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EARLY START WITH JOHN BERMAN AND ZORAIDA SAMBOLIN

Blizzard Watch in New England; Did Iran Hack Into U.S. Drone?; Brennan Confirmation Hearing; President Obama Talking Faith; NYT: Lance Armstrong May Name Names; Federal Reserve: Hacked

Aired February 7, 2013 - 05:00   ET

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


ZORAIDA SAMBOLIN, CNN ANCHOR: Bracing for the big one. Two winter storms about to merge into a monster blizzard for parts of the Northeast.

JOHN BERMAN, CNN ANCHOR: American spy secrets exposed? Iran claims it has hacked into a captured U.S. drone. We have a live report.

SAMBOLIN: And, John, it is high drama on Capitol Hill. President Obama's big pick for CIA director up for confirmation in a few hours. But will members of his own party derail it?

BERMAN: I don't know, Zoraida.

SAMBOLIN: Lots of drama.

All right. Good morning. Welcome to EARLY START. I'm Zoraida Sambolin.

BERMAN: And I'm John Berman. It is Thursday, February 7th. Five a.m. in the East. And let's get started.

Up first, brace yourselves, bundle up, and buy a shovel. This is going to be a big one. At this moment, a blizzard watch is in effects for New England. A storm is headed that way, really this way, and could be historic. This is expected to drop more than two feet of snow in some places, two feet, and it all starts tomorrow.

You get right to Indra Petersons. She is tracking this mess from the CNN weather center in Atlanta. And, Indra, you know, you told us this was coming yesterday. You were on top of this one.

INDRA PETERSONS, AMS METEOROLOGIST: We're trying. Boston could rival its worst blizzard from 2003 which had 27 1/2 inches. So, we're definitely monitoring this very closely. All of this again talks about two storm systems coming together. The first one here, notice in the South, all instability, a tornado warming out there for Plaquemines Parish. We're seeing la the instability move off to the east.

And this is how it's going to line up. We're going to watch this instability produce heavy showers even through Atlanta today. We're going to see a low form, start to be kind of a rain and wind event as it moves across or north on the Eastern Seaboard. And then, notice, the other storm system. Now, watch as these two merge together. Again, once they merge, it's all about the positioning, not only of the low itself but where the freezing line is all these factors will determine how much snow we will have in each area.

Now, let's talk about what we're expecting. We have a blizzard warning, we know that, out towards Boston, Rhode Island and Connecticut.

It's not the only story. We're talking about winter storm watches and, of course, we're also talking about winter weather advisories. Even in Michigan, we're talking about some heavy snow.

I want to talk about the focus areas. We know what we're concerned with. Of course, anyone from one to two feet. Some models have it higher than that. And then as we take you down to New York, of course, you guys are right on that freezing line.

So, depending on that position in the freezing line, we could see it vary, you could start with sleet, turning into snow, or just be with all snow. So, it's something we'll be monitoring. And, of course, keeping a very close on here as it gets close.

Hang in there, brace yourself.

BERMAN: Indra, that is a lot of deep purple over a wide, wide area there.

PETERSONS: All of New England, yes.

BERMAN: All right. Thanks very much, Indra Petersons in Atlanta.

SAMBOLIN: It is two minutes past the hour.

Another developing story this morning: U.S. secrets exposed? Iran is claiming it has decoded and now released footage from a downed U.S. drone. A man identified as a member of Iran's military narrated the black and aerial footage as it was broadcast on Iranian state media. He claims it was a drone Iran downed in 2011.

CNN cannot independently verify the authenticity of this video. We've also reached out to the Pentagon for comment but have not heard back yet.

Nic Robertson is following developments for us from London this morning. Is this the same drone that the United States said returned to the United States?

NIC ROBERSTON, CNN SENIOR INTERNATIONAL CORRESPONDENT: It is. It looks like the same one the Iranians say, the RQ-170, a stealth spy drone. The Iranians say it was flying 140 miles into their airspace off sort of their northeastern corner, close to the border with Afghanistan.

