Return to Transcripts main page

THE SITUATION ROOM

Crisis in Yemen; Interview With North Carolina Senator Richard Burr; U.S. to Evacuate Yemen Embassy; Report: U.S. Hacked North Korea Before Sony Cyberattack; Report: U.S. Hacked North Korea Before Sony Cyberattack; GOP Already Pushing Back Against Obama Plan

Aired January 19, 2015 - 18:00   ET

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


WOLF BLITZER, CNN HOST: Happening now, terror ringleader identified. We're following the breaking news on the foiled plot in Belgium and the links to ISIS. I'll ask the new chairman of the Senate Intelligence Committee what he's learning.

Plus, Americans at risk from deadly fighting and a dangerous power grab in al Qaeda's backyard. CNN is bringing you rare live coverage inside the crisis in Yemen.

And cyber-secret revealed. A new report says the U.S. knew North Korea was behind the Sony cyber-attack because it hacked Kim Jong-un's country first.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You are in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Let's get to breaking news tonight.

The suspected ringleader in the Belgium plot now identified. A counterterrorism sources say this man is believed to be the link between ISIS operatives in Syria and the terror cell that was disrupted on the brink of carrying out an attack. Stand by. We have details.

The new chairman of the Senate Intelligence Committee, Richard Burr, there you see him, he is joining us as well, along with our correspondents, our analysts in the United States and around the world.

First, let's go to our justice correspondent, Pamela Brown, with other terror developments. She's following all of this from Paris -- Pamela.

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Wolf, we have learned of the nine people in custody here in France, one of the suspects' DNA was found on Amedy Coulibaly car, and another suspect is still on the run. His DNA was found on one of Coulibaly's weapons.

As police try to hunt him down, we're learning more about missteps among French intelligence agencies leading up to the attacks here.

(BEGIN VIDEOTAPE)

BROWN (voice-over): French authorities are focused on two people whose DNA links them to Amedy Coulibaly, DNA found on an ammunition magazine of his and inside the car thought to have taken Coulibaly to the supermarket where he killed four people.

A source close to the investigation says one of them is already among the nine in custody in Paris. His DNA was found in that car. Tonight, authorities are continuing to search for Coulibaly's partner, Hayat Boumeddiene. But she is thought to be far away on the run in Syria.

UNIDENTIFIED MALE: This is obviously a larger cell that we have initially anticipated. We have today mainly more than 4,000 European Union citizens or residents involved in the jihad in Syria and Iraq.

BROWN: A series of communication lapses and delays by French intelligence agencies are shedding new light on why the Kouachi brothers may have fallen off their radar.

Authorities began monitoring the brothers in 2011, but not their computers, which sources tell CNN contain several videos and sermons of the American al Qaeda cleric Anwar al-Awlaki. And then in February 2014, one French agency received an alert about one of the Kouachi brothers' phones, but didn't pass on the details to France's main domestic spy agency until four months later, when both brothers had already been taken off surveillance.

LEON PANETTA, FORMER U.S. DEFENSE SECRETARY: There's no question that I think the failure to be able to have prevented the attack that took place in Paris was an intelligence failure.

BROWN: In an exclusive interview with CNN, former CIA head Leon Panetta said Europe needs to be more aggressive with counterterrorism operations.

PANETTA: The problem is in dealing with those in the various European areas, where there is, frankly, less aggressiveness at going after these individuals when they return.

BROWN (on camera): As security is being beefed up across Europe, here in Paris, police are guarding potential targets like this news station behind me and Jewish sites. And in Belgium, soldiers are patrolling the streets there for the first time in 30 years.

(voice-over): Tonight, Belgian authorities are waiting for a 33-year- old Algerian man arrested Sunday in Greece to be extradited in connection to the foiled plot by ISIS foreign fighters who allegedly wanted to murder police officers in Belgium.

Several suspects believed to be linked to the terrorist cell are in custody, but a senior Belgian counterterrorism official tells CNN the group's ringleader, who is considered a key ISIS operative, is still on the run.

(END VIDEOTAPE) BROWN: And today in Belgium, E.U. foreign ministers met to discuss counterterrorism strategies, among them, better information and intelligence-sharing among E.U. countries and strengthening ties with Muslim countries.

Wolf, there is this urgent concern right now that ISIS is directing recruits to go back to Europe and the U.S. and launch attacks -- Wolf.

BLITZER: Pamela Brown in Paris for us, thank you.

We're also getting more on the breaking news on the suspected ringleader of this ISIS terror blot in Belgium.

CNN terrorism analyst Paul Cruickshank is working his sources and they're very good sources. He actually broke the story for us.

So tell our viewers what else you are learning, Paul.

