|
CNN LOU DOBBS MONEYLINE
New Questions About Accounting Scandal of Mortgage Lender Freddie Mac; NASA Launches Robot That May Answer Whether Life Existed on Mars
Aired June 10, 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: New questions tonight about the accounting scandal of this country's second largest mortgage lender, Freddie Mac. Lawmakers on Capitol Hill are now demanding answers. Congressman Richard Baker has been a critic of both Fannie Mae and Freddie Mac. He is our guest tonight.
And destination Mars, NASA today launched a robot that may finally answer the question of whether life ever existed on the red planet. We will have dramatic video of today's launch, an interview with Orlando Figueroa the director of NASA's Mars Exploration Program.
And, claims and counterclaims about the use of intelligence as a political weapon before the war against Saddam Hussein. Democratic Senator Carl Levin, Republican Senator John Warner joins us tonight.
ANNOUNCER: This is LOU DOBBS MONEYLINE for Tuesday, June 10. Here now Lou Dobbs.
DOBBS: Good evening everyone.
Tonight, the first prison sentence in the crackdown on corporate crime in this country, the former head of ImClone Systems Samuel Waksal today sentenced to seven years three months in jail. He was at the center of an insider trading scandal that also threatens now Martha Stewart and her home decorating empire.
Peter Viles reports.
(BEGIN VIDEOTAPE)
PETER VILES, CNNfn CORRESPONDENT (voice-over): It was a moment angry investors had been waiting for. At long last, someone from the top ranks of corporate America is going to prison, inmate number one in the white collar crackdown Sam Waksal, friend of Martha Stewart, former CEO of ImClone.
As his 80-year-old father watched in tears, Waksal was sentenced to seven years three months in prison, fined $3 million, ordered to pay the state of New York $1.3 million for evading taxes on million dollar paintings.
THOMAS AJAMIE, SECURITIES LAWYER: Very harsh and much more harsh than anyone, including the Waksals expected. It was at the very, very high range of the guidelines. The judge could have within his discretion gone a lot lower and he didn't. He gave Waksal the absolute maximum he could give him.
VILES: Waksal pled guilty to securities fraud, insider trading an ImClone stock just before bad news came out about its cancer- fighting drug Erbitux, then a cover-up that included perjury and obstruction of justice.
These crimes are emblematic of a pattern of lawlessness and arrogance, Judge William Pauley told Waksal in court. You abused your position of trust and undermined the public's...
(AUDIO GAP)
VILES: ... emotional plea for leniency. As his father wept behind him, Waksal's lawyers portrayed him as a noble cancer fighter who to this day believes in ImClone and Erbitux and committed a crime of impulse only because he faced a personal cash crunch.
The prosecutor who brought the case, U.S. Attorney James Comey said: "We are satisfied with the sentence which shows that corporate crooks will serve real jail time. But there are no winners in a case like this. Sam Waksal ruined his own life and the financial lives of many innocent investors."
The ImClone investigation also led to the indictment of Martha Stewart. Like her old friend Sam Waksal, she's accused of lying to federal investigators.
(END VIDEOTAPE)
VILES: The government wanted Waksal taken into custody immediately. Waksal's lawyers wanted him to have eight more weeks of freedom. The judge split the difference, Waksal now under house arrest in his apartment in New York wearing a monitoring bracelet until July 2. He then goes to prison, his lawyers asking that he be sent to Eglin Federal Prison Camp in Florida. That is the one that has been called Club Fed -- Lou.
DOBBS: Club Fed, at this point there is some irony surrounding this. Right now, the stock of ImClone Systems is rising on a great deal of perhaps misplaced euphoria about the prospects for its cancer fighting drug Erbitux. Any more that you can tell us on that?
VILES: Well, there were letters read in court today from cancer patients who are doing very well on Erbitux. They said they wanted to thank Sam Waksal. He had done wonderful things, perhaps saved their lives.
The judge says this is commendable but it's not relevant to insider trading charges against him. But yes, there are some signs, some hints that this drug, certainly the future of this drug looks better now than it did when his sales were made in December of '01.
DOBBS: His faith did not extend to not selling his stock. All right, thank you very much Peter Viles. A first to report to you tonight on our "Corporate America Criminal Scoreboard" which we report to you each evening, Sam Waksal is the first executive to be sentenced to jail. He will be going to jail as such he is number one on our board. Seventy executives in all of corporate America have now been charges, 16 of those from Enron, and it has been 554 days since Enron filed for bankruptcy.
Waksal may be the first executive to see the inside of a jail cell since Enron's spectacular collapse and the onset of the corporate corruption scandal in this country but Waksal joins an exclusive fraternity of corporate criminals who traded their pinstripes for a bolder set of stripes.
Remember Ivan Boesky, he was sentenced to three years for insider trading. He was released after two years in prison. Boesky also served as the inspiration for Michael Douglas' greed obsessed Gordon Gekko in the 1987 film "Wall Street." You may remember greed is good. Boesky blew the whistle on junk bond king Michael Milken and Milken in turn was sentenced to ten years in prison but released after serving just two years.
