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CNN NEWSROOM

Drones vs. Interrogations; Possible Hostage Situation in Sydney; Sony Reeling after Epic Computer Hack; NSA Expects "Traumatic" Cyber Attacks; Qatar's Complicated Relations with Terror; Hired Guns; Director's Take on "Dinosaur 13"

Aired December 14, 2014 - 19:00   ET

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


DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: But the same thing is sort of happening. There are no rules and regulations about drones internationally as in combat situations as we're now using them. But one day other nations are going to have drones of their own. What if they start targeting Americans here? It's going to be in America's interest to get some sort of legal protocols about how drones can be used for warfare purposes.

At the moment, we're out there pretty far in front of anybody else using them. And I think they're going to grow in importance from the conversations because of the numbers who are being affected.

Here's what's interesting, Poppy. The -- all the C.I.A. torture reports and everything like that were about 119 people who were detained by the C.I.A. over time, of whom 39 were subjected to enhanced interrogation techniques; these harsh techniques, some called torture. Many called torture with good reason.

If you look at drones, we don't know the numbers precisely, because the government won't tell us, but there are organizations out there and I've been counting up in Pakistan, and there are as many as 2,500 to 3,500 people who have been killed as terrorists, but there are as many as 400 or so who are civilians who have been killed. In other words, there have ten times as many civilians killed in Pakistan, according to reports, as the number of people who were harshly interrogated by the C.I.A.

POPPY HARLOW, CNN ANCHOR: Yes. It's going to become an increasing conversation and also what legal sort of guidelines there are going to be, David, also.

GERGEN: Right.

HARLOW: What the President, the administration may be legally-held responsible for down the road.

GERGEN: Right.

HARLOW: Thank you for having -- coming on this evening. We appreciate it.

GERGEN: Thank you. It's good to see you again. HARLOW: All right. Breaking news into CNN -- We are receiving word

of a possible hostage situation in Sydney. Take a look at this video. This is video from just moments ago outside the Lindt Chocolate Shop in Martin Place -- this is a pedestrian mall in Sydney's central district. Looks normal -- looks like nothing is going on. What the authorities are very concerned about is what may be going on inside that shop.

Very little information at this time including how many hostages there may be or how many people they may be holding if this is, indeed, a hostage situation. What I can tell you is that we have spoken with the New South Wales police media unit.

Here's what they tell us. Quote, "all we can confirm at this time is that there is a police operation taking place. We are recommending that no one goes near the area. We are trying to establish exactly what is happening."

I can also tell you our affiliate there, News 7 in Sydney, says there are two gunmen on the scene. We have not independently confirmed that yet. Obviously we're working our sources on the ground there and will bring you the latest as soon as we have it out of Sydney, Australia.

Also this, Sony Pictures is starring in its own nightmare right now. The celebrated studio is in full damage control mode after hackers exposed embarrassing e-mails, salaries, secrets. And now they are threatening -- the hackers -- this $8 billion company with a so-called Christmas gift that promises to put Sony, quote, "in its worst state".

Joining me with some insight on all of this: CNN national security analyst, Bob Baer; also Jamie Dettmer, who's a contributor for "The Daily Beast". Thank you both for being here.

Bob, let me begin with you. There has been so much talk about who this group is, the GOP group of hackers, whether they're directly in cahoots, if you will, with the North Korean government or just independent of it. A lot of people tying it to North Korea -- what's your take?

BOB BAER, CNN NATIONAL SECURITY ANALYST: First up, I've got to say that I have an interest with this because I have two contracts with Sony related to movies -- so once we're through that. This sounds like it's very sophisticated. It looks like it's revenge for this movie coming out.

This -- it was done -- it was launched from multiple locations. And Sony has a very good cyber security. They saw this coming four, five months ago and they tried to improve their security and these guys are good, whoever they are.

HARLOW: Interesting we got this letter this afternoon, or the "New York Times" received a letter, CNN has not yet, from Sony -- from the attorney for Sony, David Boies warning media outlets telling them, Jamie, they should not report on some of this private information that has been leaked saying it is stolen information. Again -- CNN has not received that letter yet. Are you surprised by that? JAMIE DETTMER, CONTRIBUTOR, "THE DAILY BEAST": No, not really. I

mean -- although I think it's an impossible request. Once this information is out, even if mainstream organizations at the beginning of the report, it goes out on Twitter, it goes out on Facebook pages, then some of the new Internet startups start reporting it and eventually the rest of the media have to follow. So I think that Sony should have been better at guarding their secrets rather than making requests now for information not to be shared.

HARLOW: Bob, when you talk about information such as celebrity phone numbers, e-mails, et cetera, exposed, private embarrassing e-mails, this breach forces change, but this is -- it is a fact, a security fact, it seems, that every single company is vulnerable to this now, no matter how good or how poor their walls are.

