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How Will Pyongyang Respond?; Boston Bombing Suspect Appears in Court; Wild Week of Headlines Overseas

Aired December 19, 2014 - 07:00   ET

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

ALISYN CAMEROTA, CNN ANCHOR: And if the U.S. publicly blames North Korea, what response can we expect from Pyongyang?

For more on that, let's get right to Kyung Lah. She's live on the ground in Seoul. What are we expecting, Kyung?

KYUNG LAH, CNN CORRESPONDENT: Well, if history is going to play any cue here, Alisyn, it's going to be that North Korea really loves to deny what it does. That's been its history. That's been its pattern, especially when we deal with cyberattacks.

North Korea/South Korea, they've had this ongoing cyberwar. It is very tough and the companies in South Korea have been trying to protect themselves. But every time the South Korean government has tried to finger North Korea as being the culprit, what we've heard from North Korea and Pyongyang is -- an absolute blanket denial despite the evidence. So, that is what we are expecting.

Meanwhile, after they make that blanket assessment that they weren't involved, what cyber-intelligence experts here tell us, that there's a lot of work going on underneath. They're trying to build up a cyber- army, an army, Alisyn, that certainly, by the looks of what happened with Sony, is becoming increasingly more sophisticated -- Alisyn.

CAMEROTA: All right. It will be very interesting to see what happens a few hours from now. Kyung Lah, thanks so much.

Let's go over to Chris.

CHRIS CUOMO, CNN ANCHOR: All right, let's look at what we know. The White House is suggesting North Korea is behind the Sony attack. How do they know? And what if Sony was taken down? What does that mean about who else is vulnerable? And is there anything that's a real defense in the corporate and the personal governmental levels? Tough questions.

Luckily, we have someone who can answer them. Howard Schmidt, he was the cybersecurity czar for the Obama administration and he was also former chief security strategist at eBay and chief security officer at Microsoft.

To be gentle about it, this is in your wheelhouse, sir, so how confident are you that when the United States says, "We think it was North Korea," that they have it right? HOWARD SCHMIDT, FORMER CYBERSECURITY CZAR FOR OBAMA ADMINISTRATION:

Well, at this stage of the game, I would really be hesitant to say this is who it is. Because there's a lot of evidence out there, there's a lot of different tricks that hackers use, that nation-states use that can make it look like it's going in one direction and two weeks later you find out it's somewhere else.

So this is why I'm really hesitant to say, this is one of the possibilities. Clearly because the content and the intention here. It could be. But let's get all the facts together before we start pointing fingers.

CUOMO: All right. So two points of criticism, then, for the U.S. government. The first, why are they talking the talk then, that they know it's North Korea if, in your estimation, they can't really know at this point? Why do that?

SCHMIDT: Well, I think one of the things is, there's a desire for information. With the movie coming out, with all the release of emails and stuff from Sony, it says OK, this looks like it is some people out there that have said -- suggested this is the case. And there's a desire to get information.

And there's oftentimes not the people in the positions that really understand how this works, how critical it is. The folks at the FBI, at the cybercrime unit really understand the forensics, how to dig this thing apart and be able to move from what appears to be one thing, to the reality here.

And when you're getting pushed for answers, particularly from the White House, you come up with some hypothesis, that may or may not be correct later on.

CUOMO: Well, that's not good. And then the pressure from the other side is, why doesn't the U.S. government seem to take cyberterrorism as seriously as ordinary terrorism? If this story had gone that somebody drove a big truck into the Sony studios and broke in and stole all this stuff and ran away and then started blackmailing the company, the U.S. would be all over it. You'd have the FBI, all these guys in colored parkas running around. We're not seeing any of that. Why not?

SCHMIDT: Well, it's because one, it's scalability. I mean, this is a very large -- this is a very unique situation here. But this goes on every day, and there's only a limited amount of resources, both in the federal government and state and local law enforcement. We don't have any good agreements for norms in cyberspace between nations and nations. We have companies that are struggling to figure out, "How do we do this right?"

We've created a society from the Internet where we've built a system to be open and accessible. Then all of a sudden, we find out there's bad guys out there. Now we're trying to close that, while still running the business.

At the same token, when you look at the government's role, if there was intelligence out there that they should have been collecting on particularly that regime, if indeed they're involved, why weren't they able to go to the company and say, "Listen, we see them creating some malware that's going to target you, and so you better protect yourself."

