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Salt Shortage; Airport Chaos; Heating Bills Spiking; Winter's Freeze on Your Wallet; Target Security Breach; A Family Divided

Aired February 5, 2014 - 08:30   ET

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


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<08:31:50>

MICHAELA PEREIRA, CNN ANCHOR: Welcome back to NEW DAY. Let's give you the five things you need to know.

Another monster winter storm is dropping ice and snow on 32 states impacting 120 million Americans from Wyoming to Maine.

Four people arrested overnight believed to be connected to the drugs found at the apartment of late actor Philip Seymour Hoffman. Police tell CNN they recovered 350 glassine bags that usually contain heroin.

The Olympic torch is in Sochi this morning amid new concerns about specific terror threats to the winter games, now just two days away, this as Russian authorities say they killed the suspected mastermind behind deadly bombings in Volgograd this past December.

In Washington today, hearings on a variety of issues facing the IRS, including the ongoing investigation into claims the agency unfairly targeted certain tax exempt political action groups.

And at number five, the 12th man (ph) will be out in force today in Seattle. A parade is being held to honor the Seahawks days after their Super Bowl win over the Broncos. Rumor is, there may even be sunshine in Seattle.

We're always updating the five things to know. So be sure to go to newdaycnn.com for the very latest.

Chris.

CHRIS CUOMO, CNN ANCHOR: All right, let's get back to our big story. A massive winter storm powering - just pounding 120 million people, more than 32 states. Let's check in with Ted Rowlands in Illinois. It's one of the states where they're suffering a salt shortage. You're going to be hearing more of that and it's happening at the worst possible time.

TED ROWLANDS, CNN CORRESPONDENT: In many communities, like here in Oak Park, Illinois, they're literally running out of road salt. And there's two problems with getting more salt. First of all, it's three times the normal expense and you add that to the overtime that the plow drivers are getting and cities are having financial troubles. There's also a problem with actually getting it because supplies are short. So what they're doing here and in other places is only using salt on major intersections and mixing it with sand hoping their supplies can last these last five weeks of winter.

CUOMO: All right, so there, Ted, thanks for that. They're trying to mix salt with sand. In other places here in the Northeast, they're running out of sand because of having to deal with Hurricane Sandy. So that's going to be a problem.

Also, we now have to deal with air travel. Over 3,000 flights in 24 hours have been cancelled thanks to the storm. Let's get to Rene Marsh, monitoring the airport chaos from Reagan National in Washington.

Rene.

RENE MARSH, CNN CORRESPONDENT: Well, at airports across the nation, wicked winter weather is putting a real chill on the airline industry. Back-to-back storms has led to tens of thousands of cancellations and lots of delays too. In fact, last month was the worst month for cancelations in years. It's costing airlines millions of dollars, passengers billions of dollars. And we're expecting the cancelations to continue to pile up as more winter weather shows up on the radar.

CUOMO: So that situation gets better, not worse, for now. Our thanks to Rene.

And right now many New Yorkers are facing half a foot of snow and half an inch of ice, even more dangerous for travel, as well as all these bitter cold temperatures. You know what that means, not a good time for heating bills to skyrocket. And they are going to do just that.

<08"35:00>

Here's some more on that from Jean Casarez.

JEAN CASAREZ, CNN CORRESPONDENT: In homes across the country, the continuing storms and endless cold temperatures means heating costs continue to rise. People are reporting that their bills this year are two times as high as they were last year. And experts say that's because of the increased usage.

Now combine that with shortages of propane and natural gas even makes this a more dire situation. Bottom line, people can expect a big surprise, millions of Americans can, on their next heating bill, even significantly higher costs, all because of the continued storms and very cold temperatures.

CHRIS: All right, thanks to Jean.

We know it's hitting your household budget. What about the American economy overall? It turns out the bitter cold and awful conditions are enough to mess with that as well. Chief business correspondent Christine Romans is at the magic wall.

Break it down for us.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Hi, guys.

Well, this long, cold winter is not only dangerous and annoying, it's hurting the economy. Your heating bill will be up. Even if you don't have propane, some of the nation's utility companies says your natural gas bill for February could increase anywhere from 11 percent to 30 percent if you live in Illinois.

Cold weather hurts the jobs market. Construction employment is down because of colder weather. You can't build houses when it's so cold outside. That means people don't have to have work to go to. And you can't go to a job interview if you're snowed in.

