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Tornadoes Touch Down In Northern Colorado; Cyber Attack On Federal Government; Intelligence Believe China Led Hack; NSA Increased Internet Surveillance; Militants Using Water As Weapon In Iraq; Parts Of Dam Opened For Brief Periods Daily; Interview with Air Force Chief of Staff Gen. Mark Welsh; Airman Find Location Of Militant On Social Media; War Against ISIS; Government Computers Hacked; Korean Airman has MERS; Air Force Size. Aired 1-1:30p ET

Aired June 5, 2015 - 13:00   ET

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


WOLF BLITZER, CNN ANCHOR: Hello, I'm Wolf Blitzer. It's 1:00 p.m. here in Washington, 6:00 p.m. in London, 1:00 a.m. Friday in -- actually Saturday in Beijing. Wherever you're watching around the world, thanks very much for joining us.

We start with a massive cyber attack on the U.S. federal government. Hackers broke into the computer system at the Office of Personnel Management, giving them access to the personnel records of more than 4 million Americans current and former federal employees. The FBI is investigating the hack which was uncovered during a security upgrade on that same computer system.

Our Justice Reporter Evan Perez is here with me. Evan, what kind of information may have been compromised? How serious is this cyber attack?

EVAN PEREZ, CNN JUSTICE REPORTER: Wolf, this is the mother of all cyber attacks here in the United States. We're talking about things that are sensitive enough that it would be of high value to a foreign intelligence service. Things like security clearance information that is stored in the Office of Personnel Management computer system. And we're told that, you know, this affects, as you said, 4 million former and current workers of the federal government.

And the concern here is that it goes -- this goes beyond the Office of Personnel Management, that every single -- pretty much every single federal agency was attacked in this hack and that it is the same hackers who were behind a couple of other hacks that we've seen recently. Some cyber attacks against anthem which is a major, major health insurance company. The concern among intelligence and law enforcement officials is that the Chinese are building some kind of massive data base of Americans for the use of their intelligence and for other purposes.

BLITZER: I know U.S. officials, and you've reported this, they're pointing the finger at the government of China right now. Not just some Chinese hackers --

PEREZ: Right. BLITZER: -- but specifically the government in Beijing. They issued a statement earlier this morning saying, it's irresponsible and unscientific to make conjectural trumped up allegations without deep investigation. What do you make of that response?

PEREZ: I've got to tell you, it's a little different from previous statements that we've gotten. I regularly call and contact the Chinese embassy for comments on attack -- on hack -- on cyber attacks. And they usually just flatly deny that. This one is very different because it simply says, how can you know so quickly? So, you know, what's at work here, we're told, is that the U.S. government was able to identify through the malicious software that was used to penetrate these computers. They were able to trace it back directly to China. And, again, it's some of the stuff that they've seen in other hacks. So, they were able to match that up. They believe that they know exactly where it came from.

BLITZER: All right, Evan, thanks very much for that. Evan Perez reporting.

We're also learning that NSA, the National Security Agency, privately increased its surveillance powers over the Internet over the past few years. The "New York Times" reporting that the new directives give the agency more power to monitor Internet traffic, both in and out of the United States, that they believe could be linked to foreign hacker attacks. The Obama administration approved the move as part of the NSA's warrantless surveillance program.

The revelations of the increased surveillance came from documents released by Edward Snowden. Joining us now from New York is Jane Lute. She's a former deputy secretary for the Department of Homeland Security. She is currently president of the council on cyber security.

Jane, thanks very much for joining us. Let me quickly get your thoughts on this "New York Times" revelation about Internet surveillance designed to protect the U.S. from cyber attacks. You were at Homeland Security, the Homeland Security Department, presumably when this started, when it was underway. What can you tell us about this program?

JANE LUTE, FORMER DEPUTY SECRETARY, HOMELAND SECURITY: Well, what I can tell you is that, you know, the whole purpose of Homeland Security is to help create a safe, secure, resilient place where the American way of life can thrive. And part of that includes, certainly, preventing another 911, securing borders, enforcing immigration laws, building national resilience in the face of disasters and ensuring cyber security for the nation's critical infrastructure. There are long-standing laws and treaties regarding telecommunications that every government conforms to. And every government has a right to protect its networks and systems.

