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The Lead with Jake Tapper

Enrique Marquez Makes Court Appearance; Threatening E-Mail Closes New Hampshire Schools; Iran Reportedly Hacked into US Dam; Intel Experts Concerned About Cyberattacks On Grid; Gas Prices Below $2, Lowest Since 2009; "Star Wars" Blasts Box Office Records. Aired 4:30-5p ET

Aired December 21, 2015 - 16:30   ET

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

[16:30:01]

JAKE TAPPER, CNN: Marquez is accused of conspiring to provide material support to terrorism, making a false statement in connection with the acquisition of firearms, and immigration fraud by entering into a fake marriage with a member of Farook's family.

According to prosecutors, Marquez, a Muslim convert, and Farook had previously had plans to shoot up a community college and throw pipe bombs into rush hour traffic. That's back in 2011. Thankfully, the pair backed out of that plan.

Let's get right to CNN's Kyung Lah. She's in Riverside, California.

Kyung, what was Marquez's demeanor like in court today?

KYUNG LAH, CNN NATIONAL CORRESPONDENT: Yes, that's what really stuck out today beyond the expected denying of bond. What really struck me at least is when he came out. He was shackled. He had his wrists and his ankles shackled, and he had the chain around his waist.

He was surprisingly pleasant. Before the judge came out, he was smiling. He seemed so nonchalant. He certainly seemed aware of what was happening, but he didn't seem at all bothered by the very serious charges that are facing him.

He did grow a bit more serious when the judge did deny him bail. So why did that happen? Well, the judge said it wasn't because he considers him a flight risk, but that he is considered a risk to the community, that he bears some culpability in what happened to the community. He did not want to release this man into this community.

The next hearing, Jake, will be early January. He did not enter a plea in this hearing -- Jake.

TAPPER: Kyung, do prosecutors believe he was involved in the attack more nearly -- the closer attack three weeks ago or so?

LAH: Yes, if you really look at the complaint and you slice it down, it's not that he directly participated in what happened in San Bernardino. He did purchase the weapons, but those weapons were purchased for a terrorist plot that you mentioned, those in 2011, the community college and what happened on the highway.

But the judge said he bears responsibility. The prosecutor's saying that the plotting was real, the arming of Farook happened, San Bernardino resulted -- Jake.

TAPPER: Kyung Lah, thanks so much.

It's a time of the year that children normally look forward to, although in one New Hampshire town this holiday season it was interrupted today by a terrifying e-mail that prompted yet another school district shut down because of fear; 12 elementary schools, three middle schools and two high schools in Nashua, New Hampshire, were forced to close today over a "detailed threat of violence."

Now, as you may recall, it was just a week ago when the nation's two biggest school districts in New York City and in Los Angeles received similar threats.

Let's bring in CNN correspondent Sara Ganim.

Sara, police just held a news conference, what do we know now?

SARA GANIM, CNN CORRESPONDENT: Yes.

Jake, what they said was while they took this threat very seriously and they still have an open investigation, they do not believe that there still remains a credible threat against the schools here, and they will reopen those schools tomorrow with an additional police presence for the safety of the students.

Now, the details of that threat, the content, what was in it, was it similar to other threats that were made in other districts, as you mentioned, across the country in the last couple of days, they wouldn't talk about that. But take a listen to the superintendent of schools here explaining why they believe this was credible enough to shut down schools today.

(BEGIN VIDEO CLIP)

MARK CONRAD, NASHUA SCHOOL SUPERINTENDENT: The threat that we received yesterday was very specific. It was specific in terms of naming the two high schools by name where the action would occur. It was specific to today's date, saying today is the day that harm would be done to students, and it was specific to citing the means by which students would be harmed.

(END VIDEO CLIP)

GANIM: Now, as you heard them say, that they did take this very seriously. But as it remains today, they do not any longer believe that there is a credible threat to students, Jake.

TAPPER: Sara, last week, as you know, the Los Angeles Unified School District, the second largest school district in the nation, they shut down all their schools. There were similar threats. And the basic thinking was they're not willing to take any chances. Are other school districts following that line of thinking, a threat comes in, better safe than sorry?

GANIM: You know, that's interesting, because we saw in many school districts across the country, from California to Texas, Florida, New York, and they all handled it very differently. Some dismissing them as a hoax. Others shutting down schools. Some coming under criticism for whatever decision they made.

