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EARLY START

Target Data Breach Expanding; Sochi Security Concerns

Aired January 17, 2014 - 05:30   ET

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


(BEGIN VIDEO CLIP)

CHRISTINE ROMANS, CNN ANCHOR (voice-over): Identity theft alert. New, serious warnings for everyone who shops with a credit card. A new report revealing the massive Target security breach much bigger, more companies than we thought.

JOHN BERMAN, CNN ANCHOR (voice-over): Huge.

Meanwhile, we're just hours away from one of the most anticipated speeches on spying in generations. What the president will say about the NSA and what he will not say that has a lot of people surprised.

ROMANS: Crisis in California. Wildfires rage as a drought ravages the state. The big move coming from the governor today.

(END VIDEO CLIP)

BERMAN (on-camera): Welcome back to EARLY START, everyone. Great to see you today. I'm John Berman.

ROMANS (on-camera): It is a very busy Friday morning. I'm Christine Romans. It's 31 minutes past the hour.

OK. So, new developments this morning revealing the holiday data breach at Target expanding. It now appears to be part of a global computer hacking operation that potentially involves multiple retailers, millions more customers. A report from private and federal investigators suggests a highly sophisticated and nearly undetectable malware was used to obtain your personal information at store checkout terminals.

Investigators say part of the malicious computer code appears to be written in Russian. Experts say they have never seen a hack attack of this size and sophistication.

(BEGIN VIDEO CLIP)

ROBERT SICILIANO, MCAFEE ONLINE SECURITY: It currently looks like as much as a third of the U.S. population may have had their credit card information compromised by these hackers. However, now with this new information that many other retailers could potentially have been breached, that number could potentially double in the next couple of weeks. Consumers need to be aware right now, paying very close attention to their statements.

(END VIDEO CLIP)

ROMANS: Credit card numbers and other personal information of up to 110 million Target customers has already been compromised. Target has alerted people that the cyberattack stole much more than P.I.N. numbers. We knew it was card numbers and P.I.N. numbers for up to 40 million, but up to 70 million more also had names, mailing addresses, phone numbers, e-mail addresses compromised.

BERMAN: The size of this is just staggering and it appears to be growing, and everyone really needs to take notice.

ROMANS: Where is it coming from, could it happen again, are we in the middle of it, is it still happening? Those are the questions we need to know.

BERMAN: All right. We'll have much more on that ahead.

Meanwhile, happening today, President Obama will address the future of NSA surveillance programs in a major speech today at the justice department. Few significant changes are expected to the agency's controversial data-gathering. This is a surprise to a lot of people. However, the administration is expected to demand more government oversight and transparency.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We can and should take steps to make the activities we engage in in order to help keep America safe and Americans safe more transparent.

(END VIDEO CLIP)

BERMAN: Meanwhile, a report in the British "Guardian" newspaper says the NSA has been collecting some 200 million text messages daily in a global electronic sweep. This information is based on leaked documents, once again, from Edward Snowden.

ROMANS: New this morning, CNN has learned the names of those subpoenaed in The New Jersey bridge scandal, this, as Governor Chris Christie hires a high-powered defense lawyer, raising doubts that he'll cooperate with the state assembly investigation. Seventeen individuals and three organizations were issued subpoenas. Among those served, Christie's chief of staff, Kevin O'Dowd, former deputy chief of staff, Bridget Kelly, and Bill Baroni, a top official at the Port Authority and a Christie appointee.

Meanwhile, the governor is forging ahead with an ambitious public schedule, including a weekend of fundraising a week before his second- term inauguration.

BERMAN: It is a done deal in Congress and President Obama could sign a measure funding the government through the end of September as early as today. The Senate gave the final legislative sign-off on the $1.1 trillion spending bill following the lead of the House, which showed an overwhelming bipartisan support for the bill. The bill's passage eliminates the threat of another government shutdown any time soon. This is the first time in years that Congress has managed to pass an actual, real, long-term budget.

ROMANS: Meantime, Republicans and Democrats are battling over the extension of those long-term unemployment benefits to more than a million Americans. Republicans say any extension must be tied to spending cuts elsewhere. Senate majority leader, Harry Reid, said that the legislative fight has turned personal.

