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AROUND THE WORLD

U.S. Policy Toward Egyptian Crisis; JPMorgan Investigated; JP Morgan Hiring Probed; Couple Fights to Mary in Ecuador; Japanese Volcano

Aired August 19, 2013 - 12:30   ET

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


BRIAN TODD, CNN CORRESPONDENT: And, again, as for where he is Peter Bergen, our security analyst, says from the information he's been gathering he thinks the most likely place is Pakistan right now.

SUZANNE MALVEAUX, CNN ANCHOR: All right, Brian, thank you. Appreciate it.

Of course, we're going to watch for more developments throughout the afternoon here.

You can see more of Brian Todd's story about this tonight on "THE SITUATION ROOM." That is at 6:00 p.m. Eastern.

IVAN WATSON, CNN ANCHOR: Now here is we're what we're working on this hour for AROUND THE WORLD.

As Egypt falls deeper into violence, the question intensifies. What should the U.S. do? We'll look at the options.

Stay with us.

(COMMERCIAL BREAK)

WATSON: Welcome back to CNN'S AROUND THE WORLD.

The crisis in Egypt grows deeper by the day and the violence is escalating. Suspected militants ambushed two buses in the Sinai Peninsula today, and Nile TV reports 25 soldiers were killed.

Yesterday, at least 36 jailed members of the Muslim Brotherhood were also killed. The interior ministry says they died in an attempted jailbreak.

Meanwhile, Muslim Brotherhood members kept up their protest over the weekend. They're angry over the coup that toppled President Mohamed Morsy.

Let's bring in Fawaz Gerges. He's a professor of Middle Eastern politics and international relations at the London School of Economics.

Now, Professor Gerges, should we be concerned that Egypt may be descending into what could be the Middle East's next civil war right now? FAWAZ GERGES, LONDON SCHOOL OF ECONOMICS: I don't think we're talking about all out civil war like Syria or Lebanon or Iraq.

Remember, Egypt has powerful institutions, not only the security and military apparatus, a very vibrant civil society. We're talking about low-intensity, political-driven violence along the 1990s. There was a limited insurgency between 1992 and 1997 in which thousands of Egyptians were killed and injured.

MALVEAUX: Professor Gerges, this is Suzanne Malveaux. I want to ask you a question here.

You've got the Obama administration under growing pressure now to suspend the military aid. We're talking about $1.3 billion, as you know.

We heard over the weekend, CNN's "STATE OF THE UNION," Republican senator John McCain saying, look, the United States is losing its leverage. It's losing it credibility here.

Why are we even bothering to bolster them with this kind of money, this kind of funding? Is there a problem with the position that President Obama is in now?

Because you have the Saudis who say, you know what? If you take away the aid, we're going to make sure that you still have it.

GERGES: You know, Suzanne, values versus strategic interests, a (inaudible) dilemma in American foreign policy. This is not the first time.

Keep in mind, Suzanne, Barack Obama is a realist president. He believes that really material and strategic interests are the drivers behind American foreign policy.

Let me be blunt, Suzanne. The president plays lip service to values, to international interventionism, whether it's about Libya or Syria and Egypt. This is a fact.

The United States is deeply mistrusted in Egypt. It's really, in my mind, to my mind, knowing a bit about Egypt, it's a lose-lose situation, regardless of what you do.

I think the challenge is to minimize American losses. And, unfortunately, I think the Obama administration's stand losing both camps in Egypt today.

MALVEAUX: Explain this because I'm sure the Obama administration would take issue with saying it's lip service when you still have this administration that has refused to call it a coup so that they could allow those funds to continue.

How is that just lip service?

GERGES: Well, I mean, this tells you that the president pays lip service to the idea of human rights, to the idea of the use of excessive force against civilians.

Almost 900 Egyptians civilians and security forces have been killed, 5,000 injured. Yet, what does the president say? The president says America's strategic interest are very significant. We cannot afford to cut the umbilical cord with Egypt.

And, as you said, Suzanne, even if the United States decide to discontinue the $1.3 million of military aid to the Egyptian political military, Saudi Arabia would step in.

Already the Saudi king says that anything -- if the European Union or the Americans decide to discontinue their aid, I will step in and compensate for this particular lack of funds for Egypt.

This is turning into not just an internal conflict inside Egypt. You have major regional powers. Saudi Arabia, the United Arab Emirates and Kuwait, three countries in the Middle East, Suzanne, have provided Egypt, the military-backed government, with $12 billion in the last six weeks, $12 billion versus $1.3 billion from the U.S., annual aid.

WATSON: And, Professor Gerges, it's worth noting that all of those countries, Saudi Arabia, Kuwait, the UAE, they are also very close American allies.

I want to ask you about the post-coup government in Cairo which some have described as a military junta. It's basically been describing the Muslim Brotherhood as a group of terrorists, which is striking considering they were democratically elected and in power two months ago.

Is that a new tactic we're seeing from the generals?

GERGES: Oh, absolutely. What the generals would like you and I and Suzanne to believe is that they're waging a war or terror.

