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Aired January 11, 2002 - 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 Friday, January 11. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening. Tonight, the major focus on Capitol Hill: The collapse of Enron. Senate and House investigators now are trying to find out who knew what and when. The lawmakers are also paying close attention to the behavior of Enron's accounting firm, Andersen.
Today, a Senate subcommittee sent out 51 subpoenas seeking information about the collapse of Enron. The House probe wants Enron's accountant, Andersen, to turn over every scrap of information relating to its audits of Enron. Jonathan Karl joins us now from Washington with the very latest developments -- Jonathan.
JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, Lou Dobbs, this is just the beginning. There are eight committees and subcommittees up on Capitol Hill preparing for investigations and hearings into Enron. You mentioned those 51 subpoenas, those are going to Enron's executives and members of their board of directors, and also to executives and board members of the Arthur Andersen Consulting firm.
One of the people getting a subpoena will be Phil Gramm. Senator Phil Gramm's wife Wendy Gramm, who was a member of the Enron board.
Meanwhile, we've also just learned that another prominent Democrat in the House, Henry Waxman, has sent a lengthy letter to both Secretaries Paul O'Neill and Don Evans, demanding information about everything they can say about their contacts with Enron and with Enron's chief executive officer, Ken Lay.
Now all of this is going on in the context of a company that has spread the wealth quite aggressively on Capitol Hill. Seventy-one of the 100 U.S. senators received money from Enron since 1989. Take a look at the top four contributors to get an idea of who they were giving money to: Kay Bailey Hutchison of Texas was the number one contributor, getting almost $100,000 from Enron. Also, Phil Gramm, Conrad Burns, and Democrat Chuck Schumer, the fourth largest recipient in the Senate for Enron.
Now, if you go over to the House, you'll see a lot of prominent Texas politicians. Topping that list, two Democrats: Ken Bentsen and Sheila Jackson Lee. Also, you see there Republican Joe Barton and Tom DeLay.
But all that money not really helping Enron. As you can you can see, Lou, eight committees up there looking into this. One of the ranking -- the ranking Republican of one of those committees, Susan Collins, gave us an idea of what she's trying to find out.
(BEGIN VIDEO CLIP)
SEN. SUSAN COLLINS (R), MAINE: What is evident already is that the company appears to have deliberately misled investors and its employees and customers about its financial strength. That in and of itself is very troubling.
(END VIDEO CLIP)
KARL: And Lou, also some news now in another front, another political hot button on Capitol Hill, the tax cut. The most prominent Democrat to come out calling for its repeal or at least postponement, Ted Kennedy, we have learned, is expected to give a major speech next week at the National Press Club, where he would do what Tom Daschle has stopped short of doing. He will call for the postponement of that $1.3 trillion tax cut, saying that the current economic and fiscal situation means that that thing should be slowed down. Republicans saying that's essentially a tax increase, and the wrong thing to do in the face of a recession.
DOBBS: And a difficult thing to do as well, Jonathan. Thank you very much, Jonathan Karl.
The White House tonight says it did nothing wrong amid new revelations of more contact between high-ranking Bush administration officials and Enron executives. The Treasury Department today said Enron's President Greg Whalley called the undersecretary for domestic finance six to eight times in late October and early November, asking for help. And the Federal Reserve Board says Enron's chairman and CEO, Ken Lay, a major Bush campaign contributor, called Federal Reserve Board Chairman Alan Greenspan last October.
John King joins us now from the White House with more on the story -- John.
JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: Lou, the White House saying in light of these new revelations of contacts, the Enron president, as you just mentioned, calling a gentleman by the name of Peter Fischer, he's the undersecretary of the Treasury Department six to eight times, as you noted, at the very period in time when Enron was negotiating with its banks trying to get a credit extension, trying to avert bankruptcy.
In one of those conversation, we are told, the Enron president asked Peter Fischer at the Treasury Department to call the banks. Mr. Fischer took that to mean to call the banks and ask them to help Enron, but we are told he refused to act. He thought it would be inappropriate to do so, and he made no phone calls. This a day after we reported that both the commerce secretary and the treasury secretary also say they were contacted; in their case, by Enron CEO Ken Lay, and they too said they took no action. Don Evans specifically saying he was asked to help with the bond rating of Enron, and he decided the government could not and should not do anything to help.
So a lot of questions being raised about the Bush administration's contact with Enron. There are political connections obviously here, as Jon Karl just noted, but Larry Lindsey, the president's top economic adviser, telling CNN earlier today -- and we should note, Larry Lindsey himself once an Enron consultant -- he says in the end any investigation will find this administration did nothing wrong.
(BEGIN VIDEO CLIP)
LAWRENCE LINDSEY, WHITE HOUSE ECONOMIC ADVISER: People in both parties have received money. There's no question. The important thing here is that American capitalism is not crony capitalism. In America, when a company makes a mistake, even when it's a big company, even when it's well politically connected, that that company bears a responsibility for its decision.
