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Rebel Fighters Claim New Ceasefire Deal in Aleppo; Civilians Trapped in Aleppo Feel World Turned Back on Them; Trump Meets with Tech Industry Leaders; Trump's Conflicts of Interest with Business, Children; Duterte Admits He Killed Suspects As Mayor; Report: China Installs Weapons On Contested Islands; U.S.: 75 Percent Of ISIS Fighters Wiped Out; Yahoo: Another Massive Hack; World Sport. Aired 2-3a ET

Aired December 15, 2016 - 02:00   ET

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


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[02:00:18] JOHN VAUSE, CNN ANCHOR: This is CNN NEWSROOM live from Los Angeles.

Ahead this hour --

(HEADLINES)

VAUSE: Hello. I'd like to welcome our viewers all around the world. I'm John Vause. We now into the third hour of NEWSROOM L.A.

The original ceasefire in Aleppo lasted less than a day but opposition fighters say they have a new deal. It's not entirely clear the Syrian government has agreed to stop the fighting to allow thousands of civilians to leave. Meanwhile, the Syrian army launched an offensive on Wednesday to take back one of the last neighborhood still under rebel-held control.

Jomana Karadsheh is keeping a close watch on everything happening. She's in Amman, Jordan.

Jomana, where are we at right now with the ceasefire and the evacuation?

JOMANA KARADSHEH, CNN CORRESPONDENT: The is such a fast-moving situation really developing fast. John, in the past half hour and few minutes, we have been hearing from several different parties that preparation are underway for these evacuations. It has not happened yet. We are hearing from activists on the ground who are saying that wounded people have been gathered in preparation for the evacuation. We have also been in touch with the International Committee of the Red Cross. The ICRC is telling CNN that they have 100 volunteers and staff from the Syrian Red Crescent, too. They are standing by, ready to help the wounded as they are evacuated. They have 10 ambulances ready to assist with this evacuation.

Perhaps a more positive sign than 24 hours ago, that this might be actually happening today is we are hearing from Hezbollah's media affiliate, Al-Manar (ph) TV, also appointing that preparations are underway, but they are describing it at the evacuation of militants. So more positive signs at this point. But so far, no confirmation that this is underway just yet.

VAUSE: OK, Jomana, we'll get back to you in a moment.

Thousands of civilians who have been trapped in eastern Aleppo for months feel the world has turned its back on them.

ITV's Dan Rivers was there when the original ceasefire unraveled within hours.

(BEGIN VIDEOTAPE)

DAN RIVERS, REPORTER, ITV: Aleppoans thought this would be the day peace would finally prevail. But this afternoon, that glimmer of hope was shattered in the most brutal fashion.

(EXPLOSION)

RIVERS: President Assad's tanks and artillery once again unleashing everything they had, including this bright burning substance, possibly white phosphorus. For those trapped inside, it was terrifying.

UNIDENTIFIED ALEPPO CITIZEN: And there are the families and here we are, we have families and that will be a danger for them. I have a family. I have a baby boy, 5 months. Still here. We just want to evacuate out of the city to a save place.

UNIDENTIFIED ALEPPO CITIZEN: Criminal Syrian Assad regime and the Iranians have broke (sic) the ceasefire and they were attacking the civilians and continuing the genocide. Civilians are stuck again in the city.

RIVERS: It was a tragic end to day which had started with such promise. Before dawn, more than 30 buses were waiting to evacuate rebels and civilians, but the lack of trust between both sides saw the deal break down before a single fighter had boarded.

With the gathering light, it was clear the plan to drive them to rebel territory a few miles to the west of the city was in tatters amid arguments over new conditions imposed by Iran.

Ordinary Aleppoans made homeless by the fighting, the international wrangling means just one thing, more suffering.

Near Aleppo's airport, a warehouse complex is now home to thousands, camping out on freezing concrete floors, the inevitable result of the war that has been allowed to rage for years.

(on camera): This is what it looks like when a city is emptied by war. There are thousands of people in this refugee camp and 500 also arriving every single day. This is bitterly cold in this warehouse. And they're left to huddle around a fire to try and keep warm. You've got to wonder, where is the international community.

