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The Lead with Jake Tapper

President Obama Criticizes Sony; Head of Sony Pictures Speaks Out; Interview with Senator Dianne Feinstein of California

Aired December 19, 2014 - 16:00   ET

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

JAKE TAPPER, CNN ANCHOR: Just minutes ago, President Obama berated Sony Pictures for giving in to threats from North Korea. How are they going to respond?

I'm Jake Tapper. This is THE LEAD.

The national lead, after the feds officially point the finger at North Korea, President Obama says, hey, you know what, some dictator someplace cannot dictate free speech to the United States. And he vows the U.S. will respond.

Plus, the top executive at Sony Pictures Entertainment now talking to CNN. He says Sony hasn't caved. He wants America to see this movie. Well, maybe he hasn't checked his e-mail recently. But what he told our Fareed Zakaria just moments ago in the middle of the biggest crisis on his watch.

And the world lead, most people in North Korea don't even have the technology to watch "The Interview." But the communists there nonetheless were able to deploy a cyber-army to get revenge for an insulting stoner flick. And it could be a blueprint, frankly, for more dangerous attacks against the U.S.

Good afternoon, everyone. Welcome to THE LEAD. I'm Jake Tapper.

We are going to begin this Friday afternoon with some breaking news in our national lead. You're about to hear exclusively from the CEO of Sony Pictures Entertainment, who, frankly, just got called out by President Obama. President Obama wagging his finger at the company for caving to threats from North Korean cyber-terrorists.

President Obama this afternoon, well, frankly, he pulled no punches.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It suffered significant damage. There were threats against its employees. I am sympathetic to the concerns that they faced. Having said all that, yes, I think they made a mistake.

(END VIDEO CLIP)

TAPPER: "I think they made a mistake."

Today, the FBI officially pinned the sweeping online attack on cyber- criminals working for Kim Jong-un's government. A group called Guardians of Peace, which the FBI now directly accuses of being part of a North Korean hacker syndicate, they ransacked Sony's servers back in September as revenge for the movie "The Interview."

They leaked all sorts of personal information, e-mails, medical records, salaries, and so on before warning the American people or rather anyone willing to pay $14 to go see a Seth Rogen movie to stay home or else. And they promised 9/11-style attacks. And movie theater chains got so scared, they said they wouldn't show the film, thousands of them.

And then Sony pulled the movie from release altogether. But today the upbeat president gave a full-throated argument in favor of free speech and American values and he said he worried about the precedents being set and he forlornly wished Sony executives had called him first.

(BEGIN VIDEO CLIP)

OBAMA: We cannot have a society in which some dictator someplace can start imposing censorship here in the United States, because if somebody is able to intimidate folks out of releasing a satirical movie, imagine what they start doing when they see a documentary that they don't like or news reports that they don't like.

(END VIDEO CLIP)

TAPPER: For its part, the North Korean government today claimed ignorance, a spokesman insisting to Reuters that Pyongyang "is not part of this."

The president said so far there's no indication North Korea is acting in conjunction with any other countries. He vowed a proportional response, without revealing exactly what that means. But, as we said, the president lamented if only Sony had called him before yanking the movie.

But now Sony America's CEO says he did pick up the phone to call the White House and the company's been working with the U.S. government for weeks. Just minutes ago, CNN's Fareed Zakaria, host of "FAREED ZAKARIA GPS," sat down with Sony Entertainment chairman Michael Lynton in an exclusive interview.

Fareed joins me live now from New York.

Well, great timing on this interview. What did he have to say, Fareed?

FAREED ZAKARIA, CNN WORLD AFFAIRS ANALYST: It was a powerful interview. Michael Lynton, the CEO of Sony, really disputed frontally what the president had to say.

He said that he did call the White House, spoke with a senior White House official, informed them, briefed them about what was going on, that they had been working with the FBI for weeks. He was very complimentary about the FBI. He did say, as I say, that he spoke with very senior White House officials about precisely what the president says he wished he had been informed about.

(BEGIN VIDEO CLIP)

ZAKARIA: The president says he wishes -- I wished they talked to him.

What is your response?

MICHAEL LYNTON, CEO, SONY PICTURES ENTERTAINMENT: My response is that, a few days ago, I personally did reach out and speak to senior folks in the White House and talked to them about the situation and actually informed them that we needed help.

