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Target Breach Tied to Russian Mob; Obama to Unveil NSA Privacy Reforms; Three Arrested for California Wildfire; New Clues in Search of Missing Reporter; Police Believe Hernandez Drove Getaway Car; Prince Harry Takes on New Mission
Aired January 17, 2014 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRIS CUOMO, CNN ANCHOR: All right. A lot of news this morning. Let's get you over to the "NEWSROOM" and Miss Carol Costello.
CAROL COSTELLO, CNN ANCHOR: Thanks. Have a great weekend. "NEWSROOM" starts now.
Good morning, I'm Carol Costello. Thank you so much for joining me.
It's been a painful and jarring wake-up call for millions of Americans, there's no such thing as privacy when a skilled hacker wants your secrets.
Target customers learned that lesson over the holidays in a massive security breach for as many as 110 million people. Well, today there are new warnings and reports of possible ties to the Russian mob.
Our Phil Black is in Moscow reporting this morning the code is similar to what's being peddled on Russian speaking Web sites.
Now the other hackers work for our government. This morning President Obama announces reforms to the NSA and its massive spying program that could have collected information on any of us.
Jim Sciutto, our chief national correspondent, will preview President Obama's reforms.
But first let's head over to Christine Romans, our chief business correspondent, with the latest on the Target investigation.
The Russian mob?
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Carol, a lot of what investigators know about the hack attack is being kept under wraps. You've got cyber forensics experts sifting through all the clues.
What we do know this morning, Carol, is that Homeland Security is worried this isn't an isolated event.
(BEGIN VIDEOTAPE)
ROMANS (voice-over): The U.S. government now warning retailers across the country to be on high alert, that massive attack on target over the holidays may have compromised the personal information up to 110 million customers. It could be just the beginning.
In a brand new bulletin the Department of Homeland Security now revealing that Target may not have been alone. That the malicious software has potentially infected a large number of retail operation and for the first time they are detailing just how those hackers pulled off one of the biggest data heists ever.
ROBERT SICILIANO, MCAFEE ONLINE SECURITY EXPERT: Now with this new information that many other retailers could've potentially been breached that number could potentially double in the next couple of weeks.
ROMANS: Here's how they did it. According to a cyber security firm called Eyesight who has contributed to the investigation. They used highly sophisticated and nearly undetectable malware named Kartoxa. That's a computer that surreptitiously placed in a company's system to corrupt point of sale systems. That means at the register itself your information was being grabbed.
Eyesight says many retail organizations may not know they've been infected. The software infests retail processing systems, allowing the hackers to manipulate the malware from the outside and most troubling of all, it's using new technology that makes it virtually undetectable by all security software.
SICILIANO: It's an unknown exploit, one that they haven't seen before.
ROMANS: Just who are the hackers? There are clues. Part of the code is written in Russian. The "Wall Street Journal" cites an unnamed U.S. official who said these details suggests the attack may have ties to organized crime from the former Soviet Union.
Target still dealing with the fallout this morning. In a new e-mail by Target to its customers said the cyber attack stole much more than PIN numbers. Stole names, mailing addresses, phone numbers and e-mail addresses as well.
SICILIANO: Consumers need to be aware right now paying very close attention their statements. You can check your statements online every single day.
(END VIDEOTAPE)
ROMANS: Carol, Target will testify before Congress in early February on this. You know, no federal laws exist that set out rules for when and how companies must report these data breaches to customers and even to law enforcement. Officials say the objective of the hearing in February will be how customers can start to protect themselves -- Carol.
COSTELLO: All right. Christine Romans reporting live from New York this morning.
Now to President Obama, this morning's announcement of new reforms of the NSA surveillance program. According to senior administration officials the president will announce the end of that controversial bulk collection of telephone records as it currently exists. He's also expected to act on recommendations to better protect the privacy and rights of Americans. The president will also call for scaling back surveillance on foreign leaders.
Jim Sciutto is our chief national security correspondent. He's in Washington.
Tell us more, Jim.
JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Hey, good morning, Carol.
Well, what's clear here is that the president is going to go further, these are more aggressive changes that many people had expected. And I'm told by people involved that many of these issues were debated right up until the final hours. Just showing how controversial they are, how difficult they are to find solutions.
But in effect he's accepting the two most significant recommendations from that intelligence reform panel that he convened and one is to require judicial review, require a judge of some sort to approve every time the NSA looks into these massive phone data but also look into ways to move that data out of the government's hands, out of the NSA's hands to someone else. They haven't decided who that other body is. But at least to look into that, and that's something that the president wants to do.
And it really shows how far we've come on this since Edward Snowden revealed all this to the world. So we got to asking the question, did Edward Snowden win in effect?
And here's what we found.
(BEGIN VIDEOTAPE)
EDWARD SNOWDEN, NSA LEAKER: My name is Ed Snowden --
SCIUTTO (voice-over): In the seven months since he burst onto the international scene.
