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Massive Data Breach Could Affect Every Federal Agency; China Blasts U.S. Hacking Accusations; NSA Secretly Expands Internet Spying on Americans; Boston Terror Suspect Encouraged by ISIS; Serial Shooter on Loose in Colorado? Aired 7-7:30a ET

Aired June 5, 2015 - 07:00   ET

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


ATHENA JONES, CNN CORRESPONDENT: ... updated credit reports.

[07:00:02] MARIE HARF, STATE DEPARTMENT SPOKESPERSON: We continue to update our security, but it is a pretty significant challenge.

JONES: Hackers have targeted the American government before. Just this week, investigators say Russia attacked the IRS and made 100,000 tax returns vulnerable to criminals.

(END VIDEOTAPE)

JONES: Now, President Obama has been briefed on this latest breach as the investigation continues. And this news is prompting lawmakers on Capitol Hill to call for swift completion of legislation already in the pipeline, aimed at bolstering cyber security nationwide -- Alisyn.

ALISYN CAMEROTA, CNN ANCHOR: Athena, thanks so much for that.

Well, officials in China say they're being unfairly targeted by Washington's hacking accusations, and they're warning the U.S. not to jump to conclusions. CNN's David McKenzie joins us live in Beijing.

What else are they saying?

DAVID MCKENZIE, CNN CORRESPONDENT: Well, Alisyn, interestingly, they're not giving a denial. They're skirting the issue a little bit and let's see what they're saying. They're saying, "China resolutely tackles cyberattack activities in all forms. We ask the United States not to be skeptical and stop chasing the wind and catching the shadows, but instead add more trust and cooperation in this field."

So pulling out a Chinese proverb there to say start cooperating and stop accusing.

But there have been accusations, many of them over the years that China has hacked into all sorts of U.S. assets, including government and private enterprise. But the Chinese point out that Snowden's leaks showed that the NSA had hacked into, or attempted to hack into Chinese corporations and the government here. So right now a lot of finger-pointing. But it does seem that China could have been involved in this huge hack in the U.S. -- Chris. CHRIS CUOMO, CNN ANCHOR: All right. Well, David, another

expression is that, when you point a finger at someone, there are four pointing back at you. And now, this story about the hacking and how the U.S. found out about it has them in the spotlight, as well.

As it turns out, the White House has secretly expanded the NSA's warrantless surveillance of Americans' Internet usage. This comes just days after the showdown over the NSA's bulk collection of Americans' phone records. So what is this about? And does this need to be addressed?

CNN Pentagon correspondent Barbara Starr, what do we know?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Morning, Chris. Everybody spies, what a surprise. Apparently, these documents now revealed from Edward Snowden first reported in the "New York Times" and other organizations. The NSA went to the Justice Department in 2012 and got permission, essentially, in two classified memos, to begin expanding its warrantless wiretapping into Internet cables in the United States.

The idea was that they would be looking through this chain, this flow of information into the United States for foreign government hacking or suspicious malware, of course. The Justice Department said it had to be tied to potential activities from foreign governments, but there's two problems. Of course, you never know from overseas. It might be criminal hacking. That's law enforcement. That's not intelligence gathering. The NSA can't do that. And of course, they do pick up a good deal of information about Americans as they gather up all of this.

But the NSA, the Obama administration is sticking to the program. The director of national intelligence putting out a statement about all of this and saying, in part, "These operations play a critical role in protecting U.S. networks from disruptive and even destructive threats."

So look, the bottom line is, everybody is going to continue to do this. One of the big concerns, as Athena and David point out about China, these attacks are growing in size and scope on everybody's part. And the problem is nobody can see right now where it all ends.

CAMEROTA: That is a problem, Barbara. Thanks so much for that.

So for more now on the NSA's secret spy activities and that massive government data breach that may have been carried out by the Chinese, let's bring in CNN's national security commentator and former Michigan Congressman, Mike Rogers. He was chair of the House Intelligence Committee.

Good morning, Mike.

MIKE ROGERS, CNN NATIONAL SECURITY COMMENTATOR: Good morning, Alisyn.

CAMEROTA: OK. Edward Snowden strikes again. We know this information about the NSA spying through him, courtesy of the "New York Times." He provided information to them. And it turns out the NSA has been surveying Americans' Internet traffic, looking for evidence of computer hacking.

