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Target Hacked, 40 Million Accounts At Risk; Tabloid Hacked Kate Middleton's Phone; Panel Advises Changes To NSA Surveillance; Putin: I Envy Obama Because He Can Spy On Others And Get Away With It; A&E Suspends "Duck Dynasty" Star; Hillary: I Haven't Made Up My Mind On 2016

Aired December 19, 2013 - 10:00   ET

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

CAROL COSTELLO, CNN ANCHOR: If you have shopped at Target between the day before Thanksgiving and last Sunday, hackers may now have your financial information. That's November 27th until that Sunday. It is a massive attack for the nation's second largest retailer, one that now has the attention of the U.S. Secret Service. Online shoppers appear to be safe, but those who made purchases inside the stores need to be on the lookout.

(BEGIN VIDEO CLIP)

TALA BANATAO, TARGET SHOPPER: It's scary. This is the first time I've heard of that. I am curious to how it even happened in the first place.

(END VIDEO CLIP)

COSTELLO: Our CNN money tech correspondent, Laurie Segall, joins us now to explain what might have happened in Target stores. How did this happen?

LAURIE SEGALL, CNN MONEY TECH CORRESPONDENT: What they're saying, I've been on the phone with security researchers talking about this, is this likely happened at the point of sale, Carol. Right when you go and actually swipe your card to check out is where likely this kind of activity happened. It was a large scale hack. It wasn't something that happened in one or two stores where they manually affected this point of sale.

It was something that potentially happened with software. So on the back end these hackers were able to infiltrate and spread malicious lines of codes essentially throughout. That's where you see the widespread attack. I mean, it's pretty -- speaking to different researchers they're saying even yesterday, they said this is a big attack and it's probably only going to get worse, Carol.

COSTELLO: So how do I know if I'm a victim?

SEGALL: Well, first and foremost, check your accounts. Check your bank statements. Especially if you shopped in store at target, you need to be looking daily. My goodness, if it happened to me I'd be looking hourly at my bank statements to see if there is any fraudulent activity. That is what you can do. You can always get a new card. I would say right now you need to be very vigilant about checking -- Carol.

COSTELLO: And target finally commented on this. They say they're on the case and they're sorry for any inconvenience. Laurie Segall, thanks so much.

Now to another hacking story, this time the target is Kate Middleton's cell phone. We've learned the British tabloid "News of the World" hacked into the future duchess's cell phone while she was still dating Prince William. The revelations were made earlier today in a British courtroom at the trial of two former "News of the World" editors.

Jurors heard transcripts of messages in which the prince called Middleton by a personal nickname and told her about his military training. Nina Dos Santos is in London with more on this. Good morning.

NINA DOS SANTOS, CNN CORRESPONDENT: Good morning, carol. These are really interesting especially for us Brits who are traditionally very reserved and you don't often hear these intimate phone conversations happening between members of the royal family. As you've said this is the part of the trial that the phone hacking allegations put forward against a number of executives in very senior positions at the now defunct "News of the World" newspaper.

Let me read you some of the interesting conversations that seem to be happening between the then Kate Middleton before she married her prince and Prince William. In one case, the court heard that he left a voicemail saying, quote, "Hi, baby. It's me." And as you were saying before he referred to her by her personal nickname it seems which then was "Babykins."

It also goes on to say, "Hi, baby. I'm sorry. I've just got back in off my night of navigation exercise" when he was training to become a helicopter pilot. He goes on to say that he had a busy day in the woods chasing shadows getting horribly lost and almost getting shot with blanks after he accidentally stumbled into another regiment's ambush. So some interesting insights into the prince's own training, but into his relationship before, of course, he married the now Duchess of Cambridge.

COSTELLO: I feel bad for them, but it kind of makes you like them more, right? The trial goes on.

SANTOS: It does. It does.

COSTELLO: So the trial is ongoing, right?

SANTOS: The trial is ongoing. The other thing I wanted to bring up is that obviously it's not just members of the royal family who have been targeted here. There is a far more serious aspect to this. We've seen victims of crimes being targeted. It transpired that a school girl's voice mail had been intercepted and that left a really devastating trail of destruction for her family who thought that she might still have been alive.

