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Early Start with John Berman and Zoraida Sambolin

U.S. to Normalize Relations with Cuba; Sony May Never Release "The Interview"; Tsarnaev in Court; New York State Bans Fracking; Russia's Economy in Crisis: Putin Questioned; Muslim Countries Uniting Against Terrorism; Fed Gives Wall Street Reason to Rally

Aired December 18, 2014 - 04:30   ET

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

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JOHN BERMAN, CNN ANCHOR: A completely new course on Cuba. President Obama reveals an historic agreement to restore relations with the island, that after 50 years of isolation. But this will not happen easily. We're going to tell you about the fight that some politicians are promising. That's ahead.

"The Interview" canceled. Sony pulls the plug on this controversial film after cyberattacks and threats from hackers. Today, U.S. investigators are expected to reveal who is behind the attacks and all eyes are on North Korea. We have live coverage ahead, with the very latest.

Russia in crisis. Its ruble in freefall this morning. President Vladimir Putin being put to the test right now as reporters question what went so wrong. We are live in Moscow with the latest.

Welcome back to EARLY START, everyone. I'm John Berman. Thirty minutes past the hour. Christine Romans is off this morning.

And developing this morning, monumental changes in the contentious and complicated relationship between the United States and Cuba. The president, President Obama, announced plans to normalize relations with Cuba, this after months of closely guarded secret negotiations. The president ordered opening of an embassy in Havana for the first time in more than 50 years. The president will open an embassy in Washington, D.C.

A key part of this deal, you're looking at it right there, the release of U.S. contractor Alan Gross. He spent five years in a Cuban prison. He was immediately flown back to the United States.

(BEGIN VIDEO CLIP)

ALAN GROSS, FREED BY CUBA: God bless you and thank you. It was crucial to my survival knowing that I was not forgotten.

(END VIDEO CLIP)

BERMAN: There was a spy swap. Three Cubans convicted of espionage were released from U.S. prisons. A U.S. intelligence asset imprisoned in Cuba for 20 years, a spy, was set free. Our senior White House correspondent Jim Acosta has the latest on this historic development -- Jim.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: John, it's not the lifting of the embargo, but the cold war between the U.S. and Cuba has started to thaw. This diplomatic deal with Cuba is the culmination of secret talks with the communist nation that begun nearly 18 months ago, in June of last year. Senior administration officials say most of the discussions took place in Canada led by deputy national security adviser Ben Rhodes. And those wheels were in motion when the president and Raul Castro shook hands at Nelson Mandela's memorial service last December in South Africa.

But one key sticking point remained in all of this, and that is the imprisonment of Alan Gross in Cuba.

Earlier this year, the pope stepped in, sending letters to President Obama and Raul Castro, urging both sides to resolve this issue of Gross' status. And then to push the talks forward, the Vatican welcomed officials from the U.S. and Cuba back to Rome just last October.

Then, Mr. Obama and Raul Castro hammered out the rest of this deal in the phone call yesterday, the first presidential level contact the White House says since the Cuban revolution more than 50 years ago.

And then, at the White House, at the Hanukkah celebration, the president talked about his phone call to Alan Gross.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I spoke to him on his flight. He said he was willing to interrupt his corn beef sandwich to talk to me.

(LAUGHTER)

I told him he has mustard in his mustache. I couldn't actually see it.

But needless to say, he was thrilled. And he landed at Andrews in a plane marked the United States of America. He's going to get the medical attention he needs. He is back where he belongs, in America, with his family, home for Hanukkah.

ACOSTA: A senior administration official said Cuba's former leader, Fidel Castro, was not involved in the negotiations for this deal. As for a presidential trip to Cuba, the White House is not ruling one out, nothing Mr. Obama was in China last month, and China, they say, still has its own human rights issues and issues when it comes to democratic freedoms -- John.

(END VIDEOTAPE)

BERMAN: All right. Thanks, Jim.

