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CNN LOU DOBBS MONEYLINE
Alert Issued for Monkeypox; Bush Convinced of Weapons Program in Iraq; Mahmoud Abbas Goes on Offensive; Feds Drain Maryland Pond in Anthrax Investigation
Aired June 9, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Wolf, thank you.
Tonight, President Bush says he is absolutely convinced the coalition will find evidence of Saddam Hussein's program to develop weapons of mass destruction. Chris Burns will report from the White House.
And, former CIA Director James Woolsey joins us.
A major new development in the anthrax investigation tonight, federal agents have drained (AUDIO GAP) center. Kelli Arena will have that report.
And, misconduct at this country's second largest mortgage lender, Freddie Mac replaces its top three executives for failing to cooperate with auditors. Louise Schiavone will report from Washington.
Christine Romans will report on the effect on Wall Street.
ANNOUNCER: This is LOU DOBBS MONEYLINE for Monday, June 9th, here now Lou Dobbs.
DOBBS: Good evening everyone. Tonight, the Centers for Disease Control has issued an alert about a new and potentially dangerous threat from a virus called monkeypox. It is the first such alert since the SARS virus and, like SARS it is a crossover virus coming from animals.
This disease is in the same family as smallpox but has never before been seen in this hemisphere. Now, 33 people in three states have been infected. No one has died and tonight health officials are extremely concerned in part because there is no known cure for this virus.
Christy Feig reports.
(BEGIN VIDEOTAPE)
CHRISTY FEIG, CNN CORRESPONDENT (voice-over): Prairie dogs are kept as exotic pets across the country but the ones apparently responsible for spreading the monkeypox virus in the Midwest are proving hard to trace because they passed through several pet stores and in formal gatherings called pet swaps. DR. STEVE OSTROFF, CDC: There may be other individuals with ill animals that may not necessarily make the connection because they don't recognize that their animals are potentially from that source.
FEIG: Health officials aren't sure how many animals or humans might be infected. So far, those who are sick have been exposed in high risk places.
OSTROFF: One is in veterinary clinics. The other is in several pet shops, and the third is in individuals who directed purchased and handled prairie dogs.
FIEG (on camera): The disease is most common in Africa and studies there have found monkeypox isn't as contagious or as deadly as smallpox, which kills about one-third of people infected. Monkeypox is fatal between one and ten percent of the time.
(voice-over): But health officials can't predict how this disease might respond in the U.S.
OSTROFF: The biggest concern is the potential for it to be transferred to other types of rodents and what we refer to as lagamores (ph), which are rabbits. Those would be the animals of particular concern.
FEIG: For now, experts are asking those who have been in contact with prairie dogs to watch for symptoms like fever, headache, enlarged lymph nodes, and a rash, and most important keep pet prairie dogs from getting loose into the wild.
(END VIDEOTAPE)
FEIG: Now, health officials believe that's one of the biggest keys to contain this disease. If they can keep it from spreading into the local wildlife they have a chance of wiping it out - Lou.
DOBBS: Christy, just exactly how contagious is this virus?
FEIG: Well, experts' best guess is it's similar to smallpox since it's in the same family and they have a pretty good guess about that because they see how this disease works in Africa.
Mostly, it's from infected animal into person. Very rarely does it pass from person to person unless it's a person who is very sick with open sores. In that case, if somebody were to touch them, they may also get sick at that point. But for the most part, it's from an infected animal into a person, not from loose contact from person to person.
DOBBS: Thank you very much, Christy Feig reporting from Washington.
Turning to other news tonight, President Bush said he has no doubt that investigators will find proof that Saddam Hussein had a program to develop weapons of mass destruction. President Bush also insists that Saddam Hussein had links with the al Qaeda terrorist network.
White House Correspondent Chris Burns and National Security Correspondent David Ensor report. We begin with the White House - Chris.
CHRIS BURNS, CNN WHITE HOUSE CORRESPONDENT: Well hi, Lou. The weapons of mass destruction were, of course, the main reason why the Bush administration went to war with Iraq and this is being put into question, especially after last week's leaking of the Defense Intelligence Agency report dated back in September, 2002 that suggested at least in one sentence that there lacked reliable information that there were weapons of mass destruction in Iraq.
The Bush administration fighting this off, a number of his top aides fighting that off over the weekend, but the president during his cabinet meeting, he let in reporters today, and offered some of the first answers to that after that report was released. The president was asked whether his credibility was on the line.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Iraq had a weapons program. Intelligence throughout the decade showed they had a weapons program. I am absolutely convinced with time we'll find out that they did have a weapons program.
(END VIDEO CLIP)
BURNS: But now, note the president repeated three times "weapons program," and observers and analysts are increasing saying that the Bush administration is increasingly relying to - referring to weapons program as opposed to weapons themselves.
Ari Fleischer was asked earlier today about that and he insisted that those weapons will be found but you are increasingly hearing from the Bush administration reference to "weapons program," the talk about possibly finding the ingredients of weapons that were either destroyed or hidden and that is the issue right now.
The Bush administration also counting on additional weapons inspectors from the Pentagon being sent over to Iraq, hundreds of them, including former U.N. weapons inspectors being able to interview some midlevel officials, former Iraqi officials, that perhaps could offer more enlightenment about where those weapons are - Lou.
