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Early Start with John Berman and Zoraida Sambolin

NYT: E.U. Hack Reveals Struggles Over Trump, Russia, China; Senate Working on Short Term Spending Plan; NYT: Facebook Allowed Access to User Data; Heroic Rescue in Texas. Aired 4-4:30a ET

Aired December 19, 2018 - 04:00   ET

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

[04:00:18] DAVE BRIGGS, CNN ANCHOR: Another major hack. This one targeting the European Union. Thoughts on the president, Russia, China, and more out in public this morning.

ALISON KOSIK, CNN ANCHOR: Senate Republicans working on a short-term plan to avert a government shutdown Friday night. The White House reversing course on demands to fund the border wall.

BRIGGS: Another disaster for Facebook. The social network struck deals over 150 companies giving them far more access to your data than it disclosed.

KOSIK: And an amazing rescue for the ages caught on video in Texas. Two deputies rescue a man from a burning car. We'll have that.

Good morning, and welcome to EARLY START. I'm Alison Kosik.

BRIGGS: Good morning. I'm Dave Briggs. Good morning, everybody. It's Wednesday, December 19th, 4:00 a.m. in the East.

If that's not enough, we've got criminal justice legislation, the Mike Flynn sentencing suspended, and, oh, of course, the Trump foundation shuttered. A lot of news to get to.

We'll start, though, with what's new this morning. "The New York Times" reporting that hackers infiltrated the European Union's diplomatic network, monitoring communications for years, downloading thousands of cables. The messages were discovered by the cybersecurity firm area one. And they expose the biggest, most serious concerns of countries around the world.

So what's in them, and who broke into the E.U.'s diplomatic system?

Samuel Burke live for us in London, 9:00 a.m. this morning.

Good to see you, Samuel. How significant is this hack?

SAMUEL BURKE, CNN CORRESPONDENT: Dave, good morning. Incredibly significant, these are years of cables and thousands of them all about the headlines that you've been reporting on every day for the past couple of years in the Trump administration. But what this really does is let us know exactly what diplomats all around the world as well as the world leaders, what they're really thinking after some of these encounters and negotiations with President Trump. Let me just put up on the screen the main topics that have been

discovered in these wires starting with Trump's negotiations with China. President Xi Jinping quoted as telling European diplomats that Trump is bullying Beijing into no rules, freestyle boxing match. The Chinese president vowing that his country would not submit to the bullying of the United States, even if a trade war hurts everybody, explains some of the numbers that we saw Alison reporting on from the stock market there yesterday.

Also, Russia's successful relations with the United States. They talk about interactions that President Trump has had with Vladimir Putin in Finland, for example, and afterwards, Europeans walking away saying that the negotiations were successful for the Russian side, not necessarily for the U.S.

And finally, Europe enticing Iran to continue with nuclear agreements without the United States. So, even though Iran may not be -- even though the United States may not be participating in that nuclear deal anymore, the E.U. is trying to get them to keep ongoing.

One other thing I'd like to point out going back to the second point, Russia's successful relations with the United States, also when they talked about Russia, they talked about what's happened in Crimea. We see a quote saying that Crimea could be a hot zone, Dave, where nuclear warheads might have already been deployed. That is certainly the most concerning line I think we see in these cables.

BRIGGS: Interesting. OK. So is this at all similar to that WikiLeaks hack of the DNC in 2016?

BURKE: I think on the surface it may look like that. In all actuality, probably not.

Look, we have this very important cybersecurity firm based in California linking these cables to China in the first place. They say the techniques resemble those of China's People's Liberation Army, an elite unit responsible for other hacks according to various governments.

On top of that, the way that this was done was just a simple phishing campaign. Those emails that you might get, Dave, that ask you, hey, click here, then you log in thinking it's actually your company's e- mail when it's another company trying or group trying to get your information. And on top of that, unlike WikiLeaks, these were low- level classified documents. These were not high level even though we see sensitive information.

Most importantly, they weren't published broadly. It was just this cybersecurity firm that got this information. Important to note, though, China says that they are the victims of hacking, something that I've heard from Chinese tech officials and say they that these reports are baseless from "The New York Times."

BRIGGS: Any person, company, any country is vulnerable to a hack these days.

Samuel Burke live for us in London -- thank you.

