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LOU DOBBS TONIGHT

Terrorists Strike Middle East; Is America's Water Safe?

Aired August 19, 2003 - 18:00   ET

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

LOU DOBBS, CNN ANCHOR: Tonight: Terrorists explode a deadly truck bomb in front of the U.N. headquarters in Baghdad, killing the U.N. Iraq coordinator and 16 others -- a live report from Baghdad; 20 people are dead in Jerusalem after a bomb exploded on a downtown bus. Jerrold Kessel reports live from Jerusalem.
And tonight, a special report on this country's infrastructure, "Shaky Foundations." The water we drink, how safe is it and do we have enough?

And where should you be going to school? Tonight, the top colleges, the best in the nation academically and those that offer more fun and better food.

ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, August 19. Here now, Lou Dobbs.

DOBBS: Good evening.

Terrorists today killed 17 people in a bomb attack on the United Nations headquarters in Baghdad. At least 100 other people were wounded. That attack came hours before several members of the U.S. Congress were scheduled to visit that building. The explosion killed the United Nations' top official in Iraq, Sergio Vieira de Mello. He was trapped in the rubble for several hours before he died.

What you are about to see are pictures taken by a TV cameraman from the Japanese network NHK. In the videotape, you will see a news conference that is under way. It is followed by an explosion. The lights then go out and the NHK cameraman turns his camera and lights back on.

We begin our coverage with CNN's bureau chief in Baghdad, Jane Arraf -- Jane.

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: Lou, behind us, they have floodlit the almost destroyed remains of the front of the U.N. headquarters.

Now, that whole building, that whole facade of it looks almost as if it had been sliced with a knife. And that was the area where there were a lot of fatalities, where the U.N.'s special envoy died in the rubble. Right now -- I don't know if you can hear it, but there is heavy moving equipment behind us. The 2nd Armored Brigade has moved in and is moving big chunks of concrete to try to clear away some of that area. There is still one U.N. staff member missing. It's not clear to the U.N. people on the ground whether they've simply lost track of him or whether there is a possibility they could still be inside the wreckage there. But, in any case, there are no more rescue efforts going on tonight. That will have to wait until tomorrow -- Lou.

DOBBS: The lack of protection for the U.N. headquarters at that hotel, as I understand it, the United Nations had said they did not want a large U.S. presence of U.S. military around that building. Is that correct?

ARRAF: Well, that is generally the U.N. policy, that they really don't want to be associated in any way with the U.S. military, which is, of course, the occupying power.

They want to make clear, as they have all during their time here -- and they've been here for many, many years -- that they are engaged in humanitarian work and are not part of the military force. Now, they had been making a lot of security -- they had beefed up security quite a bit. This used to be a building -- and it's called the Canal Hotel, but in fact it's an office building. It started out as a hotel many years ago.

And they've done things like built a wall around it, moved the parking, so no one could bring in a car bomb laced with explosives. But this appears to have been a very well-planned attack. There is an access road here, down which the truck that was packed with explosives went. And the truck appears to have been parked right beneath the office of Sergio Vieira de Mello, the special envoy who was killed. It seems to have been painstakingly executed.

And no matter what you say about the security, whether it was a security breach or not -- and clearly it was, in some sense -- it still remains that the U.N. had made very clear that it couldn't be an armed fortress to the extent that military bases are.

DOBBS: There is no more respected U.N. official anywhere in the world. There was no more respected U.N. official in the world than Sergio Vieira de Mello. Is it at all clear at this point whether he was the object, the subject, of this attack?

ARRAF: He very well might have been the object of the attack, simply from where the truck bomb itself was placed. Now, it's unlikely he was the subject of the attack because of anything to do with his work, just that he was the highest ranking U.N. official here.

And, as you said, he was well respected by Iraqis in general. He was really quite amazing, in the sense that he traveled throughout this country to try to get to know it in the few months that he was here. And he was scheduled to leave in September. I went with him on one of those trips to Basra one of the hottest times in summer. And he kept being approached by people, ordinary Iraqis, who wanted things like jobs. One man wanted to know why he couldn't get a job as a translator at the U.N. And Vieira de Mello listened to him very patiently and gave him a very disarming answer. And he came across as completely genuine. He was somebody that Iraqis believed in, someone who didn't have a great deal of power here, because it is, of course, under U.S. and British occupation, but someone who had quite a lot of behind-the-scenes influence -- Lou.

DOBBS: Thank you very much, Jane Arraf, reporting from Baghdad.

President Bush today said, the civilized world will not be intimidated by terrorists. But the president did not announce any new initiative to deal with terrorist attacks in Iraq. Those attacks have now killed scores of civilians and 58 U.S. troops since the president declared the end of major combat operations on the 1st of May.