This morning, there is a raging political debate over this move. Opponents say it throws the Castro regime a lifeline, instead of letting the sanctions continue to squeeze it out of power.

Two Republican senators, you can see them both right there, both Cuban-American, both possible presidential candidates, they denounced this agreement.

(BEGIN VIDEO CLIP)

SEN. MARCO RUBIO (R), FLORIDA: This policy contradiction is absurd. And it is disgraceful for a president who claims to treasure human rights and human freedom.

SEN. TED CRUZ (R), TEXAS: We have seen for six years under this situation is that we have been consistently alienating and abandoning our friends and allies, and at the same time, appeasing and coddling our enemies.

(END VIDEO CLIP)

BERMAN: You heard there first. Senator Rubio vowed to disrupt the plan and block any possible nominee for ambassador to Cuba.

Among the reasons that some critics give for not normalizing relations, they say that Cuba admits to harboring fugitives wanted by the United States, including some accused of terrorism.

Now, one of the most contentious parts is the release of three Cubans convicted of espionage in the United States. You can see them here landing in Cuba after their release from U.S. prisons. These were the final members of the so-called Cuban Five, part of a 1990s spy ring that infiltrated Cuban exile groups, spied our military installations in South Florida.

One of these men, Gerardo Hernandez, was convicted of conspiracy to commit murder for his role in the downing of the planes flown by the exile group Brothers to the Rescue.

Family members of pilots killed in that 1996 incident are furious.

Listen.

(BEGIN VIDEO CLIP)

MAGGIE ALEJANDRE-KHULY, BROTHER KILLED: In no way, in no way it was, in no way in this, in no way equivalent to Gerardo Hernandez who has blood on his hands.

(END VIDEO CLIP)

BERMAN: In South Florida, you see a difference of opinion among Cuban-Americans. Some are shocked, some are torn. This coming, of course, after the sudden unannounced change -- or previously unannounced change that 50-year-old U.S. policy.

Many older Cuban-Americans are furious, calling the president as much as a traitor. Many younger Cuban-Americans seem pleased.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The last six years, this administration has been negotiating with Cuba, everything in exchange for nothing.

UNIDENTIFIED MALE: Unfortunately, unlike many in my community, I believe and I believe that many in my community believe that Cuba's best days have not yet been seen.

(END VIDEO CLIP)

BERMAN: Now, the normalization of these relations, this could have a very pretty big impact on American businesses.

Cristina Alesci is here with that.

Good to see you again.

CRISTINA ALESCI, CNN BUSINESS CORRESPONDENT: Well, eventually, these sanctions are lifted, we are talking a lot more than Cuban cigars. Many American companies could profit from increase in trade.

First, companies that make inexpensive staples like soap and packaged goods could obviously benefit. It could also be a big win for American carmakers.

Plus, another big one, travel. Cuba could be a huge vacation destination for Americans. In fact, shares of Carnival and Norwegian cruise lines jumped yesterday on the news.

All together, American businesses could be looking at an extra $1.2 billion in sales. And Cuba could get another $700 million a year.

A quick check on the markets. It's a good morning so far for stocks. Asia and European stocks up, that's after the Federal Reserve said it is in no rush to raise interest rates.

Right now, U.S. futures are looking up, too, after a big rally yesterday. You know, a lot of investors and traders now see these low interest rates perhaps throughout 2015. So, you are looking at an interest rate hike in 2016, which would be a big boon for the markets. The markets love low interest rates.

BERMAN: You bring up a good point on Cuba. The embargo not lifted. That will require congressional action. But what you see now is investors and businesses sort of drooling at the process that some day they may get more of an economic relationship.

ALESCI: Yes, indeed. They are trying to ready themselves for when those embargoes are lifted. I'm sure there are plenty of executives in war rooms planning on how to sell goods to Cubans right now.

BERMAN: No doubt. Cristina, thanks so much.

All right. There is another major story developing this morning, new this morning: Sony announced that it will cancel the release of the film "The Interview." They may never release this controversial comedy in any form, they now say, including home video.