[02:05:08] (voice-over): Tonight, the temperature is plummeting well below zero. Some don't even have shoes. Grown men are shivering. So how is a baby supposed to survive?

UNIDENTIFIED FEMALE (through translation): My grandson is orphaned. His father and mother were kill. We do not have anything to wear. We left everything behind to come here.

RIVERS: The most vulnerable have been left with nothing. Aid workers cannot understand why.

UNIDENTIFIED FEMALE: The people here, we have -- (INAUDIBLE). It is so cold. They can't handle this weather.

RIVERS: Across this ravaged city, there is desolation that will take decades to rebuild. So many homes emptied of families, some of whom will never return.

Dan Rivers, ITV News, Aleppo.

(END VIDEOTAPE)

VAUSE: Joining me once again is Jomana Karadsheh in Amman, Jordan. Also, Samah Hadid, with Amnesty International in Beirut; and here in Los Angeles, Lucy DerTavitian, a journalist covering the Middle East.

Thank you all for being with us.

Samah, first to you. Are you hopeful that this second attempt at an evacuation will go ahead according to plan?

SAMAH HADID, AMNESTY INTERNATIONAL: Well, John, we can only hope for a safe evacuation because we've been in touch with civilians on the grounds in the eastern Aleppo, and they desperately, desperately need an evacuation. They fear death and they feel trapped. And they feel as though they've been failed by the international community. Amnesty, along with other organizations, are calling for a safe evacuation of civilians. We're also calling for U.N. monitors to be deployed on the ground to make sure that this evacuation is safe and civilians are protected from revenge attacks from detention and unrest, because we are also hearing of reports that there have been a number of detentions and arrests by the authorities. So, we urgently need an evacuation and for U.N. monitors to be deployed on the ground.

VAUSE: Jomana, to you there in Amman, hundreds of protesters gathered outside of the Iranian consulate in Istanbul. They are blaming the Iranians for the first ceasefire unraveling. This is what happened.

(BEGIN VIDEO CLIP)

(SHOUTING)

(END VIDEO CLIP)

VAUSE: Jomana, do we know what those conditions were that the Iranians demanded at the last moment, and had they been met?

KARADSHEH: As you know, John, Iran is a key player in Syria, a major ally of the regime and a backer of Bashar Assad's regime. And they have played a key role on the ground in shifting this battle in favor of the regime. Now, while the Russian airpower has been a major game changer, we have also seen that when it comes to Iranian boots on the ground and also Iranian-backed Shia militias, Iraqi and Lebanese. They've also played a key role here, especially in the battle for Aleppo. And what we have heard from oppositions sources is that they are saying that it was the Iranians who were unhappy with this deal that was brokered by Turkey, and it was between the Russian and the opposition. And that they did not really have a say in this. And they had a number of demands, among them that they wanted included in this deal is avoiding medical evacuations in two Shia towns in Idlib Province. They wanted to see fighters, according to these reports we have been hearing, and medical evacuations to take place. We'll have to wait and see if this does happen, if the Iranians did get their way here. It really underscores how complicated the situation is, with so many different parties involved -- John?

VAUSE: It is very complicated.

Lucy, seriously, President Bashar Assad was interview by Russian TV, wasn't just the Iranians who were happy with the first ceasefire deal, but the Syrian government was unhappy as well as Assad.

(BEGIN VIDEO CLIP)

BASHAR AL ASSAD, SYRIAN PRSEIDENT (through translation): There will be no pause because this only happens in areas where terrorists, they are either prepared to hand in their weapons or leave the area. Only then, the military operations can stop. Operations do not stop during negotiations because we do not trust the terrorists, because they often say something and do the opposite. They used to ask for ceasefires only to strengthen their positions and obtain supplies consisting of weapons, ammunition, et cetera. That's why we do not allow that. Only we agree to something specific we do that.

(END VIDEO CLIP)

VAUSE: OK, we need to find out how committed the Syrian regime is to this deal, not just the ceasefire, but the evacuation. Also, what's interesting from the interview is that it seems now Assad is calling the shorts here in a major way.

