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North Korea's Growing Cyber Threat; Uber Suspends Service in Portland, Oregon; Colbert's Comedy and the Youth Vote

Aired December 19, 2014 - 10:30   ET

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

(COMMERCIAL BREAK)

CAROL COSTELLO, CNN ANCHOR: Good morning. I'm Carol Costello. Thank you so much for joining me.

Newt Gingrich says the U.S. has already lost its first battle against cyber terrorism with Sony caving in to hacker demands and pulling "The Interview" from release. Is this just the warning shot, though, in a growing cyber war?

Kyung Lah has more for you.

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN CORRESPONDENT (on camera): Here in South Korea, the cyber war with North Korea is very real, very immediate and it is escalating. The agency that runs all of this country's nuclear power plants says that hackers managed to break into their computer systems.

(voice over) Here's the important part. Cyber intelligence experts here in Seoul say that this has the fingerprints of hackers from North Korea all over it.

(on camera): What is so alarming about the hackers moving into the nuclear power plants?

LIM JONG IN, KOREA UNIVERSITY DEPARTMENT OF CYBER DEFENSE (through translator): So far, North Korea's attacked financial institutions, broadcasting stations, telecommunication companies and other public organizations. The only field they haven't attacked is nuclear power plants. So if they succeed in hacking the power plants it would be a very efficient way of threatening our government and achieving their goals.

LAH: Should America be prepared for North Korea to try to break in to these types of agencies in America?

JONG IN: Of course. Even though the U.S. is one of the best prepared nations with U.S. cyber command, cyber attacks are really hard to protect yourself from so they have to constantly be vigilant.

LAH: If South Korea is the practice ground, the big target for North Korean hackers, U.S. infrastructure and government agencies.

Kyung Lah, CNN, Seoul. (END VIDEOTAPE)

COSTELLO: All right. We have breaking news concerning the Sony hack attack. Our media correspondent Brian Stelter is here. A message came from the hackers?

BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Last night a message was received by a number of Sony executives from the people they believe to be leading this hack attack against their company. In the past, they've received messages from the hackers and at other times the hackers have put up public threats.

So you remember Tuesday's threat that led to the cancellation of the "The Interview". That was made public. That was something you could find online (AUDIO GAP). But this one is different. This is directed to top executives at the company, Amy Pascal, Michael Linton and a number of senior executives whose names I've seen on the mail. I'm not going to share that part.

But I do want to read you what the message says because I'm frankly shocked by it. It says "It's very wise that you have made a decision to cancel the release of 'The Interview'. It will be very useful for you." And then this goes on to say at the end, "We ensure the security of your data unless you make additional trouble."

So Carol this sounds like a victory laugh from whoever these hackers are effectively saying you did the right thing by scrapping this movie from theaters.

COSTELLO: And gained their power -- right.

STELTER: And as long as you keep it off line and out of theaters we will -- I think it says stop attacking you.

COSTELLO: So that negates its supposed Christmas surprise?

STELTER: That's what this new threat implies. These are people that have invoked 9/11 and sent strange threatening messages. So we don't want to take any of it totally at face value but what the message here says is quote, "We still have your private and sensitive data. We ensure the security of your data unless you make additional trouble."

COSTELLO: It does make you wonder what President Obama will say about this later today because you know, the Obama administration is loathe to call this terrorism. Others are not. But clearly it's changing the behavior of Americans and what we get to see and hear. And that's a serious thing. That to me speaks of terrorism.

STELTER: That is an intent of terrorism, right -- to instill fear. And certainly fear was instilled this week. There was a decision that had to be made by these theater owners across the country to stand by freedom of expression or to give in to this fear. This concern that moviegoers wouldn't go to the movies and see any movie on Christmas because they'd be concerned about a physical threat from digital hackers. COSTELLO: The other interesting thing that I find out about this

message. You know, they're doing this victory dance but they don't come out and say hey, North Korea is behind it, Yay, Kim Jong-Un -- right. Why not?

STELTER: That's right. There's no mention -- and I'm just going to double, you know, read this again to make sure. There's no mention of North Korea in this e-mail but there is a mention of "The Interview". The fact that they are naming the movie specifically and saying effectively you did the right thing, very wise decision to cancel the release of the movie does mean they are explicitly tying their hacking to the movie. And until recently, that hadn't happened.

