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CNN LOU DOBBS MONEYLINE
Bush, Two Closest European Allies to Hold Emergency Summit to Discuss Iraq; U.S. May Withdraw Resolution due to Lack Of Support
Aired March 14, 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 14.
Sitting in for Lou Dobbs, Jan Hopkins.
JAN HOPKINS, HOST: Good evening.
President Bush and his two closest European allies will hold an emergency summit this weekend to talk about Iraq. The White House says the summit with Britain's Tony Blair and Spain's Jose Maria Aznar is a final pursuit of the U.N. resolution to disarm Iraq. The meeting will be held on the Azores Islands in the Atlantic.
Also today, the president announced a new Middle East initiative.
White House correspondent Suzanne Malveaux has a report.
(BEGIN VIDEOTAPE)
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): First came early word of an emergency session on Iraq, then a surprise Rose Garden announcement in which President Bush renewed his pledge to help Israelis and Palestinians achieve Middle East peace.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: America is committed and I am personally committed to implementing our road map toward peace.
MALVEAUX: The White House says with the expected confirmation of a new Palestinian prime minister soon, now is the time to put the issue back on the table. The Bush administration has been criticized by Arab and European leaders for largely ignoring the Israeli- Palestinian conflict while it focuses on Saddam Hussein.
The White House insists the timing of the announcement had nothing to do with the tough diplomacy on Iraq. But its chief ally, British Prime Minister Tony Blair, acknowledged it did.
TONY BLAIR, BRITISH PRIME MINISTER: I think it's precisely now, when we do have all this focus on the issue of weapons of mass destruction and Saddam and all the things that he has done, it's precisely now that we say to the Arab and Muslim world, we accept the obligation that we've been handed us.
MALVEAUX: The White House also announced President Bush will travel to the Azores Islands to hold an emergency summit this Sunday with Britain, Spain and host Portugal in an attempt to salvage a second U.N. Security Council resolution on Iraq.
CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: Sooner or later, the United Nations Security Council has got to act or not act. And so it is time for the Security Council to resolve this and the presidents and prime ministers will get together this weekend and they'll talk about the way forward.
(END VIDEOTAPE)
MALVEAUX: President Bush has a very serious challenge this weekend ahead. The U.N., rather, does not even have the nine votes or the no vetoes for a resolution to pass and today Chile offered its own proposals to give Saddam Hussein three to four weeks to disarm, a nonstarter for the Bush administration -- Jan.
HOPKINS: A lot to talk about this weekend.
MALVEAUX: Absolutely.
HOPKINS: Thanks very much.
Suzanne Malveaux at the White House.
As the president and his allies prepare for their summit, talks continue at the United Nations on a new resolution. The United States wants a vote next week. But it may withdraw the resolution if there is not enough support.
Richard Roth joins us live from the United Nations with the latest -- Richard.
RICHARD ROTH, CNN SENIOR U.N. CORRESPONDENT: Jan, all eyes here at the U.N. are really going to be watching that island in the Atlantic Ocean, the Azores, to see just what progress is made by Spain, the U.S. and the U.K., because they are the sponsors of this resolution, which has been going nowhere, really, for days. Even an attempt by the British to make some amendments or changes and ease deadlines, that has also run into a deadlock.
Here at the U.N. Security Council, ambassadors were buzzing about, but the highlight was this. The French ambassador, entering his mission, it was supposed to be a meeting of the permanent five powers on the Council, all of them with vetoes, and then shortly before that it was canceled at the direction of the U.S., we are told, "The meeting was overtaken by events."
Nevertheless, ambassadors here are not giving up hope of any type of diplomatic solution.
(BEGIN VIDEO CLIP)
ADOLFO AGUILAR ZINSER, MEXICAN AMBASSADOR TO U.N.: We will never lose hope that a diplomatic solution could be found in the United Nations. SERGEY LAVROV, RUSSIAN AMBASSADOR TO U.N.: I hate to work over the weekends, as I hope you do, but I mean at this very serious time, of course, all our plans could be dropped if there is a proposal to meet.
(END VIDEO CLIP)
ROTH: Jan, as you said, the prospects now for that resolution, they could decide over the weekend to pull it, to put it to a vote. But it doesn't seem like the U.S. has the nine votes necessary. That would be quite embarrassing. And late news in, Iraq has now, indeed, submitted some paperwork on V.X. and nerve agent gas, a report that had been inspected for more than a week. The U.N. weapons inspectors now have it. They have it by fax. But it's 20 pages long. It's in Arabic. It's going to take time to translate it and analyze it -- Jan.
HOPKINS: Thanks.
Richard Roth at the United Nations.
The United States and Britain have made a determined effort to convince the U.N. that Saddam Hussein has continued to develop weapons of mass destruction. President Bush, Secretary of State Colin Powell and the British government all cited what they called strong evidence that Iraq was trying to obtain African uranium. But the U.N. says those documents were faked.
National security correspondent David Ensor reports.
(BEGIN VIDEOTAPE)
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): For the Bush administration and for U.S. intelligence, the matter of the apparently forged documents on Iraq pursuing African uranium is turning into a world class embarrassment.
RAY CLOSE, FORMER CIA OFFICER: I['m sure that the FBI and the CIA must be mortified by this because it's extremely embarrassing to them.
ENSOR: The question is why did the U.S. and the British government pass on to the International Atomic Energy Agency documents which the IAEA officials say are obvious forgeries, passed on as evidence Iraq might have tried to buy 500 tons of uranium in Niger.