This news comes as U.S. officials prepare to announce they have determined that North Korea is behind the huge cyber attack on Sony and the threat of violence that led most major theater chains to drop the film.

Now, that announcement from U.S. officials could come as soon as today.

We are also learning this morning that the federal law enforcement agencies received internal warnings about the threat to theaters, but that the FBI did not issue a bulletin because it did not believe that the hackers posed a real threat.

President Obama seemed so echo that view in an interview.

(BEGIN VIDEO CLIP)

OBAMA: The cyberattack is very serious. We're investigating it. We're taking it seriously. You know, we'll be vigilant. If we see something we think is serious and credible, then we will alert the public. But for now, my recommendation would be that people go to the movies.

(END VIDEO CLIP)

BERMAN: All right. So much going on with this story. We are joined by CNN's Will Ripley live in Tokyo, of course, the corporate headquarters of Sony.

Will, what's the latest?

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Well, John, I can tell you that here in Tokyo, not only Sony executives, but the Japanese government are watching very closely what's going to happen in the United States in the coming hours or days. There are two things the United States is leading the way on right now. They are investigating. Sony here in Tokyo told me most of the investigation happening in the United States, but also the fact that U.S. law enforcement officials are first to say what frankly most people have been thinking and suspecting that North Korea is behind this attack.

The next thing that Japan is going to be watching very closely is what's the response is going to be. If North Korea is believed to be responsible, what retribution, what consequences would there be for an action like this truly unprecedented attack on an American corporation that has brought this corporation to its knees, cost it potentially hundreds of millions of dollars, shaken, rattled people within the company, and caused some Americans to be fearful if indeed the movie was released in theaters, which we now know it's not going to be. There will be people who probably wouldn't go because of the threats that were made.

All of this is brand new territory. But the coming response is crucial and people here in Japan are watching it very closely. Right now, they are still staying silent, which you can bet they are monitoring what's happening in the United States.

BERMAN: And, of course, there are questions, Will, and people asking -- is this not giving the North Koreans, if they are truly behind this, is this not giving them what they want? And those questions will be asked all over this country and other countries as this story progresses.

Will Ripley live in Tokyo, thanks so much.

North Korea has been suspected of cyberattacks before, including some against South Korean media outlets and banks. Now, the three-year mourning period for his late father has ended. There are some people who suggests there could be even more coming from Kim Jong-un.

Kyung Lah is live in Seoul with more for us this morning.

Good morning, Kyung.

KYUNG LAH, CNN CORRESPONDENT: Good morning, John.

What's next is certainly what is this country's concern, because it is -- it's not really a surprise for a lot of people in South Korea. Not a surprise for the tech people here that this happened, because there is a cyber war happening here in the peninsula, between the North and the South. But the fact that North Korea decided to take the cyber war off the peninsula and attack a large company like Sony, a company that is well-entrenched in America, that is what is surprising here for South Korea.

And the people here were speaking to are wondering what is next? What is North Korea capable of? The first sign that this country knew something was what's happening was last year when the banks were at time were paralyzed, when media companies went dark.

So, John, cyber war that has full blown here in the peninsula, now going global -- a big concern.

BERMAN: A cyber war that may in fact be effective if the North Koreans, if they did launch this, getting what they want. Sony pulling this picture.

Kyung Lah for us in Seoul -- thanks so much.

Happening right now, Russia facing major economic turmoil, the ruble in freefall. And as we speak, President Vladimir Putin being questioned, grilled, by reporters. We are live with what he has to say and who he says is to blame. That's next.

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BERMAN: Happening right now: Russian President Vladimir Putin is in the middle of his annual news conference. He is -- no doubt, he is already facing questions about the economic turmoil in that country. The value of Russia's currency has been plunging in recent days. Part of that is due to oil, part of that possibly due to Western sanctions following Russian aggression in and around Ukraine. We have CNN's Matthew Chance live for us in Moscow with the latest.

