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LOU DOBBS MONEYLINE
Dow Advances 140.88 to 10,574.29; Nasdaq Advances 24.11 to 1,890.40
Aired March 6, 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.
LOU DOBBS, CNN ANCHOR: A fierce battle is under way in eastern Afghanistan. Now U.S. reinforcements and additional firepower are being sent in.
the Middle East, the week-long death toll has now risen above 100. Ariel Sharon is promising more attacks. Tonight, I'll be talking with Hasan Rahman, Palestinian representative to the United States.
Signs of an improving economy once again boost investor confidence and lead to a big rally on Wall Street.
And mission completed. A pair of spacewalking astronauts perform risky surgery on the Hubble Telescope, saving its life.
ANNOUNCER: This is LOU DOBBS MONEYLINE for Wednesday, March 6. Here now, Lou Dobbs.
DOBBS: Good evening.
It has been the deadliest battle for America in the war against terrorism. Now, additional force and firepower being added to the fight. Former Defense Secretary William Cohen will assess the effectiveness of Operation Anaconda with us here tonight.
And the week-long death toll in the Middle East has topped 100. Ariel Sharon has promised to keep attacking Palestinian militants. We will be joined by Hasan Rahman, the Palestinian ambassador to the United States to discuss those policies.
But we begin tonight with the war against terror. In Afghanistan, the conflict's fiercest battle to date is raging. Eight U.S. soldiers have been killed since Operation Anaconda began six days ago. Now, hundreds of American troops and additional attack helicopters are heading into the area as reinforcements, along with more fighters loyal to both the al Qaeda and the Taliban.
The commander of U.S. forces in Afghanistan says even more allied military power may be required in the future, and that this probably won't be the Taliban's last stand. For the latest, we turn now to military affairs correspondent Jamie McIntyre at the Pentagon -- Jamie. JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, we've been hearing for days now from the Pentagon that the Pentagon was not surprised by the fierce resistance mounted by al Qaeda fighters. But now that we're beginning to get some of the reports firsthand from the battlefield from U.S. soldiers that were there, we're finding out that there was at least a different perspective on the part of some of those soldiers.
Some of them had been told to expect that in all likelihood, faced with the overwhelming force of the U.S. military, that those al Qaeda fighters would flee, as they did in the Tora Bora area. Instead, they dug in and fight -- they dug in and fought very fiercely, and that was somewhat unexpected for some of the troops there.
Nevertheless, the U.S. has now, as you say, requested that they send in additional Apache helicopters. They're going to be moved from Fort Campbell, Kentucky to Afghanistan. And some Marine helicopters have also been moved to Kandahar as a precaution. But the U.S. is not calling this reinforcements. They're calling it repositioning.
(BEGIN VIDEO CLIP)
GEN. TOMMY FRANKS, COMMANDER, U.S. CENTRAL COMMAND: Once again, that has not been in response to surprise. It has been in accordance with our plan to reposition our forces inside the objective area as necessary over time in order to completely clear it.
(END VIDEO CLIP)
MCINTYRE: Now, again, sources tell CNN that it's unlikely that those Apache helicopters, once they arrive in Afghanistan, will be rushed into battle because it has turned out to be a very dangerous environment for assault helicopters. Five of the Apaches were disabled in the opening days of the campaign. Instead, they'll be held in reserve while A-10 attack planes and AC-130 gunships continue to pound al Qaeda positions.
The U.S., though, contends that it has still got the upper hand, that no matter how good the al Qaeda fighters are, they are outgunned and outmanned by vastly superior U.S. forces, and that victory is essentially a matter of time.
(BEGIN VIDEO CLIP)
DONALD RUMSFELD, SECRETARY OF DEFENSE: The battle very likely will take some time to play out. I believe that the outcome is reasonably assured, that they -- the people who have been in the battle will either be -- surrender or be killed in the days ahead. The forces we face represent very hardened elements of al Qaeda and Taliban, true dead-enders.
(END VIDEO CLIP)
MCINTYRE: And one more thing, the Pentagon says tonight that it's still not sure how a Navy SEAL died on Sunday. A videotape from a spy plane suggests he may have been executed by al Qaeda forces after he fell from a helicopter. But it's also possible, Pentagon officials say, that he actually died of wounds he received before the fall. They're going to continue to investigate that and try to find out the exact circumstances -- Lou.
DOBBS: Jamie, any indication by the Pentagon as to just how large a force of reinforcements are on the way?
