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Trump Touts Deal for 50,000 New Jobs, Gives Few Details. Obama Warns Against Imposing 'Religious Tests'; South Korean Military Accuses North of Major Cyber-Attack. Aired 5-6p ET

Aired December 06, 2016 - 17:00   ET

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

[17:00:08] WOLF BLITZER, CNN ANCHOR: Happening now, breaking news. Tweet of the deal. Donald Trump uses Twitter to announce what he says will be thousands more U.S. jobs. Then he introduces reporters to the Japanese businessman behind the deal. But are the jobs really new, or were they in the works already?

Air Force stun. The president-elect also shocks Boeing by calling for the cancelation of a deal for new jets to carry future presidents. Is he cutting waste or good-paying jobs?

Touting his legacy. President Obama visits the U.S. military Central Command and gives a speech defending his strategy on the -- in the war on terrorism, a strategy Donald Trump's pick for defense secretary has called a mess.

And un-checked. Kim Jong-un's hackers are accused of a cyber-attack on South Korea's military, and the worst may be to come. The former chairman of the House Intelligence Committee is worried about the threat North Korea's regime poses to the U.S.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: This hour's breaking news, Donald Trump touting a new deal he says will create 50,000 jobs here in the United States. In a rare appearance before cameras in Trump Tower, he praised a Japanese CEO for the deal.

Earlier on camera and also on Twitter, the president-elect took on Boeing, calling for the cancelation of a deal for new versions of Air Force One.

Also breaking, President Obama says we're breaking the back, his words, of ISIS. He just wrapped up a spirited and detailed defense of his anti-terrorism strategy. Despite the bloody chaos in the Middle East, the president proudly pointed to his decisions to bring home thousands of U.S. troops and rely on Special Forces and regional allies to fight terror.

We're also following alarming new developments on the Korean Peninsula. South Korea blames Kim Jong-un's regime for a cyber-attack on its military, and there are now new warnings about the North Korean threat to the United States. Congressman Jason Chaffetz, the chairman of the powerful Oversight and

Government Reform Committee, he's standing by live to take our questions. And our correspondents and analysts and guests, they will have full coverage of the day's top stories.

Let's begin with the president-elect announcing new jobs and taking on what he calls coast -- cost overruns. CNN's Sunlen Serfaty is in North Carolina, where Donald Trump is holding a major rally tonight, part of his thank-you tour. His swipe at Boeing, Sunlen, was quite surprising earlier today.

SUNLEN SERFATY, CNN CORRESPONDENT: That's right. It was, Wolf. And we really saw the showman side of Donald Trump today on full display, not only in lashing out in public about the cost of building these new Air Force One planes, but also playing up big before cameras as he tells it that he was able to broker a deal with a Japanese tech firm to send more investment here in the U.S.

The message from the president-elect very clear. He wants to show that he's already working for American workers and American taxpayers and really tapping into that populist message, now as president-elect, that drove his campaign.

(BEGIN VIDEOTAPE)

SERFATY (voice-over): Donald Trump bringing his art of the deal approach to the White House. The president-elect touting a new investment in the U.S. from Japan's Softbank.

DONALD TRUMP (R), PRESIDENT-ELECT OF THE UNITED STATES: Ladies and gentlemen, this is Masa of Softbank from Japan, and he's just agreed to invest $50 billion in the United States and 50,000 jobs. And he's one of the great men of industry. So I just want to thank you very much.

UNIDENTIFIED MALE: Thank you. Thank you.

SERFATY: Just hours before that announcement, Trump pushed the airline manufacturer, Boeing, to give the country a better deal on the building of two new Air Force One planes, tweeting, quote, "Boeing is building a brand-new 747 Air Force One for future presidents. Costs are out of control. More than $4 billion. Cancel order."

TRUMP: Well, the plane is totally out of control. It's going to be over $4 billion. It's for Air Force One program. And I think it's ridiculous. I think Boeing is doing a little bit of a number. We want Boeing to make a lot of money, but not that much money.

SERFATY: Trump did not provide proof for his $4 billion claim. A Boeing official says they are not sure where the president-elect got the number and that the cost for the planes is not final.

This as Trump faces a brewing fight with some in his own party over his proposal for a 35 percent tariff on U.S. companies that move their businesses overseas.

