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CNN NEWSROOM

Taliban Attack on School Kills 130; Heroism Emerging in Sydney Hostage Crisis; Sony Hackers Threatening James Bond?; Schools Closed as Police Hunt for PA Gunman; Fed Could Signal First Rake Hike Since 2008; Sydney Hostage-Taker's Digital Footprint

Aired December 16, 2014 - 09:00   ET

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


ANNOUNCER: This is CNN Breaking News.

CAROL COSTELLO, CNN ANCHOR: And good morning, I'm Carol Costello. Thank you so much for joining me.

Breaking news overnight a new attack fueled by Islamic extremism, this one killing dozens of schoolchildren in northwestern Pakistan. Taliban leaders there claiming responsibility for the siege which ended just minutes ago. All six of the Taliban commandos have been killed in gunfights with government soldiers.

So let's get the latest on this unfolding drama. Reporter Michelle Stockman in Peshawar this morning, tell us more.

Tell us more.

MICHELLE STOCKMAN, JOURNALIST: That's right, Carol. We're understanding that the military says that the siege is finally over. This has been about a six-hour process from the time that the attackers entered the school to when they announced that the final and sixth gunman was killed. They said it was a difficult operation, took some time because the Taliban terrorists basically put IEDs around the school to try and again wreak as much damage and havoc as they could.

We have some information from one of the hospitals where the dead and injured were taken. So far we understand from one of the doctors there that 31 bodies were taken there, all boys, as well as 45 injured boys. And it's understood that many of the injuries are just horrific because they were shot multiple times. This doctor says some of the students told him that the gunmen went into grades eight, nine and 10, and just began killing at random.

So this is a horrific terrorist attack here in Pakistan unfortunately. These types of terrorist attacks by the Taliban are nothing new but this attack on schoolchildren has shocked the children. Parents have gathered outside the hospital and it's their grim job right now to go and identify the children in their -- in the hospital amongst the dead and injured.

COSTELLO: Michelle Stockman, reporting live this morning, thank you.

Also this morning, Malala, and that's how we all know her, Malala, she's the Pakistani teenager who survived an attack by the Taliban while promoting education for girls, is condemning the massacre.

In a statement Malala writes, in part, quote, "I'm heartbroken by the senseless and cold-blooded act of terror in Peshawar that is unfolding before us. Innocent children in their school have no place in horror such as this."

CNN's Christiane Amanpour now joins me from London.

And you recently sat down with Malala.

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: I did, yes.

COSTELLO: It's just heartbreaking.

AMANPOUR: Yes. Obviously she is the most high profile of this kind of victim, schoolchildren deliberately shot and used as soft targets by the Taliban. She won the Nobel Peace Prize last week. It was officially awarded and we sat down with an interview. And she was very, very committed despite this horror that she would continue her campaign.

Now it's important to say that this wasn't specifically against education in the -- in that regard, but it was an army school that was, according to the Taliban spokesman, picked as revenge by the Taliban for an upsurge in attacks by the Pakistani -- military against the Taliban militants. So that's what they said, that this is in revenge for that, and they do soft targeting as we see and in this case so, so sadly, these children were victims of the wider war in which Pakistan is embroiled.

COSTELLO: So might this, Christiane, spur the Pakistan military to fight harder against the Taliban?

AMANPOUR: Well, look, this has been a very, very big question about the commitment of Pakistan over the last 13 years since 9/11. Since the Taliban resurgence in the mid-2000s, there's been a real question as to who is the Taliban, who is protecting the Taliban, and who is the military actually fighting. Who does the military consider its biggest enemy? Is it the Taliban? Is it the United States? Is it India? Who is it?

Apparently the latest and the newest military chief who has been to the U.S. was, you know, taken into many, many meetings with top U.S. officials over the last week, has actually stepped up the offensive against the Taliban. There has been a dramatic rise or so in the U.S. cooperation in that regard and drone attacks, but definitely by the Pakistani military which is why people think this attack came at this time in revenge, and to try to stop the attacks and the offensive that's being launched against the Taliban.

