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FAREED ZAKARIA GPS

Real-Life Russian Nightmare; A Voice of Radical Islam; Interview with China's Zhang Xin; Golf in Kabul's War Zone

Aired September 5, 2010 - 10:00   ET

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


FAREED ZAKARIA, HOST: This is GPS, the GLOBAL PUBLIC SQUARE.

Welcome to all of you in the United States and around the world.

I'm Fareed Zakaria.

We have a great show planned for you today. It's three of the most compelling, fascinating interviews we've done on GPS.

First up, a real-life thriller with a tragic ending. William Browder was once the biggest foreign investor in Russia. That made him a target.

Browder himself got out alive, but one of his loyal lieutenants was not so lucky. It's an amazing story. You won't want to miss it.

Then we hear so much about the entrepreneurial class in China. But who are they? Well, I'll introduce to you a woman who went from working in sweat shops to working in Goldman Sachs, and now is one of the richest women in China. Her wealth said to be on par with Oprah Winfrey's.

And finally, have you ever actually met a jihadi? We'll introduce to you one today. On a recent trip to London, I met a man who will not rest until Islamic law is the law of the world and who glorifies the terrorists who killed thousands on 9/11 and London's 7/7 . Another can't miss conversation.

Let's get started.

What we have for you now is an extraordinary story: hundreds of millions of dollars stolen, fingers pointed at top government officials, torture, abuse, death. And that's just the beginning of what sounds like a best-selling thriller. But tragically, it is actually real life, and at the center of it all is our guest, William Browder.

He runs Hermitage Capital Management, once the largest foreign investor in Russia. Let's listen to the story.

(BEGIN VIDEOTAPE)

ZAKARIA: Bill, thanks for joining us.

WILLIAM BROWDER, CEO, HERMITAGE CAPITAL MANAGEMENT: Thanks for having me.

ZAKARIA: 1996, you decide to go to Russia and set up an investment company that is going to invest in Russia.

BROWDER: So what happened was Russia at the time, in 1996, had gone through this enormous privatization program where the philosophy of the government was in order to go from communism to capitalism, let's just give everything away for free. And so we set up a business to invest in Russia, and it had gone very, very well for a number of years.

And then we discovered that Russia -- well, they had set up capitalism, they hadn't put the -- essentially building a house without putting the plumbing in the house. There was no laws and there was no rules at the time. And as a result, there was an enormous amount of corruption, malfeasance, and other terrible things going on inside the companies we invested in. And I felt like the only way that I could responsibly be an investor in these companies was to fight the corruption in the companies.

ZAKARIA: And you, at this point, are -- or perhaps pretty quickly become the largest foreign investor in Russia. Right?

BROWDER: I became the largest foreign investor in Russia. Our funds at the peak of our success was about $4.5 billion of foreign money invested in the Russian stock market. And so we developed a strategy which seemed a bit crazy at the time, which was let's research how they do this dealing, let's figure it all out, and then let's share the research with the international media. And we did that.

ZAKARIA: And this is just about the time that Vladimir Putin has come to power in Russia. So why is Putin allowing you to do this?

BROWDER: I was fighting with oligarchs who were trying to steal money from the companies I was investing in, and Putin was fighting with the same oligarchs who were trying to steal power from him. And so for that period of time, as we were exposing the corruption in these companies, the government was acting.

ZAKARIA: And was there public approval of what you were doing?

BROWDER: Well, everybody -- there's only one group of people that didn't approve of what I was doing, and that was the people who were stealing the money from the companies. I mean, of course, who wouldn't be happy if you find out that the bad guys are getting fired and can't steal money from the gas or the electricity company or whatever? But everything changed all of a sudden in 2003.

In 2003, in October, Mikhail Khodorkovsky, who is the richest man in Russia and the head of the Yukos Oil Company, was flying on a private jet to Siberia, and he was arrested on the runway in Siberia. And when they did that, they did one thing which was psychologically devastating for all the other rich people in Russia, which was they took the richest man in Russia and they put him into a cage, and they allowed all the television cameras to come in and film him sitting in a cage. And imagine that you were the 17th richest guy in Russia sitting in your yacht parked off the Cote d'Azur in France, and you turn on CNN and you see the richest guy sitting in a cage. And what do you want to do? You want to make sure you're not sitting in a cage. And so, one by one by one, they went back to the Kremlin and they declared their allegiance, and all of a sudden, Putin --

ZAKARIA: Declared their allegiance to Putin?

BROWDER: To Putin. And all of a sudden, Putin no longer was at odds with the oligarchs. Unfortunately, I still was.

ZAKARIA: So, you go for a business trip abroad, November, 2005, and you come back to the airport in Russia. And what happens?

BROWDER: So I arrived at the airport as I had 250 times before in the past decade. I went to the VIP lounge at Sheremetyevo Airport, handed them my passport. And what should have been a five-minute process while they process the passport turned into an hour.

And after an hour, there was a bunch of commotion, and a bunch of officers came into the lounge, and they came up to me and said, "You're not allowed into Russia. Follow me, sir." And they took me down to the detention area of the airport, where they kept me for a day, and then they deported me out of Russia.

