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Early Start with John Berman and Zoraida Sambolin

Hack Attack: U.S. Points to China; Boston Attack Encouraged by ISIS; Warriors Take Game One of NBA Finals. Aired 4:30-5a ET

Aired June 05, 2015 - 04:30   ET

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

[04:30:00] CHRISTINE ROMANS, CNN ANCHOR: The man killed by Boston police for allegedly plotting a terror attack was urged to carry out his plot by ISIS. Now, details emerging about the phone call that accelerated the investigation. Who did the suspect call? What did he say that forced police to make their move?

Welcome back to EARLY START this morning. I'm Christine Romans.

JOHN BERMAN, CNN ANCHOR: I'm John Berman. Thirty minutes past the hour right now.

And this morning, millions of current and federal employees are scrambling to check their bank statements after a huge hack that breached their personal information. Officials say nearly every U.S. agency was hit affecting up to 4 million current and former employees of the executive branch. They are calling this one of the biggest hacks against the U.S. government ever. This is a big deal.

And one of the most stunning details may be the source of this attack. Officials tell CNN that they believe it began in China, perhaps with the knowledge of the Chinese government.

CNN White House correspondent Michelle Kosinski has the latest.

(BEGIN VIDEOTAPE)

MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: Hi, John and Christine. Right, we are hearing from the Office of Personnel Management that this enormous hack has happened, possibly the biggest government hack we have seen, affecting up to 4 million former and current government employees who may have had their personal information accessed.

This office of personnel is kind of the HR department of the federal government. They were actually trying to update their cybersecurity when they realized in April that it looked like an incursion happened. Now, we know more detail about this. And those employees are being contacted.

There's reports out there that this could have come from China. For now, the White House is not commenting on that. But the federal government has been plagued by the attacks, especially in the past year. I mean, we heard about the White House and State Department computers being accessed. Just in the last week, some 100,000 Americans had their personal tax information accessed within the IRS. That hack supposedly originated from Russia, at least that's what U.S. officials believe.

But both China and Russia have been suspected in numerous hacks in the past. In some cases, it's even thought that the governments were behind them. As for China, U.S. officials believe there's even an element within the Chinese army that is planning and launching cyberattacks.

It is unclear if that was the case here. But we expect to hear more information about this in coming days -- John and Christine.

(END VIDEOTAPE)

ROMANS: There's another ominous detail about the suspected Chinese involvement in the hack. Intelligence officials telling CNN investigators believe hackers working for the Chinese military are essentially compiling a database of all of our information, Americans information. It's not clear what exactly the purpose of that database would be.

The Chinese government rejecting the claims it is behind the cyberattacks. It always rejects claims of this sort. In a statement, the Chinese embassy says, quote, "Cyberattacks across countries are hard to track and therefore, the source of attacks is difficult to identify. Jumping to conclusions and hypothetical accusations is not responsible and counterproductive."

What we know there have been many instances where a cyber expert says they can trace attacks back to China and specifically to Chinese army, to the people's liberation army. You often hear from the Chinese foreign ministry that they are not involved, and we are seeing shadows and ghosts, they usually say.

BERMAN: Well, look, because it could separation there. It may be plausible deniability, as it were. It's a big machine over there, and the Chinese military maybe up to stuff that the foreign ministry doesn't know.

ROMANS: Although, you know, the Chinese government, you know, somebody types in democracy in a browser, they're on it right now. Intellectual property theft and cybercrimes originating from China, somehow that manages to go on. So, there's a lot of concerns.

And we recently talked to a senior American banker who said they are concerned about the Iranians, the Russians, and the Chinese, the governments involved in hacking.

BERMAN: And there's down to about 2/3 of the world.

ROMANS: Right.

All right. There are new details this morning about the Boston area suspects who authorities say were initially plotting to behead conservative activist Pamela Geller, before turning their attention to police. Officials say at least one of the men involved in that plot was being encouraged to launch an attack by people overseas connected to ISIS.

We are learning more about why -- just why police moved in when they did to question Usaama Rahim. It was moving in that an approach that ended with officers shooting Rahim dead. Officials knew from a wiretap that Rahim had called his father earlier in the day to say his good-byes.

From Boston, CNN's Pamela Brown has the latest.

