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Will Americans Be Safe In Sochi?; Lt. Governor: Mayor's Sandy Claims "False," "Illogical"; U.S. Asks U.N. To Withdraw Invitation To Iran To Attend Syrian Peace Talks; Report: Six Other Retailers Hit My Malware

Aired January 20, 2014 - 10:00   ET

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

CAROL COSTELLO, CNN HOST: Good morning. I'm Carol Costello. Thank you so much for joining me. Can Americans stay safe in Sochi? The Olympic Games are just a few weeks away and security remains the number one concern, but the games go on despite temperatures well below zero. The Olympic torch reaches Volgograd, Russia, the same city that was hit by two terrorist attacks just last month.

The possibility of an attack during the games has many worried and especially in light of a new video that came out over the weekend. CNN's Phil Black has more for you.

PHIL BLACK, CNN CORRESPONDENT: Carol, it was three weeks ago, men walked into the train station behind me, approached the sec during the screening area and blew himself up, killing 18 people. The next day, another man attacked a bus nearby killing another 16. Now, a Jihadi video has emerged with two men claiming responsibility for that attack, but ominously also warning that those attacks are, but a taste of what people should expect during the Olympic Games in Sochi.

(BEGIN VIDEOTAPE)

BLACK (voice-over): Mounting concerns in Russia this morning as the Olympic torch relay makes it way for the bomb stricken city of Volgograd. Two extremists in this video claiming responsibility for two back to back suicide bombings last month that claimed 34 lives, and warning that more attacks could come during the Sochi Olympic Games.

In the hour-long video, the purported suicide bombers are seen constructing explosives and explaining their motives all before heading into their targets triggers in hand. The two men apparently part of an Islamist militant group vowing to prepare a present for the Olympics and all the tourists who'll come over. Members of Congress are very concerned.

REPRESENTATIVE MICHAEL MCCAIN (R), TEXAS: If something does happen, what is the evacuation plan and emergency response plan that would think twice?

BLACK: Others worried about Americans heading to Sochi.

UNIDENTIFIED MALE: I would not go and I don't think I would send my family. REPRESENTATIVE MIKE ROGERS (R), MICHIGAN, INTELLIGENCE COMMITTEE CHAIR: I am very concerned about the security status of the Olympics. I do believe that the Russian government needs to be more cooperative with the United States when it comes to the security of the games.

BLACK: Russian President Vladimir Putin deploying a security force at 40,000 police officers and soldiers to the region. In an interview with ABC News, Putin says that he will do whatever it takes to keep athletes and visitors safe, and pledging that Russia has adequate means of security. Security around the Olympic venue on high alert. Metal detectors and bomb sniffing dogs are visible as the games get underway in just over two weeks.

(END VIDEOTAPE)

BLACK: Russian officials say they are not changing or revising their security plan for Sochi despite the attacks in Volgograd because they believe they have already got everything in place. When the Olympic flame arrived here at this train station, there were more members of the security service and police forces here to greet it than members of the public.

It seems the lesson from the Volgograd attacks is even if Sochi is locked down successfully, there are still many other potentially vulnerable targets in other parts of the country -- Carol.

COSTELLO: Phil Black reporting live. The House Intelligence Committee Chairman, Republican Mike Rogers of Michigan is also suggesting NSA leaker, Edward Snowden, got help from Russia before he fled the United States to Russia last fall.

(BEGIN VIDEOTAPE)

REPRESENTATIVE MIKE ROGERS (R), MICHIGAN: I think there are some interesting questions we have to answer that certainly would lend one to believe that the Russians had at least something to do with, A, either helping his capabilities. We noticed that a guy worried about privacy issues, spent a lot of time, as a recent DIA report revealed, stealing information.

The vast majority of which had nothing to do with the NSA program and everything to do with our military capabilities, Army, Navy, Air Force, Marines, number one. There are some security things he did get around that are clearly above his capabilities. The way he departed and how he ended up in Moscow, we still have some questions there.

But I can guarantee you he is in the loving arms of an FSB agent right today. That's not good for the United States and not good for the information to be shared with nation states that actually hinders and will cost us billions of dollars by the way, Bob, to try to rectify the problems he has caused in the military operations.

(END VIDEOTAPE)

COSTELLO: While Edward Snowden remains in Russia. The Russian president, Vladimir Putin, has invited Snowden to attend the Olympic Games in Sochi.

