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Lou Dobbs Moneyline
The Heads of Two Aerospace Companies Discuss the Future of Aviation; What's Being Done to Protect Americans From Anthrax?; Where is the Money From Benefit Concerts Going?
Aired October 26, 2001 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Good evening. The largest military contract ever, $200 billion, awarded by the Pentagon today. The project: To build the next generation of fighter jets.
(BEGIN VIDEO CLIP)
JAMES ROCHE, AIR FORCE SECRETARY: It is our conclusion, joined in by our colleagues from the United Kingdom, that the Lockheed Martin team is the winner of the joint strike fighter program on a best value basis.
(END VIDEO CLIP)
DOBBS: Tonight, we'll hear from the heads of the two competing aerospace companies, Lockheed Martin, of course, and Boeing. And we'll tell you what this all means to the future of military aviation and to the industry itself.
Calling it a new weapon to identify and to disrupt terrorists before they strike, President Bush today signed a new anti terrorism bill into law.
As we've been reporting to you this week, the Red Cross under intense criticism over its handling of donations in the wake of the September 11 attacks. Now, the top official with the Red Cross has been forced out.
And on Wall Street today, investors managed to overlook weak quarterly results, sending markets higher for the week. We'll wrap up this day and the week for you. And we'll also be joined by Jeremy Siegel to tell us what we can expect in these markets in the days and weeks ahead.
Lockheed Martin, as we've reported, has won a Pentagon contract to build a new breed of fighter jet, that contract the biggest ever awarded by the Pentagon, ultimately expected to be worth more than $200 billion. The landmark decision coming from the Pentagon less than two hours ago.
Jamie McIntyre has the story from the Pentagon -- Jamie.
JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Lou, this is huge when it comes to defense contracts. What was called the X-35 now becomes the F-35. The Lockheed Martin version of the joint strike fighter will now go into production.
This airplane was picked over the Boeing model because of a number of things. One is its propulsion system, which includes a special lift fan that allows it to go -- to have maximum thrust in the vertical mode. Here we see the plane that didn't get the contract, the Boeing version of the plane, which some people criticized as kind of looking like a pregnant guppy, with its big scoop on the front there, but the Pentagon insists that this was not a beauty contest, that there were no aesthetics involved, that they looked at all the planes -- they looked at both planes which they considered to be very good, and they picked them because Lockheed Martin had more strengths and the weaknesses didn't seem so bad.
Now again, this is a huge victory for Lockheed Martin, the employees there doing high-fives today. As this contract, as you said, is at least $200 billion, and if you count sales to U.S. allies and possible overseas sales down the road, some people think this adds up to more than $400 billion.
The big concern is, will Boeing survive as a fighter jet maker? It does have some involvement in the making of the F-18, the new version of that, but the Pentagon said it is confident that it will not erode the industrial base when it comes to defense contractors in the United States -- Lou.
DOBBS: And Jamie, how excited are the services to get that joint strike fighter that they awarded, which was today?
MCINTYRE: Well, they desperately need it. It's supposed to be a very affordable plane. It's much cheaper than, for instance, the new F-22 that's on the horizon, and it fills a number of roles. It would replace the F-16, it would replace the A-10 in a ground attack role. It would replace the Harrier, which was really aging and getting to be a maintenance problem for the Marines with its vertical takeoff version, and they are going to be getting a huge number of these, about 3,000 altogether.
This will be the plane that is both the future of carrier aviation and also land-based aviation. This will be the basic plane for all of the services, and they are looking forward to getting it in just about eight years or so.
DOBBS: That's an extraordinary range of aircraft to replace, as you put, the F-35, from the slow A-10 to the Harrier, which is a vertical takeoff, of course, and the F-16. I mean, that's incredible.
MCINTYRE: Well, one of the things that was a selling point -- this is why the joint strike fighter program was so important -- is that they've tried to do this before, have one plane for all the services and their different needs and have that economy of having all the same parts, all the same maintenance. It has never worked out in the past, but they are very committed to doing it this time, to keep the cost down. This fighter will be between $30 million a copy for the standard version, maybe 40 or a little bit more for the vertical takeoff version. That's not expensive in today's fighter jet market.
DOBBS: No. Jamie, thank you very much. Jamie McIntyre from the Pentagon.
Well, Lockheed's victory in this competition a windfall for Lockheed Martin, which was favored to win. Kitty Pilgrim now has more on the financial results of this decision.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): The manufacturer of the F-16 fighter will make the next generation of fighter jets that will last until the year 2040, be on the cutting edge of design, landing and taking off vertically when needed.
The design beat out the bulkier Boeing aircraft, which tried out a radically different engine placement, but won praise for innovation.
LOREN THOMPSON, LEXINGTON INSTITUTE: Lockheed ended up having a superior product because they tried a highly affordable evolutionary design. Boeing tried something a lot more revolutionary, and they had difficulty implementing it.
PILGRIM: The Lockheed team includes Northrop Grumman and BAE Systems. The economic trickle-down to subcontractors will include Pratt & Whitney, Rolls Royce and British Aerospace.
