Return to Transcripts main page
Lou Dobbs Moneyline
Dow Advances 117 Points; Nasdaq Advances Three Percent; Interview With Pat Buchanan; Interview With Reza Pahlavi
Aired November 05, 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.
ANNOUNCER: This is LOU DOBBS MONEYLINE for Monday, November 5.
LOU DOBBS, CNN ANCHOR: Good evening everyone.
America's war against the Taliban and al Qaeda network is steadily intensifying. More bombs, tonight, are falling and more U.S. troops are on the ground in Afghanistan. And the Taliban are running away from Kandahar. We will check on the war's progress with General David Grange, CNN military analyst.
Anthrax has been discovered at the Pentagon. We will tell you about government efforts to ensure that drugs can be delivered to all who need them in the event of new bioterrorism.
Many of the states who sued Microsoft aren't happy with the settlement. We will tell you what's behind their concerns.
And on Wall Street today, stocks ended higher. Investors anticipating a half-point interest rate cut by the Fed tomorrow.
Also tonight, former presidential candidate Pat Buchanan will join us to us tell why he wants a two-year ban on immigration into this country.
We'll also be joined by Reza Pahlavi, the son of the former shah of Iran, on a growing pro-American shift in Iran.
And Cisco Systems Chief Executive Officer John Chambers will be here to tell us how his company is faring in this slowing economy.
A new DNA test could help speed up the process in testing for anthrax. The Mayo Clinic in Rochester, Minnesota says it's developed a new DNA test, a test that could rapidly detect anthrax in humans and the environment. The Mayo Clinic also says the tests could relieve anxiety for people who might have been exposed to anthrax. The Centers for Disease Control and Prevention says it has not yet validated the test and does not have plans to use it at this time.
Investigators in the anthrax attacks are focusing now on a few mail routes in West Trenton, New Jersey. That's where it's believed several anthrax-laced letters may have been mailed. Letters sent to NBC, the "New York Post" and Senate Majority Leader Tom Daschle were all postmarked in Trenton. Meanwhile, a post office inside the Pentagon tonight remains closed after traces of anthrax were found over the weekend. That post office does not process mail for the Pentagon. Instead, the facility is served by the same Brentwood mail center that handled anthrax- tainted letters sent to Capitol Hill.
Environmental workers began decontaminating the Hart Senate Office Building this evening. They'll be using an anti-bacterial foam used in two other government buildings. Senator Daschle's office is located in the Hart building.
Eight security workers at Chicago's O'Hare International Airport have been suspended. That after a man carrying nine knives and other weapons managed to slip through security. The man appeared in court today. He is facing federal charges of attempting to carry weapons aboard an aircraft.
Susan Candiotti joins us now from Washington with the story -- Susan.
SUSAN CANDIOTTI, CNN CORRESPONDENT: Hello, Lou.
A disturbing incident in Chicago, where a man was first arrested by local police on a weapons charge, released, then picked up late last night by the FBI. Subash Gurung appeared in federal court to face a federal charge of attempting to board an aircraft with a weapon. A criminal complaint also says Gurung had two knives in his checked baggage.
Gurung got by a security checkpoint at Chicago O'Hare with seven knives, a stun gun and mace. They were in a plastic carry-on bag. None of the items was picked up by a x-ray machine run by Argenbright Security. It wasn't until Gurung reached the gate for his flight to Omaha that United Airlines personnel searched his carry-on bag and found the weapons. Gurung called the whole thing an accident and said he collects knives. The stun gun, he said, was for personal protection.
(BEGIN VIDEO CLIP)
SUBASH GURUNG, SUSPECT: I feel very, very stupid -- something like that, (UNINTELLIGIBLE) at this moment. And I don't know, what to say about this. Yes, what the police are doing is the right thing to do.
QUESTION: You say it was all a mistake?
GURUNG: It is all a mistake, yes.
(END VIDEO CLIP)
CANDIOTTI: Gurung gave this building as his local address, an apartment building in Chicago. But the super says he did not currently live there.
The building is the same one traced to a material witness in the September 11 attacks. That man, Ayub Khan, did not live in the building, but according to a U.S. government official, calls -- said that calls to him were traced there.
As for the airport security breach, Argenbright Security says it has suspended seven employees and a supervisor. It says -- quote -- "believes its employees acted according to FAA guidelines and internal security procedures" -- end quote.
Transportation Secretary Norman Mineta is outraged.
(BEGIN VIDEO CLIP)
NORMAN MINETA, SECRETARY OF TRANSPORTATION: I consider the O'Hare failure a case of dramatic dimensions. And I am recommending that the FAA begin enforcement actions which could lead to a substantial fine against United Airlines. In addition, we are requiring United Airlines to conduct a retraining of all O'Hare screeners and I have asked the FAA to supervise that training.
(END VIDEO CLIP)
CANDIOTTI: Now, Argenbright is on probation currently with the Justice Department for putting untrained people, some with criminal backgrounds, on security checkpoints. Argenbright now says it will check hand luggage if knives are found on passengers during body searches -- Lou.
DOBBS: This is simply an astonishing set of developments, given the times in which we live. Argenbright has already been fined a million dollars for violations.
The secretary of transportation says he is seeking censure against United Airlines. Is there no teeth, no accountability here for Argenbright?
CANDIOTTI: Well, we'll have to see what happens next, of course.
And all this happening, Lou, as Capitol Hill -- the debate goes on there -- as to whether to federalize these airport security personnel. As you pointed out quite rightly, Argenbright has been fined in the past, and now is on the hot seat again.