Money manager to the stars Dana Giacchetto sentenced to almost five years in prison for fraud but was released after serving less than three years. Shoe designer Steve Madden is still serving a 41- month sentence for fraud, the result of a plea bargain. He was facing as much as 25 years in prison. It remains to be seen how much of his seven years, of course, Sam Waksal will actually serve.
Turning now to our "Thought of the Day" on criminal behavior, its repercussions sometimes called punishment: "You can not do wrong without suffering wrong." That from Ralph Waldo Emerson.
Turning to the continuing conflict tonight in the Middle East, Israel today tried to kill a senior member of the Hamas radical Islamist group in Gaza. He survived the attack but the assassination attempt could threaten the road map to peace.
Kelly Wallace reports from Gaza City.
(BEGIN VIDEOTAPE)
KELLY WALLACE, CNN JERUSALEM CORRESPONDENT (voice-over): In Gaza, two Israeli aerial assaults in just eight hours that could deliver a sharp blow to the already fragile Mid East road map.
The first an attempt to kill a senior leader of the Palestinian militant group Hamas left a Hamas bodyguard and a 50-year-old woman bystander dead according to Palestinian sources. Abdel Aziz Rantisi, the public face of Hamas in Gaza, managed to escape with moderate injuries and declared that Israel will pay a big price.
ABDEL AZIZ RANTISI, SENIOR HAMAS LEADER: We are facing murderers, terrorists, occupiers, and I say to the world no peace with occupation.
WALLACE: Hundreds of members of Hamas took to the streets calling for revenge. The group is responsible for many suicide bombings against Israelis. Now, its leaders are vowing to retaliate with more attacks targeting all Israelis, including civilians and political leaders.
Palestinian Prime Minister Mahmoud Abbas, who has been unsuccessfully trying to convince Hamas to agree to a cease fire, sharply condemned the Israeli air strike.
"Such attacks obstruct and sabotage all efforts of the peace process," the prime minister said.
Israeli military sources say the government acted now because it says Rantisi had stepped up his involvement in terror attacks against Israelis, accusing him of being the main organizer behind the coordinated attack by three major militant groups Sunday which left four Israeli soldiers dead in the Gaza Strip.
RA'ANAN GISSIN, SHARON ADVISER: Perhaps we'll have second thoughts about the action that he is taking which are really undermining the peace process and hurting the Palestinians more than us.
WALLACE: Nearly eight hours later, more injured Palestinians are rushed into the hospital after a second Israeli attack from the air.
(on camera): Witnesses say Palestinians were firing homemade rockets from here just across the border from Israel. That's why a lot of people came out on the street and that is when Palestinian sources say at least one Israeli Apache helicopter fired on this crowd here down below.
(voice-over): On this day, cautious optimism that a peace process could finally take hold seems to have gone away at least for now.
(END VIDEOTAPE)
WALLACE: And, Israel's Prime Minister Ariel Sharon speaking out tonight saying Israel, "will continue to act against all the enemies of peace" using a phrase the White House used over the weekend to describe Hamas, perhaps an effort by the Israeli administration to send a message to the White House, which offered some rare criticism of Mr. Sharon on this day -- Lou.
DOBBS: Kelly, thank you very much, Kelly Wallace reporting from Gaza City.
The White House had a message of its own for Mr. Sharon. President Bush said he's troubled by the Israeli attack in Gaza. The president said he is determined to proceed with the Middle East peace plan that he discussed with Israeli and Palestinian prime ministers last week.
White House Correspondent Chris Burns has the report.
(BEGIN VIDEOTAPE) CHRIS BURNS, CNN WHITE HOUSE CORRESPONDENT (voice-over): Faced with the first major bump in the road map toward peace, the White House responded with what it called a full court press to try to put out the flames that could spread to the road map itself.
ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: The president is deeply troubled.
COLIN POWELL, SECRETARY OF STATE: We're deeply troubled by what happened in Gaza.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I am troubled by the recent Israeli helicopter gunship attacks. I regret the loss of innocent life.
BURNS: Turning up the pressure on Israeli Prime Minister Ariel Sharon.
BUSH: I'm concerned that the attacks will make it more difficult for the Palestinian leadership to fight off terrorist attacks. I also don't believe the attacks helped Israeli security.
BURNS: Also part of the full court press, a barrage of phone calls holding both the Israelis and Palestinians to promises they made during last week's Red Sea Summit.
It all came a day after the president said he was optimistic, especially because of the new Palestinian leadership under Prime Minister Mahmoud Abbas. But Abbas has so far been unable to reign in the militants by negotiation an endeavor complicated by Israel's latest attacks on militants who now vow revenge, thus, a critical test for President Bush to stick to his commitment on the road map.
JAMES B. STEINBERG, THE BROOKINGS INSTITUTION: In order for that optimism to be realistic he has to show that he is counting on the leaders to hold fast to that and that he's going to stick with them if they stick with it.
BURNS: The White House insists it believes Prime Minister Sharon is a man of peace but says in the same breath...
