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ERIN BURNETT OUTFRONT

Corporate Greed Gone Wild; Al Qaeda Attacks; President Obama Taking Heat

Aired April 30, 2012 - 19:00   ET

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


ERIN BURNETT, HOST: Good evening, everyone. I'm Erin Burnett. Five stories OUTFRONT tonight. Dozens of exotic animals shot down after being released from a farm in Ohio, the survivors now going back to that farm.

And a crisis in America's relationship with rising superpower China, President Obama puts Osama bin Laden OUTFRONT. And a year later, al Qaeda has new plans for terror, a special report.

But first, tonight's Enron, the person OUTFRONT tonight is billionaire Aubrey McClendon. He is the outspoken, charismatic scion of one of America's wealthiest families and the founder of energy giant Chesapeake. Now tonight some analysts like Phil Weiss of Argus Research tell OUTFRONT Chesapeake could be the next Enron or WorldCom.

Chesapeake Energy is second only to ExxonMobil in drilling for natural gas in this country. More than 13,000 Americans work for McClendon, enjoying perks, which according to Reuters include on-site Botox treatments. Now Chesapeake also boasts a campus with three restaurants and a 72,000-square foot fitness facility with a rock climbing wall. Now while these goodies may have won employees over in the short term it may have been among the first signs that something doesn't add up. McClendon has often made grandiose promises that aren't backed by reality.

(BEGIN VIDEO CLIP)

AUBREY MCCLENDON, CHESAPEAKE ENERGY CEO: At a minimum, I think they can create a million jobs over the next few years.

(END VIDEO CLIP)

BURNETT: The "they" he's referring to is a fund Chesapeake was launching. Now, McClendon is not a household name, but what he's fighting for is. Even as natural gas prices have plunged by 50 percent over the past year, he's been a believer in gas as the fuel of America's future. And some people love him for it, others, not so much.

"Rolling Stone" calls him the world's biggest fracker. As a matter of fact, every headline they do is "World's Biggest Fracker Cullman" (ph), can't blame him with a moniker like that, but when pushed on the question of whether fracking chemicals pollute drinking water, in this case by "60 Minutes" McClendon didn't mince words.

(BEGIN VIDEO CLIP)

MCCLENDON: You don't drink Drano for a reason, but you have Drano in your house. If you want to define it as nasty, go ahead.

(END VIDEO CLIP)

BURNETT: His obsession may have gone too far. He's front-page material now for papers like "The Wall Street Journal". Thanks to his perks, which include more than $1 billion in loans, loans used to give McClendon a personal financial stake in every well Chesapeake drills and the company drills a heck of a lot of wells, 2,000 every year. McClendon says this arrangement keeps his interest aligned with shareholders because after all he's got a personal interest in picking good wells, right? The SEC may think otherwise. It has launched an informal investigation into those loans.

That's the tip of the iceberg. McClendon did at least 10 deals worth almost $6 billion, where Chesapeake got cash up front for natural gas it hadn't even produced or found yet. A Wall Street executive took one look at these deals, which are complex and difficult for investors to even find out exist, and told me today of McClendon, he's done.

Weiss of Argus Research says bankruptcy is now a real possibility for Chesapeake and that the company could soon be $7 billion in the hole. now even supporters of Audrey McClendon who say he did nothing wrong (INAUDIBLE) of Oppenheimer blames someone.

Geight (ph) blames the board for approving the deals and perks and this board is pretty stunning. It's stacked with politically connected friends including a former senator and Oklahoma governor who said yes, yes, yes to everything, including pay of about $200 million over the past five years. Take a look at this. We stumbled upon this today.

In a document entitled quote "Chesapeake Leadership in Action", this chart compares McClendon's 2011 compensation to other natural gas executives and they said, hey, look, it's down 15 percent. Sure, compared to the year he made $112 million. In 2008, it was the sixth biggest pay package in America. This is 2012, right, post-Lehman, post-Bear Stearns, post-Enron, post WorldCom, gees, even post-Corzine and MF Global. How can one of the biggest companies in America still be run like a personal fiefdom and considering these deals have been going on for years, how can boards and regulators seemingly still be asleep at the switch.

Andy Serwer joins us now (INAUDIBLE) and John Avlon also here. Andy it's a pretty amazing story. Not a lot of people know who this man is, but when they hear that, they may say, how can this happen?

ANDY SERWER, MANAGING EDITOR, FORTUNE MAGAZINE: It's amazing. I mean Aubrey is super smart, he's charming, he has this business, you know, well in hand, he really knows what he's talking about, but he definitely has the board of directors in his pocket. They're a board of enablers. The price of natural gas has gone down. That has really hurt his company and he's relentless. He just can't get enough, so he's all over the place. He's borrowing money, constantly trying to get more stuff, more houses, more land, wants to be king of the world, one of these people, and yet he just gets rubber stamped by the board again and again and again for the past decade and now maybe coming home to roost.

BURNETT: And what are you hearing? Because I know you've been talking to executives in the industry, especially when you start to see a company like this doing all these kinds of deals. It all comes down to people trusting whether they want to do deals with you.

