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U.S. To Punish Russia for Election Meddling; Russia Hurt Clinton in Election; Russia Vows Retaliation; Penalties for Russian Hacking; Government Reveals Hacking Names; Russian Operatives to Leave U.S.. Aired 2-2:30p ET

Aired December 29, 2016 - 14:00   ET

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

[14:00:00] FREDRICKA WHITFIELD, CNN ANCHOR: Hello, everyone, I'm Fredricka Whitfield, in for Brooke Baldwin today.

The Obama administration is preparing for payback against Russia as soon as today for meddling in the U.S. election. The U.S. is expected to retaliate with expanded sanctions, diplomatic measures and later covert actions. The upcoming announcement is already putting the Kremlin on defense. Russia warning it will respond to any hostile new steps.

But President-elect Trump, who takes office in just 22 days, doesn't seem too worried about the idea of a foreign adversary hacking into the election. Instead writing it off as sour grapes. Standing next to boxing promoter Don King at Trump's Mar-a-Lago resort. The president- elect says it's time to, quote, "get on with our lives." The impromptu news conference is hard to hear, but we have subtitled it for you.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT-ELECT: I think we ought to get on with our lives. I think the computers have complicated lives very greatly. The whole, you know, age of computer has made it where nobody knows exactly what's going on. We have speed. We have a lot of other things but I'm not sure you have the kind of security that you need. But I have not spoken within the senators and I certainly will be over a period of time.

(END VIDEO CLIP)

WHITFIELD: All right, CNN's Athena Jones is following the latest developments.

So, Athena, talk us through this retaliation, these measures, the Obama administration is likely to take against Russia.

ATHENA JONES, CNN CORRESPONDENT: Hi, Fred.

That's right, we're going to hear - we expect to hear what these measures are as early as today, even as early as the next few hours. You mentioned some of them, expanded sanctions and diplomatic measures, also a possibly covert action of unannounced moves that we'll never hear about. One more thing we expect from the administration is that they will

name individuals associated with the Russian disinformation campaign. And that's really what it's all about, Fred. Russia is known for using disinformation campaigns to meddle in and influence elections in several countries. And so U.S. intelligence officials believe that they used hacked information, mostly from Democratic Party officials and organizations, to attack Hillary Clinton and her presidential campaign. And so one of the measures would involve naming those individuals.

And this comes, though, as you mentioned, as President-elect Trump has continued to be dismissive of this whole idea that Russia meddled in the election. His views are at odds with members of his own party, including Arizona Senator John McCain, who said, you know, I agree with President-elect Trump. We should get on with our lives without having elections affected by any outside influence. So Trump's views at odds with members of his own party and certainly Democrats on Capitol Hill.

Fred.

WHITFIELD: All right, Athena Jones in Honolulu, where the president is enjoying his holiday break. So for more on Russia's reaction, let's go live now to Moscow. CNN's senior international correspondent Matthew Chance is there.

So, Matthew, what is Russia saying about the retaliation that the U.S. is planning?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, it's interesting to hear that Donald Trump may well be out of sync with the other members of his party, but he's in lockstep with what the Kremlin is saying because he again cast doubt on the possibility that Russia was involved in this, saying there's no evidence. That's exactly what the Kremlin's saying in their latest act at the Russian foreign ministry. In fact, they're say, look, you know, this is all misinformation, these hacking allegations put about by the Obama administration aiming to provide an excuse for their own failure.

They've also identified that they will actually, you know, strike back, as it were, if there are any more sanctions imposed on Russia. They said if Washington really does take new hostile steps, we - they will be answered. Any action, for instance, against Russian diplomatic missions in the United States will immediately ricochet on U.S. diplomats in Russia. That was a statement that came last night as these reports first emerged that we were waiting for an announcement for these sanctions from the Obama administration on Russia over these hacking allegations. The Russians say that, you know, they will hit back if these sanctions - these sanctions are delivered.