(BEGIN VIDEO CLIP)

SEN. HARRY REID, (D) MAJORITY LEADER: I think that it's important that Republicans go home during the few days we're going to be here, be there next week, and explain to the people in their respective states -- these are Republicans -- why they didn't give these people the benefits because of process, because I was mean to them.

(END VIDEO CLIP)

ROMANS: Reid accused Republicans of filibustering efforts to get a measure passed.

BERMAN: Breaking overnight, the current Congress will be a last for Oklahoma senator, Tom Coburn. The veteran Republican announcing that he will retire with two years left on his current term. The 65-year- old senator has been battling a recurrence of prostate cancer, but he says he's not leaving early because of his health.

A special election will be held in November to finish out Coburn's turn. Coburn is considered a staunch conservative, but, he's one who does cooperate, talk in bipartisan fashion with people across the aisle, also someone considered a friend to President Obama for several years.

New evidence this morning that al Qaeda in Iraq is stoking civil war. The "Associated Press" reporting that al Qaeda is handing out pamphlets in Fallujah, asking people to support them, urging them to take up arms in their fight against Iraqi security forces, which are largely dominated by Shiites. Al Qaeda has been fighting government troops in and around Fallujah and Ramadi for weeks.

ROMANS: New developments this morning in the fight for Syria. Secretary of state, John Kerry, says the Obama administration's goal has not changed. It still wants to set up a transitional government that doesn't include President Bashar al-Assad, but he reassured both sides, the opposition and the regime, that they will have a say in the country's future. The opposition is nearing a decision on attending next week's peace conference in Geneva.

BERMAN: With Santa Ana winds dying down this morning, fire crews in Southern California are getting the upper hand on a wildfire in the mountains near Los Angeles. Five homes have burned and more than a dozen other structures have been damaged in this fire. authoritIes say they've arrested three men for starting the blaze.

(BEGIN VIDEO CLIP)

CHIEF TIM STAAB, GLENDORA, CA POLICE: The three people that we have in custody, they're all three males in their early 20s. Reportedly, they were up, they had set a campfire, they were tossing papers into the campfire and a breeze, reportedly, a breeze had kicked up and set this fire.

(END VIDEO CLIP)

BERMAN: Officials say they have stopped the fire now from advancing. Right now, it's about 30 percent contained. Dry conditions have been a problem throughout the state of California. Later this morning, Governor Jerry Brown is expected to declare a drought emergency there.

ROMANS: Developing this morning, a travel alert in effect in parts of snow-choked North Dakota. Look at those whiteout conditions. They're being caused by near hurricane-force winds clocked at 72 miles an hour. Officials shutting down parts of I-94 yesterday. The interstate is reopening this morning, but travel alerts are still in place with stiff winds, subzero wind chills in today's forecast.

BERMAN: Just looks cold.

Slick, slippery conditions in Central Ohio, the first of three fast- moving Alberta clippers already dropping two to four inches of snow around Columbus. There is more snow in the forecast for today and tomorrow with temperatures falling down to the teens.

ROMANS: And a different kind of dusting in Frontier County, Nebraska.

BERMAN: Yikes!

ROMANS: Check out this dust storm, taking visibility to near zero. I'm going to have to look on the man to see if this is near the Nebraska Sand Hills -- sand dunes in Nebraska. Look at the debris, the dirt whipping past the camera. Wind gusts topping 60 miles an hour. Beautiful country out there, really beautiful country, but not right then.

BERMAN: Not so much in a dust storm. What you can see.

ROMANS: Not right then.

BERMAN: All right. There's a lot going on heading into the weekend. Let's check in with Indra Petersons for the forecast.

INDRA PETERSONS, AMS METEOROLOGIST: One of the benefits, right, of living in New York City, we have building and nothing really comes at you, right? Nothing blows at us. We are going to be talking about that exact same system that produced all those conditions out towards the Dakotas and Nebraska yesterday. That's now pushed its way farther to the east, today bringing some more snow into the Ohio Valley.

Keep in mind, it is wintertime, so yes, we're going to have a series of these cold fronts really kind of starting to make their way through over the next several days. So, one, two, three. You can take a look at all of these guys kind of pushing through. What is that mean for you? If you're in the Ohio Valley or the northeast, you're just going to be seeing a series of these systems bringing a wintry mix all the way through that entire weekend.