The Air Force will buy the bulk of the planes, but they are also meant for the Navy, Marines and Britain. That alters the takeoff capabilities of the design. Lockheed shares are up 47 percent this year on a defense industry rally and speculation it would win the contract.
Boeing has cut 30,000 jobs because of a fall-off in civilian aircraft business and has seen its stock languish, but analysts say the loss is sustainable.
BRETT LAMBERT, DFI INTERNATIONAL: Boeing is not going to go out of the defense business. They are too integrated into the U.S. government's planning for military systems. They offer a wide variety of other programs that they can perform on and continue to be quite profitable with.
PILGRIM: The Pentagon set a fixed sticker price of about $30 million, with the vertical lift versions for the Marines at about $40 million each. In the past, aircraft were designed first and priced later. Some wonder if cost overruns are inevitable.
(END VIDEOTAPE)
PILGRIM: Financial analysts say this was a critical win for Lockheed, and one they couldn't afford to lose, possibly knocking it out of the defense business if they did not win the contract outright. And now, those worries are over. This makes it the premier fighter jet manufacturer in the world -- Lou.
DOBBS: Kitty, thank you very much.
Well, today's decision prompting cheers of course at Lockheed Martin headquarters in Bethesda, Maryland. Lockheed, the maker of the F-16 jet the joint strike fighter is meant to replace. Louise Schiavone joins us now from Bethesda, Maryland -- Louise.
LOUISE SCHIAVONE, CNN FINANCIAL NEWS CORRESPONDENT: Well, Lou, as you can imagine, there was jubilation all around here in Bethesda, Maryland at the Lockheed Martin corporation, also with the production facilities in Fort Worth, Texas when they learned that the joint strike fighter contract had been awarded to Lockheed Martin.
Lockheed Martin chairman and CEO Vance Coffman rallied his victorious troops from Bethesda, Maryland.
(BEGIN VIDEO CLIP)
VANCE COFFMAN, CEO, LOCKHEED MARTIN: I can't tell you how pleased I am with what you just heard. We're all simply elated by this win and what it means for Lockheed Martin, Northrop Grumman and BEA Systems.
(END VIDEO CLIP)
SCHIAVONE: Well, as you noted, this cements Lockheed Martin's position as the number one defense contractor in the United States. The initial for 3,000 fighter jets, but Great Britain is going to be buying 150 of these, and there will no doubt be an export model, so another 3,000 could be produced for sale to our other allies. More than 4,000 jobs may well be added to production facilities in Fort Worth, Texas -- Lou.
DOBBS: All right. Louise, thanks very much. Louise Schiavone from Bethesda, Maryland.
The Pentagon's decision of course a disappointment for Boeing, which has been struggling in the civil aviation arena as well. Joining me now with an update on Boeing's reaction to all of this is Katherine Barrett. She is in Seattle, Washington -- Katherine.
KATHERINE BARRETT, CNN CORRESPONDENT: That's right, Lou, an undeniable disappointment to Boeing and another blow to this region which is going to suffer some 20,000 to 30,000 layoffs in Boeing's commercial aircraft division over the next year.
Now, Boeing in this competition had been seen recently as something of an underdo, so its loss was perhaps not a complete surprise, but Boeing's chairman and Chief Executive Officer Phil Condit said in a press conference from the nation's capital just moments ago that this was, quote, "a real disappointment," but that it was a tough competition and he still sees new frontiers for Boeing to conquer, and says, "we are going to conquer them."
There may be some sharing of the ultimate production of this aircraft. That has been the history with big military contracts like this in the past. Boeing could, in fact, become a subcontractor to Lockheed Martin. That is left up to Lockheed Martin to decided. The Pentagon did not go so far as to ask them to do so, but said it would not discourage it if Lockheed Martin wants to bring Boeing on board as a subcontractor.
There will be a financial impact on Boeing. The company said it will cause it to lower its revenue forecast for 2002 by $1 billion. It's lowering revenue forecast down to $55 billion for 2002 from $56, but Boeing reiterated it does have an existing strong military program many -- it makes the F-18 Hornet, the Apache and Comanche aircraft, it's also somewhat involved in the F-22 production, and it makes the C-17 transport plane, so the company insists it will continue to have a strong military production.
Nonetheless, disappointment in Seattle today -- Lou.
DOBBS: Katherine, thank you. Katherine Barrett from Seattle.
Today's announcement from the Pentagon completes years of competition in the program to build an aircraft that will be shared by three branches of the military changes the landscape of the defense industry.
Joining me now -- the man leading many of those changes, the under secretary of Defense for Acquisitions, Technology and Logistics, Edward "Pete" Aldridge.
It is good to have you with us, Mr. Secretary.
EDWARD "PETE" ALDRIDGE, UNDER SECRETARY OF DEFENSE: Hello, Lou, good to see you again.
DOBBS: Good to see you.
