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North Korea Responsible for Sony Hacking; Hackers Deliver New Message to Sony; President Obama Giving End-Of-Year News Conference This Hour; President's News Conference

Aired December 19, 2014 - 13:00   ET

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

WOLF BLITZER, CNN ANCHOR: It's 1:00 p.m. here in Washington, 6:00 p.m. in London, 9:00 p.m. in Baghdad and 3:00 p.m. Saturday in Pyongyang, North Korea. Wherever you're watching from around the world, thanks very much for joining us.

President Obama caps off a momentous week with an end-of-year news conference. That's coming up this hour. It's set to begin right at the bottom of the hour. We're going to have live coverage, of course, of that.

The president steps before the cameras after taking a major step toward diplomatic relations with Cuba. He's certain to face questions about that as well as other hot topics, including the Sony cyber- attack linked to North Korea, immigration reform and the fight against ISIS.

We also expect the president to highlight job growth, other improvements in the U.S. economy. He'll have an opening statement, then answer reporters' questions maybe for as long as an hour. Stay tuned for CNN's live coverage of the president's news conference scheduled to begin right at the bottom of the hour, 1:30 p.m. Eastern. We will have coverage, of course, -- full coverage and analysis. We'll check in with our correspondents and our analysts. That's coming up momentarily.

But first, we have breaking news. Breaking news on the cyber-attack on Sony Pictures. The FBI is now officially, publicly blaming North Korea directly for the hacking. The agency releasing a detailed statement on the investigation only hours after the hackers delivered a new message and new warning to Sony executives.

Let's go straight to our Evan Perez. He's in New York. Evan, what did the FBI say about North Korea's direct involvement in this attack?

EVAN PEREZ, CNN JUSTICE REPORTER: Wolf, this is an unprecedented statement from the FBI to so quickly come out publicly and point the finger at North Korea. I've never seen anything like this happen on this -- on this level with cyber-attacks that we have so often in this country.

The FBI says that there is no doubt -- that there is no doubt that this came from North Korea, that they used some of the same infrastructure that they've seen before used in other North Korean cyber-attacks. And I'll read you a part of the statement from the FBI. It says, as a result of our investigation and in close collaboration with other U.S. government departments and agencies, the FBI now has enough information to conclude that North Korean government is responsible for these actions.

And these actions, Wolf, they took over the Sony computer systems. They were able to destroy thousands of computers, according to the FBI. They were able to steal some of the private data, not only e- mails but also Social Security numbers and other very private information of Sony employees and executives. And they were able to hold hostage, basically, a company to force them to cancel the premier of this movie called "The Interview." In other words, they forced a censorship of a major American movie company as a result of this.

BLITZER: Evan, you broke this story two days ago that the government has concluded North Korea was directly responsible. You said an official statement will be coming out and it did come out just a couple hours or so ago. And it followed word that the hackers have now delivered another new message to top Sony executives including another threat. Tell us about that.

PEREZ: That's right. Our Brian Stelter broke that detail a couple hours ago, Wolf. And, you know, that was another unusual message in which they, essentially, declared victory and said that they were going to stop releasing information from this hack. But, at the same time, they warned the company that they want everything related to the movie to be taken down -- taken down off the Internet because there are some parts of the movie, there are some trailers that had leaked out and are -- and are being shown on Web sites. Not Sony Web sites but other Web sites and they're, basically, demanding that that be taken down or else there will be repercussions -- Wolf.

BLITZER: All right, Evan, stay with us. We've got a lot to cover. That's coming up. Once again, we're standing by to hear from the president of the United States. He's going to be holding a full-scale news conference right at the bottom of the hour.

Well, let's bring in our Investigations Correspondent Chris Frates. He's here with me in Washington. Also joining us, CNN Global Affairs Analyst Bobby Ghosh. He's joining us from New York.

Bobby, what's your reaction to this very blunt, tough statement from the FBI? And it concludes with these words, working together, the FBI will identify, pursue and impose costs and consequences on individuals, groups or nation states who use cyber means to threaten the United States or U.S. interests. So, they're directly warning North Korea, they will pay a price.

BOBBY GHOSH, CNN GLOBAL AFFAIRS ANALYST: Yes, it's naming and shaming but it's a little unclear what that last part could entail. How exactly do you make North Korea pay? We already have quite restrictive economic sanctions against North Korea. The country, basically, can do no business with nobody in the world apart from China. And China has shown no interest in punishing North Korea in the past.

