Return to Transcripts main page


Kim Guadagno Denies Accusations; Interview with Valerie Huttle; Firm Traces Target Malware to Russian Teen; New Jersey Mayor: Christie Withheld Sandy Aid; Amazon Plans to Ship Even before you Buy

Aired January 20, 2014 - 09:30   ET


KIM GUADAGNO (R), NEW JERSEY LIEUTENANT GOVERNOR: In New Jersey is completely false. Standing in Union Beach, as we are today, with some of the mayors whose towns were devastated by Sandy, and also being a Sandy victim myself, makes the mayor's allegations particularly offensive to me. The suggestion that anyone would hold back Sandy relief funds for any reason is wholly and completely false.

I thought I had a good relationship with the mayor of Hoboken. In fact, just three months after this conversation she said we had occurred, I was walking on the streets with her in Hoboken talking to her about urban markets. Just three months after this conversation she said we had and five months before she went to MSNBC. Like I said, I thought we had a good relationship.

Frankly, I'm surprised that Mayor Zimmer has chosen to mischaracterize the conversation I had with her about development and job creation in Hoboken. I have devoted an extraordinary amount of time to projects, to bringing projects, to creating jobs and retaining jobs in Hoboken. That is my job as the secretary of state and the lieutenant governor. I have visit Hoboken no less than 13 times in (INAUDIBLE). I have worked on many more projects involving Hoboken as part of that job.

The example that stand out, the one that the mayor herself asked me to work on for her is the Pearson (ph) education building, in the skyline on the waterfront of Hoboken. The mayor once told me there was an empty hole and she asked me to help her find a company to fill it. We did. Right now Pearson Education (ph) is in the waterfront -- on the waterfront. They've created hundreds of jobs. They've created hundreds of construction jobs. So, yes, I am very surprised by the mayor's allegations, and I deny wholeheartedly those allegations.

I proudly support and will continue to support the creation of jobs in Hoboken and all of New Jersey and I will continue to work on those projects. But I am going to end, and I mean end, by re-emphasizing one thing, I deny any suggestion made by Mayor Zimmer that there was ever any condition (INAUDIBLE) on the release of Sandy funds by me.

I want to thank you all for coming out, for giving me the opportunity to speak. I look forward to the inquiries. I am sure, absolutely sure, (INAUDIBLE) the facts will come out. Thank you very much for your time.

UNIDENTIFIED FEMALE: Lieutenant Governor, why the - CAROL COSTELLO, CNN ANCHOR: All right. And as promised, she's accepting no questions, but she gave a very strong statement of denial, denial, denial. New Jersey's lieutenant governor, Kim Guadagno, did not strong arm Hoboken's mayor, she did not tell her Sandy relief funds would be withheld if Mayor Dawn Zimmer did not support a redevelopment project favored by Governor Christie. Still, the whole matter is now part of a federal and state investigation.

Valerie Huttle is a New Jersey assemblywoman. She joins us this morning.

Good morning, once again.


COSTELLO: And I just want to have a bit of full disclosure here and the full transparency (INAUDIBLE). You criticized Governor Christie for using state police choppers to get to his son's high school baseball games. He, in turn, called you a jerk. You're also on the committee investigating bridge-gate. With that in mind, do you believe the lieutenant governor's denial?

HUTTLE: Well, quite frankly, when the governor called out me as a jerk, you know, that is certainly water under the bridge. We've moved forward and we have had a very good relationship. He signed many of my bills into law. As far as what I heard today from the lieutenant governor, there are no surprises there, especially that she did not take any questions from the press.

But I will tell you now that this does not change the mission of the committee to investigate. It's a question now of what she says and what the mayor says. I take them both at this time, we must take their word, but when we have the U.S. attorney looking into this, I think the lieutenant governor's right, we must get all the information and make sure that we get all of the facts before we can see what the opinion is. So I --

COSTELLO: Well, going back to -


COSTELLO: Governor Christie calling you a jerk, you say that's water under the bridge. But those are strong words calling someone a jerk for criticism that was probably deserved.

HUTTLE: Well, this governor has been known to call people out. He's used several words when he calls out the teachers and he's, quite frankly, he can be very intimidating and very abusive in his language. But this is the governor's style. And certainly that has nothing to do with me and being a member of the committee. We need to get the facts. I represent the people of Fort Lee and District 37 whose lives were thrown into havoc the day or the four days when we had those bridge - when we had the bridge traffic. So I'm here to represent the constituents in my district and all of New Jersey and get the information to make sure this is not an abuse of power, it's not a violation of the public trust and, quite frankly, we're looking at the culture of the Port Authority here as well. This Port Authority has a certain culture. They are inclusive. Their budget is $7 billion, more than 26 states, and we need transparency there.