SERWER: Yes, people in the oil (INAUDIBLE) that I talked to in Oklahoma are saying you know we're starting to like back off. Not to want to do deals with Chesapeake, not to want to compete against him because they've got very sharp elbows, someone told me a little sleazy. Also people on Wall Street are starting to really pull back, not wanting to invest with him as well, so that's kind of a problem for them.

BURNETT: And he's a big donor, John to -- to, well not environmental causes obviously and also Republicans.

JOHN AVLON, CNN CONTRIBUTOR: Absolutely, I mean there are two Republicans on his board. There's nothing wrong with that. But the real point is just the red flags that have been clustering around him for a long time. Here in October 2008, the year you say he had this huge pay package, he did a half a billion dollar margin call that ended up sinking his shareholder price 40 percent. Now that is doing violence to your shareholders in the near term and got away with it scot-free. According to Reuters, he's made over $1 billion in personal loans he's received in the last three years. Now, if that's not a sign of imbalance in a CEO, I don't know what is. How many times we've got to learn this lesson over and over. It's privatizing profits and socializing losses within the context of a privately owned company.

BURNETT: I mean and yes, he's the founder, as you say.

UNIDENTIFIED MALE: Yes.

BURNETT: A lot of people give him a lot of slack for that. You're the founder.

UNIDENTIFIED MALE: Right.

BURNETT: You're the one who came up with this whole idea. But no one ever checked him and shareholders, a lot of people -- this is the second biggest natural gas company in America.

(CROSSTALK)

BURNETT: A lot of regular people own this in their 401(k).

UNIDENTIFIED MALE: Right.

BURNETT: Other people's money getting slammed. SERWER: It's other people's money and they'll say well if you don't like it you're a shareholder, sell your stock. But a lot of people own the stock through pension funds and mutual funds and they can't help it. And the thing is I challenge the directors to explain the full implications of these loans to the bottom line, to the net profits of these companies, and I will bet you that they cannot do it. So there's unintended consequences, and as your guy said, your source very complicated stuff. And it gets more complicated and more complicated all the time. But, basically, it has everything to do with the price of natural gas being $2 per thousand cubic feet now, which is you know way down, so they're not making any money. That's the real problem with it. The price is going up, Aubrey's OK, price is going down, Aubrey's not OK.

BURNETT: And instead, he just doubles down, doubles down.

SERWER: Right.

BURNETT: But I mean how can this happen that you know after all of those examples I gave, people say, seriously, this still happens? Crony boards, huge pay package? It doesn't matter how smart you are and whether you founded the company, how the heck does this still happen?

AVLON: Clearly the incentive structures are out of whack. Once again we've seen this over and over. Here's the case of a board that doesn't seem to be doing its job and just policing the executive in question. I mean what's been done is absolutely indefensible. And part of the problem is, as Americans, we pay a lot of attention when they're sex scandals, but when they're financial scandals, we get a little bit confused by all the numbers, no matter how many people get hurt in their bottom line.

SERWER: And here's the other thing, Erin. You know when the highest point of your moral compass is that you are challenging the letter of the law, right? In other words, you're going to push the envelope of the letter of the law as far as it'll go, that's your moral compass, excuse me, you're going to get in trouble. That's bad stuff. I mean never mind the spirit of the law. There's no spirit of the law here at all.

BURNETT: All right. We'll leave it as that as the bottom line. Thanks very much to both of you. We're going to keep following this. Tomorrow we will get earnings from Chesapeake.

All right, "OutFront 2" is next.

(BEGIN VIDEOTAPE)

BURNETT: Still OUTFRONT pushing forward.

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: I believe America is on the way up.

BURNETT: Al Qaeda's secret stash.

UNIDENTIFIED MALE: What you have witnessed (INAUDIBLE) only the beginning.

BURNETT: All this OUTFRONT when we come back.

(COMMERCIAL BREAK)

BURNETT: OUTFRONT ahead, the death of Osama bin Laden used as a campaign tactic and a confession in the cyanide murder. But first, "OutFront 2" tonight, a CNN exclusive, chilling new information coming to light about al Qaeda's future plans.

Now, there was a break coming when German intelligence got its hands on a microchip after arresting an al Qaeda operative late last year. So when intelligence agents first looked at it, it actually had a pornographic movie on the chip. Maybe they would say OK, well more hypocrisy. They dug deeper. They uncovered a treasure-trove of sensitive information hidden beyond that, including what the group's next attack may be.

Nic Robertson has this exclusive story and he's OUTFRONT tonight. And what did you find when you had a chance to go through all of this information?

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: Well perhaps one of the most staggering documents in there is a document written by a man called Rashid Rauf, perhaps one of al Qaeda's best plotters and planners. He was responsible for the attacks in London, the 777-21, the liquid airline plot that would have blown up nine passenger jets as they were flying from Britain to the United States. That was in 2006 and has gone on to plot other attacks, including New York.

His accounts of his behind-the-scenes control and efforts to put those attacks through and one of the most staggering things in that was the fact that one of those plots that failed in London only failed because of one tiny missed telephone call. But it shows al Qaeda's skill and its dedication and it also shows that it's beginning to lose some of its core players, Erin.