(END VIDEO CLIP)
KING: Still, Lou, while the White House says any investigation will prove the administration did nothing wrong, they understand the political climate here. The White House has asked agencies across the government to go back, check the books, check the phone logs, detail any conversations you had with Enron so that we can have an understanding of those contacts here at the White House. They know the questions from Congress are coming. They're also saying, though, they don't want the Democrats -- and they will hold the Democrats to it -- if the Democrats keep pushing once they get the answers -- Lou.
DOBBS: John, this is boiling up a number of obviously the Democrats seeking partisan advantage here, if you will. That's also how the system works. But there to this point, John, has not been an allegation of any wrongdoing on the part of any member of the administration in any department. Correct?
KING: And that's a key point the White House makes, Lou, that no one has raised any allegation of wrongdoing, and in fact that all the evidence so far points to the fact that this company, with very good political connections in this administration, asked for help and was told no repeatedly. And the White House says so far the Democrats are being reasonable in their view. They have every right, the White House says, to ask questions about the context. Once they get those answers and once the White House says it will prove there was no improper activity, the White House then expects those investigations to focus on Enron, not the White House.
DOBBS: OK. John King, thank you very much.
Well, amid all of these revelations and incipient investigations, Enron in court today, working on a separate issue: Selling parts of its business. Enron has been looking for a buyer for its energy trading unit, once the heart of its operations. Allan Chernoff joins me now and has that part of the story for us -- Allan.
ALLAN CHERNOFF, CNN FINANCIAL NEWS CORRESPONDENT: Lou, it was UBS Warburg that did actually win the bidding today for Enron's electricity and natural gas trading operations. Note that UBS is not planning to buy Enron's other trading businesses, such as coal and broadband.
The winning bid came after an all-nighter -- a conference call that began at 9:00 p.m. last night and lasted until 7:00 a.m. in the morning. The price not real just yet, but in such cases the ultimate price is often a function of how much revenue the revived business will be able to generate. The full details will be but on the bankruptcy court's Web site at 8:30 a.m. Eastern time Monday morning.
The Official Creditors Committee has given a thumbs up. Enron chief executive Ken Lay describes the deal as a "key milestone" for restructuring Enron and emerging from Chapter 11.
But from the comments of Enron's lead bankruptcy attorney, you can be sure that's a long way off. Martin Bienenstock told the court: "This was the sale of something that was dead that we tried to bring back to life" -- Lou.
DOBBS: What was the price?
CHERNOFF: We don't know the exact price yet. We don't know that amount.
DOBBS: Will we know it at 8:30 Monday morning?
CHERNOFF: We should know the price. Probably it will be a certain dollar amount plus a percentage of future revenues.
DOBBS: This was once, various estimates, $7 billion to $10 billion in assets. What is the conventional thinking about its price, and this deal?
CHERNOFF: Well, certainly the value of this asset has declined dramatically, simply because they haven't been trading much.
DOBBS: I understand. What is the -- is there an estimate on the value?
CHERNOFF: There really have not been numbers thrown around. Nobody's quite sure.
DOBBS: Other bidders for these assets?
CHERNOFF: Citigroup was in there, no question about that.
DOBBS: And how do they feel about the deal being done?
CHERNOFF: About the deal being done...
DOBBS: UBS winning the deal.
CHERNOFF: Well, clearly they didn't want to go as far as UBS.
DOBBS: And there won't be any challenge to the outcome?
CHERNOFF: Well, there's a very small possibility, because the judge still has to give final approval. That should come at a hearing on Tuesday. So possibility, small one, that something might happen between now and then.
DOBBS: And we should point out that these are only glimmers of part of the total Enron problem that will be rolling out over the weeks and months ahead.
CHERNOFF: Most definitely.
DOBBS: Allan Chernoff, thank you.
Well, Ford Motor, another company in focus tonight. The carmaker will laying off 35,000 of its employees. Ford announcing today it will close five plants as well, and drop four of its car lines, including the Lincoln Continental.
All of this a stunning reversal of fortunes at Ford. In a one- year span, Ford has gone from a $6 billion profit to an estimated loss of nearly $1 billion. That reversal, the result of rising costs, shrinking market share, persistent quality problems and bad management.
Fred Katayama is at Ford headquarters in Dearborn, Michigan -- Fred.
FRED KATAYAMA, CNN CORRESPONDENT: Well, Lou, Ford says prosperity without profit will no longer be tolerated. In other words, it will stop selling cars that lose money. And so it launched its long-awaited restructuring plan, a very painful one at that.
(BEGIN VIDEOTAPE)
(voice-over): The luxury Lincoln Continental will become history; just one of the victims of Ford's massive restructuring plan. The biggest victims: some 35,000 workers worldwide -- 10 percent of its workforce, with 22,000 of them in North America. One-third of those employees were already cut last year.
Ford will also shut down five plants, cut production capacity 16 percent, discontinue four models and cut its dividend by one-third. To pay for this, it will write off $4.1 billion in the fourth quarter.
Chief executive Bill Ford himself will share the pain, foregoing his salary and bonus this year.
WILLIAM CLAY FORD JR., CHAIRMAN & CEO, FORD MOTOR: We realize that some of the things that must be done will be painful, and will impact people's lives in adverse ways. And I can't begin to describe how sorry I am about that. But I sincerely believe that what we're doing is necessary in order to be competitive in the short term.
