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Shoe Bomb Threats for U.S. Bound Flights; Ukraine Truce Crumbles; Facebook to Buy Messaging App for $19 Billion; Interview with Treasury Secretary Jack Lew; Judge Throws Out Keystone XL Route Approval

Aired February 20, 2014 - 09:00   ET

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

(BEGIN VIDEOTAPE)

CAROL COSTELLO, CNN ANCHOR (voice-over): Happening now in the NEWSROOM, terror threat. New concerns this morning over shoe bombs.

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: There's al Qaeda and al Qaeda in the Arabian Peninsula.

COSTELLO: Overseas flights coming into America on alert and on edge.

Also, chaos in Kiev. Police opening fire on protesters. And new this morning, Ukrainian athletes pulling out of the Olympics in protest.

Plus, what's up with WhatsApp?

LAURIE SEGALL, CNN MONEY TECH CORRESPONDENT: The global messaging war might be only be getting started.

COSTELLO: Mark Zuckerberg's biggest bet so far. $19 billion for the texting app that's adding a million new users every day.

Also, tornado threat.

INDRA PETERSONS, AMS METEOROLOGIST: Isolated threat of tornadoes will be out there today.

COSTELLO: Severe weather outbreak from Texas to Michigan now marching east. Unseasonably warm air sparking dangerous thunderstorms for millions.

PETERSONS: We're talking about 37 million of you today under the slight risk.

COSTELLO: And is that a wolf walking the halls of a Sochi hotel?

You're live in the CNN NEWSROOM.

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COSTELLO: Good morning. I'm Carol Costello. Thank you so much for being with me.

We begin this morning with a new terror warning rattling nerves and ratcheting up security. The U.S. is alerting airlines to be on guard for possible shoe bombs on international flights into the United States.

If you've flown within the last decade, you know American airports already guard against this threat which would be powerful enough to bring down an airliner in flight. But overseas, the screening is often less thorough. Possibly creating an opportunity for terrorists seeking an American target.

Barbara Starr is live at the Pentagon with more.

Good morning, Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Good morning, Carol. You're exactly right. And if you are at an airport right now waiting to board a flight you may see additional screening measures from airport security personnel.

(BEGIN VIDEOTAPE)

STARR (voice-over): New concern terrorists may target direct flights from overseas heading to the U.S. The Department of Homeland Security is warning airlines that terrorists may attempt to hide explosives in shoes, cosmetics and liquids. According to one industry source, the advisory mentions more than two dozen cities overseas including Johannesburg, Paris, London, Cairo and some additional cities in the Middle East.

BERGEN: The DHS warning is nonspecific, but the universal people who have desire and capability is not large. It's al Qaeda and al Qaeda in the Arabian Peninsula.

STARR: This demonstration shows the potential devastation a shoe bomb could cause. Sources say, intelligence indicates terror groups have been working on a new shoe bomb design.

And it's not the first time they've tried to blow up a plane that way. Shortly after 9/11, passengers on an American Airlines flight from Paris to Miami thwarted Richard Reid's attempt to detonate explosives hidden in his sneakers. After that, the TSA started asking everyone in the U.S. to take their shoes off while going through security.

This new warning comes just two weeks after U.S. officials warned airlines terrorists could hide explosives in toothpaste tubes on flights heading to Russia ahead of the Sochi Olympics. Officials say this new threat is unrelated.

(END VIDEOTAPE)

STARR: Of course we don't know exactly who is behind this new threat, Carol. But experts will tell you, al Qaeda and especially al Qaeda operatives in Yemen have never given up their ambitions to attack the United States -- Carol.

COSTELLO: Barbara Starr reporting live from the Pentagon.

Our CNN national security analyst Peter Bergen is here now with more on this.

Good morning.

BERGEN: Good morning.

COSTELLO: So when Barbara says that terrorists are working on a new shoe bomb design, do we know who is working on this design and what it is?

BERGEN: Well, the threat from DHS is nonspecific, but the group that has experimented with all sorts of interesting designs for bombs that are hard to detect by conventional means is of course al Qaeda in the Arabian Peninsula. They built the underwear bomb that failed to detonate on Northwest Flight 253 over Detroit on Christmas Day 2009.

They built the bombs that were hidden in printer cartridges and cargo planes bound for the United States that were luckily discovered in October 2010. And they have a very experienced bombmaker called al- Asiri who has never been found and is still believed to be out there. May be training other people within the group. And he has proven to be a very capable bombmaker.

COSTELLO: Hundreds of Americans are preparing to fly back from the Olympics. So I would suppose that's why this warning has gone out. How worried should we be?