The FBI has been with us now for several weeks and has been great. But I did reach out and explain the situation to them at that time.

ZAKARIA: So the president is wrong when he says that you did not reach out to him?

LYNTON: Well, I don't -- when he's asking about reaching out...

ZAKARIA: "I wish they had talked to me first" is the quote.

LYNTON: Right.

We definitely spoke to senior advisers or a senior adviser in the White House to talk about the situation. The fact is, did we talk to the president himself and talk to him about what was transpiring as the theaters started pulling back? But the White House was certainly aware of the situation.

(END VIDEO CLIP)

TAPPER: Fareed, I guess I'm not entirely sure. It sounds like they were talking to the White House. But the president was specifically saying, I wish they had talked to me and asked my advice before they pulled the film. I kind of got like a muddled message from the chairman, all due respect to him.

What exactly was he saying he talked to the White House about?

ZAKARIA: Well, he talked to the White House about the fact that they had this threat.

I think on the question of the pulling of the film, what he said, what Michael Lynton said was that the president, the public and the press have misunderstood. His argument is, Sony never pulled the film, that what happened was Sony was working very hard to get the film out. What happened was the movie theaters came to them, the major chains and one after the other refused to show it.

And his argument is, look, at some point, if you don't have anyplace to show the movie, all we did was, we canceled the December 25 release. And he did say that does not mean that they aren't going to show the movie. It means that the December 25 release cannot proceed because there is no movie theater in America that was willing to show it. And you will hear him say that. (BEGIN VIDEO CLIP)

ZAKARIA: The president says Sony made a mistake in pulling the film. Did you make a mistake?

LYNTON: No. I think actually the unfortunate part is in this instance, the president, the press and the public are mistaken as to what actually happened.

We do not own movie theaters. We cannot determine whether or not a movie will be played in movie theaters. So to sort of rehearse for a moment the sequence of events, we experienced the worst cyber-attack in American history and persevered for three-and-a-half weeks under enormous stress and enormous difficulty, and all with the effort of trying to keep our business up and running and get this movie out into the public.

When it came to the crucial moment when a threat came out from what was called the GOP at the time, threatening audiences who would go to the movie theaters, the movie theaters came to us, one by one over the course of a very short period of time, we were completely surprised by it, and announced that they would not carry the movie.

At that point in time, we had no alternative but to not proceed with the theatrical release on the 25th of December. And that's all we did.

ZAKARIA: So, you have not caved in, in your view?

LYNTON: We have not caved. We have not given in. We have persevered and we have not backed down. We have always had every desire to have the American public see this movie.

(END VIDEO CLIP)

TAPPER: So, Fareed, I had heard a few weeks ago -- I'm sorry, a few days ago -- that there were big concentrations going on with Netflix to try to get this streaming into people's homes through Netflix.

Is there any hope of the movie being released that way or on demand or online or some other way?

ZAKARIA: Jake, the impression I got is that there are very active discussions and consideration going on about precisely this.

But, again, what Lynton pointed out was they don't own the pipes, that you can't just put something on the Internet, especially in this context because you know what's going to happen. This North Korean cell is going to hack at those pipes.

So you need Netflix or even if it's YouTube, you need Google to be willing to make the investment and to take the risk, frankly, of withstanding these kind of cyber-attacks, of withstanding the malware that would come.

So far, he did say to me that no one has stepped forward. But -- and this struck me as very important. They continue to look at every alternative, including free distribution on YouTube.

TAPPER: Does Sony regret -- I'm sorry.

(BEGIN VIDEO CLIP)

ZAKARIA: Video on demand?

LYNTON: There are a number of options open to us and we have considered those and are considering them.

As it stands right now, while there have been a number of suggestions that we go out there and deliver this movie digitally, or through VOD, there has not been one major VOD, video on demand, distributor, one major e-commerce site that's stepped forward and said they are willing to distribute this movie for us.

Again, we don't have that direct interface with the American public. We need to go through an intermediary to do that.

(END VIDEO CLIP)

TAPPER: Fareed, I guess the big question for the chairman right now, does he regret making this movie to begin with?

ZAKARIA: You know, Jake, I asked him just that question. I said to him, a lot of people say this was a tasteless comedy and he was very strong on that. He said, look, that's not the issue. We made a movie we thought was a funny movie. But the real issue is, you have a group of artists who have made an artistic product. They deserve to have the public be able to see it.