You were at the intelligence committee while this was going on. What are your thoughts?

ROGERS: Well, this -- we've seen this kind of story before, this movie before. Talking about it in the terms of the NSA spying on Americans is inaccurate. It's not an accurate portrayal of the program.

CAMEROTA: Why? I mean, it says that it does look on U.S. soil at Americans' Internet activity.

ROGERS: Well, no. The program, in description, and I have to be careful because much of it is so classified, but this is -- imagine foreign information flying into the United States. Remember, for the Chinese to get into the government systems, it comes from overseas. That traffic comes into the United States.

[07:04:57] What the NSA was trying to do, according and consistent with the statement by Director Clapper, was, "Hey, listen, we think we can get a better handle on this if we can look at it coming into the United States."

And the Department of Justice, even in -- according to those documents, said this is great, but you cannot look at Americans specifically. You can't do that. It has to be tied to a foreign government.

So this notion that they were widely looking at Americans' data and information was inconsistent with the way the program was designed, and I believe it was working at the time.

CAMEROTA: OK. So in other words, you're not looking at my online shopping. You're not looking at...

ROGERS: No.

CAMEROTA: ... my e-mails to my friends. However, if I'm an American that's receiving some sort of information from a foreign government, you are looking at that e-mail traffic? I mean, that Internet traffic?

ROGERS: Well, if it's a foreign government of interest, it's likely, you would hope, that they would try to figure out what that communication is all about.

Remember, in the old days, spies used to try to get the code clerk in the embassies, because that's where all that secret information would go into the embassy. And if you could recruit the code clerk to give you the codes, you could crack it, and you could catch the Russians spying or the Chinese spying or the North Korean illegal activity. All of that has changed in the age of the Internet. So that

information is still dangerous to the United States, and it's coming into the United States in a volume that is staggering.

So candidly, they're not interested in what you're shopping for online. They're interested in trying to catch and wean down this information that we know will have a negative impact, including the Chinese stealing and building this database of Americans that's unprecedented. And they're going to use it for nefarious purposes. They'll use it for intelligence purposes. That's what they're trying to stop.

CAMEROTA: OK, let's talk about that, because it is fascinating, the timing of this. I mean, it just dovetails so perfectly today with what the U.S. believes China is up to.

So this is called the largest breach of federal personnel data. It's people's government security clearances that were supposedly hacked into. There are federal employee records. Does this mean that somebody got four million people's Social Security numbers?

ROGERS: It may or may not. It probably didn't get all 4 million, but it depends on the depth of the breach. So they are likely to have gotten some of that personal information.

And so we've seen this before from the Chinese. They've done it in healthcare systems, and they've done it now in the federal government. And they've done it in other places. They'll use this for two reasons.

This is why the Chinese cyber program is so dangerous. They will use it for government purposes, meaning I want to -- I want to be able to discern who are your intelligence agents so that we can either keep an eye on them or arrest them. No. 1, bad idea.

And two, they'll use this information, cull it together, to also try to get into private systems to steal intellectual property. And we've seen them do this to the tune of almost $1 trillion, take it back to China, repurpose it, and then artificially compete against that U.S. company, costing us hundreds of thousands of jobs, trillions of dollars. I mean, this is a massive problem.

And the Chinese are getting more aggressive, and they use all of this in the same way. So this isn't traditional government-to- government spying. This is a combination of economic espionage that the world has never seen, and this understanding that they're trying to disrupt government operations around the world, as well.

CAMEROTA: You heard our correspondents reporting on this that Chinese deny this. Well, sort of. They say we need to stop clutching at the wind. How certain are you that China is, in fact, behind this massive breach?

ROGERS: When I first got my first briefing about cybersecurity problems back in 2004, it was, you know, this is kind of a bad thing but we can handle it. Every year, exponentially worse. The capabilities of the Chinese are very, very good and getting better, unfortunately.

The good news is so is our ability to do something called attribution. Can you attribute accurately who was the perpetrator of this? Probably nobody better to do that than the National Security Agency. It's still hard, still difficult, but if the government feels confident enough that they're saying, "We believe this is the Chinese," there will be multiple layers of proof within the NSA and our other intelligence services that would confirm that.

So I'm fairly confident that, if they're saying it, they're accurate on it. And they didn't just wait. Remember, this -- this happened months and months ago. It will take a forensic study for months to try to figure this out. And again, the Chinese are good at surreptitiously getting into the country, so you have to kind of work through all of those walls of secrecy in order to find out who the true perpetrator is.

