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Biden Delivers Sweeping Speech On Global Unity; North Korea Fires Missile After Threatening U.S.; Probe: Tax Prep Companies Shared Private Financial Data With Google, Meta For Years. Aired 2-2:30p ET

Aired July 12, 2023 - 14:00   ET

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

[14:00:00]

BRIANNA KEILAR, CNN ANCHOR: More all coming in right here to CNN NEWS CENTRAL.

JIM SCIUTTO, CNN ANCHOR: President Biden closed out a critical NATO Summit with a clear message both to adversaries and allies. NATO will not waver, not in the face of Russian aggression and not in the fight, he says to protect democratic values. Last hour, he highlighted the Alliance's unprecedented unity. And he had some pointed remarks for Vladimir Putin.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: NATO is stronger, more energized, and yes, more united than ever in its history. Indeed, more vital to our shared future. It didn't happen by accident. It wasn't inevitable.

When Putin and his craven loss of land and power unleashed his brutal war on Ukraine, he was betting NATO would break apart. He was betting NATO would break. He thought our unity would shatter at the first testing. He thought Democratic leaders would be weak. But he thought wrong.

(END VIDEO CLIP)

SCIUTTO: CNN's Arlette Saenz. She has been traveling with the president. She's in Vilnius, Ukraine -- Lithuania. Arlette, this was a -- something of a victorious tone for the president here, united NATO. They're getting Sweden in within, which they've been trying, of course, for a year. I wonder is that the view of the allies that they came together, showed their unity, and got what they wanted out of this summit.

ARLETTE SAENZ, CNN WHITE HOUSE CORRESPONDENT: Well, I think amongst the G7 allies, you certainly are seeing that show of unity towards Ukraine and from NATO allies as well. Of course, there were differences throughout this summit about how concrete of a timeline that should be offered to Ukraine for joy -- for joining NATO. But ultimately, what we saw throughout this summit is this unwavering support as the G7 declaration called it for Ukraine.

You know, in that speech, President Biden insisted that the U.S. and its allies would continue to be there to support Ukraine for the long haul. But he didn't really make reference to any of the tensions that had been bubbling up at the summit nor did he get into specifics of that agreement that the G7 leaders have had to really jumpstart negotiations to establish some bilateral security commitments for Ukraine.

But he also, as we heard in that soundbite, really tried to send a pointed message to Putin. That the NATO alliance has been reinvigorated and that it is stronger than ever before. As you noted, the fact that Sweden would soon join the Alliance was a big win for President Biden heading into the summit after Turkey dropped its objections.

But in this speech, it wasn't just about projecting the unity for Ukraine and also the strengthening of NATO. It was also an opportunity that Biden tried to use to make a case for global unity overall. Saying that the fact that allies were able to come together to support Ukraine and the fact that they've been able to expand NATO, should be a path forward on other issues that the world is confronting at this moment, like climate change, and technological advances. There was one line that really stuck out to me where the president said that the world isn't a choice right now.

SCIUTTO: Yes.

SAENZ: That could be a world defined by coercion and exploitation where might makes right or a world that recognizes our success is bound to the success of others.

SCIUTTO: Yes.

SAENZ: And that really gives you a window into how President Biden has been approaching his foreign policy. And especially when it comes to Ukraine and when it comes to the NATO alliance. He is leaving here hoping to show especially to Russian President Vladimir Putin but also to the world that the NATO Alliance is a bit stronger today.

SCIUTTO: Yes. By the way, these are live pictures of Air Force One there you can see going on from Vilnius in Lithuania. Next stop is Helsinki, Finland. That, of course, key, Arlette, because Finland, the other ally to join the alliance in the last year now it's an officially ratified member here. Tell us what the importance is of President Biden's visit to Helsinki.

SAENZ: Yes. He will be as he's taking off right now.

SCIUTTO: Yes.

SAENZ: So, he'll be touching down in Helsinki in just a few hours. There, he will leave -- meet with the country's leaders as well as Nordic leaders, including Sweden. Of course, Finland is the newest member of the NATO alliance. And now they're hoping Sweden will soon join once Turkey formally votes in their parliament to give that approval.

And it's just another effort for the Biden administration to not just show their support for NATO allies, but also sending that message to Putin that they believe that his war has backfired against him that the last thing that Putin wanted to see was an expansion of NATO. And now, you have those two previously non-aligned countries, Sweden -- Finland and Sweden making NATO even bigger.