COSTELLO: Can I just-


COSTELLO: OK, let's talk more about transparency because the lieutenant governor says these allegations are illogical. And if you look at some of the evidence, they do appear to be illogical. As recent as August of 2013, the mayor of Hoboken, Dawn Zimmer, sent a tweet out and she said, "to be clear, I'm very glad Governor Christie has been our governor. I'm not endorsing because of Hoboken's nonpartisan mayoral race." And then there's a serious of tweets from November of 2012. All are very complimentary of Governor Christie. The housing authority has power. Thank you President Obama and Governor Christie for the teamwork that brought us this result. Thank you President Obama and Chris Christie just secured 10 battery trailers to us work (ph) through the night, a direct result of your teamwork. Nowhere does Dawn Zimmer ever criticize the governor's administration for withholding funds. Why would that be?

HUTTLE: Well, you know, this mayor of Hoboken has done everything to help her city get back after they were devastated by Sandy. And again, you know, she has contemporaneous notes in her diary is not for us to say whether they're true or not until we get all the facts. But I will tell you that this mayor has been a reformer, she's been a supporter of Governor Christie, which makes it very -- which raises the level of concern and suspicion if he is a friend --

COSTELLO: But you say - but you say, assemblywoman, spontaneous notes in her diary, but we don't know when that diary was written.

HUTTLE: Exactly.

COSTELLO: It could it have been written yesterday.

HUTTLE: Exactly. And that is why it's difficult to comment on this until we get the facts. And right now they are in the hands of the U.S. attorney at their request. So the U.S. attorney is taking this very seriously. So will the committee looking into anything that is an impropriety of the violation again of public trust.

COSTELLO: Well, let me throw one more thing -- January 11th, CNN did an interview with Mayor Zimmer and she told CNN on that day she did not think any Sandy relief funds were withheld because of anything. And this was after bridge-gate, right? So she could have come out at that point and said, wow, I think I've been affected by this too. But she didn't. That's why a lot of people are saying, it just doesn't make sense. It defies credulity.

HUTTLE: Whether it makes sense or not, this mayor has come forth. She has said that she would take a lie detector test. Whatever that is, that's up to the mayor to defend herself.

COSTELLO: She said she would take a lie - she said she would take a lie detector test?

HUTTLE: Yes, she did. So these are the mayor's words. And what we as a committee, a legislative committee, is a fact finding committee. We need to get the facts. We cannot draw conclusions at this point. It's much too early. And, therefore, we need to get all the information and make - and have the - you know, the appropriate inquiries. And this governor has said he would cooperate with the inquiries. You heard the lieutenant governor. I'm sure she will be cooperating with the inquiries as well. And once we get all of the answers, what we need is the truth. We need to understand what has happened, what has occurred, is this a pattern and that's what we're there for as an investigative, legislative body representing the people of New Jersey, getting answers because these are what we deserve, the answers.

COSTELLO: But - but you can see why some people, especially Republicans, saying this is turning into a Democratic witch hunt. And I want to play an interview done with former Mississippi Governor Haley Barbour. He was on "New Day" and he addressed these latest allegations. Let's listen.


HALEY, BARBOUR (R), FORMER MISSISSIPPI GOVERNOR: No, I'll tell you what it gives me concern about, that the news media is willing to leak at any farfetched story with the basis in fact unbelievable. This is a lady mayor who asked for 142 -- $127 million of hazard mitigation money from the governor to give that to her from the federal money when the state was only receiving in its entirety $300 million. It is absurd to think that one town would get well more than a third of the total amount of money.

I think you got this problem. A journal that's written can be written any time. You know, I'm a recovering (ph) lawyer, but I do still remember that from when I practiced law. And why was she sending out all these tweets that have been preserved on the Internet that said one thing that was totally different from what she was saying, and then she comes back and says, well I'm hoping I'm putting enough pressure on him that he's going to fold and let me have my $127 million.


COSTELLO: I think what some people are wondering is how skeptical are these committees going to be during their investigation into these various scandals, or will it just be kind of a partisan looking into these allegations?