PAUL CRUICKSHANK, CNN TERRORISM ANALYST: Wolf, a senior Belgian official tells me they think the ringleader behind this plot in Belgium last week was very likely Abdelhamid Abaaoud, a Belgian Moroccan who is 27 years old who is thought to have traveled around January of 2014 to Syria and to have connected there in Syria and Iraq with the senior leadership of ISIS.

He is believed to be the key ringleader in this plot and to be the key link person between the senior leadership of ISIS and the cell in Belgium. He is believed to have phone contact with two of the gunmen who were killed in that operation by Belgian counterterrorism forces last week in Verviers in Eastern Belgium.

They think it's very likely him that directed this and that he did so from Greece where he was operating after he traveled from Syria. The Belgians brought in the Greek police and CIA to try and find him. But they have not yet been able to locate him, I am told. Separately, they are extraditing an Algerian who is 33 years back to Belgium.

It's possible he may also have had some role in this plot. They're trying to piece through whether it was a major or minor role or any role at all at the moment, Wolf.

BLITZER: He is still at large, Abdelhamid. Nobody has a clue right now where he might be? Is that what I'm hearing?

CRUICKSHANK: It's a massive international manhunt to find him. He was last located in Greece.

But he appears to sort of have evaded capture so far. He could have gone over to Turkey or perhaps even back to Syria, but a huge manhunt. All the Western intelligence services trying to find this guy, sort of a key ringleader figure directing these people in Belgium to launch.

What I'm now told by senior Belgian counterterrorism officials was an ambitious plot that went beyond targeting just policemen on the street. These guys had explosive chemicals. They had automatic weapons. They had police uniforms, suggesting they wanted to gain access to a sensitive site.

There may have been multiple attacks they were planning. The surveillance of the group lasted about a couple of months, I'm told. In the last few weeks, that surveillance was 24/7. As you know, to do 24/7, you need massive resources. So the Belgians felt they just needed to move in because these guys had bought all these stockpiles of automatic weapons, they couldn't take chances after what they saw in Paris -- Wolf.

BLITZER: The search goes on for Abdelhamid Abaaoud, a Belgian Moroccan ISIS fighter.

Stand by, Paul. We will get back to you.

Also breaking right now, the U.S. military is on a higher state of alert ready to evacuate the United States Embassy in Yemen immediately if needed. The United States is monitoring an extremely dangerous situation after heavy fighting broke out in a battle for control of Yemen's presidential palace.

Our Pentagon correspondent, Barbara Starr, has got all the details that are breaking right now.

Tell our viewers what you are learning, Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, good evening.

Right now, the U.S. military ready to move in immediately, according to one official, if needed. No order, no request from the State Department yet to evacuate the embassy, but the military does have a warship offshore Yemen, helicopters, other aircraft that could come in very quickly if the Americans need to get out and it is not safe enough for them to go to the commercial airport.

Fighting across the capital today. People are talking about a cease- fire. But I don't think there's a lot of hope that it's going to hold. Of course, underlying all of this the major national security concern for the Obama administration, as Yemen unravels and you see it unraveling. What is al Qaeda there up to? How are they taking advantage of this situation when the Yemeni military and Yemeni intelligence services are so busy just trying to hang on, Wolf?

BLITZER: Just trying to survive. Do we know how many Americans are actually in Yemen right now, Barbara?

STARR: The State Department -- we asked them today -- they said they did not have a number, that they don't track it precisely. Given the security situation on ground in Yemen right now, they don't want to really offer up even an estimate. It's a matter of safety concern. They don't want to say even how many Americans are still at the embassy, Wolf.

BLITZER: We had heard, Barbara, that this was widely reported, there are, what, 100 U.S. Marines at the embassy?

STARR: That's a rough estimate. That's accurate that there are a large number of Marines at the embassy because the embassy is in fact for the last several months been one of the most heavily protected U.S. assets overseas. They have moved in extra Marines over time.

They have increased the so-called standoff distance so the embassy is not next to a road, so it is not next to traffic with the potential of car bombs, but still a very fraught situation on the ground. If they had to move in and evacuate everyone, they would take those Marines along with them -- Wolf.

BLITZER: Yes. I remember it wasn't that long ago when the U.S. decided to evacuate everyone from the U.S. Embassy in Tripoli, Libya, giving up on any hope for the situation there to come down. It's clearly a failed state right now. I suspect the same thing will happen in Yemen as well. But we shall see.

Barbara, thanks very much.

STARR: Sure;.

BLITZER: Let's get a rare report now from inside Yemen.

Only CNN, among all Western television news organizations, has a reporter on the scene. Nick Paton Walsh is our man in Sanaa, the capital of Yemen, right now.

Nick, set the scene for us. You have been there. You have been driving around. I assume you have good security from what you are seeing. Tell us what's going on.

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Right now, at 2:00 in the morning, it's deathly quiet in Sanaa.

