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Lou Dobbs Moneyline
Dow Advances 6.44 to 9894.81; Nasdaq Advances 9.45 to 2011.38
Aired December 12, 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. All four crew members of a B-1B bomber are safe tonight after their aircraft crashed into the Indian Ocean today. The crew ejected from the bomber after it became uncontrollable about 30 mimes north of the British base of Diego Garcia.
The pilot described the ejection as the most violent thing he had ever experienced, but says beside some cuts and bruises, that he and the crew tonight are fine. The pilot would not way whether the aircraft was departing or approaching Diego Garcia.
There is some question tonight regarding Osama bin Laden's whereabouts and a number of contradictory answers. The "Christian Science Monitor" reports that bin Laden escaped to Pakistan 10 days ago. The paper's Web site quoting a senior al Qaeda operative and Saudi financier named Abu Jafar (ph) , who says bin Laden was helped across the border by Pashtun tribesmen.
The State Department is skeptical of that report. State Department officials say bin Laden remains in Afghanistan although they don't know his precise location. The Defense Department however, says the terrorist is pinned down within a mile and a half area of the White Mountains near Tora Bora.
Al Qaeda fighters are indeed holed up in the Tora Bora region of Afghanistan and they have been given yet a new deadline to surrender. They now have until midday tomorrow to lay down their arms and turn over their leaders. Despite the on-going negotiations, U.S. warplanes continue to pummel cave complexes and troops in the mountainous region. One Eastern Alliance leader says he believes some of the pinned-down al Qaeda fighters are included in the president's 22 most wanted terrorists list.
Afghanistan's provisional government tonight is preparing to establish itself in Kabul. Haron Amin is the leader of Afghanistan's Northern Alliance, and joins us tonight from our studios in Washington, D.C.
Good to have you with us.
Thank you.
DOBBS: Let's deal first with these reports on Osama bin Laden. The "Christian Science Monitor" reporting that he left the country 10 days ago. What is your thinking?
HARON AMIN, SPECIAL REP., NORTHERN ALLIANCE: What we know from our intelligence on the ground and as the defense minister today had a talk, he mentioned that Osama bin Laden may not be in the Tora Bora area. In the Tora Bora Mountains, which in Pashtun really means the Black Mountains, that he has skipped over next door to what's known as the White Mountains, or the (UNINTELLIGIBLE).
That's where he is currently, but certainly the ultimatum that was delivered to the al Qaeda people has expired. A little bit more time has been extend to them. They have two ways to do this. If they want to comply and save their lives, they can do that. Or else, if they have to be forced out of the caves, then we will take the move on the ground, with the air-raid that's currently going on with the coalition forces.
DOBBS: And having let the first deadline past, 10:0 Eastern time last night, without repercussion, extending, as you say, the deadline, is this in some way, suggesting perhaps to the al Qaeda and Taliban forces there, that this is not quite as serious as it might otherwise be taken?
AMIN: I think that the seriousness of the ultimatum is very much communicated to them. It's just that they asked for extra hours and I think what we have found from the negotiations is that there are -- there are those among the Taliban, among the al Qaeda, I'm sorry, that want to turn themselves over. And there are others who are more, you know, hard line al Qaeda people who do not want to do the same.
Ultimately they are going to have to work it out within themselves and hopefully they're not going to double cross, as they can in Northern Afghanistan, that somehow this deal should come to an end when the next 12 to 18 hours.
DOBBS: Are there sufficient forces, a raid against the Taliban and al Qaeda, to carry out the ultimatum?
AMIN: Yes, indeed. We have between 3,000 to 4,000 soldiers in and around -- in around that territory. That is plenty. It is sufficient, and if need be, for us to launch the ground offensive, it will be done and it will be done effectively.
DOBBS: When will -- should that come to pass -- that the ultimatum is again ignored, when would action be taken?
AMIN: I think that right now we're still in the second phase, that extension has to be approaching an end before we can say exactly what's going to happen in the ground. But so far we're adamant about making sure the extension won't go beyond the specific time limit. Should it be the case, then I am certain that our commanders in the field will know what to do. And that's going to be in line with the wishes of the international campaign.
DOBBS: Well, what is your best judgment tonight, Haron Amin? Will Osama bin Laden be found in that region? AMIN: Let us say that so far, credible information on the ground indicates that he is still in Afghanistan, he is in the region. Should that intelligence not be trusted, then I'm certain that the campaign will go on indeed. But ultimately this campaign started over specific objective, and that objective has been beyond anything else the hunt down of Osama bin Laden and the destruction to total obliteration of the al Qaeda.
We will go after this objective with the international coalition, making sure that the hotbed of terrorism will be routed out of Afghanistan and that it won't be returning back to Afghanistan, and in -- and then of course, we've got our own political objectives to go parallel to that.
DOBBS: The Taliban, is it your judgment that the Taliban has been neutralized and will no longer be an influence in Afghan life?