BERGEN: Well, you know, these warnings happen. I mean, there's no upside for U.S. government officials if they think they have credible intelligence not to -- not to make a public warning because no one wants to testify after an event about why they didn't disseminate this kind of information.

And typically we have lots of these warnings and nothing really comes of it. Partly because the intelligence may be flawed or it may have been incomplete or maybe whatever was being planned was interrupted by the public announcement of this intelligence. So rarely do we find a kind of correlation between a warning of this kind and an actual event.

COSTELLO: Peter Bergen, thanks so much for your insight. We appreciate it.

BERGEN: Thank you.

COSTELLO: Also this morning, in Ukraine, the death toll climbs and a truce in word only disintegrates.

This is exclusive video I'm showing you. You see Ukrainian forces try to breach the fortress that now encircles the anti-government protesters. At least 20 people killed just today.

The international pressure is building on Ukraine's embattled president, Viktor Yanukovych. Today world leaders discussed sanctions against his government which backed out of a trade deal with the European Union and instead chose closer ties to Russia. And to much of the world, it's President Vladimir Putin who is playing a dark and menacing role here and resurrecting Cold War turf battle between the east and west.

Our chief national security correspondent Jim Sciutto joins us from Washington.

Good morning.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Good morning, Carol.

Well, now we have new death toll figures. The opposition there, the leader of the protesters saying that 100 people have been killed since Thursday, 500 injured. And this is this truce dissolved overnight. We're hearing more and more of firearms being used by both sides and this is really a worrisome development.

This is how that death toll can rise so quickly and our own reporters on the ground there seeing that with their own eyes -- bloodied bodies, lifeless bodies in the lobby of a hotel there that's been turned into something of a makeshift hospital.

Now President Obama commented on this yesterday during his trip to Mexico. He and other U.S. officials very much placing the responsibility on the Ukrainian government. Here's what he had to say.

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BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We expect the Ukrainian government to show restraint, to not resort to violence in dealing with peaceful protesters.

(END VIDEO CLIP)

SCIUTTO: I think for Americans to understand why this is important, we have to remember, this is a brewing war, civil war arguably, if it gets to that stage, right on Europe's doorstep. This is not a million miles away. This is right within Europe. And it's becoming more and more of a battle between east and west. The two sides here, one feels the pull of Europe. They feel the pull of west, the other side feels the pull of Russia. And Russia playing a big part here.

Vladimir Putin does not want to see the Ukraine fall out of its sphere of influence. And there's a lot of accusations of Russian involvement on the ground there as well. So it's a real crisis and it really is something that Americans need to be watching.

COSTELLO: And it's ironic because hundreds of miles to the east is Sochi where Ukrainian athletes are taking part in the Olympics, an event, you know, meant to celebrate international unity and they're getting set to go home to this.

SCIUTTO: That's right. Two members of the Ukrainian ski team, a father who's a coach and a daughter who's a skier, downhill skier, I believe, decided to go home. The Olympic Committee has said that they respect Ukrainian athletes' decisions to choose to go if they want to. We also heard from Sergei Bubka who spoke to CNN. He was a legendary Ukrainian pole vaulter. He sat down with CNN and he said he's urging restraint from both sides. And he said that his country in his words is on the brink of catastrophe.

One thing we're not seeing anymore, some of those Ukrainian athletes have been wearing black arm bands to show support for the victims back home. They're not doing that anymore. They met with the International Olympic Committee. The Ukrainian Olympic team had decided that there are other ways to show their support. They had a moment of silence in the Olympic Village but certainly, their eyes turning home to what is a real tragedy going on and not far away, as you say, from the Olympics.

COSTELLO: Jim Sciutto, many thinks.

Checking other top stories this morning at nine minutes past the hour. 35 members of a church youth group were injured last night when the second floor of an activity center came crashing down upon them. It happened at the Freedom Baptist Church in Mississippi. Six people sent to the hospital. Officials say none of their injuries are life threatening.

A new leak has been discovered at the Japanese nuclear reactor badly damaged in an earthquake and tsunami nearly three years ago. Officials at the Fukushima plant say 26 gallons of radioactive water leaked out of a contaminated water tank and was absorbed into the ground. The leak has been stopped and authorities do not believe any contaminated water has reached the ocean.

The University of Maryland hacked. The school says records for 310,000 students, faculty and staff were stolen, including Social Security numbers, birth dates and university I.D. numbers. School officials say no financial data was taken. State and federal officials now investigating.

Bank of America CEO Brian Moynihan is getting a 17 percent raise for a $14 million paycheck in 2013. Good pay for a well-run bank? Not if you ask their customers. Bank of America came in dead last in the American -- in the American Consumer Satisfaction Index's ranking of large commercial banks last year. It is the bank's third year in a row in last place.