Is there -- in this award today, is there a built-in, if you will, provision for the disappointed competitor?
ALDRIDGE: Well, I'd just like to say both teams did a great job on the concept demonstration phase.
The winners, of course, have their own teammates. They formed teammates with British aerospace and Northrop Grumman. But, if Lockheed Martin wants to partake of the technology that's available in Boeing, they're permitted to do so. It is their choice of how to proceed.
We would not object to anything that they would like to join on in any technology area.
DOBBS: What was, if there was, one specific aspect of this competition that tilted the award in favor of Lockheed Martin?
ALDRIDGE: Well, Lou, that's -- that decision, of course, on the source selection was the secretary of the Air Force's, not mine. I think you heard today, the secretary looked at a variety of things. I don't think you can point to any one factor that swung the results one way or the other.
The source selection process is very, very thorough. It has many factors that go into the process of deciding, from the performance to the manufacturing, reliability, management, past performance. All those factors go into the decision.
I don't think you can point to any one factor that made the choice. It was a combination that said, according to Jim Roche, the best value for the Department of Defense and for the nation and, in fact, for the United Kingdom as well.
DOBBS: How soon will we see these aircraft in operation?
ALDRIDGE: They'll -- first flight is about four years away. We're now going through the design -- final design of the development program. And so first flight is expected about four years from now.
DOBBS: And how soon will the money start moving from the federal government to Lockheed Martin?
ALDRIDGE: I think Lockheed Martin would like to see some right away.
DOBBS: I'd suspect you're right.
ALDRIDGE: The contracts have been signed. And as soon as the work starts, they can start billing the government for the work that they are producing. And so, I would expect it's a matter of a few months away, but very soon.
DOBBS: OK, Mr. Secretary, Good to have you with us.
ALDRIDGE: Thank you, Lou.
DOBBS: Thank you.
And we'll be talking tonight with the head men at Lockheed Martin and Boeing, the winner and loser respectively, of this competition.
I am joined first by Robert Stevens. He's the president of Lockheed from his company's headquarters, as I said, in Bethesda, Maryland.
First -- congratulations.
ROBERT STEVENS, PRESIDENT, LOCKHEED MARTIN: Thank you, Lou. It's good to be with you.
DOBBS: Lockheed, in this case, will have -- this is monumental the scale, the scope, the size of this contract.
In your judgment, what was the deciding factor here?
STEVENS: Well, I think the government had a very comprehensive evaluation of the program attributes on a best-value basis.
They looked at the quality of the airplane, the quality of our management team, our past performance, the degree to which we could put a good logistics and supportability package together and support the customer's requirements for the long term.
Of course, we assembled a very, very capable team along with our partners, BAE Systems and Northrop Grumman and I think it was a compelling best-value award.
DOBBS: And Lockheed Martin has faced, some would say, more than it's share of difficulties over the past couple of years.
It feels pretty good to win, doesn't it?
STEVENS: It feels absolutely great to win.
But today was also a day where we released our earnings for the first nine months of this year. And I think if you look back over the last seven quarters, you've seen consistent and continuous improvement across all the product lines of Lockheed Martin
We're very proud of our employees. We've really focused on customers. We're hitting all our performance marks. We've got great operational momentum and we're looking forward to the future.
DOBBS: And you've got to be proud that you win this contract the same day you were able to report that earnings are improving against Wall Street targets.
STEVENS: That's certainly so.
DOBBS: And this aircraft now to replace so many -- the value that's built into this, you know, a number of people in Congress have already started to talk about their fear of overruns.
How would you respond to them and allay those fears?
STEVENS: Well I think we have excellent systems in place. And of course, the whole architecture of this program was built around assuring we had a very affordable design, very simple, using very high quality production tools and excellent management systems in place to ensure cost and schedule performance over the long haul.
DOBBS: Robert Stevens, again our congratulations and all the best.
STEVENS: Thank you very much.
DOBBS: Well coming up next here, disguising money laundering with the help of honey, believe it or not. We'll have the latest twist for you in the money trail.
And benefit concerts have raised millions of dollars to help victims and their families of September 11. So far, that money has not reached those who need it most. We have that story coming up for you.
Also, as we told you, Lockheed Martin beating out Boeing for that contract. Boeing CEO, Phil Condit, joins me later here.
MONEYLINE will continue in just a moment.
(COMMERCIAL BREAK)
DOBBS: Well the latest developments in the war against terrorism: Heavy bombing carried out around the Afghan capital of Kabul today. The Red Cross saying several warehouses and one of its compounds were hit.
CNN's Walter Rodgers reports that the Taliban have been using that compound to shield their military vehicles. The Pentagon -- saying 80 strike aircraft were used to hit targets yesterday. They hit targets that include cave complexes, a helicopter, military garrisons and Taliban training facilities.
200 British Commando Royal Marines are being made available for immediate use in Afghanistan. Admiral Sir Michael Boyce says they'll be used in raiding parties. Additional British warships and submarines also stepping into the fray.