There are more serious aspects to this. I also want to bring you up to date with a really interesting dynamic between the two princes. Because that is something else that has emerged. In one voicemail that the court heard, it seems as though William left a message for his younger brother, Harry, putting on a high pitched voice and pretending to be Harry's then girlfriend, Chelsea Davie and he called Harry affectionately Ginger.

He said, quote, "It's Chelsea here," and saying, "You're the best looking ginger that I've ever seen." So that gives you an idea of how these two boys and now princes relate to each other and relate to their girlfriends one of whom is now the wife.

COSTELLO: All right, Nina Dos Santos, thanks so much.

To the NSA now because it has been determined the NSA needs an overhaul, but can keep spying according to a new task force appointed by President Obama. The task force made 46 recommendations on how to fix the program that captured phone messages and e-mails from everyone including ordinary Americans and world leaders. Our chief national security correspondent, Jim Sciutto, is in Washington, with more on this. Good morning.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Good morning, Carol. We already know which of those recommendations the White House is not going to do just this morning confirming to our own Jim Acosta that they're not going to as the panel recommended put the NSA under civilian leadership. They want to keep it under military leadership.

They'd already signaled that they also will not listen to another of the recommendations, which was to split the NSA from the military cyber command. Today they're all under one. And in addition to that big picture as you mentioned that though this panel questions the need to gather all of this telephone metadata, the administration already signaling they want to go forward with it, though under greater scrutiny and with greater transparency.

So the process going forward, the president is going to look at these over the next month. We're told likely at the end of January he'll make a speech to the nation and will announce, which of these recommendations he is going to accept. The administration has already signaled to me some of them that they think they will move forward on.

One that there should be the highest level of approval, that means the White House. That means the president, for when the NSA is listening to the conversations for instance of foreign leaders. You remember, Carol, all the controversy when it was found out we were listening to Angela Merkel's phone calls, the German chancellor.

Also, they say, they're open to having agreements with our allies like France and Germany to say, we all know we spy, but here is what is acceptable and here's what's not. That leaves about 40 other recommendations that the president has to make his decision on.

COSTELLO: All right, well, the topic of course is making news around the world and also in Russia where President Vladimir Putin had this to say about the NSA. Edward Snowden and how his relationship with President Obama has been affected. (BEGIN VIDEO CLIP)

VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): My relations to Obama following Snowden, I envy him because he can do this and there will be nothing for him because of this. But there is nothing specific to be pleased about or to be upset about. Everything has always been like this, first of all. Spying has always gone on since ancient times.

(END VIDEO CLIP)

COSTELLO: Now, let me translate more because what I think he said, he said that he envies President Obama because he can send spies all around the world and there are no consequences. Besides, spying has been going on forever so why are we talking about this? He also called Edward Snowden noble. Your thoughts?

SCIUTTO: Well, of course, who would know better than the former KGB guy in Vladimir Putin. This is exactly one of the worries administration officials had when Snowden went to Russia that Russia would use him in effect as a massive propaganda tool and here you see it. Vladimir Putin poking fun at the U.S. saying I wish I could spy like the U.S. can and get away with on allies. That's a problem.

And he has Snowden there, you know, the great irony being Snowden in a country that does its own spying at home and abroad. You know, arguably worse than the U.S. does and the government using that as a bit of a tool. I spoke to a senior official yesterday and he said the administration knows, it's got a trust gap that's developed from this both at home here in the U.S. but also overseas.

And even with our allies. They have to address that gap by putting the NSA under greater scrutiny. The question is, how much scrutiny? We're not going to know for another month or so until the president announces his decisions.

COSTELLO: All right, chief national security correspondent, Jim Sciutto, many thanks to you this morning.

Still to come in the NEWSROOM, one of the highest rated reality TV shows in history, but now "Duck Dynasty" is losing its star after he made some anti-gay remarks.

(COMMERCIAL BREAK)

COSTELLO: The back lash over "Duck Dynasty" has begun. This after one of the stars of the wildly popular reality show was suspended indefinitely by A&E after he made some crude antigay remarks. We're talking about Phil Robertson, a self-proclaimed bible thumb and the patriarch of the Louisiana family that struck it rich making "duck calls."

