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Abbott: Australia "Touched by Terrorism"; Taliban Kill School Kids; Pakistanis Say They'll Fight Back; Film About North Korea Causes Hacking, Political Mess; Officer Daniel Pantaleo's Abusive Past; Gas, Oil Prices Fall, Airline Prices Rise.

Aired December 16, 2014 - 13:30   ET

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


EMMA DALLIMORE, REPORTER, SEVEN NETWORK AUSTRALIA: I should say that Australia is not an overtly religious country. And there have been at times a perception or a reputation that we are not particularly inclusive. There have been some race and religious incidents in the past. In 2005, we had what were known as race riots around Sydney between young white Australians and young Middle Eastern Australians. But our Muslim leaders were some of the first people down there at martin place after this incident finished, not only expressing their sorrow but denouncing in the strongest possible terms what had taken place, saying that this person, this individual has no right to use the word Islam, let alone proclaim that he had some role in that community.

WOLF BLITZER, CNN ANCHOR: As you know, Emma, this incident came a few months back, in September. Australia actually raised its terror threat level. The government there passed tougher anti-terror laws. Police carried out several raids targeting terror suspects, supposedly they were going to go out there and behead some Australians. So there were warnings, right, that there could be these so-called lone Wolf attacks?

DALLIMORE: Very much so, Wolf. We had seen terror raids, not just in Sydney but in other major capital cities around Australia. And again, we had been warned over and over by our prime minister that we may not be immune. We watched what unfolds here in America with great interest and of course attacks in other countries like Canada. Again, everyone had prayed it would never come to our shores.

But for the Muslim community in Australia, much like the community here in the United States, it now feels like for them there is that perceived need for them to get out into the community and separate themselves again from the actions of one lone Wolf, be it that he is an extremist or mentally unwell person. But some of the members of that community are certainly fearful of what comes next. Police do confirm to us that during this siege and in the aftermath that there have been some broad threats made against the members of the Muslim community. They take all of those threats seriously. But at this stage, they do say there's nothing to suggest that there's any legitimate plan to harm anyone. And we heard in your package before this about that hash tag, "I'll ride with you." Certainly that is Australia's way of trying to make sure that there is some message of unity and peace that comes out of this and not one of hatred that follows this siege. BLITZER: Emma, thanks very much. Appreciate it. We'll stay in close

touch with you.

Still ahead, we return to our top story. Gunmen stalk a school, shooting children in cold blood. The Pakistan Taliban claims responsibility. Can they be stopped? I'll speak with the former Pakistani ambassador to the United States who's standing by live.

(COMMERCIAL BREAK)

BLITZER: Welcome back to our viewers in the United States and around the world. I'm Wolf Blitzer, reporting from Washington.

Let's get back to our top story, slaughter in Pakistan. After one of Pakistan's bloodiest days, there are defiant pledges to strike back against terrorism. But we must remember, this is a country that has been gripped by an insurgency now for more than a decade. The Pakistan Taliban, other terror groups, they've killed tens of thousands since Pakistan joined the United States in the war on terror.

We're joined now by the former Pakistan ambassador to the United States, Husain Haqqani. He's also the director for South and Central Asia at the Hudson Institute here in Washington, a think tank.

Ambassador, thanks for coming in.

Who are these terrorists, these savages that can go into a school and say, if you're below puberty, you're not going to die, but if you're 13, 14, 15, you're dead? Why would these people do that to young school kids?

HUSAIN HAQQANI, FORMER PAKISTAN AMBASSADOR TO THE U.S.: Wolf, we've already seen Boko Haram in Nigeria which does the same thing. They're all chips off the same block. They all believe in just wanting to overrun the countries where they are trying to wage wars and they want basically no one to learn anything that is modern. And they want their own way of life as they see it to be imposed on everyone by force. So they are savages. The issue is, how do we deal with it? And --

BLITZER: How? What's the answer?