TRUMP: I said we'd love to have your product. Thirty-five percent tax.

SERFATY: Congressional Republicans worrying it could spark a trade war.

UNIDENTIFIED MALE: But I do have concern with, you know, any time someone's talking about raising taxes.

SERFATY: House Speaker Paul Ryan signaling a broader rewrite of the tax code should be the focus.

[17:05:06] REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: We think the real solution here is comprehensive across-the-board tax reform, which is what we're going to be hitting the ground running on.

SERFATY: All this as Trump hits the road tonight for the second stop on his thank-you tour.

TRUMP: Mad Dog. He is great.

SERFATY: Holding a campaign-style rally in North Carolina near Fort Bragg to formally roll out on stage his pick for secretary of defense, General James Mattis.

BLITZER: They say he's the closest thing to General George Patton that we have, and it's about time.

SERFATY: Meantime, the revolving door at Trump Tower today continues.

TRUMP: We're going to talk about a lot of things to a lot of people. We have a lot of people coming up. Great group of people.

SERFATY: But the decision on secretary of state, the most high- profile job, still hangs in the balance. Trump expanding rather than narrowing his search.

GOV. MIKE PENCE (R-IN), VICE-PRESIDENT-ELECT: And he's taking his time. We have more names that may well be added to the list.

SERFATY: One of those new candidates, ExxonMobil CEO Rex Tillerson, interviewing with Trump today.

TRUMP: We've got some great people coming in today. You'll see them.

SERFATY: As Trump adds to his team, he's cutting one member of the transition, the son of retired General Michael Flynn, his pick for national security advisor.

PENCE: Mike Flynn Jr. is no longer associated with General Flynn's efforts or with the transition team, and we're focused eyes forward.

SERFATY: A source tells CNN Trump gave the direct order to remove the younger Flynn after he tweeted about a conspiracy theory involving a local Washington pizzeria that was the site of an armed attack over the weekend.

(END VIDEOTAPE) SERFATY: And after holding his rally here tonight in Fayetteville, Donald Trump has two more thank-you rallies scheduled this week. Thursday he'll be in Des Moines, Iowa. Friday he is traveling to Michigan, a state currently in the midst of a recount prompted by Green Party candidate Jill Stein -- Wolf.

BLITZER: All right. Sunlen Serfaty getting ready for the thank-you tour continuing in North Carolina tonight. Sunlen, thank you very much.

Let's get some insight from our political national security experts on all of this. And David Axelrod, let me start with you.

He made a rare appearance. He walked out before the pool of reporters in the lobby of Trump Tower to welcome this Japanese CEO and announce that he was going to be investing billions of dollars in the United States, creating 50,000 jobs. Wow! That's pretty impressive, isn't it?

DAVID AXELROD, CNN POLITICAL ANALYST: It is. I don't know the details or how many of these jobs were coming before this, but it is kind of -- he's -- it's almost like president as mayor, you know. He's -- one business at a time, one deal at a time. It's an interesting approach. I don't know if you can keep that up. But -- but it makes for a good story.

BLITZER: You think Democrats can learn something from his style? Because clearly what he's saying, he may be ahead of himself, but what he's saying will certainly resonate with the American public.

AXELROD: It will, and we saw this on the Carrier story, which was good politics. Whether it was good policy or not, it was -- or not, it was good politics. I think only time will tell what the aftermath of all of this will be.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: The other thing, Wolf, that, if you think about maybe three examples of what Donald Trump has been tweeting about or focusing on with regard to the economy or, you know, being tight with the purse strings. First of all, as you mentioned, Carrier, this Japanese deal today.

And what did he do this morning, both on Twitter and at the cameras? Talk about what he says is a $4 billion Boeing deal to do -- to make an Air Force One -- really it's to bring it up to date. But he says it's -- you know, it's too expensive. It's too much.

These are all really tangible things that his voters and now, you know, the American electorate, in whole, can look at and say, "You know what? I can wrap my head around this. I can wrap my mind around this. I understand. He's trying to save money. He doesn't want a big fancy plane. We'll see if that happens.

AXELROD: He's got one.

