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EARLY START

Sony Hack Attack: Theaters Face Terror Threats; Pakistan in Mourning; Sydney Hostage-Taker Had Gun License; Obama Signs $1.1 Trillion Spending Bill; Cheap Oil Spooks Stocks; Russian Ruble Continues to Plunge

Aired December 17, 2014 - 04:00   ET

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


JOHN BERMAN, CNN ANCHOR: Breaking overnight: Cyber terror hits the movies. Theaters pulling the plug on the film "The Interview" after being threatened with terror attacks. New confidential e-mails leaked, and now lawsuits filed. We have team coverage breaking down the very latest ahead.

Pakistan in mourning. Funerals begin for the nearly 150 people killed by Taliban terrorists. Well, this morning, new information about that attack. We're live.

And then deeply disturbed. New information about the gunman behind the terror attack in a Sydney cafe. Australia's prime minister speaking out just hours ago. We're live in Sydney with the latest new information. That's coming up.

Good morning, everyone. Welcome to EARLY START. I'm John Berman. It's Wednesday, December 17th, 4:00 a.m. in the East. Christine Romans is off this morning.

And breaking overnight: Premiere canceled. New fears overwhelming the entertainment industry. The Landmark Theater chain announced overnight that the New York premiere of Sony Pictures' controversial comedy, "The Interview", that premiere has been called off. It had been set for tomorrow.

This follows a new warning from the group behind a huge cyber attack on Sony. They called themselves "The Guardian of Peace" and they threaten unspecified violence of theaters that show the interview, which is about an attempt to assassinate North Korean leader Kim Jong- un.

Now, despite the premiere cancellation, a person close to the situation tells CNN that so far, Sony has no plans to pull the film altogether.

CNN's Pamela Brown now with the latest from Washington -- Pamela.

(BEGIN VIDEOTAPE)

PAMELA BROWN, CNN CORRESPONDENT: Well, John, this morning, the FBI is investigating a threatening message reportedly from the Sony hackers promising a bitter fate to anyone who sees the controversial North Korean comedy "The Interview" set to release on Christmas Day. The message says that soon, all the world will see what an awful movie Sony Pictures has made. The world will be full of fear, remember the 11th of September 2001."

We know the Department of Homeland Security says it is assessing the threats' credibility. Officials say they're looking into this similar to how they would investigate a bomb threat. But at this point, there's no new intelligence indicating threats against theaters in the U.S.

In the wake of this threat though, the stars of the comedy, Seth Rogen and James Franco, have actually pulled out of press appearances. Multiple law enforcement sources I've spoken to say the strong suspicion is that North Korea is in the instigator of the hack and possibly outsourced it to a group elsewhere as retaliation for the movie. This morning, the FBI is scrubbing Sony's computer system, trying to gather enough evidence to be able to definitively point the finger at the hacking culprit.

But, John, these investigations are complex and nuanced. And it could be some time before we know for sure.

(END VIDEOTAPE)

BERMAN: All right. Pamela Brown for us in Washington.

There's a lot to discuss here. Sony, of course, is headquartered, the parent company, headquartered in Japan. That's a country that has had a long tense relationship with North Korea. The release of the film "The Interview", it has only increased that friction. North Korea had called the film an act of war.

CNN's Will Ripley joins us now live from Tokyo.

And, Will, at this point, what's the reaction inside headquarters to these latest hacker threats?

WILL RIPLEY, CNN CORRESPONDENT: Well, Sony executives are keeping quiet right now, we've made repeated requests to speak to them. And those requests have been turned down. We've only been told the investigation is ongoing.

But I can tell you on the ground here in Tokyo, John, there are growing questions about why Sony here allowed its American subsidiary to create this kind of a movie, considering the tense geopolitical situation and the real ramifications that could come of this.