White House correspondent Suzanne Malveaux joins us now from near the president's ranch in Crawford, Texas -- Suzanne.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Lou, as can you imagine, it was a very difficult day for the Bush administration.

The president received word early in the morning. He was actually on the golf course when he got a call from his national security adviser, telling him of the bombing. He immediately went back to the Crawford ranch to get updates, as well as making phone calls to the U.S. civil administrator, Paul Bremer, as well as to U.N. Secretary General Kofi Annan, offering any type of assistance that the United States could give at that time. And the president, shortly afterwards, made a statement. He called it a challenge to the world -- a choice to the world to take on the terrorists.

He said that the terrorists were trying to test the will of the international community, but it would be the international community that would prevail. Now, as you know, there are at least 18 countries that have troops that have contributed to the U.S. peacekeeping effort inside of Iraq, also, United Nations heading up the bulk of the humanitarian assistance.

But President Bush really framed this attack as an attack against the Iraqi people. And again he called for help from the Iraqi people.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Iraqi people face a challenge and they face a choice. The terrorists want to return to the days of torture chambers and mass graves. The Iraqis who want peace and freedom must reject them and fight terror. And the United States and many in the world will be there to help them.

(END VIDEO CLIP)

MALVEAUX: Now, Lou, there is a debate that's taking place.

While some fear that this latest bombing will break up the international coalition working on the reconstruction efforts inside of Iraq, a senior administration official I spoke with late this evening said that -- he says there is so much outrage in the international community, he believes it will galvanize countries to get more involved, to work towards the reconstruction effort, as well as establishing a democracy inside of that country -- Lou.

DOBBS: Those are hopeful thoughts and words. But the fact is that the security of Baghdad is, for all intents and purposes, nonexistent. Did the president, any member of his staff, suggest that it was time for Ambassador Bremer, in charge of the administration's policies in Iraq, this administration, to take on a new tack in administering the rebuilding of Iraq and establishing security?

MALVEAUX: Well, one thing the administration did talk about is that there has been an increasing number of incidents of sabotage.

You're talking about sabotage attacking the water, the power plants, this bombing against the Jordanian Embassy, and now against the United Nations, that it really is a great challenge to the United States, but also that this is a time for not only the United Nations, but some of those countries that have been more reticent about getting involved, whether it's troops or whether or not it's with humanitarian assistance, that they step up to the plate, that they do get involved.

The administration is confident that, as it sees the situation on the ground now, they've not called for additional troops, but, rather, they are asking for additional assistance from other countries.

DOBBS: Suzanne, thank you very much -- Suzanne Malveaux reporting from near the president's ranch in Crawford, Texas. Thank you, Suzanne.

Today's attack was only the second time the terrorists have use a car or truck bomb in Iraq since the fall of Saddam Hussein. The employment of car and truck bombs demonstrates a level of expertise that perhaps would suggest the involvement of well-trained terrorists. Military and U.S. intelligence officials now believe those terrorists may well be al Qaeda.

Pentagon correspondent Barbara Starr has our report.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): It was the type of attack the U.S. military had already been fearing for days, the bombing of the United Nations compound increasing worries the war has shifted yet again and the U.S. is battling organized terrorists who are unveiling a wave of attacks against soft targets, facilities not heavily protected.

No one knows who is responsible for this attack, but there is growing evidence that postwar Iraq has become a magnet for terrorists.

PETER BERGEN, CNN TERRORISM ANALYST: Al Qaeda is in Iraq. And we're talking about something that's a pretty recent phenomenon. We're talking about people coming over from Saudi Arabia, over the Syrian-Iraqi border, into Iraq. STARR: U.S. officials say, an unknown number of foreign fighters continue to cross into Iraq. In early June, U.S. troops attacked a suspected terrorist training camp, killing a number of non-Iraqi fighters.

On August 7, a bombing at the Jordanian Embassy in Baghdad, more than a dozen killed, a top suspect, Ansar al-Islam, a radical group with ties to al Qaeda. That group has increased its operations in Iraq, say U.S. officials, some Shia clerics now calling for resistance against the coalition, if Shia forces join with the opposition, a new resistance challenge.

KENNETH POLLACK, CNN ANALYST: There are people inside of Iraq who really don't want the U.S. there. There are former members of Saddam's regime. There are Islamic fundamentalists. There are Sunni Arab tribesmen, all of whom don't want the Americans there, all of whom are taking shots at Americans, and all of whom who might make common cause with al Qaeda.

STARR: And this week, aggressive new sabotage attacks against water supplies and oil pipelines, another element in what U.S. officials believe is a campaign to turn the Iraqis against the coalition.

