here's to getting to know stephen all over again. >> okay, that's the show. >> that's it for "the lead." i'm jake tapper. i now turn you over to wolf blitzer in "the situation room." have a great weekend. happening now, breaking news, calling out sony. president obama weighs in on the exploding controversy saying the studio should not have bowed to terror threats as the fbi lays blame for the devastating cyber attack directly, publicly on north korea. sony responds. the ceo talks exclusively to cnn, contradicting the president, saying he's mistaken. will sony still give audiences a chance to see the movie at the center of this drama? axis of evil, experts say the sony attack was too sophisticated to be carried out by north korea alone. did kim jong-un's regime have help? i'm wolf blitzer. you're in "the situation room."

we're following the breaking news. sony pictures now responding directly to president obama who says it was a mistake for the studio to pull its new comedy movie "the interview" amid threats from cyber terrorists. sony entertainment ceo just sat down for an exclusive interview with cnn's fareed zakaria. fareed is standing by with that. we also have our correspondents and our guests on the breaking news, including congressman adam schiff. we begin with our senior white house correspondent, jim acosta. what else did the president say about this fast-changing story? >> reporter: wolf, it's been a tough year at times for president obama. but he had a spring in his step as he delivered a stern warning to north korea saying the communist nation's leaders will pay a big price for the cyber attack on sony. >> hello, everybody. >> reporter: on the most pressing issue facing him before he leaves washington, president

obama said there will be a response for the hack attack that prompted sony to pull its movie "the interview" from theaters. >> they caused a lot of damage. and we will respond. we will respond proportionally and we'll respond in a place and time and manner that we choose. >> reporter: the president declined to specify whether that response would come in the form of sanctions or even a u.s. cyber counterattack. but he echoed the complaints from hollywood to washington that sony created a bad precedent by caving to a dictator. >> yes, i think they made a mistake. i wish they'd spoken to me first. i would have told them, do not get into a pattern in which you're intimidated by these kinds of criminal attacks. >> reporter: still the president mocked north korea's behavior as a bigger joke than the punch lines in the comedy. >> i love seth and i love james.

but the notion that that was a threat to them i think gives you some sense of the kind of regime we're talking about here. >> reporter: for the president, the confrontation with north korea comes just as he's easing tensions with cuba. mr. obama defended his decision to normalize relations with the island even as he acknowledged democratic reforms won't come overnight. >> change is going to come to cuba, it has to. >> reporter: but in a nod to cricks, the president also seemed to tamp down expectations he may travel to cuba anytime soon, something the white house didn't rule out. >> we're not at a stage here where me visiting cuba or president castro coming to the united states is in the cards. >> reporter: mr. obama started his news conference touting his accomplishments of 2014, taking a victory lap over the improving u.s. economy. >> pick any metric that you want, america's resurgence is real. >> reporter: to complaints about his executive actions, he challenged the soon-to-be

gop-controlled congress. >> at issue in keystone is not american oil. it is canadian oil. >> reporter: but he conceded big problems remain, such as the racial tensions that flared up in recent weeks after ferguson. >> there are specific instances at least where law enforcement doesn't feel as if it's being applied in a colorblind fashion. >> reporter: one thing that is worth noting about this news conference is all the questions came from women in the white house press corps. meanwhile, the president in about an hour from now will be off to hawaii for his annual family vacation. he said he has a whole list of movies to watch. but did not say whether "the interview" will be one of them. >> thanks very much, jim. let's get to that exclusive

response from sony entertainment ceo michael lynton. he sat down with fareed zakaria. this is sony's first public response, fareed. it's only on cnn. and i want everyone to hear this initial exchange you had with the sony ceo. >> the president says sony made a mistake in pulling the film. did you make a mistake? >> no. i think actually the unfortunate part is in this instance the president, the press and the public are mistaken as to what actually happened. we do not own movie theaters. we cannot determine whether or not a movie will be played in movie theaters. so to sort of rehearse for a moment the sequence of events, we experienced the worst cyber attack in american history and

perseveranced f persevered for 3 1/2 weeks under enormous stress and enormous difficulty. and all with the effort of trying to keep our business up and running and get this movie out into the public. when it came to the crucial moment when a threat came out from what was called the g.o.p. at the time, threatening audiences who would go to the movie theaters, the movie theaters came to us, one by one over the course of a very short period of time, we were completely surprised by it, and announced they would not carry the movie. at that point in time, we had no alternative but to not proceed with the theatrical release on the 25th of december. that's all we did. >> you have not caved in? >> we have not caved. we have not given in. we have persevered and we have not backed down. we have always had every desire to have the american public see this movie.

>> sounds like a pretty direct contradiction to what we heard from the president of the united states, fareed. he understands that, right? >> oh, he does. i think michael lynton is a very intelligent guy. it was a direct contradiction of what the president said. 9 he also directly contradicted something the president said which you showed. which the president said, i wish they had called me. michael lynton told me in that interview they did call the white house and spoke with senior administration officials about this decision. >> i want to play another exchange, where we go from here. this is a fascinating exchange you had with mr. lynton. listen to this. >> why not release it online in some form or the other, video on demand? >> there are a number of options open to us. and we have considered those. and are considering them. as it stands right now, while

there have been a number of suggestions that we go out there and deliver this movie digitally or through v.o.d., there has not been one major v.o.d., video on demand, distributor, one major e-commerce site that has stepped forward and said they are willing to distribute this movie for us. again, we don't have that direct interface with the american public so we need an intermediary to do that. >> so they're all scared what north korea might go after them, start hacking them, that they could launch some sort of terror attack, some reprisal, is that why no one is stepping forward to show this film? >> exactly, wolf. think about it, walmart would have to decide to stock the dvds and they would face the same issue that the movie theaters did. if it were video on demand, whether it's netflix or youtube, they have to agree to host it and recognize that they would probably be subject to a cyber

attack, malware would get into their systems. the cyber attack on sony is huge, probably talking about hundreds of millions of dollars because they scrubbed sony's computers clean, all of which has intimidated corporate america. the story really here is that nobody stood by sony, not one movie studio signed anything this solidarity with it. george clooney talks about trying to get a petition and he couldn't get one actor or director to do it. so even to get it out on video, you need partners, you need distributors who are going to be willing to do it. and so far, they haven't found them. but he did say they are in discussions and they continue to hope that they will be able to get the movie out. >> we'll see if the president's powerful words have an impact on hollywood and these other corporations around the country. fareed, excellent work. thank you so much. we'll have more excerpts from your interview coming up here in "the situation room." you can see the entire fareed

zakaria exclusive interview with the sony entertainment ceo on "a.c. 360" 8:00 p.m. eastern only here on cnn. you can also watch "fareed zakaria gps" sunday mornings, 10:00 a.m. and 1:00 p.m. here on cnn. let's talk about the breaking news with democratic congressman adam schiff of california, key member of the house intelligence committee. congressman, thanks very much for joining us. >> thanks, wolf. >> not only are you a key member of the house intelligence committee, your district in los angeles represents a big chunk of hollywood, these studios, these people who work there. so you have unique perspective on this story from all sides. do you agree with the decision by sony to pull the release of this film? >> i'm very concerned about the precedent of not releasing the imif. i hope that sony can find a way to do that. i hope some of these companies that would distribute it through on demand will step forward and do this because otherwise, it not only impacts this film but

you have to imagine that when studios think about now the next film that may parody some other dictator or parody the same dictator, they're going to think, do we want to risk going through what sony did? the best response, i think, to a dictator who doesn't want this film released is to release it all over the world, translated in multiple languages. i think they ought to push this film out as aggressively as possible. >> what about those corporations, those businesses, private enterprise, that are afraid they'll be hacked by north korea and they'll suffer enormous damage or they could be the subject of a terror attack? how concerned should they be? you're progressive ivy to the s? >> no company is immune from this. we've been seeing cyber theft of our intellectual property and our trade secrets for many years now on an extraordinary scale. this is a fact of life. and i think corporate america is going to have to decide how to respond to this.

