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CNN LOU DOBBS MONEYLINE
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Aired March 7, 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 Friday, March 7. Here now, Lou Dobbs.
LOU DOBBS, HOST: Good evening. Not years, not months, but days. The chief U.N. weapons inspector, Hans Blix, today said Iraq needs months to disarm, but the United States and Britain proposed giving Saddam Hussein only days, 10 days to be exact.
A new resolution talks of a final opportunity for Iraq. And Secretary of State Colin Powell said today the world must not walk away from using force against Iraq if necessary. Senior U.N. correspondent Richard Roth has the report.
(BEGIN VIDEOTAPE)
RICHARD ROTH, CNN SR. U.N. CORRESPONDENT (voice-over): A deadline for Iraq. The U.S., Britain and Spain want to give Iraq until March 17 to give up weapons of mass destruction.
JACK STRAW, BRITISH FOREIGN SECRETARY: Mr. President, the council must send Iraq the clear message that we will resolve this crisis on the United Nations' terms.
ROTH: The deadline included in an amended draft resolution, which still needs approval by the full Security Council. France immediately rejected the idea.
DOMINIQUE DE VILLEPIN, FRENCH FOREIGN MINISTER: They are giving the deadline of the 17th of March, which is 10 days. We don't think that we go to war on a timetable.
ROTH: The deadline dilemma pushed a weapons inspectors report into the background. Chief weapons inspector Hans Blix did cite better Iraqi cooperation, but, again, with a caveat.
HANS BLIX, U.N. CHIEF WEAPONS INSPECTOR: Iraq, with a highly developed administrative system, should be able to provide more documentary evidence about its proscribed weapons programs. Only a few new such documents have come to light so far.
ROTH: The bottom line on the Blix report, no evidence of mobile weapons production centers, no evidence of underground weapons production, despite U.S. charges. Blix gives Iraq points for trying to give an accurate count of biological and chemical weapons it already destroyed, but scolds them for failing to reveal how many of those weapons it produced in the first place. When it comes to Iraq's destruction of Al Samoud 2 missiles, this showdown.
BLIX: We are not watching the breaking of toothpicks. Lethal weapons are being destroyed.
COLIN POWELL, SECRETARY OF STATE: But the problem was, we don't how many missiles there are, how many toothpicks there are.
(END VIDEOTAPE)
ROTH: The vote could come as early as Tuesday. Initial reaction -- Chile, a little skeptical, wants to give Iraq more time to cooperate. A British diplomat said if we don't set a deadline, this could go on another decade. And Lou, following up on a story we told you about last night, the U.N. protesting a fence being cut along the Iraq-Kuwait demilitarized zone. Now the U.N. says Kuwaiti workers were spotted there, cutting additional holes in the fence, 75 feet wide is the gap there -- Lou.
DOBBS: And Richard, we should explain that that fence is apparently being cut to prepare the -- for the possibility of U.S., British and coalition troops to advance on Iraq. Richard Roth from the United Nations, thank you.
The White House said the weapons inspectors told a familiar story today, one of noncompliance and deception. White House correspondent Suzanne Malveaux joins me now with a report -- Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, I just spoke with a senior administration official who says that there's nothing in Saddam Hussein's history that shows that he lives up to his obligations. The White House clearly does not believe that he is going to disarm by March 17, but rather this was meant to accommodate U.N. Security Council members who thought it was an important step to give Saddam Hussein one last chance. That official also said there is some wiggle room with that March 17 deadline, but not that much. White House spokesman Ari Fleischer earlier today squarely putting the blame -- rather, putting the burden on U.N. Security Council members to hold Saddam Hussein to account.
(BEGIN VIDEO CLIP)
ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: For nations that oppose and do so, they will vote their conscience, as they do. I think the real question they will have to answer one day is the question that will perhaps one day come from the free Iraqi people, is where were you when we needed you the most? To whom do we say thank you for our freedom? And they will know, because hands will be raised. And that, too, is a moral issue.
(END VIDEO CLIP)
MALVEAUX: On the diplomatic front, of course, the president making a number of calls to the leaders of Britain, Mexico, as well as -- as well as Russia. Also, the president meeting with his National Security Council, this on the war front. Military planning continues. All of this, Lou, as you know, as that looming deadline approaches -- Lou.
DOBBS: Suzanne, thank you very much, Suzanne Malveaux from the White House.
Iraqi government members were quick to give their views on the inspectors' reports to the United Nations today. Senior international correspondent Nic Robertson has the report from Baghdad.
(BEGIN VIDEOTAPE)
NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT (voice-over): For the first time, Iraq's main television news broadcast had immediate reaction to developments at the U.N. The unusual move by the state broadcaster bringing positive government reaction to U.S. weapons chief Hans Blix's report. A view echoed by politicians.
MUDHFAR AL ADHAMI, IRAQI NATIONAL ASSEMBLY MEMBER: I found it positive and objective and showing that Iraq is cooperating, full cooperating, and free access giving to the inspection teams.
ROBERTSON: The news broadcast, focusing on speeches by the German, Syrian, Mexican, Russian, French and Chinese foreign ministers, highlighting their comments about Iraq's cooperation. All countries which favor continuing inspections, but full coverage of the U.N. Security Council debate including comments by U.S. and British representatives, was only available in government offices here.
AL ADHAMI: I hope that the American administration might reconsider at least, think wisely about -- reconsider their attitude and think wisely about this matter, because, after all, this will threaten the peace in the area and all over the world.