In an interview with "GQ" magazine he made derogatory comments about homosexuality and went on to explain what he thought was sinful saying, quote, "Start with homosexual behavior and just morph out from there, bestiality sleeping around with this woman and this woman and that woman and those men."

A&E said it was troubled by what Robertson told "GQ" and last night Robertson released a statement saying in part, quote, "I would never treat anyone with disrespect just because they are different from me. We are all created by the almighty and like him I love all humanity," end quote.

Joining me to talk about this, Russell Moore from the Southern Baptist Religious Liberty Commission and Michelangelo Signorile, editor-at- large of "Huffington Post Gay Voices." Welcome to both of you. Good morning and thank you for being here.

Michael, I want to start with you. Thousands of people today are supporting Robertson and petitioning for his return. Republican Governor Bobby Jindal of Louisiana just issued this statement saying in part, this is a free country and everyone is entitled to express their views. In fact, I remember when TV networks believed in the first amendment. It's a messed up situation when Miley Cyrus gets a laugh and Phil Robertson gets suspended. Is he right, Michael?

MICHELANGELO SIGNORILE, SIRIUSXM HOST: Well, it's really interesting. I don't remember Governor Jindal putting out a statement calling for Martin Bashir of MSNBC to keep his job after he made what were seen as disrespectful statements against one woman, Sarah Palin. I don't remember him calling for Martin Bashir to keep his job. This man has attacked an entire group of people with horrific defamation comparing gay people to people who engage in bestiality.

There should be ramifications. There should be outrage. I'm not sure people should lose their jobs over this kind of thing. I think there should be, though, a message sent, a suspension, certainly a ramification that it's not acceptable. This is a multi-millionaire. He's an adult and he is representing a network that has standards and they expect something of their stars.

COSTELLO: Russell, had he stopped at just, you know, he thinks homosexuality is a sin and not brought in the bestiality part, would that have been wiser?

RUSSELL D. MOORE, SOUTHERN BAPTIST ETHICS AND RELIGIOUS LIBERTY COMMISSION: Well, A&E didn't hire the Robertson family to be Charlie Rose or George Will. They hired them to talk in a home spun, comedic sort of way in an unfiltered sort of way with television cameras in their homes all the time. I think the most controversial part of what Robertson said in the culture right now is his simple affirmation that he thinks that sexual morality is confined only to marriage.

That is something that millions of Christians hold around the world not only Evangelical Christians but Roman Catholic Christians and Eastern Orthodox Christians and frankly orthodox Jews and Muslims even the Dalai Lama. And so I think we ought to have the sort of tolerance in our community in which we would say we can disagree on what's moral and immoral but we shouldn't side --

COSTELLO: Let me run this by you. So he has every right to say what he feels about homosexuality and calling it a sin, but to tie it to something like bestiality, which isn't even true may be harmful because there are a lot of kids who are gay who are bullied because of comments like this. Isn't that dangerous?

MOORE: Well, I didn't read Robertson's comments as saying that homosexuality leads to bestiality or is the equivalent. He was saying that we all have a limit on what we accept as sexual morality. We have some differences on those things and once there is a loss of a moral center, all sorts of things happen. We have all sorts of conversations in the culture.

I wouldn't have said it exactly the way that Robertson said it. But his basic point was to say, look, we ought to respect one another. We ought to love one another. We ought to exist with one another but we have definite disagreements on what we consider to be sexually moral and immoral in this culture. I don't think that is that much of a surprise.

COSTELLO: Michelangelo, do you agree with that? He said that after the fact after he got in trouble, right? That we are supposed to love one another?

SIGNORILE: Yes, absolutely not. What he was engaging in was hate speech. To shroud it in the bible is really ludicrous and ridiculous. The bible, you know, promotes slavery. The bible has promoted polygamy. The bible has promoted a lot of things we don't tolerate including racism. This man made racist remarks as well and said blacks were better off in Jim Crowe during lynching. It was better off before they were getting welfare.