BLITZER: So, are you concerned that this latest revelation could reinforce this notion that the U.S. is undermining privacy privileges of the American people, for example? LUTE: I am far less concerned about that, Wolf, than what the breach

at OPM tells us about the extensiveness of our vulnerability, that people really have just not woken up to yet. No one is immune from the kinds of attacks we've seen.

[13:05:01] There's not a single enterprise in our market today, and globally around the world, that delivers value without relying on I.T. and access to the Internet. And everyone's vulnerable and not withstanding that vulnerability, there's a lot more we could be doing to reduce our exposure and vulnerabilities. And we're not doing it.

BLITZER: OPM is the Office of Personnel Management here in Washington which monitors all the agencies, departments of the federal government. You believe China is directly responsible for this hack?

LUTE: You know, we get asked all the time. I am not privy to the investigation or the information that's going on. Frankly, I'm far less interested, at this moment, in who has done this, than in how -- what happened and how they were able to do it and how we can close that vulnerability if it exists.

I mean, we've got states, municipalities, cities around this country that hold very much of the same kind of data that we see held in the federal government across all agencies. The government has a program through Homeland Security, U.S. (INAUDIBLE) is very helpful here in extending the kind of systems like Einstein that was -- that has facilitated the identification of this malware that targeted the Office of Personnel Management. And those programs for the states and municipalities have to continue. I mean, that's something we're very interested in, understanding what happened and how it happened.

BLITZER: The ranking Democrat on the House Intelligence Committee, Congressman Adam Schiff, he tweeted this, a powerful statement. He said, it's shocking because Americans may expect that federal computer networks are maintained with state-of-the-art defenses. How vulnerable are these federal computer systems with some of the most sensitive information out there?

LUTE: There's -- there -- we're all enormously vulnerable. Again, not just federal networks and systems but state and local municipalities, private sector institutions as well. And a lot of us have been working for a long time to reduce that vulnerability.

Look, there are three -- in my view, only three interesting questions when it comes to cyber security. I mean, there's an awful lot of wand waving but really three questions to get to heart -- to get to the heart of the challenge we face. Question one, how do we architect systems we can trust from components we can't? Question number two, how do we ensure the integrity as well as the privacy of our information and our identity in an open Internet? And question number three, what will the role of government be? Government can't do all that needs doing here. We need to step up our game on hygiene and really attract and retain folks to do the upper end, the high echelon cyber security hunting that allows us to detect this malware and get after it before it does much damage.

BLITZER: Jane Lute is the former deputy secretary of Homeland Affair --Homeland Security. Jane, thanks very much for joining us.

LUTE: It's a pleasure. Thanks.

BLITZER: Just ahead, water is becoming a scarce commodity in pro- government towns in Iraq as ISIS remains in control of a major dam. We'll go there. We'll get the very latest.

And John McCain says 75 percent of the air strike missions, that the U.S. and its coalition partners are undertaking against ISIS right now, return without ever firing a weapon. So, how effective is this air war, in effect, against ISIS? We're going to talk to the U.S. Air Force chief of staff. He's standing by to join us live this hour.

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[13:11:34] BLITZER: ISIS forces in Ramadi remain firmly in control of a dam on the Euphrates River that was seized just a few days ago. By opening only two or three of the dam's 26 gates for brief periods daily, they continue to cut off water supplies to pro-government towns downstream.

Let's go to our Senior International Correspondent Nick Paton Walsh. He's joining us live from Baghdad. Nick, what's the latest on the situation involving this dam because the folks out there, including the Sunnis, obviously, they need the water?

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Wolf, I can't tell you how punishingly awfully hot it is particularly out there in the Anbar desert at this time of year. What we are hearing from the local security source is that a number of people are coming to an area to the south of there, fleeing that particular area where the water is said to be lowering is doubling. And, in fact, the water level in that river is lowering as well.

Let me explain the geography to you here. Ramadi has a dam on its outskirts. Below that downstream are thousands of civilians living off the river in three major towns there. That's where the counter attack of pro-government forces aimed at Ramadi is gathering to. Further downstream is Fallujah, also held by ISIS. Now, ISIS seems to be letting a bit of water out, potentially so it can head down to Fallujah and service their people there. But it's that sense of drought, agriculture, basic daily life that is being punished in the gap between those two ISIS held towns.