COLIN POWELL, SECRETARY OF STATE: It was provided in good faith to the inspectors and our agency received it in good faith, not participating, if that's the suggestion of your question, in any way in any falsification activities.
ENSOR: Knowledgeable sources tell CNN one of the documents purports to be a letter signed by Tandja Mamadou, the president of Niger, talking about the uranium deal with Iraq. On it, a childlike signature that is clearly not his. Another written on paper from a 1980s military government in Niger bears the date of October 2000 and the signature of a man who by then had not been foreign minister of Niger for 14 years.
MOHAMED ELBARADEI, DIRECTOR GENERAL, INTERNATIONAL ATOMIC ENERGY AGENCY: We've got forensic experts and we have come to the conclusion that these documents are forgeries.
ENSOR: A former CIA operations official says the Central Intelligence Agency should have known better.
CLOSE: They have tremendously sophisticated and experienced people in their technical services division who wouldn't allow a forgery like this to get by. I mean it's just, it's mystifying to me. I can't understand it.
ENSOR: But a U.S. intelligence official says the documents were passed on to the IAEA within days of being received by the CIA, with the comment, "We don't know the provenance of this information, but here it is." If a mistake was made, a U.S. official suggested it was more likely incompetence, not malice.
CLOSE: That's a convenient explanation, but it doesn't satisfy me, because incompetence I have not seen in those agencies. I've seen plenty of malice, but I've never seen incompetence.
ENSOR: What makes the matter all the more embarrassing is that the African uranium plot was highlighted by the president himself.
BUSH: The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa.
(END VIDEOTAPE)
ENSOR: U.S. officials say that assertion by the president and the British was also based on additional evidence of Iraqi efforts to obtain uranium from another unnamed African country, though a knowledgeable U.S. official says there's not much to that evidence, either -- Jan.
HOPKINS: David, who made the apparent forgeries? Do we have any idea?
ENSOR: Well, experts I've spoken to have a number of theories. The suspects include the intelligence services of some of Iraq's neighbors, obviously some of the pro-war countries, a con man, perhaps, just trying to make money. A lot of people believe that could have been the origin of the documents, at least. So they're saying that, U.S. officials are saying that it's not, they didn't get this document from the British or from Israel and most people rule out the idea of a forgery made by the U.S. or by British intelligence, since they would make a far better forgery. These were not very good forgeries -- Jan.
HOPKINS: How damaging, David, would this be to credibility of the U.S. and others pushing for war in Iraq?
ENSOR: Well, it just doesn't help when you're producing and when your own, when the president of the United States is citing evidence that then turns out to be forged documents. So it's just sloppy work and it will not help, that's for sure.
HOPKINS: David Ensor in Washington, thank you.
While the debate over Iraq's weapons continues, the Pentagon is preparing for war. CNN has learned the United States is considering a preemptive strike against Iraqi forces. Military planners are working on ways to stop Saddam Hussein taking desperate action after a U.S. ultimatum.
Senior Pentagon correspondent Jamie McIntyre has that story.
(BEGIN VIDEOTAPE)
JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT (voice-over): B-1 heavy bombers joined the fight Friday, dropping satellite guided JDAMs on Iraqi air defenses in the southern no fly zone. The targets included a flat paced radar like this one, taken out earlier this week by the U.S. Air Force F-15. It's all part of a prewar attempt to degrade Iraq's remaining military capability and dissuade Iraqi commanders from using weapons of mass destruction.
GEN. RICHARD MYERS, JOINT CHIEFS CHAIRMAN: Any involvement by the Iraqi military in any form of biological or chemical or nuclear radiological weapons, they will not be part of any new Iraqi military.
MCINTYRE: Pentagon officials are most worried about a window of vulnerability between the time President Bush might issue an ultimatum and the actual start of the war. Pentagon sources say the U.S. is looking at options to neutralize three nightmare scenarios -- a chemical or biological attack on U.S. troops massed in Kuwait, detonation of the oil fields in the north and south and SCUD missile strikes on Israel, which could also involve weapons of mass destruction.
Pentagon officials say there remains abundant and recent evidence that Saddam Hussein is planning a repeat of the oil fires he set in Kuwait in 1991. Sources say massive amounts of dynamite have been moved near the fields, but U.S. officials say they don't know if the well heads have been wired because of the limitations of overhead surveillance.
Sources say the Pentagon plan is to put U.S. troops on a hair trigger alert to essentially begin the war if Saddam Hussein attacks U.S. troops, his neighbors or his own people out of desperation.
As part of the final preparations, the U.S. is hastily building a desert air strip in the United Arab Emirates to base more than 100 fighter planes that Turkey won't allow in. And about a dozen cruise missile firing ships and submarines have now been repositioned in the Red Sea.
(END VIDEOTAPE)
MCINTYRE: While the U.S. is still pressing Turkey for over flight rights, there's no indication at this late hour that Turkey is going to give in. One fallout of Turkey's refusal, by the way, it turns out that some of the Army's best equipment, most updated M1A1 tanks, Bradley fighting vehicles, Apache helicopters are stuck on those cargo ships floating off the coast of Turkey and will likely not make it to the war -- Jan.
HOPKINS: So, a big impact as a result of the equipment still being at sea?
MCINTYRE: Well, it's going to, the Fourth Infantry Division is the Army's best equipped division. These tanks and helicopters and vehicles had a special system that allowed them to display the maps of the battlefield, including where all the friendly forces are, linked by computers. No other division has this equipment. It's the best the Army has. It's the best at finding the enemy and protecting U.S. troops. It's all stuck on those ships and it's not going to be used.