MCINTYRE: Well, if you're talking about U.S. reinforcements, they've added another 200 or 300 U.S. troops into the region. Again, they say it was part of their plan to reposition troops in order to continue the offensive against al Qaeda. There's also reports, of course, that the al Qaeda troops and Taliban are getting some reinforcements as well. That's a little harder to confirm. But the U.S. says that they still have, as I say, the upper hand.
DOBBS: OK. Jamie McIntyre, as always, thank you very much. Jamie McIntyre reporting from the Pentagon.
Martin Savidge will be LIVE FROM AFGHANISTAN here on CNN tonight at 8:00 p.m. And of course, we'll have the very latest on the Operation Anaconda.
There is strong evidence tonight that elements of the al Qaeda that have been driven from Afghanistan are trying to regroup in Pakistan. U.S. government officials who spoke to the "New York Times" say they've tracked e-mail messages between members trying to meet and to reorganize. But other government sources tell CNN that the meetings the al Qaeda have tried to organize are not on a grand scale, and the Bush administration is now concerned the "New York Times" article may, in fact, have tipped off terrorists to U.S. intelligence gathering methods.
Five international peacekeepers were killed in Kabul today. Those soldiers were killed while trying to disarm two anti-aircraft missiles in a controlled explosion. Three Danish and two German soldiers died. Eight other peacekeepers were injured in the incident. The wounded have been flown to Ramstein Air Base in Germany for treatment.
Secretary of State Colin Powell today said Israel's policy of waging war against Palestinians is not working. Secretary Powell said that Israel should reconsider its strategy. Those comments are some of the toughest criticism yet of Israeli Prime Minister Ariel Sharon. Israeli warplanes and helicopters in action again today. They attacked Palestinian security targets. Tanks and gunboats were also used as the cycle of attack and counterattack continues. At least 10 Palestinians and two Israelis were killed in today's violence.
The United Nations Secretary-General Kofi Annan today said the fighting is completely out of control in the Middle East. He said the leaders of both sides have a responsibility to work for peace. Monday here, we talked with the Israeli consul general in the United States about the prospects for peace. Ambassador Alon Pinkus had no doubt where the blame for the failure of the peace process should lie.
I am joined now by Hasan Rahman, the Palestinian representative to the United States. Good to have you with us.
HASAN RAHMAN, PALESTINIAN REPRESENTATIVE TO THE U.S.: Thank you, sir.
DOBBS: The cycle of violence is unending. The secretary of state, Colin Powell, has said very clearly he is not impressed about the prospects for peace so long as Israel and the Palestinians pursue their current strategies. What is your best judgment as to what the solution is?
RAHMAN: Well, you know that for the last year, at least, since Mr. Sharon became prime minister, he conducted a war against the Palestinian population. Obviously, he has failed both militarily and politically because this is a political problem. It is not a security problem. And therefore, you cannot have a military solution to a political problem.
We called on Mr. Sharon, and we still call on Mr. Sharon to come to the negotiating table, and negotiate an end to Israel's military occupation that lasted for 35 years, and to reach a peace agreement with the Palestinians that will allow both of us, Palestinians and Israelis, to live next to each other in two separate states as neighbors with good relations.
But to continue with this policy of trying to defeat the Palestinian people militarily, to continue the policy of demolishing homes, killing civilians, uprooting crops, that is not going to work. On the contrary, it pushes the Palestinians to become more desperate and more violent.
DOBBS: More desperate, more violent, the cycle goes on, and the terrorism goes on. The acts of reprisal go on. And at the same time, we keep hearing all sorts of conditions. The Saudis, Crown Prince Abdullah, has put forward a plan which now Syria supports. Again, the Palestinian Authority support the Saudi plan?
RAHMAN: Yes, we did because in essence, the Saudi plan is reaffirmation for the basis of the Madrid Peace Conference in which we all attended, including Israel. And that is land for peace. Land for peace means that Israel withdraws from the occupied territories that it occupied since 1967, and the Arabs will recognize Israel and normalize relations with Israel.
That is the formula and it is the only formula that can work because if Israel thinks that they can keep the land and have peace with the Arabs, it is not going to work because Israel cannot have its cake and eat it. Either they keep the land or they have peace with the Arab countries.
We offer Israel peace in exchange for its withdrawal from the Palestinian and the Arab territories. And that is the crux, the thrust of Prince Abdullah's peace initiative. And I think that it is the only initiative that can work.
DOBBS: The question, I guess, Mr. Rahman, becomes if the Palestinian Authority had the capacity to stop the violence, as a condition precedent to any negotiation, why would you not stop it now?