BURNETT: And you talk about Rashid Rauf , obviously, he was killed in a drone attack. How much did that set al Qaeda back? And do you get a sense from this of whether key players have been eliminated by some of the successful attacks in Pakistan and in Afghanistan and in Yemen?

ROBERTSON: Absolutely. Rashid Rauf according to U.S. counterterrorism officials was at the top of his game, and that he's been missed by al Qaeda already. In fact, one of the reasons Najibullah Zazi was picked up in New York for an attack that he planned there just days before he was going to pull that attack off, was because Rashid Rauf had been killed and techniques that he used to avoid detection weren't being employed (ph) by the people that were replacing him.

Zazi was one of his planned attacks. But what we're learning is how al Qaeda is changing its tactics. It would like to attack cruise ships, execute passengers, upload the videos to the Internet. It would like a twin track (ph) strategy, cheap, low-budget, easy to pull off attacks as well as the big attacks. It would like to get its recruits back into Europe and the United States faster than it is at the moment, so it can confuse counterterrorism officials by having a lot of active players, if you will, in the field, and al Qaeda also wants to continue to try and pull off a Mumbai style attack, as we saw in India, 164 people killed by a handful of gunmen.

That's the sort of thing that they're trying to do, and we've seen through these documents and through al Qaeda's actions that they continue to pursue this. This is a massive insight into what al Qaeda's doing and why it's doing it -- Erin.

BURNETT: All right. Nic Robertson, thank you very much.

President Obama unveiled a new campaign video today. It actually has something to do with al Qaeda. And the seven-minute video chronicles some of his accomplishments. Al Qaeda leader Osama bin Laden is on that list, Carville and Frum OUTFRONT next.

(COMMERCIAL BREAK)

BURNETT: Coming up at the half hour, the new legal tactic being used by George Zimmerman's lawyer tonight, and a new development on the exotic animals taken and shot at an Ohio farm.

"OutFront 3", one year since the death of Osama bin Laden, the Obama administration taking heat for turning his death into a campaign talking point, adding fuel to the fire. An ad that came out today, with a new slogan, "forward", it touts Obama's achievements in job creation, health care, and bin Laden.

(BEGIN VIDEO CLIP)

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: Tonight, I can report to the American people and to the world that the United States has conducted an operation that killed Osama bin Laden, the leader of al Qaeda, and a terrorist who is responsible for the murder of thousands of innocent men, women, and children.

(END VIDEO CLIP)

BURNETT: CNN political contributor James Carville is here, David Frum here with me in New York. James, obviously not just that ad, you saw Bill Clinton, former President Clinton, making the same point about Osama bin Laden. The White House giving NBC access to "the situation room", of course, to, you know, tout this, tout this great achievement.

JAMES CARVILLE, CNN POLITICAL CONTRIBUTOR: Right.

BURNETT: (INAUDIBLE) going to put Osama bin Laden's personal writings on display. Is the president going over the line?

CARVILLE: No. There was a legitimate difference. Romney was critical of the effort to go after bin Laden. Secretary of Defense of Bob Gates, who is not even a Democrat, said it's the gutsiest call he's ever seen any president make. And actually, I think the White House is delighted by all of this controversy surrounding this. I'm not sure that there's a lot of votes in this, but everybody looks sort of like, what's going on? Remember Rudy Giuliani (INAUDIBLE) 9/11 or mission accomplished. I mean people have sort of taken credit for accomplishments for a long time. It's nothing new inside of politics, but all this attention drawn to it and the president jumped right back in the fray. I think they were very happy with the response to this.

BURNETT: And it's interesting, the president did comment on the whole controversy. I love this sound bite, because he uses the word "people" the way people only use it when they're referring to a person they don't want to name by name. Here he is.

(BEGIN VIDEO CLIP)

OBAMA: I just recommend that everybody take a look at people's previous statements in terms of whether they thought it was appropriate to go into Pakistan and take out bin Laden. I assume that people meant what they said when they said it.

(END VIDEO CLIP)

BURNETT: "People," it happens to be person, not they, singular, he, Mitt Romney. And here is what Mitt Romney said that the president was referring to.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Governor, you would have gone after bin Laden?

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Of course.

UNIDENTIFIED MALE: You would have given the order, Governor?

UNIDENTIFIED MALE: Well, of course.

UNIDENTIFIED FEMALE: Is it criticism of the Obama --

ROMNEY: Even Jimmy Carter would have given that order.

(END VIDEO CLIP)

BURNETT: And, his other comment was, David Frum, "it's not worth moving heaven and earth spending billions of dollars trying to catch one person." So perhaps a little bit different than even Jimmy Carter would have made that, but still doesn't look good.

DAVID FRUM, CNN CONTRIBUTOR: Let's give the president total credit for Obama -- President Obama, total credit for killing bin Laden, conceded. Now let's talk about the major foreign policy commitment this president made that is not mentioned in that video and that is his policy in Afghanistan because what Mitt Romney was talking about back in 2007, was President Obama, them candidate Obama, used the pursuit of bin Laden to justify a massive escalation of the war in Afghanistan. It is now all these years later, what has he got to show for it? So little, he doesn't mention it in his campaign advertising. That, if the killing of bin Laden was the great successful foreign policy call of this administration, the decision to massively invest in Afghanistan, something the Bush administration tried to stay away from, and was massively criticized for, that is looking like the biggest mistake and failure. What have we got to show for it for all these -- all this amount of money later. And it was worst of all, because it was a commitment that the president or then candidate made in 2007 and '8, for political reasons, to get to the right of the administration, to have something that made it seem like he was getting to the right of an administration he was otherwise criticizing.