Even auto sales could be hurt. January auto sales fell 3.1 percent from the month before to 1.1 million vehicles. That's according to Auto Data. So you saw auto sales down already in January. That's probably going to continue.

In fact, according to the weather business analysis company Planalytics, lower customer spending, the lost productivity, higher heating bills, all of these things have contributed to a big hit to the U.S. economy. That hit in the neighborhood of $5 billion in just the first week of January. That's just the first week. So it's got to go higher.

And, don't forget, none of this counts any purchases you need to make if your pipes freeze or your shovel breaks. Sure, there's going to be economic activity for anybody who is doing overtime or working overtime for storm related stuff, but you're probably going to be paying more this winter guys.

KATE BOLDUAN, CNN ANCHOR: It's hitting everybody everywhere.

ROMANS: Yes.

BOLDUAN: Christine, thank you so much.

Coming up next on NEW DAY, retailers head to Capitol Hill to explain how they plan to prevent future hack attacks, but what's being done right now to protect you when you shop?

CUOMO: And "People" magazine has stunning new details about the molestation allegations against Woody Allen. His adopted son Moses is now speaking out. Does he support his dad or his sister? We'll have that for you here.

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BOLDUAN: Welcome back to NEW DAY.

New information this morning on how hackers were able to steal financial information from tens of millions of Americans through major retailers. With new testimony on Capitol Hill expected today, we could learn what's being done to stop future security breaches from happening. CNN's Joe Johns is in Washington with much more. So what do we expect today, Joe?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Well, Kate, top retail executives are back on Capitol Hill, forced, really, to answer more questions before Congress about these credit card data breaches. And the message they've already delivered is not good news for consumers. They say they're getting outsmarted by hackers.

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JOHNS (voice-over): This morning. we know more than ever before about the scramble and race against time to stop the massive theft of information that affected nearly a third of U.S. adults. Target Chief Financial Officer John Mulligan, contrite.

JOHN MULLIGAN, EXECUTIVE VICE PRESIDENT & CEO, TARGET: I want to say how deeply sorry we are for the impact this incident has had on our guests, your constituents.

JOHNS: It began the evening of December 12th when the Justice Department notified Target of suspicious activity involving payment cards used at Target store.

SEN. PATRICK J. LEAHY (D), VERMONT: Had you had any knowledge that that malware was there before the Department of Justice gave you that notification?

MULLIGAN: Mr. Chairman, despite the significant investment and multiple layers of detection that we had within our systems, we - we did not.

JOHNS: December 14th, Target hires an independent team of experts to lead the internal forensic investigation. One day later, that team confirms criminals had infiltrated the system by installing malware on Target registers. The malware is removed.

On the 19th, a week after the tip from Justice, Target goes public with the breach. One fact now confirmed, but with no date reference, an intruder stole a vendor's credentials to get into the system and install the malware in the first place.

The question now, how to prevents this? Solutions that came out of the hearing, a chip, a pin and a new rule. First, a smart chip on payment cards that keeps personal information safer than on magnetic stripe. Target plans to have chip technology in place next year.

FRAN ROSCH, SENIOR VICE PRESIDENT, SYMANTEC CORPORATION: It's more encryption, so the credit card information would say encrypted longer it would make it much more difficult for the hacks to be able to obtain that information.

JOHNS: Also discussed, personal identification numbers, or PINS, to along with smart chip cards. And if all else fails, new rules, better notification standards so you'll know much faster when your card is compromised.

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JOHNS: But none of this is foolproof. The chip technology could cost billions and there is fear any new notification standards imposed by Congress could quickly become irrelevant after clever hackers find a way to beat the system again.

Chris and Kate.

BOLDUAN: That's exactly the problem that we're all facing, that's for sure. Joe, thank you so much.

CUOMO: They're apologizing now, but they have to make sure that they tell people sooner next time and be (ph) part of it as well.

BOLDUAN: I agree with that. Yes.

CUOMO: Let's take a break here on NEW DAY.

Woody Allen has been dogged by molestation allegations for decades. But next, there are new details and disclosures that paint more of the picture here. In fact, exclusive details from Allen's adopted son. Question, does he support his father or stand by his sister? Find out why this story just got a lot more complicated.

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CUOMO: Welcome back.