RAHMAN: You know, I must tell you that it is extremely difficult to try to control the Palestinian people while they are under attack. Remember that those Israeli troops that are invading Palestinian homes and Palestinian towns and Palestinian villages, so the Palestinians are not -- the Palestinian people are not invading Israel. It is Israel that is invading the Palestinian territories.
And any people, I believe, who become subject to a foreign military attack has the right to defend themselves. In December, we had 21 days of absolute calm. Mr. Sharon insisted on continuing his policy of assassination of Palestinian community leaders, incursion into the Palestinian territories...
DOBBS: Mr. Rahman, this violence has been going on and the rhetoric has been going on for so many decades, it's mind numbing. Last night here, George Friedman -- and I've heard this from a number of others -- suggested benign neglect. Allow the Palestinians, the Arab states, and the Israelis to simply absorb the benefit of their intractability on this issue, and for the Western powers to simply offer benign neglect and to allow you to proceed with your violence, the Israelis theirs, and see if that might be helpful to getting you to serious negotiations and bargaining. What's your reaction to that proposal?
RAHMAN: You know, I believe that this is a very important region, the Middle East. I don't think that anyone can neglect what happens in the region. The United States has had two wars in less than 10 years in the Middle East, in 1991, and today in Afghanistan, which is very close to the Middle East. This is a very important region that cannot be left alone, because if it's left alone, then what happens in the Middle East will -- what happens between the Palestinians and the Israelis would lead to instability in the region, which will affect the very vital interests of the United States. So I don't believe that is the way to deal with this.
DOBBS: At some point...
RAHMAN: I believe that the response should be a total involvement, engagement of the United States at the highest level in order to bring the two sides to the negotiating table. The two sides are unable alone to do it. We need the help of the United States.
DOBBS: Mr. Rahman, we thank you very much for being with us.
RAHMAN: Thank you, sir.
DOBBS: Hasan Rahman.
Our next guest had a breakfast meeting with Egyptian President Hosni Mubarak in Washington today. I'm joined now by Former Defense Secretary William Cohen. And, good to have you with us, Bill.
WILLIAM COHEN, FORMER DEFENSE SECRETARY: Good to be here, Lou.
DOBBS: You have just heard Mr. Rahman talk about the importance of a U.S. role. An administration which you served tried to effectively work in that regard, every administration that preceded it, and this one, as well. What do you think of the idea of simply benign neglect, and allow the Israelis and the Palestinians, as put forward by George Friedman here, to simply indulge themselves in their own intractability?
COHEN: I think a policy of benign neglect, under these circumstances, would lead into a steeper descent into the jaws of hell. You would see more Palestinians killing Israelis, Israelis responding. They cannot afford to get into a war of attrition. They will start to escalate the war in terms of trying to kill more numbers of Palestinians.
I don't think the United States or, indeed, the Western world or the United Nations can afford to sit by and watch this kind of descent into this kind of destruction. I agree...
DOBBS: There are those, as you know, Bill, who suggest that there are so many people who have been involved in a "process", peace process for so many years in this region, that they have become absolutely identified with the process and have forgotten the absolute purpose of the process, which is peace.
There seems to be no single springboard event or one element that will bring these two sides together. If you know it, would you share it with us?
COHEN: Well, I don't have any magic solutions to the situation. I do know this, that if the United States is to sit on the sidelines and allow the violence to continue unabated, then we are likely to see a spread of the violence throughout the region. I don't think that's in our interests or in the Palestinian interests or the Israeli interests.
So I believe that the United States has to become actively involved. I support what Secretary Powell has said in terms of our role, that there must be a greater effort made on reducing the violence. But also, I think that the Israelis themselves have to restrain the level of violence that they are also inflicting in return.
This cannot -- this cycle has to be broken, and the new ideas would have to come, and I think I've indicated on this program before, Arafat cannot do this by himself. He will need the support of other Arab countries, principally Saudi Arabia and Egypt. Two initiatives have come forward. Neither one may be despositive, but they may be at least the start of some dialogue, if not negotiations. That would be a start.
DOBBS: In all candor, let me ask you for as much candor as you can possibly muster here. At some point, does this not become, not only a cycle of violence, but one of simple absurdity and a role for the United Nations, absolutely critical and impose on two sides a decision and enforce it?
COHEN: Well, the United Nations has very little power to enforce it other than perhaps economic...
DOBBS: It has the power of whatever its member nations will give it.
COHEN: Well, it has the power of economic blockades or sanctions and so forth. But the United Nations is not sending in a force into the region. That's, I think, quite clear.
