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New Day

Massive Data Breach Could Affect Every Federal Agency; Boston Terror Suspect Encouraged by ISIS; Mourners Pay Respects to Beau Biden. Aired 6-6:30a ET

Aired June 05, 2015 - 06:00   ET

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

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UNIDENTIFIED FEMALE: Possibly the biggest government hack we've seen. The breach could affect every single federal agency in the United States.

[05:59:05] UNIDENTIFIED MALE: The reality of it is, you can't prevent the attacks. What you have to do is learn to detect them.

UNIDENTIFIED MALE: We knew the urgency was there, that we had to get to him.

UNIDENTIFIED FEMALE: One of the three men allegedly involved had been communicating online with known ISIS members.

UNIDENTIFIED MALE: We don't have facts to go on. We have allegations.

UNIDENTIFIED MALE: Beau had an extraordinary heart.

UNIDENTIFIED MALE: Our children live in a safer state because of Beau Biden.

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: Beau-y, I love you. I'm so proud of you.

(END VIDEOTAPE)

ANNOUNCER: This is NEW DAY, with Chris Cuomo, Alisyn Camerota, and Michaela Pereira.

CHRIS CUOMO, CNN ANCHOR: Good morning. Welcome to your NEW DAY. It's Friday, June 5, 6 a.m. in the east. Mick is off today, and we have a big story for you. What could be the biggest hack of government data ever. The personal information of some four million current and former federal employees stolen from government computers. Who did it? The U.S. is pointing directly at China.

ALISYN CAMEROTA, CNN ANCHOR: Well, China, already rejecting those allegations that they are responsible for the massive attack, this as new information reveals the NSA has been hunting hackers by secret expanding Internet spying on Americans.

We have both of these stories covered from every angle. Let's begin with Athena Jones at the White House.

Good morning, Athena.

ATHENA JONES, CNN CORRESPONDENT: Good morning, Alisyn.

We all remember that massive data breach a couple of years ago at Target. Later it was the health insurer Anthem, then Sony. Even the IRS, and now this.

And as the investigation continues, we know that President Obama has been briefed on what could be the biggest government breach in history.

(BEGIN VIDEOTAPE)

JONES (voice-over): This morning the U.S. government is struggling to assess the damage. Officials revealing possibly the biggest cyberattack on the U.S. government ever reached their critical computer networks.

Two distinct attacks crept into the federal system, sophisticated and undetectable for months, all the while stealing data information from the databases of every government agency, sensitive information from up to four million current and former federal employees now in the hands of hackers, including the employees of the Department of Defense, the Social Security Administration, and even potentially President Obama. Officials say there could be millions more.

UNIDENTIFIED MALE: These networks are so vast. They are really geographically dispersed. They're very, very difficult to be able to protect. And the reality of it is you can't prevent these attacks.

JONES: The suspect according to authorities, a super power, the People's Republic of China. According to officials, evidence points to hackers working for the Chinese military, who may be compiling a massive database of critical information on Americans.

Now federal employees being cautioned to check their bank statements and get updated credit reports.

MARIE HARF, STATE DEPARTMENT SPOKESPERSON: We continue to update our security, but it is a pretty significant challenge.

JONES: Hackers have targeted the American government before. Just this week, investigators say Russia attacked the IRS and made 100,000 tax returns vulnerable to criminals.

(END VIDEOTAPE)

JONES: Now this is made all the more alarming not just because it's happened before but because these attacks are getting worse. News of this latest beach is prompting lawmakers on Capitol Hill to push for swift completion of legislation already in the pipeline that would bolster cyber security nationwide -- Chris.

CUOMO: And also making it worse is that there's really no hiding who's doing it. So right now you have the U.S. looking at China and saying, "You just hacked 4 million of our workers."

And China saying, "What? That's the" -- they're not saying no, and that's something that's making this even odder.

So let's bring in Dave McKenzie. He's going to take that part of the story for us, up in Beijing.

David, they're not saying, "No, way, not us."

DAVID MCKENZIE, CNN CORRESPONDENT: Well, that's interesting. And you're right, Chris, they're not denying the accusations.

They're actually tapping into an old Chinese proverb. Take a listen to what the minister of foreign affairs said.

They said, "China resolutely tackles cyberattack activities in all forms. We ask the United States not to be so skeptical and stop chasing the wind and clutching the shadows, but instead add more trust and cooperation in this field."

So they're saying "Well, let's work together, but we're not going to say we didn't do it."