ROBERTSON (on camera): Few here, however, particularly following President Bush's recent reinforcement of the U.S. position towards Iraq believe war really can be avoided. It's not a matter of if, they say, but when.
Nic Robertson, CNN, Baghdad.
(END VIDEOTAPE)
DOBBS: In neighboring Kuwait, more signs today that the United States and Britain are preparing for war. Senior Pentagon correspondent Jamie McIntyre has the story.
(BEGIN VIDEOTAPE)
JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice-over): Usually D-Day, the first day of a war, is a closely guarded secret, but Pentagon sources say the U.S. is considering giving up what it calls "tactical surprise," in order to minimize civilian deaths. President Bush has said as much.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We will give people a chance to leave, and we don't want anybody in harm's way who shouldn't be in harm's way. MCINTYRE: Sources say the U.S. is considering dropping leaflets, warning the Iraqi populace 24 hours in advance. That will also maximize pressure on Saddam Hussein to reconsider the U.S.'s longstanding offer to accept exile.
BUSH: We believe that as a result of the pressure that we have placed and others have placed, that Saddam will disarm and/or leave the country.
MCINTYRE: Meanwhile along the Iraqi border in northern Kuwait, contractors guarded by the U.S. military are literally clearing a path for invasion. At least seven openings have been cut into the wire fence marking the U.N.-monitored demilitarized zone, and more openings will be cut in the days ahead, sources say.
And sources tell CNN that Saudi Arabia is quietly allowing U.S. to reposition forces from the Prince Sultan air base, southeast of Riyadh, to several forward bases closer to the Iraqi border. Sources say the forces include fighter planes, helicopters and some special forces.
And in Kuwait, the first of the 101st Airborne Division's Apache Longbow helicopters have arrived. Sources say the entire fleet could be up and flying within five to seven days. The U.S. is still waiting for Turkey to grant overflight rights for planes on two aircraft carriers in the Mediterranean Sea. At the very least, the U.S. is hoping to use the 25 U.S. warplanes that patrol the northern no-fly zone from Incirlik, Turkey.
(END VIDEOTAPE)
MCINTYRE: Though, Lou, the war plan does not yet have a catchy name such as Desert Storm, but sources say it does have a designation, it's called Op Plan 10-03 Victor (ph). Sources say it could be executed in as little as 10 days -- Lou.
DOBBS: Any particular significance to 10-03?
MCINTYRE: Well, that's -- no, I don't know what the significance of the number is. I'm sure there is a significance. But I don't know it.
DOBBS: OK. Jamie, turning, if we may, to Asia. The fact is, we are now hearing reports that North Korea may be preparing another missile test. What can you tell us about that?
MCINTYRE: Well, just to be clear, this is not a ballistic missile; this is one of those short-range anti-ship missiles, like the one North Korea tested on the eve of the inauguration of South Korea's president. Not seen as a friendly gesture, not particularly helpful in a time of rising tensions, but not something that the Pentagon says presents much of a threat. The notice to mariners, as it's called, for an exclusion zone in the Sea of Japan covers a period that basically begins now and for the next three days. And again, it's a short-range anti-ship missile, not something seen as a big threat.
DOBBS: Nothing that would likely be passing over Japan, for example?
MCINTYRE: No, it would not be passing over Japan, but it would be in the Sea of Japan, between North Korea and Japan.
DOBBS: Jamie McIntyre, thank you very much, our senior Pentagon correspondent.
Coming up next here, new leads tonight in the hunt for Osama bin Laden. We'll have a report on where U.S. intelligence now believes the al Qaeda leader is hiding. Former U.N. weapons inspector Terry Taylor will join us. He says Iraq is playing the same games it's played throughout the '90s, and he says the country is not disarming. Terry Taylor joins us from London.
Also tonight, the man responsible for keeping nuclear weapons out of the hands of terrorists around the world, Mohamed ElBaradei, will join me in an exclusive interview.
And on Wall Street today, the markets end a losing week with a winning session. Christine Romans will have the market. And later, we'll be joined by the editors of the top business magazines in the country. Stay with us.
(COMMERCIAL BREAK)
DOBBS: In news around the world tonight, more violence and death in the Middle East. Two Israelis were killed, six others wounded when Palestinian gunmen attacked a Jewish settlement near Hebron. The two attackers were shot to death. Thirty people have died this week in fighting between Israel and the Palestinians.
Violent clashes between police and protesters in Belgium today. Dock workers took to the streets of Antwerp, Europe's second largest port. They hurled firecrackers and rocks at police who responded with water cannons and tear gas. The dockers were protesting a reconstruction plan they say would cost them their jobs.
In the war on terror, the White House today said it's only a matter of time before Osama bin Laden and other al Qaeda leaders are captured. White House Spokesman Ari Fleischer said he had no information to substantiate reports today that two of bin Laden's sons were arrested. National Security Correspondent David Ensor has the report.
(BEGIN VIDEOTAPE)
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): An aggressive search for Osama bin Laden is underway, U.S. officials say as they and Pakistani officials race to take advantage of new leads.
MATT LEVITT, FRM. FBI INTELLIGENCE ANALYST: There's no question in my mind that we will catch bin Laden. It is only a matter of time.
ENSOR: The information is pointing to this part of Northwest Pakistan and Just across the border in Afghanistan. Narrowing the search, officials say, to a few Pakistani provinces and a small area along the Afghan side of the border.
