LOU DOBBS TONIGHT
U.N. wants U.S. in Liberia; Are CEO's Over Paid?
Aired June 30, 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 Monday, June 30th, here now Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening everyone.
There is no guerilla war in Iraq and U.S. troops there are not stuck in a quagmire. That is the judgment of Defense Secretary Donald Rumsfeld. He made the statements today.
U.S. troops in Iraq continued Operation Sidewinder today to try to put down remaining Iraqi resistance. Twenty-three American troops, six British soldiers have been killed since the end of major combat operations on the 1 of May.
Senior Pentagon Correspondent Jamie McIntyre has the report.
JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: While many military experts may believe that attacks against U.S. forces in Iraq fit the textbook definition of guerilla war, Donald Rumsfeld does not.
(on camera): Appreciating, as I do, your appreciation for precision in language...
DONALD RUMSFELD, DEFENSE SECRETARY: You got the dictionary definition.
MCINTYRE (voice-over): I want the DOD definition of guerilla war.
RUMSFELD: I was afraid you would. I should have looked it up. I knew I should have looked it up. I could die that I didn't look it up.
MCINTYRE: The Pentagon's own definition (unintelligible): "Military and paramilitary operations conducted in enemy-held or hostile territory by an irregular predominantly indigenous forces." It seems to fit a lot of what's going on in Iraq.
RUMSFELD: It really doesn't.
MCINTYRE: The problem with conceding the U.S. may be locked in guerilla warfare is that it raises the specter of Vietnam. In fact, a cartoon on that point hangs on Rumsfeld's wall. RUMSFELD: There are so many cartoons where people, press people are saying is it Vietnam yet hoping it is and wondering if it is and it isn't. It's a different time. It's a different era. It's a different place.
MCINTYRE: And, any comparison to Vietnam brings up the "Q" word.
RUMSFELD: We have had several quagmires that weren't thus far.
MCINTYRE (on camera): The criticism would be that you're in a situation from which there's no good way to extricate yourself (unintelligible).
RUMSFELD: Then the word clearly would not be a good one.
MCINTYRE (voice-over): The U.S. insists it does have an exit strategy. It's aggressively rounding up suspected enemies in raids and is working to replace U.S. troops with forces from other countries, but so far after consultations with some 50 countries, only 8,000 additional troops have been pledged and they won't arrive until September at the earliest.
MCINTYRE: Meanwhile, the hunt goes on for Saddam Hussein and his sons, the capture of whom is seen as the key to breaking the will of the insurgence. Pentagon officials say there's no evidence that they were in a convoy that was attacked two weeks ago, but today they did concede that some senior Iraqis who were targeted in that strike may well have slipped across the border into Syria -- Lou.
DOBBS: Jamie, a couple of questions if I may. One, is there any move, considered move now to continue the disarmament of Iraqis?
MCINTYRE: Well, they are continuing to disarm them. In fact, a lot of these raids have turned up a lot of small arms there. Each Iraqi, apparently, is allowed to have a weapon and a clip of magazine but they're not allowed to have multiple weapons and in these raids they've been scooping up a lot of small arms.
DOBBS: But is this a considered effort? Are they going to leave those Iraqis with AK-47s?
MCINTYRE: Well, there are so many guns in Iraq it's not seen as feasible, especially with the lack of government to leave all the Iraqi population disarmed, not a task that would be doable in any easy way. So, I think they're trying to set themselves a goal that's more achievable.
DOBBS: And, Jamie, you have just received from the Pentagon a videotape of an intercept by North Korea back in March. What can you tell us about that?
MCINTYRE: That's right. My colleague, Barbara Starr, actually initiated this request from the Pentagon for this tape of an incident that happened back in March when an RC-135 Cobra Ball reconnaissance plane, which you can't see because that's where the tape is being shot from, was flying about 150 miles off the North Korean coast.
It was intercepted by these North Korean MiGs, a time of rising tension with North Korea, you can see the pilot in the MiG 29 gesturing at several points to the U.S. crew variously interpreted as an attempt to get the U.S. crew to land or to, at the very least, leave the airspace.
As a result of this, the United States considered a range of options to protect its surveillance planes, but eventually just resumed the flights quietly without armed escorts, the U.S. insisting that it has the right for its reconnaissance aircraft to fly in international airspace over international waters, as I said, about 150 miles off the coast of Korea.
DOBBS: And, we should remind everyone that an incident that took place in March, the videotape just made available through a request by CNN and Pentagon Correspondent Barbara Starr. Senior Pentagon Correspondent Jamie McIntyre, thank you very much.
U.S. troops are already stretched to the limit. They now serve in 120 countries all around the world. Today, U.S. Secretary-General Kofi Annan wants the United States he says to step into the long and bloody civil war in Liberia.
Liberia is a nation of some three million people. Nearly ten percent of the population has been killed in civil war. The last president, Samuel Doe was beaten and mutilated before he was murdered, Kitty Pilgrim reports.
