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Lou Dobbs Moneyline
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Aired January 18, 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: Tonight on LOU DOBBS MONEYLINE, the White House defense efforts by Vice President Dick Cheney to collect money owed to Enron. Senator Fred Thompson's government affairs committee will investigate the growing scandal. He'll be our guest tonight.
The United States has promised to help rebuild Afghanistan. The head of the World Bank, James Wolfensohn, will also join us.
New signs the economy is coming out of recession. We'll have a report and tell you why stock prices are still falling. And we'll have a special report on how classic cars retained their popularity, even during a recession.
This is LOU DOBBS MONEYLINE for Friday, January 18. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening everyone.
Growing trouble tonight for Enron and its accounting firm Andersen around the country. The state of Connecticut is reviewing now whether to revoke Andersen's license to do business in the state. And the state of Florida may be considering racketeering charges against the accounting firm. Allan Chernoff has the report.
(BEGIN VIDEOTAPE)
ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): The state of Florida is serving Enron and its accountant, Andersen, with subpoenas as it investigates possible violation of state racketeering laws which, in Florida, can include securities fraud.
UNIDENTIFIED MALE: We want to find out what happened when. Who knew? Who did what? The state of Florida has lost hundreds of millions of dollars in its pension fund.
CHERNOFF: About $300 million. Also served with a subpoena, money manager Alliance Capital, the firm that bought that Enron stock for the state pension fund. Florida is already suing Enron chief executive Ken Lay, his board of directors and Andersen in an effort to recover money. The state of Connecticut is launching its own investigation as it considers suspending or revoking Andersen's license to practice accounting. UNIDENTIFIED MALE: Any public auditor with a permit from the state of Connecticut -- Arthur Andersen has a permit -- has a duty to uphold the public trust.
CHERNOFF: As Andersen tries to limit damage to its reputation, the "Financial Times" reports congressional investigators have learned officials at Andersen headquarters in Chicago discussed destroying Enron related documents with auditors in Houston.
An Andersen spokesman responded: We're looking into this. If there was anything improper or unethical, we'll take the appropriate action. In Texas, political fallout. Max Yzaguirre, the state's top utility regulator and a former Enron executive, resigned after it was revealed his boss at Enron donated money to Governor Rick Perry.
UNIDENTIFIED MALE: I stand by my acts and will continue to, that he was qualified, well vetted by the process. He was an individual that we will sorely miss serving in the state of Texas.
(END VIDEOTAPE)
CHERNOFF (on camera): And at U.S. bankruptcy court here in Manhattan, the judge overseeing the Enron case is weighing whether to approve the sale of the company's energy trading operations to UBS. The hearing has been going on for much of the afternoon. Fifteen minutes ago, there was a recess, and any moment now, they should resume. Creditors have been trying to make sure they will be receiving future proceeds. Enron's investment bankers and attorneys have told the judge the longer the delay, the less the trading assets will be worth -- Lou.
DOBBS: You're exactly right. And at this point, why the delay? This was supposed to have been accomplished at the beginning of the week.
CHERNOFF: And it was delayed. The details of it were delayed and delayed. And now all the attorneys in the court just want to make their opinions known to the judge.
DOBBS: And the judge is willing to listen to these opinions, having at least initially said that the UBS deal would work?
CHERNOFF: Judge Arthur Gonzalez is a patient man.
DOBBS: Obviously, with other people's money at work here, or not at work. Thanks very much, Allan Chernoff.
Vice President Dick Cheney tried to help Enron collect money. The White House today confirmed that the vice president asked an Indian government official last year about money owed to Enron from a huge power project in India. The White House, for its part, says it was just a mention and that certainly nothing improper occurred. Kelly Wallace joins us now from the White House with the story -- Kelly.
KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, as you know, some Democratic lawmakers have been questioning the administration's ties with Enron. But the White House, for its part, said a couple of things today.
Number one, aides here said that no one at Enron asked the vice president to bring up this matter during his June meeting with India's opposition leader Sonia Ghandi. They say the vice president brought the matter up, and the matter is this energy project known as the Dabhol project in, a project in which Enron was owed $64 million. Aides say the vice president brought it up because, number one, that overseas investments by American corporations benefit American workers, but also because taxpayer dollars were at stake, that the taxpayer finance Overseas Private Investment Corporation, also known as OPIC, had more than $300 million dollars invested in this project in the form of risk insurance and financing. The vice president's top adviser saying today that Mr. Cheney did exactly what he should have done.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: He said what is the status of the Dhabol project. And he was answered and they moved on. That is his job. He was asked to do that by no one other than our inner agency process. But that is the job of this government, any government, any administration, to protect American investment abroad. And in this case, this is an American-insured investment, so the taxpayers would have to pick up the change here if it goes under.
(END VIDEO CLIP)
WALLACE: And we also know that OPIC officials were hoping that President Bush would discuss the matter with Indian Prime Minister Vajpayee during his meeting back in November, but Mr. Bush did not bring up the subject.
