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Syrian Rebels Claim Second U.S. Jihadist Killed; Douglas McCain's Life Before ISIS; Major Data Breach at JPMorgan Chase; ISIS Pushes for "Lady Al Qaeda's" Freedom

Aired August 28, 2014 - 09:00   ET

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


ALISYN CAMEROTA, CNN ANCHOR: Thanks so much for watching. Time for NEWSROOM with Carol Costello.

CAROL COSTELLO, CNN ANCHOR: Thanks a lot. Have a great day.

NEWSROOM starts now.

And good morning. I'm Carol Costello. Thank you so much for joining me.

We begin with the most feared terrorist group in the world, and its appeal to young Americans who are fighting and dying for the hate- filled cause. In Syria, pro-U.S. rebels say they have killed a second American in battle. He was fighting alongside other ISIS fighters, and killed in the very same battle as Douglas McCain of Minnesota. The White House is trying to confirm this information.

Also, Obama -- President Obama faces one of the toughest decisions of his presidency as ISIS gobbles up new territory. Will American forces launch new airstrikes to stop their advance?

We're covering all the angles of this rapidly developing story. Our correspondents and analysts are here to break it all down for you. But let's start in Minnesota.

CNN's Ted Rowlands is in Minneapolis, and Ted, let me read this to you from the mother of a classmate of Douglas McCain. His name is Troy Kastigar. He, too, died as a militant fighter, this time in Somalia. Now this woman tells the "New York Daily News" referring to both her son and Douglas McCain, quote, "They both were sort of searching, it seemed like, I think both of them had a really strong desire to be needed and be of value. And they had quite a few friends in school who were Somali immigrants and an African-American friend whose family was Muslim."

What's the local reaction from there?

TED ROWLANDS, CNN NATIONAL CORRESPONDENT: Well, Carol, this isn't new but it is very concerning as you can imagine. You talked about the two individuals that knew each other in high school, Kastigar went to fight in Somalia back in 2009. He died there. He even possibly was in a promotional video which targets Minnesota young men and women. McCain and Kastigar. They played basketball together. They went to the same high school, Robbinsdale High School in New Hope which is a suburb here in Minneapolis.

This is something that has concerned people here. It's concerned the FBI here that they are targeting, they are the extremists Minneapolis and the reason is because there are -- originally there are a lot of Somalis here and the al-Shabaab group obviously was targeting the Somalis to have them come fight in Somalia, but now it has transferred into ISIS, and it is a very, very big concern.

People here refer to the young men and women who are being recruited who actually go to fight as the Minnesota martyrs, and that is the theme of that video that is out there trying to recruit these young men and women.

The biggest fear, of course, Carol, is that one of these United States citizens with a U.S. passport will be radicalized and then will return to the United States and cause damage here in the U.S. That's the biggest concern, but the fact that they continue to recruit and continue to hear reports of young men and women from the Minneapolis area going to fight overseas for these extremist groups is, as you can imagine, a huge concern not only here in Minneapolis but around the country.

COSTELLO: Of course. Ted Rowlands reporting live this morning.

We want to show you some video we're focusing on this morning. Rebel fighters in Syria say this is the very battle in which American Douglas McCain was killed. It supposedly happened just outside of Aleppo last weekend.

CNN cannot confirm this is exactly when and where McCain died.

We're also learning new details about McCain before he went overseas to fight with ISIS.

CNN's Dan Simon joins us now from San Diego.

Good morning, Dan.

DAN SIMON, CNN NATIONAL CORRESPONDENT: Good morning, Carol. Well, Douglas McCain's transformation to becoming a member of radical Islam is all the more puzzling, considering that just a few months ago he was working as a care provider to the disabled here in San Diego.

We had a chance to talk to somebody who was under his care who says that McCain was generous and compassionate.

(BEGIN VIDEOTAPE)

SIMON (voice-over): American jihadi fighter Douglas McAuthur McCain first crossed investigators' radar in the early 2000s. What attracted their attention, his association with other people with radical beliefs. One, a high school classmate and friend of McCain's in Minnesota who died in Somalia fighting alongside al-Shabaab militants in 2009.

The FBI in Minnesota, McCain's home state, says jihadi recruiters have taken a vested interest in their troubled youth.