BURNETT: James Carville, though, the president does have the headline. He got Osama bin Laden. So the nuance of what David Frum is saying whether you agree or don't agree it goes in that category of nuance, which is not a good place to be, right?

CARVILLE: I hope -- right -- I hope they don't get David as an adviser, because he's right. They shouldn't make -- say, oh, Jimmy Carter would have done it (INAUDIBLE). They would have just let it go. Again I go back to the point, I'm not sure there's a lot of votes here. Everybody knows about this. Sometimes I think that the White House or the president's people put this out just to egg a fight on and they got that.

The Romney people and the right should have never engaged in this thing. There's no new information here for the voter. The voter knows that they got bin Laden. The voter gives the president deserved credit for it and the Romney people would be smarter to talk about somebody else. They look like -- they look sour -- like sour grapes in this and I think the White House is happy with the whole thing.

FRUM: What the Romney people can talk about is President Obama said he would put his eye on the ball in Afghanistan. That's where his eye has been and what have we got for it? And not only that, but here's one other, I think, very disturbing consequence of the bin Laden raid. It now is obvious that Pakistan was sheltering bin Laden. The Pakistani military was sheltering him.

BURNETT: Yes.

FRUM: That's apparent to everybody.

(CROSSTALK)

FRUM: We can't talk about that because we are so dependent on Pakistan as long as we have this massive, new, increased commitment to Afghanistan. And the president's decision to commit to Afghanistan made the United States dependent on Pakistan, such that even when we catch them red-handed, doing the worst thing that anybody who has ever claimed to be an ally of the United States has ever done to the United States, this president cannot talk about it, cannot act on it.

BURNETT: Quickly, before we go, an op-ed in "The Washington Post" getting a lot of buzz. Thomas Mann and Norman Ornstein writing quote "We've been studying Washington politics in Congress for more than 40 years. We've never seen it this dysfunctional. We've criticized both parties in the past. Today, we have no choice but to acknowledge that the core of the problem lies with the Republican Party." That's a really damning thing.

FRUM: Look, these are two great experts on Congress. Congress is dysfunctional and it's been getting worse, but it needs to be remembered it's worse every cycle. It's worse today than it was four years ago. It was worse four years ago than it was four years before that.

We are on a downhill spiral. I don't know that it's helpful to point to one party. I think one of the reasons it's so bad now is because of the miserable economic conditions. But, you know, they're right -- last summer's debt ceiling crisis was driven by the Republicans and that was a near-death experience.

BURNETT: Yes. Before we go, James Carville, can I just ask you a question here?

CARVILLE: Yes.

BURNETT: What's that cat?

CARVILLE: That is a blue dogs, an LSU Blue Dog --

BURNETT: That's a dog with a real identity crisis.

CARVILLE: Right and this is -- Louisiana is 200 years old today. It was admitted to the Union April 30th, 1812, and this is commemorating that. This is (INAUDIBLE) my great friend (INAUDIBLE) who designed this and happy birthday to Louisiana.

BURNETT: All right. I love it. I love it, although I got to say --

(CROSSTALK)

UNIDENTIFIED MALE: A snarl or something --

BURNETT: -- that dog looks like a cat. That's all I can say. All right thanks to all of you, "OutFront 4" is next.

(BEGIN VIDEOTAPE)

BURNETT: Still OUTFRONT the great escape.

UNIDENTIFIED MALE: Obviously I'm aware of the press reports.

UNIDENTIFIED MALE: The reality is even harsher than the stories that have been circulating.

BURNETT: Widow and the beasts.

UNIDENTIFIED FEMALE: Can we ask you a quick question? BURNETT: All this OUTFRONT when we come back.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BURNETT: Welcome back to the second half of OUTFRONT. We start with stories we care about, where we focus on our own reporting from the front lines and first Chesapeake Energy's CEO Aubrey McClendon under fire tonight because of perks he's enjoying as head of the second largest natural gas company in America, perks like more than $1 billion in loans. Those loans gave McClendon a personal financial stake in every well that Chesapeake drills, and they drill a lot, 2,000 a year.

McClendon says this arrangement keeps his interests aligned with shareholders, because he wants, well, good wells picked. The SEC may think otherwise, though. It has launched an informal investigation into the loans. Analysts like Paul Weiss of Argus Research tells OUTFRONT Chesapeake could end up being the next Enron or WorldCom.

Number two, the former wife of an aide to John Edwards testified today about depositing money for the former presidential candidate's mistress. Edwards is on trial for allegedly using campaign funds to cover up his affair with Rielle Hunter. Cheri Young, wife of Andrew Young, told the court she was disgusted with having to deposit checks into her account from donors for Hunter's expenses. However, she testified that Edwards told her it was legal.

