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CNN LOU DOBBS MONEYLINE
Four Senior Members of Saddam Hussein's Regime in U.S. Custody
Aired April 23, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, HOST: Tonight, another four senior members of Saddam Hussein's regime are in U.S. custody. They include the former head of Iraqi military intelligence. Our senior Pentagon correspondent, Jamie McIntyre, will report from Washington.
Also, the United States today gave Iran a clear warning to stay out of Iraq.
The White House said the United States will oppose any effort to interview with the creation of a new Iraqi government. The warning follows reports that an Iranian agents have infiltrated the Shi'ite community in southern Iraq. Those agents are trying to influence Shi'ite clerics and promote the interests of Iran. National security correspondent, David Ensor, will have our report.
And former defense secretary and MONEYLINE regular, William Cohen, will be here to give us his judgment on the Iranian threat.
A dramatic new turn in the crises over the SARS virus today. The World Health Organization told travelers to stay away from Toronto, the most heavily populated city in Canada, its financial capital. Canadian officials reacted with shock and outrage. Peter Viles will have a special report on the sharp disagreements about how to handle the outbreak of SARS globally.
And tonight, we examine the growing impact of the virus on the world economy.
Democratic presidential candidate and former house minority leader, Dick Gephardt today launched a sweeping attack on President Bush's health and tax policy. He became the first of nine Democratic hopefuls to call for the total repeal of the President's tax cuts. Congressman Gephardt will be our guest tonight, here to explain why he things he is the best qualified candidate to challenge the President, who is riding a wave of popularity.
We go now to Fredricka Whitfield at CNN Center for the latest headlines at this hour -- Fredricka.
(NEWSBREAK)
DOBBS: And good evening, everyone. Tonight, Iraq's former leadership is falling like a house of cards. In just the past few minutes, the Pentagon has announced the capture or surrender of four major Iraqi leaders. Three of those men are among the 55 most wanted Iraqis in the U.S. deck of cards. Senior Pentagon Correspondent, Jamie McIntyre, joins us with the very latest -- Jamie.
JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, Lou, it has been a busy day for U.S. forces. They have now in custody, as you said, three more of the top 55 plus another person in custody who was not in the deck, but is considered to perhaps even more important.
Let's take a look at who they brought into custody today beginning with the queen of diamonds in the famous most wanted deck of cards used by the U.S. military. His name is Muzahim Mahdi Al-Salih. He is the commander of air defenses in Iraq. He was brought into custody today. It's not clear if he was captured or turned himself in.
Earlier today the military intelligence director, the seven of hearts in the deck of cards, Zuhayr Al Naqib was -- turned himself in. He definitely turned himself in. In fact, he gave an interview to "The L.A. Times" before he did that. He would have been in the regular army, not the Special Republican Guard or the Republican Guard, and his job would have been to keep an eye on the loyalty of Saddam Hussein's troops.
And also, the minister of trade was also taken into custody today, the six of hearts in the deck. His name is Muhammad Mahdi Al- Salih, the six of hearts, and that brings to 11 the number of custody.
Three of the top 55 are believed to be dead, 41 still at large. But the most interesting capture today came, not from a surrender, but a U.S. commando raid, bringing into custody a man who the U.S. identifies as the chief of Iraqi intelligence on the American desk. He's believed to have information about Iraqis in the United States who have been spying for Iraq, and it's expected that he will be able to provide some crucial information if and when he starts talking -- Lou.
DOBBS: Jamie, these arrests, these captures and surrenders, do we have any idea of when they actually took place? We are obviously learning about them now. Do we know when they actually occurred?
MCINTYRE: Well it's 1:30 or 2:00 in the morning in Baghdad, 1:00 in the morning in Qatar. These all happened some time in the last 12 hours or so in various operations. The said one was a commando raid, others turned themselves in, and we're just learning about them essentially at the end of day in Baghdad.
DOBBS: Jamie, thank you very much. Jamie McIntyre, our senior Pentagon correspondent.
Six Iraqi scientists say they were ordered to destroy bacteria and equipment before U.N. weapons inspectors arrived in Baghdad. According to the Associated Press, those scientists from different research institutions say they also hid equipment and bacteria in their homes in the months heading up to the war.
The scientists' testimony indicates Saddam's regime may, in fact, had advanced knowledge of some U.N. inspections as U.S. officials suspected. The White House today told Iran to stay out of Iraq. It warned Iran not to interfere with Iraq's road to democracy. A Pentagon official told CNN that Iranian-backed agents have moved into Karbala, Najaf, and Basra in southern Iraq. National Security Correspondent, David Ensor, has our report.
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DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): With Iraqi Shia passions high for their holy days, U.S. officials say there are signs Iranian intelligence agents are moving into Iraq in increasing numbers, causing concern in Washington.