Despite reports to the contrary, knowledgeable U.S. officials say they do not believe bin Laden is currently in the Southwest, the Baluchistan and Balochistan province of Pakistan. The new leads are coming from materials seized Saturday with Khalid Sheikh Mohammed. His laptop, cell phones and address book. The president called him the master mind of September 11.
BUSH: Khalid Sheik Mohammed conceived and planned the hijackings and directed the actions of the hijackers. We believe his capture will further disrupt the terror network and their planning for additional attacks.
ENSOR: U.S. officials confirm Khalid Sheikh Mohammed is now talking and has begun giving his integrators information that is of some use. Wherever he is, officials say bin Laden must know he has never been in such danger since he escaped the closing noose in Tora Bora in December of 2001.
(END VIDEOTAPE)
ENSOR: A senior law enforcement official tells CNN that among the many names and phones numbers found with Mohammed, including some in the U.S., are two names and numbers in New York City, and one from upstate New York. U.S. sources say the materials also include evidence Mohammed may have been planning attacks on apartment complexes, bridges and hotels. But, Lou, no specifics.
DOBBS: David, thank you very much. David Ensor from Washington.
Still ahead here tonight, U.N. weapons inspectors continue to search for weapons of mass destruction in Iraq. The chief arms inspector says progress is being made and that war is not necessary.
Former weapons inspector, however, Terry Taylor disagrees. He joins us tonight from Washington. He says those inspections are a waste of time, that now is the time to act.
Later tonight, I'll be talking with Mohammed ElBaradei, the head of the U.N. nuclear watchdog agency. he'll tell us why he says more weapons inspection are necessary.
Also tonight, a trio of the best in business. Steve Forbes of "Forbes" magazine, Rik Kirkland of "fortune", Mark Morrison of "BusinessWeek". They'll be here to discus the worry, the war and all that's happening on Wall Street. Stay with us.
(COMMERCIAL BREAK)
DOBBS: In news across America tonight, a warning to students heading South for spring break. Health officials say high levels of bacteria have been found at five of Florida's most popular beaches. The bacteria could lead to several different gastrointestinal diseases, some of them serious.
A big down payment today on homeland defense. The Department of Homeland Security released $600 million to states for first responders. That money to be used for training exercises and equipment that would be needed in the event of a terrorist attack.
For the first time since 1941, California's 91st Division has been called to active duty. More than 1,500 reservists from 12 Western states were mobilized today. These troop, however, not be on the front lines. They will be used to prepare combat troops for deployment.
My next guest says it is time to stop Saddam Hussein from manipulating the United Nations and the world. Terrance Taylor is a former U.N. weapons inspector and joins us from London. Terrance, if I may turn to, first the order of business with Hans Blix today before the U.N. Security Council. Did it not to you seem that he gave something just about to both sides, whether speaking to France and Germany or the United States?
TERRY TAYLOR, FORMER U.N. WEAPONS INSPECTOR: Well, he certainly, I think, in my view laid out an objective report. Of course either side of the argument can draw on bits that suit their particular arguments.
I think it was interesting to hear, for example, the Spanish foreign minister. She said very clearly, very interesting remark, that the results of the report and the way the Iraqis are behaving confirmed her worse the fears.
Whereas on the other hand the German and French foreign ministers as well as the Russian foreign minister made clear that they saw some progress, substantive progress. So there was something there for all sides to draw upon.
DOBBS: And what do you see? Do you -- at this point what is your assessment?
TAYLOR: Well, I feel we're just seeing a repeat of the 1990s, unfortunately. And I think no one on this U.N. Security Council is saying that Iraq has actually complied in full with its obligations under Resolution 1441. I think they have come nowhere near it.
In the 1990s, we were allowed quite a lot of access, except towards the end of the period, of the -- nearer 1998. And the Iraqis did come forward when we did discover things with information when they realized we had actually discovered it. They also manipulated Security Council meetings by, perhaps, giving something just before the meetings took place. So, unfortunately, I see this is just a repeat of the 1990s. The inspectors, really, have a tough job. And I think they have a tougher job than we had in the 1990s, because the Iraqis are just better at hiding things. They have learned the lessons.
DOBBS: Today we heard Mohamed ElBaradei, the head of the International Atomic Energy Agency, saying that basically they had found nothing. He wasn't ready to give Saddam Hussein a clean bill of health, but basically found nothing. It was by, I think, most accounts a very reassuring report to the Security Council. What is your best judgment, if U.S. troops, British troops, the coalition do, indeed, attack Saddam Hussein's Iraq, what will they find?
TAYLOR: Well, that is a very hard question to answer. I mean, it depends on all the circumstances. And referring to Dr. Mohamed ElBaradei's report, he said in his report that he focused on whether or not his work, the work of his inspectors focused on whether or not Iraq, any evidence that Iraq had restarted the uranium enrichment facilities. And that was the focus of their work.
But there are other issues which Dr. ElBaradei has referred to in previous reports, to do with weapons design information, where are the weapons component, what's happened to a certain amount of HMX explosive, that specialized explosive for nuclear weapons that seems to have disappeared. So there a number of issues that need to be cleared up, which is why they can't be given a clean bill of health on this issue now.
But I think what the forces would find after a military intervention, there's going to have to be a careful forensic investigation, of course, after the military operation is over. And it's very hard to tell what they would find.