But that hasn't been the case for the most -- majority of the day. AT about the middle of the afternoon, we saw the cease-fire end the series of loud explosions we had heard all day. That began early in the morning when presidential officials concerned that more among their number could be kidnapped by the Houthi rebels here, the chief of staff having been kidnapped 48 hours ago, put in roadblocks around the key buildings.

The Houthis didn't like that. They too have their own checkpoints across the city which they moved into quite successfully a number of months ago. That led to clashes. We don't know who started them, but we do know that an artillery dual broke out before the presidential administration building, which most Yemeni officials say you control that, you control that the country.

That was fought for, for by heavy weaponry a number of hours. A lot of residential buildings around there damaged. Cease-fire talks tried to slow that down. But those who attended the talks, the prime minister, the Houthi envoy found themselves being shot at as they left.

We are now seeing the cease-fire showing things somewhat. But there's a lot of heavy lifting to be done at the negotiating table. Talk of constitutional changes to suit the Houthi demands if they release the presidential chief of staff. That's a huge ask, frankly, of the president's supporters.

Now we're hearing that Houthi militia are in some way around the prime minister's residence and the presidential administration. They have always had checkpoints in the city, but it seems as though there is a tense standoff waiting for the politicians to suggest there's some compromise magicked out of this mess -- Wolf.

BLITZER: And, Nick, if the Yemeni military and law enforcement, security forces can't even protect the presidential chief of staff, there really -- the U.S. can't hope that they can protect American diplomats or civilians or U.S. military personnel, they can't rely on the Yemeni military, right?

WALSH: Not really, no.

The Yemeni military, as you say, are kind of struggling to, I think, keep themselves together here at this point. One of their number two commanders came out with a very strong pro-Houthi statement in the past four hours or so. It's quite clear there's divisions in the military, divisions within parts of the government as well a real sense, I think, that the government is struggling today to show executive authority, given how the president simply had to stay in his residence, doesn't seem likely to be able to go back to the presidential administration imminently, unless this deal managed to soothe all the different factions here.

It's not just the Houthis and the government. There's also former regime with their militia as well, deep concerns that anything could really spark off a repeat of this morning's violence. The Americans in the embassy, they're very well-defended. I was there earlier today. They are pretty relaxed, frankly.

The numbers haven't decreased because of this violence. The consulate services are still open. They are well-defended in there. They have been for quite some time. It's going to take probably quite a lot. But after Benghazi, the U.S. very keen to be sure everything is in place in case we see a rapid flaring of the violence here, Wolf.

BLITZER: Yes. After Benghazi, it didn't take long for the U.S. to decide pull everybody, all Americans out of Libya altogether and shut down the U.S. Embassy, as I said earlier, in Tripoli and I suspect the same thing might happen over there in Yemen, where you are.

Nick, be careful over there, Nick Paton Walsh on the scene for us in Yemen.

We are joined now by the new chairman of the Senate Intelligence Committee, Richard Burr of North Carolina.

Senator, thanks very much for joining us.

What's your sense? Will Americans, whether diplomats, Marines, employees, other civilians, are they going to have to be evacuated from Yemen any time soon?

SEN. RICHARD BURR (R), NORTH CAROLINA: Well, Wolf, it's too early to know.

But, clearly, we have assets in the region to take care of whatever evacuation needs to take place. We have got the Iwo Jima off the coast. We can go by helicopter. We could go by land. We're set up for that.

But the reality is that we want to stay in Sanaa as long as we can. We want to try to support the government. But, as we see, this is a government that's not been in control of a country for quite a while now. And as the fighting continues and it grows, we have to pause and ask ourselves, what is AQAP up to at this time?

BLITZER: Because the U.S. decided to cut its losses in Libya and simply get out. It was too dangerous for American diplomats and others to simply stay in Tripoli. I guess I'm already hearing some people saying, what's the point? Yemen is clearly a failed state. It's falling apart. Why risk the lives of these Americans right now? Why not just get them out while you can?

BURR: Well, Wolf, I believe that we only have essential personnel there. And the majority of the individuals are probably either Marine or some type of intelligence operation.

We're conducting business as normal. But I think we have minimized the exposure of nonessential employees. There are reasons that we need to stay in the country. But I feel very confident that the State Department will make the right decision at the right time. I think we may be close to that, though.

BLITZER: Because even if there are some Marines, some intelligence operatives and others there who are well-trained and prepared for this kind of stuff, it looks like this is becoming -- it already has been, but even more so, fertile ground for AQAP, al Qaeda in the Arabian Peninsula, which is based in Yemen, to simply expand and do whatever they want.

BURR: Al Qaeda has never missed an opportunity in chaos to either carry out an act, to start planning, to do something that would cause some type of trouble somewhere in the world just simply because our eye is not on them. And we need to make sure that we keep it on them.