(BEGIN VIDEOTAPE)

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Well, John and Christine, we are learning more about the role ISIS played with the alleged Boston terror plots -- the plot to behead Pamela Geller in New York, according to authorities, and a separate plot to target law enforcement here in Massachusetts.

According to U.S. officials I have been speaking with, one of the three men involved with this conspiracy allegedly had been in contact with known ISIS terrorists overseas. That contact happened through social media we're told and that the men believed that they were acting on behalf of ISIS.

[04:35:03] However, the family of one of the men, Usaama Rahim, who is shot and killed on Tuesday, said it's news to them that he had to do with ISIS.

Here's what the attorney had to say.

RON SULLIVAN, RAHIM FAMILY ATTORNEY: The family, of course, is aware of various media reports that suggest that Usaama Rahim had been radicalized by ISIL. That comes as an absolute surprise to the family.

They had not perceived any conduct or change in demeanor.

BROWN: And we're learning from the Boston police commissioner, William Evans, that Rahim was put under 24/7 surveillance around 10 days ago. That's when he apparently bought those three knives from Amazon.com, according to the commissioner. Authorities were growing increasingly concerned that he was becoming operational.

And apparently on Tuesday, there was a heightened concern because they believed he may be boarding a bus with one of those knives and launch an attack. That is why, we're told, those five officials approached him in the parking lot -- John and Christine.

(END VIDEOTAPE)

BERMAN: Our thanks to Pamela Brown in Boston.

Usaama Rahim's brother, Ibrahim, is backing off his initial claim that officers shot his brother in the back. After police screened security video of the shooting for Rahim's family, Ibrahim admitted his initial posts were wrong. But he told CNN's Erin Burnett, the family is still not convinced Usaama had ties to ISIS.

(BEGIN VIDEO CLIP)

IBRAHIM RAHIM, BROTHER OF BOSTON TERROR SUSPECT: Of course we dispute it. We don't know that Usaama, that to be a fact about Usaama, as his relatives at all. We are a Muslim-American community.

And, you know, I think really you have to start speaking more about the Muslims of America and not the Muslims in Syria who are doing the bad things who don't like America. Speak about the Muslims who actually live here who love America. That's me. That's Usaama. That's the Rahim family.

(END VIDEO CLIP)

ROMANS: The stories of ISIS success recruiting fighters and lone wolves on social media are just -- are everywhere. But now, there is at least one story of a social media disaster for the militant group. A top air force general has revealed that ISIS propaganda revealed the location of the Islamic headquarters building. The coalition bombers then hours later.

Senior international correspondent Nick Paton Walsh joins us now live from Baghdad with this remarkable story.

And it sounds like a fighter and his selfie meant the end of that building.

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: What is described by air force as a moron in ISIS. Took a picture of himself outside headquarters. We don't know if the Air Force then used the fact that the postings was geo tagged. You can give away a location if you don't switch it off. You look at the surrounding environment and the hills and try to work out exactly where that was.

But we know that the air force that they say 22 hours later, three JDAM hit that $60,000 of ammunitions took down that building. It comes part of the barrage of success stories that U.S. officials are keen to sell to the media in the past weeks or so. We heard similarly from the air force. They believe they have taken 13,000 ISIS fighters off the battlefield. That is 3,000 more in the period of 24 hours. The State Department said 10,000.

So, this confused body count part of the picture of information now given by the U.S. government trying to say they see success. Well, frankly, on the ground here, we are seeing the opposite, where ISIS have control now of Ramadi. As we've love known.

They shot down Ramadi's dam. That is causing severe water shortages soon or possibly already south of that area. That affects the Iraqi security forces and civilians there. Perhaps those involved in the counter attack to take Ramadi. We hear troops are rushed in to bolster that move. It hasn't happened yet. ISIS has longer in the town with the control over the dam and water now. They boost their presence in the area.

It looks harder day by day. Stories by the air force paint a picture for the success, but miss the broader issue of strategic issues -- Christine.

ROMANS: Certainly. All right. Nick Paton Walsh for us this morning in Baghdad -- thanks, Nick.

BERMAN: All right. New this morning, they keep recovering bodies following the Monday cruise ship disaster on China's Yangtze River. The "Eastern Star" has been turned upright and all hope gone of finding anyone alive. What was a rescue operation is now completely focused on recovery.

A total of 97 bodies have been found so far, just 14 people rescued. The last of them on Tuesday. More than 300 people remain missing in what could be the worse Chinese shipping disaster in more than 60 years.