BASH: He's got his own. He -- he -- you know, he's doing deals with the Japanese. And he saved a thousand jobs in Indiana. I get that. BLITZER: You know, Mike Rogers, it was surprising to me that all of a

sudden out of the blue, he's talking about canceling the deal -- a deal. Well, there's no deal yet, but eventually there will be a deal with Boeing to build new versions of Air Force One in 10, 20 years, or whatever, from now, long after he's president, even if he serves two terms.

Do you understand why, all of a sudden, he told Boeing no deal, cancel the deal, too much money?

MIKE ROGERS, CNN ANALYST: Well, he's clearly an unconventional candidate. He is now an unconventional president-elect. And I think he is doing these things to set himself up.

If you read his book and you look at the style of the way he does business, he likes to set the table for the negotiation. If he's going to be successful on all of his economic policies, he's going to need Congress. The pressure that he can build between now and election day only helps him go in because he's going to have a good majority of the public -- and I agree with Dana -- that you understand these things. I get it. He's pushing back on government waste, and he's saying, "I won't take the nicer plane, because I'm going to work on it." Even though he may not fly on it.

[17:10:16] And these 50,000 jobs, I don't care if it's a factor of a manufacturing plant, because there's always a multiple. It's really good politics, especially in the states that were traditionally Democrat-voting states and went for Donald Trump. He sent them a message that he's going to live up to his campaign promises. I think this is smart politics.

BLITZER: Hold on. Everybody stand by for a few moments. I want to bring in -- I want to talk about President Obama's final speech on national security, as well. We're going to talk about that.

But right now the chairman of the House Oversight And Government Reform Committee, the Utah Republican, Representative Jason Chaffetz is joining us.

Mr. Chairman, thanks very much for joining us.

REP. JASON CHAFFETZ (R), UTAH: Thank you.

BLITZER: Let me ask you. I know you've looked into this. Can the president-elect really take credit right now for this Japanese investment? This Japanese businessman, the CEO, goes over to Trump Tower. Trump brings him down into the lobby, says he's going to invest $50 billion in the United States -- excuse me -- billions of dollars in the United States and create 50,000 jobs. What do you think?

CHAFFETZ: I don't know. But between that and Carrier and Ford Motor Company, I mean, as long as this keeps happening every few days, it bodes well for the American worker. So I don't know who to give credit to. Just the reality is it's actually getting done. BLITZER: Is he getting ahead of himself, though? This Japanese

company, Softbank, as it's called, it owns Sprint, who had an attempted merger with T-Mobile that was blocked by the Obama administration. There's already some discussion out there, if this Japanese businessman is simply seeking to curry some favor with the president-elect and hoping that maybe he would green-light this merger.

CHAFFETZ: I don't know. Wolf, I -- we'll have to see how this plays out. I'm sure everybody would love to have Donald Trump in the room to help close their deals. But you know, it's good for the economy. If there are American jobs that are going to be grown here that are going to stay here in the United States of America. But we'll have to keep watching it.

BLITZER: What's your reaction to his announcement today that he wants to kill the Boeing deal to build new versions of Air Force One? As you know, Boeing is the largest exporter in the United States. Hundreds of thousands of people have their jobs directly or indirectly related to Boeing. There's huge competition with European Airbus right now for sales, especially in countries like China. Is it smart for the president-elect to effectively criticize Boeing at a time like this?

CHAFFETZ: Well, he's asking the right questions, because you have a new Air Force One that's so over schedule. You look at the Marine One that President Obama put a kibosh on because of the cost overruns there. I'm glad. That seems to be a bipartisan concern. We've got to have the best, latest technology for the transportation of our -- of our commander in chief, but these people have got to come in on budget.

And Congress plays a role here. I know the Armed Services Committee in the House, Mac Thornberry is going to be looking at that, as well. But these are huge contracts, and they're way over budget. And that's just not right.

BLITZER: You chair this important Government Oversight Committee. A Trump spokesman, Jason Miller, told the "Washington Post" today that Trump sold all of his stocks back in June. Are you comfortable with that?

CHAFFETZ: Well, again, as a private citizen and what he's doing, I really think the clock starts for us when President Trump becomes President Trump. Until he's actually sworn in, he has time to make these transitions. Then, I think, once he's a federal employee, albeit the president of the United States, then obviously the Oversight Committee is going to be watching him with keen eyes.