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): It's a scene or horror. In Monrovia, the burned out capital of Liberia, 700 people were slaughtered in the last two weeks and the United Nations wants American troops to step in.
The argument goes like this. Liberia was founded by African slaves after the civil war and as Cameroon's ambassador at the U.N. said recently of the United States, it's their baby and they have a responsibility there. President Bush late last week asked Liberia's president to give up power.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: President Taylor needs to step down so that his country can be spared further bloodshed.
PILGRIM: The administration is clearly considering its options.
RUMSFELD: We've spent time over the weekend, a good deal of time over the weekend visiting among ourselves about that and thinking through different aspects of it.
PILGRIM: Liberia's president, Charles Taylor, is a convicted war criminal and has incited civil wars in Ivory Coast and Sierra Leone, and instability in Guinea as well. The British led a mission in Sierra Leone, and France intervened in Ivory Coast. MICHAEL O'HANLON, THE BROOKINGS INSTITUTION: We've seen unspeakable atrocities. The British and the French have both done a great deal in neighboring countries in West Africa with 1,000, 2,000 troops.
PILGRIM: The United States has not actively committed troops in Africa since Somalia in the mid-'90s, a fiasco in which 18 Marines were killed inspired the popular "Black Hawk Down" but the United States has helped train African troops.
PROF. HERB HOWE, GEORGETOWN SCHOOL OF FOREIGN SERVICE: U.S. Special Forces a couple years ago, in something called Operation Focused Relief, trained about seven battalions, about 3,900 men in good infantry techniques. They all -- they come from three countries, five battalions from Nigeria, one from Ghana, one from Senegal, and all of them with pretty good training they'd be probably very, good on the ground.
PILGRIM: France and Britain want the United States to get involved and African countries are asking for 2,000 U.S. troops and an answer from the president before he visits Africa next week -- Lou.
DOBBS: Is there no end to what we would get involved in in this country? A nation of three million people, no direct business interest, no strategic interest, what in the world would be the pretense?
PILGRIM: And, a 14 year civil war. It's a long-running battle.
DOBBS: Extraordinary. All right, Kitty Pilgrim, thank you very much.
Well, a handshake between Israeli and Palestinian commanders today sealed the latest step in the Israeli-Palestinian cease fire. Israel today removed its checkpoints along the main highway in Gaza. Those checkpoints had caused long delays for Palestinian motorists.
Mike Hanna has the report from Jerusalem.
MIKE HANNA, CNN JERUSALEM BUREAU CHIEF (voice-over): Talk translated into action on the ground. After weeks of intense negotiation, Israel begins to hand over security control in parts of Gaza.
The checkpoints along the main north-to-south highway are dismantled and for the first time in months traffic begins to flow freely. Palestinians now able to travel from one part of Gaza to another, their movement regulated not by Israeli soldiers but by Palestinian police officers.
In the West Bank, though, more violence, a para-national working for an Israeli construction company shot and killed by Palestinian gunmen in defiance of a cease fire pledge, a local branch of the Al Aqsa Martyrs Brigade claiming responsibility and signaling that not all militants will listen to their leaders.
But despite this incident, Israeli and Palestinian security officials say they remain intent on creating new realities in the West Bank as they have in parts of Gaza.
The next area in which Israel has agreed to hand over security responsibility the West Bank city of Bethlehem, the Israeli roadblocks will remain around Bethlehem but the troops will withdraw from the city itself and the policing of Bethlehem will be put back into the hands of Palestinians.
Elements of the Palestinian police being retrained in recent weeks as attempts are made to rebuild a security apparatus that in nearly three years of conflict with the Israelis had been all but destroyed.
Mike Hanna, CNN, Jerusalem.
DOBBS: President Bush is keeping a close eye on international developments while he is also finding plenty of time to raise money for his reelection campaign. The Bush campaign has shattered records and out paced the Democratic rivals, potential rivals, by raising $30 million over the past three months, Senior White House Correspondent John King reports.
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT (voice-over): Monday lunch hour in Miami, $1.8 million more for the most methodical fundraising machine on record.
BUSH: We're laying the groundwork for what is going to be a victory in November of 2004. I'm getting ready. I'm loosening up for the task ahead.
KING: In just six weeks, the Bush-Cheney reelection campaign has shattered the records raising more than $30 million, as much if not a little more than all nine would-be Democratic challengers raised over the last three months.
SCOTT REED, DOLE '98 CAMPAIGN MANAGER: It demoralized the Democrats. It shows that this president can go spend an hour and ten minutes in a barroom and raise more money than the Democrats can in a week of running around rattling a tin cup.
KING: It costs $2,000 for a speech that runs about 30 minutes, maybe a handshake or a photo, and an early glimpse at the themes Mr. Bush hopes will bring him a second term.
BUSH: Terrorists declared war on the United States and war is what they got, and to get our economy going again we have twice led the United States Congress to pass historic tax relief for the people of America.