AMIN: We strongly believe that the Taliban was under much influence of the Pakistani Taliban in various other institutions within Pakistan. That is no longer -- the Taliban is no longer an entity and that's critical within Afghanistan. We have spared a lot of the Taliban, the lower tier, who have not been involved in crimes of war and crimes against humanity.
The top leadership, of course, will be brought to justice or justice will be brought to them. But the Taliban as a whole in Afghanistan is gone as a movement, it no longer exists. Should it wish to remanifest itself in the Afghan political scene in the future of Afghanistan, in two years time, with the current political set-up in Afghanistan, the Taliban could very well go towards elections, and maybe even serve as a candidate in the upcoming elections in two years time.
DOBBS: And Mullah Mohammed Omar, his fate, his whereabouts?
AMIN: His whereabouts and the transfer of power in Kandahar somehow right now is dubious, no one really knows. But ultimately, Mullah Mohammed Omar haven't extended a safe haven for the terrorist al Qaeda, and Osama bin Laden will not be spared. He will be brought to justice. Indeed, that is adamant. Mr. Karzai has made that known. We're very clear on that very issue to the international committee, as well as to the Afghan population.
As to where he is right now, no one knows, but ultimately, justice will be brought to this individual.
DOBBS: Haron Amin, thank you for being with us.
There is late word tonight that U.S. Marines, now at a base near Kandahar, will soon take up positions at the Kandahar airport. CNN has learned that the Marines will take control of the airport and what one officials has called a semi-permissive environment.
Christiane Amanpour is in Kandahar tonight.
Christiane, what can tell us about these developments? CHRISTIANE AMANPOUR, CNN CORRESPONDENT: Well, Lou, we have also heard those talks, those reports from people here, who we've been talking to. The officials and the commanders of the new authorities here in Kandahar tell us the same thing. And that word has been going around for a while. And we've just sort have begun to realize that it is probably going to happen.
It appears that they may move their base from where they have been over the last couple of weeks, some 60 or so miles away from us in the Kandahar Desert, back here to Kandahar City, near the -- inside the airport. That airport has of course, been a case of rather intense tension over the last couple of days as Kandahar was handed over.
We had had reports from local authorities here that there may have been some al Qaeda people holed up there and resisting. Subsequently, we heard, that the problem had been dealt with. We were never allowed access. So, we don't know exactly what happened, but we understand that the problem of any potential al Qaeda fighters who were still at the airport has now been resolved. And we have seen many U.S. special forces in the town, who are moving around in the governor's offices, where some of the new officials are.
We have also seen them along with Hamid Karzai, the new interim leader designate of Afghanistan. So, the U.S. personnel is on the ground -- Lou.
DOBBS: And Karzai set up the provisional government, what can you tell us about that progress tonight?
AMANPOUR: Well, he was due to be heading towards Kabul a board a U.S. military helicopter or an aircraft, we understood, but we don't know whether he's left and we don't know whether he's arrived. It was shrouded in some secrecy, presumably for security reasons, but he was intending to go to Kabul and he is intending to go to Kabul to meet with other members of the new interim government.
Then he was going to go off to Rome to meet with the former King, Zahir Shah, who is also -- his delegation is part of the new government. And then he was obviously coming back to Afghanistan for the inauguration of this new government on December 22.
In the mean time, in the capital Kabul, the outgoing present of the Northern alliance, and the one who is still recognized until recently as the president of Afghanistan, Rabbani, held a press conference to complain somewhat about the new government, but to say that he would, nonetheless, support it. And another senior member of the Northern Alliance, who is member of this new government, said they would welcome a multinational forcing, and that's a fairly big development -- Lou.
DOBBS: Christiane, thank you very much. Christiane Amanpour from Kandahar.
The so-called smoking gun videotape of Osama bin Laden has not been released yet. Now, apparently, it won't be released tonight. For the very latest on this developing story we go to Washington and the White House, White House correspondent Major Garrett.
Major, just how close are we to seeing the videotape?
MAJOR GARRETT, CNN CORRESPONDENT: Well, we're not going to see it tonight, Lou. White House just announced and the Pentagon confirmed, that the tape is still being worked on by translators assigned by the Pentagon, and the White House. It will not be ready for release tonight. We're told to expect it tomorrow. Of course we were told that today.
The White House and the Pentagon are basically going over the tape three and four and maybe in some cases five times, numerous times, it is safe to say. Why? Because the White House and the Pentagon are very sensitive to making sure that when the tape is released the accompanying translation of Osama bin Laden's words cannot be in any way impeached or questioned by any outside critic, here in the United States or anywhere else in the world.
So, the Pentagon and the White House have brought in outside experts to the look at the tape. Now, the tape itself is a videotape of Osama bin Laden. There are several people in the room. At times they are speaking at the same time. So it's often very difficult to hear Osama bin Laden's very soft voice through this chatter. That's been one of the problems.