Our Joe Johns reports that the trial ended early because Young said she had a migraine. Young would likely to take a stand tomorrow for cross-examination.

Number three, the Obama administration, for the first time, publicly justifying its use of drone attacks against suspected terrorists. John Brennan, the president's chief counterterrorism adviser, said today the attacks are legal and only target al Qaeda terrorists who pose a threat to the United States. But the drone program has been criticized for how targets are selected as well as civilian deaths, which happen as collateral damage.

As we reported last week, the U.S. has expanded its use of drones against suspected terrorists in Yemen. Our sources say the frequency of strikes there has increased in recent weeks.

And number four, the little blue pill has some competition. The FDA has approved a new erectile dysfunction drug called Stendra. It's the first new E.D. drug to come out in about a decade. The drugmaker said that for some men, Stendra will work faster than the other three available drugs, which are Viagra, Cialis and Levitra. Apparently, some men could see results as little as 15 minutes.

There you go. You finally have that bar trick you want to pull on a guy you really didn't like.

Analysts we spoke to say that this is a good sign for Stendra's maker, Vivus, that they're more focused on whether or not the FDA will approve the company's weight loss drug, Qnexa.

Well, it has been 270 days since the U.S. lost its top credit rating. What are we doing to get it back? Data from the Census Bureau show home ownership has fallen to its lowest level in 15 years, 65.4 percent of Americans owned their homes, well off from 2004 high of 69.2 percent. People say that could be good thing.

All right. Our fourth story OUTFRONT tonight, tension between the U.S. and China could be at a 20-year high after a blind human rights activist escaped from house arrest and went and found refuge at the U.S. embassy in Beijing.

Now, tonight, Secretary of State Hillary Clinton is going to get on a plane and head over to China for high-level meetings. The timing is not fortuitous. The U.S. is furiously trying to smooth things over, trying to scramble an advance team to Beijing to start negotiations over the activist -- his name is Chen Guangcheng -- before Clinton even arrives.

Meanwhile, the United States hasn't even confirmed that he's in our custody.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Obviously, I'm aware of the press reports on the situation in China, but I'm not going to make a statement on the issue. What I would like to emphasize is that every time we meet with China, the issue of human rights comes up.

(END VIDEO CLIP)

BURNETT: This is not the only Chinese crisis, that, of course, is right now affecting the United States. The other one's been simmering now for over a month. We've been covering it a lot on this show.

It started when British businessman Neil Heywood was found dead in a hotel room in China back in November. The police have now ruled it murder. The government tossing a powerful communist Chinese leader Bo Xilai out of his office for corruption. The scandal was part rumors of the coup in China.

Bo hasn't been seen since. His wife is now arrested and accused of poisoning Heywood when a business deal went bad. Speculation is growing she could be about to put out a written confession.

Chris Johnson is a former China analyst for the CIA. He says the two controversies have created the most tension between the U.S. and China since the Tiananmen Square crackdown in 1989. It's a significant statement.

Chris Johnson is OUTFRONT tonight.

Chris, I have to imagine Hillary Clinton and Tim Geithner are not happy at all about having to go to China this week. CHRISTOPHER JOHNSON, FMR. CHINA ANALYST, CIA: No, absolutely not. As your piece pointed out, this really is probably the most delicate moment that the U.S. has faced in its relationship with China in over 20 years. And it's a very complex situation.

We've had, of course, the tensions emanating from the Bo Xilai case. Obviously, the Chinese leadership is very distracted by that. And now this, it is not helpful to the situation at all.

BURNETT: Well, I'm just curious, because the U.S. seems to be sort of ratcheting it up. You know, I remember when the U.S. sold arms to Taiwan and China wouldn't even let the defense secretary at the time, Robert Gates, come into China, they were so angry about it. And now, it looks like the U.S. is considering another arms deal to Taiwan, considering moving troops from Japan to islands in the Pacific that China seems to want to claim as its own.

So, what's the U.S. doing here?

JOHNSON: Well, I think it certainly is a sort of steaming caldron of these various issues. My sense is that they're all sort of uniquely timed, but not meant to, you know, send a deliberate message to Beijing.

But, of course, within China, that's how it will be interrupted by a lot of folks within the leadership. There's a large number of people there who take this sort of conspiratorial mindset that the U.S. is out to stifle China's rise. And they will see all of these moves as interconnected, even they probably aren't.

BURNETT: Yes. There was a people's daily in China today, of course, wrote, saying that this was absurd speculation by the foreign media. I actually -- I think the article said that the Internet was causing so much competition for foreign media that they need to report on this story in China and make it up, essentially. That's how pathetic it was.

So certainly, they're feeling -- they're feeling like this isn't fair.

JOHNSON: Yes, absolutely. In fact, all of those sort of stories that appear in people's daily, you know, the way to observe those is, of course, whatever they're saying, the opposite is true. So, in that particular piece, they noted that, of course, there is no struggle going on in Beijing.

BURNETT: Of course not.

JOHNSON: And, in fact, that shows that there is one going on in Beijing.

