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THE LEAD WITH JAKE TAPPER

Chinese Fugitives Harassed in US; North Korean Threats; Rape Allegations At NH Prep School; Amazon CEO Rejects Work Environment Accusations. Aired 4:30-5p ET

Aired August 17, 2015 - 16:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[16:31:07]

BERMAN: Welcome back to THE LEAD. I'm John Berman, in for Jake Tapper.

The national lead, a mad scramble to get the upper hand on wildfires burning out of control out West and into the Rockies, nearly 80 wildfires, 80 considered large in scale, draining resources.

Firefighters nicknamed one near Boise, Idaho, the Soda Fire. It now stretches some 340 square miles. That's larger than New York City.

The national preparedness level is now at level five. That's the highest, as emergency officials urge people who live near these fire to consider their what-if evacuation plans.

(WEATHER UPDATE)

BERMAN: Our world lead, spy games.

It's called Operation Fox Hunt. It's happening on U.S. soil. And now President Obama is warning China to cut it out. That's next.

(COMMERCIAL BREAK)

[16:37:40]

BERMAN: Welcome back to THE LEAD. I'm John Berman, in for Jake Tapper.

Making headlines in the world lead today, the U.S. telling China there are rules even when it comes to spying. Obama administration officials are demanding Chinese government agents operating covertly here in the U.S., they want them to immediately end their attempts to -- quote -- "convince Chinese fugitives living in the U.S. to return home and face justice."

That stern warning first reported by "The New York Times." The campaign, called Operation Fox Hunt, is a major part of China's effort to crack down on alleged corruption.

We want to get straight to CNN's chief security national correspondent Jim Sciutto. Jim, it sounds complicated, but, at one level, the United States is

accusing China of having a lot of covert operators here right now, spying and doing things on U.S. soil it doesn't want them to do. You have got new information.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: That's right,

Well, the new information is U.S. officials confirming that U.S. diplomats have warned their Chinese counterparts about this new activity. Now, listen, countries spy on each other. The U.S. certainly spies on China, China on the U.S.

But you have declared spies doing what is almost widely accepted as espionage on the ground. This is something different, because you have in effect Chinese law enforcement officials pressuring Chinese citizens who are here in the U.S. to go home and face justice there, as part of what until now has been a domestic anti-corruption drive by the Chinese president.

This is unbelievably huge, John, just to make clear, that the new Chinese president is going after thousands of Chinese officials right up to the most senior leadership for corruption. I'm talking about corruption sometimes in the billions of dollars.

A lot of them have been put away, but now China extending that anti- corruption drive from within its own borders to here on U.S. shores. That was too much for U.S. officials. They have warned China to stop it.

BERMAN: Yes, it's just peculiar. It's not the type of thing you normally see.

And of course this comes right before the Chinese leader, Xi Jinping, is coming to the United States. Will this complicate the meetings?

SCIUTTO: I got to tell you, John, the list of issues between the U.S. and China now is really remarkable. And it's hard to think of a time in recent history where they have had so many major disagreements.

You have U.S. officials all but publicly blaming China for really the largest hack of the U.S. government ever before, more than 20 million federal employees current and former from the Office of Personnel Management, the director of national intelligence, James Clapper, basically fingering China for that. You have China building manmade islands in the South China Sea, against, the U.S. says, international law.

[16:40:21]

SCIUTTO: You will remember I flew on a Chinese spy plane over it as the U.S. sent a message to China that we don't accept that.

And now you have this, Chinese spies around -- doing law enforcement in effect on U.S. soil. And last week, John, it just devalued its currency, which is something the U.S. opposes as well. That's a long list to have on the table when a Chinese president comes to visit the U.S. It's his first visit to the U.S. as an official summit as well.

BERMAN: Yes, welcome to America. Here's all the problems we have with you.

SCIUTTO: Exactly.

BERMAN: Jim Sciutto, great to speak with you. Thanks so much.

Want to talk more about the U.S.-China relationship and order world news.

Joining us is "Forbes" columnist Gordon Chang. He has written extensively about China, is also the author of the book "Nuclear Showdown: North Korea Takes on the World." And we are going to talk about North Korea, so that is pertinent.

But first, Gordon, I want to talk about China. You are a man of the world. One of my favorite books about international relations is Thucydides writing about the Peloponnesian War. He says the strong do as they will, and the weak suffer as they must.

Is this a case of China sending all these spies here on U.S. soil, is this a case of China just doing what it wants to do and the U.S. has to bear it, or can the U.S. do something about this?