(END VIDEOTAPE)

STARR: And, Lou, so far, no change in U.S. military strategy, no call for more combat troops. But the Pentagon clearly hopes this attack will demonstrate that the terrorists have gone too far and that the Iraqi people will now turn and support the coalition -- Lou.

DOBBS: As I said to Suzanne Malveaux, our White House correspondent, Barbara, those are hopeful words and certainly a lot of people would share the sentiment.

But the fact is, to this point, this is not going well at all for the U.S. military, for Paul Bremer in Iraq, for the Pentagon the State Department. No suggestion whatsoever of a change of approach, strategy and management in Iraq?

STARR: Well, here is the problem they say they face.

As the opposition groups begin to attack these smaller, softer targets that are less well-protected, their feeling is, they can't possibly put enough troops on the ground, for example, to protect every building in Iraq, to protect every oil pipeline, every water main, every key infrastructure facility. That's a route they don't feel they can go down, because there simply aren't enough troops ever to do that type of job.

Their feeling here is, the long-term success still stands with putting an Iraqi face on the new government there, making the Iraqis more responsible for security at some of these key facilities, taking the U.S. military out of that picture eventually...

(CROSSTALK) STARR: ... less attacks on U.S. soldiers then.

DOBBS: Barbara, what is the suggestion there at the Pentagon about how much time the U.S. military, the U.S. administrator, the U.S. government, has in Iraq to start showing the Iraqi people real progress in rebuilding and establishing security?

STARR: Well, I think the question they're facing now today is quite an interesting one that they have no answer to. Is this attack a turning point in the war in Iraq? Will this be the one that convinces the Iraqi people that the coalition is there to help them? Will this lessen the opposition?

Because, of course, this attack is quite unique, quite different. This is an attack against the United Nations, which has operated in Iraq for many years, is well-known to the Iraqi people for its efforts, for better or worse, to provide nonpolitical humanitarian assistance to the Iraqi people. So the U.S. is clearly going to be watching very closely to see what the reaction is with the Iraqi people and what the next steps are that they feel they can take to put more of an Iraqi face on it.

But, so far, Lou, frankly, we've heard nothing about a change in strategy. And the bottom line here is, the U.S. -- the Bush administration still says they have no idea how long this will all take.

DOBBS: If disrupting the water supply to Baghdad and cutting off water to four million people cannot galvanize the people of Baghdad, it is, I think, probably in some quarters, difficult to see how an attack against the United Nations building within Baghdad could do so.

Barbara Starr, thank you very much.

Still ahead here: one of the deadliest days in three years in Jerusalem. Jerrold Kessel will have a live report for us from Jerusalem.

And sniper attacks: Police in West Virginia have several leads now. We'll have the latest for you on the investigation. Jeanne Meserve will report live.

America's "Shaky Foundations," our reports on this nation's infrastructure. Tonight, our drinking water, how safe is it? Is there enough? Casey Wian reports.

And Jack Hoffbuhr of the American Water Works Association joins us.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: My guest says al Qaeda is the leading suspect in the bombing of the United Nations headquarters in Baghdad today. CNN analyst Kenneth Pollack is director of research at the Saban Center for Middle East Policy and a senior fellow at the Brookings Institution. Ken is also the author of "The Threatening Storm: The Case For Invading Iraq."

Ken, good to have you with us.

POLLACK: Thanks, Lou. Good to be here.

DOBBS: One of principal premises of your book that provided much of the rationale for many in the attack against Saddam Hussein was that U.S. military power cannot be blunted or neutralized because of Saddam Hussein's regime. What is going on now with U.S. military power in the Middle East and the extension of our political power in the Middle East?

POLLACK: Well, this is the issue, Lou, is, we've got to be very careful about distinguishing between our unmatched conventional military capability and our ability to effect real change in the political and economic makeup of the region.

There is no question, we can topple any government we want to in the region. We can destroy any military we want to in the region. But it's very different to destroy a country's military and rebuild it as something new. And, unfortunately, what happened in Iraq was that the Bush administration recognized that the U.S. military could easily go in and wipe away Saddam Hussein's regime and his armed forces, but they weren't prepared for what was going to be necessary for what was always the much harder task of rebuilding Iraq as a stable and prosperous society.

DOBBS: Ken, the obvious question is, we have just watched the -- well, Sergio Vieira de Mello, well-liked, well-respected United Nations diplomat, perhaps the most respected diplomat in the entire United Nations, killed today in this bombing -- security breached again; 58 Americans have been killed there in hostile fire. More have died in accidents and otherwise in Iraq.

When in the world are we going to demonstrate the power of the United States and its capacity not only to destroy, but to build, to give these people something to lose?

POLLACK: Yes, Lou, it's the critical question out there. And I suspect that this event may be a watershed in a variety of ways.

