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Early Start with John Berman and Zoraida Sambolin

Sony: Caving to Hackers?; Obama to Lift Parts of Cuban Embargo; Suspected Marathon Bomber in Court; Stephen Colbert Bids Adieu; Stocks Have Best Day in Three Years; ISIS Leaders Killed in U.S. Airstrikes; Boko Haram Kidnap 185 Women & Children; Spanish Man Crashes Car Into Party HQ

Aired December 19, 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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DEBORAH FEYERICK, CNN ANCHOR: Caving to the hackers. Some of Hollywood's biggest stars slamming Sony for pulling the release of the controversial movie "The Interview." Investigators now believe they know just how hackers penetrated Sony's computer system.

Now that President Obama said he will ease restrictions on Cuba, could that mean a visit from Raul Castro to the White House, of all places? What does the future hold for American business and trade in that communist country?

And saying good-bye the only way Colbert can do, with Big Bird, Cyndi Lauper, Bill Clinton and, of course, the whacky episode that brought the Colbert Nation to its knees. And there's Jon Stewart.

Welcome back to EARLY START, everyone. I'm Deborah Feyerick. It is 30 minutes past the hour.

And we have new information this morning about the huge cyber attack on Sony Pictures, which resulted in Sony pulling the film "The Interview" out of movie theaters. Investigators believe they know just how hackers penetrated Sony's computer system. U.S. officials briefed on the investigation tell CNN that there is evidence that the hackers enter the system by stealing the computer password of a system administrator, a person who had total access to the company's network. There is also word U.S. officials are very close to naming North Korea as the official suspected perpetrator of the cyberattack.

CNN's Will Ripley is live for us now from Tokyo, the home of Sony's headquarters.

Will, what's the latest?

WILL RIPLEY, CNN CORRESPONDENT: Well, the latest is that there's multiple things that are developing. For one, as you mentioned, U.S. officials are hours away from naming North Korea.

But here in Japan, where Sony headquarters is located, the company stands to be dealt a major financial blow. The Japanese government is staying mostly silent on this issue. The chief cabinet secretary here saying that he doesn't anticipate this incident to affect Japanese- North Korea relations, which are pretty shaky as Japan tries to get answers from North Korea about a string of unsolved kidnappings, dating back several decades.

We are also learning more about the cybersecurity breach and the steps that Sony tried to take to protect itself. As you know, three years ago, back in 2011, there a major hack that shutdown the PlayStation gaming system. Sony tried to take steps to protect that, after some 77 million people had their usernames and passwords exposed. And yet, this hack happened, and one administrator at a cybersecurity lab tells me they may have had no way to protect against this because of the way that the hackers infiltrated the system, by getting the log-in from an administrator, which allowed them to get right in, Deb.

FEYERICK: What's interesting is, I've spoken to a number of cybersecurity experts, and that's what they will tell you. Oftentimes, it's human error. Somebody may click on a link that they're not supposed to and infect the system with malware. And that allows somebody to get somebody's access to the system and it's happening for years, talk to anybody from the FBI.

You were able to talk specifically to somebody or get information on what is called the North Korea Bureau 121. That is their elite team of hackers. Tell us what you know about them.

RIPLEY: Well, it's -- this is a program North Korea has had now for years. And it's kind of gone under the radar. The world's attention up until now has been focused on their nuclear program, the projectiles that are launched routinely into the Sea of Japan.

But this is what we're learning, essentially a covert team of an estimated of 1,800 of some of the brightest minds from Pyongyang University that are trained to conduct these cyberattacks. And to use these techniques that for a country like North Korea that's relatively poor, this is an inexpensive way to cause a huge amount of damage. Just look at the fact that a major American corporation stands to lose hundreds of millions of dollars and it's been humiliated publicly. There's been relationships destroyed, not to mention the fact that a major American film has been censored as a result of these activities.