WHITFIELD: All right, Matthew Chance, thank you so much.

Well, this breaking news on more detail, perhaps, on what the Obama administration has planned. Our Evan Perez is joining us now with more information on this.

Evan.

EVAN PEREZ, CNN CORRESPONDENT: The White House is out, including new information from the Treasury Department. They've added, according to this information, they've added five entities and four people. These are all officials, high-level officials in the Russian GRU, which is the military intelligence unit of the Russian spy services. This is one of the agencies, one of the spy services, that is blamed for penetrating the DNC, the Democratic National Committee, as well as carrying out hacks of other Democratic Party organizations in the past year. And they were, frankly, playing a central role in this Russian - well, what the U.S. intelligence agencies say is a Russian disinformation campaign that has been going on in the past year.

[14:05:14] According to the U.S., a lot of this was aimed at harming the campaign of Hillary Clinton and helping Donald Trump's election. So right now we see the first time - for the first time the names of some very high level officials in Russian intelligence who have now been placed on sanctions lists, including some of the top officials from the GRU. Again, this is the Russian military intelligence unit that was responsible, the U.S. believes, for some of the hacks.

And, again, a lot of the - we're still reading through the information that has come through from the Treasury Department. We expect that we're also going to see from the State Department, we're going to see some diplomatic actions that the U.S. will take against - against Russia. We're waiting to see what that entails. But, again, right now, at this time, we have the - the first list of individuals and entities that have been sanctioned by the Obama administration.

WHITFIELD: All right, Evan, hold tight. I want to go back to Athena Jones, who's there in Honolulu where President Obama is vacationing with family there.

So, Athena, what more do we know about why now? The timing of this with the naming of names and these entities that are being blamed?

JONES: Hi, Fred. Well, the hope is that this will have some impact. Why did it take this long? Why wasn't there action sooner? The White House has been asked that question quite a bit and their response for starters is that they wanted to make sure that intelligence agencies and law enforcement agencies were able to do their work. Able to carry out thorough investigations. To make sure that they had the evidence they needed that Russia was behind this attack.

We know the White House has come under fire, including from Democrats, for not responding sooner. That is part of their answer. Another part of their answer is that they didn't want - they wanted to be able to protect the classified sources and methods that they've used to determine that Russia was behind these actions.

And there also was some sensitivity. The White House didn't want to appear to be putting their finger on the scale for the president's preferred candidate Hillary Clinton. They believed that she was going to win and they didn't want to give who they thought would be the defeated Donald Trump any excuses to question the legitimacy of the election. And so that is what you hear coming from the White House. But these are the steps they've taken. We're still going through them and we'll be able to report more on them in the coming hours.

Fred.

WHITFIELD: All right, Athena Jones, thanks so much.

When you get more information, of course, bring that to us.

Let's talk more about this now with Major General James "Spider" Marks, a CNN military analyst. I also want to bring in David Andelman, editor emeritus of "World Policy Journal," a columnist for "USA Today" and a cnn.com opinion contributor.

All right, good to see both of you.

So, general, you first, your reaction to the naming of names, five names, entities, from Evan Perez's reporting there from the White House in terms of their culpability, involvement in influencing U.S. elections.

MAJ. GEN. JAMES "SPIDER" MARKS, CNN MILITARY ANALYST: Well, first of all, I don't think we should be releasing those names. I think the fact that those names are available, in other words, there is, in fact, a very strong intelligence effort. These names have been uncovered. We have with levels of certainty an understanding of who took place - or what took place, who directed it, et cetera. That should be kept behind closed doors. We shouldn't be announcing that right now.

And what it really comes down to is the notion of, what is the United States' intention relative to Russia and its involvement? I hate the word "meddling," but when you look at the cyber domain, the cyber online activities are, in fact, a domain of war, much like they - we have sea, we have air, we have land laws of warfare. We simply don't have that yet in the cyber domain. That needs to be addressed. So for us to be involved in a response to what Russia is doing online and using all those elements of power, that should be quiet diplomacy. And if there are covert actions, we should be taking those actions and not announcing those.

