the school. And I agree with that.

CUOMO: You said they handcuffed her and took her away.

ARSHACK: At -- no, when she's brought to the courthouse, she's put into the United States Marshal Service custody. She's handcuffed there, and the Marshall Service acknowledges that. They acknowledge that they handcuffed her, that they strip searched her --

CUOMO: Gotcha.

ARSHACK: -- that they did a cavity search of her, they put her in a cell.

CUOMO: Why do you think? Why would they -- what could be possible justification?

ARSHACK: This is muscle flexing. That's what this is.

CUOMO: To what end? A visa fraud?

ARSHACK: It sounds odd, doesn't it?

CUOMO: It does. It's confusing.

ARSHACK: Yeah, it's confusing.

CUOMO: And it sure has created a heck of a problem.

ARSHACK: And that's precisely the reason that Secretary of State Kerry, in an incredible moment, stood up and said, `We're sorry. We regret this happened to you. There was a better way to handle this, and we expect that this conversation that's going to be happening today will help move the ball forward to resolve this altogether.'

CUOMO: You are a known and experienced attorney. When you contacted the USA, you've dealt with them before and said, `Why are you doing it this way?' What was their response to you?

ARSHACK: Too late at that point. By the time I got the call, I was told she's being arrested. We're at the school now. We're putting her in a car. We're taking her, and we'll be delivering her to the United States Marshal Service. So I met her at the courthouse after she had been subjected to that kind of rough treatment.

CUOMO: It's important to understand how we got to where we are right now. Mr. Arshack, thank you so much for laying out your perspective. Appreciate it.

ARSHACK: Thank you so much for having me. You bet.

CUOMO: Kate, over to you.

BOLDUAN: Thanks, Chris.

Coming up next on NEW DAY, Hillary Clinton narrowing down when she'll decide on a presidential run. What she's saying now about 2016.

Plus, prosecutors making a new push for tougher punishment in the teen affluenza case we've heard so much about. They say the punishment must fit the crime.

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