COSTELLO: Christiane Amanpour, thanks so much. I appreciate it.

In Sydney, Australia an outpouring of public grief at the sign of yesterday's deadly hostage standoff. And amid the morning where two hostages killed, unconfirmed stories of their heroic final moments. Tori Johnson, the cafe manager on the right, reportedly grabbed the gunman's weapon. And there are reports that Katrina Dawson, the 38- year-old lawyer, shielded her pregnant friend from the gunfire.

CNN's Andrew Stevens is in Sydney.

(BEGIN VIDEOTAPE)

ANDREW STEVENS, CNN INTERNATIONAL CORRESPONDENT (voice-over): A bed of hundreds of flowers blanket Martin Place, the site of a deadly police standoff that claimed the lives of two hostages. Each bouquet a tribute to the bravery that occurred here.

TONY ABBOT, AUSTRALIAN PRIME MINISTER: This has been an absolutely appalling and ugly incident. That's the only way I'd describe it.

STEVENS: We're learning more about the harrowing story amidst this terrifying ordeal.

After a firestorm of gunshots rang out in the heart of downtown Sydney, authorities still piecing together what set off the chain of events, forcing heavily armed police to storm the Lindt Chocolate Cafe, freeing the hostages inside.

COMMISSIONER ANDREW P. SCIPIONE, NEW SOUTH WALES POLICE: They might be called because they believe that at that time if they didn't enter Some said 34-year-old Tori Johnson, the cafe's manager, may have grabbed the hostage-taker's gun but authorities wouldn't comment on those accounts. Shots were heard from the street during the struggle, Johnson was killed. Thirty-eight-year-old Katrina Dawson, a lawyer and mother of three, also died.

Johnson's family said in a statement, "We are so proud of our beautiful boy, Tori, gone from this earth, but forever in our memories as the most amazing life partner, son, and brother we could ever wish for."

For nearly 17 hours before the crisis ended, hostages remained on edge, visible through the cafe's windows forced to hold a black flag with Arabic writing. Some held at gunpoint managing to escape. Their mad dash to safety captured on local news.

A full investigation into the mind and motives of the gunmen, a self- proclaimed Muslim cleric, is under way. Fearing a potential backlash, fellow Australians are showing support to the Muslim community online. Under the hashtag "I'll ride with you" Australian Twitter showing solidarity offering to accompany Muslims wearing religious clothes on public transport as Sydney works to return to normalcy.

(END VIDEOTAPE)

COSTELLO: Andrew Stevens reporting.

Newspaper reports in Australia say the hostage-taker had also written letters to the families of the soldiers killed in Afghanistan. A judge described those letters as cruel and sadistic. He was sentenced to community service. Still to come in the NEWSROOM, Bill Cosby's wife is speaking out in

her husband's defense, asking the question, who's the victim here?

(COMMERCIAL BREAK)

COSTELLO: As Sony continues to reel from a devastating hack attack that's embarrassed top executives along with the A-list movie stars who've made billions for the country a new threat has emerged involving the upcoming James Bond film.

CNN's Pamela Brown has more for you.

(BEGIN VIDEOTAPE)

PAMELA BROWN, CNN JUSTICE CORRESPONDENT (voice-over): James Bond appears to be battling a new enemy not on the big screen. The Sony hackers who call themselves Guardians of Peace are believed to have stolen an early version of the script for the upcoming Bond movie "Spectre" and the concern is that they will leak it to the public.

Over the weekend, the group posted online, "We are preparing for you a Christmas gift, the gift will surely give you much more pleasure and put Sony Pictures into the worst state."

UNIDENTIFIED MALE: I have a gift for you.

JAMES FRANCO, ACTOR, "THE INTERVIEW": Oh, the dog is killing me in its cuteness.

BROWN: Christmas Day is when "The Interview" is set to release, a comedy about an assassination attempt to North Korean leader Kim Jong- Un which the reclusive country has strongly condemned.

HOWARD BRAGMAN, FIFTEEN MINUTES: I don't think this is a good time to withdraw. I think it's a good time to stand your ground. They've already weathered a very tremendous attack and I think they can take more of the strong people.