BLITZER: Here is a question a lot of people are asking me. Maybe you have the answer, because something clearly went wrong in recent months in Yemen. Last September, President Obama said Yemen was actually an example of how the U.S. had successfully pursued a counterterrorist strategy.

I think he's referring to the drone strikes that killed several, a lot of AQAP terrorists, including Anwar al-Awlaki. But that's clearly doesn't seem to be the case right now. It doesn't look like things are moving in the right direction at all.

BURR: Let's just admit it. Al Qaeda has not been decimated. It doesn't matter whether it's al Qaeda in the Arabian Peninsula or al Qaeda core or Khorasan. Al Qaeda is alive and well. The fact is that when we kill one, three new recruits come in. They are well-equipped. They have unbelievable training. And they are able to reconstruct really the highest ranks within al Qaeda within every one of the organizations in a matter of hours. It's a temporary setback. But it certainly doesn't last forever.

BLITZER: I'm going to take a break.

But very quickly, here is what worries me, Mr. Chairman, is that if the U.S. waits too long, yes, there are V-22 Ospreys on the Iwo Jima, that ship off the coast of Yemen. There are helicopters, but both of those kinds of aircraft are very vulnerable to shoulder-fired surface- to-air missiles, unlike a big plane that might be able to go in and out and take everyone out. This is a delicate dance, delicate operation. You can't wait too long and risk the lives of the helicopter and Osprey pilots to go in there and save those Americans.

BURR: Wolf, you are absolutely right. The RPGs are another weapon familiar to the region and commonly used in close quarters like we would be in could be a very effective tool as well.

BLITZER: Richard Burr, stand by for a moment. We will take a quick break. We have a lot more to discuss, especially what's going on in Europe right now, the terror operations that are under way, the massive manhunt for the mastermind of what's been going on.

Stay with us, much more of the breaking news after this.

(COMMERCIAL BREAK)

BLITZER: We're back with the new chairman of the Senate Intelligence Committee, Richard Burr.

We are talking about the terror investigation in Europe right now.

Mr. Chairman, how surprised are you to hear how poorly apparently France tracked the Kouachi brothers, even after receiving a heads-up about them from U.S. officials back in 2011?

BURR: Well, Wolf, you know, I said early on in this we were going to learn a lot. I didn't say it would all be good.

The reality is that it looks like the French went through a lot of the difficulties that we went through on 9/11 or leading up to 9/11 where law enforcement didn't talk to intelligence, where intelligence didn't talk to law enforcement.

I'm not sure that we could have stopped this one, that they could have stopped it. But, clearly, we're going to have to rethink to what degree we surveil people, how long we keep it on them, what the thresholds are, how we run names and acquaintances through the database. These are all going to be essential.

BLITZER: We're also hearing that the presumed Belgian mastermind of the foiled attack in Belgium still very much on the run right now, remaining at large. Did this alleged terrorist, his name, Abdelhamid Abaaoud , a Belgian Moroccan, did he get orders from ISIS to plan this attack?

BURR: I'm not sure that we know that today.

I think that it's safe to say that by all news accounts, the Belgians knew, as we did, about this group. Their decision to wrap up a terror cell was their decision, as it relates to the timing. I think it's safe to say from all accounts that this was potentially much bigger.

And I think that any time we have an attack like Paris or we have had in Belgium with the roll-up, we have got to be worried about that either accelerating another attack or sending underground people that we are looking for. At the end of the day, we have got to remember, this is about an ideology. This is not about an individual.

So, as we look for ones or twos here or there, it's still an ideology that we have got to be worried about.

BLITZER: One quick question on North Korea. You saw the "New York Times" report saying the NSA actually was engaged in hacking and engaged in cyber-warfare against North Korea years ago, was monitoring what's going on. As a result, they knew for sure it was North Korea that engaged in that operation against Sony Pictures.

By revealing all this information, was any damage done to U.S. intelligence collection?

BURR: Well, just personally speaking, I don't like these types of things being in the public domain, because I think it does hurt us in the future on what we're capable of doing.

But let me address North Korea specifically. I don't think there was one piece of intelligence, one intelligence node that slammed the door on the North Korean involvement. I think it was everything together that gave us the confidence that this was North Korea who committed this act by themselves.

So, I think it's important that we realize that we're trying every day to keep America safe. And the tools that we use are the tools that the American people provide us with or that they finance. And we have got to be as robust as we possibly can.

BLITZER: Chairman Burr, thanks very much for joining us.

BURR: Thanks, Wolf.

BLITZER: Richard Burr, the new chairman of the Senate Intelligence Committee.

Just ahead, we have more on the new report out there about NSA spying on North Korea. Could the U.S. have warned Sony about that cyber- attack before it happened?

And we will also talk about new twists in the terror investigation in Europe and the missteps before the slaughter in Paris. Our analysts, they are standing by.