DOBBS: Chris, thank you very much, Chris Burns reporting from the White House.
President Bush today reaffirmed his belief that Saddam Hussein allowed al Qaeda terrorists to operate in Baghdad and Iraq. National Security Correspondent David Ensor joins us now from Washington - David.
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, Lou, the president says that he still insists the evidence is there that there were al Qaeda connected terrorists, specifically this man Abu Musa al- Zarqawi (ph) and his group who were operating out of Baghdad.
He was responding to a report which we confirmed that officials are saying that these two men, Abu Zubaydah and Khalid Shaikh Mohammed, two well-known senior al Qaeda figures who are prisoners of the U.S. under interrogation have been denying that they know of any connection between al Qaeda and Saddam Hussein's regime.
Now, they are saying that, officials confirm, but these same officials say they are somewhat suspicious. On the one hand they say these men might deceive. They've been known to have lied to their interrogators in the past at time.
Secondly, they're not at all convinced that either of them would necessarily know if there was a connection between al Qaeda and the Iraqi regime since much of the al Qaeda structure is very compartmentalized and people only know what they need to know.
So, skepticism about these comments by these two men, at the same time officials confirming they are denying any connection between the two and you had the president saying he's convinced that there is at least an indirect connection. There was at least the evidence between this Zarqawi group and the fact that he was there in Baghdad and he, of course, was the leader of this group that is thought to have killed Lawrence Foley, that American diplomat who was killed in Amman, Jordan - Lou.
DOBBS: David, this is taking on a large dimension now at least in Washington, D.C. on the issue of weapons of mass destruction, the al Qaeda links. As you report, at least indirect links have been established in the case of the al Qaeda terrorist network, have they not?
ENSOR: Indirect links, yes, although officials say while Zarqawi had connections with, held meetings with various al Qaeda figures, he's not thought to have been a member of al Qaeda itself.
And, the other thing is, you have to prove that the Iraqi regime knew he was in Baghdad. Now, it was a police state. Most U.S. officials I speak to believe that somebody in the Iraqi regime had to know that this rather obvious terrorist figure who was missing a leg, or had a damaged leg, was entering Iraq but still some people say he might have gotten in without them knowing. So, it isn't an absolutely proven connection - Lou.
DOBBS: And, in terms of proof, weapons of mass destruction, intelligence assessments suggesting weapons of mass destruction which then became a straightforward statement of weapons of mass destruction in the possession of Saddam Hussein, all of that is based on findings by the intelligence community. Where do we stand with that? It seems straightforward to me.
ENSOR: Well, I think where we stand right now, Lou, is that the intelligence community reaffirms that it said to the president and others, look the evidence we have is that it is overwhelmingly likely that the Iraqi regime still has weapons of mass destruction. There were thousands of them that were unaccounted for at the end of the Persian Gulf War. Now, as to whether there were ongoing productions of new chemical weapons, there may not be so much evidence of that but I still talk to plenty of officials who believe that given time, and it may take a while, the people who are looking for weapons of mass destruction are going to find some - Lou.
DOBBS: And chief amongst those officials the president of the United States.
ENSOR: That's right.
DOBBS: In his statements today. David Ensor, National Security Correspondent, thank you very much reporting from Washington.
From Iraq now to North Korea, for the first time North Korea today publicly said that it may build more nuclear weapons. It said a nuclear deterrent may be necessary to respond to what it called hostile U.S. policy.
The United States believes North Korea already has one or two nuclear weapons. It also has medium-range ballistic missiles that could hit South Korea and Japan. Thirty-seven thousand U.S. troops are based in South Korea.
In the Middle East, Israel and the Palestinians today tried to keep the roadmap on track. Today, Israel dismantled two settler outposts on the West Bank. Israeli Prime Minister Ariel Sharon has promised to dismantle dozens of outposts as part of that process. Neither outpost dismantled today was inhabited but settlers threaten mass protests to stop further demolitions.
Palestinian Prime Minister Mahmoud Abbas is facing strong criticism from radical Islamists for his role in the Middle East peace process. Today, Abbas said he will continue efforts to negotiate a ceasefire with those radical groups in spite of Sunday's attacks against Israelis.
Kelly Wallace reports from Ramallah in the West Bank.
(BEGIN VIDEOTAPE)
KELLY WALLACE, CNN CORRESPONDENT (voice-over): Facing a coordinated challenge from all three major Palestinian factions, the embattled Palestinian prime minister went on the offensive condemning Sunday's attack which left four Israeli soldiers dead, and renewing his call for an end to all attacks against Israelis.
"We insist on a dialog, but in the end we will not force anyone to resume talks" Prime Minister Mahmoud Abbas said.
But it is a tough sell with radical Palestinian groups, such as Hamas, breaking off ceasefire talks last week accusing the Palestinian prime minister of demanding too little of Israel in his speech last week in Aqaba, Jordan, and so, Prime Minister Abbas tried to do some damage control. "Now there was a misunderstanding regarding the statement at Aqaba," the prime minister said. "And we clarify to you now and to the public."
And he took on issues he had not publicly in Jordan, such as the plight of Palestinian prisoners like Abu Suqa (ph) who until his release last week was the longest serving Palestinian prisoner in an Israeli jail.