SCIUTTO: No question. Arlette Saenz, thanks so much, in Vilnius. Our Melissa Bell. She is also in Vilnius.

[14:05:01]

And, Melissa, Zelenskyy wants to be in NATO. He didn't expect to get it at this summit. He got something, a pathway perhaps.

But I wonder. Is it progress -- I mean is Ukraine as a practical matter closer to joining NATO today than it was prior to this summit?

MELISSA BELL, CNN CORRESPONDENT: I think what was interesting was to see that even President Zelenskyy, who after all, Jim, had come in yesterday all guns blazing with that very fiery rhetoric about what he was not good at getting, recognized today in his closing remarks how much had been achieved since 2008 when that initial pledge was made by NATO that Ukraine and Georgia would become members one day, kickstarting this whole process. He spoke of the gap in those 15 years. Those had been pledges, he explained, in fact, what there were now were tangible commitments that had been ratified by individual nation-states and their Parliaments.

And there was a distinct change in tone. A little earlier here, we heard from the British defense secretary about the fact that he'd taken aside the Ukrainians at one point to say, look, we understand that you want more than you've gotten, but you have to understand that as far as NATO allies go, these are our weaponry is that you're talking about. They're our own stockpiles of ammunition often that we're giving. There is a lot of political capital that has gone into getting you what you've gotten so far. A lot of economic capital as well. Let us make it clear in your tone that you understand that.

And I think you did see, Jim, a distinct shift in the tone of President Zelenskyy. There was a lot more thinking, a lot more gratitude, and a lot more recognition of everything that has been achieved rather than simply what he still wants to have achieved. So, I think he goes home having spoken to his public and that's one of the points that the British defense secretary made.

Look, we understand that you're speaking to your people after a lot of blood has been spilled and with a lot of pressure on you. But he has also now come and recognized all that's been done and gone home I think reinvigorated. You have on one hand, Jen Stoltenberg, the Secretary General of NATO, and President Biden, they're really echoing in each other's closing comments how galvanized NATO comes out of this summit.

SCIUTTO: Yes.

BELL: But I think Ukraine goes home with a clear message, not just that it's going to continue to get all of the military capabilities it gets from the F16s to the cluster bombs to try and move those frontlines forward. But also, perhaps more importantly, the political- economic backing it's getting from clubs like the G7, for instance, to make sure that it is clear to Moscow as well, Jim, that he is now firmly on the other side of the line.

SCIUTTO: Yes. Well, listen, as you mentioned there, he goes home to a real battle. The ongoing counter-offensive in the East has not achieved what was expected, at least at the early stages. They're in the middle of it. Melissa Bell, in Vilnius, Lithuania, thanks so much. Brianna.

KEILAR: Just days after North Korea threatened to shoot down U.S. spy planes, the hermit nation now firing off a missile into the ocean near Japan. This is a missile that flew more than 70 minutes indicating North Korea is slowly advancing when it comes to its weapons development.

Let's go to the Pentagon now and CNN's Oren Liebermann. Oren, what can you tell us about this launch?

OREN LIEBERMANN, CNN PENTAGON CORRESPONDENT: Brianna, this launch is significant both in terms of what North Korea demonstrated here. But also in terms of the timing around this launch. So first, what did North Korea demonstrate?

As you point out this missile, an intercontinental ballistic missile flew for 74 minutes on a lofty trajectory. Meaning, instead of firing it far to demonstrate what it can do and how far can go, they essentially launched it up and it came back down between the Korean Peninsula and Japan.

But still, it is significant. And according to analysts, at least a marginal improvement on their previous launches. The last time North Korea launched an ICBM was back in April and March, so not all that long ago, although this isn't the frenetic pace of testing that we saw last year.

Now, in terms of the timing. That also is significant as well. And North Korea will often launch missiles when they see something that they view as antagonizing from the U.S. or the West. In this case, you have the leaders of the U.S., South Korea, and Japan meeting on the sidelines of the NATO summit in Vilnius. So, that would be something North Korea would keep an eye on.

On top of that this launch, according to the Chairman of the Joint Chiefs of Staff office also came while General Mark Milley was in Hawaii meeting with his Japanese and South Korean counterparts. According to a statement from his office, the three will discuss bilateral and trilateral military options. Often, after you see a provocative launch like this, you'll see a joint exercise from either South Korea and the U.S. or perhaps including Japan as well, to demonstrate that deterrence that the U.S. is trying to maintain as well as South Korea and Japan against North Korea.

