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Officials: China Likely Behind Huge Cyberattack; ISIS 'Moron' Reveals Target, U.S. Bombs It; Iraqis Flee as ISIS Cuts Water Flow from Dam; ISIS Video Shows Fighting in Key Refinery Town; Boston Police to Release Video of Shooting; Alleged Dennis Hastert Victim's Family Speaking Out; Violence Flares as U.S. Ally Fears New Putin Invasion. Aired 5-6p ET

Aired June 5, 2015 - 17:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now: massive cyberattack. New details about an extraordinary data breach cutting across the U.S. government. China is believed to have targeted government secrets and the personal information of millions of Americans. Could it now carry out an insider attack?

Terror tape. ISIS releases an elaborate, dramatic new video presented in fluent - fluent English. Is the terror group trying to gain new recruits in the United States?

Grave accusations. A woman comes forward to say Dennis Hastert abused her late brother back when Hastert was a high school wrestling coach. But has someone else been blackmailing the former House speaker?

And Russian aggression. International monitors warn that the situation in Ukraine is getting worse by the day. Is Russia's President Putin about to launch a new invasion?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

U.S. investigators are blaming China for a cyberattack which may be unparalleled in its scale and audacity. Millions of Americans, including current and former government workers, are the victims. Personal information and security records have been jeopardized in a data breach which cuts across almost every federal agency, and the Chinese military is suspected of building a massive database on Americans. What will the Chinese do with all this information? I'll speak live with Senator James Risch. He's a member of the Intelligence and Foreign Relations Committees. And our correspondents, analysts and guests are standing by with full coverage.

Let's begin with our chief national security correspondent, Jim Sciutto, who has the very latest -- Jim.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Wolf, this breach unprecedented both in scope and in its target. Four million federal employees compromised, including personal information and security clearances, and it only took one government agency that had not taken the simple step of updating its server software. That was the open door that hackers, believed directed by the Chinese government, entered U.S. government systems.

Now the concern is that this appears designed to lay the groundwork for future attacks, many more of them, using that stolen personal information to both fool government employees in so-called spear- phishing attacks but also to impersonate them to carry out insider attacks. And, crucially, by revealing who has security clearances, they may now be able, as well, to identify expose, even blackmail U.S. officials.

The White House is not publicly naming China, but it is certainly acknowledging the scope of the problem.


JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: We have seen our adversaries use innovative techniques and to learn from their previous efforts to try to find vulnerabilities in our system and to exploit them.


SCIUTTO: Now, this brief is just the latest in a series of hacks believed to be originating from China, including the recent breach of the Anthem healthcare system. Together, they appear to be aimed at building a huge database on Americans.

Chinese hackers, they'd previously focused on stealing military and government secrets and corporate data for financial gain, but I should also add, Wolf, that once this breach was discovered by the U.S. government, the U.S. created inside the system a fake system, which then absorbed Chinese attacks without them knowing; something of a cyber-honeypot so that they were able to deflect and have them think they were getting value when they were not. But of course, that was after they were able to get a great deal of value from entering U.S. government systems.

BLITZER: I know a lot of folks out there are asking this question: Why not retaliate? Should the United States retaliate?

SCIUTTO: Well, the Obama administration, its tried virtually everything here, including raising this issue president to president. They charged an elite group of Chinese hackers with criminal charges. But China's attacks have only grown.

And there is a debate about the wisdom of hacking back. The private sector is legally barred from doing so. The government concerned about sparking a cycle of escalation, a tit for tat where the attacks just getting -- keep getting more severe.

The president did issue an executive order authorizing what are called cyber-sanctions. These are similar to say what the government has imposed on Russia for its actions inside Ukraine. You pick out companies; you pick out individuals similar to these individuals who were charged with criminal charges. But in terms of taking that further, that hasn't happened.

Really, they're trying to find a way to deter China. They have not found that way yet.

BLITZER: Jim Sciutto reporting. Thank you.

Meanwhile, a chilling new message from ISIS seems to be aimed at Americans. And what the U.S. Air Force is delivering a message of its own, dropping smart bombs on an ISIS command center after a dumb ISIS fighter gives away the location online.

