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CNN LOU DOBBS MONEYLINE
Mad Cow Disease Found in Canada; U.S. on High Alert for Terror Attacks; Exporting America
Aired May 20, 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: Good evening, everyone.
Mad cow disease has now been found in Canada. The United States has taken swift action to stop Canadian beef shipments after an infected cow was discovered on an Alberta farm. Greg Clarkin, Bill Tucker will report.
The United States is tonight on high alert for a terrorist attack. Radical Islamists may be planning a major attack within this country. Senior White House correspondent John King, national security correspondent David Ensor will report.
And tonight, we continue our series of special reports on exporting America. With unemployment in this country rising, American corporations are increasingly building factories overseas, shipping factory jobs offshore, and exporting hundreds of thousands of jobs abroad.
Tonight, health and agriculture officials in the United States and Canada are trying to contain the first outbreak of Mad Cow Disease in North America in more than a decade. Canadian officials say a cow slaughtered in Alberta has tested positive for the disease. Experts warn that an uncontrolled outbreak would lead to the slaughter of millions of cattle and cost billions of dollars.
Greg Clarkin reports.
(BEGIN VIDEOTAPE)
GREG CLARKIN, CNNfn CORRESPONDENT (voice-over): There was an 8- year-old cow in Alberta, Canada that was underweight, suffering from pneumonia. Inspectors singled it out and destroyed it. That was late January, and since the animal didn't show any signs of Mad Cow Disease its brain wasn't tested until recently, tests that came back positive and Canadian officials moved quickly.
SHIRLEY MCCLELLAN, AGRICULTURE, FOOD & RURAL DEV.: The important thing is this animal was not allowed into the food chain. The system worked. The provincial inspector took the animal, condemned it, and then all of the necessary steps, which are in place for this very reason, occurred.
CLARKIN: The U.S. suspended cattle trade with Canada shutting down the biggest cattle market for Canadian beef. Last year more than one billion pounds of Canadian beef and more than one million cattle were shipped to the U.S. U.S. inspectors flew immediately to Canada to help in the investigation, all trying to figure out just where this cow came from.
DR. CLAUDE LEVIGNE, CANADIAN FOOD INSPECTION AGENCY: As soon as we can find the herd of origin of this animal we'll be able to get a better idea of whether this animal was born in Canada or was born in another country and what this animal was fed.
CLARKIN: But until that's determined and more tests are done on the rest of the herd, people want to know if the disease could have entered the U.S. Cattle experts can't say for sure but they believe it's unlikely.
There's a series of firewalls to prevent Mad Cow from crossing into the U.S., the import ban on countries with confirmed cases and surveillance of at risk cattle, and finally a feed ban on supplements that may contain the disease. Still, the short-term damage could be severe.
DAN BASSE, AGRISOURCE: We're all looking forward to the Memorial Day weekend. It's one of the big grilling weekends of the year. I mean we're all fearful that as the consumer goes to the meat counter and makes his selections on Wednesday, Thursday, and Friday, that he's going to go to chicken and pork and maybe skip beef.
(END VIDEOTAPE)
CLARKIN: Now, it is early on but some speculate it may never be known just how this one particular beef cow contracted Mad Cow Disease. The cow was from a herd in the northern reaches of Alberta and some believe it could have been transmitted by deer, possibly even elk -- Lou.
DOBBS: Deer, elk, carry the disease, that's surprising.
CLARKIN: I discovered that as well reporting this. Some folks say that could be a possibility.
DOBBS: And the U.S. agriculture department moving very quickly.
CLARKIN: They did. They sealed the border basically and that's one of the firewalls they have in place to confirm cases. They shut it down immediately.
DOBBS: Okay, Greg Clarkin thank you.
Well, the Mad Cow scare in Canada set off an immediate reaction in the currency markets. The futures and stock markets were also hit. Bill Tucker joins us now with the story -- Bill.
BILL TUCKER, CNN CORRESPONDENT: Lou, worry that consumers were going to go to the grocery store and pick up that chicken instead of the beef had an immediate impact on beef futures. Cattle futures fell the daily limit today down one and a half cents a pound to 72.5 cents. It also sent a number of beef sellers, like Outback and McDonald's rushing to the market with statements. Outback coming out with a statement saying they do not buy Canadian beef, flat out, only U.S.D.A. Nebraska born, bred and raised beef. McDonald's statement a little less reassuring for those who might be worried, they came out and said they only buy from facilities inspected and approved by the Canadian food inspector, and you can see that concern reflected in the stocks today.
We saw Outback Steakhouse, McDonald's, Wendy's, all closing lower on the day. In fact, you'll see McDonald's actually down the most, down six and two-thirds percent. Outback fared a little bit better. Smith Foods, which is also on the list is a pork producer. It didn't get a gain on the day but it suffered only a loss of a penny.
As for the Canadian dollar, Lou, it hit a seven year high today. It's up 17 percent since the start of the year. This is a currency that's blown right past fears of SARS. It came down off that high by three-tenths of one percent, so the Canadian dollar still on a tear.
DOBBS: Well, we pay you to monitor even those modest moves in the currency, Bill, and thank you for updating us on that, any reaction from Wendy's?