According to e-mails obtained by CNN between OPIC officials, one official writes, quote, "confirmed that President Bush cannot talk about Dhabol again." Again, Dhabol is the energy project in question. The e-mail goes on to say that Lawrence Lindsay, the president's top economic adviser, quote, "was advised that he could not discuss Dhabol." Now Lawrence Lindsay served as a consultant to Enron before joining the Bush administration. And White House press secretary Ari Fleischer did say today that administration lawyers recommended to Mr. Lindsay that he not discuss the matter with Indian government officials because of a conflict of interest.
Fleischer also said that Mr. Bush did not bring up the issue simply because the vice president had already raised it during an earlier meeting. Bottom line here, Lou, White House officials say no one did anything wrong. In fact, Ari Fleischer says that commerce secretaries during the Clinton administration actually discussed this project as well with Indian government officials. But Democrats in the Congress say it is another example of how Enron may have benefited from administration actions or policies, and they want more information about on any meetings between Enron officials and White House advisers -- Lou.
DOBBS: Kelly, thank you very much. Kelly Wallace from the White House.
Shareholders are suing Enron executives and board members, accusing them of dumping Enron stock, more than $1 billion worth. Brooks Jackson joins us now with a closer look -- Brooks.
BROOKS JACKSON, CNN CORRESPONDENT: Well, Lou, this is one of those story where the more you learn, the less you know for sure. To start, that $1.1 billion figure the lawyers use is misleading. It covers more than three years of stock sales and more 80 percent of that was while the stock was going up. But less than 20 percent of those shares were dumped when the price was going down.
It's also inflated. The total is just the gross proceeds from the sale without accounting for the cost for exercising the stock options. Here's an example, when Ken Lay sold 2,500 Enron shares last July 31 at $45.98 a share, the gross proceeds amounted to nearly $115,000. But after accounting for what it cost Lay to exercise his option to buy the stock from Enron at $19.06 per share, his net proceeds were just over $67,000. That's still not bad.
Lay clearly pocketed tens of millions of dollars, but was he dumping stock knowing bad news was coming? That's not clear at all. That July 31 sale was actually the last recorded sale by Lay. He stopped selling as the price declined further. And in fact, at the end of August, about the time Enron executive Sherron Watkins was warning him that Enron faced an accounting disaster, Lay actually bought 93,630 shares of Enron. Was that a vote of confidence in the company? Well, maybe so, but then again, maybe not. The shares had a market value then of just over three-and-a-half million dollars. But Lay payed just under $2 million by exercising more options, leaving him with an instant profit, on paper, of nearly a million-and-a-half.
And now it turns out that Lay got rid of a lot of Enron stock in transactions that have yet to be reported. From last February through mid-October last year, Lay was turning back big chunks of his stock to Enron. According to his lawyer, there were perhaps a dozen or such transactions. Lay had borrowed money from Enron, secured by the Enron stock he owned, and he was facing margin calls as the price declined. So, rather than pay cash, he turned over stock, effectively selling it to Enron.
And again, some of those transactions came after that late August warning Lay received from Watkins. But, how much stock? How much money? What dates exactly? Public reports on that don't have be filed until next month. So the full picture is still emerging -- Lou.
DOBBS: Well, Brooks, thanks for illuminating that part of the picture. And, as you suggest, one of the difficulties here is that everybody wants answers. They'd like it to be simple, but it's clearly not simple. Brooks, thank you very much -- Brooks Jackson.
The Enron scandal has raised sensitivity to record-keeping and related issues on Capitol Hill, to say the least. That new reality today sent shares of ImClone plunging 30 percent. A government committee said that it would investigate allegations that ImClone may have misled investors about a cancer drug. Steve Young joins us now with more on this story -- Steve?
STEVE YOUNG, CNN CORRESPONDENT: Lou, one pharmaceutical analyst told me Congress fired a shot across ImClone's bow because of heightened awareness because of the Enron scandal. The same committee is investigating the fallen energy giant.
Many analysts and medical researchers believe the biotech company's cancer drug, Erbitux, has huge money-making potential. It focuses sharply on cancer cells and magnifies the effectiveness of standard chemotherapy. But the Food and Drug Administration late last month said it wouldn't grant approval for the first use until ImClone produced much better clinical records. CEO and President Sam Waksal later told an investor's conference, quote, "what happened was that we put together a faulty package and we screwed up".
That's puzzling because Bristol-Myers Squibb has invested $1 billion in ImClone, has agreed to invest $1 billion more, and the drug giant knows a thing or two about getting FDA approvals. The controversy's been fueled by the disclosure that the CEO's brother, Harlan, who is the chief operating officer, sold 700,000 ImClone shares before the bad news came out. The company says that was to pay a tax obligation.
ImClone investors have paid heavily as a result of this barrage of negative fallout. Since the first negative word from the FDA, the stock has fallen by nearly two-thirds. The biotech late today said: The company remains fully confident in Erbitux and looks forward to continuing its dialogue with the FDA."
It's also going to have to dialogue with the House Energy and Commerce Committee, which wants a pile of records by the end of the month, and wants to question the CEO and other employees too -- Lou.
DOBBS: And in the case of ImClone, there are some startling disconnects, if you will. The FDA, in point of fact, had told ImClone that its trials were not satisfactory, and yet the company proceeded.
YOUNG: The company tried to minimize all that apparently in the view of some investors, large ones, spinning.
DOBBS: Spinning. What you call spinning some might call outright deceiving.