BAER: Anybody who goes on the Internet with a computer is hackable. The only computers that are not are standalones. Intelligence communities have figured out this long time ago. They have to be separated physically. They in no way could ever access the Internet because every computer is vulnerable.

And they're vulnerable in other ways, too. They send off emanations, it's called Tempest. So if you have a secret to keep, don't put it on a computer, don't put it on a smartphone. Write it on a piece of paper -- whisper it in somebody's ear. Nobody is safe.

HARLOW: Exactly. You said it -- any big company is vulnerable to this. And if you insert any big company name in its place, it would spell trouble for their companies, their credibility, their stock.

Online security experts say it is a guarantee hackers will hit the corporate world again and again. Our Deborah Feyerick took a fascinating look at this. Let's watch her piece and then come back on the other side.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT: Cyber attacks against Sony, Target, Home Depot, JPMorgan Chase, Google, e-Bay, and virtually every business sector have allowed criminals and bad actors to steal millions of Americans' personal data, credit card numbers, as well as corporate secrets.

Now imagine if similar cyber attacks made your lights go out or cut off your water supply. Imagine if a critical infrastructure we rely on every single day simply shut down. The threat is not only very real, it's inevitable.

ADMIRAL MICHAEL ROGERS, NSA DIRECTOR: It is only a matter of the when, not the if, that we are going to see something traumatic.

FEYERICK: Admiral Michael Rogers heads the NSA and cyber command.

ROGERS: We have seen individuals, groups, inside critical U.S. infrastructure.

FEYERICK: That's right. Power plants, banking systems, air traffic control, subways. All are vulnerable.

REP. JIM LANGEVIN, (D), RHODE ISLAND: Years ago, what could have only been accomplished through a kinetic attack using missiles or bombs now can be done with a few key strokes where they could wipe out, you know, a whole sector of our nation's electric grid not just for days or weeks but potentially for months.

FEYERICK: According to the Department of Homeland Security, adversaries from China, Russia, and elsewhere are inside hundreds if not thousands of U.S. critical infrastructure computers.

It's not just about getting information it seems, but it's also the ability to control those sectors.

UNIDENTIFIED FEMALE: This is something that we worry a lot about.

FEYERICK: CNN was given rare access to the DHS' heavily protected cyber security center known as NCIC (ph). It's run by the DHS undersecretary Suzanne Spaulding who oversees teams of federal investigators analysts and private infrastructure experts scrutinizing real-time cyber breaches.

SUZANNE SPAULDING, DHS UNDERSECRETARY: The thing that keeps me awake at night is knowing that there is the potential there for adversaries to get into those control systems -- those systems that really run machinery, whether it's gates on dams or parts of the electric grid.

FEYERICK: Isn't this an act of war?

TOM PARKER, CTO, FUSIONX: Well, that's the million-dollar question. What the Chinese are doing is really preparing the battlefield -- if that day were to arrive then they would have significant advantage.

FEYERICK: Cyber security expert Tom Parker showed us just how easy it is to shut down something like a power grid.

PARKER: Here we have the hacker's computer and the hacker has already broken into the electric utility and now we have access to the electric utility's network. We've reverse engineered the codes which are running, the operation system that's running on this device which is controlling the electric grid in this scenario.

FEYERICK: Once inside the system, the attacker waits to strike and then watch as the lights go off in less than a second.

More than three quarters of the nation's critical infrastructure is privately-owned. Critics say those companies are not doing enough to safeguard their own systems.

LANGEVIN: They don't want it coming out of their bottom line.

FEYERICK: Congressman Langevin says the threat is akin to knowing about the hijackers pre-9/11 and still doing nothing.

LANGEVIN: We know that there's a glaring vulnerability and we're not moving with all urgency to close it. FEYERICK: Deborah Feyerick, CNN, Washington.

(END VIDEOTAPE)

HARLOW: All right. Let me bring back in my guests. Bob, you're a national security expert. So it's more than clear that big companies from Target to Home Depot to Sony are vulnerable to the attacks. But realistically, how vulnerable are our power grids, our financial networks?

BAER: Poppy, absolutely the bank -- we've seen them hit banks before and they can again.

HARLOW: JPMorgan.

BAER: You can hack into a car and control the speed of the car. It's sort of whatever you can imagine, they can do. And the Russian Mafia is very good at this. The North Koreans as we now know. And we simply don't have the defenses in place to stop this sort of thing.

HARLOW: So, Jamie, given what Bob said --

DETTMER: I'll also add there --

HARLOW: Yes, please.