they can respond by backing down or by saying, we won't be intimidated. i hope they choose the latter course. if they don't, they're only inviting further extortion of the kind we are seeing through this north korean attack. >> let me play another clip, this is from fareed's exclusive interview with michael lynton, the sony ceo. >> you are well-known as somebody who supported president obama. >> yes. >> were you disappointed in what you heard today? >> i would be fibbing to say i wasn't disappointed. the president and i haven't spoken. i don't know exactly whether he understands the sequence of events that led up to the movie's not being shown in the movie theaters. and therefore i would disagree with the notion that it was a mistake. it's a generally held view by the public and the press that that's what happened and maybe that's how that view was held by him. but knowing as i do the facts

and how they've unfolded, we stood extremely firm in terms of making certain that this movie would appear in movie theaters. >> what happens here? was there not enough of a dialogue between sony and the federal government? >> well, i have great respect for michael. and it looks like from what he's saying that sony feels its hand was forced. these theaters are saying, we're not going to exhibit it. i imagine there's a certain threshold you have to have in terms of exhibition to make any kind of a screening of a film successful. so i think the story is not finished yet because sony is still considering putting this film out there. it wants to get it out before the american public and the world public. the question is, will sony have partners? and sony is saying, we don't have partners. we can't do this all on our own. i think it's in our interest, it's in the white house's interest to encourage the other corporate actors to work with

sony, to have sony's back and to help distribute this film. >> because the damage that has been done to sony, that's a huge operation in los angeles and around the world, some say tens of millions, some say hundreds of millions of dollars. and people will say, it's easy for congressman adam schiff or president obama to say, just do the right thing. these businesses have to worry about their bottom line. and they're nervous about losing hundreds of millions of dollars and maybe even having their computer systems and their entire businesses shut down. >> absolutely. these are my constituents. i probably represent more of the industry than any other member of congress. you have the employees concerned about their personal privacy. you read the stories about the celebrities whose privacies were invaded. but the other studios have to look at that and say, but for the grace of god, there go i.

this is an unprecedented situation, you have a country attacking a single studio over a film. you couldn't write this stuff. nonetheless, it's a real-life concern. i think those concerns are absolutely valid. at the same time, these companies have to understand -- and i think they do -- what the impact will be if they're seen as backing down, if they're seen as allowing a dictator somewhere to decide their editorial content or their artistic content. so there's a lot at stake here. i have to think the end result is going to be the distribution of this film. >> i suspect no one is more surprised how this situation has exploded than kim jong-un himself. he's probably sitting there in pyongyang saying, how did this happen? everybody is basically cowering in the face of what north korea did. >> it's absolutely extraordinary. extraordinary that they would make such a big deal over a satire and extraordinary that thus far it's been successful. but we have to make sure that there's a different ending to this story. >> we have a lot more to discuss. i want you to stand by, including what the u.s. should

be doing about this. once again, you can seyfried's exclusive interview with the sony entertainment ceo, michael lynton in full later tonight on "a.c. 360," 8:00 p.m. eastern only here on cnn. we'll have much more on the breaking news right after this. i was out for a bike ride. i didn't think i'd have a heart attack. but i did. i'm mike, and i'm very much alive. now my doctor recommends a

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we're following the breaking news. president obama and sony now at odds over the cyber terror threat that prompted the studio to cancel the release of its new comedy "the interview." president obama calling the decision a mistake and says sony should have reached out to him before making that decision. in an exclusive interview with cnn, sony entertainment ceo michael lynton says he did reach out to the white house and that president obama's mistaken about the studio's decision. we're back with democratic congressman adam schiff of california, member of the house intelligence committee and also represents a big chunk of hollywood in los angeles. what does the u.s. do now? how can the u.s. retaliate proportionately, as the president said, against north korea? >> it's very hard. if we get in a cyber tit for tat with them, they can do a lot more damage to us than we can do

to them because of the primitive conditions in north korea and our exposure. the administration must be looking at what economic levers it can pull to make life difficult for the regimes, for the cronies that surround kim jong-un. there are ways to tighten the financial screws to them, make them pay a financial price and hopefully deter them from doing this again. but the biggest deterrent is to do what they wanted to avoid, that is the broad distribution of this film. >> the economic sanctions against north korea by the united states, they're already pretty tight. but there are some areas where the u.s. could really take steps to further punish north korea. >> there are. north korea's engaged in a lot of illegal commerce with includidrugs and other denied goods. we can go after some of that illegal export that brings in money to the regime. we've done some of that in the past. i think we'll do it with a general van vengeance now and look for other opportunities to make them feel the pain. but getting in a public fight with them or an explicit cyber

fight might undermine our own opportunities and inflict damage on our own businesses. >> you have no problem with the fbi conclusion that north korea directly did this cyber attack? >> no, i don't. i've talked to intelligence officials about it and they use levels of certainty in describing their conclusion that you don't often hear from the intelligence community. and also looking at the facts of what we've been able to crab rate seems pretty overwhelming. >> the president says there's no indication north korea was acting in conjunction with any other country. you accept that? >> i do. i haven't seen any evidence that some other countries were complicit. these actors try to -- there's no indication there were knowing partners elsewhere. this looks like purely the result of the regime making a decision and then tasking its people with implementing it. >> what about individuals outside of north korea,

subcontractors, if you will? is it possible they were involved? >> well, it's certainly possible that people outside north korea were involved. the infrastructure within the country is pretty limited. so to carry out sophisticated cyber attacks, they're going to use a combination of what they do inside the country and some combination of actors outside the country. whether those are all north korean nationals or whether they employ the services of others, i think this was probably predominantly, if not exclusively, a north korean operation. but they may have other players that are working with them. >> only china presumably could shut down that north korean computer infrastructure, isn't that right? >> well, china has the most leverage on north korea, both in terms of its infrastructure -- internet infrastructure, but also in terms of food and fuel. the question is whether we can get china to do any more than we have tried to get them to do in the past over the nuclear program. china's obviously worried about a collapse of the regem, lots of refugees having essentially a

south korean government or a western friendly korea, unified korea on its border. it's only going to go so far. but china's expressed increasing displeasure with the rogue nature of this regime and the fact that it draws american resource, naval and other, into the region which china doesn't want. if they can't control their bad boy in pyongyang, they know they're going to invite a stronger american presence into the region. >> congressman, thank you. up next, more breaking news. new details of the fbi investigation of the sony cyber attack and why officials are now calling it a game-changer. plus, why experts say north korea did not act alone. is there evidence of a new cyber terror alliance out there, a hack-sis of evil, as some are calling it? shopping online is as easy as it gets. wouldn't it be great if hiring plumbers, carpenters and even piano tuners