DOBBS: Susan, thank you very much -- Susan Candiotti from Washington.
Well, turning to the latest developments in the war on Afghanistan against terrorism: The Pentagon says air strikes there have virtually destroyed the al Qaeda network's known infrastructure and its ability to use its terrorist training camps.
The Pentagon says jets are continuing to target and to destroy armored vehicle and Taliban entrenched positions. The Pentagon also says the air assault is helping the Northern Alliance troops, but says it does not know when those forces plan to advance on major Afghan cities. Defense Secretary Donald Rumsfeld is returning to the United States after his trip to Russia and central Asia. Before leaving India today, Rumsfeld said he believes the U.S. bombing campaign in Afghanistan is becoming more effective. The defense secretary met with the president of Tajikistan over the weekend. U.S. military teams are checking airfields in that country to see whether they could be used to deploy U.S. forces and air strikes.
More bombing, more U.S. troops on the ground and the Taliban running from Kandahar.
For more now on the war's progress, we're joined by General David Grange. General Grange, good to have you with us this evening.
GENERAL DAVID GRANGE, CNN MILITARY ANALYST: Good evening, Lou.
DOBBS: There are reports that the Taliban, at least a portion of Taliban, are leaving Kandahar. Is that as encouraging a development as it first appears?
GRANGE: Yes, it's encouraging that they are leaving,
I'm not sure that it's as successful as it may appear. When you destroy command-and-control systems that are fixed on a guerrilla-type force, it is really hard to determine that you actually have taken out the leadership and the communications that they can move around, that's very mobile. So I think there's more targets than appear just taken a few out in Kandahar.
The other thing is that these organizations are broken down into maybe 10, 20-man elements that are very fleeting, very evasive, hide very well. And they are experts at using terrain, camouflage and decoys that make you think you are taking out targets that, in fact, as a secondary or decoy target, not the real target for communications. So, it's very hard to determine that.
DOBBS: And with the defense secretary's statement that we have more ground troops now in Afghanistan, is that what you expected?
GRANGE: Absolutely.
And we are going to have to put some ground troops in there to, at least, assess the condition of the anti-Taliban units, what their status is on readiness before they start any major offensive and also to coordinate the synchronization of air strikes and ground maneuver. That's very critical, that combined arms synergy from air and ground together which is what it is going to take to destroy the Taliban forces, is assessed, is coordinated in a very effective manner for us to be successful.
DOBBS: And as you know, reports today -- and we should say these are unconfirmed reports -- but reports that witnesses in Kabul heard helicopters in the midst of strikes against the Taliban today.
Is it your judgment that this would be about the time to be stepping into that phase of the military activity? GRANGE: Well, the helicopter activity may be indicators of reconnaissance flights. It may be where they're dropping off teams to do ground reconnaissance or to put -- lays (ph) targets for air strikes.
But the key thing to remember on Kabul or Mazar-e-Sharif or any of the other probable objectives, is that we're asking anti-Taliban forces to switch from a defensive nature to an offensive nature. And it's more than just delivering equipment or a few helicopters flying around. You have to assimilate this equipment, train on it and change from this defensive mindset to an offensive mindset before you can do any kind of massive attack against these objectives. There are tough objectives they're trying to take down. It's going to take a lot of effort.
DOBBS: Is it your judgment, that we are going to see that advance, that effort to create an offensive on the part of the anti- Taliban Northern Alliance?
GRANGE: I would...
DOBBS: Soon?
GRANGE: I would hope so. They are going to have to do something here before the weather gets too severe. They can operate in the cold weather, but they want to make some kind of headway, want to get the -- show the people that the anti-Taliban forces can be successful, to win over some other people that are kind of on a fence line as well as get some of the moderate Taliban to change sides.
As you know from Pakistan and in that area, we have pro-Taliban forces supporting, reinforcing the Taliban already around Kandahar. So we want to persuade these moderate Taliban forces to change over to the Northern Alliance, the anti-Taliban forces of the al Qaeda. And to do that, they need some limited objective success -- hopefully Kabul, hopefully Mazar-e-Sharif.
DOBBS: OK.
General Grange, as always, thanks for being here -- General David Grange.
GRANGE: Thank you.
DOBBS: Well, the United States is now stockpiling drugs, preparing to battle any bioterrorism attack. But can those drugs be delivered quickly enough to those who would need them?
Fred Katayama has the report.
(BEGIN VIDEOTAPE)
FRED KATAYAMA, CNN CORRESPONDENT (voice-over): Chaos in Colorado, a bioterrorist attack strikes Denver. A plague quickly spreads. But this is a mock attack to test emergency preparedness. Taking part, the National Pharmaceutical Stockpile run by the Centers for Disease Control.
Turbulence at the airport. Drugs from the stockpile arrive within hours. But they can't be distributed immediately. The drugs arrive in bulk, in so-called push packages, so they need to be counted and sorted by hand. Small bags are needed to put them in, so one worker heads for a Safeway, but gets stuck in traffic. Doctor Stephen Cantrill took part in the drill.
DR. STEPHEN CANTRILL, DENVER MEDICAL HEALTH CENTER: When you are trying to, say, take tablets that are in bottles of 500 or 1,000 and counting out as many as you need for each patient and then getting them packaged, it seems like a pretty trivial process. But when you are talking about doing it for a million different dosages, that becomes a major issue.
KATAYAMA: A general accounting office report in September said the exercise highlighted problems in the coordination, breakdown, transport, security, and distribution of the stockpile.