SNOWDEN: I think the public is owed an explanation.
SCIUTTO: Edward Snowden has made some of the most secretive aspects of America's intelligence gathering public knowledge. The mass collection of Americans' phone data. Eavesdropping on the leaders of America's closest allies and tapping into the very back bone of the Internet.
Uproar at home and abroad led the president to convene an expert reform panel and now he'll announce which of their recommendations he'll accept. In short Snowden accomplished much of what he said he was fighting for -- a point he's been none too shy to point out.
SNOWDEN: The conversation occurring today will determine the amount of trust we can place both in the technology that surrounds us and the government that regulates it.
SCIUTTO: Jane Harman served on the House Intelligence Committee for eight years.
(On camera): When you look at what Snowden intended to do, expose this, right, to the glare of the public eye, can you say he won?
JANE HARMAN, PRESIDENT, WILSON CENTER: Well, I'll never say he won. He jumpstarted a debate. I'm glad we're having the debate. I condemn the way he did it.
SCIUTTO (voice-over): The debate Snowden sparked helped lead the president today, administration officials tell CNN, to end bulk collection as it currently exists. Acquiring judicial review for searches and exploring moving the data out of the government's possession. The NSA will still have access to the metadata, however, the president's reform panel say it's a necessary tool to prevent terror attacks.
MICHAEL MORELL, FORMER DEPUTY DIRECTOR, CIA: The program, as I said in the op-ed, only has to be successful once to be invaluable. And it does carry the potential going forward to prevent a catastrophic attack on the United States.
SCIUTTO: Snowden has won over a majority of the American public. A new Quinnipiac University poll found that a majority of Americans consider him more of a whistle blower than a traitor, by 57 percent to 34 percent.
But that support likely will not win him his freedom. Among lawmakers even the NSA's most ardent critics call Snowden a criminal.
SEN. RAND PAUL (R), KENTUCKY: I think there have to be rules about leaks. I don't think you can give away national security secrets.
(END VIDEOTAPE)
SCIUTTO: To be clear, this phone metadata, all these phone calls, these numbers that are dialed, when they are dialed, not the content, not what was said on the calls but that data will stay. The NSA will still apparently get access to it, though with greater safeguards, and that is what his panel of advisers recommended.
You know, we often make the point that terrorists only have to be successful once and their point, his advisers, the point they made is that, you know, a program like this only has to be successful once in preventing an attack for it to be valuable and that really seems to be the prevailing conventional wisdom that it's a necessary tool so it has to go forward, Carol, but with greater restrictions.
COSTELLO: OK. Well, let's talk about the judge you were talking about, because I already thought that a judge oversaw everything collected by the NSA and they took it to court before they used it.
Is there something different I'm not hearing that's going to be new? SCIUTTO: Well, the key here is that when the NSA wants to access a particular, say, phone number or collection of calls by a particular phone number or particular group of suspects they will now need to go to that court to get judicial review. Another thing we're hearing is that the president may put a public advocate on that court. Up to this point the court really just has the prosecuting attorneys in effect arguing for the access and the judges hearing it.
You don't have someone on the other said saying hey, wait a second, here's the argument for not doing it or forcing them to justify. So that's another possible change to make it more of a fair process. But the idea here is that now for each individual search they would then have to get that kind of judicial approval.
COSTELLO: OK. We'll hear more at 11:00 a.m. Eastern when the president gives his big speech.
SCIUTTO: That's right.
COSTELLO: Jim Sciutto, many thanks to you.
President Obama also will unveil those NSA reforms, as I said, less than two hours from now, 11:00 a.m. Eastern and of course you can see that live on CNN.
Also this morning three men in police custody accused of starting that raging wildfire near Los Angeles. Police say the group of 20 somethings started a campfire and were carelessly tossing paper into it when a gust of wind blew hot embers into the brush.
Now more than 700 firefighters are battling the blaze. Officials say it's at least 30 percent contained.
You're looking at live pictures there. 1700 -- 1700 acres, rather, have been scorched so far. Five homes destroyed. More than a dozen other buildings damaged. All this while California is in the throes of its worst drought since the 1980s.
CNN's Casey Wian is in Azusa, California, just outside of Los Angeles with more.
CASEY WIAN, CNN CORRESPONDENT: Good morning, Carol. As we show you these pictures from our affiliate KABC of one of these flare-ups that's happened over night. The wind has picked up this morning and that's causing some of this fire activity to sort of pick up again.
It's been pretty much calm overnight. Thirty percent containment so far. Authorities hoping to get more containment later today. Meanwhile 2,000 residents of this foothill communities waiting to hear when they'll be allowed back into their homes.