KATAYAMA: To do that, Ford will hold capital spending at its current level and speed up development of new models.
Analyst Scott Hill likes the plan because it manages to cut costs and invest in the development of new vehicles over the longer term.
SCOTT HILL, SANFORD BERNSTEIN: When you start looking 2003, 2004, 2005, it really is a very strong program. And we think it will restore normal earnings power for the firm.
KATAYAMA: Ford needs to get out of the pit stop fast. It's losing money and market share. The quality of its vehicles has skidded from top to bottom of the Detroit automakers, and its stock has fallen roughly 50 percent from its peak last year.
(END VIDEOTAPE)
KATAYAMA: Ford left the door open to more cost-cutting moves. It hopes to attain a pre-tax profit sometime this year. And to that end, Ford is cutting costs whenever it can, from selling its corporate jets, to cutting out coffee at staff meetings -- Lou.
DOBBS: Fred, thank you very much. Fred Katayama tonight from Dearborn, Michigan, where the news is definitely not good.
Coming up next, we will continue to take a look at Ford's problems. Those problems didn't help the mood on Wall Street today; stock prices ended the day lower. We'll tell you why. Fed Chairman Alan Greenspan talking about the economy for the first time in three months; investors glad he's doing so on only a quarterly basis.
And we'll be talking with Ford's chief operating officer about the carmaker's plans to reverse those losses next. Stay with us.
ANNOUNCER: Next, Lou talks with Nicholas Scheele, COO of Ford Motor.
(COMMERCIAL BREAK)
DOBBS: One of the plants being closed by Ford in its massive restructuring is its Ranger pick-up truck plant in Edison, New Jersey; a plant that employs nearly 1,600 workers.
Peter Viles is at the facility, and has the report for us -- Pete.
PETER VILES, CNN CORRESPONDENT: Well, Lou, this plant had three strikes against it. As you say, they make the Ranger here. Sales of the Ranger have been slipping. This is also an old plant -- over 50 years old. The third strike: They make the Ranger somewhere else; they make it in St. Paul. So this plant did not make the cut today.
Let's look quickly at other Ford plants around the country that did not make the cut. Parts plants in Michigan and Ohio. Now, the job losses there are not dramatic. But then you get to three assembly plants where the job losses are dramatic.
Here in Edison, New Jersey, 1,570 jobs. Oakville, Ontario, over 1,400 jobs, the biggest of all. Hazelwood, Missouri outside St. Louis, where they make the Explorer: 2,600 jobs there will be lost eventually.
A very important note here, though, about the timing of these plant closings and the timing of Ford's cost-cutting. Ford gave up the right to close these plants during the current contract for the United Autoworkers Union. Ford cannot close any plants during the life of that contract, and Ford appears to be honoring that contract. Earlier today here in New Jersey a local union official explained that contract, what it means to Ford.
And here's what he had to say.
(BEGIN VIDEO CLIP)
BOB LA POINT, PRESIDENT, UAW LOCAL 980: I really got to be honest and say this: Ford Motor Company has lived up to the agreement. We have a moratorium on plant closings that was agreed to in 1999's agreement. That carries us through to September the 14th of 2003. So right at this time, they won't be closing the plant before 2003.
(END VIDEO CLIP)
VILES: They will close this plant sometime in 2004; they didn't say what month. SO this will be -- this plant will be open for another two years. The same is true, we understand, of those assembly plants in the Midwest. So Ford, a company that needs to cut its costs very dramatically and very quickly, hampered by these union agreements. They can't achieve cost savings at these plants for at least two years, Lou.
DOBBS: OK, Pete, thanks very much; Peter Viles.
Well, Ford's job cuts deeper than many of Wall Street's analysts had expected, as well. I talked with Ford's Chief Operating Officer Nicholas Scheele, and asked him where those cuts will be, and where they're expected to begin.
(BEGIN VIDEOTAPE)
NICHOLAS SCHEELE, COO, FORD MOTOR: Some of them have already started. We had announced shift reductions and, indeed, shift eliminations in some U.S. plants. And in Latin America, where we're also taking some reductions, we had already started there. It will progress over much of the balance of this year, and then on into '03.
But, yes, it is a fair number of positions. But it's done to put ourselves in a position where we will be fit, where we will be healthy, and where we can go forward as a very, very profitable company that is generating the necessary cash to invest in an aggressive slew of new programs.
DOBBS: And closing five plants -- over what period of time do you expect to have those closed?
SCHEELE: OK, those plants will basically close as replacement vehicles arrive. We're not going to close any plants for which there is still demands for their products. But as we move through the cycle of replenishing vehicle programs, those plants will close when we have no further demand for their production. So it will be a process that will take place and will complete by the middle of the decade.
DOBBS: Wall Street today reacting I think the most favorable construction of Wall Street reaction would be ambivalent. Some analysts concerned that you are not cutting capital expenditures sufficiently. How do you respond?
SCHEELE: I think that really misunderstands part of what is the critical dynamic of this industry. Product is what drives us. Yes, we have got to get cost under control, and we're doing that. We are right-sizing capacity, so that is under control as well. But the critical thing is to get attractive high value, good quality, appealing product, and that's why we do need to sustain our product program.