(on camera): The lesson learned: All the drugs won't do much good unless local officials know how to break them down and distribute them. The National Pharmaceutical Stockpile admits more needs to be done.
(voice-over): It has trained emergency and health officials in all 50 states, and has just begun training at the city level.
BRUCE CLEMENTS, CENTER FOR STUDY OF BIOTERRORISM: Although it's great to have the state resources and it's critical that they are trained and in place, we have a lot more work to do at the local level to better train and equip and prepare the people at the local level who are going to receive this and actually do the work.
KATAYAMA: In the Denver drill, nearly 1,000 people theoretically died in three days. Colorado isn't wasting time. In the next few weeks, the state will send training manuals and videos regarding the stockpile to its cities and counties.
Fred Katayama, CNN Financial News, New York.
(END VIDEOTAPE)
DOBBS: Still ahead, an anti-terrorist training camp -- we'll be going inside to show you how pilots, flight attendants and law enforcement agents are now training for future possible terrorist attacks on aircraft.
We will also be joined by the son of the shah of Iran, Reza Pahlavi, on his involvement in the growing pro-American sentiment in Iran.
And we'll hear from a former presidential candidate on why an immigration ban is necessary to succeed in America's war on terrorism.
ANNOUNCER: Next, Lou is joined by Pat Buchanan, former presidential candidate and founder of the American Cause. (COMMERCIAL BREAK)
DOBBS: America's new war calls for tough decisions and tough action. Pat Buchanan wants as much as a two-year ban on immigration. The former presidential candidate says immigrants without valid visas should be made to leave the country. And the former presidential candidate says profiling is necessary to detect terrorists and protect national security.
Pat Buchanan joins us tonight from Washington, D.C. Pat, good to have you with us.
PAT BUCHANAN, FORMER PRESIDENTIAL CANDIDATE: Thank you, Lou.
That's -- in some quarters, I would say, that that's real tough talk to put a ban on immigration. You really think that is necessary?
BUCHANAN: Well, Lou, we take in a million legal immigrants a year and a half a million break in illegally. That's a million and half there, something like 8 to 11 million illegal immigrants in United States right now. You can't fight a war against al Qaeda organization in 60 countries with open borders. I think a ban or a moratorium on immigration for two years is the first necessary step.
DOBBS: From every country?
BUCHANAN: I would say yes, but that's -- by a moratorium, I would say you could bring in 250,000 legally. And they should probably not be coming from countries that are rogue states or states that harbor terrorists or states that we're bombing at that time. And they also should be individuals who want to become Americans. This country is more than just a job market, it's our home. And we have an obligation and a duty to defend it and we have not been doing it.
DOBBS: And how would you deal with that specific part of the problem?
BUCHANAN: You mean the dealing with the illegal immigration coming across the border?
DOBBS: Right.
BUCHANAN: I would call on Mr. Fox and Mr. Tretian (ph) and say: Gentlemen, we are in a new world. There's a war going on now. The days of open borders and free trade and all the free immigration are all over. The Mexican trucks will not be traveling across the United States of America. There will be no amnesty. I want you to sit down with Tom Ridge and act as though we are at war and our North American borders have to be defended.
DOBBS: But, Pat, don't you think that plays right into the hands of the goals of some terrorists and that is to roll back globalization itself?
BUCHANAN: Well in my judgment, Lou, the -- you've got to ask yourself whether the United States can participate in an open-borders, globalized economy, free trade, when we've got terrorists operating in 60 countries and walking into the United States. There is a dichotomy here.
And America has got to realize we are in a brand new world. I think the president does. I think he is moving in that direction. He is not fully there yet. I think the best thing the president can do, however, for confidence and for the economy, is to take down the Taliban, which he wants to do as quickly as possible, and get bin Laden. And I think we'll have consumer confidence return and the market will soar.
DOBBS: And that -- with that prospect, putting forces, sufficient forces, on the border to effectively seal those borders, which is what you are really talking about -- a very controlled border -- where do you find that manpower?
BUCHANAN: Lou, there are 70,000 American soldiers sitting in Bavaria defending the German Democratic -- or the German Republic from the Czechs, both of whom are in NATO. That's the Cold War. It is over.
It's a new world. Bring the 70,000 home, tell the Europeans they're responsible for the security of the continent now. They're rich and powerful, Russia is weak. Bring those troops home from Germany, bring them home from Korea and realize that the enemy is inside the gates. He is killing Americans on American soil for the first time since the War of 1812. And we have got to realize that is a new world.
I think we are all moving toward it. And I think the realization is coming home. And I pray to God something horrible like this doesn't have to happen again before the realization is driven home, that the problem is here in the United States.
DOBBS: It is here in the United States, Pat, obviously. And it is also, however, in other countries. Our good ally, Great Britain, France, it appears now Russia and countries around the world.
If we do not work together, how can we successfully eradicate these terrorists who are global?
BUCHANAN: I'm 100 percent in favor of the rapposhant (ph) with Russia. The president is doing the right thing. With regard to the European allies, I would simply say: Look, you can defend Europe now. You are rich and powerful. There is no threat. With Canada and Mexico, sit down with them and say fellows, we are in a new world and we can not have, for example, 10,000 Mexican trucks crossing the border uninspected every day if we are all going to be secure. Let's figure out how we do it.
