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CNN LOU DOBBS MONEYLINE
N. Korean Fighter Jets Intercept U.S. Reconnaissance Plane Over Sea of Japan; Turkish Parliament Votes to Refuse U.S. Troops Access to Bases
Aired March 3, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is LOU DOBBS MONEYLINE for Monday, March 3. Here now, Lou Dobbs.
LOU DOBBS, HOST: Good evening. A dramatic face-off in the skies over the coast of North Korea. Several North Korean fighter jets intercepted a U.S. reconnaissance plane over the Sea of Japan yesterday morning. This is the latest sign of growing tension in the region after North Korea resumed its nuclear program. Senior Pentagon correspondent Jamie McIntyre joins me now with the details -- Jamie.
JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Lou, the Pentagon does not know exactly what to make of this. It's the first time in more than 30 years that North Korean fighter jets have actually gone to the trouble of intercepting a U.S. reconnaissance plane. The last time this happened, back in 1969, the planes actually shot down the U.S. plane. This time, there was no indication of hostile intent, although the intercept took place about 150 miles off the Korean coast. A pair of MiG 29s and another pair of MiG 23s.
There were some tactics that were designed apparently to intimidate the U.S. plane, including at one point, one of the MiG planes activated its target acquisition radar. Not exactly a lock-on, but still not a friendly act.
The planes came within 400 feet of the U.S. surveillance plane, before backing off, following it for about 20 minutes. Again, the Pentagon says it's not quite sure what the motive was, and perhaps the most remarkable thing about it, said one Pentagon official, is that they were actually able to get those planes that far away from Korea. That means they had to have a pretty good idea of where the U.S. reconnaissance plane was -- they don't fly that often -- and they had to have the planes pretty much standing by in order to conduct this intercept.
Again, the incident ended without incident, and the U.S. is putting it down right now to simply another show of frustration by North Korea, who has been complaining for months about U.S. spy missions along its coast -- Lou.
DOBBS: Jamie, the Pentagon may say it's an act of frustration on the part of the North Koreans, but it's also true that the U.S. officials said that it was not an aggressive act. You just referred to the fact that those fighter jets, two MiG 23s and two 29s, did turn on their target acquisition radar. What would be the distinction between painting an aircraft for target acquisition and a hostile act?
MCINTYRE: Well, the painting the aircraft or locking on indicates that there's a weapon system armed and it's locked on to fire on a plane. This is a radar, we're told, it's not quite as intimidating. It's essentially a radar a plane uses to locate another plane in the sky, not necessarily a lock-on.
So not quite as hostile as that. But still, not a friendly act. But this is -- these are the kind of tactics that are typically used by fighter planes when they're trying to simply send a message to intimidate U.S. planes. But again, the U.S. says its unarmed surveillance plane was in international air space. And though the MiG jets were armed, we are told that the crew never felt that they were actually threatened by the North Korean planes.
DOBBS: Jamie, one other question. For a period of 20 minute, these aircraft nearby, did the United States respond with fighter aircraft, or any other -- take any other protective message for the RC-135 surveillance aircraft?
MCINTYRE: No, apparently not. Apparently, again, the crew did not feel particularly threatened. This kind of thing is not unusual for the Chinese, for instance, to do. They've been sending up planes to sort of monitor or escort or shadow U.S. surveillance planes for quite a while. It's just unusual for the North Koreans to do it. Their air force is in not very good shape. And again, the most significant part about it, according to one Pentagon official, was simply that they were able to do it.
DOBBS: Jamie, thank you very much for that report. Jamie McIntyre, our senior Pentagon correspondent.
The North Korean aircraft intercept took place as the United States faces new challenges in preparation for possible war with Iraq. John King has White House reaction to the incident with the North Korean fighter jets -- John.
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Well, Lou, diplomatically, the administration says it plans to launch a formal protest. Exactly where has not yet been decided, but one possible venue is the U.N. mission -- the North Korean mission at the United Nations in New York. A senior administration official just a few moments ago, saying, quote, "there is no question this is a higher level provocation than what we have been seeing. This is the type of situation where one miscalculation and people lose their lives, and then there is a risk of some counterresponse where more people can lose their lives."
So look for a protest from the United States, most likely at the United Nations, in the coming days, although that has not been decided.
Lou, one irony out of this, U.S. officials have had a very hard time getting the Chinese and the Russians to agree on a strategy of putting pressure on Pyongyang in this nuclear standoff in recent weeks and months. One senior official saying the Chinese and the Russians will look at this and the risks involved and say OK, North Korea is now going too far. So maybe some diplomatic process out of this incident that will bring a diplomatic protest -- Lou.
DOBBS: John, turning to the Turkish parliament's vote to refuse U.S. troops' access to Turkish bases, what is the White House saying about that?