CAMEROTA: Yes.

ROGERS: I'm confident the NSA has accomplished that.

CAMEROTA: Mike, very quickly, what is a bigger threat in your mind: this level of hacking or ISIS?

ROGERS: Well, they're so very, very different. One can blow up, you know, your -- come to a mall and shoot people. And the other one steals your economic prosperity moving forward. And the economic loss to criminal -- organized criminal enterprise that are stealing both our finances and our future is significant. So it's a big strategic threat, and it's a local physical threat. Both are equally as bad.

[07:10:04] CAMEROTA: Our intelligence officers have their hands full, certainly.

ROGERS: Yes.

CAMEROTA: Mike Rogers, thanks so much. Nice to talk to you.

ROGERS: Thanks.

CAMEROTA: Let's get over to Chris.

CUOMO: Alisyn, we have new details this morning in the Boston terror plot. U.S. officials tell CNN that at least one of the men linked to the attack was encouraged by ISIS. This as the suspect's family gets to see the surveillance video showing his alleged attack and the officers' deadly response.

Let's get right to CNN's Alexandra Field, live in Boston -- Alexandra.

ALEXANDRA FIELD, CNN CORRESPONDENT: Good morning, Chris.

For the first time the family of Usaama Rahim has now seen that surveillance video early on in the aftermath of the shooting, where Rahim's brother posted on Facebook that he believed that his brother had been shot three times in the back. The police have maintained their story that he was not shot in the back, that he was shot in the torso and in the chest.

Now that the family has seen that video, his brother is walking back those statements, saying that they will let the facts of this case play out. They've got a lot of questions about two investigations going on here: one into the death of Usaama Rahim, and two, into the plot alleged by police that he had plans to attack law enforcement officers.

A spokesman for the family is speaking out now, talking about the family's response to these allegations. Listen to that.

(BEGIN VIDEO CLIP)

ROBERT SULLIVAN, FAMILY ATTORNEY: Everything they knew about their brother is starkly inconsistent with what has been reported. So it's a very shocking development for them. The family, however, is keeping an open mind, and they are going to go wherever the evidence leads them.

(END VIDEO CLIP)

FIELD: They are asking others to keep an open mind, as well. They have plans to bury Usaama Rahim at some point today.

The family says they had no indication of any plotting that he may have been doing. They have no indication, they say, that he had been inspired or radicalized in any way by ISIS.

They also say they had no indication that he was under surveillance. We are, however, now learning that officials had been watching him 24 hours a day for at least ten days before his death. We are learning that authorities decided to move in on him in that CVS parking lot after listening to a phone call in which they say he said his good-byes to his father -- Alisyn.

CAMEROTA: OK. Alexandra, thanks so much for that.

Well, the FBI investigating a possible serial shooter on the loose in Colorado. They're looking into a rash of unsolved shootings, three of them in the past six weeks. The latest, a 65-year-old man found fatally shot just blocks from his home.

CNN's Dan Simon is live in Windsor with the latest. This is scary, Dan.

DAN SIMON, CNN CORRESPONDENT: Well, hi, Alisyn.

We are at the Windsor Police Department. This is where that interagency task force that includes the FBI is investigating those shootings, including the latest one that left that 65-year-old man dead.

William Connole was shot dead on the sidewalk just a few blocks away from his home. He was a father and a grandfather. He was shot in the chest. At this point, authorities are just saying there are some likenesses in terms of what happened with his shooting and the other two.

I want to review briefly what happened with those other two shootings.

In late April, you had a 20-year-old woman who was in her car. She was shot in the neck. She survived. She was going on an interstate on-ramp. And then about a month later, you had a 48-year- old man who was on a bicycle, shot dead along a country road.

Those two shootings had been positively linked in some fashion, but authorities aren't saying what that is. Now with this third shooting, they are saying there are some likenesses. Of course, this has unnerved this community, Alisyn. And so the question is, is this linked? And that's what authorities are trying to determine. They know that people are on edge, and they say the key right now is just to be extra vigilant and report anything that might be suspicious.

Chris, we'll send it back to you.

CUOMO: The unknown, Dan. That's what makes it so frightening. Thank you for the reporting.