ARI FLEISCHER, WHITE HOUSE SPOKESMAN: We have made clear to Iran that we would oppose any outside organization's interference in Iraq interfering with the road to democrat see. Infiltration of agents to destabilize the Shia population would clearly fall into that category.
ENSOR: That message went through diplomatic channels in recent days, officials say. There was a similar message just before the war from Zalmay Khalilzad, President Bush's special envoy, at a meeting with Iranian officials in Geneva.
ROB SOBHANI, GEORGETOWN UNIVERSITY: There's no doubt that Iranian intelligence agents and revolutionary guards are in Iraq today because, to the extent they can help set up an Islamic republican of Iraq, they would have accomplished their mission.
In addition to that, that the goal of the Iranian government is for the United States not to succeed in Iraq.
ENSOR: But other analysts, in and out of government, are less worried. They say the influence of Iran and Iraq is, in fact, somewhat limited. The Iraqi Shia are Arab, not Persian, and the two countries fought a bloody war. These analysts argue that Iran does not want a confrontation with the U.S. over Iraq and would, in fact, like to warm up its frosty relationship with Washington.
Former Iranian leader, Ali Rafsanjani, recently suggested putting to a democratic vote whether to improve relations with the U.S. polls suggest the idea would win handily in a nation where clerical rule and reflexive anti-Americanism are no longer popular.
(END VIDEOTAPE)
ENSOR: U.S. officials are emphasizing how much better U.S.- Iranian relations could become if there's cooperation, not meddling, in next door, Iraq -- Lou.
DOBBS: David, thank you very much. David Ensor reporting from Washington.
A new war of record words has erupted tonight between the United States and France. Secretary of State, Colin Powell, made one of his strongest statements yet. The Secretary said French efforts to block military effort in Iraq would have consequences. The White House today strongly supported Secretary Powell's comments. Kitty Pilgrim reports.
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KITTY PILGRIM, CNNfn CORRESPONDENT (voice-over): It's payback time. Secretary of State, Colin Powell, warning France would pay a price for going against U.S. policy on Iraq.
COLIN POWELL, SECRETARY OF STATE: It was a fascinating diplomatic experience, but now it's over, and we have to take a look at relationship. We have to look at all aspects of a relationship with France.
PILGRIM: The White House, when asked about it, backed up Secretary Powell's comments.
FLEISCHER: He was direct and honest. He said yes, and indeed relations between our countries, have been strained, and that's no secret to anybody. I think the real surprise or news would have been no, no consequences, in other words, pretending that everything is hunky-dory between the United States and France.
PILGRIM: The French today totally in denial, saying quote, this does not correspond in any way to the reality of our current relations with the U.S., unquote.
French Foreign Minister, Dominique De Villepin, is on an influence tour through the Middle East. He said France would continue to hold to its principles no matter what the cost. France was against the war.
But that doesn't stop De Villepin from pushing hard for the U.N. to take a central role in post-war Iraq, a blatant bid for influence as France holds a key Security Council seat at the U.N.
Meanwhile, there are already consequences. The Pentagon reportedly cut has a number of planes attending the Paris air show this June, an annual event and the largest exposition of its kind.
(END VIDEOTAPE)
PILGRIM: As for rebuilding Iraq, don't look for any give in the U.S.-French relationship. This week the State Department came out and said there are opportunities to work with allies, but recent disagreements will have an effect on U.S. views -- Lou.
DOBBS: Kitty, thank you very much. Kitty Pilgrim.
Oil has begun flowing in Iraq ahead well ahead of schedule. U.S. engineers started pumping crude oil from Iraq's giant southern oilfields. It's expected those wells can produce 800,000 barrels a day by mid-May. This oil will be used for domestic consumption, not for export. Money from international oils sales is expected to be Iraq's principal source of income.
Elsewhere in the Middle East tonight, Yasser Arafat backed down in a dispute that threatened to block the formation of a new Palestinian government. Arafat's concessions, under pressure from Egypt, mean that Abu Mazen will become the Palestinian prime minister.
The deal also clears the way for the U.S.-backed road map toward a Middle East peace settlement. Senior White House Correspondent, John King, reports.
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JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): Administration officials say the President's road map for Israeli- Palestinian peace could be made public within the next week or so. Drafted in consultation with Russia, the European Union and the United Nations, Mr. Bush would not release it until the Palestinians installed a new prime minister and removed Yasser Arafat from day-to- day decision making.
It calls on the Palestinians to quickly confirm a new cabinet and adopt security reforms that further marginalize Arafat's influence, and it calls on Israel to lift curfews and travel bans in the Palestinian territory and to halt the confiscation and destruction of Palestinian homes and property.
Arab resentment at the war in Iraq runs deep, and the road map is viewed as a major test of U.S. credibility.
HISHAM MELHEM, "AS-SAFIR" NEWSPAPER: United States is interested seriously in impressing Arab grievances and Arab anger and Arab resentment. They have to be very firm with the Ariel Sharon government .