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we're following the breaking news of today's fbi confirmation that north korea is behind the cyber attack on sony pictures, in conversations with cnn, justice reporter evan perez,

u.s. officials are describing the attack as a game-changer. evan is joining us now with more. this is a huge deal. as you've been reporting, almost unprecedented how the fbi is reacting. >> reporter: that's right, wolf. it takes a long time normally for the fbi to decide to name and shame countries responsible for cyber attacks. you started seeing a change earlier this year when the fbi and the justice department went after the p.l.a., the chinese p.l.a. for stealing secrets from u.s. companies. what i'm told is that in the last few weeks, they've been working around the clock, weekends and nights, to try to nail down this attack to see where it was coming from and all signs pointed to north korea. the decision, wolf, came when these hackers decided that they were going to threaten attacks on christmas day, when this movie was supposed to open, threaten terrorist attacks

against movie theaters. a decision was made that it was time to name and shame north korea for this attack. >> evan broke this story 48 hours ago right here on cnn, first reporter to break the news that the u.s. government had concluded north korea was directly responsible for this cyber attack against sony pictures. good reporting, evan. thanks very much. there's more breaking news coming into "the situation room" now. another brand-new statement from sony. let's bring in brian stelter. what are you learning, brian? >> they're coming fast and furious today. what sony's just said goes a little bit further than where the ceo went with fareed zakaria earlier today. i'll read it to you. it says, after the theater owners decided not to run this movie, they had no choice but to pull it but after that decision on wednesday, we immediately began actively surveying alternatives to enable us to release the movie on a different platform. it is still our hope that anyone who wants to see this movie will get the opportunity to do so. what does that mean?

it means they are once again seeking digital distributors, maybe companies willing to let you buy this movie online and watch it for $10 or $20 or maybe even release it for free. i think everything's on the table right now. the question is, is there any company willing to help sony do this? during the commercial break, i heard from netflix, the first company that comes to mind when you think about who could release this movie to everybody all at once. netflix says, we were approached on every unconventional release by the networks and studios. as a matter of course, we don't discuss publicly the pitches, con sets or ideas that come our way. i interpret that to mean, they're not ruling it out but not discussing it publicly either. the question is, is anybody going to help sony release this movie? >> these companies are concerned about another cyber attack against them and concerned about a direct terror threat, a physical threat to employees or customers, aren't they? >> that's right. there's a number of different considerations.

one of them is this. even if a company is willing to put it online, let you pay for it for ten bucks, would any customers be willing to hand over their credit card information with the concern of hacking. >> that's a good point. brian stelter, excellent reporting. while president obama says there's no indication another country worked with north korea on the sony attack, it does leave open the question about who or what did help the north koreans. cnn's brian todd is working his sources. what are you picking up? >> reporter: tonight, officials and experts we're talking to say the footprints of this attack are not as clear-cut as they seem. they say the sony hack required a lot of skill and north korea may have operated in the shadow wi world of freelancers to pull this off. the evidence all points to north korea, according to the fbi. the computer code, algorithms, the i.p. addresses. but that's not necessarily a

clear path to pyongyang. >> it's all circumstantial evidence that can be faked. >> reporter: scott borg's security group says there were elements in the sony attack that went beyond their skill level. >> the biggest one is they were able to carry on with activities inside sony's network for so long without being spotted, moving possibly terabytes of data without anyone knowing requires a lot of skill. opening documents all over the place to download them and no one noticing, requires skill. earlier this year, there was no sign of that level of skill. >> reporter: he believes some of it may have been outsourced. but to whom. >> most likely, this was hacking talent that volunteered to help them or criminals that they

hired or someone inside of sony who provided them with all kinds of inside access. >> reporter: u.s. investigators have evidence that hackers stole the computer credentials of a sony system administrator to get inside access. but could another government have helped north korea? one analyst says another u.s. enemy may be involved. >> there are signs that suggest iran may indeed have helped because they have worked together on missile development for many years, because iran has been a major client of north korea weapons. >> reporter: cnn reached out to iranian officials about that. they didn't respond. the white house maintains north korea acted alone. >> we've got no indication that north korea was acting in conjunction with another country. >> reporter: north korea denies hacking sony. but if pyongyang pulled this off without any outside help, it would be the greatest success for their shadoww hacking group called bureau 121. >> they've been investing in their own cyber capabilities

over the last four or five years and they've had some trial runs on south korean media and banks. >> one analyst points to a key reason why other governments may not have helped with the sony attack. this analyst says these other governments probably wouldn't be foolish enough to hand any kind of attack tools to north korea given their unpredictable behavior. >> pretty good fear, i would say. the way these attacks are masked, we may never know who specifically did this in terms of outside assistance to north korea or anyone specifically inside north korea? >> that's right. as far as the individual hackers we're talking about, the footprint, the forensic trail, of course, leads to north korea, according to the fbi. but one cyber expert says if you have a sophisticated enough hacker, they could be anywhere and they can mask that malware well enough to make it look like it came from north korea. the hacker could have been in south korea and used malware to make it look like it came from north korea. >> the amazing thing about these

hackers, you only need a few of them to really do enormous demonstration, 1,000 or 2,000 people working on it but five or six who know what they're doing can cause a lot of damage. brian, thank you. while the attack on sony is getting all the attention, the u.s. has been the target of tens of thousands of cyber attacks over the past year. the u.s. government now in "the situation room" is chris frates of cnn investigations, helping us better appreciate this stapa of the story. the u.s. government has been hacked? >> that's right. re-reviewed hundreds of pages of documents on security breaches against the u.s. government. what we found was astounding. every day, the government is under attack, cyber attack. there were 61,000 hacks and security breaches throughout the u.s. government last year. >> there's an adversary out there whose job it is to break into our systems. so somebody's trying 24/7, it's

going to get much worse than it is today. >> reporter: cyber incidents involving u.s. government agencies are skyrocketing. that number hit more than 46,000 last year. >> cyber espionage is increasing at unprecedented rates. >> reporter: in january 2013, hackers hit the army corps of engineers, grabbing sensitive information. they allegedly stole data on the nation's 85,000 dams, including their locations and the potential for fatalities if they were breached. >> people were stealing hard copies of paperwork and passing it off to our adversaries. today, they can do that digitally and take magnitudes more data than they could in the past. >> reporter: in july 2013, hackers infiltrated the energy department, taking the personal data of more than 100,000 people. they lifted information including birthdays, social security and bank account numbers. >> government and industry are in a difficult battle against cyber adversaries.

there are always very sophisticated actors out there. and for them, we just have to assume that an attack could occur. so organizations need to be prepared. >> reporter: the government spent $10 billion on cyber security last year. but that can't defend against an employee who's duped into clicking on a malicious link. as one expert told me, there's no good defense against a stupid user. >> chris frates reporting for us. thank you very much. let's get more right now. joining us in "the situation room," cnn law enforcement analyst, tom fuentes, former assistant director of the fbi. also joining us, kim masters, editor at large for "the hollywood reporter" and christian whitton, senior adviser on north korean matters. i assume you accept the fbi's bottom-line conclusion, saying there's enough evidence to conclude that north korea -- the north korean government is responsible for these actions, you have no doubt about that? >> no doubt. they wouldn't put that out if they had the slightest doubt.