HOPKINS: Jamie McIntyre at the Pentagon.
Thanks.
And still to come on MONEYLINE, in the past half hour, police investigating the abduction of Elizabeth Smart have revealed new details about the case. Jeanne Meserve will have a live report from Salt Lake City.
Millions of Spaniards took part in a protest against a possible war with Iraq today. But the Spanish government continues to support the United States. The Spanish ambassador to the U.N. will tell us why Spain believes Saddam Hussein should be disarmed now.
On Wall Street, the Dow advances again, but the NASDAQ and the S&P are little changed. Greg Clarkin will review the markets.
Ford and G.M. have been producing cars faster than they can sell them. That means they're facing some tough choices about the future. Peter Viles will have a special report.
(COMMERCIAL BREAK)
(VIDEO/AUDIO GAP)
HOPKINS: ... strategy. Spain has played an important role in trying to persuade Mexico and Chile to back a tough new U.N. resolution against Iraq.
Joining me now is Innocence Arias. He's Spain's ambassador to the United Nations.
Welcome, Ambassador.
INOCENCIO ARIAS, SPANISH AMBASSADOR TO U.N.: Thank you.
HOPKINS: In terms of the meeting this weekend, what's the top part of the agenda? Is it to get a resolution through the U.N. or to plan for an attack against Iraq?
ARIAS: I think the first part is the important one because everybody is interested in the United States, the United Kingdom and Spain in finding a diplomatic solution to the problem. And I should tell the presidents will have to decide whether we present the resolution or we don't present it.
But I think my country did what everybody (UNINTELLIGIBLE) following the path of the United Nations. I understand it, and if my country call correctly, in September 12, six months ago, we have been fighting here to try to reinstate what is obvious, that this man, that Saddam Hussein is violating the international law. And we mustn't allow that.
HOPKINS: Is there a compromise possible in the U.N.? I mean you're sitting there at the U.N. and you've been working very hard to get Chile and Mexico behind the resolution. Is it possible to get the resolution passed and...
ARIAS: Well, it is...
HOPKINS: I mean I guess it's not possible to get it passed and not vetoed.
ARIAS: Well, we cannot abandon hope and we have said that this, we can be ready to get in touch with other members. There is a Chilean proposal floating, but I think that what we call the six undecided, which are Chile and Mexico and Guinea, Pakistan, Cameroon and Angola, haven't reached an agreement to present it to us. We have studied it gladly. There were some points that we didn't like, like the fact that the proposal deleted too much the meaning and the philosophy of Resolution 1441. But we are waiting. I think that all ambassadors are waiting.
HOPKINS: But the White House basically said that this proposal, which allows more time for Saddam Hussein, is a nonstarter so...
ARIAS: Yes, I think, yes. I think so. There are some ideas in the proposal that we couldn't accept and there are some others we could discuss. The diplomatic solution is the last thing we should abandon.
HOPKINS: What happens at this meeting if the decision is that the only possible move is to pull the resolution off the table? Then is there a discussion about how and when to attack Iraq?
ARIAS: Well, you're asking me a political question that should be asked to the prime minister. I think that the first they are going to discuss what is happening here and what we can do. We can vote, we'll have the vote, we will do it, we don't do it. But later on I suppose they will discuss what is the next step, which is not forcing me to attack Iraq, but that's something for the president, not for a (UNINTELLIGIBLE).
HOPKINS: Thank you, Ambassador Inocencio Arias of Spain.
Thanks for joining us.
And coming up next, an anti-war protest in San Francisco today. There were more scheduled for the weekend. We'll have the story.
His anti-Semitic remarks cost a Democratic congressman a top party post? But that hasn't stopped charges that Jews are pushing America into a war with Iraq. We'll have a report.
Did Elizabeth Smart's alleged kidnapper have another target in mind? We'll have the latest on that story and more when we come back.
(COMMERCIAL BREAK)
HOPKINS: Coming up next, NASA is planning to restart the space shuttle program sooner than you might think. We'll have that story and other news across America.
Plus, Russia is one of the top exporters to Iraq. Bill Tucker will have a special report on what it stands to lose in the event of war.
That and more ahead.
(COMMERCIAL BREAK)
HOPKINS: A new development tonight in the Elizabeth Smart investigation. Police say that her alleged kidnapper may have also tried to abduct Elizabeth's cousin just a few weeks later.
Jeanne Meserve is in Salt Lake with the latest -- Jeanne.
JEANNE MESERVE, CNN CORRESPONDENT: Jan, a press conference just a short time ago with the Salt Lake County sheriff, Aaron Kennard. He said that he may bring charges as early as Monday or Tuesday against Brian Mitchell for the attempted kidnapping of a cousin of Elizabeth Smart. The cousin was awoken in the middle of the night last July when she heard a noise. She looked up. She saw an object poking through a closed blind. She alerted her parents. They let out the family dog. 911 was dialed. Investigators came. They found nothing at the time that would indicate who was responsible and initially attention focused on neighborhood kids.
But the sheriff indicated that information and evidence has been developed since the recovery of Elizabeth Smart which makes them believe that Brian Mitchell may, indeed, be associated with this case, as well. They would not spell out specifically what the nature of that evidence was.
Meanwhile, we have talked to the U.S. attorney's office. No final decision there on what charges will be brought against Mitchell in connection with the Smart abduction itself. They're still in consultation with police, both state and federal prosecutors. We're told it's likely that state charges will go first and they could be filed as early as Monday.