YOUNG: Indeed.
DOBBS: OK. Steve, thank you very much -- Steve Young.
Next week, the Senate holds new hearings into the collapse of Enron. The goal of the Senate Committee on Governmental Affairs is to try to find out how it all happened. Senator Fred Thompson is the ranking Republican on the committee and is here with us tonight. Senator, good to have you here.
SEN. FRED THOMPSON (R), TENNESSEE: Thank you very much.
DOBBS: What in your judgment is the most important thing for you and the committee to determine here?
THOMPSON: Well, a couple of different levels, I guess. First is the age old, what did they know, when did they know it. But ultimately, more importantly, what about the system. How could this have happened? What do we need to do to try to make it less likely that it will happen again?
DOBBS: You have been in public service for a number of years. We have, over the course of that time, seen a number of problem companies and collapses. This one is unique in the relationship to its accounting firm, Andersen, and the destruction of files.
It's also, perhaps not altogether unique, but noteworthy that a lot of documents are flowing out of, at least one can infer rather clearly, that a lot of documents are flowing from the investigators on Capitol Hill. What's your feeling about that? Is it appropriate? Is it simply the way of doing business?
THOMPSON: Are you talking about the leaks that are coming out and the statements?
DOBBS: Yes.
THOMPSON: It would be a lot better, obviously, if that didn't happen. I mean, I've been around so long. I was concerned about that on the Watergate committee back a couple of hundred years ago, and things have not changed any at all.
It would be better if someday we had a set of hearings and then reached conclusions instead of the other way around and quit trying to fan the flames. But there's a feeding frenzy going on right now, in a large part, justified. I mean, this is a heck of a scandal and, you know, some heads ought to roll. But there's time to do that. It's not like the train is leaving the station. But there undoubtedly will be some accusations that are being made now against individuals and perhaps companies that will not pan out to be true in the end.
DOBBS: In talking with Senator Carl Levin earlier this week, the senator said, rather clearly, this should not be a political issue. It should not be a partisan issue. Do you think that that, in fact, will turn out to be the case?
THOMPSON: Well, everything that happens on Capitol Hill that has to do with politics turns out to be, in some extent, to be a partisan issue and people will be waiting to take advantage for whatever openings are there. Right now, it's not a partisan issue as such because apparently there was no political wrongdoing.
But if there is any -- they will keep trying and, you know, guilt by association type things. And if there's any opening there, you will see how quickly that will turn. But so far I must say that everyone is on the same page. And we all feel like we need to get to the bottom of what happened here. You know, there's some malfeasance and misfeasance that has come about in an area of our lives that is extremely important to more and more Americans. DOBBS: Critical. Absolutely critical. It is your judgment, as you go into these herrings, that this is going to be a seminal point, a change in the regulation and the oversight of the accounting profession. a change in the way in which companies in this country report and are allowed to report their earnings, their revenue?
THOMPSON: Yes. I think we're seeing the soft underbelly of the system, and it's causing a lot of people a lot of consternation. As you know, we have the most transparent system in the world, but we rely on it heavily. And anything that goes against that is very troubling and should be troubling. But there are a lot of people who have been surprised at the reality, and that is nobody watching the store, oftentimes. And we see a situation now where we have a major company that's engaged in activity that's very difficult to understand.
You have accounting firms, auditing firms that have tremendous conflicts of interest. Andersen made, you know, $50 million on audit related activities. You have tremendous pressures to meet numbers and meet expectations. You put all of that together, SEC -- there's 17- what, 17,000 public companies. The SEC can't audit all of those companies. They don't audit companies anyway. It's been a self- regulating kind of thing in the accounting profession. Now we find that the rules themselves, what's accepted practices, are very vague and we're going to have to do a lot of things differently I think. And I think we will.
DOBBS: Senator, we appreciate you being here.
THOMPSON: Thank you.
DOBBS: Senator Fred Thompson.
Well coming up here next, despite massive bad-loan losses to Enron and to Argentina, the nation's largest money-center banks are holding up fairly well. The markets are not holding up. We'll have the full report for you on Wall Street next.
We'll also tell you how the attack at a bar mitzvah (sic) sparked a new round of violence in the Middle East. And dramatic video from the Congo tonight. A river of fire from a volcanic eruption sending hundreds of thousands of people running in terror.
(COMMERCIAL BREAK)
DOBBS: Enron's meltdown has, of course, decimated its shareholders and employees. But it has also dented at least the fortunes of some of the nation's banks. This week Citigroup, J.P. Morgan Chase wrote down half-a-billion dollars because of Enron, more losses still to come.
But by far, the biggest liability for banks, Argentina. Fleet Boston this week said it will delay reporting its quarterly results until it can figure out the effect of Argentina's meltdown. Fleet is only one of many banks in the region owed about $6 billion and $475 million in outright debt. Kitty Pilgrim takes a look at how these banks are doing.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): It's not a good time for banks, some with exposure to Enron, others trying to deal with bad debt from Argentina. On top of that, a weak U.S. economy and worries over bad credit. Nevertheless, financials are holding up fairly well. Bank stocks have kept pace with the rest of the market during the rebound since late September. Bank analysts say the downside risk to bank stocks is not as bad as might be expected.