(on camera): Complicating Mahmoud Abbas' efforts, his lack of political support on the street, he has only a single digit popularity waiting and his speech in Aqaba did not seem to bolster his standing here.
"We do not agree with this speech because he neglected everything we want," said Mohammed Samata (ph), who told us he faces tougher travel restrictions now than he did before the summit.
Still, many Palestinians say Mr. Abbas should be given a chance, like Naja Taya (ph) who splits his time between Brooklyn, New York and Ramallah.
UNIDENTIFIED MALE: He wouldn't have the support and, believe me, if you ask all the people one by one, 99 percent they want the peace.
WALLACE: The Palestinian prime minister now faces the biggest test since the smiles of Aqaba, achieving a ceasefire and winning Israeli concession, crucial not just for the roadmap but perhaps for his political future.
Kelly Wallace, CNN, Ramallah.
(END VIDEOTAPE)
DOBBS: Here in this country, federal agents investigating the anthrax attacks that killed five people started draining a Maryland pond today. The investigators believe the killer may have dumped evidence into that pond which is near the Pentagon's Biological Warfare Defense Center at Fort Dietrich.
Justice Correspondent Kelli Arena joins me now live from Washington - Kelli.
KELLI ARENA, CNN JUSTICE CORRESPONDENT: Lou, this is a massive undertaking and it's one the FBI obviously believes may provide a break in its 20-month investigation.
Approximately 50,000 gallons of water will be drained out of the one acre pond in Frederick, Maryland into a nearby pond and it's a process that's expected to take several weeks.
In a statement, the FBI says that, "The purpose of these searches is to locate and collect items of evidence related to the attacks." Now, the pond is about ten miles from Fort Dietrich where the Army has experimented with anthrax. And, according to government sources, agents who searched the pond back in December found a large plastic enclosed container with two openings in the side, similar they say to those used to limit exposure during scientific tests and several vials were also found.
Sources say that testing on those items and others continue. Still, officials say there is no evidence connecting anything found in the pond to the anthrax attacks nor is there any evidence linking any individual to the deadly anthrax letters and that included Stephen Hatfill.
He's a former researcher at Fort Dietrich. He was described by the attorney general as a person of interest. Hatfill has consistently denied any involvement in the anthrax attacks, and today, his spokesman had this to say about the FBI's latest move.
(BEGIN VIDEO CLIP)
PAT CLAWSON, HATFILL SPOKESMAN: Anything that can be done to clear Steve Hatfill right now he welcomes and he knows that the search of the pond in Frederick is not going to lead to anything tying him into the anthrax case because he had nothing to do with the anthrax case. So, if it helps prove his innocence he welcomes it.
(END VIDEO CLIP)
ARENA: Lou, one final note, the cost of draining this pond has been estimated at about $250,000 - back to you.
DOBBS: Kelli, $250,000 if it leads to a solution here would be cheap, but the fact is we still do not know much since the testing on the materials found, the box, the vials in that pond, why not? They've had a lot of time to do testing.
ARENA: Well, as you know, Lou, the FBI has not officially commented about any of this. This is all sourced information but our sources tell us that there are scientific protocols that have had to be established all throughout this investigation and that those protocols take a long time to establish before testing can even begin.
And, as you move from one testing phase to the next, the process starts all over again. So, they say that while it sounds like it's a long time, considering they've never conducted tests like these before that could eventually be used in a prosecution, that everything - there's a million steps that they have to take before they can actually go through with it.
DOBBS: As you point out, as they say, it does seem like a long time. Kelli, thanks very much, Kelli Arena reporting from Washington.
Still ahead here tonight, cleaning house from the top down at Freddie Mac scandal, a major shakeup in management.
And, divided over WMD, can U.S. intelligence be trusted? Former CIA Director James Woolsey joins us. Stay with us.
(COMMERCIAL BREAK)
DOBBS: A management shakeup at one of the biggest mortgage companies in the country. The top three executives at Freddie Mac are out. That follows an investigation into Freddie Mac's financial results over the past three years.
Freddie Mac today fired its president and chief operating officer David Glenn. The company's chairman and CEO has resigned and the chief financial officer out as well. That all combined to push the stock down 16 percent today. That is the largest decline in the company's history.
Louise Schiavone reports from Washington.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Mortgage- backed securities giant Freddie Mac is shaking up its management team even while coping with a broad restatement of past earnings, out, David Glenn, President and Chief Operating Officer; Leland Brendsel, retiring Chairman and CEO; and Vaughn Clarke, resigning Chief Financial Officer.
Glenn's firing was spurred by pressure from regulators at the Office of Federal Housing Enterprise Oversight. Concerns arose in January when Freddie Mac changed auditors from Arthur Andersen to Price Waterhouse Coopers, and at the same time announced a restatement of earnings for the past three years.
There is some dispute as to whether the restatement upward is a red flag to shareholders.
BERT ELY, FINANCIAL CONSULTANT: As far as I'm concerned, there is still a dark cloud hanging over Freddie because until we see the restatement, and until we see first quarter 2003 numbers, we really can't make any judgment about the magnitude of the restatement, what lies behind it, or what this says about the future for Freddie.
SCHIAVONE: Freddie Mac and Fannie Mae were chartered by Congress to facilitate the goal of home ownership for low-income buyers. They buy home loans from banks and other lenders to create a supply of ready cash. Their charter from Congress lets them off the hook for certain oversight, a charter that several in Congress are now determined to revisit.