And I did ask him, do you regret making the movie? Listen to what he said.

(BEGIN VIDEO CLIP)

ZAKARIA: Would you make the movie again?

LYNTON: Yes, I would make the movie again, I think for the same reasons we made it in the first place. It was a funny comedy. It was a -- it served as political satire.

I think we would have made the movie again. Knowing what I know now, we might have done some things slightly differently. But I think a lot of events have overtaken us in a way that we had no control over the facts.

ZAKARIA: And you're saying you still want the public to see this movie?

LYNTON: We would still like the public to see this movie, absolutely.

(END VIDEO CLIP)

TAPPER: But somebody has to step forward, whether Netflix or YouTube or on demand, someone, and take the risk of actually showing it. Fareed Zakaria, great work. Thank you so much.

Be sure to catch Fareed's full interview with the CEO of Sony tonight at 8:00 p.m. Eastern on "A.C. 360." That's tonight "A.C. 360."

The president said Sony made a mistake by pulling its release of "The Interview." Does Hollywood agree? Did the company give in to the cyber-terrorists and does this set a bad example on how to handle cyber-threats? We will pose those questions next to the current chair of the Senate Intelligence Committee.

We will be right back.

(COMMERCIAL BREAK)

TAPPER: Welcome back to THE LEAD. I'm Jake Tapper. We're going to continue, of course, our coverage of the national lead.

President Obama all but scolding Sony Pictures today for scrapping plans to release "The Interview" film. And Sony hitting back in a way, telling CNN exclusively that they really had no choice.

Now, the movie itself may be a farce. But the bigger picture here has very serious implications for U.S. national security.

Here now, the chairwoman of the Senate Intelligence Committee, Democratic senator from California, Dianne Feinstein.

Senator, I know you were listening closely to both President Obama and the Sony chair. What's your response?

SEN. DIANNE FEINSTEIN (D-CA), CHAIRWOMAN, INTELLIGENCE CMTE.: Well, here's my response.

This is part of a much bigger picture. It really began in 2008 with robberies by cyber of both the Royal Bank of Scotland and Citibank, to the tune of about $8 million and $10 million, respectively. It has gone on and graduated to the point where most companies have been attacked one way or another. In the last two years, we have JPMorgan Chase, we have Home Depot, we have eBay and we have Target.

What's different to me about this attack is the monumental size of it, and secondly, there is extortion involved with it. In other words, the North Koreans are saying, unless you do this, we will do that. And this is where it becomes extraordinarily dangerous.

TAPPER: Uh-huh.

FEINSTEIN: In the six years that have gone by, we have no real policy to handle this. Now, right now, you can look at North Korea, taken off the terrorist list, you can see this attack is in a sense a terrorist attack. You could put them back on. You can levy financial sanctions against them.

But the big problem is developing an international agreement with teeth to stop this kind of behavior because we're going toward bloodshed, I believe, if we don't solve it. We have tried to pass a cyber information-sharing bill.

TAPPER: Right.

FEINSTEIN: I'll be interrupted if you want.

TAPPER: No, I just -- what do you mean by bloodshed? We're going towards bloodshed. That seems like a very stark comment.

FEINSTEIN: Well, because you can respond in a number of different ways. Attacks can come in a number of different ways. There can be an attack on the electrical system of the United States, on airport computers of the United States.

We're getting into the arena of major attacks. Right now, it has to do a great deal with private industry. But the cost for private industry is now in the trillions of dollars. And it has to be stopped.

So, the question comes: how do you stop it?

One step is allow companies to share information, both with each other, and through what we call a portal with the federal government, and get responses, where necessary, from technicians in the federal government, and be protected for liability for so doing. That's part of our information-sharing bill that we passed out of the intelligence committee that has been awaiting floor action.

TAPPER: Right.

FEINSTEIN: And we hope this next year, we will get it to the floor and get it passed.

TAPPER: Let me ask you about the events of the last week when it comes to Sony Pictures. Do you think the decision by the movie theater chains and by Sony Pictures sets a dangerous precedent, as President Obama said?

FEINSTEIN: I don't quite understand -- danger -- the response by Sony sets a dangerous precedent?