ZAKARIA: But then Russian government decides to go after you in another way which is quite extraordinary.

BROWDER: So this was nothing. This part of the story was nothing compared to what happened next.

So, after a while, I give up on trying to go back to Russia, and I do something which I'm thankful that I was able to do, which is I took all the money that we had in Russia and I liquidated it and took it out of country. I then took all of my people out of the country, and I thought, more or less, OK, that was an unpleasant situation, that was pretty bad, but, you know, time to move on.

Well, I wasn't really able to move on because something truly extraordinary happened, which was in June of 2007, 25 officers from the Moscow Interior Ministry raided our office in Moscow, and another 25 officers raided the office of our law firm in Moscow with a very specific target, which is they wanted to get hold of the stamps and seals and articles of association of our investment companies that we -- through which we had invested in when we made our investments in Russia. And --

ZAKARIA: These were the proofs of ownership of the companies so if they had them, in effect, they could exercise authority of those companies?

BROWDER: Exactly. In order to transfer ownership, to do almost any important activity of the company, you need to have these special documents. So these guys, the police, the Moscow police, take away these documents, and then the next thing we know, we no longer own our companies. The companies have been transferred into the name of a convicted murderer.

So -- and the only way they could have transferred the companies was using the documents that the Moscow police had taken. But that was just the beginning of the unbelievable thing that happened.

The next thing we discovered was that our companies had apparently been sued in court without our knowledge based on forged, backdated contracts that were created using all of those stolen papers from our offices. And after the -- during the lawsuit, some lawyers show up that we've never hired, that we never knew about, to defend our companies.

ZAKARIA: Claiming to represent you?

BROWDER: Claiming to represent us. But instead of defending our companies, they plead guilty. And in five-minute hearings, the judge in St. Petersburg and Moscow and Kazan, which are three cities in Russia, award more than a billion dollars to three shell companies against our companies which we no longer owned.

ZAKARIA: So, at this point, they have tried to take this money out from your companies. But actually, there's no money in your companies because you've transfer it all back to London and given it back to the investors. Correct?

BROWDER: There wasn't a penny in Russia. So the billion dollars of judgments got them nothing from me. They went around to our banks looking for assets, but there was nothing in the banks.

ZAKARIA: And at this point you hire a bunch of lawyers in Russia?

BROWDER: Well, we hired a bunch of lawyers the moment that they had raided the offices. But at this point, as all these strange court decisions come in and strange transfers of ownership, we hire a bunch of lawyers. We hired seven lawyers from four different law firms, including one very special man named Sergey Magnitsky. He was a 36- year-old lawyer at the time working for an American law firm called Firestone Duncan, and he was one of these extremely hard-working, earnest-type people who you could call up at 7:00 in the evening when you discover some big question you have, and he would cancel his dinner plans and stay in the office until midnight to figure out the answer. A real sort of decent, hard-working young man.

And we said to Sergey, "Help us figure out what's going on with all these lawsuits and all this strange stuff." And he was the one who figured out that the companies had been stolen and transferred to the convicted murderer. He was the one that figured out that these judgments had been entered into -- these huge billion-dollar judgments had been entered against our companies. And he was the one who figured out that the police were the ones who had the documents that made this all possible. And then he figured out something else, and this is the most astounding part of the whole story, that the reason to steal the companies, the reason to create these billion dollars of judgments, was in order for the people who stole our companies to then go to the tax authorities and claim that a billion dollars of profit that these companies had made in previous years and $230 million of taxes that we had paid in previous years shouldn't have been paid because there was a fake billion dollars of losses. And they took these fake losses, along with the companies that they stole, and they went to the tax authorities in Moscow, and they applied for a $230 million tax refund, which was awarded to them in one day.

ZAKARIA: Would this have been the largest tax refund ever made?

BROWDER: This was the largest refund in the history of Russian taxes in one day, which tells you for sure that they had people on the inside of the Tax Ministry involved in the scam.

So, so far what, do we know? We've got judges, we've got police officers, we have tax officials, we have lawyers, all these different groups of people involved in this conspiracy to defraud us and to defraud the Russian government.

(END VIDEOTAPE)

ZAKARIA: And we will be back with more of this extraordinary story right after this.

(BEGIN VIDEO CLIP)

BROWDER: They put him in pre-trial detention, and they then started to put pressure on him to withdraw his testimony. His health just precipitously went over the edge. He was in excruciating pain. He was in such pain, he couldn't even lay down.

This went on and on. Things got worse and worse.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ZAKARIA: And we are back with William Browder, once Russia's largest investor, to tell an extraordinary story.

So, they first tried to steal the money from your companies. But when they discover your companies don't have any money left in them, they steal the money from the Russian state.

BROWDER: So -- exactly. So you basically have sharks feeding on their own blood. It's the most extraordinary thing.

