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Dow Near Milestone; White House Rejects Claims of Slow Response; Ex-Trump Allies Hold Meetings in Moscow; Congress Hearings on Hack; China Installs Weapons on Contested Islands; School Bus Driver Back in Court; Explosives Found on Remains of Egyptian 804 Victims. Aired 9:30-10a ET

Aired December 15, 2016 - 09:30   ET

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

[09:30:00] ALISON KOSIK, CNN MONEY BUSINESS CORRESPONDENT: A milestone. But you know what, Carol, even if it doesn't hit that milestone this year, the Dow's had a fantastic year so far. The Dow is up 13.5 percent this year. And we've still got a few weeks to go before 2017. And as the opening bell rings, we see the Dow is beginning in the green. So it looks like investors kind of shook off the cobwebs and got right back into it.

CAROL COSTELLO, CNN ANCHOR: All right, Alison Kosik, reporting live from the New York Stock Exchange, thank you.

And good morning. I'm Carol Costello. Thank you so much for joining me.

Donald Trump's team bristling at sharp accusations coming from the White House. President Obama's press secretary saying the president- elect must have known that Russia was interfering in the election and doing it to benefit the Trump campaign. Here's what Josh Earnest said.

(BEGIN VIDEO CLIP)

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: The Republican nominee himself calling on Russia to hack his opponent. It might be an indication that he was obviously aware and concluded, based on whatever facts or sources he was -- he had available to him, that Russia was involved.

(END VIDEO CLIP)

COSTELLO: The Trump team is firing back.

Let's bring in CNN senior political reporter Manu Raju.

Hi, Manu.

MANU RAJU, CNN SENIOR POLITICAL REPORTER: Hey, Carol.

Yes, Josh Earnest actually going much further than the White House has previously in suggesting that Trump was obviously aware of that Russia connection given that Trump had urged Russia to hack Hillary Clinton the last time that he held a press conference, which was in July. But in the aftermath of Earnest's comments, perhaps this post-election detente between the White House and Trump is over.

Trump tweeting this earlier today. "If Russia or some other entity was hacking, why did the White House wait so long to act? Why did they only complain after Hillary lost?" And earlier this morning, Carol, a top Trump adviser, Kellyanne Conway, firing back at the White House.

(BEGIN VIDEO CLIP)

KELLYANNE CONWAY, TRUMP SENIOR ADVISER: That is breathtaking. I guess he's auditioning to be a political pundit after his job is over. So that is incredibly disappointing to hear from the podium of the White House press secretary because he is -- he basically -- he essentially stated that the president-elect had knowledge of this, maybe even fanned the flames. It's -- it's incredibly irresponsible, and I wonder if his boss, President Obama, agrees.

(END VIDEO CLIP)

RAJU: But what is perplexing to actually a lot of Republicans is that the intelligence community released on October 7th an assessment stated very clearly that it was confident that the Russian government did hack into U.S. political organizations. Something the U.S. government believes was authorized by the most senior-most officials in Russia. Yesterday, Senator Lindsey Graham, a Republican who ran for president last year, said he, too, had been hacked.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I do believe that the Russians hacked into the DNC. I do believe they hacked into Podesta's e-mail account. They hacked into my campaign account. I do believe that all the information released publicly hurt Clinton, didn't hurt Trump. But I don't think the outcome of the election is in doubt. What we should do is not turn on each other, but work as one people to push back against Russia.

(END VIDEO CLIP)

RAJU: Now, this comes as new questions are being raised in the aftermath of revelations that Jack Kingston, a former Georgia congressman, and a very visible Trump surrogate, was in Moscow this week briefing American businesses, discussing the possibility that Trump could ease sanctions on the country, to -- that he -- so sanctions imposed, of course, by the Obama administration and by Republicans in Congress. Kingston later telling NPR that he did not meet with any officials from the Russian government. But his meetings, Carol, only raising further questions about Trump's ties to a country many here do not consider an ally.

COSTELLO: OK. So stick around here. I want to bring in Phil Mudd. He's CNN's counterterrorism analyst. He's a former CIA counterterrorism official.

I want to go back to Kingston for just a second. Just to make it clear. So if sanctions are lifted in Russia, American imposed sanctions, and they're also imposed by the Europeans, right, so what might that mean for Russia as far as its economy and making some money, Phil?

PHILL MUDD, CNN COUNTERTERRORISM ANALYST: Look, I think it's not about money. It's about political pressure on to Putin. This is not a good time to do this. We're transitioning. We're a month out of transition. This should be left to the next president. But you can't look at this in isolation as a question of money. We have questions about how we can work with Russia.