[02:10:09] LUCY DERTAVITIAN, JOURNALIST COVERING MIDDLE EAST: It seems like that, but we have to remember that what is happening on the ground is that Assad's forces are tired, they're week. And another thing that happened that's important is they've localized and they're kind of Quds forces have become more regional forces and their interests are more regional rather than those of Assad. Rally, who is doing the work on the ground is the Iranians and the Russian, which means, no matter what, Assad has to balance his ambitions with those of the Iran's and the Russians. He doesn't have the kind of force that he used to have. We know now they're claiming east Aleppo, it's not going to end there. Once the victory has been fully realized, as Assad called it, the fight is going to be taken to Idlib.

VAUSE: What you're saying is when the Iranians say this deal won't go ahead, Assad doesn't have much choice? DERTAVITIAN: I don't think he does. It doesn't seem like it because the Iranians are the boots on the ground and doing the work. And a lot of his forces have, again, have taken - their focus is more their smaller, regional governance that they have to protect. They have to protect their people and the Iranians and the Russians, of course, are the ones that are clearing out the rebels.

VAUSE: Samah, to you, the U.N. earlier accused the Assad forces of essentially shooting dead unarmed civilians in the streets. Do you have any evidence which also backs up those claims?

HADID: We looked into those reports and our research is consistent with those U.N. reports. Which need a lot of confirmation, and this really underscores the need for investigation but also the need for accountability in this war. We are now reaching nearly six years of war where regime and other parties to the conflict have not been held to account for war crimes and crimes against humanity committed during this six years. We urgently need the U.N., particularly the U.N. Security Council to stop blocking action when it comes to these atrocity, stop blocking action in terms of holding parties accountable for these war crimes and atrocities. We haven't seem that yet. We're urgently calling on the member states and members of the Security Council to allow accountability measures to be in place so we can prevent these atrocities like the ones reflected in the U.N. report from taking place.

VAUSE: Jomana Karadsheh, we understand the U.K. government is working with other governments to collect evidence of war crimes in Aleppo and other places in Syria. But especially in Aleppo, how can they get the evidence in the middle of a war zone?

KARADSHEH: You hear there from Samah, it is a very difficult situation considering the security situation. And it would be very difficult for international investigators to be collecting evidence. But we do know that there are organizations in the past that have trained Syrians to gather this sort of evidence in other parts of Syria. The situation in Aleppo is too volatile, very difficult to say if anything like that is going on in the background. But we know there has been a process in the background taking place where they have collected evidence in other parts of the country. It is very complex, very difficult. We also heard just last month, John, from the US ambassador to the United Nations, Samantha Powers, also mentioning the names, naming and shaming, several Syrian military officials, generals, they say, that are responsible for such crimes. It would seem that there is something going on in the background to try and collect this evidence for perhaps one day to try and bring these perpetrators of these alleged crimes to justice.

VAUSE: Lucy, finally to you, a lot of people are blaming everyone for what's happened in Syria. What is interesting, Ben Rhodes, a senior aide to Obama, he said, for the United States, there was no good options in this conflict. This is what he said.

BFC

BEN RHODES, U.S. DEPUTY NATIONAL SECURITY ADVISOR: The challenge we face in Syria, even as we have exhausted every diplomatic effort, even as we been the largest provider of humanitarian assistance for those in need, we have not had a military option that we felt could resolve the situation, could make the situation discernably better. You have a brutal dictator backed by Russia and Iran. You have a variety of extremist groups fighting on the ground. And really, we have not had a military option that we believe could be implemented to resolve the situation.

VAUSE: Was this really a choice between failed diplomacy and a full- scale military option with nearly 50,000 or 100,000 U.S. and coalition troops in Syria? Was there a middle ground?

[02:15:10] DERTAVITIAN: I don't know if there were. He's absolutely right. The United States and the international community had no options. Also, don't forget, the rebels are divided. That's why Assad was able to gain traction in eastern Aleppo. When you're talking about the rebels, a big force of the rebels is al Nusra Front, which, as we know, is al Qaeda of Syria, so we do not really have -- we do not have choices on the ground. But at this point if Assad is smart, he would work on a political solution because a military resolution is going to be an end game in Syria. I think the Iranians want a political solution right now as well because it's impacting on the Iranians, the Russians. The Syrian forces are worn out. So, this is the time to gain a political solution.

