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china has given it a new, modern-day twist, enlisting an army of spies not to steal military secrets, but the trade secrets and intellectual property of american companies. it's being called "the great brain robbery of america." the justice department says that the scale of china's corporate espionage is so vast, it constitutes a national security emergency, with china targeting virtually every sector of the u.s. economy, and costing american companies hundreds of billions of dollars in losses and more than two million jobs. >> john carlin: they're targeting our private companies. and it's not a fair fight. a private company can't compete against the resources of the second largest economy in the world. >> stahl: john carlin is the assistant attorney general for national security, with responsibility for counter- terrorism, cyber attacks, and increasingly, economic espionage. >> carlin: this is a serious

i mean, our economy depends on the ability to innovate. and if there's a dedicated nation state who's using its intelligence apparatus to steal, day in and day out, what we're trying to develop, that poses a serious threat to our country. >> stahl: what is their ultimate goal, the chinese government's ultimate goal? >> carlin: they want to develop certain segments of industry, and instead of trying to out- innovate, out-research, out- develop, they're choosing to do it through theft. >> stahl: all you have to do, he says, is look at the economic plans published periodically by the chinese politburo. they are, according to this recent report by the technology research firm invent i.p., in effect, blueprints of what industries and what companies will be targeted for theft. >> carlin: we see them put out the strategic plan, and then we see actions follow that plan. we see intrusion after intrusion on u.s. companies. >> stahl: do you have a number of u.s. companies that have been hit? >> carlin: it's thousands of actually companies have been

>> stahl: thousands of u.s. companies? >> carlin: of u.s. companies. >> stahl: but getting c.e.o.s from those companies to talk is nearly impossible because most of them still have business in china and don't want to be cut out of it's huge market. daniel mcgahn, the head of american superconductor, is an exception. his firm spent years and millions of dollars developing advanced computer software for wind turbines that mcgahn says china looted, nearly putting him out of business. he's talking because he wants to fight back. >> daniel mcgahn: i'm personally never going to give this up. too many lives were affected, too many families were damaged through this. we can never give up on this. >> stahl: you had to fire 600 people. >> mcgahn: yes. >> stahl: out of how many jobs? >> mcgahn: at the time, we were almost 900. >> stahl: so how much did you lose in share value? >> mcgahn: total loss is well over a billion dollars. >> stahl: today, his factory

company. >> mcgahn: i think part of the strategy in all this was to... to kill us. >> stahl: they set out to kill you. >> mcgahn: to kill the company. >> stahl: how can he be so sure? well, his story begins when china passed a clean energy law in 2005, calling for the creation of mega-wind farms throughout the country. the law made china the hottest wind power market in the world. so, mcgahn partnered with a small chinese firm called sinovel, which was partly owned by the government. sinovel made the skeletons of the turbines, and his company, american superconductor, the sophisticated gadgetry and computer code to run them. they actually built the turbines. >> mcgahn: they make the turbine, we make the controls. >> stahl: and did they make these turbines with your brains in them for the entire country of china? >> mcgahn: yes. >> stahl: when he went into business there, china was already notorious for poaching

so he says he did everything he could think of to protect his technology from being stolen. >> mcgahn: we made sure that any software or any pieces of the code were restricted and use... were able to be accessed only by a few people within the company. >> stahl: once they got everything over there, couldn't they reverse-engineer it? >> mcgahn: we believe that's what they tried to do. and what they learned was this encrypted protocol was in the way. they didn't quite understand how it worked, and they couldn't reverse-engineer it. >> stahl: everybody knows, if it's on the internet, some brilliant hacker can get at it. >> mcgahn: it wasn't accessible through the internet. >> stahl: you kept it off the internet. >> mcgahn: yes. >> stahl: it sounds like you... you built a little fortress around your... your precious codes. >> mcgahn: we certainly tried. >> stahl: initially, business boomed in china for american superconductor, with sales skyrocketing from $50 million a

>> mcgahn: we were going through exponential growth. it's what every technology company wants to get to is this high level of growth. we were there. >> stahl: then, in 2011, his engineers were testing the next- generation software in china on sinovel's turbines. the software had been programmed to shut down after the test, but the blades didn't shut down. they never stopped spinning. >> mcgahn: so we said, "why?" we didn't really know. so the team looked at the turbine and saw running on our hardware a version of software that had not been released yet. >> stahl: that's when you >> mcgahn: realized something's wrong. so then we had to figure out how did... how could this have happened. >> stahl: to find out, he launched an internal investigation and narrowed it down to this man, dejan karabasevic, an employee of american superconductor based in austria. he was one of the few people in the company with access to its