KING: With no primary opponent, Mr. Bush contests more than themes. He lost California and New York by big margins last time but Chief Strategist Carl Rove thinks they could be more competitive this time and the primary season fundraising goal of $175 million or more allows the luxury of organizing, polling, and even TV ads in states that would not make the cut in a campaign short on cash and while the Democrats are competing against each other, Mr. Bush can train his focus on next November.
REED: Forty or 50 percent of this money on paid advertising and the rest will be focused on grassroots organizing in these battle ground states where they'll be able to hire workers for the first time, put them on the ground to go out an identify the vote and turn out the vote.
KING: One down side for an incumbent is the price tag of flying Air Force One.
KING: But, like many of his predecessor, Mr. Bush is mixing policy events around his fundraising schedule, note a Medicare event in Miami early this morning, so the taxpayers, Lou, picking up some of the tab for the travel cost and it's not just the president bringing in the big bucks. He's getting able assistance from both the vice president and the first lady -- Lou.
DOBBS: This is, as you point out, an extraordinary period of fundraising. At what point does that Air Force One become an expense for his campaign?
KING: Well, whenever he does a political event the campaign has to pay some of the price and some of the price is frankly classified because of the military help that goes along, the security along with Air Force One, so the campaign is paying every time.
Mr. Bush is in Tampa, Florida right now speaking, as we speak, raising $1.2 million. The campaign will pay for that travel. Because he had a policy event in Miami this morning, it's split. The taxpayers pay for some. The campaign pays for the rest. But the Bush campaign says it is well worth it. They are bringing in so much money at these events, so quickly, they say that that's just one of the prices that comes with being the incumbent out raising money.
DOBBS: In financial terms, I think we would have to declare the margin looks pretty good for the president on those expenses versus the amount he's raising. John, thank you very much, John King our Senior White House Correspondent.
Still ahead here, capitalism and democracy, our series of special reports begins this week in conjunction with the "Economist" magazine. Tonight, CEO pay and why these two men are among the most overpaid chief executive officers in the entire country.
And, say goodbye to overtime, some eight million Americans will no longer be eligible under new rules proposed by the Labor Department. Bill Tucker has the report. We thought the two stories went rather well together. Stay with us.
DOBBS: Well, your 401K received a little help over the past three months despite the fact that stocks moved a little lower today.
Susan Lisovicz has the market for us -- Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: Lou, meager losses on the day but explosive gains for the quarter. That ended with today's closing bell. For the second quarter, the Dow Industrials added 12.5 percent, the best report card since the last quarter of 2001.
The broader S&P 500 surged nearly 15 percent, its best since the fourth quarter of 1998, and the until recently battered NASDAQ rocketed 21 percent its best since the end of 2001.
Investors flocked to sectors that had been among those most beaten up in the bear market. Airlines took off, up nearly 70 percent, Internet, up better than 50 percent and telecoms up better than 40 percent.
That king of rotation can also be seen in the Dow's best performers. McDonald's, in the midst of a reorganization, is at the head of the list, followed by Altria, the parent company of Phillip Morris, and financial powerhouse JP Morgan.
The market was positive for much of the day but traders say there was increased volatility because of last minute adjustments before closing the books on the quarter and the first half of the year.
And, Lou, as good as Q2 was for the major indices, it was even better for the index that measures small cap stocks. The Russell 2000 enjoyed its best quarter, Lou, since 1991, a tough act to follow.
DOBBS: Best in 12 years, that's remarkable.
DOBBS: No wonder a lot of Wall Streeters are a little concerned this market may be recovering just a little too quickly.
LISOVICZ: A little too enthusiastic.
DOBBS: It's amazing to look over there and see that statistic on Internet stocks, 40 percent. It makes you think about the good old days, doesn't it, Susan thank you, Susan Lisovicz.
Still ahead here, eight million Americans are about to have their pay cut by the federal government. Bill Tucker reports on what could be the end of overtime as you know it.
Then, a young athlete is missing, authorities fear the worst. We'll have a live report for you on the search for Patrick Dennehy from Waco, Texas.
And, your thoughts on the United Nations' request to have the treasury foot the bill for its restoration, remodeling, rehabilitation. Stay with us.
DOBBS: The federal Do Not Call registry has already been inundated by Americans anxious to be free of telemarketing calls. The government's web page was slow, in initially Friday. Critics were quick to come out swinging.
Senate Minority Leader Tom Daschle was among those to question the website. He said: "I am disturbed; however, by reports I am receiving today from a number of South Dakotans that they have had trouble accessing the Do Not Call website." Daschle went on to say: "I am hopeful that these technological glitches can be worked out soon so the promise of the project is realized."
Well, apparently he got his wish. According to the FTC more than ten million Americans registered over the weekend bringing to the total to more than 13 million phone numbers now on the Do Not Call list. The Federal Trade Commission expects to register up to 60 million phone numbers in the first year.
Another new plan from the federal government is receiving a somewhat less welcome response. The Labor Department is changing the rules on overtime pay for the first time in 50 years. Union leaders say the changes will make millions of Americans work more for less.
Bill Tucker reports.
UNIDENTIFIED MALE: George Bush is unfair.