I agree we all work together, I think the president is right in putting together this coalition. I hope he succeeds. And frankly you know, Lou, I'm a bit of an optimist. I think the American forces are systematically moving. It may take some time, I hope it's sooner. I think they are going to take down the Taliban. I think they are going to get this guy. I think they are going to drive al Qaeda out of Afghanistan. I think we are going to pursue him. I think the American people will back him up all the way as long as he does it.
DOBBS: And your judgment about how the president is conducting this new war to this point.
BUCHANAN: I think the president really became President of the United States for all the people the night he give that speech to Congress. I think he showed himself -- outstanding leader. I think he gives the American people assurance. I think his priorities are correct. And I really hope he succeeds and I was glad I was able to help him out down there Palm Beach County.
DOBBS: OK, Pat, thank you very much -- Pat Buchanan tonight from Washington.
BUCHANAN: Thank you.
DOBBS: Coming up next here, the United States attacks, sending terrorists running from Kandahar. We'll have the latest for you on developments in Afghanistan and the war against terrorism there.
We'll also be going inside an anti-terrorist training camp in this country. We will tell you how airline personnel are being trained to fight off terrorists attacks in aircraft.
And in a remarkable shift, a growing pro-American sentiment in Iran. We will be talking with the man who is, at least in part, helping to shape some of that change next here on MONEYLINE.
(COMMERCIAL BREAK)
DOBBS: Even as the nation tonight remains on high-security alert, a man carrying knives, mace and a stun gun narrowly managed to board a flight at Chicago's O'Hare Airport just last evening. Seven security employees have been suspended as a result along with their supervisor.
Across the country, law enforcement agencies must prepare for the possibility of terrorist attacks. One company, offering serious training designed to combat terror using specialized drills and real life situations, is profiled now by Bruce Francis.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Now ladies and gentlemen, welcome aboard Spirit Airlines flight 824 with nonstop service to Fort Lauderdale, Florida.
BRUCE FRANCIS, CNN CORRESPONDENT (voice-over): It starts with a familiar, even comforting routine. But then it soon looks like the scenario all of us dread.
UNIDENTIFIED MALE: Everybody in your seats. Get in your seats. Everybody get down.
UNIDENTIFIED MALE: Let her go, let her go.
Get on the ground, get on the ground, get on the ground. Put your hands behind your back. Police -- everyone stay down.
FRANCIS: Welcome to counter-terror camp.
In a Spirit Airlines hangar in Detroit, former law enforcement and special forces officers are training SWAT teams and flight crews. This morning's exercise is a demonstration of the pepper ball, an air gun that shoots high-powered pellets of a powder that causes victims to cough and choke. The advantage, unlike bullets, pepper balls won't damage a plane.
ANTHONY ZARINNIA, SPIRIT AIRLINES PILOT: Would I feel safer with one on board? Yes, I think I might -- yes.
UNIDENTIFIED MALE: You're my doorman?
UNIDENTIFIED MALE: Sure, yes.
UNIDENTIFIED MALE: Know how to work it?
FRANCIS: IN this drill, Detroit-area special forces officers train for a hostage rescue using a special assault vehicle.
UNIDENTIFIED MALE: Go, go, go, go -- stop.
Go ahead -- go, go, you're there.
UNIDENTIFIED MALE: Freeze, get down.
FRANCIS (on camera): Believe it or not, before September 11, the company that runs these training camps did most of its business overseas. That is about to change.
(voice-over): At least that's what Bill Spalding hopes. He runs the Teal Team, training consultants who are largely former special forces officers. The counter-terror camp is run in conjunction with U.S. Cavalry, a company that sells equipment to police departments.
BILL SPALDING, PRESIDENT, THE TEAL TEAM: It's taken several major, major attacks on our soil before the people realized, "Hey, it is happening here." So now that it's happened, we can prepare for it.
FRANCIS: That preparation is costly. Drills like these cost $1,500 per trainee. And so far, most law enforcement agencies rely on internal training programs. But in these days of redefined priorities, training that was too expensive before September 11 may get a closer look now.
UNIDENTIFIED MALE: Flight attendant, they're under control.
FRANCIS: Bruce Francis, CNN Financial News, Detroit.
(END VIDEOTAPE)
DOBBS: In the war against terrorism, a New Jersey postal worker who contracted inhalation anthrax has been released from a hospital. And a state department mail handler with the same form of anthrax has been moved out of intensive care tonight.
A public post office inside the Pentagon Complex remains closed tonight after traces of anthrax were found over the weekend. The post office does not handle the Pentagon's mail.
The Mayo Clinic says it's developed a new test that will lead to quicker detection and treatment of anthrax. The clinic teamed up with Roche Molecular Biochemicals on the project. The Centers for Disease Control and Prevention says it has not yet validated the accuracy of the test.
U.S. air strikes intensifying around the Taliban stronghold of Kandahar, and CNN has learned that many Taliban members, fearing for their safety, are fleeing the city.
The Pentagon says it has taken away the al Qaeda's ability to operate freely within Afghanistan. Rear Admiral John Stufflebeem says American warplanes continue to bomb cave complexes and Taliban frontline positions.
As the Northern Alliance prepares for a large scale offensive against the Taliban, increased attention is being paid to a post-war Afghanistan. European leaders, this weekend, called for a broad-based political concept. But in a country divided along ethnic lines, a political solution in Afghanistan will undoubtedly have to take that diversity into account.
The predominant ethnic group, nearly half the 28 million population, is Pashtun. This group makes up most of the Taliban and is concentrated mainly in the south and east along the border with Pakistan. The second largest ethnic group, the Tajiks, and they make up a quarter of the population. Tajiks also make up a majority of the opposing faction of the Northern Alliance.