When this cyber attack first happened in late November they didn't explicitly say they were doing it because of anger about the movie "The Interview". Only more recently has that come out. And at times this has felt like extortion. If you go forward with the movie we're going to hurt you. If you don't go forward we're not going to hurt you. And that's exactly what they're saying here by saying quote, "We still have your private and sensitive data."

COSTELLO: Well, the Department of Justice is going to release some sort of statement tying North Korea to this hack attack and that's going to happen at any minute now. Evan Perez is on the case, right?

So it will be interesting, one, to see if the government uses the word "terrorism" which we don't think it will. And, two, it will name North Korea but there's got to be a reason that the hackers are not saying North Korea or Kim Jong-Un in their messages to Sony and I don't know what that reason is but it just seems odd to me.

STELTER: Right. And I'm looking at this. The subject line of the e- mail was Message from GOP. Now GOP in this case stands for Guardians of Peace. That's the name that these hackers have given to themselves. And then it begins by saying "Hi, I am the boss of GOP." And then it goes on from there. One of the reasons why Sony believes it's legitimate --

COSTELLO: But the GOP, the Guardians of Peace -- that's been used by North Korea before but a long time ago, in the 70s.

STELTER: Right. And people have seen that as a possible clue here. All along I've also thought another possible clue to this, this is just -- this is my speculation, but a bunch of Sony movies were stolen and released online before they were supposed to come out in theaters, Annie for example which comes out on Christmas. But "The Interview" didn't leak. That to me was an early sign of the potential motivations here. That they truly -- whoever these people are, truly don't want this movie to be seen.

But as you know, there's been a rising cry in the last couple days that this film should be seen -- some way, somehow, online or something because otherwise it is a capitulation to these hackers.

COSTELLO: Well, the other industry thing that will come out of the statement from the DOJ and, of course, the President news conference later this afternoon is what the United States is going to do because you can't go to war over a Seth Rogen movie -- right. So you have to be careful.

Some people have suggested that covert action will be taken and we'll never know what the United States has done in retaliation for this.

STELTER: I think that's very possible. I do. I will hope as a media reporter that some impressive reporters will figure out what the action is. Often times these things do leak out eventually. But I think it's very possible there won't be a public announcement of what that is.

COSTELLO: Brian Stelter, many thanks so you. We appreciate it and of course, Evan Perez is awaiting that statement from the Department of Justice. When we get it, we will pass it along to you immediately.

I'm back in a minute.

(COMMERCIAL BREAK)

COSTELLO: It's becoming an increasingly bumpy road for Uber. The ride sharing service has now agreed to put its cars in park in Portland, Oregon for the next three months ending a fight with the city. But this isn't the only pothole popping up for Uber -- heavy criticism over price gouging, privacy, even attacks on customers by drivers.

Dan Simon looks at some of the problems Uber is trying to overcome.

(BEGIN VIDEOTAPE)

DAN SIMON, CNN CORRESPONDENT (voice over): As thousands attempted to flee downtown Sydney during the hostage crisis, Uber found itself in the headlines again and not for good reason. As car demands surged, the service used in more than 250 cities around the world charged passengers four times the normal rate with Uber's controversial surge pricing.

The company soon apologized and began offering free rides but the damage was done. It's the latest in a string of high-profiles mishaps for Uber whose high-speed growth from a few employees no-name company to an international juggernaut has led to a series of troubling issues -- everything from price gouging and privacy invasion to allegations of assault and rape.

In Boston authorities just announced that an Uber driver has been charged with rape and kidnapping. Police say the victim was driven to a secluded location where the driver beat and sexually assaulted her; the company in a statement calling the crime "despicable". "Uber has been working closely with law enforcement and will continue to do everything we can to assist their investigation."

In New Delhi, a driver had also been accused of a similar crime. That as the company stresses that safety is its number one priority and that it is working on security enhancements. But there have been other recent issues. In San Francisco, the company's hometown, and Los Angeles, a lawsuit filed by the D.A.s accuses the company in part of misleading customers about driver background checks. In Portland, Madrid, and Bangkok, Uber has been ordered to cease operations amid allegations it wasn't complying with local laws. In Paris, a court has banned its lower cost service Uber Pop after the taxi industry protested.