KOSIK: Another black eye for Facebook and this one's a biggie. "The New York Times" reporting the social network gave major tech companies much more access to people's data than it originally disclosed.

[04:05:01] The company was already reeling from a series of privacy scandals.

Now, hundreds of documents obtained by "The Times" detail among other things how Facebook allowed Microsoft's Bing search engine to see the names of virtually all of Facebook users' friends. Facebook also gave Netflix and Spotify the ability to read users' private messages.

BRIGGS: Facebook also allowed Amazon to obtain users' names and contact information through their friends and let Yahoo view friends' posts as recently as this summer. Some of those companies offering varying levels of denials overnight. In total, more than 150 companies benefited from the deals.

Facebook's director of public policy says none of the partnerships violated users' privacy. He says most of the partnerships did not require users' consent because Facebook considered the partners extensions of itself. Facebook says it has found no evidence of abuse by its partners.

KOSIK: Senate Republicans are drafting a stopgap spending bill to head off a partial government shutdown. The measure would fund about a quarter of the federal government until February. Some Republicans still want to negotiate a broader budget deal. Meantime, the White House appearing to be backing off the president's demand for $5 billion to fund a border wall.

BRIGGS: Republicans yesterday proposed $1.6 billion for, quote, border fencing with an extra $1 billion for the president's immigration priorities. Democrats rejected that. Still, Majority Leader Mitch McConnell says he is sure there will not be a shutdown. Right now, the best way what the president wants is to check the Twitter feed.

More on that from Kaitlan Collins at the White House.

(BEGIN VIDEOTAPE)

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Well, Dave and Alison, the White House seems to be signaling that President Trump may be backing off that demand for funding for his border wall, easing fears in Washington that there is going to be a partial government shutdown on Friday. Now, Trump hasn't gone as far as White House officials have, telling reporters only we'll see if there's going to be a shutdown. But aides like the press secretary, Sarah Sanders, seem to be offering a glimpse of hope that they will come to some kind of compromise and that the government will not shut down on Friday.

But during the briefing on Thursday, Sanders was trying to explain how they could get the border wall build and funded without taxpayers having to pay for it, though her reasoning seemed to raise a few eyebrows.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: We're not asking American taxpayers for that. We are looking at existing funding through other agencies right now that we can draw on to do that in the -- immediately. The president's been clear, the president has been clear that the USMCA deal would provide additional revenue through that deal that would show that Mexico is paying for the wall.

COLLINS: Sanders making the argument that they could use funding from agencies, though that funding that agencies have is taxpayer money. So the White House seems to be struggling to say that the American taxpayer is not going to be paying for this wall and, instead, Mexico is going to be paying for it as President Trump argued multiple times while on the campaign trail -- Dave and Alison.

(END VIDEOTAPE)

KOSIK: OK. Kaitlan, thanks very much.

I am not hiding my disgust. Those were the words from Federal Judge Emmett Sullivan before he delayed sentencing Michael Flynn for lying to the FBI. After Sullivan's urging -- at the judge's urging, the former national security adviser asked to postpone, it was dramatic. Flynn wants more time to cooperate with federal investigators.

BRIGGS: Special counsel Robert Mueller's team suggested little to no prison time for Flynn. But Sullivan's frustration was evident. His voice growing harsh as he vilified Flynn. The judge ordered Flynn to stay within 50 miles of Washington and surrender his passport in January.

Jessica Schneider has more.

(BEGIN VIDEOTAPE)

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Alison and Dave, it was a remarkable rebuke from the federal judge who was supposed to sentence Michael Flynn. The judge in this two-hour hearing, he twice raised the prospect of treason. He asked if Flynn's conduct rose to the level of treasonous activity at which point prosecutors responded that they never considered charging Flynn with treason.

But the judge focused his real frustration and confusion on the circumstances surrounding Flynn's guilty plea, asking why Flynn's lawyers accuse the FBI of tricking Flynn when they were questioning him. That, of course, the claim in the sentencing memo and it really seemed to backfire since the judge was so hung up on it. Flynn eventually acknowledged that he did know that lying to the FBI was wrong, and his lawyer said the FBI did not entrap Flynn. But still at that point, the stage was set.

And after the judge asked Flynn multiple times if he was sure he wanted to proceed to sentencing and suggested that Flynn wait until he's cooperated a bit more with the special counsel, Flynn's team officially asked for that delay. So, the question is, what happens from here? Well, both sides have to

file a status report by March 13th. Then the judge will determine if sentencing can proceed.

