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U.S. Investigators: North Korea Ordered Sony Attack; U.S. Man Freed from Cuba in Historic Deal

Aired December 17, 2014 - 19:00   ET


ERIN BURNETT, CNN ANCHOR: OUTFRONT tonight, major breaking news, U.S. investigators telling CNN tonight, North Korea ordered the Sony cyber-attack. Is this an act of war?

Plus Cuba releasing an American man as part of a landmark deal. The two countries re-establishing relations after more than 50 years as better enemies. So, will Congress kill this deal?

And shocking new images tonight at the aftermath of the attack in which 132 school children were slaughtered in Pakistan. Let's go OUTFRONT.

Good evening to all of you. I'm Erin Burnett. And we begin OUTFRONT tonight with the breaking news, U.S. investigators have determined North Korea is responsible for the cyber-attack on Sony pictures. Sources tell CNN that the orders to expose confidential e- mails and documents, you've seen it, social security numbers, health information all was made directly by North Korean leaders. This is a major development coming on the same day Sony is caving to the hackers and announcing tonight it is pulling the controversial new comedy about North Korea from theaters. The FBI and Justice Department determined that hackers working for Kim Jong-un, the leader of North Korea maliciously attacked Sony and shutting down its computers, phones and e-mails. Five Sony films including four unreleased were dumped online, financial and personal information of celebrities as well as Sony employees all released and this all happening after the hackers threatened a 9/11 style attack on Americans who actually physically went to theaters to see the interview when it debuted on Christmas Day. The threat said, quote, remember the 11th of September, 2001. Despite this the President speaking to ABC News and said this.


PRES. BARACK OBAMA (D), UNITED STATES: The cyber-attack is very serious. We're investigating it, we're taking it seriously. You know, we'll be vigilant. If we see something that we think is serious and credible, then we'll alert the public. But for now my recommendation would be that people go to the movies.


BURNETT: As he said people should go to the movies but that interview, I want to note, was conducted just before Sony announced it would going to pull that movie out of theaters. Let's go straight to our justice reporter Evan Perez who broke

the news. Evan, you know, there has been talk that it might have been North Korea but to come out and say that, that is a significant thing.

EVAN PEREZ, CNN JUSTICE REPORTER: That is right, Erin. You know, they have been behind the scenes discussions between the Justice Department, between the intelligence agencies, the State Department, about what to do about this because I think they were worried about, you know, if you go out and say that North Korea did this attack, then what are you going to do? You know, what sanctions are you going to bring, what -- who are you going to try to name might be responsible and so I'm told that as soon as tomorrow we expect to hear something public from the Justice Department, the national security division there has been working on this and that tells you how important this case is. We know that these hackers got into the systems at Sony, they spent some time doing reconnaissance just looking around and then they started taking action.

They destroyed some computer systems and then they took some of this information that you just referenced and started releasing it publicly. And so we know that the North Koreans have had a very robust hacking capability in the last few years. They've carried out attacks against South Korean companies. This is the first time we've seen something of this scale from the North Koreans against an American company, Sony pictures. And so now the U.S. is really facing what it is going to be able to do against North Korea.

BURNETT: And that is the crucial question, Evan as you say, and the awkwardness that they're facing. If this happens against the American armed company, is this an act of war. Evan just talked about the capability of North Korea, which is pretty stunning, because in North Korea, they basically don't have access to the internet. That hasn't stopped the regime though from grooming its best and its brightest to wage cyber warfare against its enemies.

Kyung Lah is OUTFRONT live out in South Korea for us tonight. And Kyung, what can you tell us? I mean, they have a sense of the capability. I think a lot of people watching us. When you hear about a country when you don't even have the internet are shocked that this capability exists?

KYUNG LAH, CNN NATIONAL CORRESPONDENT: And that was a feeling that a lot of South Koreans had for some time, until last year. Last year March 2013 in June there was a widespread attack on the South Korean government servers, on banks here where people couldn't withdraw money from some of their ATMS and some of the high-profile companies here in South Korea. It was an awakening that's now refer to here as dark Sol (ph). Because there was a time when Sol went dark. Some of the servers went completely dark. That may sound eerily familiar to people at Sony. Well, there are some of the best sleuths, some of the best cyber war sleuths here trying to see if there are similarities between what's happened to Sony and what happened here last year and that is where they may try to connect the dots back to North Korea and learn something new. What is key here is that this was a cyber-war, a cyber-war that Koreans on both sides of the border knew what was happening. South Koreans learning that this was going to be stepped up, they

started beefing up their cyber military warriors, as they refer to here, trying to protect some of the high-tech companies here. It is something that is now stepped off the Peninsula. That is what is the underscoring this entire thing here in North Korea. Is that it is no longer a battle of cyber war between north and south, it is now north against the world because at least that's their interpretation because they have stepped off the peninsula. And just like we've seen North Korea try to do with this nuclear capability is with any bomb attacks or missile attacks on South Korea, they are trying to get the world's attention and this may be a sign Erin that they are just stepping up their capability in doing that.