DOBBS: Your assessment, as we have watched the U.N. Security Council pass Resolution 1441, it has now been just about six months since the president put this issue before the world community. How much patience do you think should be required here? The British and the Spanish, the U.S. have advanced the idea of March 17 as a deadline. What is your thought on that?
TAYLOR: Well, I think it depends on how you weigh the risks. In other words, your risk assessment of the situation. We heard the French foreign minister in particular, Dominique de Villepin, say, well, there are greater risks in carrying out a military operation than there is in perhaps prolonging the inspection process, which might take some time, maybe months, maybe longer, but that would be some sort of containment. And the United States, the United Kingdom, and Spain and others say, well, they've had that chance, this was the last opportunity, and there are greater risks involved, not only with regard to Iraq, if we allow this situation to drift, like it was in the 1990s, and we know then it was clear that they continued their weapons of mass destruction programs while the inspectors were on the ground. And then of course, later, the political will gave way and Iraq was able to free itself from the inspection process.
So this is what those countries fear, I think with good reason.
DOBBS: And turning quickly, if we may, to North Korea. Your thoughts about a U.N. role there? Or is it -- and what should be done?
TAYLOR: I think the important relationship here is if Iraq is not dealt with promptly in the present circumstances, the North Koreans will take the lesson well the U.N. is not a serious and powerful organization in dealing with these issues and will actually make them even more brazen than they are already. So I think a prompt and efficient way of dealing with Iraq, by military action, if necessary, sends the right message to Pyongyang. I think there are greater dangers in letting this situation drift than resolving it straight away. Whether the U.N. has a role in North Korea, I don't think there is an immediate role for them at the moment there.
DOBBS: Terrence Taylor, tonight from London, we thank you very much.
Coming up next, the global nuclear threat is widening. Kitty Pilgrim will have a special report -- Kitty.
KITTY PILGRIM, CNNfn CORRESPONDENT: Lou, the list is getting longer of countries who may have nuclear weapons. Tracking nuclear material is harder than ever -- Lou.
DOBBS: Thank you, Kitty.
Also tonight, fresh from his presentation before the U.N. Security Council today, Mohamed ElBaradei will join us. He has just been called back to further consult with the Security Council. The head of the International Atomic Energy Agency will be here to tell us what inspectors are now doing to ensure Iraq's disarmament. That and a great deal more still ahead. Stay with us.
(COMMERCIAL BREAK)
DOBBS: The top stories tonight, the chief U.N. Weapons inspector Hans Blix today told the Security Council today Iraq needs months to disarm. But the United States and Britain propose instead to give Saddam just days. They have suggested a deadline of March 17 for full and complete disarmament.
Two Israelis were killed today, four others wounded when Palestinian gunmen infiltrated a settlement on the West Bank. The two gunmen were dressed as Jewish religious students. They were both shot and killed by security officers.
The White House today said it's only a matter of time before Osama bin Laden and other senior al Qaeda leaders are captured. The United States and its allies are concentrating the search in the border areas of Afghanistan and Pakistan.
There's growing threat of nuclear war in the world today. More countries developing nuclear capability than ever before. And some may be willing to sell nuclear material to terrorists. Kitty Pilgrim reports.
(BEGIN VIDEOTAPE)
PILGRIM (voice-over): When it comes to nukes, it's one of the worst times ever.
LEONARD SPECTOR, MONTEREY INSTITUTE: We're concerned about the future of Pakistan. We are worried about what's happening in North Korea. We're worried about Iraq and Iran. I think this is a very dangerous period, probably the most we've seen.
PILGRIM: Top of the list is North Korea. North Korea is thought to have processed enough plutonium for one or two nuclear weapons, and has restarted its atomic facility at Yongbyon, seen in these satellite photos. The worry is North Korea could be months away from producing enough plutonium for several nuclear bombs, or sell that material to terrorists.
Iran has declared all its nuclear programs as peaceful. Yet one facility, Natanz (ph), about 200 miles south of Tehran, is visible in these satellite photos. The U.S. State Department has questioned whether Iran was building a secret underground weapon there. Russia is also helping Iran with its nuclear power projects.
Pakistan and India have the potential to be the next nuclear flashpoint. Tensions flared last spring as the two nuclear powers faced each other across a disputed border. Pakistan is thought to have 30 to 50 nuclear warheads; India considerably more, perhaps twice as many.
And although Iraq is still lacking a key ingredient for a nuclear weapon, fissile material, the worry is they might get it on the black market.
GARY MILHOLLIN, WISCONSIN PROJECT: If you had to rank nuclear threats to the United States today, I think you'd have to put North Korea first, Iran second, and Iraq somewhere down the list, third. Iraq simply doesn't have the nuclear potential that either North Korea or Iran now has. But the problem with Iraq is, that if they can smuggle in enough for a couple of warheads, you'd never find them until they were used.
(END VIDEOTAPE)
PILGRIM: And the worry is so many countries appear to be attempting nuclear programs, it's a challenge to track all of them. And experts say the biggest worry of our time is that nuclear material will be sold or passed on to terrorist groups -- Lou.
DOBBS: Kitty, thank you very much.
And that will be one of the subjects we'll be discussing with Mohamed ElBaradei, the director general of the International Atomic Energy Agency, about Iraq, his efforts to stop nuclear weapons from spreading around the world.
As we reported, the United States and Britain have proposed setting March 17 as the deadline for Iraq to disarm. That's the subject of our MONEYLINE poll question this evening. Do you think the deadline for Iraqi compliance is too generous, too severe, or just right? Cast your vote at cnn.com/moneyline. We'll have the preliminary results coming right up.