DOBBS: Nick, Ford has gone from $6 billion in profit to a loss of approximately an estimated loss of $1 billion for 2001. That is a remarkable turnaround by any standard. What happened?
SCHEELE: I think some analysts have called it "the perfect storm," and I think that probably just about sums it up, Lou. What really happened was that we generated the vast majority -- in fact, greater than 100 percent -- of our profitability in our North American market principally with trucks and SUVs.
Competition saw that, came after us, put new capacity in place. The margins on those units started eroding. That was then compounded by economic uncertainty, and then again by September 11 and the events thereafter. Then on top of that came zero percent financing. Variable marketing support went up, and in fact it's increased some 5 percentage points over the last 12 months.
Now, when I tell you that our margin at the best of times in this business is only about 4 or 5 percent, you can appreciate that a 5 percent increase in marketing costs really does go straight to the bottom line. In addition, we had well publicized failings, internally and indeed externally.
DOBBS: And it gets the backdrop of what should be by itself, all of those negatives notwithstanding that you just enumerated, just about the second best performance in the history of the automobile industry in this country.
SCHEELE: Yes, it is. I mean, we closed the year at $17.5 million, an incredible performance. But it was not without cost to the bottom line, and fairly severe costs. So volume was there, but not the profit that you would assume would go with it.
DOBBS: You have mentioned product several times as we've been talking. You're also eliminating product, amongst them, the venerable Lincoln Continental, the Escort. Why those models, which -- many of which seem popular at least to the layman? SCHEELE: Yes, the Escort has been popular. But of course, we have Focus now, best-selling car in the world. It goes into the same segment as Escort. So we really don't need two entries in that small sedan size market. Lincoln Continental -- frankly, Lincoln Continental has been under some volume pressure in recent years. It is no longer economic to continue with that product, and that's really the reason that's led us.
If we've got products where we've got declining volumes and we see no long-term successor to those vehicles, we'd rather take action now rather than prolong things and merely put increased marketing support behind them to move volume which does not contribute to the bottom line.
DOBBS: As both you and Bill Ford have said, you cannot cut your way to profitability and prosperity. You've mentioned product. Give us an indication of the kind of product that we can expect from Ford, how soon and how significant will it be against the backdrop of an almost 10 percent decline in market share year over year.
SCHEELE: Well, what we're going do is really emphasize new product. In fact, we plan more than 20 new model introductions in the North American market alone on average over the next four years. And that ranges from Ford cars, Ford trucks, Ford SUVs, right up to Austin Martin sports cars.
We will see a deluge, a blizzard of new models coming at the North American market. And why? Because it is new models that sustain this business. You need new models that are exciting, that are high quality, that do in fact provide the very essence of what this industry is all about, and that truly is a desire to drive a car or a truck.
DOBBS: Nicholas Scheele, we thank you for being with us here.
SCHEELE: Lou, thank you.
(END VIDEOTAPE)
DOBBS: And on Wall Street, stocks moving lower today. Ford actually moving a little higher, up 21 cents, to $15.5 a share, still near its 52-week highs, but at least a lukewarm reception to the restructuring.
The markets falling today after Fed Chairman Alan Greenspan warned the economy faces significant near-term risk. On the day, the Dow dropping 80 points. The Nasdaq fell 24 points. The S&P 500 down nearly 11.
The markets lower on the week. The Dow down more than 2.5 percent. The Nasdaq fell just about 2 percent. The broader S&P down more than 2 percent as well
Long-term optimism, short-term risks -- that's the message from Alan Greenspan, the Fed chairman. He said the economy is getting better, but there are some risks. Kathleen Hays is here to tell us just precisely what the Fed chairman meant.
KATHLEEN HAYS, CNN FINANCIAL NEWS CORRESPONDENT: And let's not forget, he said a lot of positive things. He said the news is not as unremittingly negative, more signs of stabilization, and a very important thing: Businesses have slashed inventories so severely during this recession, all of those excess goods they've piled up, but they're closer to getting to the point where they can boost production again. But that depends on the consumer holding up, and that's not a sure bet.
(BEGIN VIDEO CLIP)
ALAN GREENSPAN, FEDERAL RESERVE CHAIRMAN: Despite a number of encouraging signs of stabilization, it is still premature to conclude that the forces restraining economic activity here and abroad have abated enough to allow a steady recovery to take hold.
(END VIDEO CLIP)
HAYS: Here are some of the risks Greenspan cited. The rise in mortgage rate could (UNINTELLIGIBLE) housing activity. Climbing unemployment could hit the consumer. Profits are still weak. Investment hasn't picked up. The loss of stock market -- well, that's another thing that could hit consumers.
But again, Mr. Greenspan's long-term view is very optimistic. The stock market took it poorly, but look at this: He notes the economy survived a bear market in stocks, a bad one, and the September 11 attacks. The 1990s high-tech productivity boom is still intact. That's going to help the stock market long term. Fiscal spending, tax cuts, those will boost growth.