REP. ED MARKEY (D), MASSACHUSETTS: Freddie Mac has escaped full scrutiny for its entire history. I think now if Congress acts as aggressively as it should that it will now be put under the full scope protections that consumers need.
(END VIDEOTAPE)
SCHIAVONE: Lou, making this case all the more mysterious, a Freddie Mac official stated this morning that ousted President David Glenn had personal diaries which he had altered before giving them to Freddie Mac's counsel. What was in this diary and what was omitted with the alteration is unknown - Lou.
DOBBS: Louise, thank you very much, a troubling development certainly also its stock falling 16 percent as we reported, Louise, but Fannie Mae participating in that as well. It had a different auditor though correct, KPMG?
SCHIAVONE: Yes. Fannie Mae is so far not touched by this except by association.
DOBBS: Sure.
SCHIAVONE: They're both government sponsored enterprises chartered by Congress.
DOBBS: OK, Louise, thank you very much, Louise Schiavone reporting from Washington.
Seventy executives in all of corporate America have now been criminally charged, 16 of them from Enron. No one has been sent to jail. It's been 553 days since Enron filed for bankruptcy.
On Wall Street today, stock prices dropped, all of the major indexes lower. The Dow Jones Industrials down 83 points. The NASDAQ fell 23.45. The S&P 500 off 12 points.
Christine Romans is here now to talk about what was a down day on Wall Street.
CHRISTINE ROMANS, CNN CORRESPONDENT: It was for the Dow. It was the first down day in seven, the biggest drop in about three weeks for the Dow Jones Industrial Average. Some blaming a Motorola profit warning, Lou, others said upheaval at Freddie Mac renewed accounting concerns on Wall Street. Some pointed to falls like Disney, which tumbled five percent after a two-week 19 percent run-up.
Then there was oil at three month highs and a rally in bonds, but frankly many have been calling for a pullback in stocks for some time. The internal indicators have been strong. Some say a giveback might refresh things.
John Roca (ph), (unintelligible) says for the first time, Lou, in six years, 94 percent of the stock in the S&P 500 are above 50-day moving averages, 89 percent are above 200-day moving averages, and the major averages have rallied, as you know, 20 percent from their March lows.
So, today two stocks fell for every stock that rose at the big board. Volume lighter than average and the NASDAQ volume broke its eight session string of two billion share days.
And, meanwhile a deal to tell you about, Veridian rallied 26 percent after General Dynamics said it would buy that company for $1.5 billion, most of that in cash so some excitement there but for the most part a pullback today.
DOBBS: And as you point out after the run-up we've seen, not entirely perhaps a bad thing.
ROMANS: Absolutely.
DOBBS: Christine Romans, thank you.
Now, our nightly check on the national debt, tonight it stands at $6,578,000,000,000. That debt has risen more than $20 billion so far this month.
Still ahead, blackmail on Capitol Hill, hundreds of U.S. servicemen and women caught in a political crossfire. A U.S. Senator is using members of the U.S. military as political hostages.
And, a nine-year-old girl is safely back with her family tonight after a violent abduction, her remarkable story when we continue.
(COMMERCIAL BREAK)
DOBBS: A Senator today defended his decision to block more than 200 Air Force promotions because he wants another four Hercules cargo planes based in his state. Republican Senator Larry Craig said the Air Force made a commitment to station those aircraft in Idaho seven years ago, Congressional Correspondent Kate Snow reports.
(BEGIN VIDEOTAPE)
KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Fighter pilots just back from Iraq, young majors, high-ranking generals, all in limbo because one man, one U.S. Senator isn't getting what he wants.
SEN. LARRY CRAIG (R), IDAHO: Well, for 18 months I've been working with the Air Force to try to bring stability to an Air Guard mission in the state of Idaho and during that 18-month period, long before Iraqi Freedom, they really refused to work with us.
SNOW: Idaho Senator Larry Craig says the Air Force promised to move four brand new C-139 cargo planes to Gowan Field in Boise. If the Air Force won't keep its word, he won't let the Senate promote Air Force officers.
CRAIG: You use the opportunity at hand to get the attention of the Air Force. The Air Force has brought this on themselves.
SNOW: It happens all the time in the Senate where one Senator can bring things to a screeching halt. In a tradition that dates back to the '60s, Senators can secretly put a hold on a bill, essentially threatening to filibuster the measure if it ever comes up for a vote.
RICHARD BAKER, SENATE HISTORIAN: And they're saying to the leader don't move this on to passage because if you do I'll object, and if I object that could then trigger a filibuster and if we trigger a filibuster then all of a sudden you've lost control, Mr. Leader, of the floor because you can no longer predict the schedule.
SNOW: It used to be more common to hold up one single nominee. Gay rights activist James Hormell, for example, nominated by President Clinton to be ambassador to Luxembourg held up for nearly two years.
But Senators have placed blanket holds too, in the mid-'80s under President Reagan, Democratic Senator Robert Byrd held up thousands of military promotions to make a point. Critics say the practice has gotten out of control in the past ten years.