FLEISCHER: This is a test for all those who are committed to peace and committed to the road map.
(END VIDEOTAPE)
BURNS: President Bush has vowed to "ride herd" on either side to preserve that road map for peace and part of that is a planned troubleshooting team headed by Assistant Secretary of State John Wolf. They are to arrive in the region in the coming days and considering the latest violence that's not a minute too soon -- Lou.
DOBBS: Chris, the reaction at the White House obviously the words troubled, deeply troubled, expressed by a number of top officials, including the president, any suggestion there about a next step for U.S. policy in the Middle East? BURNS: They're being very careful about that, Lou. They are sending that troubleshooting team. That's what had been planned in more than several days actually, ever since that Red Sea Summit last week. So, that is on the record right now.
Of course the president has raised Condoleezza Rice, the National Security Adviser, to be the real key troubleshooter from a distance in any case. So, they will be working the phones as they have today. They will be sending that troubleshooting team and that's what they plan as a next step -- Lou.
DOBBS: Chris, thank you very much.
In Baghdad today, one U.S. soldier was killed, another wounded when they were attacked by gunmen and the gunmen had rocket-propelled grenades. The soldiers are members of the 82nd Airborne Division. More than 30 U.S. servicemen have now been killed by hostile fire in Iraq since President Bush announced the end of major combat operations on the first of May.
Still ahead here tonight, feeling the heat, energy prices pushing 20-year highs posing a serious threat some say to the economy, not to mention to our electric bills.
And, the race is on to find life on Mars. Orlando Figueroa is the director of the Mars Exploration Program for NASA. He will join us to talk about two exciting crafts that are on their way to Mars this month. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Federal Reserve Chairman Alan Greenspan today warned a Senate panel the sustained higher energy prices could erode growth in the U.S. economy. The Fed chairman cited shrinking natural gas reserves and rising natural gas prices.
Those prices have more than tripled over the past three years threatening industries that switched from oil to natural gas in order to save money at that time. An official representing the farming industry warned the panel that the industry may need to flee overseas to escape unprecedented costs. We'd love to see that.
Louise Schiavone reports from Washington.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNNfn CORRESPONDENT (voice-over): Fed Chairman Alan Greenspan is forecasting a continued tight supply of natural gas and continued high prices.
ALAN GREENSPAN, FEDERAL RESERVE CHAIRMAN: We are not apt to return to earlier periods of relative abundance and low prices anytime soon.
SCHIAVONE: Prices are double last year's. An unusually long and cold winter means inventories are almost a third below their five-year average and supplies in the easy places are shrinking.
MELANIE KENDERDINE, GAS TECHNOLOGY INSTITUTE: We have substantial reserves of natural gas. We have cherry-picked the inexpensive gas and now we have to figure out how to produce and deliver what gas is out there in a more affordable manner.
SCHIAVONE: That's particularly important to certain American cities. Houston, Texas, Los Angeles, and San Francisco are the most dependent on natural gas for their power.
Nationwide, 18 percent of electricity is generated by natural gas, industries hardest hit steel, aluminum, fertilizers, and chemicals. At Dow Chemical, a heavy consumer of natural gas both for manufacturing and content, believe 50 percent of the workforce is now overseas where natural gas prices are lower.
PETER MOLINARO, DOW CHEMICAL: As time goes on, if natural gas prices remain and continue to escalate there will be, you know, decisions about where the next dollar of investment will be and you will have to consider going to places where you are more advantaged in your raw materials such as natural gas.
(END VIDEOTAPE)
SCHIAVONE: Lou, that would mean more companies moving overseas and more jobs lost in the United States, but there are no quick fixes as new technology and drilling is expensive and time-consuming. Experts say in the short term the best solution is conservation -- Lou.
DOBBS: And it seems like the response always is a threat to go somewhere else. Those prices don't tend to fluctuate that much across this global economy. Louis Schiavone, thank you very much reporting from Washington.
Stocks finished today at session highs on strength in blue chips. The Dow Jones Industrial Average gained 74 points. The NASDAQ rose today 23.70. The S&P 500 up almost nine points.
Christine Romans is here with details on what turned out to be a positive trading session.
CHRISTINE ROMANS, CNNfn CORRESPONDENT: It did, you know, Boeing and McDonald's both got upgrades. There were some positive comments out of micro technology so that sort of sparked it all. But, Lou, it was the quietest day in three weeks at the big board. Less than 1.3 billion shares, that's ten percent below this year's average and 19 percent below last June's average volume.
Still the rest was positive. More than two stocks rose for every stock that fell and volume in software stocks was heavier than usual. Microsoft was the biggest Dow gainer. You know after Oracle's hostile bid last week for PeopleSoft, many see this sector in play, so there's been some decent volume there.
K-Mart shares soared. These are new K-Mart shares though. They were delisted from the big board after 84 years there. The company is out of bankruptcy now and it trades under KMRT at the Nasdaq. The old shares as we know are worthless.