COSTELLO: But, so, wait a minute, Phil, just to be clear, so you don't think Kingston should be in Russia at this particular time because, a, Mr. Trump isn't technically president yet.

MUDD: Correct.

COSTELLO: Right. So why are they negotiating right now? I mean Kingston was talking to American businessmen in Russia.

MUDD: Yes.

COSTELLO: He didn't talk to any government officials, but, still, in your mind, this is unseemly?

MUDD: Look, this is unseemly. It's -- regardless of who he's talking to, the message here is clear. When there's a new game in town, and that game in town hasn't started yet, we will have a conversation about issues, including sanctions that are not only sensitive, but that relate to national security, including what Russia is doing in Syria. This is not the right time for this.

[09:35:06] COSTELLO: So, Manu, does this strike you as odd or unusual?

RAJU: Well, it raises a lot of questions among Republicans in particular because they don't know exactly how Trump is going to deal with the issue of sanctions, whether or not he will try to ease those sanctions, whether he'll try to push Congress to move forward in an effort to ease sanctions. And what will his secretary of state nominee do? What his position will be on that issue of sanctions. We know that Rex Tillerson, when he was -- when he was Exxon Mobil's CEO, opposed issuing sanctions on Russia.

So those are the questions that are being raised. And when you have a Trump ally, who is not a member of the campaign, Jack Kingston, not a member of the campaign but a visible, very visible Trump surrogate, having that message that that the Trump campaign coming in could ease those sanctions, it does cause some concern, even among Trump's own party here, Carol.

COSTELLO: OK. So, so, Phil, this is all happening in light of this Russia hacking into the DNC and also into Senator Lindsey Graham's e- mail. And the CIA is trying -- well, the CIA says that Putin was definitely trying to tilt the elections to Hillary Clinton, and Mr. Trump keeps kind of blowing off those claims. You know we mentioned Josh Earnest and what he said Mr. Trump said during the election. And just to refresh our memories, here is what Mr. Trump said about Russia during the election.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT-ELECT: Russia, if you're listening, I hope you're able to find the 30,000 e-mails that are missing.

(END VIDEO CLIP)

COSTELLO: OK. So, Phil, Kellyanne Conway said that was sarcastic. And so let's just say it was a sarcastic comment, meant to be funny, but how might Russia take that?

MUDD: If you're looking at this from a Russian perspective, you're having an early holiday party. We call this covert action. That is, action under the table to try to influence something overseas in the interests of your government. In this case the Russian government. Look at what we've got here. We've got the American people questioning the integrity of an electoral process. Not questioning who won. That's a smokescreen. Questioning whether the election was run properly, and whether there are people overseas, the Russians, who are trying to change the way we thought about the election. Unquestionably, yes.

The second thing they've got, equally fascinating, is an incoming president of the United States, Donald Trump, sideways with his Central Intelligence Agency. Can you imagine being in the Russian security service today? Big celebration today. They won.

COSTELLO: Really, Phil? They won? They're celebrating in Russia?

MUDD: Absolutely. What do you think the intent of the campaign was? This is a -- this has achieved their objectives beyond the dreams of the security service. The intent by releasing these via WikiLeaks was to lead to questions about the American electoral process and then to embarrass a candidate that the Russians didn't like. I think that's obvious.

What we had in retrospect? We've had exactly that happen in America, with the added bonus, icing on the top for the Russian service, the president -- incoming president of the United States, in public, outing the CIA by saying he thinks they're lying for political purposes. Unbelievable success for Russia.

COSTELLO: OK, so, Manu, I know that there are going to be hearings in Congress. How many hearings might there be?

RAJU: It depends how many will be classified and how many will be in the public eye. We don't know that yet. What we do know is that three committees on the Senate side plan to look into this. The Foreign Relations Committee, the Armed Services Committee and the Intelligence Committee, all run, of course, by the Republicans who will control that chamber. On the house side we're only aware of the House Intelligence Committee. And a lot of those hearings will happen in a classified setting behind closed doors, which is one reason why some Democrats are calling for a stand-alone investigatory body to look into this, the way that Republicans set up a select committee to look into the 2012 Benghazi attack.

But right now, Republican leaders are resisting that stand-alone committee and believe that they can be done through the existing committees in Congress. So we're going to expect to see a lot of those hearings take place on those specific panels, but it could take a while before we learn a lot of the details about what actually happened.