HAQQANI: And what we need essentially is that there is a lot of sadness today and there's a lot of outrage in my country, Pakistan. And I share it. But we need to transform it into resolve. Pakistan has seen these attacks for many, many years. We've lost at least 20,000 civilians and more than 6,000, 7,000 soldiers fighting the menace. But unless and until we decide that all terrorists need to be eliminated and that their ideology needs to be delegitimized instead of saying they have some legitimate grievances against the West, basically no grievance actually allows something like what happened in Peshawar.

BLITZER: They don't want any education, certainly not for girls, right? HAQQANI: They don't want education for girls. They don't want

Western education. They want a specific type of education. But I don't think this was about education. This was about retaliation for the Pakistani army's very belated but brave effort to deprive them from having a safe haven in the north, where they have been ensconced for a long time. But unfortunately, Pakistan's problem has been, as Hillary Clinton put it, that you can't have snakes in your backyard in the hope that they will only bite the neighbors. Today these snakes, of course, are biting Pakistanis, and Pakistan needs to have a comprehensive strategy against all jihadi groups.

BLITZER: These children, 130 out of 141 people who were killed, 130 at least school kids, they're children of Pakistan military officers --

HAQQANI: Not all of them. A lot of them are civilians. But, Wolf, every child is your child, every child is my child. And if their father is in the Pakistani military, that's something for them to be proud of and for us to be proud of. The real issue here is it confused society where some political leaders, for their own objectives, many media leaders, have told the people of Pakistan that somehow this extremism is an outgrowth, a product of just politics. It's not. It's a mindset. And that mindset needs to be fought and competed with. And it hasn't been done. That's why we are having these attacks.

BLITZER: What is the connection between the Pakistan Taliban and ISIS, al Qaeda, al Shabaab?

HAQQANI: They all share a similar ideology. Most of them were borne out of the war against the Soviets. That's when they got military training. But since then, they've all gone on their own. There are elements within the Pakistani Taliban who actually have pledged some kind of allegiance or support for ISIS. There are others. There are factions. The problem is that this cannot be seen as like a company having another spin-off. These are people with a shared world view, but with different organizations who operate. And all of them, all of them are a problem for the whole world and for Pakistan.

BLITZER: How good or bad is U.S./Pakistan cooperation in the war on terror right now?

HAQQANI: Well, the U.S. and Pakistan have continued to struggle in having cooperation. The biggest problem is that Pakistan has not made the decision to treat all terrorist groups as equally bad. The consequence of that is, for example, only a few days ago, a terrorist group, which is believed by the Americans, by the Indians, by the rest of the world as being responsible for the Mumbai attacks just a few years ago, that group openly held its convention in the Pakistani city of Lahore. Now, that annoys the Americans. But the American government continues to give financial support to Pakistan and military support. The question is, will Pakistan be able to transfer its grief and anger into serious policy which basically delegitimizes all jihadi extremists, all Taliban, all factions of militant groups that are operating in Pakistan.

BLITZER: Ambassador Haqqani, thanks for joining us.

HAQQANI: Pleasure being here.

BLITZER: Husain Haqqani is the former Pakistani ambassador to the United States.

Other news we're following, a film about the assassination of its leader, isn't going over very well in North Korea. We'll take a look at the geopolitical mess the film has stirred up and whether it could be connected to one of the biggest cyber attacks ever on a major corporation.

(COMMERCIAL BREAK)

BLITZER: North Korea's calling it an act of war worthy of a merciless response, a film produced by Sony Pictures that portrays the assassination of the North Korean leader, Kim Jong-Un. So was that response the orchestration of the massive cyber attack on a Tokyo- based Sony Pictures corporation? Whatever the answer is, one thing is certainly for sure, controversy over the film has sparked a geopolitical crisis out there.

Here's CNN's Will Ripley.

(BEGIN VIDEOTAPE)

WILL RIPLEY, CNN CORRESPONDENT: Wolf, that cyber attack is causing huge problems for Sony Pictures entertainment's parent company, Sony, here in Tokyo. In just one week, their stocks plummeted 10 percent. There are also fears here in Japan that the growing controversy could derail sensitive talks.

(voice-over): Hackers calling themselves Guardians of Peace leaked embarrassing, sensitive insider information. They're promising more to be released on Christmas day when Sony is set to release "The Interview."