Let's get the very latest from our Pentagon correspondent, Barbara Starr -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, we know that ISIS is growing in its sophistication, but this latest video seems perhaps to be an effort to recruit westerners and especially Americans.


[17:05:03] UNIDENTIFIED MALE: Together they march. They are the soldiers of Allah. Their honor is in jihad.

STARR (voice-over): Fluent English on a new video released by ISIS's media machine.

UNIDENTIFIED MALE: Swept by the coming winds of jihad.

STARR: Why an English speaking voice?

AKI PERITZ, FORMER CIA ANALYST: This is a great example of how they hone in on a specific audience and sort of push their message to a specific group of people.

STARR: In this case a coveted North American audience. But ISIS's social media savvy can sometimes backfire. Air Force General Hawk Carlisle told reporters this week his team of analysts combing through ISIS social media posts were able to identify the location of a command and control center. Within 22 hours, they were able to take the building out.

U.S. intelligence teams working in Florida have been continually scouring social media hoping to find, in the general's word, "a moron" who gives up their location, making them a target. The head of the Air Force says it's what they do.

GEN. MARK WELSH III, AIR FORCE CHIEF OF STAFF: We're using everything we can to find potential targets.

STARR: But the four-star general with more than 3,000 hours in the cockpit would not address the Pentagon's estimate that up to 13,000 ISIS fighters have been killed in coalition airstrikes.

WELSH: I don't know where the number of 10,000 came from.

STARR: But he should. DOD officials say it all comes from Air Force and Navy pilots themselves, who estimate the dead after each airstrike. But even with the air campaign, ISIS still showing muscle. WELSH: They're still influencing things on the ground. They were

still able to move into Ramadi. They're still threatening to use water as a weapon. So until we can stop all that activity, this will not be successful.


STARR: Now, that very sensitive issue of body count just doesn't seem to go away. While one general is saying it's up to 13,000, the Pentagon says it's 10,000. Another general says he doesn't know. In fact, still another general today told Pentagon reporters that the coalition airstrikes are killing up to 1,000 ISIS fighters every month -- Wolf.

BLITZER: I don't know where they're getting those numbers, but those numbers obviously are fluctuating. We're going to have more on this part of the story coming up. Barbara, thanks very much.

In Iraq, meanwhile, ISIS is turning up the pressure by turning off the tap. The terror group is using water as a weapon by cutting the flow at a strategic dam.

Let's go live to Baghdad right now. Our senior international correspondent, Nick Paton Walsh, is on the scene.

Nick, what's the latest, as far as this dam is concerned?

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Wolf, you can't imagine how are you urgent this must be for those people living in that area downstream from the dam closed off by ISIS.

They closed 23 of the 26 gates of that dam, and we're hearing today that the water level of that river has dropped again substantially, as have the number of people fleeing that area downstream to areas further south, where they think they can get better supplies.

Now this is key, because that area downstream from the Ramadi dam is where the security forces of Iraq are gathering, along with military, too, as are a number of civilians who are still trapped there. They need that water simply to exist. Agriculture. Washing. Drinking. You name it.

There's another issue, too, which seems to hour by hour get precariously close. If that water level drops substantially ISIS will be able to cross which since now, until now has been a defensive mode, of sorts, protecting the Iraqi pro-government forces. That could change the balance militarily here.

But really, look at the narrative, Wolf. You know, we're now weeks into the operation to recapture Anbar and Ramadi. We've not seen much territory change backhand towards pro-government, but we have heard that ISIS have understood what the key resources in the area are, switched them off. And now, frankly, if you're a Sunni living in Anbar and you want water to live, you need to go ISIS's side of the dam -- Wolf.

BLITZER: Nick, we're also seeing some very disturbing new video from ISIS at the scene of a major Iraqi oil facility. Tell us about that.

WALSH: What you're seeing now is part, I think, of what Barbara was mentioning before, the slick social media campaign to bring in recruits. The fighting you're seeing will appeal to those people in basements around the world who are looking for a bit of an edge by joining ISIS.