[04:10:01 So, really, it won't be until sometime next year that Michael Flynn will finally learn if he will serve any prison time -- Alison and Dave.

(END VIDEOTAPE)

BRIGGS: A game changer.

Jessica, thanks.

Criminal justice reform close to becoming reality. The Senate overwhelmingly passed a bill that eases sentences for nonviolent offenders hoping to reduce recidivism and the federal prison population. All the senators opposed were Republicans who feel the reforms go too far and could allow dangerous criminals back into society. The House likely to take up the bill today and approve it, sending it back to the president who's expressed support and could sign it before he leaves town.

KOSIK: We are just hours away from a major decision from the Federal Reserve on interest rates. The Dow closing 83 points higher on Tuesday. As we watched the earlier rally fizzle out, the index had been up as much as 335 points. The S&P 500 ended unchanged while the Nasdaq gained a fraction.

Both the Dow and the S&P 500, they remain on track for their worst December since the Great Depression. The bear market and oil, that keeps getting worse amid worries about global growth and a supply glut. U.S. oil prices plummeting 7 percent to $46 a barrel -- the lowest close since August of 2017.

Now, today, once again a very important day for Wall Street and the Federal Reserve. The Fed is widely expected to raise interest rates for a fourth time this year. But that's not the surprise. Investors are really going to be listening closely to what Powell says is going to happen next year. President Trump has repeatedly used the Fed chair, Jerome Powell, as his pinata and blames rate hikes for the market's recent drop.

So, it's going to be interesting to see what the Fed decides to do next year.

BRIGGS: Right.

KOSIK: What's the fed's strategy with -- you know, how many, how much, will it --

BRIGGS: Has to be cautious because if he hints that the economy is slowing or nearing recession, then the market could go further negative. The world is watching the actions and words of the Fed chair.

KOSIK: Delicate balance.

BRIGGS: Indeed, it is.

OK. President Trump's personal charitable foundation folding up amid a lawsuit over its finances. The New York attorney general suit claims the president and his three eldest children abused the foundation's tax-exempt status and violated campaign finance laws by coordinating with the 2016 campaign. The suit alleges the foundation was used, quote, as little more than a checkbook to serve Mr. Trump's business and political interests.

The agreement to dissolve allows the A.G.'s office to review the recipients of the charity's assets. The largest donation -- $264,000 gift to the Central Park Conservancy in 1989 -- appeared to benefit Mr. Trump's business. It paid to restore a fountain outside Trump's Plaza Hotel. An attorney for the charity called the A.G.'s statement misleading, saying the foundation had been trying to dissolve since Trump's election but was blocked by the A.G.

When you pull back even more, the largest donor to this foundation, Vince and Linda McMahon. McMahon got to be the small business administrator for the Trump administration.

KOSIK: Hmm, what's going on here?

BRIGGS: It reeks below the surface. Yes.

KOSIK: All right. She was the creative genius behinds classic scenes like this.

Bet you didn't know she was behind that. Actor and director Penny Marshall has died. More on her legacy, next.

(COMMERCIAL BREAK)

[04:1731] BRIGGS: A federal judiciary council dismissing 83 complaints against Supreme Court Justice Brett Kavanaugh. Most of them stemming from statements Kavanaugh made during his fiery confirmation hearing in September. The complaints generally allege Kavanaugh voiced inappropriate partisan statements demonstrating bias and lack of judicial temperament.

The judicial council called the complaint serious but said it lacked the authority do anything about them. On the Supreme Court, Kavanaugh is no longer subject to the judiciary's misconduct rules.

KOSIK: The Yemeni mother of a 2-year-old boy on life support will arrive in the United States evening. Swileh was unable to enter the U.S. due to the White House travel ban, but her expedited visa to travel from Cairo was finally approved. Her husband, Ali Hassan, tells CNN he wants consulate officials in Cairo to apologize to his wife for delaying her visa waiver. She plans to go to her son's hospital in Oakland immediately to say her good-byes.

BRIGGS: Family, friends, and fans around the world mourning the death of actress-turned-trailblazing director Penny Marshall. Marshall shot to stardom in the 1980s earning three Golden Globe nominations for playing Laverne in a classic sitcom "Laverne & Shirley." Love that L. She went on to direct hit movies like "Big" starring Tom Hanks.