So, apart from the strong language, it's a little hard to see what exactly the FBI or the United States can do about these hackers. Especially since the North Korean regime has a certain amount -- has built in a certain amount of plausible deniability. They are saying these people are sympathizers or supporters. We are not doing it directly.

BLITZER: But the FBI, in a statement, they didn't hedge at all. They didn't give any questions. They said the FBI now has enough information to conclude that the North Korean government is responsible for these actions. A very tough statement from the FBI.

Chris Frates is here with me. You've been doing some reporting. That's just private companies that are vulnerable to these kinds of cyber terror attacks. The U.S. government is vulnerable as well.

CHRIS FRATES, CNN INVESTIGATIVE CORRESPONDENT: Well, that's absolutely what I found, Wolf. I took a look and reviewed the cyber- attacks across federal government agencies and found that they're up 35 percent. In 2010, 34,000 cyber incidents. Last year, 46,000. So, I talked to some experts and they said this cyber spying is way up. And we wonder what kinds of things are people going after? We took a look. The Army Corps of Engineers was hacked and what was taken was the sensitive information about 85,000 dams across the country. Where they're located and even how many fatalities could happen if they were breached.

So, I asked what -- are we not spending enough money? What's going on? We spent $10 billion last year on information security. And the experts tell me that's not really the problem. The problem seems to be, in a lot of cases, human error. These are people who are clicking on links in their e-mail, they're allowing malware to come onto their computers which infect the whole system, allows these hackers to get in and look around.

I talked to one analyst, Wolf. She said, you can't protect against the stupid user. And so, on a lot of ways, even with all of the money we spend, we're going to need to take a hard look and figure out how we protect ourselves, both on the government level and the company level, going forward.

BLITZER: They have to learn how to protect themselves against stupid users because there are millions of users out there. Some of them are pretty stupid. They'll hit a -- hit a link and they'll go someplace and it's clearly somebody who phishing and trying to get some malware out there. Stand by for a moment.

Bobby, Senator John McCain, he's the next chairman of the Senate Armed Services Committee. He says he's going to be holding a hearing. One of his first responsibilities as the new chairman on the cyber-attack on Sony. He's going to be doing it, he says, the first two weeks of the next Congress in early January. He wants the United States to hit North Korea with a cyber-attack of its own. Listen to what he said about the Sony attack and the threat from North Korea.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, ARIZONA: I think it should be a wakeup call. It should be a wakeup call that a country like North Korea has this kind of capability. Imagine the capability they have to disrupt other aspects of American life. So, it's time, we as Congress -- frankly, it's time that Congress got together with the administration and passed legislation on this whole issue of cybersecurity and we have not.

(END VIDEO CLIP)

BLITZER: Yes, that legislation has been around for a couple of years. Ed Royce, the Chairman of the House Foreign Affairs Committee, he's worked together with Mike Rogers, now the outgoing Chairman of the House Intelligence Committee. But that legislation rarely hasn't gone that far. I suspect now, with what is going on, Bobby, you probably agree, the pressure is going to be enormous to get the -- to get this train moving, to get some action.

GHOSH: Yes, there will be pressure on both the White House and Congress to do something about this. But they will -- they will keep finding themselves coming up against the same frustration, what exactly can you do? Mounting a cyber-attack against North Korea, there's only a limited amount of cyber-attacking you can do. The country is mostly analog. There is no equivalent of a Sony corporation in North Korea that has sort of -- that you can attack. A lot of North Korea's infrastructure is very old and based on sort of analog communications.

The only country that has any leverage on North Korea is China. The only way to get North Korea to behave is to persuade China to put pressure on Pyongyang and the leadership there to behave. And China has always resisted that kind of temptation. So, -- or that kind of pressure to make North Korea behave.

And so, yes, there's going to be a lot of pressure. Yes, you will hear politicians say, this will not stand. We've got to do something about it. The trouble is there's not a whole lot that we can do about it.

BLITZER: All Right, Bobby Ghosh, thanks very much for joining us. Chris Frates, good reporting on your part.

President Obama about to hold his year-end news conference over at the White House. Our Jim Acosta is in the briefing room. He's standing by -- Jim.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Wolf, President Obama just may be just hours away from his annual family vacation to Hawaii but he's not going to be in the Aloha spirit when it comes to dealing with North Korea. We will be watching for the president's comments on North Korea and that FBI conclusion that the communist government was behind that hack attack on Sony. We'll also be watching for what the president has to say about this blockbuster diplomatic deal on Cuba, the economy and more. That's coming up in just a few minutes -- Wolf.