>> usually the fbi hedges a little bit, allegedly, suspected -- because this is flat and firm. >> well, the fbi has this habit of wanting evidence and being able to prove something. this is another example of that. when they're able to do it, they do it and they say who did it. >> when the president of the united states says there's no evidence, no indication north korea was acting in conjunction with another country, you accept that? >> yes. >> what about other individuals, not necessarily a formal nation state? >> that's possible. just as mentioned in the previous report, working with organized crime, there are organized crime groups all over the world penetrating systems all the time. we've just had that recently with groups out of russia that attacked groups here or stores here like target, home depot, banks. but this has caught everybody's attention because it's so prolific and brazen right now. but this is something that the fbi's been battling and other agencies battling this for 20 years.

i was in meetings in 1994 where we were discussing information warfare, the threat of cyber attacks on the critical infrastructure, what to do about protecting it. the fbi in the '90s established a program called infraguard which has tens of thousands of companies that they work with every day to help them look at their systems and keep track of their systems because of what it would do to the united states -- power, water, nuclear facilities, communications most of all. so these things -- this is something the government's been focused on, not necessarily resourced enough over the years, that's a different battle. but this is not a new fight or a new issue. >> it's a huge, huge priority. certainly it is right now. christian, what do you think? did north korea do this alone or did they have some other outside partners, actors, individuals, maybe even someone inside sony helping them? >> well, the fbi and the president seem to be pretty clear that it was just north korea. but frankly north korea has

helpers consistently in its electronic warfare. those helpers are in china and russia possibly in cooperation with iran. even if those governments weren't specifically involved in this attack, nonetheless they are part of helping north korea, which i think just goes to show that we can't purely be on the defensive against all of these countries. there has to be some plausible retaliation for this. unfortunately, i don't think we're going to see one from washington. >> what do you want to see? >> i want to see basically electronic warfare focus back at them. we should seek to disrupt the communications or electronic systems in pyongyang and if chinese or russian companies were involved, we should covertly target them. just to show there is a consequence. if you look through successive administrations, not only the one i served in but also the obama administration, we always talk tough after north korea does something. when they sank a south korean ship in 2010, we said we would

hold them to account. when they tested a nuclear device, the president said we have to have a swift and credible response. as soon as the headlines change, we let them off the hook. i think that will happen now. they will hit us again. >> kim, you heard the president say today he wished sony had talked with him before deciding to pull the movie. the sony ceo later telling fareed zakaria they spoke with senior advisers in the white house. but they had to pull the movie because the distributors out there, major movie theaters around the country, they didn't want to show the film. your analysis? >> i think sony sort of danced around until the theaters finally refused to show it. then they sort of pulled it from nothing. there was no place to show it. michael lynton, the ceo of sony's entertainment operations here, is correct about that. i think it's absolutely remarkable to see michael lynton from sony saying obama has it wrong. but it is correct that they didn't pull it from anywhere because there is no place to put it.

>> jim, the group behind the cyber attack issued another new statement, sent it out to senior sony executives last night, essentially demanding that the company erase any trace of the movie's existence. here's what they said, among other things, we want everything related to the movie, including its trailers, as well as its full version, down from any website hosting them immediately. what's the likelihood sony will comply with this latest demand? >> it seems right now like sony is trying to have it both ways. they're saying, if somebody would come to us and be willing to stream it, we would stream it. but at the same time, i haven't heard about any pirated copies or bootlegged copies or copies online or anything that suggests that any piece of this movie is getting out there beyond the promotional stuff that's already been released. >> at least one trailer is out there online, if you want to find it, you can watch it. >> right.

i guess they want them to -- >> yeah. they obviously are very sensitive to that one trailer that all of us or a lot of us have seen. is this a matter of insurance? you don't collect the insurance if you go ahead and release it? >> there's a lot of discussion about whether sony can do better on a bookkeeping basis by declaring the movie as a total loss as opposed to getting some sort of revenue out of it. but either way, it's going to be like a drop in the bucket of the damage that's been done. sony has had so much damage from this. let's say the movie cost $100 million. and they write that down, there's hundreds of millions more involved in trying to mop up the mess from this attack. they've got now four class action lawsuits filed against them. and they've got their relationships in hollywood. everybody's pointing fingers. george clooney is calling them out. sean penn is calling them out. there's all kinds of controversy. did sony cave?

sony says they didn't. it's a very ill-judged decision to make a movie with kim jong-un in it in the first place, named and identified as a sitting head of a foreign state. no other studio would have done it. sony did it. now they're paying a horrible price. and the whole country is being pulled into this horrible display of suppression of freedom of expression and an international incident. >> if somebody would have said at the beginning of the year, the president would have a news conference at the end of the year and most of it would be dominated by sony pictures and north korea, we would have said, what? kim, thanks very much for joining us. kim masters, christian whitton and tom. thanks very much. in this accident...

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even though president obama says sony made a mistake in cancelling the release of its film entitled "the interview." the fbi is pointing directly to north korea as the source of the cyber attack on sony pictures. with us is bruce bennett. thank you very much for joining us. sony hired you as a consultant on this movie. you saw the controversial scenes. i take it you advised them to leave the ending alone. walk us through your thinking. why did you do that? >> well, first of all, you have to be careful. i was not hired to do anything. the president of sony pictures sits on the rand board of trusties. rand asked me to talk with him as a favor, and so i took a look at the film. i told them that i thought it was coarse, it was over the top in some areas but the picture of

kim jong-un needed to get into north korea and once it made it on dvd it would in large numbers get into north korea. and there are a lot of people in prison camps in north korea that need to take advantage of a change in thinking. >> so you thought if this dvd was circulating in north korea, that could have an impact on the regime there? >> over time. it's not going to change things immediately. but the elite in north korea aren't happy with kim jong-un. he's purging people right and left, and far extreme of what his father did and inducing instability in the country. so you never know what's going to change things. >> describe, i haven't seen it, the controversial scene involving kim jong-un and the assassination or whatever. >> oh, it's not an assassination by any definition i'm familiar

with. in the movie, the reporters from the u.s. interview kim jong-un and embarrass him severely on international media and in front of the north korean people. he therefore goes after them to kill them and they flee and eventually get in a tank, thinking they're safe. he attacks them with an attack helicopter, firing rockets and machine guns at them, and they finally say wow, wait a minute, we're in a tank, we can respond and they fire a tank round at his helicopter and that does him in. so this is an act of self-defense. hardly an assassination. >> is it clear this is obviously satire or comedy or something along those lines? >> oh, yeah. they get to that decision as sort of hit the head, oh, yeah, we can do something about this. >> i understand also, correct me if i'm wrong, you had at least one conversation with a senior

state department official, maybe the envoy for north korea human rights to consult with him about what was going on, is that right? >> yeah, and the situation there when i saw the movie, i knew the state department needed to find out about it. and so he's a friend. i informed him about the movie, and he took the standard government approach. we don't tell american industry what to do unless it will endanger americans. none of us thought that was necessarily going to happen. so he said look, this is a sony choice. >> listen to this excerpt from the exclusive interview that our own fareed zakaria had with the sony ceo. >> would you make the movie again? >> yeah, i would make the movie again. i think for the same reasons we made it in the first place. it was a funny comedy. it served as political sat fire.

