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NSA Intercepting Laptops Ordered Online; Obamacare Enrollment Surges; Bombings Hit Russia Ahead of Olympics; Stranded Ship to Get Chopper Rescue; Racing Great in Coma; Black Monday Hits NFL Coaches; Numbers Show Fewer Flight Delays; U.S. Stocks Little Changed; Pot Becoming Legal; Political Battles

Aired December 30, 2013 - 13:00   ET

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

JIM ACOSTA, CNN ANCHOR: Hello, everybody I'm Jim Acosta in Washington. Wolf Blitzer is off today. We begin with yet another revelation about the extent of secret surveillance programs carried out by the NSA. This time, it involves the agency targeting computers including laptops purchased online. First, it was the collection of massive amounts of phone and Internet data that caused uproar. Then there were reports of the NSA infiltrating virtual video games like World of Warcraft. Now, the German Magazine, "Der Spiegel," reports the NSA has started intercepting laptops and infiltrating desktop computers to install spyware.

Brian Todd is following the story for us. And, Brian, this seems almost unbelievable, impossible to believe but yet it may be happening.

BRIAN TODD, CNN CORRESPONDENT: Right, it could be happening. Jim, according to "Der Spiegel" magazine, this is called the tailored access operation unit of the NSA. Essentially, it's an elite group of hackers, most of them very young in their 20s or early 30s.

As far as the techniques they use, they use a lot of different techniques from remote hacking to physical techniques, actually installing spyware physically on a targeted computer. They essentially profile a targeted computer by a hacking, that can track cookies that pop up on that computer. They can track -- they can even tap into Microsoft's error messages to try to navigate onto that computer. It's amazing what they can do. They can hack into Blackberry service to read e-mails of a targeted person. That's on the hacking side.

On the physical side, they actually intercept computer shipments. If you're a bad guy and you're getting a new computer in the mail, they can actually physically intercept it. They can find out who it's going to intercept it, open the package, put some kind of a spyware or bug on that computer physically, send it along as if it was never compromised. So, it's amazing the techniques that they can use. They can also install bogus cables on a desktop computer. And they work even with the FBI and CIA, according to "Der Spiegel," to place operatives on the ground in foreign countries in order to do this. We've got no comment from those two agencies.

ACOSTA: And all of this becomes more believable because of the strong of revelations that have come from former NSA contractor, Edward Snowden.

TODD: Right.

ACOSTA: But what some people may be wondering about here in the United States, Brian, is if they order a computer online and that laptop shows up at their house as the NSA --

TODD: Right.

ACOSTA: -- put spy aware in that laptop, it appears we're talking about foreign targets, is that right?

TODD: Foreign targets and probably people who they have an inkling, they might have a suspicion that they've done something. So, yes, it's foreign targets. If you're an American ordering a computer, you likely do not have to worry about any of this stuff. But they did say as far as, you know, how widespread their operations are, 279 operations worldwide in 2010.

We just got a statement from the NSA on this saying that this TAO unit is, quote, "a unique national asset that is on the frontline of enabling the NSA to defend the nation and its allies and that it works -- it's worked centers on foreign intelligence collection." That is from the NSA. We just got that similar to what they sent to "Der Spiegel."

ACOSTA: The NSA very busy these days.

TODD: Yes.

ACOSTA: Brian Todd, thank you very much. Appreciate it.

TODD: All right.

ACOSTA: There's been a big turnaround for the Obama administration's new health care program. December has seen a big surge in people enrolling in Obamacare. It's now passed the 1 million person mark. But as Athena Jones reports, there's a long way to go to meet the president's enrollment goal.

(BEGIN VIDEOTAPE)

ATHENA JONES, CNN CORRESPONDENT (voice-over): HealthCare.gov may finally be hitting its stride. Health officials say more than 1.1 million people enrolled in health plans through the federal exchange between October 1st and December 24th with nearly a million of those coming this month alone.

LAUREN REISIG: It changes my life.

JONES: People like Lauren Reisig, a 27-year-old marketing director from McLean, Virginia, who suffers from Crohn's Disease. She enrolled with the help of a government call center after running into trouble on the Web site. Starting January 1st, her premium is dropping from $1300 a month to $400.

REISIG: It gives me the option to finally move out of my parents' house at age 27.