And now the results of yesterday's question which was, "Has Iraqi president Saddam Hussein had sufficient time to comply with demands to disarm?" Sixty-three percent of you said yes, 37 percent said no.
Frivolous lawsuits are out of control in this country. The White House and Congress both are trying to do something about that. Just this week, the House Judiciary Committee approved a bill that would limit medical malpractice awards. Tort reform so far has been limited to this country because the big jury awards are limited to this country.
Jan Hopkins has the report.
(BEGIN VIDEOTAPE)
JAN HOPKINS, CNNfn CORRESPONDENT (voice-over): Last October, a Los Angeles jury awarded former smoker Betty Bullock a record $28 billion in damage. A judge later reduced that to $28 million. Sixty companies have filed for bankruptcy as a result of asbestos lawsuits. Andersen went out of business because of legal action against the firm. Yet, in the accounting scandal, no individuals have gone to jail.
In Europe different. Individuals can end up in jail, but companies don't companies pay the same kind of fines they do in the United States.
GEORGE BERMANN, COLUMBIA SCHOOL OF LAW: If you're suing in a European court for the very same loss of limb, life, profit expectancy, you can expect the figures to be so much lower outside the U.S.
HOPKINS: In Europe, civil cases don't go to juries. Judges decide damages, and damages are limited to the amount actually lost. With the government paying for medical costs in Europe, the losses are minimal.
This legal climate would seem to attract business from U.S. companies. But there are other considerations.
STUART FISENSTAT, FORMER U.S. AMB. TO EU: There's tremendous amount of overregulation. Almost every facet of life is regulated from top down in ways we would never tolerate.
HOPKINS: And there's a legal problem looming for U.S. companies in Belgium, the home of the European Union. A proposal moving through parliament would make executives criminally liable for any crimes against humanity anywhere in the world any time.
ALAN LITMAN, U.S. CHAMBER OF COMMERCE: Allegation is sufficient to trigger investigation. And that's the biggest problem for us.
Also, there is no protection against any allegation about crimes that are 20, 40 years old. And name a country that didn't have its share of problems in the world.
HOPKINS: U.S. companies are thinking twice about investing in Belgium until this matter is sorted out.
(END VIDEOTAPE)
HOPKINS: In Europe, the legal system seems to be designed to punish individuals and not companies. In the United States, the court system has been so hard on companies, there is a move afoot to reform the process -- Lou.
DOBBS: Good old American initiative and innovation, individual responsibility. That's about Europe.
HOPKINS: That's right, not about the U.S.
DOBBS: Ah, boy. Fascinating.
HOPKINS: Very interesting.
DOBBS: Thanks a lot. Jan Hopkins.
Coming up next, our "CEO of the Week," who runs company so popular with its employees, they slog their way through a flood to help save the business.
A rarity in Washington -- a settlement that will helps rid the air of pollution but won't cost taxpayers a dime. We'll have the story.
And we'll show you how the relationship between the United States and France has literally gone down the drain.
Stay with us.
(COMMERCIAL BREAK)
ANNOUNCER: LOU DOBBS MONEYLINE continues. Here again, Lou Dobbs.
DOBBS: Toyota today settled its lawsuit with the Environmental Protection Agency with an outcome that is good for the environment and it won't cost taxpayers a dime. And it was a very uncorporate-like resolution. Under this agreement, Toyota will pay $20 million to improve antipollution controls on diesel buses that it doesn't even manufacture.
Peter Viles has the story.
(BEGIN VIDEOTAPE)
PETER VILES, CNNfn CORRESPONDENT (voice-over): From the EPA and Toyota, a breath of fresh air. A creative settle to a complicated problem.
It started like this. The EPA found problems in 2.2 million Toyota cars built from 1996 to '98, including the Camry, the Corrolla, the Turcel and the Rav 4. But he problem was a technical one. It involved the systems that recover gas vapors, nothing to do with tailpipe emissions. The part of the system that checks for vapor leaks didn't work very well, but there was no evidence of emissions or safety problems, so a recall didn't make sense.
So Toyota agreed to put better systems in new cars and extend the warranties on old ones. But he's the wrinkle. It also agreed to spend $20 million to retrofit 3,000 old buses they didn't even make to reduce tailpipe emissions. Toyota specifically wants to fix up old yellow school buses that emit old black smoke.
L.P. SUAREZ, ASST. ADMIN., ENFORCEMENT EPA: And what that means is that our school kids, when they';re waiting for the buses, when they're getting on the buses , they're not going to be breathing in some of those harmful fumes that we know that are emitted by these dirty, older bus engines.
VILES: It also means that Toyota's lawyers and the government won't spend years and millions of dollars arguing over this dispute.
IRV MILLER, TOYOTA MOTOR SALES USA: We would have continued to fight this action, had the government elected to continue. So when the idea of resolving this came forward, we were very much in favor of it, as was the EPA. And I think it's a great opportunity to show what government and business can do when they sit down and understand and discuss the issues and try to move forward and come to a positive conclusion.
(END VIDEOTAPE)
VILES: What is especially unusual about this settlement is that both sides felt good enough about it to actually appear on our cameras. Typically companies will settle with the government and then, on the advice of their lawyers, refuse to comment further. So, refreshing sunshine here, Lou.
DOBBS: A lot of sunshine and remarkable, as you say, settlement. It would be nice to see the EPA and corporate America do business this way a heck of a lot more often.