NORM ORNSTEIN, AMERICAN ENTERPRISE INSTITUTE: Senators have been very happy to have an anonymous process where they can take a hostage, hold up a nomination, hold up a bill, and use it as a bludgeon against an administration usually to get their way on something completely unrelated.
SNOW: In this case, Republican Senator John McCain says Air Force generals are caught in the crossfire.
"It is completely inappropriate to place a hold on the promotion of scores of servicemen and women who play no role whatsoever in establishing Air Force policy" McCain said in a statement.
(END VIDEOTAPE)
SNOW: Now, Senator Craig for his part says he strongly supports the Air Force. He didn't mean to keep any of this a secret but holds are by nature a secret process, Lou, and Republican aides say that now that this one is out in the public and out in the open they may try to quietly solve this one - Lou.
DOBBS: Any prospect that this is going to be resolved by either Senator Craig or the Republican leadership in the Senator forthwith?
SNOW: Well, that's exactly what Republican aides are saying that now that it's out there that perhaps there will be additional pressure. The Air Force will come up with these planes somehow or Senator Craig will back down, although I can tell you he tells CNN he's not backing down on this one - Lou.
DOBBS: It puts the Republican leadership in a difficult position because they're very upset with the Democrats blocking those traditional nominations and yet one Republican Senator, in this case Senator Craig from Idaho, is doing precisely the same thing.
SNOW: And, Ari Fleischer was asked about that today at the White House. He sort of sidestepped the issue and said well these are holds. This is something that happens in the Senate all the time. We'll let it run its course.
I can tell you, Lou that Senator Frist, the Majority Leader, the Republican leader, is staying completely out of this one. Aides to him say he's not going to get messed up in this conflict. He's going to let them resolve it. It's between the Senator and the Air Force.
DOBBS: Kate Snow, as always, thank you very much reporting from Capitol Hill.
We, of course, invited Senator Craig to join us on this broadcast but the Senator decided not to make any further comments at least for now.
President Bush today struck back at critics who have questioned the White House's intelligence on weapons of mass destruction in Iraq. President Bush said he is absolutely certain that evidence of such weapons will surface in Iraq.
Joining me now on this issue and more is former CIA Director James Woolsey who joins us from our studios in Washington, D.C., Jim good to have you here.
JAMES WOOLSEY, FMR. CIA DIRECTOR: Good to be with you, Lou.
DOBBS: This is reaching what Howard Dean is really putting in stark epic proportions, saying that this is bigger than Watergate. What do you think?
WOOLSEY: Oh, I think that's ridiculous, Lou. People need to stand back a little bit and look at the facts here. I mean, Saddam Hussein admitted after his son-in-law defected, who was the head of the biological weapons program, Saddam had said they didn't have such a program.
After Kamal (ph) defected in '95, they admitted to having produced 8,500 liters of anthrax. That's about 8 1/2 tons. That's an amount that would fit on one medium-sized truck or, if they dried it out, it would be a couple of big suitcases, 80-pound -- a couple of big 80-pound suitcases. And they admitted to having a program. They admitted to having produced 500 or so shells full of mustard gas. They admitted to having produced several tons of VX.
Now, the U.N. inspectors' numbers were bigger, and Colin Powell used some of those, like 25,000 liters of anthrax, three times as much. But there's no real dispute. The people who say that they had no weapons of mass destruction program are being more supportive of Saddam than Saddam was.
DOBBS: Well, at this juncture how confident are you that U.S. and now U.N. inspectors will find evidence of that weapons of mass destruction program?
WOOLSEY: That's a very different question. You can produce anthrax, for example, in something very much like a microbrewery attached to a restaurant. Material that can produce pharmaceuticals, for example, can be used to produce something like anthrax.
And if you're talking about, you know, one truckload worth, it's pretty easily destroyed. You can burn it up. There are at least two different reports about destruction, one in "The L.A. Times" today, an Iraqi scientist talking about destruction and secreting away the way to make more weapons of mass destruction in the late '90s.
And then another "New York Times" story about five weeks ago, front page, by Judith Miller. A scientists saying he was ordered to destroy substantial shares of nerve gas and to secrete away some of the ways to produce it further. So there is at least the chance that some of this in the late '90s or even just as the war was starting was destroyed and it may be hard to find a lot of it. But there should be no question that he had a program and that he produced things like anthrax and nerve gas. He said he did.
DOBBS: And would not account for that material even under the presumption that it had been destroyed.
The two mobile laboratories, the U.S. government is continuing to cling to those as evidence of the program, yet no sign of weapons of mass destruction, chemical or biological agents, and some contest over whether or not in point of fact they are mobile laboratories for that purpose. How do you sort that particular issue out?
WOOLSEY: Well, they had some good intelligence, and I think Colin Powell used it in his statement to the Security Council, that the several Renault trucks, I think there were eight of them, had been designed to be used to produce anthrax or some other biological agent. And certain features of their design look that way, and then some experts on the outside have said other features such as their canvas sides don't make them look that way.
But it shouldn't be suspicious if they don't have any anthrax in them. They may never have been used actually to produce the anthrax. They may have been their standby mobile capability. I think the absence of spores and so forth really shouldn't prove the negative here.
DOBBS: Obviously, the White House is being accused by many, and some of them, most of them, in point of fact, with a partisan viewpoint. But the assertion is that the White House overstated what the intelligence community had delivered to it in the way of information, knowledge, and, if you will, interpretation. What's your reaction?