PARTICIPANTS: All we want is our fair share.
BILL TUCKER, CNN CORRESPONDENT (voice-over): The last day of June, the final day of public comment on proposed rule changes about who gets OT and who doesn't. Labor was not going quietly into the night.
RICHARD TRUMKA, AFL-CIO: Did you know that the Department of Labor has not held one single public hearing on an issue that is going to cut the pay for at least eight million American workers and they held not one single hearing.
TUCKER: Good speech material, bad facts.
VICTORIA LIPNIC, ASST. LABOR SECRETARY: We had 40 stakeholder meetings with employee groups, employer groups, unions. We invited them in. We asked them for their ideas. We wanted to hear their suggestions. That was before we even got started on this proposal.
TUCKER: The proposals themselves have been public knowledge since March. Here's what the screaming is all about. If you earn $425 a week or $22,100 per year or more you may not get overtime. The old rule was $155 or $8,060 a year. White collar workers earning above $65,000 will now be exempt, along with supervisors and workers who are experts in their fields.
JARED BERNSTEIN, ECONOMIC POLICY INSTITUTE: Well, the problem with these proposed changes is that they threaten to remove as many as eight million workers from the roles of overtime time and a half pay.
TUCKER: Bernstein calls the action by the Department of Labor a solution to a non-problem, adding that no one has suggested that the problem with the economy is overtime rules.
TUCKER: Changes are not official yet. They become official only after the Department of Labor reviews the comments on the proposed changes and there is no deadline for any decision on that review -- Lou.
DOBBS: No deadline. Who is affected? Are the labor unions affected? They're not, are they?
TUCKER: Labor is not affected. If you have a collective bargaining agreement you are exempt from these rules, not affected by them.
DOBBS: So what is the reason the Labor Department wants to do this?
TUCKER: They say they want to update the rules and, in truth, both sides will agree, labor and the Department of Labor, that a lot of these rules need to be changed. They've shortened them from $30,000 to $13,000. They've cleared up some of the jobs.
DOBBS: Shortened what from $30,000 to $13,000?
TUCKER: The rules and regulations. They're trying to make them clearer. What both sides do agree, Lou, is that when this decision is made they're probably all going to be in court with lawyers trying to argue this legally to get a better, clearer definition.
DOBBS: Well, it seems to me that that would be criminal to take overtime pay away from people making $22,000 or more.
TUCKER: Well, it's not that clear. You don't take it away from them.
DOBBS: What's not that clear?
TUCKER: If you earn less than that, you get it. If you earn more than that you may still get it. They've shortened the test. They now call it a standard test to determine whether, in fact, you're a supervisor.
DOBBS: Oh, for crying out loud. TUCKER: Yes.
DOBBS: Unbelievable. All right, Bill Tucker, thank you very much.
TUCKER: You're welcome.
DOBBS: Now, for a look at some of your thoughts, many of you have written in about our series of special reports on the security of our national borders, a series of reports, "Border Patrol."
Ava Shevitt of Los Angeles said: "I am outraged at the lack of concern over illegal immigration. I can wash my own car, clean my home, and secure my own produce if it lightens up traffic, schools, and the enormous burden on our healthcare system."
Linda B. of El Segunda, California said: "There are hundreds and hundreds of immigrant workers seeking and needing work. Los Angeles can not handle any more unskilled workers, our medical facilities can not handle any more free care, our schools are falling apart and overcrowded."
Bill Neal of Tulsa, Oklahoma wrote about the United Nations request to have the U.S. Treasury fund its restoration. "As far as the United Nations needing repairs, I hear there are some really nice palaces in Baghdad that need new tenants and there is plenty of parking!"
Giles Kavanaugh of Idaho had another idea. "Send the U.N. to Paris, which could then be known as the City of Light, Smoke, and Mirrors."
Colleen McLinden of Peoria, Illinois wrote about the government's Do Not Call list. "My revenge to all the telemarketers who have interrupted me so many times is whenever a telemarketer asks for me I say, just a minute and put the phone down and let them wait and wait and wait."
Mary Ann Pietrowitz of Lake Mohawk, Sparta, New Jersey said: "Don't we have the law backwards? Shouldn't our phone numbers not be on these lists in the first place unless we request to be put on them? We should not have to opt-out but opt-in." Mary, we couldn't agree with you more.
And Doug Royer of Idaho Falls said: "How about a national do not send unsolicited e-mail list?" That's a good idea too but one that looks like it's going to have to wait its time.
Send us your thoughts at LouDobbs@cnn.com.
Turning now to tonight's poll, the question is: "What do you think of U.N. Secretary-General Kofi Annan's latest suggestion to send U.S. troops to Liberia, brilliant, reasonable, or idiotic?" Cast your vote at cnn.com/lou. We'll have the preliminary results later in the broadcast. The final results of Friday's poll, the question: "How should the United Nations pay for repairs to its headquarters?" Thirty-six percent of you said charge all members equally, 15 percent said charge the United States the most, five percent said France and German pay, 43 percent said Get Outta Town.