Good morning, Matthew.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Good morning, John. That's right.

He started off this press conference, Vladimir Putin, with an introduction in which he talked about the economic crisis, trying to reassure this country that the mess they are in economically would be dealt with, would be handled. They said the recovery would take in the worse case scenario two years. But he did pledge that he and his government would overcome the economic challenges facing the country. Those economic challenges are great, of course.

The ruble, the Russian currency, plunging by 60 percent against the dollar over the course of the year. He said that he will use the country's foreign exchange reserves to support the ruble as much as possible and whenever necessary, also saying that he would reduce spending and key diversify the Russian economy.

Remember, the Russian economy is almost wholly dependent on the price of crude oil. It rises and falls with the price of crude, which is why the ruble has been dragged down so much over the course of the past several weeks because of crude oil has been going down as well. That has been a fundamental economic mistake on the part of the Russian leadership. It's left them vulnerable to fluctuations in the global oil market. And Vladimir Putin now, not for the first time I have to say, he is saying that Russia will diversify away from that dependence on oil.

And so, these are the kind of reassuring remarks he is making as he faces questions over the course of the next four hours or so from journalists from around the world, journalists from Russia, journalists from Ukraine as well. He was asked by a Ukrainian journalist about the situation there. And he again took this opportunity to deny that Russians are engaged in combat operations inside Eastern Ukraine. This is something that the Russians have denied all along, despite reports from NATO and others that Russian troops are indeed doing more than just giving moral support to the rebels in Eastern Ukraine, but providing weapons and actually engaging in combat operations.

Again, Vladimir Putin denying that. So, little sign, John, that he is do an about turn on his international issues at this key press conference.

BERMAN: No. It's always an event when he takes these questions once a year, like this from reporters. I think what Russians probably want to see is what happens in the next few days with the financial moves and with the currency.

Matthew Chance in Moscow for us, thank you so much.

Forty-seven minutes after the hour. Boston marathon bombing suspect Dzhokhar Tsarnaev will make his first

appearance in court in more than a year this morning. He will attend a final pre-trial hearing before jury selection begins in this murder trial on January 5th. His lawyers have filed a motion to delay that start date. The judge could rule on that request today. The 21-year- old has already pleaded not guilty to a 30-count indictment.

Missouri Governor Jay Nixon has lifted the state of emergency he declared for the St. Louis area, in the wake of Michael Brown's shooting death. Nixon praised the work of local and state police and Missouri National Guard for containing their work following the grand jury's decision not to indict Officer Darren Wilson. There was not a single fatality in the protest.

New York City Comptroller Scott Stringer looking to settle a pending $75 million civil rights lawsuit being filed by the family of Eric Garner. High profile cases like this death are usually handled by the city's law department which is overseen by the mayor. But Comptroller Scott Stringer says it makes sense for the city to try to settle the case now before a long and bitter trial begins. The Garners are not expected to formally file their suit until early next year.

More heavy rain and mountain snow in California. Let's take a look at the weather now. Let's get to meteorologist Derek Van Dam for an early look at your weather.

DEREK VAN DAM, AMS METEOROLOGIST: Good morning, John.

We are monitoring a low pressure system, bringing some wet weather to the Central Plain States, as well as the Tennessee River Valley. I- 40, it could be a wet start to your morning. So, drive with care near Nashville.

This is cold enough for snow to the north. That means winter weather advisory is in effect from Kansas, all the way to Missouri, one to three inches of snow before it is all said and done. This is a fairly quick moving storm. So, we'll say good-bye to that by later this afternoon.

Still monitoring a departing low pressure across New England. Few flurries possible near New York, but no accumulating snow. We do have one to three inches in the forecast across Maine and parts of Vermont.

Here is a look at temperatures through the weekend. Trending below average for places like Chicago and Minneapolis, mild to the southeast. New York, you top 43 today.

We are monitoring two different weather makers for this upcoming holiday travel weekend. Wet weather across the Southeast, especially near Louisiana and southeastern Texas. Yet another storm across the West Coast of the United States, bringing much-need rain to California.