KYLE LOVEN, FBI SPOKESMAN: Unfortunately the recruiters and those who would lure youth overseas are very aware that they have a pool of potential travelers here in Minneapolis.

SIMON: Still no indication then that McCain, who studied Arabic at San Diego City College, was involved in anything nefarious. According to law enforcement, he seemed to radicalize gradually in the years since converting from Christianity to Islam.

KANYATA MCCAIN, COUSIN OF DOUGLAS MCCAIN: He grew to have like really strong Muslim beliefs. I know his religion was very important to him. But those people, the ISIS people, they don't represent what my cousin's beliefs are.

SIMON: Despite being on a terror watch list, U.S. authorities did not discover McCain was headed to the Middle East until after he arrived. Exactly how and why he became radicalized bewilders those who knew the 33-year-old. While living in San Diego McCain worked for a program assisting people with disabilities.

JUSTIN FILLEY, FRIEND OF DOUGLAS MCCAIN: Yes, that's him.

SIMON: Justin Filley was one of McCain's clients at the program. For two years, he says McCain helped him with day-to-day activities and spent time with him.

FILLEY: He was just a genuine fun guy. You know, we would do fun things together, hang out.

SIMON: Filley says they became close but lost touch after McCain told him that he was going back to Minnesota. Eventually he was unable to reach him.

FILLEY: It's just a scary picture to imagine. Yes. I miss him a lot, and you know, it's kind of sad right now.

SIMON: Now he and others are deeply puzzled about what would cause a one-time care provider to fight for a terrorist group.

(END VIDEOTAPE)

SIMON: Well, Justin Filley says he knew that McCain was religious but was unaware that he held extremist views.

The bottom line here is, Carol, the last thing you'd expect to see on the resume of a terrorist fighter is care provider to the disabled. Just another dimension to this incredible story -- Carol.

COSTELLO: It is hard to wrap your mind around.

Dan Simon, reporting live from San Diego this morning.

We want to show you some video now from ISIS and in typical ISIS fashion it's gloating about battlefield conquests. Again, CNN cannot confirm the claims posted online, but that's an American M-198 Howitzer cannon that the ISIS terrorists are firing. They cost about a half million dollars each and can shell areas up to 20 miles away.

At the bottom of the hour, we'll talk to our panel of experts as the U.S. rushes to formulate a possible military action against ISIS.

ANNOUNCER: This is CNN Breaking News.

COSTELLO: A major breach at JPMorgan Chase and possibly one other big bank have bank customers jittery this morning. The FBI and the Secret Service say Russian hackers may, may have stolen sensitive account information.

Now whether that has anything to do with what's happening in Ukraine is an open question but we do know that up to 1,000 Russian troops have now moved into southern Ukraine with heavy weapons and they appear to be ready for a fight.

Phil Black is live in Moscow with more for you.

Hi, Phil.

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Hey, Carol. Yes, the Ukraine has accused Russia of crossing the border before with its military but like this, not on this scale. What they're describing is a major Russian military operation with Russian forces now directly involved in the fighting in two key locations near Donetsk, a major city of the region, and also near the port city of Mariupol, on the road towards that town.

Now if this is true, it could be the Russian move that the West has feared for some weeks and months now, because the Ukrainian government forces have been doing well on the ground, winning militarily, beating back the rebels, reclaiming territory, perhaps even looking like they could seize an outright military win. The fear has been that the chances of direct Russian military involvement have increased. So the concern is that this could be a Russian move to change that momentum on the ground.

So far, though, no official comment from the Kremlin. Remember up until now they've always insisted they have no involvement in fighting, sending fighters, sending weapons, any of that sort of practical assistance towards the rebels.

We have, however, heard from a rebel leader, interviewed by Russian state media today, in which he admits that yes, there are Russian soldiers on the ground. He says as many as 4,000 of them but, and it's an important but, he says they are either retired veterans or they are serving soldiers who are on vacation, choosing to spend their holiday time fighting with rebels in the east of Ukraine.

If this is true, it could perhaps explain why there is a significant Russian military presence in that region, but it would not explain why there is so much Russian military hardware being used by these fighters -- Carol.