BURNETT: All right. Kyung Lah, thank you very much. Kyung, as we said live in Seoul tonight.

And joining me now our Fareed Zakaria, host of "FAREED ZAKARIA GPS" and the former CBS evening news anchor Dan Rather, great to have both of you with us. I know, you have been to North Korea. I know you have been covering it. The big question. Kyung talked about this that there's been, they called it a cyber-war. You now have American arm of a company attacked, that's the word. They have confirmed it's North Korea, is this an act of war? Isn't that the definition?

DAN RATHER, ANCHOR AND MANAGING EDITOR, AXS TV'S DAN RATHER REPORT: Well, yes. If all of this turns out to be true. But the following points need to be made. But first of all, let's see the evidence. We have indications tonight that the investigators are saying this but let's see the official announcement, let's see the evidence. You have to be certain, not just high probability, certain it was North Korea. Granted the evidence points in that direction, but let's check and double check, study and make sure we know what we are doing. Second, understand that our options are limited against North Korea in this cyber-attack if there is indeed a North Korean cyber-attack but we are not helpless with it. Pressure put on the banks as we did once before with North Korea, their money and banks off shore in the Pacific is one way to put pressure. But we have to understand China is the key to anything and any pressure on North Korea has to go through the Chinese and if the Chinese agree to do it, this will stop and stop pretty quickly. If they don't, there is not much else we can do about it.

BURNETT: Yes. So, the point you make about of what to do about it, Fareed, this is I mean, the question, I mean, I think the world has now seen the damage that can be done and made a very quick check if you look online the latest CIA stats for North Korea was a GDP of $40 billion for Sony corporation overall, and the income statement, $76 billion. This has changed the game. If there were a physical attack on someplace in America, this country would go to war. This is a cyber-attack that has hurt and cost billions of dollars of damage, so what does the U.S. do?

FAREED ZAKARIA, CNN HOST, "FAREED ZAKARIA GPS": Well, it is even worse than that, again, if it is all true. It is not just the cyber- attack, there was also the threat of terrorism that has succeeded. What the North Koreans did was say, if you show this work of art, this piece of movie, we will -- we will stage a terrorist attack.

BURNETT: And they said physical attacks in the theaters. That's what they were threatened.

ZAKARIA: And it worked. Now, imagine for some reason, we tend to view the North Korean regime as sort of comical and odd and crazy dictator with his weird hair dos. Imagine if the Iranian regime has said this, that you know, there's a book that's coming out that makes fun of the supreme leader, we're going to have a terrorist attack if that book is published. We would all be outraged. Instead what's happen is, there's not so much Sony that has escaped, is the movie theaters that have all caved. It is, you know, there is not one other producer, Hollywood producer that stood in solidarity with Sony. Where are the intellectuals condemning this? You know, if you remember the Salman Rushdie case, very similar situation. The government said, if this work of art is publish, you know, we will kill someone. Rushdie and the whole world rally to his defense. Here with -- maybe, you know, the gossip about Angelina Jolie has gotten us distracted. This is a very simple story. A very nasty regime has threatened terrorism, if a work of art is shown, and it has so far won. North Korea has won.

BURNETT: North Korea has won. And because they may said, if people go to the movies on Christmas Day and see this movie there's going to be September 11th style attacks. That's what they threatened. Now, who knows what they were capable of doing, what they would have done. They never going to know. But what does this do to ISIS and to other groups out there and say, well, if you scare them, they're going to back off.

RATHER: Well, there's point that were taken, this cannot stand. If it is, it now appears to be. But there are other ways to go at this. Immediately flood the market with DVDs and what about Netflix. These things don't have to be shown --

ZAKARIA: Well I wouldn't be surprised, Dan, if the movie theaters aren't willing to do this, will Walmart be willing to stop the DVDs, will Costco be willing, you know, there is a follow-on effect here because everyone is now government intimidated. I wonder in terms of the question of retaliation, we have pretty good cyber capabilities, isn't it possible for the United States, I would hope the U.S. government is very seriously considering how it could essentially shut down this cyber unit.

BURNETT: Doesn't the U.S. have to do something. Because again, if this were a physical attack on a theater in the United States, and they said North Korea was -- the country would go to war. That is what would happen. And so but the U.S. government not to do anything, it is pretty shocking. But the options are pretty thin.