And there have been accusations against the Chinese before in multiple hacking attacks on the U.S. government and on just private companies that even led to five People's Liberation Army officers being indicted by the U.S Justice Department. But China has denied those attacks in the past. And they say they, in fact, are the victim of U.S. attacks on a constant basis -- Alisyn.

CAMEROTA: OK, David. Thanks for that.

Now to this similar developing story. The NSA secretly spying on the Internet activities of Americans to target hackers. CNN Pentagon correspondent Barbara Starr has the latest on this story. What do we know, Barbara?

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

"The New York Times" apparently got access to some documents from guess who? Edward Snowden. And this is revealing that the NSA, the National Security Agency, in 2012 got two memos in the Justice Department which basically opened the door to allow the NSA to, without a warrant, monitor Internet cables on American soil. What they were permitted to do is look for computer intrusions from abroad, but it was limited to computer intrusions that they felt they could tie to foreign governments.

This opens the big controversy. If you can tie a computer intrusion to a foreign government, that's intelligence gathering for the NSA. But many computer intrusions may be from criminal activity overseas. That is law enforcement, the NSA not allowed to do that. The director of national intelligence issuing a statement responding to all of this saying -- and let's take a look at it.

The director of national intelligence saying, "It should come as no surprise that the U.S. government gathers intelligence on foreign powers that attempt to penetrate U.S. networks and steal the private information of U.S. citizens and companies. These operations play a critical role in protecting U.S. networks from disruptive and even destructive cyber threats."

[06:05:14] Now, of course this week Congress passing legislation limiting some of this cyber activity, but this activity without a warrant pretty much untouched by what Congress did. So we are at a point where it looks like everybody spies on everybody else. What a surprise -- Chris.

CUOMO: And that does seem to be the demeanor. There's an odd nonchalance here, Barbara. Let's talk about it, because it sounds like this could be a real problem for people going forward. Shouldn't we know if people are hacking and what it could mean and how do we stop it and is our government doing it to us?

Big questions, so let's bring in some people with answers. Former cyber security czar and -- for the Bush and Obama administrations and partner of Ridge-Schmidt Cyber LLC, Mr. Howard Schmidt. And CNN law enforcement analyst and former FBI assistant director, Tom Fuentes.

Gentlemen, thank you for being here to help me understand this.

Howard, I start with you. Are the -- is the U.S. chasing the shadow and clutching the wind, or did China do this?

HOWARD SCHMIDT, PARTNER, RED SCHMIDT CYBER LLC: Well, nobody knows, but it's a good opportunity to be able to prove once again that it is the Chinese. The data that was taken was normally important to an intelligence agency, and the methodology was similar to what they see out there.

So there's a good likelihood that, once again there's other ways to cover their tracks to make it looks like somebody else. So this is really, really difficult and particularly troubling, given the data of the Office of Personnel Management retains on all the employees. And retirees, I might add.

CUOMO: Tom, here's what I don't get about this, and I've asked you this every time we had a hacking story. If someone broke into a federal building and stole the files, paper files; and it got traced back to a government it would be like a war was about to start. But when it's a hacking, it seems like the government's like, "Yes, four million people. We think we know who did it. You know, this happens. We're going to try and stop it."

Why the nonchalance?

FUENTES: Well, I think you're right, Chris. That's exactly. Because I think it's gotten to be business as usual on foreign governments, organized crime groups, individual hackers, individual hacker clubs wanting to show that they can get into these systems and penetrate the security. But in the case of foreign governments, they're specifically

looking for information that's going to help them with their trade craft, with their spying on America.

And OPM is the repository of all personnel records and all government employees and especially all retirees. So once a person retires from an agency, their records are transferred to OPM, and then from that point on OPM takes over the pension payments and all of that.

And so by another government having those records, they can determine who's a high-ranking official in these agencies, who might be somebody they want to target on the ground for espionage or cooperation or to turn into, you know, an agent on behalf of them. And so I think that's where the sensitivity comes, is OPM knows what everybody in the government does and what they get paid to do it and what their job titles are and where they're working. Since they're retired, what they used to do.

CUOMO: Sensitivity would be good in there were more of it. Seems like there's not enough sensitivity, Howard. So Tom is explaining to us, well, here's why they go to OPM. How much of this is about the actually data they can hack and how much of this is about showing that they simply can do this?

SCHMIDT: Well, it's more about the data collection. It's like a giant vacuum cleaner that they've been doing for years. Government agencies, private sectors, transferring intellectual property, and everything else.

But the really interesting piece like we've seen recently with the IRS, it doesn't look like IRS was hacked. It looked like information had been collected from other hacks and other places used to expose this.