And the interesting part of that, though, is that the term political struggle is appearing in the front pages of the communist party mouthpiece. Again, that really hasn't happened in many, many years and it shows the depth of the political -- charged political atmosphere in Beijing right now. BURNETT: Chris, I'm also curious. A lot of people have been very frustrated in the United States about the Secretary of State Hillary Clinton going over to China in the past and not talking about human rights. That the U.S. has gone ahead and done deals and moved ahead in its relationship in China and not talked about human rights.

How is she going to avoid it this time when the United States seems to have a leading Chinese human rights activist in its embassy in Beijing?

JOHNSON: Yes, I think you're absolutely right. There's no way that they'll be able to avoid discussing the issue this time, and I don't think that's their intent. As President Obama pointed out, the U.S. does discuss this issue quietly behind the scenes with China, because they understand that that's usually the best way to make progress with the Chinese.

In this case, however, of course, the U.S. is facing its own political election season coming up. Governor Romney has already spoken publicly on the issue and I'm very sure the Obama administration is very much feeling the pressure to do right by Chen and his family.

BURNETT: Yes. But how do you prevent this from becoming a serious issue? I mean, she can't -- I mean, there's got to be a public resolution to this. If he's really in the embassy, he's going to come out. China won't be willing to lose face like this.

I mean, how does this get resolved?

JOHNSON: Well, that's the real pressure point at this point. Obviously, assistant secretary, Kurt Campbell, is in China right now, trying to resolve the situation. Everyone hopes that that will be resolved before Secretaries Clinton and Geithner arrive on the scene. If they do not, it really does threaten to steal the thunder from these very important strategic and economic dialogue talks where important issues like North Korea, Iran and Syria will be addressed.

And this, of course, could upset all that. If he doesn't come out before then, I think it will be some time before he leaves.

BURNETT: All right. Well, thanks very much to you, Chris.

Something to keep in mind for all of our viewers -- of course, China not on board with a lot of these Iran sanctions, a lot of things U.S. wants. Getting this resolved by the time Hillary Clinton and Tim Geithner arrive would be very difficult. After all, she's on the plane now.

And now the case against volunteer neighborhood watchman George Zimmerman. There's been -- less than two weeks after his arrest for the shooting of Trayvon Martin, but his defense is up and running. And they've got a new Web site, they have a Twitter account, and they have a Facebook page.

So why does a second-degree murder defendant have such an incredibly broad presence on the Internet? Now his attorney, Mark O'Mara, was on this show, saying it's all an effort to provide the public with details about the case. It's modern times, he's got to be a modern guy, and he's got to raise payment for what he says could be a $1 million case.

What is the real motivation behind this approach to defend George Zimmerman?

Paul Callan is a criminal defense attorney.

What is the motivation? He shut down all of his client's social media presence and did it all in a very formal, specific way.

PAUL CALLAN, CNN LEGAL CONTRIBUTOR: Well, it's a grand old media, you know, strategy of trying to influence the judge and the jury by moving public opinion. There was a case -- I think the masters of this were the people involved in the Amanda Knox case. You remember the American college student who was charged with murder in Italy? They put up a Web site called injustice in Perugia. And it has subcategories on every piece of evidence on the case. You'd click on it. It would take you to source materials in the case and then it would take you to a persuasive article about why they, the Amanda Knox people, were right.

You watch, they're going to do the same thing on this Web site. And it's a spin effort to spin the press and to spin public opinion toward George Zimmerman. And this can be a very effective strategy if the Web sites are done properly.

BURNETT: Now, are they doing it properly, so far? I mean, it looks like they've only got about 800 followers. This is a new site, so it's unclear how quickly that will grow, whether it will grow. The defense is following only the media.

CALLAN: Well, so far they're following only the media. But who they follow is not relevant as much as who follows them. Is the media following them?

Now, I took a quick look at it. It's sort of a professional kind of serious, non-tabloidy presentation.

BURNETT: Right.

CALLAN: But what you're hoping for is that a reporter who's writing a story and is looking for source material, one of the 911 tapes, they're going to click on that, because they can listen to the 911 tape there, and then there'll be a link to an article that says, you can't identify who's voice this is, given current technology, maybe that affects an article that gets written later on. That's how these things are done.

Now, it remains to be seen how they structured theirs. They've just set it up now.

BURNETT: Is this unprecedented? I mean, I know you talk about the Amanda Knox trial, but -- CALLAN: It's brand-new. Amanda Knox did it, Casey Anthony did it. It's getting to be the thing in high-profile cases now.

So, you know, they're just trying to --

BURNETT: Is this admission that a jury will always be biased, whether the members of the jury think they are or want to be, I'm not saying that. But, yes, people have -- there's no one in this country who doesn't know about this case.

CALLAN: Well, and we know statistically that people get their information from the Internet. The jury pool will be selected from people who read the Internet.

But here's the real question: will the judge try to shut it down? You know, it's unethical for an attorney to the try to directly influence a jury outside of the courtroom. This is being run by an attorney.

Very different than even in the Amanda Knox case, there were independent third parties running the Web site. This is unusual. O'Mara's running it himself. And I think he might get in trouble with the judge. So we're going to have to see how the judge responds to this.