All this for a company that just launched four years ago and is now valued at more than $40 billion.

(on camera): As an entrepreneur, did you ever think that you'd be running a car service in.

TRAVIS KALANICK, CEO, UBER: Absolutely not.

SIMON (voice over): That's Uber CEO Travis Kalanick back in the early days explaining to me the original vision behind the company.

KALANICK: It was for me, my co-founder and our hundred friends to be able to push a button and an S-Class Mercedes rolls up. And that was it -- right. But everybody wanted it. All of our friends want it and their friends want it so we just opened I up.

SIMON: Uber doesn't actually employ its drivers instead it serves as a technology middleman, connecting them to passengers. Its valuation has surpassed companies like Delta and Hertz but of course, the press coverage hasn't always been so friend.

UNIDENTIFIED FEMALE: It was terrifying.

SIMON: Just last month a senior Uber executive said at a private dinner, that Uber should pay a million dollars to hire opposition researchers to dig up dirt on journalists writing negative pieces.

Silicon Valley blogger Sarah Lacy, one of the apparent targets of the scheme.

SARAH LACY, PANDODAILY: I've covered powerful tech companies for a long time and powerful moguls for a long time and I've never heard a plan like that detailed before.

SIMON: Uber's Kalanick later tweeted that the executive's comments were terrible and do not represent the company.

(on camera): Can these PR problems bring down the company?

KALANICK: They could if they continue to get out of control and if there are more of them if the company doesn't address them. So this Robin Hood sight might turn into a (inaudible) later, if they're not careful enough about how quickly these things get out of control.

SIMON: Uber has likened its struggles to a political campaign which is why it hired David Plouffe, who helped mastermind President Obama's election in 2008. Part of Plouffe's job, to get Uber in cities where the powerful taxi industry has been successful in keeping them out.

In a recent blog post, Uber CEO writes "Acknowledging mistakes and learning from them are the first steps." Kalanick trying to save the image of a company born out from a simple idea.

KALANICK: We just wanted to push a button on our phone and get a ride. That's an aspiration and a functionality but I think millions of people in cities across the country and around the world want.

SIMON: Dan Simon, CNN, San Francisco.

(END VIDEOTAPE)

COSTELLO: Ok. So what does Uber do? Those are serious problems. Daniel Katz-Golden is a strategy director for brand development at Siegel and Gale. He joins me now. You're watching Dan Simon's story and grimacing through it.

DANIEL KATZ-GOLDEN, SIEGEL AND GALE: Yes, they're clearly dealing with a lot of issues and I think it's what you see from a company going through some growing pains.

COSTELLO: Well, some people say the company grew so fast. It has a very young CEO -- he's made some very serious mistakes and missteps and hasn't apologized for them, frankly. So maybe the first step would be to maybe replace the CEO?

KATZ-GOLDEN: I don't think we necessarily need to start talking about executive leadership changes quite yet. I think what Uber needs to do is realize they need to turn an amazing product. And it is an amazing product. We took Uber today from our offices at Siegel and Gale to get to your studio. And people love the product but how does a great product turn into a world class company and a world-class brand? That's what they're struggling with currently.

COSTELLO: So what do they need to do? What does David Plouffe need to do first?

KATZ-GOLDEN: Well, I think the first thing they need to do is start building an experience that's more than just a product and the app. I think a lot of these problems are stemming from the fact that there's not much experience around the company, around the organization. You hear a lot of complaints around customer service and lack of recourse or who do I call when there's a problem. And I think you're seeing a lot of these cracks kind of rise to the forefront as the company grows, the customer base grows, more problems would become more apparent.

COSTELLO: These problems could have plagued Facebook, right? But Mark Zuckerberg hired Sheryl Sandberg because she knew what she was doing. He knew he didn't.

KATZ-GOLDEN: Well, I think that's right. I think at some point in certain organizations you realize the people who founded you maybe aren't the people who are right to take you to the next step. It's not always the case. There are just as many examples of founders who are leading amazing companies today. But it's certainly something that does require a hard look to make sure the right skills are in place to take an organization to the next level.

COSTELLO: So what are your predictions for Uber?