Dettmer: I'll also add there, it's not just state actors. We know that al Qaeda and ISIS have been looking at this for years. Al Qaeda chiefs have been talking about this being a potential other Pearl Harbor if they can get inside critical infrastructure computers in the United States and the systems. They've talked about trying to bring banks down. They'd like to do another 9/11 -- a financial crash, if you want.

ISIS in particular has got a whole generation of new young computer programmers who have been working with them. We've seen evidence on this on online activity and conversations going on. So it's not purely Moscow and Beijing we have to be concerned about, but other non-state actors as well.

HARLOW: So Jamie, given that --

BAER: Jamie is absolutely right.

HARLOW: Go ahead, Bob.

BAER: They are very sophisticated. They beat NSA at their game and they've been very sophisticated in the fight for Mosul using mobile Wi-Fi, defeating the National Security Agency. They can easily take this sort of technology and hit our banks and I think it's just a matter of time. Jamie is absolutely right.

HARLOW: Yes, and it begs the question, how are we going to fight this new war on that front? And how are we going to beef up our skills on that front to defeat it?

Guys, thank you very much. Appreciate it. Wish we had more time. We have breaking news into CNN. Jamie and Bob -- thank you.

All right. This breaking news just in to CNN. We have new video of a possible hostage situation. This is all unfolding in Sydney, Australia. You're looking at video shot moments ago from the Lindt Chocolate Shop in Martin Place. That is a big pedestrian mall downtown in Sydney's central business district. It's a popular spot for tourists and also people going to work. You think, you know, Monday morning there.

There is very little information at this time. What we don't know -- how many possible hostages are there? How many people could be holding them at this point in time? The New South Wales police tell us this. Let me read you this quote. "All we can confirm at this time is that there is a police operation taking place. We are recommending that no one goes near that area. We're trying to establish exactly what is happening."

We also have an affiliate, News 7 on the ground there in Sydney. They say there are two gunmen involved, and CNN cannot independently confirm any of that. We're checking and I'm also hearing we're getting new information coming from our affiliate.

Our affiliate on the ground telling us that around 9:44 a.m. local time, remember, it's Monday morning there, a woman right there in Sydney's central business district saw a man with a blue sports bag. She thought it was a gun. She called the police at that point in time. She said a man entered the Lindt Chocolate Shop there -- this is what that eyewitness is saying, and says this then turned into a hostage situation.

What we also know at this point in time, according to seven networks, CNN's affiliate on the ground in Sydney, is that civil aviation is shut in terms of the airspace above Sydney -- shut down right now. And our bureau, the bureau for the affiliate, News 7 in Sydney, is located right near that area.

Let me recap this for you. What you're looking at is video shot just moments ago in Sydney, Australia, where it is Monday morning. This is from the central business district there. Concerns about a possible hostage situation in the Lindt Chocolate Shop there, in a pedestrian mall that is heavily traveled.

Here's what we from our affiliate on the ground. Around 9:44 a.m. local time, a woman say a man with a blue sports bag. She thought it might be a gun. She called the police. The man then entered that Lindt Chocolate Shop. That is when we are told that it possibly turned into a hostage situation. Also as a precautionary measure, we're told that the airspace above Sydney has been temporarily closed.

We are obviously monitoring this incredibly closely, working with our sources on the ground. As soon as we have more information, we will bring it to you right here.

Quick break -- we'll be right back.

(COMMERCIAL BREAK) HARLOW: All right. This breaking news into CNN. We have limited information but what we can tell you is there's a possible hostage situation under way right now in Sydney, in the central business district in Sydney. What you're looking at is video shot just moments ago of a chocolate shop -- outside a chocolate shop -- The Lindt Chocolate Shop at Martin Place. That is a mall, very busy mall, in Sydney's central business district.

Again, not a lot of information. Here's what we know at this point in time. According to our affiliate in Sydney, Australia's 7 Network, they're saying around 9:44 a.m. local time -- remember, it is Monday morning there, a woman saw a man with a blue sports bag. She thought it could possibly be a gun. She then told the police. We're also told from our affiliate that that man with the bag entered the Lindt Chocolate Shop. That is when our affiliate is reporting that this turned into a possible hostage situation.

We also can tell you that Reuters at this hour is reporting that the Sydney Opera house has been evacuated as a precautionary measure and that the airspace, according to 7 Network, the airspace above Sydney has been temporarily shut due to this situation.

We're working our sources on the ground. As soon as we have more information, we will bring it to you. But again, a possible hostage situation taking place Monday morning in a very busy part of downtown Sydney in the central business district there at a heavily-trafficked pedestrian mall. Those are shots up close of the windows. Really, you cannot see much though at all.

As soon as we have more information, of course, we'll bring it to you right here on CNN.