And there's one of the fears, Wolf, too, that if that water level drops fast enough, and it seems to be happening pretty quick, then it deprives pro-government forces defending the river bank there of a natural defensive moat between them and ISIS. And that could make ISIS' job of attacking them easier. Frankly, this one use of water as a weapon seems to be undermining what the government have long been talking about for weeks now as their bid to liberate Anbar of ISIS -- Wolf.

BLITZER: Nick Paton Walsh, be careful over there. Thanks very much.

An ISIS mistake apparently turned into a game for the United States Air Force. Airmen in Florida were combing through social media posts by the insurgent group when they discovered a picture of an ISIS fighter standing at his command post. They also found comments in an open forum bragging about command and control capabilities. The commander of air combat command said the airmen were able to pinpoint the location of the headquarters and destroy it less than a day later.

The U.S. Air Force has taken the lead in the fight against the Islamic state, conducting air strikes over Iraq and Syria for nearly a year. The Department of Defense reports U.S. and coalition forces launched 17 new air strikes against ISIS targets in Syria and Iraq Wednesday into Thursday.

I'm joined now by General Mark Welsh III. He's the chief of staff of the U.S. Air Force. He's also a military adviser, of course, to the secretary of defense, the National Security Council and, indeed, the president of the United States. General, thanks very much for joining us.

GEN. MARK A. WELSH III, CHIEF OF STAFF, U.S. AIR FORCE: Thanks, Wolf. It's a privilege to be here.

BLITZER: What can you tell us, first of all, about using social media to find a potential target then launching an air strike to go after that target?

WELSH: Wolf, I think it's -- it would be safe to assume that we're using everything we can to find potential targets. Everything that they do is something that potentially we can exploit. And I hope they're thinking about that.

BLITZER: Can you confirm this report that is exactly what happened as we just reported?

WELSH: Yes, Wolf, I saw -- I saw this report but I don't know anything beyond the details, as General Carlisle relayed.

[13:14:58] BLITZER: How is the air war going? You're in charge of the U.S. Air Force. We heard the deputy secretary of state, Tony Blinken, say the other day in Paris at this coalition meeting that 10,000 ISIS fighters have been killed in these air strikes. Others say maybe even more, 13,000. What's - what's your information?

WELSH: Well, I think I would relate myself - I remember John Kirby's comments a while back from the DOD statement that -

BLITZER: He was - he was the Pentagon spokesman.

WELSH: He was a Pentagon spokesman who said that the numbers really are kind of irrelevant and we are not tracking that specifically. So I think the key is, what are they able to do on the ground, what are we able to keep them from doing on the ground, how are we able to influence them over time?

BLITZER: Why are the numbers irrelevant? Because if Blinken is right and 10,000 ISIS fighters have been killed, they may have 20,000 or 30,000, that's a huge percentage of their war capability. WELSH: Yes, sir. But as you just saw in your - in the report from Iraq, they're still influencing things on the ground. They were still able to move into Ramadi. They're still threatening to use water as a weapon. So until we can stop all of that activity, this will not be successful.

BLITZER: And so - so basically what you're saying is, when he comes up with that number, and as someone, you know, old enough to remember the body counts during the Vietnam War, how do you come up with a number like 10,000, 13,000, whatever it is? And there was one report only two civilians were killed in all those air strikes, which as you well know, and you're the chief of staff of the U.S. Air Force, when you launch a strike, there's always going to be what they call collateral damage.

WELSH: Yes. Hopefully there's not always collateral damage.

BLITZER: But usually there's - there's a possibility.

WELSH: We work hard - we work hard to avoid it.

BLITZER: Right.

WELSH: But no matter how precise a weapon is, when 250 or 500 pounds of TNT hit the ground, it's not that precise. And so we take a lot of care to avoid dropping it in the vicinity where other people who are not combatants could are injured. I don't know where the number of 10,000 came from.

BLITZER: I think that's the number that's been thrown out. But, obviously, its generated a lot of buzz.

John McCain, he's the chairman of the Senate Armed Services Committee, as you well know, he repeatedly points out that these U.S. air strikes over nearly a year now, that 75 percent of the U.S. war planes go out there and they come back without dropping their ordnance because they don't have a target. Is that right?