WOOLSEY: Well, there was one overstatement. Someone put into the president's speech that this uranium oxide ore from Niger in Africa was part of the program, and I think that's been rather substantially discredited. But that was not in Colin Powell's statement to the United Nations.
And I think the substantial majority of what the administration has said has stood up. They've been a little sloppy in talking about the weapons themselves as distinct from biological agent or chemical precursors or chemicals because in a lot of these cases you don't load the shells until the last minute.
So one could quibble and say you don't have a biological weapon until the shell is loaded up. But that's not really substantively important. What's important is if they produced and had the anthrax. And they did. I mean, they admitted it.
DOBBS: Also important here, Jim, is just how good is U.S. intelligence on a separate issue? It now turns out a likelihood, a possibility, rather, that "Chemical Ali," who we were told had been killed by the best assessment in the war, is free. Osama bin Laden is free. The list goes on. The top seven people in that deck of most wanted in the Saddam Hussein regime still have not been found.
There seems to be some issues here. What is going on? Do you think there is a failure here of human intelligence at the CIA, NSA, DIA, the various agencies?
WOOLSEY: Well, obviously, we're looking hard for these people. But I think one on this one needs to also cut the administration a little bit of slack. I mean it took seven years to find the suspect for the Olympic bombings in North Carolina and the Unabomber went I think 15 years.
It's not easy to find people, even if you have an army in a country. And this is a country, Iraq, the size of California. I do think that it is a good idea for people to be cautious about the fog of war and not to report if you're in the government the first indication that yes, Chemical Ali was the one who was hit. It's best to continue to hedge until you're sure.
But generally speaking, except for a few slip-ups like that, I think the administration has been taking something of a bum rap here from the critics, frankly. If Saddam hadn't produced this material, it would be one thing, if there were any argument about it. But as I said, there's not. He said he destroyed it and that he had no record of having destroyed it and he didn't remember where or when or who did it.
Well, you know, anyone who believed that, there's a bridge in Brooklyn they ought to buy. And it wasn't just the Americans and British. It was the French and the U.N. inspectors and, as I said, on some occasions the Iraqis who were admitting that they had programs.
DOBBS: James Woolsey, as always, good to have you with us.
WOOLSEY: Good to be with you, Lou.
DOBBS: That brings us to the subject of tonight's poll. The question, how important is it to you to find Iraqi weapons of mass destruction? Very, somewhat, a little, or hey, it's over? Cast your vote at cnn.com/moneyline. We'll have the preliminary results later in the broadcast.
The final results of Friday's poll, whom do you trust most on the issue of Iraqi weapons of mass destruction? Fourteen percent said Donald Rumsfeld, 18 percent Colin Powell, 4 percent the CIA, 64 percent said U.N. weapons inspectors.
When we continue, a stunning development tonight that could make the skies safer if a little less friendly.
And two new investigations claim WorldCom's Bernie Ebbers had a little more information and activity in the scandal than first thought. We'll be right back.
(COMMERCIAL BREAK) DOBBS: A rare tie vote in the Supreme Court on the subject of ancient -- Agent Orange. The Justices deadlocked on whether Vietnam veterans can sue to recover damages for exposure to the chemical if they were diagnosed after a 1984 class action settlement. Justice John Paul Stevens did not participate in that decision. No reason was given, but his son was a Vietnam vet who died of cancer in the mid 1990s.
Police have a man in custody tonight in connection with the kidnapping of a 9-year-old California girl. The suspect was arrested near the girl's home in San Jose. He will be charged with kidnapping and sexual assault. The girl was found alive in a store near her home late last night.
The nation's airline pilots are a step closer to having stun guns in the cockpit. The Transportation Security Administration said they would be a useful security tool but has yet to approve their use.
The search for signs that life may have existed on Mars will wait another day. NASA has delayed the launch of the Mars rover from Cape Canaveral because of bad weather.
Turning to our corporate crime watch, two highly anticipated independent reports today released claim that WorldCom's former CEO, Bernie Ebbers, did play a role in inflating WorldCom's revenue. Those reports provide new details about Ebbers' role in the record $11 billion accounting scandal.
Greg Clarkin is here now with the story -- Greg.
GREG CLARKIN, CNNfn CORRESPONDENT: And Lou, both of these reports show that Bernie Ebbers did indeed know about that $11 billion accounting scandal at WorldCom. The reports describe a culture of fraud at WorldCom in the late '90s as it scrambled to cover up financial weakness with accounting tricks.
Now, the fraud included WorldCom executives falsifying financial results in a bid to hide the weakness from investors. Among the key findings was WorldCom's use of one-time items to pump up revenue numbers. It was called "close the gap," and it took place frequently, according to a report by lawyer William McLucas. The "close the gap" practice peaked in 2001, when WorldCom was trying to double its revenue growth from 6 to 12 percent with the use of these one-time items, items it failed to disclose.
Now, the McLucas report found a rare memo from Ebbers -- rare because Ebbers left little in the way of a paper trail. The memo to WorldCom's chief operating officer shows Ebbers was familiar with the "close the gap" practice.