(COMMERCIAL BREAK)

BLITZER: Let's get some more on the breaking news unfolding right now. The bloody power struggle under way in Yemen and the dangers to Americans, as well as the terror threat in Europe.

We're joined by our national security analyst, Peter Bergen; CNN counterterrorism analyst Philip Mudd; and our military analyst, retired Lieutenant General Mark Hertling.

This situation, Peter, in Yemen, it's unraveling and it's unraveling fast. By all accounts, for all practical purposes, Yemen now is a failed state.

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: I think that might be too polite a term, to call it a failed state.

You know, Yemen has serious problems already. Arguably, three different civil wars going on. It's running out of oil. It's running out of water. It's running out of cash to pay its government employees. And now we have this crisis, which I do think helps al Qaeda. Al Qaeda in Yemen has been taking some hits in the last years. It controlled a lot of southern Yemen. And a lot of drone strikes have been taking out its leadership. That said, it can now present itself as the defender of Sunnis in Yemen against the Shia Houthis that are basically taking control of much of the country.

BLITZER: This is a real worrisome development, Phil, because as you know, this chaos is going to guarantee that AQAP, al Qaeda in the Arabian Peninsula, which is based in Yemen, it's only going to help them, right?

PHILIP MUDD, CNN COUNTERTERRORISM ANALYST: Yes, let's distinguish between short-term and long-term, Wolf. Short term, civil war in some ways helps America. If al Qaeda is engaged in a conflict in the streets on Sana'a, for example, with the Houthis, potentially the al Qaeda leadership is less focused on western targets.

That would not be the way I'd think about it in the mid- to long-term. If al Qaeda can control territory, the same as we've seen, for example, with ISIS in Syria or Iraq, their ability to focus more on overseas targets, because they begin to govern areas of Yemen, means that we face a higher threat in Europe and the United States.

BLITZER: Quickly, Phil, at what point does the U.S. say, "Enough is enough and get those Americans out of there"?

MUDD: Boy, I'd say pretty soon. What I'm seeing now is -- and again, remembering Benghazi, you've got to focus on the short-term targets. The operatives in the embassy are helping to find, fix and finish al Qaeda targets with drones. But you cannot risk a rerun of Benghazi. And there is no way you're going to be able to control that embassy compound. Doesn't matter how many marines you have there. If the civil war is hitting the streets of Sana'a, I would say sooner, rather than later, you've got to get people out. BLITZER: Yes. That's what a lot of people are concluding.

General Hertling, as you well know, and you've been involved in these operations, is there, first of all, any military action that could stop what's going on in Yemen, U.S. air strikes, for example, more drone strikes? Or would all of that just simply be a waste of time?

LT. GEN. MARK HERTLING (RET.), CNN MILITARY ANALYST: It's a waste of time, Wolf. Because what are the targets?

Right now the government is still in charge. They're trying to hold onto power. President Hadi is trying to continue to do what he needs to do.

The key piece right now is the potential NEO operation. And I'm suggesting that that's probably not going to happen any time soon. A NEO op, or a non-combatant evacuation operation procedure, I've been involved in several of those. Those are very delicate dances between the military wanting to get people out and keep them safe, and the State Department wanting to stay there and continue to make connections with the local government. Those are tough operations.

But I think we've got forces in both the Arabian and the Red Sea. We've had air forces overhead. Reinforced Marine reaction team at the embassy. I think the embassy and the Americans are safe there for now.

BLITZER: Yes. For now. But if you've got to send in helicopters or Ospreys, those V-22s, as I've been pointing out, they are really vulnerable to shoulder-fired surface-to-air missiles. It's by no means a risk-free operation.

HERTLING: Not at all. It never is. But you also have reinforcing high-performance aircraft to support those ospreys that are going in to pick up the passengers.

So I don't think we'd have a whole lot of problem getting the folks out of there before it would be an untenable situation.

BLITZER: As far -- you want to weigh in, Peter?

BERGEN: Yes. You know, I mean, there are also risks in just abandoning our post inside.

BLITZER: The U.S. did it in Libya.

BERGEN: Well, let me...

BLITZER: Everyone is out of Libya right now, even though the U.S. had spent billions trying to get rid of Khadafy. And now there's nobody, no Americans in Libya.

BERGEN: Sure. But go back to the founding of al Qaeda in Sudan in the mid '90s. We closed our embassy in Khartoum. Basically meant we had no idea about this al Qaeda thing that was growing in Sudan at that time. So, you know, you -- we have to balance -- that embassy is not like Benghazi. Benghazi was a very poorly...

BLITZER: Benghazi was a consulate.

BERGEN: Yes.

BLITZER: But they shut down the U.S. embassy in Tripoli, which was a heavily fortified compound. And they concluded it's too dangerous. The Americans are getting out of there.

BERGEN: Right. Well, so I mean, you have to -- it's a very tough call, obviously. But you know, we don't want to be blind. Al Qaeda in Yemen is behind the Paris attacks. Do we really want to be blind in Yemen?