COSTELLO: All right. Phil Black reporting live for us this morning. Still to come in the NEWSROOM, as I just told you, hackers break into

some of America's biggest banks and the FBI suspects Russia might be behind it all.

Christine Romans is live with more for you.

Hi, Christine.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: At this point it is an investigation, the FBI looking into a data breach at JPMorgan and other big banks. We'll talk about the timing and the suspicions among the cyber espionage community, right after the break.

(COMMERCIAL BREAK)

COSTELLO: The FBI and the Secret Service are investigating whether Russian hackers stole information from customers and it might affect more banks than just JPMorgan. The FBI not only considers this a major breach but a national security matter basically because we don't have a clue what these hackers are doing with the information they stole from customers.

Christine Romans is here with more on this.

This is scary.

ROMANS: It is scary. This is an investigation at this point, we should be very clear that FBI officials telling CNN they don't know the origin or the motive behind this hack yet but a hack into the American financial system, the world financial system really, these are multinational banks, is something that people take very, very seriously.

Now what the cyber -- the hacking community, the people who make a living looking at this and selling solutions for, they're saying that the timing and the sophistication of the hack leaves them to think that Russia should be at the very center of an investigation, because it was sophisticated and they did get a great deal of information, they say, out of JPMorgan.

COSTELLO: What kind of information specifically?

ROMANS: Well, it's interesting because sometimes you see this denial of service attacks and this has happened -- this happened to the banks before, but this is actually retrieving gigabytes of information. And we do know that JPMorgan has said that they are working with the United States Secret Service or were working with the United States Secret Service to determine the scope of this.

And that they are also saying that quite frankly, they have, people try to hack them every single day but they have layer after layer of protections, so they are very serious about it. You know, when you look within the financial reports of JPMorgan, by the end of this year, they're going to have 1,000 people at the bank working on cybersecurity and some $250 million a year they spend trying to keep their systems secure, because, Carol, if you can hack into banks, if you can see what's happening on trading desks for example for gas and oil, right, if you can see -- if you can get access to people's accounts, that's something that goes to the very security of the financial system -- something that people with nefarious intentions for the economy and for the United States could find very, very valuable.

COSTELLO: So, it's sort of a high-tech way of running a plane into the World Trade Towers, right?

ROMANS: It can be. Or it can just something as simple as organized crime gangs who have nationalist bent towards Russia without the knowledge of Russia actually doing something just to be, just to do it. I mean, there are a lot of different reasons, there are financial motives, there can be political motives.

And remember these kinds of hacks have come from around the world. They've been centered in China before, in Iran, in Eastern Europe, from Russia, sometimes with, sometimes without the knowledge of government. So, that's what American officials are going to have to really zero in, on where do this come from? Could it happen again? How do you protect from it? And what were the motives?

Remember, these banks also are the entities that have to enforce sanctions against Russia, right?

So, if the United States Treasury says these certain people in these organizations can't do business with us. You have to freeze the assets. These are the banks who have to do it, it would be one reason you could think there would be political motivation but we don't know yet. Investigators just don't know yet.

COSTELLO: OK. Christine Romans, thanks so much. We appreciate it.

Still to come in THE NEWSROOM, we know this woman as Lady al Qaeda. But what makes her so important to ISIS militants that they offered to release hostages to win her freedom? We'll talk about that, next.

(COMMERCIAL BREAK)

COSTELLO: Checking on some top stories 19 minutes past the hour.

The search goes on for a 23-year-old missing hiker in Israel. He's a United States citizen. Hundreds of volunteers including Aaron Sofer's father have been looking at a forest outside of Jerusalem. Sofer was reported missing last Friday by a friend who was hiking with him. Sofer's parents have put up a $29,000 reward for finding him.

The World Health Organization says a suspected Ebola outbreak in Central Africa is not related to the one that's killed more than 1,500 people in West Africa. Health officials say a woman was infected in the Democratic Republic of Congo after butchering a dead bush animal. The woman and 12 others linked to her have died.

There is new information helping investigators figure out the final route of Malaysia Airlines Flight 370. Australian officials say the missing jet may have turned south slightly earlier than previously thought. Experts analyzed data from a satellite phone call from the ground that was unable to make contact with the plane.