When we continue, capitalism and democracy, our series of special reports this week in conjunction with the "Economist" magazine, tonight we focus on executive compensation and why one expert says Bill Gates is underpaid but he's almost all alone.
Compensation expert Graef "Bud" Crystal joins us.
And, hurricane season is underway, the wild weather wasting no time. We'll be talking to Max Mayfield of the National Hurricane Center on what's expected this storm season and the latest from Tropical Storm Bill. Stay with us.
DOBBS: Today, we begin a series of special reports in conjunction with the "Economist" magazine, the topic capitalism and democracy. Tonight, we examine how it is that CEOs have continued to grow rich even with corporate profits down and unemployment rising to what is now a nine-year high.
GRAEF CRYSTAL, EXECUTIVE COMPENSATION EXPERT: Your average American gets up every morning. The alarm clock rings. They put in a full day's work. They earn a salary. They probably don't get a bonus. They probably don't get a stock option. And yet the CEOs, they're the laziest slobs in America, because to get them to even get to the shower in the morning you have to give them 100,000 shares of stock options.
DOBBS: Meet great Bud Crystal. After more than two decades as an executive compensation consultant, Bud had enough, and he believes so have America's CEOs. Bud keeps a data base tracking CEO pay. We asked him to share his thoughts on who were among the most overpaid.
BUD CRYSTAL, EXECUTIVE COMPENSATION CONSULTANT: Edward Whitacre, CEO of SBC communications, overpaid.
He's received massive amounts of pay. I believe at one point 60, 70 million dollars in a single year I clocked him at, for delivering virtually nothing in the way of performance.
Gordon Bethune, CEO of Continental Airlines, overpaid. He's had all sorts of strategies he's picked up to pay himself a lot of money. Meanwhile, of course, we're beating the hell out of pilots and the machinists union and the flight attendants. You've got to pull in your belt. And you know, you can't see his belt because he has such an enormous paid gut overhanging it.
DOBBS: But Crystal does say there are a few CEOs out there, a few, who are actually underpaid.
B. CRYSTAL: Bill Gates, the chairman of Microsoft Corporation, underpaid. Arguably the richest man in the world. He pays himself, oh, I think, around 500,000, 600,000 a year. A very, very tiny amount of money for running such a huge enterprise as Microsoft, which he built from nothing.
DOBBS: Since 1970 the gap between CEO pay and that of the rank- and-file worker has risen dramatically. The ratio has increased from 30-1 to 1,000-1.
BILL EMMOTT, EDITOR-IN-CHIEF, "THE ECONOMIST": The gap is becoming like the gap between the peasants and the aristocrats at the time of the French Revolution. It's just huge.
DOBBS: The problem is even worse at fraudulent companies. A recent report by the Institute for Policy Studies found CEOs at firms under investigation made 70 percent more than their peers.
Many claim CEOs have been raking in huge pay largely because of passive institutional investors. TIAA-CREF manages pensions primarily for teachers. It's one of the largest institutional investors in the country, and it's becoming even more active on the issue of CEO compensation.
PETER CLAPMAN, TIAA-CREF: The system now demands that boards of directors act differently, but who will monitor the performance of boards of directors and try to promote those higher standards? It's got to be the institutional shareholders.
DOBBS: TIAA-CREF is trying to identify companies with serious corporate governance issues and apply considerable pressure.
CLAPMAN: On our compensation initiative this year we started with 50 companies, and it's only going to come to a vote at two companies, which shows the power of dialogue, the power of negotiation.
DOBBS: But the power of the market may offer the best hope of correcting CEO runaway pay. Including incentives that encourage a longer-term perspective.
EMMOTT: The most important remedy is to shift away from stock options which are basically a short-term one-way bet for CEOs, and towards long-term holdings of shares to give people an incentive really in the long-term performance and development of the company.
DOBBS: But fundamental to corporate reform boards of directors need to re-establish their independence.
B. CRYSTAL: Ultimately, you have to blame the boards. Unfortunately, your standard issue board consists of ten friends of the CEO, one token woman, one token minority, and 60 percent of the board members are CEOs of other companies, and they don't come to the table with a philosophical predisposition against high pay. On the contrary they love it. (END VIDEOTAPE)
DOBBS: Joining me now with some further thoughts on excessive CEO compensation is the man you've just heard from, executive compensation expert Bud Crystal. Bud, good to have you here.
B. CRYSTAL: Nice to be here, Lou.
DOBBS: Is there a solution here? Not a regulatory solution, but is there indeed a real solution available to investors who've watched their shares diluted, who have watched, in some cases in fraudulent companies, literally the looting of the company by these renegade CEOs?
B. CRYSTAL: Well, there is a solution. The question is whether people want to apply it, and that is, as Peter Clapman suggested in your tape, that the shareholders need to take control of their own companies, take it back again. The shareholders are not impotent. If they want to, they can throw these boards out in the street and put in boards that will do what they want. So that's the ultimate solution.