TUCKER: No statement from anybody else just McDonald's and Outback.
DOBBS: OK, Bill Tucker thank you.
The markets also reacting to the government's decision to raise the terror alert status to orange from yellow. Officials said recent suicide bombings in both Saudi Arabia and Morocco could be followed by an attack in this country. The FBI warned local law enforcement agencies to strengthen their security immediately.
Senior White House Correspondent, John King reports.
(BEGIN VIDEOTAPE)
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT (voice-over): The president signed off on the decision at mid afternoon, sending the nation back to a high level of terrorist alert, code orange, because of new intelligence suggesting al Qaeda is trying to launch new attacks here in the United States.
Homeland Security Secretary Tom Ridge made the recommendation to go to higher alert yet stressed in a statement, "there is not credible specific information with respect to targets or method of attack."
The government worries that the recent attacks in Saudi Arabia could be the model for new attacks here at home warning police to be on alert for "small arm equipped assault teams, large vehicle borne explosive devices, and suicide bombers. Weapons of mass destruction including those containing chemical, biological, or radiological agents or materials can not be discounted."
ASA HUTCHINSON, UNDERSEC. OF HOMELAND SECURITY: This is not to indicate this is going to happen in the United States but when we see a pattern of activity overseas directed at United States targets we certainly have to be aware that there remains that potential.
KING: So-called soft targets like sporting events, hotels, and public squares are the top priority for increased security especially heading into the Memorial Day weekend.
Local police carry the brunt of the higher alert status and such vague warnings bring complaints that cities and states spend millions on overtime but don't know just what to look for. But senior officials tell CNN the sheer volume of the so-called intelligence chatter swayed the administration's decision to raise the terror alert status to orange, high risk, for the fourth time since the color code was adopted 14 months ago.
(on camera): The increased terror alert and the recent al Qaeda resurgence call into question the president's recent statement that the tide has turned in the war on terrorism. His spokesman says tides have a way of coming in and going out and that while the president believes al Qaeda has been significantly weakened, this is yet another reminder it is far from destroyed.
John King, CNN, the White House.
(END VIDEOTAPE)
DOBBS: New York City is stepping up its security in response to this latest terrorist threat. Police Commissioner Ray Kelly today said more police officers will be on patrol near subways, bridges, and other crowded public places. Kelly said the move is precautionary, that the city has received no direct specific threats. New York City has been on high terror alert status since September 11th.
The threat of an imminent terrorist attack prompted the United States and Britain to close their embassies and consulates in Saudi Arabia today. U.S. diplomats in the Persian Gulf said terrorist activities may include suicide attacks, bombings, or kidnappings.
National Security Correspondent David Ensor joins us now. David just how good, in your judgment, is the intelligence about the possibility of an attack? What else does it indicate?
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, U.S. officials are saying, Lou, that the intelligence they think is credible. They don't have anything specific on how the terrorists might be planning to attack or where or with what but it is credible in their view. There's a lot of it.
It's coming from various different directions and it follows, of course, the attacks in Riyadh, the attack in Morocco which we don't know the providence of but could turn out to be al Qaeda connected. So, there's just a sense that although they don't have specificity they needed to take this step because the threat level is pretty high out there.
DOBBS: And in Saudi Arabia the use of the word imminent, that's uncharacteristic. ENSOR: Yes. There was very blunt talk, of course, from Prince Bandar our Ambassador from Saudi Arabia, the Saudi Ambassador to the United States, who said his gut feeling is that something big is going to happen either here or there. Some of this intelligence is clearly coming from Saudi Arabia itself where the cooperation between the U.S. and the Saudis is at a pretty good level at this point -- Lou.
DOBBS: And, why do U.S. officials, particularly intelligence officials believe terrorists may well target so-called soft targets this time?
ENSOR: Well, it may be a sense of opportunity. It may also be a sense of desperation. Al Qaeda's had some setbacks in the last few months and years but in the last week or two they've managed to pull off some soft target attacks in Saudi Arabia, possibly also Morocco. So, it is working for them.
It is easier and clearly the word has gone out in al Qaeda they want to do something that will make a difference. If they can't do something big, well try for some soft targets and, of course, soft targets scare people. If you go after big crowds of people it may create more terror than hitting some sort of harder target that's better defended would -- Lou.
DOBBS: David, thank you very much, David Ensor, National Security Correspondent reporting from Washington.
Saudi authorities have arrested three more al Qaeda suspects, those suspects arrested in Jeddah by police investigating the suicide bomb attacks on three housing complexes. Four other suspects are already being held in custody.
Still ahead here tonight our weeklong series, "Exporting America" continues tonight. Jan Hopkins will have our special report on American jobs being exported to India.
Also tonight, investigating North Korean ties to crime, from drug trafficking to counterfeiting, that story and a great deal more still ahead. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Treasury Secretary John Snow today predicted a good recovery for this economy in the second half of the year. Secretary Snow told a Senate subcommittee that the current pace of recovery, however, is too slow but he said elements are in place that should change all that.
(BEGIN VIDEO CLIP)
JOHN SNOW, TREASURY SECRETARY: I would look to growth rates in the fourth quarter that are getting back up towards where they should be. I hope they're in the...