Nevertheless, it is still tense with all of the situation essentially on the peninsula there. And we've been waiting essentially for more months if not more than a year, Brianna, for a possible nuclear test from North Korea. That also remains on the table for the next steps from the North Korean regime, potentially.

[14:10:00]

KEILAR: Potentially. And these are the developments that are drawing the attention right now of the Biden administration competing for that attention. Oren Liebermann, thank you so much for that report from the Pentagon.

Of course, the NATO Summit wrapping up. And the president's speech there today is certainly the big thing that he is focused on today. And we're joined now by a member of the House Foreign Affairs Committee, Democratic Congressman Jason Crow of Colorado, to talk more about that.

Sir, I want to ask you. We heard that the National Security Adviser, Jake Sullivan, said Biden was going to offer Zelenskyy these long- range missiles in this bilateral meeting that they already had. That's something that you and some of your colleagues have been calling for months, for -- at this point. What difference is this going to make in the war?

REP. JASON CROW (D-CO): Well, Brianna, I think we have to continue to respond to the changing battlefield. One thing I learned at war myself when I was in Iraq and Afghanistan was that no day or week at war is the same as the last day or week. So, we're evolving the nature of our support, and we have to continue to provide the tools for Ukraine to strike deeper behind Russian lines.

What we're seeing with the counter-offensive right now is that the Russians have moved a lot of their logistics supply lines, their command-and-control centers further back into Crimea, further back from their front line of defenses. We have to provide the Ukrainians with the ability to do that. The British have already done it, the French announced that they're going to provide longer-range strike missiles, and the United States is going to follow suit.

KEILAR: When we talk about the material that the U.S. is providing, it was really interesting to hear what John Kirby from the White House is saying on Sunday. He was asked about this somewhat controversial decision to provide cluster munitions to Ukraine. And he was asked if the U.S. was sending those because it doesn't have enough of the kind of munitions that Ukraine really needs you know, was this in a way a substitute.

And he said that that is right. That that's what was happening there. Is the U.S. or Western allies actually running out of munitions at this point? How much of a concern is that and how is that going to impact the eventual end of this war?

CROW: Well, Brianna, one thing is really clear and that is we are not going to do anything that jeopardizes our own national security and our own ability to conduct operations and to have stockpiles. We are drawing from our reserves, no doubt, and we are trying to increase our own supply chain. One of the things that we've seen with this war is that every NATO country has seen stresses on its supply chain.

So, we're actually making moves right now to do supply chain reform and to enhance our capability to respond to that. But as Jake Sullivan said, just a couple of days ago, we do need a bridge ammo supply as we make those longer-term changes to our supply chain. And that's why this decision to provide cluster munitions is actually such an excruciating decision because I'm personally very conflicted on this.

I don't like these munitions. I've seen the impact of them on the battlefield. They definitely have some humanitarian concerns. At the same time, we have to make sure we're supporting the Ukrainians in what is an existential fight for their survival

KEILAR: A Ukraine, that ultimately joins NATO, assuming it does, that does seem to be the goal right now, do you see it being a Ukraine that includes within its border territories of the Donbass and Crimea? Do you think that's enough for Zelenskyy's domestic audience to sort of have the guarantee that hey, Russia is not going to come into Kharkiv or Kyiv or Odessa, but he may have to leave some of these other places on the table, but they won't come into these other big cities without NATO actually going to bat for Ukraine?

CROW: Well, one of the great things about free and democratic societies of which every member of NATO is a free and democratic society, that is a requirement of being a member of the -- of the alliance, is that no other country in the alliance can dictate the terms of how those countries governed. So, that's actually a decision for the Ukrainians to make is how far they're going to push in terms of their own sovereignty and their own freedom.

Now, we've been really clear -- the United States have been very clear that we believe that the Donbass and we believe Crimea to be a part of a sovereign Ukraine. And we support their efforts to retake sovereign Ukraine. But that is ultimately a decision for the Ukrainians.

I firmly believe that Ukraine should be a member of NATO. That we provide a very clear pathway to them that join NATO because NATO is a security alliance. It's designed to maintain security and prosperity in Europe and to combat Russian aggression.

And nobody, nobody has done more to combat Russian aggression and to maintain peace and security in Europe than the Ukrainians have the last year and a half. They have done it with blood. They've done it with their soil. They have done it with their money, they have put everything on the line. And they've certainly proven their ability to join that alliance.

