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President to Address NSA Surveillance Scandal; Subpoenas Issued in New Jersey Bridge-Gate Controversy; Senate Releases Report on Benghazi Attack; Interview with Philippe Reines; Michelle Obama Celebrates Birthday With Dancing

Aired January 17, 2014 - 07:00   ET

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

CHRISTINE ROMANS, CNN CORRESPONDENT: The software contains a new kind of attack method that is able to covertly subvert network controls and common forensic tactics, concealing all data transfers.

ROBERT SICILIANO, MCAFEE ONLINE SECURITY EXPERT: It's an unknown exploit, one that they have seen before.

ROMANS: Eyesight called the malicious computer code Khartosha (ph), a Russian word because parts of the code were written in Russian. Accord to the "Wall Street Journal" who spoke to sources familiar with the report, parts of Khartosha (ph) have been on the Internet's black market for weeks. The paper added that unnamed U.S. officials say these details suggest the attack may have ties to organized crime from the former Soviet Union. And in a newly issued e-mail by Target to its customers, the cyber-attack stole much more than pin numbers. Names, mailing addresses, phones numbers, and e-mail addresses were also taking.

SICILIANO: Consumers need to be aware right now paying very close attention to their statements. You can check your statements online every single day.

(END VIDEOTAPE)

ROMANS: Target will testify before Congress in early February. No federal laws exist setting out standard rules for when and how companies must report data breaches to customers and to law enforcement. Officials say the main objective of the hearing will be how customers can protect themselves. But fair to say it is the Wild West out there with your information and hackers around the world trying to get it.

KATE BOLDUAN, CNN ANCHOR: And fair to say. Customers almost have a right and responsibility to be very wary of what they're being told here about this.

ROMANS: Absolutely. This is going to be bigger. It's not just Target. And everyone's very concerned about how wide this going.

BOLDUAN: Thanks, Christine.

ROMANS: You're welcome. BOLLING: In just a few hours -- we are just now learning new details about President Obama's much anticipated speech on surveillance reforms for the National Security Agency. With the White House under fire over controversial data collection programs, the president is promising to limit the NSA's reach. CNN Senior White House correspondent Jim Acosta is here with much more. So Jim, what more are we learning about the plans that he's going to propose?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Kate, a senior administration official tells CNN President Obama will announce that he is ending the NSA's bulk phone record collection program, quote, "as it currently exists." One key recommendation is that the NSA need a, quote, "judicial finding" before it can use that database. It's all part of a speech that the president and his team were working on into the night for an event at the Justice Department later this morning.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: End mass surveillance.

ACOSTA: More than six months since former NSA contractor Edward Snowden started leaking the details of the government's massive surveillance programs, President Obama is poised to make some changes to the ways Washington spies on the world.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We can and should take steps to make the activities we engage in in order to help keep America safe and Americans safe more transparent.

ACOSTA: The president is expected to weigh in on one of the most controversial programs, the bulk collection of American's phone records, a practice a federal judge and even one member of the White House's own NSA review panel have called unconstitutional.

GEOFFREY STONE, WHITE HOUSE NSA REVIEW GROUP: It leaves sitting out there a huge amount of information, personal information about Americans that could be abused in awful ways.

ACOSTA: A senior administration official says the president will call for those phone records to stay at the NSA temporarily, but he will seek input on Congress and the intelligence community on where to store that data permanently. The president is also expected to appoint a public advocate to take part in the secretive federal surveillance report and scale back eavesdropping on foreign leaders.

That move would begin some much needed diplomatic healing after widespread reports of spying on U.S. allies like the German Chancellor Angela Merkel.

The NSA controversy has placed the president in a position he likely never saw coming.

BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES: No more ignoring the law when it is inconvenient.

ACOSTA: That is, defending a surveillance state he once criticized when he first ran for the White House.

OBAMA: That means no more illegal wiretapping of American citizens.