VAUSE: He's on his strongest feet right now than he has been for years.

DERTAVITIAN: Absolutely.

VAUSE: Lucy, thanks so much for being with us.

Also, Samah Hadid in Beirut, and Jomana Karadsheh in Amman, Jordan.

Thanks to all of you.

Paris is showing its support for Aleppo. Hundreds demonstrated Wednesday, one of the largest protests in Paris, against the Syrian civil war since it began five years ago.

Meanwhile, the Eiffel Tower went dark Wednesday night. The mayor of Paris say it is a symbolic measure to call out the international community on the urgency to act.

You can help Syrians caught up in the civil war. CNN has listed aid organizations helping families to escape the danger, also to receive basic supplies. Just head to CNN.com/impact to find a full list.

When we come back, Donald Trump meets with top tech leaders. What he's promising them and what he is asking in return.

Also, Yahoo! Says there's been another massive security breach and it is likely the largest hack ever.

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(WEATHER REPORT)

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[02:20:55] VAUSE: Now to the latest development in the Trump transition, beginning with some post-campaign fence mending. Donald Trump held a roundtable discussion with the heavy hitters from the tech world, including Amazon, Facebook, Microsoft and Apple. The turnaround after the tensions between Trump and the industry during the campaign. The President-elect says, hey, let's stay in touch.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT-ELECT OF THE UNITED STATES: You'll call my people, you'll call me, if really doesn't make any difference. We have no formal chain of command around here.

(END VIDEO CLIP)

VAUSE: Joining me now is Democratic strategist, Matt Littman, and CNN political commentator, John Phillips, talk radio host and political columnist the "Orange County Register."

Guys, thanks for being here.

It's strange, out of every one that got invited to this big get- together, Twitter was left out. The CEO Jack Dorsey was not invited. It's been reported, during the campaign, his company reportedly refused to approve a "Crooked Hillary" emoji. Trump spokesman, Sean Spicer, denied this, tweeting, oddly enough, "Another example of false, reprehensible, pathetic tabloid foie journalism.

John, the problem is, given Trump's record, this report seems more likely than not, doesn't it?

JOHN PHILLIPS, CNN POLITICAL COMMENTATOR: Well, his invitation must have got lost in the snail mail. He should have tweeted him a message.

It clearly is Trump's favorite website he spent all his time on, so I do not know why he was not there.

But I think this meeting is a good thing because as we have seen with what happened with Yahoo! today with the billion accounts that were breached, as we have seen what happened was Sony in the e-mail hacking scandal that happened, either by the North Koreans of the Chinese, what happened to the DNC, with John Podesta, this is clearly going to be a recurring problem in the future. This was an industry that did not politically back him. Peter Theil is the only one I can think of who publicly got behind Donald Trump. They're going to need to mend fences so that Washington, D.C., can work together with Silicon Valley to take care of what is clearly going to be a big problem the 21st century.

MATT LITTMAN, DEMOCRATIC STRATEGIST: John managed to mention all that about hacking without mentioning the Russians. But we'll get to that later. PHILLIPS: Yes.

LITTMAN: But here's the thing with the tech companies. The tech companies want, number one, is tax repatriation. They want to be able to bring their money overseas at a lower tax rate, the biggest priority. If Trump can do that for them, they will develop a much more friendly relationship.

Number two, they want more H1B visas. They want to bring over highly qualified immigrants to work at the tech companies. If he could help with that also, great. Those are the biggest issues for the tech companies. If Trump can do, he wants to lower the corporate tax rate, then that relationship will get much better.

VAUSE: It's all about the billions because they did wimp out on some of the big issues which they raised in the campaign, like net neutrality. No one talked about that. No one talked about a Muslim database, for e-xample. These CEOs brave in the campaign, kind of cowards in the face of -

LITTMAN: Yeah. Again, those, the biggest issues for them. The biggest issues will be that tax rate. If they're able to bring over billions of dollars from overseas, a company like Apple, that is the biggest thing for them.

PHILLIPS: For the American people, this is a national security issue, having foreign espionage attack American companies, American political parties, American elections, that is something needs to be taken care of and --

LITTMAN: Do you think there should be a bipartisan hearing about the --

(LAUGHTER)

VAUSE: The meeting went about 90 minutes. The president-elect really was laying it on thick. Listen to this.