But particularly, it relates to the oil refinery in Baiji. Now that's key, because it is potentially an economic catastrophe, an ecological catastrophe. Were it set fire in the way that ISIS threatened to do it. We are also seeing in that video, too, are American-made weapons.

Now that could be an AR-50 or an M-4 particularly being used there, but it shows you the proliferation of weapons in this area and how things originally given to the Iraqi army are ending up potentially in the hands of ISIS.

[17:10:00] Now, I've seen American weapons in the hands of many other militia here. The Hezbollah (ph), in fact, included, as well. And it also adds to the issue many disarmament advocates make, that if you simply add more small arms to a conflict, you have no idea where they'll end up. You're not necessarily bringing peace; you're potentially causing more violence in the future.

These pictures you're seeing here are for a vital area. The government says they have the upper hand. But it's quite clear ISIS do not want to let go of this state.

BLITZER: It's also clear, as you point out, ISIS does have a lot of U.S. weapons that the Iraqi army simply abandoned as they were fleeing major cities, whether Mosul or Ramadi or elsewhere. Nick Paton Walsh in Baghdad, be careful over there.

Joining us now, Republican Senator James Risch of Idaho. He's a key member of both the Senate Intelligence and Foreign Relations Committee.

Senator, thanks very much for joining us. I want to talk to you about what ISIS is doing, the threat from ISIS here at home and abroad. But first, I have to ask you about this massive cyberattack on the U.S. government, the federal government, first of all. I know four million federal employees, current and former, have been impacted by this. Does this include staff members up on Capitol Hill, including members of your own staff?

SEN. JAMES RISCH (R), IDAHO: Wolf, it doesn't. The report we have is that it is affecting only members -- only employees of the executive branch. So it would probably exempt ours, but that's a small number compared to the number of employees in the executive branch.

BLITZER: But if you have members of your staff who used to work in the executive branch, whether the Department of State, the Department of Defense or whatever, they may be impacted by this, right?

RISCH: Right. No question about that. BLITZER: So it's believed that the Chinese are amassing -- are doing

this cyberattack, amassing huge databases of personal information about Americans. Do you have any idea why they're doing this?

RISCH: You know, there's a lot of speculation, Wolf, on why they're doing it. I think the first thing that needs to be determined is exactly who is doing it.

The question that you asked at the beginning is a question we always ask in the intelligence committee when we get a report like this, and that is, is this state-sponsored, or is it a commercial operation. Or is it some kid sitting in his basement just playing?

And, unfortunately, you can trace it back to China. But beyond that, it's impossible, really, to pin it on anybody, at least at this point. As you know, the official response of the Chinese government is that they didn't do it, and of course, they would say that. But before -- I know you talked about a retaliatory action. Before you even think about anything like that, you really need to determine who is specifically responsible for this.

BLITZER: Because basically, the information we're getting here at CNN from U.S. officials is that China did, in fact, not just some Chinese hackers but Chinese hackers working for the Chinese government or the Chinese military were directly responsible for this enormous hack over these past several months.

So it's not just some kid in the basement. This is a deliberate act by the government of China. That's the information we're getting. Are you telling me, Senator, you're getting different information. You can't confirm that yet?

RISCH: Yes, Wolf, I wouldn't say that I'm getting different information. How I would phrase it is we're not getting the information that does confirm that. I -- I would question the veracity of someone who said that they could specifically trace this back to the Chinese government. I'm not saying they aren't doing it. I'm just saying that I think that that may be a little bit premature.

Having said that, you and I talked about this before, that there are thousands of attacks on the U.S. government, on U.S. businesses, on U.S. individuals coming from foreign countries -- some state actors, some non-state actors -- every single day as we're sitting here and talking. There's attacks going on right now.

And I really believe that the next incident in America is going to be a cyber-incident. We all know what can happen if you can shut down the Internet and shut down all of the cyber world, particularly for any length of time. It would be a very, very serious problem.

BLITZER: All right. Senator Risch, we have more to discuss and especially what's going on with ISIS in Iraq and Syria. We'll take a quick break. More with Senator Risch when we come back.

(COMMERCIAL BREAK) [17:19:08] BLITZER: We're back with Republican Senator James Risch of Idaho. He serves on both the Intelligence and Foreign Relations Committees.