DIANA YATES, A.G. EDWARDS: For the most part, these companies have addressed Enron exposure pretty aggressively. Citigroup actually wrote down their unsecured portion about 50 percent today, and some of the secured portion they still expect to collect on.
PILGRIM: Banks have weathered the economic slowdown well. Low interest rates have enticed consumers to take out mortgages, and buy more on credit. Yet with the downturn in the economy, the exposure of banks to bad credit is much less than in the past.
A look at a chart that shows the last recession and the current downturn finds the high levels of nonperforming assets during the 1991 recession were not duplicated in the current downturn.
DIANE GLOSSMAN, UBS WARBURG: This is just the time to be worried about credit quality, when we were at the trough of a recession. So people are worried about the right thing. Relative to history, though, the banks have done a tremendous job, and their portfolios are in considerably better shape than we've seen them in past recessions.
(END VIDEOTAPE)
PILGRIM: Now, that doesn't mean that banks or bank stocks are poised to go higher. Both JP Morgan and Citigroup emphasized the difficult year they had been through and the distant prospects for an economic rebound. And that, after all, is the climate in which banks not only survive, but thrive -- Lou.
DOBBS: Despite Enron, despite Argentina.
PILGRIM: It's been a tough week for the banks.
DOBBS: It sounds like a great business, though. You just keep on going. Kitty, thank you.
Stocks extending the week's losses on Wall Street. Heavy selling in IBM and Microsoft weighing on the markets today after disappointing earnings news. For the week, the Dow down more than two percent. The Nasdaq down almost five percent. The S&P 500 down more than 1.5 percent on the week.
Our correspondents following the markets and the economy here now. Christine Romans, Greg Clarkin, Kathleen Hays, joining Kitty Pilgrim and myself. First, let's turn to you. This has been a tough week here.
CHRISTINE ROMANS, CNN FINANCIAL NEWS CORRESPONDENT: It really has, Lou. If there's any solace, I guess, any consolation is that the volume was not great any of these days. The breadth was narrow. There was never a runaway day of decliners or a runaway day of advancers. So it's just showing the markets...
DOBBS: Stable but down. Is that right?
ROMANS: Stable but down. No, you are absolutely right. It means that there is a lot of volume in the top 10 traded stocks there. And then, outside of that, you are seeing as many stocks moving higher as moving lower.
GREG CLARKIN, CNN FINANCIAL NEWS CORRESPONDENT: The week of the reality check for technology. First batch of earning reports come out, not nearly as rosy in terms of outlook as a lot of folks anticipated, and a lot of folks had to reevaluate how long do I want to be in these tech stocks.
DOBBS: People were -- investors were really expecting things to the improve markedly?
CLARKIN: Unrealistically so. Definitely, you know, they were expecting the comments to be a little bit more upbeat. You did get some good words out of Apple and out of Dell Computer today. Intel says things are still, you know, "cloudy," in their words, so that wasn't you know...
DOBBS: Nobody used the word "visibility"?
CLARKIN: Yes, visibility was (UNINTELLIGIBLE) lack of.
DOBBS: Well, Kathleen, why aren't we seeing better performance in these markets? You have recovery to report I'm sure tonight.
KATHLEEN HAYS, CNN FINANCIAL NEWS CORRESPONDENT: I think it's like when you have been sick for a while and your temperature comes down, the doctor says, OK, you're not sick now, but you're not feeling better. Right? And it's going to take a while to feel an oomph in the economy. I have to tell you though, Lou, today we got a mid-month look at consumer sentiment from the University of Michigan. And their graph, their increase was really quite stunning. We had a...
DOBBS: A two-year high?
HAYS: Well, just about, just about a two-year high. A 12 point move-up from the lows we hit after the September 11th attacks. And it's interesting, because people's view of current conditions weakened a little, but they are much more confident about the future, and that's why you see what looks like maybe as an up trend.
Another thing, the pace of job losses has slowed. People are getting laid off, they are still collecting unemployment benefits, but it looks like maybe the peak for that, the peak of badness was October.
DOBBS: The peak of badness?
(LAUGHTER)
HAYS: The peak of job losses. And the thing that's interesting is they tend to peak about three months before the recession ends. So this could be the month when it begins. But again, just because you're not sick anymore doesn't mean you leap up and say I'm going to run around the block and do jumping Jack.
DOBBS: All of those folks who heard you say that we hit the peak of badness and watched Sun drop, what this week, 8 percent?
CLARKIN: About 8 percent.
DOBBS: Who watched Cisco fall back as well. Watched IBM today drop about 3 percent. They're not going to be feeling a lot better.
HAYS: The stock market got way ahead of everybody. And I think the stock market said, we're doing better. Stocks are rising, therefore the economy must be doing better. And it is, but it just isn't going at the pace that the stock market would like to see. When you talk about tech stocks doing so well, industrial production we saw output shoot up and high tech production picking up a little bit at the end of year.
DOBBS: Kitty, you're reporting on the banks. They've had a difficult, as you say, period. The financial sector and the markets, the prospects there in this environment?
PILGRIM: Well, you know the old song that the financials have to lead the market out, but it doesn't look like this time that they will be able to. That the real emphasis for the banks is going to be on growth and profits, and the projections on the economy are not out until further in the year. So the financials may not be the catalyst this time.