And, Deb, you talk about cybersecurity. One thing that experts here say that Sony should have done better and a lesson that other companies and government entities should learn is that they need to do a better job of monitoring if somebody infiltrates the system and starts taking information, because in this case, the hack went on for a long time, a tremendous amount of data was stolen, had somebody detected it sooner. You cannot always stop people from getting in. If you detect it and stop it, you can prevent a catastrophic event like what Sony is experiencing right now.

FEYERICK: Yes, there's no question about it. It's no longer good enough to be protecting companies from the outside, forming a firewall, a perimeter. You've got to have a system that works internally, monitoring everything inside. So, it's twofold, and I think a lot of people inside cyber security are focusing on that.

All right. Will Ripley, thank you for that. I appreciate that.

And Hollywood is reacting with fear to the cyberattack on Sony Pictures. And for many at least, a lot of disappointment of Sony's decision to cave and withdraw "The Interview", the movie that sparked all this.

Actor Rob Lowe, who has a cameo in the movie, tweeted, "Wow, everyone caved. Hackers won, an utter and complete victory for them. Ben Stiller, he wrote, "Really hard to believe that this is a response to the threat to freedom of expression here in America."

And comedian Chris Rock giving voice to the fear an uncertainty gripping Hollywood right now.

(BEGIN VIDEO CLIP0

CHRIS ROCK, ACTOR/COMEDIAN: This whole thing is scary, man. You know, e-mails and it's your private stuff. I mean, the whole town's scared. Everybody has got to be scared.

(END VIDEO CLIP)

FEYERICK: And Sony says that it has no plans to distribute the $40 million film in theaters or on home video.

And President Obama will no doubt face questions about the Sony hack at his annual end of the year news conference today. Insiders expect he will field questions on a number of topics as well, including his executive action on immigration, his historic move to restore relations with Cuba and the Senate's CIA torture report.

The White House is leaving the door open this morning for a possible future visit to the U.S. by Cuban President Raul Castro. Reporters pressed for details from the administration following Wednesday's historic announcement of plans to reestablishment diplomatic relations between the U.S. and Cuba.

White House Press Secretary Josh Earnest compared a possible visit by Raul Castro to earlier visits by leaders from other countries that have what he called checkered human rights records like China and Burma.

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JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: The president has had the leaders of both Burma and China to the United States. And for that reason, I would not rule out a visit from President Castro.

(END VIDEO CLIP)

FEYERICK: Well, John Kerry hopes to return the favor, becoming the first secretary of state in 60 years to visit Cuba. Meanwhile, "The New York Times" is reporting that President Obama plans to act on his own to lift many of the elements of the trade embargo against country, in a move that, you can bet, will provoke a furious fight with the new Republican Congress. The White House says that the president plans to use broad executive powers to lift restrictions on travel, commerce, as well as financial activity.

And no one is more eager to see the 60-year-old trade sanctions against Cuba lifted, well, than the people who live there. But whether Cuba with its wrecked economy is ready for such a massive influx of goods and especially American tourists -- well, that's another option.

CNN's Patrick Oppmann has more from Havana.

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PATRICK OPPMANN, CNN CORRESPONDENT: There are actually two Cubas, and this is the one that most visitors don't see. It's a grim place. You can see buildings are collapsing all around me. People are just hanging on.

Part of that is due to the long time U.S. economic sanctions, part of that is, frankly, due to the Cuban government's inability to manage their own economy. So, you talk to people here and hear about how they only make about $20 a month. It's not nearly enough to get by, but it's what they have.

They have, of course, old cars passed down for generations. They keep running. They look like they could fall apart anytime. And some of them do.

So, when you talk about people in impoverished neighborhoods like this one, when you talk about the improved U.S. and Cuba relations mean for them, they talk about how they don't just want to improve the economic relations, they need it to.

UNIDENTIFIED FEMALE (through translator): You try to make things better so you have more. We have enough, but more would be better.

OPPMANN: And this is the other Cuba, the one that is for international visitors who come to Cuba with hard currency to spend. You can see the streets are fixed, the walls are painted and buildings are not falling down.

Is Cuba ready for all these changes? It doesn't appear so, but they are welcoming them all the same.

(END VIDEOTAPE)

FEYERICK: Hmm, certainly a lot of people are ready to go there.