ZAKARIA: It is limited. I mean, China is the key, as Dan said. They provide something like 90 percent of the fuel and 50 percent of the food that North Korea receives. So unless they are in some way involved, it's going to be tough to do. But again, as I say, there is cyber war that works both ways. These guys need internet access to operate and there is probably a way to get back in. RATHER: The point is we need to respond, as it now appears. We

certainly need to respond. But we've learned not to rush. Don't immediately do something. Think it through. What are the options in the counter cyber-attack on them? What are our options in the banking, as I mentioned earlier? What are the options for showing it? You say Walmart and Target might not handle a DVDs, let's put it to the test. They might not, but they might. But finding a way to get this movie out as one man's opinion is now imperative. We have to find a way to have this movie shown in the United States, or we'll be blackmailed constantly by one regime after another all around the world.

BURNETT: Which is what gets to the point you may -- which is the deadly serious of this nature of this threat, the September 11th style attack. That is deadly serious. And then you get back in fact that they're doing all of this, over a comedy that had a comedic assassination of the North Korean leader and people say, you are willing to risk war because you don't want that movie to come up?

ZAKARIA: Well, but, you know, when Charlie Chaplain made the great dictator, which was another satirical movie about a crazy dictator. When it was being made it was the late 1930s. The British government announced, and I believe this is true, that they would not allow the film to be distributed in Britain because at that time the British government was following a policy of what it's called appeasement toward Nazi Germany. As it happened, by the time the movie was produced, but was at war with Germany and the issue became moot. So, we've had this does before. It doesn't matter whether the movie is silly or good or bad or tasteless, the point is, there's freedom of expression.


ZAKARIA: And you cannot be intimidated. And as you very widely pointed out, what is the message ISIS is going to take from this? What is the message al Qaeda? They claim to be outraged by almost everything, you know, a cartoon, this or that, are they going to view this and say, well, this is very easy, we just threaten these guys and they will cave.

RATHER: And the message cannot be appeasement. I just want to say, calculated response based on evidence, we have time to make a response, but respond we have to.

BURNETT: The United States cannot appease. Thank you.

ZAKARIA: At a time and place of our choosing. I like that point, at a time and place of our choosing.

BURNETT: Thank you both so much.

RATHER: Thank you, Erin.

BURNETT: And next, more on our breaking news. Sony tonight yanking that movie from theaters. Gone. Not going to debut. Is the United States caving to Kim Jong-un? Plus, there are other top stories. An American released after

five years in a Cuban prison. Part of a historic deal that's already coming under fire. Could this historic day collapse? And Pope Francis, the first Latin American pope had a crucial and surprising role in the U.S.-Cuba agreement. We'll tell you all about it.


BURNETT: Breaking news, CNN is learning tonight that U.S. investigators have determined North Korean leaders ordered the cyber- attack on Sony pictures. This comes on the same night Sony caved, announcing it will pull the controversial new comedy about North Korea from theaters in the face of the threat of 9/11 style attacks. There is growing outrage over the decision to yanked the movie about two Americans who take part in the plot to kill the North Korean Leader Kim Jong-un. The scene depicted in this film from leaked footage that was posted online by the hackers.

Brian Stelter Is OUTFRONT with tonight's "Money & Power" outside of AMC Theater in New York City. Brian, AMC was one of theaters that decided to show the movie, they're really the ones that caved and then Sony basically said, hey, the theaters aren't going to show it and we have to pull it?

BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: That is right. This was between freedom of expression on the one hand and fear on the other. Ultimately fear won out and here is what happened.


STELTER (voice-over): Capitulation, that is one word for what happened on Wednesday. Sony caving under pressure, canceling next week's release of "The Interview" and later the decision by many of the countries' biggest theater changed, they yanked films from the schedules citing uncertainties and security fears. This coming after a warning by anonymous attackers threatening a 9/11 style attack at theaters where the film is played. The State Department says, they have no evidence of a specific credible threat but --

UNIDENTIFIED WOMAN: We of course take seriously, all recorded physical threats made against movie theaters.

STELTER: There were real worries that Americans might fear the holiday trip to the movies. Cineplex now calling it, "an unprecedented and complex situation." Regal Entertainment citing, "The ambiguous nature of any real or perceived security threats." The change are keeping their options open with Regal saying, it's just delaying the opening. But this is another blow for Sony, come in three weeks after more than 100 terabytes of data were stolen and the hits keep coming. On Tuesday, actor Seth Rogen and James Franco canceled many of their upcoming precedence. Including appearances on "Late Night" with Seth Myers, "The Tonight Show" starring Jimmy Fallon, a BuzzFeed event and "Live with Kelly and Michael."

MICHAEL STRAHAN, CO-HOST, "LIVE WITH KELLY AND MICHAEL": James Franco was supposedly here this morning but they are going through a lot over there but they had to cancel but, you know, hopefully everything gets worked out.