KING: Well, it's significant setback for the Bush administration, both militarily and politically. The administration had hoped that deployment was under way earlier this week to help it make the case at the United Nations that there was growing international support for the president's posture when it comes to Iraq. Senior administration officials here say everyone at the White House is under orders not to say anything overly critical of the Turkish government. There is still some hope here that in the days ahead, there will come word from Turkey that this vote will be reconsidered.
There are plans being made, obviously, by the military as a backup plan. White House officials saying to us earlier today, at one -- at some point, we may have to let them know how unhappy we are. We're not at that point again. Again, Lou, they are hoping, hoping, that Turkey somehow reconsiders here.
DOBBS: And to this point, John, we've had no indication that those troops containing those -- those ships containing troops and equipment off of the coast of Turkey are being redeployed, have we?
KING: No, the plan would be to send most of them, I believe, to Kuwait to redeploy them. But as of earlier today, no orders have been given. That's our understanding here at the White House.
DOBBS: John King, our senior White House correspondent. Thank you, John.
Military commanders are now focusing on plans to attack Iraq without the use of Turkish bases, should that prove necessary. The commander of U.S. forces in Europe, General James Jones, said a war with Iraq would be successful even without a northern front in Turkey. Here again, our senior Pentagon correspondent Jamie McIntyre with that story -- Jamie.
(BEGIN VIDEOTAPE)
MCINTYRE (voice-over): U.S. B-52 bombers, which will fire air- launch cruise missiles on the opening night of the war, have begun arriving in England. While 60,000 additional U.S. troops to serve as follow-on forces have received deployment orders, including the 1st Calvary Division in Texas and the 1st Armored Division in Germany.
It's evidence that while more than 20 U.S. transport ships cool their rudders in the Mediterranean, waiting to see if Turkey will have a change of heart, the Pentagon is moving ahead with plan B, to invade Iraq with or without Turkish support.
ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: If the president of United States makes the determination that force must be used to disarm Saddam Hussein, whatever route is taken, ultimate military mission will remain successful.
MCINTYRE: Sources say the Pentagon decided weeks ago to send not just part, but the entire 101 Airborne Division to Kuwait as a backup, so the U.S. would not have to wait for the heavier 4th Infantry Division to either get into Turkey or move to Kuwait.
BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: The U.S. will go in with other means, lighter forces, to take down the targets in northern Iraq. Probably more paratrooper, air assault with helicopter, techniques.
MCINTYRE: Under that option, the U.S. will rely more on seizing forward bases in Iraq, such as this old Iraqi air base near the Turkish border, and would not able to move as many forces as quickly into the north.
GRANGE: There would be more risk involved. It may cause more casualties, and it would probably take longer.
MCINTYRE: Right now, the Turkish parliament is saying no to an all-in-one package deal, but sources say the U.S. may press for Turkey to allow more modest, less provocative steps, such as basing of search and rescue crews, and granting of overflight rights.
Currently, plan A is for two U.S. aircraft carriers in the eastern Mediterranean to send their planes into northern Iraq by way of Turkey. But plan B is to move the carriers south into the Red Sea so the planes can overfly Saudi Arabia, as was done in the 1991 Persian Gulf War.
(END VIDEOTAPE)
MCINTYRE: And sources say that a sixth aircraft carrier, the USS Nimitz, which is not due to arrive in the region until early April, could be added to the war plan to make up for the loss of land-based planes that were to go to Turkey -- Lou.
DOBBS: Jamie, thank you very much. Jamie McIntyre from the Pentagon.
Iraq today said it will destroy more than 100 of its Al Samoud missiles. Iraqi officials have destroyed, they say, 16 of the missiles so far, that after U.N. inspectors said those missiles exceeded limits on range. But Iraqi officials said the missile destruction program would stop if they determined war seems likely. The United States said the Iraqi program fails to meet the test of full, complete and immediate disarmament.
Thousands of people turned out in Cleveland yesterday. They were there to show support for the men and women of the U.S. armed forces. The rally was organized by conservative radio personality, Glenn Beck. Beck has also organized rallies in Texas, and plans to organize more rallies around the country. Many of those who attended the rally carried U.S. flags and cheered when speakers criticized France and Hollywood celebrities whose have vocally opposed a war in Iraq.
Turning now from Iraq to the war against terror, U.S. officials today said they found a treasure trove, as they described it, of material during the capture of the al Qaeda operations chief Khalid Shaikh Mohammed in Pakistan. FBI and CIA agents are now study studying computers, computer disks and cell phones that were found when Mohammed was arrested Saturday. Our national security correspondent, David Ensor, with the report.
(BEGIN VIDEOTAPE)
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): Among the information seized at the house where the al Qaeda operations chief was captured, U.S. sources tell CNN, is a treasure trove on al Qaeda including the names of suspected al Qaeda operatives, some of them believed to be in cities in the United States.