(BEGIN VIDEO CLIP)

TRUMP: I'm here to help you folks do well. And you're doing well right now. And you I'm very honored by the bounce. They're all talking about the bounce. So right now, everybody has to like me at least a little bit. But we're going to have that bounce continue. And perhaps even more importantly, we want you to keep going with the incredible innovation. There's nobody like you in the world.

(END VIDEO CLIP)

VAUSE: Which brings us to the last shot there. What were the Trump children doing at this meeting, John, especially the two sons, Don Jr and Eric? Aren't they running the company? Isn't there meant to be a firewall between -

PHILLIPS: He's still President-elect Trump. He is not President Trump. And the kids will be running the company. Donald Trump will be running the country. So, there will be separation between the two.

Look, this is a very close family. This is a family where the kids work for the family business, where they sit around the dinner table, they talk about business, they talk about these things. This is not something that is uncommon. It is not something also that is uncommon in the world of politics. Look at the Kennedys. What happened with all the relatives that sat around and work in the business?

(CROSSTALK)

[02:55:20] VAUSE: I think a law was put into place after that though.

(CROSSTALK)

PHILLIPS: -- with the Clinton Foundation.

LITTMAN: The Clinton Foundation is a lot different than Trump businesses. There are laws against accepting gifts from foreign governments while you are the president of the United States. We have already seen that people want to use the Trump Hotel from foreign countries, possibly to curry favor. Also, it is really hard to say that the children are not going to make money off of what they are hearing about from these tech companies. I mean, that is -- Trump talked about draining the swamp. How is that not the swamp?

VAUSE: Speaking of the Trump family, Ivanka Trump, we have been told she will have an office in the East Wing, usually reserved for the First Lady.

Matt, that's not weird, is it?

LITTMAN: I mean, I think Trump's wife will be living in New York.

VAUSE: Raising their son, Barron.

LITTMAN: Right. Actually, I think Ivanka Trump will have somebody there. Ivanka Trump is a pretty good spokesperson. I think she actually will do a pretty fine job of that. That is the least of my concerns, given the cabinet appointments that we have seen. Some of these people who are being appointed to these roles, will have to go through these hearings, have spoken even about dissolving the agencies that they are going to be running. I think that is a much bigger issue than Ivanka Trump --

(CROSSTALK)

VAUSE: She's more of a Democrat, is you listen to what she says.

PHILLIPS: She is from New York, but the role of the First Lady is generally apolitical.

VAUSE: Right.

PHILLIPS: This is a bipartisan issue. If Hillary Clinton were to be elected, my guess is that Chelsea Clinton would have probably served as First Lady, in that particular role.

VAUSE: Well, we'll never know.

There will another break from tradition. It se3ems like the daily White House briefings, which have been a regular feature for so long, may be going away. This is what Reince Priebus, the incoming chief of staff had to say.

(BEGIN VIDEO CLIP)

REINCE PRIEBUS, INCOMING CHIEF OF STAFF: I think it's important that we look at all of those traditions that are great, but quite frankly, as you know, do not really make news and just -

(CROSSTALK)

PRIEBUS: -- mundane, boring episodes. You know, even looking at things like the daily - the daily White House briefing from the Press Secretary, there's a lot of different ways things can be done.

(END VIDEO CLIP)

VAUSE: One way is, what, to follow tweets every day?

LITTMAN: I don't think they want to be answerable to the press. And Trump has not held a press conference in many, many months. I do not think he wants to answer tough questions from the press. And I think, given all these conflicts of interest, given the fact that Trump is -- I do not think he will be able to fulfill any of these promises - I'm sure you'll agree -- that's he'll be able to fulfill a lot of these promises, I do not think they want to be out for the press every day.

PHILLIPS: My guess is he is floating a trial balloon here to see what the reaction is. And these things, frankly, do change over time. The State of the Union address was initially was something that was written and delivered to Congress. Then it became something that happened before a joint session of Congress. The weekly radio address is something that is fairly recent invention so -

(CROSSTALK)

(LAUGHTER)

(CROSSTALK)

VAUSE: Oh, gosh. OK.