So, temperatures, yes, they are going to be kind of cooling a little bit below normal, but generally speaking, they're not going to be too bad out there. Just a hint below normal and then back to above normal. I did want to take a second and show you the Colby fire. You can easily see the offshore winds, the Santa Ana winds really blowing all that smoke offshore, enough that you can see this guy from space. Unbelievable here.

They're still talking about very dry conditions, high pressure in place. Humidity's very low, even as low as three percent. That's the concern here as winds are really bringing record-breaking temperatures in addition to those low humidities. Never a good combo.

BERMAN: Dangerous, dangerous conditions out there. All right. Indra, thank you so much.

ROMANS: Thanks, Indra.

Stock futures higher this morning, fighting back after markets got hit by weak earnings from Best Buy and Citigroup. Dow Industrials closing yesterday down about 65 points, the S&P down, but you know what, the NASDAQ was up just a little bit. So, we're going to call that a mixed close on the day.

In Europe right now, stocks are up in London, Frankfurt and Paris. In Tokyo, the Nikkei closed just slightly lower.

There was a celebration in an Apple store in Beijing this morning. The Apple CEO, Tim Cook, helping kick off the first day that iPhones would be sold through China Mobile. China Mobile is the world's largest wireless carrier, boasting a customer base twice the size of the entire U.S. population. It took Apple six years to negotiate this deal.

And interesting, one of the first questions he was asked by a customer in one of those Apple stores was, will you make one with a bigger screen? Chinese customers have different taste than American customers. They want a bigger screen. They like these bigger screen models, so, he said that they don't like to tell people what they're going to do next.

BERMAN: A lot of Americans were asking that question, too, though. A lot of Americans want bigger screens, also.

ROMANS: I know.

BERMAN: All right. Forty-one minutes after the hour right now. Coming up for us next, controversy and safety concerns surrounding the site of the upcoming Olympics. Now, Russia's president is weighing in. We're live with what the Russian leader is saying. That's right after the break.

(COMMERCIAL BREAK)

BERMAN: Welcome back to EARLY START, everyone. Just 22 days now, the world heads to Sochi for the start of the winter Olympics, and Russian officials are trying to ease security concerns, and there are a lot of them, for the more than 6,000 athletes from 85 countries who will be attending these games.

President Vladimir Putin paying a symbolic visit to the many volunteers who are working to get the Sochi venues Olympic-ready. CNN's Phil Black has been watching this for us. He is live in Moscow this morning. Phil, what's the Russian leader saying?

PHIL BLACK, CNN CORRESPONDENT: Good morning, John. Vladimir Putin is visiting these volunteers, as you say. These are the people that will be trying to spread the Olympic spirit, help visitors while wearing big, bright, colorful uniforms. They're usually the heroes of any local Olympics, and Vladimir Putin is trying to maintain a positive message about these games with just three weeks to go until the opening ceremony.

And while Russian officials say the final preparations are on track, going smoothly, they continue to be shadowed by some pretty serious issues. Firstly, security and the threat of terrorism, particularly domestic terrorism after recent suicide attacks in something of an up- step in Islamist militant activity, and secondly, the ongoing international criticism that the Russian government is actively pursuing a policy that discriminates against the country's gay community.

Vladimir Putin has been maintaining a consistent message on this point. He'll continue to do so today through a number of media activities. He will be saying that Russia is ready to host these games safely, that it's done all it can to counter the terror threat to protect Sochi and the visitors, and that Russia is a country that does not discriminate and will not discriminate during the two weeks of these Olympic games -- John.

BERMAN: Phil Black in Moscow. I cannot remember an Olympics that began under the shadow of so much controversy. This is something we will be following in the 22 days until the games kick off. Thanks, Phil.

ROMANS: We're also learning new details this morning about a deadly grocery store shooting in Elkhart, Indiana. Police say the two women who were killed may have actually known the gunman. He's been identified as 22-year-old Shawn Walter Bair. The boyfriend of one of the victims says her family is still in shock.