TAPPER: Well, he was saying that if we -- if Sony caves in because of the -- North Korea doesn't like this film, this silly stoner flick, what happens when North Korea or another enemy of the United States doesn't like a documentary or doesn't like news --

FEINSTEIN: Well --

TAPPER: -- or doesn't like a company? Like, is -- did Sony just blink and now we are all subject to that?

FEINSTEIN: Well, I listened to Mr. Lynton very carefully for the excerpts that came through from Fareed Zakaria. And I think he did practice all due diligence. He did call the White House. He has tried to work something out. He recognizes that their contracts with big theater companies, if they pull out, that obviously prompts a decision on his part. This is a complicated matter. And there is the question of liability.

If something were to happen, who is liable for the loss of life? So --

TAPPER: And you heard Mr. Lynton saying that so far, no company, whether Netflix or on demand or YouTube, no one has stepped forward to offer to show this movie, presumably because they're all so afraid that they're going to be hacked, too?

FEINSTEIN: Well, that's correct. And that's why it is so important to take governmental action, and assure America's business sector, America's entertainment sector, America's transportation sector, that the government has a plan and an ability to respond appropriately imminently.

Now, this attack took place almost a month ago. So, we're 3 1/2 weeks into it and still going back and forth as to what might be done or who should have done what. And this can't continue to happen, in my view. This is a problem that's going to be with us for a very long time. And so, we have to get certain strictures in place and the ability to handle it.

TAPPER: Senator, as chair of the Intelligence Committee in the Senate, do you think that North Korea is acting alone here or do you suspect that there might be another country involved?

FEINSTEIN: Well, I have no way of knowing at this stage. I assume since the digital marks, as I understand it, come directly from North Korea, and this Guardians of Peace organization, which I gather is government-enabled and probably controlled, that puts an onus on the government.

I would hope that we can convince the North Koreans that this carries a very heavy price. And maybe it's the beginning of America taking some actions. The eventual action has to be a worldwide agreement because we have these attacks from a number of different places.

Certainly, we have attacks from China. We have attacks from Russia. We have attacks from Iran and we have attacks from within our own country.

So, it has become a very sad way of life. And at some point, we face a disastrous attack. And this is what we must prevent. And only some international enforceable agreement is the way to solve it, that I can see.

The fact is, we've gone on for six years now after these first two big attacks and it continues on. So, I -- I am one not to assess blame or say -- the blame has to be against us. We have to find a way to control these and respond to these and stop these. And that's not an easy thing to do.

TAPPER: Senator Dianne Feinstein, thank you so much.

FEINSTEIN: You're welcome.

TAPPER: And happy holidays to you.

FEINSTEIN: Same to you, Jake.

TAPPER: So, it's a place where the Web isn't closed to being worldwide at all. How did North Korea, according to the federal government, North Korea hack into a multibillion-dollar movie company's computers and spark all of this lunacy? Well, we'll show you how, next.

Also in the pop culture lead today --

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, COMEDIAN: Folks, if this is your first time tuning in to "The Colbert Report," I have some terrible news.

(LAUGHTER)

(END VIDEO CLIP)

TAPPER: Now, there's only one emotionless, igneous news rock left, and you're looking at him.

All the highlights from the final "Colbert Report", and my interview with the only man who can bring Willie Nelson and Cookie Monster together on stage, without causing munchy Armageddon.

Stay with us.

(COMMERCIAL BREAK)

TAPPER: Welcome back to THE LEAD. I'm Jake Tapper.

We want to dig a little deeper on the world lead. Exactly how does U.S. intelligence know for certain that North Korea is behind the Sony hacking?

Well, for nearly a month now, the FBI has been backtracking data released online, working to identify who put it there. Sources told CNN, hackers stole the credentials of a Sony administrator, then went to town. They lurked around the system for months, then stole information. At times, the FBI even thought other countries like maybe Iran or China might have been involved.

So, what led U.S. intelligence to this point?

Let's bring in CNN chief national security correspondent, Jim Sciutto.

Jim, how much evidence does the U.S. have, evidence?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, this was a cyber sleuthing investigation that in many ways was as unprecedented as the attack itself, both in the speed of this investigation and its scope. Investigators from the FBI, NSA and other intelligence agencies, working around the clock, tracking the hackers around the world, from Asia, including China, to Europe, Latin America, even servers here in the U.S.