And tensions are running high both inside and outside the courthouse where suspected Boston marathon bomber Dzhokhar Tsarnaev made his first public appearance in 17 months. This was a pre-trial hearing. Well, during the trial, a friend of the 20-year-old shouted out her support saying, "We know you're innocent." Meantime, outside, a victim, you see there, he lost his leg in the bombing, he confronted a Tsarnaev supporter and he shook his prosthetic leg saying, "Here is your proof." This trial is set to begin January 5th, though Tsarnaev's team is going to try to ask for another delay. And Stephen Colbert filed his last report Thursday night. The faux

Republican comedian put on a show only like he can. In his the word segment, he thanked the nation for supporting him and all his crazy pursuits, like, I don't know, saving the Olympics and also running for president. He came close.

He even broke out into the hit song, "We'll Meet Again." Jon Stewart was there, Willie Nelson, Cyndi Lauper, Big Bird, Katie Couric, even CNN's Christian Amanpour. They got in on the fun.

And in true Colbert fashion, he bid final farewell like only he could.

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, COMEDIAN: I just got too many people to thank. Well, first and foremost, everyone who worked hard to make something special, all of our friends and family for putting up with our long hours, the network for giving us the chance to begin with, and, of course, all of the guests who came on, thousands of them, there are just too many to thank. So, I'll just thank Mavis Staples.

Mavis, if you could just call everybody tomorrow, that would be great. Thanks.

Oh, and you, the Colbert Nation. We couldn't have done it without you. Thank you for being such a big part of it. That was fun.

OK. OK. That's the show. From eternity, I'm Stephen Colbert.

(END VIDEO CLIP)

FEYERICK: All right. Well, the wet weather continues all along the Pacific Coast. Let's get to meteorologist Derek Van Dam for an early look at your forecast.

DEREK VAN DAM, AMS METEOROLOGIST: Good morning.

This is the way we want to start our early weekend. Sunshine dominating the New England coast. We are monitoring the low pressure that will bring rain to the Gulf Coast, and we do have a storm system moving across the Pacific Northwest. High temperatures for the day, Windy City tops 33, 57 for Atlanta, Georgia, the nation's capital at 45, and the Big Apple at 38 degrees for the afternoon.

Here's our low pressure system bringing rain to Houston, Texas, as well as New Orleans, but the bulk of the precipitation is still waiting to impact southern Georgia and Florida Panhandle by the end of the weekend.

Now, there's been a lot of chatter on social media about the possibility of a Christmas Eve storm. All of our long range computer models indicating this will be a mainly rain event for the New England coast, for a snow storm. On the back side of the system, we will set up windy weather leading to the possibility of lake-effect snowfall.

Great news across California, the drought-stricken state, we do have some improving statistics across the central and northern half. Much- needed rain moving in with snow across the Cascades and Northern Rockies.

All the time we have for you. Back to you.

FEYERICK: All right. Good news for those people going skiing.

Well, let's get an early start on your money with Cristina Alesci.

And, Cristina, stocks. Huge moves. Unbelievable.

CRISTINA ALESCI, CNN BUSINESS CORRESPONDENT: Yes, a great morning for stocks around the world really. European and Asian shares are higher and so are U.S. stock futures after a massive rally yesterday. The Dow had its best day in more than three years. It climbed 421 points or 2.4 percent.

Now, just to put this into context, in the past two days, the Dow has added 709 points total. That's the best two-day gain since November of 2008. It is a huge reversal from the past two weeks when stocks were sliding and everyone was talking about a potential pullback. It never came.

So, what's sending stocks higher? Well, it is all about the Federal Reserve. The market right now is addicted to easy money. And since Fed Chair Janet Yellen indicated there was no rush to race interest rates, stocks are getting a boost.

So, you could see investors really excited about the fed delaying any kind of interest rate hikes. There was a surprise to some people, but there are analysts and economists out there that say we could have low interest rates for the rest of 2015. That actually an interest rate hike won't happen until 2016. That is actually indicating that maybe our economy isn't as healthy as the Fed would like it to be.