So a South Korean airmen on a U.S. base has tested positive for MERS. This is a virus that has killed at least three people. The World Health Organization warns the outbreak is likely to spread. Thirty-five people have been diagnosed with MERS since May 20. Symptoms of the disease include fever, shortness of breath, but there are more serious complications like pneumonia and kidney failure that can develop. At least 1,400 people are now in quarantine

CAMEROTA: All right. Take a look at this crazy story. This is a shoot-out. Sparks flying in Chicago after a roman candle fight. That's a kind of firework, by the way. You can see the two groups battling it out in the streets of Chicago's West Side Tuesday night.

Witnesses say this was a friendly battle among long-time neighbors. But police eventually had to come break it up. No one was hurt.

I mean, are board games out? Can you just not play board games with your neighbors anymore? You need a roman candle battle?

CUOMO: Yes, look. You look at it two ways. One, they've had such trouble with gun violence in Chicago recently that this is, you know, a step in the right direction. But, you know, you could get very hurt doing what they're doing right there. You ever had a roman candle?

CAMEROTA: I have not.

CUOMO: They -- you know, I mean, it's an explosive device. It's just a firework.

CAMEROTA: I thought a roman candle was just a big candle. CUOMO: If you shot me with a roman candle from close range,

you'd hurt me; you'd burn me.

CAMEROTA: Don't tempt me. But no one was hurt in that battle.

Meanwhile, fighting words. Hillary Clinton calling out her GOP rivals by name, insisting they are afraid to let citizens have their democratic say. This is all part of her new push to support voting rights. Does she have another motive?

[07:15:12] CUOMO: And Rick Perry entering the race for president. He makes his big announcement speech. But there's more talk about the sweat on his brow than the words coming out of his mouth. Is that fair? "Inside Politics" takes it on ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I'm calling for universal, automatic voter registration. Every citizen in every state in the union.

Every young man or young woman should be automatically registered to vote when they turn 18.

(END VIDEO CLIP)

CUOMO: Hillary Clinton calling for sweeping changes to the nation's voter access law. Sounds good, right? But is it -- that all it's worth? Is it what it sounds like? Let's test this with former DNC communications director and president of the pro-Hillary super PAC, Correct the Record, Mr. Brad Woodhouse.

Brad, it's good to have you on the show.

BRAD WOODHOUSE, PRESIDENT, CORRECT THE RECORD: Good morning.

CUOMO: Let's unpack this supposition. It does sound good, but this is done state by state, so even the president wouldn't be able to just wave a hand and make this happen. Is this more show than go?

[07:20:09] WOODHOUSE: No, not at all. I mean, look, first of all, "The New York Times" editorial this morning said that this is bold, but it's also -- it's also common sense. I mean, you know, the idea that we should make it easier for people to vote, we should make it more convenient for people to vote, I have a hard time believing that people would oppose...

CUOMO: But she can't deliver on it is what I'm saying. I'm not saying it's a bad idea. I'm saying that you can't do it.

WOODHOUSE: I wouldn't say -- I wouldn't say you can't deliver on it. I mean, let's remember this: President Obama a couple years ago called for an increase in the minimum wage. That hadn't happened in the Congress, but that type of galvanizing effort that a president can play, it's happened in states and municipalities all over -- all over the country.

So I think if a president or presidential candidate gets behind this type of effort, you can see sweeping change in states. But states are part of the problem, and I think that's why she called out states like Wisconsin and states like Texas, states like North Carolina where there are Republican governors or Republican legislators have put in laws or tried to put in laws to make it so fewer people vote because they don't like the people who are voting.

CUOMO: Not just a coincidence that she went after the records of everybody when she can't be criticized the same way, because she's never really been in charge of something like voting?

WOODHOUSE: Well, I mean, she hasn't been in charge of voting, but she has been in Congress where these issues came up, and she was -- in the Senate, she was very active in the issue of voting rights. She had a -- she had a proposal that was called the gold standard. It included a possibility of a federal holiday on election day to make it easier for people to vote. So she -- she's not Johnny-come-lately to the issue.

CAMEROTA: OK. So Brad, let's -- your organization is called Correct the Record. So let's look at a couple of other issues where Hillary's critics say she has flip-flopped on, and you can correct the record if need be.

The first is immigration. In 2008, she opposed driver's licenses for undocumented immigrants. Now today, she supports driver's licenses, undocumented immigrants. That seems like a flip-flip.