Now, there's also potential insider trading by Ebbers. One report outlines how Ebbers sold $870 million in WorldCom stock in late 2000. That is a sale that was done after he had received information about WorldCom's revenue weakness, and that stock trade also occurring a month before WorldCom told investors of this revenue problem. And just in case that wasn't enough, the reports describe how WorldCom kept the company's auditor -- yes, Arthur Andersen -- in the dark, altering documents and denying Andersen access to a data base.
So you have an $11 billion case of corporate fraud, a case that caused investors to lose $180 billion, and still no criminal or civil charges against the CEO, and a lot of people want to know where does it go from here. Well, it's believed that these two external reports could provide a road map for prosecutors to bring charges against Ebbers, keeping in mind in addition to leaving little if any paper trail, Ebbers did not use e-mail and that's had prosecutors hustling to piece together what went on at WorldCom from other sources.
And Lou, tonight from Ebbers' attorney, he says all these reports make for a good sound bite in the media, but there is no substitute for the evidence that is required to pursue such serious allegations in a court of law.
DOBBS: Greg, thank you very much., although that looks like that may be one of the places we're headed. Greg Clarkin.
A reminder now to vote in our poll. "How important is it to you to find Iraqi weapons of mass destruction? Very? Somewhat? A little? Or, hey, it's over?" Cast your vote at cnn.com/moneyline. We'll have the results in just a few minutes.
Turning to our "Quote of the Day," from the top U.N. official in Iraq, who today made comments in Baghdad on rebuilding the country, saying: "It is unstable. That is obvious, is it not? Depending on the area we're talking, whether in Baghdad or in the rest of the country, it is unstable. But as far as I'm concerned, I can see improvements by the day, fortunately." That from Sergio de Mello, U.N. special envoy to Iraq.
Checking now the U.S. trade deficit, it stands tonight at more than $222 billion, rising by a billion-and-a-half dollars a day.
When we continue, hunting the big fish in a sea of corporate criminals. Three prosecutors are leading the charge. CNN legal analyst Jeffrey Toobin will join us.
And we'll share some of your thoughts, including thoughts on a Florida ruling that prohibited a Muslim woman from wearing a veil on her driver's license photograph.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Each night we track the efforts of the entire justice system, some 93 U.S. attorneys in all, to crack down on corporate wrongdoing. Of the 70 criminal cases we're currently tracking on our corporate crime scoreboard, well over half those cases are in the hands of only three prosecutors.
Peter Viles reports on the three U.S. attorneys with the most points on the board.
(BEGIN VIDEOTAPE)
JIM COMEY, U.S. ATTORNEY: Good afternoon, folks. I'm Jim Comey.
PETER VILES, CNNfn CORRESPONDENT (voice-over): Tall and handsome, Jim Comey is a rising star in the Justice Department.
He is also Martha Stewart's worst nightmare. He's the U.S. attorney who decided to indict her. And it's not personal. Jim Comey is also Sam Waksal's worst nightmare and Frank Quattrone's worst nightmare and certainly the Rigas family's worst name.
COMEY: The charges in the complaint total a maximum possible imprisonment term of 100 years.
VILES: Comey is one of three prosecutors taking the lead in cleaning up corporate America.
In Birmingham, Alabama, U.S. attorney Alice Martin is on a roll. In the Healthsouth scandal, 11 executives charged and 11 guilty pleas in a massive accounting fraud ring.
ALICE MARTIN, U.S. ATTORNEY: Each of them tells a consistent story of being approached by upper management. We've referred to them as senior officials. The comptroller, the CFO and being told we need to temporarily park something here.
VILES: The big fish Martin hasn't caught: Healthsouth founder Richard Scrushy.
But she does have another priority. She just got the Eric Rudolph bombing case.
LESLIE CALDWELL, ENRON TASK FORCE: We're moving forward, though.
VILES: In Houston, Texas, Lesley Caldwell's Enron task force has now racked up charges against 21 executives, 16 at Enron, a conviction and five guilty pleas. Put another way, she's got five corporate insiders now playing on her team.
CALDWELL: Essentially, when someone agrees to cooperate, essentially all the knowledge that they have becomes our knowledge.
VILES: The big fish she hasn't caught...
KEN LAY, FMR. ENRON CEO: I do.
VILES: ...Ken Lay and Jeff Skilling.
And then there's Comey in New York: 14 executives charged and seven guilty pleas. The most recent indictment is the highest- profile: Martha Stewart.
COMEY: Martha Stewart is being prosecuted not because of who she is but because of what she did. VILES (on camera): Now Comey is about to become the first prosecutor to accomplish something that investors have been clamoring for.
On Tuesday, Sam Waksal will be sentenced almost certainly to time in prison, the first prison sentence in this crackdown on corporate crime.
Peter Viles, CNN, New York.
(END VIDEOTAPE)
BLITZER: Joining me now is CNN legal analyst Jeffrey Toobin.
Jeff, while as Peter Viles points out these three prosecutors have been successful within certain measures, I think it's fair to say, overall this -- how would you describe how effective overall the prosecution has gone?
JEFFREY TOOBIN, CNN LEGAL ANALYST: I think it has demonstrated that even when you have these flagrant disasters, Enron, WorldCom, Tyco, it's very tough to complete the process, get people actually in jail. For all those successes, as you show in your scorecard every night, zero people are in jail from those companies, and it's been 500-plus days since Enron declared bankruptcy.