Because the role, as the oversight chairman, is not to be the cheerleader for the president. It's to be there as a check and a balance on the president.

But what they're doing as a private citizen, as a candidate, as long as the financial disclosures were there, which by all accounts are there, at the FEC Website, then, you know, he gets to conduct his own business.

BLITZER: Do you believe the president-elect should release documents to prove that he no longer owns stock in these companies? Should he release it, even at this late stage, his income tax returns?

CHAFFETZ: Well, I said previously I thought that the best course of action, albeit not required by the law, would be open up his kimono and actually show his tax returns. I think that every candidate should do that. But that's not necessarily the law. And so his only obligation is to that of the law. And moving forward, come January 20, he plays by a different set of rules.

BLITZER: Because, as you know, there's been a lot of discussion of potential conflicts once he becomes president. It's extraordinary, because he does have such a huge business empire right now.

CHAFFETZ: Yes.

BLITZER: As far as the stocks are concerned, it's been estimated maybe he sold as much as $40 million in stocks. That's, from his perspective, if he's worth $10 billion, as he says he is, that's not a whole of lot of money. But you want to see details, I assume, as chairman of this Oversight Committee.

CHAFFETZ: Well, I think it would be different, take the Boeing situation, if he was shorting the stock and trying to profit off of that. But there's no evidence of that in any way, shape or form. He had in his portfolio some of the stock. He criticized, you know, Boeing and the cost overruns of this -- of this new airplane. But you know, it's a whole new world for Mr. Trump. Every word, the world markets and others, including the Oversight Committee, will be watching what he says.

But I think he still needs time during this transition to get settled in. He's got a new general counsel. He'll have an army of additional attorneys there. We look forward to making sure they're held accountable.

BLITZER: So bottom line, what type of oversight are you, the Republican majority in your committee -- I am sure the Democratic minority will want to work with you -- what type of oversight are you planning for Donald Trump's many businesses here in the United States and around the world?

CHAFFETZ: Well, again, he's got to comply with the law. And the law is actually different for a president than it is for other federal employees and members of Congress. They have more leniency. You can't ask -- I don't know exactly why that is, but that is the case. And so we'll have to compare the actions with the law and see where he's at.

But, you know, there's always somebody doing something stupid somewhere. So give it a little bit of time, and there will be plenty of things to go after, I'm sure.

BLITZER: I'm sure there will be. All right, Mr. Chairman, stand by. We'll take a quick break. Lots to discuss. We'll resume our conversation right after this.

(COMMERCIAL BREAK)

[17:21:07] BLITZER: We're back with Congressman Jason Chaffetz. He's the chairman of the Oversight and Government Reform Committee.

Mr. Chairman, your committee, you released a report concluding that the State Department has been prioritizing architectural design over -- over security at various embassies around the world. What are the problems you see.

CHAFFETZ: Well, when Colin Powell was doing it, we had standard embassy design. These things were coming in under budget, ahead of schedule. Beautiful buildings.

When Hillary Clinton took over, and the Obama administration, they prioritized and changed it to design excellence. The problem that I see is these buildings that were in the $35 million range are now coming in at $250 million. That happens in Mozambique, and in Zimbabwe. Look at what's going on in Port Moresby. And so in a post- Benghazi world, we've got to have safe and secure buildings, but after two years of investigation, we have places like London that is literally more than a billion dollars. And when component testing was done on the blast shield, you know, there were some real questions as to whether or not it could withstand a blast. And now we're concerned that the embassy in London won't open in February, as it was originally planned to do.

BLITZER: Eliot Engel, the Democratic Congressman, the ranking member of the House Foreign Affairs Committee, he says your -- your numbers lean on inaccurate information, making partisan claims rather than attempting to find real solutions to keep our brave men and women safe in an increasingly complex global environment. Your reaction to his accusation that what you're reporting now is partisan.