CUOMO: The malware supposedly written in North Korean software language, whatever that means. If that's true, do you believe it is? And if it is, is that indicative, if not dispositive of ownership?

SCHMIDT: Well, see, if I was a hacker, that was one of the first things I would do. I would find somebody that can create that malware on a computer system that's the language and the operating system is in Chinese or in Russian or in Korean. And that's one of the things that throw people off automatically.

So when you do this, you really have to get down to deciding whose fingers met the keyboard. And it's very difficult to do in a situation like this, particularly after the fact.

CUOMO: Howard, Sony was hacked before. Supposedly, they obviously didn't get a correct fix. But let's analyze Sony. Are they a one- off? Or is this an example that, if Sony is vulnerable, with your experience at eBay and Microsoft, everybody is vulnerable? And if so, is there an answer to the vulnerability?

SCHMIDT: Well, the answer is that there's vulnerabilities that exist. One of the big ones we've seen that gets repeated over and over again is vulnerabilities in software for insecure coding mechanisms, creating the software itself, that aren't fixed in a timely manner.

The other thing is, is the way we created this business process, is accessibility was the main thing. So we have to sort of back off from that, look at this: how do we create an infrastructure that gives us the ability to be entertained, to be -- get electricity, to get fresh water, in an environment where we use strong authentication. Get away from user I.D. and passwords. That is just -- and by all accounts, this is one of the symptoms of this case. Get encryption out there. So if you steal something, which is -- could happen, that they can't do anything with it. And that we have to change that culture.

CUOMO: So here's my concern, Howard. You have me nervous. Because it seems like what you're suggesting is that this is a big risk, it's out there; it's growing all the time. And that we are not set up to deal with it as a government or as a society or as a corporate structure. And if that's true, then what is the limit to how often we're going to see this and how high it can go in terms of its disruptiveness?

SCHMIDT: Well, and that's one of the concerns we've had since 2003, when Tom Ridge and I released the national strategies to secure cyberspace. We basically called out there. We need better intelligence collection and sharing with the private sector. We need the private sector to sort of coalesce amongst themselves so they know the best practices, the threats that are out there to help each other.

It's been a hit-and-miss thing almost the past 12 years now. So as a consequence, what we really have to do is sit down and say, "What does it mean to fix this? How can we make sure we prioritize it where it's the water and the electricity and the telecom is a higher priority than, you know, somebody doing online video watching?"

CUOMO: So one of the excuses for the U.S. government here, although I'm not in the business of providing them with the excuses, is that there's a lot of law about sharing of intelligence. And maybe the U.S. government wasn't able to tell Sony what it knew about what might have been happening with Sony. I don't think that should be an excuse, but what do you do about the law and intelligence and what the U.S. government can do to protect corporations and itself?

SCHMIDT: That should not be the case. When I was at the White House the last time, we had an incident took place that took over three months to notify private sector, and there was no reason not to. It was just, "Well, we're concerned about intelligence. We're concerned about the bad guy knowing that we're watching them."

In the meantime you're seeing things start crumbling down.

The president actually signed an executive order that said, enough is enough. You will share unless there's some reason not to. But we're still not doing that. They're still holding on to the old -- you know, belief is if we tell somebody classified information it's going to ruin an operation.

All you have to do is tell someone not where you got it, not how you got it. All you have to say it look for this piece of malware. Look at this I.P. address and you can better protect yourself. And we're slowly but surely getting to that. But it's slow.

CUOMO: You think there's a chance -- you think there is a real chance that the U.S. knew that this was going to happen to Sony?

SCHMIDT: Well, it's tough to tell. Because you have so many different parts of the U.S. government looking at the cyberspace, looking at cybersecurity. Some are reeling from the Snowden issue, where there was, you know, a finger-pointing at the U.S. government for too much collection.

But if you have focused collection doing these things, yes, quite possible that somebody somewhere said, "Oh, gee, we see something taking place," whether it was Korea, whether it was Korea outsourced to China, whether it was some other nation. The bottom line, if they see it, how do you get that through the bureaucratic system that we have today?

CUOMO: Who's better: the United States at defending or the hackers, specifically this Bureau 121, whatever that is, in North Korea, in trying to disrupt? Who's better?

SCHMIDT: Well it's a cat-and-mouse task. We get ahead a little bit of the time. Then we fall behind, because an unknown vulnerability is discovered.