Also getting an unimpeachable translation of Osama bin Laden's words has also been a high priority, that's why the outside experts were brought in. There are several other problems with this videotape, Victoria Clark, the chief Pentagon spokeswoman, summarized some of them earlier today.
(BEGIN VIDEO CLIP)
VICTORIA CLARKE, PENTAGON SPOKESWOMAN: The quality of the tape is poor. The picture is not great, this is not a professionally produced videotape. The audio is very poor. Evidentially, if you are a fluent Arabic speaker, it's very hard to hear some of the things, so want to be very careful that we have an accurate translation of those parts that we can.
(END VIDEO CLIP)
GARRETT: Lou, I want to tell you, there's no sense here at the White House whatsoever, of reluctance to release the tape. The White House considers this a crucial piece of evidence to show the world not only of Osama bin Laden's foreknowledge, his complicity,and his chilling sense of glee of what in fact happened on September 11. That, many White House officials say, is among the most troubling and disturbing parts of this tape.
No one in here at the White House ever doubted Osama bin Laden's complicity and guilt in this matter, but it is the chilling quality of his personal reaction to what happened on September 11 that they believe will disturb certainly millions and millions of Americans and millions of others around the world -- Lou. DOBBS: This tape being released and released as I understand it, not by the White House, in this case, but by the Pentagon, is that correct?
GARRETT: Yes. But it does not happen without the president's OK, and without the president's foreknowledge and agreement.
DOBBS: That -- makes it looks as though, frankly, that this is designed for international consumption, if you will, rather than domestic, is there anything to that?
GARRETT: Certainly, Lou, the White House is ever presently aware of its need to sort of -- explain to those doubting Thomases that remain in the world, that Osama bin Laden is in fact a central player in what happened on September 11, and everything that's been done so far in Afghanistan to target the Taliban and al Qaeda terrorist organization is justified by his guilt, his complicity in what happened September 11.
But it is also worth pointing out that the President has made abundantly clear in recent days that there will be other venues for this campaign against global terrorism beyond Afghanistan, and al Qaeda operatives in other countries will be sought and brought to justice.
To carry that campaign forward, the White House wants as persuasive and strong a case as it could possible marshal that showing that al Qaeda was behind what happened on September 11 and if it continues to exist in any nation, poses continued threats, not only to the United States, but other U.S. allies and that's why the campaign must continue. In that context, this tape is very important indeed -- Lou.
DOBBS: Major, thank you very much. Major Garrett from the White House.
The FBI warning that there has been a threat to Texas schools. The FBI saying the vague and unsubstantiated threats suggest two people may retaliate against unknown schools in that State in response to U.S. attacks against al Qaeda and Taliban forces in Afghanistan.
The governor of Texas, Rick Perry, insists that his state schools are safe, and says parents should not keep their children home.
Coming up next tonight, we'll continue to bring you the latest developments in the war against terrorism. Also we will have the latest on the war on Middle East, which is broadening. Israeli jets tonight retaliating, attacking Palestinian targets in Gaza City, yet another deadly suicide bombing in Israel.
We will also tell you what Hollywood is doing to promote patriotism both here and abroad.
And we'll be talking with the head of Enron's accounting firm -- ask him why his company didn't see the biggest bankruptcy in history coming. (COMMERCIAL BREAK)
DOBBS: Tonight, Israeli jets are attacking Palestinian targets in Gaza and the West Bank. At least four bombs were dropped near Yasser Arafat's presidential compound. A naval installation was also hit in those attacks, as well as a security compound in Nablus. These airstrikes are in retaliation for three deadly Palestinian attacks earlier in the day. Those attacks left at least ten Israelis dead.
Gunmen opened fire on a bus in the West Bank, and two suicide bombers set off explosions in Gaza. The Palestinian Authority says it will now close all offices and institutions linked to Hamas and the Islamic jihad.
Mike Hanna is in Jerusalem with the latest -- Mike.
MIKE HANNA, CNN CORRESPONDENT: Well, Lou, the Israeli cabinet is still continuing an urgent meeting called in response to the series of attacks in the course of the day, yet another day of deadly violence after 40 months of ongoing conflict.
Bus number 189 was on its way to Tell Aviv to the West Bank settlement of Emanuel; 52 people on board, all ultra orthodox settlers. A road side bomb exploded next to the bus, and Palestinian gunmen, alongside the road opened fire. At least ten people killed. As many as 30 people were injured. And according to the Israeli army, the Palestinian gunmen fired, as well, on ambulance as they arrived on the scene to help the wounded.
Also at the same time, two suicide bombers carried out an attack on a Jewish settlement in the Gaza Strip. The killed only themselves, but injured four Israeli settlers. The Israeli government response was strong, airstrikes in Gaza at a number of targets there, the number of injuries not clear at this particular point. The exact targets also are not clear.