ROMANS: We are hearing from Edward Snowden for the first time since this fight -- this political fight in the U.S. over the Patriot Act.

[04:40:03] In a piece for "The New York Times", Snowden speaks in favor of the changes to the Patriot Act which stripped the NSA authority to collect data on American phone calls. He writes, "We are witnessing the emergence of a post-terror generation, one that rejects the world view defined by a singular tragedy. For the first time since the attacks in September 11th, 2001, we see the outline of a politics that turns away from reaction and fear in favor of resilience and reason."

This as we learn the White House secretly expanded the warrant list of Internet traffic in the effort to combat computer hacking. That is according to "The New York Times".

BERMAN: Delaware is mourning one of its favorite sons. Beau Biden, people will pay the final respects at the viewing at a church in Wilmington. On Thursday, more than 1,000 people attended the memorial service -- this was beautiful -- honoring Biden at the Delaware statehouse.

Beau Biden died after a battle with brain cancer. He was 46 years old. I think anyone who sees this, this is not about politics. This is about family, this is about a man who loved his children about a man who was beloved by his father and a family that's dealt with so much adversity over the years. And like I said, this ceremony yesterday was beautiful.

President Obama will deliver the eulogy at a mass on Saturday.

ROMANS: All right. Forty-one minutes past the hour.

An FDA advisory panel voting to recommend approval of Flibanserin, better known as female Viagra. The drug is designed to treat hypoactive sexual disorder, the technical term for low libido in women. This is a third time it was reviewed by the FDA, which in the past has rejected it for having too many side effects. It now awaits official FDA approval.

Let's get an early start of your money this morning. Stocks are mostly lower around the world. European Asian shares are down. Greece will not be making a loan payment due to the IMF today. That country is strapped for cash. It risked default and a possible exit from the Eurozone. That sent U.S. stocks lower yesterday as well.

The Dow, ugly day, folks, it was down 170 points. A lot more to consider before the opening bell. The May jobs report is due out at 8:30 a.m.

At CNN Money, we polled experts. They predict 222,000 jobs added, basically unchanged from last month. Unemployment rate is 5.4 percent. If true, those are strong numbers.

But what I'll be watching very closely is wages. Wages are stagnant, stuck at 2 percent. It doesn't make you feel good. The labor market is tightening. And that could translate to higher wages ahead. This is what Federal Reserve is watching and economists are watching to see when wage growth picks up to raise interest rates, because it will show the economy is strong enough.

But every worker would like a better raise than just 2 percent.

BERMAN: Two hundred twenty thousand jobs today, if that's the number, that's not bad.

Police in Colorado are trying to unravel a murder mystery. Three people gunned down in two months. Two of the shootings already linked. People are wondering is there a serial shooter on the loose?

We'll take you to Denver next.

(COMMERCIAL BREAK)

[04:46:38] ROMANS: Deepening questions this morning about a rash of unsolved shootings, making people in northern Colorado very uneasy. The latest is a 65-year-old man fatally shot just blocks from his home in Loveland. Now, local police, county sheriffs, the FBI, they formed a task force to investigate if a serial shooter is on the loose in Colorado.

Dan Simon has latest for us.

(BEGIN VIDEOTAPE)

DAN SIMON, CNN CORRESPONDENT: John and Christine, this street is where the latest victim, 65-year-old William Connole, was shot. He was actually just a few blocks from his house when he was gunned down.

Now, at this point, authorities are not saying there is a firm link to the other shootings, only there is a likeness. At this point, an agency task force is investigating whether or not there is a connection.

As we have been recording, this is the third shooting in this area in the past six weeks. In late April, a 20-year-old woman was shot in her car as she was about to get on the freeway. She was shot through the neck and survived. A month later, a 48-year-old man was shot along a country road. His bike found nearby.

Authorities say those shootings were committed by the same person, both victims shot twice. But they are not revealing anymore similarities in terms of what happened in the shootings. The question, of course, is whether the same person may be responsible for this third shooting.

John and Christine, back to you.

(END VIDEOTAPE)

ROMANS: That's terrifying. Thanks, Dan.

BERMAN: All right. The Defense Department is dolling out big bucks for promotion. And that's not sitting well with a whole lot of people. Now the Senate is taking action. We'll tell you how next.