Stunning new details from "People Magazine" this morning about the family dynamics surrounding Dylan Farrow and Woody Allen. Allen is currently facing renewed allegations he sexually abused Farrow at the age of seven. But now Farrow's claims are being called into question by her own brother who is supporting his father.

Joining us now is Kate Coyne, she's the assistant managing editor of "People Magazine" and I'll tell you the piece is rich with reporting.

KATE COYNE, ASSISTANT MANAGING EDITOR, "PEOPLE MAGAZINE": Yes.

CUOMO: I actually just want to like go through it and unpack these things because a lot of this is exclusive and new, gives windows into the situation I didn't know before.

So let's begin at the beginning. Yes, it's 20 plus years ago but we've never heard from Dylan especially in this kind of detail and that's very unusual for a victim but again, give us the context how it grew out of a very ugly custody situation and the allegations there.

COYNE: Yes, many people who think back to the Woody Allen/Mia Farrow split probably first and foremost think about the fact that Woody Allen was involved with Soon-Yi Previn, the adopted daughter of Mia Farrow. And that was ugly and nasty enough and made its own set of headlines. But also involved in that split was custody of Dylan and the little boy then named Satchel who is now Ronan Farrow, who Mia got sole custody of in part because one of the allegations that was made during this split was that Dylan had been sexually molested by Woody Allen.

CHARLIE ROSE: Now, I'm looking through this. All right. So as we phase through this the Soon-Yi thing just totally colored perception about Woody. This was testified to at the time though it was part of the decision of the court. It's in your piece that they found, you know, ample cause to separate Woody from the child. So that's true even though there was no prosecution -- family court.

COYNE: There's no debating that Mia got sole custody. Dylan Farrow has grown up --

CUOMO: In part because of what that judge saw as his behavior (ph) -- yes?

COYNE: The judge saw that there was sufficient behavior to grant sole custody, and that judgment was never changed, never further challenged. It remained in place. Dylan Farrow grew up not knowing Woody Allen at all.

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CUOMO: And the prosecutor Maco -- M-A-C-O -- then came out and said I'm not going forward but not because I can't.

COYNE: Yes.

CUOMO: I have probable cause, low standard, but I have probable cause. The kid is too traumatized I don't want to do it to her.

COYNE: One of the people who was most upset by that decision was actually Woody Allen because he felt in a way that he was just damned by this prosecutor's statement and yet wasn't going to get his day in court or his chance to defend himself. I mean the prosecutor essentially said I could try him because I have enough stuff on him but I won't.

CUOMO: But even that -- let's unpack that. "I want my day in court" to go against your own daughter?

COYNE: To prove that he hadn't done --

CUOMO: How do you prove that you didn't do it? Come on, seriously.

COYNE: Well, that's the problem. What he had tried to do, he had cooperated with investigators for a period of months. Dylan Farrow, you know, went through multiple, multiple, multiple interrogations nine different times. She was questioned on her story. And, you know, Woody very much feels that there were inconsistencies -- that he had grounds to fight.

CUOMO: And to that point in your own piece, just to take one step back the custody judge termed Allen's behavior grossly inappropriate, however -- however, a panel of Yale New Haven hospital investigators concluded Dylan had not been abused --

COYNE: Yes.

CUOMO: -- confused fantasy with reality and may have been affected by a product of parental alienation -- the ugliness between the spouses bleeding over.

That takes us to the newest -- ok. Moses -- one of the other children, 36 years old, a therapist himself -- think about how interesting that is in this dynamic. He says it never happened. He says it's all about the parental alienation. He supports his father. True?

COYNE: Yes. This is true. And it's a huge development, you know. Obviously everyone took notice this weekend when Dylan Farrow wrote an open letter detailing for the first time in her own words coming straight from her what she says she endured from Woody Allen. This was a bomb shell in and of itself but to now have the brother that she grew up with coming forward and saying "She's not telling the truth, I support my father" and actually saying some pretty intense stuff about Mia Farrow, you know, it's really shocking.

CUOMO: And he's a therapist. But now let's line the two up. On Dylan's side -- and again this is so horrible to even suggest. But, you know, look it's going on. It's coloring perceptions of all these people so the truth of it must be analyzed.

Dylan on her side -- very young -- they don't usually lie at this age unless corrupted by parental alienation or some other dominant influence. However she's young. She told the babysitter first -- unusual. Unusual and gives some corroboration to her account. And then many years later in college she meets her future husband and says I have problems with intimacy stemming from this and then to write this letter in this detail. All of those things certainly indicators to people who analyze these situations as she has nothing to gain, this is believable.