There was a court hearing today relative to a shoplifting charge that was filed against Mitchell. Mitchell was not in the courtroom. There was a closed circuit TV feed from his jail cell. He pleaded innocent to those charges. Also today, some videotape was obtained of a hearing in San Diego. This when Mitchell was arrested in February for breaking into a church. He was held there for six days, as has been reported, and was let go because police in San Diego had no idea that anyone was interested in talking to him in connection with the Smart case.
Tonight, here in Salt Lake City, a rally is scheduled. Ed and Lois Smart are expected to be there. Elizabeth is not. But given the weather, which you can see has gotten a little bit severe, we're unsure whether that will be proceeding as scheduled -- Jan, back to you.
HOPKINS: Thanks.
Jeanne Meserve in a very stormy Salt Lake.
Checking other stories making news across America tonight, NASA wants another space shuttle in orbit by this fall. The shuttle program has been grounded since Shuttle Columbia disaster on February 1st. A top NASA official told engineers to make changes to the craft that may be suggested by the board investigating this tragedy.
A flashing warning light forced the emergency landing of a military helicopter in New Jersey. The pilot of the Black Hawk called the landing precautionary. The crash of another Black Hawk earlier in the week killed 11 soldiers at Fort Drum, New York. Those soldiers were remembered today as heroes.
Anti-war protesters tied up rush hour traffic in San Francisco this morning. Dozens were arrested. More massive rallies are planned for tomorrow. And there were at least two rallies for America scheduled this weekend. Organizers say that those rallies are meant to show support for U.S. troops.
The issue of a possible war with Iraq has caused one congressman an important party post. Democrat James Moran of Virginia resigned as a regional whip, a position that helps rally votes for the party. That follows his remarks that American Jews are pushing this country into a war with Iraq. Israel and American Jewish groups deny the allegations, but that hasn't stopped the allegations from spreading.
Candy Crowley has the report.
(BEGIN VIDEOTAPE)
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): Whether implied or stated outright, the suggestion is there, that powerful Jewish interests are driving the Bush administration into a war. The notion is so prevalent, the country's top diplomat had to explain how policy is not made.
COLIN POWELL, SECRETARY OF STATE: It is not driven by any small cabal that is buried away somewhere that is telling President Bush or me or Vice President Cheney or Condy Rice or other members of our administration what our policies should be.
CROWLEY: Perhaps this anti-Semitism or maybe conspiracy theories thrive because people are confused about the reason for war. Whatever it is, the notion of a Jewish conspiracy peppers the Internet, unfettered by facts, unbounded by cyberspace. The issue recently made mainstream headlines when Democratic Congressman Jim Moran told an anti-war meeting, "If it were not for the strong support of the Jewish community for this war with Iraq, we would not be doing this. The leaders of the Jewish community are influential enough that they could change the direction of where this is going and I think they should."
Some saw a nasty flash of history, a furor erupted, Moran apologized. There are, in fact, prominent Jewish-Americans in the Bush administration and the president has, in fact, linked war with Iraq to greater security for Israel.
BUSH: Success in Iraq could also begin a new stage for Middle Eastern peace and set in motion progress towards a truly democratic Palestinian state.
CROWLEY: President Bush has been strongly pro-Israeli. But some point out to believe a Jewish conspiracy is plotting war for Israel's sake is to misunderstand the view from Israel.
LI GOLDBERG, EDITOR, "THE FORWARD": There's a large consensus in the defense establishment there that Iran and Iraq neutralize each other and make the Middle East safer for Israel. So that the notion of going to war and eliminating Iraq as a strategic force terrifies a lot of Israelis who see Iran then unobstructed.
(END VIDEOTAPE)
CROWLEY: The idea that American Jews are pushing for war also flies in the face of domestic politics. The American Jewish vote is heavily Democratic. One Jewish source said, "You could more easily make a case for a conservative Christian conspiracy. They are both pro-Bush and pro-war."
Jan.
HOPKINS: Interesting.
Thanks.
Candy Crowley.
And Elizabeth Smart's safe return home is the subject of tonight's MONEYLINE poll. We're asking, "Is it time for the media to leave the Smart family alone now that Elizabeth has returned home?"
Cast your vote at cnn.com/moneyline. We'll have preliminary results later in the broadcast.
Yesterday we asked, "Do you believe the media to be liberal, conservative, balanced or out of touch with your views?" Twenty-nine percent of you said liberal, 55 percent of you said conservative, four percent said balanced and 12 percent said out of touch with your views. Coming up on MONEYLINE, Russia has spent the last several years strengthening its economic ties to Iraq. Bill Tucker will have a special report -- Bill.
BILL TUCKER, CNNfn CORRESPONDENT: Jan, Russia and Iraq are old friends, with a friendship that goes back to 1958 and it's classic guns and butter. I'll explain it to you later.
HOPKINS: Thanks, Bill.
And some companies say that homeland security is hurting their bottom line. We'll have that story and more ahead.
(COMMERCIAL BREAK)
ANNOUNCER: LOU DOBBS MONEYLINE continues. Here again, Jan Hopkins.
HOPKINS: These are the top stories that we're following tonight.
President Bush and the British and Spanish prime ministers will hold an emergency summit about Iraq on Sunday. They will meet on the Azors Islands in the Atlantic. The leaders will discuss whether or not they should continue to look for a diplomatic solution to the crisis.
B-1 bombers have attacked targets in Iraq for the first time since the military buildup in the Persian Gulf began. They're taking part in raids to prepare the ground for a possible invasion of Iraq.
NASA today said it could resume its space shuttle flights before the end of the year. This would only happen, though, if problems that led to the Columbia disaster last month can be identified and corrected.