DOBBS: Jeffrey Immelt on this program, doing a brilliant job with GE, reporting great earnings, record earnings continuing, and the stock today down.
ROMANS: I would argue that there are only a few stocks moving this market. IBM was half of the Dow's move today. IBM was responsible for half the Dow's decline, so I think that there is a lot of rumors and earnings-related stuff going in a lot of different companies, and outside of that there's still a lot of indecision.
DOBBS: And obviously still in this environment investors will be very cautious. Do you agree?
ROMANS: I completely agree. Of course.
CLARKIN: Absolutely.
DOBBS: We have a unanimous view, and here we go. As always, thank you very much, everybody.
Coming up here next, hundreds of thousands of residents fleeing from an erupting volcano in the eastern Congo. We'll have that story for you.
Israel launches retaliatory strikes destroying the Palestinian security headquarters. We'll have that report.
Plus, the president of Pakistan says Osama bin Laden may be dead. An exclusive interview with him, Tom Mintier, our correspondent, with that next here on MONEYLINE.
(COMMERCIAL BREAK)
DOBBS: In the Middle East tonight, more violence; Israel retaliating for a deadly attack yesterday. Israeli F-16s fired missiles into the compound of the Palestinian governor, killed one policeman and injured more than 50 people in that attack. The missiles destroyed the Palestinian security force headquarters in the compound.
Yesterday, a lone gunman entered a ballroom at a bar mitzvah in Hadera, Israel, killing six people. Twenty others were injured. The gunman was shot dead. A militant Palestinian group has claimed responsibility.
Richard Reid, the man accused of trying to ignite explosives hidden in his sneakers pleaded not guilty in federal court today. Reid answered not guilty to eight charges, and his attorney asked the court to enter a plea for him on the ninth. After she raised questions about it, the judge set a court date of March 4 for a status conference. Reid was subdued by passengers when he tried to allegedly light explosives on board of an American Airlines flight from Paris to Miami.
New, though airline security measures became law today. The new procedures include checking all baggage for explosives and dangerous weapons, either through machine scans, hand checks, bomb sniffing dogs, or matching each piece of checked luggage with a passenger. The government says there were few problems or delays as travelers packed light in preparation for these new, tougher security standards.
Pakistan's president tells CNN he believes Osama bin Laden is most likely dead. Tom Mintier earlier today in an exclusive interview talked with Pakistani President Pervez Musharraf. Tom joins us now from Islamabad with more on the story -- Tom.
TOM MINTIER, CNN CORRESPONDENT: Lou, the interview lasted more than a half-hour, and it covered just about everything, from his speech last Saturday night to his relations with the United States and U.S. President George W. Bush. But probably the most amazing part of the interview was when I asked him about Osama bin Laden. We were talking about people making it across into Pakistan from Afghanistan. There were seven arrests. There have been several hundred arrests over the last few weeks, but seven arrests just yesterday. And I asked him if it was possible that Osama bin Laden and Mullah Omar might be able to make their way across the border as these others did, men dressed as women, and he gave me a very surprising answer.
(BEGIN VIDEO CLIP)
GENERAL PERVEZ MUSHARRAF, PRESIDENT OF PAKISTAN: I give the highest priority now, to be frank, that he is dead, for the reason that he's a patient leader, could be patient, and I know that he had - we know that he donated two dialysis machines into Afghanistan. One was specifically for his own personal use, and the other for general use.
Now I really don't know whether he's getting or he's been getting all that treatment in Afghanistan now. And the photographs that lately have been shown on the television show him extremely weak, and I personally feel I would give the first priority that he's dead.
(END VIDEO CLIP)
MINTIER: President Musharraf is probably one of the few people on earth who would have a real good idea what Osama bin Laden might be facing right now. He has the intelligence service here in Pakistan, but administration sources say they have no evidence themselves that Osama bin Laden is dead, so they're left wondering -- maybe might find out on the phone today if the White House indeed calls the Pakistani President, why he believes indeed that Osama bin Laden is dead -- Lou.
DOBBS: And, Tom, I believe as you know General Tommy Franks today said that he had no evidence that would support President Musharraf's view on this - on the likely death of Osama bin Laden. But he's only half of the equation. Mohammed Omar, any suggestion by Musharraf as to where he might be?
MINTIER: None whatsoever. He said that, you know, there have been a lot of sightings of Mullah Omar, but as far as Osama bin Laden, he really was a bit adamant, saying that his best estimate was that Osama bin Laden was dead, and pointing out that a lot of the evidence, visual evidence of what Osama bin Laden looked like the last time.
And he has his own intelligence sources as well that knew about this dialysis machines that had been going in, the two dialysis machines that had gone into Afghanistan. This has been whispered about, rumored about, talked about off the record by a lot of people, but this is the first time that someone has said that they indeed believe that Osama bin Laden is dead.
DOBBS: Tom, thank you very much, and as always terrific reporting. Tom Mintier from Islamabad. Well, how to pay for the rebuilding of Afghanistan will be the focus of world leaders when they meet in Tokyo next week. Also scheduled to attend, the President of the World Bank, officials of the IMF, and other development agencies.