And, United Airlines' parent, UAL, says it's highly likely its shares will be worthless when it emerges from bankruptcy. Surprisingly, Lou, that stock on the pink sheets lost about half of its value today.
Meanwhile, the bond market rallied. That's taking yields to new 45-year lows. Treasuries have rate-cut fever they're saying on the floors there. The two-year note fell to 1.12 percent below the Fed funds target -- Lou.
DOBBS: What's going on here?
ROMANS: Unbelievable. They just keep thinking the Fed is going to cut interest rates and it has to cut interest rates and so they have been buying treasury bonds.
DOBBS: And, people trying to figure out why stock is worthless in bankrupt companies.
ROMANS: Yes, newsflash, when a company emerges from bankruptcy chances are your stock is not going to be worth anything.
DOBBS: Terrific, a positive day but a somewhat quiet trading day, all right.
ROMANS: Yes.
DOBBS: Christine, thanks, Christine Romans.
The Congressional Budget Office today said the federal deficit this year will top $400 billion. That's up from the $300 billion deficit estimate that the CBO had projected a month ago. It would top the record deficit of $290 billion that set back in 1992.
Checking now on the national debt, it's doing very well as well, standing at almost $6,578,000,000,000.
When we continue what some are calling a threat to this country's drinking water and potentially our food supply. Casey Wian will have a special report on a threat to the public health.
And, a battle heats up in Washington over the search for Saddam Hussein's weapons of mass destruction, political weapons they seem now. Senator Carl Levin, Senator John Warner join us to share their views from both sides of the aisle in the Senate. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Tonight, health officials in the Midwest are trying to contain the spread of monkeypox. There are now 38 actual or suspected cases of the virus which is related to smallpox. The Centers for Disease Control now says monkeypox jumped to humans from prairie dogs. Officials say the prairie dogs probably were infected with that virus at a Chicago-area pet distributor. Investigators are trying to track down 115 customers who bought animals from that distributor since the 15th of April.
Turning now to another health threat, perchlorate. Earlier this year we reported that this toxic chemical, which is one of those used in rocket fuel, has been found in drinking water now in several states. There are claims that the toxin may be found as well in some food, possibly tainting more than $1 billion worth of crops, food that eventually winds up on our tables.
Casey Wian reports.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Water from the Colorado River helps southern California's arid Imperial Valley produce much of the nation's winter vegetable crop. The farmers here worry about their future because of growing fears of a toxin in their water.
Perchlorate was used to make rocket fuel during the Cold War. Government studies link long-term, high level exposure in drinking water to thyroid cancer and birth defects. Now, environmentalists say their study found the chemical in nearly a fifth of the winter lettuce they tested.
BILL WALKER, ENVIRONMENTAL WORKING GROUP: That lettuce that's grown on the California-Mexico border is distributed throughout the entire United States, so the first significance of what we found is to say that perchlorate has gone from being a localized, regionalized problem in an area where the water was contaminated to a national problem for anybody who buys perchlorate contaminated produce.
WIAN: The group says evidence in a lawsuit against a defense contractor shows perchlorate exists in other leafy vegetables as well. Farmers and food safety experts, while conceding perchlorate may be a long-term threat, question the environmentalists' testing methods and evidence.
JACK VESSEY, IMPERIAL VALLEY GROWERS ASSOC.: We don't want to have a food scare here. What we want to do is get the right data and know what the problem is if there is really a problem. There's no set standard for drinking water with perchlorate, so of course there's no set standard for uptake in lettuce or food.
WIAN: Imperial County's agriculture commissioner calls the environmental working group's conclusions irresponsible.
(on camera): According to Carl Winter, Director of the Food Safety Program at the University of California Davis, there is no imminent hazard from perchlorate and the bigger health threat would be if people stopped eating fruits and vegetables because of the scare.
(voice-over): It's the long-term danger that concerns the Environmental Protection Agency. It's gathering data to determine how much perchlorate is a threat. Potential federal regulation won't happen for four and a half years.
PAUL GILMAN, EPA SCIENCE ADVISER: We think we're moving aggressively. We've asked the National Academy of Sciences to complete its review in about half the time that they typically would take on such an important matter.
(END VIDEOTAPE)
WIAN: Still, regulators are far from determining an appropriate standard for perchlorate in water or food. It's measured in parts per billion and different studies place the acceptable level as low as one part per billion and as high as 200 -- Lou.
DOBBS: Casey, thank you very much, Casey Wian reporting from Los Angeles.
Still ahead here tonight, the race is on to find signs of life on Mars. Bill Tucker will report on the first of two historic missions.
And, NASA's director of Mars exploration in charge of those missions joins us tonight.
And, building a case against Freddie Mac, Congress and the SEC launch investigations, Congressman Richard Baker joins us. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Tonight, the NASA rover, it's called Spirit, is on its way to Mars. The rocket carrying the exploratory rover lifted off this afternoon from Cape Canaveral its mission to search for evidence of water on Mars, enough water perhaps even to support life.
Bill Tucker has the story.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Three, two, one, and engines start and liftoff.