BROWN: CNN has learned Sony is still deciding on whether to censor parts of the film showing the assassination for international audiences.

Federal investigators are looking into whether North Korea is behind the unprecedented Hollywood hack that has opened up a treasure trove of confidential information from Sony, and embarrassing e-mail exchanges about A-list celebrities like Angelina Jolie and George Clooney.

GEORGE CLOONEY, ACTOR: That's right.

MATT DAMON, ACTOR: Aren't we a little old for that?

CLOONEY: Yes.

BROWN: The latest leak shows Clooney was apparently upset by the bad reviews of his World War II drama "The Monuments Men," e-mailing to Sony exec, Amy Pascal, "I fear I've let you all down, not my intention. I apologize, I've just lost touch."

In a separate leaked e-mail exchange with a Sony producer, Pascal called Leonardo DiCaprio's behavior despicable after he backed out of starring on the Steve Jobs biopic last October.

BRAGMAN: I hate to see what they have up their sleeve next. But it seems to be very concerted and actually very intelligent people doing this. They know how to damage the studio.

BROWN: As the leaks continue to slowly trickle out, Sony hired renowned trial lawyer David Boies who sent a threatening letter to the media including CNN asking it to stop publishing leaked information or face legal action.

"If you do not comply with this request and the stolen information is used or disseminated by you in any matter," the letter says, "Sony will have no choice but to hold you responsible."

PAUL CALLAN, CNN LEGAL ANALYST: On the one hand David Boies on behalf of Sony is going to argue that this is stolen material, that the media is aiding and abetting a burglar into the night who's broken into a computer, stolen material, and is now trying to get the benefit of it. On the other side, though, media outlets are going to say hey, this is material of enormous public interest.

Then it doesn't matter how it came into our hands. The public has a right to know what goes on in this very important industry.

BROWN: Pamela Brown, CNN, Washington.

(END VIDEOTAPE)

COSTELLO: Still to come in the NEWSROOM, oil prices plummeting, inflation lowering and the pain at the pump easing. All signs of an economy on the mend, right? Not so fast. Why your wallet could be hit, next.

(COMMERCIAL BREAK)

COSTELLO: A manhunt now under way for a former marine reservist suspected of killing his ex-wife and five former in-laws. Some schools are closed today in Montgomery County, Pennsylvania, that's north of Philadelphia, as residents are being told to stay vigilant.

CNN's Miguel Marquez is in Harleysville, Pennsylvania, with more.

Good morning.

MIGUEL MARQUEZ, CNN CORRESPONDENT: Good morning there, Carol.

Some of the schools are closed and some on modified schedule today, because there are concerns about this individual who is still on the run. The big question is, where is he? And officials don't seem to have any good answers at the moment.

There was a sighting overnight, an individual tried to steal a car about 30 minutes from where we are northwest of Philadelphia. That caused a shelter in place for that area northwest of Philadelphia. They did not turn up anything there.

The man ran off into the woods. All this begun yesterday morning around 4:25 a.m., this is what one of the neighbors heard at one of the scenes.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I heard three or four gunshots and the kids yelling, "Mommy, no, no, mommy, no," and he just said "Let's go, we got to go."

(END VIDEO CLIP)

MARQUEZ: Now, perhaps one of the saving graces of this is that Mr. Stone is not alleged to have killed his children. He took his own two children and dropped them off at a neighbor's, but the police say what began with a 911 hang-up call, they went to three different scenes and found six different individuals deceased including his ex-wife, ex- mother-in-law, grandmother-in-law, his ex-sister-in-law, her husband, their 14-year-old daughter amazingly enough, their 17-year-old son, who is in hospital.

He is in Philadelphia in hospital and hopefully he will be fine but they are now all-out manhunt for this individual who may be dressed in fatigues.

They also released a second photo of Mr. Stone overnight, clean- shaven, Mr. Stone, saying that they had information he was clean- shaven the night all of this they suspect took place -- Carol.

