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LOU DOBBS TONIGHT

Israel, Palestinian Groups Agree on Terms of Israeli Withdrawal from Gaza, West Bank; Leaders Will Announce Truce Sunday

Aired June 27, 2003 - 18:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ANNOUNCER: This is LOU DOBBS TONIGHT for Friday, June 27. Here now Lou Dobbs.
LOU DOBBS, HOST: Good evening everyone.

Tonight, what could be the beginning of an important breakthrough in the search for peace between Israelis and Palestinians. security officials from both sides today agreed on the terms of an Israeli withdrawal from parts of Gaza and the West Bank city of Bethlehem. At the same time, radical Islamist leaders said they will announce a truce with Israel this Sunday. Matthew Chance has the report from Jerusalem.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN CORRESPONDENT (voice-over): Amid all the talk of peace, more lives have been lost in a conflict few in this region believe can soon be brought to an end.

The killing by Israeli forces of four Palestinians in Gaza, including the son and the brother of a leading Hamas militant, themselves wanted by Israel offers the skeptics plenty of reason.

Explosions and a fierce gun battle around the now demolished house of reputed Hamas bomb maker Abman al-Houl (ph) also left an Israeli soldier dead as well as a 30-year-old Palestinian bystander. Another suspected Islamic Jihad militant was killed nearby.

Israel says it was acting on a tip off that an attack was imminent, a ticking bomb it had to diffuse. But out of the bloodshed has sprung what could be a real hope for peace, a meeting of Israeli and Palestinian officials has agreed to implement measure that have until now only been discussed.

Among the points agreed, the officials say a key road running north to south through the Gaza Strip will be permanently opened. Israeli forces will withdraw from Beit Hanoun and other areas in northern Gaza as well as from the West Bank town of Bethlehem.

Palestinian men between the ages of 15 and 35, previously confined to Gaza, will be allowed to travel and tight restrictions of Rafah border crossing from Gaza into Egypt will be eased.

In exchange, Palestinian security forces, controlled by Mahmoud Abbas and his deputies, will assume full responsibility for security. It is an important step on the U.S.-backed peace road map.

SILVAN SHALOM, ISRAELI FOREIGN MINISTER: I think the time has come for the Palestinians to attack this strategic decision and it means that any territory that will transfer to their responsibility there will be with a commitment from their side that to put an end to terrorism and violence.

CHANCE: Much still depends, though, on Hamas and the other militant groups. Their representatives say a three-month ceasefire could be announced soon. Without it, Palestinian Authority officials say they're unable and unwilling to stop militant attacks on Israelis. The coming days could show if this initiative has any hope.

Matthew Chance, CNN, Jerusalem.

(END VIDEOTAPE)

DOBBS: As late as yesterday, the Pentagon was saying it would stand by its plan for Iraq. Now, the Pentagon appears to be having second thoughts. The Pentagon is now reviewing military strategy in Iraq because of the rising number of attacks against coalition forces.

Twenty American troops have died from hostile fire since President Bush declared an end to major combat on the first of May. Another soldier was shot and seriously wounded today.

Pentagon Correspondent Barbara Starr joins us now -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good evening, Lou.

Well, Pentagon officials aren't yet ready to call it a full- fledged review but what the U.S. Central Command is doing is taking a very hard look at what is going on inside Iraq.

Now, after several weeks of this strategy of aggressive raids and patrols against opposition forces, they're going to take a deep breath, take a look at the results of what they have been doing in the field and see if they want to make any changes. So far, they say, they're not ready to commit to any changes. They believe they will stay the course but very tough times now for U.S. troops in Iraq, of course.

And, here in Washington Defense Secretary Donald Rumsfeld began his day on Capitol Hill briefing U.S. senators about the situation in Iraq. When he came out of that closed door briefing on Capitol Hill this morning he talked to reporters about his view about why he thinks these hit-and-run attacks are continuing.

Here's some of what he had to say.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, DEFENSE SECRETARY: In the neighborhood of 100,000 people turned out of their prisons. Those people are out there. They're doing things that are unhelpful to the Iraqi people. It's also no question but that there are leftover remnants of the Saddam Hussein regime that are doing things that are against the coalition.

(END VIDEO CLIP)

STARR: Now, several Iraqis are being detained and questioned still today about that disappearance of two U.S. soldiers on Wednesday from their patrol north of Baghdad. No word on the fate of those two soldiers and where they may be but U.S. officials are now worried, in the words of one, that there is a possibly abduction here. They emphasize they have no information but it is now one of their top concerns.

And, again, another U.S. soldier killed in Iraq in the town of al-Najaf which is in southern Iraq. This soldier was killed apparently while he was investigating a car theft, this, of course, of concern to U.S. officials because southern Iraq had been considered generally friendly to U.S. forces.

Now, as you said, Lou, since President Bush declared the end of major combat back on May 1, some 60 U.S. troops have died, 20 of those 60 in hostile incidents. U.S. officials are saying now, here at the Pentagon at least, they believe this is a classic insurgency situation and that they are beginning to face the prospect of an urban guerrilla force in Iraq -- Lou.