BILL TUCKER, CNNfn CORRESPONDENT (voice-over): And so began NASA's latest mission to Mars, a smooth flawless launch of the Mars rover named Spirit, a launch that will be followed in about two weeks by a second rover Opportunity. Why two?
Well, the better the chances that one will actually make it.
ORLANDO FIGUEROA, MARS EXPLORATION DIRECTOR: With only 12 successes out of 30 attempts in the world community we know that Mars exploration is an inherently high risk endeavor. Now it's a challenge that believe me we don't take for granted.
TUCKER: Once there, if they get there seven months from now, the search for life begins. The rovers are big, 375 pounds big, and about the size of a golf cart. They cost about $800 million for the pair. Each rover can travel the length of a football field every day. They have panoramic cameras so we should get some pretty amazing pictures.
In addition to the landscape photography, the rovers will photograph rocks and each rover has a rock abrasion tool or a RAT to grind up stone for chemical analysis to see what they're made of and all of that data will be sent back to scientists at NASA. The rovers are to land in areas that scientists believe once held lakes. Water means life or so the thinking goes and that is the point.
THANASIS ECONOMOU, UNIVERSITY OF CHICAGO: To know that life exists in other places is one of the fundamental questions that humans have. I mean we want to know are we alone in this universe or if life is present on Mars that means, you know, it could be present in many other places.
TUCKER: As for why now, that one is easy. Mars is currently closer to earth than it's been since 57,617 B.C. and with a launch window of three weeks to take advantage of the positioning.
(END VIDEOTAPE)
TUCKER: Europe also has a probe on its way to Mars. It was launched Monday a week ago. The scientific community is downplaying any talk of a race or who can find life first. But the European probe named Beagle II weighs less than 70 pounds and costs less than one- tenth of the cost of NASA's mission -- Lou.
DOBBS: Well there should be no race at all. That's good old American ingenuity and budget should overtake them.
(CROSSTALK)
TUCKER: That's exactly right.
DOBBS: All right, Bill Tucker. Thank you very much.
Joining me now from the Kennedy Space Center in Florida is the man responsible for the Mars exploration, Orlando Figueroa. Good to have you with us.
FIGUEROA: Good evening.
DOBBS: Congratulations on a successful launch. Now you've only got about seven months to hold your breath before the probe begins landing.
FIGUEROA: That is about right. Seven months of intense effort and prayer.
DOBBS: And what you have to pray over here is truly remarkable. We all remember the 1997 Pathfinder mission that brought back those incredible images from the surface of Mars. This time, what would you say is the principal advantage over the Pathfinder mission, the improvements? FIGUEROA: Well the rovers are significantly more capable, not only the ability to move on the surface for hundreds of meters, as compared to short distances as Sojourner did. It has significantly more capable instrumentation to determine what the rocks in the soils are made out of and even scrape the surface to expose fresh material.
And also the first microscopic views of rocks on Mars, or on any other planetary body, actually. So -- and that coupled with the ability to move around significantly larger obstacles gives us significant advantage over anything we've seen before.
DOBBS: As we're talking here, Orlando, this Delta 2-B rocket with the, if you will, the space cam on the launch and now it's like about a minute into the flight. This is truly remarkable vehicle. Tell us how far it will actually take the payload itself.
FIGUEROA: Well, it's about 99 nautical miles orbit before it put us in an injection path or projectory to Mars. So when we launch from Florida, we are off the east coast of Africa, go over (UNINTELLIGIBLE) the east coast of Africa before we separate entirely. And today this vehicle gave us a remarkable and very accurate flight in putting us on our way.
DOBBS: And the Europeans, as Bill Tucker reported, the Mars Express it's on its way, launched eight days ago. It's to arrive on the 24th of December. The space race seems to have been won by the Europeans, at least in so far as getting to Mars. Will there be any coordination amongst those probes?
FIGUEROA: There has been for a long time. In fact, we are in very close scientific collaboration on their mission and so are they on ours. We offer also support for telecommunications. We've agreed to share the scientific data and the knowledge. And more than a race, it's a intense and intimate collaboration between the two agencies.
DOBBS: The issue that you're going to hear, of course, as you get toward the January set-down for both Spirit and Opportunity, Opportunity will be launched, what, the 25th of this month?
FIGUEROA: The 25th of this month or thereabouts.
DOBBS: You're going to -- as you watch this, we're watching the video here, the animation of what will happen, those balloons coming around the spacecraft itself, the recovery, has that ever been tried before?
FIGUEROA: We tried it with Pathfinder and Sojourner. And that was quite successful. In fact, the first demonstration of such a system. And now we tested it a little beyond the boundaries of what we knew and got them ready to give us a soft ride or as soft as it can be for these rovers.
DOBBS: And those six wheels, multidirectional, those also look vaguely familiar.
FIGUEROA: Yes. They're much larger, of course. And we learned a great deal from the Pathfinder experience. And we'll have the opportunity to move over much larger terrain with those.