Everybody asked me, how can the government have allowed this to happen? And the answer is because high-up officials in the government were part of the conspiracy to do this. So Sergey Magnitsky was the brilliant lawyer who was able to figure this out. It wasn't easy to figure out. An enormous amount of investigative work, 14 months of investigation went into figuring this whole thing out. And once we figure it had out, he helped us then draft a criminal complaint which we filed with the Russian general prosecutor, and then did he something which was extraordinary.

In October of 2008, he went and gave sworn testimony to the Russian State Investigative Committee, which is like the FBI of Russia, in which he named the police officers who were involved in the theft of our companies and the theft of $230 million. He named names.

One month after he gave testimony against those officers, three other officers who reported to one of the officers he testified against came to his house at 8:00 in the morning in front of his wife and children, and arrested him and put him in pre-trial detention. So, essentially, the same people he testified against arrested him.

They put him in pre-trial detention and they then started to put pressure on him to withdraw his testimony. They did really horrible things.

They put him in a cell with eight inmates and four beds so that the inmates had to fight over the beds and sleep in shifts. They put him in cells without any windows in the Moscow winter so the cold air just blew in. They put him in cells where there was no toilet, just a hole in the floor, and sewage would bubble up from time to time.

After several months of this, they came to him and said, everything can improve if you withdraw your testimony against us and plead guilty to a trumped-up charge to justify why we've done this to you. And Sergey was a man of intense integrity. He was a man who said no, it doesn't matter what you do to me. I'm not going to withdraw my testimony. I certainly will not perjure myself.

And so they put more pressure on him. They moved him from cell to cell to cell. I think he was moved more than 10 times in a very short period of time. And every time they moved him, they would lose his belonging, including one very crucial belonging which was a water boiler, because the water is undrinkable in the prison, and then lost his ability to sterilize the water.

And so after about six months of this, he started getting very ill. He started getting sick all the time. He lost 40 pounds. He had intense, excruciating stomach pains.

And he was eventually given an appointment at the prison hospital, and they said, "It looks like have you pancreatitis and gallstones. And you should come back in about a month's time and we'll do an ultrasound. And if nothing is improved, then we have to perform an operation."

It wasn't an operation -- it wasn't a complicated operation, but it was a life-saving operation. They came to him again and asked him to withdraw his testimony. He refused. One week before his operation, they then abruptly moved him to Butryka Prison, which is a maximum security prison, the harshest, toughest prison in Moscow, and there was no hospital there. And at that point, his health just precipitously went over the edge.

He was in excruciating pain. He was in such pain, he couldn't even lay down. His cell mate would have to bang on the door for hours trying to get medical attention. And when they got there, they said, "You can have the medical attention when you get out of jail."

This went on and on. Things got worse and worse. And on November 16, 2009, Sergey Magnitsky died in prison at the age of 37.

ZAKARIA: He was 37 years old?

BROWDER: He was 37 years old. He was a lawyer, a father of two, married, and he died right in the heart of his life.

ZAKARIA: And he was not a great human rights advocate. He was a tax lawyer who just happened to be an honorable man, who wouldn't give into this kind of pressure.

BROWDER: He wasn't an oligarch, he wasn't a human rights activist. He wasn't a journalist uncovering -- going after people.

He was my tax lawyer who happened to be assigned this situation where he was trying to figure out what was going on. And then when he saw what was going on, he said, "This is unbelievable. This is my country. These people can't be allowed to do this."

He wasn't a person going out and looking for trouble, but when trouble found him, he did what he had to do, which was stand up to it. And it cost him his life.

He was a young urban professional working at a law firm who buys a Starbucks in the morning, who was plucked out of his job, put into a prison, and tortured to death. We all could be Sergey Magnitsky, is what they said.

And this thing bubbled up to the surface, it bubbled up in the press. And eventually, President Medvedev had to do something about it.

He called for a criminal investigation into what happened to Sergey Magnitsky. But even President Medvedev, even the president of the country, after calling for a criminal investigation, we're now six months later. There hasn't been a single person charged with any wrongdoing. Not a single person charged.

ZAKARIA: What does this say about Russia today?

BROWDER: Well, unfortunately, what it says is that there's criminality that permeates the government and the law enforcement agencies at the highest level. And it's impossible if the president of the country who calls for an investigation can't get an investigation, it says to you how difficult this problem really is and how Russia really doesn't operate in the same legitimate manner that you would assume other countries to operate in.

ZAKARIA: So this is a kind of -- almost a state run by the Mafia.

BROWDER: It's a state which many, many important organs of the state are Mafia-controlled, for certain.

ZAKARIA: And you're not optimistic that much is changing?

BROWDER: Well, the one thing I can say about Russia is that it's always changing. It may change for the worst, it may change for the better. Russia is never a static country. But where we are today is an extremely bad situation.

ZAKARIA: William Browder, thank you very much.

BROWDER: Thank you very much.

ZAKARIA: And we will be back.

(END VIDEOTAPE)

(BEGIN VIDEO CLIP)

ANJEM CHOUDARY, RADICAL Let me tell you something. If there was an election between any leader of the Muslim countries in the world today, Osama bin Laden, he would win hands down.