VILES: Well, I'm told this is a priority for Christy Todd Whitman at the EPA to find more situations where, instead of fighting for years with no obvious benefit to the public, you can do something like this.
DOBBS: Well, I think she should have plenty of opportunity out there. Pete, thanks. Peter Viles.
Another piece of good news from the corporate world tonight. Our "CEO of the Week" runs a company that specializes in fun. Altering vehicles and snowmobiles are the manufacturers top products, generating $1.5 billion a year in revenue.
Tom Tiller of Polaris, our "CEO of the Week."
(BEGIN VIDEOTAPE)
TOM TILLER, CEO, POLARIS: This thing is a beast. It'll go anywhere.
DOBBS (voice-over): Tom Tiller rides a Polaris product 200 days a year. His employees are just as enthusiastic.
TILLER: The thing that really separates Polaris from the competition has been that passion for the ride and really what people experience out there, because we do it ourselves. DOBBS: All-terrain vehicles, or ATVs, are 60 percent of his company's revenue, a segment of the market that's exploding, more than quadrupling over the past 12 years. Customers range from weekend warriors to real warriors, searching for the al Qaeda.
TILLER: Over in Afghanistan, there's about 250 or so Polaris vehicles over that the troops are using to get around the countryside, some of the most rugged country in the world. And Polaris vehicles are designed specifically for that kind of application.
DOBBS: Polaris also makes snowmobiles, jet skiis, apparel and the new line, Victory Motorcycles. Bike sales were up 53 percent last year. Tiller says there's more money to be made.
TILLER: We'd like to see the motorcycle business, by the end of the decade, be around a $300 million business. We think this year, it'll grow very rapidly -- you know, 40, 50 percent kind of growth.
DOBBS: Polaris has a profitsharing as well as a stock option plan for employees. The board is independent.
The company employees 2,000 of the 2,700 people who live in Roseau, Minnesota. A disastrous flood nearly crippled the town and Polaris last June.
TILLER: We had hundreds of employees who had their own home just devastated, five minutes later walk across the street or got in a boat and came over and worked to try to save what we could, in particular save the place that they work and the place where all their neighbors work.
DOBBS: Polaris committed $7 million to expand the Roseau facility and employees raised another $500,000 to help their colleagues.
TILLER: There's a very strong work ethic in Northern Minnesota. People are very proud people, they care an awful lot about this company and the company cares an awful lot for them. And that really came to the forum in very difficult times.
(END VIDEOTAPE)
DOBBS: Congratulations to Tim Tiller, "CEO of the Week."
Still ahead here, as the French whine about America's Iraq policy, American protesters bid adue to French wine.
And some of the best and brightest business minds in the world join me next to discuss the world today. Steve Forbes of "Forbes" magazine, Rik Kirkland of "Fortune", Mark Morrison of "BusinessWeek." Stay with us.
(COMMERCIAL BREAK)
DOBBS: Now for a look at your words. Jenny Ware of California wrote to say, "It wouldn't matter to me if our president was Bush or Gore, we need to stand behind him and our troops."
Dan Waller wrote, "I'm against the coming war. This is just a test e-mail to see if you show e-mails from the anti-war side any more. Seems like I haven't seen one in weeks."
Well we sure have.
Alain Miller of Jamaica posed this question: "Will the United States, its military and its leadership be held accountable for war crimes if they launch an unprovoked attack on Iraq without the legality of approval by the United Nations?"
Dorothy Gleeson of California wrote to say, "I am a 68-year-old female and I am sick and tired of the media, politicians, Hollywood idiots, liberal scum protesters, Hans Blix, Jesse Jackson, Nelson Mandela, Hillary Clinton, bill Clinton and any other half-wit, nit-wit and screwball who hates America. God bless our men and women in the armed services. And God bless America."
We invite you to share your thoughts with us anytime, moneyline@cnn.com. Please include your name and address.
Well a lot of Americans are somewhat upset with France for its opposition to the president and the issue with Iraq. Today, there was an outpouring of anger, quite literally. Protesters gathered in front of the French consulate in Los Angeles, they proceeded to pour bottles of French wine into the gutter. A group called California Young Americans for Freedom sponsored the event. The group hopes its actions will encourage a boycott of French products.
Stocks today closed higher, the market suffered its second straight losing week, the Labor Department today reported business cut 300,000 more jobs last month, the unemployment rate is now 5.8 percent. Christine Romans has the market -- Christine.
CHRISTINE ROMANS, CNNfn CORRESPONDENT: Well, Lou, first a big selloff on the jobs report then cheers on the floor of the Exchange and a rally on rumors two of bin Laden's sons were captured in a firefight. the White House casts doubts on the reports and the Dow changed direction six times before closing higher. Advancers slightly beat decliners and the average stock rose half a percent today.
But it was another negative weekly performance. The Nasdaq, the worst of major averages, down more than 2 percent, hurt today by Intel and the semiconductors. And 27 Dow stocks closed lower this week led by GM, Lou, down 8 percent to an 8-year low. Coke, Boeing and ALCOA also week. Only ExxonMobil, Johnson and Johnson and General Electric pulling out gains for the week -- Lou.
DOBBS: Christine, we'll get a monthly retail sales report. What are we going to get else next week?
ROMANS: Michigan Sentiment is important, also PPI, but mostly folks are saying they want to see these retail numbers, particulary because of the jobless situation right now. Also watch those bond rates. The 10-year yields really close to those 41-year lows. And a Fed meeting just two weeks away.