Joining us tonight before he leaves for that meeting in Tokyo, the man who runs the World Bank, James Wolfensohn. Good to have you here.
JAMES WOLFENSOHN, PRESIDENT, THE WORLD BANK: Nice to see you. DOBBS: I have talked with the Afghanistan Finance Minister. He puts the number that would be required to rebuild Afghanistan at something near $20 billion. What is your best guess as to what can be raised and reinvested in Afghanistan to rebuild it?
WOLFENSOHN: Well I think, Lou, the question of whether it's $15 or $20 billion, none of us will really know for years. The more important question is what happens in the next two and a half years, and indeed, in the next two and a half months so that we can get some money to the Afghan government to try and move things forward.
For that, I think we need very quickly several billion dollars, and certainly in the next two and a half years, $5 or $6 billion, and it's my hope that we'll be able to raise that.
DOBBS: That money, a lot of money within a country that's gross domestic product for some years has been primarily driven from the drug trade, and moving now to a nation that has been all but destroyed by war over the last two decades.
Where would you spend that first, say $3 billion?
WOLFENSOHN: Well the first thing we've got to do is get rid of the mines. It's a country that has more mines in it than any other country in the world, and before you can clean that up, you'll have no possibility of getting activity going again.
Secondly, you've got to start by getting some sense of a government and legal and judicial reform, certainly you have a framework in which people can operate, which is not there at the moment. It's been run by warlords and by people in various villages.
DOBBS: Is it your sense that that can be a secular court system?
WOLFENSOHN: I believe that that is for the Afghans to decide, but I think they want to have a secular court system. They want to have something which would be understandable to foreign investors and domestic investors to protect rights.
DOBBS: You, world leaders, meeting in Tokyo to bring this money, donations. What will be the role of the World Bank in dispersing this money?
WOLFENSOHN: Well, we'll be a trustee to try and disperse it, to try and insure that it goes to the place that it should, but more than that, we'll be working to try and come up with the Afghans with a plan that includes education, health, reconstructing their highways, doing all the things that are necessary in a post-conflict situation, the sort of thing we've done in Kosovo and Timor and in Congo.
DOBBS: This investment by the community of nations in Afghanistan strikes me as an opportunity to do something quite differently from the west toward an Islamic nation. Is that in point of fact the strategy?
WOLFENSOHN: Well, I think that's exactly right and I think what we're all learning is that unless you deal with the issue of poverty, unless you deal with the issue of hatred and the issue of hope, all the bombing in the world is not going to bring about peace. And it's my belief that for our country and for the major countries of the world, it's a necessary consequence of the bombing that we remove the conditions in which terror can start.
DOBBS: James Wolfensohn, thank you very much.
WOLFENSOHN: Thank you, Lou.
DOBBS: Good luck in Tokyo.
WOLFENSOHN: Thank you.
DOBBS: Well, to turn to a remarkable story, wide rivers of lava continuing to flow through the streets of Goma in the Congo tonight. A volcano erupted there just yesterday, sending lava spewing 200 feet into the air and forcing nearly a half million people to flee for their lives.
There are no reports of deaths tonight, but many of the town's homes have been destroyed by both lava and the fire. Explosions heard at Goma's main fuel depot as that lava runs down the mountain.
Coming up next, coping with September 11th. We'll take a look at how the tragedy has led to trauma, to depression for some of those who worked on Wall Street. And it's hard to believe that the demand for extravagant cars is still strong in the midst of recession, but we're going to surprise you. We'll take a look at the growing sales for classic automobiles.
And the box office will see a spike in sales this weekend as the holiday Monday and the selection of new films, particularly one film. We'll have a preview next.
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DOBBS: Next week, one of the world's largest hospitals and the Securities Industry Association will hold a seminar on post-traumatic stress syndrome. Mental health officials say September's terrorist attacks in New York's financial district have left many people there at risk of suffering from the disorder. Susan Lisovicz has the story.
(BEGIN VIDEOTAPE)
SUSAN LISOVICZ, CNN CORRESPONDENT (voice-over): The horror of September 11th is something that haunts Greg Manto daily.
GREG MANTO, FINANCIAL SERVICES CONSULTANT: I see that man looking straight ahead and jumping. I see the couple grabbing each other's hands, jumping and then I see the building falling down like dominoes.
LISOVICZ: Manto, a broker, was one of thousands of people who worked so close to the World Trade Center that his building shook when the first plane crashed. He was close enough to see terrible things, and then he joined those thousands of people in returning to work within just a few days.
Alden Cass completed a study on stress in the brokerage industry two years ago, when the stock market and the economy were booming. He found the rate of clinically diagnosable depression more than three times higher than that of the general population. He's talked to a lot of brokers in the aftermath of 9/11, and he is troubled.
ALDEN CASS, ST. LUKE'S-ROOSEVELT HOSPITAL CENTER: They're really having a lot of trouble coping and the unwritten rule within these firms is, don't talk about it.
LISOVICZ: Maria Porcelli was forced to relocate to New Jersey after her firm's headquarters in Tower 2 of the World Trade Center was destroyed. All of her colleagues survived, but one-fifth of them have since left the company.