ZAKARIA: Except that there are elections in half the Muslim world, and the Muslim fundamentalists, let alone the jihadis, do terribly.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ZAKARIA: Have you ever met a jihadi? Well, you're about to.

It's easier to find them in London than in New York. In fact, earlier in the decade, London took on a nickname, "Londonistan," the origins of which were obvious.

A brand of radical Islam seemed to flourish. At the center of the movement was the infamous Finsbury Park Mosque. Its imam, Abu Hamza al-Masri, openly preached jihad and played host to terrorists ranging from the missing 9/11 hijacker, Zacarias Moussaoui, to the shoe bomber, Richard Reed.

Britain has cracked down on some of the activity. The Finsbury Park Mosque is closed and Abu Hamza al-Masri is imprisoned. Yet, jihadis continue to preach openly in mosques and meeting houses here.

One is Anjem Choudary, an activist who has praised both the 9/11 attacks in New York and the 7/7 bombings in London five years ago. He has called for the imposition of Sharia law in Britain.

I thought it would be worth your meeting him. Anjem Choudary joins me now.

Tell me -- we're five years past the 7/7 attacks, the subway bombings in London. And you say that you think there will be more because Britain hasn't learned the lesson of 7/7.

What was the lesson of 7/7?

CHOUDARY: Well, the lesson was that if you have certain causes in place, the occupation of Muslim land, the murder of innocent men, women and children, as in Iraq, in Afghanistan, if you support the enemies of Islam, like the Israelis who are occupying our land, and if you bring in a whole host of Draconian laws against the Muslim community, then this is bound to have a backlash.

This has not changed. In fact, the situation has regressed five years on.

ZAKARIA: Many mainstream Islamic scholars who have very wide followings which are documented say that people like you are a fringe of a fringe, that you really have almost no followers.

CHOUDARY: Yes.

ZAKARIA: That this is a great publicity-seeking enterprise, but there's nobody behind you.

CHOUDARY: Well, I believe that there are many people, in fact, who have the same ideas, because my ideas are Islamic. I don't speak for any one individual organization. I speak in Sharia (ph) law, and I try to propagate what is the Islamic viewpoint.

ZAKARIA: You know, people just listening to you, the first thing I think they would think, at least in the United States, and I think in many parts of the world, is, gosh, this guy doesn't sound like a jihadi.

Do you think of yourself as British?

CHOUDARY: I'm a Muslim first and a Muslim last. If I'm in Britain and I have a passport, then that's a travel document. If I was in America, I would have a travel document with an American institution on it.

At the end of the day, you know, our identity is defined by our thoughts and our ideas. My ideology is Islam. It's something I believe in, I live by, and I want to struggle for and I'm willing to sacrifice for. So, you know, I am determined and I am defined by what I believe, not where I was born or my lineage, or, you know -- or what the government would have me labeled as.

ZAKARIA: Is there any government of a country that is Muslim that you support?

CHOUDARY: No. We have today about 55 so-called Muslim countries. None of them are implementing the Sharia. Some of the worst and the most barbaric, in fact, are, for example, the Iranian regime and the Saudi regime.

Many people believe that they are Islamic countries, but, in fact, they're implementing non-Islamic (INAUDIBLE) law. And, in fact, this is much more dangerous, because when you give a semblance of Sharia, and then you, after that, oppress the people and you're implementing justice, it gives the impression that there's something wrong with the Sharia. And that's not the case.

ZAKARIA: So why don't you want to spend more time overturning the government of Saudi Arabia rather than Britain?

CHOUDARY: Well, I live in the world which has been created by God. Wherever I am, I will propagate Islam. Who said that Britain belongs to David Cameron? Britain belongs to God.

I will implement the Sharia here if I can. If I'll go to Saudi Arabia, I'll do the same there. If I'm in Pakistan, the same there.

ZAKARIA: But isn't it fair to say though it is much easier for you to espouse your views in an open democracy. If you were to say what you're saying in Iran, they would kill you. If you were to say it in Saudi Arabia, they would at the very least imprison you. Here you get to be on television.

CHOUDARY: I don't believe so. I believe, in fact, America, Britain and much of the West is looking for an alternative. You can see from the credit crunch to the MPs and the --

ZAKARIA: You're saying the solution to the credit crunch is Islam, Sharia law?

CHOUDARY: Of course it is, yes. I mean, you can talk to me about anything, about the economy in the West, and I can give you an Islamic alternative.

ZAKARIA: All right. What I want to first talk to you about though is, if you look at polling done across the Islamic world, what you find is support for the kind of ideas you're describing has been dramatically falling all over the world.

CHOUDARY: I don't think so. I don't think so. You've been living in America for too long. If you go into the streets of Indonesia or into Malaysia or Pakistan, if you go into the streets of Lahore and say to them what they think about Sheik Osama bin Laden or the current -

ZAKARIA: When - when was the - OK, when was the last time you were in Indonesia and -

CHOUDARY: I was in Indonesia about three, four months ago.