DOBBS: Barbara, as you point out, it is a very serious situation with American lives being lost. It also states very clearly the United States does not have control of a country in which it waged a successful war.

Two questions arise. Why is the military not disarming those Iraqis who are firing upon them; and secondly, if those prisons were emptied of 100,000 inmates, why has the United States and the coalition not gone after those criminals to return them to the prisons?

STARR: Well, you know, Lieutenant General John Abizaid, who was on Capitol Hill earlier this week and is going to be confirmed and sworn in as the next head of Central Command, had a bit of a broader view perhaps than the secretary as we spoke about it on your show last night I believe.

He said it was Islamists. It was criminals and it was basically Ba'ath Party loyalists. There is a growing sense that the opposition to the presence of U.S. forces perhaps represents all of those groups and that when the U.S. military faces the prospect of Baghdad and the regime falling so quickly that basically there wasn't a massive attack against those loyalists in Baghdad and in that area.

Those people are basically left alive, in existence. Many of the people who were loyal to the regime were not killed in this war and disarming them is proving to be a much more considerable task, officials also saying they are seeing again foreign fighters, perhaps people brought in through Syria also emerging in Iraq.

So, day by day the situation continues to be one that's very complex, clearly much more than just criminal being let out of prison according to some Pentagon officials -- Lou.

DOBBS: Or, perhaps, Barbara, more than just simply dead-enders as the secretary of defense has suggested. Barbara Starr from the Pentagon as always thank you.

STARR: Sure.

DOBBS: For months, the United States has known that a number of al Qaeda terrorists are in Iran. One of those terrorists may be Osama bin Laden's number two, Ayman al-Zawahiri.

The Al-Arabiya Television Network today reported that al-Zawahiri and several other top al Qaeda leaders are now in Iranian custody. The Iranian government will not confirm the Al-Arabiya report nor will it identify the al Qaeda members being held in Iran.

In this country, the FBI today arrested seven men suspected of helping a radical Islamist terrorist group in Kashmir. Federal prosecutors charged 11 men in all accusing them of training in the United States to carry out terrorist attacks in Kashmir, the disputed border province between India and Pakistan. Nine of the men are U.S. citizens. Prosecutors said the others are Yemeni and a Pakistani.

(BEGIN VIDEO CLIP)

PAUL MCNULTY, U.S. ATTORNEY: These indictments are a stark reminder that terrorist organizations of various allegiances are active in the United States and these groups exploit America's freedom as a weapon to recruit and position themselves on our shores in our society.

(END VIDEO CLIP)

DOBBS: Here in New York this morning, we attended a ceremony that garnered little attention, the long overdue issuance of a new stamp to commemorate the Purple Heart.

Created by General George Washington, the Purple Heart is the oldest decoration in the U.S. military. It goes to servicemen and women wounded or killed in combat. To the credit of the U.S. Postal Service, this wasn't an event dominated by big name politicians or movie stars.

The celebrities were the veterans who've earned the Purple Heart. We want you to meet some of them, including a Vietnam Veteran from Long Island named Peter Addesso.

(BEGIN VIDEOTAPE)

PETER ADDESSO, VIETNAM VETERAN: It was the most devastating time of my life. I was only 19 at the time. I found out later on I was pretty lucky because out of 312 Marines, like I said it was only me and 15 others that came out. The first Marine chopper that came in to pick me up was blown out of the sky. Two Marines got killed.

UNIDENTIFIED MALE: For those of you here today that have earned the Purple Heart I salute you.

UNIDENTIFIED MALE: My name is Stanley Kalfus (ph). I got my Purple Heart in Germany when we were breaking through the Siegfried Line.

HAYWARD CAMPBELL: I'm Hayward Campbell. (UNINTELLIGIBLE) World War II.

UNIDENTIFIED MALE: Ted Bittle (ph), I was wounded on April 10, 2003 in Baghdad. A suicide bomber came up and flew himself up wounding myself and four other Marines.

ADDESSO: I was in and out, unconscious, then I came out of it because I got hit (UNINTELLIGIBLE) a 40 rocket, made a hole about that big and lived to tell about it.

UNIDENTIFIED MALE: Jose Campbell (ph), (UNINTELLIGIBLE) and one in the Philippines.

STANLEY CARTER: Stanley Carter, I got wounded in Vietnam March, '69.

JOHNNY DAVIS: Johnny Davis, wounded in Vietnam in '69.

UNIDENTIFIED MALE: Charles Walleck (ph), I served in the ETO, European Theater of Operation. I got wounded in Germany in 1945.

ADDESSO: This stamp, the Purple Heart, means so much to me because it reminds me of the guys that are left in Vietnam. It's not easy to talk about because they were young guys. We were only 18, 19- years-old at the time.

UNIDENTIFIED MALE: Thank you for the service to this country. Thank you for helping, making it possible so we could stand here today a free nation.

(END VIDEO CLIP)

DOBBS: The post office says this is not a commemorative stamp. It is what the Postal Service calls a definitive. That means the Purple Heart stamp will be with us for years and years as it should be.

Still ahead, our series of special reports on our border, "Border Patrol." Tonight, throwing the book at students who are in this country illegally, lawmakers are cracking down. Louise Schiavone will report.