STELTER: Even The New York premiere of "The Interview" set for tomorrow has now been scrapped. This is a movie with a $44 million budget and so if theaters won't play, what should Sony do?

JAMES MCQUIVEY, FORRESTER RESEARCH ANALYST: I think Sony should fight fire with fire. Using information they have hacked on the internet, wide open on pirate sites and all kinds of other -- that is where Sony should take the fight, rather than trying to get the movie, the information into movie theaters, I think it should be posted all over the web. Let the whole world see it for free in HD and really show these hackers that two can play at this game.

STELTER: No word from Sony on a digital release yet. A lot of companies could help Sony stream the movie. The question now, will any of them risk a hack attack to do it.


STELTER: And so for, Erin, no companies have stepped up at least that we know of. Sony hasn't commented. But one group is very happy about this I think in private and that is other studios because, you know, this was not the only movie scheduled for Christmas Day. Here at this theater, unbroken and into the white woods was also supposed to premier on Christmas and now those studios don't have to worry about threats from hackers, possibly causing people to stay away from these theaters.

BURNETT: All right. Brian Stelter, thank you very much.

And OUTFRONT now, Gordon Chang, author of "Nuclear Showdown: North Korea Takes On the World." And Shawn Henry, the former FBI executive assistant director and president of Crowd Strike Services which specializes in cyber security. Good to have both of you with us.

Gordon, let me start with this issue as Brian said that there were words of concerns about whether people would go to the movies on Christmas Day because there has been a threat of September 11th style attacks on people physically who went to the theaters. Were those threats serious?

GORDON CHANG, AUTHOR, "NUCLEAR SHOWDOWN": Actually, I don't think so. Because I don't think North Korea could mount an attack on U.S. soil. But they didn't really have to. All they had to do was just threaten and we've seen the results of that. And so what they've been able to do is determine content of what Americans will see in Pyongyang. And that is a very bad lesson because the next time for instance, China is unhappy with a New York Times report, they're not just going to cancel the visa for the reporter, they're going to shut off the lights at the New York Times headquarters.

BURNETT: So, Sean, what can Sony do? You talked about what the world must do to fight back. What is the United States must do? Because as we've been saying, if there were a physical attack, it's an act of war. You know, Dan Rather and Fareed were saying. You know, that's an act of war. The U.S. can't appease it. So, what happened here? If you can't get anyone to sell the DVD, what do you do? Get Google to put it on YouTube and then Google risk thing hacked? I mean, that's kind of your option.

SHAWN HENRY, FORMER FBI EXECUTIVE ASSISTANT DIRECTOR: Yes, I think this really comes down to U.S. government, strategy and policy. And the U.S. government has got to take actions. Right now, we've got U.S. companies that are being hacked by multiple nations, including China and Russia. When you think about U.S. citizens that are fighting foreign armies literally, that is not their fight, it really is the government fight. And the government is going to have to take a stand here especially when we have this revelation potentially that the government of Korea is behind this. North Korea, they have to take a stand.

BURNETT: So what should that stand be? I mean, because there are sanctions. I mean, there is already sanctions on North Korea. I mean, what more you're going to do on that front? Should the U.S. government consider something physical or not?

HENRY: The U.S. government has considered what the retribution might be, if somebody crosses a red line like this. Is there some physical response? Is there a cyber-response? Those discussions are being held at U.S. cyber command, they're being held at the White House. These are discussion that have to be expedited because this has to be taken care of immediately.

BURNETT: I mean, this is a decision point. Gordon, in the Daily Beast today, you wrote, "Now the hackers with the reference to the 9/11 attacks suggests they are prepared to kill. If they in fact are linked to North Korea, the threat may not be as empty as people think." I know you said perhaps they couldn't have mount an attack at theaters but now we are finding out it's linked to North Korea. What do you mean about that physical threat not being as empty as people might think?

CHANG: Well, for instance, the North Koreans can go over U.S. bases and there are many of those in Asia. So they don't have to actually come on to U.S. soil in the continental 50 states. They can do something against American servicemen elsewhere. And we have to remember that this is not just North Korea. You know, the North Koreans used Chinese internet protocol addresses that were in China and they routed it through China and there are North Korean hackers who are more or less based in China. So, this is not just the North Korea issue, this is a China issue as well.

BURNETT: Shawn, I was also pointing out. This is something that could change the concept of war for everyone. When you look at just the overall number -- the Yahoo finance, you know, the revenue of Sony Corporation, over all $76 billion. The entire size of the North Korean economy from the latest CIA estimate was $40 billion. So you are looking at a David now able to bring down a goliath.

HENRY: We've been talking about this for years. It is an asymmetrical threat, when you've got some of these nations that have the ability to really wage war in the domestic United States of America by launching attacks like this, turning companies off, stealing their data, disrupting or dismantling critical infrastructure, that is a huge risk, huge threat. We have not given it enough attention in this country, we have to now.