DOBBS: Shareholders in this case, and in most cases means the institutional shareholders, the large pension funds, the large funds. What's the likelihood of that happening?
B. CRYSTAL: Well, that's the issue. You know, if, for example, you're Fidelity or Newberger and Berman, these huge mutual funds, you know, it's very difficult. You don't have a lot of leverage or traction to criticize someone making $30 million a year if you're making $30 million a year. And so most people would rather change the subject than hurl criticism. So that's a problem.
The problem with some of the state funds is the politicians get pressure from their constituents. I watched this happen with the giant California Public Employees Retirement System in California about ten years ago, where a group of CEOs went to the then governor and said, do something about these commies who keep attacking our pay packages and the governor actually tried to do something, he didn't succeed, but it sent a chill over Calpers and pretty soon Calpers dived to 600 feet and rigged for silent running.
DOBBS: Well, TIAA-CREF, Calpers for its part says it is addressing the issue. You just don't buy that at this point?
B. CRYSTAL: Oh, no, no, I think that it's all to the good. I think finally some of these institutions are starting to react. For example, I just made a presentation to the board of trustees of the California State Teachers Retirement System the third largest fund, called Calsters, in which I was noting, for example, my own research.
I wrote an article recently, "Can You Make Money Off Me?" and I discovered that if I write negative articles, if you were to take that stock out of your portfolio you would have improved your return about 1400 basis points or 14 percentage points.
On the other hand, if I write a good article that doesn't seem to have any connection at all. And, you know, there is the giant D-word, disinvest. If you can't do anything else, I know a lot of these institutions say we have to own everybody. I don't think Moses came down from Mount Sinai and said you have to do that. They can go to these companies and say, look, we're tired of your behavior, we've asked you to change, we're just going to dump your stock out of the portfolio, and if we do that and enough people do it, there goes the option profits for these CEOs, and finally they will wake up, I think.
DOBBS: Bud crystal, as always, good to have you with us.
B. CRYSTAL: Nice to be here, Lou. Take care.
DOBBS: And that brings us to tonight's thought, which defines a corporation in a somewhat different way. "A corporation, now, an ingenious device for obtaining individual profit without individual responsibility." That's somewhat skeptical, some might say cynical definition from Ambrose Bierce.
When we continue, Tropical Storm Bill is bearing down on the Big Easy tonight. We'll be talking with Max Mayfield of the National Hurricane Center as the storm season has arrived.
And the beast takes Japan with fist fulls of cash. A former NFL player says good-bye to the grid iron, hello to stardom. We'll have his unique story. Stay with us.
DOBBS: Well, in Europe tonight, politicians are anxious and headline writers are positively giddy, because tomorrow the controversial and colorful Prime Minister of Italy Sylvio Berlusconi becomes president of the European union. The presidency rotates every six months. It's Berlusconi and Italy's turn.
Europe is united in disgust, or so said the headline in this morning's "Independent" in London. In Germany "der Spiegel" ran the headline "The Godfather Now Showing Across Europe". Berlusconi is trying to avoid the embarrassment of being convicted while serving as Europe's president. Today a judge in Milan suspended Berlusconi's bribery trial, citing a new Italian law that grants immunity to that country's top five official. An interesting law.
Turning now to tonight's quote, a few parting words from the former U.N. weapons inspector on his last day on the job, "Of course I was disappointed at the time but some more months might have shed enough light on the situation and what is done is done and it is over and we have to look forward". This from retire Chief Weapons Inspector at the United Nations, Hans Blix.
Across America tonight the Senate majority leader says he is in favor of a Constitutional amendment now before the House that would ban outright gay marriages. Senator Bill Frist told ABC's "This Week" he believes marriage is a sacrament that should extend only to a union between a man and a woman.
Furthermore, Senator Frist said the Supreme Court's ruling on gay sex could lead to the legalization of prostitution and drug use in the home.
In other news across America tonight, a government audit has found that several different contracts for modernizing this country's air traffic control system are now way over budget and well behind schedule.
The Treasury Department reviewed 20 FAA projects. Those contracts originally $14 billion. Fourteen of them were over budget by a total of more than $4 billion. Thirteen of the projects at least a year behind schedule.
And in California firefighters are working to contain a wildfire burning south of Bakersfield. That fire has burned through 1100 acres near the Fort Cason (ph) State Historic Park. Firefighters are surrounding half of it, but they say the fire is growing. The fire began on a pickup truck along the Golden State Freeway.
The second tropical storm of the season is drenching the Louisiana coast and parts of Mississipi and Alabama tonight. Tropical Storm Bill moved ashore this afternoon bringing with it winds of up to 60 miles an hour. Forecasters say those winds have spawned two possible tornados near New Orleans. The storm is expected to drop as many as 15 inches of rain. Flooding is already a problem.
Joining me now for more on this storm is the director of the National Hurricane Center in Miami, Max Mayfield. Good to have you with us, Max.
MAX MAYFIELD, DIRECTOR NATIONAL HURRICANE CENTER: Thank you, Lou.