MARIA PORCELLI, WEATHERLY SECURITIES: From all the stress that everybody was under, as far as emotional and all the work that had to be done to get our business back up and running, it was very hard for a lot of the employees to get back into the workplace and do the good job that they've always done.
LISOVICZ: Mental health professionals say employees who work under extraordinary stress make more mistakes and are less productive.
DR. RICHARD ROSENTHAL, M.D., ST LUKE'S-ROOSEVELT HOSPITAL CENTER: The people who are out there working in the financial industry and working in the securities industry have an impact in the market itself, that our economic recovery is not only a passive thing, you know, when it gets better, we'll feel better. But it's only going to get better if we feel better.
MANTO: There is a section for a CEP (ph) IRA, and you did check it.
LISOVICZ: Greg Manto has never sought professional help for his flashbacks, but he did switch jobs this month. He no longer works on Wall Street as a broker, where his earnings were based on commissions. He does financial consulting instead.
MANTO: I've been the happiest I've been in the last two years, and there's probably a number of reasons. But I finally wake up with a smile. I walk through the streets smiling.
(END VIDEOTAPE)
LISOVICZ (on camera): The president of the Securities Industry Association, Marc Lackritz told me that many Wall Street firms are trying to take care of their employees, and at the same time avoiding dwelling in the past. One of the characteristics of post-traumatic stress, however, is that problems associated with the disorder often take months to emerge. Lou.
DOBBS: Any sense from the experts as to how many people of all those who experienced September 11th on the streets of New York City, how many of them are affected by post-traumatic syndrome? LISOVICZ: Oh, that's -- no data exists that we know of right now, and often because that it is post-traumatic and that the symptoms aggravate often with time.
DOBBS: OK. Susan thanks very much. Just ahead here, driving the way in an old set of wheels. We'll take you to the nation's largest classic car auction, where a lot of money is being invested in these venerable good old names, and the story of modern war brought to the big screen. The stories are next.
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DOBBS: With a sharp decline in stock prices over the past year and a half, many investors looking for alternate place to put their money. This weekend, many buyers are investing in old cars at that nation's largest classic car auction. Casey Wian has the story from Scottsdale, Arizona.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice over): There's little evidence of recession here, 5,000 car buffs at the opening party for the Barrett-Jackson Classic Car Auction. Larry Dove plans to bid on a 1966 Ferrari.
LARRY DOVE, CAR COLLECTOR: Beautiful car. It just needs a paint job.
WIAN: A $50,000 paint job, Dove says. Still, it's a rare model with a 4-cam engine that he thinks will fetch at least $150,000.
DOVE: It's probably just as good there as it is investing in the stock market right now.
WIAN: More than 800 classic cars are for sale during the four- day event. Many are unique, such as the oldest surviving V-8 Corvette, a 1920 Page (ph), the first car to break 100 miles an hour at Daytona, and dozens of custom built hotrods. Others are valued for who drove them. Dale Earnhardt steered this car to the 1986 Winston Cup Championship. This '52 Crosley belonged to architect Frank Lloyd Wright, and this otherwise ordinary Lexus was owned by Wayne Newton.
(END VIDEOTAPE)
WIAN (on camera): Bidders are required to have bank lines of credit to back up their offers. This year, 47 bidders have arranged credit lines of at least $1 million.
(voice-over): Prices are quoted in a half dozen currencies. Organizers call this the Super Bowl of car collecting.
CRAIG JACKSON, PRESIDENT, BARRETT-JACKSON AUCTION: Another $175,000 muscle car.
WIAN: Craig Jackson's family has been auctioning classic cars for three decades. He's seen the bottom fall out of the market during the last two recessions. He says this one's different.
JACKSON: I'm seeing where there's a slowdown in the very high end of the market, but the broad-based collector type cars. There's still a very high demand for them, and I've seen the prices actually escalating lately.
WIAN: Charlie Todd's glad for that. He's selling his 1957 Buick Roadmaster to pay for knee replacement surgery.
CHARLIE TODD: My wife, she calls it my girl-getting car because I met her when I was driving this.
WIAN: It sold for $40,500. Some don't fare as well. Last year, 83 percent of the cars here sold. Organizers hope to top that this year.
WOLFGANG KUPKA, CAR COLLECTOR: The general population thinks it's the car, but really it's a piece of art, and it will never depreciate in value.
WIAN: It seems a collector is born every minute.
Casey Wian, CNN Financial News, Scottsdale, Arizona.
(END VIDEOTAPE)
DOBBS: Well, the film business is looking forward to another strong weekend at the box office because it's a holiday weekend. The only major new picture, however, in wide release is "Black Hawk Down." That film has already been running in select theaters around the country, based on the true story of a U.S. Special Forces mission in Somalia in 1993.
Even though critics praise the film for its thought-provoking, realistic rude creation of events, some say the two and a half hour long film will not be received well by audiences. We'll find out this weekend.
The advertising slowdown proved to be too much for "Talk" magazine. Miramax Hearst tonight pulled the plug on the Tina Brown publication. The magazine launched in the summer of 1999.
Joining us now on the demise of "Talk" and a look at the business of entertainment, "Variety's" editor-in-chief, Peter Bart. Peter, good to have you here. You've got to be, if not surprised, at least kind of curious about the fact that "Talk" chose today to shut its doors, I would think.