JONES: The government will release more complete numbers, including numbers from Medicaid and state-run market places, next month. But this latest surge of activity puts overall enrollment on pace to meet this bold prediction made before Christmas.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We now have a couple million people, maybe more, who are going to have health care on January 1st and that is a big deal.

(END VIDEO CLIP)

JONES: What's not clear is just how many people still may not have coverage starting January 1st due to problems with the site the government has worked overtime to fix. And not everyone is celebrating the numbers. California Republican Darrell Issa says too many people will be getting government subsidized.

REP. DARRELL ISSA (R), CHAIRMAN, OVERNIGHT AND GOVERNMENT REFORM: There's 318 million Americans, 1 million getting on subsidized health care in many cases probably another million getting on Medicaid as a result of Obamacare and 6 million people who had plans they liked that have been thrown off of it. I don't think there's anything to celebrate.

JONES: And while the surge in enrollment is good news for the Obama administration, it will likely still fall short of the goal to sign up 3.3 million people by January 1st. Those who missed last week's deadline for coverage starting in January have until January 15th to sign up for plans that start February 1st. Open enrollment ends March 31st.

Athena Jones, CNN, Honolulu.

(END VIDEOTAPE)

ACOSTA: And we've learned that a key official that helped implement HealthCare.gov is retiring. The administration says Michele Snyder, the Chief Operating Officer for the center for Medicare and Medicaid services, is leaving the agency after 41 years of service.

And coming up at the bottom of the hour, we will go in-depth about Obamacare and more on the political scene when we talk with Zeke Miller of "Time" magazine, plus 2014's big political battles, will the minimum wage and unemployment be winning or losing issues in next year's elections?

A second deadly terrorist attack in Russia is adding concerns about the security of the winter Olympics in that country. The games are less than six weeks away. The bombings highlight the challenges Russia faces when athletes and spectators from around the world gather there. Diana Magnay has the latest on the investigation and on Russia's plans for securing the games.

(BEGIN VIDEOTAPE)

DIANA MAGNAY, CNN CORRESPONDENT (on camera): As the rest of Russia celebrates in the new year, the city of Volgograd will be holding three days of mourning after twin attacks devastated the city. Here's a look at the events of those two days.

(voice-over): Two deadly terror attacks in the southern Russian city of Volgograd in less than 24 hours. Monday's attack on the crowded trolley bus in morning rush hour, more than a dozen killed. Authorities say the blast the work of a suicide bomber. Possibly detonating his device towards the back end of the bus where the damage seems worse. Many on board were students. This is exam time in Russia. Among the injured, a baby boy now in a coma with multiple skull injuries. Authorities say they don't know who he is or whether his parents were killed in the blast.

This follows another attack at noon on Sunday in Volgograd's main railway station. The moment of the explosion caught on surveillance video. Seventeen people were killed in that blast. Authorities saying that was also the work of a suicide bomber.

These attacks come less than six weeks before the start of the winter games in Sochi which is around 600 miles southwest of Volgograd. Russia's President, Vladimir Putin, has vowed the highest possible security around the games themselves in the town of Sochi. But it is clearly hard to police the whole of southern Russia to the same level.

Russia is fighting an Islamist insurgency in the north caucuses not far from Sochi. In July, Russia's most wanted man, Doku Umarov, a Chechen extremist and leader of an Islamist faction in the north caucuses, threatened to unleash, quote, "maximum force to prevent the games from happening." The U.S. State Department has a $5 million reward out for Umarov. Former intelligence officials believe further attacks are entirely possible.

BOB BAER, FORMER OPERATIVE, CIA: And I think if we don't see one, an attempt on the Olympics, I'd be very surprised.

MAGNAY (on camera): Even if the high security around Sochi means terrorists may find it hard to strike there, they are proving themselves more than capable of spreading maximum fear by targeting cities elsewhere in the region with deadly results.

Diana Magnay, CNN, Moscow.

(END VIDEOTAPE)

ACOSTA: There is a new mission to rescue people stuck on that research ship in the Antarctic. A Chinese helicopter will airlift 56 passengers and crew members when the weather improves. Bad weather forced an Australian ice breaker trying to reach the vessel to turn around earlier today. Seventy-four people have been stuck on that research boat since Christmas. It left New Zealand on December 8th to study the effects of climate change.

Former race car champion, Michael Schumacher, remains in a coma at a French hospital. Schumacher fell and hit his head on a rock while skiing with his son over the weekend. His doctors say it is too soon to say how much damage has been done but they did say that wearing a helmet saved his life. Schumacher is regarded as the most successful formula I driver of all time and remains the sports' biggest star even after his retirement.