Senator, we saw earlier this week police in Boston shoot and kill a man who was believed to be planning a knife attack on law enforcement. We also know that at least one of the men connected to the plot, the alleged plot, had been in touch with ISIS fighters overseas. Do you know if ISIS had a direct involvement in this Boston plot?

RISCH: Yes, I do know, but Wolf, I really can't go into the details on that.

You'll recall some weeks back when I appeared here on your show, I told you that they had moved from -- that is, ISIS had moved from just aspirational motives to actually going to operational. We're seeing the -- we're seeing the effects of that right now.

One month ago today, of course, there was the attack in Garland, Texas. Tuesday, of course, the law enforcement shot and killed a man in Boston who was actually in the process of carrying out an attack. They didn't let him get very far with it.

Both of these are feel-good success stories for us here. Our intelligence community is doing an excellent job as far as staying on top of these things. Unfortunately, as you know, we have to be right 100 percent of the time. All we can do is pray that they continue to do as good a job as what they're doing.

But, look, when it comes to ISIS, they're doing their best using social media to inspire people in America who are so inclined, who are foolish enough and who are vulnerable enough to buy into their philosophy and theory. They're doing their best to inspire them and, indeed, they're getting more bold on social media, as far as getting specific direction to people for times, places and individuals that that they would like to see attacked.

So this is serious. It's getting more serious all the time. We've got to continue to ratchet up our response to that. I can give the American people absolute assurance that we are ratcheting up our response to that. And we're going to continue to do so to meet it head on.

BLITZER: I just want to be precise as much as you can tell me, Senator. Is it your understanding that someone in ISIS directed Usaama Rahim, the man who was shot and killed by Boston Police and the FBI earlier this week, they directed him to go out to and purchase three large military-style knives to go ahead and kill police officers and also behead Pamela Geller?

RISCH: You know, Wolf, I really can't get into the details of that. I think probably you've already reported some of the open source reporting that's been on that. Certainly, the -- the proposed victim was specified by ISIS. How that was done directly, and beyond that I really can't go into it. It's classified. But they're getting more bold in identifying targets, dates and

methods of how they want to see things done. And, unfortunately, I think we can only expect that that's going to increase rather than decrease.

BLITZER: Very quickly, more than three individuals involved. We know there are two. One is dead; one is arrested. They are looking at a third suspect. Are any other suspects connected to this Boston terror plot out there?

RISCH: Again, Wolf, if I go into that, I'm going to be disclosing things that are classified.

But, again, let me assure you that the intelligence community is on top of these things, and they're using every tool they have in the tool box to connect the dots whenever they can. And they're going to continue to stay on top of it.

BLITZER: Senator Risch, thanks very much for joining us.

RISCH: Wolf, thank you.

BLITZER: Coming up, following the burial of the Boston terror suspect, we're waiting for Boston Police to release the video of the actual shooting as new details emerge about a third man potentially involved in the case.

And is Russia's President Putin about to launch a new invasion? International monitors are warning that the situation in Ukraine is getting worse by the day.

Stay with us. You're in THE SITUATION ROOM.


[17:28:20] BLITZER: Following the burial of slain Boston terrorist suspect Usaama Rahim, we're waiting for police to release the video of the shooting.

Meantime, new details are emerging about what authorities say was an ISIS-inspired plot.

Our justice correspondent, Pamela Brown, is in Boston for us.

What are you learning right now, Pamela, because there's a lot of concern that Rahim was someone the FBI was on to for some time, but they moved only in the past, obviously, several days.

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: That's absolutely right. In fact, we're learning that Usaama Rahim suspected the FBI was onto him back in 2012 and was bugging his phone.

This is based on a Facebook post under the alias Abdur-Rahim Al- amreeki. He posted on his Facebook page back in 2012 that he heard some clicking noises on his phone and that an FBI agent had called him about, quote, "allegations" and had been by his House to visit a few times.

Now we have confirmed through law enforcement officials that he has been the subject of an FBI investigation for the past couple of years. But there was growing concern in the past ten days that he was becoming operational. That is why he was put under 24/7 surveillance.