Last night, Bill Tucker reported on the French connection in Iraq. France is a top exporter to Iraq, spending $600 million worth of goods there each year.
And tonight we examine, our rather he examines, another top exporter that has opposed using force in Iraq, and that is Russia. The Iraqi-Russian relationship goes back for decades. It's steeped in politics and oil.
Bill Tucker has the story.
(BEGIN VIDEOTAPE)
TUCKER (voice-over): From the oil fields of Iraq to the Security Council of the United Nations.
SERGEY LAVROV, RUSSIAN AMBASSADOR TO THE U.N.: Russia does have material interest in Iraq, but Russia is promoting this economic interest in Iraq, not through illegal means, but through implementation of the resolutions.
TUCKER: The suggestion of impropriety is needed, but some definition might make it more clear.
Russian oil companies currently have contracts to explore and develop oil fields containing 3.6 billion barrels of oil, all for development after sanctions are removed. Two other oil fields are open for negotiation. Those fields contain 21 billion barrels of crude.
Phase 2 of the current field have belonged to Russia's largest oil company, Lukoil, until they committed an error in judgment.
ROBERT EBEL, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: They signed a contract with Iraq to develop the oil field, but then Iraq canceled it out, because it appeared that Russia was talking to the U.S., trying to protect its interests in the case -- in the event that Saddam Hussein was replaced.
TUCKER: And the Bin Amare (ph) field had been widely seen as going to France's TotalFina until Iraq took it off the table and put it in play with the Russians.
This is high stakes poker with more than just oil being bet. Power and longstanding influence in the region are at stake, and then there is the matter of debt. Iraq owes Russia some $8 billion for military equipment that it bought during the Iran/Iraq war.
CONSTANTINE MENGES, HUDSON INSTITUTE: Of course, let's remember that right now Russia continues to supply Iraq with missiles, missile parts, technicians and so forth.
TUCKER: Iraq and Russia also remain cozy through the U.N. oil for food program. Most of the oil brokered through that program is estimated to go through Russian brokers.
(END VIDEOTAPE)
As for what should happen in a post-war Iraq, well, all bets are off. But the prevailing opinion among observers is that international law would keep those contracts enforced. And that jam would, in effect, give Russia a no-lose hand in this game of poker.
HOPKINS: Very interesting. But it does look like Iraq has been very shrewd in dealing with business people.
TUCKER: Yes. They have a reputation for being shrewd. They put the screws to Lukoil for committing that error of talking to the U.S., want to stay in line after post-war. And they put it to TotalFina to ensure, in fact, that the French stay in line, according to some people. And that's why they took the huge field off of the table with Total and said, stay in line. It may come back on.
HOPKINS: Thanks, Bill Tucker.
TUCKER: You bet.
HOPKINS: Homeland security is a national priority, but some in the business world say that it comes at a cost. Many companies say that the government's efforts to keep terrorists out of the country are hurting their businesses.
Casey Wian has the story.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNNfn CORRESPONDENT (voice-over): The U.S. trade show industry is already struggling because of the weak economy, the slumping tech sector, and international travel jitters. Now it's being crippled by strict homeland security features.
Take last week's CE (ph) trade show last week in Miami. Italian deck chairs arrived in port two weeks ahead of time, but customs inspectors held up the shipment, and the chairs missed the show.
From a container of Turkish stainless steel cookware, cleared too late for Chicago's national restaurant show, to employees of a dozen Chinese instrument makers, denied visas to Anaheim's musical products convention, trade shows are losing international business.
JACQUELINE RUSSO, INTERNATIONAL ASSOCIATION FOR EXHIBITIONS MANAGEMENT: Some major exhibitions in the United States have more than 30 percent of their exhibitors are international. If even two or three percent of those exhibitors, which are coming from abroad, are not able to make it to the show, that results in large gaps on exhibition show floors.
WIAN: It's not just trade shows. Boeing has delayed jet deliveries because some foreign buyers couldn't get visas for pilots. Motorola says a communications equipment sale to Vietnam has been jeopardized because of visa delays, one of several recent problems the company blames on U.S. bureaucratic bottlenecks.
Businesses say they support increased security measures, but too often, they say, low risk transactions are casualties of the war on terrorism.
BILL REINSCH, PRESIDENT, NATIONAL FOREIGN TRADE COUNCIL: Our competitors are beginning to use this as a bargaining point. They're coming in to say, you can't get into the United States, you won't be able to be trained in the United States, come to Canada. Come to Germany. Come to wherever, you won't have this problem.
WIAN: the Bush administration is listening. Homeland security department's point man for the private sector met with business leaders last week to hear their concerns.
(on camera) But even if the process is stream lined, businesses are preparing for continued delays. As a former Commerce Department executive puts it, no one wants to be the one to stamp "approved" on the next terrorist visa.
Casey Wian, CNN, Los Angeles.
(END VIDEOTAPE)
HOPKINS: Still ahead tonight, Detroit automakers are facing tough times, forcing tough decisions. The situation looks especially bad for Ford. Peter Viles has more on that story -- Peter.
PETER VILES, CNNfn CORRESPONDENT: Jan, it's been a really tough year so far for auto sales, and Detroit at the production level is responding, cutting back production, hunkering down until the questions over Iraq are settled -- Jan.
HOPKINS: Thanks, Peter.
Our CEO of the week's company is providing security of a kind for the U.S. military in the Persian Gulf.
And also tonight, I'll be joined by the nation's top business editors in our weekly editors circle.