In the NFL, it's called black Monday. The Monday after the last season -- last regular season game. That's the day when pink slips go out to head coaches whose teams had a bad year. So far, six and counting there, including that man, Mike Shanahan of the Washington Redskins. We'll talk about that just ahead.

(COMMERCIAL BREAK)

ACOSTA: Statistics show flight delays have been dropping steadily for years but a lot of frequent flyers may not agree with that. Now a report from the U.S. inspector general says these on-time numbers may not be telling the whole story.

Zain Asher is at the New York Stock Exchange with the details. And, Zain, why is this report suspicious? I know as a frequent flyer, that they've been padding these times, these start times, these departure times and arrival times. Does that have something to do with this?

ZAIN ASHER, CNN CORRESPONDENT: Hi, Jim. Yes, unfortunately, that is exactly right. So, even though the data shows that flight delays have improved, if you will, from between 2000 and 2012, down by about 33 percent, number one, you have to take into the fact that only 76 percent of airlines are actually included in this report and also the fact that it's only 16 of the largest carriers. Second of all, as you mentioned, there is some padding going on. Most of the airlines actually push back their scheduled arrival times so that, you know, in case there are delays, you don't necessarily notice it.

So, on paper, flight durations are getting longer so that even if the flight is delayed, technically, it still ends up arriving on time. So, for example, the Delta flight from -- between Detroit and LaGuardia allots itself roughly two hours. But in reality, that flight should take closer to one hour and 15 minutes. Now, the airlines are saying that they have to be sort of realistic because, obviously, you have to take into consideration crowded runways and weather and that kind of thing. But the DOT says that more airlines should be included in the study and that even though delays do show signs of improvement, it's certainly more of a case of smoke and mirrors -- Jim.

ACOSTA: And shifting over to the markets, it's been really kind of a banner year, has it not, for the markets? We're winding down trading on the markets for the year and how are things looking as we leave 2013 and heading into 2014?

ASHER: Hi, Jim. Just looking at the -- at the board right now, we're up about seven points so pretty much flat. You've got to remember that the week between Christmas and New Year's is usually a quiet one. You have a lot of traders out and certainly the ones that are in and ready to close their books for 2013. Volume is definitely low as we see in that trend over the past few days, only about 200 million shares traded. Not that much at all so we could see some volatility. But listen, if we end up by one and a half points, we will see the 51st record close so far this year. The major averages, as you mentioned, have been stellar up by about 26 percent. That's huge.

But, yes, if we see one and a half points -- a gain of one and a half points, that will be the 51st record close. In terms of 2014, some analysts say they do anticipate that the rally will continue, at least in the short term, because some of the investors who sort of missed out on this rally look for ways to get in. But one of the major headwinds that we do anticipate will be January's earnings. You've got to remember that a lot of retailers basically offered steep discounts this holiday shopping season to lure customers in. And that could have an effect on their bottom line. So, if we end up one and a half points today, 51st record close, and it could go either way at this point -- Jim.

ACOSTA: Wow. OK. And we know you will be watching. Zain Asher, thank you very much.

ASHER: We will be.

ACOSTA: Thanks a lot.

ACOSTA: Thanks a lot.

It's a well-known job hazard in the NFL, win and you're golden but lose, especially a lot, not so much. The biggest name on today's list of fired head coaches is Washington's Mike Shanahan. And it's fair to say, he knew it was coming. So far, the list has six names and counting. Our Rachel Nichols is in New York.

And, Rachel, I have to be -- full disclosure here. I am a lifelong and long suffering Washington Redskins fan. I never thought I would say that. When I was a kid, we would go down to Constitution Avenue and see the Redskins have their parades after they won the Super Bowl. We haven't done that in a long time in this town. But what do you think about Mike Shanahan going out the door at Redskins Park? Obviously it was expected. But really, I mean, the Skins just have to start from scratch now it seems.

RACHEL NICHOLS, CNN SPORTS CORRESPONDENT: Yes, Jim, you know, I grew up in the D.C. area, as well, and it is a lot different than it was in our collective childhoods.

ACOSTA: Yes.