He didn't say it on A&E, which, you know, was just mentioned that A&E, you know, hired these people to come into their homes. He said it giving an interview outside. I think A&E probably would not have aired something like that. So he made reckless and irresponsible comments, shrouding it in the bible I think is a cop out. There are horrific statements in the bible about a lot of people and a lot of groups of people. We don't say that's OK that you can say on television.

COSTELLO: All right, I'll have to end the debate there. Thanks to both of you for being with me this morning. Russell Moore from the Southern Baptist Convention and Michelangelo Signorile from the "Huffington Post." Thanks so much.

Hillary Clinton definitely has Barbara Walters' vote for the most fascinating person of the year that is Clinton taking the top spot on Walters' annual list of newsmakers. When pressed on whether she'll make a potential White House bid Clinton had this to say.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, FORMER SECRETARY OF STATE: Well, it's such a difficult decision and it's one that I am not going to rush into. I haven't made up my mind. I really have not. I will look carefully at what I think I can do and make that decision sometime next year.

(END VIDEO CLIP) COSTELLO: Our chief national correspondent John King is in Washington. Good morning, John.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Good morning, Carol.

COSTELLO: Well, Hillary may not have made up her mind, but critics are already fired up, right?

KING: They are beginning to get fired up. That is what is quite interesting because she does have the luxury of time and even though she says she hasn't made up her mind, one of the reasons she has that luxury is not only because of her popularity, Carol, not only because she has been down this track before, but because there is a campaign in waiting for her.

There are super PACs, staffers. People already raising money should she run. Her decision is whether to stop them not to start a campaign. Other Democrats beginning to test the waters to see can she be beat? Remember In 2007 she was inevitable and then along came Senator Barack Obama now President Barack Obama.

Listen here. Remember what Obama did in 2008? He used her vote in support of the Iraq war to get to her left in the Democratic primary. The former Montana governor, Brian Schweitzer, a liberal, very populist he likes to say, listen to him in Iowa last night.

(BEGIN VIDEO CLIP)

BRIAN SCHWEITZER, FORMER MONTANA GOVERNOR: George Bush got a bunch of Democrats to vote to go to that war. I was just shaking my head in Montana. I'm asking you to pick the leaders that are going to say, we're not going to make those mistakes.

(END VIDEO CLIP)

KING: Let's call that, Carol, a very early trial balloon from Governor Schweitzer to see if 2016 can be 2008 all over again.

COSTELLO: Interesting. Let's talk about the very bottom line. When does Hillary Clinton absolutely need to make a decision? When does she need to say, yes, I'm running for president?

KING: You know, she wants to wait as long into 2014 as she can to see what happens in the mid-term elections to see what the dynamic is, to see how the economy recovers, to see what the president does about the NSA, to see what President Obama's approval ratings are because she can be tied to the administration in so many ways. Most people think she should make it by the middle of the year. She might try to hold on a little longer closer to the elections.

Again, she has this luxury and more time than anyone else because she is not starting from zero. There is a campaign in waiting and the infrastructure is already there and growing by the day. So she can wait, depending how other things go, whether any democrats, other Democrats make a mark, she'll try to wait as late into the year as she can and probably can wait pretty late. COSTELLO: All right, John King, many thanks to you.

KING: Thank you.

COSTELLO: Still to come, senior shock. Many older Americans discover they are about to lose the doctor they entrust with their health.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Dr. Mitkowski has been my doctor for 20 years. No one knows me any better. It is silly not to continue to go with him.

(END VIDEO CLIP)

COSTELLO: We'll explain why insurers are dumping doctors and why Obamacare may be getting the blame.

(COMMERCIAL BREAK)

COSTELLO: You may have a favorite restaurant or even regular mechanic, but no business relationship is more valued than a long standing partnership with a trusted doctor. A staggering number of older Americans are discovering their long-time doctors are being dumped from their insurance plans and that leaves them with some difficult and expensive choices to make.

CNN's Chris Frates is with our investigations unit. He joins us live from Washington. Tell us more.

CHRIS FRATES, CNN INVESTIGATIONS UNIT: So, Carol, what we're learning is that because Obamacare makes it tougher for insurance companies to drop their patients, that instead it appears that now they're dropping the doctors and that's hurting thousands of patients across the country in at least a dozen states.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: I'm decorating and making curtains.