BURNETT: All right. Well, that is going to be the key question. And we'll get an answer to that. I would imagine if he's going to do it, he's going to do it soon.

Now five exotic animals seized from an Ohio farm, you may remember some of those animals were shocked, it was a horrible story. But now the ones who survived are being sent back to that farm. We have that story, next.

(COMMERCIAL BREAK)

BURNETT: We're back with tonight's "Outer Circle," where we reach out to our sources around the world.

And we begin in London, where new evidence did little to shed light in the investigation into the bizarre death of a British intelligence officer. Gareth Williams was found dead in his apartment locked into a sports bag eight days after he was last seen alive.

Today, pathologists said the amount of time it took for him to be discovered makes it difficult to really know exactly what happened, but there are some very strange theories.

Dan Rivers is covering the story in London and I asked him what progress they're making.

(BEGIN VIDEO CLIP)

DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: Erin, it is a mystery worthy of a spy film. How on earth did Gareth Williams wind up dead in that bag inside his apartment when there was no sign of a break-in, no visible injuries on his body whatsoever, no real sign of how he died? Experts have suggested perhaps he was either poisoned or suffocated. They've tried to work out how he managed to get inside the bag when the key for the lock of that bag was inside.

Some suggested it was related to his personal life, $32,000 of women's clothes were found in his apartment. But his family insisted he didn't have a secret sex life, that he wasn't gay. At the moment, it remains an enigma -- Erin.

(END VIDEO CLIP)

BURNETT: All right. Thanks very much to Dan.

And now to the Central African Republic, where 100 U.S. Special Forces are helping their African partners to hunt down Joseph Kony and other leaders of his militant group, the Lord's Resistance Army.

Nima Elbagir visited one of the bases where the Special Forces are and I asked her whether they think they're getting closer.

(BEGIN VIDEO CLIP)

NIMA ELBAGIR, CNN CORRESPONDENT: It definitely seems like there's reason to be optimistic, Erin. Those 100 U.S. Special Forces that were deployed back in October are now finally up and running after having to contend with some of the most impenetrable forest in the world, in the region roughly the size of the state of California. That's where the LRA has been operating, across three countries.

But the reality is that LRA attacks are continuing. And one of the words we've been hearing for those involved with this operation is patience. Special Forces believe that Kony is in survival mode and cornered, but the reality is that he does remain a threat -- Erin.

(END VIDEO CLIP)

BURNETT: All right. Thank you to Nima.

And now let's check in with Anderson with a look at what's coming up at the top of the hour.

Hey, Anderson.

ANDERSON COOPER, HOST, "A.C. 360": Hey, Erin. Yes, we're keeping them honest tonight.

The back-and-forth and the political bickering over the killing of Osama bin Laden. Tomorrow obviously marks the one-year anniversary of the start of the raid on his compound. Today, candidates and surrogates marked the moment with charges and counter-charges of playing politics. We'll speak with Ari Fleischer and Paul Begala about that. Also, Peter Bergen who obtained exclusive access to the compound before it was demolished.

On the lighter side tonight, Jimmy Kimmel, after leading the laughs at the White House correspondents' dinner, Jimmy joins me to talk about some of the materials he did not use this weekend, some of the jokes decided not to go with. He'll tell them tonight. He also took a few shots at me, most at my ridiculous laugh.

Those stories and tonight's "Ridiculist" at the top of the hour, Erin.

BURNETT: All right. Looking forward to it, Anderson.

And now, our fifth OUTFRONT story: two leopards, two monkeys, and a bear, not exactly the kinds of animals you would expect to see in your neighborhood, unless your neighbor is Mary Anne Thompson in Zanesville, Ohio.

You may remember this. Six months after taking Thompson's exotic animals away, the Ohio Department of Agriculture says she can have them back.

Now, you may recall that her husband, Terry, released 56 exotic animals on his farm before he committed suicide. It had a horrible ending for so many of those animals. The uncaged sent the community into panic, obviously, a lot of them hunters. The authorities say they killed 48 of them for public safety.

The remaining animals have lived at the Columbus Zoo ever since and now are going back to Thompson's care.

Tom Stalf is the chief operating officer of the Columbus Zoo and is OUTFRONT tonight.

And, Tom, I appreciate your taking the time, coming on the show. Obviously, you've had these animals at your zoo for the past few months. Are you opposed to having them returned?

TOM STALF, COO, THE COLUMBUS ZOO & AQUARIUM: Well, I was also there during the tragedy at the Thompson farm on October 19th, and what I witnessed as their holding facility inside the house, as well as outside, was horrific. So I am opposed to having these animals leave the Columbus Zoo & Aquarium and go to such conditions.

BURNETT: And I'm a little bit confused, because I know at the time, there was -- people were shocked around the country that this could have happened. That these animals could be not just kept in what you describe and others described as bad conditions, but just that you would have animals like this at someone's home.

And my understanding was that the law had was that the law had changed. So obviously not?

STALF: Well, they're in the process. Unfortunately, Ohio is one of only a few states that did not have restrictions for dangerous wild animals. And currently the bill has passed the Senate and now on to the House.

It is something that is really needed especially when we talk about how many animals that could be in the state that are considered restricted species. We want to ensure public safety and animal welfare. And the good news is this bill is going to cover that.