KING: The next phase, in theory to be completed this year, envisions additional Palestinian political and economic security reforms, both a freeze in Israeli settlements and an Israel pullback from territory occupied since September, 2000, and a major regional peace conference.
FLEISCHER: None of this is easy, but it's certainly much easier than the violence that has taken place and the loss of life that has taken place between the Israelis and Palestinians for the last several years.
KING: The final phase calls for establishing borders for a provisional Palestinian state in early 2004 and then launching negotiations aimed at a final resolution and a new Palestinian state by the end of 2005 and for Arab nations, in turn, to accept normal relations with Israel.
Aides say Mr. Bush is well aware setting goals and timelines is not enough.
MARTIN INDYK, FORMER U.S. AMBASSADOR TO ISRAEL: There has to be a check, I think, that the President himself has to introduce, which is a way of raising Palestinian and Israeli eyes out of the way and towards a brighter horizon.
KING: The next step is for Secretary of State Powell to head to the Middle East, perhaps in the next week or so. (END VIDEOTAPE)
KING: And barring a setback on that trip, the new Palestinian Prime Minister, Abu Mazen, might soon have in hand something never extended to Mr. Arafat, and invitation to visit the Bush White House -- Lou.
John, thank you. Progress -- welcome progress at that. John King, our senior White House correspondent, thank you.
Coming up next, the United States, North Korea, and China today started talks on halting North Korea's nuclear program. Former defense secretary William Cohen will join us. We'll be discussing the Korean crisis, as well as the Middle East.
Several new developments tonight in the spread of the SARS virus. Peter Viles will have the late of the for us the mysterious disease, and we'll bring you a report on the global economic impact.
We continue our special report in association with "The Economist" magazine, "Challenge of Change: the New Korea." Tonight we report on South Korea's economy and whether it's strong enough to withstand the challenges posed by North Korea. For more, I'll be joined by international financier, Wilbur Ross.
All of that and more still ahead. Stay with us.
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DOBBS: Delegates from the United States, North Korea, and China have met face-to-face for the first time in a half century. The meeting, taking place in Beijing, centering around North Korea's nuclear program, but it is not expected to bring a quick end to the standoff.
Joining me now to discuss the North Korean crisis is former defense secretary and regular contributor to this broadcast, William Cohen. Bill, good to have you with us.
WILLIAM COHEN, FORMER DEFENSE SECRETARY: Good evening.
DOBBS: These are monumental talks, despite the fact that not much is expected. What do you think can be accomplished here.
COHEN: Well, there's a concerted effort to lower expectations, understanding that there will be no quick deals arrived at here, but time is really kind of the essence as well. On the one hand, we have to get a commitment out of the North Koreans that they are, indeed, going to freeze or suspend any further development of nuclear weapons and to have that really verifiable before the United States can talk about providing any kind of economic assistance or helping to integrate North Korea into the international community.
That's going to take some time, but hopefully not a long time because if, in fact, they are proceeding down the path of reprocessing those spent fuel rods, that could put them well on the road in a few months to producing nuclear weaponry and, if that starts, then it could very well end up in the hands of other groups in the coming months and years
DOBBS: Bill, it's interesting. You say, others say, if they are. They continue to assert that they, in fact, are. There seems to be little question, at least unless we doubt that North Koreans' own statements, that they are proceeding.
COHEN: Well, there was question about the use of the language and the interpretation of that language as to whether, in fact, they started the reprocessing of the fuel rods If that takes place, it poses a great problem, not only for us, but for all in the region, and that's to be determined yet. I think has to be clarified. If they are doing it, then everyone, China Russia, Japan, South Korea, and we have a major problem.
DOBBS: The fact that Russia, with a board or North Korea, is not a part of these talks, the fact that South Korea with its border and principally threatened by North Korea is not a member of these talks -- how long can that go on in these negotiations?
COHEN: Well, it's key to have both South Korea and Japan to have a unified policy with The United States in terms of how we proceed from here.
Russia and China can play an important role, but the negotiations or discussions have to really take place between North Korea, the U.S., South Korea, and Japan. That is the crucial combination.
I think that Russia, obviously, will be involved at some point. China is currently involved as sort of the broker at this point, but China's involvement is key here right now.
DOBBS: Bill, let's turn quickly to the road map from the White House, the agreement on a new cabinet for the Palestinians. Are you hopeful that we are going to see real progress this time?
COHEN: I am encouraged. This is a real breakthrough on the part of the Palestinians to elect this -- have this -- prime minister set up his cabinet. It does start the process, and I think if it continues to proceed, if he can get control of Hamas and Hezbollah and make 100 percent effort to try to stop the terrorism, there's a real chance here that the road to peace can be followed with some speed. So I'm encouraged by it.