DOBBS: And what do you think the odds are -- the wonderful photographs that we have gotten back from Mars with Surveyor, from those remarkable pictures of the topography that show, in many cases, wind erosion. But also remarkable pictures that show what could be only, as best anyone can possibly infer -- and what we're looking at here are actually more of the examples of wind erosion. But here now we're looking at the top of a canyon that is water erosion.
And what do you think the odds are of actually finding evidence your best guess, your best judgment, of water and perhaps the basis for life on Mars?
FIGUEROA: Well, the two landing sites where we're going, Gusev and Meridiani, there could be -- if we -- what we observe from orbit is true, and if some of the layering that we observe or could observe of them were indeed the product of water activity in its past -- and likewise, on Meridiani whether the minerals we observed were indeed formed in the presence of water acting on it for a long time, then we're closer to determining that indeed there were habitats that -- where the conditions may have been present for life to take hold. This could be a significant break-through.
DOBBS: Orlando Figueroa, NASA, Mars exploration mission leader, we thank you very much for being with us. And we wish you all of the best and congratulations on the first stage of the journey.
FIGUEROA: Thank you very much.
DOBBS: Coming up next, weapons of mass destruction, a political weapon in Washington? Senators Carl Levin and John Warner join us to share views that are somewhat different.
And Freddie Mac. Fall-out grips Washington. Congress, the SEC launching investigations. We'll tell you why that's important to all of us. Stay with us.
(COMMERCIAL BREAK)
DOBBS: There's growing debate tonight about the failure of coalition troops to find weapons of mass destruction so far in Iraq. Some have called for a Congressional investigation into whether U.S. intelligence was embellished to make a case for war. In a moment, we'll be joined by the chairman of the Senate Armed Services Committee, Republican Senator John Warner who says it's much too early to tell whether an investigation is required.
But first, I'm joined by the ranking Democrat on the committee, Senator Carl Levin who says the time is now. And he says there is evidence that the CIA shaded intelligence. The senator joins us from Capitol Hill. Senator Levin, good to have you with us.
SEN. CARL LEVIN (D-MI), ARMED SERVICES COMMITTEE: Good to be with you, Lou.
DOBBS: The intelligence community, Senator, as you know, has been relatively uniform in the suggestion there were weapons of mass destruction. Are you really suggesting a political, if you will, manipulation of that intelligence?
LEVIN: There is evidence, which is very troubling, that the evidence was either shaded or exaggerated. Whether it was the vice president saying that aluminum tubes were being used by Iraq to create a nuclear weapons program, when in fact that was disputed right within the intelligence community.
Or whether it was the president himself at the State of the Union message saying that Iraq was trying to obtain uranium from an African country, when apparently there was evidence to the contrary that was bogus information.
Just last weekend we had the secretary of state saying that the vans that were found there were, without doubt, used for biological weapon creation, when in fact there is a very different view inside the intelligence community, at least by some of it, according to last Saturday's "New York Times" stories.
And this is just too important an issue not to be either reviewed or investigated or inquired into. It doesn't make any difference to me what the words are. It makes a big difference to me that on a bipartisan basis, our staffs jointly look into the evidence that does exist of exaggeration or shading and see whether or not in fact that happened. Not so much just to look backwards, but frankly to look forward. Because our intelligence must be credible. We must have the confidence of the American people that these assessments are in fact objectively made and not being made to support any one's policy positions.
DOBBS: And that policy position obviously to conduct war against Saddam Hussein, if he did not in fact forswear and turn over weapons of mass destruction, and fully cooperate with the United Nations, he did not, does that trouble you as you consider these issues as to why, if there were no weapons of mass destruction, which to this point we found evidence in the form of mobile laboratories that do not have traces of chemical or biological weaponry, does it trouble you that he would not respond had he none?
LEVIN: All of his conduct troubles me. But we don't have much control over that conduct. What we do have control over, however, is our intelligence. We've got to make sure for the future security of this country that when, that when for instance, the intelligence community is reporting to us now as it allegedly is that there is an al Qaeda connection between Iran -- with Iran, that we've got to be able to rely on that. We were told there was an al Qaeda connection with Iraq.
There is some real question as to whether the intelligence community reached that conclusion or not. Well, that's water over the dam which we need to look at, not just to see whether there was any shading or exaggeration, but also in terms of our future decisions. We must be able to rely on the word, honesty, truthfulness, objectivity of the intelligence community. If they say right now there is an al Qaeda connection, with Iraq, that could lead to -- excuse me -- with Iran now, that could lead to some very significant actions on our part.
DOBBS: Senator Carl Levin, we thank you very much for being here. We appreciate it. Good always to talk with you.
We now have the final results of yesterday's poll question which we asked how important is it to find Iraqi weapons of mass destruction. Seventy-three percent of you said very important, 4 percent said somewhat, 5 percent, a little, 18 percent said, hey, it's over.
Our poll question tonight, "Which will happen first?"
Iraqi weapons of mass destruction will be found, U.S. Troops leave Iraq, life on Mars discovered or Ken Lay charged
Cast your vote at cnn.com/moneyline. We'll have the results of our poll, highly scientific as it is, for you later in the broadcast.