-- satire. i think we would have made the movie again. knowing what i know now, we might have done something slightly differently, but i think a lot of events have overtaken us in a way we have no control over the facts. >> and you're saying you still want the public to see this movie? >> we would still like the public to see this movie, absolutely. >> do you think it's going to be released and should it be released based on everything that's happened over these past few months? >> i think it should be released. again, i think kim jong-un was most concerned about it getting on dvd and getting into his country. because once his elites see it, it is going to have some effect and it's not going to be good for him. in the end, that's what they were trying to stop by stopping the release of the film. i think it's going to be hard business wise to get organizations to agree to show

it because of the cyber threat. but i think from political perspective, kim jong-un's playing politics. if we want to have a proportional response, we have to respond with internal politics. >> i suppose you, like so many others, are stunned by how this story, this situation has escalated. >> oh, absolutely. but look, it was going to happen sooner or later. some other country or north korea were going to take this kind of action. and now we have to decide, are we going to diddle around and not take action or are we going to take serious action and really convince these people from a deterrence perspective not to do it again? >> bruce bennett of the rand graduate school, thank you very much, mr. bennett for joining us. >> thank you. >> and a reminder, you can see fareed's exclusive interview with the sony ceo in full later

tonight on "ac 360" at 8:00 p.m. eastern. more breaking news. the exploding controversy over sony's decision to cancel the release of its new comedy "the interview." president obama and the sony studio ceo are publicly at odds. and president obama has been sitting down for an exclusive one on one interview with cnn's own candy crowley. i have a cold with terrible chest congestion. i better take something. theraflu severe cold doesn't treat chest congestion. really? new alka-seltzer plus day powder rushes relief to your worst cold symptoms plus chest congestion. [breath of relief] oh, what a relief it is.

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happening now. north korea blamed for the cyber attack on sony. president obama is promising a response equal to the crime. just hours after the president's news conference, he's now wrapping up an exclusive one on one interview. we're standing by for details. and sony ceo fights back. he's talking to cnn and denying his company caved to north korea's threats. we want to welcome our viewers in the united states and around the world. i'm wolf blitzer. you're in "the situation room." >> this is cnn breaking news. >> let's get to the breaking news tonight. president obama is promising that north korea will pay for the cyber attack on sony, and

he's not ready to say yet, though, what that punishment might be. he is making it clear that he thinks it was a mistake for sony to cancel the release of the movie entitled "the interview." now the head of sony entertainment is firing back. in an exclusive interview with cnn, he's denying his company gave in to north korea's threats. listen to the president's remarks and sony's response. >> sony is a corporation. it suffered significant damage, there were threats against some employees. i am sympathetic to the concerns that they faced. having said all that, yes, i think they made a mistake. >> did you make a mistake? >> no. we have not caved, we have not

given in, we have persevered and we have not backed down. we want the american public to see this movie. >> angus king is standing by along with all our correspondents. first, let's get the latest from our chief national security correspondent jim sciutto. jim? >> reporter: wolf, this was an investigation as unprecedented as the attack in many ways, both in its speed and scope. investigators from the fbi, nsa and other intelligence agencies working around the clock tracking the hackers around the world, from asia, including china to europe, latin america, even servers here in the u.s. they were eliminating other potential suspects as they went, including actors in china, iran, russia. ultimately the trail led back to north korea. the blame has been dealt. the u.s. now calling out north korea, naming the rogue nation publicly as responsible for the sony hack. in a statement today, the fbi

said "the destructive nature of this attack, coupled with it s coerceive naver, sets it apart." >> we cannot have them posing censorship here in the united states. >> reporter: routing the attack from servers from asia, including china, then europe and latin america. some servers in the u.s. were even used. still, the nsa and fbi were able to track the attack back to north korea and its government. >> think of this as dirty tricks on a global scale. this has exceeded their expectations. they always make threats. most people shrug off the threats. so threatening a cyber 9/11. >> the film is dead. they must be incredibly happy in pyongyang. >> reporter: now that the country behind those damaging key strokes has been identified, the administration is looking at

how to respond. >> they caused a lot of damage. and we will respond. we will respond proportionally, and we'll respond in a place and time and manner that we choose. >> reporter: u.s. could impose sanctions on north korea's prized military complex. and further economic sanctions, including tighter revick shuns on pyongyang's access to dollar denominated trade. the state's economic lifeline to fuel, food, and crucially weapons. still, u.s. officials are not yet calling the hack an act of terror or war. >> the cyber domain remains challenging. it remains very fluid. part of the reason why it's such a challenging domain is because there aren't internationally accepted norms and protocols. >> reporter: there are other steps the u.s. can take, such as cyber attacks on critical

systems delivered in a way that the source is unclear. but the administration also very conscious of avoiding escalation. they don't want to provoke further cyber attacks or missile tests or another nuclear test by north korea. >> jim, you spent time in china. that's the source of a lot of the cyber attacks against u.s. businesses, even some government agencies. how did the u.s. respond to what they allege that china was doing? go ahead. >> first by naming and shaming china. but that took years rather than days in this case. only recently have american companies that have been the victims of cyber attacks from china gone public, banning together saying enough is enough. until then they've been reluctant to admit they have these vulnerabilities. and they were worried it would invite further attacks. we saw that with sony and others involved with this movie.

but the real challenge is defense going forward. it's frankly difficult to defend against these attacks but also expensive. one thing that legislation before congress is trying to correct is improving the cooperation between the government and companies, the government helping companies to defend against these attacks. these attacks have been going on for years coming from china. they haven't figured out how to defend against them. >> thank you very much, jim sciutto. we're also learning more about the federal investigation into the sony cyber attack. u.s. officials have pub luckily, openly pinned the blame on north korea. our justice reporter evan perez has been getting more information. what else are you learning? >> reporter: wolf, behind the scenes, the white house, the justice department have been working on this case around the clock. the turning point is when these hackers made the threat on christmas day they were going to launch terrorist attacks if this movie opened. the decision was made that it

was time that they needed to name and shame north korea. of course, now they're trying to decide how to respond to this, wolf, because behind the scenes, the intelligence and law enforcement officials tell me that they were outraged, because north korea has managed to win basically with this attack by censoring an american movie studio, and they fear that this means there will be more of these types of attacks. >> evan perez, thank you very much for that. a new statement sony entertainment says it hopes anybody that wants to see "the interview" will eventually get a chance to see it. but the company remains firm it had no chance to cancel the release because of north korea's threats. let's hear more now with the interview from the head of sony entertainment, rejecting president obama's claim that his company made a mistake by pulling the movie. listen to this. >> the president, the press, and

the public are mistaken as to what actually happened. we do not own movie theaters. we cannot determine whether or not a movie will be played in theaters. so to sort of rehearse for a moment the sequence of events. we experienced the worst cyber attack in american history, and persevered for 3 1/2 weeks under enormous stress and difficulty. and all with the effort of trying to keep our business up and running and get this movie out into the public. when it came to the crucial moment, when a threat came out from what was called the gop at the time, threatening audiences who would go to the movie theaters, the movie theaters came to us, one by one, over the course after a very short period of time, we were completely surprised by it, and announced that they would not carry the

movie. at that point in time, we had no alternative but to not proceed with the release on the 25th of december. >> now president obama is responding to michael lynton. he wrapped up an interview with cnn's candy crowley. she's joining us now from the north lawn of the white house. how did it go, what did he say in >> i said to him, i summarized what the chairman of sony had said, that the movie distributors had come to him -- i'm sorry, the movie theaters had said we can't show this. and the president said, look, i understand, and i said i understand they were under pressure. but maybe if he had come to me, i could have talked to those movie theater chains and talked to them about it. he said it just sends the wrong signal. it's not what we need to do.