We learned this past Sunday, Wolf, he allegedly met with his nephew, David Wright, and a third person to discuss an alleged beheading plot in New York -- Wolf.

BLITZER: Pamela, the criminal complaint says there was a third man involved. What do we know about him?

BROWN: We're learning more about him. We have learned that he's 24 years old. And he was friend of David Wright and Rahim, as well. We know that he was questioned on Tuesday and then the FBI raided his home on Wednesday, and authorities have been outside his home ever since the shooting here in Boston.

But it's important to point out no arrests have been made. He has not been charged with a crime. The investigation still very active into him. But I am told not to...

[17:30:00] PAMELA BROWN, CNN JUSTICE CORRESPONDENT: But it's important to point out no arrests have been made. He is not been charged with a crime. The investigation still very active into him. But I am told not to expect any law enforcement activity any time soon. As one official told me if we were going make an arrest already we would have.

Again the investigation ongoing. But important to point out one of our producers, Paul Murphy, talked to him over Twitter this past March, talked to this third individual, and he apparently told him that he was in touch with a member of ISIS and this alleged ISIS fighter was encouraging him to go to Syria to fight with the terrorist group -- Wolf.

WOLF BLITZER, CNN ANCHOR: All right. That's pretty important. Thanks very much for that, Pamela.

Let's get back to our top story now. China is being blamed for the unprecedented cyber assault on government agencies affecting millions of Americans.

Let's bring in our CNN law enforcement analyst former FBI assistant director Tom Fuentes. Also joining us a cyber security expert, Kevin Mandia, he's president of FireEye, Inc. And former CIA analyst Tara Maller, she's now with New America. That's a think-tank here in Washington.

Put this into context for us, Tom, this cyber attack allegedly by the China government by not simply some random hackers, if you will. Give us some context to what's going on.

TOM FUENTES, CNN LAW ENFORCEMENT ANALYST: Well, I think, Wolf, in the first place it would be hard to believe any random hacker would want four million records of employees from the federal government. Chinese and other countries spy trade craft including our own, you know, would be to find out all you can about who are the employees, what sensitive position, what's their pay grade level, what clearances do they hold, where do they live, what's their address, what are their Social Security numbers.

All of the data possible on present and former employees so that then they can do a more targeted approach to try to find somebody to cooperate with their side.

BLITZER: To have a huge database, if you will, from which they can go ahead and search for specific information.

Kevin, we know the U.S. government essentially left the door open for this somewhat. They didn't update software that was -- that could have entirely prevented what happened. That's what we're hearing. But I want to get your analysis.

KEVIN MANDIA, PRESIDENT, FIREEYE: Well, I don't think you ever learn what can prevent an intrusion based on the state of a victim company that's been compromised or victim organization. Meaning this, Wolf. The attack that worked if that safeguard happened to be in place it would have been the second attack, the third attack. I'm not sure we saw the boundary of the capabilities of this attack group at each one of these victim sites. But they usually have another trick in the bag that would be successful had the prior attack failed.

BLITZER: You investigated the North Korea hack allegedly against Sony Pictures back in December. How do you go about investigating something as enormous as this one, four million Americans, federal employees, current and former, who may have had their most sensitive information stolen by Chinese hackers.

MANDIA: Well, there's nothing different about this investigation than any of the others. Right now it's one intrusion amongst many. The group that hacked into the government has hacked the private sector, other government organizations, and right now as we overturn each little rock we're finding evidence that they've been in other places. So this is not an isolated incident. This is a wave of attacks being done by at least a state enabled hacking group in China.

BLITZER: Tara, you've studied this extensively. This whole issue of these cyber attacks. How good are the Chinese at this?

TARA MALLER, FORMER CIA ANALYST: Well, the recent attack would suggest they're quite good. This affected four million former and current government employees. There's only 2.6 currently in the federal executive government overall right now. And I think what we've seen is the Chinese have engaged in a variety of attacks, not just to gain information for economic purposes or intellectual property, but this is particularly concerning because it can be used for blackmail purposes, getting information on security clearance individuals, and it can be used for counter intelligence purposes as well, as Tom was just talking about before.