Joining me now the chairman of the Senate Armed Services Committee. Senator John Warner has said at this point there is no need for a full investigation into intelligence leading up to the war. And he joins us tonight as well from Capitol Hill.
Senator, good to have you with us.
SEN. JOHN WARNER (R-VA), ARMED SERVICES COMMITTEE: Thank you.
DOBBS: We just heard Senator Carl Levin say that it's very troubling and it's his judgment that there was at least an embellishment of intelligence by the Bush administration in advance of the war against Saddam Hussein.
Are you as troubled?
WARNER: Well, my good friend, Carl Levin, and I have served together on this committee for a quarter of a century, 25 years. He has been chairman, I have been chairman. And we work together. And I'm confident that our committee will continue its work. We've had three hearings now on the issue of Iraq, and a very important part of each of those hearings related to the ongoing efforts by administration to determine the whereabouts of weapons of mass destruction. Our committee will continue its work. And I will share that responsibility with my ranking member.
I think an important distinction we've got to raise here is this word investigation. The oversight of our committee is in the nature of investigation because we talk to people, we interview people, we examine documents. But in the larger context of the word, the Senate leadership takes away from the several committees, be it armed services, foreign relation or intelligence.
The functions and turns it over by a special resolution to an investigatory committee. And that's where I expect my good friend Levin and I a difference. I do not think -- and I certainly certainly in meeting with my leadership today, there is no intention of the leadership to take this issue away from Armed Services, Intelligence, Foreign relations and those committees, perhaps the Appropriation Defense Subcommittee who are looking into these matters, or have oversight responsibilities.
DOBBS: Senator, you have seen the intelligence from the outset over the course of the past year, really year and a half. And in the months leading up to the taking of the case by the Bush administration to the United Nations and then ultimately moving towards war.
Is there anything that you saw in that intelligence that troubles you today that in retrospect you think is worthy of reconsideration?
WARNER: Important that you raised that. The intelligence that the president of the United States receives is basically the intelligence that comes to this very building and is given to the committees of the Arms Services Intelligence and say foreign relations. All colleagues, including Senator Levin and I, have access basically to that intelligence. Now the president, of course, has the national security advisors, the director of the CIA, who actually sit with him from time to time and go over it verbally.
But we read the same material. And thus far, as I have said, I have not found a solid base of fact, in past or current intelligence, which gives rise to this senator's opinion that there has been any -- should we say -- distortion. That is clear manipulation or distortion by any member of the administration. To the contrary. I agree with the president that we'll find weapons of mass destruction. And I agree with the president's decision to have utilized force in this situation when diplomacy failed.
DOBBS: And Senator, Senator Levin brings up the concerning point at least, and certainly one deserving of consideration, it seems at least to me, that if our intelligence is not of a high enough order on the issue of Iraq, what can it be when we look toward Iran and the issues that are culminating there?
Does that trouble you?
WARNER: Let me say that the intelligence provided to the president and to the Congress is exceedingly important. As a matter of fact, it controls much our decision making around here. So absolutely right. To the extent Senator Levin says that's important to our decision making, he is right and I agree.
But the issue before us at this present time, that our committees and others are looking into in a very calm and, I think, constructive way, is whether or not there is any basis to allegations that the same intelligence that we have both looked at here in the Congress and the administration, lends itself to some type of distortion as that intelligence was referred to in public statements.
But let me just read one thing. This is Colin Powell...
DOBBS: Senator, I'm sorry. We're really out of time.
WARNER: This is Colin Powell, secretary of state, before the U.N. He said right here, "by this time every one has heard about those tubes." Those tubes related to a possible nuclear program. And we all know that there have been differences of opinion. There is controversy about what these tubes are made for. Clearly, I think members of this administration have carefully pointed out the balancing effects of some of these intelligence reports.
DOBBS: Senator, we thank you very much. Senator John Warner, we appreciate your time. We -- we appreciate the time of your colleague, Senator Carl Levin. Thank you both.
WARNER: Good.
DOBBS: That leads to us our "Quote of the Day" from a senior U.S. official who is traveling abroad now meeting in fact with diplomats in Latin America. For the first time since these disagreements arose about the intelligence that led up to the war against Iraq. He said, "I hope the people of Latin America will watch these pictures. We're now seeing a mass graves, 10s upon 10s of thousands who were murdered by Saddam Hussein, and they will come perhaps to a different judgment as to whether the United States and its coalition partners acted correctly." Those words from Secretary of State Colin Powell in Chile.
When we continue, the fall-out from the Freddie Mac scandal, lawmakers demanding answers. Chief among those lawmakers, Congressman Richard Baker will join us and we'll share some your thoughts about the search for Iraqi weapons of mass destruction. Next. Stay with us.
(COMMERCIAL BREAK)
DOBBS: More fall-out today at one of the biggest mortgage companies in the country. The top three executives at Freddie Mac forced out yesterday following an investigation of the company's financial results over the past three years. The House Financial Services Committee today said its Capital Market Subcommittee will hold hearings into the accounting questions at Freddie Mac.