BLITZER: All right, we'll get right back to you. CNN's special coverage of the president's news conference. The end-of-year news conference will begin right after this.

(COMMERCIAL BREAK)

BLITZER: President Obama's end-of-year news conference is set to start in about 15 minutes or so. We'll bring it to you live as it begins. You're looking at live shot of the briefing room over there at the White House in the west wing.

Among the many hot topics likely to come, the cyber-attack against Sony linked to North Korea. The president's push to restore diplomatic relations with Cuba after more than 50 years, the fight against ISIS. We also expect the president to highlight job growth and improvements in the economy. We've got a lot coming up this hour.

Let's bring in our panel for a little discussion, a little review of what's going on. Here with me in our CNN studios in Washington, our Chief Washington Correspondent Jake Tapper, our Chief Political Analyst Gloria Borger, our Chief National Security Correspondent Jim Sciutto. Also joining us from New York, our CNN Global Affairs Analyst Bobby Ghosh. He's the managing editor of "Quartz." And in Austin, Texas, the presidential and historian and professor and author, Douglas Brinkley. All -- to all of you, thanks very much for joining us.

You know, it's amazing when you think about it, it's only six weeks since the mid-term elections when the Democrats suffered an enormous setback in the House and in the Senate. Yet, the president, you know, he seems motivated to move quickly on so many of these sensitive issues despite that political setback.

JAKE TAPPER, CNN CHIEF WASHINGTON CORRESPONDENT: That's right. He seems very active and we had Jay Carney on the other day and he said that despite the pundits saying that they thought President Obama was checked out, he never thought that was true. And we do see President Obama very active, especially with the -- with the new policy in Cuba.

I will say that it doesn't really seem to be making any impact whatsoever on his job approval numbers. One of the interesting things, if you look at President Obama's job approval numbers, is that they -- they're pretty much immune to the ups and downs that we've covered this past year. The public seems to have, at this point, kind of made up its mind with about 52 percent disapproving of President Obama and early low 40s, about 42, 43 percent approving of President Obama.

So he goes into 2015 still struggling when it comes to the public's perception of the job he's doing.

BLITZER: Yes. And, Gloria, you have a piece on cnn.com. It's being widely read. Among other things you write this, "it's as if he has shed his Clark Kent-ish demeanor for the more flamboyant cape. He's no Superman to be sure, but he's spending an awful lot of time lately trying to get off the ground."

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: He is.

BLITZER: He's got two years to go.

BORGER: Right.

BLITZER: And he clearly wants to make the most of it.

BORGER: And I think, you know, Jake is right, the public has kind of decided what they believe about President Obama. It's probably not going to change one way or another dramatically. But it's an open secret in Washington that he was frustrated before this last election. He felt like he couldn't do a lot of things. He didn't want to endanger Democrats. By the way, that strategy turned out not to work so well for him. But in any case, he felt like he wanted to do more. He's got a list. He's checking it twice, as we say at this time of year. And there are things he wants to get done.

Now, this doesn't mean, by the way, he's going to succeed because he's got a Republican Congress. They're not likely to lift sanctions against Cuba. For example, they may not approve an ambassador over there. And on immigration, could wind up before the Supreme Court for all we know. But at least he's getting on the record with as much as he can with executive action. And it will become an issue in the presidential campaign in 2016.

BLITZER: And, Jim, as you know, the breaking news this morning, the FBI directly, publicly, officially blames North Korea, the North Korean government, for the attack, the cyberattack, on Sony pictures. The FBI now has enough information to conclude the North Korean government is responsible for these actions. Which then raises the question, so what does the U.S. do about it?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: You know, it's interesting, you always talk about how presidents, during their lame duck sessions, they focus on foreign policy, of course. But here you have a president focusing on the ones that he can control, Cuba, it's something he planned, it's something for his legacy, but then these other challenges that he can't control. North Korea, a major attack on a major company. This is a new challenge unexpected. And there will be a lot of pressure on him in two directions. One, how do you respond? They've talked about a proportional response. How do you retaliate but how do you retaliate without sparking something bigger? North Korea is a very testy country, to say the least, and you don't want to provoke something bigger, including the possibility of military action, including the possibility of another missile test or a nuclear test. These are things we do not want, while at the same time showing North Korea that you want to stand up.

But the second thing, this is the other real challenge, how does the U.S. protect American companies from this going forward? What is the president going to say today about this? Because U.S. companies have been getting hacked by Chinese companies for years now at the cost of tens of billions of dollars a year. Companies haven't figured out how to protect themselves from that kind of state sponsored hacking. The government has not figured out how to protect companies and help them.