Homeland Security Undersecretary Asa Hutchinson joins us to talk about the security of our borders and what more needs to be done.

Also ahead, from affirmative action to Medicare, the editors of the country's premiere business magazines join us to share their views on this week's top stories. Stay with us.

(COMMERCIAL BREAK) DOBBS: The indexes on Wall Street today lost and, for the first time in a month, posted a losing week, the Dow down today 90 points closing back below 9,000, the NASDAQ down nine points, the S&P 500 down almost ten.

Susan Lisovicz, here now with the market -- Susan.

SUSAN LISOVICZ, CNNfn CORRESPONDENT: Lou, Wall Street ended an eventful week with a whimper. After the Federal Reserve's first move on interest rates this year, the market seems to have moved to a show- me state as it nervously awaits the onslaught of corporate profits.

Nike was punished today by shareholders, losing seven percent, after missing earnings estimates and showing weakness in future orders. AOL Time Warner, the parent of this network, edged down despite upbeat reports from two brokerages citing, among other things, confidence in management's ability to stabilize the America Online Division.

American Express, a Dow component, also lost ground even as Bear Stearns raised its earnings estimates. Lilly shed two percent after Merrill Lynch raised concerns about growth for its anti-psychotic drug Zyprexa.

But another pharmaceutical, Genentech rallied on word that its colon cancer drug Avastin has been granted fast-track status by the Food and Drug Administration. (UNINTELLIGIBLE) narrowly positive on both the NYSE and the Nasdaq but only three of the Dow 30 stocks moved higher on the day, Altria, GM, and United Technologies.

Lou, it was a losing week for the three big indices but the gains since the lows of March remain impressive. All of them up around 20 percent or more which, Lou, puts them in positive stead for Monday which is the end of the second quarter and the end of the first half of the year.

DOBBS: Looks like a very good beginning to this first half of the year, what the Dow's up about nine percent, the Nasdaq up about 20?

LISOVICZ: They're all up for the year solidly and, of course, since the lows of March 11, we're talking double digits.

DOBBS: Right.

LISOVICZ: But with the corporate earnings, the lack of capital spending and, of course, the weakness of the labor market there's a lot out there that makes investors nervous.

DOBBS: And it's also what makes markets. Susan, thanks very much, Susan Lisovicz.

Seventy-three executives in all of corporate America have been charged with crimes, 16 of them from Enron. Sam Waksal headed to jail. He is the only executive to be headed in that direction to this point and it has been 571 days since Enron filed for bankruptcy. When we return, Americans finally given a voice in the battle against those telemarketers, Bill Tucker reports on a new federal "do not call."

Then, we'll share some of your thoughts on the search for weapons of mass destruction in Iraq and what thoughts they are.

And, "Our CEO of the Week". He is handing out enough dough to the hungry, the homeless, just one of the ways his company gives back and does well. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Well, it's not often that the federal government comes up with a program that is popular but this one that made its debut today is certain to become one of the most popular ever.

The national do-not-call list is designed to stop those telemarketers from calling the phone numbers listed. So far, hundreds of thousands of Americans have already signed up. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNNfn CORRESPONDENT (voice-over): With a keen nose for the politically popular, the president announced the kickoff of the National Do Not Call list in the Rose Garden using some sharp language.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Unwanted telemarketing calls are intrusive. They are annoying and they're all too common.

TUCKER: Apparently a lot of people agree and love the idea of blocking the telemarketers. Hundreds of thousands rushed to register their phone number on the national do-not-call list, sometimes at a rate of 1,000 per second.

Demand was so great that servers had to be added to expand capacity. Verification e-mails were deliberately delayed to increase network speed and still there were delays and failed first time attempts at registering.

LOIS GREISMAN, ASSOC. DIR. FTC: Consumer interest is overwhelming. It's perhaps even more than we expected.

TUCKER: Phone numbers can be registered using the FTC maintained Web site, www.donotcall.gov or by calling the toll free number, although the phone number isn't available nationally until July 7.

Now, 27 states currently have do-not-call lists of their own. Most will transfer this list to the national list. These states won't, so if you live in them and are registered with the state, you will also need to register with the feds.

CHRIS MURRAY, CONSUMERS UNION: Consumers should be thrilled about the fact that we finally have a mechanism to keep dinner time to the family rather than family and friends of the telemarketing industry.

TUCKER: There are exceptions. Politicians can still call. So can tax-exempt, non-profit groups, and if you buy anything from a telemarketer they can call for up to 18 months after the purchase unless you tell them you don't want to be called.

MICHAEL POWELL, CHAIRMAN, FCC: If you get calls, you should lodge your complaint. We're going to have places on our Web site and a telephone number that will allow you to call and register your complaint with the commission.

TUCKER: Fines for violating the list can range as high as $11,000.

(END VIDEOTAPE)

TUCKER: Now the Federal Trade Commission wants everyone to understand there is no rush. You have until the end of August to sign up. The list goes into effect October 1 -- Lou.

DOBBS: No rush, but those lines were pretty busy. The Web site just inundated today.