(COMMERCIAL BREAK)
HOPKINS: U.S. automakers have kept sales rolling the past 18 months with incentive deals. But with many Americans driving new cars on interest-free loans, the auto industry appears to be headed for a more challenging phase.
Peter Viles has our report.
(BEGIN VIDEOTAPE)
VILES (voice-over): In a time of economic uncertainty, the auto industry is slamming the brakes: GM slashing production 10 percent in the second quarter, Ford 17 percent. Neither wants to be stuck with too much inventory.
Behind the cutbacks, weak sales in January and February. But the question economists are wrestling with, is this just war anxiety, or is it something deeper? Maybe an end to the remarkable run of strong auto sales or signs of a broader consumer pull back.
RICHARD RIPPE, PRUDENTIAL SECURITIES: The auto companies tell you something about the consumer, but they do not tell you the whole story. And I think consumer signs are still OK. February was a weaker month, but we had some temporary restraints in that month. And I believe the trend in consumer spending is still upward.
VILES: Before this year's slump, the industry was moving cars and trucks, but only by offering huge incentives at huge costs.
Ford shares now trade near an 11-year low. There's been even talk that bankruptcy is a possibility. Credit analyst Sean Egan saying recently, quote, "If it didn't have the name Ford, it would be in bankruptcy."
Ford shot back that it is, quote, "fundamentally strong."
The problem is it was already losing money. And now auto sales are likely to slow down from the $17 million a year pace.
DAVID BRADLEY, J.P. MORGAN CHASE: Ford lost money last year when the industry was $16.8 million, and they lost money the year before when the industry was $17 million. And they'll probably lose money again this year, at least on the North American truck business.
VILES: For the record, Bradley is an optimist. He sees overall U.S. auto sales falling by just one percent this year. More bearish analysts see a five percent decline.
(END VIDEOTAPE)
VILES: Jan, you talked about incentives at the top of that story.
At this GM dealership in Brooklyn, just to give you an idea of incentives out there, the best-selling vehicle at this dealership is the Envoy. Usually, the best selling car in the dealership doesn't have heavy incentives. This one does. Zero percent interest, 60 months, and $1,000 back. That's what Detroit manufacturers are doing to move cars at the retail level, Jan.
HOPKINS: And the SUVs are moving or are not moving?
VILES: At this dealership, the SUVs and the high tech items are still doing well. Where they've noticed a fall-off, if you will, is in the lower priced cars, which tells them that the marginal buyers are dropping out of the market while the buyers with more money are still in there.
Sales at this dealership are flat, but they sell a lot of commercial vehicles here.
HOPKINS: Thanks, Peter Viles.
Prospects of war are not hurting every company. As the military buildup in Persian Gulf continues, our CEO of the week's company is working with the troops to secure the communications networks that will be used in the event of a war.
CACI's Jack London is our CEO of the week.
(BEGIN VIDEOTAPE)
(voice-over) CACI is an information technology company managing secure communications networks around the world. Ninety-two percent of the company's revenue comes from government contracts. Two thirds of that business is with the Department of Defense.
CACI is working closely with U.S. military in the Persian Gulf.
JACK LONDON, CEO, CACI: As they arrive in the country our engineers will be providing network services, because they will be bringing in components that will need new communications capabilities, and when those new capabilities are in place, they become part of a network, then, that we will manage in that particular theater.
HOPKINS: Most of what CACI does is highly classified. We asked what it's doing for the FBI.
LONDON: Things that have to do with communications and that's about all I should say.
HOPKINS: The CIA?
LONDON: I wouldn't dare tell you.
HOPKINS: If CACI is tracking Osama bin Laden.
LONDON: We probably shouldn't be talking about any of this, actually.
HOPKINS: And monitoring Saddam Hussein?
LONDON: Again, I really shouldn't be talking about these things.
HOPKINS: One thing London will gladly talk about, the company's performance.
LONDON: Ten successful growth quarters, one after another. It's a beautiful chart. I love to look at it.
It is an extension, really, of our success over the last five or six years, where we have a record of approximately 20 percent compounded annual growth year on year.
HOPKINS: Shares of CACI are up more than 130 percent over the past two years. London expects revenues to soon hit the billion dollar mark.
LONDON: We had a game plan with our board of directors for five years, starting in fiscal 2000, to be a billion dollar company by the end of fiscal '05. I think we're going to beat that.
HOPKINS: Many CACI employees, including London, a retired navy pilot, come from a military background.
LONDON: We've got a kind of a service oriented outfit anyway. A lot of the things they do, they look at as having a definite patriotic dimension to it. They're really doing something for the country.
(END VIDEOTAPE)
HOPKINS: Jack London of CACI, our CEO of the week. Congratulations.
And coming up next, I'll be joined by some of the brightest minds of business journalism: editors from "Forbes," "Fortune," and "Businessweek" will join me for our weekly editors circle. That's next.
(COMMERCIAL BREAK)
HOPKINS: An inconclusive ending for the week on Wall Street. The Dow Industrials and the S&Ps finished higher, the NASDAQ finished a bit lower. But the markets did finish out the week higher, breaking a two-week losing streak.
Greg Clarkin joins us with more on the week's gains -- Greg.
GREG CLARKIN, CNNfn CORRESPONDENT: And Jan, somewhere around 11:30 this morning, investors decided to cash it in. And you know how this works: one seller becomes two, two becomes four. The next thing you know you have the whole herd lined up. It took the wind right out of a triple digit gain on the Dow.