BORGER: But Congress has legislation pending, right, on cybersecurity, which has not been approved? SCIUTTO: They do. That's true.

BORGER: Yes.

SCIUTTO: But even with that kind of legislation -

BORGER: Yes.

SCIUTTO: This is such a major challenge and no one's quite figured it out. And in the meantime, companies are reluctant to stick their heads above the parapet because to call out, whether it be China or North Korea, because they don't want to be even a bigger target for these kind of attacks.

TAPPER: Right.

BORGER: Right.

SCIUTTO: And our country has to figure out what we're going to do about this going forward.

TAPPER: And they don't want to -- they don't want to hurt their bottom line by exposing the fact that they have been cyberattacked.

SCIUTTO: Yes.

TAPPER: One other thing that we're going to have to keep -- pay a lot of attention to in 2015, of course, is the fact that we have troops back in Iraq. Jim just reported yesterday, 1,300 more troops. And that is potentially a real mess what's going on. And we haven't covered it as in depth in the last few weeks. But the fact is, we're kind of fighting alongside Iran, one of our enemies, and it's really unclear how any of this is going to play out, especially with Iran working with the Shiite militias in Iraq. What is going to happen over there? Is there an exit strategy?

BLITZER: I'm sure there will be questions on ISIS, there will be questions on Syria, North Korea to be sure, Cuba. There are going to be a lot of significant questions. And maybe the first question, we don't know what it's going to be, Bobby, but the first question potentially could be, all right, you said North Korea's responsible, Mr. President. What are you going to do about it? What does he say?

BOBBY GHOSH, CNN GLOBAL AFFAIRS ANALYST: Yes, that's a good - that's the question that's likely to stump him. I think, apart from rhetoric, as I was saying earlier, that apart from rhetoric, there's not a whole lot he can offer. The South Koreans, who watch the northerners incredibly close because, of course, North Korea represents an existential threat to South Korea, have for years tried to do something about this. You have to remember that the majority of North Korea's hack attacks are against South Koreans. And pretty much the only thing you can do is build more robust cyber defenses. That's what you can do about North Korea.

And keep working the China angle. Keep telling the Chinese, listen, this is your Frankenstein's monster. Right now it's attacking us. But one of these days it's going to turn on you. And so you have a stake in controlling them and you have a stake in making them behave like a more responsible global citizen. Beijing has resisted all these kinds of pressures before, but you've got to keep working that line.

BLITZER: Doug Brinkley, you've studied presidents. You've studied the last two years of the second term of a presidential administration. I suspect he wants to do as much as he possibly can to build up that legacy. I suspect he's reviewing all the promises he made when he was running for the White House, when he first was elected president. And now he wants to go through and check off the list, I did this, I did this and I did this. That's what presidents in their final two years try to do, right?

DOUG BRINKLEY, PRESIDENTIAL HISTORIAN: Absolutely. And if we remember, what were the issues when we elected him in 2008? The great recession. And so we're going to ask, well, how has he done with that? And at the press conference today, the president's feeling pretty good. These have been about the best numbers he's had thus far. Now, we don't know what it's going to look like two years from now when he punches out, but he's going to say, look, I'm - I've lived up - we're living up to that promise. He's -- our troops are going to be finished, our operations in Afghanistan, at the end of this year, and he's going to say, I've taken care of that piece. Iraq, ISIS, it's a big mess and a big problem, but I think the president wants to feel that he's not somebody goateed into war the way George W. Bush was. In other words, as ugly and flip-flop and topsy-turvy as his Syrian policy has been, we don't have troops in Syria right now and I think he thinks history will shine a bright light on his restraint in that regard.

BLITZER: Yes, I suspect in his opening statement -- we don't know for sure, but we assume there will be an opening statement, it will take a look at this year and he'll point out, maybe going back to the beginning of his administration, when the economy was in deep trouble, a great recession, 600,000, 700,000, 800,000 jobs a month being lost. He'll point out there have been many, many months of continuous job approval and the economy is in better shape, although by no means where it should be.

Everybody stand by. CNN's special coverage of President Obama's year- end news conference will continue. There you're looking at live pictures from the Briefing Room at the White House. The president, pretty soon he'll be walking in. He'll make a statement and answer reporters' questions, probably for about an hour.

(COMMERCIAL BREAK)

BLITZER: All right, we're waiting for the president of the United States. Momentarily he'll be walking into the Briefing Room over there at the West Wing of the White House, open with a statement and then answer reporters' questions.