DOBBS: I'm going to think about that Fed meeting all weekend, Christine.
ROMANS: I know, you can't wait.
DOBBS: Thank you.
Joining us now to talk about the economy, the political economy and the geopolitical situation around the world, is Steve Forbes, the editor in chief of "Forbes" magazine. Rik Kirkland, the managing editor of "Fortune". Mark Morrison, the managing editor of "BusinessWeek". Gentlemen, good to have you here.
(CROSSTALK)
DOBBS: This has been quite a week. I personally was surprised by the stability of the market today, given the president's press conference last night, the higher unemployment rate, all of the volatility on the market. What is your sense of this market?
MARK MORRISON, MANAGING EDITOR, "BUSINESSWEEK": Well I think we're at the end of the diplomacy phase, as the president said last night. And the market has been, has seen this coming. I think none of what we seeing play out here.
And these last couple of weeks are come -- none of this comes as a surprise to the market. And it's very oversold. No one is buying, it's just plateaued here at a pretty low level.
DOBBS: The unemployment rising, did that surprise you, Steve?
STEVE FORBES, EDITOR IN CHIEF, "FORBES": Not really. I think a lot of economic decisions have been postponed in the last three or four weeks because of the uncertainty. And the same thing with the market. As soon as we take decisive action on Iraq I think you're going to see this thing pop upward. People are just waiting to move.
DOBBS: Do you agree with that?
RIK KIRKLAND, MANAGING EDITOR, "FORTUNE": I think I agree with that. in other words, we knew this was a relatively jobless recovery. I think there's some funny stuff about those numbers in terms of the reservists and so on.
But it was clearly bad number. I think it was made worse by the climate of the last couple of weeks. Business is -- everyone I've talked to is absolutely frozen, they're just not doing any of the spinning they thought they might do two months ago.
So as Steve says, if things go right in Iraq, the real question is you might see unemployment rising up to as much as 6 percent. But if we begin to stop seeing layoffs and at least stability, maybe some gradual recovery here later in the year, then I think we'll be OK.
MORRISON: I have a different view. I think there's going to be a lot more unemployment ahead. You still have industries like financial services, airlines and any number that have huge excess capacity. And even after Iraq is behind us, we're not going to get the kind of robust growth in the economy that is going to cause people to go out and start hiring people again after going through the pain of getting their costs down.
FORBES: But a lot a lot of their equipment is starting to get obsolete. What was bought in '98, '99. And they've got to either upgrade it or buy new equipment. So I think capital spending is going to start move it. And when the market goes up 20, 30 percent and this thing is behind us, suddenly confidence is going to come back. Confidence follows the market, doesn't lead the market.
DOBBS: I think that's a wonderful point, Steve. Confidence here has been stubbornly resistant to any suggestion that the sun might shine even briefly. We've got record low investor confidence, it's only been measured since '96. We have a nine-year low in consumer confidence. We have an $8.5 trillion debt we learned this week, on the part of consumers and their households. What in the world is it going to take to lift confidence?
KIRKLAND: Well, some real signs of recovery. And business beginning to hire again. I mean I think part of what's kept people going is this economy is a mix of countervailing forces as people keep pointing out. So you've got low interest rates keeping people spending.
The real issue to me is that consumers are going to hang in there. But they're not going to give us more gas. They're pretty much done. So if we don't get some restoration and business confidence and some lift in spending, I'm not looking for a big rise in market. But if we don't get some kind of recovery there, then the confidence isn't going to come back.
But I think if this war on Iraq starts soon, which it will, and it goes well, which we will see, then that's the best you can hope, that we'll begin to see some restoration.
MORRISON: Confidence follows leadership. We saw that after September of 2001 when the market tanked. And then Bush made it clear we're going in Afghanistan, we routed the Taliban and the market rallied. We've been in what World War II called the "phony war phase" for over a year, waiting, what is going to happen with Iraq? Once that's out of the way and the world sees we can act, it sees what our military can do, even if we take some unexpected surprises, I think people are going to be relieved that it's over, decisions will start to be made and people will say there's, indeed, a tomorrow.
KIRKLAND: And perhaps most important of all we need a profits recovery and need people to believe in the numbers that are being reported. And I think that is going to happen before the end of the year. I think the market is going to end up higher this year.
FORBES: And I think people would love it if that French foreign minister would go and be a model, which he should be, for club med.
DOBBS: Well, you know what, I think he probably had some other ideas. But it's an interesting concept.
FORBES: That's where he belongs.
DOBBS: We're going to continue our conversation here in just a moment. "CROSSFIRE" is beginning in just a few minutes. Let's go to James Carville and Tucker Carlson to find out what in the world we can expect in just a few minutes -- James.
JAMES CARVILLE, CO-HOST, "CROSSFIRE": Well, sweet Lou, we won't have any fries tonight, but we have got a lot of burgers. As in former Secretary of State Larry Eagleburger and former National Security Adviser Sandy Berger. So we'll see if we can put some ketchup and mustard (UNINTELLIGIBLE). Honestly, we have a very serious night here tonight, talking about the looming and almost certain war with Iraq and North Korea and all those things going on around the world.
TUCKER CARLSON, CO-HOST, "CROSSFIRE": And then, Lou, Janeane Garofalo is in town for the Code Pink women's march against the war tomorrow. She is an actress, she is against the war, but we're not going to treat her like a ditzy actress who's against the war, we're going to treat her seriously and find out why we shouldn't go into Iraq. Janeane Garofalo. It's going to be a great interview.