Sources say Washington, D.C. is among the cities the information suggests may contain al Qaeda personnel. U.S. officials have said they have evidence Khalid Shaikh Mohammed was trying recently to organize another attack against the United States.
U.S. intelligence officials are declining comment on the information gleaned during the raid, but other U.S. sources say FBI agents are speeding to try to track down the suspected operatives named in it, hoping to stop any imminent attack.
MICHAEL CHERTOFF, ASST. ATTY. GENERAL: We are obviously always mindful of the need to be vigilant and move as quickly as possible to frustrate anything that's ongoing in terms of potential terrorist threats.
ENSOR: Mohammed, meantime, is under intense interrogation at an undisclosed location by the U.S. Central Intelligence Agency. Officials say all appropriate pressure will be used in an effort to stop any attacks the new prisoner may know of.
FLEISCHER: The standard for any type of interrogation of somebody in American custody is to be humane and follow all international laws and accords dealing with this type of subject. That's precisely what has been happening and exactly what will happen.
ENSOR: Although the White House expressed warm gratitude to Pakistan's President Musharraf, some U.S. officials privately expressed dismay that Pakistani officials made news of the seizure public so quickly. U.S. officials would have liked more time to try to roll up al Qaeda cells before the word got to them that their operations chief was in enemy hands.
PERTER BERGEN, CNN ANALYST: It's quite possible that people may panic and try and push something forward because they're worried he may talk. Most of the al Qaeda leadership have eventually talked. The question is really time. You know, time is of the essence.
(END VIDEOTAPE) ENSOR: Time is of the essence and though U.S. officials express confidence Khalid Shaikh Mohammed can, in time, be convinced to cooperate with the interrogators, they are in a hurry -- Lou.
DOBBS: Understandably. David, thank you very much, David Ensor national security correspondent from Washington.
The woman in charge of improving this country's image in the Arab World has resigned. Charlotte Beers was a State Department official, former advertising executive. She announced she was resigning for health reasons, but a U.S. official told CNN that her departure is connected to problems on the job. Critics said Beers spent a lot of money on slickly produced ads, but she, her critics claim, never understood her target audience.
Still ahead here tonight, more violence in Gaza. Israeli forces say they've captured a top radical Islamist terrorist. We'll have a report for you.
German leader Gerhardt Schroeder opposes U.S. policy toward Iraq. Tonight, the German ambassador to the United States, Wolfgang Ischinger, will be here to talk about his country's policies, and the decision of Mr. Schroeder not to accept U.S. views on Iraq.
And a tough start to the month on Wall Street today. Christine Romans will have the market for us. And we'll have a special report for you tonight on soaring gasoline prices in this country and why some are charging price gouging.
We'll have those stories, a great deal more still ahead. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Disagreement over policy in Iraq has turned relations between Germany and the U.S. into a high profile dispute. Berlin is refusing to support Washington in a military campaign if it's required to remove Saddam Hussein from power.
In taking this approach, Germany has turned its back on more than 50 years of close military and political cooperation with the United States. Some independent analysts are questioning whether Germany will remain a U.S. ally in the future.
To learn more about Germany's views and a prospect for that relationship, we're joined now by ambassador Wolfgang Ischinger, the German ambassador to this country.
Mr. Ambassador, good to have you with us.
WOLFGANG ISCHINGER, GERMAN AMBASSADOR TO U.S.: A pleasure to be here tonight.
DOBBS: How substantial, how lasting do you see this rift between the German government and that of the United States on the issue of Iraq? ISCHINGER: Well, you know, I arrived in this country on 9/11. I was here the morning it happened. And I understand the threats that America feels. Our question is, by eliminating the Iraqi regime, are we really going to reduce that particular threat of international terrorism? I think most Americans are not aware of the fact that we are and continue to be among your closest allies in the fight against international terrorism. Do Americans know and understand that we have 10,000 soldiers deployed overseas, side by side with Americans to defeat the Taliban, to maintain stability in Afghanistan, in the Balkans and elsewhere? So, you know, our relationship is much broader and richer than just the difference which exists over the question of how to proceed on Iraq. So I'm not really concerned as much as some others may be over the future of the German/American partnership.
DOBBS: Ambassador, you understand this country very well. You've been here for some considerable time, serving the Schroeder government. Gerhard Schroeder is in - he's not enjoying what I would call a surge of popularity at home. And the Schroeder government made much of the dispute over Iraq in the domestic elections. How much of the policy that Germany is following, in your judgment, is domestically a consideration? What factor, what element would you say that is?
ISCHINGER: Well, let me start by saying, Lou, that we should not forget that it was exactly this Chancellor Schroeder that we're talking about here who was the only Western leader who took a personal political risk in November of 2001, right after 9/11, to make it possible for Germany to deploy troops in Afghanistan. We declared ourselves to be in solidarity. In fact, we used the term "unlimited solidarity" with the United States. And that's where we still are.