It was known, however, that within an hour of the bus attack in the West Bank and the suicide bombing, all Palestinian security officers had been evacuated. Obviously, Palestinians, knowing that some kind of Israeli retaliation was going to come.
Amidst all of this, diplomatic efforts continued. The U.S. envoy Anthony Zinni still in the region. He was attempting to get security officials from the two sides to agree to a cease-fire. No sign whatsoever of a cease-fire, Lou, however, it has been indicated that Anthony Zinni will remain in the region despite this ongoing cycle of violence, this ongoing attack and retaliation.
DOBBS: The cycle of violence, as you say, Mike, continues, in fact, worsens. Is there a clear statement from the Israeli government tonight as to exactly what their goals and strategy will be here? Is there going to be constraint, or will the government decide to go beyond that?
HANNA: Well the Israeli government has said that it will continue to act, in its words, responsibly. It will continue, it says, to retaliate for every attack on Israeli targets. However, it says, it's still wants to implement a cease-fire, it still wants to get a cease-fire to work. It insists it is up to the Palestinian Authority to stop the action of militants on the ground.
The Palestinian Authority says the same. It says it still wants a cease-fire. It is still condemns these attacks on Israeli civilians. Both sides are saying what they want, which is a cease- fire. But neither side appears able to achieve it, Lou.
DOBBS: And the violence continues. Mike Hanna from Jerusalem.
Coming up next here, some good news for investors, Wall Street managing to post modest gains. Good news for the crew, as well, of a crashed U.S. B-1 bomber. We'll have the latest for you on that story.
And after 18 years of public service, House Majority Leader Dick Armey says it is time for him to stand down. We'll have the details coming up. Also, the debate over an economic stimulus package continues tonight in Washington. Some insight into how soon a plan may emerge next here. Stay with us.
ANNOUNCER: Next, Lou speaks with former Fed governor and White House economics adviser, Lawrence Lindsey.
(COMMERCIAL BREAK)
DOBBS: Tonight in the war against terrorism, four crew members of a B-1B bomber that crashed in the Indian Ocean are safely aboard the destroyer USS Russell. The B-1 bomber, like one shown here, today crashed about 30 miles north of the British base, Diego Garcia. The pilot says the force of the ejection was the most violent thing he has ever experienced, but that he and the crew members are bruised, but otherwise fine tonight.
Jamie McIntyre is at the Pentagon now and has more on the story. Jamie, what happened?
JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, the interesting thing, Lou, is we got a firsthand account from the pilot and also some of the people who rescued him about what happened. This B-1 bomber, according to Pentagon sources, took off from Diego Garcia for a bombing run over Afghanistan. About 100 miles out, we're told, it developed a series of mechanical problems. The plane turned around, tried to make it back to base. But 30 miles away and at about 15,000 feet, they just couldn't maintain control of the plane. All four crew members bailed out.
It was nighttime. It was dark, and the search began. Fortunately, a KC-10 refueling plane was flying nearby, heard the distress call, flew to the area, saw a flare fired by one of the crew members down below, continued to circle the position while a U.S. Navy destroyer raced to the scene. The Navy ship discovered that the water was treacherously shallow, and instead it had to put small boats in about seven miles away. But they did find all the crew members within a short radius. Once the small boats got close, some of the crew members fired off another flare, and they were all picked up and brought back. They're suffering some bruises and some cuts and they went through that very violent ejection from the aircraft, but they're all fine. The pilot says that he's a little sore, but he's ready to start flying again -- Lou.
DOBBS: A remarkable story of that rescue and the ability of that destroyer to be there so quickly. And as you say, fortunately, all four crew members safe tonight. Jamie McIntyre, thank you very much.
It is official: House Majority Leader Dick Armey is calling it quits. The 61-year-old Republican of Texas is retiring at the end of his term in January of 2003. Armey has served 17 years in the House of Representatives. He witnessed the end of the Cold War, the collapse of the Soviet Union and victory in the Gulf War. Today, he reflected on what he will remember most.
(BEGIN VIDEO CLIP)
REP. DICK ARMEY (R-TX), HOUSE MAJORITY LEADER: Despite the often too bitter contests we have, I cherish the fact that when our country needed us to come together, we stood on the steps of this Capitol and hand to hand, we sang "God Bless America."
(APPLAUSE)
It is that feeling of unity, not the heated exchanges, that I will remember most fondly when I leave here.
(END VIDEO CLIP)
DOBBS: Dick Armey, in addition to serving as House majority leader, a professor of economics. And House Majority Whip Tom DeLay, who is not a professor of economics but another Texan, is running for the majority leader's post.
The Enron story continues to unfold. A hearing today taking place on Capitol Hill. Congress trying to get to the bottom of the rapid downfall of the energy firm that once ranked No. 7 on the Fortune 500. The CEO of the accounting firm at the center of the Enron/Dynegy debacle is Joe Berardino, the CEO of Andersen. He testified today while others didn't testify. Berardino said his company had warned the energy giant about possible illegal acts. Also testifying today, Richard Trumka, the secretary treasurer of the AFL- CIO.