(END VIDEOTAPE)

ACOSTA: And Congress is now waiting for the president to call for more oversight and transparency over at the NSA. As for that massive spending bill that raced through the Congress and passed this week, there is a provision inside that bill that calls on the administration to lay out details as to the number of phone records being stored by the NSA. It also requires the administration to lay out details as to terrorist activities that have been disrupted by those surveillance activities. But the president, as we mentioned at the top of this, in just a few hours from now, Kate and Chris, is expected to call for some sweeping changes to that phone metadata program, and some big changes will be coming for this administration and for the National Security Agency.

CHRIS CUOMO, CNN ANCHOR: Jim Acosta from Washington, thank you for that.

Now we move onto Chris Christie. He is one of the few officials not served a subpoena in the bridge-gate scandal. And 17 people have been served by a special state committee along with three organizations have been served as well. These are just a few people on the list, including Bridget Ann Kelly, Christie's former deputy chief of staff, and Bill Stephien, Christie's fired campaign manager.

Let's go to Erin McPike live from Trenton this morning. People will hear that the governor has not being subpoenaed and that may make them that think he is out of the woods, but that is hardly the case.

ERIN MCPIKE, CNN CORRESPONDENT: Chris, yes, that's hardly the case, but John Wisniewski, the chair of the committee that's investigating this, yesterday said during a press conference that it's clear that Chris Christie wasn't involved at least in terms of the documents that they have already reviewed. His name just didn't come up. He said he thinks he probably didn't know anything about it at the time. Now, Wisniewski did say that the intent was to use process servers to deliver subpoenas to the people who were being served last night and into this morning. But the list of names leaked out early last night, it affects a wide range of Christie's top staff. Many of them are lawyering up too.

(BEGIN VIDEOTAPE)

JOHN WISNIEWSKI, (D) NEW JERSEY ASSEMBLY DEPUTY SPEAKER: There's no intention right now to subpoena the governor.

MCPIKE: Governor Chris Christie in the clear for now according to John Wisniewski, the Democratic assemblyman leading the special committee investigating the so-called bridge-gate controversy. The reason -- he says because Christie's name has not come up in any documents that have already been reviewed. But the probe is growing in scope. After holding an executive session, the committee decided to subpoena 17 people in three groups they've seen listed in already reviewed documents.

WISNIEWSKI: I want to be very clear, though. Those people who will receive them, some of them may expect them, some of them may not.

MCPIKE: CNN has obtained a list of those being subpoenaed. Among them are Christie's chief of staff, his communications director, and his attorney general nominee. Also names already cited in e-mails, like the chairman of the Port Authority, Christie's press secretary, and his former deputy chief of staff at the center of the controversy.

The request for documents comes from newly hired special counsel Reid Schar, the lead prosecutor in both corruption cases against the now imprisoned former governor of Illinois Rod Blagojevich. To Republicans, that's a point of contention.

UNIDENTIFIED MALE: There are 56,000 lawyers in the state of New Jersey. Couldn't you find one?

MCPIKE: Democrats on the committee countered they wanted not only competence, but the best in the country and someone without a conflict of interest. For his part, team Christie lawyered up too, bringing on former assistant U.S. attorney Mastro of New York. But Christie himself is moving on, hitting the Jersey Shore Thursday morning.

GOV. CHRIS CHRISTIE, (R) NEW JERSEY: Whatever test they put in front on of me, I will meet those tests because I'm doing it on your behalf.

MCPIKE: This weekend, he'll test the strength of his political standing nationally with fundraisers for Florida governor Rick Scott and a dinner to cozy up to wealthy Republican donors Sunday night ahead of a likely 2016 presidential run, all of this before his second inauguration which will happen noon on Tuesday at the Trenton War memorial.

(END VIDEOTAPE)

MCPIKE: And Christie is trying to move past this in many ways. Today, he'll head to Rutgers University to swear in a new justice for the New Jersey Supreme Court. Now, on Tuesday, during his inauguration, he has a prayer service at 8:00 a.m. He gets sworn in at noon, and then he'll give a 25 minute address. There is a party at 8:00 at Ellis Island, but he is obviously trying to move on and doesn't want to talk about this anymore, Kate and Chris.