DOBBS: You don't think we've hit a few limits here?
ISCHINGER: Well, even on the issue of Iraq, yes, it is true that we disagree about the need to go to war right now. But I totally disagree with what's been said about Germany, you know, opposing this. We are actually helping Americans to do what they believe must now be done. We are protecting American installations in Germany with thousands of German troops. Is that known in America? I have not seen a single article about it. We have sent Patriot missiles to Israel, to help defend Israel. We've sent Patriot missiles and other material to Turkey to help defend Turkey. In other words, we are one of your most active allies. There is no nation in the world that has more troops deployed with the United States than Germany. We have over 10,000 now. And when you consider that my country, as recently as six and seven years ago, had zero, we have come a very long way. And we're doing it with America, not against America.
DOBBS: I think we should say, Ambassador, and I quite take your point in terms of the deployment of German forces. But the British have deployed and are in the process of deploying more than 40,000 troops to the region in the coalition. The German reluctance to disarm Saddam Hussein by force, if necessary, is in this country, in some quarters, very difficult to understand, because he represents with - there is no question whatsoever, represents an absolute rebuke to the United Nations. He has not permitted inspections until they were forced upon him by, as you would say this chancellor, I will say, this president. The Bush administration, in your judgment, I would be curious to know how much credit do you give President Bush and his administration for - through the United Nations, forcing this new round of inspections, which has already been quite - without previous consideration, found the Al Samoud missiles, how much credit do you give the Bush administration for driving this inspection process to begin with?
ISCHINGER: I think, Lou, we're giving President Bush a great deal of credit. He went - you're absolutely right he went to the United Nations. The United States was the driving force behind this famous resolution 1441. Fifteen - you know, to nothing, unanimous resolution. We agree that Saddam Hussein must disarm now. We agree he is a threat. We agree that he probably still has, from the '80s and '90s, some weapons of mass destruction. So that's not really in dispute. The only thing that's in dispute is, is it necessary, in the light of what's been happening recently, to go to war now? And if I may add one point.
DOBBS: Surely.
ISCHINGER: You know, from a German point of view, I hope that Americans can understand that, from a German point of view, with our national history, a country that has gone to war repeatedly for the wrong reasons, isn't it OK for us to be even more concerned and more skeptical about the use of military force than other nations? We want to use military force really only as the very, very, very last resort, because we have used it in the past not as a last resort. And I think that is actually to our credit. So, you know, I don't think that we should discuss this only in sort of the terms of are we for or against the United States? I understand the policy of the Bush administration. And I think there are good arguments to be made for it. But I think there are also good arguments for our point of view. If the inspections have produced some results, why not let them continue? Maybe they'll produce more. And let's use military force only if we can demonstrate that all other means are exhausted. That's basically our position, and I think that's not a dishonest position.
DOBBS: Nor do I, Mr. Ambassador. Nor would I suggest otherwise. And I don't believe President Bush has ever expressed anything that would suggest he doesn't think the German position and the French position are sincere. It is clear, also, though, that this president means to have Saddam Hussein disarmed. If you acknowledge that Saddam Hussein has weapons of mass destruction, if you acknowledge that this president, this administration, has driven these inspections, which are now to this point, resulted in the destruction of at least 16 of the Al Samoud missiles, that he's in violation of the most recent resolution that this president went before the Security Council with almost, now, six months ago, what end does - where does the German patience find end?
ISCHINGER: I admire the American patience. You know, I'm a professional diplomat. I have great respect for how the Bush administration is handling this matter right now. They are, at this moment, not putting the draft resolution in New York to a vote. They are actually also giving this process a little more time. Now, we believe we should give it a little more time than just a little bit. I don't think that our difference is really that fundamental, so long as we speak about the disarmament of Saddam Hussein. Yes, we share the disarmament goal. Yes, we support it. No, we don't think war is necessary at this point. And, of course, no, we don't think that our shared objective is the objective of regime change, because the U.N. resolution, which we have all written together and supported together, does not really endorse that particular objective. But the full disarmament is something which we share.
DOBBS: Mr. Ambassador, we thank you for being here to help us better understand the position of the Schroeder government, the German government. And as you suggest, we all hope it doesn't result in long-lasting or irreparable damage to a long-standing relationship. Ambassador Wolfgang Ischinger, thank you.
ISCHINGER: Thank you. A pleasure to be on your show, Lou.
DOBBS: Coming up next, Colonel William Drennan. We'll be talking about the implications of North Korea's interception of American reconnaissance aircraft over the Sea of Japan. And Israeli tanks bulldoze their way into a Gaza refugee camp, with deadly results. We will have the report for you coming right up.
Montgomery County Police Chief Charles Moose has now gained national attention following the sniper spree of last October. He is now, himself, feeling the heat of another investigation over whether he is profiting from his newfound notoriety. We will have that story.