CHAFFETZ: Well, a hundred-plus pages of reports, footnoted every single step of the way, I think the report speaks for itself. Maybe he should have read the report before issuing a press release. He had no possible time, I am sure, to go through and actually do that. The reality is that, if we don't open the embassy in London on schedule in February, as they've assured us every step of the way, then the American taxpayers will pay $100,000 a day to keep the doors open, because we sold the other building, and if you can't move into the new embassy, you have to pay a lease payment back to the new owner. And that comes out to more than $100,000 a day. And it could go all the way -- at least from what we're hearing from Whistleblowers, till the end of 2017.

So a very costly mistake and a huge concern. But I am proud of the work that committee staff and that we have done literally over a two- year period to make sure we get this right.

BLITZER: Because Congressman Engel, among others, they say instead of investigating these embassies which are relatively small amounts of money, you should be investigating the reported $125 billion in administrative waste over at the Pentagon that was reported today in the "Washington Post."

What's your answer to him when he says investigate that waste. Don't waste your time on relatively modest sums of money?

CHAFFETZ: Well, modest sums of money in this case end up being billions of dollars. And shame on us if you think that a billion dollars here and there is just chump change and a modest amount of money. It comes up to a lot of waste, fraud and abuse.

The report that came out of the Pentagon that suggests there was $125 billion that was misspent or that certainly could have been reduced in dramatic ways, I mean, that money, we're trying to scrape to get to the fighting men and women out there, make sure they have the equipment. But they have this bureaucracy now, this overhead that I'm sure President Trump and certainly the Congress wants to get after. And very worthy of looking at in every single aspect.

BLITZER: So your committee will look at that, as well?

CHAFFETZ: Yes, absolutely. The Armed Services Committee will also be looking at it. It's something we're -- we just became aware of. And the fact that the Pentagon tried to bury this report, at least that's what I'm reading in the news accounts -- is very concerning.

BLITZER: That's real waste, $125 billion.

CHAFFETZ: Yes. Yes.

BLITZER: Mr. Chairman, thanks for joining us.

CHAFFETZ: Thank you, Wolf.

BLITZER: Later tonight, CNN's Van Jones talks with Michael Moore, Rick Santorum, Ana Navarro in a live town-hall event. Be sure to watch "THE MESSY TRUTH WITH VAN JONES," later tonight, 9 p.m. Eastern.

[17:25:07] Coming up here in THE SITUATION ROOM, President Obama strongly defends his record on fighting terrorism, insisting the U.S. and its allies are breaking the back of ISIS right now.

And later, alarming new details about a new cyber-attack blamed on North Korea. How much of a danger does Kim Jong-un pose to the United States?

(COMMERCIAL BREAK)

BLITZER: There is breaking news. President Obama defending his anti- terrorism strategy. Our White House correspondent, Michelle Kosinski is with the president in Tampa, Florida.

[18:30:00] Michelle, the president, without naming him directly, seemed to criticize Donald Trump at the end of his speech. Let me play a little bit of that for you.

(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The United States of America is not a country that imposes religious tests as a price for freedom. We're a country that was founded so that people could practice their faiths as they choose.

The United States of America is not a place where some citizens have to withstand greater scrutiny or carry a special I.D. card or prove that they're not an enemy from within. We're a country that has bled and struggled and sacrificed against that kind of discrimination and arbitrary rule here in our own country and around the world.

We're a nation that believes that freedom can never be taken for granted and that each of us has a responsibility to sustain it. The universal right to speak your mind and to protest against authority, to live in a society that's open and free; that can criticize a president without retribution.

(END VIDEO CLIP)

BLITZER: Pretty strong words, Michelle, from the president. Are you surprised he decided to go this route at the end of his final national security speech? These are clearly important values that he sees part of his own legacy.

MICHELLE KOSINSKI, CNN CORRESPONDENT: Yes. I don't think it's surprising at all. I mean, he -- I think he really felt the need to get something in there as a message to the next administration. It's something that we heard repeatedly from the president on the campaign trail. I mean, in some cases parts of this speech were almost word for word from how we've heard him criticize Donald Trump in the past.

I mean, when you think about it, this is really how this administration is continuing to communicate with the next administration. And the points that the president continues to hammer. He chose the Muslim issue, arguably, one of the most controversial parts and continues to be of Donald Trump's platform during the campaign.

But it's also the contrast that the president makes in his continued opposition to Gitmo, calling it a blot on our national honor; in his opposition to enhanced interrogation methods, or torture, saying during the speech today that adhering to the rule of law isn't a point of witness -- of weakness. In fact, he called it our nation's greatest strength.