Also opposed to the Taliban, the Hazara, in central Afghanistan, and minor ethnic groups in the north, including Turkmens and Uzbeks.
We are joined tonight by a man who is staging something of an unlikely comeback in Middle East politics. He is the son of the former shah of Iran.
In 1979, U.S. backed Shah Pahlavi fled Iran in fear for his life. His arrival in the United States later that year for cancer treatment enraged radical students in his homeland. They seized the U.S. embassy, took 66 hostages, starting one of the ugliest incidents in U.S.-Middle East relations. And for 20 years, his son has lived quietly in suburban Maryland until now. For the past year, Reza Pahlavi has been broadcasting his message of democratic secular reform into Iran. And that message is apparently catching on.
He joins us now from our studios in Washington, D.C. Good to have you with us.
REZA PAHLAVI, SON OF FORMER SHAH OF IRAN: Good evening, Mr. Dobbs. DOBBS: The site of students and soccer fans, of all people, in Iran talking about rising pro-American sentiments is astonishing to most Americans. What is, in your judgment, the reason for this?
PAHLAVI: Well, I don't think it should be astonishing, especially for Americans who have known the Iranian people, whether before the revolution or after.
What did change in 1979 was the regime. And today, fortunately, by breaching the barriers of censorship and by having foreign media observers on location to finally see for themselves the genuine sentiment and aspiration of my compatriots, they have demonstrated not only that they have nothing against the United States but, in fact, they have a tremendous reservoir of goodwill reserved with this country.
DOBBS: How large is...
PAHLAVI: They certainly would expect to see the U.S., at this time, to stand with them and not against them on the way to secular reforms.
DOBBS: How large a segment of the Iranian population, some 64-65 million people, do you think that represents?
PAHLAVI: Well, considering that the population of Iran has doubled since 1978, which is nearly close to 70 million today, we could safely say that 50 million of the 70 million people are 30 or younger. It's a very young country.
However, it's a country where political lack of opportunities and lack of economic opportunities has created a situation of stalemate. And the Iranian people today are openly voicing their frustrations and their demand for reform.
However, this time beyond a regime that has proven to be unable to implement any meaningful change and are demanding for secularization process, which ties into the concept of creating a secular democracy.
And my campaign has been geared around a national referendum in which the Iranian people will be able to determine a regime of their choice in the future, where we can restore self-determination, popular sovereignty, and hopefully through that, with political openness, economic opportunities as well.
DOBBS: And obviously with the mullahs, and it is anything but a secular democracy today, putting yourself in opposition to the government itself, but President Khatami, a moderate influence. Are you working in support of his views and his policies?
PAHLAVI: Well, I think that this good cop, bad cop game worked for a while, but it doesn't fool anybody any longer. I would caution any government dealing with Iran, not to fall in that trap again.
Let us not forget that the commitment of someone like Mr. Khatami is ultimately to protect the constitution of this very regime and his ultimate loyalties with the system, and not necessarily against it in listening to what the people are demanding.
Today, we hear chance of beyond Khatami on the streets of Iran. And we should not be surprised why. I think the Iranian people have seen that after five years and four successive elections, these so- called candidate for reform has yet to be able to implement a single promise of his campaign of five years ago.
Why? Not because he's necessarily a bad person, but because the system is ultimately incapable of allowing for any meaningful reform. Hence, the reason to move beyond the system. And the only way the Iranian people will be achieve those goals and meet their aspirations is by finally having a government where they can control, where there is rule of law, manmade law that is. And that through separation of clergy from the state, we cannot only uphold our culture and religious values, but we can also function as a modern state with democratic institutions.
DOBBS: You have not been in Iran for two decades. You have not lived there. You've lived here, and Egypt, Morocco. Do you feel that you have a strong enough sense of what is happening there, to speak with great authority about the prospects for Iran?
PAHLAVI: My life for the past 23 years, Lou, has been day and night, Iran and only Iran. That has been my preoccupation. And I have dedicated my entire life for the cause of freedom and liberty of my compatriots.
As a result, I have been in constant contact with my fellow countrymen, various sectors of society, both at home and abroad. And today, with the advent of newer technologies that facilitates communication both ways, specifically, the Internet, and of course by means of satellite broadcast and transmission, I have had the ability to communicate my message even more at large with a great number of my fellow compatriots.
And the feedback that I have received has been tremendous. I think the message that I'm talking about is essentially what the people of Iran have been longing for decades, especially under the current regime. And the youth of my country today are very much in line with this way of thinking.
I believe that anybody who would look at it from a modern standpoint, with a future vision, could not disagree with the fact that for any nation to begin implementing any true progress, it has to start with democratization. And that is really what the whole world ought to invest today in that part of the world, albeit as a result of a tragic event on September 11, but certainly an opportunity now to take it all the way. And this is a golden opportunity for the people of region, as well as the international community to invest.
DOBBS: A quick last question, if I may. We're just about out of time. Is the United States' policy toward Iran, we have seen a substantial thawing in that relationship here since September 11, is that helping or hurting, in your opinion, what you would call a modernization initiative for Iran?
PAHLAVI: Well the Iranian people stand in candlelight vigils, showing their support and sympathy with America and supporting the cause to fight terrorism. I think they're also asking America, in return, to acknowledge them and send a clear message that this country stands with them and not against them in their quest for democracy and secularization.
This is an important message that the administration could send today to Iran. And I believe the Iranian people will certainly welcome such a positive step.
DOBBS: Reza Pahlavi, thank you very much for being with us.