And survivors have been found in a plane crash in Massachusetts. We'll have that story and a great deal more still ahead. Stay with us.
(COMMERCIAL BREAK)
DOBBS: The top stories we're following tonight -- U.S. Officials say they found a treasure troth of material when the al Qaeda Operation's Chief Khalid Sheikh Mohammed was arrested in Pakistan. The material includes computers, computer disks and cell phones.
Another aircraft carrier battle group left San Diego today. The USS Nimitz will require a month to reach the Persian Gulf. Five other aircraft carriers are already on station in the region.
Also today, the Pentagon announced that two more full army divisions will be deployed in the Gulf.
Four North Korean fighter jets intercepted a U.S. aircraft over the Sea of Japan early yesterday. The American plane, an RC-135 surveillance aircraft. This is the first time North Korea has intercepted an American plane in more than 30 years.
My next guest says this incident is another provocation by North Korea. Colonel William Drennan is a Korean specialists. He's at the institute -- U.S. Institute of Peace, formally head of Policy and Strategy at the U.S. military headquarters in Korea.
Colonel, good to have you with us.
COL. WILLIAM DRENNAN (RET.), U.S. INSTITUTE OF PEACE: Nice to be back with you, Lou.
DOBBS: As you and I have been discussing the situation with North Korea, this is, in your judgment, an outright provocation?
DRENNAN: It's the latest in a series that dates back at least two weeks ago, Lou. There was another MiG incident got the world's attention about 14 days ago. A MiG transgressed the -- basically the extension of the border between North and South Korea.
DOBBS: Right.
DRENNAN: On the other body of water to the west of the peninsula. And then when the new president was inaugurated on the it 25th of February, just prior to that, North Korea launched a missile -- it was attacked missile, basically and anti-ship missile. And now to the -- intercepted a RC-135 on a reconnaissance missile.
DOBBS: This latest provocation, the Pentagon initially said this was not -- was not an aggressive act. As more details have come forward now from the Pentagon, we find out that the point of fact the target acquisition radar from at least one of the MiG fighter jets was painting the RC-135. And that it wasn't as short duration incident. In point fact, they were shadowing aircraft for now an estimated 20 minutes.
DRENNAN: Right.
DOBBS: At this point, should the United States be thinking about a different approach in that region because of the obvious tensions that are rising?
DRENNAN: Well, this is a throwback to the tactics of the Cold War. And we haven't seen anything like this in quite some time. With the one exception very notable exception two years ago with the People's Republic of China. There was that unfortunate incident where a Chinese fighter collided with a U.S. Navy EP-3, and also almost downed that EP-3. So that's a notable exception. But these kind of incidents during the Cold War pretty much pro forma. We would intercept Soviet bombers as they approached the air space of the United States.
DOBBS: Colonel, John King reported on the White House' reaction, talking about a higher level of provocation now. Is there, as John King reported, the White House's perhaps considering some opportunity here for the Chinese and the Russians now to assert themselves in the incidents of North Korea?
DRENNAN: Well, I certainly hope so. And I believe that the White House will be actively encouraging them to do this. We have long hoped that others would involve themselves in the provocations that North Korea is doing. All in the context of their nuclear challenge. We're attempting, as you and I have spoken before, to make this or to keep this an international challenge, and not only a challenge to Washington.
DOBBS: What should be the U.S. response in your judgment?
DRENNAN: Well, one thing I think that we definitely need to do is to keep flying these missions. I'll leave it up to the experts as to whether or not we want to provide U.S. Air Force fighter issues escorts for them. But this was an international air space . We have every right to be there. Quite frankly, so do the North Korean pilots. But what they don't have a right to do is to hazard and to threaten our airplanes in international air space. So the last thing we want to do is allow North Korea to coerce us out of these missions. We haven't in the past with other adverse airs and I am pretty confident not to allow North Koreans do it either.
DOBBS: William Drennan, U.S. Institute For Peace. Thanks for being here.
DRENNAN: Thank you, Lou.
DOBBS: Turning now to the Middle East. Israeli tanks and bulldozers went into a refugee camp in Gaza today. Eight people were killed in the attack. Dozens other injured. A co-founder of the radical Islamist group Hamas was erected. The Palestinian leadership immediately criticized the incursion but Israeli defense forces said the operation was designed to arrest Hamas activist involved in terrorist activities.
In other news around the world tonight, hundreds of thousands of people have turned out for the second night of Carnival in Brazil. These festivities marketed by huge parades through the streets of Rio De Janeiro that party ends tomorrow night on the even of Ash Wednesday which marks the beginning of Lint.
Naked anti-war protests spreading around the world. Hundreds of Australian women bared all in protest in Sydney yesterday. They lay down on a sport's field to spell out the word, as you see there, "no war." Protesters have staged similar demonstrations in California, and Chile.