NICHOLS: And you of all people know that in Washington, D.C., and that whole really middle area, mid-Atlantic area of the country, just how deep the roots run, fandom of the Redskins, how seriously people take it. The old expression in Washington is that the two most important people in town are the president of the United States and the quarterback of the Washington Redskins, and not necessarily in that order.

And it has been such a difficult season, right? Eight straight losses to end this season. That's the worst finish the Redskins have had in more than 50 years. And really just a gut punch to people in town after last season, which was just such an optimistic high, the feeling that finally things were starting to turn around. The team won seven straight, won the division, earned the playoff (INAUDIBLE). The young excitement of the young quarterback, Robert Griffin III. But in between, injuries, back fighting, shifting allegiances. It all fell apart.

And I want to give you, Jim, just a little picture of the dysfunction and paranoia going on in the organization right now.

ACOSTA: Sure.

NICHOLS: This morning, the media shows up expecting maybe Mike Shanahan is going to be fired. News vans, cars, all kinds of people. And the team decides, because of the negative attention, they don't want to let all those people in. So there's this clog of traffic that formed outside the parking lot.

ACOSTA: Wow.

NICHOLS: And it's only one road that gets you there. So Mike Shanahan comes in to have this meeting, where he's going to get fired, and he can't get in because they've shut all the news media out and they have to start moving cars aside to let him into the facility where he is late for the meeting where he goes to get fired.

ACOSTA: Wow.

NICHOLS: So, that tells you what's going on right now in D.C.

ACOSTA: Yes, and a note to all those respective head coaches, all those interested head coaches who may want to come to Washington, it's not -- not that easy exiting or entering Redskins Park these days.

What about some of the other coaches who may be on the chopping block right now, Rachel? Jason Garrett, obviously last night the Cowboys did not make the playoffs for the second year in a row. It was sort of a make or break last game of the season for them and they did not win. Who else is on the list, do you think?

NICHOLS: Well, this is called "Black Monday" in the NFL for a reason. There's 20 teams that didn't make the playoffs. And I want to throw up this list of names here. Six head coaching openings already in the NFL and it's not even 2:00 on Monday. All six of these guys, some of them didn't get fired today. Gary Kubiak was fired a few weeks ago. Chudzinski in Cleveland was actually fired last night. They didn't even let him go the night after losing his game yesterday. But these are all considered the recent "Black Monday" victims.

And we might have a couple more to go here. There's a couple guys who are on the brink. You know, it's interesting, you mentioned Jason Garrett in Dallas. He's actually safe. Jerry Jones, the owner, has made repeated statements in the last few weeks that he is keeping his guy -

ACOSTA: Wow.

NICHOLS: Which a lot of fans in Dallas are not so happy about. So we have a lot of emotion in a lot of places, a lot of different reasons. In Minnesota right now, we've had reports of players crying in the locker room they were so attached to their coach who was let go, Leslie Frazier, but the ownership there has to sell tickets for a new stadium so they're trying to apiece an upset fan base. A lot of things going around in the league right now. Not an easy day to be a coach, unless, of course, you're going to the playoffs and then, hey, you're golden, right?

ACOSTA: Exactly. At least for this week. And then it will be not so golden depending on which team gets to the end or not. All right, Rachel Nichols, great talking to you. And did not know that you also grew up in this area. So, good to talk to you about that as well.

NICHOLS: Montgomery County, Maryland.

ACOSTA: Montgomery. OK, very good. Fairfax County, but we won't go into that right now. We could go all day with that. We'll talk later. All right, thanks, Rachel, appreciate it.

All right, there are several new laws going into effect New Year's Day, but one in Colorado is topping the list of what people are talking about, legalizing marijuana. It's coming up.

(COMMERCIAL BREAK)

ACOSTA: All right, set your watches. At 8:00 in the morning New Year's Day, anyone over 21 years old will be able to buy marijuana in Colorado, but only a few retailers have been able to clear the hurdles required to sell the drug. And as our Casey Wian reports, there's a lot of scrambling going on to get ready.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): It's a big day for Tim Cullen.

TIM CULLEN, CO-OWNER, EVERGREEN APOTHECARY: I would liken it to graduation, you know. It's just been a tremendous amount of work to get to this point.

WIAN: He's joining a handful of business owners receiving Denver's first licenses to sell marijuana for recreational use starting January 1st.

UNIDENTIFIED FEMALE: That's information that needs to go to every customer that comes in and buys (INAUDIBLE) marijuana.

CULLEN: Right.