WOODHOUSE: Well, you know, look, I don't know -- I don't know if it's a flip-flop. I don't know that that's accurate what her 2008 record was in total. I think you're talking about -- talking about an issue in the state of -- in the state of New York.

But, again, she is -- she is -- she is in support of immigration reform in a way that Republicans are not in terms of bringing -- you know, bringing these people out of the shadows. And it's just common sense. It's like this voting issue. It's common sense that we want to do something to have comprehensive immigration reform in this country.

CAMEROTA: Well, sure. But I mean, things that seem like common sense now are things that some politicians, like she, didn't believe were common sense previously.

Let's move on to gay marriage. She, in 2007, said that she supported civil unions, not gay marriage, but today she says that she believes same-sex marriage is a constitutional right.

WOODHOUSE: Well, look, I think everybody acknowledges, President Obama has acknowledged that there has been an evolution on peoples' attitudes about -- about this issue of gay marriage.

And look, I think it would be, you know, what do we want? Do we want politicians whose stances are stagnant over time? I mean, 2007 is a long time ago, and there's been a ton of change in this country.

Remember, you know -- remember, back then Republicans were putting ballot initiatives all over the country, trying to restrict people from marrying or trying to restrict civil unions, or saying that marriage was only between a man and a woman. So being for civil unions is a reaction to something that could have been much worse.

CUOMO: Well, it's happening. It's happening more aggressively now. You have these religious freedom laws. I mean, that fight is far from over, no matter what the Supreme Court says. So Hillary Clinton will have plenty of chances to be out in front of it.

But these are kind of the softballs for you. The tough things for you to deal with, in terms of her record, aren't technically record. But they go to the e-mail scandal and to what's going on with the Clinton global initiative, and what seemed to be, like enough of a potential conflict of interest that we had Rudy Giuliani on the show, saying, "If I was a federal prosecutor, she'd be before a grand jury right now."

What do you say about those two situations?

WOODHOUSE: Well, look, first of all, I wouldn't, you know, I wouldn't be -- I'm not surprised that Rudy Giuliani is attacking -- is attacking Hillary -- Hillary Clinton.

First of all, look, as it relates to -- as it relates to the e- mail issue, Hillary Clinton followed federal guidelines. She did at the State Department -- she did at the State Department what Jeb Bush did in Florida. She had a server. She decided what to turn over, what she thought was work-related.

CUOMO: But Jeb Bush wasn't under the same restrictions, and she knew that this had a lot of optical pressure on it. And the easy thing to do was to turn over the server, and she didn't do it.

WOODHOUSE: Well, look, she turned over 55,000 pages of e-mails. She turned over what was work-related. Every federal employer has to decide what they archive as work-related and what they consider -- what they consider personal. She did exactly what every other federal official did. She did what previous secretaries of state did.

And look, no one's found -- you know, "The New York Times," they wrote a story that some type of laws might have been broken. It turns out they had to retract that. People had to back off that. It's totally not true.

[07:25:00] CAMEROTA: Brad Woodhouse, thanks so much for being on NEW DAY.

WOODHOUSE: Great. Thank you so much.

CUOMO: All right. So from the Democrats to the Republicans. Now we have Rick Perry. He's bespeckled and ready to go. Will the media give him a fair shake? John King takes it on in "Inside Politics," coming up. (COMMERCIAL BREAK)

CAMEROTA: China denying it's -- you should have told me I was on camera.

CUOMO: I was. I said this is you, sweetheart.

CAMEROTA: Oh, that's to me?

China denying what may be the biggest breach of U.S. government computer networks ever. The personal information of at least four million current and former U.S. government employees stolen by hackers. Nearly every government agency was touched by this. Investigators say it's possible millions more people could be affected. Chinese officials dispute the allegation, saying they've made a great effort to combat cyberattacks.

[07:29:40] CUOMO: My turn. Despite being molested by their brother Josh Duggar, Jill and Jessa are defending him. In an interview airing tonight on FOX, the sisters say they're horrified by the way the story has been portrayed in the media. Both women say their brother is not a child molester or rapist, calling those words "embellished lies." Recall, Josh has allegedly said that he molested as many as five kids, including his sisters and one that was not his sister. He has apologized, as well.

CAMEROTA: OK. Here's the story...