he also spent a lot of time in china working with sinovel. >> mcgahn: and what they did is they used cold war-era spycraft to be able to turn him... >> stahl: they turned him. >> mcgahn: ...and make him into an agent for... for them. >> stahl: do you know any specifics of what they offered >> mcgahn: they offered him women. they offered him an apartment. they offered him money. they offered him a new life. >> stahl: the arrangement included a $1.7 million contract that was spelled out in emails and instant messages that mcgahn's investigation found on dejan's company computer. in this one from him to a sinovel executive, dejan lays out the quid pro quo-- "all girls need money. i need girls. sinovel needs me." sinovel executives showered him with flattery and encouragement- - you are the "best man, like superman." and did they say, "we want the... the source codes"? >> mcgahn: it was almost like a grocery list. "can you get us 'a'? can you get us 'b'? can you get us 'c'?"

messages, the text message, in which dejan says, "i will send the full code, of course." >> mcgahn: that's the full code for operating their wind turbine. >> stahl: dejan eventually confessed to authorities in austria and spent a year in jail. not surprisingly, the chinese authorities refused to investigate, so daniel mcgahn filed suit in civil court in china, suing sinovel for $1.2 billion. but he suspected that china was still spying on his company, and that beijing had switched from cold war to cutting-edge espionage. so why were you brought in? >> dmitri alperovitch: we were brought in because the attacks now continued in cyberspace. >> stahl: mcgahn hired dmitri alperovitch and george kurtz, co-founders of a computer security firm called crowd strike, to investigate. they zeroed in on a suspicious email purportedly sent by a board member to 13 people in the

attachment. a few people clicked on an attachment and that let the chinese in. it was sort of like opening the front door. >> stahl: what do you mean, they were in? >> alperovitch: once they clicked on that email and they opened up the attachment, malicious codes started executing on their machine and it beaconed out to the chinese and basically let them right into the company. from that point, they can hop to any machine and take any file that they wanted from that network. >> stahl: by analyzing who the email was sent to, they were able to infer that the chinese were after more than just computer codes. >> alperovitch: they also wanted to figure out the legal strategy of the company, now that they were suing sinovel for $1.2 billion. >> george kurtz: whenever there's a big lawsuit, we'll see the chinese government actually break into that company, break into the legal department and figure out what's going on behind the scenes so they can better deal with that lawsuit. >> stahl: now, did you know at that time who had perpetrated the hack? >> alperovitch: we were able to

that this was unit 61398, part of the chinese military that was responsible for this attack. >> stahl: unit 61398 is believed to be based in this nondescript building in shanghai. it's part of the people's liberation army, and it's charged with spying on north american corporations. >> alperovitch: we estimate that people in this unit alone, this one unit. >> stahl: how active is this unit? >> kurtz: it's one of the most prolific groups that we've tracked coming out of the chinese government. it's unbelievable what they've been able to steal over the last decade. >> stahl: like what? give us a sense of the scope. >> kurtz: every industry-- engineering documents, manufacturing processes, chip designs, telecommunications, pharmaceutical. you name it, it's been stolen. >> stahl: in 2014, five military officers in the unit were criminally charged with economic espionage by john carlin's national security division at the justice department. >> carlin: these were officers

was to get up, go to work, log on, and steal from a range of american companies. and you would watch, as we put in an exhibit in the case, the activity would spike around 9:00 in the morning. they get into work, turn on their computers, and start hacking into american companies. then, it calms down a little bit from about 12:00 to 1:00 where they take a lunch break. >> stahl: ( laughs ) >> carlin: and then it continues until the end of the day, 5:00 or 6:00... >> stahl: and then they go home. >> carlin: ...at night. and then they go home, and it decreases till the next morning. >> stahl: china has always denied that it conducts or condones economic espionage. but in september, during a visit to washington, president xi jinping pledged, for the first time, that china would not engage or knowingly support cyber-theft of intellectual property for commercial gain. >> alperovitch: it's the first time ever they've admitted that economic espionage should be off-limits and that they will not conduct it. unfortunately, what we saw is that, the very next day, the day after they were in the rose garden shaking hands, the

>> stahl: wait, wait, wait, stop. the hacking has not stopped. >> alperovitch: the hacking has not stopped. but one of the things that has happened is that the military units that have been responsible for these hacks have actually had their mission taken away from them, and it was given to the ministry of state security, their version of the c.i.a. so, in effect, they said, "you