We asked the superintendent today, did that play a factor in his decision making? He said no. He said he looked at this one individually and said, you know, is this something that -- am I putting students in harm's way if I don't take this seriously today? And that's the reason they decided to shut down schools.

He also said, you know, in light of what's happened -- we asked him this -- they haven't received a threat like this here in 10 years. So when they do receive one, it's something they take very seriously, Jake.

[16:35:00]

TAPPER: Of course, every -- four years ago, Nashua, New Hampshire, and every town in New Hampshire gets a lot of visitors because of presidential contests, the New Hampshire primary first in the nation. Does that, that spotlight, does that make the area more sensitive to such threats?

GANIM: It's certainly more high-profile, right?

You know, just today, Jake, you have three presidential Republican candidates visiting the state of New Hampshire. You have John Kasich here, Marco Rubio and Ben Carson, none of them in Nashua, but in the state of New Hampshire.

So this is a place there are a lot of eyeballs, a lot of people watching here, also a lot of gatherings. A lot of people meet in meeting places in this state. Of course, that makes this a more high- profile place right now, Jake.

TAPPER: All right. Sara Ganim in Nashua, New Hampshire, thanks so much.

New details of a hack attack by the Iranians against a dam very close to New York City. Should cyber-attacks like these be a bigger concern for U.S. officials than the threat of violent extremism? That story next.

(COMMERCIAL BREAK)

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

Making headlines in the national lead, Iran hacks into the control system of an American dam just 20 miles north of New York City. That means that an enemy of this country was potentially able to put American lives in danger all from the comfort of a theoretical computer terminal in downtown Tehran. Now, the breach represents a nightmare scenario for U.S. officials and

exposes a significant gap in the security of our nation's critical infrastructure. That includes factories, bridges, pipelines and the power grid. Experts say that could lead to a cyber-Armageddon.

Let's get right to CNN's Rene Marsh.

Rene, were the Iranian hackers actually able to physically take control of the dam itself?

RENE MARSH, CNN AVIATION CORRESPONDENT: We do know, Jake, that this was not a terribly sophisticated attack. Despite that, the hackers were able to breach the software that enabled them to take control of the dam's floodgates.

Tonight, the mayor of the village where this dam is located is concerned this was just a dry run for a cyber-attack on a larger target.

[16:40:10]

(BEGIN VIDEOTAPE)

MARSH (voice-over): Physical barriers could not keep intruders out. CNN has learned Iranian hackers infiltrated computer software that controls the floodgates of this Rye, New York, dam, just 20 miles outside New York City.

A former U.S. official familiar with the investigation revealed the classified details from 2013, which was first reported by "The Wall Street Journal."

Paul Rosenberg is mayor of the village of Rye Brook.

PAUL ROSENBERG, MAYOR OF RYE BROOK, NEW YORK: What it says to me is they're looking at everything. Was this a dress rehearsal for something larger? It also makes me concerned about the security of our infrastructure that is significantly more critical than the Bowman Avenue Dam.

MARSH: Investigators believe the intruders were just probing to see what they could get into, but no damage was done. Hacking of dam controls have long been a homeland security concern. In 2013 hackers penetrated a sensitive database of U.S. dams maintained by the Army Corps of Engineers.

Asked about the breach involving the dam in Rye, New York, the Department of Homeland Security told CNN by e-mail it has no comment on the alleged incident.

MICHAEL DECESARE, CEO, FORESCOUT TECHNOLOGIES: Obviously, it's fairly scary for us as a nation to imagine that somebody sitting on the other side of the world could hit a keystroke and all a sudden water could start flooding through a dam.

MARSH: Just last week, CNN broke news of a major breach at computer company Juniper Networks. The company sells equipment and routers to the Defense Department, Justice Department, FBI and Treasury Department.

U.S. officials worry that hackers working for a foreign government were able to spy on the encrypted communications of the U.S. government and private companies for the past three years. Other critical infrastructure, like the nation's power grid, also constantly under siege.

ROSENBERG: It makes me wonder about what would be potentially next. And that makes me concerned.

MARSH: A more modernized grid system using digital technology means more access points for intruders.

(END VIDEOTAPE)

MARSH: The Department of Homeland Security said in a statement it continues to work with federal agencies and the private sector to strengthen the nation's cyber-security. We know the government has a 24/7 hub for sharing cyber-security information.

But, as you know, Jake, as it relates to the infrastructure, it has become so interconnected that many of the people on the front lines will tell you it's almost impossible to prevent all cyber-attacks from happening. Their focus is making sure they minimize just how many happen.