PAHLAVI: I appreciate the opportunity. Thank you.
DOBBS: The strategic importance of Turkey. It has been apparent since the beginning of the conflict with the Taliban and al Qaeda. Turkey has Nato's largest standing army in Europe. It is a predominantly Muslim country. It is one of the first also to have stepped forward with support for United States operations. But in terms of its own financial health, it's in critical condition.
Kitty Pilgrim has the report.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): And IMF team is assembling in Ankara, to discuss some $8 billion in additional loans for Turkey. The country has clawed back from the brink of financial collapse in the last few months, but it still desperately needs funding. And the timing could not be more critical.
IAN LESSER, RAND: The exposure of the international financial system to what is happening in Turkey is limited. But in terms of Turkey's own future, in terms of the future of the society, its future as a stable Nato ally, the stakes are very, very high.
PILGRIM: Turkey is strategically important, both because of U.S. airbases and its proximity to both Afghanistan and the Persian Gulf, and its role as Nato's largest standing army in Europe.
The United States, has stressed increased financial help should not be in response to strategic concerns, but should come in response to economic restructuring. Turkey maintains the war situation and financial crisis are linked. Turkey's economy minister has said the drop-off in international tourism after the September 11 attack has damaged Turkey's financial condition. The economy is expected to shrink by more than 5.5 percent this year.
Yet financial analysts say progress has been made in restructuring the economy.
OMER AYAN, RAYMOND JAMES: Turkey's importance makes it really more likely to get extra funding from IMF. But the thing is not only being a strategic importance for U.S., although the Turkish government has achieved a lot of things in terms of fiscal discipline.
(END VIDEOTAPE)
PILGRIM: Officials are working literally around the clock to work out additional funding for Turkey. They're trying to finalize a program that will tie reforms to the extra funding. And the expectation is that an outline could come in as little as two weeks.
Lou?
DOBBS: And an actual solution?
PILGRIM: Well, it's getting better.
LOU: I mean, outline.
PILGRIM: Oh, it's getting better. The condition of Turkey is getting slowly better.
DOBBS: OK. Kitty, thanks. Kitty Pilgrim.
Just ahead , stocks rally. And sent the Nasdaq to a nine week high. We'll take a look at the day on Wall Street just ahead here. Alan Greenspan and Fed officials expected to cut interest rates for a tenth time this year. Is it enough? We'll find out next.
ANNOUNCER: Next, Lou speaks with Lakshman Achuthan of the Economic Cycle Research Institute.
(COMMERCIAL BREAK)
DOBBS: Hurricane Michelle heading to sea this evening, leaving in its wake at least 5 people dead in Cuba, a dozen others dead across Central America last week, millions and millions of dollars in destruction. The storm blasting through Cuba Sunday. Winds of more than 135 miles per hour.
More than two dozen homes collapsed in Havana, where 300,000 people were evacuated. Conditions elsewhere on the island remained unclear because communications are still down. Hurricane Michelle slowed slightly before ploughing into the Bahamas today. Winds of 80 miles an hour, flooding houses, cutting power.
The storm is weakening. It's expected to drop to tropical storm status by tomorrow morning, but a hurricane watch remains in effect tonight for Bermuda.
Now turning to what was a winning session on Wall Street today. Stock prices higher, largely on expectations that the Fed will cut interest rates for a tenth time this year when it meets tomorrow. The Dow up 117 points. The Nasdaq composite, S&P 500, both posting double-digit gains on the day.
Christine Romans at the New York Exchange. Greg Clarkin at the Nasdaq marketsite.
Christine?
CHRISTINE ROMANS, CNN CORRESPONDENT: It was down right Fed euphoria here, ahead of that meeting tomorrow. And you can see the good blue chip and well-known tech buying in the most actives when you look at the plays that were being made here today.
On top of the list, EMC, the software -- the storage firm up about $1.40. AOL Time Warner, parent of this network, up about $1.58. Meanwhile, Enron, the battered energy trader, up on a report that maybe, just maybe, there could be folks out there eyeing it to make a bid. And General Electric, up another 81 cents here today on that blue chip buying we were talking about.
Also watching the carmakers, the automakers. Ford is on this list. It was down today, but late this afternoon, a report from "The Financial Times", saying the company may ax 20 percent of its U.S. white collar staff. That's 8,000 salaried employees at Ford. The stock down was during the day. General Motors, Daimlerchrysler, both of those stocks higher. However, we'll watch Ford shares tomorrow as well.
Lou?
DOBBS: Christine, thank you.
The Nasdaq today, surging nearly 3 percent. Let's turn to Greg Clarkin for more on that rally.
GREG CLARKIN, CNN CORRESPONDENT: And Lou, I'll tell you, anticipation, optimism today really driving these technology shares. The anticipation over another Fed rate cut tomorrow.
Optimism over Cisco's earnings report. It came out after the close of trade. But ahead of that, Cisco shares traded up is nicely. There are some of the other big caps. Microsoft, Sun Microsystems, Oracle, and Intel all gaining.
Take a look at some of the networkers though. Cisco really kind of leading the way there. We saw the networking stocks post the best percentage gain collectively, off 6 percent. Juniper, Extreme, Ciena also kind of riding the coat tails there today and posting nice gains.
The Nasdaq at one point today, touching 1800 . Trading at one point above that. That's the first time we've seen those levels since September 4, Lou.
DOBBS: All right, Greg. Thank you very much, Greg Clarkin.
Let's turn now to Lakshman Achuthan. The Fed meets tomorrow. What are they going to do?