The Taliban says it executed well-known opposition leader Abdul Haq and two others in Kabul today. The Taliban says Haq was on a spying mission. He had been working to forge a coalition government in case the Taliban is toppled.
On the home front, President Bush today signed a new anti- terrorism bill into law. That law gives some agencies greater surveillance and intelligence-gathering powers. It also toughens penalties against terrorists and their accomplices.
Now for the latest in the anthrax attacks: A filter removed from the Supreme Court's off-site mail center has tested positive for anthrax. So far, tests at the Supreme Court itself have been negative. But the building is expected to be closed for further testing.
And a small group of workers at the vice president's residence has been tested for anthrax exposure -- that after small traces of anthrax were found at the CIA's Virginia facility that handles some of the vice president's mail.
And the White House saying anthrax found in Senator Tom Daschle's office is so sophisticated that it could have only been produced by a Ph.D. microbiologist in what they called a well-equipped laboratory. But they did not rule out state-sponsored terrorism at all.
Now to tell us what's being done to protect Americans from anthrax, I am joined by Dr. Sanjay Gupta, who met with the director of the Centers for Disease Control and Prevention today.
It's good to have you with us. Let me start...
DR. SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: Good evening, Lou.
DOBBS: Let me ask you just at the very beginning: There's obviously a great concern in the country about anthrax and the way that we're responding to it.
Give us your best judgment about the way the agencies are working and working together.
GUPTA: Well, one word that sort of springs to mind immediately, Lou, is a little bit confusing -- confusing being the word.
We've seen Florida, we've seen Washington, we've seen New York. Cases -- we've seen testing go on in some places. Not so much testing in the other places. We have seen 14 days of antibiotics with the option of 60 in one place, three days in another. All of that, but still just three deaths out of all of that.
I had a chance to talk to the director today of the CDC and shared some of my concerns with him. I said it's a sort of bewildering system, a little bit puzzling, and this is what he had to say.
(BEGIN VIDEO CLIP)
JEFFREY KOPLAN, CENTERS FOR DISEASE CONTROL: It's confusing because I think people associate nasal swabs with when they get throat swabs for a sore throat, and this is a very different circumstance. There is no screening test for anthrax, so let's not confuse it with other diseases.
And the way we use the nasal swab is as parallel to the way we use surface swabs. So, we use it to determine has there been anthrax in proximity to where you work or in the environment.
(END VIDEO CLIP)
GUPTA: So, it's like no other disease, he's saying. And we're doing tests, but these tests are not individual diagnostic tests. There is no single test that will tell you whether or not you have anthrax. A lot of where that testing is originating from or where the tests end up is right there behind me at the CDC.
I want to point out as well, Lou, that there are barricades that have been put up. This is a building that is trying to become more secure like so many other buildings that we have seen. These barricades are to prevent things like, for instance, car bombs actually getting into the building. They are trying to do their job and they are trying to do it safely as they can -- Lou.
DOBBS: Sanjay, let me return if I may to the issue of testing, because it is of course one of things that is frustrating here for those who think they have been exposed to anthrax, and that is the fact that the testing seems to be -- whether one refers to it as a screening test or not -- the testing seems to be all over the map. Is there in process here an effort to create one test for anthrax that could be helpful to the agencies who have to respond and of course the victims of anthrax exposure or infection?
GUPTA: That's right, Lou. It is confusing. There's no one single diagnostic test that will be able to tell us whether or not someone has been exposed or infected to anthrax. So, what this -- and I'm going to try to be concise as possible -- but what they have told me is that a laboratory test in conjunction with several other tests, for example, how much anthrax was there in the room, was there a window open in the room, was there a fan?
All these sorts of things are factors that they use to try to determines whether or not someone has actually been exposed. No single thing will determine or not.
What it ends up being is that someone could present, have their nasal swab and have absolutely no nasal spores and still be deemed an exposure and still be treated as such. A little confusing, but aggressive and probably safer in the long run.
DOBBS: And of course, what in some cases is being recommended is people take Cipro or another antibiotic as just a precaution irrespective of whether the test comes back negative or positive. But isn't there a risk here with the administration of all these antibiotics that some taking them who have not -- who do not have symptoms could be down the road exposed to a disease that has built up a resistance to antibiotics?
GUPTA: That's right, Lou. Just like in the financial role, it's a risk/benefit sort of analysis. And in this case, the risk of possibly contracting anthrax in someone who has never had symptoms -- they still think it's higher than possibly the risk of having this antibiotic resistance.
Antibiotic resistance is a real problem. And in an individual, this strong antibiotic might actually kill some of the normal bacteria, allowing more deadly bacteria, more harmful bacteria to grow and be less treatable. That can happen in individuals, that can happen in communities. The CDC officials are certainly concerned about that, but they would rather not see anymore cases of anthrax.
DOBBS: OK. Sanjay Gupta, doctor, thank you very much for being with us.
GUPTA: Thank you.