So this is not an immediate thing, like we'll be doing something in the next six months. They could sit on this data for a long time, come back in, undermine everything, from financial records, you know, talk about the ability to collect information. It doesn't have to be on you. You go to LinkedIn. You go to Facebook and you look at their data and then who they're connected to, and you can pretty much build a profile of anybody that you want to target, and more importantly, they're friends and they don't even know it.

CUOMO: So this story also brought into focus what the government is doing to stop it, which starts to look a lot like what we thought we just fixed with Section 215 of the Patriot Act.

So it comes out that people are doing a victory lap. Privacy won. Edward Snowden is writing his op-ed for "The New York Times": "See? I was right all along, and you changed it." And now it turns out, well, it didn't completely change, because the government without warrants can still look at your online activity the way they were looking at your telephone activity and even more so. Is that accurate? [06:10:06] SCHMIDT: Yes, it is. And that was the conversation

we've had for years now, where NSA has the best technology to be able to do this in intelligence collection.

And the other agencies" homeland security, which has the primacy; or the United States Customs; FBI does a great job on the criminal and counter intelligence part. But neither of them had the technology capability that NSA has. So it was just a normal NSA saying, "Hey, nobody else can do it as good as us. So we're going to do it for you." And it really has caused some issues and it's maintained in their closet where nobody could see what's going on.

CUOMO: Well, Tom, if you take the statement that Barbara Starr put up before, about the government explaining why they did this and you replaced the word "cyber" with terror in front of the word "threats," it's the same explanation they gave for Section 215 about what they were doing with metadata. You know, this is how we get after the real risk. You don't invade privacy any more than we need to. We're looking at just surveilling wide amounts of activities so we can connect dots quicker.

Did people just forget about online activity when they were caught up in the privacy furor about Section 215?

FUENTES: No. The issue on this particular privacy is that back in 1996, President Clinton issued a directive, saying that organized crime and international drug traffickers are a threat to United States security, and therefore, the National Security Agency can also work with law enforcement to address the issue.

So when Barbara Starr mentioned they have to determine if it's a criminal group or if it's a foreign power that's attacking us, it's espionage or crime, as of 1996, the decision basically and Congress passed a statute to amend the National Security Act to say we don't know.

And in the beginning of an attack, we really don't know. Therefore, we will treat any such attack, whether it's organized crime, whether it's another government, as a threat to national security. And therefore, that enabled NSA, going back to 1996, to look at traffic coming in from around the world into the U.S.

CUOMO: Tom Fuentes, Howard Schmidt, thank you very much for helping us understand what seems to be a very big deal -- Alisyn.

CAMEROTA: OK, Chris. There are new details this morning in the Boston terror plot. U.S. officials tell CNN that at least one of the men linked to the attack was encouraged by ISIS, this as the suspect's family gets to see the surveillance video showing police shooting Usaama Rahim dead.

Let's get right to CNN's Alexandra Field, live in Boston.

What is the latest, Alexandra?

ALEXANDRA FIELD, CNN CORRESPONDENT: Good morning, Alisyn. In the aftermath of the shooting, Ibrahim Rahim, the brother of

Usaama Rahim, got on Facebook, claiming that his brother had been shot three times in the back by police officers. He and his family members have now watched the surveillance video of that shooting at the district attorney's office, and he has acknowledged those are not the facts of the case. He knows that his brother was not shot in the back.

However, the family says that they are calling for and expecting a thorough investigation into both Rahim's death and the plot that authorities say that they uncovered. Family members of Rahim say that they're simply shocked by allegations that he was inspired by ISIS. They say they saw no evidence that he was plotting any kind of attack. And his own brother came onto CNN, asking people to reserve judgment as the case is investigated.

(BEGIN VIDEO CLIP)

IBRAHIM RAHIM, BROTHER OF USAAMA RAHIM: We are a Muslim-American community, and you know, I think really, you've got to start speaking more about the Muslims of America and not the Muslims in Syria, who are doing 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)

FIELD: At the time of Rahim's death, he was under 24-hour surveillance. Authorities now say that on the morning of his death, he called his father to say good-bye. An attorney representing the family acknowledges that there was a phone call between Rahim and his father, but he says the family isn't aware of the context or the content of that conversation, Chris.

CUOMO: All right, Alexandra. Thank you very much. A lot more to come there.

We also want to tell you this morning that the capsized cruise ship in China's Yangtze River has now been righted, but the scene remains very grim. Officials there have now recovered a total of 97 bodies. That means hundreds are still missing. Rescuers are losing any hope of finding anyone alive after four days. Crews preparing to drain the water in the ship to have it float on its own.