The new U.S. embassy in Nairobi, Kenya is officially opened for business tonight. The building replaces the one shattered in an al Qaeda bombing attack in 1998. The U.S. embassy in Tanzania which was bombed the same day was also replaced. It will be dedicated and opened tomorrow.
Coming up next, former investment banking star, Frank Quattrone is under investigation.
Peter Viles will have the story for us.
Gasoline price are climbing. More than rising oil places to blame.
Kitty Pilgrim will have the story -- Kitty.
KITTY PILGRIM, CNNfn CORRESPONDENT: Consumer groups are being barraged by complaints about high gas prices. We'll tell if you it's price gouging -- Lou.
DOBBS: Kitty, thank you, and I'll also be joined by the attorney general of the state Florida, Charlie Crist. And hard times for an institute of higher learning. Workers are on strike at one of this country's top universities. That story, a great deal more, still ahead. Stay with us.
(COMMERCIAL BREAK)
DOBBS: The possibility of war with Iraq has helped to lift gasoline prices to more than $2 a gallon in parts of the country. And officials in some states are suspicious. Their suspicion these prices are not simply of result of supply and demand but of price gouging.
Kitty Pilgrim reports.
(BEGIN VIDEOTAPE)
PILGRIM, (voice-over): In Michigan, these inspectors conduct routine surveys of gas stations, checking if pumps are working and gas is pure. Now, they've been asked by the governor to check and report any price gouging.
Michigan got tough for a reason. Some Michigan gas stations raised gas prices right after the September 11 attacks for no reason at all. The state took action against 48 gas stations imposing $30,000 fines, and making some pay $100,000 in refunds to customers.
Nationally, gas prices have been climbing. The price of regular, at self-serve stations nationwide, up on the average of 19 cents a gallon in the last month alone. And 54 cents in the last year. That's in part because oil prices are high. Breaking through $40 a barrel last week. War worries is driving the price of crude oil higher in trading.
But the American Automobile Association says it sees no real reason for price jumps of thirst or 40 cents all at once, and issued a warning to the industry.
JUSTIN MCNAULE, AMERICAN AUTOMOBILE ASSOCIATION: Typically, February and March is when we see some very low demand for gasoline. It's not summer driving season. This is the time when we expect to see prices at the low end. Yet, we've had perhaps even a dozen states hit their all-time highs.
PILGRIM: Consumer groups say seasonal adjustments in refining can cause price fluctuations, but they worry there is more of a problem with the entire industry.
TYSON SLOCUM, PUBLIC CITIZEN: As a result of all of these mergers over the last five years, the top five oil companies now control over 40 percent of all U.S. oil production, over half of all the oil refinery capacity, and over two-thirds of all the retail gas stations.
(END VIDEOTAPE) PILGRIM: Now, consumer groups say the customers' best defense is to do the checking themselves. Look at the price every week. If it goes up 30, 40, 50 cents, don't buy the gas. Pick up the phone and call the state attorney general. Have it looked into -- Lou.
DOBBS: Kitty, thank you very much. Kitty Pilgrim.
One of the people looking into it is attorney general of Florida, Charlie Crist. Last week, he questioned officials from six companies about the recent spike in gasoline prices. He's also called on the Federal Trade Commission to investigate. Attorney General Crist joins us now from Tallahassee. Good to have you with us.
CHARLIE CRIST, ATTORNEY GENERAL, FLORIDA: Good to be with you, Lou, thank you.
DOBBS: Is there anything that you have seen or in your discussions that suggests that this is -- that there is price gouging on the part of the oil companies themselves?
CRIST: Well, we're not prepared to say that at this point. I can tell you, though, it's a concern of our citizens. When the price of gas goes higher than it's ever been in the history of our state, it raises their concerns, and, then, therefore, they're ours as well at the attorney general's office. In fact, we have received over 200 complaints from citizens across the state about the price of fuel here. That's why we decided to ask six of the largest oil companies to come to Tallahassee to explain to us why it is that the price of gas has gone so high.
And, as you can imagine, we heard a variety of reasons that would justify that. Three primarily from each of them. They talked about the strike in Venezuela.
DOBBS: Right.
CRIST: They also talked about the cold winter, that you're having up north, which we're sympathetic to, and the jitters that concern the war in Iraq. And we have a concern about supply and demand, frankly. That's really usually what drives the markets, and what we're focusing on through our antitrust division.
DOBBS: And were those answers to you satisfactory, persuasive?
CRIST: Well, somewhat. And so that's why we don't want to lurch ahead and say that -- you know, accuse anybody of anything at this point. I think that would imprudent of us to do so. But we are following up with those companies. Because of the fact when you ask about supply, that's where the answers aren't as clear as maybe with some of the other reasons that we're hearing at this point.
Some of the companies produce their own crude domestically. And we would hope that they would increase the supply that would, therefore, reduce the demand and the cost along with it, we would hope. DOBBS: Mr. Attorney General, you're not making a lot of fans right now in parts of the Northeast and in the Midwest where home heating oil is a more desirable product this time of year.