Just within the last hour, New Jersey's lieutenant governor flatly denied the latest scandal to engulf Chris Christie. Kim Guadagno is accused of strong-arming the mayor of Hoboken. The Democratic mayor, Dawn Zimmer, says she was given this ultimatum, support a redevelopment plan backed by Christie or her town would get short on money, shortchanged on Hurricane Sandy relief funds. The accusation drew a sharp response minutes ago. Here is Guadagno's entire statement.

(BEGIN VIDEOTAPE)

LT. GOVERNOR KIM GUADAGNO (R), NEW JERSEY: You need to hear me say this out loud and I will in short. Mayor Zimmer's version of our conversation in May of 2013 is not only false but illogical and does not withstand scrutiny when all of the facts are examined. Any suggestion, any suggestion that Sandy funds were tied to the approval of any project in New Jersey is completely false.

Standing in Union Beach, as we are today, with some of the mayors whose towns were devastated by Sandy and also being a Sandy victim myself makes the mayor's allegations particularly offensive to me. The suggestion that anyone would hold back Sandy relief funds for any reason is wholly and completely false.

I thought I had a good relationship with the mayor of Hoboken. In fact, just three months after this conversation she said we had occurred, I was walking on the streets with her in Hoboken talking to her about urban markets, three months after this conversation she said we had and five months before, she went to MSNBC.

Like I said, I thought we had a good relationship. Frankly, I'm surprised that Mayor Zimmer has chosen to mischaracterize the conversation I had about development and job coordination in Hoboken. I have devoted an extraordinary amount of time to bringing projects, to creating jobs and retaining jobs in Hoboken.

That is my job as the secretary of state and the lieutenant governor. I have visited Hoboken no less than 13 times. I have worked on many other projects involving Hoboken as part of that job. The one that the mayor herself asked me to work on is the Pearson Education Building in the skyline on the waterfront of Hoboken.

The mayor once told me there was an empty hole and she asked me to help her find a company to fill it. We did. Right now, Pearson Education is in the waterfront, on the waterfront. They have created hundreds of jobs. They created hundreds of construction jobs.

So, yes, I am very surprised by the mayor's allegations and I deny wholeheartedly, those allegations. I proudly support and will continue to support the creation of jobs in Hoboken and all of New Jersey. I will continue to work on the projects. I'm going to end and I mean end, by reemphasizing one thing.

I deny any suggestion made by Mayor Zimmer that there was ever any condition placed on the release of Sandy funds by me. I want to thank you all for coming out, forgiving me the opportunity to speak. I look forward to the inquiries. I am sure, absolutely sure of the facts will come out.

COSTELLO: The Hoboken mayor, Zimmer, says she turned over her journal and other documents when she met with several prosecutors for several hours yesterday. An investigation into this is ongoing. Joining me now is Michael Crowley, the deputy Washington Bureau chief for "Time" magazine. Good morning, Michael.

MICHAEL CROWLEY, DEPUTY WASHINGTON BUREAUF CHIEF, "TIME": Good morning.

COSTELLO: You heard the lieutenant governor. She didn't mince words. She called the Hoboken's mayor claims that Sandy funds would be withheld false and illogical. Was she believable?

CROWLEY: It was an impressive performance. She was very poised, firm and articulate. Of course, the theater is not as important as the facts. I will say that there was a lot of commentary over the weekend yesterday about the fact that the governor's office's original response to this story did not seem to contain a very direct, flat denial of the facts.

There was a lot of bluster and attacking of MSNBC, the network, which had first presented the allegations. People were saying, wait a second. What about the core allegations? So what we now have is a very firm, adamant clear denial of the fact by the person involved, not hiding behind press releases.

That's worth something. What we really have is he said, she said. We will have to see where it leads. It is interesting that there may be some contemporaneous journal entries and documents. Perhaps we'll see an effort to get some internal documents, e-mails from within the governor's office. I would say this is a good appearances, good theater here for Governor Christie's camp.

COSTELLO: On the other side, the person making the allegations, Mayor Dawn Zimmer of Hoboken. There are things out there that have some people skeptical, nearly republicans. She spoke glowingly about Governor Christie.

August of 2013, she said, to be clear, I'm very glad Governor Christie has been our governor. On January 11th, in an interview on CNN, she didn't think funds were being withheld because of any political retaliation. She comes out and makes these allegations. You can see why Republicans would be skeptical of these allegations.