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afteprescas erytng >> charlie rose: when joaquin "el chapo" guzman slipped out of mexico's most secure prison through a secret tunnel last july, the drug lord triggered an international manhunt. it was his second escape from mexico's most secure prison-- military and law enforcement on both sides of the border brought every tool at their disposal to the search. so who should find him, but oscar-winning actor and self- described "experiential journalist," sean penn, with the help of a mexican actress. the story of penn's visit with el chapo, appearing in "rolling

it was published after mexican marines raided guzman's sinaloa hideout and recaptured him. thursday night, for the first time, sean penn talked with us about his encounter with el chapo. he had a lot to say. why does sean penn want to go to mexico to interview a drug lord who's escaped from prison with a notorious reputation for doing terrible things and supplying a lot of drugs to america? what's the point? >> sean penn: i think the policy of the war on drugs, which so deeply affects all of our lives, seems not to change. it seems to be so unmovable. and it occurs to me that often, because we want to simplify the problem, and we want to look at a black hat and put our resources into focusing on the bad guy and na-- and-- and-- ju-

i absolutely understand justice and-- and the rule of law. and so i do what i call experiential journalism. i don't have to be the one that reports on the alleged murders or the amount of narcotics that are brought in. i go and i spend time in the company of another human being, which everyone is. and i make an observation and try to parallel that, try to balance that with the focus that we-- that i believe we-- we tend to put too much emphasis on. so, when i understood from colleagues of mine that there was a potential for contact with him, it just struck me that i wanted to-- >> rose: to do what, sean? i mean i don't understand that. because, i mean clearly-- drugs are a huge problem in america. there's a huge consumption of drugs in america. it's a terrible thing in what it

but what is going to see him going to do about it, other than somehow-- getting a lot of attention. >> penn: i feel complicit in the suffering that is going on, because i'm not thinking about it every day. i'm not watching these laws that are showing no progression, these rehabilitations that are not happening. so i'm looking the other way. i find that equally complicit with murders in juarez. >> rose: you think we demonize el chapo too much? >> penn: i think that there's-- to over-demonize any human being is-- is-- is not in our-- best self interest. like it or not, we're married to them. they're of our time. they're affecting us. so like a marriage, you-- you know, you might want a divorce. >> rose: okay, let me... let me... >> penn: but you've got to look at this person as a-- as a person. >> rose: okay. >> penn: or you're never gonna have-- or if the-- if the

understand is that this is a very bad person, then let's not understand anything else. >> rose: you wanted to have a conversation about the policy of a war on drugs. >> penn: that's right. >> rose: that was the motivating factor for you-- >> penn: with-- with the reader. >> rose: with the reader. >> penn: with-- with him, i wanted to sit, observe, ask him questions. and then use that as a-- as an anchor into this article. >> rose: what did he say? why did he accept? >> penn: well, i-- i can't read his mind. >> rose: yeah, but you talk to him, and you know the characters involved. >> penn: uh-huh. i would say that, you know, from the conversation that was had, he, in several ways-- wanted to be on the record. >> rose: how sean penn came to be on the record with el chapo is a tale. penn knew of a mexican tv and movie star who had caught chapo's attention. kate del castillo had once

telenovela. chapo was a fan. they kept in touch through texts and social media. last august, del castillo and penn met and she agreed to arrange a meeting with el chapo. in october, penn, del castillo and two others traveled by small plane and truck into cartel- controlled territory. they were escorted by one of el chapo's sons. >> penn: i was baffled at his will to see us. nonetheless-- >> rose: because you-- thought he might be putting himself at risk. >> penn: yeah. i mean we followed the protocols laid out by them in terms of-- in terms of communications and so on, as well as travel. >> rose: so as far as you know, you had nothing to do, and-- and your visit had nothing to do with his-- recapture? >> penn: the things-- here's the things that we know. we know that the mexican government has-- is-- is-- they've been very humiliated by the original escape.

>> penn: they were clearly very humiliated by the notion that someone found him before they did. well, nobody found him before they did. we didn't-- we're not smarter than the d.e.a. or the mexican intelligence. we had a contact upon which we were able to facilitate an invitation that allowed us in. >> rose: what we know now from transcripts of texts released by the mexican government is that el chapo was interested in the actress. he didn't even know who sean penn was. was it naive of you, naive, to believe that you could come to mexico, meet with kate del castillo, and go see el chapo without somebody knowing about it? >> penn: i assumed they knew about it. and i say so in the article. i was-- i was stunned-- that-- that he would risk our trip. i was stunned.