Let's go to our senior White House correspondent, Jim Acosta. He's got a little preview of what we can anticipate. And I anticipate there will be a lot of questions, Jim.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Absolutely, Wolf. And I don't know if you can tell in this room, but it is completely packed in here, as is always the case with these year-end press conferences. And as you were setting up earlier with all of our correspondents and guests, this is going to be an action-packed news conference. You're going to hear the president asked about a variety of subjects, North Korea, obviously, being perhaps the most pressing issue of the moment, that Sony hack attack, and what the president plans to do about it. We know that the FBI has pointed the finger at North Korea. The question now, of course, is, Mr. President, what are you going to do? How far are you going to take this? And what will this response be that you and your administration has been talking about all week? So I think we'll have to watch and see what he has to say about that.

He has been, as you and Jake and Jim and others have been talking about, a lame duck on the loose lately. Sort of the bear on the loose that we heard about over the summer. I asked the president at that midterm -- post midterm news conference, are you a lame duck? He said, well, technically I am. That's what you call presidents at this stage in their administration. But he has been trying to rewrite that playbook to some extent by going out on his own on these various deals that you saw cut with China, for example, on climate last month, Cuba on normalizing relations with the communist island.

I will say, though, with one caveat though, I did talk to one White House official earlier this week who said, you know what, keep in mind, you know, some of this lame duck on the loose stuff, the president being sort of unbridled, you know, after the midterms, they have been working on some of these things over the course of many, many months. The Cuba deal, for example, that started back in June of 2013. The climate deal with China came together all rather suddenly when we were in Beijing, but there was advanced work done on that, as well as immigration, the immigration executive action that the president announced after the midterms and which we don't talk about quite as much as maybe we did a few weeks ago, that was also a work in progress over several months. And so I think you're going to hear about all of those subjects.

But, Wolf, also the subject of the economy is something this president wants to take some credit for and I think we'll hear the president perhaps talk about that in his opening statement before he takes question. But, Wolf, you know, I think you can only look to this primer that was put out by the top adviser to the president, Dan Pfeiffer, in the last several hours. He posted a piece on Medium (ph) that says this has been a year in action. You heard this at the beginning of the year, this was going to be a year in action. The president using his pen and his phone. The White House says that's exactly what the president did, Wolf.

BLITZER: Yes. All right, so stand by. I know you'll be asking -- hopefully you'll be asking a question for the president of the United States. Jim Acosta is our senior White House correspondent.

Jake, you know, you're a former White House correspondent. I'm a former White House correspondent. We understand what's going on right now over at the White House. The president, later tonight, he'll be leaving Washington and heading for vacation out in Hawaii with his family, a well-deserved vacation, let him enjoy, get some R&R, as they say. But at these kind of end-of-year news conferences, it is an opportunity, to a certain degree, for a president to gloat and little bit and say, you know what, we did this, this and this.

TAPPER: I don't know if gloating is the right word, especially after the shellacking of the midterm elections for Democrats. But you're right in that President Obama is always very, very eager to talk about the stronger economic numbers than he faced at the beginning of his first term. And, in fact, there was that moment, you remember when he came out to talk about ISIS and how to - he was going to directly talk - address ISIS, bomb ISIS. And even in that press conference, which had this very big momentum foreign policy news, he started off by talking about the economic numbers. He wants to talk - he will, I'm guessing, say something about them before he takes question and, as often as he can, pivot back and talk about the successive months of job growth and how the economy is better than it's been in years.

BLITZER: Why doesn't he get more credit for the improved economy? Because we're - it was six years ago, as opposed to where it is right now, it's dramatically improved.

BORGER: That's what they're asking at the White House, Wolf.

BLITZER: So what's the answer?

BORGER: Well, first of all, you have two-thirds of the American public believing that we're headed in the wrong direction. One of the reasons is that while you've seen job creation, you haven't seen wages go up.

TAPPER: Yes, stagnant.

BORGER: And for the last time in the - last time in the job report we had, which there was, you know, which was terrific for this White House, you saw the beginning of wage growth. And once wage growth really gets underway, then people are going to start to feel that actually this economic recovery is affecting them. So there's kind of a lagging indicator there and that's what - that's what they're waiting for.

But, yes, they think they should have gotten credit for it during the midterm elections. And, guess what, none of their Democratic candidates were actually talking about the economy because they knew that the public didn't feel it. Didn't feel the improvement.