So what he wants to do is set up a "Look at my record. Here's how I think it's worked. Yes, there is more work to do." But there's also a warning in this, Wolf, to the Trump administration, saying, "You have to be careful about how you handle these intricate complexities. Otherwise, you make the problems worse."

BLITZER: Michelle Kosinski, traveling with the president in Tampa, Florida. Thank you.

Let's get some insight from our political and national security experts. Phil Mudd, I'll start with you. What stood out to you in the president's approximately 45-minute speech?

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: Wolf, quite simply tone and temperament. Step away from all the details and go back eight years.

We have a new president talking about change who says, "I'm going to shut down Guantanamo, and I'm going to pull out of places like Iraq." Reality is a brutal teacher. Guantanamo closure was opposed by Congress. It's still obviously not closed. And ISIS was the reality that taught the president you can't pull out that quickly.

We have a president-elect now who says, "I might institute water boarding, and I want to make a U-turn on Syria by potentially working with Russia." I think when he transitions from the campaign trail to the Oval Office and the situation room, he's going to face the same problems with the bureaucracy and with international reality that President Obama did.

The message from the president is simple. Say whatever you want on the trail. But when you face the realities of the office, tone and temperament are going to be different.

David Axelrod, you served as a top advisor to President Obama during his first term. What stood out in your mind?

AXELROD: Well, I thought the speech was interesting, because on the one hand he really was speaking to history. He was laying down his legacy as a president who came to office when 180,000 troops were in an active theater in Afghanistan and Iraq, when Osama bin Laden and al Qaeda were active and plotting. And he marked the progress we've made but also the challenges that lie ahead.

But the second audience was Donald Trump and the American people. A full-throated case for values that he feels are embedded American values that are worth fighting for or that, in fact, make us stronger and not weaker. So there were two audiences for this speech.

BLITZER: And Jim Sciutto, you've covered it. I've covered it. We've all covered these eight years of President Obama. His critics point out take a look at the region: North Africa, the Middle East, South Asia. They say, "You know what? It's a lot more tense, volatile, dangerous today than it was then."

SCIUTTO: No question. Listen, the Middle East is a mess. And Syria, here's an example. If you look at the Obama legacy, what was the Obama foreign policy vision as encapsulated by them? It was don't do stupid stuff. But substitute the word for stuff. That was the formula. The idea being that you can make situations worse by intervention, a lesson of the Iraq War. et cetera.

But of course, you look at a place like Syria and lack of intervention can also leave horrendous problems. Refugees, you name it. Chemical weapons use.

So in addition to being a valedictory speech, it was also a rebuke of Donald Trump's at least proposed altering of the course. But the fact is, when you look at those big issues, those big interventions, I don't know that Donald Trump has articulated that he's going to be that different. Right? I mean, he's talked a lot about standing up, being tougher, negotiating better deals, et cetera. He's not talking about a military intervention on the ground in Syria. He's not talking about--

BASH: Just the opposite.

SCIUTTO: Just the opposite, in fact, not talking about a greater investment of troops on the ground even in Iraq. Even though, you know, criticizing Obama for bringing those troops out. So what are the major adjustments we're going to see from Donald Trump? I don't think it's clear.

BLITZER: Mike Rogers, until recently you worked on the transition team for the president-elect. How do you see it?

ROGERS: I think what they're going to do, Wolf, is they've got a more of a screw driver approach to this. You're not going to see the 101st Airborne Division getting deployed to Syria and Iraq. I think they know that's a disaster.

But the rules of engagement have been hindrance to us. And it's interesting. If you talk to foreign leaders in the region, they have started to walk back and say, "Listen, we're a little nervous. We're not sure either but we look at it as a huge opportunity to rebuild the coalition and have U.S. presence with our special capabilities forces with new rules of engagement. It sounds complicated, but that little adjustment can go a long way to more progress.

BLITZER: Dana, you wanted to make a quick point.

BASH: Well, that's a great point and obviously an insight, because you were on the transition.