We have somebody that we're focusing on one piece, they go in on another. You mentioned earlier in the Sony, the previous hack. They were focusing on the PlayStation and that whole system out there, because that's what was attacked. And that's a different system than what we've seen this time.

So we really have to understand this is a very, very complex ecosystem. We have to look at all facets of it, prioritize where we're going to put our resources, and also make sure we're developing for the future.

Because what we don't want to see -- and I think it was mentioned at the top of the hour -- that we don't want to be in a position -- I don't want to be in a position to say you can't see this movie. I may or may not like it. I may not agree with it. I may not spend money on it, but that's my choice, not somebody that's out there hacking systems, because they have a political motivation and prevent us from being entertained the way we want to be entertained.

CUOMO: Well, Howard Schmidt, it is very clear that not only do you understand the situation, but you understand the solutions we need, and they're not in place. So hopefully things get better soon. Because if they'll do this over a silly movie, who know what could happen next?

Thank you very much for your perspective on NEW DAY.

SCHMIDT: Thanks, Chris. My pleasure.

CUOMO: A lot of other news this morning. So let's get you right to Mick.

MICHAELA PEREIRA, CNN ANCHOR: All right, Chris. Ten minutes past the hour. Here's a look at your headlines.

Breaking overnight, another tragedy in Australia. Eight children have been found stabbed to death in a home in Cairns, along the northeast coast of that country. The children are between the ages of 18 months and 15 years old. Police say a 34-year-old woman was also wounded. She is believed to be the mother to seven of the children. At this time no suspect has been identified or apprehended.

The White House is not ruling out the possibility of Cuban President Raul Castro making a visit to Washington, even though that island nation has a checkered human rights record. In the meantime, we've also learned the name of the spy who was released along with Alan Gross. Sources tell CNN he has been identified as Rolando Sarraff Trujillo, a Cuban national who helped lead the U.S. to a network of Cuban agents and other spies in the United States.

Ford is expanding the recall of Takata air bags or cars containing Takata air bags after extensive pressure from federal regulators. Ford was one of five automakers encouraged to expand driver recalls nationwide after Takata refused to cooperate. The total number of cars is now over 460,000 in the U.S. and another 80,000 overseas. Ford said it was aware of one accident with an injury possibly related to those malfunctioning air bags which have been linked to five deaths. Two states are manning a legal challenge to Colorado's marijuana law

over concerns the drug is being brought across state lines. Nebraska and Oklahoma filed a lawsuit with the U.S. Supreme Court. The states argue that marijuana has begun to overwhelm their criminal justice system since Colorado legalized it at the start of the year. Colorado's attorney general says he will defend the marijuana law, saying the suit has no merit.

Emotions running very high inside and outside as Boston Marathon bombing suspect Dzhokhar Tsarnaev made his first court appearance in over a year Thursday. The close of the brief hearing, an outburst in the courtroom. Outside, a bombing victim clashed with Tsarnaev supporters.

Deb Feyerick is here. She was there to see all of this play down. Quite a crazy dynamic.

DEBORAH FEYERICK, CNN CORRESPONDENT: Yes, it really was. And this was supposed to be a very routine sort of pretrial hearing.

But what happened, this was the first time Tsarnaev was in court since pleading not guilty 17 months ago. The first time I saw him back in July of 2013, he was still healing from the wounds that he'd suffered immediately in the aftermath. Now he's got the sort of prison pallor. He's a bit Gray. His hair is long, a bit disheveled. And he's growing a beard, kind of this odd little beard that he was playing with while he was in the courtroom.

He was very respectful to the judge. The judge asked him whether he felt he was -- that his lawyers had his best interests, and he said, "Very much so."

He never looked back to see his supporters. But they were in the courtroom for him. And that woman who ultimately stood up as he was being cuffed and led out of the courtroom is the mother-in-law of a Tsarnaev friend. Somebody who was implicated in a triple murder along with Tamerlane Tsarnaev. FBI agents ended up killing that man when he was apparently swearing out a confession. She was yelling in Russian, saying, "Don't kill innocent boys."

But on the other side of the courtroom, there were a lot of bombing victims. And I spoke to one woman. She said, "Look, don't get me wrong. I'm not here to see Tsarnaev. I'm here so that Tsarnaev can see us." She said -- she asked -- I said what question, "What question would you ask her [SIC]?" and she said, "Why? Because you didn't win. You didn't accomplish anything. We're stronger." And that was the message that the supporters wanted to send to those people who were in the courtroom.