[14:15:00]

KEILAR: As a veteran yourself, you mentioned, you know what's at stake here obviously, when it comes to a NATO that might include Ukraine. If Ukraine is a NATO member, and that does include Crimea, that does include the Donbass, does that increase the chances of U.S. military involvement directly in Ukraine here in the coming years?

CROW: Well, we're not going to be in a situation. We just -- well, the president has been very clear about this, the administration have been very clear about this that we're not going to put ourselves or NATO in a situation where Ukraine is entering into the NATO alliance in a manner which invokes Article Five of the NATO charter. And Article Five is the neutral self-defense obligation of the NATO charter that says an attack on one is an attack on all.

We're just not going to create a situation where the United States and NATO goes to war with Russia. We cannot sustain that. That's not tenable.

But this is not binary. That's a false choice to say that will happen, it will not happen. There is a very viable, very large third path where we provide a clear pathway to Ukraine with clear criteria for them to join NATO over the next couple of years that they make the reforms. They make the investments that create the interoperability with their military with the NATO partners. That's another requirement.

Ukraine will do that. I have full confidence that they will. And we can do that without creating an escalation of risk.

But the last point, Brianna, is this. We should never ever give Vladimir Putin veto authority over our own security decisions. The United States and NATO will decide what's in our own interests in the interests of European security and our own national security. And Vladimir Putin should not have a veto pin over those decisions.

KEILAR: Congressman Jason Crow, obviously a very critical day as we watch what is happening in Lithuania, and we monitor the president's trip. Thank you for being with us.

CROW: Thank you.

KEILAR: Jim?

SCIUTTO: Microsoft and the White House say that China-based hackers have breached government e-mail accounts and have now gotten hold of some sensitive information. I'm going to speak to the former chief of U.S. cybersecurity about this. Next.

And a Congressional report says some of the biggest tax prep companies have been sharing their users' financial data with tech companies such as Meta and Google. Details on what one expert calls a five-alarm fire. Why did this happen? That's next.

Plus, California spent more than $17 billion on the homeless crisis. And somehow, it's actually gotten worse. We're going to explain why. You're watching CNN NEWS CENTRAL. And we'll be right back.

(COMMERCIAL BREAK)

[14:21:31]

KEILAR: Right now, lawmakers on Capitol Hill are calling on the Justice Department to investigate after a Congressional probe found some of the nation's largest tax prep companies, we're talking TaxSlayer, H&R Block, and TaxAct, spend years sharing tens of millions of Americans private taxpayer data with the tech giants like Meta and Google. Legal experts describe this new report as a "five-alarm fire for taxpayer privacy."

We have CNN tech reporter Brian Fung, who has been reporting on this and joins us now. What types of data are we talking about that were shared here?

BRIAN FUNG, CNN TECHNOLOGY REPORTER: Yes, Brianna. This is a pretty serious legit violation of taxpayer privacy here. You know, ordinarily, this data is pretty protected. Even the government has restrictions on what it can share and with whom.

And so, you know, looking at what this information is, it's really interesting. It's not just basic personal information like your names or address. It's stuff like filing statuses, your adjusted gross income, how big your refund was, or what tax breaks you may have tried to claim, and even what buttons you might have clicked on some of these tax prep services.

Now, a lot of this information was anonymized, according to these companies when they told Congress you know what they did with this information. But it's not clear whether or not that's going to be enough to insulate them from litigation. This is a really serious allegation about how they potentially mishandled information belonging to taxpayers.

And, you know, Meta even when it received this data, told Congress that that data ended up being used for targeted advertising and developing its artificial intelligence algorithms. And the companies don't even know necessarily whether that data is still in the tech company's hands. So, this is a really serious problem and the tax prep companies could be on the hook for billions in fines, Brianna.

KEILAR: So, they're saying it was anonymized. Meaning if you, Brian Fung, used one of these tax services and your information is turned over to one of these tech giants, it doesn't say Brian Fung files jointly makes this much gross income.

FUNG: Right.

KEILAR: That's not what they're talking about. Yet it was scoped data used for targeting.

FUNG: Theoretically, this information is scrambled in such a way to protect people's privacy. But FTC experts have said even when you anonymize data, it's very easy to reverse engineer to find out you know connect a piece of data to an actual person. And that's really the issue here, Brianna.

KEILAR: That's a huge issue. Brian, thank you so much for explaining that to us. Jim?

SCIUTTO: All right, so another hack. U.S. officials and Microsoft are scrambling to determine the impact and scope after hackers based in China breached e-mail accounts at more than two dozen organizations. Those organizations include U.S. government agencies, such as the State Department. The full hope of -- the scope of the hack is being investigated but the White House and Microsoft say it was part of an apparent spying campaign aimed at acquiring sensitive information.