CAMEROTA: Just terrible.

Well, a developing story now: about 160 climbers including Americans are trapped on one of the tallest mountains in Southeast Asia. A 6.0-magnitude earthquake rocked the island of Borneo, and the epicenter is very close to the 13,000-foot summit of Mount Kinabalu. Five Americans are among those unaccounted for at this hour. Rescuers are trying to climb the mountain by foot to rescue those stranded.

[06:15:03] CUOMO: Some devastation in northern Colorado as a pair of tornadoes just ripped through the state. Several homes destroyed. Thankfully, no injuries reported yet. But take a look at the twister baring down on a storm chaser,

stirring up these intense winds and tossing debris, as he sits alone on a dirty road. The storm chaser initially thought he was out of the storm's path. Here it is. This guy, you know, storm chasers, this is what they do. He thought he was clear of it. He was wrong. Take a look.

CAMEROTA: Well, hundreds of mourners in Delaware paying respects to Beau Biden. The vice president's son died last weekend at the age of 46 after losing his battle to brain cancer. President Obama set to deliver a eulogy tomorrow at Biden's funeral.

CNN's Sunlen Serfaty is live in Wilmington, Delaware -- Sunlen.

SUNLEN SERFATY, CNN CORRESPONDENT: Alisyn, such a painful time for the Biden family, as well as Delaware. There are three days of ceremonies to mourn Beau Biden's death.

Today here, there will be a public viewing here at this church, the church where the Biden family has been huddling this week as they grieve.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Forward march.

SERFATY (voice-over): His casket cloaked in red, white and blue, former Delaware attorney general, Beau Biden, was honored Thursday as an American hero, a selfless husband, father and son.

Surrounded by his wife, grieving grandchildren and widowed daughter-in-law, Vice President Joe Biden was overcome with emotion over the loss of his eldest son.

UNIDENTIFIED MALE: This is a painful and somber time.

SERFATY: Inside the Delaware legislative hall, the governor presented the vice president's late son with a Delaware Conspicuous Service Cross for his heroism and outstanding achievements.

GOV. JACK MARKELL (D), DELAWARE: Beau had an extraordinary heart, and from that heart, he lived a life that is a model for us all.

SERFATY: The vice president's heartbreak evident during talk of Beau's legacy.

MARKELL: Natalie and Hunter should know that even when you weren't around, your dad beamed with pride and love for you. A model for what a son should be, his attachment to his parents is now a part of history. Never has a son's love been so genuine and so deep.

SERFATY: A touching moment, Biden wiping away a tear from his granddaughter's cheek, comforting the two small children and wife his son leaves behind. Hundreds of mourners lined up to pay their respects to the former

Iraq War veteran, the Biden family graciously greeting them, one after another. In addition to serving a tour in Iraq, Beau Biden was also a member of the Delaware Army National Guard for more than a decade.

(END VIDEOTAPE)

SERFATY: And Vice President Biden telling all those mourners that came out yesterday, quote, "You guys are holding me up."

And President Obama will deliver the eulogy for Beau Biden tomorrow -- Alisyn.

CAMEROTA: OK, Sunlen. Thanks so much for that.

Wow, those are poignant pictures.

CUOMO: You know, it's just -- there's no good way to put something like this when it happens. It's so devastating for so many reasons, but just -- I think what's also motivating people is this guy was so good. And he dealt with so much so early on in his life. And then again, at such a young age, 46. But that word "genuine," that really does stand out about this guy. I'm telling you, Alisyn, when people would talk to you about him, they would be like "this guy is something special."

CAMEROTA: Well, I get it.

CUOMO: He wasn't some big bragger, you know.

CAMEROTA: I mean, you know, we all hear his titles as military man, devoted family man, public servant, but you know, you have helped sort of bring him to life for me. And I'm sorry I didn't know him.

CUOMO: It's really tough. And we really feel for the family. This is going to be hard, and it's going to take a long time.

CAMEROTA: All right. Well, meanwhile, new details emerging about the Boston terror plot and the family of Usaama Rahim, the suspect changing their tune about what happened.

CUOMO: Hillary Clinton, voting rights crusader. The Democratic frontrunner calling for an overhaul of election laws, and in doing so, is calling out Republican rivals. Help, hurt? Is this the issue that makes the difference? We discuss.

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[06:22:41] CAMEROTA: Now to the latest on the Boston terror plot. The Rahim family is denying that Usaama Rahim was linked to ISIS, but that's different than what law enforcement sources tell CNN about the Boston terror suspect.