ZAKARIA: All right. Because I've been to both places, and I would disagree. I would say the polling is also consistent with my personal observations. So -

CHOUDARY: Let me tell you something. If there was an election between any leader of Muslim - of the Muslim countries in the world today and Sheik Osama bin Laden, he would win hands down.

ZAKARIA: Except that there are elections in half the Muslim world and the Muslim fundamentalists, let alone the jihadis, do terribly.

CHOUDARY: No, you've got -

(CROSSTALK).

CHOUDARY: Wait a second. Wait a second, I'm not propagating the idea of elections and democracy and freedom because these things are anathema to Osama --

ZAKARIA: Except when you want to make your point.

CHOUDARY: No, no, no. My point is that these fellows are more popular among the Muslim -

ZAKARIA: But they're not. Demonstrably, they're not popular because they are -

CHOUDARY: Of course they are. No, of course they are (ph).

ZAKARIA: There are elections in Pakistan. There are elections in India. There are elections in Indonesia.

CHOUDARY: If you - if you go to any ordinary practicing Muslim in any part of the Muslim world, they will say we believer the Sharia needs to be implemented. We -

ZAKARIA: So how do you explain that when there are elections they don't vote for these people?

CHOUDARY: Because they don't stand for those elections, number one, and they don't believe voting is allowed. They believe -

ZAKARIA: They do stand for them. In Malaysia and Indonesia there are Islamic fundamentalist parties.

CHOUDARY: -- but they're - they're not - they're not actually abiding by the Sharia because if you were a Muslim practicing, you don't believe in democracy because they don't - democracy separates God from life's affairs and politics.

We believe the whole of the system, including the politics and the judiciary, must be according to the Sharia law.

ZAKARIA: This is like having a debate with a - with a pure Marxist where nothing -

CHOUDARY: Oh, forget Marxism. No, no.

ZAKARIA: -- no Marxism has ever been implemented, so you can never test it.

You talked about the reasons why's there was jihad and why you were advocating it and why the Brit - Britain had not learned the lessons of 7/7, and you've talked about the occupation of Afghanistan, Iraq, et cetera.

So what were the reasons for the planning of the attacks, 9/11, the attacks in Nairobi, in Kenya, during that - that period when al Qaeda was planning attacks on the United States, the United States' foreign policy, central objective, in the mid 1990s was saving Bosnia's Muslims from ethnic cleansing and annihilation by the Serbians.

CHOUDARY: Wait a second. History did not begin in the 1990s.

ZAKARIA: I'm asking -

CHOUDARY: Before the 1990s, the Americans were supporting the pirate state of Israel occupying Muslim land. Before the 1990s they had puppet regimes in our countries who they were feeding with weapons of mass destruction who - which were being used against our own -

ZAKARIA: But you don't - you don't deny that the United States sent an armed force to try and save Bosnian Muslims?

CHOUDARY: No, no. It was not about the Bosnian Muslims.

ZAKARIA: What was it about?

CHOUDARY: They were in - they were in Europe to - to secure their own military, economic, strategic and ideological interests.

ZAKARIA: What does that mean? That sounds like a lot of big words.

They went and tried to save the Bosnian Muslims from being massacred.

CHOUDARY: That is nonsense. No. What they did - what they did -

ZAKARIA: What did they gain from it? What is that (ph)?

CHOUDARY: What is that? When they came into Bosnia, what the - what the NATO alliance did is they took the weapons from the Bosnian Muslims and they allowed the Serbs to slaughter them. That's why you have mass graves in places like Srebrenica and other places. This is the reality.

ZAKARIA: That was not - that was not the American policy. The Americans were to come in and correct that.

CHOUDARY: They were not. They were lying as much as they can about their foreign policy. But the American policy there was to establish their own interests. They were wanting -

ZAKARIA: We're going to argue around this. All right. Kuwait, saving the people - they, the people in Kuwait from an Iraqi invasion. That is saving one Muslim country from another's forces (ph).

CHOUDARY: That's aggression. There's no difference between Iraq and Kuwait and Saudi Arabia. All of this is Muslim land. There's nothing wrong with --

ZAKARIA: But one of group of people were killing the others. CHOUDARY: That is not true.

ZAKARIA: Saving lives is not true?

CHOUDARY: That is not true. That's not true.

The ordinary Muslims don't have a problem with each other. We believe our land, our war, our peace is won. We have --

ZAKARIA: The ordinary Kuwaiti Muslims were being killed by Iraqis.

CHOUDARY: No, no, no. This is not - this is not correct. The -- the Iraqi and the Kuwaiti regimes had interests, mainly oil interests, with the British and the Americans. They changed hands after the first Gulf War. They shifted in - in favor of the Americans. So the Americans had interests, economic interests in the area.

Besides which the two regimes there are well known to be puppets of the Americans and British. So it's not about, you know, actually the Muslims -

ZAKARIA: The Iraqi, Saddam Hussein was a puppet of the British?

CHOUDARY: He was originally - no. He originally was -

ZAKARIA: I will ask you, in 1990, when he - when he invaded Kuwait.