UNIDENTIFIED ACTOR: You want us to kill the leader of North Korea?

RIPLEY: The comedy is about two journalists killing Kim Jong-Un. North Korea's supreme leader reportedly infuriated. His top officials call the movie an act of war.

JEFF KINGSTON, ASIAN STUDIES PROFESSOR, TEMPLE UNIVERSITY: Obviously, Pyongyang is very upset with this movie depicting the assassination of their leader and the fact that the CEO of Sony was directly involved.

RIPLEY: Temple University Asian studies professor, Jeff Kingston, says what may be a joke to some is deadly serious to North Korea.

I was in their capital, Pyongyang, a few months ago. Pictures of their leaders are everywhere. Almost like gods, they're worshipped and honored.

(on camera): Here in Asia, defending honor is everything. So there's rampant speculation that North Korea orchestrated the cyber attack on Sony to take revenge.

KINGSTON: They're denying that they are directly involved. We all suspect they were.

RIPLEY (voice-over): If Sony suspects anything, they're not saying it publicly. A spokesman acknowledged growing speculation but would only say the investigation is ongoing.

This professor says, to understand why Sony may be hesitant to point the finger at North Korea, you need to know the geopolitics at play.

(on camera): Do you think any Japanese lawmakers would ask Sony not to criticize North Korea?

UNIDENTIFIED PROFESSOR: Maybe.

RIPLEY (voice-over): North Korea still maintains this unofficial embassy in Tokyo, while the nations have no formal diplomatic ties, Pyongyang does have some influence through political and business back channels.

UNIDENTIFIED PROFESSOR: They want to stop the movie.

RIPLEY: And while North Korea may seem distant to most of the world, its military routinely launches projectiles into the Sea of Japan. Pyongyang also admitted to kidnapping Japanese citizens in the '70s and '80s, forcing the abductees to train North Korean spies.

KINGSTON: The abductee issue is extremely politically sensitive in Japan.

RIPLEY: Tokyo and Pyongyang are in the middle of sensitive talks that Japan hopes will lead to more reunions like these from 2002 when North Korea let five Japanese abductees come home. Some fear it could all fall apart if the Sony hacking controversy escalates.

(on camera): You won't see the interview playing in movie theaters here in Tokyo. Sony has decided not to release the film in Japan. The hackers are insisting that Sony cancel the release altogether or they say the worst may be yet to come -- Wolf?

(END VIDEOTAPE)

BLITZER: What an awful story this one is.

Thanks very much, Will Ripley.

Just ahead, it's not the first time the officer at the center of the Eric Garner case has been in trouble before. We're taking a closer look at Daniel Pantaleo's past.

(COMMERCIAL BREAK)

BLITZER: The New York City police officer became nationally recognized after a federal grand jury decided not to indict him in the death of Eric Garner. That was in New York City grand jury, I should point out. He was captured on video taking down Garner in what appeared to be a choke hold. A medical examiner said that Garner's July death was a homicide caused in part by the choke hold.

But this isn't the first time Pantaleo found himself in trouble. He has been sued before for prior misconduct.

Brian Todd talked to one of the victims who won a settlement against the officer. He's joining us from Staten Island.

What happened in this incident, Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, we spoke to a man named Tommy Rice. He says in 2012, right about at this spot on Staten Island on Jersey Street, he, his brother-in-law, and another man were pulled over by Officer Pantaleo. He says he got him out of the car right here, they strip searched he and his brother-in-law right here in the middle of the street in midday. And that they humiliated him for really a lack of good evidence they had drugs in his car as the police suspected. They said -- he said that Officer Pantaleo, at the time, did go too far in humiliating him. Here's part of our conversation.

(BEGIN VIDEO CLIP)

TOMMY RICE, PULLED OVER BY OFFICER PANTALEO: Well, he pulled my boxers down, he went up, like upward motion, boom. I told him, you hit me in my testicles. He told me to shut up and does it on the right hand side and does it again. And this, at that point, he takes my shoes off, and then searched, and put me back in the van. Put my pants back up and put me back in the van.

TODD: How are you feeling at this point?