GORDON CHANG, AUTHOR, "NUCLEAR SHOWDOWN: NORTH KOREA TAKES ON THE WORLD": Well, we certainly can do something about it.

But the reason why the Chinese do this -- and this is a violation of American sovereignty, because this is not spying. This is basically law enforcement on our territory, without talking to us. The reason why the Chinese are doing this is because for more than a decade we have allowed Chinese operatives to engage in all sorts of impermissible activities, especially spying on Chinese students on campuses and organizing demonstrations on American soil.

And because we allowed them to act with impunity, now they don't think that this is such a big deal, Operation Fox Hunt. So I think this is not a question of they're being strong and we're being weak. This is just we have been teaching them all the wrong lessons.

BERMAN: You say stop now and they will just stop?

CHANG: I think we probably are going to have to impose some costs, because we have said to the Chinese not only on this issue, but others, stop now and we have never really done anything to really impose consequences.

So we're going to have to probably do that to get them to stop these activities.

BERMAN: I want to shift to North Korea right now, because North Korea once again threatening the United States, threatening an attack on the U.S. homeland, saying it has offensive weapons unknown to the world. This is in response to the joint U.S.-South Korean operations that happen every year. But there are people suggesting that this threat seems especially caustic. In your mind, Gordon, is threat different than all other threats?

CHANG: We will only know a few weeks from now.

The North Koreans make threats all the time. Every once in a while, they carry through on them. And the issue here is that now they have long-range missiles that can reach the West Coast of the United States and they also have nuclear warheads. The reason why they don't kill a lot of Americans is because they think it's in their interests not to do so.

Therefore, we do have to be concerned. Even if we think this is bluster, and I actually think it is, they have the capability of making a pretty direct impact on us.

BERMAN: They have the capability and they make these threats, but it doesn't seem to me at least like the U.S. changes its actions in that part of the world because of these threats, or am I missing something?

CHANG: Yes, and to a certain extent, we shouldn't. We should continue working with the South Koreans, making sure that they can defend themselves.

And there's a lot of things that the United States does to guarantee security and peace in East Asia. And we should continue to do those, but we have to recognize the North Koreans now have more capabilities, and have got a very insecure political system with all of these executions indicating that there are real problems of Kim Jong-un, the leader, actually keeping control of his regime, especially the military. So this is a dangerous situation.

BERMAN: A dangerous situation. We will wait, Gordon, as you say, another few weeks to see if this is just the usual bluster. Gordon Chang, thank you so much.

CHANG: Thank you.

BERMAN: Sickening accusations at a prestigious New England prep school, a student accused of rape. Was this alleged incident some part of a sexual competition at the school? That's next.

Plus, Amazon's CEO defending his company after a "New York Times" expose says it's a brutal place to work, where backstabbing is encouraged. That's next.

(COMMERCIAL BREAK)

[16:45:30] BERMAN: Welcome back to THE LEAD. In the National Lead, an elite prep school in New Hampshire rocked by a scandal coming to light in a rape trial starting today. St. Paul's has a distinguished list of alumni including Secretary of State John Kerry, former FBI Director Robert Mueller and also the Breakfast Club's Judd Nelson.

There are allegations the institutions that dates back to the 1950s, it could have been an unwanted tradition, a so-called senior salute, a contest to sleep with younger students.

Officials are looking into a possible culture of sex and competition among the young men on campus. The claim surfaced when a senior was charged with sexual assault. It is a disturbing story.

CNN's Boris Sanchez is following this case and joins us now -- Boris.

BORIS SANCHEZ, CNN CORRESPONDENT: John, officials at the school were trying to distance themselves from these allegations. We're learning that several students are expected to testify in court, potentially shining a light on this controversial tradition that allegedly took place at a prestigious institution.

(BEGIN VIDEOTAPE)

SANCHEZ (voice-over): Six congressmen, 13 U.S. ambassadors and our current secretary of state, John Kerry, have all called this prestigious prep school home. But today the steeped traditions of St. Paul's School in Concord, New Hampshire are getting a closer look as allegations of rape put the school under a spotlight.

The 19-year-old Owen Labrie has been charged with sexual assault of a 15-year-old student on campus last year, just two days before his graduation.

[16:50:03] Signing a police interview with Labrie, the "Associated Press" reports the alleged rape may have been part of a tradition called the senior salute.

The "Concord Monitor's" Jeremy Blackman says Labrie was not in the contest alone.