CRIST: Well, I understand that. I have relatives in Pennsylvania. So I'm very sympathetic. But at the same time, we think that if they could generally, in an overall sense, the oil companies, that is, increase their supply and us be able to be sure that they are not holding back some of that supply, then we could have enough for heating oil and gasoline, and make the North and South happy. And that would be a good thing for America.
DOBBS: One of the things that in looking into this situation ourselves, one of the most recent editorials, frankly, in the "Wall Street Journal," showed that there have been 25 investigations since 1970 of price gouging by the major oil companies, and that not one had resulted in a finding of price gouging. Does that surprise you?
CRIST: Well, I don't know if it surprises me or doesn't surprise me. We're concerned about what -- the inquiry we're looking at right now and what's present to the citizens of Florida, and that's what I am concerned about, and that's why we're trying to get answers to these questions as to why the price of gas has never been higher in the history of our state.
I will tell you that the end of last week, we found out through Senator Wyden's office, that there was an inner-office memo at Texaco that indicated they wanted to keep down the supply that they were producing because it was reducing some of the margins they wanted to experience in the market place. That was somewhat disturbing to me to find that out.
We are in the process of trying to follow that up, to see if we can get more information about that, as well as asking the FTC, the Federal Trade Commission, through Chairman Muris, to look into this even further. They have jurisdiction here as well, and they have kindly agreed to help us out and see if we can get some rationale as to why the prices are as high as they are.
DOBBS: Attorney General Charlie Crist, we thank you for being here.
CRIST: Thank you, Lou, my pleasure.
DOBBS: Appreciate it.
Still ahead, ImClone founder Sam Waksal today pleaded guilty to more criminal charges. Some of them are unrelated to the insider trading scandal that could send him to prison for years. Peter Viles will have a special report on the progress on the government's prosecution of corporate crime -- Peter.
PETER VILES, CNNfn CORRESPONDENT: Lou, there's been something missing and all the perk walks we've been seeing for months. What's missing, no one on Wall Street has taken the long and lonely walk -- Lou. DOBBS: We even hadn't had many perp walks.
VILES: Not lately.
DOBBS: Peter, thank you.
Also ahead, they went to Baghdad to protest the war to serve as human shield. Now, they are giving up and heading back home because, well, being a human shield apparently raises some safety concerns. We'll have that story and more, still ahead. Stay with us.
(COMMERCIAL BREAK)
DOBBS: In news across America tonight, at least four members of a family whose plane crashed last night have been found alive in Massachusetts. Their small plane with a family of seven aboard was returning from Florida when officials lost contact with it. The survivors were rescued from the snow-covered Berkshire Mountains by helicopter.
Five thousand workers at Yale University began a five-day strike today. They are protesting deadlock contract talks. Their action shut down the university's dining halls, and that forced students to either buy groceries or to find some other place to eat out.
There will be no cameras in the courtroom during the trial of Lee Boyd Malvo. Judge Maro Rouch said she is concerned the coverage could prejudice potential jurors. The 18-year-old Malvo is charged with killing an FBI agent during a sniper shooting spree last October in Washington.
Montgomery County Police Chief Charles Moose became a familiar face during the sniper investigation. Now, he's facing questions about his ethics. Chief Moose is writing a book about the shootings, but failed to receive prior approval for the book deal.
ImClone's former CEO, Sam Waksal, back in federal court today in New York. Waksal pleaded guilty to conspiracy, wire fraud and evading $1.2 million in sales taxes on art. The charges are unrelated to the insider trading scandals surrounding Waksal that includes ImClone Systems. Waksal pleaded guilty in October to six criminal counts, including bank fraud, securities fraud and obstruction of justice.
Waksal is one of about three dozen executives in all of corporate America that have now been criminally charged. The list of criminal charges, however, does not include a single, a single Wall Street executive. Peter Viles has our report.
(BEGIN VIDEOTAPE)
VILES (voice-over): Tax evasion is a serious crime, but it's hard to argue it was the crime of the century, which is why it's odd that prosecutors have now brought two criminal cases, based on million-dollar artwork, and not a single major criminal case against Wall Street in the stock market meltdown. Question to U.S. Attorney James Comey, what are you doing about wrongdoing on Wall Street? JAMES COMEY, U.S. ATTORNEY: We are deadset against it and working like crazy on it. I mean, I hope you have seen some of the fruits of our work. I can't comment on particular cases, but it's something that we that is the crown jewel of our work here in New York. Something that we and the FBI and others do very, very aggressively. So if you stick around and follow our work, I think you will come to feel the way I do.
VILES: But to date, Wall Street has escaped without the threat of prison time. Jack Grubman at Salomon, Henry Blodgett at Merrill, no criminal charges.