DOBBS: Is it fair to call this a prosecutorial failure?
TOOBIN: I think that we're not quite there yet to say it's failure. Certainly, it demonstrates that when it comes to white- collar crime it's a very slow process, and no one has figured out a way to speed it up very well.
DOBBS: Why is that?
These prosecutors are very bright, capable attorneys with experience in criminal and civil for the most part in civil issues. This is going on now well over a year and a half.
Isn't there a learning curve that should get a little less steep?
TOOBIN: It should be. But when you realize that the standard is proof beyond a reasonable doubt and you're talking about executives who are insulated by several layers of other executives, you know, who have lawyers all around them, you're talking about thousands of documents, simply to accumulate the documents, to look for the wrongdoing, it takes a long time. It's very difficult.
DOBBS: Are lawyers outgunned, out financed, outresourced?
TOOBIN: There's certainly an element of that. You have, I mean, tremendous legal resource on the other side, and essentially unlimited. Defense lawyers are fond of pointing out that the government has unlimited resources, which in theory they do. But in fact, you know, these U.S. Attorneys, they're not just responsible for prosecuting Enron. They have all the federal crimes in their jurisdiction to prosecute with, you know, a few dozen lawyers. And yes, there is an outgunning that goes on in these big white-collar cases.
DOBBS: What would you say is going to happen here?
At this point you mentioned WorldCom. we have still Enron. The list goes on, Tyco.
Is there some point at which people are going to become extraordinarily impatient?
TOOBIN: They will be impatient. But there will be successes. Tomorrow Sam Waksal will be sentenced to prison. Sam Waksal's sentencing guidelines are 70 to 87 months, which is a certainty he'll do at least that much time, and the federal government is going to ask to be added on to that. So you're talking about Sam Waksal starting tomorrow will be doing six, seven, eight, nine years in prison with no chance for parole. There's no parole in the federal system. So you know, the merry-go-round will stop with certain people but you know, they won't get everybody. That's for sure.
DOBBS: They won't get everyone. You mentioned Waksal. Let's go to the issue of Martha Stewart. Our viewer response continues, and it's interesting to me. To go to the idea that it's because she's a woman, she's being prosecuted, it's because she's a celebrity because she's being prosecuted. I talked with Congressman Greenwood last week in Washington. And his view is, I thought he put it rather interestingly, he said that everyone has a presumption of innocence, but if I were a betting man I'd say she's guilty.
Where do you believe this -- where do you come down on the Martha Stewart prosecution?
TOOBIN: I think that is going to be a fairly tough case for the government because you have a very small amount of money is at stake, a woman who was a billionaire is accused of covering up a trade that would have saved her $47,000. And you know, there is no claim that she engaged in insider trading. You know, these cases, it's very easy to say in the abstract let's get tough on corporate crime. The jurors...
DOBBS: The civil charges are on insider trading.
TOOBIN: The SEC charges are. But the criminal case isn't. Jurors, you know, in the abstract think it's tough, want to be tough on corporate crime. But when they see those executives sitting there in the box and they're wearing nice suits and they have lawyers talking about all the good things that they've done in their career and talking about how complex the accounting rules are, jurors are more reluctant to pull the trigger and find these people guilty than you would think.
DOBBS: All right. Jeffrey Toobin, as always, thanks for being with us. We'll ask you to come along and mark the progress of this...
TOOBIN: If any. DOBBS: This prosecution. As you say, if any. Thank you, Jeffrey.
Turning now to our "Thought of the Day," "Nothing in life is to be feared. It is only to be understood."
That comes from (UNINTELLIGIBLE) Marie Curie.
When we continue, we'll have the preliminary results of tonight's poll, and we'll share some more of your e-mails about Martha Stewart and some creative ideas on the treatment of corporate criminals. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Checking the results of our poll tonight, the question, "How important is it to you to find Iraqi weapons of mass destruction?" 81 percent of you said very, 4 percent, somewhat, 3 percent, a little, 12 percent of you said hey, it's over.
A look at some of your thoughts now. Many of you wrote about the Florida ruling prohibiting a Muslim woman from wearing a veil on her driver's license photograph.
Susan Davis of Medford, Oregon said, " Should that person be involved in a hit and run auto accident, no one could identify her with a driver's license or even in person! I don't think anyone who has anything to do with driving a car should be veiled."
From Burbank, California, Tina says this about Martha Stewart, "Cheating is cheating no matter how large or small. Our country's culture has made it OK to lie, cheat, and steal. We need to return to basic morals and values. If Martha Stewart committed this crime, she should be prosecuted."
Kevin Good of Mechanicsville, Virginia, he has the last word tonight. "How in the world did Martha Stewart come to be the most important businessperson in the vast ocean of corporate impropriety over the past few years? There are many bigger fish that need to be fried with extra virgin olive oil, some white wine, a clove of fresh garlic, scallion shards, a pinch of lemon pepper and served with a spring of parsley."
Send us your thoughts. Always at loudobbs@cnn.com. Thanks for being with us tonight. Tomorrow our guests will include Senator Carl Levin, who says pre-war intelligence on Iraq was manipulated to support the Bush administration's pro-war policy. And former defense Secretary, regular contributor of this broadcast, William Cohen will be with us. For all of us here, good night from New York.
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