Bottom line, he left the door open to more rate cuts. That's ultimately a positive. And what people are saying is implicit here, Lou, he's going to make sure we get an economic recovery. He's not complacent. He's not going to rest until we see the definite signs. That is actually a very positive message from this speech, even though near term he's being cautious.
DOBBS: And however, though, there's still great doubt out there amongst investors that the Fed chairman can significantly influence recovery here, after 11 rate cuts.
HAYS: And maybe you have to say, if he hadn't cut rates, how much worse could it have been?
DOBBS: Yes, but moving beyond the hypothetical, people are now looking for real recovery here. We've got a lot of stimulus in the way, as you suggest, but they're looking...
HAYS: Fingers are crossed.
DOBBS: Absolutely. And everything else we can. Kathleen, thanks.
Joining us, now joining Kathleen and me -- we are joined now Christine Romans and Greg Clarkin, who of course follow the markets for us day in, day out, hour by hour, minute by minute, the Nasdaq and the New York Exchange. A bad week, unrelentingly so?
CHRISTINE ROMANS, CNN FINANCIAL NEWS CORRESPONDENT: You know, look at what happened this week. I mean, it was a financial reporters' dream or nightmare, depending on how you look at it. The week started with AOL Time Warner saying that they could have a charge in the firsts quarter of $40 billion to $60 billion. K-Mart shares...
DOBBS: That's with a B.
ROMANS: With a B. K-Mart shares hit a 30-year low -- that's three-zero -- 30-year low. Ford restructuring, we've been looking for it for a long time, comes out, deep job cuts, and the Fed chief caps it all off. Next week, we got reporting earnings. A lot of folks talking about what these numbers are going say, what they're going to say about the year 2002. There's a lot going on here, and investors -- look at the transports, down 4 percent this week.
GREG CLARKIN, CNN FINANCIAL NEWS CORRESPONDENT: Wasn't that gloomy over on the Nasdaq. It was just down 1.8 percent. We actually had the middle of the week the composite trading at five-month highs, up around 2,100. CFO of Oracle, the CEO of Cisco coming out with fairly positive things to say. Everybody backed off the last three days. They're in a holding pattern now for earnings. Next week, we have Intel, we have Sun, Yahoo!, a lot of the big heavyweights.
DOBBS: And so you're optimistic over there at the Nasdaq?
CLARKIN: You know, the tech stock market, generally speaking, by anybody's account is severely overpriced. But I think they've bid it up to a level where they're just going to let it sit until they get something to show them to push it down.
DOBBS: Are we looking at a reversal here in direction, or are we in a holding pattern do you think for the next few weeks, months?
HAYS: In terms of the stock markets?
DOBBS: Sure.
HAYS: Well, I said before Christmas that I thought once -- that it would be tough to really break decisively above 10,000 and 2,000 because of the fact that this economy is not going to roar yet. It may never roar this year. That, maybe we're going to have this subdued recovery.
And that's why everyone keeps saying, Lou, you got to pick individual stocks. You can't just buy the market. You have to know what has value, who's the sector leader -- that's what experts are saying.
DOBBS: Buying the market, I've never met an investor who did that.
ROMANS: Well, for example, this week, FedEx down sharply. A lot of analysts are out there saying, we've already seen the run-up, the anticipation of a good economy in '02. Now we got to see the evidence.
CLARKIN: Exactly. That's exactly the feeling of tech investors. I mean, they bid these things up. Now they want to see some sign that, forget the fourth quarter, that the first and second quarters are looking OK.
DOBBS: All right. Thank you all, as always. And have a great weekend.
Well, we've looked a little perspectively. Let's look a little backwards. Investors know it is the future for companies that, more important surely than the past. But we took a look at 2001 and found a few surprises we thought we'd share with you.
Six of the 10 best performing stocks of last year came from the same sector. Retailing took top honors, believe it or not. The top 10 S&P 500 stocks last year: Nvidia, Office Depot, Best Buy, Auto Zone, JC Penney, Circuit City, Xerox, H&R Block, Lowe's and Cendant. And the biggest losers: Providian Financial -- also among the worst performers -- Palm, Applied Micro Circuits, U.S. Airways -- as you would expect -- Corning, Ciena, Comverse, EMC, JDS Uniphase, of course, and Vitesse Semiconductor. And that's our last look back, I promise you on this broadcast.
Coming up next, the first Taliban and al Qaeda prisoners arrive at the U.S. navel base in Guantanamo Bay, Cuba. We'll being going live to our correspondent there.
And a prison inmate reveals a possible assassination plot against the governor of Florida. We'll have that story for you.
And a rough time for the Miami Dolphins. Almost 20,000 seats still unsold for this weekend's all important playoff game. The local television stations may not be airing the game. We'll take a look at why the Miami Dolphins, winners, are struggling. Stay with us.
(COMMERCIAL BREAK)
DOBBS: For weeks, the Pentagon has been saying that evidence gathered in caves and bunkers in Afghanistan has prevented terrorist attacks, but the Pentagon offered very few details. We now know that one such attack was planned against U.S. Naval ships, sailors and other western targets in Singapore. A videotape found in Afghanistan features a man speaking over video while the camera zooms in on terrorist targets. The Singapore government arrested 15 terrorists last month. Two were freed, 13 will be held for at least two years under that country's internal security act. Defense Secretary Donald Rumsfeld say he believes Singapore acted with dispatch.