BURNETT: But again my question is, what can the U.S. do to North Korea, all right? On the cyber front that's really going to crush them. Okay. Unless it is shutting down their nuclear reactors, their public doesn't have access to the internet. Their people don't have enough food to eat. So, if you are trying to say, respond in kind, how is that going to send the message that the U.S. won't tell their?

CHANG: There some of the things we can do. So, for instance, North Korean citizens have DVD players and what North Korea is worried about is not the theatrical --


BURNETT: So it starts playing on everyone's television in North Korea?

CHANG: They just take the DVDs and give them to the South Korean activists who put them in the balloons that go over the demilitarized zones and North Korean citizens start watching them. That is what Pyongyang is really worried about. Also, we got to remember that at the last term of the Bush administration, they used financial sanctions, they cut North Korea off from the global financial system. It was extremely effective. We can do that.

BURNETT: But their nuclear program has grown stronger.

CHANG: Yes. But we have not continued those sanctions. We prematurely lifted them. So, there are so many things that we can do to get the North Korean to heal on something like this. And we have to do it. Because what we have seen the North Koreans do by getting Sony to pull this picture is basically they are determining what the content is in the U.S.

BURNETT: Well they are. And Shawn, it is also the point that Fareed made which is if Iran did this, this country, there is no question we will be talking about very serious responses as you would be using the word war. Because it is North Korea and a regime that people sort of take as a joke. The discussion is a little more muted, but should it be.

HENRY: I don't know that it is just because of North Korea, I think it is because it is cyber. And we've seen attacks, we've seen exfiltration of data, of U.S. companies, intellectual property, research and development for many years and there has been no significant actions taken, the discussion hasn't occurred. When you look at this new domain, when you look and the network being used as a tool or a weapon, that has change people's minds. There are going to be discussions about this up on Capitol Hill.

BURNETT: Well, this is not going to change the American public's discussion about this, this event in and of itself. Thanks so much to both of you. And next, the power of the pope, the pontiff's critical role into

historic U.S.-Cuba deal. We have new details on that coming up.

Plus the video, the aftermath of the horrific terrorist attack that killed 145 people, 132 of them school boys.


BURNETT: Breaking news: an American man now free after five years in a Cuban prison, and a historic announcement from the president today. He said the United States will restore full diplomatic relations with Cuba after 50 years of hostility.

Alan Gross was an American government contractor when he was sentenced to 15 years in a Cuban prison charged with spying. Gross says he was bringing satellite phones and computer equipment to Cuba's Jewish community.

Now, the deal to free Gross was negotiated in secret over 18 months. In exchange for Gross, the U.S. returned three Cuban spies that have been imprisoned in America since 2001. That's the core of this. It was an exchange. And Cuba also returned a U.S. intelligence agent imprisoned there for nearly 20 years.

Cuba agreed to release 53 Cubans identified as political prisoners.

Patrick Oppmann is the only one American reporter in Cuba tonight. He is in Havana.

And, Patrick, what is the reaction there to this news?

PATRICK OPPMANN, CNN CORRESPONDENT: You know, it was a bit surreal, Erin. For a couple of hours, Cubans didn't know this deal had happened, this landmark historic agreement had been reached. And then, finally, at noon local time, Raul Castro took to the waves in an unusual speech, really an unprecedented speech where he talked about feeling respect for President Obama and talked about the future of improved Cuba-U.S. relations.

Most Cubans I know had never seen anything like it from the government. Some reacted with tears. Some began cheering in the street around where our bureau is located. And then all around us, while we were live on TV, we started to hear bells ringing in old Havana, the city where I am now.

And it was obviously seeing history in the making. Of course, this really opens up an interesting point. The Cuban government places all the blame for the country's terrible economy on the U.S. embargo and had said for years that the U.S. needs to lift that embargo. The embargo is still in place it. It requires Congress to lift it.

But a lot of the restrictions were removed today and it stands to see whether the Cuban economy will now finally improve. BURNETT: So, Patrick, one thing, and I talked to Alan's wife a

couple of years ago and she seemed very beaten down. I don't think she expected anything would ever happen to free her husband. When did he learn that he was going to be released?

OPPMANN: You know, it wasn't until yesterday, following President Obama's historic 45-minute phone call with Cuban President Raul Castro that Alan Gross's attorney Scott Gilbert called him in his cell here in Havana and told him he would be released. Alan Gross at first didn't believe it, but this morning a U.S. government jet came and picked him up, and when he was in the air he was able to call his two daughters and his first words to them were, "I'm free."


All right. Patrick, thank you very much. As we said, Patrick is the only American television reporter live in Havana tonight.