TAPPER: You said that infrastructure is constantly under siege. Do we have an idea how often these attempts to hack into the system, whether it's a dam or the power grid, how often it happens?

MARSH: It happens a terribly large amount. We know on Capitol Hill they just had a hearing just months ago. And just one company alone, according to the panelists here, just one company alone 5.5 hacks per hour. That's just one company.

So we're talking about thousands and thousands per day. And it's just something that they're really struggling to get a handle on, of course, high priority preventing it from happening. But, again, those on the front line saying it's almost impossible to make sure no one ever breaches the system.

TAPPER: Very disturbing. Rene Marsh, thanks so much.

Joining me now to talk more about this, CNN counterterrorism analyst Phil Mudd, former deputy director of the CIA's Counterterrorism Center.

Phil, thanks so much for being here.

You used to work at the CIA. Should the public be more concerned about our enemies waging a cyber-war and hacking into the power grid or dams than they are concerned, for instance, about a terrorist attack like the one we saw in San Bernardino?

PHILIP MUDD, CNN COUNTERTERRORISM ANALYST: I think the concern should grow over time.

Look, if you're looking at conventional warfare, war against threats like North Korea or Iran, what we're seeing is these countries collecting information that could be used in unprecedented ways that we haven't seen in war in the past, dams, chemical facilities, trains. I think if you're looking at what happens down the road and how war will be waged in the decades to come, you have got to look at this and take a leap and imagination and understand, what does the world of the future look like when you don't actually have a physical presence to damage the infrastructure like a country like America?

TAPPER: You had the Juniper Network hack last week.

According to a study released by the federal Energy Regulatory Commission, the U.S. could suffer major blackout for weeks, if not months, if hackers were able to take out just nine of the 55,000 substations across the country, just nine of them.

Has the government and the private sector, have they been doing enough to take care of this problem?

MUDD: I think they're working on it. The big problem you see here is a transformation in the U.S. security apparatus. That is, if you think about where we were 20 years ago, the government owned everything in terms of national security.

If you wanted to understand the Soviet Union or China, intercept the communications, overhead imagery, satellites, for example, spies in the Soviet Union. That was the information you used. Today, the information to protect this country resides not in government but in companies, in infrastructure.

So I think the government is trying to understand how do we get some balance between compelling the private sector to cooperate and asking them to give us information that helps us secure the country better? I don't think we have a handle on this yet.

TAPPER: And private sector obviously does not frequently want to share information because they don't want their customers to be alarmed. Tell me what you think about this hack of a dam. Why do that if it's such a relatively unimportant dam? Is it just a dry run, you think?

MUDD: I don't think it's unimportant. I think what you're looking at is the difference between collection and use. That is if you're a security service, you're collecting information that you might be able to use in the event of a conflict.

Dams, what's happening in major cities, for example electrical grids, it's not that they intend to attack one single dam. It's they're trying to understand the capabilities they can employ in the event of a conflict. You have to separate out what they're collecting now and how it might be used down the road.

TAPPER: This is an alarming statistic. According to "The Wall Street Journal," 295 industrial control system hacking incidents were reported from September 2014 to September 2015. That's up from 245 the year before. The number of successful hacks keeps going up. What security improvements can be taken to prevent these attacks?

MUDD: There's got to be a conversation between the private sector and the government and Congress has to get involved. It's the same conversation you have ongoing dark. That is encryption allowing terrorists to communicate without the government intercepting them.

You don't want to force the private to cooperate because as you said as soon as the government forces the private sector, the private sector loses a competitive advantage. Chinese company says come with us. We're not going to give your information over.

At the same time you can't allow this to continue without some conversation among the private sector about what are they experiencing, let's share our experiences without revealing what's happened to us.

So I think there's got to be some sophisticated conversation enabled by the government to allow sharing of information across the private sector without revealing a lot of detail.

TAPPER: How much is the U.S. government doing this as well? For instance we know about the stocks worm that the U.S. working with Israelis did to sabotage the Iranian nuclear program. Is the U.S. doing this too and the U.S. government just not acknowledging it?

MUDD: Heck, yes. You have to differentiate a few things. If you're collecting information that could be used in the event of a conflict, how does electrical grid work? If you're involved in a conflict in a major city, you want to take that out.

There's a huge differentiation in the U.S. government that other countries don't necessarily use, and that is if you're collecting information for national security purposes, people like me, my generation would say that's appropriate.