Also this, it's a country that offers public support to the U.S.-led efforts to fight terrorism, to fight ISIS. But it also is linked to fund-raising for terrorist networks around the world. We're talking about Qatar -- tiny but very wealthy nation and critics have said this is the most two-faced nation in the world.

Let me bring in our guests to talk about this: Jamie Dettmer who just wrote a fascinating article about Qatar for "The Daily Beast; and also Bob Baer, former CIA operative and national security analyst.

Let me talk to you first Jamie about this because the U.S. relies on Qatar in a lot of ways -- sort of a midpoint, a negotiator who helps us with situations, an ally in the region. But you wrote an article with a lot of points that shows that Qatar is trying to please all sides here.

DETTMER: Well, you know, we have several allies in the Gulf that play both sides -- Saudi Arabia and Kuwait, naming another two. The difference at the moment has been the Saudi Arabians do seem to have made an effort to try to cut down on some of the terrorist funding that's coming from that country or at least the administration has been saying they've been making more progress. Whereas Qatar, they're still having major problems. For example, they set up a crime -- a financial crime unit several years ago, but they haven't mounted one prosecution. A number of the people who have been sanctioned by the U.N., the U.S., and the Europeans, because there's evidence suggesting they have been channeling millions of dollars to al Qaeda and other jihadist groups, are still free in Qatar, have not been imprisoned. There's been a lot of pressure in recent weeks from the administration on the Qataris. But again, very little has been happening.

And now we're beginning to get a ground swell in Congress. Last week about 24 lawmakers sent a letter to the Treasury Secretary asking for an update on what's happening to these figures that we know living in Qatar, and we have allegations that they've been funding money. What's been happening to them and what further steps are the Qataris going to make in order to try to cut down the funding to jihadist groups?

HARLOW: So, Bob, this is a fine line that the U.S. has to make. It has to make the decision, what's most important, how critical do you believe, Bob, Qatar's support for the U.S., for fighting ISIS, et cetera, is?

BAER: Well, Poppy, the problem is we've turned a blind eye to Qatar right from the beginning. Khalid Sheikh Mohammed, the master mind of 9/11, sought refuge there in the mid-90s. In fact he was a government employee when the FBI arrived to arrest him. We had an open arrest warrant for him. The Qataris hid him and there was no accountability for this.

And they continue as Jamie said now to fund all sides. They fund al Jazeera, they fund indirectly at very least, ISIS. Al Qaeda type groups all through the Middle East and they're funding Libya right now -- the jihadi groups right there.

There's not much we can do about it. They simply say they'll look into it. This is done privately. There's nothing they can do about it. Frankly I don't believe it. They are playing all sides; it's like they're on a roulette wheel, putting a coin on every number.

It's quite amazing and they are a serious problem and one day we're going to have to face it.

DETTMER: Well --

HARLOW: Jamie -- go ahead, Jamie.

DETTMER: There are things we can do. I mean one of the arguments is that we make it more politically painful for them, we change the entire political calculus that the elite in Qatar have to make about this. A lot of this is reflecting divisions within the royal family. There are about 3,000 members of the royal family and they're split really between three groups -- the modernizers around the former mayor and the current mayor, his son -- what one could call Machiavellians, the people in the (inaudible) who go either way, and the strong religious conservative base to the family as well. So what we're seeing is them playing with us -- the modernizers want us to but then seeing the religious conservatives carrying on, encouraging the funding of jihadist groups.

HARLOW: Bob, do you think the U.S. policy is going to change toward Qatar? Do you think we're going to see any dramatic change right now, especially given, being in the midst of this war on terror and fighting ISIS?

BAER: No, we're going to see the Gulf Arabs playing a difficult game. What they're really worried about is Iran, in particularly related to Iraq. They see the Iranians taking over Iraq. And the way they're going to counter it is to fund ISIS connected groups, the tribal groups in al-Anbar province or even al Qaeda. And there's no way to trace this money. It's just -- it goes through channels, we don't even begin to understand.

HARLOW: Wow.

BAER: And we're not willing to really put pressure on Riyadh and Riyadh still funds these fundamentalist groups and Doha.

HARLOW: The money behind it critically important. Guys thank you for joining me. Jamie -- fascinating article in "The Daily Beast". It's called "U.S. ally Qatar shelters jihadi money men" -- check it out on "The Daily Beast". Thank you, both. Appreciate it.

We're going to take a quick break here, then we're going to come back with the latest on the breaking news out of Sydney, Australia.

And we're also going to bring you a CNN investigation into armed security guards. You're going to not want to miss this. Back after a quick break.

