CNN "CNN The Situation Room" - Transcript - Chinese Cyber-Spying

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BLITZER: Happening now: designs for some of America's top defense systems compromised by Chinese hackers. The House Intelligence Committee chairman is standing by live to talk about the growing danger from cyber-spying.

Also, I will ask a storm chaser what it felt like to be inside a tornado and shoot this remarkable video.

And the 9-year-old boy that took on Chicago's mayor, I will talk to him about his fight and the way he fires up a crowd.

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

Let's get back to our top story this hour, a disturbing new report about Chinese cyber-spying on some of America's most advanced weapons and aircrafts -- aircraft. It lists more than two dozen defense systems whose secret designs were targeted by hackers.

Joining us now, the House Intelligence Committee chairman, Mike Rogers.

Mr. Chairman, thanks very much for coming in.

REP. MIKE ROGERS (R-MI), CHAIR, HOUSE INTELLIGENCE COMMITTEE: Wolf, thanks for having me.

BLITZER: You saw the story in "The Washington Post," that Chinese hackers have gone through all these plans that the U.S. spent maybe trillions of dollars on to develop some of the most sophisticated weapons and they stole it. How significant, how serious is this problem?

ROGERS: Well, it is tremendously serious.

And this is something the Intelligent Committees have seen for a while, our intelligence community has been trying to get ahead of for awhile. But the viciousness in this, the volume of attacks, not only by the Chinese, but Russians and others, trying to get the blueprints of our most sensitive material is just breathtaking.

And they're getting better, so their capability for getting into systems and getting that kind of information. It is not just government networks, Wolf. They're also doing the supply chain. Anybody that is connected to any of our defense industry is really vulnerable to this type of attack.

BLITZER: Can you confirm that just "The Washington Post" story, that it was Chinese military hackers, if you will, that stole all this material?

ROGERS: I can't confirm what they have gotten, but I can tell you that it was the Chinese military, and they have been aggressively pursuing it.

And I will tell you this. And for folks at home, well, what does this mean to me? We in some cases have to go back for any material that may have been stolen, as you can imagine, and redesign it. It costs more money. It costs billions and billions of dollars extra to try to make sure that we are staying ahead of our adversaries with technology.

When they steal it, they leap ahead. That means we have to invest more and change that technology. It is a serious problem.

BLITZER: In the real world, though, you can't blame the Chinese for trying to steal it. You can't blame the Russians or others for trying to steal this kind of stuff, but you can blame the U.S. national security infrastructure, if you will, if it can't protect this kind of information.

ROGERS: Well, here is something to think about.

So, about 10 percent of the networks are government networks. And so we ask our intelligence agencies to go overseas and find out what the bad guys are up to. They bring information back and do a pretty good job about protecting government networks. It is that 90 percent. There's a common myth that the government or the NSA, the National Security Agency, CIA, others, are monitoring the private network. They're not. And so what happens...

BLITZER: They should be. I mean, if you have these private defense contractors, and their security is not good. And they're getting access to all of this sensitive material and Chinese hackers are stealing it from one of these big defense contractors, that's a -- that's a major problem.

ROGERS: Well, it's a huge problem. We think we have a separate answer by just allowing the government to share malicious source code with the private sector and the private sector to share back. That should happen. It hasn't yet.

BLITZER: Why hasn't it happened?

ROGERS: Well, it passed the House. We're awaiting action in the Senate. I think we're going to get a bill this year, a bipartisan bill sponsored by myself and my ranking member -- that's Lucas Berger (ph) -- that will pass in some form this year. I think that will happen.

But remember, you don't want your government monitoring the 90 percent of those private-sector networks. I think this is a uniquely American problem, but we have to have a uniquely American solution.

I think we have that, and part of that is -- is making all of the supply chain, everybody who makes the screws for a particular weapons system, to putting it together in its final form. And some of those have exceptionally good defenses. It's the weakness of that supply chain.

BLITZER: It's one thing trying to steal blueprints and steal technology. It's another to use that hacking ability to undermine a power grid or telecommunications network, to do something like that that could grind a big chunk of this country to a halt. Is there any evidence the Chinese, for that matter the Russians, want to do that?

ROGERS: Absolutely. We've seen -- it's now and forever more part of military planning. We saw that in Estonia, where the Russians went in, because they took a statue of a Soviet soldier down from a square. They did a very vicious and effective cyber attack. They prepped the battlefield, if you will, before they went into South Pacefia (ph) in Georgia with a cyber attack before they sent their takes in.

We know that now this is part of nation-state military planning. They will launch an aggressive cyber attack when we're in conflict. Now what should worry people is, yes, Chinese have the capability. Yes, the Russians have the capability, but now who is creeping up are Iran, South Korea. They're still a little ways behind.

BLITZER: South Korea, an ally?

ROGERS: Excuse me, North Korea. Apologize. I should have brought...

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ROGERS: Well, we hope they have a defensive capability anyway.

BLITZER: So, what you're saying, you're saying that Iran and North Korea have what?

ROGERS: Well, they're gaining in capability, and they're not rational actors. China isn't going to necessarily shut down our electric grid unless we're in conflict. You can't say that about Iran or North Korea.

What's happening is that you've seen that the Iranians are here on our shores. They have been probing our financial institutions. We know that they have been probing certain electric grids and whatnot. That's a real problem for us because again, there's a cyber war going on now. Most Americans are aware of it. And it is not one that we're well-prepared to handle from the private sector's perspective.

BLITZER: Let me shift to Syria for a moment while I have you. This report out now that the U.S. is, the president asked the Defense Department to take another look at a no-fly zone over Syria to try to deal with Bashar al-Assad. To go ahead and maybe arm some of these Syrian rebels. What do you think?

ROGERS: We have to do something. It's destabilizing the region. This is not just about getting involved in a conflict. Lebanon has started to deteriorate. The crush of refugees, the humanitarian crisis on Turkey, on Jordan. The pressure it's putting on Israel when you have now every flavor of terrorist now operating in Syria.

The problem here, Wolf, is that if it deteriorates, if it falls apart, if there's nothing left, you have all of those terrorist groups who want to get a hold of chemical weapons and very sophisticated conventional weapons. This is turning into a disaster beyond its borders, and we need -- I think we need to take some serious steps.

BLITZER: So you would support a no-fly zone?

ROGERS: I would but not necessarily the way some have called for with planes. We can use our Arab League partners to push down in the north and then from the south, and have weapon system capability that would not allow helicopters and airplanes to cause havoc.

BLITZER: What about arming the rebels? Because there's a lot of concern some of those weapons could get in the hands of el Misra (ph), for example, the al-Qaeda-oriented kind of terror group.

ROGERS: Well, the problem is those groups are being armed already. So the Arab League folks have been in there for a year providing weapons. And the one thing that's been missing, I think, is U.S. leadership to make sure that those weapons get into the right hands.

So we have the unique capability -- this is not about troops on the ground. This is not about engaging our Air Force. We want to use the Arab League, and then we can vet the folks who should be getting these weapon systems, train them, and give them intelligence packages to make them...

BLITZER: So I hear you saying -- I'm going to wrap it up -- you would support a limit, some sort of no-fly zone and some sort of provision of hardware, weapons if you will, lethal weapons to the rebels?

ROGERS: I would, in the cases of which we just talked about.

BLITZER: Under those circumstances. It's a tough, tough situation. You've got to be concerned if those weapons wind up in the wrong hands, which they easily could be.

ROGERS: Absolutely.

BLITZER: Congressman, thanks very much for coming in.

ROGERS: Thanks, Wolf.

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