BLITZER: Well, you see what's going on in Libya right now. It's a disaster. There are a lot of al Qaeda in the Maghreb, ISIS. They're training in Libya right now. And that's a lot closer to Europe than Yemen is right now. So it's a serious situation.

Guys, I want all of you to stand by, because this is a very worrisome -- from my reporting, I'm very worried about those Americans, the diplomats, the intelligence operatives, the U.S. Marines, the civilians, the NGO people. It's going to -- they're going to have to get those people out of there sooner rather than later.

Just ahead, more on the terror threats and the U.S. response, including cyber spying that's been going on for years. We're going to talk about the new report that the NSA was hacking North Korea years before the Sony cyberattack.

(COMMERCIAL BREAK)

BLITZER: Tonight new evidence as to why the United States was so quick to blame North Korea for the cyberattack on Sony. We have more now on a new report that the NSA has been breaking into North Korea's Internet network, actually, for years.

Brian Todd is here in THE SITUATION ROOM. He's got the information for us. Tell us what's going on.

BRIAN TODD, CNN CORRESPONDENT: Wolf, tonight Kim Jong-un's government has a strong read on just how it came to be blamed for the Sony hack. "The New York Times" reports the NSA had been infiltrating the North Korean regime's computer networks, its hacking teams, since 2010.

"The Times" says the NSA tapped into the Chinese servers that connect North Korea to the outside world, that it picked through connections in Malaysia used by North Korean hackers, and that it got help from South Korea to tap directly into North Korean networks.

Now, the reason the NSA had been hacking North Korean hackers for that long? "The Times" says the NSA wanted information on North Korea's nuclear program. And they knew the regime was building up its hacking capabilities.

Now, we know -- you saw that picture earlier. We know the North Koreans have this shadowy team of hackers called Bureau 121. And a larger branch of cyber warriors called the Reconnaissance General Bureau. That branch is run by General Kim Yong Chol, an influential former bodyguard for Kim Jong-un's father and grandfather.

Now the question is, if the U.S. intelligence community knew about North Korea's capabilities, did it warn Sony in advance that it could possibly be hacked?

North Korea had warned as early as last June that it considered Sony's movie "The Interview" an act of war. A U.S. official tells CNN Sony was not warned about a potential hack. But that same U.S. official says, prior to the Sony hack, U.S. intelligence had not noticed that North Korea was doing anything more than its usual hacking activity: denial-of-service attacks, so-called phishing e-mails. No one had any indication that such a massive cyberattack against Sony was in the works, Wolf.

BLITZER: Interesting stuff. Brian, thank you.

Let's bring in Stephen Yates. He served as deputy assistant for national security for former vice president, Dick Cheney. Also joining us Gordon Chang. He's a columnist for Forbes.com, the author of the book, "Nuclear Showdown: North Korea Takes on the World." And CNN counterterrorism analyst Philip Mudd.

Stephen, the software or malware, whatever you want to call it, that the NSA used to map North Korea's computer networks, how does that work?

STEPHEN YATES, FORMER DEPUTY ASSISTANT FOR NATIONAL SECURITY FOR DICK CHENEY: Well, of course the NSA didn't share that with me. And I'm hoping they didn't share that with the "New York Times" either. This had to have been a very, very high priority for them.

Basically, we've been in intense negotiations and disputes over the intelligence with regard to North Korea's nuclear programs for well over a decade. And so it wouldn't surprise me at all if they had heavy monitoring. And I certainly hope the NSA was doing this and more, in terms of getting to ground truth on what's going on in North Korea.

BLITZER: So I assume, Phil, this technology really helps the United States in terms gathering intelligence on North Korea, right?

MUDD: This is the bread and butter of intelligence. What we could call in the business plans and intents. You look at a couple of programs that the U.S. is interested in. We talked about nuclear. Remember, there's a significant ballistic missile program in North Korea.

There's three things you want to know about those. No. 1, what's going on today? No. 2, can I introduce software? Remember years ago when we disrupted -- I think it was the U.S. and Israel -- the nuclear program. Can we introduce software to disrupt what's going on today. And No. 3, in the event of conflict, can we shut down these programs via the Internet. So I think this is critically important in U.S. intelligence.

BLITZER: But here's the question, though, Phil -- if the U.S. had breached the North Korean system, why weren't they able to pre-empt or at least stem that Sony - that Sony hack?

MUDD: My guess is that North Koreans are heavily compartmented. When I joined the agency, one of the first things you learned as an intelligence officer is, I may work in counterterrorism, that doesn't mean I know anything about what's going on with CIA's China operations, Russia operations. So, if NSA is looking at defense systems, what's going on, for example, on the Internet in North Korea in the South Korean border, what's going on with the ballistic missile program, what's going on with nukes, that doesn't necessarily mean to me they know what's going on with the potential Sony hack.