(COMMERCIAL BREAK)

HARLOW: This breaking news just into CNN. This is all unfolding in Sydney, Australia. We have new details on a possible hostage situation at a mall in the central business district in Sydney. What we can tell you is that the government has closed the airspace above Sydney. That is coming from our affiliate, Channel 7 Network. They've done this out of precaution -- to be very cautious.

Here's what we know at this hour. The Lindt Chocolate Shop right now is where the focus is. That is the shop in the mall here. And according to our affiliate, 7 Network there on the ground in Sydney, around 9:44 a.m. local time, a woman there saw a man with a blue bag carrying it. She thought there might be a gun inside. She told the police. That is when our affiliate says that the man entered the Lindt Chocolate Shop and this turned into a possible hostage situation.

As I said, the airspace above Sydney is closed. I can also tell you that Reuters is reporting at this hour the Sydney Opera House has been evacuated. To give you a sense of where that is, the Sydney Opera House is a four-minute walk, about 1.3 kilometers from this mall -- Martin Place. So it's not far. They have evacuated the Sydney Opera House -- that iconic structure, according to Reuters. I can also tell you that our affiliate on the ground, News 7, is tweeting this, "Police have ordered everyone at the 7 News Sydney newsroom to evacuate as a siege situation unfolds in Martin Place." We know that that newsroom is also very close to the mall where this is all happening.

Again, let me bring up that video for you to show you, to show shot just moments ago there outside the mall. This, all unfolding on a very busy Monday morning in the central business district of Sydney. We're keeping a very close eye on this.

What I can tell you the statement from the New South Wales police, what they're saying at this time all we can confirm is that there's a police operation taking place. We recommend that no one goes near the area as we're trying to establish exactly what happened. As soon as we have more information into CNN, we will bring it you.

Now let's move on to this.

We're talking a lot about private armed security guards. They're everywhere. You see them everywhere. They're in shopping malls, sporting events, patrolling neighborhoods. But unlike police officers, the training that they get, the government oversight, it's spotty at best. And this leads sometimes to tragedy as our Drew Griffin found out in this exclusive report he did with the Center for Investigative Reporting.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT (voice-over): This is former security guard Joshua Kosatschenko, taking a smoking break outside the private security company where he works in suburban Phoenix.

He's not carrying a gun now. But five and a half years ago, he was armed and licensed to carry by Arizona's Department of Public Safety. That turned out to be a dangerous breakdown in the system.

An investigation by CNN and the Center for Investigative Reporting found licensing requirements so varied and, in some states, so lax, it can be harder to become a manicurist than an armed security guard.

DANIEL TARANGO, SHOT BY SECURITY GUARD: I woke up and I had tubes running down my throat.

GRIFFIN (voice-over): Daniel Tarango today is in a wheelchair, paralyzed after being shot through his car window over stolen food.

The person that shot and nearly killed him was a then 19-year-old security guard, Joshua Kosatschenko, who should have never been allowed to carry a gun.

GRIFFIN: Hey, Joshua, Drew Griffin with CNN; how are you?

We've been trying to get in touch with you and we're doing a story on security guards. How did you become an armed security guard?

How is that possible?

JOSHUA KOSATSCHENKO, FORMER SECURITY GUARD: I'd rather not comment, sir.

GRIFFIN: Do you think that you should be placed in a position where I believe you're training security guards now?

KOSATSCHENKO: No comment.

GRIFFIN (voice-over): It was shortly before 2:00 in the morning on June 3rd, 2009, at this convenient store in Tucson. Tarango was 18 years old. Kosatschenko was hired as a security guard, watching for shoplifters.

TARANGO: We were just going to get some food in the eve and it wasn't going to be that big of a deal.

GRIFFIN (voice-over): Tarango says he waited outside in his car as his friends went in to steal food. And in the next few moments, Kosatschenko and a second security guard gave chase. A scuffle broke out. His friends ran. Tarango threw the car in reverse. Kosatschenko opened fire.

TARANGO: I just heard bah, bah, bah. When I heard the gunfire, I looked back and I just seen the glass shatter and I felt like a slight push, like somebody had pushed me over.

GRIFFIN (voice-over): Tarango admits he should have never been there. It turns out Kosatschenko should not have been working as an armed guard there, either.

He had a criminal record as a juvenile. In fact, he had several run- ins with the juvenile system. When he was 13, he pled guilty to two counts of aggravated assault. He was deemed a felon and a juvenile delinquent. The court placed him on probation and made him a prohibited possessor, meaning he lost his right to bear arms, at least until he turned 30.

But even with all that information, we discovered the Arizona Department of Public Safety never checked his record.

Captain Steve Enteman oversees licensing for armed guards.

GRIFFIN: This guy's juvenile records apparently weren't checked.

So where was the breakdown?