UNIDENTIFIED MALE: Two and a half percent?
SNOW: Two and a half to three percent could well be the number.
(END VIDEO CLIP)
DOBBS: Many economists have trimmed their forecast for growth this year. It found, the Federal Reserve did, that economists now expect the GDP to rise at 2.2 percent exactly this year instead of 2.5 percent.
Stocks today fought back from news of Mad Cow Disease and a higher terrorist threat. The market erased steep losses but still closed lower, barely, for a third straight session, the Dow down two points, the NASDAQ down just under two points, the S&P 500 down a point.
Christine Romans despite those relatively modest losses an interesting day on Wall Street nonetheless.
CHRISTINE ROMANS, CNN CORRESPONDENT: It was and volume picked up a big today, Lou, to 1.5 billion shares. More stocks rose than fell today. If it weren't for McDonald's and Merck the Dow would have closed higher.
You heard about the Mad Cow news in Canada. It slammed the restaurant stocks, McDonald's down more than $1, the worst Dow performer. Drug shares tumbled for a second day. Analysts expect that Supreme Court ruling in Maine to potentially cut drug prices and hurt earnings if more states follows Maine's suit.
But the big action was in the bond market today, Lou. The orange terror alert drove the ten-year note yield as low as 3.35 percent. It closed just above there. The two-year note is now just two basis points above the Fed funds rate.
Last time yields were this low, the Dow Jones Industrial Average was at 450. It was 1958 and Dwight D. Eisenhower was president. Alfred Hitchcock's "Vertigo" was in the movie theaters and the average ticket price about 58 cents.
That's Perry Como. He won the Grammy Award for Best Male Artist, and Lou, Alan Greenspan was 32 years old last time yields were this low. Investors are keen to hear what he has to say before Congress tomorrow. He'll be testifying and if he downplays the deflation threat, a lot of folks think those yields will come up just a little bit.
DOBBS: And if he doesn't?
ROMANS: And, if he doesn't I don't know maybe I'll tell you more about 1958 tomorrow night.
DOBBS: That sounds good and some of us who were there appreciate the trip down memory lane. These rates, it's just incredible.
ROMANS: It's unbelievable. It really is, 3.35 percent, you know, who'd have thought you'd even be saying that.
DOBBS: Exactly. I should point out in 1958 I was just about two years old. Christine thanks a lot, Christine Romans.
Well, it's been 533 days since Enron filed for bankruptcy. Sixty-five executives in all of corporate America have been charged, 15 of them from Enron. No one of course has gone to jail.
When we continue, North Korea's criminal connections testimony today on Capitol Hill about drug trafficking, weapons proliferation, and counterfeiting and more. Tim O'Brien will have the story for us next.
And, Congress battles over tax cuts as the House and Senate Republicans vow to put a bill on the president's desk by the end of the week. Jonathan Karl will have the latest for us from Capitol Hill.
(COMMERCIAL BREAK)
DOBBS: North Korea still forcing the issue of nuclear weapons on the world and that crisis continues unabated but today a Senate committee heard that North Korea also could be the world's largest crime syndicate. Two of the people who testified to the committee today were former high-ranking officials of the North Korean government.
Tim O'Brien joins us now from Washington -- Tim.
TIM O'BRIEN, CNN CORRESPONDENT: Lou, the witnesses wore hoods and testified behind a screen to conceal their identities, one of them a former high-ranking North Korean official described the regime of Kim Jong Il as the world's worst one-man dictatorship since Hitler and a regime subsidized by the sale of illegal weapons and drugs.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE (through translator): North Korea must be the only country as far as I can tell on entire globe to run a drug production trafficking business on a state level. It's been no secret that the North Korean regime has been using its diplomats and businessmen for drug trafficking using all means possible.
O'BRIEN (voice-over): The committee played a videotape of a North Korean ship that had been seized by Australian authorities last month attempting to deliver $80 million worth of heroin. The defectors testified that North Korea's economy was in such a desperate state the government's involvement in the drug trade is certain to continue, that the government had even required food crop production be limited in favor of poppy crop production.
Other witnesses testified that the country's legitimate exports were dwarfed by the sale of illegal drugs and weapons said to bring in more than $1 billion a year.
REP. PETER FITZGERALD (R), ILLINOIS: North Korea is essentially a crime syndicate with nuclear bombs, or as one commentator put it: "It's a mafia masquerading as a government." LARRY WORTZEL, THE HERITAGE FOUNDATION: If you want to put economic pressure on the government of North Korea, if you don't want a military lever only, you begin to take care of all this other illegal trade. That's one way to do it.
O'BRIEN: The Kim Jong Il regime resembles more a cult-based, family run criminal enterprise than a government.
(END VIDEOTAPE)
O'BRIEN: Witnesses for the U.S. government testified that most of the drugs end up in Taiwan or Japan, not the United States, but the threat is seen as global. The proceeds of these illegal trades don't subsidize the people of North Korea. The fear is they may subsidize the development of a nuclear arsenal and other weapons of mass destruction -- Lou.
DOBBS: Tim thank you very much, Tim O'Brien reporting from Washington.