COYNE: Yes. The interesting thing is that even people very, very close to Woody will be the first to say they believe that Dylan believes what she is saying. They don't think that Dylan thinks she's lying. So, it's a very nuanced situation because even Moses feels like Dylan very much believes that these are genuine, authentic memories. They -- Moses, people on Woody Allen's side feel like these memories have been planted, have been manufactured, have been manipulated so that Dylan believes them to be real.

CUOMO: Interesting. Even Mia said -- Mia Farrow said her truth, this is about her truth.

COYNE: Her truth.

CUOMO: You know it's probably just word choice but still interesting. But again Moses a family therapist, grew up in the same setting and came to this opposite set of conclusions about influence. Even with him digesting the Soon-Yi stuff, he still came out on the side of "I support my father." COYNE: He's very close to Soon-Yi and Woody now. I mean he --

CUOMO: He points out that they were all in public rooms when the event allegedly happened. Moses says I was there. We were all in like common rooms. There was no sneaking in the attic. But it better goes to his recollection and what we really remember.

COYNE: It does. It does. And he was young himself. They also have Dylan and Moses wildly divergent accounts of what their childhoods were like. Moses said he grew up in an abusive household where Mia was abusive and punitive and Dylan has no such recollection. She says at worse they were sent to their rooms.

So they clearly are on very opposite sides of the spectrum on this.

CUOMO: And look I got this all out of the piece. It's incredibly informative. Another big name in here to take into consideration a no-joke journalist named Maureen Orth also gives a lot of credibility to Dylan's account out of this and what she thinks writing the letter means and doesn't mean. So an important read.

COYNE: Yes.

CUOMO: Kate -- great to have you here.

COYNE: Thank you.

CUOMO: This is of interest not just because of the celebrity component but the behavior towards these children important to investigate. Thank you very much.

COYNE: Sure.

CUOMO: Kate.

KATE BOLDUAN: All right. Coming up on new day a Good Samaritan pulls over for a terrible car wreck and gets a whole lot more than she bargained for.

<08:55:04>

BOLDUAN: One Hawaiian's very wild ride straight ahead.

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CUOMO: It's so miserably cold out there. We're going to get some warmth by contact here on two levels.

One we've got the good stuff and it's a good one. Second of all it comes all the way from Hawaii where, of course, it's warm so double good right there.

MICHAELA PEREIRA, CNN HOST: How nice. CUOMO: Here's the story. A woman in Hawaii witnessed an SUV plow into a concrete barrier right in front of her and immediately pulled over to help. Take a listen.

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JENNIFER JONES: Just take a sharp turn left and then sharp turn right into the median. There was a woman hanging half out of the passenger side and she looked pretty bad -- she had blood all over her.

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CUOMO: Jennifer Jones pulls the woman out of the fiery wreck to safety but that's when the good stuff turns into the bad stuff. Why was she hanging out of the window? Because there were two men in the SUV as well and the driver was acting kind of shady.

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JONES: He just kind of backed away looking at me but backed away this way and then all of a sudden my brake lights went on and burned rubber and it just screeched off.

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CUOMO: Turns out Jennifer didn't just respond to the scene of an accident she helped break up a suspected kidnapping. That's the bad stuff.

PEREIRA: Wow.

CUOMO: But here's more good stuff. The injured victim expected to pull through. The suspect in the passenger seat nabbed. And as for Jennifer's car blue Miyata, those are the brake lights she saw go on, the driver jumped into her car, took off. Her phone was left in it. They used an app to find it abandoned less than a mile away.

And here's the goodest part.

(BEGIN VIDEO CLIP)

JONES: It's not going to hinder me from helping someone again. You know, I think that's -- I'm not going to let their bad behavior change my good behavior.

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CUOMO: I'm not going to let their bad behavior change my good behavior -- line of the morning. The bad guy is still at large but boy the good stuff --

PEREIRA: The spirit of aloha.

CUOMO: The good stuff was done.

<09:00:01> BOLDUAN: A wild ride -- my goodness.

CUOMO: A lot of news for you this morning so to the "NEWSROOM" with Miss Carol Costello -- Aloha.

CAROL COSTELLO, CNN ANCHOR: Thanks so much. "NEWSROOM" starts now.