STEVE ENTEMAN, ARIZONA, DEPARTMENT OF PUBLIC SAFETY: Because Arizona does not require juvenile records to be reported. On this particular instance was -- and his adjudicated record as opposed to a conviction.

It does not show that he had any kind of record whatsoever.

GRIFFIN: But certainly the check could have gone beyond that?

You could look at his juvenile records.

ENTEMAN: We could look at his juvenile records had he disclosed that he had that in his background.

GRIFFIN: So as long as he lies on his application, he basically hides his entire juvenile record?

ENTEMAN: In this particular case, yes.

GRIFFIN (voice-over): The state didn't even need his juvenile record. Since Kosatschenko is a prohibited possessor banned from carrying a gun, that information would have shown up in a federal law enforcement database, but Arizona didn't check it.

The State of Arizona may be a poster child for what's wrong with the nation's lack of regulation for the armed security guard industry.

Kosatschenko's armed guard training consisted of just 16 hours, only about four of which took place at a gun range. Arizona is one of 27 states that doesn't check if someone applying to become an armed guard is prohibited from possessing a gun.

The company that hired Joshua Kosatschenko refused to talk with CNN, as did Kosatschenko himself.

GRIFFIN: Yes. Drew Griffin with CNN.

UNIDENTIFIED MALE: Hey, gentleman.

GRIFFIN: Hey, can I just please...

UNIDENTIFIED MALE: Can you please leave the building. We don't want to be on film.

GRIFFIN: OK.

GRIFFIN (voice-over): But in a court deposition, he explained he was fully justified in shooting the fleeing shoplifters because his job was to stop them.

UNIDENTIFIED MALE: OK. So did you think it was smart to chase after him into the parking lot?

KOSATSCHENKO: I wouldn't necessarily say it was smart or not smart. I would say that it's a danger associated with the job.

UNIDENTIFIED MALE: And the job was to arrest snack food shoplifters? Is that right?

KOSATSCHENKO: Shoplifters for anything, period.

GRIFFIN (voice-over): Steve Amitay is a lobbyist and general counsel for the National Association of Security Companies. We met up with him at the industry's annual convention earlier this year, where he continues to push for FBI background checks for anyone who wants to be an armed guard.

In nine states, even an FBI background check is not required.

STEVE AMITAY, GENERAL COUNSEL FOR THE NATIONAL ASSOCIATION OF SECURITY COMPANIES. The public, they look to security officers in emergency situations. We want to make sure that this guy is properly vetted and is not going to be a problem himself.

GRIFFIN (voice-over): That's not going to be easy. In the last four years, there have been no fewer than a dozen bills introduced in state legislatures and in Congress trying to control, license or regulate who can become a security guard; of those, most have failed.

UNIDENTIFIED MALE: Get down on the ground.

GRIFFIN (voice-over): Even after the shooting of Daniel Tarango. Arizona did little to change its licensing requirements. There is this additional box, which relies on applicants to disclose or check if they are a prohibited possessor, legally barred from owning a gun. But Arizona still doesn't check that federal database when someone applies to be an armed guard.

ENTEMAN: If they're not truthful with us, we can't control if a person's untruthful to us.

GRIFFIN (voice-over): As for Joshua Kosatschenko, after the shooting, he was arrested for attempted murder but, ultimately, only indicted and convicted for violating the law that banned him from possessing a gun. He served probation.

He now works, according to his LinkedIn page, as a corporate trainer and hiring manager for the very same security company he worked for the night he shot and nearly killed Daniel Tarango.

GRIFFIN: Do you think that the State of Arizona should have given you a license to be an armed guard when you got unarmed?

KOSATSCHENKO: No comment, sir.

GRIFFIN: No comment at all?

KOSATSCHENKO: No comment.

(END VIDEOTAPE)

HARLOW: All right. Our thanks to Drew Griffin for that.

Now the breaking news out of Sydney, Australia. What I can tell you at this point in time is there's a possible hostage situation unfolding in a very busy central business district in Sydney at a mall there called Martin Place.

This is all happening inside the Lindt chocolate shop. You obviously have authorities there fully armed outside monitoring this situation. We are being told that at least 13 hostages may be inside.

How did this unfold?

According to our affiliate, Seven Network in Sydney, they say around 9:44 am local time, remember, it is a busy Monday morning there in Sydney, a woman saw a man with a blue sports bag. She thought it might be a gun so she told police. Then that man entered the Lindt chocolate shop and that is when it turned into a possible hostage situation.

Again, this is coming from our affiliate on the ground; CNN is working our sources to confirm this as well.

As a precaution, a few things have happened. Reuters is reporting the Sydney Opera House has been evacuated. And to give you some perspective, the Sydney Opera House is a four-minute walk from this busy mall, about 1.3 kilometers, nearby.