We are still below that 2 percent growth target that the Fed can see before it raises interest rates. We are falling below that. And that's what's not being picked up right now.

FEYERICK: Do you think people are taking advantage of the low interest rates or are they hesitant?

ALESCI: I think they are. I just actually went shopping for a car. I wanted to lock in the interest rate on that car loan because I know at some point rates are only going to go up. So, I think, yes, this has stimulated the economy and has encouraged people to buy homes and cars and the Fed does not want to put the brakes on that anytime soon, especially with the target on growth so low.

FEYERICK: No question. All right. Cristina, thanks so much. Appreciate that.

And the U.S. is now confirms that air strikes were successful in taking out three ISIS leaders. What this means for the militant group and the 1,300 U.S. soldiers that are now being deployed to Iraq.

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FEYERICK: Three ISIS leaders have been killed in U.S. airstrikes. A senior military official tells CNN two top leaders and one mid-level leader were killed in multiple strikes last month. This comes as the president signed deployment orders Thursday for 1,300 troops to head to Iraq. The troops are now going farther afield being deployed outside Baghdad and Erbil.

Eight children were found stabbed to death inside a home in Australia. People were called in a house in Cairns after getting calls about a woman with serious injuries. When they arrived, they found the victims who were between 18 months and 15 years old, all of them dead. Their mom is receiving treatment and she's speaking with police. At this point, there's no word on the motive or for that matter, a suspect.

And details are emerging this morning about a new attack by Nigerian Boko Haram militants. Local officials claim that the Islamist insurgents kidnapped at least 185 women and children in the village of Gumsuri, killing some 32 people in the process. The officials say that the militants also burned most of the village using gasoline bombs.

And breaking this morning in Hong Kong, a business tycoon and a top official had been found guilty in the biggest corruption trial ever. City chief secretary for administration, Rafael Hui, was found guilty on five counts, ranging from official misconduct to bribery. Businessman Thomas Kwok was convicted of misconduct in public office. His brother, however, was cleared on all counts.

Also breaking this morning in Spain, a 37-year-old businessman has crashed a car into the headquarters of Spain's ruling conservative party. Well, the man claims there are explosives in the car. Police say there are gas canisters visible inside the vehicle, but they do not think they are explosive.

CNN's Al Goodman is live for us now from Madrid.

Al, what are you learning? What do they think this threat is?

AL GOODMAN, CNN INTERNATIONAL CORRESPONDENT: Hi, Deborah.

Well, first thing is they do not -- it does not appear to be terrorism. Of course, Spain has been hit by Islamic terrorism, by Basque ETA terrorism. This does not appear that case.

They have cordoned off a huge area of central part of Madrid, basically right over there, just very close to our bureau. That means a lot of people can't get to work. Traffic is snarled. They have arrested this man who is around that age of late 30s, disgruntled businessman blaming the government for his economic problems. So, that would be a desperate cry in the Spain's deep economic crisis, 23 percent unemployment overall. But it does not appear to be terrorism. They have not lifted the threat level and they activated because of all the horrible previous experiences that have happened here -- Deborah. FEYERICK: Al, is there any concerns why the headquarters of the

conservative party?

GOODMAN: Why, because according to reports, again, they have been interrogating this man who got his car, according to a photo on Twitter on a major newspaper here in the main hall of the ruling party headquarters. That was at 7:00 in the morning.

He is blaming the conservatives for policies he claims, according to the police reports, that have led to his economic ruin. So, that is why the betting line right now is this is some sort of economic desperate claim in the economic crisis and not it appears, not terrorism -- Deborah.

FEYERICK: All right. Al Goodman, thank you so much. We appreciate that. We'll check back with you a little later.

Just quickly, have they diffused that device?

GOODMAN: We do not have -- we are checking on that. There have been some indications that maybe the bomb squad has taken off their suits. But we don't have official confirmation and I just saw a police Twitter that says everything is blocked.

FEYERICK: OK, good enough. Thank you so much. We appreciate that.