And OUTFRONT now, historian -- presidential historian Douglas Brinkley, along with Republican strategist Ana Navarro.

Doug, let me start with you. I mean, this is the Cuba of the Cuban missile crisis, the Cuba of possible nuclear war, the Cuba that holds a unique place in American history. How significant is today?

DOUGLAS BRINKLEY, PRESIDENTIAL HISTORIAN: Well, it's gigantic. It's the beginning of a U.S.-Cuban policy for the 21st century. You know, events you talked about were in black and white. You know, now, look at what the world thinks has changed.

And people sometimes seem to be critical about normalizing relations with Cuba, but after all, we normalized them with Vietnam, after losing 58,000 soldiers and we normalized things with Germany and Japan.

I'm not suggesting Cuba's regime shouldn't hopefully crumble. Cuba is not our new best friend, but it's I think a very good bit of news to be able to now say, look, we're having an embassy there, and we can find some common ground on things like the environment alone.

BURNETT: Ana, the U.S. freed several Cuban spies in exchange for Alan Gross. Now, Alan Gross, as far as I understand it, was in Cuba providing satellite phones, equipment like that, to Cuban Jews, working for an agency of the U.S. government. That's why he was supposedly there.

The Cubans have alleged he was a spy. Is it possible that was true?

ANA NAVARRO, CNN POLITICAL COMMENTATOR: You know, I don't think so. There was never really any evidence he was a spy. They would have brought it out. This was a man who was trying to get Internet connection to the very small Jewish community that still remains in Cuba. He was not committing a crime. This is a good person trying to do a good deed for the Jewish community in Cuba. And let me tell you, Erin. We all want to normalize relations

with Cuba. We just don't want to normalize relations with the Castro dictators.

You know, if we could meet the requirements that are set in law for lifting the embargo, which is the unconditional release of political prisoners, the recognition of labor unions and journalists an the parties and schedule of free elections we'd all be celebrating . The way we are celebrating Alan Gross' release. What we don't like is the precedent this sets, and the legitimizing of this dictator at the very end of their lives.

BURNETT: Legitimizing dictators at the end of their life, and they are, of course, elderly at this point, although it's such a key part of the history of this situation.

You know, Doug, there is also the issue of the deal itself and the precedent it sets. You know, today, the Democratic Senator Robert Menendez, top Democrat in the Senate Foreign Relations Committee, slammed the deal, so he's a Democrat, the president's own pal, saying in a statement, quote, "trading Mr. Gross for three convicted criminals sets an extremely dangerous precedent. It invites dictatorial and rogue regimes to use Americans serving overseas as bargaining as bargaining chips."

You know, Cuba got -- Cuba got three. The U.S. got two. This summer, it was five Guantanamo detainees for Bowe Bergdahl.

Is this a precedent that the U.S. should set?

BRINKLEY: Well, there were also 53 political prisoners released apparently in Cuba too, and it shows that the United States will bring back our own. We brought this contractor back here in time for Hanukkah. We're all very excited about that.

Secretary Kerry met him down the tarmac and embraced him. So, I feel good about that.

The loser here is Russia. Russia's economy is crumbling. Russia had invested in this satellite nation of Cuba during the Cold War and beyond. And now, basically, you're seeing Cuba wants nothing to do with Russia. So, I think there is a win there. If the Cold War was about the United States and Russia, we just got a big win in the fact that Cuba seems to be basically doing anything to try to work with the United States.

And we deal with bad people all of the time. Who likes the Chinese government? So, we've got to be realistic. Opening up the embassy, having a little bit of talk. If it doesn't work in a few years, if this isn't a new era, then you close shop and you say, we at least tried.

But it's gotten very stale out there, and this to me isn't a surprise. Hillary Clinton and the president (ph) had earmarking this would happen pretty soon and hence today is the day. BURNETT: It's an interesting point. And, Ana, to this point,

President Obama was asked by ABC News about the Castros, right, about the phone call he had, and he was asked if there was any change and as you call those aging dictators, here's what he said.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm not sure that Raul Castro in the 80-something is going to be changing significantly. But there's going to be generational change in Cuba. This last conversation was substantive. I was very insistent with him that we would continue to promote democracy and human rights and speak out forcefully on behalf of the freedom of the people of Cuba.


BURNETT: Ana, doesn't he make the case. Why not just do it now? The next generation will be different. You are telling them what the future could be, why wait?

NAVARRO: You know, probably because manufacture -- because many of us feel that we are close to the end. We haven't seen Fidel Castro in God knows how long. I think a lot of us feel he's the character at "Weekend at Bernie's". They stick him in an Adidas sweat suit and prop out his corps every now and then to show in front of people.