DOBBS: The Palestinian-Israeli road map is published. It also looks like the road map for the Middle East, that the Bush administration has been talking about for some time is also being formulated rather quickly.
Bill Cohen, thanks for being with us, as always. Look forward to seeing you next time.
COHEN: Thank you, Lou.
DOBBS: Coming up next, health officials tonight are warning travelers to avoid Toronto because of the SARS virus. Canadian officials are simply outraged. Peter Viles will have the report for us.
We'll also report to you on the economic success and challenges facing South Korea. It is part of our special series of reports from "The Economist" magazine. "The Challenge of Change: the New Korea."
And Democratic Congressman, Richard Gephardt, unveils a new health plan for America. The presidential hopeful will tell us what it will cost, why he thinks it is necessary. He is my guest next. Stay with us.
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DOBBS: Disturbing new developments tonight in the global outbreak of the SARS virus. The World Health Organization issued travel warnings affecting Beijing and, somewhat surprisingly, Toronto.
Canadian health officials reacted angrily. They called the travel warning an overreaction. Peter Viles has the report.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT (voice-over): A sharp new disagreement in the global fight against SARS. The question, is it safe to travel to Toronto, Canada? The World Health Organization now says no, urging travelers to delay unnecessary trips to Toronto, for that matter, Beijing.
DR. DAVID HEYMANN, WORLD HEATH ORGANIZATION: In both China and in Toronto, there is local transmission of the disease outside of the hospital setting in their close personal contacts. Cases are being exported from both China and Toronto to other countries.
VILES: Canadian officials reacted with shock and outrage, arguing they do have the SARS virus under control.
DR. PAUL GULLY, HEALTH CANADA: We believe that it is safe to travel to Toronto. We do challenge the WHO's assertion that Toronto is an unsafe place to visit, and we will make our challenge formally through a letter to be sent to the World Health Organization today.
MEL LASTMAN, MAYOR, TORONTO: I want them here tomorrow! I want them to investigate Toronto tomorrow. I think they're doing this city and this country a disservice.
VILES: The United States, through the C.D.C., appeared to back Canada. Americans are urged to take precautions before traveling to Toronto, but not urged to avoid the city.
DR. CLIFFORD MCDONALD, CENTERS FOR DISEASE CONTROL: In terms of the criteria that we use to issue a travel advisory, we do not feel like that has been met.
VILES: There was no immediate protest of the travel warning in Beijing, where the government has closed down the schools and warned it will use its power to order quarantines and even shut down entire buildings.
The WHO now reports there have been 4,288 cases of SARS globally, a 30 percent spread in the disease over the past week, 251 people have died. The death rate now stands at 5.9 percent and rising.
(END VIDEOTAPE)
VILES: Only one new case reported today in Canada; 306, however, new cases in China. And the WHO now says it believes the disease is still being underreported in the Chinese city of Shanghai -- Lou.
DOBBS: A 30 percent increase. That is up considerably from the rate of increase the previous weeks. Is that because of the add added reporting from China?
VILES, Well, almost all of the numbers are coming from China, 90 percent of today's new cases. So this problem, one, two, three and four is in China. This is partly why the Canadians are so upset. It had one new case today, the Chinese more than 300, and the travel warning in both places.
DOBBS: And two million schoolchildren in Beijing. Amazing, out of school. Peter, thanks. Peter Viles.
For the first time, the SARS virus is affecting the American economy. The Federal Reserve today reported San Francisco and Dallas have report a drop in air travel because of the SARS virus, and Canada's Deputy Prime Minister, John Manley, says economic growth is flowing in his country as a result of the SARS virus, but he and Canadian officials cannot forecast yet the impact.
In Asia, where this disease began, early reports are offering clues about the cost of SARS, the toll on the global economy.
(BEGIN VIDEOTAPE)
DOBBS (voice-over): Thirty billion dollars, that's the World Health Organization's estimate on the global cost of SARS so far.
Travel in Asia has plunged. Asian airlines are slashing schedules. Travelers are canceling plans, trying to avoid contact with SARS. U.S. carriers have lost more than 10 percent of their business in the region.
Today's WHO's warning against travel to Toronto will hurt that country's financial capital. Two conferences have already been cancelled, one that was expected to attract 12,000 attendees.
In Asia, travel agencies toured groups, retailers, hotels, restaurants. All are reporting big declines in their business.
DOMENIC WILSON, GOLDMAN SACHS: The degree to which the domestic spending has slowed, I think, is something that has surprised us and in terms of the speed with which it's come through.
DOBBS: Goldman Sachs estimates six months of SARS damage could cost Hong Kong's economy more than $2 billion. Three months of SARS damage will cost Taiwan, Singapore, and Thailand as well. The cost to China's economy is impossible to calculate because the number of SARS cases is not certain, and the total damage unclear. But even a minimal impact on China's economy would amount to more than $4 billion.
And here in the United States, businesses are focusing on alternatives to Asia for supplies and equipment.