BOLDUAN: Erin, thanks so much for the update.

So on the heels of a Senate intelligence committee report that calls the attacks in Benghazi, Libya, likely preventable, top Republicans are renewing criticism of Hillary Clinton's leadership during her time at the State Department. But as 2016 presidential buzz around Clinton grows louder, and as "TIME" magazine asked the question "Can anyone stop Hillary?" it's clear the debate over her political future is heating up now more than ever.

Let's bring in Philippe Reines, a senior advisor to Hillary Clinton. He's also the founder and managing director of Beacon Global Strategies. Philippe, it's great to have you here.

PHILIPPE REINES, SENIOR ADVISOR TO HILLARY CLINTON: Thank you, good morning.

BOLDUAN: The last time that we talked, we talked about this. This was as Hillary Clinton was leaving office. It was during the inauguration. Since then you now have this report and you have some Republican senators jumping on it. Let's listen to a little bit of what they said.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM, (R) SOUTH CAROLINA: She couldn't be on TV to talk about what happened in the State Department because she was distraught? I don't buy that. Does anybody believe that about Secretary Clinton?

SEN. JOHN MCCAIN, (R) ARIZONA: Except for one mention in the minority views, there is no one, no individual who is held responsible. So now we have a conversation where bureaucracies are responsible but individuals are not.

SEN. KELLY AYOTTE, (R) NEW HAMPSHIRE: There were failures and no one has been held accountable. Why?

(END VIDEO CLIP)

BOLDUAN: Lindsey Graham even making comparisons to how Chris Christie has handled the scandal around him and how things were handled differently in the administration during Benghazi? What's your take? You're a close adviser to Hillary Clinton. Does Hillary Clinton think now that this attack was likely preventable?

REINES: Well, the attack, everyone would have loved to have done everything and go back in time and do more to prevent it. With the benefit of 20/20 hindsight, there are many things that could have been done differently. And the report that the Senate Intelligence Committee released this week echoes previous reports, which is to say that there was no specific warning. There was no specific intercept or any kind of classified information to say this is going to happen here, anything that was what they call actionable.

So the question is, what were the decisions that were being made in that window? And I think it's important to remember that this isn't in a vacuum. There are some people as a matter of policy who don't think the United States should be in these places. And that's a valid opinion if they want to have it, that's a valid debate to have. That is not one that this president or Secretary Clinton believes. She believes if you aren't in these places, you are creating other problems for the United States.

America has vital national security interests in these places. We can't only protect ourselves or advance or national security through our embassy in Switzerland. There are places and they tend to be dangerous and thankfully the men and women of the diplomatic corps and the foreign service, they take that responsibility and they put themselves in harm's way.

BOLDUAN: Do you agree with the report then that it's likely preventable?

REINES: I don't know what that means. I know that this report comes on the heels of three or four previous reports. And you know what the hardest hitting report was on the State Department? The State Department. And it was led my Ambassador Tom Pickering and Admiral Mike Mullen. And they didn't pull any punches. They came up with 29 recommendations of things that should be differently. Secretary Clinton at the time accepted all 29 immediately and pledged to leave office until all 29 were on their way to being implemented. I know that's a process of a State Department is still doing.

And the most important thing is -- the reason to look back not just to understand what happened, it's not to affix blame. It's to make sure that this is prevented in the future and that --

CHRIS CUOMO, CNN ANCHOR: We both know, responsibility, if it's going to end at the top there has to be assessment at the top, there has to be action at the top. The criticism here is there wasn't. Whatever list of recommendations there were you had Secretary Clinton stand up in front of the hearing committee and say what difference does it make why this happened. And now in light of the report it seems to make a big difference what you knew, what you didn't do about it, and what price you should pay for those choices.

REINES: Well, Chris, what she actually was responding to was a senator who was asking her about why is it you believe there was a protest? Why did someone go on a television show on Sunday and say that it wasn't planned. What she was saying was, once it happened, it happened. Four Americans were killed. That is what is most important, to figure out what happened and how to prevent it, not to continue to harp on the political benefits of looking at what was said by who at what time, because those questions have been answered in addition to the Congressional inquiries that have been done and the State Department's own.