(BEGIN VIDEOTAPE)
WIAN (voice-over): Firefighters scrambled to control a rapidly moving wildfire threatening the suburbs northeast of Los Angeles. With super scooper fixed wing aircraft, helicopters and ground crews racing against the weather.
The blaze about 30 miles from downtown L.A. led to thousands of evacuations and destroyed part of the historic mansion once belonging to the Singer Sewing Machine family.
RAY PARAYNO, HOMEOWNER: This one is just something that really caught us by surprise. And it's really early in the morning. As we were driving down the long driveway, I mean, I -- that driveway was starting to catch fire and so, I mean, you could feel the heat.
WIAN: January temperatures stretching into the 80s, humidity below 10 percent and the forecast of hot Santa Ana winds threatened to turn the modest 1700-acre brush fire into a frightening conflagration.
CHIEF DARYL OSBY, LOS ANGELES COUNTY FIRE DEPT.: We were able to save hundreds if not thousands of homes this morning.
WIAN: This time, firefighters and all but five homeowners caught a break. The winds stayed calm and the fire slowed dramatically late in the day.
Fire started police say when these three men allowed their campfire to burn out of control, on a morning when red flag warnings because of drought and high temperatures were in effect.
CHIEF TIM STAAB, GLENDORA POLICE DEPARTMENT: I don't think they cared, to be honest with you. They're three guys in their early 20s camping up in the foot hills. You know they may have cared, but, you know, I can only assume that fire safety wasn't their top priority.
WIAN: One of the men admitted starting the fire, police say. Now they're in jail facing possible felony charges.
(END VIDEOTAPE)
WIAN: Bail initially set at $20,000. Overnight it was increased to $500,000 for each of those suspects. Police say, Carol, that one of the men had marijuana in his backpack. At this point he's not facing any charges for that because he had a California medical marijuana card -- Carol.
COSTELLO: CNN's Casey Wian, reporting live this morning. Thank you.
Also this morning we're learning more about who could be subpoenaed in the investigation into the New Jersey bridge scandal. Sources telling CNN among the subpoenas are Bridget Anne Kelly, Christie's former deputy chief of staff, who Christie, as you know, fired last week. David Samson, a close Christie adviser, and this woman, Christie's incoming chief of staff.
Lawmakers also issued 17 other subpoenas, 14 more for individuals close to Christie and three for organizations. All are mentioned in documents related to that traffic jam on the George Washington Bridge that may have been political punishment for the Democratic mayor of Fort Lee.
The search for a missing "Wall Street Journal" reporter may lead across the border.
David Bird was last seen leaving his New Jersey home Saturday night for a quick walk. He never came back. Now after days of searching a clue may have been uncovered thousands of miles away.
Margaret Conley joins us with more.
Good morning, Margaret.
MARGARET CONLEY, CNN CORRESPONDENT: Good morning, Carol.
Volunteers and police have been scouring the area looking for the 55- year-old father of two. There's an added urgency here because he needs his medication from a liver transplant. He needs to take it twice a day.
(BEGIN VIDEOTAPE)
CONLEY (voice-over): Police began day seven of rescue efforts today hoping to crack the bizarre case of missing 55-year-old David Bird. The energy reporter for the "Wall Street Journal" vanished Saturday afternoon when he left his home to go for a walk, something the avid hiker and marathoner does frequently along the trails around his home.
JACQUIE PETRAS, FAMILY FRIEND: We have every reason to believe that he just wanted to go for little stroll. There's no -- nothing pointing to anything else.
CONLEY: According to his wife he left his house in Millington, New Jersey, around 4:30 p.m. He left without his cell phone, wearing a red jacket, blue jeans, sneakers and glasses. She reported him missing two hours later.
CHRIS FLEMING, SISTER-IN-LAW OF DAVID BIRD: It's just unfathomable to me. He was just taking a short walk. We're all trying to stay calm and stay hopeful. But we don't -- we can't figure out what happened.
CONLEY: Media report says Bird's credit card was used in Mexico Wednesday night. It's unclear exactly what this clue may mean. Investigators declined to comment. But the family says authorities are following up on this lead as they've done all others.
FLEMING: The police have been incredible. Just looking through every single scenario they can think of.
CONLEY: Of particular concern to Bird's family is his health. He received a liver transplant nine years ago and takes anti-rejection medication twice a day. Medication that he's been unable to take since Saturday.
Hundreds of officers and volunteers scoured the surrounding areas for six days, desperately trying to find him. Police posted an update on Facebook Thursday, saying several good leads have come in that investigators are working on and urging people to come forward with any relevant information regarding his whereabouts. UNIDENTIFIED FEMALE: His family loves him dearly and we just are really hoping anybody that knows anything, please just call the police. Just want to bring him home.
(END VIDEOTAPE)
CONLEY: Now, there are still lots of questions around this case. Police have said that there's nothing in Bird's background that shows any indiscretions. The search continues again today -- Carol.