and he agreed to a future meeting including a formal interview with sean penn eight days later. when the manhunt grew more intense, the face-to-face interview became too risky. instead, penn sent a list of questions and el chapo recorded his answers. the questions were not confrontational. they included el chapo growing up in poverty and who he blamed for the drug problem. you understand that a lot of people, a lot of people would have wanted you, in this conversation, in a sense, to see how he would react if you wanted to hold him accountable for his life. >> penn: uh-huh. >> rose: did you-- >> penn: or-- or-- >> rose: consider that? or? >> penn: it just means that, if somebody wants me to ask the questions that they want me to ask-- >> rose: right. >> penn: well, there's that little problem we run into in life. they're not me. so any experiential-- >> rose: and you had no-- but-- but just tell me this.

you didn't have any interest in understanding how he justified, felt about, made decisions, organized the cartel. >> penn: i have a fascination... >> rose: that is so powerful? >> penn: ...with all of that. >> rose: penn's "rolling stone" article is a ten thousand word, sometimes rambling, often gripping account of the el chapo meeting. it was published the day after chapo was recaptured and it quickly became the headline. >> penn: my article should not have made this much noise. el chapo should not have been this popular a figure to read about. >> rose: well, he was a-- he was a figure that people read about and talked about before you ever went to mexico. >> penn: oh, i-- i'm-- i'm well aware of that. >> rose: what about those who say, "this is his ego. he likes being in the center of this. he's an adventurer. he thinks of himself as a writer in the tradition of hunter thompson with a kind of experiential quality to him." you accept any of that? >> penn: do i accept that people feel that way?

>> penn: i absolutely accept that they feel that way. >> rose: and are they right? >> penn: no, they're not right. >> rose: on january 8, when the mexican marines finally raided el chapo's hideout as seen in this video, they caught him as he attempted still another escape. chapo's arrest raised questions about whether the actor and actress had been tracked and helped lead the mexican marines to the drug lord. mexico's attorney general claimed they had been quote, "essential." do you believe that the mexican government released this because they wanted to see you blamed, and to put you at risk? >> penn: yes. >> rose: they wanted to encourage the cartel to put you in their crosshairs? >> penn: yes. >> rose: are you fearful for your life? >> penn: no. >> rose: do you believe the cartel wants to do harm to you because they have accepted the

made somehow led to the recapture of el chapo? >> penn: they've been in this business a long time. they've dealt with law enforcement issues for lg ti. they've dealt with misinformation for a long time. there are irrational people. and so i can't say for sure, you know, that there's no risk. >> rose: have you heard from anybody in the cartel? >> penn: no. >> rose: what's it been like for you? what are your concerns? >> penn: i-- i'll be-- you know, as honest as i can be with you about this. i can be very-- you know, flamboyant in my words sometimes. i can get angry-- like many people can. i'm really sad about the state

it has been an incredible hypocrisy and an incredible lesson in just how much they don't know and how disserved we are. you know, the-- of course i know that there are people who don't like me out of the gate-- >> rose: you're not without controversy. >> penn: not without controversy. fair enough. again, journalists who want to say that i'm not a journalist. well, i want to see the license that says that they're a journalist. >> rose: sean penn did commit something of a mortal sin for most journalists by allowing the most wanted man in the world to approve his story. >> penn: what was brokered for me to have the interview with el chapo was that i would finish the article, send it to him, and if he said no, then that was no harm, no foul to any reader. >> rose: it would never be printed.

printed. >> rose: it was printed and soon after, penn's article was being criticized for being sympathetic to a killer responsible for the deaths of thousands and the biggest drug supplier in the world. >> penn: i was not present to report on the things people would like to see reported on. i was not present at murders. i was not present to see narcotics. i was not present to that. what i was present for i wrote. i wrote that to use it as a pillar for an article about the- - the policy of the war on drugs. >> rose: you're not naive. and you knew that if sean penn went to see a drug lord on the run, and had a conversation with him with a mexican actress who he was smitten with, you knew that's a story. you knew that's a big story. you're not naive. and now you're blaming people for wanting to know more about it. >> penn: it's-- it's-- >> rose: it's inevitable. >> penn: no, no, no, no.

it. let's go to the big picture of what we-- what we all want. we all want this drug problem to stop. and if you are in the moral right, or on the far left, just as many of your children are doing these drugs, just as many of your brothers and sisters, your mothers and fathers, the teachers at school, are doing these drugs. just as many. and how much time have they spent in the last week since this article came out, talking about that? one percent? i think that'd be generous. >> rose: you're saying there's not much dialogue about-- >> penn: my article failed. >> rose: --as a result of el chapo. >> penn: let me be clear. my artic has failed. >> rose: to? >> penn: in that the ques-- in-- in-- in that everything that's spoken about is everything but what i was trying to speak about. >> rose: you regret that people- - >> penn: that i failed that. >> rose: but-- but-- but you're really saying, i-- what i really regret is not anything that did. i regret that people misunderstood what i did.

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