Now as for what sparked this selling, most say it was a mix of nerves and common sense. There's a weekend of diplomatic wrangling ahead; there's your nerves. And this morning's run-up, coupled with yesterday's big gains, gave many the perfect chance to lock in tidy profits and get out.
The Dow ended up 37, the NASDAQ barely moved, down less than a point.
Now Ford's stock was stuck in reverse on word of those production cuts. It dropped 5 percent.
But that really was a day at the beach compared to Elan. The FTC is poking around to see if it broke any rules in marketing its muscle relaxant drug. The big fear is this may kill a deal; Elan had to sell the drug. Elan's stock was down 33 percent on the session.
And you just never know what you'll find in an SEC filing. Tucked away in Monsanto's filing was this little gem: It's being investigated by the Justice Department. Monsanto's Round-Up is the best selling weed killer. Justice is checking to see if Monsanto has been playing by the rules in marketing it.
So after a solid start to the trading day, investors clearly decided, with the weekend summit on tap, the best strategy, when in doubt get out -- Jan.
HOPKINS: Thanks, Greg.
Joining us now to talk about the stock market this week and the situation with Iraq are the editors of the leading business magazines. Rik Kirkland is the managing editor of "Fortune." Jim Ellis is the chief of correspondence at "Businessweek." And Dennis Kneale is the managing editor at "Forbes."
Thank you all for being here.
And let's talk first about the summit this weekend. What do you think is really on the agenda? Are they trying to get everybody around a resolution in the U.S., or are they trying to figure out what to do next? Rik?
RIK KIRKLAND, "FORTUNE:" I think, to be honest, no one knows for sure. And I think at a minimum, they're trying to show they've gone the extra mile on diplomacy. And it's very important, as people keep saying, for Bush to show the support for Tony Blair.
I assume they're strategizing about the U.N. One last chance for getting a resolution through. I think, if they don't feel like they have the votes, they're not going to pursue that route.
And they may be even discussing war strategy, since they're planning to go ahead regardless.
HOPKINS: And you have all of them in the same place for the weekend.
KIRKLAND: Right.
DENNIS KNEALE, "FORBES:" If you really wanted something substantive to come out of this meeting, why don't we sit down and talk to the French and the Germans and the Russians. I mean, we're sitting down, talking to, you know, the supporters that have been with us all along.
KIRKLAND: Right. The six guys that are swing votes aren't even there. I mean, that's true.
KNEALE: This is kind of nice cover for Blair, I guess.
JIM ELLIS, "BUSINESSWEEK:" Well, I think that actually what it means is that they've pretty well given up on any possibility that they're going to be able to get the votes, and they might as well move on and at least, however small, that the alliance is an alliance.
HOPKINS: So then you're assuming that they are going to decide that they have to pull the resolution?
ELLIS: I think that it's going -- from where we have seen right now, I don't see how they can actually come up with a vote. And I think it probably would be more humiliating and it also would probably be more damaging to the U.N. in the long run to do it with a vote that doesn't go.
KIRKLAND: You can make the case with the original resolution applies if you don't have a vote. If you go for a vote and lose, it gets a lot harder.
KNEALE: Does anyone here think that, since we're getting ready to basically tell the rest of the world to go jump and we're going to go into Iraq, should we never have gone for the first resolution at the U.N.?
KIRKLAN: I think you can't second guess it. I think you had to do it.
ELLIS: I think that also that if all of the U.N. had been behind the first resolution and actually not gotten sort of caught up in the sort of great job that Iraq has done in sort of changing the issue, I think that we wouldn't have this problem we have now.
And also the administration didn't do itself any favors by going and doing a lot of stupid things diplomatically early on.
HOPKINS: You know, it's interesting. The market on Thursday had such a huge rally, and part of the explanation that the pundits gave was the expectation that the war was delayed.
KIRKLAND: You've got to watch those pundits, Jan. They're often wrong.
HOPKINS: Well, I actually also heard from someone that it might have been an Elizabeth Smart rally, the kind of feel-good rally as a result of Elizabeth Smart coming home.
ELLIS: Well, I actually, I mean, I hate to be sort of thick about it, but you know, even a dead cattle will bounce if it falls far enough. I mean, I think that that's exactly what happened. I think that people are looking for any excuse to pump that market up.
KIRKLAND: Plus the short recovery. And in this market, when people think it's starting to move, they just jump in. Then when it moves down, they jump out. It's swinging really hard here.
KNEALE: It was a computer-driven rally. Computer software decided that it's been down so long, it looks like up. And then they decided to go ahead and buy it.
HOPKINS: But if what you're saying is true about the weekend, that the decision is no more at the U.N. and preparing for some kind of war, then what happens next week in the market?
KIRKLAND: We don't go anywhere, like we did today. I mean, we may go down a little bit more. I mean, we could break through those October lows again. It's going to be pretty volatile until we have some certainty about the likely fact this is going to go reasonably well.
KNEALE: It's really interesting to watch, though. If -- You're starting to get this feeling, we in America, because we're Americans, that what happens if we do go into Iraq and then it ends in five or ten minutes. It ends so quickly. I think the markets could rally hugely on that, at least for a couple of days, until reality sets in again.
HOKINS: We'll come back to Jim and the rest in just a couple of minutes. But "CROSSFIRE" begins in a few minutes. And Actor Ron Silver will face off tonight against Paul Begala. And Paul joins us now with a preview of what's to come.
Paul, are you prepared?
PAUL BEGALA, "CROSSFIRE" CO-HOST: I am prepared, Jan. It should be a lot of fun. In fact, I believe Ron will be the first host ever to have hosted on the left and now on the right he's subbing for Tucker and Bob. They're off tonight studying the collected philosophical works of George W. Bush, a weighty tome, I know. They said they couldn't make it to work tonight. We're very honored to have Ron here.