A little bit of cosmic justice in Silicon Valley. Check out these tweets from tech developer Brian Acton. "Got denied by Twitter headquarters. That's OK. Would have been a long commute. A couple months later, Facebook turned me down. It was a great opportunity to connect with some fantastic people. Looking forward to life's next adventure."

In other words both Twitter and Facebook turned him down for a job but that was so 2009 and, boy, how times changed.

Acton, along with his partner, are now newly minted billionaires after Facebook paid $19 billion for their messaging service WhatsApp. Never heard of it? Well, WhatsApp allows its users to send text messages, videos and photos all without paying any pesky fees to your mobile provider.

Zain Asher is live from the New York Stocks Exchange to tell us more.

Good morning.

ZAIN ASHER, CNN BUSINESS CORRESPONDENT: Hi, Carol. Yes, I think what shocked most people is the price that Facebook is willing to pay. $19 billion. It's the most expensive deal Facebook has ever made especially when you compare it to Instagram. It only paid $1 billion for Instagram. I say only.

But this deal is going to be 25 percent in cash. The rest of it is going to be in stocks. $19 billion for WhatsApp. But also I really wanted to show people why this deal is important. Why is Facebook willing to spend this kind of money.

First of all, WhatsApp is pretty much the most popular messaging app for smartphones out there right now. It's not that big in the U.S. but it is huge in developing countries and the emerging markets partly because you can actually send these messages over broadband so when you communicate with people in other countries it's basically free. Right? So you're not -- you're not spending money on text messaging fees.

But also, for the most part, it is free but some users in some markets do actually end up paying $1 a year.

So I wanted to show you this chart as well. Take a look at this chart. This really sums up why this deal is attractive for Facebook. It has grown exponentially over the past four or five years. It's basically a baby. It's only been around four or five years. But in the past two or three years, this company has shot up like a rocket, basically adding about 100 million users on average every single year. Currently stands at about 400 million users.

So this is really about Facebook scooping up competition. It wants to maintain dominance in the mobile world. That is important to Facebook. But it also wants to expand internationally as well. And those two things are WhatsApp has down to a T -- Carol.

COSTELLO: Zain Asher, thanks so much.

ASHER: Of course.

COSTELLO: Fighting in Congress nothing new. But soon our illustrious elected leaders in Washington may have a new fight on their hands with us. There is a new petition from Moveon.org calling on Congress to give up their paychecks, all $174,000 of it, if they do not plan on passing any new laws this year.

Last year you might remember they hit a new low passing the fewest laws in modern history. Nearly 30,000 Americans think this is a good idea for them to give up their paychecks and have put to paper the -- and signed the petition.

And you also remember back in December, a CNN/ORC poll found two- thirds said this is the worst Congress of their lifetime.

So will this petition spur Congress to action? I'll let you decide that one.

Still to come in the NEWSROOM, if the gap between the 1 percent and the 99 percent grows ever wider, the Treasury secretary is throwing his hat into the ring in the fight over the minimum wage. He sat down with Christine Romans for an exclusive interview.

Hi, Christine.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Hi, Carol. And he said in this economy, he sees a decided arc of progress, but a lot more work needs to be done. And what does he think will fix income inequality in this country? I'll tell you right after the break.

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COSTELLO: As the fight over income inequality rages on, Treasury Secretary Jack Lew is throwing his voice into the debate. He says raising the minimum wage to $10.10 an hour is the right thing to do. The secretary sat down with our Christine Romans for an exclusive TV interview.

Christine, hi. What else did he say?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Hi there. Well, you know, he said the economy is improving. A decided arc of progress, he said, Carol.

But we did talk an awful lot about that minimum wage issue. He said even though there's been some thawing in the relationships in Washington, get something progress on the farm bill, getting some progress on appropriations bill, and the like, raising the debt ceiling, they still have a lot of work to do and he'd like to get that minimum wage raised. It's just the right thing to do. It's an economic justice issue really in this country. That's his view there.

You know, I asked him specifically about something that one of his predecessors has been writing about. Larry Summers has been writing about how the U.S. economy is becoming a "Downton Abbey" economy. Think of that, where you have the super rich, the top 1 percent who have so much of the power and money in the country and everyone else who works for them or everyone else at the bottom of the rung.

I asked him, are we at risk of becoming a "Downton Abbey" economy. Here's what he said, carol.