(VIDEO CLIP PLAYS)

BRIGGS: Who can forget that scene? Marshall then found huge success with the women's baseball comedy "A League of Their Own." In an interview, Marshall explained why she wanted to make that film.

(BEGIN VIDEO CLIP)

PENNY MARSHALL, ACTRESS/DIRECTOR: No girl wanted to write it. They don't like baseball.

(END VIDEO CLIP)

BRIGGS: Marshall grew up in the Bronx, the sister of legendary producer and director Garry Marshall. A family spokesman says Penny died in her Hollywood Hills home of complications from diabetes. She was 75, and, boy, did she have a major impact on Hollywood.

KOSIK: Gosh, I would watch that show, "Laverne & Shirley," religiously, loved that show.

BRIGGS: No doubt.

KOSIK: Did you identify with one of the women like I did?

BRIGGS: Not so much. Not so much. But "Big," I don't get it, one of my favorite lines of all time. And "A League of Their Own," "no crying in baseball." Good stuff.

KOSIK: She leaves behind a legacy.

The judge who sentenced Larry Nassar up to 175 years in prison will be reviewed for alleged bias.

[04:20:00] Did her vocal takedown of Nassar go too far?

(COMMERCIAL BREAK)

BRIGGS: The judge who sentenced serial sex abuser Dr. Larry Nassar will be reviewed for alleged bias. Michigan Circuit Judge Rosemarie Aquilina sentenced Nassar up to 175 years in prison for sexually abusing teenagers. Aquilina ripped into the former USA Gymnastics doctor in court.

She imagined aloud what she'd do to him if not for the Constitution's ban on cruel and unusual punishment. Nassar's lawyers say she showed bias, trying to advance her own agenda.

KOSIK: All right.

[04:25:00] You're about to see video that would -- that will terrify you but also inspire you. Two Texas deputies rescuing a man from a burning car. Watch this. (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Sir?

UNIDENTIFIED MALE: Hurry.

UNIDENTIFIED MALE: Sir? Give me your arms.

UNIDENTIFIED MALE: Hurry.

UNIDENTIFIED MALE: I need your help. It's too --

(END VIDEO CLIP)

KOSIK: That is why we call them heroes. Body cam footage from the accident last week showing Chambers County Deputies Braedon Boznango and Carlton Carrington running toward a burning car. The heat so intense, Boznango's body cam partially melted.

Still, the two officers dragged the unconscious man out. He is in stable condition. Just amazing.

BRIGGS: OK. An update to a trending story we told you about yesterday. The Carlton, of course, the subject of a lawsuit. Actor Alfonso Ribeiro suing the makers of the game "Fortnite" over the use of his famous Fresh Prince dance.

Also suing at the game is Backpack Kid over his signature floss or pickle dance. I spoke to the most famous "Fortnite" player known as Ninja. He shared his thoughts on this controversy.

(BEGIN VIDEO CLIP)

BRIGGS: You helped get these dances and popularized the dances. Should people be paid for them, and how essential are they for the popularity of the game?

TYLER "NINJA" BLEVINS, PROFESSIONAL VIDEO GAMER: Absolutely. That's his dance, man. So, new dances when the artists and apps r coming out with these, they definitely in my opinion should be working with Epic and being, you know, put into the game.

BRIGS: I want what your favorite dance is.

BLEVINS: It's probably -- I love the Floss. It's classic, man. I think jubilation's classic.

(END VIDEO CLIP)

BRIGGS: Do you have a favorite "Fortnite" dance?

KOSIK: I love flossing.

BRIGGS: Can you do it?

KOSIK: My son taught me, of course. BRIGGS: I didn't know anyone over the age of 30 could do the floss

dance --

KOSIK: I worked diligently on it. I am pretty darn good. If I wasn't sitting, I would show you.

BRIGGS: Epic Games makes between $200 million and $300 million a month. It's hard to justify not compensating of these artists.

KOSIK: I hear you. Yes.

All right. Diplomatic cables from the European Union have been hacked. Some stunning revelations from E.U. diplomats about the president, about Russia, about China, and more.

BRIGGS: And this may not shock you, but it should outrage you. Facebook had deals with more than 150 companies to share more of your data than it suggested. Wait until you hear Facebook's latest explanation.

(COMMERCIAL BREAK)