Investigators tonight are questioning the credibility of a prison inmate who claims to have knowledge of a possible plot to assassinate President Bush's brother, Florida's governor, Jeb Bush. The informant says four Florida men with Arab names tried to hire someone to drive a van loaded with explosives -- the plan to kill Governor Bush. One law enforcement official told CNN on a scale of one to 10, he would rate the informant's credibility a three, which he said was being generous. Governor Jeb Bush says he does not feel threatened and does not want people around him to be concerned.
The first group of al Qaeda and Taliban prisoners arrived in Guantanamo Bay, Cuba, today. They arrived under, as you would expect, extremely tight security aboard a U.S. military transport aircraft. The trip from Kandahar, Afghanistan to Guantanamo Bay covered 8,000 miles and included one stop at an unknown location. The 20 al Qaeda and Taliban prisoners are believed to be extremely dangerous. They are being housed in thick, concrete, outdoor cages. They're now expected to be photographed, fingerprinted and clothed in orange jumpsuits. They are part of more than 350 prisoners being guarded by U.S. forces at the Kandahar airport.
An Egyptian man has been charged with lying about an aviation radio found in his hotel room facing the World Trade Center. Abdallah Higazy told the FBI the radio wasn't his. However one of his prior jobs was to repair pilot air-to-ground radios. Today, a federal magistrate ordered Higazy to be held without bond. The 30-year-old Egyptian was arrested December 17, that after he returned to the Millennium Hilton Hotel to claim his possessions.
For more now on the terrorist threat against U.S. forces in Singapore, we are joined by Jamie McIntyre at the Pentagon -- Jamie.
JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, this videotape that was released by the Singapore government, Lou, is a chilling account of how terrorists stalk their prey. On the tape, which is narrated by a man identified as Hashim bin Abbaz (ph). You can see them actually -- he actually identifies a shuttle bus that U.S. military personnel regularly use to get back and forth to a Singapore subway stop.
He also points out bicycles nearby with boxes on the back and comments about how these boxes could be used to conceal explosives. At the Pentagon today, they said that this is an example of how the importance of the U.S. intelligence gathering mission in Afghanistan has helped the worldwide fight against terrorism.
(BEGIN VIDEO CLIP)
DONALD RUMSFELD, DEFENSE SECRETARY: We do have vessels in the area and we do have people in the area. And so do other countries, coalition countries and the government of Singapore. There are all kinds of targets that exist in that area. And I think that the government of Singapore has acted with dispatch. And we're very pleased they have been able to do what they've done.
(END VIDEO CLIP)
MCINTYRE: Now, the Singapore government says that eight of the 13 suspects that they are holding actually traveled to Afghanistan to receive training at al Qaeda terrorist camps, and that the plan presented to al Qaeda leaders were greeted with great interest, but then for unknown reasons, not carried out. A second plot that was also described as fully developed would have had terrorist attacking U.S. Navy warships in the waters of Singapore -- Lou.
DOBBS: Remarkable. Jamie, thank you very much. Jamie McIntyre from the Pentagon.
Well, here now to assess these latest developments in the war against terrorism as well as the plot at U.S. forces uncovered in Singapore and the arrival of those prisoners in Cuba, CNN's military analyst, General David Grange. General, good to have you with us.
RETIRED GENERAL DAVID GRANGE, CNN MILITARY ANALYST: Good evening, Lou.
DOBBS: The prisoners, the first element of those prisoners, arriving in Guantanamo Bay. Do you expect much productive in the way of generating intelligence from them?
GRANGE: Lou, I believe that as these integrations continue, they will get more information. Some of these people eventually break down. There will be some hardcore detainees that may not break, but more information will come out of them.
There in a traumatic situation, obviously. To them, death is more honorable than some dishonorable things like shaving your beard and having their heads covered in chains on a media being taken to a remote country that they are quite unfamiliar with. And this is, to many of them, worse than death. And so, this is going to have quite an effect on them and I think that it will help get more information as well as cause and effect on other terrorists around the world watching this on the media.
DOBBS: Those terrorists, as you say, around the world, the plot uncovered in Singapore against U.S. servicemen and women and also Naval ships, that plot carried out across a broad range geographically, what do you make of it?
GRANGE: Well, you know, it's one positive thing, many positive things, but one that came out of the fight so far, the war against terrorism in Afghanistan besides getting rid of this oppressive regime of the Taliban and destroying a good part of or disrupting the rest of the al Qaeda network is that we're finding some terrific intelligence.
We may not have Omar, may not have bin Laden, but we're getting information that will thwart many attacks, future attacks. Now this one in Singapore may not have been countered if some of this information was not captured in the war in Afghanistan. And I'm sure this planning on many of these types of attacks around the world and it behooves us to continue the pressure to get information as much information we can constantly to keep it from happening.