WHITFIELD: David, your view on whether the U.S. should be releasing these names, the information?

DAVID ANDELMAN, EDITOR EMERITUS, WORLD POLICY JOURNAL: I think the releasing of the names really does very little, frankly. It is the one irreversible fact that the United States can do. That can't be reversed. Once those names are out there, they're out there. And Donald Trump, or the Trump administration, can't withdraw them, can't annul those kinds of operations. They are - they've been done.

What is interesting, though, is, and I would suspect, as I mentioned to you in our break, I visited the NATO cyber command in Estonia last - in October and what they said was that there are a myriad of efforts that we can make against the Russians that I suspect, frankly, may very well be on route simultaneously with these others to send the - a comparable message to the Russians.

WHITFIELD: For example, like what?

ANDELMAN: Well, I mean, there are all sorts of denial service attacks. There are all sorts of - they can - they can wipe, you know, computer drives. They can do all sorts of interesting things like that. What they have to be aware of, though, and this is something that they - they emphasized to me is, we don't want to give away too much to the Russians in this about what our capabilities are and what our offensive - what defensive capabilities are. And that's something the Russians would always be watching for in the event that we lit up some of these - these capabilities. So that's very important going forward.

[14:10:25] WHITFIELD: And so, general, what about the agreement that releasing these names also acts as a deterrent. It shows that this administration is taking action now that it has the information from the intelligence community, as a way from deterring something like this from happening again?

MARKS: Yes, I don't think the release of the names is an op (ph) priority condition for taking action. We certainly don't want to give away our capabilities, but at the same time it's very difficult to talk about proportionality or an in-kind or an asymmetric type of a response when we're talking about the cyber domain. We simply don't understand what that is.

What is proportionality if they are, quote, "involved" in our election. What's a proportional response to Russia and what does that look like? I think in a kinetic sense, in all those other domains of war, we have an understanding of what that might look like. We simply do not hear. So we should go about the business of doing what we think is appropriate and not announcing our intentions.

WHITFIELD: So, David, putting these people, these entities on a list where sanctions are incoming, this is a decision of this president's White House. But if Donald Trump, the president-elect, has said he is willing to undo executive orders put in place by President Obama, what do you forecast potentially would happen?

ANDELMAN: It can be done in an instant. There's no doubt about that. But not only against the individuals. Remember, there is a broad array of sanctions that are en route that are in place against Russia right now. And what's going to happen is, as soon as next June, a lot of these sanctions will have to come up for renewal, not sanctions against individuals necessarily, but against corporate entities, against units of the Russian government and so on. These are the sanctions that have really bit. And if the Europeans, which have been unanimous in the - in enforcing these sanctions, if they suddenly begin to sense that the United States wants to pull back or is indeed going to pull back, that could very well influence their willingness to go forward unanimously in continuing sanctions like that and that starts to let the Russians off the hook.

WHITFIELD: Twenty-two days to go before swearing in. Could sanctions be imposed within that body of time? Can an impact be made in just a matter of weeks?

ANDELMAN: Well, the sanctions can be imposed instantly. I mean there's no doubt about that. Again, sanctions do take time to bite. They do take time to really take effect.

WHITFIELD: To resonate.

ANDELMAN: When they're against individuals, you know, you can freeze bank accounts and so on. Those can, again, be unfrozen in a matter of a flip of a switch or a signature on a piece of paper. So - so sanctions themselves are not necessarily a long-term fix unless you get a unanimity of action by our allies in western Europe and certainly throughout the - this administration and then going forward in the Trump administration.

WHITFIELD: And then, general, how do you see this potentially impacting U.S./Russian relations? Whether those sanctions are imposed right away or whether it takes them time and then they're simply reversed by a new administration.