OK, we'll take a quick break. Up next, the U.S. issuing a startling assessment of how air strikes have decimated the ranks of ISIS.

And China says it has no plans to militarize its man-made islands. Now, new images might show a different story.

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[02:32:04] VAUSE: Welcome back, everybody. You're watching CNN NEWSROOM live from Los Angeles. I'm John Vause. We'll check the headlines.

Evacuation preparations are underway at Aleppo for wounded civilians. The International Committee of the Red Cross says it has 100 staff and volunteers ready to help. Meantime, several sources say there are also preparations happening to evacuate rebel (ph) (inaudible).

Japanese Prime Minister Shinzo Abe is welcoming Russian President Vladimir Putin to his hometown to talk. Mr. Putin has been looking to strengthen ties with Asia. Tokyo is hoping the meeting could end with Russia returning a chain of islands, the then-Soviet Union seized at the end of the Second World War.

And Donald Trump offering his help to leaders of America's top tech companies. Executives from Apple, Amazon, Tesla, Facebook, and other companies met with the President-elect at Trump Tower. A source says the group talked about jobs, immigration, and China.

Philippine President Rodrigo Duterte admits he killed suspected criminals to show police they could do it too. He says it happened when he was mayor of Davao City. In the six months of Mr. Duterte's presidency, almost 6,000 deaths have been reported in his war on drugs.

Satellite images now show China has installed weapons systems on all seven of the islands it built in the South China Sea. The images show antiaircraft guns that could guard against cruise missiles. Beijing has already built airstrips on the islands leading some analysts to call them unsinkable air craft carriers. It all seems to contradict statements from President Xi Jinping that China had no intention of militarizing the islands.

A major skirmish in the battle for Mosul has sent thousands of Iraqis fleeing the city. Iraqi Security Forces, backed by reinforcements, have pushed ISIS out of several neighborhoods which the terror group tried to retake. Officials say dozens of ISIS fighters were killed.

In the big picture, U.S. officials say the ranks of ISIS fighters have been hit hard by coalition air strikes, their numbers reduced by 75 percent. Pentagon correspondent Barbara Starr has the details.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voiceover): As President Obama prepares to hand off the fight against ISIS to the new commander-in-chief, Donald Trump, the White House says there is significant progress.

BRETT MCGURK, U.S. ENVOY TO THE COALITION AGAINST ISIS: The number of battle ready fighters inside Iraq and Syria is now at its lowest point that it's ever been.

STARR: The U.S. estimates there are now 12,000 to 15,000 ISIS personnel, a dramatic decline from the peak in September, 2014 when ISIS had amassed close to 32,000 fighters in Iraq and Syria.

ISIS had always been able to replace its ranks, moving people across the Turkish border into Syria. But, no more.

UNIDENTIFIED MALE: ISIL now has no access to international border, and this has significantly impacted the campaign because they are now a very isolated entity.

[02:34:57] STARR: Based on estimates from nearly 17,000 coalition strikes, the U.S. believes 50,000 ISIS fighters in total have been killed over the last two years. Its ranks slashed by nearly 75 percent. The top coalition commander says that's only part of the story.

LT. GEN. STEPHEN TOWNSEND, COMMANDER OF U.S. FORCES IN IRAQ AND SYRIA: We've taken back over half of the land that Iraq, for example, lost to ISIL in 2014. So I think that's a measure of the progress.

STARR: Now, the top priority -- get ISIS out of its self-declared capital in Raqqah, Syria.

TOWNSEND: We also know that they are plotting attacks on the West, and we know that central to external operations plotting is the city of Raqqah, and that's why we need to get down there and isolate that city as fast as we can.

STARR: U.S. special operations forces watch Raqqah around the clock from drones overhead. It's all led to key intelligence and a critical strike. One drone struck a vehicle with three ISIS leaders inside. (inaudible) had been involved according to the U.S. in attacks against the West, two said to have facilitated the deadly attacks in Paris last year.

But even with the death of many fighters, ISIS has not given up the fight. ISIS has retaken the area around Palmyra and captured Syrian regime weapons.

TOWNSEND: Some armored vehicles and various guns and other heavy weapons, possibly some air defense equipment.