Now, the Iranians are saying this aircraft was flying from the Kandahar airfield base inside Afghanistan, and some of the footage, and I looked at it, some of it could be Kandahar air base but there's no guarantee this video actually came from the aircraft in question here. Did they get this video from somewhere else? It's just not clear.

There's no way to verify at the moment what the Iranians are saying. The spokesman that the Iranians are putting forward from the Revolution, however, says that the aircraft was sent to California several times in 2010 for repair and used in operations inside Pakistan.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE (through translator): This aircraft has had many flights in countries around Iran, and operations that have taken place in Pakistan. This aircraft has provided guidance.

(END VIDEO CLIP)

ROBERTSON: Again, Zoraida, no indications that we have that they have the real video from this drone. They may do, but we can't -- we can't know that for sure at the moment, Zoraida.

SAMBOLIN: OK. So, potentially, this could be a fake. We have not substantiated any of these claims. But if it is not a fake, what does it say about the strength and sophistication of the Iranian intelligence system?

ROBERTSON: Well, let's face it. If you were a spy agency from another country and you wanted to get inside a U.S. military base and got video footage of it, that would be a coup. If the Iranians got some footage from inside Kandahar airfield base showing things that the United States and allies rather the Iranians not see, then that is a coup.

Now, we have to be very, very clear here. What the Iranians say they have done is decoded the video that's on board the aircraft. That is entirely different from watching a live stream of video as drone operators do, as combat troops in the field can do. So, these are two vastly different things.

So, it may show the Iranians have some advantage here, but certainly doesn't show they hacked into the all-important, being able to watch downstream live video as it happens, Zoraida.

SAMBOLIN: Yes, that's really the unanswered question.

Nic Robertson, live in London for us, thank you.

BERMAN: We have some new developments this morning concerning a secret U.S. memo authorizing the targeted killing of Americans overseas. President Obama giving in to congressional demands, will release classified documents outlining the legal justification for drone strikes that kill U.S. terror suspects abroad. Until yesterday, the White House refused to acknowledge these documents existed.

SAMBOLIN: And news of the disclosure coming just as John Brennan, the president's nominee to be CIA director, is set for his Senate confirmation hearing. Brennan was the architect of the administration's drone policy. As Barbara Starr tells us, it's just one of the obstacles that he faces.

(BEGIN VIDEOTAPE)

ANNOUNCER: And Mr. John Brennan.

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): When President Obama's pick for CIA director heads to capitol hill today for his confirmation hearing, it's some in the president's own party that are threatening to hold up John Brennan's nomination.

Oregon Democrat Senator Ron Wyden telling reporters he would, quote, "pull out all the stops" to get answers about the legality of targeting Americans involved with al Qaeda overseas. In written answers to committee questions, Brennan didn't address killing Americans, but insisted all targeting is made on a case by case basis.

CHRISTOPHER ANDERS, ACLU: Senator Wyden was trying to find out that basic information and has been denied that. So, you know, the most basic questions about a program that John Brennan has been -- has been the architect of and the orchestrator of for four years, the most basic details of it have been withheld.

STARR: It's just one controversy Brennan faces at his confirmation hearing. There's his role in administration leaks about covert operations, like the cyber attack on Iran's nuclear program, and the use of a mole to infiltrate al Qaeda in Yemen. Senators want to know his knowledge of harsh interrogations when he was at the CIA during the George W. Bush years. Brennan said he was aware of the program but wasn't involved in it. He promised, "These techniques would not be used again by the CIA if I were the director."

SEN. JOHN MCCAIN (R), ARIZONA: Well, he says he had opposed, quote, "enhanced interrogations or torture", but there are statements that clearly he made several years ago where he supported it. I'd like to see those -- that issue resolved.

STARR: Outrage over the interrogation program scuttled Brennan's chances to lead the CIA in Obama's first term. But now, he says he's ready for the political heat.

JOHN BRENNAN, CIA DIRECTOR NOMINEE: Although I consider myself neither a Republican nor Democrat, I very much look forward to working closely with those on both sides of the aisle.