he used cnn as an example and said what if cnn was threatened because of something it said in coverage. he said we can't shut that down. he talked to white house officials that apparently sony did call, but he said they called about the hacking, not about not distributing. so the president sticks with the idea that he's sympathetic with it, but thinks it's the wrong signal. >> he seems almost liberated in these final two years. he mentioned in his news conference, he was going into the fourth quarter of his administration, crazy things happen in a football game in the fourth quarter, but he seemed willing to speak out and say what maybe he might have been more cautious about saying during the first six years. >> i think we remarked afterwards that he seemed relax. i kidded him when he came in, i said oh, my gosh, i thought we

were going to have to watch you packing, because they're off to hawaii. he said no, i'm already packed. so there's that end of the year giddiness. but i think the president is also feeling the release of -- he's not now responsible for midterm elections. he's not responsible for, you know, whether the senate majority can get this or that, because the dye is cast and he's going to be working with republicans. as you heard him say, i'll work where i can. there are things we can do business on. >> the full interview will air in its full sunday morning 9:00 a.m. eastern and at noon eastern. and i want our viewers to know, it will be candy's final "state of the union" after five years, after 27 brilliant years at cnn. candy is moving on. she's been an inspiration, a wonderful journalist and great

person over all of these years. she's been extremely helpful to me and to all of our colleagues here at cnn. we're going to miss you. thanks for everything you've done. >> thank you, wolf. >> candy crowley. don't forget the full interview "state of the union" sunday morning 9:00 a.m. eastern. let's bring in a key member of the senate intelligence committee, senator angus king, the senator from maine. he caucuses with the democrats. do you agree that sony made a mistake by pulling the movie? >> it sounds to me like maybe i should invite the president and president of sony over for a beer to work this out. i agree with the general point. i think the president of sony makes a good point, it was the theaters that said we're not going to carry the film. but the president's general point is you can't give in to threats like this. and i think that's correct. wolf, i've got to say, the real

story here is the vulnerability of this country to this kind of attack. it was a movie production house. what if it had been the new york stock exchange or the power grid or the gas pipeline system? i mean, this is a huge problem. and in a sense, you know, it's a cliche to use the term wakeup call, but man oh man, this is something we've got to do. and frankly i think it's the one big piece of unfinished business from the last congress. john mccain says we're going to get on it in the first two weeks and i sure hope so. the fact that we're the most technologically advanced country in the world is the good news. the bad news is we're the most technologically dependent. so what does this tell us about our whole country's vulnerability? >> it's really chilling when you think about what these hackers could do, especially a nation state, if you will. i want to play another clip from the interview with the sony ceo.

listen to this. >> you are well known as somebody who supported president obama. >> yes. >> were you disappointed in what you heard today? >> it would be fitting to say i wasn't disappointed. the president and i haven't spoken. i don't know exactly whether he understands the sequence of events that led up to the movie not being shown in the theaters. and therefore, i would disagree with the notion that it was a mistake. it's a generally held view by the public and the press that's what happened and maybe that's how that view was held by him. but knowing as i do the facts and how they have unfolded, you know, we stood extremely firm in terms of making certain that this movie would appear in theaters. >> what does it say to you about the way this whole situation unfolded, the message it sends to cyber terrorists out there?

>> it's a terrible message, but it's one -- you know, wolf, we're getting right at this very moment, there are probably a thousand attempts to hack american businesses right now. it happens all the time. i've run into it in small businesses here in maine and large businesses. whether it's international packing or just crooks. we had target and we've had other major companies. this is a huge issue. i've been saying for the last year and a half the next pearl harbor will be cyber. shame on us if we're not ready for us, particularly having this incident occur, which is really a dress rehearsal for something that could be much more serious in terms of effect on infrastructure and those kinds of things. this is a -- what they call an asymmetric vulnerability because of our technological advancement. you know, the bad news is we're extraordinarily vulnerable. and we've got to figure this

out. one of the things -- i think one of your reporters mentioned it, there needs to be a closer area of cooperation between government agencies like the nsa and the fbi and the private sector so that when there is a threat or when they detect an intrusion of some kind, we can immediately respond with all the knowledge and information, both in the government and outside. that's what is not happening right now. that's what i think congress has to fix hopefully in the first couple of weeks if not the first month or so of the new year. >> yeah. stand by for a moment, senator. we have more questions on what happens next, what the u.s. should do specifically. how much of a threat to the united states is kim jong-un and the north korean regime? much more with senator king. we're following the breaking news right here in "the situation room." [ shutter clicks ] hi there! [ laughs ] -i'm flo! -i know!

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we're back with senator angus king. senator, stand by. we're getting new information about north korea's cyber warfare. i'm going to want you to react to that. south korea is now revealing details of an attack on its

nuclear power play system. let's go to seoul, south korea for all the details. cnn's kyung lah is joining us live. what are you learning? >> reporter: wolf, we need to underscore this is the very first time we're hearing about this in this country. it's coming to light just now. we have to underscore it was a successful attack. just like with sony, what investigators are saying, it was the same malware that allowed managers to get into one of the most protected government agencies in this country, the one that runs nuclear power plants. the most brazen attack coming to light just this week. a hack of south korea's nuclear power plant system. hackers posted on a blog, nuclear power plant blueprints and other secret documents. and then wrote this.

>> operation of nuclear power plant, they will destroy. >> reporter: very serious. >> yes. >> reporter: that raises some serious alarm bells with the government. >> yes. >> reporter: not just because of what was stolen, but because of what this means. they're getting better at it. while the north consistently pleads innocence, the south maintains the evidence is there. last year, south korea's banks and media companies were hacked. atms frozen, television news knocked off the air. similar malware to what ground sony systems to a halt and similar code to what led to the latest breach of south korean nuclear power plants. there's a pattern practiced first in south korea, then aim overseas. should america be prepared for north korea to try to break into these types of agencies in america?

of course, he says. even though the u.s. is one of the best prepared nations, cyber attacks are hard to protect yourself from. so they have to constantly be vigilant. >> you want us to kill the leader of north korea? >> yes. >> what? >> reporter: with sony's decision to pull thing movie, it may send a simple signal to north korea -- cyber attacks work. one concern that korean investigators here have is what could be next in america. one thing that koreans, south koreans expect that north koreans want to target is nasa, because there is nothing more, wolf, that they would love than to control the communication of the way we communicate in the united states. wolf? >> i want to be precise, that one threat issued by the north koreans to the south koreans, he said if you don't stop your nuclear power plant, you will be destroyed, is that what they're

threatening? >> reporter: that was the threat. it was the threat that if you don't do what we want, we're going to destroy your nuclear power plant. that was posted on a blog along with blue prints of that nuclear power plant. we've heard the north koreans try to threaten, whether it be the united states or south korea, they threaten. they can't follow through but they make the threat. >> kyung lah reporting from seoul, south korea, 40 miles or so from the dmz with north korea. let's bring back senator king. how much of a threat, senator, do you believe north korea poses to the united states? >> i think it's a serious threat. i felt like saying after listening to that report, i rest my case. this stone thin this sony thing, it's a movie and it's devastating for the people at this company, but what if it was a nuclear power plant