Earlier on CNNfn, Trumka made it clear he believed Andersen might have known more than it led on.
(BEGIN VIDEO CLIP)
RICHARD TRUMKA, AFL-CIO SECRETARY-TREASURER: They had some very, very lucrative contracts. They had $27 million each year in consulting fees that never went through their audit committee. They got another $29 million in fees, making $59 million in total that they got from Enron. It affected their objectivity. What we want to do is make sure that accountants cannot review their own transaction and their own work so that somebody could actually look at this work to make sure it's accurate.
(END VIDEO CLIP)
DOBBS: Well, here now to talk about today's testimony is Andersen's chief executive officer, Joseph Berardino. He joins us from our studios in Washington, D.C. Joe, good to have you with us.
I know this has been a difficult day for you, but it is also a day in which a number of people at the center of this controversy, including Ken Lay of Enron, declined this invitation. How would you judge your reception on Capitol Hill today?
JOSEPH BERARDINO, CEO, ANDERSEN: Lou, I was impressed with my reception on Capitol Hill. We're, frankly, in the first chapter of what will be a long story in terms of understanding what actually did happen at Enron. And I was happy to come down here to explain what we know at this point and time.
I think Congress was impressed that we were willing to be forthcoming. And I thought we had a very constructive dialogue.
DOBBS: Well, you said today in your testimony that if you did make mistakes, you will acknowledge them. I have to believe the Capitol Hill, the congressman, wanted to hear that. We also heard Richard Trumka, the AFL-CIO, basically accuse you of a conflict of interest. It is not the first time the charge has been leveled, as you well know, concerning the size of the fees that you collected from Enron. Did that play any role in your firm's conduct?
BERARDINO: Absolutely not, Lou. I mean, this has been an issue for generations in terms of our being paid by our clients to do audits, let alone consulting fees. But our people are very professional. We call it as straight as we know how. We are human beings at the end of the day.
But this is an issue that clearly is on Congress' mind. And we're very sensitive to the fact that there are some legitimate questions about whether or not there is a conflict. And I suspect we haven't had the last of that conversation and we're prepared to be a full participant in that conversation going forward.
DOBBS: Joe, let's turn to some of the details. And I will warn our audience right now, some of them are excruciatingly just bonecrushing boring and complex and, frankly, beyond my level of comprehension, so I'm going to stay where I'm most comfortable and that's on the superficial in some of this.
But in the case of the structured financing, the special purpose entities, how could this not be included in the per view of what Andersen was examining and reporting on?
BERARDINO: Lou, as you say, this is not easy stuff. We started the education today, I think, with Congress and we had a lot of people listening very hard. But this was within our per view. A company like Enron uses so-called special purpose entities. Wall Street sells them by the billions. DOBBS: Right.
BERARDINO: And they accomplish using one or two objectives. They take assets off the balance sheet, where companies take assets off the balance sheet and get cash. They also use to take liabilities off the balance sheet in very legal, above board ways.
Over the years, in an attempt to try to provide some guidance, some clear rules, bright line rules have been written on which transactions stay on the balance sheet, which transactions stay off the balance sheet. We look very carefully at these transactions. And we gave the client our best advice on which ones would quality and which ones wouldn't.
DOBBS: Well, the one and the largest one which triggered, what was it, about $700 million in restatements in earnings. Is that correct?
BERARDINO: Actually, Lou...
DOBBS: Chewco, the so-called Chewco?
BERARDINO: Yes, actually, Lou, there were two transactions...
DOBBS: Right.
BERARDINO: ...that were unwound, that pushed back about $600 million losses back to 1997. 80 percent of that was the so-called Chewco deal.
DOBBS: Right.
BERARDINO: And in that situation, frankly, we did not have all the facts at the time we made our judgment call.
DOBBS: Joe, did you know, and I wish somebody there would tell you, but you're actually looking at the wrong camera. And I wish someone one in our Washington studios would tell you that you're looking at the wrong camera. I apologize for that.
We'll right here, if you can see us. Straight ahead, if you would, Joe.
BERARDINO: OK.
DOBBS: This is one of the most confounding things, I know, to be sitting there in that studio. And you're a good sport to sit there alone. It looks easy, but it isn't to be doing this sort of thing where no one is in the studio with you. And I apologize for that.
But in terms of the fact that the CFO was sitting on those entities and had a financial interest in them, this never came to the attention of Andersen in its audit role?
BERARDINO: Well, Lou, actually, that's not true. This -- the fact that a senior financial officer specifically indicated as the CFO was a partner in several of these transactions was disclosed in the company's proxy statement for about two years and in the annual report.
DOBBS: Right.
BERARDINO: And that was well known to the board, to us, to the audit committee...
DOBBS: And that didn't raise the red flag with anyone?