STARR: As President Obama's top counterterrorism adviser, Brennan continues to be seen as all powerful.

FRAN TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: I think for sure John is regarded in terms of the intelligence community, even where he is now, as a first among equals.

STARR (on camera): If he's confirmed as director of the CIA, John Brennan will have a new boss. He'll now report to James Clapper, the director of national intelligence. But if there's covert action, some of the CIA's most secret activities, then Brennan will still have the authority to walk right into the Oval Office.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

BERMAN: And our thanks to Barbara Starr.

Defense Secretary Leon Panetta gets fired up in his final days on the job, warning that we are on the brink of the most serious readiness crisis faced by the armed services in more than a decade unless Congress takes action to stop across the board military budget cuts from taking effect on March 1st.

(BEGIN VIDEO CLIP)

LEON PANETTA, DEFENSE SECRETARY: This is not a game. This is reality. These steps would seriously damage a fragile American economy and they would degrade our ability to respond to crisis precisely at a time of rising instability across the globe.

(END VIDEO CLIP)

BERMAN: Some passion from the outgoing Defense Secretary.

Meanwhile, even as budget cuts loom, the U.S. Air Force just renewed its NASCAR partnership with Richard Petty Motorsports number 43 car. NASCAR says the Air Force will be the primary sponsor for two races and an associate sponsor all season.

SAMBOLIN: President Obama is expected to open up on faith this morning as religious and community leaders gather for the 61st Annual National Prayer Breakfast. This is just a few hours from now.

It will be the president's first remarks to the faith community since he announced his support for same-sex marriage. The fellowship foundation which organizes this event has historically held conservative evangelical views. And an ethics groups says the foundation is linked to legislation in Uganda that would make being gay a crime punishable by death.

BERMAN: A shocking discovery, a teenager chained to a pipe in his basement. Kansas City police responding to a tip from the Missouri children's hotline found a 17-year-old boy locked up, appearing frail and hungry. The special needs teen told police he had been locked down there by his parents since September. According to a neighbor, the mother had been telling people that the boy had been out of town. After witnessing prior abuse, neighbors expected something was wrong.

(BEGIN VIDEO CLIP)

ASHLEY REPPY, FRIEND OF VICTIM: I know there were a couple times I came over here after school and he was sleeping on her front porch because they wouldn't let him in the house. It was sad, very sad. We cried a lot yesterday.

(END VIDEO CLIP) BERMAN: What an awful story. Three adults are in custody. The boy is in the care of the state right now.

SAMBOLIN: The Boy Scouts organization says it needs more time on whether to lift its ban on day troop and scout leaders. The executive board is expected to vote yesterday on that proposal yesterday to allow local scout groups to set their own policies. But a decision was put off until their annual meeting. That is scheduled in May. The Scouts said it was due to the, quote, "complexity of the issue".

BERMAN: That will only ramp up the controversy surrounding the issue.

SAMBOLIN: Yes.

BERMAN: All right. A baseball card described as rarer than rare sold for $92,000 at auction. The 1865 photograph of the Brooklyn Atlantics is considers one of the first ever baseball cards. The Atlantics, they were a founding team in the National Association of Baseball Players, a forerunner of the National League.

The seller found the card at a yard sale in Maine. The only other copy --

SAMBOLIN: What a find, huh?

BERMAN: Mom, don't throw away the box of baseball cards. There's only one copy that we know about in the Library of Congress. Baseball cards, the treasure that keeps on giving.

SAMBOLIN: Wow, 1865. That's remarkable.

BERMAN: Old. I have some from the '60s.

SAMBOLIN: Do you really?

BERMAN: Yes.

SAMBOLIN: The '60s that doesn't seem old anymore now, does it, Berman?

BERMAN: Maybe not to you. But to me --

SAMBOLIN: Ancient.

BERMAN: It feels very old.

SAMBOLIN: Thank you very much.

All right. So he came clean in dramatic fashion to Oprah on national television. You know who I'm talking about. But is Lance Armstrong ready to name names about doping in the cycling world? Details from a new report headed your way.