But I just also remind people that, in the campaign, Donald Trump talked really tough about Pakistan, for example. Then it seems, according to what the Pakistani government released, breaching diplomatic protocol, was a quite different tone in private. So I think that is just a reminder, like things on the domestic side, on the international front, what he said in the campaign and the way a President Trump will act as commander in chief, to be determined.

BLITZER: And he's negotiator, and he always wants to bargain from a position of strength.

Everybody, stand by. I have much more coming up.

A note to our viewers: be sure to watch tomorrow night when CNN's Fareed Zakaria talks with President Obama about the triumphs and the struggles during his time in the White House. CNN special report, "The Legacy of Barack Obama" Wednesday night, tomorrow night, 9 p.m. Eastern right here on CNN.

Coming up, South Korea blames Kim Jong-un's regime for a cyber-attack on its military. How big of a threat does North Korea pose to the U.S.? Plus, will controversy force Donald Trump to reconsider his choice of

a retired general to be his national security advisor?

(COMMERCIAL BREAK)

[17:42:23] BLITZER: New tonight, South Korea says some of the nation's most sensitive military secrets have been exposed by North Korean operatives.

Our Brian Todd is tracking these late-breaking developments for us. What's the extent, Brian, of this cyber-attack?

BRIAN TODD, CNN CORRESPONDENT: Wolf, tonight Kim Jong-un's army of hackers appears to have done a real number on South Korea's military. They've reportedly tapped into secret military documents and could have forced South Korean commanders to rewrite operation plans.

And tonight we've learned a key American military battery might also have been targeted.

(BEGIN VIDEOTAPE)

TODD (voice-over): Tonight Kim Jong-un's hackers accused of a major breach of military secrets. The South Korean defense ministry says North Korea hacked its military's secure computer network. It's part of South Korea's new cyber command.

JAMES LEWIS, CENTER FOR STRATEGIC & INTERNATIONAL STUDIES: That was sort of the back-bone of the South Korean military, and they probably got access to a lot of sensitive information. Maybe including some of the information on the missile defense activities the U.S. is taking with South Korea.

TODD: According to the Yanhap (ph) news agency, military documents, including confidential information, have been hacked, potentially forcing South Korea's military to rewrite operation plans.

Kim's army of hackers, said to number as many as 6,000, work for North Korea's notorious Reconnaissance General Bureau, including an elite unit called Bureau 121, built up by General Kim Yun-cho (ph) a former body guard for Kim's father and grandfather.

They've previously targeted a South Korean nuclear power plant, hacked the smartphones of top South Korean officials and allegedly carried out North Korea's only direct attack inside America, the cyber-attack on Sony Pictures Entertainment in the fall of 2014.

Analysts say Kim's cyber army is good at grabbing hacking tools from the criminal black market and breaking into hard targets.

LEWIS: When you look at them, they don't have an I.T. industry. Some days they don't even have electricity. So it's hard for them to build this kind of thing. But the North Korean leadership, both the current Kim and his father, put a big emphasis on I.T., on hacking.

TODD: The report of a cyber-attack comes at a time when the U.S. And South Korea are bracing for another possible provocation from Kim Jong-un. A time of political transition in the U.S. and political turmoil in South Korea. The country consumed by a corruption scandal with president Park Geun-Hye likely to resign or be impeached. She worked to impose sanctions on North Korea. Now both countries could be changing leaders simultaneously.

BRUCE KLINGNER, THE HERITAGE FOUNDATION: One would think Kim Jong-un would take advantage of not only the weakness of the South Korean government but the transition of the U.S. incoming Trump administration. North Korean defectors have said that North Korea acts against the new presidents to train them like a dog.

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TODD: And experts say Kim Jong-un may really benefit from the next South Korean President who is likely to be more left-leaning. That president, they say, is likely going to be a lot less tough on Kim Jong-un than Park Geun-hye has been. They'll be more likely to give aid to North Korea, to resist America's deployment of an anti-missile battery in South Korea, and overall, could be just easier for Kim Jong-un to intimidate -- Wolf.

BLITZER: Brian, recently there've also been some very possibly disturbing images coming from North Korea's nuclear bomb test site. What are you learning?