UNIDENTIFIED FEMALE: All right. Thanks. Congratulations.

CULLEN: Thank you, Jenny (ph). Appreciate it.

UNIDENTIFIED FEMALE: Yes, you bet. Have a nice new year.

CULLEN: Awesome.

WIAN: At Cullen's medical marijuana store, employees scramble to get ready. Pot retailers must navigate so many regulations, only 14 of about 250 medical marijuana businesses in Denver have received one of these, a license to sell to anyone over 21. There are multiple inspections, packaging requirements and, in some cases, new construction.

ANDY WILLIAMS, PRESIDENT, MEDICINE MAN: We're building an absolutely impressive showcase for the world to see that this is an industry, this is not an underground business.

WIAN: At Medicine Man, all the pot sold is grown on site.

WILLIAMS: Customers don't want it really leafy. They like it nice, tight and dense.

WIAN: It's hiring 25 new employees -

UNIDENTIFIED MALE: You can just get some of this and smoke it in small quantities or get as high as smoking a group (ph).

WIAN: And installing new equipment.

WILLIAMS: We have to tag all these plants with an RFID tag, a radio frequency identification, and so it's another inventory control that we have to implement here. This is a light tight, air tight container and -

WIAN (on camera): Wow.

WILLIAMS: This is our San Fernando Valley OG (ph) cush (ph). And the smell will hit you probably from there.

WIAN: There's a little bit of a sour - sour milk - sour milky smell to it? Is that - am I wrong?

WILLIAMS: No. Some people like stuff that are really stinky.

WIAN (voice-over): Each of these containers holds about $7,500 worth of marijuana, so it's no wonder Medicine Man has an armed former Army Ranger guarding the front door.

WILLIAMS: I think next year we're going to have about two and a half - between two and two and a half times more business than we do this year.

WIAN: Weed Maps, a Yelp like service for marijuana retailers, predicts prices will spike.

UNIDENTIFIED MALE (ph): Demand is going to be very high on day one. With a potential shortage of supply, prices will go up.

WIAN: Lines are expected outside pot stores January 1st. CULLEN: We're going to have cookies and coffee set out.

UNIDENTIFIED MALE: Those cookies going to be laced with anything?

CULLEN: Absolutely not. No, no. My - my parents volunteered to come down and hand out cookies and coffee.

WIAN: No one's expecting a marijuana Mardi Gras.

MICHAEL ELLIOTT, MEDICAL MARIJUANA INDUSTRY GROUP: It's still legal to drive impaired, to take the product out of state, to resell it to anybody, to give it to someone under 21 or to consume it publicly.

WIAN: The city says it's prepared.

ASHLEY KILROY, DENVER MARIJUANA POLICY DIRECTOR: We haven't seen a negative impact from 10 years of medical marijuana, and we don't expect to see that with retail marijuana.

WIAN: Statewide, about $300 million worth of medical marijuana was sold in 2013. The industry expects sales to more than double next year.

Casey Wian, CNN, Denver.

(END VIDEOTAPE)

ACOSTA: Congress went home for the holidays, but the political battles for 2014 are already brewing. We'll have a look.

(COMMERCIAL BREAK)

ACOSTA: Members of Congress are home for the holidays, but the political battles for 2014 are already underway. Republicans plan to use Obamacare as an election issue and Democrats seem poised to make economic inequality their issue next year. Zeke Miller is a political reporter for "Time" magazine and has covered Washington and the White House for years and was my campaign buddy out with the Romney campaign for much of last year.

And, Zeke, first Obamacare. I mean we see the news that enrollment is up. They had a huge surge in December, 975,000 people on the federal marketplace. And it seems as if, you know, I was talking to one administration official about this. If they haven't turned the corner, they can at least see the corner. What do you make of this enrollment surge? Should we be calling it a surge? What does it mean?

ZEKE MILLER, POLITICAL REPORTER, "TIME": Well, it's certainly, you know, better than where they were in October and November. It's also not nearly as, you know, as far as they thought they would it, you know, before October, before the website issues came about. So it's somewhere in between. It's a sign of progress. It's a sign that people do want health insurance, or at least, you know, 1.1 million people do want health insurance and that's - that's a good thing. Whether or not you like the law or not, people are getting coverage.

ACOSTA: Right.

MILLER: At the same time, you know, in terms of the overall success of the law, they were predicting something like, you know, 7 million between sort of October 1 and the end of March.