COSTELLO: All right, Phil Mudd, Manu Raju. Thanks to both of you.

Still to come in the NEWSROOM, China makes a bold military move in contested waters. Why China is claiming it's all in the name of self- defense.

(COMMERCIAL BREAK)

[09:42:47] COSTELLO: China makes a bold and alarming move. New satellite images reveal anti-aircraft and other weapons systems have now been installed on a group of artificial islands in the contested waters of the South China Sea. China has already built military-length airstrips and deployed missiles to the islands.

Let's bring in CNN's Pentagon correspondent Barbara Starr. She has more.

Hi, Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good morning, Carol.

Well, this move is likely to be politically unsettling, at least. You know, President-elect Donald Trump already commenting that China should not be doing this in this area. These contested waters. Also, unlike -- likely to unsettle China's nearby neighbors, especially Japan and the Philippines. They've been watching all of these moves, as well as Vietnam, all of these moves by China for months.

So these weapons that they've now installed, are they military significant? That may not really be the point. Some of them are smaller anti-aircraft guns. The Chinese have the ability to move these weapons around to these various locations.

It doesn't fundamentally change the balance of military power in this region. But what it does do it demonstrates that China is making a military statement to the region. That it will continue its military buildup in this area. It will move things around. It will very much be a presence there. The Chinese foreign ministry saying it's all for China's self-defense and that China has every right to do this.

Carol.

COSTELLO: Barbara Starr reporting live from the Pentagon. Thank you.

Checking some other top stories for you at 44 minutes past.

Today is the last day you can sign up for 2017 health coverage under Obamacare. More than 4 million people have already signed up despite President-elect Trump's vow to repeal Obamacare when he takes office. The Health and Human Services secretary, Silva Burwell, spoke with CNN's "New Day." (BEGIN VIDEO CLIP)

SYLVIA BURWELL, SECRETARY OF HEALTH AND HUMAN SERVICES: And for those people in the marketplace, what we know is for those folks, right now we see 4 million folks have already come in, and we see our numbers moving and people coming in before the December 15th deadline for coverage on January 1st. It's a product people want and need.

(END VIDEO CLIP)

COSTELLO: In the meantime, Republican lawmakers still plan to fast- track the repeal come January.

[09:45:05] Recreational marijuana now legal in Massachusetts. Under a new voter approved law, adults 21 years old and over are allowed to possess up to 1 ounce of pot outside of their home, and up to 10 ounces inside their home, and they can also grow up to a dozen marijuana plants per household. The catch? You can't sell it. It will take at least a year until the first pot shops are licensed.

New developments in the Jonbenet Ramsey case. Investigators have introduced a new round of DNA testing, hoping to solve her 20-year-old murder. But it will only be a breakthrough if the results match evidence authorities have already found. And Boulder's district attorney is downplaying the new test saying they are, quote, "not significant" and "not a big deal." Jonbenet was found dead in 1996.

Right now, the Tennessee school bus driver involved in a crash that killed six children last month is back in court. I want to take you live inside a Chattanooga courtroom where several officers have been testifying. The bus driver, 24-year-old Johnthony Walker, he entered the courtroom just last hour. He's expected to plead not guilty today to a slew of charges, including vehicular homicide. CNN's Victor Blackwell has more.

Good morning, Victor.

VICTOR BLACKWELL, CNN CORRESPONDENT: Carol, good morning to you.

The judge in this case has signaled that this will be a long day of testimony. But already in just the first few minutes this morning, there have been several important headlines to come out of the testimony from officers who were on the scene that day. And at the center of this case will be the speed at which Johnthony Walker was driving at the time of this crash. We know that the speed limit was 30 miles per hour on that street. There was an audible gasp, we're told from one of our producers in that courtroom, when one of the officers testified that Walker was driving between 50 and 52 miles per hour at the time of this crash.

We also know from officers' testimony that there was no signal of braking at the point that this bus rolled over and hit a tree. And we also know that there were cameras on this bus. Three cameras. One of them captured Johnthony Walker using a cell phone while he was transporting those students. They have not said if he was using a phone at the time of the crash. But, of course, that's not only unsafe, it's against Tennessee law.

Now the defendant here, 24-year-old Walker faces six counts of vehicular homicide, one each for those six children who were killed during this crash. We know they were ages six to 10, and 31 students we've learned from testimony were taken to hospitals for injuries.

