Sony �made a mistake’ in canceling release of �Interview,’ Obama says

Reporting from Washington â€”  President Obama on Friday said Sony Pictures “made a mistake” in canceling the release of the satirical film “The Interview” after threats from anonymous hackers, offering an unusual public rebuke by a president of a corporate decision along with a strong defense of free expression.

Obama said he was “sympathetic” to Sony executives, whose computer systems came under attack from hackers who the FBI says were directed by the North Korean government. “The Interview” depicts a fictional plot to assassinate North Korean leader Kim Jong Un, and officials of that government have denounced the film but have denied involvement in the attack.

But the president, speaking at a White House news conference, sided decisively with the studio’s critics on the issue of creative freedom. In response, Sony Pictures Entertainment’s chief executive, Michael Lynton, sought to deflect responsibility onto theater chains, saying Sony had “no alternative” but to cancel the release after exhibitors balked.

Obama appeared eager to rebuke Sony, skipping over a question about North Korea’s role in the case to first deliver the criticism of the studio.

“We cannot have a society in which some dictator someplace can start imposing censorship here in the United States,” he said. “Because if somebody is able to intimidate folks out of releasing a satirical movie, imagine what they start doing when they see a documentary that they don’t like or news reports that they don’t like.”

In addition to outright censorship, Obama said, there is the “even worse” risk that “producers and distributors and others start engaging in self-censorship because they don’t want to offend the sensibilities of somebody whose sensibilities probably need to be offended.”

Obama said he wished Sony executives had spoken to him before making their decision to pull the film.

“I would have told them do not get into a pattern in which you’re intimidated by these kinds of criminal attacks,” he said. “We can’t start changing our patterns of behavior any more than we stop going to a football game because there might be the possibility of a terrorist attack.”

Earlier in the day, FBI officials issued an extremely rare public statement about a significant criminal investigation still underway, saying that North Korea had conducted the attack and posed “one of the gravest national security dangers to the United States.” It was the first time the government has ever publicly blamed a foreign state for a specific, destructive cyberattack on a U.S. target.

Obama said the U.S. would respond, but he declined to outline the options under consideration.

“They caused a lot of damage. And we will respond,” he said. “We will respond proportionally, and we’ll respond in a place and time and manner that we choose.”

Lynton insisted that Sony “would still like the public to see this movie.”

“The president, the press and the public are mistaken as to what actually happened,” he said in an interview with CNN’s Fareed Zakaria.

“We do not own movie theaters. We cannot determine whether or not a movie will be played in movie theaters,” he said.

“When it came to the crucial moment,” when the hackers made statements “threatening audiences who would go to the movie theaters, the movie theaters came to us one by one over the course of a very short period of time” and said “they would not carry the movie. At that point in time, we had no alternative” other than to cancel the release date, he said.

Theater owners disagreed with that characterization. Speaking anonymously, officials of theater companies said that in a meeting Tuesday, Sony officials told theater executives that they were free to make their own decision on whether to screen “The Interview” and that the studio would not take actions against them. Several companies were prepared to show the film, they said, rebutting Lynton’s assertion that Sony had no distribution channel.

Lynton also said he had discussed the general subject of the attack with White House officials, but stopped short of saying that he had discussed the decision to cancel the Dec. 25 release.

Sony is still considering other ways for the public to see the movie, including video-on-demand services, but no one “has stepped forward and said they are willing,” he said.

Neither the FBI nor the president disclosed who in the North Korean government approved the hacking or whether others outside Pyongyang were involved. Obama did say, however, that there were “no indications” that another government took part in the attack.

But the motive was clear: The self-styled Guardians of Peace group that carried out the attack sought to punish Sony, and did so with a vengeance.

The intrusion was carried out with “destructive malware and the theft of proprietary information as well as employees’ personally identifiable information and confidential communications,” the FBI said.

They noted that thousands of Sony computers became inoperable, that Sony was forced to take its entire computer network offline, and that the hacking “significantly disrupted the company’s business operations.”

The hackers caused tens of millions of dollars in damage; destroyed valuable files; leaked five films, four of them unreleased; and exposed private employment information, including 47,000 Social Security numbers.

The company requested FBI assistance within hours, the bureau said. And the FBI has collected key pieces of evidence that place North Korea’s fingerprints on the attack.

Technical analysis of the data-deletion malware “links to other malware that the FBI knows North Korean actors previously deployed,” the bureau said. Agents found similarities in specific lines of code, encryption algorithms, data-deletion methods and compromised networks.

The bureau also said it discovered a significant overlap in the system used in the Sony attack and “other malicious cyber activity the U.S. government has previously linked directly to North Korea.”

The tools used in the Sony attack had “similarities to a cyberattack in March 2013 against South Korean banks and news outlets, which was carried out by North Korea,” the statement said.

Federal law enforcement officials have increasingly warned that cyber crime presents a severe threat to the United States. Targets could be a power grid or Wall Street, causing widespread chaos to infrastructure and the economy, they have said.

For now, however, Sony has become the corporate face of what can happen when cyber criminals attack private industry.

“It is a despicable, criminal act,” Chris Dodd, chairman and chief executive of the Motion Picture Assn. of America and a former senator from Connecticut, said Friday. “Disappointingly, that fact has been lost in a lot of the media coverage of this over the past few weeks. The situation is larger than a movie’s release or the contents of someone’s private emails.”

Homeland Security Secretary Jeh Johnson said, “Every CEO should take this opportunity to assess their company’s cyber security.”

On Capitol Hill, Rep. Ed Royce (R-Fullerton), chairman of the House Foreign Affairs Committee, called upon next year’s Congress to pass a financial sanctions measure against North Korea similar to one from 2005. “This regime must feel the great economic pressure these sanctions brought and could bring again,” he said.

Rep. Adam Schiff (D-Burbank), a senior member of the House Intelligence Committee, urged Obama to hold North Korea accountable. “The Kim regime must be made to understand that acts such as these will only deepen its diplomatic and economic isolation,” he said.

Times staff writer Richard Verrier in Los Angeles contributed to this report.

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