(COMMERCIAL BREAK)

[04:51:50] ROMANS: Welcome back.

The U. .S. Air Force is easing its rules concerning transgender troops offering them more protection against potential discharge. In the past, a service member diagnosed with gender dysphoria or identifying as transgender was typically discharged on medical grounds. Those decisions were made by doctors and company commanders. The new policy requires that such actions be reviewed by high level officials at Air Force headquarters.

BERMAN: Three U.S. senators, including John McCain, are calling for an end to the practice of using the practice of taxpayer money to honor the military at sporting events. Senator McCain says the Super Bowl champion Patriots and two other franchises, they have received hundreds of thousands of dollars for flag rollouts, color guard performances and other events recognizing members of the military. Overall, the Pentagon paid out $7 million over a three-year period.

In a statement, the NFL says the amendment McCain and others are pushing for paints a distorted picture with NFL teams and the military.

ROMANS: I did not know those were paid. I thought it was part of the performance.

BERMAN: Yes, I didn't know it, but look, there's the fine line, because the military does advertise a bit on TV and other places. Those matter to them. Where the line ends is interesting.

ROMANS: All right. Game one of the NBA finals is in the books. Golden State Warriors beating the Cavaliers in overtime, 108-100. The Warriors trailed most of the game, but took over in the extra session. They were never threatened. LeBron James, we're on the first name basis, he scored 44 for the Cavaliers. Game two is Sunday.

BERMAN: And Kyrie Irving walked off the court limping. He may not play game 2.

American Pharoah is a mile and a half from history with a victor in the Belmont stakes on Saturday. The derby winner, the Preakness winner could become the first horse in 37 years to capture racing's Triple Crown.

ROMANS: Are you putting money on it?

BERMAN: No, no. It's ne of the hardest feats in sports, especially if you're not a horse. Just last year, California Chrome failed in its -- I would say his Triple Crown bid. The last horse to win was affirmed in 1978.

ROMANS: That was a long time ago. A lot has changed, too.

BERMAN: Well, a lot has changed in life, except my clothes.

ROMANS: All right. Yahoo! Maps was the hot tech way to get around. More on Yahoo's big changes, next.

(COMMERCIAL BREAK)

[04:58:00] ROMANS: All right. Happy Friday. I'm Christine Romans. Let's get an EARLY START on your money to end the week.

Stocks lower around the world. European and Asian stocks lower right now. You can see the numbers there.

Greece will not make a loan payment due today, instead pushing it off, hoping its creditors will give more bailout funds later this month. U.S. stock futures barely moving.

A lot to consider. The May jobs report comes before the opening bell at 8:30 a.m. Eastern Time. Plus, a decision on oil output from OPEC this morning. We are looking at 222,000, 223,000 net new jobs in the month.

Facebook rolling out a stripped down version of the app. Facebook light. It's designed to work quickly on the slow networks typically found in developing countries. You will still have access to essentials. You news feeds, status updates, photos, notification. The app is available on Androids in Asia, will rollout in Africa and Latin America in a few weeks. Earlier this year, Facebook launched a project to bring free web access to underdeveloped parts of the world.

Get ready to change your bookmarks. Yahoo Maps shutting down. In a blog post, the company's chief software architect said the eight year old service will be discontinued by the end of the month. Yahoo Maps has been under competition from its rivals Google Maps and Apple Maps.

The CEO Marissa Mayer has been shuttering failing products as she focuses on growing the company's core search business. She's streamlining its media operation. Some of Yahoo's regional TV and radio offerings are also going away.

BERMAN: I never used it. I was a Map Quest guy.

ROMANS: A Map Quest, oh --

BERMAN: Which is now owned by AOL.

ROMANS: Is it?

BERMAN: It is, yes.

ROMANS: Interesting.

BERMAN: And still exists barely, but interesting.

EARLY START continues right now.

(MUSIC)

BERMAN: Developing overnight: unprecedented hack attack emerging. The target: millions of federal workers. This is an attack against the U.S. government and the government is now pointing the finger at the Chinese. We have the latest developments straight ahead.

ROMANS: Encouraged by ISIS, the man Boston police say planned to behead a well known conservative activist communicated online by the terror group. New details emerge why police could no longer wait to take action.

Good morning. Welcome to EARLY START. Nice to see you all this morning. I'm Christine Romans.