CROWLEY: No doubt and you heard as part of the response that we just heard that apparently the relationship between the mayor and the governor's office went on and that she was not hostile, not even in private seeming to hold a grudge, complain threaten to go public. That does complicate the story a little bit.

It is not crazy to think a mayor would not want to challenge a governor who was enormously popular who felt like people might not believe that. There is a crack in the armor and people are saying, what is this about and what is it capable of?

t does complicate the story and I think we can't completely take the mayor's statements at face value. These journal entries, is there any documentation inside the governor's office, e-mails, that sort of thing. We will have to see.

COSTELLO: Michael Crowley of "Time" magazine, thanks so much for joining me this morning.

CROWLEY: Thanks for having me.

COSTELLO: You're welcome. The Syrian opposition is threatening to pull out of this week's peace talks in Geneva. The opposition is upset that Iran, a staunch supporter of the Assad regime accepted the United Nation's invitation to attend those talks. The opposition has set a 2:00 p.m. Eastern deadline for the U.N. to rescind the invitation or for Iran to meet certain conditions. This is happening as we see Iran engaging more with the west.

Let's bring in our chief national security correspondent, Jim Sciutto. He has more on this story. So why did the United Nations invite Iran to these peace talks.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, Carol, this was a surprise announcement by the U.N. Secretary General Ban Ki- Moon to say the least and it's thrown these peace talks into disarray 48 hours before they start. As you mentioned, the Syrian opposition say they will not participate if Iran is coming.

They have set this deadline for just a few hours from now. They call it a deal breaker. The reaction from the U.S., very firm as well, U.S. officials saying they have communicated to the U.N. that this invitation should be rescinded. Their position, they would only allow Iran to participate in these talks if Iran accepted certain conditions. Here is how strong the language is the State Department is using on this invitation.

A statement from Marie Harf, the deputy spokesperson, saying, we remain deeply concerned about Iran's contribution to the Assad regime's brutal campaign against its own people which has contributed to the growth of extremism and instability in the region if Iran does not fully and publicly accept the Geneva Communique, this invitation must be rescinded.

Now the key demand to support a transitional government away from Bashar Al-Assad who is in effect, Iran's guy there, this is saying that Iran has not would go to these talks but without preconditions. It is a real problem. Other things the U.S. has demanded is to pressure Syria to stop bombing civilians there.

This was another demand in the weeks leading up to these talks, something Iran has not publicly agreed to do. In the last 24 hours, the war goes on in Syria, 155 people killed yesterday alone.

COSTELLO: Jim Sciutto, reporting live from Washington. Will Americans be safe in Sochi? The U.S. is making rescue plans if an attack should happen. More on that after a break.

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COSTELLO: A safe, secure Sochi. The Russian government is trying to convince everyone that they are doing everything possible to keep terrorists out of the Olympic Games. The "Wall Street Journal" is reporting though, the U.S. is not bringing a lot of security compared to past Olympics. There are apparently major roadblocks to an evacuation of American athletes and dignitaries if something were to happen.

Let's bring in our CNN law enforcement analyst, Tom Fuentes, he is in Washington this morning to talk us through this. Good morning.

TOM FUENTES, CNN LAW ENFORCEMENT ANALYST: Good morning, Carol.

COSTELLO: So you were part of the security detail during the 1996 games in Atlanta. How worried should we be?

FUENTES: I think we should be very worried for a couple of reasons. The difference between this and other Olympics has been that for the other countries that have hosted in the past, including the U.S., the threat was always external. We always worried about a terrorist group coming in from the Middle East or North Africa or West Asia or some other dangerous hot spot in the world.

The problem this time is that you are talking about terrorist groups based 300 miles away in Chechnya, in Dagestan, right, within Russia. They don't have to cross. They don't have to go through passport control. They don't have to enter the country from halfway around the world. That's the difference this time.

You have an internal group that's Russia based and they have already promised to do a terrorist act and disrupt the Olympics. They have already as a preview carried out a couple of terrorist attacks killing about three dozen people in Volgograd. This is different this time. It is a very serious situation.

COSTELLO: There are a couple of things happening surrounding all of these incidents. President Putin spoke with ABC and said they are going to have a steel ring of security or something like that around the games.