KATZ-GOLDEN: Well, I think that Uber is going to be fine. I think they have found such an amazing value proposition and it has been so much loyalty to this brand for people who it works for. I think what they need to do as we saw in this segment, the CEO said, learn from their mistakes, build on them. Be forthcoming about their problems.

COSTELLO: So wouldn't a simple thing be to say you know what? We're going to increase the background checks on our drivers. We're going require them to take fingerprints and here's our plan, public, here it is. Why don't they do that?

KATZ-GOLDEN: I think probably very soon you're going to start to see some very loud and overt steps to shore up some of these areas where they have been lacking. You hear them talking about things such as background checks and I'm sure it's only a matter of time before that's very much inherent in the brand, not just from a servicing standpoint but they're going to start talking about that more than maybe just it's a great way to get you from point A to point B.

COSTELLO: Ok. Daniel Katz-Golden, thank you so much for being here. I appreciate.

KATZ-GOLDEN: Thank you.

COSTELLO: Still to come in the NEWSROOM --

(BEGIN VIDEO CLIP)

JON STEWART, TALK SHOW HOST: Hi, how are you feeling?

STEPHEN COLBERT, TALK SHOW HOST: I'm always excited, Jon.

STEWART: Right, but I mean tonight's a very special show, very exciting show.

COLBERT: I like to think every show is special Jon. It's a little something called professionalism.

(END VIDEO CLIP)

COSTELLO: Stephen Colbert closes one chapter and readies for his next gig as the host of "The Late Show" on CBS. We'll take a look back and we'll also look at his influence on U.S. politics, especially the youth vote. That's next.

(COMMERCIAL BREAK)

COSTELLO: It was star-studded sendoff for Stephen Colbert and his hit show "The Colbert Report", a night several months in the making after CBS announced Colbert would take over for David Letterman next year. Comedy Central tweeting that 2014 marks the final year of "truthiness". That's Colbert's trademark phrase. One fan piling high his cartons of Colbert signature ice cream Ben & Jerry's Americone Dream in preparation for the finale. That fan joining lawmakers and celebrities in paying tribute to a man who became one of the best known political comedians of the last decade.

(BEGIN VIDEO CLIP)

COLBERT: What do I do now?

Now, folks, if this is your first time tuning into "The Colbert Report, I have some terrible news. Nation, I know that this -- I know that this is an emotional night for a lot of you. So I want to start the show tonight with something a little more upbeat -- Syria.

The truthiness is all those incredible things people say I did -- running for president, saving the Olympics, Colbert super PAC, treadmill in space, the rally to restore sanity and/or fear and/or Cat Stevens' career -- none of that was really me. You, the nation, did all of that. I just got paid for it.

(END VIDEO CLIP)

COSTELLO: I wish we could have played the whole thing because it was fantastic. Colbert's show became a destination for politicians on both sides of the aisle, especially those who wanted to connect with younger voters. One member of that key demo opening up on social media about Colbert's influence writing in part quote, "I was 16 and Stephen Colbert along with Jon Stewart changed how I looked at the world. I spent so many nights sitting on the couch with my parents watching a satire that informed my young mind more than actual news ever did. It's almost strange to think of how much of an impact this show has had on my life. Thank you, Stephen Colbert."

Let's talk about this. Joining me now, Ashley Spillane, she's president of Rock the Vote. Good morning and thank you so much for being with me.

ASHLEY SPILLANE, ROCK THE VOTE: Good morning. Thank you for having me.

COSTELLO: So just talk a little bit more about the appeal that Stephen Colbert has for the younger generation?

SPILLANE: Well, Stephen Colbert for the last nine years has taken political issues and otherwise mundane goings on of the government and our society and made them interesting and fun and put a comedic spin on it that made it relatable for young people. And it's sad to see after nine years it coming to an end but we're excited for his next step.

COSTELLO: Underneath the humor, though, is this cynicism that everybody's kind of stupid, all of our politicians are kind of stupid people. Doesn't that affect the way people think about lawmakers? I know people hate Congress right at the moment but they're doing an important job?

SPILLANE: Well, Stephen Colbert was so good at calling out the actual ineffectiveness that is happening in the country and I think the underlying cynicism young people feel about the -- our government and our system is that there is a lack of progress being delivered upon. And young people aren't as politically partisan as previous generations and they're much more focused on issues and not as -- their tolerance for partisan bickering is low and I think what the Colbert report did was put an honest spin on what was happening.