BERARDINO: Well, Lou, you know, my job is and our responsibilities are to report the facts.
DOBBS: Right.
BERARDINO: And we reported the facts. And whether it's a red flag or a yellow flag or a green flag is, I guess, somebody else's decision to make. Obviously, it's gotten a lot of attention lately.
DOBBS: $1.2 billion lost in shareholder equity. That became a very big deal, very quickly. How do you feel about your company's -- your firm's role in that?
BERARDINO: Well, actually, Lou, that's, you know -- that was a very important issue at the time. And let me provide some factual data.
DOBBS: If you can, Joe, very quickly, because we're really getting crushed for time.
BERARDINO: OK. Essentially these were a series of transactions in the first quarter of this year unaudited, which were reflected on the financial statements, but as assets, rather than as reductions of equity. And when the company, and we realize that these were erroneously recorded as assets in the first and second quarter, they were adjusted in the third quarter.
DOBBS: All right. Now in terms of the fact that we've got a tremendous issue now between Dynegy, lawsuits, the punitive white knight here with Enron. You served as both the audit firm for Enron and Dynegy. We have a situation where J.P. Morgan Chase, Citigroup were working as both bankers, well actually bankers, investment bankers and prospective investors here, it looks, at this stage, like a horrible, horrible web of potential conflict of interest among a number of firms. How do you see it?
BERARDINO: Well, Lou, I think we have to call it straight. I'm down here in Washington to call it straight. We will communicate with the boards of each of these companies.
DOBBS: Right.
BERARDINO: On the facts. And people will have to make decisions based on those facts.
DOBBS: Your own sense? BERARDINO: My own sense of where we're going?
DOBBS: Your own sense, really, of how this web of cross purpose, in many cases, roles taken on by at least two of the principle banks involved here and the influence that you would've had as the audit firm for two companies in the merger. I know that that's done quite often, because there are very few firms that can do what your firm does. But still, it's remarkable the number of cross purposes here.
BERARDINO: Well, Lou, obviously, they're in similar businesses. And it's not unusual that one day they might be fighting, and another day, or competing another day, they might be cooperating.
Our job is to report on historic financial information.
DOBBS: Right.
BERARDINO: And deal makers make deals. We do not make these deals. We do not structure these deals. We help companies report their financial data as accurately as they know how, in accordance with the rules of the SEC and FASB. And so, we don't see a conflict. We just call it straight. We try to give our best advice.
DOBBS: OK, Joe Berardino, thanks for being here and talking about it straight up. I commend you for doing so.
BERARDINO: Lou, thank you for having me.
DOBBS: Joe Berardino, the CEO of Andersen.
Well, the economy, as we know, is in recession, yet Congress cannot yet put together an economic stimulus package. Congressional leaders say they'll push for compromise within the next two days. But despite efforts by the White House to move this process ahead, a number of differences remain.
I talked earlier with the President's chief economic adviser, Lawrence Lindsey.
(BEGIN VIDEOTAPE)
DOBBS: Mr. Lindsey, let me begin, first, in terms of economic stimulus. A meeting this morning. Where do we stand? Will we have economic stimulus coming out of Capitol Hill
LAWRENCE LINDSEY, WHITE HOUSE ECONOMIC ADVISER: Well, the President and moderates from both parties met last night. And it is clear that there is a majority of the members of United States Senate who favor the compromise bill that these moderate Democrats and President Bush came together on. What we are waiting for is for a vote to be scheduled, so that the will of Senate can be heard.
DOBBS: How soon?
LINDSEY: I don't know. We're not in control of that side of it. Again, we're waiting for the Senate leadership to schedule a vote. DOBBS: And the Fed cuts rates for an 11th time. Is this enough and will it have an impact?
LINDSEY: Well, as you know, ever since I left there, I've kept my central banker union card. And I don't comment on what the brotherhood is up to. But whatever they do will be the right think, Lou.
DOBBS: Would it be safe to say that the White House is not displeased?
LINDSEY: No, I think Chairman Greenspan has done an outstanding job throughout his tenure, and has been very much on top of the economy this year.
DOBBS: Economic recovery, what is your forecast now?
LINDSEY: Well, we're looking forward to an expansion. The key is going to be to get this economic stimulus package through. You know, looking back at the first half of the year, monetary and fiscal policy worked very well together. The NBER, when it came out with its report, said that we probably would have avoided a recession altogether, thanks to the fiscal and monetary policy, had it not been for 9/11.
We got another setback. Now is the time, I think, to do act 2. After all, the textbook worked in the first half of the year. I think if we do get the fiscal package through, that the President and the moderates in both parties agreed to, that we will have recovery by the second quarter.
DOBBS: And with that, we'll just say we hope you're exactly right.
LINDSEY: I hope so, too.
DOBBS: As has been the case in your previous life. Larry Lindsey, thank you very much for being with us.
LINDSEY: My pleasure, thank you, Lou.