Let's bring in Juliette Kayyem. She's a CNN national security analyst and a former assistant secretary at the Department of Homeland Security. Juliette, good morning.

JULIETTE KAYYEM, CNN NATIONAL SECURITY ANALYST: Good morning.

CAMEROTA: OK. So the suspect's brother says that he does not believe that Usaama Rahim had any connection to ISIS, but, of course, law enforcement sources are saying that he does. What so we -- what's the evidence that he was connected to ISIS?

KAYYEM: So there's a pretty strong affidavit out there that was filed in connection to Wright, the co-conspirator in this case, which shows a clear wiretap going on against Rahim, and discussions, very serious discuss purchases about the weaponry and what they were going to be used against.

So the family obviously is -- has a narrative of who Rahim is, and they want that narrative out there. But the facts are the facts, and they so they're going to have to challenge what the wiretap actually shows Rahim was doing, and then obviously, that he was in possession of this weapon and went after the police.

CAMEROTA: But I mean, is the suggestion...

KAYYEM: I understand...

CAMEROTA: Is the suggestion that he was in e-mail communication with ISIS operatives, and they told him to go buy a knife and kill police?

KAYYEM: That suggestion is only out in the atmospherics of what law enforcement are essentially leaking or what's coming out in the media. If you just take the affidavit, the affidavit does not mention ISIS; it does not mention al Qaeda.

What it does mention, I will say, though, and the link that seems pretty clear to me, at least in the language of the affidavit, is they sort of -- they discuss -- Wright and Rahim discuss a beheading that is so similar to the ISIS videos that we've seen that they are at least motivated by what ISIS has done.

But there is at least no specific evidence yet that has come out in the court or any of the proceedings that there was someone in ISIS telling them what to do.

And so -- so there's just two different issues. One is Rahim. You know, what did Rahim actually do? And it seems like there's a pretty strong case. And then who told Rahim to do it? That is going to come out or, you know, is coming out in sort of leaks and dribbles right now.

[06:25:00] CAMEROTA: But isn't that second part where the plot possibly falls apart? Because why would ISIS tell Rahim to go and buy a knife to kill police? I mean, on what planet is that a good plot?

KAYYEM: Well, it's a good plot in terms of ISIS. Look, people --I mean, to understand ISIS is that they're not asking people to act on their behalf with specificity. What they are, are essentially creating atmospherics in which people who want to pledge allegiance to ISIS are listening to what they do.

So they have a number of outlets in which they're saying kill cops, kill these people, you know, support the caliphate; come here, women, and be our wives. I mean, they have so much going on in terms of media outreach that that's essentially what their recruitment effort is.

Very different than al Qaeda, which was a very one-on-one specific recruitment...

CAMEROTA: Yes.

KAYYEM: ... with training, and people came to Afghanistan.

So that sort of understanding, atmospherics, would then explain, well, you know, the connection between ISIS and Rahim, even if you don't find a certain guy in ISIS saying to Rahim, "Do this."

CAMEROTA: Yes, I mean, I guess my point is -- I mean, it's reminiscent of the attack, the incomplete attack in Garland, Texas...

KAYYEM: Yes. That's exactly it.

CAMEROTA: ... where the two guys show up. They're outmanned. They're outgunned by security guards, but they open fire anyway. I mean, these seem like awfully amateurish plots to have been directed by ISIS.

KAYYEM: I -- I guess ISIS sort of likes amateurishness, too, you know, in the sense that any success that they can have, even if it's the killing of a particular individual or a beheading of a police officer or a hatchet against a police officer, all of those go to their success, because they show that they can an animate otherwise lawful people, which Rahim appears to have been, to do something really egregious. That is a success in their mind.

So the Al Qaeda model of "We're going to really plan, you know, 19 guys, four airplanes, 3,000 civilian deaths," it's just a different model for ISIS, which is "We're going to freak everybody out, essentially, by having these small things going on throughout the United States." It's just a different kind of psychological warfare on their part. So it's success for them.

CAMEROTA: That really helps to understand it. Because in other words, they're trying to sell chaos rather than body count. That really sort of explains the difference.

Juliette Kayyem, thanks so much for the expertise.

KAYYEM: Thank you.

CAMEROTA: Let's get over to Chris.

CUOMO: A mile and a half from history. American Pharaoh. Not since King Tut's tomb has a pharaoh captured our attention this way. Will he break it? Not since 1978 have we had a Triple Crown winner. Details ahead.

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