LAKSHMAN ACHUTHAN, ECONOMIC RESEARCH INSTITUTE: Well, they're going to cut interest rates again.
DOBBS: How much?
ACHUTHAN: Oh, 25, 50, I didn't know, if for economy it really makes too much of a difference at this point.
DOBBS: Well, it sure made a lot of difference apparently to a number of investors today rallying this market.
ACHUTHAN: It did. Well, I mean, they -- each time the Fed cuts, there is certainly some optimism that it's going to turn things around. And we've yet to see that happen.
DOBBS: Right.
ACHUTHAN: There's a lot of...
DOBBS: With nine rate cuts so far.
ACHUTHAN: With nine rate cuts so far and a lot of other stimulus in the economy.
DOBBS: There isn't something in economics that says the tenth time is the charm?
ACHUTHAN: Tenth time, no.
DOBBS: What's it going to take?
ACHUTHAN: It's going to take consumer confidence turning back up. And I don't know that a rate cut tomorrow of 25 or 50 basis points is going to do it.
DOBBS: So you're saying that the Fed needn't show up tomorrow for the FOMC meeting?
ACHUTHAN: No, I think they need to, because as we see the markets are betting on it. So I think it is important for maintaining investor confidence. But we need that confidence to spread from the investor to the man on the street.
DOBBS: And what do you think is going to take to do that?
ACHUTHAN: We need to see job losses slow. And we need to see some homeland security progress. Those are the two things that I think are weighing very heavily on...
DOBBS: What kind of security progress? What does that mean?
ACHUTHAN: Well, we have a war in Afghanistan. And we need to see some tangible progress. We have securities...
DOBBS: OK. I see what you're seeing. I'm sorry. I was thinking in terms of national security at home.
ACHUTHAN: Well, I mean, Pat Buchanan was talking about it. There's lots of ideas.
DOBBS: Right.
ACHUTHAN: But some sense of tangible progress on either of those fronts, security or jobs would, I think, make a lot of us feel better.
DOBBS: And as we look at prices now, we're getting a lot of stimulus built in here. We have low oil prices, broken through the two-year ago of levels. We have this federal stimulus package, nine interest rate cuts. It just seems that there is a lot of stimulus built in here.
ACHUTHAN: Yes, I would almost -- I would say that stimulus is not the issue. It's -- there's pent-up stimulus at this point. The consumer's taking it, putting it in their pocket. We're paying down debt. We need the situation where they go out and spend it.
DOBBS: And we'll get there.
ACHUTHAN: That's where we need to go.
DOBBS: You want to quickly tell me when?
ACHUTHAN: Not this year, I'm afraid.
DOBBS: Lakshman, thanks a lot.
ACHUTHAN: OK.
DOBBS: Coming up right after the break, at least one state says it won't sign off on that proposed settlement between Microsoft and the U.S. Justice Department. We'll have a report for you. And technology bellwether Cisco reports sharply lower earnings. We'll hear from CEO John Chambers whether the worst is over for Cisco.
ANNOUNCER: Coming up, Lou talks with John Chambers, Chairman and CEO of Cisco Systems.
(COMMERCIAL BREAK)
DOBBS: After the close, Cisco Systems reported a sharp decline in its earnings. Cisco's first quarter earnings, excluding charges and acquisition costs, down 77 percent. This earnings of 4 cents a share, however, beat Wall Street expectations. Wall Street is watching Cisco, looking for any sign of a turnaround in technology.
The stock is up about 60 percent from its lows of late September. Joining me now, the chief executive officer of Cisco, John Chambers.
John, I would have to guess tonight you're feeling pretty good about these results?
JOHN CHAMBERS, CEO, CISCO SYSTEMS: Well, I think, Lou, given the economic conditions in capital spending, it was very good first step, but it was just that. Sequential growth for the first quarter of this calendar year was very, very, good. Our financial performance was solid across the board, market share gains, etcetera. So it's a lot different phenomena than we saw the first half of this calendar year.
DOBBS: Your revenue actually edging a little higher, not anywhere near where you were a year ago. What's your best guess going forward?
CHAMBERS: Well this quarter, we gained a huge amount of market share, Lou. Our average competitor in North America was down in the high teens sequentially this last quarter. So our, you know, from flat growth to minus 50 percent growth.
In terms of long-term best guess, I think the industry analysts would have us, you know, in the 15 to 20 percent range. I'm a little bit more optimistic as the economy and as the capital spending picks back up. I think our stretch goal 30 to 50 percent is doable, but I would invest in the company based on what the industry analysts say. And let's see if we can hit our normal stretch goal mentality or not.
DOBBS: Well, there's talk on service providers. They're about a third of your business. They're reeling back their investment. How do you see that working out in terms of your revenue?
CHAMBERS: Well, the good news and the bad news, Lou, is it's well below a third of our business at the present time. And I think you're beginning to get a base underneath of it. I think capital spending, the search for a broader market, will continue to be tough this year and for next year. But the areas that are growing in, the IP telephony, the data areas are the future and they know that.
So I think it comes down to one of execution. If you're the optimist here, you would say the slowdown gives Cisco a chance to repeat what it did in the enterprise marketplace. If you're the pessimist, you might be a little bit tougher on us from that side.
I'm the optimist, obviously. I believe we can become one of the top, if not the top player, in the service provider market, as we've done in enterprise and the commercial marketplace.
DOBBS: And with about, you've got about $16 billion dollars in cash on hand right now? Is that right?