DOBBS: Dr. Bernadine Healy today resigned as head of the American Red Cross. She said she was forced out. The Red Cross has been under fire for being unclear about where $500 million that it raised in the wake of September 11 is going, and how quickly victims and their families are receiving help from the Red Cross.
Speaking at a news conference today, Red Cross Chairman David McLaughlin, standing next to Healy, denied she was forced out.
(BEGIN VIDEO CLIP)
DAVID MCLAUGHLIN, CHAIRMAN, RED CROSS: No, she did not get forced out. I think we ought to close it off.
BERNARDINE HEALY, CEO, AMERICAN RED CROSS: When you have a 50- person board, you have a lot of differences of opinion. And I think that the board has to have the CEO that they have complete agreement in, and that's all.
(END VIDEO CLIP)
DOBBS: Healy's tenure has been marked by controversy among over things, over blood. Healy was unable to free the organization for a court-ordered consent decree with the Federal Drug Administration for repeated violation of blood safety. Healy was also withholding payment of dues for the Red Cross' parent in Geneva because of controversy over Israel's application to the International Red Cross. We will be following up on that story.
And next, we'll be talking about benefit concerts that have raised millions of dollars for the victims of September 11, and we'll give you a look at what's preventing those funds from reaching those in need.
And on the trail of terrorist money, heightened airport security uncovering smuggled money in honey. We'll have that story for you.
Also, the Pentagon chooses Lockheed Martin for its joint strike fighter program. We will be talking with the head of Boeing. That and more coming right up. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Well, the campaign against terrorist financing is turning up some unusual cases, not all of them directly related to terrorism, or at least we don't know whether they are directly related to terrorism. The placement of two honey shops in Yemen on the Treasury Department's list of terrorist organizations has brought sharp scrutiny of honey imports -- honey imports. And that's that scrutiny that last week led customs officials to discover a large amount of money in honey.
(BEGIN VIDEOTAPE)
ALLAN DODDS FRANK, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): This small Brooklyn store, called The Immigrant, sells luggage, clothing and American honey. It hardly seems like the starting point for a tale of international money smuggling, but authorities say it is.
The owner of the shop, Ali Alfatimi, is in this jail, held without bail on charges of conspiring to transport money illegally from the United States. The 45-year-old immigrant from Yemen also runs the adjoining travel agency and laundromat, and, according to the federal complaint, a money transport business.
He told U.S. customs agents that for at least the last 18 months, as part of his travel agency and money transfer business, he employed couriers to move cash to Yemen. Alfatimi's lawyer insists his client was engaged in a routine transaction gone awry.
ALAN DREZIN, ATTORNEY FOR ALI ALFATIMI: The only crime that we have here is in not reporting the transportation of money out of the country. And my client maintains that it was his instructions that, you know, he thought that the money was going to be properly reported.
FRANK (on camera): By whom did he think the money was going to be properly reported?
DREZIN: Well, I presume by Mr. Nahshal.
FRANK (voice-over): Mr. Nahshal is Basam Nahshal, the 22-year- old naturalized American from Yemen and Alfatimi's courier, caught at the Delta terminal at Kennedy International Airport.
As Nahshal's 19 pieces of luggage went through security, seven cardboard cartons similar to these, filled with containers of honey caught an inspector's attention. Packed around the honey containers, $100,150 in cash. Customs agents found Nahshal carrying another $26,413 in cash, along with $4,200 in negotiable checks. And inside a suitcase, $10,000 in traveler's check.
Nahshal then called Alfatimi, who came to the airport, where both were arrested.
TREVOR HEADLEY, ATTORNEY FOR BASAM NAHSHAL: Mr. Alfatimi, when he was arrested, he indicated that the money was in the boxes. The money belonged to him and that my client had no knowledge that the money was there.
FRANK: Still, for Nahshal, who for the last year or so, worked at this delicatessen along the Brooklyn-Queens border, it was a lot of money.
(on camera): Basam Nahshal told us authorities he earned $1,000 a month working at this deli. And he said he had no other assets, no checking account, no savings account, no stocks and bonds.
(voice-over): In the complaint, the government says Alfatimi told Nahshal to deliver the money to a man in Yemen authorities will not identify. Alfatimi's lawyer claims the $100,000 in the honey belongs to his client.
DREZIN: My client was going to use that money to build a house in Yemen. And basically, he was really sending it to himself or his family down there.
FRANK: So what about the money that Nahshal carried in his pockets?
HEADLEY: There were additional sums and some of which belonged to my client. What part of it belonged to my client? I'm not prepared to say.
FRANK: Both men remain at the Metropolitan detention center, while facing conspiracy charges carrying as much as five years in prison and fines of $250,000. The complaint makes no mention of terrorists. And the defense attorneys insist their clients have no connections to Osama bin Laden or his al Qaeda network.
(END VIDEOTAPE)
Until recently, honey shipments alone did not raise many eyebrows at international airports. Since many people from Middle Eastern countries routinely take honey home as gifts. In Yemen alone, a country of 16 million people, they imported nearly one million pounds of American honey last year, 10 percent of America's export total -- Lou.