TUCKER: It was, 735,000 people as of 5:30 New York Time today alone, Lou, signed up.

DOBBS: Sounds like it leaves about 290 million people to sign up for this thing. This has been long overdue. Telemarketers have become aggressive to the extreme. Why October 1? Let's get it going now.

TUCKER: Well, it was to give everybody a chance to get everyone signed up, transfer over those state lists, get everything done and then give them time to make it work. It is the government, Lou.

DOBBS: It is the government and this time they're doing it right, doing as they say a good thing. All right, Bill Tucker thank you.

Well that brings us to our "Quote of the Day" and it is this: "When Americans are sitting down to dinner or a parent is reading to his or her child, the last thing they need is a call from a stranger with a sales pitch. So, we are taking practical action to address the problem," President George W. Bush.

Taking a look now at "Your Thoughts," we continue to receive a lot of e-mails about our series of special reports on "Border Patrol".

Jeff Joseph of California said: "The reality is this -- if Americans are willing to pay a lot more for fruits, vegetables, chicken, clothing, housing, carpet, and landscaping services, then all those illegal aliens won't be needed."

Regarding our poll on whether evidence of an Iraqi weapons of mass destruction program will be found, R.J. Clawson of Texas: "In addition to yes and no, I wish there had been one other choice, 'Does it matter?' I don't care if Saddam Hussein had nothing but water balloons, he needed to go and I'm glad we're there."

Pete Bruno of North Carolina: "Weapons of mass destruction will be found in Iraq but not this year. Wait until about this time next year when the elections start heating up."

And, Betty Macier of Arizona: "I believe WMD will be found in Iraq when Defense Secretary Donald Rumsfeld wakes up and sends more military personnel to Iraq. The troops there now have their hands full just trying to stay alive and protect the Iraqis, as well s trying to root out the terrorists who keep killing and wounding them."

Margie Parkes of Canada: "I agree with the U.S. presence in Iraq solely on humanitarian grounds. Genocide, oppression, evil and greed runs rampant. Thank you U.S.A. for having a conscience, taking action and for the chance to make this world a better place."

H. Beck of Los Angeles: "Your show should be required viewing. It is outstanding." Thank you. We would like to think -- well, we wouldn't want to be coercive about it but we do appreciate having such intelligent and sensitive viewers as yourself.

We love hearing from you. E-mail us at LouDobbs@cnn.com. Please include your name and address.

Still ahead here, a series of special reports concludes tonight on Border Patrol, tracking tonight foreign students in this country. Louise Schiavone reports.

And, Homeland Security Undersecretary Asa Hutchinson joins us to talk about security at our border and what more needs to be done.

And, "Our CEO of the Week", who says the key ingredients for success are vision, tradition, and character, that and more still ahead.

(COMMERCIAL BREAK)

DOBBS: The United Nations wants U.S. taxpayers, you and me, to finance loans to repair its New York City headquarters. Critics say that is totally unfair. They say the financing should be paid for equally by all the member countries of the United Nations. The United States, by the way, contributes the largest amount to the United Nations.

Kitty Pilgrim has the story.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNNfn CORRESPONDENT (voice-over): The U.N. is falling to pieces, literally. They need to remove asbestos, shore up masonry, and put in sprinkler systems. At one point, they had to put a net up over the General Assembly to keep chunks of the ceiling from falling on the delegates. TOSHIYUKI NIWA, EXEC. DIRECTOR, U.N. CAPITAL MASTER PLAN: If a fire breaks out I'm not entirely sure whether the New York Fire Department can come in and rescue us.

PILGRIM: But another problem is how all this is going to be paid for. The United Nations wants the U.S. taxpayer to foot the bill through interest free loans from the treasury, which could mean $800 million over the course of the loan.

Leo Kayser with the U.N. Development Corporation for seven years just quit over the issue. He is outraged.

LEO KAYSER, FMR. DIRECTOR, U.N. DEVELOPMENT CORP.: It's an interest free loan they're seeking from the U.S. Treasury. There is absolutely no reason to do that except for the fact that these bureaucrats at the U.N. want to stick the U.S. taxpayer with 100 percent of the interest expense.

PILGRIM: He says the interest on the loan should be shared by all the member countries. The United States already pays the largest chunk of money to the United Nations, about 22 percent of the U.N. budget, not counting peacekeeping operations, and some countries are downright deadbeats.

In 2002, 74 countries didn't pay their regular budget contributions in full. In 2001, there were 56 deadbeat countries. It's not the first fight over money at the U.N. New York Mayor Rudolph Giuliani steamed over diplomats' hundreds of thousands of unpaid parking tickets, challenged the U.N. to get out of town, adding it's valuable property and he wouldn't mind freeing up the real estate for housing.

(END VIDEOTAPE)

PILGRIM: Now, the real worry is that after all this the member countries will not pay back the billion dollar loan. After all, the record on dues doesn't seem to suggest a good credit risk -- Lou.

DOBBS: A billion dollars.

PILGRIM: They need the money to fix the place but it's a problem.

DOBBS: Oh, I can just see the sympathy building in this country for this project. Kitty, thank you very much, Kitty Pilgrim.