And also coming up, is the Secret Service stretched too thin? Well, a new report with shocking claims about a lack of staff training, even security issues protecting the White House. Who is responsible? We'll have the details. Stay with us.

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FEYERICK: Well, we all saw it. The recent fence-jumping and incidents at the White House. Well, an independent review has found the Secret Service is stretched beyond its limits and could use a funding bump. It found the need for more training, and more staff, and concluded that the service is too insular. It needs a director from outside its ranks.

The review also recommended that the White House fence be raised, which is something Secret Service has been arguing for, saying it needs to be at least four or five feet taller. It's also got to curve outward.

Well, after intense pressure from federal regulators, Ford is expanding the recall of Takata airbags. Ford was one of five automakers encouraged to expand drivers side airbag recalls nationwide. The company is also expanding the recall globally, adding nearly 500,000 more cars to its list. Well, Ford said it was aware of one accident with an injury possibly related to malfunctioning airbags.

And this morning, police in Kentucky are searching for a suspect who stole a car with a 20-day-old baby in the backseat. Baby Henry, you can see the car there, Baby Henry was reunited with his frantic parents Thursday after he was found abandoned in a car at a gas station in Ft. Mitchell. Two women in the area reported the vehicle to police after recognizing it from the Amber Alert.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I was on my way to work and I saw the car. My dad works next door. And I saw the car and I just pulled in thinking that's no way that that's car. And I saw the license plate. So, I ran up and I saw her. I was like, are you seeing the same thing? We opened the door, and the baby was inside.

(END VIDEO CLIP)

FEYERICK: Now, pretty incredible. Police said the car was stolen just seconds after Henry's mom walked inside a Florence gas station.

And happening this morning, Olympic gold medalist Michael Phelps' trial on drunk driving charges, that begins in Baltimore. Phelps had a blood alcohol level of .14 when he was arrested in September. That is nearly twice the legal limit. It was his second DUI charge in 10 years. Phelps put his Olympic career on hold while he deals with the charges.

And what little kid hasn't wondered whether the man behind the white hair and beard is really Santa. Well, 6-year-old Aaron Williams got a bigger than usual surprise when he pulled Santa's beard. Guess what? It turns out to be his daddy.

Air Force Senior Airman Nicholas Williams home on a 20-day pass from South Korea. Well, Aaron got his one and only Christmas wish, and you are looking at it right there.

Well, Uber is off the roads in Portland. We will tell you about the company's latest hurdles coming up, straight ahead.

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FEYERICK: And good morning, everyone. Let's get an early start on your money with Cristina Alesci.

ALESCI: Yes, Christmas is coming early for stocks. Take a look at this. Asia and European stocks are up a lot this morning and U.S. stock futures are, too.

Now, Deb, just to recap the week, yesterday, the Dow had its best day since 2011. It climbed 421 points. And since Wednesday, has had its strongest two-day performance in more than six years. Why? The Fed promised to keep the easy money, flowing showing no rush to raise rates.

Now, while stocks are up, oil is still tumbling. And that's putting big oil state Texas at risk of recession.

Look at this chart. Crude oil is sitting at $54 a barrel right now. In the summer, it was over 100. Prices have been slashed in half because of a supply boom in the United States. Forty percent of that oil comes from Texas. And now, JPMorgan Chase says it could cause a recession in the States, as producers dial back on investments and job (INAUDIBLE).

Now, Uber is suspending service in Portland for the next three months. A judge asked the company to stand down while the city updates regulations to account for the car service. So, it's not all bad for Uber. It may soon have a legit way to operate in the area. The car service is facing similar hurdles in cities around the world.

And, of course, this isn't the only hurdle Uber has had to overcome. Not only on the regulatory front, but the company has been hit by awful PR because of the drivers and what happened in India with the rape allegations. It's causing a lot of questions and maybe even surveillance on the drivers themselves. Maybe the company will have to implement some way to monitor the drivers and have some maybe even video.

FEYERICK: Yes, and it makes sense. That's why they're looking into regulations.

All right. Cristina, thank you so much. We appreciate. We know you'll be back.

Good morning. EARLY START continues right now.