Turning now to our Thought of the Day: "International crises have their advantages. They frighten the weak but stir and inspire the strong," that from journalist James Reston.
Defense Secretary Donald Rumsfeld today said low yield nuclear weapons could be useful to destroy an enemy's chemical and biological weapons but the defense secretary stressed the Pentagon just wants to study this type of weapon not to deploy it.
Senior Pentagon Correspondent Jamie McIntyre joins us now with the story -- Jamie.
JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Lou, under a provision of the Defense Authorization Bill, the Pentagon would get $15 million to study the feasibility of developing what's called a robust nuclear earth penetrator, a new generation of bunker busting weapons that could take out deeply buried targets such as in North Korea but the Pentagon insists that it's premature to suggest the U.S. plans to pursue, develop, or deploy the mini nukes.
(BEGIN VIDEO CLIP)
DONALD RUMSFELD, DEFENSE SECRETARY: It is a study. It is nothing more and nothing less and it is not pursuing and it is not developing. It is not building. It is not manufacturing. It's not deploying and it is not using.
(END VIDEO CLIP)
MCINTYRE: And on so-called low yield nuclear weapons under five kilotons so-called battlefield nukes, but now concerned about how it might face chemical or biological weapons on the battlefield it sees nuclear weapons as perhaps the only effective way to take out enemy stockpiles without spreading a deadly plume.
(BEGIN VIDEO CLIP) GEN. RICHARD MYERS, JOINT CHIEFS CHAIRMAN: In terms of anthrax, it's said that gamma rays can, you know, destroy the anthrax spores which is something we need to look at and in chemical weapons of course the heat can destroy the chemical compounds and make them not develop that plume that conventional weapons might do that would then drift and perhaps bring others in harm's way.
(END VIDEO CLIP)
MCINTYRE: But opponents see another danger. If the U.S. has nuclear weapons and the Bush administration doctrine of preemption, other countries like India and Pakistan, for example, might be less inclined to forsake them.
(BEGIN VIDEO CLIP)
SEN. DIANNE FEINSTEIN (D), CALIFORNIA: Our efforts have been to limit the proliferation of nuclear weapons. To me it's counterproductive to our overall purposes of limiting proliferation to begin studies that take us into the area of the use of tactical nuclear weapons.
(END VIDEO CLIP)
MCINTYRE: Now, the Pentagon says suggesting its about to develop or actually deploy new, more usable nuclear weapons, is in its words hype, but critics argue that just thinking about it makes the unthinkable well that much more thinkable -- Lou.
DOBBS: Jamie thank you very much. Is there some reason this is coming out just now? This country has had a nuclear arsenal for better than 50 years. Why these low yield weapons now?
MCINTYRE: Well, two, one is increasing the Pentagon believes that its adversaries are "going underground" and it doesn't have an effective way conventionally to take out things that are underground.
The other is that it has been operating under this ban for ten years, congressional ban, and as part of the reforms that Defense Secretary Rumsfeld has proposed he's asked Congress to lift that ban. So, it's being debated in Congress this week and that's why the issue has come to the fore now.
DOBBS: OK, Jamie thank you very much, Jamie McIntyre our Senior Pentagon Correspondent.
Coming up next, "Exporting America," millions of American jobs will be shipped offshore over the next decade alone. Jan Hopkins will have that report.
And later, it is home to some of the world's most prominent companies but the NASDAQ facing some tough times, big challenges. We'll talk with the man who is leading the NASDAQ, the new president and chief executive officer Robert Greifeld about how he plans to direct the NASDAQ into the future. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Tonight, we continue our series of special reports on "Exporting America." By one count, 560,000 high technology jobs have been lost in this country over the past two years. Many of those jobs have ended up in India. This trend of exporting high tech jobs to India is expected to explode.
Jan Hopkins has the report.
(BEGIN VIDEOTAPE)
JAN HOPKINS, CNN CORRESPONDENT (voice-over): Bangalor, India's home to 100,000 high tech workers many of them employed by American companies. Across all of India one million people work for U.S. based companies, like GE Capital, Oracle, and Microsoft.
Three billion dollars in services are exported from India to the United States each year. The U.S. consulting firm, A.T. Kearney is doing more and more work in India.
STEFAN SPOHR, A.T. KEARNEY, INC.: We do have an office in Delhi actually with nearly 100 people, 50 of whom are consultants and the rest are working in creative services and information research.
HOPKINS: Companies like Indian employees because they're hard- working, well educated, and speak English, but the most attractive thing is the difference in pay. An Indian worker earns from one-tenth to one-half what a U.S. worker would. More and more companies are looking at these numbers and moving jobs to India.
JOHN MCCARTHY, FORRESTER RESEARCH: The conservative numbers show that over the next 13 years upwards of 3.3 million services jobs in the U.S. economy will be moved offshore.
HOPKINS: India is the leading destination. The exporting of jobs angers groups like Wash Tech, an offshoot of the Communications Workers of America. They regularly protest outside Microsoft in Seattle with signs like "Think India, Think Unemployment."
MARCUS COURTNEY, WASHTECH: This is a real slap in the face to American technology workers that they have built up this industry. It's one of the most profitable industries in the history of America and now what they're facing is that these companies are turning around and sending their jobs offshore.