PETER BART, EDITOR-IN-CHIEF, "VARIETY": Well, of course, they threw a big party last night.
DOBBS: Right.
BART: For the film crowd around the time of the Golden Globes, which is coming out this weekend. So it was a rather glum party, but not a word, not a hint was dropped by Tina Brown, the editor of "Talk", about the demise of her magazine, which will represent a loss, Lou, of slightly over $50 million.
DOBBS: $50 million over the course of two years and, against that backdrop, Ron Galotti, the president of "Talk" magazine, they had a tremendous advertising revenue. They were selling ads in a market where just about everyone else in the industry was flagging badly.
BART: But you know, one telltale sign is that, of every 10 issues of "Talk" magazine delivered to the newsstand, only two were sold. The other eight effectively were returned, and that's always a sign that it just hasn't hid a chord with the audience. There was lots of talk but no music. That was the bottom line.
DOBBS: And Miramax, a big backer, Disney.
BART: Miramax and Hearst, yeah and Hearst was -- they owned half of it. As a matter of fact, Hearst they don't like to lose money as you know, Lou. They announced their withdrawal, so it was up to Harvey Weinstein at Miramax to find a new buyer for the other half of the investment. None was available.
DOBBS: And in this -- what do you expect is next then for Tina Brown?
BART: She had, of course, such a brilliant career at "Vanity Fair", and then at the "New Yorker", so this is really in the United States. This is the first time she's really gone down to defeat. She's a redoubtable person, as you know, and I'm sure she'll reinvent herself, if not in magazines, in another career. Perhaps since she's out here, she'll even become a film producer, as her father was.
DOBBS: Absolutely, a brilliant, talented, classy lady. Let's turn to the box office this weekend. Some discussion that "Black Hawk Down" won't do well. Why not?
BART: Well, what's interesting about this picture is the following question: Is the American audience really open to a tough, unrelenting war picture? Or, do they want comfort food as, for example, the network heads feel?
This is an "R" picture. It's like the first 12 minutes of "Saving Private Ryan." It's tough stuff, so it's not only an interesting box office puzzle. We're talking about 3,100 screens. That's a wide release. But also it tells something about the sociology of the moment.
DOBBS: And it celebrates, does it not, the heroism of these soldiers?
BART: It does, but you know the subtext really is what a ridiculous mission Somalia represented.
DOBBS: Peter Bart, as always good to have you here. Can't wait to see how "Black Hawk Down" does over the weekend. I'm pulling for it.
BART: Me to. DOBBS: Peter, thanks. "WOLF BLITZER REPORTS" begins in a few minutes. Let's go to Wolf now in Washington -- Wolf.
WOLF BLITZER, WOLF BLITZER REPORTS: Thank you very much, Lou. Coming up a special report, how safe are your skies? We'll take a look at the latest aviation security measures that went into effect today. We'll go live to airports around the country.
Also, will any of these new measures make a real difference? We'll get two very different perspectives. It's all next on our special report. Lou, have a great weekend.
DOBBS: You too, Wolf, looking forward to the program. Still ahead here, your comments on the fall of Enron and Andersen's role in the accounting scandal. Stay with us.
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ANNOUNCER: Next week on Lou Dobbs MONEYLINE, Lou goes to the heart of the matter. MONEYLINE is live from Houston, Texas to bring you a closer look at Enron, its impact on Houston, and across the nation, next week on LOU DOBBS MONEYLINE.
(COMMERCIAL BREAK)
DOBBS: Well, next week the markets are closed Monday in observance of Martin Luther King Day. We'll have a holiday edition of MONEYLINE on the state of the economy. And be sure to tune into MONEYLINE Tuesday as well, when we have a special edition of MONEYLINE, live from Houston, Texas, outside Enron. And later in the week, Federal Reserve Chairman Alan Greenspan testifies before the Senate Budget Committee.
And in tonight's corporate news, Germany's Bayer, now reporting around 100 deaths linked to its cholesterol drug, Baycol. That's more than twice the earlier estimate. Bayer withdrew Baycol in August, costing Bayer more than $700 million in operating earnings last year. Bayer is set to debut on the New York Stock Exchange next week.
Dell Computer had better than expected results in the last quarter, but the rest of the PC industry did not. Market research firm, IDC, says worldwide computer shipments fell more than five percent last year.
And more job cuts at 3M, 3M scotch tape is slashing another 2,500 jobs on top of the 6,000 jobs announced last year.
Now let's take a look at your thoughts, most of then centering on Enron and Andersen. Roy Rutka writes in to say: "Whether it is Enronandersen or Andersenenron, it is hard to tell where one company began and the other ended."
And from Eileen Scwartz in Portland, Oregon: "Enron firing Andersen! Isn't that a bit like Bonnie firing Clyde?"
Next week, the hearings on Capitol Hill investigating the collapse of Enron begin in earnest, and we always enjoy hearing from you. Please e-mail us at: moneyline@cnn.com. Please include your name and your address.
That is MONEYLINE for this Friday evening. Thanks for being with us. Have a very pleasant weekend. Good night from New York. "WOLF BLITZER REPORTS" begins now.
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