FRATES (voice-over): Jody Sabatino is like many seniors. She sees multiple doctors and takes lots and lots of medication.

(on camera): How many prescriptions do we have here?

UNIDENTIFIED FEMALE: OK. One, two, three, four --

FRATES (voice-over): Last month the 79-year-old got jaw-dropping news. Her insurance company, United Health Care, is cutting four of her six physicians from its Medicare advantage plan, including her most trusted doctor, Dr. Lawrence Mitchkowski or Dr. Mitch to patients like Jody. The cardio specialist will be unceremoniously dumped from United's Medicare advantage network January 1st with little explanation or as United put it in a letter --

UNIDENTIFIED MALE: United Health Care is amending your agreement referenced above to discontinue your participation in the Medicare advantage network. This amendment does not require your signature.

FRATES: But the doctor thinks United is trimming physicians from its network because under Obamacare it's harder to drop patients.

UNIDENTIFIED MALE: Let those high cost patients move out of the United Health Care Medicare advantage plan over to Anthem or Humana and let those poor suckers so to speak pick up the cost.

FRATES: United's decision left Jody and her 94-year-old husband, Nick, facing a tough choice. Do they stay with United and find new doctors or try to keep their doctors by finding a new insurance plan?

UNIDENTIFIED FEMALE: Dr. Mitchkowski has been my doctor for 20 years. No one knows me any better than he does and it's silly not to continue to go with him.

FRATES: So Jody went shopping.

UNIDENTIFIED FEMALE: This was expensive. This was expensive.

FRATES: And the plan she bought is going to cost her much more.

(on camera): Do you have any sense how much more that will wind up costing you?

UNIDENTIFIED FEMALE: These will be double.

FRATES (voice-over): Jody and Mitchkowski are not alone. The American Medical Association says United and other insurers have taken similar actions in at least a dozen states. In Connecticut for example, United cut about 20 percent of its doctors according to the State Medical Society and here in Ohio the insurance giant dropped hundreds of doctors affecting thousands of patients.

TODD BAKER, OHIO STATE MEDICAL ASSOCIATION: The patient costs a lot and United is going to those patients' doctors and dropping them. And therefore, getting rid of the patient.

FRATES: United concedes it is reducing the size of its network but declined an on camera interview request. In a statement to CNN, United said, many health plans are making changes to their networks to improve quality and keep health insurance affordable. These changes are necessary to meet rising quality standards in an era of Medicare funding cuts.

The Insurance Industry Trade Group argues that the changes are a direct result of Obamacare. To help pay for health care reform, lawmakers included $200 billion in cuts to the Medicare advantage program and a new tax on health insurers.

ROBERT ZIRKELBACH, AMERICA'S HEALTH INSURANCE PLANS: Washington can't cut and tax the Medicare advantage program this much and not expect seniors in the program to be harmed.

FRATES: Even though Jody was able to find a plan that included Dr. Mitch, she is still going to lose two other doctors. UNIDENTIFIED FEMALE: We're walking away from people we've known and trusted and counted on for over ten years. That's hard.

(END VIDEOTAPE)

FRATES: Now, Carol, Dr. Mitch tells me that the vast majority of his patients who are affected by United's decision followed Jody's lead and got a new insurance so they continue seeing Dr. Mitchkowski. That is really not a surprise here. I talked to another of his patients who told me if you looked at the directory of doctors that patients can go to under United, this year, it's about 25 pages. When you look at what will be offered next year, that booklet is only five pages long.

COSTELLO: You know what's really scary, she is well and has the energy to fix the problem, but not all elderly people do. It's like they're preying on the most vulnerable people in our country.

FRATES: That's right. What Jody told me was she was very fortunate they had a health adviser who Dr. Mitchkowski helped set them up with to go over all their options. These are spread sheets. They have a number. She is on eight different medications. She needs to find out how many are covered, how many of my six doctors can I bring over to this new network? It is complicated.

She was lucky and will tell you that I am lucky that I'm able to figure this all out. It was certainly very stressful for her and for many seniors across the country who are now facing a similar situation.

COSTELLO: Chris Frates, many thanks to you.

FRATES: Thank you.