BERMAN: Plus, he was one of President Obama's top advisers. Now, Tim Geithner seems ready to tell all.

(COMMERCIAL BREAK)

SAMBOLIN: Welcome back to EARLY START. I'm going to dance.

BERMAN: It seems that's what we're dancing.

SAMBOLIN: Sing a little this morning.

All right. So, he confessed to doping during his incredible Tour de France run. Now, Lance Armstrong could name names. It is brand new this morning. "The New York Times" reporting that Armstrong is in talks with the U.S. Anti-Doping Agency to possibly disclose who helped him dope and to talk about how he covered it up for nearly a decade as well.

This report came out only a few hours after the Anti-Doping Agency gave him more time to talk.

BERMAN: This is a big deal. It's the thing that everyone says he needs to do if he wants to get his suspension reduce so he can run whatever races he wants to run in the future. But it is a big, big development.

SAMBOLIN: Absolutely.

BERMAN: All right. It is 16 minutes after the hour right now. I want to bring you up to speed on all the morning's top stories. Christine Romans is here for that.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Good morning to both of you. Get ready for this big story. A dangerous winter storm targeting the Northeast.

BERMAN: It's the big one.

ROMANS: It is. Parts of New England already under a blizzard watch this morning. You know, two feet of snow, maybe more could fall in parts of Massachusetts and Rhode Island beginning tomorrow. Get ready.

The FDA sends out a warning about a new fake version of the cancer- fighting drug Avastin. It says at least one batch sent by a New York- based distributor contained no active ingredient. The counterfeit version is marked as Altisan (ph) which is not approved -- not approved -- for sale in the U.S. The only approved version for sale in the U.S. IS Avastin. The injectable drug treats colorectal, brain, lung and kidney cancers.

Two weeks after stepping down as Treasury Secretary Timothy Geithner announces plans to write about a book his response to the financial crisis. Geithner took a lot of heat from his critics for the bailout of the big bank and how it was, quite frankly, free money for the banks. He was head of the New York Fed at the time. Supporters credited him with helping preventing a global economic collapse. We are told he is shopping still for a publisher.

Bridget Jones with calorie-obsessed, unlucky in love heroin played on screen by Renee Zellweger, will return in book form in November.

SAMBOLIN: Yay!

ROMANS: You know, it's been 14 years since the last installment of this popular series by the British author Helen Fielding. The first two "Bridget Jones Diary" and "Bridget Jones: The Edge of Reason", sold 15 million copies. Both, of course, were made into feature films which Berman can memorized -- has memorized.

SAMBOLIN: Well, apparently, he doesn't like it.

BERMAN: No, I mean, it was made to see the movie once. And I'm still --

SAMBOLIN: Made to see the movie. Fantastic.

BERMAN: It's not for guys. This is not for guys.

SAMBOLIN: Really?

BERMAN: Really.

SAMBOLIN: I think you could bond really well during the movie. I say it's a must for guys.

Thank you, Christine.

ROMANS: You're welcome.

SAMBOLIN: It is 18 minutes past the hour.

It's time for your local reads, or early reads that is, your local news that is making national headlines.

So, this from Idaho's "Spokesman Review". State Senator John Goedde who chairs the state's education committee, introduced legislation that would make every high schooler read and pass a test on Ayn Rand's "Atlas Shrugged" before graduating. When a fellow senator asked him why he chose that specific book, Goedde replied, "That book made my son a Republican." That's a direct quote.

He reportedly doesn't plan to push the bill to a hearing. Goedde said he just wanted to send a message that he's unhappy with some of the state board's recent decisions on high school graduation requirement. I happen to love the book.

BERMAN: A lot of people are. Paul Ryan loved it. It was a big part of the election last year. It's not a bad book. It's a good book. One that people should read.

All right. So, one of the most popular male models in the world is giving up fame and the potential for a considerable fortune to play college football.

"The Dallas Morning News" reports that Miles Crosby has signed a letter of intent to play football for Southern Methodist University next year.