Back to you, John.

BERMAN: All right, Derek. Thanks so much. Happening now: Pakistan vows to fight back against Taliban terrorists,

the once who are behind that horrific school massacre. This morning, CNN crews take you to the seen of this crime. That's live, next.

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BERMAN: New this morning, in the wake of the Tuesday's horrific school attack in Pakistan, leaders there are asking Afghanistan for help. The two countries spent years torn apart by tribal combat. They, of course, face a common enemy, terrorism along their border. No act of terrorism more barbaric than the murder of those 130 children on Tuesday.

Our senior international correspondent Nic Robertson is live in Pakistan this morning.

And, Nic, you have seen the results of that carnage firsthand.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: And it's horrific, John. The army here is telling us that the death toll that they have is climbing, 148 people total, they are now confirmed dead. They say that in one of the hospitals here, one of the principal hospitals, there are 15 children still treated, four of them in ICU, another two in high dependence unit, one in surgery today. So, some of the children still are in very, very critical condition.

But when the army took us into the school today, you just get a sense of shock and disbelief when you see what happened. The army showed us where the Taliban came into the auditorium where a lot of the children were getting a class from the brigadier, an army brigadier on first aid. The pieces of equipment he was using to show them what to do, just lying where the brigadier was shot down and killed.

But what is absolutely horrific, the army officer showed us, that the two doors of the side of the auditorium, that's where the children fled to try to get out of the room, because the Taliban were shooting at them. And that's where the Taliban mowed them down, 100 children died trying to get out of the doors and areas around the doors, the carpets are just absolutely blood-soaked.

Another chilling thing we saw, the computer lab. Computers down either wall of the classroom, chairs right next to the computers, very clear what happened there. Taliban just going in and shooting the children cold-bloodedly, while they were sitting an working on their computers.

Why can you tell that? Because on the floor underneath where they were sitting, it's just pools of blood. The army is now trying to clean it up. Police forensic teams are in there. But, of course, nobody is any doubt here about just what happened, John.

BERMAN: Nic, those images are difficult to see, but important to understand the brutality of what happened there.

Nic Robertson live for us in Pakistan, thanks so much.

Fifty-five minutes after the hour.

New trouble for Uber. A driver accused of rape. What the company says it will do now to keep passengers safe.

We're going to get an early start on your money, next.

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BERMAN: All right. Cristina Alesci is here with an early start on your money.

And, Cristina, you know, there's a lot going on in the world, a lot of turmoil. Yet, there seems to be a lot of optimism in the markets.

ALESCI: Yes, that's what we're seeing right now. It looks like a good day for stocks around the world, big gains in Europe and Asia.

BERMAN: Wow.

ALESCI: And U.S. stock futures are signaling a higher open as well. The Dow is coming off its best day of the year yesterday. It closed up 288 points or 1.7 percent. Why?

Well, a small rally in oil prices was a good sign for energy producers, but the big reason, the Federal Reserve.

The Fed said yesterday it is not raising interest rates anytime soon. Remember that language everybody was watching, that promised to keep interest rates low for a considerable time? Well, that didn't change.

Fed Chair Janet Yellen hinted it will be closer to the middle of next year before the Fed makes any moves. She also stressed it all depends on how the economy is doing. That is what Wall Street wanted to hear. That's snapping stocks out of a three-day losing streak. It's a big deal.

Now, Uber is trying to clean up on its bad reputation. It's been at the center of huge scandal, including allegations of drivers raping and assaulting passengers. Now, the company is working on new technology to monitor drivers and improving its background check practices. Uber is also setting up a rapid response team for emergencies. This company is getting one negative headline after another.

BERMAN: Day after day after day after day.

ALESCI: They got to do something.

BERMAN: All right. Cristina Alesci, great to have you with us.

ALESCI: Absolutely.

BERMAN: EARLY START continues right now.

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