CHAMBERS: Well, cash and cash equivalents about $19.1 billion. We generated about $1.4 billion in cash this last quarter. So our cash position's extremely strong. Our gross margins improved.
DOBBS: You're looking for...
CHAMBERS: Inventory turns improved.
DOBBS: You know where I'm going looking. Are you looking at acquisitions?
CHAMBERS: Absolutely. I think, Lou, it's more a question of what time. We'll continue to move into markets through developing the product ourselves, acquisitions and partnerships. It'll be the blended group. Probably 8 to 12 acquisitions over the next year.
DOBBS: John, as always, good to have you here.
CHAMBERS: Lou, thank you very much. Look forward to seeing you next quarter. DOBBS: John Chambers, Chairman and CEO of Cisco Systems.
Well Massachusetts and possibly other states will refuse to go along tomorrow in U.S. District court with that settlement worked out between Microsoft and the Justice Department. The critics say it's full of loopholes and omissions.
Steve Young assesses those criticisms now.
(BEGIN VIDEOTAPE)
STEVE YOUNG, CNN CORRESPONDENT (voice-over): After closely examining the proposed settlement over the weekend, the Massachusetts Attorney General and other critics say it fails to control a company found to be a monopoly abuser. Indeed, says the critics, in some respects, it gives Microsoft more power than it has now.
Item, 14 days after an owner switches on a Windows PC, the settlement appears to let Microsoft replace any desktop icons put there by the PC manufacturer with icons for competing Microsoft products.
Item, two courts said competitive threats to Windows were supposed to be protected. They're known as middleware. But in the settlement, Microsoft is free to try extinguishing any technology upstart if it wasn't used by one million people during the preceding year.
ED BLACK, CEO, CCIA: The people who would write middleware will many never do it, knowing that Microsoft has the ability to block it, the way they do. So you'll never hit that critical mass of users.
YOUNG: The proposed settlement signed by Microsoft and the government can't go into effect until Judge Colleen Kollar-Kotelly considers whether it's in the national interest. With states holding out, the question would be much thornier.
DAN WALL, LATHAM & WATKINS: This has all the makings of a brawl, where the states are saying this not in the public interest. The government -- the U.S. government is saying that it is. And all sorts of special interests groups come in and chime in as well.
YOUNG: How long the review could take is anybody's guess.
(on camera): But since a breakup of Microsoft is not part of the settlement, it should move along faster than the last review of a major decree involving AT&T. The court review of the breakup of AT&T took two grueling years.
Steve Young, CNN Financial News, New York.
(END VIDEOTAPE)
DOBBS: "WOLF BLITZER REPORTS" begins in just a few moments. Let's go to Wolf now in Washington. Wolf, what have you in store for us? WOLF BLITZER, HOST, "WOLF BLITZER REPORTS": We're here in our CNN war room, Lou, getting ready for a freewheeling discussion on the course of the war. I'll talk with three men with lots of government experience, former Pentagon officials Richard Perle and Laurence Korb, and former State Department official David Mack. We'll also get the latest news from our correspondents at the Pentagon and in northern Afghanistan. All that and much more next.
Lou?
DOBBS: We look forward to it. Wolf, thank you very much. Coming up next here, we'll have your reaction to the CEO of the September 11 Fund who appeared here Friday. And we'll take a look at what we could expect tomorrow.
(COMMERCIAL BREAK)
DOBBS: Tomorrow, Fed policy makers meet to determine the direction of interest rates. Many economists expecting a half- percentage point cut. That would be the tenth rate cut this year.
Quarterly results, earnings expected from British Petroleum, Oxford Health, Polo Ralph Lauren and Qualcomm. And please join us here tomorrow night when Dr. Bernadine Healy, the president of the Red Cross, will be my guest.
Time now to take a look at some of your thoughts. A big response to my interview Friday with the executive director and CEO of the September 11 Fund, Joshua Gotbaum. I pressed the fact the September 11 Fund has only distributed $50 million of the $350 million it raised and questioned whether your money is getting to the families of the victims.
After seeing the interview, Gladys Calles wrote in to say that I was very rude, immature, and very unprofessional. Gladys goes on to say that I need to grow up and "accept the fact that people can and should disagree with me from time to time." I assure you that's something I have come to almost accept.
But that's not what most of you saw in that interview. Joanne Case in South Carolina says, "Thanks for your tenacity. The gentleman should be a politician, as he seems to be able to side step questions and give unrelated answers."
Bob Jackman in Tennessee writes, "The man did a virtual Fred Astaire. The very obvious fact was the victims are not receiving any direct monies. He tried to throw it off on the Red Cross and another organization that the $50 million out of the $350 million went to aid."
From Mike Cooper in Atlanta, "I gave to this fund with the intent that it would be directly distributed to individuals, not brokered through another charity that's diluting the effectiveness of my contribution. Shame, shame, shame."
Well as always, we want to hear from you. And our e-mail address, moneyline@cnn.com. Please include your name and your address.
The strong feelings expressed by many of you about the charities' response to the terrorist attacks are now going to be heard on Capitol Hill. There will be two hearings this week. Dr. Bernadine Healy, the head of the American Red Cross, who will be here tomorrow night, is expected to testify now before a House panel investigating the use of charity money collected since the September 11 attacks. Thursday, the House Ways and Means Committee will tackle "questions raised about the distribution of charity money."
That is MONEYLINE for this Monday evening. We thank you for joining us. I'm Lou Dobbs. Good night from New York. "WOLF BLITZER REPORTS" begins right now.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