It's appropriate in the cyber world. If you're collecting it for commercial purposes to allow better competition against the Chinese version of Apple or the Iranian version of General Motors, that would be viewed as not legitimate. National security OK, economic advantage not OK.

TAPPER: All right, Phil Mudd, thank you so much.

In our Money Lead, gas prices so low you might think it's an error in your favor from the register. Is it a Christmas miracle or is this a new normal?

Plus, like a wooki with a bad attitude, "Star Wars" smashing box office numbers. The latest numbers are in. That's next.

(COMMERCIAL BREAK)

[16:52:00] TAPPER: Welcome back to THE LEAD. I'm Jake Tapper. Our Money Lead, just in time for the holidays drivers are getting a nice holiday gift this season. The lowest gas prices in six years. The average price of a gallon of regular gasoline today fell below $2 a gallon, for the first time since 2009.

CNN chief business correspondent, Christine Romans, explains whether the low prices are here to stay.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Hi, Jake, $2 gas is here. The nationwide average price for a gallon of regular is now officially $2, hasn't been this cheap since 2009. You know, the olden days when they were only two versions of an iPhone.

So how long will prices stay low? Analysts say at least into January. What's driving it, pun intended? Well, it's a bear market in oil. Down from $53 a barrel at the start of the year, now near the lowest level since the great recession.

You know, Jake, the world is awash in oil. At the very moment global demand for it is slowing. OPEC is pumping at record levels. U.S. production is only expected to barely decrease, thus the production side.

Global demand, growth is slowing in Europe and China and elsewhere. The resulting oil crash has sent a shiver through the economies of oil producers like Russia and Canada and others.

It has slammed energy stocks, but drivers rejoice. Drivers saved an average of $540 this year because of those low gas prices. That's about $10 every time a customer filled up. And consumers are spending that money, about 80 percent of their gas savings going directly into the economy -- Jake.

TAPPER: Christine Romans, thank you so much.

The Pop Culture Lead now, they were lining up from here to the Degaba System. "Star Wars" episode seven is breaking all kinds of box office records and making Mickey Mouse look like a genius with his $4 billion purchase of the franchise from George Lucas.

"Star Wars: The Force Awakens" already raked in an estimated $238 million at U.S. theaters, the biggest opening weekend in history. CNN senior media correspondent, Brian Stelter is taking us inside the numbers and the mania.

BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Hey there, yes. This weekend "Star Wars" definitely awakened to the biggest box office opening ever. The total at the moment looks like $238 million in ticket sales. And that's just in the United States.

Up until now the title of biggest opening weekend ever belonged to "Jurassic World." That movie came out in June from the studio of Universal and it made $208 million in the U.S. on opening weekend.

Now, "Star Wars" is clearly blasting past that. According to Disney, which is releasing the film, "Star Wars" also set new records in the U.K. and Germany, Russia, Australia.

It looks like it made about $279 million outside the U.S. so that's well over $500 million overall. And the film hasn't even opened in China yet. It's slated for January 9th there.

This is just the opening weekend of course. So it's going to make a lot more money in the weeks to come as more and more people flock to the box office to see what all the hype is about. They'll see what all the fuss is about.

[16:55:01]This movie has been really well reviewed. It's kind of one of those rare movies where it's a huge franchise, a huge blockbuster that reviewers have also really liked. It's got a 95 percent positive rating on the website, Rotten Tomatoes.

And overall here months from now when all the ticket sales are tallied up, this movie could make well over $1.5 billion, maybe even $2 billion. They are clearly off to a very strong start this weekend. And of course, the Christmas and New Year's holidays are right around the corner -- back to you.

TAPPER: All right, Brian Stelter.

Here's a guy who wishes he was in a galaxy far, far away right now. Steve Harvey, his unfortunate flub turned the internet into a Times Square on New Year's Eve last night.

Steve Harvey, as you may now know, announced the wrong winner of the Miss Universe pageant last night saying that first runner-up Miss Colombia was the winner. The aftermath is so deliciously uncomfortable it will give you those certain kinds of chills. So of course, let's watch it again.

(BEGIN VIDEO CLIP)

STEVE HARVEY: I have to apologize. The first runner-up is Colombia. Miss Universe 2015 is Philippines.

(END VIDEO CLIP)

TAPPER: I mean, who hasn't yelled out the wrong name at the most inappropriate time before, am I right? Harvey has since said he's sorry.

Chilling details on the deadly plot of one of the San Bernardino terrorists was planning with his friends including pipe bombs thrown onto a highway. That story next.

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