COSTELLO: All right. Miguel Marquez reporting live this morning.

Checking some other top stories at 19 minutes past the hour: the parents of nine victims of the Sandy Hook massacre have filed a joint lawsuit against the makers of the gun that killed their children. The suit is claiming Adam Lanza would not have been able to killed 26 people in five minutes without his weapon of choice, a Bushmaster AR- 15. The suit says Bushmaster knew or should have known that the sale of this gun pose an unreasonable and egregious risk of physical injury to others.

Disturbing dash cam video surfacing, showing a police officer taking down and tasing a 76-year-old man in Victoria, Texas. That officer is on administrative leave. Police stopped the man to question him about an expired inspection sticker while he was seated in the police cruiser, you can hear the man say to another officer that the dealer tags on his car make it exempt from inspection. As you might expect an investigation is under way.

And teenagers may be losing some of that rebellious rep. A new study finds kids are smoking fewer cigarettes, drinking less alcohol and abusing few prescription meds. The National Institute on Drug Abuse discovered the downward trend after monitoring teen behavior over the last 20 years. In money news this morning, despite tumbling oil prices and low

inflation, there is talk amongst economists that the Federal Reserve could actually be raising interest rates and this hike could be just months away.

CNN Money correspondent Cristina Alesci joins me now.

And we've been enjoying these low interest rates.

CRISTINA ALESCI, CNN MONEY CORRESPONDENT: We have been indeed. And what's going on now is the Fed is meeting for the last time this year, and they're going to release a statement about that meeting tomorrow, and what is different this time or what may be different this time around is that we've had this language in this statement all year long that the Fed will keep rates near zero for a considerable time.

Now, many economists think that considerable time language will actually not be in this statement and so many people in the market believe that means we could see rates go up in mid 2015.

COSTELLO: Why would that happen?

ALESCI: Well, for a lot of different reasons. I mean, the economy is getting better, so specifically when you look at economic data, the U.S. is actually reaching its target on employment or jobless rate of between 5.2 percent and 5.5 percent. So, a lot of people are looking at that and saying, OK, we've achieved a jobless rate that we're comfortable with. You know, now the Fed can go ahead and remove its effective stimulus by keeping interest rates at zero percent.

COSTELLO: Got you.

Cristina Alesci, thanks so much, I appreciate it.

I'll be right back.

(COMMERCIAL BREAK)

COSTELLO: We're learning more this morning about the gunman who held hostages for 16 hours in a Sydney cafe. He had a long criminal record and equally long social media journal of hate.

Man Haron Monis was killed in that police raid, but he's left behind haunting reminders of his extremism. CNN traces of his digital footprint.

CNN's Laurie Segall has more for you.

(BEGIN VIDEOTAPE)

LAURIE SEGALL, CNN CORRESPONDENT (voice-over): "Dear Muslims in Australia, may God bless you, that you have chosen team Islam," a tweet from Man Haron Monis just four days before he took Australians hostage in a chocolate shop.

A crime committed by someone whose views are well-documented, an extremist with an established social media footprint, nearly 13,000 likes on his Facebook page, a vehicle for gaining support. It's been taken down but pages deleted from the Internet often leave a trace.

For example, his Web site, it's now removed but was once a form for expressing hate against America and its allies. He posted a letter he sent to Australia's prime minister requesting a debate on the country's role in the war in Afghanistan. On Twitter, similar messages, "Shame on those racist and terrorist Australians who support the governments of America."

And no stranger to media, he posted YouTube videos from his previous brush with the law, appearing in court in 2013 after sending messages to the families of fallen soldiers, condemning their actions overseas.

MAN HAROS MONIS, HOSTAGE TAKER: I want to send 237 baskets of flowers attached with 237 letters.

SEGALL: His last tweet linked to his Web site, with a haunting message posted the day of the attack. "If we stay silent towards the criminals, we cannot have a peaceful society. The more you fight with crime, the more peaceful you are."

(END VIDEOTAPE)

COSTELLO: Laurie Segall reporting.

I'll be right back.

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