CHOUDARY: The fact is, look, the - the main superpower -

ZAKARIA: I was just trying to see to what lengths you have to go to make your - your world view work.

CHOUDARY: (INAUDIBLE) you.

ZAKARIA: Tell me, your - you present yourself as a man of religion and as a - as a holy man. Islam says if you kill one life it is like killing the whole world.

CHOUDARY: A Muslim life.

ZAKARIA: Are you - are you - yes, a Muslim Life. Are you comfortable that the kind of thing you're advocating, most of the jihad being - taking place is - it kills Muslims. It kills Muslims and -

CHOUDARY: That's rubbish.

ZAKARIA: What? The jihadist in Pakistan, whom are they killing? The jihadist in Indonesia, whom are they killing?

CHOUDARY: Actually, they're not. Well, you have - you have (INAUDIBLE) -

ZAKARIA: The jihadist in Saudi Arabia -

CHOUDARY: Wait a second. Wait a second. If you look at the reality, if you open your eyes a little bit, you will find that the CIA agents in the area, like Blackwater and others, they are the ones who are carrying out operations in public places and then they are trying to discredit the Mujahideen by blaming it upon them. The Asian - in the public arena -

ZAKARIA: So you're saying all the - all the Jihadi operations that are taking place now in Pakistan, in Afghanistan, where people go and blow up cafes, blow up at bus stops, those are all actually secret CIA operations?

CHOUDARY: No, I'm not saying all of them, but -

ZAKARIA: The young Muslims who have bombs strapped to their belts are actually undercover Blackwater agents?

CHOUDARY: Wait a second. Wait a second. What I'm saying is that, you know, each operation needs to be looked at on its own merit. You will - you will find that many of them, who are - which have been carried out in the public arena are in fact carried out by agents of the Americans via the CIA. You know -

ZAKARIA: The 7/7 attacks killed Muslims.

CHOUDARY: Wait a second. But the 7/7 operation was not targeted towards the Muslim community, was it? It was targeted by -

ZAKARIA: It killed Muslims and there are Muslims in the -

CHOUDARY: But in the - in the time of the prophet, they used catapults and they targeted the enemy and die, for example, and there were innocent -

ZAKARIA: So those were OK because they're killing -

CHOUDARY: Wait a second. Wait a second. Wait a second. Let me just finish. Let me just finish.

And there were innocent women and children there among the dead. And the prophet said - he said, don't target them. But if they - if you target the enemy and they're - they're there, they are part of the target. I mean, nobody would target women and children and people who are not part, you know, of -

ZAKARIA: What were they targeting?

CHOUDARY: Well, obviously, they were targeting the infrastructure of the - But you need to look at -

(CROSSTALK)

ZAKARIA: Wait - wait. They were targeting subway cars.

CHOUDARY: Wait a second. Wait a second. Wait a second. Wait a second.

ZAKARIA: They were targeting the people. Of course they were targeting - CHOUDARY: Obviously - obviously, you haven't seen the will of Mohammed said - (INAUDIBLE). They were carrying out their operation against the British, and obviously they were carrying out the operation against the British public and the infrastructure, because of what was taking place in the foreign policy.

ZAKARIA: So they were trying to attack the subway cars, the empty subway buses?

CHOUDARY: How do you - how do you know they were targeting the empty subway buses? Is that what they're targeting?

ZAKARIA: I'm asking you. They were deliberately trying to kill people and innocent men, women, and children.

CHOUDARY: Yes. I agree - I agree with you. Yes. No, not men - not women and children. But they were - they were targeting people -

ZAKARIA: There were - there were women and children there.

CHOUDARY: Wait a second. Wait a second. Let me ask you a question. Let me ask you a question.

ZAKARIA: That's not the rules of -

CHOUDARY: Let me ask you - let me ask you a question.

ZAKARIA: The covenant we're under here, my friend is that I get to ask you questions.

CHOUDARY: Well, let's change - let's change the rules. Let me ask you a question. Who were the people who elected the British prime minister or the American president?

ZAKARIA: You may say it's OK.

CHOUDARY: Let me ask you a question.

ZAKARIA: So you're saying it's OK?

CHOUDARY: No, I'm asking you a question. Who are the ones who - who elected them?

ZAKARIA: Sir, let me - I'll answer your rhetorical question. What you're saying is that because ordinary -

CHOUDARY: No, no. I'm asking you a question. Who is the one who elected the president of America?

ZAKARIA: Are you going to let me answer?

CHOUDARY: Or the prime minister of - of Britain? Yes.

ZAKARIA: Are you going to let me answer? What you're saying is because ordinary Americans and ordinary Brits elected their government, they are fair target to be killed randomly - CHOUDARY: Yes. As far as - what about their support for the - for the Jewish state of Israel? Were they not doing that?

ZAKARIA: Is that American military force bombing anyone?

CHOUDARY: Who was giving them billions of dollars over the last 50 years? Let me ask you. Who was behind Sabra and Shatila?

ZAKARIA: Let me ask you something very simple.

CHOUDARY: Let me ask you that though, Sabra and Shatila? Who was behind Sabra and Shatila?