BLITZER: Gordon Chang, you think North Korea, Kim Jong-un, they're going to retaliate against the U.S. or others for what has just gone on?

GORDON CHANG, FORBES.COM COLUMNIST: Well, North Korea always retaliates for something like this. So, unless there's a real change of heart in the regime, we're going to see some sort of action on the part of the North Koreans. It could probably be cyber. But they have used other means by going, for instance, attacks on American bases, or maybe even South Korea. So, there's just going to be something, we just know when. But it will occur.

BLITZER: You know, I have been reading reports over the weekend -- Stephen, let me let you weigh in on this, that Kim Jong-un, the leader -- the young leader of North Korea, is thinking of accepting an invitation to go to Russia for his first visit out of North Korea since taking over for his father. What do you make of that?

STEPHEN YATES, FORMER NATIONAL SECURITY ADVISER TO DICK CHENEY: Well, number one, I would take it as a sign of confidence on his part that everything is settled well enough in North Korea for him to be able to leave. Obviously, when you're running a dictatorship, you have to be certain you can afford to leave and come back. So, he seems to have I think exceeding amount of confidence that nothing is coming his way by -- from the United States or internally to be able to contemplate that kind of a trip.

BLITZER: Because his father, Gordon, as you know, used to go to China, Kim Jong-il, all the time. If he decides to go to Russia first as opposed to China, what does that say?

CHANG: Well, there's a lot of scrambling of diplomatic relations on the Korean Peninsula right now, with both the North Koreans reaching out to Moscow and Moscow reaching out to North Korea. And at the same time, you have the Chinese who have been North Koreas good friends, they are now trying to build bridges with South Korea as they have problems with Pyongyang.

And so, you have a lot of different relationships being formed right now. And it's before the dust settles, we don't really know what all this is going to mean. But things will be different.

BLITZER: Certainly will be.

All right. Gordon Chang, thanks very much. Stephen Yates, thanks to you. And, Phil Mudd, of course, always appreciate having you here in THE SITUATION ROOM.

Just ahead, a suspected ringleader now identified as investigators are scrambling to stay ahead of the terror threat that is sweeping across Europe from the Middle East.

(COMMERCIAL BREAK)

BLITZER: On the eve of President Obama's State of the Union Address, Republicans are already pushing back against some of his initiatives that don't have much chance of being passed anyway.

Let's discuss what is going on. Joining us, our chief congressional correspondent Dana Bash, our chief political analyst Gloria Borger, and our senior political analyst Ron Brownstein, the editorial director of "The National Journal."

Gloria, this new tax plan that the president --

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Robin Hood?

BLITZER: Yes. It's called Robin Hood. You take from the rich, you give to the middle class in this particular case.

BORGER: Right, middle class.

BLITZER: Tell us what's going on there.

BORGER: You know, this feels like a president who's kind of liberated, right? He doesn't have to worry about Democrats up for re- election in 2014. He's worried about his legacy. He's trying to set the table for 2016.

So, what is he doing? He's going to increase taxes on the wealthy. By the way, none of this is likely to get passed. Oh, increase the capital gains --

BLITZER: That was a light bulb.

BORGER: That was a light bulb, wow, scary. Everyone is good.

Increase the capital gains tax rates, increase inheritance taxes to pay for things like free community college, tax credits for the middle class, education, that kind of thing. That's the centerpiece.

BLITZER: It really has no chance of passing?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Well, exactly, no chance.

But I think there are a couple of things interesting here. One, Gloria is absolutely right, the president couldn't have done this a year ago when he had so many fellow Democrats on the ballot who -- that just didn't even want to have to face questions about, will you support the president with tax increases? But also, one of the things that I've heard from Democrats, one of the many things, their criticism of the president, is that he negotiates from a position of compromise, to start, instead of starting out where, you know, sort of at the far end of where he thinks he can possibly get from his philosophical position, he starts out far into the middle. So, in this case --

BORGER: This isn't the middle.

BASH: Not at all. Not at all.

And he's also appealing to the base. The problem is going to be, when he talks about substance and getting things done and compromise, what this does show is such different philosophical visions of how to deal with the tax cuts.

BLITZER: This could help Democrats in 2016 if the Republicans are seen opposing these tax breaks, these additional credits for the middle class.

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Right. As everybody said, this is really about framing the debate for 2016. There's not a lot of legislation that we're likely to see the president and this Republican Congress agree on. And this really does, though, point, Wolf, I think what is likely to be the central economic debate in 2016.

The landscape is shifting. People are backing more polar, more optimistic about the economy. The job growth is continuing. It's possible by the end of the two terms of the Obama presidency, the economy will have produced about 10 times as many net jobs as it did during George W. Bush. But the big except is that incomes are not rising for average families, and what you see here is one of the Democratic kind of offerings. At the same time, Jeb Bush and Mitt Romney are talking about a broad range of policies we're going to see from both sides in 2016 focusing on that.