(BEGIN VIDEO CLIP)

KYLE BARNETT, VICTIM'S BOYFRIEND: She did not deserve this at all. Out of all the people, she did not -- she didn't deserve it. I don't know what his goal was. I don't know what his aim was, mad at the world. There is definitely a family grieving for her.

(END VIDEO CLIP) ROMANS: Mad at the world. Police shot and killed the suspect, Shawn Bair, who was holding a store manager at gunpoint when they arrived on the scene.

BERMAN: Happening today, a change of plea hearing is scheduled for the man charged with sending poison-laced letters to President Obama and other officials. Forty-two-year-old James Dutschke has pleaded not guilty. He's been jailed since April on charges of sending ricin letters to the president as well as to Senator Roger Wicker and a judge in Mississippi. He faces life in prison if convicted.

ROMANS: We're following the disappearance of a "Wall Street Journal" reporter who vanished seven days ago after leaving his home in New Jersey. David Byrd (ph) left without his cell phone or any of the medication he needs to manage his liver transplant. Thursday, Media reports said Byrd's credit card had been used in Mexico. Investigators have declined to address that but say the search continues and that they have several good leads.

BERMAN: Sure hope he's OK.

This morning, the two victims in the Roswell, New Mexico, middle school shooting are both showing signs of improvement. Doctors say they remain optimistic about 12-year-old Nathaniel Tavares (ph). He is heavily sedated and on a breathing machine, still in critical condition. The other student shot by a classmate, 13-year-old Kendall Sanders (ph), is expected to be released from the hospital soon. And we hope their recovery continues.

Look what's coming up on "NEW DAY" right now. Kate Bolduan joins us now. Kate's here? Kate, how are you? What's coming up on "NEW DAY"?

KATE BOLDUAN, CNN CORRESPONDENT: Well, hey, guys, how are you?

ROMANS: Someone just went running behind you, too.

BOLDUAN: Yes. You know?

ROMANS: Physically getting ready for the big show.

BERMAN: The chaos of the morning!

(LAUGHTER)

BOLDUAN: You know, it was just one of those mornings where I had someone talking in my head when you guys were coming to me. You know, it's just Friday. OK. So, here's what's coming up in the show.

Hillary Clinton may be facing a huge hurdle if she decides to run for president. Republicans are already pouncing on that newly released report that I'm sure you guys have been talking about as well, that says the attack on the U.S. consulate in Benghazi, that it was likely preventable. That has been fuel to Republicans' fire.

One of her top defenders is going to be live on our show speaking out. What impact does he think it will have on her chances? He's a very close adviser to Clinton. We're going to get his take.

Also coming up, a new accusation against Governor Chris Christie's administration this morning. A former prosecutor says he was fired for trying to indict one of Christie's allies. Would the governor really go that far or is this just a disgruntled former employee lashing out? We're going to talk with the man behind the claims on the show, coming up.

BERMAN: Fantastic. You know, Kate, we all have to come to grips with the voices in our head.

(LAUGHTER)

BOLDUAN: Yes, I know. I'm still -- it's a daily battle for me.

ROMANS: Thanks, Kate.

BERMAN: We'll see you in a little bit.

BOLDUAN: Thanks, guys.

ROMANS: Coming up, a growing frustration in West Virginia this morning. Thousands still without water, others with access now being warned about its safety. A lot of big questions in West Virginia. We've got the latest next.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ROMANS (voice-over): Fifty-one minutes past the hour. Growing concern this morning for people in West Virginia who remain without water. Thousands still have not been accessed -- allowed access to water, and those who have are now being warned about its safety. Pregnant women advised not to drink the water. Many people in the state had no idea that an obscure company was storing the coal-washing chemical or that the company had not received regular inspections.

(BEGIN VIDEO CLIP)

MAYOR DANNY JONES, (R) CHARLESTON WEST VIRGINIA: I can't believe that what those folks did wasn't against the law on its face. In other words, if what they did was not against the law, we're in real trouble. The wall was deficient. The tank had leaked for quite some time. And somebody, apparently, dropped the ball. Most coal operations are safe, and they're as clean as coal is allowed to be.

(END VIDEO CLIP)

ROMANS: An employee from Freedom Industries says the chemical leak was caused in part by a broken water pipe near its property.