I mean, think of the terms that the military backed government has used in the last few days, Islamic fascism, terrorism, extremism terrorism and war on terror, in fact, terms borrowed from the American dictionary on the war on terror after 9/11.

Not only they're trying to justify and rationalize the war, the campaign inside Egypt, they're trying also to convince the international community that their use of excessive force is legitimate because they're facing terrorism, a terrorist enemy that's trying to destroy Egypt.

WATSON: Thank you, Professor Gerges, London School of Economics.

MALVEAUX: Egyptian prosecutors today ordered that the ousted President Morsy be detained for 15 more days. Now that is according to the Middle East News Agency.

And Morsy, he's accused of participating in the detention, the torture and murder and attempted murder of Egyptian citizens.

Also, a court has acquitted former President Hosni Mubarak. This is in a corruption case. Now Mubarak still faces charges more serious charges that he was involved in the killing of protesters during the 2011 uprising.

Still a lot of problems in that country.

And the big American bank, JPMorgan, could be in trouble for it hiring practices not here in the United States, but in China.

We're going to tell you what it has to do with the political big shots over there.

(COMMERCIAL BREAK)

MALVEAUX: One of the world's biggest financial firms, JPMorgan, under an investigation for some of its hiring practices, this is in China.

Now this case could actually add a number of legal issues that this company is already dealing with. We're talking about legal troubles that JPMorgan says could cost billions of dollars.

Zain Asher is at the New York Stock Exchange. Zain, good to see you as always.

So in a nutshell, Securities and Exchange Commission looking into who the company has been hiring in China and the connections that those employees have.

Tell what this controversy is all about.

ZAIN ASHER, CNN BUSINESS CORRESPONDENT: Hey, Suzanne, that's exactly right.

So the U.S. authorities are looking into whether JPMorgan hired the children of Chinese officials to help the bank win lucrative business over there. But the big question is, were the children hired as a way for the bank to secure contracts with certain companies?

JPMorgan disclosed the investigation earlier this month. "The New York Times" has a confidential document that goes into a little bit more detail.

Some of the people hired include the son of the chairman of a Chinese bank and the daughter of an official at a Chinese construction company. It's obviously a huge conflict of interest because JPMorgan then reportedly received business from those companies.

We're not entirely sure if the documents definitely linked JPMorgan's hiring practices to these contracts.

And, by the way, there's no evidence, no concrete evidence, that these employers weren't necessarily qualified. One of them attended Stanford and many of them were trained in the U.S., so it's going to be interesting to see what the SEC is actually able to prove.

MALVEAUX: And, Zain, what is -- I imagine the company is defending its practice. What are they saying about this and the legal issues behind all of this?

ASHER: They are essentially cooperating with investigators, but I do want to mention that these lawsuits are sort of really accumulating against JPMorgan.

They're saying they're going to pay an additional $6.8 billion in fines and fees. And that's on top of what they've already set aside.

And I do want to mention that analysts that I've spoken to say that it does seem as though the SEC and the Justice Department are kind of aggressively going after JPMorgan.

You've got to remember, Suzanne, that this is a bank that was once the darling of Wall Street, right, known for stellar risk management, the biggest bank in terms of assets.

And now what you're seeing is that its reputation is sort of being dragged through the mud.

I'm going to list a couple of things that JPMorgan is going through right now. First of all, last week criminal charges were brought against two former JP bankers, accused of trying to cover up $500 million worth of losses.

And then also the government is investigating how JP Morgan marketed risky mortgage backed securities to investors. And lastly, now they're saying that JP Morgan should have known that Bernie Madoff was involved in a massive Ponzi scheme since they were, after all, his bank.

So it does seem like JP Morgan is really haunted by the financial crisis.

Suzanne.

MALVEAUX: All right. They, obviously, have a lot of statements and a lot of explaining that they're doing on their end. Thank you, Zain. Appreciate it.

Still ahead on AROUND THE WORLD, right now same-sex couples in Ecuador are not allowed to get married. But a legal loophole might actually change that. We've got that story up ahead.

(COMMERCIAL BREAK)

WATSON: Welcome back to CNN's AROUND THE WORLD.

A couple in Ecuador is fighting to get married. As Rafael Romo reports, their lawsuit says the law contradicts itself in that country.

(BEGIN VIDEOTAPE)

RAFAEL ROMO, CNN SENIOR LATIN AMERICAN AFFAIRS EDITOR: They gave been a couple for more than four years. Pamela Troya and Gabriela Correa recently went to a civil registry office in Quito, the Ecuadorian capital, to get married. They say they had all the paperwork and had fulfilled every requirement except for one.

PAMELA TROYA, PLAINTIFF (through translator): They told us that in order to get married, one of us had to be a man. Otherwise, they said, you have to go your separate ways. Each of you go find a man and come back and marry them. That really violates our constitutional rights.

ROMO: The couple is suing because they say the Ecuadorian constitution contradicts itself. Article 67 says, "marriage is the union between a man and a woman." But the second clause of Article 11 stipulates that "no one can be discriminated against on the basis of gender or sexual orientation, among other categories.