HOPKINS: Most companies we talked with like Oracle say they are global companies. They aren't outsourcing high tech jobs they're "augmenting work done in this country with thousands of workers in India." Whatever they call it, in high tech centers like Silicon Valley it's hard to find a job.
HEATHER BOUSHEY, ECON. AND POLICY RESEARCH: Unemployment for information technology in the information technology sector has more than doubled over the past couple of years. It now stands at 7.7 percent. HOPKINS: Wall Street is the latest to join the flight to India. J.P. Morgan Chase will create 40 jobs in India for research analysts. Lehman Brothers is also hiring analysts in India.
If you even look at an MBA graduating from the India institute of technology, you'll see that that graduate will hope to get about a $12,000 per year salary. And that's with two to three years' experience. Contrast that with a Harvard business school graduate, who will really hope to get closer to $100,000 with the same sort of skill set.
(END VIDEOTAPE)
HOPKINS: Now, Wall Street firms say that these are not the star research analyst jobs like Jack Grubman had and Larry Meeker has, but for crunching the numbers. Wall Street says Indian analysts will do just fine -- Lou.
DOBBS: It's an extraordinary number of jobs to be exported.
HOPKINS: It's amazing.
DOBBS: OK. Jan Hopkins, thank you very much.
Tomorrow we continue our series of special reports on "Exporting America." We'll tell you what this loss of jobs is doing to American workers and to this economy. Two and half million jobs lost over the past two years. Two and half million jobs being shipped abroad. We'll also be joined by senator Fritz Hollings. He says the issue is critical because it is now hurting America's manufacturing base. Senator Hollings will join us to tell us what he thinks should be done to fix this problem and now.
That brings us to tonight's poll. The question, should Congress launch an investigation of corporations that export U.S. jobs overseas?
Yes or no?
Cast your vote at cnn.com/moneyline. We'll have the preliminary results later in the broadcast.
The final results of yesterday's poll question, "Do you agree with the Department of Homeland Security's decision to fingerprint and photograph foreign visitors with Visas? 57 percent of you said yes, 41 percent said no, 3 percent are undecided.
We've received hundreds of e-mails from our viewers in support of this series, "Exporting America."
D. Johnson of Abbeville, Alabama wrote to say, "I am grateful to see your special series on "Exporting America." Maybe it will elevate this growing economic problem to the national and political attention it deserves."
Christopher Wall of Rural Hall, North Carolina, said "I hope American voters will wake-up and realize that as U.S. corporations move jobs overseas the purchasing power of all Americans will continue to suffer." -
One viewer, who for obvious reasons didn't wish to be identified, said, "My company also started exporting work to India and laying off people here in the U.S. Our company was founded by a true patriot, Robert Bowne in 1775. I think he would roll over in his grave to see us laying off employees while sending work to India."
Wendy Miller of San Rafael, California, asked, "What kind of country will this be if this continues? Greater unemployment, rise in poverty, hunger, and homelessness. We will become a third world country unless something is done to stop this drain in the name of corporate greed."
We will hear some more of your thoughts later in this broadcast.
Checking the U.S. trade deficit tonight, our estimates show it now stands at more than $193 billion, growing just about a billion and a half a day, despite that -- all of that discussion about weak dollars and improving manufacturing bases in this country.
Republican lawmakers today pledged to send a tax cut bill to President Bush this week. However, the House and Senate still at odds over the exact nature and size of the package.
Congressional correspondent Jonathan Karl reports now from Capitol hill -- Jonathan.
JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, Lou, intense negotiations are under way between the House and the Senate. And really, it comes down to two men right now, the ways and means chairman in the House, Bill Thomas, and the finance chairman in the Senate, Chuck Grassley. They are trying to come to terms on it. They emerged from the first of several meetings today. Chuck Grassley telling reporters the two sides are still very far apart, but they have been told under no uncertain terms by the president himself that this tax cut he expects on his desk by Memorial Day. The president delivered that message to the top Senate and Republican leaders at a White House meeting last night, and those Senate leaders, as Bill Frist said today, were convinced the president was serious, and they will work to work out the differences by the end of this week.
(BEGIN VIDEO CLIP)
SEN. BILL FRIST (R-TN), MAJORITY LEADER: The president made it clear last night that he very much believed it was in the nation's interest to complete this package as soon as possible and before the recess. And I think that does have an impact, it demonstrates his leadership, it's something that we feel very strongly about on the Senate side. So I think it was agreed by the speaker and myself and the president of the United States that it could be done, that it should be done, and that it will be done.
(END VIDEO CLIP) KARL: And that was a significant change from just before that meeting when Republicans on both sides of the capitol were saying that this was going to take much longer to iron out because the two sides were quite far apart both on the size of the tax cut and the substance of the tax cut. Now they have an agreement to get it done this week, but they don't have an agreement on the substance, on those two critical questions. And the two major sticking points right now are, one, is that dividend cut that the president has fought so hard for House leaders, House Republicans are saying they prefer the idea of cutting capital gains taxes. And just a short while ago Bill Frist told reporters that one option is to do away with the dividend cut that the president's been fighting for and replace it with a cut in the capital gains tax, which of course would also affect dividends. Another key area of concern is the size of this. House leaders are still hoping that they can get a tax cut larger than $350 billion, Lou. But the Senate continues to say that anything larger will not pass over there.