DOBBS: Well, if there's that kind of money within the boxes of honey, you could understand its popularity in Yemen or almost anywhere else, couldn't you?
FRANK: It's better than getting a free coupon.
DOBBS: All right. Thanks very much, Al.
Coming up next here, another piece in the puzzle of where the September 11 charity money is going. Tonight, where is the money from those rock concerts? Peter Viles will be here to tell you.
And Wharton Business School professor Jeremy Siegel will join us. He's wondering if there is perhaps too much optimism in this stock market. Stay with us.
(COMMERCIAL BREAK)
DOBBS: And now for the latest in the war against terrorism. Anthrax spores found in an air filter at the Supreme Court's offsite mailing center today. So far, no traces of anthrax have been found at the Supreme Court itself.
A small number of people who work at the Vice President's residence have been tested for anthrax exposure. This, following the discovery of anthrax traces at the CIA's processing facility in Langley, Virginia. That facility, by the way, handles some of the Vice President's mail.
The Centers for Disease Control and Prevention saying it plans to administer anthrax vaccine to high risk laboratory workers and to decontamination specialists. President Bush today signs an anti- terrorism bill into law. It gives law enforcement officials expanded powers to track down terrorists. The President also asked Congress to pass two international treaties that require the prosecution and extradition of terrorists.
U.S. aircraft striking Taliban caves, troops and storage facilities in Afghanistan today. Heavy bombing carried out in and around the capital of the Kabul.
And now, the runner-up in the massive competition to build the military's next generation jet fighter. Phil Condit, the CEO of Boeing, joins us from Arlington, Virginia. Phil, I know you've got to be disappointed here. Give us, if you will, your best strategy going forward now for Boeing.
PHIL CONDIT, CEO, BOEING: One, yes, we are disappointed. You have to be. On the other side, we've got a lot of great stuff going forward. High rate production right now on FA-18, the prospect of another extension on the C-17 program, which has been a great program for us, looking at tankers to replace the some 500 very aging tankers in the U.S. Air Force fleet, where we've got a great product.
DOBBS: Are you talking about...
CONDIT: So we've got a lot of those things we're doing.
DOBBS: You're talking about the KC-130?
CONDIT: KC-135s. 40 years old.
DOBBS: Right. And what is the likelihood of that coming to fruition?
CONDIT: I think it's pretty likely. It was clearly in the Air Force's plan a little later. The events of September 11 have sort of pushed that requirement forward. So there's a lot of discussion right now on Capitol Hill about that tanker program.
DOBBS: And the tanker program, the other products that Boeing builds, what is the impact here for Boeing of not winning this contract? Had you built it into your long-range forecasts? Will it have an impact on your earnings?
CONDIT: What we have done is said it will change our guidance for '02. We had said $56 billion in revenue for '02. That's going to be closer to $55 billion. We don't think it will impact our margins. And we don't think it will impact our cash flow. So yes, a slight top line change, but holding margins.
DOBBS: And your basic outlook for Boeing in the next year yourself, particularly in terms of commercial aircraft?
CONDIT: Yes, commercial's going to be tough. No question about it, but we're going after it that says every cost is variable. We're going to keep that business profitable. And we can. We have a great military business with some chances to plus that up. And we've got a great space business. So overall, I'm pretty happy with where we are. And we're going to go make it happen.
DOBBS: Phil Condit, thanks for being here.
CONDIT: Lou, thank you.
DOBBS: Coming up next, we continue our look at the money raised to help victims of the families of those victims of the September attacks. Tonight, we focus on two high-profile rock benefits and why there's been no rush to distribute that money. Then some of your thoughts on both sides of this controversial issue. All of that coming right up.
(COMMERCIAL BREAK)
DOBBS: We continue our special report now on the victims and the family of the victims of September 11, the charities set up to help them, and an assessment as to where the money is and where it's going.
Tonight, we focus on two very high-profile rock concert benefits, and we report on what is happening with the money raised.
Peter Viles with the report.
(BEGIN VIDEOTAPE)
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PETER VILES, CNN CORRESPONDENT (voice-over): Paul McCartney's concert for New York City held six days ago, the richest event ever at Madison Square Garden. $14 million raised in ticket sales alone. No word yet on how much was raised in pledges. All the money committed to Robinhood Relief Fund, which in turn aids families of low-income workers, who perished on September 11.
To date, none of the money has been dispersed, nor has the money raised by the blockbuster Tribute to Heroes Telethon, which ran on the major broadcast networks September 21, five weeks ago. The benefit raised $150 million in pledges. $85 million of which has been collected and is now held by the September 11 Fund.
A special board meets next week to set guidelines for handing that money out. So why no rush to distribute the money? In large part, because the September 11 Fund has paid out of separate funds $10 million in emergency aid to families, on top of $40 million from the Red Cross.
Speaking of those families, a fund spokeswoman said, "They are already getting money on an emergency basis out of the September 11 Fund with the telethon money. They will be able to get more money over a longer period of time." Spokeswoman adding, "From everything we can see, a tremendous amount of support is getting into the hands of people who need it."