And so, we are close to that generational change. We are close to that very end of the Castro regime, when the two brothers disappear from the atmosphere in Cuba. And when there is real change. And so now that we are so much more closer than we were when this began is when we are going to cave, unilaterally, without the requisites that are set in law being met.

And also, Erin, you know, he is again side-stepping Congress here. And I'm not sure that all of those things he announced today he's going to be able to get done and are going to materialize. The funding of an embassy, that needs to goo through Congress. The confirmation of an ambassador, that needs to go through the U.S. Senate, and there is a very strong, very united Cuban-American caucus in Congress and they've got a lot of friends and allies.

BURNETT: All right. We will see. Obviously, you've got Marco Rubio with his ties to Cuba saying he will do anything he can to stop this from going through Congress. It is far from done but still an incredibly historic day.

And next, the surprising announcement on the U.S. and Cuba. Guess who the broker was? I mean, this is actually perhaps the most historic part of it all -- it was Pope Francis. We'll tell you the details on his crucial role next.

And the shocking video of the terror attack that killed 132 schoolchildren. We were able to see that school today.

(COMMERCIAL BREAK) BURNETT: Breaking news tonight, new details on the crucial role

Pope Francis played in brokering today's historic agreement between the U.S. and Cuba. The Catholic's first Latin American leader celebrated his 78th birthday today, and a major diplomatic victory.

It's a pretty incredible story -- and Jim Acosta is OUTFRONT.


JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): Nothing sees a thaw in U.S. and Cuban relations more than this, the historic phone call between President Obama and Cuban leader Raul Castro.

UNIDENTIFIED MALE: The Soviet military build-up on the island of Cuba.

ACOSTA: The first presidential level engagement the White House says since the Cuban revolution, more than 50 years ago.

OBAMA: We will end an outdated approach that for decades has failed to advance our interests and instead, we'll begin to normalize relations between our two countries.

ACOSTA: Senior administration officials saying the secret U.S.- Cuba talks started in June 2013, with most of the discussions happening in Canada and led by deputy national security adviser, Ben Rhodes.

Those wheels were in motion when the president and Raul Castro shook hands at Nelson Mandela's memorial service last December.

But one key sticking point remained: the imprisonment of Alan Gross in Cuba.

OBAMA: A major obstacle stood in our way. The wrongful imprisonment in Cuba of a U.S. citizen and USAID subcontractor Alan Gross for five years.

ACOSTA: Last March, President Obama found a pivotal player to help broker the deal, Pope Francis. They discussed Cuba at the Vatican, something Mr. Obama did not disclose when asked by CNN.

(on camera): What were his concerns?

OBAMA: In terms of the meeting with His Holiness, Pope Francis, we had a wide-ranging discussion.

ACOSTA (voice-over): Earlier this year, the pope kept the conversation going, sending letters to President Obama and Raul Castro. And in October, the Vatican welcomed officials from the U.S. and Cuba to push the talks forward.

RAUL CASTRO, CUBAN PRESIDENT (through translator): I want to thank and recognize the support of the Vatican. ACOSTA: The pope, who celebrated his 78th birthday today with a

mass celebration, is also the first Latin American leader of the Catholic Church. So, it should be no surprise he got the ball rolling according to the Vatican spokesman.

GREG BURKE, VATICAN SPOKESMAN: I'm sure not everybody in the U.S. is happy with what's happening here. There's no doubt about that. We've already seen that. And yet, he says it's always better to be talking than not talking, and that's really what this was about.


BURNETT: Now, Jim, have you had any indication from the White House as to whether the president -- and this would be a really big step, but this is a big day -- would he visit Cuba?

ACOSTA: It would be.

You know, Erin, amazingly so say this on the front lawn of the White House, the White House is not ruling this out. He was in China last month where democracy is not exactly on the march. So, despite the fact there are human rights concerns and democratic freedom concerns in Cuba, they're saying the president could make the trip there.

You know, there is an opportunity for him to do that. There is a Summit of the Americas coming up in April in Panama. Cuban leader Raul Castro will be there, and the president will have a face-to-face encounter with Castro at that summit. He could potentially go to Cuba after that.

My sense is that is too early, but, Erin, it would be historic because if you think about this, the last U.S. president to step foot on Cuba was Harry Truman, it appears from looking back at records, back in 1948 when he went to Guantanamo. You have to go back to Calvin Coolidge going to Havana before that.

So, this would be historic and it would certainly have the blessing of the pope, I gather, from all of his involvement in this as well.

BURNETT: That is pretty incredible, the irony of Harry Truman and Guantanamo.


BURNETT: Thanks very much to Jim Acosta.

And next, shocking new video of that horrific attack in which 145 people died, 132 school children that were taking an exam.

And Jeanne Moos with some unusual robberies. This one caught on tape.


BURNETT: Now, let's check in with Anderson with a look at what's coming up on "AC360" -- Anderson.