The principal in this case had expressed concerns with Walker's driving in just the several months that he was working for this company. We know that also students complained that he was trying to hurt them with his driving. And one parent even threatened to fight him over complaints that he was cursing at some of the students.

What we've heard in just the first few minutes of testimony is the meat of this case. It's the technology, the science behind the investigation that prosecutors are putting together. The GPS, the engine control modules, all of the science and technology they will put together to try to determine if Walker is guilty of these four counts -- six counts, I should say, of vehicular homicide, also reckless endangerment and reckless driving. We'll continue to watch what's happening in Chattanooga, Carol.

COSTELLO: All right, Victor Blackwell, thanks so much.

I'll be right back.

(COMMERCIAL BREAK)

[09:52:03] COSTELLO: All right, this just in to CNN. New clues about what may have happened to Egypt Air Flight 804. That flight disappeared over the Mediterranean back in May. The committee investigating the crash says traces of explosive material have been found on the remains of the victims. CNN's Nic Robertson has more.

Hi, Nic.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, hi there, Carol.

They say they're going to refer this case to the Egyptian prosecutor. Of course, this is raising a lot of questions. It's a very sensitive issue for the Egyptian authorities to imply that the plane might have been brought down by explosives. A lot of questions were asked when the -- at the time when the plane came down. There were a lot of indicators, early indicators in this investigation that indicated it might not be, that it might be a mechanical malfunction on the aircraft. For example, when the aircraft began to lose altitude, Greek authorities picked it up on the radar. It was at 37,000 feet. They say it took a 90 degree turn to the left, went down, then took a 360 degree turn to the right, and then continued going down into the ocean.

The data chips, when they were recovered, were damaged. They were sent to France. They were repaired. And the information that came from them and that was being transmitted from the aircraft at the time indicated that there was a smoke alarm in the laboratory and a smoke alarm in the cockpit and that the air crew were trying to fight some kind of fire on the aircraft at the time.

So this piece of information now from Egyptian authorities perhaps flies in the face of what we knew up until now. And it's a sensitive issue, the explosives, because, of course, it was that Russian charter jet that came down by an ISIS bomb just several months before this plane disappeared. And the Egyptians really never were completely transparent about everything they knew about that aircraft, Carol.

COSTELLO: Interesting. Nic Robertson reporting live for us this morning. Thank you.

Still to come in the NEWSROOM, one billion accounts hacked. What Yahoo! is telling users to do right now.

(COMMERCIAL BREAK)

[09:57:44] COSTELLO: A new security breach at Yahoo! And it is massive. More than one billion user accounts hacked. The hack believed to be one of the largest security breaches ever.

CNN's Samuel Burke joins us now with more.

Hi, Samuel.

SAMUEL BURKE, CNN CORRESPONDENT: Good morning, Carol.

It's absolutely mind-boggling to think that this hack actually occurred in 2013. Yahoo! didn't find out about it until just now.

Now, I want to put up a list on the screen of all the things we believe that these criminals got away with, including names, e-mail addresses, phone numbers, passwords and dates of birth. What they did not get was credit card information and bank account information. But don't breathe a sigh of relief, because, remember, you can always change your credit card number, you can't change your date of birth and you're likely not going to change your name.

So what can people do now? Well, let me just put up a list on the screen of that as well. So, of course, the customary change your password, which it feels like we have to do almost every other day now. You also might want to think about deleting all of your old e- mails, especially those with sensitive information, like copies of your passport. But if you only remember one thing from this report, Carol, go to settings and turn on two factor authentication. That allows a code to be sent to you every time you log in to your e-mail account, your bank account, your credit card account. That way even if a hacker gets your password, they won't be able to get into your account because only you have that number on your phone each and every time you log in. Annoying, but, hey, with all these hacks, millions and now billions of accounts hacked, it's the only sure way.

COSTELLO: All right. Samuel Burke reporting live for us. Thanks so much.

The next hour of CNN NEWSROOM starts now.

And good morning. I'm Carol Costello. Thank you so much for joining me.

We begin with the crisis in Syria. Evacuations finally underway. Here is the newest video out of Aleppo right now. A new cease-fire appears to be holding but you know how that goes. With the constant air strikes, they have taken their toll, their deadly toll. Hundreds of thousands of civilians have been killed and there is still fear that people will not make it out alive.

[10:00:00] (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: (speaking in foreign language).

(END VIDEO CLIP)

COSTELLO: That is the voice of an orphan in Aleppo and this is what he's saying. Quote, "this might be the last day you will hear my voice and see me.