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An obvious question here, what happens to the interest on that $85 million? True total is actually closer to $200 million now sitting in that September 11 fund. And we are told the interest earned on that account will be reinvested in the fund -- Lou.
DOBBS: Terrific. Now let's go to the September 11 Fund itself. That money will be dispersed. Have they given an indication as to when?
VILES: They haven't given an indication of what the total time period will be, no.
DOBBS: And the September 11 Fund has pledged that that money will be going to the families of those victims of September 11?
VILES: The families' victims and some community associations.
DOBBS: Right.
VILES: Although the money from the concert that is in the fund is restricted just to the families.
DOBBS: And we still have a number of charities working in an atmosphere of confusion, doing the very best they can. But the fact is for various reasons, we simply don't know, do we, who the victims of September 11 are?
VILES: We still don't have that adequate master list of who the victims are and what their needs are and what's been given to them. That is, it's a problem here for these charities.
DOBBS: Bernadine Healy stepping out. She says she was forced out of the American Red Cross. What do you have to add to that story?
VILES: I think as you mentioned in your report, there were some problems there prior to September 11, but the huge controversy over the massive amounts of money they raised on September 11 and their lack of clarity of where some of it was going was probably the last straw.
DOBBS: OK. Peter Viles, thank you.
This story hitting a raw nerve with many of our viewers. We're going to take a look at what many of you have had to say on this shortly, but here is, if you will, an example.
Bart Perry in Texas writing in to say, "I donated $100 to find out families are having trouble getting help. It's appalling."
Deborah Giles in Burbank, California, "Quit bickering and be glad we have a wonderful organization like the Red Cross."
We'll have a lot more of your thoughts coming up here on MONEYLINE, including a letter from someone at ground zero, whose been there since September 11. And you'll want to hear what she has to say.
On Wall Street, stocks prices up for the fifth week. Investors banking on better times, but is it too early to talk about recovery? We'll find out next.
ANNOUNCER: After the break, Lou speaks with Wharton Professor of Finance Jeremy Siegel.
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DOBBS: The Dow Jones Industrials up 82 points today. The Nasdaq ending down 6.5 points. For the week, the Dow gaining almost 4 percent. The Nasdaq gaining almost 6 percent. And Christine Romans, who's been following the big board action from the floor all day and Greg Clarkin over at the Nasdaq joining me now. Let me ask you, this turned out to be a good performance for the Nasdaq?
GREG CLARKIN, CNN CORRESPONDENT: And it certainly did, Lou. I mean, up solidly on the week. And if you look at the four week span going back to when the markets, in the words of many people at this point they think bottomed September 24, rather, Nasdaq's up 24.5 percent. So it's had a heck of a run.
DOBBS: That's extraordinary. And over on the big board, are people starting to feel pretty good about this?
CHRISTINE ROMANS, CNN CORRESPONDENT: Well, they are, but you mentioned, when they think the market bottomed, no one's really sure if it did yet, but the S&P, the Dow, up 15 percent from the September 21 lows. It was a nice move.
All this news out there that you could take negatively if, you know, you were so inclined. It is a bear market, after all. And look, you know, the buyers keep coming in here. So it's been really interesting. Traders are telling me that there's some good volume behind some those pops. They feel like it's buying the dips, because we don't want the miss the next big rally.
DOBBS: And is that pretty much, you think, the sense amongst those buying on the Nasdaq?
CLARKIN: Without a doubt. As one gentlemen put it, he goes, "Nothing attracts money like higher stock prices." I mean, people are feeling they don't want to get left behind. A good sign of confidence, the IPO market picking up for the first time since July. There's a massive next week, $1.5 billion. We haven't seen an IPO like that in months. So that's a good sign of confidence.
ROMANS: But interesting fund managers -- interesting comments from a fund manager today. He said that people are happy now, but at 10,000 in the Dow, at 1800 or 1900 on the Nasdaq, are they going to be quite so willing to buy again? Or are they going to say, wait a second, we still do have a lot of uncertainties out there.
DOBBS: Well, Greg saying the higher the prices, the more buyers we've got. Isn't that -- that's the way they...
CLARKIN: Well, next week I guess it'll be critical. You have some October numbers, some fresh October numbers. You know, you don't have the September 11 influence. They'll be watching those carefully.
OK, Greg Clarkin, Christine Romans, thank you both.
Markets, as they've just said, finishing higher on the week, putting the Dow nearer it's pre-September 11 level. The Nasdaq has already moved above it. This rebound has Wharton Business School Finance professor and market guru Jeremy Siegel wondering if there is perhaps some misplaced optimism here. He joins us from Philadelphia. Jeremy, good to have you with us.
JEREMY SIEGEL, WHARTON BUSINESS SCHOOL: Good evening, Lou.
DOBBS: It makes me nervous when you think that people aren't nervous enough.