DOBBS: Tucker, I know that you will bond profoundly. Thank you very much, Tucker. We look forward to it, James.
Here we'll continue our conversation with Steve Forbes, Rik Kirkland and Mark Morrison. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: More with the editors of "Forbes," "Fortune," "BusinessWeek" in just a moment. But first the preliminary results of tonight's poll. The question, do you think the deadline for Iraqi compliance is too generous, too severe, or just right? Thirty-six percent said the deadline is too generous, 46 percent say too severe, 18 percent say just right. Now, more of your thoughts. Regarding by interview with Terry McAuliffe, the chairman of the Democratic National Committee last night. Donella Scott of Arizona wrote to say: "That snide Republican grin on your face while you were interviewing Terry McAuliffe was unnecessary and very offensive. Maybe you should take lessons on how to appear less biased."
Larry Shays of Missouri said: "At the end of your interview with Terry McAuliffe, I screamed at you and switched to Dan Rather."
Rod Cook of Tennessee disagreed a bit. He said: "You showed a great deal of poise in talking with Terry McAuliffe. Dealing rationally with a radical Democrat is, at best, a futile situation. Congratulations."
And Cashel Weiler of Minnesota said: "It was a surprise to hear someone thought you were biased towards Republicans. To me, you are one of the least biased media persons in prime-time. Thank you for being so trustworthy." Thank you.
Send your e-mails to us at moneyline@cnn.com. Include, please, your name and address.
We're back now with the guys who run the nation's top business magazines. Steve Forbes of "Forbes," Rik Kirkland of "Fortune," Mark Morrison of "BusinessWeek."
Oil prices today back up. How severe do you think these prices are going to get?
MORRISON: This is very scary. And everybody is assuming that once we get beyond Iraq, we're going to get rid of the $10 premium that's on the barrel of oil right now. I'm not sure that's true. We have got very tight supplies, partly from Venezuela, part from weather. And there's no assurance that just because we get Iraq behind us, that suddenly the supply is going to gush forward.
DOBBS: Should we get Jimmy Carter scared? How scared should we be here?
MORRISON: Well, I think very concerned. And...
KIRKLAND: But for how long, Mark? I mean, yes, it can be a little longer than we think, but if things go right in Iraq, and that gets resolved, and this supply tightness, shouldn't it resolve itself in a matter of months?
MORRISON: You don't know how much damage is going to be done to the Iraq flow of oil, which is a considerable part of the equation. You don't know how fast Venezuela is going to come back. And a lot of the countries, even Saudi, you talk about the spare capacity they have, it's not as great as we think. And they'll turn it up as much as possible, because they don't want the price of oil to go any higher, but I'm not sure they're going to do it. We're entering the heavy driving season with no gasoline out there in the pipeline, because we're still making heating oil to try to stay warm.
FORBES: I think OPEC, knowing those nations, are going to find every way to squeeze every extra barrel out. The Russians love the opportunity to rake in tens of billions of dollars. Even if we go in Iraq without their permission, they'll be glad to take our money. And the thing we are going to have to deal with is that psycho and psychopath in Venezuela. That is a crisis. But I think there, there's growing domestic opposition among all segments of Venezuelan society. And if it looks like this lunatic will go, then I think you're going to see the oil prices really go down.
DOBBS: Referring to President Hugo Chavez...
FORBES: Wannabe Castro.
DOBBS: Wannabe Castro. I don't think there is any doubt about that whatsoever. There's no suggestion, however, that he is nearing a transition, is there? FORBES: No, but as the opposition grows, somebody is going to do something against (ph) him.
(CROSSTALK)
FORBES: He has got a test coming in August. He's got to say whether he is going to have an election or not. And if he passes that deadline, making it clear he is going to have a dictatorship, I think you're going to see the street really rise up in Venezuela.
DOBBS: North Korea. The issues there concerning nuclear proliferation, the restart of the weapons plants. How big an influence do you think that is having on the world economy right now, the world markets? And what do we think should be done about it?
KIRKLAND: Well, it's a psychological effect. But I find Korea a fascinating example of the kind of hypocrisy out there now. When you are the world's indispensable superpower, on the one hand, we're taking grief for unilateral action in Iraq, and yet in North Korea, all the folks who should be helping us deal with this, Japan, and China, and South Korea, and others in the region are all of a sudden saying, you guys talk to them, we're going to stay out of it. So you just got to do what you can.
FORBES: And I think North Korea's attitude will start to change when they see Iraq actually happen in reality, not abstract.
DOBBS: Are you amazed at the patience of the Bush administration through all of this? Because where we started, if we can call it starting in August, this has been a remarkable constraint.
MORRISON: Yes, I called it the pre-war, and I think Saddam won the pre-war. It has been frustrating for the administration. I think they've been pretty patient and I'm glad they have been. So I think it's been discussed.
DOBBS: I'm giving you the last word, even if I'm stepping on you, apologies. We are running out of time. Steve Forbes, Rik Kirkland, thank you very much for being here.
That's MONEYLINE for this Friday evening. We still hope to talk with the director of the International Atomic Energy Agency, Mohamed ElBaradei. He is still working right now at the United Nations, called back to the Security Council. We hope to have that interview for you during "CROSSFIRE." Thanks for being with us. Have a very pleasant weekend, and for all of us here, good night from New York.
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