(END VIDEOTAPE)

ROMANS (on-camera): A new legal battle brewing this morning in Washington State over the sale of pot for recreational use. The state's attorney general, Bob Ferguson, says cities may opt to ban marijuana businesses despite a voter-approved state law. His opinion is not legally binding, but the issue could land in court. Some applicants for marijuana licenses have indicated they'll sue if they're blocked from doing business.

"12 Years a Slave" is the critics' choice, the film winning best picture at the Critic's Choice Movie Awards just hours after receiving nine Oscar nominations. Its breakout star, Lupita Nyong'o, won for Best Supporting Actress. Some of the night's other big winners could foreshadow Oscar night. Matthew McConaughey took home the award for Best Actor in "Dallas Buyers Club" and Cate Blanchett winning for her role in Woody Allen's "Blue Jasmine."

Coming up, China takes a bite of the Apple. IPhones now on sale in Beijing and Apple's CEO, Tim Cook, on hand in China there for the launch. "Money Time" is next.

(COMMERCIAL BREAK)

ROMANS: Welcome back to EARLY START. It's "Money Time," Friday edition. We've got stock futures higher this morning, rebounding after markets were hit by weak earnings from electronics retailer Best Buy and underwhelming results from Citigroup. The Dow Industrials closing down nearly 65 points. The S&P down a little bit after a record close the day before. The NASDAQ edging higher.

Here in the U.S., shares of Intel are down 4.5 percent in premarket trading. The world's largest chipmaker says last night it expects revenue growth flat in the year, something that surprised Wall Street. Intel said it overestimated the amount of spending by companies on things like new PCs.

And it was a party in an Apple store in Beijing this morning. Apple's CEO, Tim Cook, helping kick off the first day that iPhones would be sold through China Mobile. China Mobile Is the world's largest wireless carrier, boasting a customer base twice the size of the entire U.S. population. It took Apple six years to negotiate this deal. China mobile says it had more than a million preorders for iPhones.

Bitcoin just got another cheerleader. You know what Bitcoin is, right? The digital currency that basically came out of nowhere. You've been hearing it. Some say it might rival the U.S. dollar one day. Some say it's just something used in the course of illegal activities. There are plenty of critics who think this is all pipe dream, of course.

But the NBA Sacramento Kings became the first professional sports franchise to accept bitcoins. Customers will be able to shop online for tickets and merchandise with bitcoin by March 1st. Online retailer, overstock.com, and game maker, Zynga, already accept bitcoin.

"NEW DAY" starts right now.

(BEGIN VIDEOTAPE) UNIDENTIFIED MALE: It currently looks like as much as a third of the U.S. population may have had that credit card information compromised.

CHRIS CUOMO, CNN CORRESPONDENT: New alert. The U.S. government warning retailers that the hackers who hit Target could strike again. They're revealing just how they did it. Their methods more advanced that we knew. All details ahead.

BOLDUAN: Moment of truth. President Obama takes on the NSA today, expected to announce changes to the agency's controversial surveillance program. CNN has an advance look. What stays, what goes.

CUOMO: "Duck Dynasty" down. The hit reality show back on the air after huge controversy. The ratings are in. We'll tell you if the Phil firestorm helped or hurt.

Your "NEW DAY" starts right now.

ANNOUNCER: This is "NEW DAY" with Chris Cuomo, Kate Bolduan, and Michaela Pereira.

(END VIDEOTAPE)

CUOMO: Good morning. Welcome to "NEW DAY." It's Friday. We breathe in, we breathe out, check day and date, January 17th, six o'clock in the east.

Now some news, it turns out the massive security breach at Target was a lot bigger than even we thought. New this morning, the federal government sounding a warning to retailers. The breach, it turns out, part of a much larger cyberattack on businesses that may not even know they've been compromised. And get this, the sophisticated malware used in the attack appears to be partly written in Russian. The hackers may have ties to the Russian mob. Chief business correspondent, Christine Romans, tracking the latest developments. What do we know?

ROMANS: We know that a lot of what investigators know about the hack is being kept under wraps, Chris. A cyber forensic experts sifting through these clues. What we do know at this point, Chris, is that homeland security is worried this not an isolated event.