PEREIRA: Powerful and intense stuff.

FEYERICK: Yes.

CAMEROTA: Deb, thanks so much; Michaela, for that update.

All right. Let's get now to our forecast around the country. Meteorologist Jennifer Gray keeping track of it for us.

Hi, Jennifer.

JENNIFER GRAY, AMS METEOROLOGIST: Hi, Alisyn.

Yes, we are looking at a lot of rain across the Gulf Coast. We're going to see rain anywhere from Houston all the way to New Orleans through Baton Rouge, south of Shreveport.

And over the next couple of days, we are going to look at possibly three to five inches of rain as we go through the south. So if folks are traveling through the weekend, say ahead of Christmas Eve and Christmas day, you are going to run into a little bit of trouble there.

We are also looking at rain and the west. We're going to see a little bit of mountain snow, as well. Sorry, we're having a little bit of graphic trouble, obviously. But we are going to see quite a bit of snow in the west, as well as that rain.

If you are traveling for Christmas Eve and Christmas day, guys, it looks like we are going to see snow around the Great Lakes. So that's going to be your main trouble spot.

CAMEROTA: Jennifer, thanks so much.

CUOMO: All right. So the war on ISIS, it is raging on as we speak. The question is: is there progress against the terror group? Three ISIS leaders were killed back to back in recent airstrikes. Does it really matter when you hit people at the top of chain of command, or do they just get replaced?

CAMEROTA: And also, chaos erupted around the world this week. The Sydney siege, the Pakistan school massacre, Russia's economy tanking. Fareed Zakaria will be here to make sense of all this.

CUOMO: Cuba.

CAMEROTA: Right.

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CAMEROTA: It has been a stunning week of international news. The hostage-taking in a Sydney cafe on Monday, the massacre at a school in Pakistan on Tuesday, an historic deal with Cuba on Wednesday, Russia's economy tanking yesterday. All this as North Korea apparently hacks Sony.

So here to explain this wild week of news is Fareed Zakaria. He's host of CNN's "FAREED ZAKARIA GPS."

Fareed, great to see you. Normally, the week before Christmas is what we call a slow news week in the business, not -- can you remember a week like this in recent memory?

FAREED ZAKARIA, CNN HOST, "FAREED ZAKARIA GPS": With so many generally big stories, no. Because each of these stories on its own would have been a lead story, would have probably been something we would have discussed for hours and hours. And ere we've had, as you know, a situation where we can't get to this third-world breaking historical story, because we've got two others ahead of it.

I mean, think about the Taliban attack on the Pakistani schoolchildren. That would have occupied a week discussing it and understanding it. The tragedy, the politics behind it. It's kind of gotten pushed aside, alas.

CUOMO: Do you think that's because of the exigencies of other stories or do you think it's also a little bit of a nod to the compressed news cycles and the fatigue that the audience has for these types of stories?

ZAKARIA: I think it's more because, you know, the Cuba story was so huge until the North Korea story came out, right? And these -- I think these, people would have been interested in. Because they combine human elements, drama.

I mean, there is one underlying theme to almost all of them, which is the asymmetry of power. I mean, think about who has -- who has been able to prevail or at least make a lot of trouble? It's been hackers against Sony. It's been the Taliban against the Pakistani army. It's been currency traders against the Russian Central Bank.

All of these cases, what you have is what people now talk about, is asymmetries of power, the small guy empowered by technology and empowered by fanaticism is able -- I think about Sydney -- is able to hold a city hostage or take on the Pakistani military or destroy the Russian ruble.

PEREIRA: But also the other thing, too, is the fact that all of these stories have global implications. I mean, from Sydney to the school in Pakistan, to what is going on in Cuba, it reaches all of us here at home in different ways.

ZAKARIA: And they're all connected in a way. So for instance, if you look at what's happening in Cuba and what's happening in Russia, they're essentially part, at least in some way, part of a larger drama, which has been the fall of oil prices and the rise of the United States as this dominant oil power.

Why? Because Cuba relied for its cash, its subsidies on Venezuela. After the Soviet Union stopped sponsoring Cuba, the Venezuelans picked up the slack. Venezuela is in very big trouble.

Russia and Venezuela probably -- Russia, Iran, Venezuela, are the three countries most affected by this drop in oil prices, because they have large populations. They need to subsidize these populations. Fallen oil prices mean Russians get into trouble; Venezuelans get into trouble. Venezuela -- you know, Cuba looks at that and says, "Our sugar daddy is going to probably stop paying us." And so maybe they're more willing to make a deal.