JEREMY BLACKMAN, STAFF REPORTER, "CONCORD MONITOR": This case raised an issue that a number of students are taking part in an annual tradition of competing with one another to have sexual encounters with underclassmen.

SANCHEZ: According to the AP, senior boys kept a running tally of sexual encounters with a marker on a laundry room wall. Later the teen told the detectives he was trying to be number one.

BLACKMAN: Owen Labrie claims that there were a couple of different kinds of senior salutes, some that were not sexual at all. Some that were just, you know, going for a walk with a student or kissing someone.

SANCHEZ: Court documents obtained by Blackman show Labrie's encounter went well beyond kissing.

BLACKMAN: According to his account, she was acting aggressively towards him, and that he in fact had a condom in his pocket that she pulled out, according to his account. That he put on, but from divine intervention, and it went no further than that.

SANCHEZ: According to the monitor, however, a medical examination shows the female student had a, quote, "laceration that would be consistent with penetration having occurred," end quote. Labrie has pled not guilty to all charges.

A spokesperson for St. Paul's tells CNN, quote, "Current allegations about our culture are not emblematic of our school or our values, our rules or the people who represent our student body, alumni, faculty and staff," end quote.

(END VIDEOTAPE)

SANCHEZ: The AP also reporting that Labrie was set to attend Harvard this year, but John, the school says he's no longer enrolled there.

BERMAN: All right, troubling. Boris Sanchez, we'll watch this story. Thank you so much.

Coming up for us, "Star Wars" and space mountain in the very same place. For Disney, it's do or do not, there is no try. That's next.

(COMMERCIAL BREAK)

[16:56:27]

BERMAN: We are back with the Money Lead, from the company working to bring you drone deliveries and online groceries, Amazon may flaunt its creative innovative side to the public, but now company CEO, Jeff Bezos, is rejecting accusations about the work environment inside Amazon.

"New York Times" says current employees gave descriptions to the paper that go way beyond a hard day at work. Some say they've seen co- workers crying at their desk regularly, been forced to work late at night, participating in conference calls while on vacation and they describe a secret evaluation process used to criticize each other.

CNN Money correspondent, Cristina Alesci, joins me now. Cristina, what is Amazon's response to this?

CRISTINA ALESCI, CNN MONEY CORRESPONDENT: It was a pretty quick one. The "New York Times" published its story on Saturday, by Sunday Jeff Bezos, the CEO of Amazon issued a memo to employees.

He said, "The article claims that our intentional approach is to create a soulless workplace where no fun is had and no laughter heard. Again, I don't recognize this Amazon and I very much hope you don't either."

Now here's is the critical word here, intentional. He's not exactly denying that these specific incidents happened. What he's saying is he's urging employees read the article and report any kind of behavior like the one the "New York Times" described, to HR or to him personally.

So if you really want to parse words, you have to pay attention to the way he worded his memo, but there's pretty scathing stuff. I know you like to harp on the review system, but also the paper suggests they spoke to employees who told them that Amazon pushed people out because they took time off for medical reasons like miscarriage. That's pretty tough.

BERMAN: No one wants to be intentionally soulless and dystopian. Cristina Alesci, really appreciate you being with us. Thanks so much.

So you will never find a more wretched hive of scum and villainy, and it will be inside the happiest place on earth. Yes, Disney which back in 2012 purchased Lucas Film and The "Star Wars" franchise for $4 billion has announced it is building two huge "Star Wars" theme parks at Disneyland in California and Walt Disney World in Florida.

It is Disney's biggest expansion ever for a single brand. Visitors will soon be able to fly in a millennium falcon, or grab a drink at the cantino. Disney says the parks will be staffed by droids, but not the ones you are looking for, they are in the gift shop, and by roaming beasts, but please don't feed the wookies.

Disney didn't say when this galaxy far, far away will be ready for humans with credit cards and fast passes, but frankly it sounds awesome.

All right, a big surprise at the box office this weekend in our Pop Lead, "Straight Outta Compton" chattering expectations, topping the charts bringing in more than $60 million. It was only expected to bring around $25 million in its debut weekend.

The film chronicles the early beginnings of the rap group NWA, born out of the turmoil between the black community and the Los Angeles Police force back in the 1980s. Some movie theaters beefed up security ahead of the premiere, but no major incidents were reported.

Be sure to follow the show on our Facebook page. Tweet us @theleadcnn. I'm John Berman on Twitter and Facebook. You can follow me too, in for Jake Tapper today. I now turn you over to Wolf Blitzer in "THE SITUATION ROOM."