The hackers also targeted an agency on Capitol Hill. Unclear if they were successful in breaching that agency. State Department says "detected anomalous activity took immediate steps to secure our systems, and will continue to closely monitor and quickly respond to any further activity."

Joining me now is the former senior official at the Department of Homeland Security on cybersecurity, Chris Krebs. He's now a partner at Krebs Stamos Group. Good to have you on, Chris.

CHRIS KREBS, FORMER DIRECTOR OF THE DEPARTMENT OF HOMELAND SECURITY'S CYBERSECURITY AND INFRASTRUCTURE SECURITY AGENCY: Good to be on, Jim.

[14:25:01]

SCIUTTO: So, this -- the breaches here, we're not for instance of classified systems, but as you know far better than me, China and other state and non-state actors will use information from non- sensitive systems, line them up with sensitive information, try to create whole pictures, whole portraits here. When you look at the scope of this one, how big a deal is it?

KREBS: Well, I think the most concerning aspect of this hack is that it is a really key critical fundamental security tool inside Microsoft that was obtained by the Chinese affiliated actors and that they were able to use those to gain access to these accounts, as you -- as you said. The upside though or the good news, where -- and there is some here, is that it was a fairly limited in scope impact.

You mentioned the State Department and Capitol Hill. My understanding is it is a handful of agencies, possibly three and fewer than 10 accounts per agency. So, very targeted, very narrow, and we got on it. The U.S. government detected it early. It was able to report it to Microsoft and mitigate it.

SCIUTTO: That's key because early detection is key. When you look back, for instance, at a Russian breach of the State Department back in 2014 -- 2015, they were in for months and they didn't know. You bring up something very important here that the hackers in effect breached a key as it were, like a digital key to the -- to the system here.

That's surprising. Do we -- how often does that kind of thing happen? And what does that show about Microsoft security that that was reachable?

KREBS: That's where I think the key questions are with this incident -- with this event. And as I understand it, the U.S. government is taking a hard look at some of the security processes in whether the requirements for government contracting, including these mail systems, this e-mail, or this cloud-based e-mail, complied with government requirements that had been steadily improving over the last several years.

But the takeaway is that the Chinese actors -- the Chinese government- affiliated actors see what we're doing, they see that we're making this dramatic shift in the cloud-based systems. And they know that's where the sensitive data is. So, they're targeting.

In fact, they have a bug bounty or a -- it's called the Tianfu Cup, but it's a competition where they bring in hackers to find vulnerabilities in Western-based cloud systems.

SCIUTTO: Wow.

KREBS: And then they use those in their offensive hacking capabilities.

SCIUTTO: It's such a fantastic point because it shows China like Russia, they will use these hacking groups in effect is non-state actors, right? But kind of brought in drafted into the national efforts to breach sensitive information. You were so involved in investigating Russian interference in the 2016 election, which was impactful. We know that.

They did it again in 2020. We're coming up on another election right now. How safe are those systems? And I'm not talking about election vote counting systems but other systems -- although I would like to get to that, other systems in general. Are our protections better today than they were seven years ago -- three years ago?

KREBS: Jim, I got to say. The hair on the back of my neck stood up there for a minute thinking about 2020 and what we have in store for us in 2024.

Look. Any software has potential vulnerabilities within it. It's just a matter of time, frankly, before a bad guy finds it or a good guy finds it and patches it or the bad guy finds it and exploits it.

The key here particularly for elections in the United States is the concept of software independence. And that is where the election process itself is not singularly dependent for success on software or hardware. And that there are measures of resilience.

And that's why in the run-up to the 2020 election, we put such an emphasis on paper ballots out there. Georgia switch.

SCIUTTO: Yes.

KREBS: Pennsylvania and other states have switched. So, I've got confidence here. But I think -- I think it's going to be -- it's going to get a little hairy here in the next 18 months.

SCIUTTO: Of course, the downside is --- and I always mentioned this. That in 2016, the primary actor in terms of disinformation, etcetera was a foreign actor. Now, we have willing domestic participants, right, interference whether candidates asking for it or sharing disinformation. Is there any way to protect against that? KREBS: Well, you know, the Russian playbook from 2016 has been repeated and routinized. The Iranians took a play -- took a page out of the playbook and 2020. And as you pointed out, domestic actors seeking influence power, money, or whatever it is.

I would expect to see that come again.