Well, our poll question tonight: "How should the United Nations pay for repairs to its headquarters, charge all members equally, charge the U.S. the most, France and Germany pay, get outta town?" You can vote on our Web site, cnn.com/lou. We'll have the results later in the show.

Final results of last night's poll, the question, do you believe evidence of an Iraqi weapons of mass destruction program will be found? Fifty-eight percent of you said yes, 42 percent said no. And that's a little closer than I thought it would be, actually. And a number of you did react to the fact we said program rather than simply Iraqi weapons of mass destruction. I think you have a point. The original discussion was weapons of mass destruction. Program has been evolutionary. Interpret it as you will.

Now, our series of special reports on "Border Patrol." Tonight, cracking down on foreign student visas. Federal agents are tracking down students now who are in this country illegally. New technology is helping universities and law enforcement keep tabs on the foreign students. Louise Schiavone has the report.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNNfn CORRESPONDENT (voice-over): As the new school year begins this fall, roughly a million foreign nationals will be registered in the United States on student visas, but the formally easy-going atmosphere for visiting has changed dramatically.

SIU KI CHEN, STUDENT: Last year I went back to the home country. And when I came back, it's a little bit more complicated. I was wondering if they would think me -- am I a terrorist or something like that. And, yes. That's what I worry.

SCHIAVONE: Three of the September 11 hijackers were in the U.S. on student visas, one never attended classes. And the Immigration and Naturalization Service issued the student visa paper work for two others, including ringleader Mohammed Atta, six months after the attack.

BUSH: I was stunned and not happy. Let me put it another way. I was plenty hot.

SCHIAVONE: And that helped lead to a $37 million computerized identification system: the Student and Exchange Visitor Information System or SEVIS. It tracks the immigration status, address and course work of foreign students across the country and picks up whether or not a student cuts classes.

JILL DRURY, SEVIS PROGRAM DIRECTOR: We have a mechanism to identify this, and the immigration and customs enforcement agents can then make a determination as to whether or not this warrants a follow- up law enforcement action.

SCHIAVONE: SEVIS does not track present or past membership in student or political organizations.

HORTENSE HINTON, NORTHERN VIRGINIA COMMUNITY COLLEGE: I don't think service (ph) system would prevent anybody from doing anything. And if I wanted to come here and get a F-1 visa and engage in something else, I could go to class and do that. And VCIS (ph) would never know the difference because in the system I'm fine.

SCHIAVONE: The information feeds back to Homeland Security offices. More than 7,000 academic institutions, including vocational training schools, participate in SEVIS, even as many fear that the program sends an unwelcoming message to their foreign students. (END VIDEOTAPE)

SCHIAVONE: Lou, while the SEVIS system sends up a red flag when a student visa expires, a student drops below full-time enrollment or doesn't show up at school to register, the nagging question remains, how sound is this safety net -- Lou.

DOBBS: Well we're going to find out perhaps the answer to that question. Our guest next has decidedly the inside track on the answer. Louise Schiavone, thank you very much.

Despite the formation of the new Department of Homeland Security, protecting this nation's borders has proved difficult to say the least. It is a daunting challenge. A look now at the border patrol by the numbers. You a may find some of these numbers alarming.

Twenty-two, the number of government agencies now overseen by the Department of Homeland Security. Six thousand, the number of miles of borders protected by our border patrol. Thirty-one hundred, the number of new border patrol agents added by the federal government since the September 11 terrorist attacks. Almost $38 billion, the 2003 budget of the Department of Homeland Security. Seven hundred thousand, the estimated number of illegal immigrants, illegal aliens, entering this year every year.

Joining us now to talk about the security of our borders and prevent illegal immigration, Asa Hutchinson, he is the undersecretary for border security and transportation at the Department of Homeland Security and joins us tonight from San Diego. Mr. Secretary, good to have you with us.

ASA HUTCHINSON, UNDERSECRETARY, BORDER & TRANSPORTATION SECURITY: Good to be with you, Lou.

DOBBS: Those are extraordinary numbers. I think there is little doubt in the minds of anyone familiar with those numbers and the task before you that just has to take off their hat at the effort you have been mounting for the past two years. How concerned are you right now about our border security and the Department of Homeland Security's efforts to make those borders more secure?

HUTCHINSON: Well any time you live in a free country that's dependent upon commerce and we've had a history of open borders, it is a huge challenge. But the key is first of all, using technology, putting more people on the border which we have done. And our border security is greatly enhanced since September 11. We've made enormous strides.

But we always will have a challenge in a free society. What we're concentrating upon is information about people who visit the country, technology between the ports of entry, and then being able to enforce with the information that we have.

DOBBS: The SEVIS system as Louise Schiavone was reporting, you heard the college officials say they didn't think that the SEVIS system would be really much practical help. What's your reaction to her view?

HUTCHINSON: Well, I mean, I think one of the points was that if somebody comes on a student visa they can go to class and they can also do harm on the side, which is a true statement. But it gives us information about the students that come in. We will be checking them more closely as to any ties or any suspicions or threats they might have.