WELSH: We only drop, as you've been seeing and reporting, 15 to 25 targets a day air strike. We fly about 125 Sorties total per day. The U.S. Air Force flies about 80 of those or so. And we're dropping about 75 percent of the weapons that are dropped in Iraq and Syria.

BLITZER: The U.S. is dropping 75 percent?

WELSH: The U.S. Air Force is flying about 70, 75 percent of those Sorties.

BLITZER: Yes.

WELSH: And I think the - Senator McCain's numbers are accurate. But remember, the intent is not to go after everything possible, it's to go after targets that we can verify, that we can validate, where we can eliminate collateral damage.

BLITZER: And so there's a difference and I want our viewers to appreciate that, between a Sortie and an air strike.

WELSH: Absolutely there is.

BLITZER: Explain the difference.

WELSH: A Sortie is an airplane that flies into the air space that's being - that's over the battle space. This could be an air refueling Sortie. It could be an intelligence collection Sortie. It could be a potential strike Sortie. And then if a target presents itself, then the strike will occur. But it doesn't happen with every Sortie.

BLITZER: Yes. So, the Sorties, they just go out there. And if there's no - if there's no capability of launching a strike, they just come back and they'll do it another day if they have a good target.

WELSH: Or there's no way to guarantee a minimal collateral damage.

BLITZER: Collateral damage, meaning innocent civilians might be in the neighborhood (ph).

WELSH: Yes, sir. Exactly.

BLITZER: And you watch that closely. But you don't have those forward spotters that McCain, Lindsey Graham and others keep talking about, which would give you more precise information on these kinds of strikes, right?

WELSH: Well, the biggest advantage to having people on the ground, whether it's j techs, soldiers, special operators, is that you know exactly where your friendly forces are versus the enemy forces. That is one of the biggest advantages for people in the air. From the air it's very easy to spot certain kind of targets. But when you get into urban terrain, for example, it's very hard to differentiate between good guys and bad guys and sometimes hard to tell who else is in a building.

BLITZER: So you're relying on, what, friendly Iraqis to tell you where these enemy guys, these ISIS forces are, is that right?

WELSH: Not in every case, but there - we are working very hard to work with the Iraqi government, government forces, to try and make sure that they help us identify the right targets to engage.

BLITZER: General, stay with us. We have more to discuss. An important conversation right now.

When we return, we'll also talk about the case of MERS on a U.S. air base in South Korea. That and a lot more coming up with General Welsh when we come back.

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[13:22:43] BLITZER: We're continuing our conversation with General Mark Welsh. He's the chief of staff of the U.S. Air Force, also a very important military adviser to the secretary of defense, the National Security Council, and the president. What do you make of this allegation that China has now hacked into the

Office of Personnel Management, stealing information, sensitive information, about 4 million Americans', federal employees and various agencies, I assume the Department of Defense as well. This is a pretty outrageous development. Very serious.

WELSH: Yes. Wouldn't be the first thing they've hacked. And probably won't be the last, which kind of highlights the importance of this cyber security, cyber defense, and the effort that the nation really needs to be collectively engaged in, Wolf.

BLITZER: How worried are you that the U.S. Air Force could be hacked?

WELSH: We're worried about it every day.

BLITZER: Has there been any evidence it has been hacked?

WELSH: Clearly there - it has happened and there's attempts daily, millions of attempts.

BLITZER: Millions of attempts?

WELSH: Absolutely.

BLITZER: By governments, by individuals?

WELSH: Yes, by - by - by both.

BLITZER: All of the above.

WELSH: All of the above.

BLITZER: So is China a main culprit, Russia, North Korea? Who's - who's doing this?

WELSH: I think all of them have been involved over time and there's other organizations and there's other people, individuals, who have been involved in doing this.

BLITZER: What are the - I mean a government like China, they get 4 million - information on 4 million federal employees. What do they do with that?

WELSH: I have no idea, Wolf. But when they downloaded the Library of Congress size files that I read about a couple of years back, I hope they read through them all and can give us the summary. I don't know what they do with all the data, but they look for things that are exploitable for the future. That's the concern that we ought to have from a national security perspective.