DAVID WYSS, STANDARD AND POOR'S: We're going to have to think about where we're going to source a lot of stuff, if nobody's willing to fly to southeast Asia. Companies are already starting to talk to maybe India, Pakistan, south America.
(END VIDEOTAPE)
DOBBS: Coming up next, "The Challenge of Change: the New Korea," our special series in conjunction with "The Economist" magazine tonight. A report on the dramatic development on South Korean's economy. Then we'll be joined by Wilbur Ross, and international investor who says Korea's economy is in trouble.
Also tonight, Congressman Richard Gephardt on his run for the White House in 2004. He'll join me to talk about the Bush tax cut, his health care plan for every American worker.
And the cleanup of the Walls Street corruption scandal continues. A millionaire investment banker faces criminal charges in connection with his dealings in the late 1990s. That story and more still ahead.
Stay with us.
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(NEWSBREAK)
DOBBS: Over the past two decades South Korea has become one of the world's most successful economies. South Korea is now the 12th largest trading nation. Its growth rate rebounded to six percent last year after the economic crisis of the late '90s. The latest edition of "The Economist" magazine includes a survey of South Korea. The cover of that survey has a dramatic satellite photograph of the Korean Peninsula. It shows the difference in power usage between South Korea and that of the north. Today in conjunction with "The Economist" magazine we examined the South Korean economy in "Challenges of Change: the New Korea."
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DOBBS (voice-over): Welcome to the most wired nation on earth, South Korea. It leads the world in broadband Internet access. Sixty- seven percent of Korean households have a broadband connection compared to only 15 percent in the United States. And Seoul has fast become the online gaming capital of the world thanks to start-ups like NCsoft created and run by 35-year-old Kim Taekjin. KIM TAEKJIN, PRESIDENT & CEO, NCSOFT: Korea had the leader in the area of the Internet and we give and we give a lot new style of content and especially games.
DOBBS: And with more than 4 million subscribers, NCsoft's online fantasy game, Lineage, allows 300,000 players to log on at the same time. It's surpassed even gaming powerhouses like Microsoft and Sony.
But even today it is the chaebol, large family controlled businesses such as Samsung And Hyundai who wield real economic power here. The cheabol were responsible for the success of Korea Inc. They made possible the quick industrial growth and capital intensive sectors like steel and semiconductors.
The success has come at a cost. Rules bent and laws broken. The chaebol have sometimes been built on insider trading, questionable accounting practices and sweetheart deals, some sanctioned by the government.
BILL EMMOTT, EDITOR-IN-CHIEF, "THE ECONOMIST": Korea has had cronie capitalism in the past. It's made a lot of big strides in pushing it back, but it hasn't gone far enough. There's still too much corruption.
DOBBS: Hyundai, the largest chaebol was forced to breakup. Daewoo, second on the list, defaulted in 1999 on $78 billion of debt. Korean accounting standards remain murky and many remain unconvinced by attempted reforms of the chaebol.
VICTOR O. CHA, PROFESSOR, GEORGETOWN UNIVERSITY: If you look at the exit polling for the elections you will find that contrary to what many people outside of South Korea might think, North Korea was not the No. 1 issue. The No. 1 issue for voters was the economy and was reform in terms of political reform and ridding corruption.
EMMOTT: The chaebol represents an unhealthy concentration of power in the Korean economy and Korean society. It's just like the Rockefeller trust and other big monopolies formed in the United States in the early 20th century. The monopolies were too big, they had to be broken up. It's the same in South Korea.
DOBBS: The major challenge to the South Korean economic miracle in the short-term comes from just over the border.
CHA: I've done lots of conference calls with investors in which the main question that they ask is not about the Roh Moo-hyun government, not about his economic plan and not about his economic advisers. It's about the threat from North Korea.
DOBBS: In February, Moody's cut its long-term outlook on the South Korean economy from positive to negative because of rising tensions on the peninsula.
But ironically, if war with the north causes concern, reunification would bring its own substantial problems. North Korea's economy is in shambles. Absorbing communism's worst failure could easily cost more than a trillion dollars.
South Korean leaders argue the answer both to avoiding war with the north and easing the cost of reunification is the same, the Sunshine Policy. That's the term of former President Kim Dae-jung's program of reconciliation, engagement and investment in the north.
KIM: The kind of achievement and accomplishment in the humanitarian, economic and non-controversial areas between north and south for the last five years will not be reversible or revocable.
DOBBS: So far it's resulted in the construction of north-south rail links through devastated North Korea that could open eventually Chinese, Russian and even European markets. And there have also been dramatic family reunions across the DMZ. Still some argue the Sunshine Policy has a darker side, a side that can no longer be ignored.
CHUNG MIN LEE, PROFESSOR, YONSEI UNIVERSITY: Ironically of the hundreds of millions dollars we get from North Korea I am convinced that much the money was used for military purposes to target the U.S. forces as well as South Korea. And this is the biggest irony of the Sunshine Policy.