BLITZER: Give us an example, Tara, how it can be used for blackmail.

MALLER: Exactly. So basically the OPM is the office that is the human resources --

BLITZER: The Office of Personnel Management.

MALLER: Officer of the Personnel Management.

BLITZER: Of the federal government.

MALLER: Of the federal government. They hold about 90 percent, I think it's been reported, of the security clearance records of government employees. So from individuals from the Defense Department, the FBI, the CIA, go through clearance and fill out information on themselves, it's housed in a repository at OPM. So that has information on where you lived, where you -- you know, personal information, your personal background history, all information that even potentially individuals who are not currently government employees might still have records on file there. And it can be used to coerce or blackmail somebody with information they don't want made public.

BLITZER: Tom, you worked at the FBI. You were the assistant director. Were FBI agents compromised in this cyber attack?

FUENTES: Absolutely. Right after I retired I had an issue that I wanted to check in my personnel file. I contacted human resources at FBI headquarters. They said sorry, we've already sent your entire file over to OPM. So they are the repository for everybody in the executive branch for sure.

BLITZER: So even as we speak, Tom, right now the Chinese hackers, whoever did it, they may have all your sensitive information?

FUENTES: Well, they probably do but I had about eight or 10 trips to China on -- FBI business also. So I'm sure if they wanted me they already had it. I'm not that worried about it. But yes.

[17:35:08] BLITZER: But you got to take some actions to change passwords, stuff like that, right?

FUENTES: What are you going to do? Not going to move, change Social Security. Any change you would make you would have to make it in the records of OPM and frankly I've had a few dealings with OPM. It would take them about 18 months to figure it out.

BLITZER: Kevin, what are the Chinese going to do with all this information?

MANDIA: Yes. I really don't know. You know I'm not a mind reader. I don't know what they intend to do. I just look at the scale of this. It's not stopping just at government organizations. You see the health care providers being targeted. I think that the real important issue, Wolf, is we've got to figure out as a country, is it reasonable for us to defend ourselves against state enabled attacks like this?

Because there's no doubt in my mind the Chinese government, if they're not behind it, are certainly aware of attacks of this nature.

BLITZER: You -- Tara, you were an analyst at the CIA. Your personal information could have been compromised as well?

MALLER: They didn't really specific what agencies in particular were affected, although reports have said over 20 federal agencies have been affected. So I think they said they're going to be notifying people affected on Monday. So hopefully we're not sitting here as victims of the attack. I think the interesting thing to see and to look for is how does the U.S. respond and if and when it is made public, the specifics in terms of attribution, is the United States going to issue sanctions, is it going to just do some more public shaming?

And there's a, you know, strategic and economic engagement summit coming up at the end of the month here in D.C. with the Chinese. So it'll be interesting to see how Secretary Kerry handles it in the upcoming discussions.

BLITZER: Yes, the Chinese -- their president is supposed to come here in the United States in September. We'll see how that works out as well.

Tara Maller, thanks very much. Tom Fuentes, you'll be back. Kevin Mandia, always good to get your expertise as well.

Coming up, an ominous new warning that civilians are at risk because of a -- of new fighting in a U.S. ally, a prelude to a full scale invasion by Russia's Putin. Stand by.

Also shocking new allegations of sexual abuse involving the former speaker of the House of Representatives, Dennis Hastert.


[17:41:45] BLITZER: We're following breaking developments in the Dennis Hastert scandal. The former Illinois congressman, the former speaker of the House, is under federal indictment for allegedly lying to the FBI and violating banking rules to cover up payments to an unnamed individual because of what prosecutors call Hastert's, quote, "prior misconduct."

Now the sister of a man who was an equipment manager for a high school wrestling team that Hastert coached back in Illinois has now come forward. She tells ABC News her brother who died in 1995 told her in 1979 that he was gay that he was gay and he was abused by Dennis Hastert.


JOLENE BURDGE, SISTER OF ALLEGED VICTIM OF SEXUAL ABUSE: I asked him, Stevie, when was your first same-sex experience? I mean, he just looked at me and said it was with Dennis Hastert. And I just -- I know I was stunned. I said why didn't you ever tell anybody, Stevie? I mean, he was your teacher. Why didn't you ever tell anybody? And he just looked at me and said who is ever going to believe me?