BLITZER: Let's go through a few other issues that I can get - get your reaction to. This report that in South Korea, at an air base in South Korea, a U.S. base in South Korea, a Korean air force member has tested positive for MERS. This is the Middle East Respiratory System virus that's very, very deadly. What can you tell us about that? WELSH: I just know that he's receiving the proper treatment. He is - he is no longer on the installation and there is no indication or symptoms indicated by anybody else. (INAUDIBLE) in touch with him.

BLITZER: Any indication U.S. air force personnel are in danger right now?

WELSH: No, sir. No.

BLITZER: You're not taking any special precautions or anything like that?

WELSH: They're doing - they've done some medical screening but there's no indication that there's a wider problem.

BLITZER: All right, that's - that's good to know. The whole notion of the U.S. Air Force right now, do you guys leading the air war against ISIS, do you have everything you need? You go to Congress. What else do you need in order to maintain this kind of operation?

[13:25:02] WELSH: Well, I think the Congress has been very supportive in giving us the funding to continue this type of operation. Over time what we need is to modernize our Air Force. We have got to be ready to do this and much more significant military operations.

BLITZER: So what's your number one priority right now?

WELSH: Modernization of the Air Force.

BLITZER: We have -

WELSH: We have - we have aging fleets -

BLITZER: Get a new generation of fighter aircraft, F-15s and F-16s. They've been out there for a long time.

WELSH: Long time. We're at a point now where our fighter fleet is averaging somewhere between 25 and almost 50 years old in the case of the A-10, for example. We have other aircraft that are -have fleets of airplanes over 50 years old. We have 12 fleets that can drive around with antique license plates in the state of Virginia that are over 25 years ago. Air Forces have to modernize to stay relevant, Wolf.

BLITZER: And you've got enough personnel. What's - what about the manpower?

WELSH: The manpower has dropped about as low as we can go and still do what we've been asked to do today even. And so we can't get any smaller unless the nation wants to reconsider how it uses its military as an instrument of national power.

BLITZER: I remember when I was a Pentagon correspondent, the work assumption was the U.S. Air Force, the Army, the Marine Corps, the Navy, they could fight two simultaneous wars at the same time. That was the mission. Is that still the mission? WELSH: No, sir, we're passed that. We - we now have a strategy that

says we should be able to fight and defeat one opponent. We should be able to deny another aggressor somewhere else in the world for some period of time and we should be able to defend the homeland simultaneously. And we are on the ragged edge of being able to do that.

BLITZER: Is your mission to degrade ISIS or to destroy ISIS?

WELSH: Our goal in the near term - there's multiple lines of effort going on right now. There's, as you know, there's a diplomatic line of effort, there's an economic line of effort, there's a counter financing line of effort and the air campaign is intended to degrade, to delay, to destroy where we can, leadership ability to finance those kind of targets and try and not get too far ahead of the other lines of effort. What we don't want to do is destroy large areas of the population, create more ungoverned space which some of these other groups can then step into and create more difficulty for the Iraqi government to manage.

BLITZER: One final question. We heard the secretary of defense, Ash Carter, say that he was really disappointed the Iraqi military showed no will to fight when they abandoned Fallujah, they abandoned Mosul. And you served in Iraq. You're familiar with what the experience of the United States military there was. What happened to the Iraqi military?

WELSH: Wolf, I think the key force is not figuring out why someone didn't fight, it's figuring out, what are they willing to fight for. They are brave men and women in Iraq, just like there are brave men and women anywhere on earth. We have to figure out what it is they are willing to fight and die for and then stand beside them as they make that effort.

BLITZER: All right. Well, thank you very much, general, for coming in.

WELSH: Thank you, sir. A pleasure to be here.

BLITZER: Thank you for your service to the United States of America.

WELSH: That's a privilege.

BLITZER: General Mark Welsh is the chief of staff of the U.S. Air Force.

The former Iraqi foreign minister, Tariq Aziz, has died. Tariq Aziz was the face of the Saddam Hussein regime during both gulf wars as the foreign minister, the deputy prime minister. I interviewed him on several occasions during the course of those wars. Tariq Aziz surrendered to U.S. troops back in 2003. He was later sentenced to death, but that sentence was never carried out. The 79-year-old died in prison.

Just ahead, new information about sex abuse allegations involving a former speaker of the House of Representatives here in Washington. A woman accused Dennis Hastert of abusing her brother. We're going to explain how this ties to the hush money scandal surrounding Dennis Hastert, right now.

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