I think the United Nations should be actively involved. But I also think the United States, given its special relationship with Israel, also has to be involved in this. And now that you have the Saudis coming forward, the Egyptians also wanting to come forward and play a role, at least may provide a slight window of -- an opening which ought to be at least taken advantage of in my judgment.
DOBBS: OK. Well, Bill Cohen your judgment, as always, very sound indeed, and much appreciated on this broadcast. Thanks for being here.
COHEN: OK. Thanks, Lou.
DOBBS: Bill Cohen.
Still ahead, CNN military analyst General David Grange on the latest developments from Afghanistan.
Charities under fire for the way they distributed money to the families of victims of September 11. We will tell you where that money is going.
We'll be telling you about another big rally on Wall Street. The Dow erases most of yesterday's losses. That story is next. Stay with us.
(COMMERCIAL BREAK)
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DOBBS: As we reported, the most intense fighting of the campaign, the war against terrorism in Afghanistan, is under way. I'm joined now by CNN military analyst General David Grange. General, we are obviously in the guerrilla phase of this combat. Some consolidation being attempted by the al Qaeda and the Taliban. What is the center of gravity here that will lead to their defeat?
BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Well, I think many people think you run over this area, you kill some of the enemy, you run over to another area and kill some of the enemy, and killing the enemy in this is an objective.
But the center of gravity, the critical point that I believe our military needs to go after, with the coalition, is how they supply themselves, their cache sites. If you've seen pictures of the enemy, the way they move is with one bandalier of ammo, a rifle and a rope. They're not carrying any equipment. They're living out of these hide- sites, small villages, caves. And they need to be taken from the enemy, destroyed or not let the enemy go there.
The other is the routs, the infiltration, exfiltration routes of the enemy. Not only in the 60-70 square mile area where the current fight is taking place, the anaconda fight, but also out of Pakistan, as an example. They need to be interdicted, ambushed, and severed so they cannot be used.
DOBBS: How difficult are those two separate tasks?
GRANGE: Again it relies, like we talked about the other night, on intelligence, a tactical low-level intelligence. But it can be done, should be done, and our forces have trained for just that type of fight in some of our training centers in the United States.
DOBBS: And in terms of the repositioning that General Franks talked about today of troops, he seemed very strongly motivated not to use the word reinforcements. Is this such a sensitive issue with the Pentagon and the U.S. military leadership that they would be, if you will, parsing language on the issue of weather reinforcements or repositioning?
GRANGE: Well, you know, it shouldn't be. You know, gradualization, when you -- as you increase incrementally, it's not advantageous to the fight. What we need to do, really, I think, is put more there than we need. And if you have to take away from it, fine.
For instance, one of the most effective weapons in this type of terrain, mountainous terrain is high angle fire weapons like mortars. And more than just hand carried mortars -- bigger mortars, artillery. Things that can give you immediate counterfire. And enemy mortars, when they fire them, or as this enemy is so fleeting, can put fire on them, and not wait at times for aircraft to come in.
DOBBS: The loss of the Navy S.E.A.L. The Pentagon today saying we may never know precisely how he died. But the video of his death, what is the effect on the military, the men and women, the combat troops there, of that incident?
GRANGE: Yes, well, it appears from some of the reports that the Navy S.E.A.L. was executed. He was wounded, became a prisoner and was executed. It makes you want to think how a lot of people whine and moan about how we treat the detainees in Cuba. I mean, they're treated pretty well, considering how this one example of an American prisoner was treated in this case if he was executed.
It will keep the resolve of the American military up to accomplish their mission. It will reinforce their belief that we have the higher moral domain on this fight, that we're fighting for the right kind of values. Very important. And especially very important that we went in to get this lone individual.
DOBBS: That the risking of those American lives to go back for this one lone individual, as you said, how important is that to the men in combat there, the men and women? GRANGE: Many would say why risk another 20, 30 troopers to get one that may already be dead. But the intangible combat multiplier of soldiers knowing that their buddies are going to come back in and get them out, dead or alive, is so powerful in combat, that it is very -- it's just very, very important to the force.
In Vietnam, there was a bad firefight for a platoon, and there was a guy that was hit out in front of the position. And one soldier's getting ready to go rescue his buddy. And a lieutenant said, don't go. I may lose you. It's too dangerous. And the soldier said, I'm going. He ran away. He bolted off. He got to his buddy. As he was dragging his buddy back he got hit several times. He came back with his buddy. He died in his lieutenants arms. His lieutenant said, why'd you go? Now I've lost both of you. And the trooper said, because when I got there, Frank said, I knew you'd come.