(END VIDEOTAPE)
DOBBS: I'm joined now by Wilbur Ross, he's the chairman and CEO of the WL Ross & Company, perhaps the best-known restructuring financier in this country. And he has firsthand experience in Korea and was awarded a medal by the South Korean government, in fact, for his help during the crisis of '97 and '98. Good to have you with us, Wilbur.
WILBUR ROSS, CHMN. & CEO, WL ROSS: Good to be with you, Lou.
DOBBS: The tensions have been this high since, in fast, the Korean War. Is it going to be a substantial impact in your judgment on the South Korean economy?
ROSS: Think there already has been. Almost every significant foreign investor I know is holding back on plans, including we are.
DOBBS: And to what degree do you think this effect will be lasting?
ROSS: I think it will only last until there's some resolution of the present situation. Prior to that, most of us were quite convinced that North Korea didn't really want war, had no aggressive plans. And I felt the Sunshine Policy would lead not to the reunification but to normalization of relations.
I don't think anybody wants reunification. The German experience has proven how expensive that can be. But South Korea desperately needs a low-cost manufacturing alternative to China. Eight hundred companies have signed up with Hyundai for what was going to be a big industrial park, just on the north side of the DMZ, before the Sunshine Policy was eliminated by our government. DOBBS: Are the antics of Kim Jong Il inexplicable to you?
ROSS: No, I think that's the only weapon he has. You have people starving there and there's no tradition stronger than having a common enemy to distract a starving population from their own problems.
But I also think, if you look at the timing, he was very quiescent until the Sunshine Policy was knocked out. He really wants money, not weapons.
DOBBS: He wants money, not weapons. But he is engaging in nuclear blackmail now and at to this point successfully in at least creating an engagement. And at the same time he is leading a country, the dictator of a country of some 25 million people, almost 50 million in South Korea. He is watching an economic miracle right across the border. He is watching the punishment of his own people. There can be no question what the right answer is here.
ROSS: Well, I think the right answer was what was about to happen before the Sunshine Policy was ended. Namely South Korea and Japan were going to dumps tens of billions of dollars into North Korea, as they say to provide an alternate to China. It's unfortunate that our geopolitical policy interfered with the economic trend that it was developing. And what I think is going to be an even stranger outcome, if we now make a detente, it'll cost us something because being so involved in the process.
DOBBS: When you say the Sunshine Policy was halted because of geopolitical concerns, precisely what do you mean?
ROSS: Well, the first state visit that President Bush received was that of Kim Dae-jung, very shortly after the inauguration. All that Kim Dae-jung wanted was a quiet acquiescence in his continued policy. That's not what he got. Instead he got a little bit later on the axis of evil speech. So Korea's not in a position to act unilaterally on North Korean matters, and that's really what I think marked a turning point in the relationships.
DOBBS: To what degree can the United States or the world, in point of fact, afford to go about with a policy of engagement and containment of --when North Korea is one of the leading suppliers of weaponry to terrorists around the world?
ROSS: Oh, sure. I'm not condoning what they've done. That isn't my point at all.
DOBBS: No, no, no. I didn't suggest that you were condoning it. But at the same time we can't ignore it and to what degree can we balance those risks?
ROSS: I think the trade, if I'm right in my theory about what he wants is money, not weapons, perhaps we should literally buy the weapons from him. That's in effect what we did with the former Soviet Union as part of their disarmament. If he's going to sell the weapons somewhere, I'd rather he sells them to them to us and we neutralize them than sell them to some sort of a true terrorist nation.
DOBBS: Of course, as you well know, in the case of Soviet Union, first came absolute capitulation.
ROSS: I understand.
DOBBS: Wilbur, as always, it's great to talk with you. Come back soon.
ROSS: Great to talk with you, Lou. Thank you for having me on.
DOBBS: Coming up next here, Democratic presidential contender Richard Gephardt steps up his attack on the president's tax cut plans. We'll hear about Congressman Gephardt's plan, an ambitious health care plan that he unveiled today. We'll be discussing those issues and a great deal more.
And obstructing justice, federal prosecutors charge former investment banker Frank Quattrone with obstructing justice and witness tampering.
Jan Hopkins will have the report for us including the smoking gun e-mail that could have sent Quattrone to jail for up to 25 years. Stay with us.
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DOBBS: On you will Wall Street today stocks rallied, lifting the Nasdaq to the highest close of the year. The Dow Jones Industrials up 30 points. It closed at 8515.66. The Nasdaq also up about 1 percent, the S&P 500 up 1 percent. Federal Reserve Board Chairman Alan Greenspan today saying he has every intention of accepting another term as chairman of the Federal Reserve.
President Bush said yesterday that he would offer Chairman Greenspan another term and this term ends next year. By the way, next year is an election year, isn't it.