There's been comprehensive reporting lately about what did happen outside the gates that night. And it's found that to some extent that there was things going on, that people in the city, by the way, were very much attuned to what was happening in Cairo and the infamous video that was roiling the region.

So there is a point where healthy debate has to meet somewhere in the middle where people are acknowledging responsibility, acknowledging that obviously when four Americans are killed something went terribly wrong, and working to fix that. And it seems that that's not happening.

BOLDUAN: And you know that going -- you well know, you watch it all. There is so much discussion even though her decision has not yet been made about 2016 that when that decision is made if she runs this will follow her. You know that very well. She also has a book coming out. How forthcoming is she going to be about Benghazi in this book from what you know, because people want to hear more from Hillary Clinton, what she knew, when she knew it, what her process was when this all went down?

REINES: Well, I think you don't have to wait for the book to do that. Secretary Clinton has appeared many times in the last, I guess, 14, 15 months, including seven hours in front of both sides of Congress to answer every single question they've had. So in terms of what she did, how she did it, she's been very vocal about that. She is proud of what she has done to -- to handle and to improve and to try to prevent that.

In terms of the politics of it, it's very, even sitting here, very difficult to shift to talking about people losing their lives in the politics of 2016. For as much as people want to make the two the same and to use one in that context, we don't see it that way.

I know that sounds canned, but we just don't and we're not going to help those who want to. And I would think that, again, in the context of trying to be constructive to prevent this from happening again, which is the most important thing, is not to make it a political football.

CUOMO: That's the point. That's the point is that you lost lives. Everybody regrets that. So you want to make sure that there's responsibility and accountability.

REINES: Yep.

CUOMO: Because without that, then you don't change going forward. But the points are well made, Philippe, appreciate you being here.

REINES: Thank you for having me.

BOLDUAN: Thanks so much, Philippe.

CUOMO: We're going to go from political wildfires to actual wildfires now. Because there are thousands who live in a path of a fast-moving wildfire in California. They've had to be evacuated from their homes this morning. Flames have charred more than 1,700 acres so far, destroyed five homes in the foothills of the San Gabriel Mountains about 30 miles northeast of Los Angeles. We're tracking this for you.

Indra Petersons is watching it. What do we see so far?

INDRA PETERSONS, METEOROLOGIST: It's the exact opposite of what we want to be seeing. This is the rainy season for southern California. They should be seeing rain, not fires. Instead, they have record breaking temperatures. They have low humidities and strong winds. So much so, that this fire is so big you can actually see it from space.

Love this map because it actually shows you here the picture from yesterday what is going on. You can see it's these northeasterly winds. And notice the mountain range. They're squeezing through these canyons and producing these fires on the other side.

The confusing thing for a lot of people, the colder the air is in the great basin, the better chance you have for these fires. Why? Well, take a look where that cold air is and keep in mind the big difference between temperatures brings strong winds, right?

Now you have these strong winds. And remember I showed you that mountain range? You're taking all that wind -- it has nowhere to go. So it squeezes through those mountain ranges. And as it does so, a little physics for you guys, the pressure will increase, and you're actually going to bring those temperatures way up, so much so that even at the coast line on the other side of the canyon, those temperatures are record-breaking right now, a good 20 degrees above normal.

What else happens when it squeezes through those canyons? They dry out. So humidities going to the single digits. So that's the concern, typical Santa Ana wind going on here. Drought conditions are now extreme. It looks like the governor most likely going to make a statement today about emergency drought conditions in California.

Let's talk about what else is going on across the country. We have some cold fronts making their way through. So all the action is really on the eastern half of the country.

Here's where a series of cold fronts are going to make their way through. Blizzard conditions yesterday in the Dakotas and Minnesota. That same system not producing blizzard conditions, but more snow expected in through the Ohio Valley today and eventually making its way to the northeast for the weekend.