RICE: Very violated as a man. Very disrespectful. He was aggressive. He -- he just -- I just felt like as a man, I just felt bad. Because I knew at that point -- I was powerless at that point.

(END VIDEO CLIP)

TODD: We tried to get response to our interview with Tommy Rice from Officer Pantaleo through the attorney. We have not heard back. We've also not been able to get comment on this from the New York Police Department. But the top police union in New York calls Tommy Rice's lawsuit against Pantaleo baseless and frivolous. They settled with the city for $15,000 each. And Pantaleo denied the claims. In the lawsuit, he denied the claims he strip searched Tommy Rice and inappropriately touched him -- Wolf?

BLITZER: And Tommy Rice's critics, they say he has a criminal record of his own, right?

TODD: That's right. And the court documents support that, Wolf. He pleaded guilty to attempted criminal possession of a controlled substance in 1996. He pleaded guilty in 2000. So he's no angel. But he says he takes responsibility for those actions in those incidents. He says, in this particular incident, in 2012, there were drugs in the car, but the drugs in the car were not his. He didn't have any drugs on him.

BLITZER: All right, Brian's going to have more on this story coming up later in "The Situation Room."

Brian Todd, in Staten Island, thank you.

Drivers have a good reason to smile when they fill up these days. Prices at the pumps, they keep dropping and dropping, but the story is not necessarily the same for those who prefer to fly. We're going to tell you what's going on. (COMMERCIAL BREAK)

BLITZER: Oil prices plunged once again today. The price of oil now down, get this, down more than $50 a barrel since hitting its peak back in June. Gas prices are also down more than $1 per gallon since peaking in April. One place consumers are not seeing relief, however, is up in the skies, in the air, as airline prices continue to climb despite the downward trend of oil prices.

Let's get some more now. Our aviation and government regulation correspondent, Renee Marsh, is with us here now.

What's going on? Because the price of gas of oil is going down. We haven't seen any relief when we were buying tickets to fly.

RENE MARSH, CNN AVIATION & GOVERNMENT REGULATION CORRESPONDENT: And you fly a lot. I know you got back from L.A. Listen, as far as the airlines go, they're doing really well this year. They're expected to make nearly $20 billion in profit this year, and next year, the prediction $25 billion. One of the main expenses for airlines is jet fuel. And oil prices are down 40 percent in the last six months. But this year, the cost of a ticket for an airline, that is up 3 percent according to an airline trade group, and 31 percent since 2009.

So the question is, with the record profits soaring stocks, billions in baggage fees and low oil prices, why is it the cost of a plane ticket getting cheaper? Well, an airline trade group says, the cost of a ticket -- and this is from 2013 -- they say there is more to it than just fuel. They say there's taxes. Labor and other expenses make up large portions of that ticket when you buy an airline ticket. And they say they only get a sliver of profit. Instead of lowering the prices, airlines say what they are doing with this extra money is they're reinvesting it into new planes, on board technology, other perks for passengers, which, by the way, some of those perks will come with a price tag. But airlines say they don't buy fuel the way drivers do. They have long-term contracts, so the prices are locked in. Airlines in the U.S. compared to 2001, we saw that there were 10 major airlines, now we only have four. So a lot of consumer advocates are saying they are blaming those megamergers, essentially. There's less competition. Advocates say there's less chance for people to get a bargain. That's what the advocates are saying.

BLITZER: That's what the airline industry, the lobbyists here in Washington, the trade association is saying. But, you know, a lot of people are very angry at the airlines right now, cut the prices. And I suspect that's going to put pressure on lawmakers to increase airline regulation.

MARSH: Well, we've already seen Senator Schumer just this weekend. He came out saying he's calling for an investigation by DOJ, Department of Justice, as well as the Department of Transportation. Because he wants to know if the oil prices are going down, why are these ticket prices so high?

BLITZER: Rene, thanks very much. We'll continue to follow this story.

That's it for me. I'll be back 5:00 p.m. eastern in "The Situation Room."

For our international viewers, "Amanpour" is coming up next.

For our viewers in North America, "Newsroom" with Brooke Baldwin starts right now.