ZAKARIA: You know what, we're either going to end this program or you're going to answer my question.

CHOUDARY: Who were they funded by? No, but we're having a conversation.

ZAKARIA: You're either going to - No, we're not.

CHOUDARY: We're having a conversation.

ZAKARIA: We're not. We're having an interview where I'm interviewing you.

You claim to be a man of religion. You claim to be a holy man. I want to return to this. Are you comfortable with the fact that what you're advocating is going to mean the death of innocent men, women and children?

CHOUDARY: No. No, what I'm advocating is for the British -

ZAKARIA: No, it is because it's already happened. So I just wanted to know -

CHOUDARY: Can I answer the question?

ZAKARIA: Can you live with that?

CHOUDARY: Can I answer the question?

ZAKARIA: Yes.

CHOUDARY: OK. I'm advocating the removal of armed forces from western countries, stopping the support for the parasite of Israel. In return, there can be some kind of normalization between the relations.

ZAKARIA: How can there be normalization?

CHOUDARY: But as long - but as long as Muslim land is occupied and innocent men, women, and children are killed by the American British foreign policy, of course, there will be repercussions.

ZAKARIA: But there was no occupation of Afghanistan or Iraq when 9/11 was being planned and you were still advocating that kind of thing.

CHOUDARY: No, no. No, no. Before that - before that they were killing innocent Muslims.

ZAKARIA: Where?

CHOUDARY: They were killing them in - in Israel, for example.

ZAKARIA: American forces?

CHOUDARY: Of course, they were. Look -

ZAKARIA: You've got to get your history right.

CHOUDARY: Wait a second. Wait a second.

ZAKARIA: We are going to have to go.

CHOUDARY: My history - my history is correct. I'm afraid that you're living in the world of CNN.

ZAKARIA: I am living in the world of CNN, as are you right this minute. We will be right back.

(END VIDEOTAPE)

(BEGIN VIDEO CLIP)

ZHANG XIN, CHINESE REAL ESTATE DEVELOPER: We're only allowed to make money, nothing else. And that's why all the focus is on making money, and - and I think that's not enough as a - for a human being.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

CANDY CROWLEY, CNN ANCHOR: I'm Candy Crowley, and here are today's top stories.

Suicide bombers struck an Iraqi military base in Central Baghdad, killing seven people, injuring 21 others. The attack comes four days after the United States officially ended its combat operations in Iraq.

The failed blowout preventer that triggered the BP oil well explosion in the gulf has been brought to the surface and placed on a vessel. The device was taken into custody by the Justice Department as evidence in the investigation into the incident.

Despite the sluggish economy, more Americans are expected to travel this Labor Day Weekend. AAA expects 34 million people will hit the roads and airways. That's a nearly 10 percent increase in holiday travel over this time last year.

Those are your top stories. Up next, much more FAREED ZAKARIA GPS, and then on "RELIABLE SOURCES" Howard Kurtz looks at how the media covered President Obama's Iraq speech.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ZAKARIA: We talk about China's explosive growth often on this program, but who exactly has gotten rich in all that growth, and what do they think of China? Well, China has a new billionaire class, and one of its richest and most prominent members is a developer named Zhang Xin, who has built some of the biggest buildings in Beijing.

Zhang Xin happens to be a woman with an amazing life story. She grew up in a Hong Kong slum, spent her childhood working in a shoe factory, and then worked hard enough to get herself to university, then Goldman Sachs, and she is now the CEO and founder of SOHO China, one of the largest real estate firms in the country, and therefore the world.

You would think that someone who got so rich off China's current system would defend it vigorously, but listen to what Zhang Xin told me when I sat down with her last week in Beijing.

ZHANG: You know, on the one hand, of course, you know, this is a moment where the government can spend a lot of money and they have a lot of money. But, on the other hand, they're facing the biggest challenge ever. You know, we have the - at this moment, the income disparity is so huge and you talk about, you know, the social discontent is so - so strong, and I think the - the sentiment in the public, it's not that positive.

You know, despite that the GDP number seems to be growing very high, if you just take the number, yes, you will believe that's everything. But if you -- you know, I was talking to you, if you go into Chinese Twitter, (INAUDIBLE), you will see the massive public discontent. And I think the government is really trying to balance both.

ZAKARIA: What do you think of state-run capitalism? You must have to deal with government officials all the time, getting land and things like that.

ZHANG: I think that is actually the single biggest challenge China faces now, because, bear in mind, how do we become, you know, economic - economically affluent to today's level? It's through the market economy, through opening doors, through market, through reforms, through moving towards more market economy, and that's the last 20 years.

And now, in this crisis, the government realized that we cannot rely on the market too much and we have a lot of money. So then it all become all government dictated, government-oriented policies, and I think the market has become so weak that we, as a developer, for instance - you know, very often an investor would ask, you know, what is your strategy for the next two years? We have no strategy because it's the government who sets the strategy, government's planning, government's decision.

So, you know, it's really - we, as a developer, we can only see what will the government likely to come up with the next policy, and then we need to gear our company towards that.