MARKS: Fred, that's really the question that I see right now. What we see taking place is a transition that is in a certain level of disruption, if you will. And that it's very clear that an incoming president has stated that he wants to try to correct a relationship with Russia. He made the statement today that we need to get on with our lives, which is really a statement of, let's keep this distant right now. Let's try to figure this stuff out. But we, the United States, and the Russian Federation need to be able to get along and let's figure out where those areas are.

So we see a great difference in terms of what this outgoing administration is trying to achieve in these last few days and what the new administration is going to do. It wouldn't be surprising at all to see all of these sanctions completely undone with the stroke of a pen.

WHITFIELD: And I was just handed a statement coming from the president of the United States, from the office of the press secretary, saying this, and it's a four paragraph statement, so I won't be able to read all of it to you, but I'll give you a portion of it. "Today I have ordered a number of actions in response to the Russian government's aggressive harassment of U.S. officials and cyber operations aimed at the U.S. election. These actions follow repeated private and public warnings that we have issued to the Russian government and are a necessary and appropriate response to efforts to harm U.S. interests in violation of established international norms and behavior." A respond to that, David.

ANDELMAN: Well, again, this is just an announcement that they are, in fact, they are doing this. And this was anticipated for today. What he doesn't say, of course, is just what are the specifics of these? What have they gone in and done? What has he ordered done that we may never see? Has he ordered the people in (INAUDIBLE) and Estonia at the NATO cyber command to take some action. Has he ordered Pentagon cyber officials to take some action? Has he ordered the NSA to take some action? That's something we don't know and may never know.

[14:15:06] WHITFIELD: OK, and it may - some of that may be in the body of this very lengthy statement.

ANDELMAN: There you are.

WHITFIELD: When we're in a commercial break, I'm going to read it thoroughly. And if there's more to add to that, then we'll bring that as well.

David Andelman -

MARKS: I hope it's not in that, Fred.

WHITFIELD: You hope it's not. OK. OK. Well, let's pick up this conversation on the other side of the break.

ANDELMAN: Perfect.

WHITFIELD: General, David, thank you so much.

Also next, ten days after the terrorist truck attack in Berlin, police departments from Times Square to the Rose Bowl in Pasadena announcing enhanced security measures heading into New Year's Eve weekend. I'll talk to the police chief of Pasadena about what he has learned from studying previous attacks and how he plans to protect a five mile parade route.

Plus, after months of nothing, what U.S. intelligence is learning about the latest movements of ISIS leader Baghdadi. Where he has been and where he might be going. We'll take you live to the Pentagon.

Also straight ahead, 22 days away, revealing new details emerging about Trump's plans for his inauguration speech. How long or how short it's going to be, the past presidents that he is using for inspiration and his vision on how to bring the nation together.

We're back in a moment.

(COMMERCIAL BREAK)

WHITFIELD: Welcome back.

On our breaking news, the Obama White House now imposing sanctions and naming names of those Russian entities and individuals believed to be involved in cyber hacking of this U.S. - of this country, influence U.S. elections. Our Athena Jones is traveling with the president in Honolulu.

Athena, more now on what this president is willing to reveal.

[14:20:06] JONES: Absolutely, Fred.

We have a statement from the president that we've gotten just in the last couple of minutes. It's important. It's lengthy. I'm not going to read all of it, but I want to read to you the major points. The president says, "today I have ordered a number of actions in response to the Russian government's aggressive harassment of U.S. officials and cyber operations aimed at the U.S. election. These actions follow repeated private and public warnings that we have issued to the Russian government and are a necessary and appropriate response to efforts to harm U.S. interests in violation of established international norms of behavior."

The president goes on to say, "All Americans should be alarmed by Russia's actions. In October, my administration publicized our assessment that Russia took actions intended to interfere with the U.S. election process. These data theft and disclosure activities could only have been directed by the highest levels of the Russian government. Moreover, our diplomats have experienced an unacceptable level of harassment in Moscow by Russian security services and police over the last year. Such activities have consequences. Today I have order a number of actions in response."