Secondly, and very importantly, if they overstay their they visa, do not go to class, they violate the terms of their visa, we have the information under that system in which to take action if necessary. This adds integrity to the system, but also a security component for our nation.

So, it's the right thing to do both for the integrity of the system, honor those people that come into our country legitimately, but also to protect against those who wish us harm.

DOBBS: Mr. Secretary, one has to be at least, I would, say alert to if not skeptical about a few of the statistics. Amongst those statistics, 583,000 overseas students attend U.S. colleges and universities at any one time. A third of all U.S. students are foreign. And 40 percent of students in doctoral programs, in computer sciences are foreign. It looks like there may be an economic interest because that is a huge number of students to be in those programs, highly important to those universities, some of whom said they're not going to cooperate with these programs.

HUTCHINSON: Well, the universities need to cooperate and they have been cooperative. Certainly, it's a concern to them because there's an economic interest. A huge volume of students come.

But even more importantly, there's a national interest and being able to educate the world about America. Our student education programs is (sic) very helpful in that regard. One thing we want to do at Homeland Security is let the world know we welcome foreign students. We just want them to understand that we will do more closer scrutiny of those students. And we'll be able to be able to monitor them when they come and leave the United States.

That's our responsibility but we certainly welcome them and there is a benefit to our country.

DOBBS: You know, Mr. Secretary, as you point out, this nexus of commercial interest, academic interest, even foreign policy interest at our borders, at the way in which we interact with the foreign visitors and guests, all of this comes about without truly a national policy on immigration. There's been no enunciation, not by this administration, not by previous administrations for a number of years.

Do we need a national policy in which we have a political consensus about the trade-off between a free country's interest and its security of its borders? Do we need to reach to that level? Because there's 700,000 illegal aliens crossing into this country every year. HUTCHINSON: We have a national policy. The question is whether you want to change that national policy and you have to develop a political consensus to do that. At presently (sic), we have an immigration policy that allows from countries a certain number each year, it's ranged from 300,000 to a million...

DOBBS: Well, I'm sorry, Mr. Secretary. I mean, that's the legal immigration policy. But a border policy that permits 700,000 illegal aliens a year to cross into this country is either no policy at all or it is simply a lack of enforcement of it.

HUTCHINSON: Well and that is a separate issue. And, you have to decide in this country as to the level of enforcement resources you want to put toward that problem.

We're trying to build integrity in the system which means you have to have a broad enforcement policy, but you also have to target it. And right now, we obviously want to target those criminal aliens that pose a danger to our society. But at the same time to be response to the broad allegations of illegality and respond when we have that information.

That's the balance that where trying to achieve and it's up to the policy makers to see if there should be any change in that.

DOBBS: I guess that's what I'm really getting to, Mr. Secretary. Again, your people working in national -- the tremendous number of issues you're facing, 7 million containers, ports, borders, intelligence abroad. All of these issues are immensely complex.

But the fact is, one can't help but wonder if you have 700,000 illegal aliens being permitted to cross into this country because one assumes that some juncture you have to say they could be terrorists. The war on drugs, the number of drugs that come into this country, those could be as well anthrax or chemical or biological agents, other chemical or biological agents.

At some point, shouldn't our politicians, our political leaders be making that determination to make your job easier, to make us more secure?

HUTCHINSON: Well, obviously, we need to have a consensus as to the level of enforcement, the level of resources devoted this problem but I would quibble with the term we permit that number of illegal aliens to come in the country. We did not.

It is a very dangerous business as evidenced by the number of deaths, the arrests, the apprehensions that are made. So it's not a difficult effort, even though in a free society we cannot have a perfect system along the border protections, we're do have a good strategy that enhances the protection in containers as well as the border security. We're going to build on that and make it better.

DOBBS: And we applaud you for the efforts that you have taken this to point. Asa Hutchinson, undersecretary for the department of Homeland Security. We thank you for being with us. HUTCHINSON: Thank you.

DOBBS: Still ahead here, our CEO of the week. He satisfied a hunger for stability and tradition among investor, and those who invested have certainly enjoyed hearty returns.

And this week's editor's circle, the editor's of "Business Week" and "Fortune" and "Forbes" join us to talk about what all of this week's news developments mean for all of us. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Panera is latin for bread. Panera Bread shareholders are certainly feeling their time has come. They're making a lot of Panera. The bakery/cafe stock has risen 687 percent over the past three years and it's a leader. Ron Shaich, is not surprisingly, our "CEO of the Week".

(BEGIN VIDEOTAPE)

DOBBS: Panera Breads CEO, Ron Shaich, believes to sticking to the basics.

RON SHAICH, CEO PANERA BREADS: We really are committed to doing bread right. We do it based on the traditions of a bakers who have been baking for hundreds of years. Stone deck ovens that cost us $50,000 per unit to put in. We use no chemicals, no preservatives.

DOBBS: Customers are buying into that philosophy at Panera's 505 locations around the country. Sales expected to hit $1 billion this year.

SHAICH: Earnings have been up from 80 percent, compounded annually, over the last four years. And essentially that has been driven because our average unit volumes at a million 850 thousand dollars.