Some American lawmakers are concerned that Russia is not being as forthcoming about their security plans as need-be. They are not cooperating with Americans who also want to help provide security for the games. We had lawmakers come out yesterday on CNN and say, I wouldn't send my family to Sochi for the Olympics.

FUENTES: Yes, that's a tough thing. As far as sending your family, you know, the Olympic Games are different in the sense that the people that compete spend a lifetime preparing at the Olympics. They start, three, four, five years old. Now, they only have a window of one, two, or three Olympics depending on how good of a shape they are in and how competitive they can be. If you have a child that has spent 15 years preparing to be a gold medalist at the Olympics, it is hard to say, it is dangerous, I'd rather you don't go. That makes it a little hard to do in this particular case. As we've seen in other parts of the world. The threats are everywhere. You can make an argument for not leaving your home. Just have pizza delivered every day and that would be fine.

For a situation like this, you do have to rely on a great extent with the Russians. Again, getting back to whether they are cooperative or not, I think the question isn't whether they are cooperative, it is whether even if they share everything they have, is it enough and do think know everything we would like them to know.

COSTELLO: You know, I've wondering, Sochi is beautiful, a resort town on the black sea. It is sort of remote. I just wonder why that particular city was chosen by the Russians because evacuating people out of that area will be difficult because it is so remote.

FUENTES: That's true. I don't think they pick Olympics based on the planning of getting people in or out based on terrorism. There are other logistical concerns that are considered. The summer Olympics are ten times larger than any winter Olympics. You can have 25,000 athletes competing in the summer games and two or three thousand in the winter games. They are always going to be smaller. They can use smaller towns.

You are picking towns that are basically ski resorts that they have access to nearby mountains that enable skiing. They can build the skating stadiums and the indoor events. So oftentimes it is going to be in a town that isn't huge compared to having the games in Atlanta or Los Angeles or Beijing or a larger city like that for the summer games.

COSTELLO: Tom Fuentes, thanks for your insight this morning. We appreciate it.

FUENTES: You're welcome, Carol.

COSTELLO: Still to come, a security firm is pointing the blame for the massive hack attack on a Russian teenager. How can we be so sure? Zain Asher is following that story. Good morning, Zain.

ZAIN ASHER, CNN PERSONAL FINANCE/BUSINESS CORRESPONDENT: if it was carried out by a teenager, how can companies better protect themselves. I'll have that story coming up.

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COSTELLO: A Russian teenager is believed to be behind the software used to hack Target and Neiman Marcus. Now the warning is going out to other retailers, be prepared for more tax. CNN's Zain Asher is following the story from New York. Tell us more, Zain.

ASHER: Hi, Carol. A lot of fingers are being pointed at this 17- year-old Russian teenager, apparently. I want to make this clear. CNN has not independently confirmed this. We are still talking to security experts all the time to try to figure out who was responsible for these attacks.

I want to make it clear. What we are hearing is that a 17-year-old may have written the malware, may have written the malicious code and sold it to cybercriminals underground who ended up carrying out the attacks. The first version of the malware was created back in March. What is that, almost a year ago.

Dozens may have been sold around the world. We are told that once this appears online, hackers can use it as they please. Even when companies do try and protect themselves, hackers can create various mutations of it. It may not just be Target and Neiman Marcus. Other retailers may have been impacted in this breach as well.

COSTELLO: Let's talk about other retailers could be affected by this too. What companies doing to protect consumers?

ZAIN: OK, so I have been speaking to a few good guy hackers this morning. What can companies really do? They need to invest in stronger end point security systems, better anti-virus on point of sales systems, but also means better intrusion prevention on the point of sales systems as well.

Here is an interesting point. There needs to be better information sharing between retailers. If Target comes out and says, we were hacked. This is the piece of malicious code that was used to hack us so they can protect themselves and others as well. Retailers are going to be very hesitant to come forward this situation. Why, because they want to protect their reputation.

They don't want lawsuits. They don't want their sales or share prices to be impacted. It may not be just Target and Neiman Marcus. It is going to be interesting to see how long it takes for others to come forward as well.

COSTELLO: All right, Zain Asher, reporting live from New York this morning, thank you.

Still to come in the NEWSROOM, false, illogical and not able to withstand scrutiny of the facts, that's how the New Jersey lieutenant governor address claimed she withheld funds from the local mayor. What this latest controversy means for the Christie administration next.

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