COSTELLO: Rush Limbaugh said CBS declared war on the heartland of America by hiring a partisan so-called comedian. So in other words Stephen Colbert is going to move to CBS and spew all the liberal jargon he can to sway even many more young minds. Is he right?

SPILLANE: I don't think so, I think what Stephen Colbert did by making politics interesting and fun and relatable I hope he will bring to CBS and will continue to reach a broader audience but we're excited to see what comes next.

COSTELLO: I just wanted to ask you this question because everybody says, you know, Stephen Colbert and Jon Stewart sways the minds of young voters and maybe that will get them out to vote but it really doesn't because for this year's midterm elections the turnout for people 18 to 24 was just 4.9 percent. So you have to wonder, does Colbert really have all that much power when it comes to the youth vote?

SPILLANE: Turnout across the board was down this year as it usually is in the midterm election and I think we need more people. What's so exciting about Colbert moving to CBS is that he will reach a broader audience. And we hope that he'll continue to talk about politics in an engaging way that inspires young people to get involved and to care about what's going on around them.

COSTELLO: All right, Ashley Spillane with Rock the Vote. Thanks so much for being with me. I appreciate it.

SPILLANE: Thanks for having me.

COSTELLO: A dog born without front legs is now able to run around the yard. CNN's Jeanne Moos shows us the 3D technology that's providing hope to owners of other disabled pets.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT: See Derby run. If you're wondering what's making the clickety-clack it's his 3d printer prosthetic legs.

DOM PORTANOVA: Hey Derb, we got your new leg.

MOOS: When he's not wearing his legs, Derby has to walk on his elbows. He was born this way almost euthanized then rescued.

D. PORTANOVA: He's such a lovable dog.

Dom and Sherry Portanova adopted Derby but he was first foster by Tara Anderson who says she cried whenever she looked at his photo.

TARA ANDERSON: Ok. I was like ok, I'll do it, foster -- I'll take care of it. MOOS: Terror not only for (inaudible). She helped design its new

legs that the company where she worked the company's 3D. The beauty of 3D is that they can change the design and easily print out a new leg. Derby has had four versions ranging from a peg leg that didn't work to his current wheel and spokes.

PORTANOVA: They're just velcroed and we have little cushions in here.

MOOS: Derby took to this version right off the bat.

DOM PORTANOVA: When I saw him sprinting like that, it was amazing. It just -- I couldn't believe it.

MOOS: Now, we've seen a tortoise with a wheel and a pig with a two wheeled cart. And even an elephant fitted with a giant cross thesis. But Derby's easily redesigned 3d leg cans grow with him. They're being gradually elevated. It only takes a minute to put them on.

DOM PORTANOVA: Good boy.

MOS: His elbows are tender.

SHERRY PORTANOVA: Well, at first he really does not want you to put him on there. He's being very, very good today. Once he has them on then he's just happy as a clam to go out and run around.

MOOS: Derby now wears them two to three hours a day and can go about a mile. His owners hope he'll be an inspiration to others with disabled pets. His Facebook page attracts dogs with similar problems like Wolfy and Mabel. There are even plans afoot to turn Derby into an action figure. No, we're not pulling your leg. What do you call them?

S. PORTANOVA: We just kind of call them and shoot. No, put your shoes on.

MOOS: If only other disabled dogs could learn to walk in his shoes.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

COSTELLO: Checking a few other top stories for you at 59 minutes past. That massive fire that lit up the L.A. Skyline early this month has been ruled arson. Fire officials say they're looking for two potential witness bus they don't have any suspects yet. The fire destroyed a seven story complex under constructions costing more than $20 million in damaged.

New York's attorney general is firing back on fake guns. Eric Schneiderman, I apologize, tweeted this post after announcing he's going after retailer Wal-Mart and Amazon for allegedly selling banned toy guns online. Toys that authorities say could easily be mistaken for real weapons.

And it's a bittersweet good-bye to Robin Williams. "Night at the Museum 3 opens today, the last major movie to feature Williams who died earlier this year. In the movie Williams plays the fatherly and hysterical Teddy Roosevelt.

Thanks for joining me today, I'm Carol Costello.

"@THIS HOUR WITH BERMAN AND MICHAELA" starts now.