or the new york stock exchange or our banking system? this is real stuff, wolf. we're focusing on north korea, but there are other countries around the world with this capacity and are using it. sometimes just for good old theft of intellectual property and sometimes money. but the national security implications of this are extreme. i mean, i don't want to scare people, but this is something that we have to attend to. one of the other problems is, it can be done relatively cheaply. you don't have to build a huge missile complex or complicated weapons or anything else. you just have to have some really smart, diabolical people with a laptop on the network. this is one of the threats. this is one of the disadvantages of the 21st century. we have to learn how to deal with it and defend ourselves and that's one of our great challenges in the next couple of

years. >> what other countries are you talking about? >> well, we know china is doing this in a very serious way, not necessarily in a national security way but more on intellectual property. iran has this capacity. we know the russians have this capacity. those are ones that we know for sure, along with north korea. and then the other thing, you know, it's like talking about terrorism. what about some guy in a basement in peoria who decides it would be fun to stop all the stop lights in chicago. there's a sort of internal threat. i don't necessarily call it terrorism. but again, this is a vulnerability based upon our technological dependence, which makes our -- enriches our lives tremendously, but this is the down side of it. i think it's something that's going to be happening more frequently. we're going to have to do -- and there's never going to be 100%

defense. there's never going to be total assurance. i think there are more things we can do when you combine the knowledge and expertise in the private sector and what we know in the public sector in the government. we've got to face this, i think, as one of the most, if not the most serious threat that this country faces right now. >> i've heard cyber warfare government experts tell me their nightmare scenario is the u.s. power grid. here's the question -- is that vulnerable? >> you know, i'm not an expert. i know there are plenty of people working on making it not vulnerable. but i suspect sony probably thought they had good defenses, too. that's the concern, the power grid, gas pipelines, the new york stock exchange. the financial system. all of those things. i can't say whether it's vulnerable or not. but i don't think anybody can say to a certainty that they're

invulnerable. i think we have to start with the assumption that, a, this is a serious threat. b, we have to deal with it in a timely way. we don't have two or three years to think about this. and it's going to take the best resources we can muster, both in the private sector and the public sector, in order to defend ourselves. >> what do you want the u.s. to do now to north korea? >> i think, again, i'm not making these decisions, but i like the president's response that there will be a proportional response at a time of our choosing. i'm guessing there's going to be some kind of cyber response. one of the problems is, this is essentially a hermit country. there's not a lot of things -- we can't cut off aid or remove our ambassador or cut off banking system. but they're engaged in a lot of enterprises around the world and i think we might have an opportunity to disrupt that are

bringing money into the country that i think -- i suspect there's some people in washington right now who are thinking about networks that may be disrupted, financial networks that might be disrupted and make them pay a price. i think they do have to pay a price. i think the president made that clear today. wolf, i don't want to leave without echoing your comments to candy. frankly, i don't know how we're going to have a presidential election without candy crowley. it just won't seem the same. so i also want to add my thanks to her for the great work she's tone over the years in keeping us all informed and asking the right questions at the right time. >> well said indeed. we're all going to miss candy here at cnn. but she's moving on to a new captor aai chapter and we wish her only the best. senator, thank you very much for joining us. >> thanks, wolf.

much more on north korea and this threat against the united states. what should the u.s. be doing? we're also checking in, this is a new protest under way against police tack ttics happening rig at the nypd. the new york police department headquarters in manhattan. and hearing about a counterprotest with people supporting police in new york city. we'll update you with what's going on. that and a lot more when we come back.

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to show the film despite threats by north korea. let's bring in gloria borger, jeffrey toobin and dana bash. thank you very much for joining us. jeffrey, there's been a lot of this back and forth all day today between the president and sony about the decision to pull the film. president obama said he wished sony had called them, sony pushing back to our own fareed zacaria saying he didn't have much choice. how much blame goes to sony and how much to the theaters? >> this is really the decision of the theaters. since 1948, a supreme court decision, movie studios are not even allowed to own theaters. so this was not sony's decision. but i think this misses the main point, which is that sony has been left out twisting in the wind by the other entertainment

companies, who have not stepped up and shown any solidarity at all. where is disney? where is comcast universal? where is our parent company, time warner? you know, these are the people who are really at risk. do you think north korea is going to stop with this one movie? this just shows that these companies have acted in a small minded way, in a shortsighted way when it's not just the government that has to respond, it's all americans and all companies to strike back at this threat. >> gloria, so much of the president's end of year news conference today was dominated by sony and north korea. >> yeah, it was, because it's a story that everybody is interested in and understands, and everybody understands the danger of cyber attacks, except perhaps congress, which hasn't acted or legislation yet. i think what the president was doing here, wolf, was kind of

belittle north korea. obviously to answer these questions, and he spoke his mind quite honestly about sony, but he was saying don't they get this was a seth rogan comedy? and yes, we'll respond in a proportional way, but it's going to be at what he says a time and place of our choose. so belittling north korea at the same time saying, you know what, guys? come on, we're going to respond. >> he also said he was hoping that despite the fact that republicans are going to be the majority in the house and the senate, there might be in these final two years, as he called it, the fourth quarter of his administration, some cooperation. does that look realistic? >> there might be some cooperation. but i think at the beginning of the fourth quarter, you're going to see a lot of attention, for sure. the first thing that the congress is going to do, the republican congress, is pass the keystone pipeline, approving the keystone pipeline.

the president said today in the press conference, he leaned very far into the concept of vetoing that bill. >> he didn't say he would, he just said this is canadian oil. i don't know if he appreciated how much he's angering the canadians, american's number one ally. why wouldn't he want to help the canadians? because that would be a significant benefit for the closest ally the united states has. >> he's much more focused on u.s. domestic issues than our relations with canada. but i think the other thing that i gleaned from what the president said, the "yeah, but" on keystone was talking about the fact that he doesn't think it would create that many jobs. but there are job creating legislative ideas that they have out there, like infrastructure. i know that sounds like a yawner. but this is actually something where you have the most conservative republicans, and the most liberal democrats already talking about

legislation that they can do together to build more roads and bridges. that is something they have bipartisan agreement on. >> this is a president, you would have not heard him do his preveto he did about keystone today during the midterm elections. he feels that the burden of all of his tactical responsibilities as the cheerleader in chief for democrats in the midterms are kind of lifted and it didn't do them any good, by the way, his restraint. now what you saw today is a president who said i have an agenda and legacy. i'm going to go down my list and check it and get these things done. >> you've seen it this week with cuba and everything else. >> if i could just jump in here. look at the three issues he's picked since the midterm elections. immigration reform, the global warming, and opening up relations with cuba. all of which are poor popular. his positions are more popular

than the republicans on those issues. >> guys, thank you very much. just ahead, there are fresh threats against sony right now. what can the u.s. government do to protect companies from cyber terror? as she prepares to leave congress, is michele bachmann rehearsing for a new gig? >> i look incredible. i'll wear your grand dad's clothes. i got $200 in my pocket and i'm going to the surf shop down the road. people with type 2 diabetes