DOBBS: The war against terrorism continuing, globally. And in the midst of it, rising tensions between India and Pakistan. Secretary of State Colin Powell to go to Afghanistan next week trying to diffuse at least one side of this potential conflict. Half a million troops, General, on the Indian side of that border massed for potential war. Give us your assessment of what's going to happen. GRANGE: With the exception of a rogue state or a terrorist group with radioactive dirty bomb-type capability, it's probably the most tenuous nuclear situation in the world today. And I believe that it's a very delicate coalition building that we have used to help us with the war in Afghanistan, with Pakistan and keeping India at bay to some degree in this regard. Very difficult and it behooves us obviously not to have any kind of a nuclear exchange, but there will be fighting back and forth, at least conventionally, to some extent.
DOBBS: The head of the Indian army today said that his nation is prepared to use nuclear weapons if necessary, as he put it. Give us a sense of the sophistication and the technology, the firepower of both the Indian and the Pakistani army, if you would.
GRANGE: Well, I think at question, most of these -- the nuclear exchange being discussed, or as tactical nuclear weapons, which have more of a defined area. For instance, taking out an enemy airfield as an example. Yes, there will be some radiation from that, but it's really to destroy certain segments of militaries, most likely. But, you know, we also don't rule out the use of nuclear weapons and neither does Russia and other countries that have the capability. So, yes, they do say that. And there is some saber rattling, but whether they do it or not, I would hope not. I don't think so, but the possibility exists.
DOBBS: General David Grange, thanks for being with us.
GRANGE: Thank you.
DOBBS: Coming up next, this weekend's Miami Dolphins playoff game will be blacked out locally. That's the first time in the team's history that's occurred. Nearly 20,000 seats remain unsold tonight. We'll be heading to Florida for the live report.
And we'll have a special report for you on funding terrorism. We'll take a look at the government's aggressive efforts to track and to freeze terrorist assets all around the world. That special report next. Stay with us.
(COMMERCIAL BREAK)
DOBBS: The National Football League kicking off the playoff weekend. Yet, the Miami Dolphins' game will be blacked out on local television tomorrow for the first time in the team's history. Nearly 20,000 tickets remain unsold. Miami the only of four playoffs sites not sold out. Whether it's the steep ticket price, the opponent, the Baltimore Ravens, or having the largest capacity stadium of all the teams to fill, fans won't be able to tune in on TV. John Zarrella has the story from the Pro Player Stadium -- John.
JOHN ZARRELLA, CNN CORRESPONDENT: Lou, go figure. Here we are, outside of Pro Player Stadium, a beautiful Friday night. The weather at game time Sunday afternoon at 4:05 expected to be in the 80s. And as you can see, there's hardly anyone in line to get tickets for the game. The game is blacked out. At last call, they had about 15-16,000 tickets still available for the game. And everybody has got his or her own reason why they're not going the game. Lots of people are saying it's the economy. People don't understand. Money is tight. Christmas just passed. Money is tight, lots of bills to pay.
But the Dolphins are 11-5 this year, were 11-5 last year, are the only team to go five straight years to the playoffs and they can't sell out. A lot of people are saying this is just a poor's sports town. All day today, we've been out here a couple of times, the ticket lines at the stadium are just really short, very few people. Even with word that the game will not be shown on TV, they couldn't make the deadline. It is blacked out and could not make the deadline for selling out the stadium in order to allow the game to be shown locally. So the 5 million people in South Florida will not be able to see the game.
But as you mentioned, the other three cities -- Oakland, California, they're sold out. They're sold out in Green Bay, and they're sold out in Philadelphia. In these cold weather towns, people stood in line and sold their seats out, their stadiums out, in just a matter of hours. Everyone had sold out those stadiums for those playoff games.
But again, not here. A lot of people have waited, the Dolphins say, because they have such a large stadium. People waited until the last minute. And when it was announced that the game would not be on television, that's when they decided to go out and get their tickets.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: If you go and look at any other city in the country, everything has been sold out. I don't know what it is down here. Baseball, football, a lot of the fans are not into it. You know, it's amazing.
UNIDENTIFIED MALE: The idea was watch it at home on my 60-inch TV with my beer right around and that would be ideal.
(END VIDEO CLIP)
ZARRELLA: The Dolphins say that they do expect that by game time, it will be a sellout. That's not going to do most of the 5 million people in south Florida any good. And, Lou, a lot of people are saying if it had been the hated Jets, your team from up there in New York, it would have been a different story. The game would have been sold out right off the bat -- Lou.
DOBBS: I'll guarantee it, John. I mean, what's wrong with you people down there? You do this to the Marlins. And now you're doing it to the venerable Dolphins. What's the deal?
ZARRELLA: Lou, we've already lost a soccer team. They've announced that the professional soccer team has been disbanded. The Marlins maybe here one more year, probably are going to be contracted before all is said and done. And the Dolphins, you would expect, which is the bread and butter team, the team that's been here the longest, you'd think they would be able sell it out. People are just down here, apathetic -- Lou.
DOBBS: OK, John. John Zarrella, thank you.
Well, still ahead here tonight, donations, believe it or not, are still pouring into Islamic charities in the United States despite the government's crackdown, severe crackdown on terrorist funding. That story is next. Stay with us.