BURNETT: So -- but not in the case of these animals. When are they going back?

STALF: Well, the state veterinarian did release the quarantine order today. So, now, we will be in negotiations with Mary Anne Thompson's veterinarian as well as our veterinarians to ensure that the animals are leaving the Columbus Zoo correctly.

I know the state of Ohio has still been pushing to ensure that the public is safe in Zanesville. We are very concerned that the cages the animals were in, they must be repaired. The cages that I witnessed, the primates were in bird cages, small bird cases in the basement. And the brown bear was in what I would consider, I might call a parrot cage.

BURNETT: I don't understand how the state even if they haven't changed the law that that would be acceptable. I mean, if what you're describing through that, that's just inhumane. Forget the laws of who can have animals. They've got to be taken care of to a certain standard, don't they?

STALF: Absolutely. And as the Columbus Zoo at the beginning was a resource for Mary Anne Thompson, a resource for the state of Ohio to educate the folks that are moving forward to pass the bill. We still stand as a resource to ensure that the public is safe and these animals are cared for.

BURNETT: And so, are you having direct conversations with Mary Anne? Do you think there's any chance this won't end the way it appears to be, which is the animals going back to those kinds of cages or no?

STALF: Well, we've reached out to Mary Anne Thompson. And we continue to be a resource and to help educate not only her but anyone else that would have restricted species to make sure that they have the proper husbandry standards and care. And that the proper habitat for them to ensure they have an enriching life. Not only that they are giving them proper care, but there's a purpose for them.

Because the bottom line is, these animals, these restricted species, do not make good pets. And we have been spreading that message. We'll continue to spread that message, that you do not want to own a tiger or a lion.

BURNETT: Right.

STALF: Now, I want to make sure that you understand, though, that there are private facilities that are outstanding. We're talking about what we were witnessing at the Thompson farm, places where there were holes in the cages. No perimeter fence. Not proper care, feces and mud and no shelter for the animals, way too small. That has to stop.

BURNETT: All right. Well, Tom, thank you very much. I appreciate your taking the time. The E-block is next.

(COMMERCIAL BREAK)

BURNETT: David Frum is back, contributing editor at "Newsweek" and "The Daily Beast," frequent guest on this show.

His new guest is called "Patriots," a novel about the inner workings of Washington, D.C., not an oxymoron, I promise, right? And a group of people he calls the corrupt and derelict political elite. It's available on e-book today and will be released in paperback on May 7th.

And joining us now OUTFRONT now, David Frum.

OK. So, corrupt and derelict political elite. I mean, I'm glad you're not picking on one party or the other.

DAVID FRUM, CNN CONTRIBUTOR: The parties in this book have fictitious names. It's set in an altered reality.

I want to take you out of the headlines to say, why is it the government has so badly failed so many American in this time of crisis? And to tell a story to the point of view of somebody pretty derelict himself, my protagonist, is kind of aimless guy, and he learns he's got to step up.

BURNETT: And so why fiction? Because you were -- is this one of those you put a disclaimer at the front, you know, any links to people or resemblance, don't sue me.

FRUM: If you think you're seeing something, don't sue me. Exactly.

And I want to make it funny because I think you can get your blood so boiling about these scandals that you need some humor to help you along, and I hope that this -- that this is funny. I mean, I think you also need to be able to give people a story, because otherwise, for so many people it's blah, blah, blah on TV. They feel betrayed. They feel no one is looking out for them. They don't understand what went wrong, things seemed to be better in the past.

BURNETT: And so this protagonist, this analyst --

FRUM: Walter Shotski (ph).

BURNETT: It sort of makes me think of thank you for not smoking, right? That guy, you need up connecting? Does this person get redeemed?

FRUM: He does. Walter Shotski is heir to America's largest mustard fortune. Everywhere he goes, people say to him Shotski like in the mustard. He's inherited a lot of money. He's a member of this idol, derelict class of wealthy people. And he thinks he's got a lot of problems in his life and that gives him an excuse. What he realizes over the course of the book is he has no excuse. In fact, it's the neglect of people like him that allows bad things to happen.

BURNETT: And I think one thing that's interesting from what you're saying is that it is bipartisan. I mean, in terms of the influence of wealth, it's not something only in one party. It's in both parties, right? You think how well people are in Congress.

FRUM: One of the worst people in the book is a lobbyist is a lobbyist who started as a anti-apartheid crusader and now is in the vast on the eastern (INAUDIBLE) that calls Mandela house, because he has not forgotten his origins in the anti-apartheid movement. Even as he takes money on a massive scale and spends it to corrupt Congress.

BURNETT: Wow. You sure they do all right, it fairs all right in the story?

FRUM: It's a very nice place.

BURNETT: That's good.

(CROSSTALK)

BURNETT: I'm from there so I've got to make sure. All right. Thank you very much.

FRUM: Well, thank you.

BURNETT: And check out the new book. Obviously you say David Frum talk about real people in real ways. Sometimes fiction speaks a whole louder than reality.

All right. Thanks so much as always for watching.

"ANDERSON COOPER 360" starts now.