DOBBS: General, thank you very much.
GRANGE: Good evening.
DOBBS: We'll continue in one moment.
(COMMERCIAL BREAK)
DOBBS: A footnote on our coverage of Afghanistan today; 28 people are now reported to have died in an outbreak of hemorrhagic fever in a village more than 200 miles west of Kabul. Ebola is one type of that fever, but it is not clear what form of disease, what form of hemorrhagic fever, is responsible for these deaths. The World Health Organization is investigating. Those officials are planning to travel to the region to make an assessment.
Let's turn to the economy now. The federal government's projected surplus will be much smaller than the White House had predicted according to the Congressional Budget Office, which now says that tax cuts and the extra defense will shrink the surplus to $681 billion over the next ten years.
The Bush Administration is predicting a surplus of $1 trillion over that period. The economic slowdown has been evident in cities like Chicago, New York, Washington, D.C. But it is the western part of this country that has suffered the most. And it means the region is no longer the nation's economic leader. Casey Wian has the story in Los Angeles.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN ANCHOR (voice-over): From aerospace and high- tech layoffs in the Pacific Northwest to travel and tourism slumps in Las Vegas and Hawaii, to entertainment and dotcom job losses in California, the western United States is reeling.
For the past decade, western states led the nation in job creation, and most other measures of economic growth. Now, some are suffering job losses for the first time in 20 years. KEITARO MATSUDA, UNION BANK OF CALIFORNIA: Of course, the technology sector weakness was sort of spilling over to the services sector, and the retail and the wholesale trade in the western regions. But then, the incident on September 11 really dispersed the weakness to the rest of the economy.
WIAN: According to a San Francisco Federal Reserve Bank report, the west's transportation, communications, and utilities sector, which includes airlines and aircraft manufacturing lost jobs at a 9.2 percent annual rate in the fourth quarter. Tourism-dependent Hawaii lost jobs at a 10 percent clip.
Oregon's January employment rate was a U.S. high 8 percent. Four of the six highest jobless rates are in western states. During the recession of the early 1990's, California was the western state hit hardest, largely because of post Cold War aerospace job losses and excess commercial real estate. This time, California's neighbors are suffering most.
DONALD STRASZHEM, STRASZHEIM GLOBAL ADVISORS California has increasingly become dominated by southern California. Southern California's economy is maybe four times as large as that in northern California, and southern California's economy has now become a very diverse economy, so it's not really dependent on any particular sector. That helps to lift the whole state.
WIAN: Overall, job growth in the Fed's Western District plunged four percent last year, more than double the rate of the rest of the nation.
(on camera): Economists say the West is likely to recover from recession along with the rest of the nation, and if technology rebounds strongly, the West could even reclaim its position as the leader of U.S. economic growth. Casey Wian, CNN Financial News, Los Angeles.
(END VIDEOTAPE)
DOBBS: And a sign today that California is recovering from the energy crisis, the California Public Utilities Commission has dropped a plan to cut voltage on local power lines during electricity shortages. Energy saving programs help reduce that state's power consumption by nearly seven percent. Peak demand was cut by 10 percent, and today the commission said because of all of that, cutting power line voltage is now no longer necessary.
Well energy concerned Williams Company is finding itself on the defensive these days. It's telling investors it is not Enron, that its business model does work, and it discloses all the information it needs to. Joining us now is Keith Bailey. He is the chairman of the Williams Company. It's good to have you here, Keith.
KEITH BAILEY, CHAIRMAN, THE WILLIAMS COMPANIES: Always good to be here.
DOBBS: You have had an interesting period, I think is a good way, the positive way in which to put that. You have delayed reporting earnings to clean up some accounting issues, as a result of the Williams Communications liabilities in terms of some of that debt. You're going to report what, is it March 8th?
BAILEY: Well, we would expect to report earnings tomorrow.
DOBBS: OK, tomorrow then.
BAILEY: Yes, and then we are having our regular analyst meeting the following day.
DOBBS: And your stock today shot up pretty strongly on word that you had resolved some of the debt issues.
BAILEY: Well actually, yesterday we had a big day. Today, we had another positive day, but they both, I think, revolved around the fact with all the uncertainty in the market, a lot of short players had come into the stock and when the tide turns, they move out as aggressively as they move in, and I think that helps.
DOBBS: You crushed them in other words?
BAILEY: Well, I don't know about that but the stock is trading with a much more positive tone today than it was as recently as a couple of weeks ago.
DOBBS: Tell us about the restructuring on the liabilities, vis-
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