We will also be interviewing the former head of the CIA and a former congressman who's the head of Win Without War. So it should be an entertaining and informative night and fun, Jan. I hope you watch. HOPKINS: Thanks. "CROSSFIRE" at the top of the hour.
We'll continue our discussion with Rik Kirkland, Jim Ellis, and Dennis Kneale in just a moment.
We'll also hear what you thought about our interview last night with controversial columnist Christopher Hitchens.
(COMMERCIAL BREAK)
HOPKINS: Now the preliminary results of tonight's MONEYLINE poll. We asked, "Is time for the media to leave the Smart family alone now that Elizabeth has returned home?" This was not controversial. Ninety-two percent of you said yes, and only 8 percent of you said no.
And now for a look at your words. In reaction to Lou's interview with Christopher Hitchens last night, the outspoken journalist and author, Jim Arnold in California wrote, "Love your brilliant decision to let Christopher Hitchens speak his articulate views on the history and character surrounding the war that we're facing. I've not heard those angles before and wonder why not. Thank you for your part in opening minds."
Genevieve LaGreca wrote, "Thank you for your brilliant guest. Hitchens' view that no morally responsible person could support the continued existence of the butcher of Baghdad's brutal regime was a breath of fresh air."
John Smith of New Jersey wrote, though, "Hitchens made a strong case for invading Iraq and removing Saddam 10 years ago. He didn't make much of a case for doing it now."
And Tom St. Clair in California said, "There are so many intelligent people around do you need to give air time to a confused individual like Hitchens?"
Thanks for your e-mails. Send them any time to MONEYLINE@CNN.com. Please include your name and address.
And now, let's continue with our weekly editors circle. We're joined again by Rik Kirkland, the managing editor of "Fortune;" Jim Ellis, chief of correspondents at "Businessweek;" and Dennis Kneale, the managing editor of "Forbes."
One thing that we have not discussed, which was news today, was President Bush going into the Rose Garden and saying that he has a road map for peace in the Middle East.
Why now, do you think, Jim?
ELLIS: Well, I think that it's definitely needed now. It's one of the reasons that so many of our allies, our supposed allies, in the Middle East have been so cool to us, is that they think that the administration hasn't been particularly aggressive in trying to go ahead and get the Middle East issue settled. Actually, I think that he's actually backpedaled from the previous administration, that Clinton was much more out front on this. And so this is a good thing.
Now that we get a new prime minister in Palestine and we get something from the president about where he wants to see things going. That also is going to help us in Europe.
HOPKINS: Well, that's the cynical view the timing has something to do with trying to get people...
KIRKLAND: Sometimes the right thing is just the right thing. I mean, everybody -- it's like questioning their decision to go to the U.N. People call for it all summer. They finally go, and you say, oh, that's just cynical. No, it's the right thing to do.
If you're going to prosecute a war against an Arab country and fight the war on terror, you need to show you're addressing the central issue for Arab people, and you have an excuse. This new guy. The new guy is a perfect excuse.
Because Arafat, they weren't dealing with him. You know, he's a terrorist. But this new, more moderate figure is the perfect moment for them to come forward.
KNEALE: Just a devil's advocate point here. Is there really a grand plan in the Bush administration? If there were, I believe we would have read about the details on the front page of "The New York Times" already. And I've seen very little.
KIRKLAND: It's on a napkin, Dennis. It's on a napkin, it's got a few holes. It really is.
KNEALE: And this gives him cover to show he's not totally obsessed with Iraq, when actually the administration is utterly and entirely obsessed with Iraq, and it probably should be.
HOPKINS: So now you have Middle East, Iraq, North Korea, a whole lot of things on the plate of the administration. And, you know, the domestic economy.
KIRKLAND: You can be able to walk and chew gum at the same time in this world.
KNEALE: It's reason for hope. And watch the Palestinian Authority. In addition to the new prime minister that Arafat has nominated, there's another guy in there that's bringing good old- fashioned transparent accounting rules to the P.A. so that Arafat no longer has control of the money and the Israelis have to worry that he's supporting terrorism.
And the Israelis have started giving the Palestinian Authority $30 million in taxes every month now because they have greater faith that the money is being used for the right purposes.
HOPKINS: Jim, consumer confidence fell again. What is that telling us about the consumer?
ELLIS: Well, it's telling us that the consumer, who's been responsible for propping up the economy for now almost two years is finally getting a little weary.
I think that what's happening now -- a lot of it's war-related. And it's very difficult to be pumped up, even with zero percent financing, even with the lowest mortgage rates we've seen in, you know, decades. It's still hard to go out and spend with this kind of bad news out there.
It also means that there's trouble ahead for the president, simply because a lot of the swing Democrats are going to start saying, my God, the economy is not so great. Maybe I don't want to support him.
HOPKINS: That has to be the economy.
KIRKLAND: He doesn't have to be a hero. If business comes in, we're going to be OK.
HOPKINS: Dennis, thank you.
KNEALE: Thanks.
HOPKINS: Rik Kirkland and Jim Ellis, thank you all for being with us.
That's MONEYLINE for this Friday evening. Join us Monday when defense expert Richard Pearl shares his thoughts on Sunday's diplomatic meeting in the Azors.
And former U.N. weapons inspector David Albright will be here, as well.
I'm Jan Hopkins in for Lou Dobbs. Thanks for joining us. Have a great weekend. For all of us here, good night from New York.
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