BLITZER: The woman tells ABC she never asked Hastert for money and only recently was contacted by the FBI. Hastert and his attorney have not responded to CNN's request for comment.

Joining us here in the SITUATION ROOM is Lynn Sweet. She's Washington bureau chief for the "Chicago Sun Times" and CNN senior Washington correspondent Jeff Zeleny.

What else are you hearing about this, Jeff? You worked in Chicago, you reported from Chicago for a long time. What else are you hearing about what's going on now?

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Friends and fellow members of Congress who the speaker served with are still stunned by this. And they're stunned even more today by these new revelations that we're hearing from the sister because she also attended the same high school. So on Facebook actually, she posted a story of Speaker Hastert and she also said, I can say with absolute certainty there's so much more to this story, finally the truth.

There was somewhat of a conversation going on with former alums in the school. But no one so far that we've talked to on the wrestling team, fellow students, fellow teachers, remembers anything like this at all. One other thing we are learning, the FBI is confirming that they have talked to a second person and are confirming that they did talk to her but she is not part of any of this. So there are at least now three victims but two people here who are central to this investigation.

BLITZER: You covered Illinois, Chicago politics for a long time, Lynn. Is there any -- did you ever have any indication at all that the speaker of the House had some sort of sordid background if you will?

LYNN SWEET, WASHINGTON BUREAU CHIEF, CHICAGO SUN-TIMES: Absolutely none. When the indictment came out last week people were shocked as more details came, dealing with sexual misconduct. Even more shocked. I mean as you know and as Jeff knows just having politicians in Illinois get accused of corruption, well, that's kind of common. We're used to that.

This is a whole new situation that no one ever knew was anything that Dennis Hastert would be involved in. Plus when he had the apparent bad judgment of how he decided to pay individual A and talking to the FBI apparently it looks like without a lawyer. BLITZER: You have no idea who individual A is?

SWEET: I -- I have --

BLITZER: And Jeff, you have no idea who individual --

ZELENY: I do not know who the individual is. Someone who was at that high school presumably during that time frame but we do not know who it is and no one seems to be coming forward.

SWEET: But what is --

[17:45:05] BLITZER: One former congressman did say the other day that yes, he had heard rumors, sort of rumors, if you will, but just sort of shrugged it off.

SWEET: I don't know why he is saying that now. I saw that, too. If you have any specificity or something, but here's something to think about. I understand that if this did happen you had those weeks in 1998 when Denny had in that whirlwind day locked up the nomination for speaker because Newt Gingrich wasn't going to be speaker and the man who is heir apparent, Bob Livingston.

ZELENY: Bill Livingston.

SWEET: Bob Livingston.

ZELENY: Bob Livingston.

SWEET: Had his own affair and this is in the context of the day that the House voted to impeach Bill Clinton who had his own Monica Lewinsky problems. All some of these people had to do if it was out there is just -- start talking about it and I am pretty sure Denny would not have become the speaker. They would have moved out.

BLITZER: Back in 2006 there was a scandal involving a former congressman, Mark Foley of Florida, who supposedly was sending inappropriate texts to young pages working up on Capitol Hill. At the time Dennis Hastert was speaker and he said this.


DENNIS HASTERT, FORMER SPEAKER OF THE HOUSE: We will do everything possible to make the program safe for the kids while they are in our care in Washington, D.C. And we will make sure that we can be a resource for their parents once they return home.


BLITZER: Understandably a lot of people are focusing in on that right now.

ZELENY: Right. And new questions about that. At the time he was criticized by some Republicans and some others for not acting swiftly enough on Congressman Foley, and it opened up a lot of questions about his management style. It ultimately led to Republicans who lost the House later that fall and Democrats took control and he left the House. I mean, now this is all in this context had we known it is a whole different thing.

But again, his staff, I talked to them, we know the same people, we covered him for a long time. No one says that they remember any of this. So this is something that he clearly either kept to himself or to a very tight circle.