SAMBOLIN: Look at your TV, come over to your TV.

BERMAN: He's OK looking.

SAMBOLIN: Really? Look at that.

BERMAN: At 17, Crosby appeared -- he's 17. Brace yourself.

SAMBOLIN: I know, I know.

BERMAN: He's appeared in a number of Calvin Klein ads. And he's also been featured in "Esquire", "GQ" and "Vanity Fair." I guess he's the 11th ranked male model in the world. I wonder how those rankings work. It's like college basketball. If you lose, do your rankings go down?

He said he has a passion for football and a desire to study film with the hope of becoming a director.

SAMBOLIN: So he's smart and beautiful.

BERMAN: He's --

SAMBOLIN: Way to go, mom.

BERMAN: And plays football. The guy is obviously talented.

SAMBOLIN: Wow.

So, for an expanded look at all our top stories, head to our blog, CNN.com/EarlyStart. You can follow us on Twitter or on Facebook. Just search for EarlyStartCNN.

BERMAN: All right. Some serious questions about cyber security this morning at the Federal Reserve. Coming up, the data that hackers may now have access to.

(COMMERCIAL BREAK)

BERMAN: New York, New York, where we are minding your business this morning. U.S. stock futures are slightly up this morning, ahead of the European Central Bank meeting later today. Investors are also watching initial budget claims, first time jobless claims and consumer confidence today.

SAMBOLIN: And Christine Romans is here with a look at today's business roundup.

ROMANS: And a whole boatload of earnings news again. The market has been like a pendulum every day this month. The few little days we've had this month, just back and forth, back and forth.

The Dow is within 200 points of an all-time high. So the big question on everyone's mind, should we be getting into stocks or is this the perfect time to be getting out of stocks? Let me show you what's really been happening here. You've had last year, record outflows. Normal people taking money out of the stock market, $150 billion out of the stock market, at a time when the stock market kept rising. Now, at the beginning of this year, individual investors are rushing in. They put $17 billion into stocks so far in 2013. Now, apparently, they are convinced.

Well, why are they convinced? Well, they're convinced because earnings are -- they're convinced because for four years, the stock market has been going up, now regular people think, hey, this is not bad.

These are the four stages of a bull market I was telling you about. You can see, at first, there are some reservations. Then you see that some point by the third stage, it's acceptance. And then, finally, you know, you get a little bit exuberant. And that's where we think we might be right now.

By the way, corporate insiders are not rushing into the market. Corporate insiders are rushing out of the market to the tune of 9 to 1. Corporate insiders are nine times more likely to be selling their shares in their company than buying. That's a huge signal.

What's a big buy signal? The Fed continues to pump money into the system, $85 billion a month. So, that is really a good tailwind for the overall economy and for the stock market.

And speaking of the Fed, it was hacked. The Federal Reserve telling us that hackers got in there and were able to access their systems. They say no data was breached overall. But they -- you can see, there's the Federal Reserve there.

But the group Anonymous has taken responsibility. Apparently, it was a system that the Fed uses to talk to banks when there is a crisis, that was breached.

Now, the incident did not affect critical operations of the Federal Reserve System.

BERMAN: That's scary.

ROMANS: It is.

BERMAN: I mean, the Fed is one of those things you kind of hope never gets hacked.

ROMANS: It is. And they said they noticed it was from an outside vendor. They noticed that's how they got in. As soon as they noticed it, they shut down this hack.

But this is a big -- every company, every bank, everybody who moves money and makes money is very concerned.

SAMBOLIN: So sophisticated with it.

ROMANS: They really have. They have. So, there you go. SAMBOLIN: Thank you, Christine. Appreciate it.

ROMANS: You're welcome.

SAMBOLIN: Twenty-six minutes past the hour.

Oscar winner Steven Spielberg is under fire this morning. He's accused of fudging key facts in his blockbuster movie "Lincoln." Why one lawmaker is actually demanding changes. And he wants that to happen before the movie comes out on DVD.

(COMMERCIAL BREAK)