Congressman Richard Baker is the chairman of that subcommittee and joins us now from Capitol Hill. Congressman, good to have you here.
REP. RICHARD BAKER (R-LA), CAPITAL MARKET SUBCOMMITTEE: Thank you, Lou.
DOBBS: You have been calling for greater oversight, greater regulation of what is, I guess the best way to say it, quasi- public/private agency for at least three years. Do you believe that oversight could have avoided this?
BAKER: Well, Lou, I've started in this mission about a decade ago and I do believe that adequate oversight could have perhaps minimized the effects. I was basically surprised about these developments for two reasons. One, I never thought it would be management risk that would bring difficulty to either of these enterprises. I always thought it would be interest rate exposure given the environment we're in now with abnormally low rates for so long.
What appears to have happened is inside the corporation there was a conscious decision to account for profits in a particular way inconsistent with the law. And I believe had there been adequate regulatory oversight, it would have been much less likely for that decision to have been made.
DOBBS: Well the market made a judgment today as Freddie Mac stock went up slightly, Congressman, as you know that there must be some mitigation of risk, and that is that they were preparing this management team at least to look -- it looks as though to smooth out earnings. But where you see one inappropriate approach, in fact now an illegal approach to accounting, it makes you worry about the rest of it.
How concerned are you right now about the financial health and the structure, the integrity, of Freddie Mac?
BAKER: Well, I am. And let me state for the record that had not this managerial change occurred over the weekend but during the business week, I think the outcome could have been significantly more adverse. The fact that management was on duty Monday morning ready to carry on the normal book of business was a very good thing.
I am concerned that three individuals were relieved of their responsibilities when the basis of the problem are, or least explained so far, was that it was a irregularities found in a diary which was reluctantly handed over to the accountants...
DOBBS: By the chief operating officer.
BAKER: That's correct. And that misconduct, if it is in fact misconduct, would not warrant the other officials from being relieved of duty.
So I do believe there are more revelations to come. Are they sufficient to cause the enterprise adverse financial consequences? I don't believe that now. But we're certainly going to make a thorough examination.
DOBBS: Your committee, the SEC, many people may be surprised that until last year the SEC had no role really in the regulation and oversight of Freddie Mac and Fannie Mae. Is it your judgment though -- because our viewers are going to be paying very close attention to this, as you well know -- is it your sense that tonight it is a matter that requires investigation by your committee, by the SEC, but at this time that you're neutral on the issue of risk as associated with Freddie Mac?
BAKER: Well, I have requested the SEC to make a thorough examination of the events. I have requested OFHEO to do their best work. I do believe that the basic underlying business model of Freddie Mac is sound. I do believe that the current interest rate environment does present some problems in balancing their portfolio which might have brought on risks they otherwise would not have taken. But I do believe that at the end of the day, regulatory changes should be and will be adopted to preclude this from occurring in the future.
One question analysis. If Freddie and Fannie...
(CROSSTALK)
BAKER: ... were regulated banks, they would pay about $70 millions in fees to the regulator. We fought in Congress raising OFHEO from $21 to $23 million. So there is a big disparity in the adequacy of their regulatory environment.
DOBBS: Right, referring to the oversite agency...
(CROSSTALK)
DOBBS: Yes.
Congressman Richard Baker, we thank you for your time. You've been joined in this now by a pretty good personage in the form of the chairman of the Fed, Alan Greenspan. And we thank you very much for being with us.
BAKER: Thanks for your time, Lou.
DOBBS: Turning now to the trade deficit, now $224 billion, just under, by our calculations.
Still ahead, the preliminary results of our poll. We'll share some of "Your Thoughts" about the search for weapons of mass destruction.
(COMMERCIAL BREAK)
DOBBS: Well the preliminary results of our poll tonight, which will happen first? Eleven percent said Iraqi weapons of mass destruction will be found, 17 percent said U.S. troops leave Iraq, 60 percent said life on Mars discovered, 12 percent said Ken Lay charged.
Taking a look at some of "Your Thoughts" now on corporate crime, Becky Correia from Sacramento asked, "Did Martha's alleged actions destroy the livelihoods of thousands of Americans, defraud investors or their hard-earned cash and raid the retirement plans of her own employees? I think not."
Tom Cook of Evansville, Indiana: "I pity the poor timing by the `Three Musketeers' from Freddie Mac. They better hope they go to the same prison as Martha. At least then they will get some great meals. At least on days that Martha gets kitchen duty."
On the subject of Iraqi weapons of mass destruction Rose Foster of Willits, California, "What do you suppose those trailers prove? That is proof positive that there are WMDs somewhere. They will be found someday." Jennifer Schwarz of Naperville, Illinois, "Finding thousands of bodies in mass graves is plenty of proof to me that Iraq did have at least one WMD and his name is Saddam Hussein."
We love hearing from you. E-mail us at loudobbs@cnn.com. Thanks for being with us tonight. For all of us here, good night from New York.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Freddie Mac; NASA Launches Robot That May Answer Whether Life Existed on Mars>
|