Former Wall Street investment banker, Frank Quattrone, tonight faces a possible 25 years in prison. Federal prosecutors charge Quattrone following a criminal obstruction of justice investigation. He's the first person to face criminal charges in connection with the government's investigation of Wall Street.
Jan Hopkins has the report.
(BEGIN VIDEOTAPE)
JAN HOPKINS, CNNfn CORRESPONDENT (voice-over): Former Wall Street superstar Frank Quattrone was in court in New York to answer to criminal charges that he obstructed justice. The criminal complaint alleges that Quattrone sent an e-mail to his employees instructing them to destroy evidence.
JAMES COMEY, U.S. ATTORNEY: In this case the complaint alleges that an important investment banker at a very important firm, Credit Suisse First Boston, decided to encourage his subordinates to clean out their files. Despite the fact that he knew that a grand jury and the SEC had asked for documents that were in those files.
HOPKINS: Quattrone's lawyer says he's innocent.
JOHN KEKER, FRANK QUATTRONE'S ATTORNEY: Only a prosecutor like these prosecutors who look at the world through dirty windows would take a one-sentence e-mail, and try to turn it into a federal criminal case.
HOPKINS: Quattrone's former employer, Credit Suisse First Boston, had no comment on the case. The firm has already paid a $100 million fine in connection with the federal investigation of how Wall Street distributed initial public offerings. Quattrone headed Credit Suisse's Global Technology Group in Silicon Valley, and reportedly earned as much as $100 million a year. He now faces a maximum fine of $750,000, and a maximum prison sentence of 25 years if convicted.
(END VIDEOTAPE)
HOPKINS: In another matter Congress wants to look into the multibillion-dollar accounting scandal at Health South. The House Energy and Commerce Committee has asked for documents from the company and its auditor Ernst & Young. Ten Health South executives have already pleaded guilty in the case. And Lou, tonight we get word that the SEC next week may be filing civil charges on insider trading against the former Internet analyst from Lehman, Holly Becker and her hedge fund husband Michael Zimmerman.
DOBBS: This prosecution has been slow, but it seems to be picking up some momentum.
HOPKINS: Picking up some steam. Right.
DOBBS: Thanks very much, Jan. Jan Hopkins.
Well, as we reported Frank Quattrone today became the first Wall Street banker or analyst to be criminally charged with the investigation into corporate corruption. Quattrone, in fact, is 49th executive in all of corporate America to be charged since the collapse of Enron. Seven Enron executives have been charged. It has now been 506 days since Enron went bankrupt. Of the 56 executives charged, not one has spent a day in jail.
Still ahead, an interview with Democratic presidential hopeful Congressman Richard Gephardt. Also some of your thought this program. We'll be reading your e-mails, and I'll explain about a little symbol that's important to a lot of us. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Democratic presidential hopeful Congressman Richard Gephardt today unveiled his plan to extend health insurance to every American. Congressman Gephardt proposed paying for the $2 billion plan by repealing President Bush's tax cuts. Congressman Gephardt had strong words for the president today saying Mr. Bush, quote, "couldn't care less about health care."
Congressman Gephardt joins us now.
Congressman, good to have you with us.
REP. RICHARD GEPHARDT (D-MO), PRESIDENTIAL CANDIDATE: Good to be here.
DOBBS: First, congratulations for what is certainly an ambitious plan.
GEPHARDT: Well, I think people need a choice and I want to give them a choice between what I think is a failed tax and economic plan, and a plan to get everybody covered with health insurance which has been a longtime problem that this whole country faced and our people have faced. And at the same time better stimulate the economy. Better health. Put money in people's pockets. Help corporations be able to create new jobs.
DOBBS: You know, Congressman, people are going to say, paying for health care how in the world can that stimulate the economy in the short term.
How does it?
GEPHARDT: Well, it puts money in people's pockets. We think over $300 billion a year will find its way into workers' pockets that they can use to spend on things and make investments. It also puts money into corporations who need to make investments, maybe hire new people, but a lot will be passed on to workers. So it helps business and it helps workers at the same time.
DOBBS: And we should explain and please correct me if I err here, the cost of the program by some estimates, approximately 200 billion, $212 billion a year. The plan would provide 60 percent of the cost of those health care benefits as investment -- as tax credits to those business.
GEPHARDT: Companies of all sizes whether or not they now give health care.
DOBBS: The remaining 40 percent would come from where?
GEPHARDT: Well it could be added to by the corporation to get to 70 or 80 percent. Many corporations pay for 80 percent or if they're not doing anything now they don't have to add anything to it. All I require is they pass the tax credit along to the employees so they can purchase a plan with their 40 percent.
DOBBS: Ultimately that becomes in many cases a burden for the employee as well.
DOBBS: Ultimately that becomes, though, in many cases, a burden for the employee as well.