That, I think, is very dangerous, because if you take away the market, then what are we left? We're left back to the planning economy. As - as imperfect as the market economy, we still do not have a better system than that for today's world.

ZAKARIA: Your company is named SOHO China. A lot of your buildings have American-style names. Is there a change in the - in the attitude of - of the Chinese people towards the West, towards America?

ZHANG: I do think that the American glory is fading a bit. You know, if I were to look back in the last 30 years, you know, of course, in the beginning of the 30 years, everybody was looking towards America. You know, going to America was the theme among the graduates of - university graduates.

Still so, but, you know, more and more people are thinking, you know, come - if - right after university, immediately coming back to China. You know, we - we hire MBA graduates from the U.S. business schools, right?

And then, you know, I see these Chinese young graduates. I say, you know, why don't you work in America for a few years? They're like, no, no, we want to come back immediately because the opportunities are better here.

ZAKARIA: One of the things I've noticed, Zhang Xin, about China, when I've come, is that women work here at every level in the society. First of all, is that just my impression, or is it true that there are many people, maybe not quite at your - at your level, but there are many female entrepreneurs, businessmen, people in all walks of life?

ZHANG: I think that is certainly true. You know, in China, you know, if I were to say that compared to many other countries where I lived and worked before, this is the country where women have, at least in the urban area - you know, if we take away the rural area, urban area women have -- are enjoying very high level of equality, if not completely equal but at least high level of equality compared to many other -- you know, compared to European countries, for instance. You know, you don't see so many women in - in, you know, boardrooms.

And here in China, I think you see many. You know, top CEOs are actually women.

ZAKARIA: You've talked about how the government is worried about instability. And if you look at the government's own statistics, the number of protests have risen quite a lot in the last 10 years, I mean, to 70,000, 80,000 protests a year. Many of these are small and localized, but still, so much change in a - in a society. There must be a lot of pent-up tension. Do you worry about that?

ZHANG: I see a lot of discontent and, you know, the high growth itself, it's already instability to everybody. But also, there are some people growing faster than the others, and that gap creates more discontent. So I think the government is very much aware of this, and I - I see this as one of the biggest challenge for this country. ZAKARIA: One of the things that's been happening in China is a lot of labor trouble, which seems to have come together, some very large companies that are doing huge amount of - of manufacturing for all the big western brands. Do you think that there's something special happening at this moment? Why is it that there's so much labor trouble?

ZHANG: If you see that this - this government has allowed this country's economy to grow nearly freely to where it is now, but in every other area that matters to - also to the human being, you know, in ideology, in education, health care, in spirituality. It's tightly controlled, and that's why we're seeing these labor problems.

You know, these people are migrant workers to go to a new - new city, and they're there just to make money because they're - they're not supported by their family or friends. And - and I think that if the society is more liberalized in all the other areas, culture, politics, ideology, then you will see a very different society than where it is now.

We're only allowed to make money, nothing else. And that's why all the focus is on making money, and - and I think that's not enough as a - for a human being.

ZAKARIA: Are you optimistic, at the end of the day?

ZHANG: I -

ZAKARIA: You've been more successful. This is - you're living the Chinese dream.

ZHANG: I think China will first hit the crisis first, and that crisis will push more reforms, and that's desperately needed for this country. Because we've been living a life as the world manufacturer, the world factory for the last 30 years and it is not -- you know, we're not going to go forward for the next 30 years as the world factory.

We have to reform our own internally, and that - I see today there's not enough strength to push that reform. And, you know, like you say, it's the crisis that enables reform, and I see a crisis coming.

ZAKARIA: On that note, thank you very much.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ZAKARIA: There's no "Question of the Week" this week. We wanted to give your brains a rest, and probably ours, too. It's August. But do I want to recommend a book, as I do every week.

This week, it's a beach read, with a GPS twist, I suppose. It's called "A Good Man In Africa". It was written by William Boyd, and English novelist. It's the story of a newly-minted diplomat sent to be Her Majesty's representative to a small African nation. But when he arrives, just about everything that could go wrong does go wrong. It is a classic British dark comedy that's sure to make you chuckle on the beach.

Now, for the "Last Look".

It's the end of the summer. Many of you are probably looking back wistfully at some rounds of golf you played over the last few months. But I doubt many of you played those rounds in a war zone or even knew you could.

One entrepreneur has opened a golf course in Afghanistan, just outside of Kabul. It might not be up to par for you, but it's all they've got in Afghanistan. There is no grass. The fairways are covered with stones and oil. Instead of a water hazard, there's a well.

And outside of the clubhouse, a remnant of a Russian military base. It's riddled with bullet holes. Before the course could open in 2004, the owner had to remove dozens of land mines from the grounds.

This is definitely not golfing for the faint of heart. So, if you're a golfer up for adventure, you might want to consider booking the next flight to Kabul. After all, a round of golf here only costs $15.

Thanks to all of you for being part of my program this week. I will see you next week.

Stay tuned for "RELIABLE SOURCES".