SIEGEL: I think the market may have gotten a little bit ahead of the economy. I worry when bad news is interpreted as good news. Like Thursday morning, certainly that was not good economic news, but the feeling is both the Fed and the government are going provide enough stimulus to automatically bring us out of this quickly. And history does thought assure us that'll be the result.
DOBBS: Well, history does -- you've acquainted with the history though that suggests that markets tend to rally in advance of recovery, economic recovery, by about five months, as I recall was your research on that. Are you suggesting that recovery isn't at hand?
SIEGEL: Well, that's a good point. And five months from September, if September 21 was the bottom, would be February. That's right in the middle of the first quarter. And I'm, you know, thinking that it might take a little bit longer for the economy to turnaround than that.
Earlier, many people were saying that it was going to be the second or third quarter. And that's why I think that there's a little bit too much optimism looking right over the valley to the hill, and assuming that there's going to be no problems in the interim.
DOBBS: Well, do you believe this market has bottomed?
SIEGEL: I think that September 21 is a very good a chance to be a bottom, but I think a lot of this run up might be retraced over the next several months. The news on the economy really has not been good. And I'm concerned about the global economy.
DOBBS: Right.
SIEGEL: Also impacting. And also, the Federal Reserve, certainly they've been lowering rates, And you know, I've been aggressive in asking them to lower them more. And I think they work to go.
DOBBS: Well, they've accommodated you nine times. How much more do you want?
SIEGEL: Well, I would like on November 6 another 50 basis points. Now my prediction is it's only going to be 25. But one reason that I think they should go down more is commodity prices are collapsing.
DOBBS: Right.
SIEGEL: I think inflation is going to be near zero over the next six months. So I think they really can afford to go down to the level that really would provide a little bit of more stimulus on that spending side.
DOBBS: Jeremy, as always, it's good to see you. And let's hope that that recovery comes mid-February and these markets are right where they ought to be.
SIEGEL: I hope so.
DOBBS: But I've got too much experience with you over the years to accept your caution, to dismiss it anyway. So Jeremy, thanks for being with us.
SIEGEL: Thank you very much.
DOBBS: Jeremy Siegel. "WOLF BLITZER REPORTS" begins in just a few minutes. Let's go over to Wolf now in Washington, D.C. -- Wolf.
WOLF BLITZER, HOST, CNN'S "WOLF BLITZER REPORTS": Thank you, Lou. There have been some major developments in the anthrax story. The Centers for Disease Control and Prevention is about to begin offering anthrax vaccines to certain high risk groups. And traces of anthrax have now shown up at a Supreme Court facility right here in Washington. We'll have details. We'll also have a debate. Is Saudi Arabia helping or hurting the U.S. war against terrorism? Two former officials face off next -- Lou.
DOBBS: Wolf, thank you.
Coming up next here, we'll have your thoughts. And we'll take a look at what to expect next week.
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DOBBS: Next week, highlights include the unemployment report for the month of October, gross domestic product figures and consumer confidence. Quarterly earnings are due from Dow component Procter and Gamble, as well as United Airlines, Delta, U.S. Airways and Continental.
Well, we've had a huge response to our reporting about charitable donations. As we reported earlier, the president of the American Red Cross, Bernadine Healy today, stepping down from her post at the end of the year.
A lot of your criticism has been, in fact, directed at her.
David Freedman in San Francisco writing in to say, "It never occurred to me when I watched Dr. Healy make her plea for Red Cross donations that they would be using the funds raised for other purposes. Evidently," David says, "many people fell into this trap."
Many, including Alan Shepard in Pennsylvania, agree the advertisements were deceptive, but she also says it's also good business sense to strike while the iron is hot. But running the Red Cross more like a business than a charity is apparently what has upset many people.
Joe Zwack in Iowa writes to say, "Here in Dubuque, we have vivid memories of the Red Cross during a flood disaster a while back. The Salvation Army gave away food and coffee to exhausted workers. As for the Red Cross," he says, "you paid for their coffee.
And Joel Franson in Houston, Texas, like many of you who wrote in says it's nothing new. Joel says his uncle was in the army during the second World War and says he approached a Red Cross outpost in Germany, tired, hungry, out of money. When he asked for candy, they charged him for it.
But Nancy Rotger in New York says take a look at the whole picture. She says since September 11, she's been working with the Red Cross 18 hours day. And she writes, "Why are you not telling people about the work we're doing helping more than 20,000 families who have lost loved ones, helping rescue workers and relief workers by providing them with hot meals and a place to rest 24 hours a day?"
Greg Rose writes in to say, "Keep supporting the Red Cross. You or the one you love may be the one in need next.
Sarah Royster in Greenville, South Carolina has the last word tonight. "The spirit of the Red Cross is aide to all Americans in light of September 11. We should come together in the American spirit to help all those in need."
Send us your thoughts, moneyline@cnn.com. Thanks for joining us. That's MONEYLINE for tonight. I'm Lou Dobbs. Good night from New York. "WOLF BLITZER REPORTS" begins right now.
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