DOBBS: And as we begin this season, does it look like this storm is going to dissipate quickly?
MAYFIELD: I don't think so, Lou. This is not over by any means. It's already made landfall, as you said, and it's primarily going to become a rainfall event over the next two to three days as it moves through Mississippi and Alabama and even into eastern Tennessee, the western Carolinas, up into Virginia. So I think we'll be talking about the rainfall even into Thursday.
DOBBS: So this storm, while we're used to talking about hurricanes, this tropical storm is bringing quite a load of water with it, then.
MAYFIELD: It is and we've had a study done here at the National Hurricane Center, and we've actually determined that most people who lose their lives in tropical storms and hurricanes in our country die because of the inland freshwater flooding. So we really don't want anybody to let their guard down. As this system moves up toward the Appalachians it will still be a rainfall maker, and if people just exercise a little bit of common sense here, we don't have to have any loss of life.
DOBBS: Give us a sense again of the track, Max. I know you mentioned it moving all the way through to Tennessee. Will this be a severe storm by the time it reaches as far as Tennessee?
MAYFIELD: No, sir. The winds will die down tonight. In fact, by tomorrow morning I suspect it will be down to a tropical depression. So it's really not going to be a wind event. Right now they're having some storm flooding in southeast Louisiana and along the Mississippi coast. That will die down during the night. The track actually takes it up here through northern Alabama and into eastern Tennessee, and then to Virginia.
But the center is not the main thing here. It's going to be the rainfall. And that's what we're going to be looking at very closely here over the next few days.
DOBBS: And at least two tornadoes apparently spawned by this, at least according to our information. Do you have any more on tornadoes being spawned by Tropical Storm Bill?
MAYFIELD: They almost always spawn some. When you have a Gulf of Mexico system like this. There's one there in Reserve, Louisiana, west of New Orleans that had about 20 mobile homes damaged, I'm told, and four people injured. So there will be some additional isolated tornadoes with this system.
DOBBS: And this hurricane season, which began at the beginning of this month, what is your forecast, your expectation through the remainder of the season?
MAYVIELD: Well, the National Oceanic and Atmospheric Administration is forecasting above normal activity, more than the normal number of storms and hurricanes. In having said that, this is just sort of a wake-up call is the way I would interpret this. The peak of the season really begins about the middle of August, it goes until the end of October. So we all need to be ready.
DOBBS: Okay. Max Mayfield from the National Hurricane Center, we thank you very much, as always.
MAYFIELD: Yes, sir. Thank you.
DOBBS: A reminder now to vote in our poll tonight. The question tonight is what do you think of U.N. Secretary-general Kofi Annan's call to send U.S. troops to Liberia? Brilliant, reasonable, or idiotic? Cast your vote at CNN.com/lou. We'll have the preliminary results coming up later in the show.
Still ahead tonight -- officials fear foul play in the disappearance of a Baylor University basketball player. We'll have the very latest on this unfolding mystery.
And the Angels throttle the competition at the box office. The whole wrap-up of the weekend movie results when we come back. Stay with us.
DOBBS: The FBI has joined with local police in investigating the disappearance of a Baylor University basketball player as a homicide. Patrick Dennehy has not been seen in three weeks. Police say some of his teammates could become suspects. Lisa Hannah of affiliate KWTX TV is in Waco, Texas, with the latest.
LISA HANNAH, CNN CORRESPONDENT: There are still many more questions than answers this evening regarding the disappearance of 21- year-old Baylor basketball player Patrick Dennehy and the investigation that has ensued. Today Waco police officials read a statement to the media, but allowed for no questions to be asked and no questions to be answered.
What they did do, though, is reaffirm what they told us a couple of days ago that they believe Dennehy to be the victim of a homicide and that potential suspects in the case are in fact fellow Baylor basketball players. They believe that that murder may have taken place in the Waco area. Dennehy, who was a transfer from the University of New Mexico, has yet to play for the Baylor Bears because of the NCAA's transfer policy he is going to red shirt this coming season. Obviously, all of this information has sent a shock wave through the Baylor campus and the community.
Today Waco's police chief did send out a cautionary toll to the media saying that when it comes to speculation as far as people that are being questioned in this case, that you need to be very careful because they are not going to obviously release names in this case until a warrant is issued. So again, they are questioning people. We have heard that they have questioned Baylor basketball players, but again, still no names and not a lot of information that was released today in this case that we did not already know.
So again, 21-year-old Patrick Dennehy, missing since June 11. Not a lot of answers today, we do know he is still missing. Police believe he is a potential homicide victim. Tomorrow morning they say they are going to do questions and answers with the media. That will be at 10:00. We are in Waco this evening. I'm Lisa Hanna. Back to you.
DOBBS: Well, another shake up of a different sort in college sports tonight. The University of Miami and the Big East have parted ways. Miami will now be part of the Atlantic Coast Conference. The move comes after a heated battle over the past two months as the Big East offered the Hurricanes $45 million over five years to stay in their league. Four Big East member schools sued to keep Miami from defecting. Miami will begin playing for the ACC in the 2004-2005 season.