Remember, there are several systems. If you add all of them together, the hotspots, right around Minneapolis, you can see about four to six inches. Also, north of Syracuse, those are going to be the hotspots. Everyone else, maybe one to two inches, kind of a wintry mix switching between rain, sleet and snow as each system kind of passes through.

Temperature-wise, coldest air still going to be, of course, to the upper Midwest, starting to cool off in the north. And then, of course, there is the record-breaking heat once you go out West.

So it's kind of a weird concept. So the colder the air is, the higher the fire danger out west. That's what's going on.

BOLDUAN: Thanks, Indra.

PETERSONS: Sure.

CUOMO: Following the fires, other news as well, so let's get to John Berman in for Michaela.

BERMAN: Thanks so much.

So it is a done deal in Congress and President Obama could sign a measure funding the government through the end of September as early as today. The Senate gave the final legislative sign-off on the $1.1 trillion spending bill following the lead of the House with an overwhelming show of bipartisan support.

The bill's passage eliminates the threat of another government shutdown any time soon. And it's really the first time in years that Congress has managed to pass a real long-term budget.

Former Defense Secretary Robert Gates says he agrees with President Obama that imposing new sanctions on Iran now would probably torpedo nuclear negotiations. And he said six months should be a firm deadline for a deal. On Thursday, the White House released a 30-page roadmap for implementing the agreement to law-makers on Capitol Hill.

New details from the deadly shooting in an Indiana supermarket that left two women and a gunman dead. Police now say the suspect, 22- year-old Walter Bair, may have known his victims. It's not clear what their relationship might have been. Bair was shot and killed by police after he turned his weapon on them. The identities of the two women he killed have not been released.

Some long forgotten photographs reveal the space shuttle Challenger disaster as it happened. Michael Hines (ph) of Massachusetts had been searching for photos to include in a memorial service for his grandmother when he came across these Challenger photos. The film prints were copies given to Hines' (ph) grandfather years ago when he was a NASA contractor. To Hines' (ph) knowledge, the photos had never been published. Still tragic.

And now, just look at this video from Fulton County, Georgia. Wow is right. Four thieves driving right through the front of a gas station convenience store. This was a botched smash-and-grab robbery. They were trying to make off with the ATM machine inside, but it was bolted too tightly to the store. A clerk and a customer rushed to the store's cooler to hide. They were not hurt. The thieves took off empty-handed, and they are still on the loose. Fools on the run.

CUOMO: What do you think they were trying to do? Back in and then --

BERMAN: They were trying to back in, smash the ATM over. It's something, you know, these people do, get the cash and go. But it was bolted too tightly to the floor.

BOLDUAN: Thanks, John.

Going to take a break. Coming up next on NEW DAY, a Texas man arrested for warning drivers about a speed trap. He says it's his First Amendment right. Does he have a good argument?

CUOMO: And 50 and fabulous. That's Michelle Obama. She's having the big 5-0. They say it's the new 40, so that's OK. And she's having a big party to celebrate. We're going to give you little details about the secret guest list and some of the other stuff to make it extra special.

(COMMERCIAL BREAK)

BOLDUAN: Welcome back to NEW DAY. Today is First Lady Michelle Obama's birthday. Happy birthday! She's describing the milestone as fabulous at 50. This morning, new details about the big party plans and the star-studded guests heading to the White House to celebrate the first lady.

CNN's Nischelle's in Los Angeles with all the details. So tell, tell, tell.

NISCHELLE TURNER, CNN ENTERTAINMENT CORRESPONDENT: Well, first of all, I hope I look as fabulous at 50 as she does. That's for sure, Kate.

Yes, the first lady is 50-years-old. Hopefully, she is watching this morning while somebody's bringing her breakfast in bed. That's what she deserves on her 50th birthday. And she says, according to her, that it's all just getting better.

(BEGIN VIDEOTAPE)

MICHELLE OBAMA, FIRST LADY: You know, I'm going to be 50.

(APPLAUSE)

Yeah. 50.

TURNER (voice-over): First Lady Michelle Obama is embracing the big 5- 0, recently describing herself as 50 and fabulous. Yesterday President Obama gave his wife a half century shoutout.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It's her birthday tomorrow.