Also, the 7 News Sydney news network, our affiliate on the ground, is located very close to this mall. They have tweeted that the police have ordered all of them to evacuate.

They tweet, "Police have ordered everyone in the @7NewsSydney newsroom to evacuate as a siege situation unfolds in Martin Place."

Those are closeup shots from moments ago of the windows there, but really you can't make out anything.

We're going to take a quick break. We're going to bring back on the other side with a live report from a reporter on the ground there in Sydney. Stay with us.

(COMMERCIAL BREAK)

HARLOW: All right. As we continue to follow the breaking news out of Sydney, Australia, about a possible hostage situation in Sydney's downtown central business district at a mall there with at least 13 hostages inside, I want to join our affiliate, Seven Network, their live coverage on the ground there. Listen in.

UNIDENTIFIED MALE: They're responding to somebody who has approached them, befriended them, one-on-one, may have started online, but it happens offline.

And they've been -- frankly, they've been groomed much like a pedophile grooms their victim. And so that means you have older individuals who have some degree of charisma and some capacity to influence the young. It's really a peer network.

It's also, of course, once they get into it, this narrative of fighting a cosmic battle. This battle the Islamic State's fighting is portrayed as sort of a great Armageddon conflict of the end of time. So the last jihad, so it's not just a call to join a jihad but the great jihad. And the coalition against them including us are presented as being crusader forces.

It's all about imagery ads. But it starts with the social network, with the peer pressure. UNIDENTIFIED MALE: We're seeing some amateur footage now of the events immediately after this siege took place, obviously some mobile phone footage. If you're just joining us, at 9:44 am, a gunman was seen with a blue sports bag walking into, with a gun inside of it, walking into the Lindt chocolate shop in Martin Place in Sydney.

HARLOW: All right. It looks like we lost our feed there. We'll try to get it back. That was the live broadcast of our affiliate on the ground there, Seven Network, in Sydney, Australia. Let me recap for you.

It is Monday morning in Sydney, Australia, and you're looking at images of police standing outside of Martin Place. That is a very busy, heavily trafficked mall in the middle of Sydney's central business district. What we know is that there is a possible hostage situation there. We're being told that there are at least 13 possible hostages inside.

The other details that we have, as we try to confirm all of this for you, coming from our affiliate, Seven Network, is that this morning around 9:44 am local time, there was a woman, saw a man with a blue sports bag, thought a gun may be inside, called the police.

This man then enters that chocolate shop. You're looking at the exterior shot a little while ago before all the police arrived -- entered it. This is when it turned into a possible hostage situation. As a precautionary method, we know that they have evacuated the Sydney Opera House. That is about a four-minute walk. So, very close to this mall. That has been evacuated.

The airspace above Sydney has been closed temporarily as a precaution. We also know that 7 News network, that is our affiliate on the ground, their newsroom has been evacuated by police as this all unfolds.

Guys, are we able to dip back into that live coverage from Seven Network?

All right. We can't get that at this point in time. We are trying.

We're also working to get you a live report from the ground there in Sydney as soon as we have it. Obviously, there are a lot of concerns but we want to take this very slowly, as we have not yet confirmed at CNN that this is, indeed, a hostage situation.

What we can tell you, though, is what the New South Wales police media unit is saying. Here's the statement that they gave us.

Quote, "All we can confirm at this time is that there is a police operation taking place at Martin Place in Sydney's central business district. We are recommending that no one goes near the area. We're trying to establish exactly what has happened."

And those images you're seeing, not live images, images from just moments ago there outside of that busy mall in the middle of Sydney's business district, this all unfolding on a Monday morning there.

Again, we are being told by our affiliate there are at least 13 potential hostages inside.

We're going to take a quick break. We'll be back with more breaking news right after that.

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HARLOW: We are continuing to monitor a possible hostage situation unfolding at this moment in Sydney, Australia, in the central business district at a very heavily trafficked mall there called Martin Place. This is all happening at the Lindt chocolate shop.

What we know at this hour, there are 13 potential hostages inside. That is coming from our affiliate on the ground there, Seven Network. CNN has not yet independently confirmed that.

What I can read you now, just in to CNN, is a statement from Australian prime minister Tony Abbott.

It reads in full, "New South Wales police and the Australian federal police are currently responding to a reported hostage-taking incident in Martin Place in Sydney. I have spoken with NSW premier Mike Baird and offered him all possible commonwealth support and assistance.

"The national security committee of cabinet has also convened for briefings on the situation. This is obviously a deeply concerning incident, but all Australians should be reassured that our law enforcement and security agencies are well trained and equipped and are responding in a thorough and professional manner.