COSTELLO: All right. Margaret Conley reporting live for us.
Still to come in the NEWSROOM: Prince Harry Gates new assignment. The royal puts down the traffic controls to pick up a pen. We'll have details, next.
(COMMERCIAL BREAK)
COSTELLO: Checking our top stories at 18 minutes past the hour.
In West Virginia, there are new questions of whether health officials lifted its ban too early on that contaminated tap water. Concerns grew when announcements was followed by a warning that pregnant women shouldn't drink the water. Some health officials say maybe people should stick to bottled water.
Users of the wildly popular Snapchat are getting photo messages they were not expecting. Spammers are using automated porn bots to send nude photos. But the messages are designed to look like they're coming from real people. The scam asks the user to download another app.
Big cuts are coming for nearly a million families who use food stamps. A new proposal in Congress would slash food stamps by as much as $90 a month. It's about a fourth of the amount congressional Republicans wanted but nearly double what Democrats had proposed.
Near whiteout conditions for some in South Dakota, as a strong blizzard rolls through the state. In Nebraska, that same front cause ad dust storm with wind gusts up to 60 miles per hour. Get most people inside on Thursday. Today, more snow is in the forecast for the Midwest and it's moving to the Northeast.
As Aaron Hernandez prepares for trial in one murder, police are pointing to him as the possible triggerman in two others. Police say the NFL star may have been a shooter in an unsolved 2012 double murder.
Susan Candiotti has more on this.
Good morning, Susan.
SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Hi, Carol. Good morning.
In newly unsealed court documents, for the very first time, Boston police are confirming what law enforcement sources have been telling us, that they suspect Hernandez played a direct role in a fatal drive by shooting of two men outside a Boston nightclub in 2012.
In a search warrant executed last June, police wrote this, "There's probable dues believe that Aaron Hernandez was operating the suspect vehicle used in the shooting homicides and may have been the shooter. After Hernandez was charged with murder in a separate case last June the shooting of semipro player of Odin Lloyd, police found an SUV used by Hernandez parked with a layer of dust at his uncle's house. Court documents say it matches the description of a vehicle described at the scene of an unsolved double homicide in Boston.
That jogged a detective's memory who recalled seeing Hernandez on surveillance videos taken inside and outside that nightclub and helped them make a connection to Hernandez as a possible suspect -- Carol.
COSTELLO: So, what happens next?
CANDIOTTI: Well, we're waiting to see whether a Boston grand jury will charge Hernandez in that double homicide. He's already pleaded not guilty in that other case, the murder of Odin Lloyd.
COSTELLO: Susan Candiotti reporting live in New York this morning. Thanks.
Still to come in the NEWSROOM: Prince Harry goes from flying high to laying low.
Erin McLaughlin is here with more on the prince's new job.
Good morning, Erin.
ERIN MCLAUGHLIN, CNN INTERNATIONAL CORRESPONDENT: Good morning, Carol. Prince Harry is leaving his job as an apache pilot. I'll have all the details on his career move after the break.
(COMMERCIAL BREAK)
COSTELLO: Prince Harry is taking on a brand new mission, stepping down from his role as a high flying chopper pilot to take a desk job with the British army.
Erin McLaughlin is live.
It doesn't sound like Harry, Erin.
MCLAUGLIN: It sure doesn't. No more war zone duty for Prince Harry. He's leaving his job as an Apache pilot. He'll be working a desk job.
Kensington Palace making that announcement this morning. He'll still be working for the British military based in their central London offices. He'll be focusing on organizing special projects and commemorative events.
This is a big change for Harry. After all, he did spent months in Afghanistan. Always talked about how much he enjoyed being an Apache pilot but it will allow him to spend some more time on his royal duties. It will also allow him to spend some more time with his girlfriend, Cressida Bonas, or Cressy as she's known.
She's also based in London. They were seen together on Monday eating hamburgers. This news is sure to fuel those engagement rumors, Carol.
COSTELLO: They were seen in London eating hamburgers. I read they broke up.
(LAUGHTER)
MCLAUGHLIN: Well, you never know.
COSTELLO: Erin McLaughlin, many thanks to you.
In just over an hour, President Obama will announce specifics on how he wants to see the NSA reform. But will it really change anything about the way the NSA works? We're going to talk about that, next.
(COMMERCIAL BREAK)
COSTELLO: Good morning. I'm Carol Costello. Thanks for joining me.
The opening bell just about to ring on Wall Street. The Dow trying to make back some of its losses it suffered yesterday. It's bad news for corporate America, weighing the markets down.
Alison Kosik is watching all of this from the New York Stock Exchange.
Good morning, Alison.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Good morning, Carol.
You know, you look at fourth quarter earning season so far. It's gliding pretty nicely and then all of a sudden, a couple of companies spoiled the party with results that missed estimates.