TODD: That's right, Wolf. U.S. officials recently telling CNN there's been some digging at the Punggye-ria nuclear test facility where North Korea has tested their nuclear bombs. One U.S. official tells us it includes some digging out of a tunnel previously used in a nuclear test. Now, this could be just maintenance, but it also could be a sign that they are preparing for another nuclear bomb test, maybe sometime around President-elect Trump's inauguration.

BLITZER: That would be on January 20th. All right. Thanks very much. Brian Todd reporting for us.

Let's dig deeper on this developing story with the former Chairman of the House Intelligence Committee, CNN National Security Commentator, Mike Rogers. Congressman, actually, we're getting some new information right now. I want to take a quick break. We'll absorb that, then you and I will discuss much more right after this.

MIKE ROGERS, FORMER CHAIRMAN, HOUSE INTELLIGENCE COMMITTEE: Sure.

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[17:50:57] BLITZER: We were tracking some very disturbing developments on South Korea right now, where a major cyberattack by North Korean hackers has reportedly exposed military secrets. Let's get some more from CNN's National Security Commentator, former Chairman of the House Intelligence Committee, Mike Rogers.

Congressman, how troubling is this North Korean hack that we're now reporting? ROGERS: Well, it's troubling in this sense, their capabilities have

ramped up very significantly. The Sony attack that many Americans were aware of where they actually broke into Sony, destroyed data -- that's a disruptive attack -- and stole data really showed us that they had this capability. By the way, they bought it off the deep and dark Web. They didn't engineer it themselves.

So since that date, they've been getting better. So they've showed now that they can get into phones. They can get into computers in South Korea. We've seen them attack a bank in South Korea to try to do destructive attack, to try to cause some harm. And now what you see with this, it shows that the breadth of their ability to use cyber as an aggressive weapons set is growing, and that's why so many of us in the national security space are concerned.

BLITZER: But don't they understand there could be retaliation? If they launch a cyberattack like this, the U.S. or others could launch cyberattacks against them, effectively shut it down?

ROGERS: Well, yes. We have, certainly, capabilities to do it, but you have to remember, only a third of the population of North Korea has electricity, so the damage that you can do is limited. And their ability to shut off their -- they control their internet, the United States doesn't. Eighty-five percent of the networks here are private sector networks, so it poses some challenge.

We do have capabilities, but remember, this is the other piece of this, Wolf. Very aggressive and they're using it, cyber. They also, about eight months ago or so, fired off missiles from submarines that they claimed could be intercontinental ballistic missiles, meaning the provocation is on all fronts. It's the ability to launch a missile from a submarine.

The fact that that looks like they're preparing for a nuclear test, another round, they're going to have 100 nuclear weapons within the near future. Within the next 20 years, people believe. They have some now. They think they can have as many as 100. This is what we're worried about. It is irrational in the way they're using their military and intelligence service.

BLITZER: Because Trump national security team has been told, apparently, by the U.S. intelligence community, North Korea now represents the top threat to the U.S.

ROGERS: Well, they're certainly going to do some act of provocation. They're showing that. So they know that during a transition, and normally, holidays -- they're very good about finding American holidays or other things like these transitions -- where there is a lame duck President, he is leaving, and you have a President-elect that's going in who doesn't have a lot of foreign policy experience, that's just an opportunity for our adversaries.

So I'm hoping that the national security team is getting together and starting to function like a national security council already because they're going to deal with the consequences of some provocation from North Korea. BLITZER: Mike Rogers, thanks very much for that update.

ROGERS: Yes, thank you.

[17:53:54] BLITZER: And coming up, Donald Trump practices the art of the deal, coming before cameras to announce a Japanese investment that is supposed to produce 50,000 jobs in the United States.

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[17:59:28] BLITZER: Happening now, breaking news. Towering deal. President-elect Donald Trump announces a giant investment by a Japanese company to create new American jobs, and he says it's only happening because he won the election. Does Trump deserve the credit, or was it a deal that was already planned?

Blasting Boeing. Donald Trump takes to Twitter to lash out at the American plane maker saying costs for a new Airforce One are out of control and that the order should be canceled. Why is he publicly attacking a U.S. company that employs thousands of people?

Back on stage. Trump is about to hold a rally on his "Thank you" tour and he'll introduce his pick for Secretary of Defense, but General James Mattis will need special action by both Houses of Congress before he can be confirmed.