GEPHARDT: Absolutely. I mean, it's a burden now if you're an employee and you don't have health insurance.
I met a woman in Iowa. She was -- had a diabetic child, single mother. She lost her plan. She got a new job without health insurance and then they fired her because she had put all of her diabetic kids' bills on her MasterCard. So this say big problem for everybody. We need to solve this.
DOBBS: It's a big problem. It is one that is -- well, yours is the most ambitious plan since the Health Security Act of 1993, advanced by the president. It's going to be an interesting debate that surrounds it. You will certainly now be at the forefront of that group of contenders for the nomination of your party.
Some would say why you have been too bold, too early. How do you react?
GEPHARDT: Think we've got to have bright line alternatives. I do not think we're going to defeat George Bush by trimming around the edges and in effect being Bush lite.
I'm going to give people a clear choice. I think they deserve that kind of choice and I'm going to say, If you think the Bush economic plans have done good things and made this economy move, vote for him. If you want to move in a different direction to both solve the health care problem and better stimulate the economy then give me a try. I think we can get this done.
DOBBS: It's obvious that the Senate, the House, the White House, are now coming together on a compromise over the president's tax cut proposal. Extraordinarily ambitious, $724 billion initial plan, pared down in the Senate, as you know, 350, 550 in the House. There are those who would argue that to repeal tax cuts here -- the 2001 tax cuts to forestall those would be very -- would be deleterious to the economy at the worst possible time. Does that concern you?
GEPHARDT: Well, those issues are right now issues. And the Congress is going to decide that in the next few weeks. I don't know where they'll decide it. I'm not for any of that. I don't think the president's tax cut is going to ignite this economy, but the Congress will decide that.
I'm trying to describe what I would try to put in the place of both tax cuts, whatever's on the books by the time I get there, and I would do an alternative way of cutting taxes they think is better for business, better for labor, better for the economy.
DOBBS: You've made this proposal today. You've talked about the relationship between business and labor in this country. Do you think you can bring support from those too often inimical interests together in support of a plan like yours?
GEPHARDT: I really think I can. you know, business and workers, employers and employees are really trying to do the same thing. They're trying to create jobs. They're trying to create wealth. They're trying to get the pie to be bigger for everybody in this country. I think it's time to bring business and labor together. They're on the same team and we've got to solve problems that they both face. Most employers that I've met in this country want to do health care for their employees. Many of them can't figure out how to pay for it.
DOBBS: Congressman Richard Gephardt, thank you very much for...
GEPHARDT: If you want to know more about the plan, dickgephardt2004.com.
DOBBS: Could you say that one more time? I didn't quite get that.
GEPHARDT: dickgephardt2004.com
DOBBS: Congressman, thank you very much.
GEPHARDT: Thanks so much.
DOBBS: Good to talk with you.
Coming up next, we'll share your thoughts about France, about Germany, Hans Blix and my lapel pin.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: It's time now for your thoughts.
Helena Behringer of California wrote in to say, "Boy, you don't hesitate for a second to inject your neoconservative personal opinion into your program any chance you get. How shameful of you to make a disgustingly disrespectful remark about Hans Blix, calling him petulant."
Well, Mrs. Behringer, how else would you describe the rude, insulting remarks of a United Nations low-level bureaucrat attacking this country?
Roy Tucker of California wrote to say, "Dear Lou, you are the best and we consider you as one of the family. You bring back the true meaning of journalism."
Mr. Tucker, we do our very best. Thank you for the kind words.
Chris Parry of Las Vegas, however, said, "I'm disgusted that your show would take the 'ban any business with France and Germany' position on the Yucca Mountain project. What next? No T-shirts from China?"
Well, Chris, I've never said ban any business with France or Germany. But I do say that France's aggressive campaign with other countries working against U.S. policy shouldn't be ignored. Any government that acts against U.S. interest should pay a price. If the French government wants to enjoy economic privileges of being an ally of this country, then it should conduct itself as an ally.
And Joe Vloemans of San Francisco wrote, "Lou, why are you and many others, including the president, still flaunting a flag pin on your lapel? We all know that you're an American, so what are you trying to tell us?"
Well, first, Joe, I don't flaunt a flag pin. I simply wear one. But I want to answer your question because a lot of others have asked as well. I've worn a flag pin on my lapel since the terrorist attacks of September 11. I chose to do so out of respect for the thousands of people who died in this country that day. I do so because our country is in a global war against terror. And as I've said before I'll wear it for the duration, however long that is. And I wear it to make clear to my viewers around the world that I'm not an objective, neutral journalist on the issue of this country and American interests. If that offends anyone, so be it.
To be perfectly honest, however, I do wonder why anyone, in this country or anywhere else, would be offended by a little flag pin on a lapel. Maybe it's because it represents such a very big idea. It makes you wonder.
I'm Lou Dobbs. Thanks for being with us.
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