DOBBS: And they're just about out of offsets, as they put it, further tax increases to give a tax break. And Bill Thomas, the powerful chairman of the Ways and Means Committee, looks like he could well have his way on the issue of the capital gains tax reduction.
KARL: He may.
DOBBS: All right. Jonathan Karl, thank you very much.
A "Quote of the Day" comes from a billionaire who has been critical of the tax cut plan. Warren Buffett says the plan's voodoo economics and Enron style accounting will give tax breaks to the rich and do little to help families.
The "Quote of the Day,""Government can't deliver a free lunch to the country as a whole. It can, however, determine who pays for lunch. And last week the senate handed the bill to the wrong party."
That of course from Warren Buffett from today's editions of the "Washington Post."
Our nightly check on the national debt, which stands tonight at $6,460,299 million and climbing.
Commerce Secretary Don Evans, however, said the debt isn't a problem.
(BEGIN VIDEO CLIP)
DON EVANS, COMMERCE SECRETARY: The debt level, the deficit level is very manageable. The debt level today is very affordable. The debt level today is about 34 percent of the gross domestic product. That's well below where it has been in years gone past.
(END VIDEO CLIP)
DOBBS: Official word today that there will be an investigation into the use of the Department of Homeland Security to help locate those wayward 51 Texas Democrats who fled and hid in Oklahoma. The Democrats successfully thwarted a Republican redistricting effort that would have taken five house seats from the Democrats in 2004. Texas Rangers were dispatched to track down the Democrats, but authorities said they could do nothing once the lawmakers crossed into Oklahoma. Jurisdictional issues, you know. The Department of Homeland Security was drawn in after an officer hinted that an airplane full of Democrats might have crashed. In a hearing today Secretary Tom Ridge again confirmed that incident will be fully investigated. No word yet on why those Texas Republicans didn't use the National AMBER Alert System.
Coming up next, it was one of the biggest stars to emerge in the technology boom of the '90s, but now the Nasdaq is struggling a bit. Robert Greifeld is the new president and CEO. He joins us next to tell us what his plans are for the Nasdaq and its future.
And suing corporate America. Companies struggling through a weak economy, but attorneys are doing just fine, thank you.
Peter Viles reports on a recent wave of multimillion-dollar lawsuits that are enough to boggle your mind. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Since the Nasdaq composite hit its peak above 5,000 more than three years ago, that index has fallen 70 percent. The Nasdaq struggling as well to, if you will, reinvent itself.
Robert Greifeld is the president and CEO of the Nasdaq, and he joins us now.
First, congratulations on your new job and your new set of challenges.
ROBERT GREIFELD, PRESIDENT & CEO, NASDAQ: Good afternoon, Lou.
DOBBS: the -- let's turn to what you want to do, what you want to see the Nasdaq accomplish here.
GREIFELD: Well, one thing I want to stress with the Nasdaq market: it is an electronic market. And we in the last three years have strived very hard to improve it. And when I define electronic market, we talk about the fact that we have the ability to process thousands of trades per second.
This is the proper market model going forward. It gives our investors transparency. They can see what's going on with the market, and it gives them liquidity. And we believe that will help restore investor confidence.
DOBBS: How are you going to drive listings?
GREIFELD: Listings is very easy to talk about. We have a value proposition for our companies.
We first start with the fact that companies that list with us conform to all the standards put out by Sarbanes-Oxley, and they also have conformed to the standards that we have published for our member firms. And what's very interesting is that we, as an organization, follow those standards. We're in the process of spinning off from the NASD, the regulatory body, into a for-profit public company, and we are practicing what we preach with respect to standards.
DOBBS: In this IPO market, Bob, yours may be one of the few IPOs out there.
GREIFELD: Right.
DOBBS: What do you anticipate doing it?
GREIFELD: Well, we clearly wish there were more IPOs. It would be good for the economy and good for the Nasdaq stock market.
Right now our main issue is to get full approval from the SEC to separate from the NASD, and then we will be like a normal company trying to gauge when its the right time, and it would be impossible for me to predict at this point.
DOBBS: Your profitability at the Nasdaq versus your principal competitor, the New York Stock Exchange -- how are you measuring up?
GREIFELD: Well, one, it's impossible to do an apples to apples -- apples to apples comparison in that we're a public company. They're not. Their financials are not released to the public.
In addition, they have the regulatory...
DOBBS: Would you like to change that?
GREIFELD: Well, one, I think the fundamental issue is they are a market center combined with a regulator. It is the position of Nasdaq that the regulators should be separate from the market center. We think it's incorrect for the market center to have any input and control in terms of the people they regulate.
DOBBS: And at this point the competition sounds like -- when we hear Bob Greifeld talk, sounds like the competition's up to heat up again between the Nasdaq and the New York Exchange.
GREIFELD: Well, I think what I want to talk about is what Nasdaq is about.
We're an electronic market. One of our leading stocks is Cisco. Cisco has the ability to trade 40 times per second. Our leading competitor is a floor-based model. And I like to...