(END VIDEOTAPE)
DOBBS: Coming up next, we'll have the latest for you on the war against terror in Afghanistan. U.S. warplanes resumed bombing the region in the mountains of Tora Bora. A deadline for the al Qaeda surrender has passed, a new sent up. We'll see how the al Qaeda responds to this latest ultimatum.
And Europe's dominant commercial aircraft space and defender contractor finally puts figure on its financial outlook. Stay with us.
(COMMERCIAL BREAK)
DOBBS: In the war against terrorism, all four crew members of a B-1B bomber are safe tonight. That after their aircraft crashed into the Indian Ocean today. The crew ejected after it became uncontrollable 30 miles north of the British base of Diego Garcia.
(BEGIN VIDEO CLIP)
WILLIAM STEELE, VOICE OF CAPTAIN: I will say that going through an ejection like that is about the most violent thing I've ever felt. We're all pretty bruised up and have some cuts. But, overall, we're doing very well.
(END VIDEO CLIP)
DOBBS: That the voice of Captain William Steele, the commander of the aircraft. Meanwhile, a deadline for the al Qaeda to surrender has been extended until noon tomorrow, noon Easter time tomorrow. This as U.S. warplanes pound al Qaeda positions in the region of Tora Bora. The Pentagon says terrorist forces are surrounded, but that it may still be possible for one or two of them to escape.
Meanwhile, American John Walker, who fought alongside the Taliban, says there will be another al Qaeda attack in the United States in the coming days. However, a senior Bush administration official says it's doubtful Walker knows much about what the al Qaeda has been planning.
Today, the governor of Texas warned of a vague and unsubstantiated threat against Texas state schools. Governor Rick Perry says the threat appeared to be in response to the U.S.-led attacks against terrorism in Afghanistan, but insists the schools are safe.
In California, two leaders of the militant Jewish Defense League have been charged with conspiracy to blow up Arab and Muslim targets in southern California. Irv Rubin, the group's chairman and another member were arrested late yesterday.
How has the war against terrorism affected EADS, Europe's largest aerospace defense contractor? EADS is not only the largest commercial aircraft maker, it's also the continent's largest defense contractor.
Phillipe Camus is the chief executive officer of EADS and joins us now.
Phillipe, good to have you here.
PHILLIPE CAMUS, CEO, EADS: Thank you, Lou.
DOBBS: First, we know the plight of Boeing, your principal rival. Are you also suffering cutbacks in commercial aircraft orders?
CAMUS: Well, I'm very glad because EADS is doing rather well for the time being. We shall deliver what we have promised this market for 2001, as far as revenue and profit are concerned. And for the next year, we have a very strong backer. DOBBS: And your other business' defense?
CAMUS: Well in defense, well, we have a strong position. We -- our prime contractor in everything which flies.
DOBBS: Right.
CAMUS: Satellites, missiles, fighter aircraft in Europe, unmanned vehicles. And we are in a turnaround situation with a large backer, which represents three years of revenues.
DOBBS: And with that backdrop, your space business?
CAMUS: You mean, where is space?
DOBBS: Yes.
CAMUS: Space maybe it's not difficult business, but there has been many, let's say, unfortunate decision in telecommunication satellites.
DOBBS: Right.
CAMUS: An evolution. But there is a fast growing market, which is relating to earth observation, especially military earth observation, as the war in Afghanistan has demonstrated.
DOBBS: Is the war against terrorism, in fact, driving your defense business?
CAMUS: Yes, because this new environment is creating new needs, especially on space observation, censors, unmanned vehicles, also everything which is gathering information and image processing where we have very strong position.
DOBBS: And your view of the European economy, in particular, over the course of the next year?
CAMUS: The European economy is lagging, I would say behind the American economy. So probably that will be a rather flat year I suspect in 2002. But generally, we are expecting to have a recovery at the end of 2002.
DOBBS: OK, Philippe Camus, good to have you with us here on...
CAMUS: Thank you very much.
DOBBS: Thank you.
Well, on Wall Street today, we can tell you about a late rally that lifted stocks out of negative territory, but we can't tell you about an exciting gain on any of the indexes. Blue chips recovered from a loss to post a gain of 6 points on the day, 6.44. The Nasdaq gaining 9.45. The S&P 5000 up .31. And the best news of all, of course, those aren't losses that we're reporting tonight. Just ahead here, Hollywood putting aside commercial, profit motives, at least somewhat, chipping in to help the war effort. We'll tell you how Hollywood is helping out, next.
(COMMERCIAL BREAK)
DOBBS: The September 11 Fund helping victims access much needed cash. That fund today announcing the release of an additional $75 million to aid victims and families of the September 11 attacks. Under this newly announced program, victims' families will receive $10,000. Those who lost their homes or jobs in those attacks will receive $2,500.
The September 11 Fund has raised nearly $350 million. Now this still leaves a lot of money to account for, including today's announcement, still 60 percent of that money remains uncommitted.