HUTTLE: I just want to say this, that jumped out at me, that he called her a lady mayor. She is a mayor just like any other mayor. And as far as the committee, it is a bipartisan committee and we are represented by special counsel. And everything that, yes, we're given to the committee will go through the Office of Legislative Services, which is a nonpartisan department in the state of New Jersey. Once that information is disseminated, our special counsel, Reid Shar (ph), will give us her information. Nothing as far as personal information. Anything that's related to getting the information and the facts he will share with us and we will share together on a bipartisan level.

We want to work together to get the information and make sure that we are doing our due diligence in a very fair and impartial manner. And so far this committee has been that as an extension of the transportation committee. Don't forget, it started out sending subpoenas out for the massive toll hikes and we have many questions about the Port Authority. Just to also keep in mind that I had a Port Authority transparency accountability act that this governor has vetoed. I plan on reintroducing this again. And I think we need to get to the root of the problem, again, get to the bottom of it and find out the truth.

COSTELLO: All right, thank you so much for being with me and answering all of my questions.

HUTTLE: Thank you.

COSTELLO: New Jersey Assemblywoman Valerie Huttle.

We're back in a minute.


COSTELLO: A Russian teenager is believed to be behind the malicious software used in the cyber-attacks on Target and Neiman Marcus, one security firm say it identified the malware author as a 17-year old with roots in St. Petersburg, Russia.

He's accused of selling more than 40 versions of the software to hackers around the world. The warning now going out to other retailers -- be prepared for more breaches.

George Howell live in Chicago with more on this. Good morning, George.


No doubt that hack here with Target caused all kinds of headaches for customers, caused real problems for Target as well and now we know the person who made the malware made it so that it can be used again and again and again.


HOWELL (voice over): It's kind of like playing that old game whack-a- mole. First it was Target -- the security breach that compromised the confidential information of millions of Americans. Then we learned about Neiman Marcus -- the high end retailer disclosed it too had been hacked. We're still waiting for word on how many people are affected.

And now a report from the cyber watch group, IntelCrawler suggests at least six more retailers have yet to tell customers they have been breached as well with the same malware attacking their online credit card processing. So the question now, where should we look next?

KEN STASIAK, CEO, SECURESTATE: Once it's identified then the security community can rally around it and start to put controls in place. But the problem is the hackers know that so they manipulate or mutate this malware and then reuse it.

HOWELL: According to Intel Crawler the source of the malicious software can all be traced back to one place. A hacker close to 17 years old in Russia. The report claims the very first sample of the malware was created in March of 2013, hitting stores in Australia, Canada and the United States.

PAUL CALLAN, CNN LEGAL ANALYST: Let's say hypothetically a retailer has 40 million transactions by 40 million different customers. All 40 million may have been damaged in some way and under law they can be joined together in a class action lawsuit.

HOWELL: Legally the burden is on retailers to protect customer information. But from what we know now this could be the tip of the iceberg. Experts say the teen who made the malware that started this whole mess shared it with other hackers.

STASIAK: And was able to put that up on the Internet for download for other hackers to then take and potentially use it for malicious harm and that's what we believe happened to Target as well as Neiman Marcus.


HOWELL: So the bottom line here we could see a lot more of this and you know, if you find yourself the victim, the unlucky victim of credit card hacking the good news at least is according to the experts, customers are not liable for the costs incurred with this but Carol, the bigger issue here is just identity theft, just having your personal information out there to be used by someone else.

So, you know, the best advice is just always to go to those banking statements and make sure you know exactly what's on those.

COSTELLO: That's the best advice. George Howell. Many thanks.

A new scandal but the same question for Chris Christie: what did the New Jersey Governor know and when did he know it? We'll take a look at the latest accusations that the Governor's administration abused its power.


COSTELLO: Just a few minutes ago, we heard New Jersey's Lieutenant Governor adamantly deny that she threatened to short change Hoboken on Hurricane Sandy relief money. It's the latest embarrassment for Governor Chris Christie already a target of late night comics. Case in point at "Saturday Night Live" skit with Christie's bristling at questions from a faux Piers Morgan.


UNIDENTIFIED MALE: I'm very curious about how these new allegations that you withheld Hurricane Sandy funds to punish the Mayor of Hoboken.

UNIDENTIFIED MALE: Oh really you're curious? We'll let me ask you a question Piers. How long is your drive to work?

UNIDENTIFIED MALE: I don't know maybe 15 minutes.