STARR: The U.S. now watching closely to see if in fact those weapons, possibly including shoulder-fired missiles, will threaten U.S. troops.

STARR (on camera): Of course, there are still plenty of challenges. One of the enduring worries is that ISIS' ideology will still appeal to fighters around the world who may be inspired to stage lone wolf attacks. Barbara Starr, CNN, Washington.

(END VIDEOTAPE)

VAUSE: More than a billion Yahoo! accounts could have been hacked. It's likely the largest security breech in the history of the internet. Details when we come back.

(COMMERCIAL BREAK)

[02:39:49] VAUSE: There's been another massive security breach at Yahoo!, likely the largest hack ever. More than a billion accounts could be affected. The data stolen may include names, e-mail addresses, and passwords, but not financial information. Hemu Nigam joins us now. He's an internet security analyst and the founder and CEO of the online safety firm SSP Blue.

Hemu, thanks for coming in. Always good to speak with you, even under these circumstances. If we look at the information that was stolen, the passwords, e-mail addresses, that kind of stuff, this is personal information, but it's not the financial information, but there's still a big danger here.

HEMANSHU NIGAM, FOUNDER AND CEO, SSP BLUE: There is a big danger because it's not just the e-mail and personal -- even the security questions that were unencrypted were also stolen, and personal addresses and things like that. In essence, a hacker could create a whole new identity and -- mind you, this happened three years ago. So if anything, Yahoo!, at this point, I would say gets the gold medal for the greatest hack in history, possibly, as well as the silver medal, because the previous one was 500 million.

VAUSE: Yes, OK. So we have this hack which happened in 2013, the 500 million was 2014. Why are we only finding out about the billion hack right now? Why's it taken so long?

NIGAM: Well the fact that Yahoo! didn't identify it tells us that their mechanisms of figuring out what's happening on their system for security purposes was nonexistent, possibly, or most likely.

On the other hand, the FBI actually had a source who came to them and said, hey, look what I have over here. This is coming from Yahoo!. And They checked it out, they called Yahoo!, and they said, you have one billion accounts that were taken, or accessed.

VAUSE: So who would access these accounts and what's their gain in this? Do they then on sell the information? Do they use it themselves? How does this sort of scam work?

NIGAM: It's both. In the dark net, what you can actually do is go to organized crime and say look, I've got access to a billion accounts. What are you going to pay for it? Or break them up into pieces, sell some here, sell some there, and those accounts are then going to be used for further phishing attacks. So the users of Yahoo! could have been getting more e-mails coming to them asking for more information but looking legitimate because they know something about you so you think, oh, I should trust this individual.

VAUSE: OK, so Verizon is in the process of buying Yahoo! for almost $5 billion. The company issued a statement. As we said all along, we will continue to evaluate the situation at Yahoo! as Yahoo! rather continues its investigation. We will review the impact of this new development before reaching any final conclusions. Could this hack impact that Verizon deal?

NIGAM: Well if I was inside that evaluation team, I would say it absolutely reduces the value of Yahoo! right now, and in fact, it's time to renegotiate, and then what Yahoo! should do second is still go ahead if you want to go ahead and do the buy, but come in with better security, better reputation building programs, and really reach out to the customer base and say, you know what, new game in town. We're going to do it better, we're going to do it right, and we're going to do our best to put customer security first rather than the way Yahoo! did it.

VAUSE: Yahoo! said a foreign country rather, foreign government was behind the initial hack. What (inaudible) the one back in 2014 that we found out about. What about this one in 2013?

NIGAM: Right. They actually don't know this one in 2013, which even creates more issues. At the end of the day, if you really look at what's going on, there was also another attack in 2015 and another one in 2016, all on Yahoo!, so that's almost yearly there's something going on. In other words, every door, every window is open. They don't really know how many other hackers may have come in. They only know what they're aware of and what they're talking about right now.

VAUSE: They don't know what they don't know.

NIGAM: They don't know what they don't know.

VAUSE: And that seems to be a lot.

(LAUGHTER)

Thanks so much. Appreciate it.

And thank you for watching CNN NEWSROOM live from Los Angeles. I'm John Vause. WORLD SPORT is up next, and at the top of the hour, the news continues with Max Foster in London.

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