(COMMERCIAL BREAK)
Despite the government's crackdown, donations still flowing into leading Islamic charities in the United States that are thought to be funding terrorism around the world. More than $3 million now sitting in frozen accounts. Allan Dodds Frank reports.
(BEGIN VIDEOTAPE)
ALLAN DODDS FRANK, CNN CORRESPONDENT (voice-over): After FBI agents raided the biggest Islamic charity in the country, the Holy Land Foundation For Relief and Development, the president went on the offensive.
BUSH: Money raised by the Holy Land Foundation is used by Hamas to support schools and indoctrinate children to grow up into suicide bombers.
FRANK: According to Holy Land's tax returns, the foundation raised more than $13 million dollars in the year 2000 to support its programs in the Middle East. But the U.S. government has blocked the financial assets of the foundation.
JIMMY GURULE, UNDER SEC. OF TREAS. ENFORCEMENT: If the money trail leads us to a charitable institution, a charitable organization that's funding terror, that funding mechanism must be cut off.
FRANK: Holy Land Foundation Chairman Gharshan Elashi declined to speak to CNN. But at an earlier press conference, he complained about the government's action.
GHARSHAN ELASHI, HOLY LAND FOUNDATION: We are strictly charitable organization, and we have no relation with any terrorist organizations.
FRANK: Holy Land and other charities are saying they are being unfairly singled out by the government. A former FBI terrorism expert says that's not true.
MATTHEW LEVITT, THE WASHINGTON INSTITUTE FOR NEAR EAST POLICY: In the world now there are all too many people who are in desperate need of help. In Chechnya, in Bosnia, in Gaza and the West Bank and all kinds of places, all corners of the world. Some of those funds do in fact make their way to legitimate charity purposes. The problem is that not all of them do. FRANK: Thousands of Muslims live in this suburban community outside Chicago, which houses two of the largest American Islamic charities. The Global Relief Foundation and the Benevolence International Foundation. On December 14, the government blocked the assets of both charities.
Mohamad Chehade, the executive director of Global Relief is still upset about the FBI seizure of many personal items from his apartment. His wife and three daughters also remain rattled.
MRS. CHEHADE: I felt very saddened and hurt when I found out my wedding pictures were missing.
FRANK: At his offense, the government's actions have brought work to a standstill. Even as the mail brings in stacks of the new donations.
MOHAMAD CHEHADE, GLOBAL RELIEF FOUNDATION: This is a donation of $15,000.
FRANK: They pile up before being deposited into blocked bank accounts.
Global Relief says in the year 2000 it raised $5.3 million from about 20,000 donors. The money funded the the Foundation's operations in 20 countries, including many hot spots suspected by the U.S. of harboring terrorists.
(on camera): Do you think it's possible that any of your funds or programs have supported any of the terrorist groups the United States government is opposing?
CHEHADE: I would say it's impossible. We do not tolerate violence or act of terrorism, so we make sure. We insure our money is spent on the proper way.
GURULE: The government has clear and credible evidence that Global Relief is supporting terrorist activities.
FRANK: But do you have reason to believe that it's related to al Qaeda or the Taliban.
GURULE: Yes we do.
FRANK: The government admits it is investigating numerous charities and the way they interact.
Mohamad Chehade vows to contest the case against Global Relief, by stressing the commitment every Muslim makes to charity, he perhaps inadvertently puts his finger on the enormity of the challenge facing investigators.
CHEHADE: There most be organizations to fulfill the (UNINTELLIGIBLE) obligations of Muslims. Whether they are in the states or somewhere else.
FRANK: Allan Dodds Frank, CNN Financial News, Bridgeview, Illinois.
(END VIDEOTAPE)
DOBBS: We'll have more for you on this story, and the search for terrorists inside the United States Sunday evening, CNN presents "The Enemy Within." That documentary program will air this Sunday at 7:00 p.m. Eastern Time.
"WOLF BLITZER REPORTS" begins in just a few minutes. Sitting in for Wolf tonight is Jeanne Meserve. Let's go to Jeanne now to find out what's ahead -- Jeanne.
JEANNE MESERVE, CNN ANCHOR: Thanks, Lou. The fist wife of al Qaeda and Taliban detainees held by U.S. forces has arrived in Guantanamo Bay, Cuba. We will have a live report from there. And details on an alleged al Qaeda plot against American forces in Singapore.
All that, plus a live discussion with former NATO Supreme Commander General George Joulwan, former National Security Council member James Steinberg and Ken Adelman from Defensecentral.com. That's all just ahead on "THE WAR ROOM" -- Lou.
DOBBS: Jeanne, thanks. Looking forward to it. MONEYLINE will continue in just a moment. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Next week, earnings season begin in earnest. Companies expected to report quarterly results include: Intel, General Motors, JP Morgan, Chase, SMR, eBay and Tyco. We not only expect them to -- I bet you they do.
And reports on the economy out next week include the consumer price index for the month of December, housing starts, retail sales and industrial production, and I'm sure you're like I, can hardly wait. That's MONEYLINE for this Friday evening. We thank you for being with us. I'm Lou Dobbs. Good night from New York.
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