Well, Hollywood is responding to appeals from the White House to support the war against terrorism. Disney, for example, sending movies and magazines to troops overseas, while giving free theme park tickets to the military here at home. Amid the rising tide of patriotism, Hollywood is saying it too can play a role in this war against terrorism.
Casey Wian has the story from Los Angeles.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Hollywood has a long tradition of entertaining the military during wartime. And the war on terrorism is no exception.
GEORGE CLOONEY, ACTOR: We're going to get on a plane and go over there and give them Julia Roberts.
WIAN: The cast of "Oceans Eleven," this week, flew to Turkey to show the film and visit U.S. troops.
ANDY GARCIA, ACTOR: I think it's important to show our support overseas, you know, to something that -- to people who are representing us in such an extraordinary way.
MATT DAMON, ACTOR: It'll be a nice diversion for a couple hours, you know, for these guys. Because they're not going to be able to come home for Christmas, so it's a little piece of home.
WIAN: After several meetings between the White House and studio executives, both sides say there are no plans to alter entertainment content, but Hollywood has agreed to help rally the troops abroad and spread patriotism at home.
(on camera): The Friday before Christmas, more than 9,000 U.S. movie theaters will begin showing a three minute patriotic trailer with clips from more than 100 classic American movies.
UNIDENTIFIED MALE: This is a holiday salute to our brave troops overseas.
WIAN: Television networks are running patriotic public service announcements, featuring their stars. Universal Studios, Sea World and Disney are offering military personnel free admission to their theme parks. While Disney's ABC Network devoted two episodes of "Who Wants to Be a Millionaire" to servicemen.
ROBERT IGER, PRESIDENT, COO, WALT DISNEY: These actions to support our country, to support our military personnel have nothing to do with profits or commercial motives at all. This is done solely, in effect, out of the goodness of our heart as citizens of America and citizens of the world.
WIAN: But the war is influencing some entertainment business decisions. MGM, for example, delayed the release of its World War II themed movie "Wind Talkers." While Sony has announced an early release its upcoming "Blackhawk Down," based on a 1993 battle between U.S. Marines and Somali warlords. Fox also hurried its $40 million film, "Behind Enemy Lines," to theaters this month. Set against the backdrop of the Bosnian War, it earned $31 million at the box after just 10 days.
Casey Wian, CNN Financial News, Los Angeles.
(END VIDEOTAPE)
(PREVIEW "WOLF BLITZER REPORTS")
DOBBS: Coming up next here, we'll take a look at your thoughts, and we'll take a look at what, at least part of what we can expect tomorrow. Stay with us.
ANNOUNCER: Tomorrow on LOU DOBBS MONEYLINE, calling for the surrender of Osama bin Laden, an inside look at the pressure being applied to the al Qaeda, with military strategy and intelligence expert George Freeman tomorrow on LOU DOBBS MONEYLINE.
(COMMERCIAL BREAK)
DOBBS: Tomorrow, reports on the economy. They include the Producer Price Index and retail sales, both for November as well as weekly jobless claims. Oracle will report its quarterly earnings. And also, we can look for a new issue to begin trading tomorrow. Prudential's initial public offering priced tonight at $27.50 a share, to raise $3 billion. It's the largest IPO ever in the insurance business. Prudential will trade under the ticker symbol, PRU, P-R-U.
Taking a look at your thoughts, Stan Engle writes in to say, "I do not understand how the prime lending rate can fall 11 times this year, while the lending rate for home loans has not followed suit."
Stan, I hope you haven't been waiting for something. Mortgage interest rates have just recently come off their historic lows. And refinancing has hit a record. But according to the Mortgage Bankers Association today, long-term rates hit 7.11 percent last week, the first time they've been above seven percent since the summer. Now those rates have been rising over the past few weeks because long-term mortgage rates follow changes in long-term bond yields, most often the 10-year Treasury note. The market is pushing those bond rates higher, in anticipation of economic recovery early next year. Economists advice right now? If you can get a 30-year-mortgage for under 7 percent, lock it in. Larry Carter writes in to say, "I'm perplexed. Interest rates have gone down, except the rates on my credit cards. Why?" Most people have variable rate cards that are re-priced every quarter. So it can take a while for that rate cut to kick in. Also, a lot of cards have minimums or "floors." And no matter how low rates go, you just won't get a lower rate. A recent survey by bankrate.com shows a quarter of variable rate cards have floors and a fifth of them have already hit that floor. If you think you're not getting a reasonable rate, by the way, the average, the national average, is about 14 percent. Call your bank or credit card company. They're competing for your business. Take advantage of it. And you can sure beat 14 percent.
Well, that is MONEYLINE for tonight. Please e-mail us, moneyline@cnn.com. Include your name and address, if you would.
We thank you for joining us this Wednesday evening. I'm Lou Dobbs. Good night from New York.
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