ISIS is upping the pressure on the United States to release a woman known as Lady al Qaeda. She is Aafia Siddiqui, a Pakistani neuroscientist with a world class education. She even has degrees from MIT and Brandeis. Siddiqui keeps coming to our attention because ISIS is offering to set hostages free from the United States releases Lady al Qaeda from a Texas prison.

The current offer is for the release of a female American aide worker.

CNN's Jean Casarez has been looking into this woman.

(BEGIN VIDEOTAPE)

AAFIA SIDDIQUI, LADY AL QAEDA: What I'm saying is simply that a woman is not an unpaid slave.

JEAN CASAREZ, CNN CORRESPONDENT (voice-over): This is Dr. Aafia Siddiqui, also called Lady al Qaeda, a Pakistani national. Her release from a U.S. prison was one of the demands made by ISIS in exchange for American journalist James Foley before he was beheaded by his captors.

In an e-mail sent to Foley's family on August 12th ISIS wrote, "We have also offered prisoner exchanges to free the Muslims currently in your detention like our sister Dr. Aafia Siddiqui."

DEBORAH SCROGGINS, AUTHOR, "WANTED WOMAN": She is an icon. She is the poster girl for jihad. And in that way, she served as a sort of rallying point.

UNIDENTIFIED FEMALE: She is the premier symbol of the Muslim woman in distress.

CASAREZ: Siddiqui earned degrees from MIT and Brandeis University outside Boston. This petite 44-year-old woman, a neuroscientist and mother of three, lived in the U.S. for more than a decade, and in 2003, she disappeared. In 2004, was put on an FBI alert list, considered a clear and present danger.

In 2008, Siddiqui was stopped by Afghanistan National Police for acting suspicion outside a government building. According to court documents, officers searched her handbag and found numerous documents describing the creation of explosives, chemical weapons and other weapons involving biological material and radiological agents.

Handwritten notes by Siddiqui referred to a mass casualty attack, listing various locations in the United States, including the Empire State Building, Wall Street and the Brooklyn Bridge.

When American authorities came to question her the next day, she grabbed one of their rifles and started shooting. Siddiqui was flown to the U.S. where she was never charged with terrorism but convicted of attempted murder. Siddiqui claimed she was framed.

SCROGGINS: She interrupted her trial repeatedly with heated outbursts, anti-Semitic outbursts about Jews, all kinds of things. The judge found that she was mentally capable of standing trial, but that she needed some sort of treatment, and that's why he sentenced her to a prison in Texas where she is able to receive psychiatric care.

CASAREZ: She also has a notorious in-law. Siddiqui married the nephew of Khalid Shaikh Mohammed, the mastermind behind the 9/11 attacks.

CASAREZ (on camera): Based on what you know, is she a scientist or is she a terrorist?

SCROGGINS: She's definitely a terrorist sympathizer, there's no doubt about that. And she was helping terrorists. But she was never -- she's never been accused of actually committing a terrorist act herself.

CASAREZ: Whether she has committed a terrorist act or not, ISIS clearly considers her to be of great value.

(END VIDEOTAPE)

CASAREZ: And this convicted felon or alleged terrorist as many believe is in the federal medical center in Texas now. But I think she's a prime example of how terrorist organizations, they want money for those that they hold, but if they can't get money, they want prisoner swaps.

COSTELLO: I still don't get why she's so valuable to ISIS, because she wasn't really connected directly to ISIS but she was connected directly to al Qaeda. So --

CASAREZ: Exactly, I think because of her name, because of her being this frail, little female. I think that just makes her become something that ISIS wants to promote and get out there.

COSTELLO: Strange. Jean Casarez, many thanks to you.

Still to come in THE NEWSROOM, in a bitterly divided Washington, will President Obama gets the support he needs to take the U.S. fight against ISIS into Syria? One top Republican lawmaker says yes.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: It's pretty clear ISIS is a serious threat. They have the potential to hit us here at home. He's the president of the United States, and if he's prepared to try to prevent that, I'm sure he'll have a lot of congressional support.

(END VIDEO CLIP)

COSTELLO: But the White House says the president could go it alone. So what should he do? We'll talk about that next.

(COMMERCIAL BREAK)