Now, among those actions, Fred, we've already been talking about are sanctions against nine entities and individuals, including officials from the Russian intelligence services, also from the FSB, what is the - what replaced the KGB. Two Russian intelligence services, four individual officers of Russian intelligence, three companies that provided material support to those cyber operations. Also the secretary of the treasury is designating two Russian individuals for using cyber-enabled means to cause misappropriation of funds and personally identifying information.

We also learned that the State Department is shutting down two Russian compounds in Maryland and in New York that the government says were used by Russian personnel for intelligence-related purposes and declaring 35 Russian intelligence operatives as persona non-grata. So that is among the actions that the administration is announcing today in addition to the Department of Homeland Security and the FBI releasing declassified technical information on these Russian civilian and military intelligence services and their cyber activity so that people who are trying to defend networks against those kinds of attacks have the information they need. So a lot of information that we're still going through here, Fred, but those are the key points.

WHITFIELD: Right. Very comprehensive. Athena, thank you so much.

So, persona non-grata, in other words, deportation for many. Our Evan Perez is back with us with more on that.

How immediately are we talking?

PEREZ: Well, once the State Department declares these diplomats to be persona non grata, they have to get out of the country as soon as possible. By the way, we expect that the Russians are going to respond in kind. The U.S., I'm sure, has already prepared for the fact that the Russians are going to expel U.S. diplomats from Russian, as well as perhaps curtail some of their assistance, some of their cooperation with U.S. law enforcement.

One of the big parts of what the Obama administration is announcing here today, Fred, is the fact that they're saying that the - that the FBI and the Homeland Security Department are going to release a lot of the classified investigation that they've collected over the last couple of years that details the way in which the Russian intelligence services have been breaking into websites and computers, not only of the security apparatus of the United States, but even of private sector - of the private sector. And, obviously, that was one of the big problems here when the FBI first noticed - the NSA and the FBI first noticed that the Russian intelligence services had broken into the Democratic National Committee. There was a lot of information that they had that they could not share because it was classified. A major part of what the administration is announcing today is that they're going to push that information out to the private sector. So now you're going to see IP addresses, you're going to see some of the signatures that could help prevent the Russian security services from using some of the same tactics.

Of course, this means that they're just going to find new ones, right, to try to break into web sites and computer systems in this country. We expect that those security services already know that some of the stuff that they've been doing in the last couple of years, they've hacked into the State Department, they've hacked into the White House. We know that that's one reason why they knew some of the activity was directing right back to Russia. We expect now that the security services are going to simply change their tactics.

Another part of this is the announcement here that they're sanctioning essentially the FSB and the GRU. These are the two big security services of the Russian government. That's unheard of. It's unprecedented for the U.S. government to go essentially after the security apparatuses in this manner of the Russian government. I suspect that you're going to see a fierce response from Moscow as a result of these sanctions.

Fred.

WHITFIELD: Well, and, Evan, the expectation would be that this White House would know that there would be some severe reaction coming from Russian -

[14:25:06] PEREZ: Right.

WHITFIELD: And that perhaps it would mean that U.S. personnel that is in country would be asked to leave or demanded to leave. Is there any feeling that they have already been given notice, even by Washington, to make their way out before in notice, this would be made public?

PEREZ: Well, I think that's one of the things that's - that's been worked on in the last few days. There's a lot of - there was a lot of legal work. There was a lot of work to make sure that what - what information the FBI and the DHS are able to release is declassified, properly declassified, doesn't betray any sources and methods. And exactly what you said. I think what they do is they go to the U.S. embassy in Moscow and they say, OK, you know, we know you have x number of people that are going to be asked to leave, so just get ready to make sure that those people can get out of here, that they've made sure that they've completed their work to button things up before they have to leave the country. It's a lot of preparation that goes into this.