BRIAN LANE, FRM. SEC ATTORNEY: It's much easier to bring a criminal case when you find one person, you know, like a CEO or CFO or two or three people who are engaged in some sort of criminal conspiracy. It's much harder when you want to indict a whole industry.
VILES: But now Comey and New York Attorney General Eliot Spitzer are investigating CS First Boston banker Frank Quattrone. A key question, did he instruct justice by endorsing a move to clean up company files after investigations had begun. That's basically the charge that put Arthur Andersen out of business.
A spokesman for Quattrone says he's done nothing wrong and was in compliance with the firm's document retention policy.
(END VIDEOTAPE)
VILES: Quattrone is on paid leave at CS First Boston with the emphasis on that word paid. He made nearly $100 million a year at the peak of the market. Tonight, the firm, however, says that his status there is, quote, "in flux" -- Lou.
DOBBS: In flux.
VILES: In flux.
DOBBS: Peter Viles, thank you.
Still ahead, a sad commentary on the state of American education. Most people can't read car seat instructions, because they're too complex. That story and more next.
(COMMERCIAL BREAK)
DOBBS: On Wall Street today, stock prices fell for the first time in three sessions. This latest report on slowing expansion and manufacturing erased early gains. The Dow, Nasdaq, S&P 500 all down about 1 percent. Christine Romans has the market for us now -- Christine.
CHRISTINE ROMANS, CNNfn CORRESPONDENT: Hi there, Lou. Stocks actually up 1 percent early on because of progress in the war on terror. But the weak economy overshadowing that. It was the lightest volume in two weeks and the same number of stocks rose as fell. Crude prices retreating to below $36 a barrel and bonds edging higher. Auto sales shifting into low gear in February. GM sales fell 19 percent, Ford flat, DaimlerChrysler sales tumbling 4 percent. That's payback, the analysts are saying, for those great incentives and all of those stocks ending lower.
A Capital One financial also lower. Its CFO resigned after getting notice from regulators that he's been investigated. Palm cut its target, fell 11 percent. Business customers cool to its high-end hand helds. And Procter & Gamble the biggest Dow loser amid reports it's considering a 5 to $6 billion bid for a German hair care company, Wella -- Lou.
DOBBS: And Warren Buffet had a little counsel for investors.
ROMANS: Cautious, saying sometimes the most successful strategy is inactivity. He's been buying, Lou, junk bonds over the past year. He's got six times more junk bonds now than he did before. And he's saying he's cautious on stocks. He likes what he own, but he's not really adding to anything. This is a preview to next week's shareholder letter. So we'll watch for more of that.
DOBBS: Christine, thanks a lot.
Well it wasn't national security but national pride that led a soldier wounded in Afghanistan to reenlist. Specialist Wayne Stanton (ph) was among the first Americans wounded when U.S. forces walked into an ambush in Afghanistan a year ago. One year to the day later, the 21-year-old Stanton signed up for another tour of duty. He says, "It's my job."
Stanton's unit, the 1st Battalion, 87th Infantry out of Fort Drum, New York expects to learn this week whether it will be redeployed to Afghanistan.
Instructions for installing car seats may be too difficult for many adults to understand in this country. Unbelievably, a new study says most manuals are written at a 10th grade level and only a quarter of all Americans read at or below the fifth grade level. At least 25 percent read at about an eighth grate level. We're still a little short there on those levels.
The study raises concerns because car collisions are a leading cause of death and injury for children and infants. Half the people surveyed not able to understand the instructions.
Coming up next, we'll share your e-mails and some of the peace activists in Iraq have had second thoughts about offering themselves up as human shields for a very, very rational reason. All of that and more still ahead. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Now your thoughts on Iraq. Ralph Castanza of Raleigh, North Carolina wrote, "Despite what the French say, it's not the inspections that are working, it is the threat of war and the 250,000 U.S. troops in the region that are the main catalysts for get those missiles destroyed."
Tracey Nelson of Ohio: "Saddam Hussein knows we need to strike before the weather gets too warm, so of course he's going to start saying he'll disarm just to try an impede us. We should have gone weeks ago."
And many of you wrote in about the Ninth U.S. Circuit Court of Appeals, which last week stood by its ruling that the Pledge of Allegiance is unconstitutional.
Barbara Gibson of Phoenix asks, "What's next? Taking `In God We Trust' off our money? Making it a felony to sing `God Bless America'? If `under God' offends you sensibilities, don't say it."
E-mail us, moneyline@CNN.com.
And finally tonight, they went to Iraq to protest a possible war and to act as human shields. Now some of those protesters have returned to London because they fear for their safety. Nine of 11 European activists reassessed their actions after Saddam Hussein limited the sites that the human shields could visit. Several dozen human shield do remain in Iraq.
That's MONEYLINE for this Monday evening. Thanks for being with us. For all of us here, good night from New York.
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