We are told by insiders that there are very likely going to be meetings between top Sony executives here in Tokyo and the Japanese government, because the Japanese government is going to want answers why this American company was allowed to create a movie that depicts the graphic assassination of a sitting leader, a leader of a country that routinely launches projectiles towards the Sea of Japan and that Japan has been trying to hold very sensitive talks with as of late. Also overnight, John, I've confirmed new information, because many are wondering why Sony Pictures ever approved this in the first place, we know that the CEO of Sony Entertainment, Michael Lynton, actually met for quite a while with analysts from RAND Corporation. It's a nonprofit global think tank, that basically they do research about different geopolitical issues. And researchers from RAND actually gave a report to the Sony Entertainment CEO, telling him how the movie would be received by audiences here in Asia specifically, Japan and Korea. But we don't know exactly were the contents of that memo that was sent to Sony.

BERMAN: This is unbelievable. I'm a big Seth Rogen fan. But it's shocking to think there's that much discussion and really international tension over a film from a guy who was in "Knocked Up."

Will, how has this "Interview" affected the relationship between Japan and North Korea?

RIPLEY: Well, we don't -- all we know, frankly, is that North Korea is outraged. And you see the reaction. We don't know whether North Korea's role, what role if any, played in this hacking attack. But if you look at the clues, if you look at the fact that the cyber attackers, the Guardians of Peace, are threatening more disastrous things leading up to the release of this movie on Christmas Day.

They certainly are upset about "The Interview", North Korea officials, high-level officials, called it an act of war because in Asia, especially in North Korea, they hold their leaders up. The honor of their leaders is everything. And it appears now this is an attempt to defend the honor of Kim Jong-un, the leader of North Korea, in whatever means necessary to carry out whatever they plan to do next.

BERMAN: All right. Will Ripley, it's a fascinating story. We'll check back in with you in a little bit. Thanks for being with us this morning.

A lot of bad news for Sony, and now, here come the lawsuits.

Cristina Alesci is here with us this morning.

Wow.

CRISTINA ALESCI, CNN BUSINESS CORRESPONDENT: Yes, bad morning for Sony, because two former employees have filed lawsuits against Sony for failing to protect their personal information. The recent breach results in an exposed employee Social Security numbers, medical information, and pay data. They say Sony was hacked before, yet, still failed to secure its networks.

The former employees are asking the court to make the lawsuit a class action so other employees can join us. That could get very expensive for Sony. Sony shares have already taken a hit. They're down 9 percent since the hack occurred. The stock market has been down in recent days, so this may not be tied into the hack. The stock, keep in mind, is up 14 percent for the year. And the market may not get too down on Sony because which has only impacted Sony pictures which is only 10 percent of the company's sales. But there are definitely some big long-term questions about A- list celebrities not wanting to work with Sony after their information was compromised.

BERMAN: Yes, this is a very uncomfortable holiday season.

ALESCI: Exactly. Some big stars like Angelina Jolie, you know, got to see what some of the movie executives were saying behind her back. And I think a lot of celebrities may not like that.

BERMAN: Yes, not the holiday season that Sony pictures was expecting at all.

ALESCI: Not at all.

BERMAN: All right. Interesting stuff. Cristina, thanks for being with us.

North Korea making news elsewhere asking the United Nations Security Council to add torture by the CIA to the agenda for its meeting next week. Pyongyang calls the CIA's harsh interrogation techniques brutal and medieval. Now, this new move turns the tables North Korea which is already on the Security Council agenda for its human rights record. The council will consider the resolution, calling for North Korea to be brought before International Court for crimes against humanity.

Eight minutes after the hour right now.

And the funerals have begun this morning in Pakistan for the 145 people killed, murdered, in the horrific attack by Pakistani Taliban gunman. The number of dead includes 132 students, most of them under the age of 16. That death toll does not include seven terrorists who all died in the attack.

CNN's Michelle Stockman live for us now from Islamabad.

Good morning, Michelle.

MICHELLE STOCKMAN, CNN CORRESPONDENT: Good morning.

