Can a corporation lease an apartment for use by its employees? If so, how/where is the tax deduciton taken?

Yes.  I'm not an accountant, but the transaction should have the same tax  consequences as if the corporation paid the employee additional money, which the employee then used to rent an apartment.  Thus, would deduct its expenses in leasing the apartment, and the cmployee would pay tax on the value of the use and occupancy of the apartment (which, in practical terms, would be the amount of the rent paid by the corporation.)