DOBBS: Panera started as Oh Bon Pain, a company that Shaich founded in 1981. That company bought St. Louis Bread in 1993. When Oh Bon Pain's growth stagnated, Shaich wanted take a risk, get rid of the Oh Bon Pain franchise and keep St. Louis Bread. It wasn't an easy decision, nor an easy transition.

SHAICH: Guy that believed in the vision, the investors that believed in the vision, they watched the stock go flat for a couple of years. And the internal folks that had stock options, they watched parts of their net worth disappear.

The toughest part in going through that transition was watching the people that believed you, deeply, go through that pain. I don't know that there's ever been anything so difficult in my life.

DOBBS: It was worth it. The stock is up more than 1300 percent since they renamed the company Panera Bread in May of 1999.

Shaich's salary is $353,000 a year. Last year he turned down a $375,000 bonus.

SHAICH: I used a charter jet for part of the year. And I personally felt like I was more than well compensated with my salary. I just didn't feel it was something I should take.

DOBBS: Panera also has a charitable program, it calls "Donation".

SHAICH: Often times at the end of the night we have lots of baked good left over. And all of that goes to soup kitchens and charitable shelters around the country.

DOBBS: Last year Panera donated more than $12 million dollars in goods to feed the hungry and homeless.

(END VIDEOTAPE)

DOBBS: Ron Shaich of Panera Bread out "CEO of the Week" our congratulations.

Our poll question tonight, how should the U.N. pay for repairs to its headquarters? Charge all members equally, charge the United States the most, have France and Germany pay, get out of town. You can vote on web site cnn.com/lou. We'll share the results later in the show.

And when we continue, the editors of the nations top business magazines join us at a look at the stories of the week. The topics range from Medicare reform, affirmative action, and all that money that everyone is making in the stock market.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: We have just learned that Chante Mallard the 27-year-old woman in Fort Worth, Texas, who killed the 37-year-old homeless man -- trial that has lasted now in its fifth day -- has just been sentenced to 60 years in prison, 50 years for murder, 10 years for tampering with evidence. Chaste Mallard, 60 year sentence and that wrapping up -- that trial wrapping up now in Fort Worth, Texas.

Turning now to our "Editors' Circle", the federal reserve this week cut interest rates, historic Medicare reform has cleared the House and the Senate -- barely in the house, and affirmative action in the workplace and in our schools.

The editors of the top business magazines here to share their views on these stories and more and a great deal more. "Fortune" in the latest issue asked and answers the question, how did Krispy Kreme become America's hottest brand?

"Businessweek" looks at the revolution taking place inside Proctor and Gamble.

And "Forbes" has the 100 hottest celebrities. Joining me is Rik Kirkland, the managing editor, "Fortune". Jim Ellis, chief of correspondents of "Business Week". Tim Furgeson, executive editor of "Forbes." Gentleman, good to have you here.

Quite a week. I'm pretty excited about the Federal Reserve cutting interest rates. Rik, that should turn this economy around.

RIK KIRKLAND, MANAGING EDITOR, "FORTUNE": Oh, that all we needed.

(LAUGHTER)

KIRKLAND: You can see from the reaction. The Fed had to cut the quarter point. They had broadcasted they hadn't done it. To do it there would be a really been a disappointment but they are, at this point, trying to have it all ways. The economy is looking better but we're sort of worried about deflation and we kind of want to keep our ammo, you know, just in case we need to use it again. So, go figure it out.

DOBBS: Does it make a difference in your opinion, Jim?

JIM ELLIS, "BUSINESSWEEK": Well, it makes a difference simply because the market expected it to happen, so it had to happen. I think what I'm most worried about is look at the reaction on long rates. I think that they probably expected the long rates would not have gone up they way they had in the last few days, and that's a little worrisome because it means that maybe the Fed is having less control over rates than they thought they had, and as we get lower and lower, it's closer and closer to zero, they have less and less ammo.

DOBBS: You can imagine the Federal Open Market Committee sitting around and saying, you know, we have got interest rates down to 44- year lows, let's drive them down to 45-year lows. Tim, your thoughts?

TIM FERGUSON, "FORBES": Well, I think the only people who got excited about this move this week were the (UNINTELLIGIBLE) and the other traders who drove the price of the long bond up more than 10 percent. That's going to affect the mortgage machine and that will have an affect on the economy.

KIRKLAND: Yes, but you have got to remember, we came down from something like 3.9 about a month and a half ago to, what, 3.08, and now we're back up to a halfway, so if you're in the housing market or refin market, you're still pretty good shape here.

DOBBS: Remember that, 3-2-1 they could have locked in.

(LAUGHTER)

DOBBS: Supreme Court. Stepping out on affirmative action. Tim, what do you make of it?

FERGUSON: Well, it's certainly a decision of symbolic importance, which is why American business was weighing in prior to the decision for the most part in favor of continuation of policies. I have to say, though, that this is really a program that is in that sense aimed at the upper echelon of the graduates and the hirees around the country. I prefer to think that a more fundamental solution will come from building the schooling system and the home life that will provide a larger work force that will attain the diversity that these programs are after.