Well, again, this is a nation reeling with grief. Peshawar is a city paralyzed as funerals began last night. They went on through the night and are still going on through the day. It seems like almost everyone in the community knows someone who was killed in this attack and has been affected by this horrific incident.

The TTP has released a statement this morning, detailing a little bit more about why they committed this horrific set of murders. They are claiming it's a retaliation for civilians in areas under their control in the tribal areas within Pakistan from the military operation through airstrikes. Children in that area who have been killed.

They said that they specifically targeted children between ages of 12 and 16 who were military members' children. And they vow that these attacks will continue.

Now, the prime minister in response has said that he will lift the moratorium for the death penalty for terrorism cases. Will this be a deterrent? It's unlikely.

These attacks are blowbacks for the military campaign against the militants but to root out the militant presence within Pakistan, the military needs to take this tough stance. And so, it looks like the battle is going to continue.

BERMAN: All right. Michelle Stockman for us in Islamabad, thank you so much.

More terror news: the gunman whose siege of a Sydney cafe led to the deaths of two people had a gun license and had fallen off the government's security watch list.

Australia's prime minister is vowing to find out why they put any lessons learned in the investigation into practice.

(BEGIN VIDEO CLIP)

TONY ABBOTT, AUSTRALIAN PRIME MINISTER: I will not rest until I am confident that you are as safe as any government can possibly make you.

(END VIDEO CLIP)

BERMAN: All right. Live for us now from Sydney, CNN's Andrew Stevens.

Good morning, Andrew. What's the latest?

ANDREW STEVENS, CNN INTERNATIONAL CORRESPONDENT: Good morning, John.

Yes, Tony Abbott, the Australian prime minister, really pushing this line about making sure that everything that can be done will be done, to make sure this doesn't happen again.

Those questions you ask, most importantly, how could this have happened when we know that the gunman lived on the fringes of extremism here in Australia? He was well-known to police. He was allowed to have a gun. He had a gun license, and he was not on the terror watch list. These are the questions being asked not only by the prime minister, but by the Australian media as well.

But, John, I also want you to take a look behind you because this is the scene here in Martin Place, not far from the Lindt Chocolate Cafe. And you see there, that floral tribute continues to grow, and people -- thousands of people have been coming here all day (AUDIO GAP) sort of 300, 400 people. These people have come down to spend their regards, so much, sort of giving their regards and showing their grief with what happened just two days ago.

Also, we've had family members and friends of the slain, Tori Johnson, the manager who was killed when it looks like he tackled the gunman. Friends of his were here today. This is what they had to say.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Very aware of his role as manager, which I think has kicked into place when he's being faced with this gunman and all the lives that he was probably responsible for (INAUDIBLE) these people.

(END VIDEO CLIP)

STEVENS: So, that's the sort of sentiment that's here. There's a lot of real sadness. But there's also the solidarity which we have been talking about for the past 24 hours, how Sydneysiders are coping with this and dealing with this. And it is a very somber scene here, John, but it's also one of great dignity. And to be frank, this scene is going to continue, I suspect, for another couple of days as thousands more want to come out and contribute and share their grief with what happened.

BERMAN: I think a lot of people want to show their solidarity with each other with that city and those who suffered and those who really overcame this challenge.

Andrew Stevens for us in Sydney, thank you so much.

All right. Breaking overnight, President Obama signed a huge $1.1 trillion spending bill that will keep the federal government operating for the next nine months. The measure rolls back regulations some regulations some banks, but it does keep Obamacare funded for the deal. It also apparently has a soundtrack that we're playing right now. The Department of Homeland Security will only get money through February, which sets up a showdown over the president's executive action on immigration reform.

A federal judge in Pennsylvania has ruled that the president's executive action on immigration is unconstitutional. Judge Arthur Schwab says the president violated the separation of powers by creating a systematic and rigid process for determining which immigrants qualify to remain in this country. The finding really has no immediate impact to the president's reform. It's not clear how it might affect the measure moving forward.