DOBBS: Well, I thought you said you wanted to talk about the Nasdaq.
(LAUGHTER)
GREIFELD: I do. I do. I'm comparing and contrasting. So we can do 40 trades a second. You see the people on the floor, the blue smocks or the red smocks, and you cannot conceive of them being able to do one or two or three trades a second.
So we think we're the right model going forward. So when we talk about Nasdaq, we talk about the electronic market, we talk about that we have fair and open governance standard and we have a fully transparent venue for trading.
DOBBS: And in this environment, market integrity, integrity across corporate America is the principal issue. What is the Nasdaq doing to assure an improvement in the confidence of its market and on the part of the investor?
GREIFELD: Lou, that's one of the fundamental challenges we face. And what we're focused on is our market being open and transparent. It's truly an open book.
We also have an open book with respect to corporate governance. We're a public company. We disclose everything about our operation. We think that's the right role model for all companies going forward, and we are practicing what we preach.
DOBBS: Bob, good to have you with us. And again, all the best to you as you embark on your new job.
GREIFELD: OK. Appreciate it, Lou.
DOBBS: Robert Greifeld...
GREIFELD: Thank you.
DOBBS: The CEO of the Nasdaq.
GREIFELD: Thank you.
DOBBS: A reminder now to vote in tonight's poll. The question: "Should Congress launch an investigation of corporations that export U.S. jobs overseas?" Cast your vote at cnn.com/moneyline. We'll have -- we'll have the preliminary results later in the broadcast.
And when we continue here, suing blue chips. Household names under fire for alleged discrimination. Peter Viles will have our report.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Chairman of the House Judiciary Committee, Congressman Jim Sensenbrenner tonight said the Homeland Security Department completed its investigation into a report that France gave passports to fleeing Iraqi officials. A report in "The Washington Times," has said former members of Saddam Hussein's regime were given passports by French officials in Syria. But tonight Congressman Sensenbrenner said no evidence has been found by the Department of Homeland Security to indicate the French government issued passports or visas to former members of the Saddam Hussein regime. One part of the American economy doing well: the lawsuit business. Among the major corporate names under legal attack this week, and they're an impressive list of names: Coca-Cola, Macy's, Wal-Mart.
Peter Viles reports now on why business is booming for attorneys suing corporate America.
(BEGIN VIDEOTAPE)
PETER VILES, CNNfn CORRESPONDENT (voice-over): The lawsuit business. You might say it's as American as Christmas at Macy's, except that Sharon Simmons-Thomas would disagree because she is suing Macy's, alleging it profiles minority shoppers as shoplifters and did just that to her last Christmas.
SHARON SIMMONS-THOMAS, SUING MACY'S: Instead they took me to a detention area where I was handcuffed and ridiculed. Even worse, they wanted me to sign a false confession, and I couldn't confess to a crime I didn't commit.
VILES: Macy's wouldn't comment on the case but says it -- quote -- "does not profile, target or discriminate against any minority group or individual."
Wal-Mart has a big legal headache. Miss America 1992, Caroline Sapp, is lending her support to a campaign accusing Wal-Mart of discriminating against female workers. Wal-Mart denies those allegations.
And Coca-Cola is in a legal tussle with a former auditor who's either a whistleblower or a shakedown artist, depending on who you believe. Matthew Whitley accuses Coke of firing him after he blew the whistle on alleged accounting shenanigans. Coke says outside lawyers and accountants are investigating those allegations, but then it blew the whistle on Whitley, saying -- quote -- "this disgruntled former employee has made a number of allegations accompanied by an ultimatum that the company pay him almost $45 million or he would go to the media."
Some analysts say that kind of bold demand may actually weaken Whitley's case.
NORMAN JENKINS, EMPLOYMENT ATTORNEY: In my view, it does because it looks like you're shaking down the company. However, you could make the argument that asking for a lot of money will get the company's attention and will force them to take you seriously.
(END VIDEOTAPE)
VILES: Legal analysts say the weak economy is in part driving this legal trend. So much job cutting, such a weak job market, it is becoming more common for employees to make a few accusations on their way out the door -- Lou.
DOBBS: A remarkable trend. VILES: It sure is.
DOBBS: Well, one ironic twist in a gender discrimination lawsuit against the world's largest retailer to tell you about as well. Female employees of Wal-Mart allege they were taken to strip clubs on business trips. One former store manager said district meetings in Indiana were sometimes held at the local Hooters. This, by the way, is the same company that pulled magazines it deemed too racy from its shelves earlier this month. Wal-Mart pulled the popular men's magazines "Maxim," "Stuff," and "FHM," saying some customers were uncomfortable with their covers. Wal-Mart disputes the lawsuit's allegations, saying discrimination against women is not tolerated at Wal-Mart.
Well, joining me now to discuss the recent flood of lawsuits against big companies, our legal analyst Jeffrey Toobin. Jeffrey, good to have you here.
JEFFREY TOOBIN, CNN LEGAL ANALYST: Hello.
DOBBS: This trend, is there anything to it? Some of these issues sound serious, but then there's a lot of -- sounds like mitigating circumstances.