ANDERSON COOPER, CNN ANCHOR: Erin, yes. Obviously, we'll be taking a look at the history between the United States and Cuba today. We'll speak with former President Jimmy Carter about President Obama's decision to normalize relations with the island nation. Plus, we'll ask him about the release of American prisoner Alan Gross. President Carter pushed for his release for years. We'll talk to the former president live on the program.

Also, dramatic video showing major turbulence on American Airlines flight heading to Dallas. An intense winter storm injured several on board, forced the plane to make emergency landing. Details on that.

Plus, the latest on Sony's decision to pull the movie "The Interview", and tonight's "RidicuList".

All the top of the hour, Erin.

BURNETT: All right, Anderson. Looking forward to that and see you in just a few moments.

Well, in a moment of shock of horror, 132 children murdered in Pakistan. In response to Tuesday's attack where Taliban militants ambushed a school slaughtering 145 people. The Pakistan government today lifted the moratorium on the death penalty for terrorism.

And now, for the first time, we are seeing the images of the gruesome aftermath. Pakistan army allowed cameras inside the school to see the barbarity of the Taliban. We thought it was important to show them and Nic Robertson is OUTFRONT.


NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): Tumbled chairs, concrete walls chewed apart by a fuselage of bullets few of the children in these classrooms could dodge. Evidence of the ferocity of Taliban's craven attack is everywhere. Floors still soaked in the blood of the innocents.

This town is drenched in grief, funeral after funeral. Those between 12 and 16 years old, many buried in their school uniforms. The smaller they are, the heavier they are to carry, one official said.

Education in this impoverish town of 3 million is everything. No one saw this coming.

Survivors are now wondering how they made it through.

UNIDENTIFIED MALE (through translator): We hid in a locker room and pretended to be dead. They kind of believed us. Two students and a teacher caught their attention, so they shot them in the head to make sure they were dead.

UNIDENTIFIED MALE (through translator): Six men entered the halls. They opened fire on some students. Some died on the spot and others were injured.

ROBERTSON: Vigils are lighting up across the country. Sympathy is strong and so is condemnation of the Taliban. It is rarely this universal and rarely this visceral.

These men, some of them seemingly young as their victims, are the attackers, according to the Taliban, who say they planned and coordinated every murderous step the gunmen took classroom to classroom. Brutality now becoming clear.

Inside the school, a burnt office. A 28-year-old woman, an office assistant, not just shot but set alight here too.

(on camera): Too horrific for words but already the recriminations are starting. Pakistan's prime minister who blamed the Afghan authorities but said this attack was planned on Afghan soil. The Taliban themselves say, no, that their commanders in the planning all took place from inside Pakistan -- Erin.


BURNETT: Nic, thank you very much. Incredibly difficult piece to watch.

We'll be right back.


BURNETT: They were stealing Barbie's Corvette and it was all caught on tape. Jeanne Moos on the thieves with a softer side.


JEANNE MOOS, CNN CORRESPONDENT: Police say that the heart of this shoplifting scam was a fake heart attack. Harris Scott (ph) in the red hat and vest enters a Florida Walmart with his buddy Jenard Dupree (ph) in the light sweatshirt.

GRADY JUDD, SHERIFF, POLK COUNTY: With grand plans for Christmas.

MOOS: The two started loading stuff in a cart.

JUDD: They were going to steal Christmas presents and one of them was a Barbie car.

MOOS: As well as a Barbie glam vacation house.

Well, they go towards the door, separately where Dupree gently gets down on the floor.

JUDD: He didn't even do a really good job of faking the heart attack.

MOOS: He clutches his chest. The shopper notices and starts to look for help. Meanwhile, Scott with the loaded cart slips out the door and as soon as the cart clears the door, Dupree recovers.

JUDD: Miracles occur around Christmas. His heart was all better and he strolled out.

MOOS: Two meet in a parking lot and take off. Their getaway car was not the pink Barbie car.

JUDD: It was not the pink Barbie car. That was not very manly manly.

MOOS: The fake heart attack caused Walmart to examine their security cam video. They discovered the theft and the sheriff's department had no trouble identifying the suspects since both had long arrest records.

Scott had recently been released from prison after serving ten years for armed robbery.

JUDD: So guess what? We wish them a merry Christmas from our county jail.

MOOS: But dropping from cardiac arrest ending up getting them arrested.

Jeanne Moos, CNN, New York.


BURNETT: And thanks so much for joining us.

Be sure to set your DVR to record OUTFRONT, so you can watch us anytime. And we will be back at 9:00 Eastern with more on our top breaking new story, the U.S. saying North Korea is responsible for the cyber attack on Sony pictures and an American freed after being held in Cuba for five years. We'll see you in an hour from now.

"AC360" begins now.