Alaska's pristine Bristol Bay is now off-limits to oil and gas drilling. President Obama has banned it. The announcement covers 52,000 square miles of water that supplies the United States with 40 percent of wild seafood. The president says Bristol Bay and the surrounding waters are, quote, "too precious to put out to the highest bidder."

Fourteen minutes after the hour.

There is trouble ahead for holiday travelers in the forecast. Let's go to meteorologist Pedram Javaheri for an early look at your weather -- Pedram. PEDRAM JAVAHERI, AMS METEOROLOGIST: Good Wednesday morning to you.

Let's talk about what's happening around the Northeast. Well, fog kind of starts your morning around New York, Washington, visibility down to about two miles but work your way north of New York and to Boston, that's where the wet weather is going to be sticking around for the next day or so. Of course, north of Boston, you get some higher elevations, some decent snow accumulations.

Big story, though, across the Gulf Coast states, the next couple of days is pretty active, from New Orleans, all the way across to Atlanta, as we head into Friday. Additionally, the models had that storm system turning its way potential nor'easter across this region of the country, but at this point, it looks like it will stay way offshore, at this -- the forecast for the next couple of days for the Northeast should be light rainfall across areas of, say, Boston, gusty winds are in the forecast. While to two inches of snowfall in the southern portions of Maine, get up to the north, over four inches left in the forecast.

But again, it starts down here around Houston, to Jackson, Mississippi, several inches of rain in the forecast. A soggy next couple of days in the south.

Sending it back to you.

BERMAN: All right. Pedram Javaheri, thanks so much.

A family's fury, their loved ones shot and killed by police while carrying a pellet gun, a BB gun, inside a Walmart store. A family is now filing lawsuits after a grand jury did not indict the police officers. We have new developments, ahead.

Plus, Bill Cosby cleared by at least one prosecutor, declining to file sexual assault charges. This as his daughter breaks her silence, next.

(COMERCIAL BREAK)

BERMAN: The family of the man fatally shot by police officers at an Ohio Walmart is suing the retailer giant, also police. John Crawford's family filed a wrongful death suit after he was shot and killed by police as he held a BB gun. A grand jury decided in September not to indict any of the officers involved in this incident.

Walmart is not commenting on the specifics of the case but released a statement saying, quote, "Out of respect for everyone involved, we believe it is not appropriate to discuss the specifics of this matter, but we can say that our associates acted properly."

The family's attorney said they want justice for Crawford's death.

(BEGIN VIDEO CLIP)

SHEAN WILLIAMS, ATTORNEY: The first thing to do in a country this great is to make sure we hold accountable everybody for their actions, whether you're the police or not, whether you are a corporate giant like Walmart, we all as citizens, corporate citizens, governmental citizens, owe it to each other to make sure we treat each other with the respect, the care, the dignity, that we all deserve.

(END VIDEO CLIP)

BERMAN: The Beaver Creek Police Department also released a statement saying, quote, "We acknowledge the family's right to bring this action. We are confident the trial will be fair and impartial. We believe the evidence will prove the officer's actions were legally justified."

The city of Los Angeles is buying 7,000 body cameras for police officers in an effort to increase transparency. Body cameras, of course, have become a big issue in the wake of Michael Brown's death in Ferguson, Missouri. The mayor of Los Angeles calls the cameras a critical part of the formula to regain the public's trust in police. More than million dollars raised from private donations will help pay for these cameras.

The manhunt for a suspected mass murderer in Pennsylvania is over. The body of Iraq War veteran Bradley William Stone was discovered in the woods near his home north of Philadelphia. Officials say the ex- marine appears to have died from self-inflicted knife wounds. Stone was involved in a custody battle with his wife and is suspected of killing her and five of her relatives.

Prosecutors in Los Angeles will not to file sex abuse charges against Bill Cosby. The decision comes after just 10 days after an alleged victim Judy Huth met with Los Angeles police detectives. She's filed a civil suit against Cosby, claiming he forced her to perform a sex act on him in 1974, when she was just 15 years old. Cosby's attorneys claimed that Huth tried to extort $250,000 from Cosby before filing the suit.