One thing worth noting, though -- in 1997, when Bill Clinton signed the balanced budget deal, one of the things he did was cut the capital gains tax. So, it will be interesting to see whether this is one of the many areas where Hillary Clinton has followed Obama. Will this be another?

BASH: The president is proposing to raise the taxes.

BASH: Exactly.

You know, and this president, from when he took office, has governed in a country that has been in a severe recession and you can't talk about raising taxes in the middle of a recession. Well, that discussion is kind of passed now. Not only do people feel a little better, they see starting wage increases and people are feeling more optimistic. And so, the discussion is shifting now to income equality and what now can the president do to push the agenda he had when he really came into office but couldn't do it because he was hamstrung by the recession.

BASH: I want to drill down on the whole issue of the different philosophical visions. It is so real. I mean, you think about Paul Ryan, who is going to be in charge of the tax writing Ways and Means Committee. I mean, he fundamentally and other Republicans believed the way to spur growth in the economy is to cut capital gains taxes, to redo the corporate system.

And here you have the president proposing the exact opposite, that Democrats fundamentally believe that it is best to right now spread the wealth, distribute wealth, which is a Republican slogan against Democrats in the campaign, but --

BLITZER: He seems, Ron, the president, to be a lot more confident, maybe because of the poll numbers. There's a new ABC/"Washington Post" poll out now showing him for the first time since 2013, his job approval percentage at 50 percent. Our CNN poll had him at 48 percent. Now, they say 50 percent.

What's driving this bounce?

BROWNSTEIN: Predominantly improving views about the economy. That is enormously significant because if you roll -- if the economy maintains its forward momentum through 2016, we could be looking at a very different presidential year landscape than many people expected. If you look back to American history, outgoing presidents who were popular, who were not necessarily able to ensure a victory to its successor, Eisenhower in 1960, Clinton in 2000. The opposite, though, is almost always true. If the outgoing president is unpopular, forget it.

BASH: Forget it.

BROWNSTEIN: And so, Republicans have been banking on President Obama's approval rating Election Day on 2014 was 44 percent, if it was down at 2016, that's a big hill for any Democrat to climb, he could be in a much stronger position by the end of his presidency than people anticipated.

BORGER: And it's setting the base for the Democratic Party for Hillary Clinton, who's had some problems with the base of the Democratic Party. But don't forget, one man's fairness argument is another man's class warfare.

BASH: Yes.

BORGER: The argument we're going to be having, heading into 2016. But if Jeb Bush runs and if Mitt Romney runs, expect to hear them adopting a lot more of the discussion about income and income inequality. Republicans will adopt that as their own, or try to.

BASH: I, of course, think that you're right, that it's all about the economy, stupid, right? I mean, that's what we've known for decades.

(CROSSTALK)

BASH: No. Who, me?

Believe me, the last person to call stupid, but I just having been out on the campaign trail in the fall of last year, it's something that is harder to pin down. I believe it's also leadership, that people are finally like, OK, we have somebody who is making a decision -- maybe they don't agree with him -- making decisions, standing up for something that he believes in, and that is almost incalculable when it comes to --

BROWNSTEIN: I'm sorry. It's worth noting, real quick, that these decisions he's making are going to have a big impact on 2016. Immigration, Cuba, climate, I mean, he is putting down markers that both parties are going to revolve around.

BORGER: If I were a Republican running for president, I'd be talking about reforming Wall Street. Just saying.

BLITZER: Ron Brownstein, Gloria Borger, Dana Bash, guys, thanks very much. We're going to look forward to tomorrow night.

Please be sure to tune in tomorrow night, starting 7:00 p.m. Eastern. I'll be joined by my colleagues, Jake Tapper, Anderson Cooper, all of our excellent analysts. CNN's special coverage of President Obama's State of the Union Address tomorrow night.

Take a look at this. You're looking at a live picture of the tomb of Dr. Martin Luther King Jr. in Atlanta. President Obama honored Dr. King's memory today with community service on this national holiday. He took part in activities at a boys and girls club here in Washington, along with the first lady and their daughter Malia.

I was honored to take part in a tribute to Dr. King over the weekend in Atlanta, at the King Center. I co-hosted the annual Salute to Greatness Award Dinner. Bill Clinton was honored.

You see Martin Luther King III. I got to visit with him, with the King family, Bernice King was there, there's Bernice King, the daughter of Martin Luther King Jr. Jovita Moore is my co-emcee at our affiliate WSB in Atlanta.

Remember, you can always follow us on Twitter. Tweet me @wolfblitzer. Thanks very much for watching.

"ERIN BURNETT OUTFRONT" starts right now.