SWEET: And more telling when I talk to former staffers now today I've been saying, well, did anyone come to the office with a story that they said they wanted to tell, maybe you brushed it off at the time, maybe the person didn't push enough. Is there anything where somebody tried to say I have important information and they all say no.

BLITZER: Although the sister of this young man who died in 1995 she did go supposedly to ABC News and offered this information but not on the record and nothing ever emerged from that.

SWEET: And ABC said that Denny denied it.

ZELENY: Right. It was not on the record so there would have been only rumors at that point.


ZELENY: But in the rough and tumble of Chicago politics amazing that this did not come out.

BLITZER: All right. Guys, we'll leave it on that note but we'll continue to cover the story. Obviously, thank you.

SWEET: Thank you.

BLITZER: President Obama reassures the U.S. ally it has its strong support but is Russia's Vladimir Putin planning a full scale invasion?


[17:52:23] BLITZER: Tonight new fears of a full-scale Russian invasion of Ukraine.

Let's go to Brian Todd, he's watching the story -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, President Obama's conversation with the Ukrainian president tonight strikes at the urgency of what's happening in Ukraine and their concerns over what Vladimir Putin might do next. Mr. Obama is sending his U.N. envoy, Samantha Power to Ukraine next week. This all comes as the security situation there is growing worse by the minute.


TODD (voice-over): Pro-Russian rebels blast away at Ukrainian forces. One rebel scrambles into an underground shelter.

The worst fighting inside Ukraine in months has the Ukrainian president issuing a new and ominous warning. Petro Poroshenko tells his military he's convinced of Russia's intentions.

PRES. PETRO POROSHENKO, UKRAINE (Through Translator): A full-scale invasion along the whole length of the border with Russia, we must be truly ready for this.

TODD: Officials at the White House, State Department and in U.S. intelligence aren't commenting on whether they share the belief that Vladimir Putin might launch a full-scale invasion of Ukraine. But tonight U.S. officials tell CNN they're concerned about attacks by combined forces from Russia and the separatists. Russia they say is ignoring the cease-fire.

SAMANTHA POWER, U.S. AMBASSADOR TO THE U.N.: It goes right on applying its playbook in new territories as though this council and the world are too blind or too easily deceived to notice.

TODD: Putin has denied that Russian troops are inside Ukraine. A State Department official tells CNN the Russians not only have heavy weapons there, but that Russian officers are in Ukraine leading separatists.

SAMUEL CHARAP, INTERNATIONAL INSTITUTE FOR STRATEGIC STUDIES: Well, he has invaded Ukraine, and he's trying to keep it a covert war, as best as possible.

TODD: But a full-scale Russian invasion of Ukraine is another story. Putin could be held back by his fear of more sanctions and a possible bloodbath.

JOHN HERBST, FORMER U.S. AMBASSADOR TO UKRAINE: He could obviously take that territory. But there will be a guerilla war conducted by Ukrainians and he'll have a lot of casualties. He can take almost any place in the Ukraine or any place in Ukraine he wants, holding it is highly unlikely.

TODD: But with his aggression towards Ukraine, his fighter planes' close encounters with American warships, and other provocations, analysts say Vladimir Putin is seeking to recapture the days of Russian dominance over its neighbors. Putin's next possible target might draw America into a fight.

HERBST: We need to wake up and understand his ambitions go beyond Ukraine. He has committed serious provocations against the Baltic states who are NATO allies. If we don't stop him in Ukraine, he might strike in the Baltic states where we have a duty to use our troops to defend.


TODD: John Herbst says the Obama team does not understand the urgency of stopping Putin in Ukraine before he can get to the Baltics. He says Putin sees the United States and NATO as weak and is taking advantage.

[17:55:08] An administration official countered by telling us their actions against Putin have been strong and they are serious about keeping him in check -- Wolf.

BLITZER: Brian, thanks very much. Brian Todd reporting.

Coming up, U.S. officials are blaming China for an extraordinary cyberattack on the federal government.


BLITZER: Happening now, blaming China. Investigators think the Beijing government is behind an unprecedented cyber attack on the United States that could lead to blackmail or worse. How was the federal computer nature cracked?