(LAUGHTER)

So I want everybody --

(APPLAUSE)

-- to just keep that in mind.

TURNER: There are big plans for Mrs. Obama's big night, a snacks, sips, dancing and desert party at the White House.

M. OBAMA: I'm not exactly sure yet what I'm going to do, but it might involve some dancing.

(APPLAUSE)

TURNER: You better believe this party will have dancing, lots of it. Guests have been advised to practice their moves and wear comfortable shoes.

It's well-known and well documented that Mrs. Obama loves to get her groove on. The guest list for the big night has been kept under lock and key. But many expect Beyonce and her husband, hip hop mogul Jay- Z, to attend. She sang for the first couple's first dance at the 2008 inaugural ball.

BEYONCE, SINGER (singing): -- looked at you.

TURNER: The fist lady made headlines this week following a candid interview with "People Magazine" where she talked about getting older and even the possibility of getting botox, saying, "Women should have the freedom to do whatever they need to do to feel good about themselves. Right now, I don't imagine I would go that route, but I've also learned to never say never."

UNIDENTIFIED FEMALE: She was open to talking about her body, how she's changed her workout, menopause. She's getting ready for a really active 60s, 70s and 80s.

TURNER: Those who know the first lady say she'd never have predicted she'd be celebrating this milestone at the White House.

TURNER (on-camera): You think she planned to be the first lady?

UNIDENTIFIED FEMALE: Oh, absolutely not. No, that -- that took her by surprise.

(LAUGHTER)

I remember when I interviewed them, this was before Barack had even been elected senator, you're going to be first lady one day. And she just laughed and smiled, like, "Oh, my goodness you must be kidding."

TURNER (voice-over): Good thing they say 50 is the new 40 because Mrs. Obama shows no signs of slowing down in the years ahead.

(END VIDEOTAPE)

TURNER (voice-over): And by the way, if you were one of those lucky ones to get one of the invites to the party, then the motto is EBYC. That means "eat before you come". Because you might be drinking and dancing and eating sweets, but there is no sit-down dinner. And I don't think anyone will really care. You know, Mrs. Obama only said she wants to dance. She wants to have a good time and celebrate. And it looks like that's exactly what she's going to be doing tonight.

BOLDUAN: EBYC, the new version of BYOB, I guess.

TURNER: Exactly.

BOLDUAN: Thanks, Nischelle.

TURNER: You know, guys, one of the --

BOLDUAN: No, go ahead.

TURNER: That's all right.

CUOMO: No, now you have it.

TURNER: I was just gonna say, one of the things I learned about Mrs. Obama in kind of doing this story and doing the special that's going to run tonight is that -- we all look at her as this regal and kind of very tall and beautiful woman.

She was very insecure about her height growing up. And I was kind of surprised about that because she seems so put together. But I listened to an interview that she did with that "Chicago Tribune" reporter. And the transcripts -- and I listened to her talk about it. And she said, "You know I really didn't get it. I was really kind of weirded out about how tall I was and very insecure." So hey, even the first lady has her insecurities as well.

CUOMO: And now, after being in politics, her height is the least of her insecurities.

(LAUGHTER)

TURNER: There you go.

BOLDUAN: Thanks, Nischelle, that was fun. EBYC. I like that. That's my kind of party. Eat before you come. We're gonna be dancing all night.

And as Nischelle pointed out, Michelle will bring us much more in CNN's new documentary, "An Extraordinary Journey: Michelle Obama turns 50". That premiers tonight at 10 p.m. Eastern right here on CNN.

CUOMO: All right, coming up on NEW DAY, is Hillary really unstoppable as a new magazine headline claims? Or will this report on the Benghazi attack derail her hopes? We'll break it down for you in the gut check.

BOLDUAN: Also ahead, is it freedom of speech or breaking the law? A Texas man warning drivers about a speed trap is put in cuffs and arrested. We're gonna find out what could happen to him from our legal expert.

(COMMERCIAL BREAK)