"We will provide regular updates as further information becomes available." That coming from Australian prime minister Tony Abbott, saying that they are monitoring the situation, that they are prepared to deal with it.

Again, our affiliate on the ground there in Sydney saying at least 13 hostages are potentially inside. We will bring you the latest on this of course as soon as we have it.

All right. I want to turn to other news as we continue to gather our resources on the ground there in Sydney. If you missed the premiere of this extraordinary film, "CNN Films: Dinosaur 13," make sure to catch the encore presentation. That's tonight at 9:00 Eastern, right here on CNN.

It follows the unbelievable tale of Sue, the Tyrannosaurus rex, which now stands in the Chicago Field Museum. And her discovery, how it led to a serious federal charge against many of those who found her, as you'll see in this clip in the film.

(BEGIN VIDEO CLIP)

KRISTIN DONNAN, FREELANCE WRITER AND RESEARCHER: Once you start to understand the indictments, basically this is what they said.

Pretend we're in Wyoming and we're standing in the middle of the prairie and let's assume for a moment that the fence is in the right place. You're standing on this side of the fence, the government says, right over there, on the other side of the fence, there's this fabulous fossil.

And they're basically saying that Pete and Neal and Bob and whoever was out there would go step over the fence, wrongly, knowingly pick up the fossil that they're not supposed to pick up, carry it back over the fence, put it in their car.

When they drive from Wyoming to South Dakota, they then have conducted an illegal act, which is called interstate transportation of stolen property.

They get back to the institute, they would make a phone call, send a fax, maybe, to Japan and say, we found the thing that we you looking for.

Do you want to buy it? Well, that's wire fraud.

And then if the Japanese museum were to purchase that fossil and the guys would put that money in the bank, that's money laundering.

So basically the guys were called conspirators, who were creating this very elaborate scheme to intentionally steal things and sell them illegally.

(END VIDEO CLIP)

HARLOW: All right. Joining me now, the director of the film, "Dinosaur 13," Todd Miller.

Thanks for being here. Good to have you on the program again. It's a fascinating movie. I enjoyed it so, so much.

Let me begin with the controversy over why Pete Larson ultimately went to jail, why a lot of the folks that found Sue were tried for this because some groups have come out since it aired and blasted it and blasted the film and said it doesn't uncover the whole truth.

You have a group of paleontologists coming out and saying, look, this is biased and one-sided.

So what's your response to that?

TODD MILLER, DIRECTOR, "DINOSAUR 13": We stand behind all the facts in the film. Everything was vetted and triple checked.

We had the lead prosecutor that was involved in the criminal trial cooperated with us as well as the National Park Service, other elements and the government that participated in the events in the film. But I would say one group in particular has decided, Vertebrate Paleontology, has issued a press release.

(CROSSTALK)

HARLOW: Right. We have it right here. MILLER: And this is the same group that, you know, they sent two letters during the custody battle and this was a very -- it was only two key figures within the organization that sent that.

And it was a very vocal minority and in response back then, almost 20 years ago, you had the president of that organization quit. And we also have four members of that society that are in our film that, you know, are very much in line with, you know, the facts that are played out in the film.

HARLOW: And look, even more of a reason to watch this film because it is so -- there is so much passion on both sides about this, about where Sue should be.

I got to spend Thursday at the Chicago Field Museum -- we might have a photo of it -- with a lot of school kids that were there, visiting Sue. And ultimately, you know, they lose this battle for Sue to the federal government.

Pete Larson, the lead paleontologist on this, goes to jail and serves a bit of time for this. But it seems that if Sue could be anywhere else, they say they'd like her to be here. They would like to have her in South Dakota where she was found, but at least the science gets to be done on her at the Chicago Field Museum and kids get to see her.

MILLER: The Field Museum is a great resource. It's an amazing institution. They've been doing a fantastic job with Sue there. I think the way in which they've dealt with the Black Hills Institute over the years has been a little questionable, in my personal opinion.

But I think that's going to change and I think it's great that she's in a place that she's loved, she's taken care of, and millions of people get to see her.

HARLOW: Very quickly before break, why did you decide to tell this story?

I certainly didn't know the backstory of Sue, the largest and most complete T-rex ever found in the history of the world.

MILLER: I just wanted it to have a larger audience. There had been so little actually written in the media about it and I just wanted people to enjoy that same love affair I had with the book when I read it, "Rex Appeal."

HARLOW: And it's a fascinating film. I enjoyed it so much. Again tonight at 9:00 pm Eastern right here on CNN.

Great work. Congratulations. Thank you for being with us.

We have a lot of breaking news for you out of Sydney, Australia. This possible hostage situation unfolding there. We're going to take a quick break and we'll be back with that at the top of the hour.

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