ELLIS: But I actually think that -- I'd say it's more than just symbolic. I think that a lot of American businesses wanted some reinforcement from the court that a lot of the affirmative policies that they were taking wouldn't be challenged later on. I think that's the thing that brings some clarity to the situation, that the -- that race can be considered, and that the whole notion of diversity is a goal. It's a goal that has a benefit for state institutions, and therefore, businesses want to latch on on to that, too, so I think that's why a lot of businesspeople were supporting this, particularly since census says that we're going to end up with about 42 million non-white, you know, new workers in the next 20 years. And we see that as a new market, we see that as the people who will be coming into American business, and so business has to do something to make sure that these people become prepared to sort of take up the, you know, crossing the new era.

KIRKLAND: They wanted clarity, they got it. The only thing you can't do is be, what's the word, mechanistic (ph). You can't put numerical values on these things, but you can use race as a factor. Companies have been doing it, and they are going to continue.

DOBBS: Tom DeLay said up here, well, you can use subtle affirmative action. You just can't use that...

KIRKLAND: Just don't put a number down on a piece of paper.

DOBBS: Tom DeLay, one of the more nuanced legislators (UNINTELLIGIBLE).

(CROSSTALK)

DOBBS: Absolutely. Absolutely. I thought it was interesting, Sandra Day O'Connor saying in 25 years from now she probably wouldn't vote the same way, intimated that. It makes you wonder since Bakke, the Bakke decision, just how much progress business, universities made? We've got an educational system that's failing on any level that you want to look at. Public education system that's failing on any level. None of these fancy decisions and high blown philosophy about social goals seems to be doing a darn thing to fix that.

FERGUSON: No. But at the same time in American society, there's been a tremendous infusion of new arrivals who seem to be accomplishing some remarkable things.

KIRKLAND: But in the upper echelons and sort of the upper tiers of that, we still got a long way to go. So maybe in 25 years, we'll be there, but sure didn't get there over the last 25.

DOBBS: Yes, we're going to have to pick up the pace just a bit from the past 25. The market. We saw a losing week. Sort of astonishing, off on the week for the first time in a month. Is the bull market over, Rik?

KIRKLAND: No, it's not over, but I'm sort of happy about it, myself. Not that I want the week to go every week, but the market has been getting out of itself. Tech stocks are up 46 percent on average off their lows.

DOBBS: Aren't tech stocks always supposed to be up?

KIRKLAND: I know they're supposed to be up, but they're ahead of themselves, and if you look -- by some measures, I've seen the lowest quality stocks have been going up the fastest, and I just think, you know, we're not going to get to 12,000 this year. We'll see.

DOBBS: Let's hope not.

KIRKLAND: Because otherwise it will come back down.

DOBBS: We're going to take a quick break. We'll continue with the "Editors' Circle" in just a moment and we'll have the results of tonight's poll. Stay with us.

(COMMERCIAL BREAK)

DOBBS: I know our editors want to bash the telemarketers who were dealt a heavy setback today, but first, the preliminary results of our poll tonight. The question, should the United Nations pay for -- how should the United Nations pay for repairs to its headquarters? Twenty-eight percent of you said, charge all members equally; 10 percent said charge the United States the most; 5 percent said France and Germany pay; 57 percent said get out of town. I'd like to remind everyone, this is a highly scientific poll.

We're back with Rik Kirkland, Jim Ellis, Tim Ferguson. Let's turn to those telemarketers, Tim. This was a major setback for them today, but a blow for freedom for nearly everyone else.

FERGUSON: Well, I think so, Lou, although the retail sales have been a little weak. Maybe we ought to be priming the telephone pump.

DOBBS: Do I hear concurrence?

KIRKLAND: I don't know. I might live for a couple of points, tenths off of GDP if we could solve the telemarketing problem.

DOBBS: Let me raise the other possibility. Is a setback to telemarketers perhaps (UNINTELLIGIBLE) direct advertising that might move them into the nation's preeminent business magazines? Would that...

(CROSSTALK)

KIRKLAND: We're not supposed to admit that.

(CROSSTALK) DOBBS: That's interesting. What will that do to you guys? Your newsstand sales will carry over, right?

KIRKLAND: Yes, we're just going to sell 10 times as much on newsstands.

FERGUSON: Not sold, it's bought.

DOBBS: Your thoughts on this economy? CEOs, business people, economists, there seems to be some varying views. Do you believe we have turned a corner?

KIRKLAND: I love the latest survey I saw; 70 percent of CFOs are more optimistic. That's the good news. The bad news is, none of them are ready to hire or invest in capital spending. We are still waiting for that.

ELLIS: That's the big problem is right now, nobody wants to make a move. Basically, we do believe that the economy's bottomed out. The problem is that there doesn't seem to be anything out there on the horizon that is going to make it pick up from here.

FERGUSON: One great thing about our economy, we're not Japan and we're not Germany.

DOBBS: Sounds good to me. Tim Ferguson, Jim Ellis, Rik Kirkland, gentlemen, thank you very much for being here. Have a great weekend.

That's our show for tonight. Thanks for being with us. For all of us here, have a very pleasant weekend. Good night from New York.

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