(BEGIN VIDEO CLIP)

JACK LEW, TREASURY SECRETARY: I don't think we have to be. I mean, I think it's more of a prediction than it is an assessment. And I think if you do the right things, we can create opportunity. You know, one thing about American people generally is if they are doing well, they don't begrudge other people doing well. They want a chance to have a middle class job, and we can solve that problem. (END VIDEO CLIP)

ROMANS: We can solve that problem by training and investment in the right kinds of education. He said, Carol, this income inequality problem in this country, you're not going to fix in one year what's taken some 30 years to kind of develop here. I mean, he is concerned about it but keeps going back to this idea of training the right kinds of skills, community colleges.

He points out, Carol, there are 3 million job openings in the country right now. It's true. There are 3 million job openings, but CEOs complain that they don't have workers with the right skills and workers complain that they're not getting hired. We have to fix that mismatch. He says that's something that the government can help with, Carol.

COSTELLO: Christine Romans, many thanks.

Still to come in the NEWSROOM: it's the pipeline that is struggling to get built. Now, there's a new problem for the Keystone Pipeline. And what court -- and how one court ruling could halt everything.

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COSTELLO: The politically charged Keystone Pipeline hits a major league snag. A judge has ruled Nebraska's governor has no right to seize private land to build the pipeline. That means the Keystone Pipeline's progress has come to a screeching halt because 200 miles of that proposed pipeline is supposed to run from Canada through Nebraska, to the Gulf of Mexico.

Many Republicans are bound to be upset by this ruling because they say the Keystone Pipeline would create thousands of jobs and oil independence.

With me now, Randy Thompson, one of the land owners who filed suit to keep the Keystone Pipeline from running through his ranch.

Welcome.

RANDY THOMPSON, NEBRASKA CATTLE OWNER: Thank you. Thanks for having me on.

COSTELLO: Oh, I'm glad you're with us this morning.

Are you feeling victorious?

THOMPSON: Well, I guess in a tempered fashion, we are. We realize that, you know, this is only the first step. But it's a huge step for the citizens of Nebraska, what happened yesterday.

COSTELLO: You are a cattle buyer. You're a rancher. Your family settled in Nebraska in the 1880s. Tell us what the land means to you.

THOMPSON: Well, I think with most Nebraskans, you know, we have a long history of our families being in this country and, you know, we realized what it took for our parents and our great grandparents and our entire family, what they went through with the depression and all those tough years, and how hard they worked to establish themselves.

And then to have a foreign corporation just come along and arrogantly tell us that they're going to take our land away from us and there's nothing we can do about it, you know, that hasn't really gone down too well with most folks out here.

COSTELLO: You have very much become the face of this fight in Nebraska. You protested in Washington, D.C., alongside Robert Kennedy Jr. and the actress Daryl Hannah. You got arrested along with them. You don't seem to be the stereotypical tree hugger.

What would you say to those who accuse you of costing America jobs?

THOMPSON: Well, you know if you look at the job situation, really, I don't want anybody to be out of work, but realistically, we're looking at a couple of thousand temporary jobs which will be gone within a couple of years. And then we're looking at a sum total of 35 permanent jobs that this pipeline would create in the entire United States.

And I would just say that our local grocery store would employ more people than that on a permanent basis. So, really, the jobs thing is -- it's smoke and screen as far as we're concerned.

COSTELLO: Of course, many people would disagree with you. Is there any compromise? Is there any place in Nebraska or any land owner in Nebraska that would feel comfortable with that pipeline running through that state?

THOMPSON: Well, you know, I don't speak for every Nebraskan for sure. I'm sure there's land owners that are in favor of it. And, you know, that's definitely their privilege.

But there's a whole lot of us that are not in favor of it and we definitely do not feel that a foreign corporation should be able to have the power of eminent domain to condemn our property as American citizens and the LB-1161 actually gave the power of eminent domain to TransCanada before they even had a permit to build the project in the United States. And we think that is a ridiculous idea. It's outrageous.

COSTELLO: Well, I'm sure there will be an appeal to this ruling so your fight will go on, right?

THOMPSON: Oh, no doubt. Yes, it will. But I do believe -- yes?

COSTELLO: No, go ahead. Finish your thought.

THOMPSON: I was going to say, no doubt it will. I'm quite confident when the final bell rings, the citizens of Nebraska will be the ones left standing.

COSTELLO: Randy Thompson, thanks so much for taking the time. I appreciate it. THOMPSON: Thank you.

COSTELLO: Still to come -- Ted Cruz faces the heat after filibusters put him in the spotlight and his party in the hot seat with voters. Now, he talks exclusively to CNN about the fallout, rather.

Our chief congressional correspondent Dana Bash has that story.

Hi, Dana.

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Hi, Carol.

Well, usually when you hear a politician accuse somebody else of trickery, of show votes, it's another party. But not with Ted Cruz. It's a lot of friendly fire and he is not stopping. I'll have more of my exclusive interview after the break.

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