Bill Cosby's daughter Evin is publicly defending her father, releasing a statement to "Access Hollywood" that reads, "He is the father you thought you knew. 'The Cosby Show' was my today's TV reality show. Thank you, that's all I would like to say."

Let's get an early start on your money now. Let's turn to Cristina Alesci, who's with us again.

Good morning.

ALESCI: Good morning.

The market is freaking out --

BERMAN: Yes.

ALESCI: -- over cheap oil.

Right now, U.S. stock futures are up, but who knows what will happen in this wild market. Take yesterday, it was a totally volatile day. The Dow closed down 112 points. It's now down 5 percent from the record high on December 5th and has dropped for six of the past seven trading days.

Investors and traders are looking at a few key factors this morning.

One, Russia's economy is in dire trouble. And its currency, the ruble, is plunging against the dollar.

Two, the Federal Reserve may tweak its language and hint at an interest rate hike later today.

And three, this is the big one as I mentioned, oil. Crude oil is $55 a barrel right now. That's a five-year low, and down almost 50 percent from the summer peak.

That's causing big concerns about global growth around the world, John. Because if countries aren't using that much oil, there is a big question as to what's going on with business growth, with consumer demand. So, that has a lot of investors and traders nervous that the global economy is not as healthy as most people thought it was.

BERMAN: No, it's a big difference between what's going on here in the United States and what's going on in the rest of the world. And that could affect the markets here in the United States. Crazy, crazy times.

ALESCI: Yes.

BERMAN: Christina Alesci, great to have you here with us. Appreciate it.

Russia is being hit hard by all of these economic factors. The ruble is just tumbling. And it has major geopolitical implications. We're live in Moscow with the latest on the Kremlin's economic free fall. That's next.

(COMMERCIAL BREAK)

BERMAN: All right. New this morning: financial upheaval in Russia, being felt all around the world this morning. The ruble is in freefall. That despite an astronomical interest rate hike earlier this week, that was aimed at propping it up.

Now, there's a lot behind this. The plummeting oil prices. One of the causes also seems to be western sanctions, and President Obama now says he is ready to sign a new round of sanctions just passed by Congress.

A lot going on in Moscow. That's where we find our senior international correspondent Matthew Chance standing by.

Matthew, a real problem for Vladimir Putin.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes. Potentially, certainly, if discontent in the public starts to spread. At the moment, he's still immensely popular. His approval ratings are 85 percent or even more. But it's the start now at what could be a very, very deep and damaging economic crisis. And it's going to be hard to see how he's going to be able to maintain those approval ratings when people start losing their jobs and can't pay their mortgages.

So, this is something that the Kremlin and Vladimir Putin is going to be looking over his shoulder at very carefully over the weeks and months ahead. So, a very difficult situation for him.

BERMAN: He has this big, you know, marathon news conference on Thursday where he'll answer all kinds of questions for hours and hours. The focus, I would imagine, much of it will be on the economy.

CHANCE: Yes, I thought so. You know, this is the major crisis affecting Russia right now. And, you know, I spoke to a lot of Russians over the past couple of days. And they've been making the connection as well, which is interesting, between the economic crisis and Putin's foreign policy. One woman telling me yesterday, you know, how come we can afford war in Ukraine, but we can't afford to pay the medical bills and the education bills in this country?

So, that kind of sentiment is still a fringe opinion, but again, as his discontent spreads, that kind of opinion is bound to catch hold.

BERMAN: Matthew Chance for us in Moscow, thanks so much. We'll check with you in a little bit.

Twenty-seven minutes after the hour.

Movie theaters threatened with terror attacks. These theaters now pulling the plug on a movie that was due out in days, that is hackers promise new violence if the film is shown. We have live team coverage next.

(COMMERCIAL BREAK)