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for a free quote today,call liberty mutual insurance at see car insurance in a whole new light. liberty mutual insurance. breaking news tonight here in "the situation room." on the cyber attack against sony. hackers made new threats against the company today before the u.s. publicly accused north korea of being directly responsible. let's bring in cnn's law enforcement analysis tom fuentes, our intelligence and security analyst bob baer and ryan stelter. let's talk about this statement, you've been reporting on the message that sony received from

this hacking group, presumably north korea. what's the likelihood sony will capitulate to these latest demands? >> the threat from the hackers last night, wolf, was sent to a couple dozen sony executives that landed in their e-mail boxes. some of these executives did not open it. but what we know the message said is essentially you did the right thing, you did the wise thing. now don't you dare release any portion of this movie. the hackers even said, take the trailer offline. we don't even want to see the trailer online. but so much has changed. we know that sony is in new talks with digital distributors to get this movie online. netflix are not denying the possibility. in the next few hours or days, wolf, we may hear this movie is coming out. >> that's interesting, brian. tom, if the movie doesn't come

out, what message does that send to aspiring hackers? >> it says we've caved and we'll cave again. but this kind of extortion has been going on for decades. it's a constant interplay, whether it's an attack on banks or retail stores. this has always been a concern since the early '90s that this threat would happen. >> bob, is it fair to say that cyber terrorism represents the greatest threat facing the united states? >> i think it does. the fact that this is a state that launched this, not a simple hacker. it was so systemic and destructive in the fact that it's affected the american media is huge. i think the north koreans right now are capable of doing anything. i call it a criminal regime. it's irrational. they are capable of attacking nuclear plants, power plants. if we escalate, we'll probably

see more of it and we are not prepared to meet this threat. >> tom, you're a former fbi systems director. is the government doing enough to protect the american people when it comes to cyber terrorism? >> wolf, this has been a battle for two decades of trying to convince congress and office of management and budget and everyone that controls the resources for agencies like the fbi, who have said oh, what's the big deal, people can't do it. and the experts on the inside, the agents and technicians have said look, the united states is the most vulnerable country in the world, because we're so dependent on our computer networks. if the right hackers penetrate these systems, they could turn us into somalia. that was just considered hype and oh, no, they can't. we're just seeing one attack on one company. if we had a sustained attack on other elements of the critical infrastructure, it would be horrible. >> brian, let me play another

clip with fareed zacaria and the sony ceo. >> why not release it online in some form or the other, video on demand? >> there are a number of options open to us, and we have considered those, and are considering them. as it stands right now, while there have been a number of suggest shuns that we deliver this digitally, there's not been one major video on demand distributor, one major e commerce site that said they are willing to distribute this movie for us. again, we don't have that direct interface with the american public, so we need to go through an intermediary to do that. >> brian, you're saying that stuff is happening very quickly right now. we could see a major change within hours, right? >> i think we could. you know, sony owns a website

called crackle, but they need someone that will charge people to watch this movie, someone who will help them with subscriptions. those are the talks happening right now here at sony. >> guys, thank you very much. appreciate it. up next, congresswoman michele bachmann wraps up her career with a little bit of a rap. but first, this impact your world. >> bode miller was inspired to start turtle ridge foundation after a close friend suffered an accident that left him paralyzed from the chest down. >> i was trying to help him get revolved in sports i saw how hard it was and how little support there was for him. people who are in a wheelchair or handicapped, we provide the sporting equipment for them and sort of the environment that allows them to participate in whatever sport that is. >> once a year, skiers flock to bodie-fest on his home turf in

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the outgoing republican congresswoman michelle bachman

is known for a few things, but rapping wasn't one of them. dana bash is back with some details. michelle bachmann rapping? >> she wrapped up, pun intended, her time in congress just this past week. i spent a lot of time over the past eight years asking her tough questions but in this particular time i thought we would show the lighter side of michelle bachman, the ones we don't see. >> i think i discovered what we're going to do after congress. you're going to be a hip-hop artist. >> you found out. my secret is out. >> so give me a rap. let's hear it. >> i look incredible. i'll wear your granddad's clothes, i got $20 in my pocket and i'm going to the thrift shop down the road. >> anybody got a beat box? so nobody has to worry about petition -- competition from me. >> is this what you listen to on

your ipod? >> it is the kids. we were on i think easter vacation and our son harrison was playing this. >> how old is he? >> he is now 27. and he had it on his iphone and it was plugged into the car and we thought it was hilarious. so during the whole time over the break our family was trying to learn the lyrics to thrift shop. and that was the family joke. and so any way, now it just resurfaced as video tape often will. so i think it is hilarious. >> hilarious, it is. no question about it. she said she doesn't know what she will do next. guessing it is not a hip-hop career, but we're probably going to see her in some way, shape, or form in politics. >> does she have specific proposals, radio talk show. she is not ruling out a run for the white house. >> she did for 2016. i asked her specifically.

>> and she flatly -- >> she said she wants to be involved but she won't run herself. >> thank you very much for that. dana bash reporting. let's wrap up this show with something very, very special. i want to take a moment to share with you a few words about a member of our situation room family who is about to start a new chapter in her life. we're talking about linda roth. she is in the control room right now. i have worked closely with her for 14 years. and i wouldn't be where i am today without her. she is a legendary producer here at cnn. she has worked at cnn for 26 or 27 years in the control room and the field. whenever you see me on tv reporting huge stories around the world, linda roth is with me, including war zones, whether in iraq, kuwait, all -- over the world. and most recently in israel. that is linda, running for cover with me there incoming hamas

rockets coming in from gaza, the sirens were blaring. linda has risked her life way too many times to bring all of us the news. she is really an incredible journalist. wherever we went, i could always count on linda to make me look good. more importantly than any of that, i could always rely on her to get the story, to get it right. linda is an incredibly smart journalist. she's passionate about the news. she never hesitated to ask tough questions or speak her mind as all of our other colleagues here at cnn know, she is someone who is tough, feisty, always dedicated to her job. she's got an excellent news judgment. there she is. linda, look at the camera and smile. let our viewers see how beautiful you are as well. linda roth, give her a big round applause. she's in the control room right there. she's moving on. and i want to say, linda, on bee half of all of us here in "the situation room" and at cnn, you

will be missed. because it won't be the same working here without you. you've really been an amazing asset to all of us. and as i like to say, i wouldn't be able to do this job without you. but i'm happy for you and i'm happy you will begin the next new chapter in your wonderful life. you've had a great career. she started here right out of boston university and worked her way up from very low-level -- entry-level job at cnn and she's managed to reach this position. she's done an amazing job for all of us. on bee half of all of us, once again, thank you very much. >> thank you, wolf. >> and can you follow us on twitter and follow linda rom on twitter at linda roth cnn. and go ahead and follow her. tweet us at the show. you can tweet me at wolf blitzer and tweet the show at cnn sit room. join us again on monday right here in "the situation room." you can watch us live or dvr the show so you won't miss a moment.

that's it for me. thanks very much for watching. have a wonderful relaxing weekend if you can. i'm wolf blitzer in "the situation room." erin burnett "outfront" starts right now. [ applause ] "outfront" tonight, breaking news, the president puts kim jong un on nrts vowing to -- on notice vowing to react. >> tonight sony responds. >> and a new terror alert for americans traveling during the holiday travel season. let's go "outfront." >> good friday evening to all. i'm erin burnett. "outfront" tonight, the breaking news, the president talking to north korea and sony. president obama was very blunt. he said north korea and north korea aloneau