CAMEROTA: So between the Russian economy collapsing, between normalizing relations with Cuba, between the devastation in Pakistan, which of all of these do you think is most significant?

ZAKARIA: Going forward, I think clearly the two stories that are going to be most significant in the short-term is going to be the North Korean one. Because this is an attack. I mean, let's be very clear what happened here.

CUOMO: From the U.S. perspective.

ZAKARIA: A government, one of the nastiest governments in the world has attacked the United States on its soil, probably inflicted about $100 million of damage, threatened a terrorist attack if we -- if an American company, what is essentially an American company, were to show a work of art and has gotten away with that. So something is going to have to be done. And Chris, you're right that so far the response has not been strong enough.

CUOMO: Imagine if they -- you know, we were talking to one of the cybersecurity experts about if they drove a truck into the lot in Hollywood and had blown up a building, God forbid, and stolen things physically, forget it. It would be all -- you know, we would be talking about brink situations. You and I would be in other parts of the world right now.

PEREIRA: And on a less sinister side, what if that had been "The New York Times" or a major TV network and it had been censored? This is a movie. Granted, our lives won't be dramatically changed and we won't feel like we're cut off from communication if we can't see a movie. Yet still, the hackers essentially won.

ZAKARIA: Exactly. And, you know, it doesn't matter that it's a comedy. Charlie Chaplin's "The Great Dictator" was a comedy. And when he was making it in '38, the Neville Chamberlain government wanted to ban it. Luckily, by the time it got made was 1940 and Britain was at war. So in fact, then they welcomed -- the new government, Churchill's government welcomed it. But it shows you this pressure exists.

And we stood up to the Iranian fatwa against Salman Rushdie. This is exactly the same thing. It doesn't matter what kind of book it is; it's the idea that you can intimidate.

So that's the short term. But my point, Chris, is there will be a response. I think it will be more -- it's a more complicated story. And so maybe one of the things we can do is cyberattacks go both ways, and I very much hope and I suspect that the NSA is looking into what it can do.

PEREIRA: Retaliatory or a counter, sort of?

ZAKARIA: I think if there were a way to shut down that unit in the North Korean military that does this, remember, the problem in North Korea is 12 people have computers. But those 11 of those 12 are engaging in the cyberattack. So that's an 1,800-man unit in the North Korean military. That must be connected to the world, probably through Chinese servers. I think we will have to have a very serious conversation with Beijing

and say, "You have got to let us do this and assist us in doing this. Because we will -- otherwise we will -- you know, there are things we can do that will make China's life tough."

The second story, I think longer-term, is Cuba. If this becomes the opening, if this has a snowball effect, you see the stories in "The New York" today about American companies desperately looking to figure out ways to start making money in Cuba.

Remember, Cuban -- Cuba was an American island, you know. It was a place where almost everything was American. If that -- if those waves of American commerce and companies start washing through Cuba, you know, we may look back on this and say this turned out to be the turning point, where Cuba is one of the three main rogue countries in the world. North Korea, Iran, Cuba. If Cuba comes in from the cold, that's a big long-term story.

CAMEROTA: We only have a few seconds left. We know you're going to be interviewing the Sony CEO later this afternoon. What's the one thing that you most want answered?

ZAKARIA: Why did you pull the movie?

CAMEROTA: That's the big question. Because that's the censorship.

Fareed Zakaria, thanks so much. Always great to get your perspective.

CUOMO: Huge interview at the right time. Good for you, Fareed.

ZAKARIA: Thank you, sir.

CAMEROTA: All right. Tune in Sunday at 10 a.m. and 1 p.m. Eastern to watch Fareed's full interview with that Sony CEO, Michael Lynton. That will be on "FAREED ZAKARIA GPS."

CUOMO: Also later today, you can catch President Obama's end-of-the- year news conference right here on CNN. We'll have it at 1:30 p.m. Eastern time.

CAMEROTA: And Sunday Candy Crowley's interview with President Obama on "STATE OF THE UNION." That's at 9 a.m. Eastern. So you have a lot of viewing to do in the next 48 hours.

Also, three high-value ISIS targets wiped out in recent weeks by U.S. airstrikes in Iraq. Does that mean the fight against ISIS is working? We'll discuss with our military analyst.

CUOMO: Keep Fareed.

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