At the box office this weekend, "Charlie's Angels: Full Throttle" took the top spot. In its debut weekend the sequel took in $37.6 million, that's nearly $2 1/2 million less than the original movie made in its debut weekend. "Charlie's Angels" muscled "The Hulk" out of number one. "Finding Nemo" was third, followed by "28 Days Later" and "Bruce Almighty."
When we continue, the results of tonight's poll. Then they call him the beast, and he is taking Japan by storm. This former NFL player didn't make it on the grid iron, but he's making big yen in Japan. Stay with us.
DOBBS: Checking tonight's poll, the question, what do you think of U.N. Secretary-General Kofi Annan's suggestion to send U.S. troops to Liberia?
Fourteen percent of you said brilliant, 33 percent said reasonable, 53 percent saying idiotic.
Joining me now, Susan Lisovicz, Kitty Pilgrim, Bill Tucker. Let me start first of all, Kitty with this report on Liberia.
Why would they want to do it?
Three million people.
KITTY PILGRIM, CNN CORRESPONDENT: Three million people. I've been talking to people all day. And it's a real tough moral decision because so many people are at risk. And yet, and yet, what makes the United States the policeman of the world is the one compelling argument.
DOBBS: Any financial interest?
DOBBS: Any economic interest?
PILGRIM: No, not to speak of.
BILL TUCKER, CNN CORRESPONDENT: My question is we're a sovereign state in this particular case, and Annan's giving us the discretion to go in at will. Yet in the middle of the Iraqi crisis we were a member of the United Nations and not to act on our own, which is what I find amazing in this story.
PILGRIM: The thing that's interesting is that we did train African troops simply to cover this region, and there's a very compelling argument to use the African troops that were trained by U.S. special forces.
DOBBS: Well, we're getting the domestic economy under control. We're going to cut overtime. The Labor Department wants to remove overtime from an estimated 8 million people.
TUCKER: Thank god.
DOBBS: With CEO pay running about 500 times that of the average worker.
TUCKER: Why are they doing this?
That's what I couldn't figure out all day long.
DOBBS: Well, what did they tell you, Bill?
TUCKER: We're simplifying the rules, Lou. That was the answer. That's what they kept coming back at.
DOBBS: We're from the government, we're here to help you.
SUSAN LISOVICZ, CNN CORRESPONDENT: The bulls weren't running overtime in the second quarter, Lou, the best quarter for the Dow and the Nasdaq.
DOBBS: That is a transition if I've ever heard one.
LISOVICZ: Since the end of 2001 S&P 4 1/2 years. But it will be difficult to maintain that, obviously, rest of the year.
DOBBS: Susan, Bill, Kitty, thank you very much.
Well, we want to turn to a happy ending. Bob Sapp didn't make it in American football like his famous brother Warren Sapp. So he packed it in, he moved to Japan, and became "The Beast." And he is having the last laugh. Rebecca MacKinnon with the story.
REBECCA MACKINNON, CNN CORRESPONDENT (voice-over): Meet Japan's most popular American. He failed as an NFL football player and as a professional wrestler. But now Bob Sapp is a Japanese superstar with a best-selling rap video and CD.
BOB SAPP, K-1 FIGHTER: I think the first time I really was shocked was when they told me how much the autograph was going for, and that was $10,000 U.S., and that's when I went, you've got to be kidding me.
MACKINNON: Bob's main job in Japan is as a K-1 fighter, a sport that combines boxing, Asian martial arts, and kickboxing. Japanese fans love his dramatic fighting style, not only when he wins but also when he loses.
SAPP: (UNINTELLIGIBLE) the fights. I continue to do television shows and commercials and slot machines and alarm clocks in my image, and he's back training.
MACKINNON: And Bob sure is racking in the yen. With endless product endorsements -- talk shows -- and advertising contracts. Nothing seems beneath this mountain of a man.
(on camera): Beyond the usual t-shirts and action figures, the marketing potential here seems endless. Take this Bob Sapp mousepad, "The Beast" Apple Crunch, and even special Bob Sapp rice crackers.
So what is it about this guy that the Japanese just love so much? (voice-over): He's huge but he seems very gentle, says this housewife. He reminds me of a samurai, says this man. Bob speaks almost no Japanese. So he communicates mainly with facial expressions. And his life story does have universal appeal.
SAPP: I've suffered many, many ups and downs in my life, and so does everyone. And the thing is to always know, when it's down the only place you can go is up.
MACKINNON: From unemployed athlete to millionaire, Bob has certainly hit Japan's commercial jackpot. Rebecca MacKinnon, CNN, Tokyo.
DOBBS: Thanks for being with us. Tomorrow our series of special reports continues in conjunction with "The Economist" magazine. Capitalism and democracy: tomorrow, we take a look at free trade, whether it's really fair. We'll be joined by author and professor Francis Fukuyama of Johns Hopkins University. Former Defense Secretary William Cohen will also be here. We hope you will be too. For all of us here, good night from New York.
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