And, look, Fred, what - the other part of this is that the United States wanted to make sure that this was proportional, that this wasn't going to get out of hand, to make sure that there wasn't a cyber war that gets declared as a result of this. So there's a lot of - there's parts of this also that are not - stuff that we don't' know about. The government has said - the U.S. government has said - the Obama administration has said that part of this is going to be a covert response, that we may never know the totality of. And I think that's one of the things that the Russians are certainly on the lookout for.

WHITFIELD: OK. So, David Andelman, I want to bring you back in here. Is this proportional? And, of course, just to Evan's point, there might be elements of this but the public may never know and for good reason.

ANDELMAN: Right. Well, what I do find interesting was one thing that he said, that the United States was going to do, was they're going to release a lot of the material that they had learned about how the Russians were hacking us, how they were getting in and operating here.

WHITFIELD: What's the benefit of doing that?

ANDELMAN: Right. Well, there's a benefit of doing that is just to just let everybody know that we're for real. The downside of doing that is that the same time Russians will also know exactly what our capabilities are of monitoring what they're doing. So they change that way of doing it the next time because they know that we have the ability to go in and see them and watch them - what them operate against us and they - and that they've - that they know that we've done that and that everybody basically knows that we've done that. That does change the whole modality of how this kind of cyber defensive war, shall we say, is operating.

Again, when I was in Estonia with the cyber command, NATO cyber command, one thing they said was, was that, they - they - there are a lot of defensive measures that we can take. We're not necessarily going on the offense. Going on the offensive is what really can touch off a cyber war and then we're talking about, you know, major changes, attacks on the power grid, on a huge host of issues.

WHITFIELD: And, real quickly, politically, does this play to the hand of strengthening President Obama by doing this, but at the same time perhaps undermining, potentially weakening the incoming president?

ANDELMAN: Well, it changes the way you will have to operate certainly. There's no doubt about that because the Russians are now going to be very suspicion of almost everything the United States does. And also, remember, we will have fewer assets over there that the new president, that President Trump can call on within the intelligence community because they're going to have been sent packing. It takes time to rebuild some of these networks, to bring these people back online, to familiarize themselves with what's going on.

And I did a piece in fact for CNN Opinion about two weeks ago on this whole question of, you know, how do we operate? How does the - how do we operate against the Russians in all of this? And Sir Richard Dearlove, the former head of MI-6, British intelligence, he said that, you know, the Russians do have some - some very important capabilities that we know about and they may not know that we know about, and that's very important to understand. WHITFIELD: All right, Matthew Chance is in Moscow.

So, Matthew, how is this news hitting Moscow?

CHANCE: Well, I mean it's all happening so quickly that actually we haven't had a chance to get any reaction yet. I've tried to speak to the Kremlin. I've asked them for their reactions. The same with the foreign ministry as well. But they've not got back to us yet. We're expecting to hear from them very, very shortly. I'm certain they will react to it.

In fact, they said as much just last night. The Russian foreign ministry spokesman telling me that if U.S. diplomats are targeted in the way that they have been and the State Department is essentially saying it's expelling 35 Russian diplomats from Washington and San Francisco from my early reading of this statement, then that's going to be answered in a reciprocal way. The Russian foreign ministry saying that this will ricochet immediately on U.S. diplomats operating in Moscow and in the rest of Russia as well. And so I expect we're going to see - this hadn't been announced yet, but I expect we're going to see some kind of tit for tat reciprocal action from the Russians in the hours ahead.

WHITFIELD: And so, Matthew, one of my producers telling me in my ear that diplomat there have 72 hours in which to leave. How might that impact those American diplomat there with just that little bit of time?

[14:30:06] CHANCE: Well, I mean, it's not - it's not very long, is it? But I think that's the kind of time frame they usually give diplomats when they're expected in - under these kinds of - under these kinds of circumstances.