UNIDENTIFIED MALE: Well that's a nice commute. It would be a real shame if something were to happen to it.

UNIDENTIFIED MALE: Governor, are you threatening me?

UNIDENTIFIED MALE: I don't know. Am I?


COSTELLO: CNN's Erin McPike is in Trenton. And our CNN national political reporter Peter Hamby is in Washington. Erin I want to start with you.

The Lieutenant Governor says this whole thing is just illogical, she categorically denied everything. What are people saying in Trenton?

ERIN MCPIKE, CNN CORRESPONDENT: Well Carol what they have been saying for the past couple of days. The Christie administration put out a statement and a fact sheet saying that this was completely false. As you mentioned, the Lieutenant Governor said it was illogical. She also said it was particularly offensive as a Sandy victim herself.

COSTELLO: And Peter, it's interesting. The Governor is not exactly hiding. He -- well I guess you could argue he kind of is hiding and kind of not. He went to Florida to raise money for the Republican governor there, Rick Scott. Nobody really saw him. But I do have word that he was greeted warmly by Republican supporters.

PETER HAMBY, CNN NATIONAL POLITICAL REPORTER: Yes Carol I mean I've talked to people in the room with this fundraiser and they say that you know this story has actually really added to the interest in Chris Christie frankly among in the financial class of the Republican Party. There were a number of fund-raisers in Florida. Most of them were for the re-election campaign of Governor Rick Scott of Florida. Christie is the chairman of the Republican Governor's Association.

And if you talk to people in the rooms at these meeting he said over and over again, you know, the focus is on winning in 2014. That's what the job is supposed to be and frankly this is what he was supposed to be the doing. He is the head of a fundraising committee raising funds for campaigns.

The most interesting event over the weekend Carol was an event in Palm Beach at the home of Home Depot founder, Ken Langone and a lead GOP donor, long-time Christie fan. He invited a bunch of financial supporters of the Republican Party to his home just to meet Christie. This wasn't a fund-raiser, per se. I talked to people in the room. And there were some big names in the room. Jack Welch was in the room; Al Hoffmann, a big George W. Bush fundraiser was in the room; Ray Kelly, the former New York Police Commissioner was in the room. I talk to folks in the room they say Christie you know was upbeat. He punted on questions about 2016. He was asked over and over about this. And he said, again, the focus is on 2014. But his mood, according to people in the room, was actually pretty good. So you know this is the first of many upcoming fundraising trips that he's going to have as chairman of the RGA -- Carol.

COSTELLO: All right Peter Hamby, Erin McPike many thanks. NEWSROOM will comeback in a minute.


COSTELLO: Amazon is betting it knows what you want even before you click your mouse to order it. So the Internet giant now has a new patent in hand as it charters into new territory called "anticipatory shipping".

CNN's chief business correspondent Christine Romans is here to tell us all about it -- interesting.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Carol, it can read your mind. It can look at all the kinds of things that you look at online and what your previous wish lists and shipping orders are and figure out what you want before you even place the order. That would make shipping time so short right?

I mean think about it Amazon wants to have this big pipeline of stuff moving all the time and actually kind of gauge what you want before you even order it. They filed for this patent. And when you look at a picture at one of the diagrams as many pages of this patent you can see they want to have these hubs where they are moving things they think you want closer to you and maybe even get there before you actually press the "buy" button.

They can even we're told see how long your cursor hovers over an item thinking maybe you're that close -- that close to pulling the trigger on it -- Carol.

COSTELLO: Yes but what if I don't really want that stuff?

ROMANS: Well here is the interesting thing maybe it's cheaper for them just to let you have it anyway than send it back, the shipping to send it back or maybe they are going to keep it very close. They are going to stage these things close to where you are so that it would be easy for them to get it back to a warehouse.

It's almost like thinking of it the way the utility thinks of water or electricity, the consumer goods that we use. They are going to use their algorithms to try to figure out what we need, when and get it to us super, super, super quickly. Why would you have to go to the store again if they can read your mind like that Carol?

COSTELLO: That's kind of scary but fascinating.

ROMANS: It's fascinating.

COSTELLO: Christine Romans, thanks so much.

The next hour of CNN NEWSROOM starts now.

Good morning. I'm Carol Costello. Thank you so much for joining me.

Can Americans stay safe in Sochi? The Olympic Games are just a few weeks away and security remains the number one concern.