Their attorney says this means the right to marry should extend to all couples regardless of whether they are homosexual or heterosexual.

RAMIRO GARCIA, COUPLE'S ATTORNEY: When it comes to rights, we're all equal. We all have the possibility of exercising our rights in equal conditions. Discrimination is prohibited, especially when it comes to sexual orientation.

ROMO: Both Troya and Correa say they're willing to take their case all the way up to Ecuador's highest court.

TROYA (through translator): Even if we're 80 years old, we're going to get married. The question here is not whether same-sex marriage is going to be allowed, the question is when. We're convinced that's going to happen. The question is when and on what side of history you want to be.

ROMO: The couple faces another challenge. Correa's family does not approve of their relationship.

GABRIELLA CORREA, PLAINTIFF (through translator): My mother is precious and has a very good and noble heart. I'm still her daughter. I'm still a human being. I can only hope that one day I will have my mother's full support.

ROMO: Ecuadorian President Rafael Correa, a Roman Catholic, opposes same-sex marriage, but he says he wouldn't oppose amending the constitution through a referendum so that voters can have the final say during next year's national elections.

Rafael Romo, CNN.

(END VIDEOTAPE)

WATSON: Just ahead, 500 times in just one year. That's how many times this volcano has erupted this year alone. It's something you have to see.

(COMMERCIAL BREAK)

WATSON: Have a look at this. This is pretty remarkable. That cloud of ash is from Mt. Sakurajima in Japan. It just erupted for the 500th time this year. And it's making a big mess in nearby Kagoshima. Chad Myers is in the severe weather center. Chad, are the concerns - are there concerns this volcano could really blow its top and what are the effects going to be for the people living nearby?

CHAD MYERS, AMS METEOROLOGIST: You know, if it has popped 500 times already this year, doesn't it seem like it just won. Like it's just kind of continuous all the way through the year, right? I mean it's just going one after the other.

The big thing about this last one, it was 5,000 meters in the sky. I'll do the math for you. I'll bring it back down to English. About 15,000 feet in the sky.

MALVEAUX: Wow.

MYERS: So this was pretty high.

WATSON: Wow.

MYERS: And this is now getting up to where the airplanes may have to worry about it.

Here's the problem. If you take and you get an airplane or a jet to fly through volcanic ash, it melts again back into essentially lava and it doesn't like to be inside of a jet engine. When it goes out the other side of a jet engine, then it turns back into something hard, like a rock. And I don't want any rocks in my engines. I don't care if it's even my car engines, so they're going to have to kind of worry about this. Yes, it could be a bigger thing and this could actually keep going.

Here's one of our Getty Images here. Just all the way on up to the top.

WATSON: Wow.

MYERS: Just amazing. It looks like a thunderstorm. Like in Oklahoma, you just expect a big thunderstorm to go all the way up into the sky. Here it is - I'm going to take you to a Google Earth map of it because I mean you're talking about Tokyo way up to the north. This is the southern island way here down in the bunk (ph), but a very big volcano right through here, exploding up through the - and there's all these towns around here. Towns are getting covered, completely covered in this ash one day after the next. They are picking up the ash, and throwing it out. And it depends on which way the wind blows, whether you get covered up or not. It has been a tremendous couple of days out here in southern Japan.

WATSON: Chad, a quick question.

MYERS: Yes.

WATSON: The last time - a couple of years ago there was a huge volcano in Iceland that froze flights for days, if not weeks.

MYERS: That's right. WATSON: Is there any fear that that could happen here?

MYERS: Well, you know, kind of like a pressure relief valve. If you've - you know, you've taken your - let's say your pressure cooker and you go, ch, ch, ch, ch, ch, ch, ch 500 times, you're letting pressure out. And so it's not as big of an explosion possible. If you keep the lid on and all of a side you don't let it go ch ,ch, ch 500 times and all of a sudden it explodes, and that's what happened up there in Iceland. It was one big explosion that set this ash plum 40,000, 50,000 feet in the sky.

WATSON: Chad Myers, thank you very much.

MYERS: You're welcome.

MALVEAUX: Yes, talk about explosions, Usain Bolt, fastest man in the world, sprints ahead of the pack with a new record and a new way to celebrate. What he wins, check it out, up next.

(COMMERCIAL BREAK)

MALVEAUX: Usain Bolt, the fastest man in the world, wins three gold medals at the world championships in Moscow. That was on Sunday. Well, here he is winning the four by 100 relay for Jamaica. Look at him go. The constant crowd pleaser. And a quirk at the end. This is interesting. Ditching his usual lightning bolt pose for a more traditional Russian dance. Look at him. He's great. Love it. He now has eight gold medals at the world championships. A record held only by three other America runners, Carl Lewis, Michael Johnson and Allyson Felix..

Love that dance, don't, Ivan? Is that kind of cute.

WATSON: I had to do that when I as a kid. My name is Ivan.

Thanks for having me on the show. Thanks for watching AROUND THE WORLD.

MALVEAUX: Well, you know we'll see you tomorrow, yes?

WATSON: Hope so.

MALVEAUX: OK. Very well.

CNN NEWSROOM starts right now.