TOOBIN: Well, I mean, you have contradictory trends. You have all the corporate misconduct that's generated a lot of lawsuits. Enron has generated lawsuits, and a lot of those people are probably going to win some of those cases.
At the same time you have a serious tort reform movement in this country where malpractice cases, various tort cases, have driven state legislatures and Congress to consider caps on punitive damages and, you know, just true lawsuit abuse.
DOBBS: Now, Jeff, I think only a lawyer could call this serious tort reform. I mean, we have -- the tort reform may be under way in some pockets, but my gosh.
TOOBIN: Well, no, I mean there really is. In some states are adopting $250,000 caps on punitive damages. When you're talking about millions of dollars, $250,000, it really is a big change in a lot of states.
DOBBS: And corporations in this -- 250, I'll take 250. Wherever we can find it.
TOOBIN: All right.
DOBBS: Big corporations are basically wimpy. They want to avoid bad publicity. They're going to pay it off, and employees know that.
TOOBIN: And employees know that, and plaintiff's lawyers know that. And that's why you see cases, you know, some of which look highly marginal, that they hope they will be paid to get rid of the nuisance value. But corporations are having trouble, too. So they're turning off the spigot as well. They don't want to pay these damages. DOBBS: Peter, in talking about the Coca-Cola case, I mean $45 million demand for accounting transparency. Well, I guess that could be considered a bargain in some places.
VILES: It's an awfully big number. And you have to ask, given that the standing of corporate America is so low now among investors and shareholders, is there any sense that that may translate to juries and that gives these plaintiff's lawyers the feeling that they have some power in these cases?
TOOBIN: It depends so much on where the lawsuit takes place. Juries vary tremendously. You know, some states in the south, tremendous verdicts for plaintiffs. In New York -- New York state, great for plaintiffs. Other places, not so good.
DOBBS: Quickly, we have very little time, I want to turn to a whole another issue. Reports coming out of Washington suggesting that we may see two, at least two retirees from the Supreme Court. What do you make of it?
TOOBIN: I think that there -- we don't know for sure, but there will be retirements from the Supreme Court if not this year then next year. The Democrats have really laid down a marker with the filibusters against lower court nominees. They are going to fight any nominee that they believe is going to threaten Roe V. Wade. I think the fight is all going to come down to abortion.
DOBBS: They're going to fight? But what about replacement, advice and consent? Isn't it?
TOOBIN: Well, that's the rule. But Democrats think this political issue is a winner. They don't have many. And they think that abortion is the one that will -- that they can fight on about judicial nominees, and they're willing to filibuster to do it.
DOBBS: And in this edition of "The New Yorker," I think it's Jeffrey Toobin, "Advice and Dissent."
TOOBIN: That's the story.
DOBBS: We highly recommend its reading. We appreciate "The New Yorker" making it available for all of us. And, Jeffrey, as always, we thank you. Peter Viles, thank you.
When we continue, we'll share some of "Your Thoughts" on our special series of reports, "Exporting America." And we will have, of course, the results of tonight's poll. Stay with us.
(COMMERCIAL BREAK)
DOBBS: We now have the preliminary results of tonight's poll. The question, should Congress launch an investigation of corporations that export U.S. jobs overseas? Eighty-nine percent of you voting yes, 11 percent, no.
Taking a look now at some more of "Your Thoughts" about our series of special reports, "Exporting America."
One viewer, who simply calls himself "A Concerned American," wrote to say, "Corporate America is exporting once high paying chemical tech --" let's try that all over again.
"Corporate American is exporting once high paying American technical positions overseas and is displacing American technical positions at home with much cheaper foreign visa program staff."
M. Kern of Falls Church, Virginia has a rather skeptical view. "America: a country in which executives engage to swindle millions of dollars from Americans on regulated national exchanges, then take that money to headquarters in Bermuda and use it to invest in plants and take jobs for the third world."
And Ljubomir Buturvic from San Jose, California disagreed with our reporting, saying, "I believe that companies free to pursue the most efficient way of conducting their business will ultimately generate greater profits and create more jobs. In the long term, it is more likely to benefit this and other countries who chose to join and respect free trade agreements."
Paul Wah of Ventura, California wrote to say, "It is obvious that the white collar workers are now getting a taste of what the blue collars have been eating. I think NAFTA should more aptly be called `SHAFTA.'"
And on to the issue of tracking foreigners. Steve from Pittsburgh said, "I recently traveled to Ireland and was photographed at their customs entry point along with all other visitors. Why do we make such a big deal about things other countries have already put into place?"
And David Fiedler of Laguna Woods, California agreed. "Immigration control of our borders is an embarrassment and must be tightened in this day of active terrorism.
We love to hear from you. E-mail us all of your thoughts at loudobbs@cnn.com. Thanks for being with us tonight. Tomorrow our guests include Senator Fritz Hollings on why free trade agreements have done nothing to keep jobs in this country.
And the Crown Prince of Bahrain will be here to discuss the impact of free trade agreements in the Middle East. Those agreements, the effect they're having on his country, the world war against terrorism, and the task of rebuilding Iraq.
"LIVE FROM THE HEADLINES" with Bill Hemmer is coming up next. for all of us here, good night from New York.
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