And one of them may be that you may see the United Nations reacting to this in a way that I don't think the U.S. government necessarily expects. I think that you may see the United Nations coming to the U.S. after this and now demanding a greater role in the running of Iraq's occupation and reconstruction. So far, the U.N. has basically deferred to the U.S., which has insisted that, as the occupying power, the U.S. would call all of the shots.

Now, there are many U.N. members who have not been happy about that. And I think that now, with de Mello's death -- and you're absolutely right. De Mello was enormously respected all around the world as the one person who really knew what he was doing and might be able to pull this off. Now that he's been killed, you may see the U.N. come to the United States and saying: All right, if we're going to be there dying for this cause, you've got to give us a bigger say in how things are going to be run.

DOBBS: That, if I may say, Ken, resonates a bit with the suggestion on the part, apparently, of the administration that this may galvanize world opinion and that somehow an international cavalry reach into Iraq, run in with flags flying.

The fact is that this was a U.S.-led war. It is a war that toppled Saddam Hussein, his regime. It is the stated absolute purpose and goal of this administration that they would bring democracy, that they would rebuild Iraq. None of that is happening. And the point is, how long can we continue this without a change in strategy and a real commitment? Or, in point of fact, is there some reason to suspect a lack of sincerity in commitment on the part of this administration?

POLLACK: Well, honestly, Lou, I really don't feel comfortable speculating on exactly what the Bush administration is thinking.

I suspect that there are a range of different views within the Bush administration on this particular issue. But what I can say is that I think that it is becoming increasingly clear that the approach that they're taking, while it's enjoying some successes -- and you can't take that away from them -- there are some successes out there -- also isn't able to accomplish the bigger goals, like dealing with the security situation.

I think it's very clear that the 160,000 mostly American troops inside Iraq are just not enough to handle the security problems there. And the problem is, it's all well and good for the administration to say, well, we need to put an Iraqi face on it. But the simple fact is that the Iraqis are not going to be ready to contribute in a meaningful way to their security for many months, if not years. And if we can't put the troops in there -- and we need to remember, we just don't have too many more troops to put in there -- and the Iraqis can't do it, we're going to have to reach out to the international community.

And that's something the administration hasn't been willing to do, because the countries that can really provide troops, troops in the thousands and tens of thousands, have all done it insisting that the U.S. give up some control to the U.N.

DOBBS: The bombing today in Jerusalem, the bombing in Baghdad, one of the countries that has supported terrorism in various groups, the Syrians, we have not heard a word from this administration after intense saber rattling. Is there a role that Syria is playing in all of this?

POLLACK: Well, I think that there probably is a Syrian role certainly in what's going on in Israel. It's unclear how direct that is. I certainly have no evidence to suggest that they were directly complicit in today's attack in Jerusalem.

But, certainly, the Syrians do have an interest in not seeing the Israel/Palestinian negotiations reach fruition. The Syrian position has always been that they want Israel to sign a peace deal with them before they sign a deal with the Palestinians. As far as the attacks in Iraq, there is no real evidence that the Syrians are encouraging al Qaeda and other people to move into Iraq. It's just unclear how much they're impeding their movement.

But early on, they were clearly trying to play a little game with the United States on Iraq. President Bush read them the riot act. They seemed to have gotten a little bit better in terms of Iraq recently.

DOBBS: Let me ask you this. And the most succinct possible 10- word answer, if I can ask you to do that, Ken. Do you believe that the goal of democratizing the Middle East, as expressed by the president's national security adviser, as we began this -- the war against Saddam Hussein, is it achievable soon?

POLLACK: I think that it is achievable, probably not soon. I think it will take decades.

DOBBS: Ken Pollack, CNN analyst -- we thank you very much for being with us, Ken.

POLLACK: Thank you, Lou.

DOBBS: Tonight's quote is from Sergio Vieira de Mello, the top U.N. official in Iraq who was killed today. I talked with him on this program last May, just before he began the difficult task of bringing aid to the people of Iraq in the midst of continued unrest and violence.

This is what he said: "I think it will make our common task extremely difficult. Clearly, until such time as law and order has been restored, all the rest will remain very difficult and, in some areas, impossible. You know, that's a precondition for the rest to unfold. And I do hope," he said, "based on my own experience, that appropriate measures, urgent measures, will be taken to restore law and order, particularly in large urban centers such as Baghdad."

Sergio Vieira De Mello, United Nations special envoy to Iraq, today killed in Baghdad. He was 55 years old.

Death and destruction in Jerusalem as well today. A suicide bomber killed at least 18 people. More than 130 others were injured in the explosion. The suicide bomber blew himself up on a bus full of people returning home for prayers.

Jerrold Kessel is at the scene of that attack and joins us now live with a report -- Jerrold.

JERROLD KESSEL, CNN CORRESPONDENT: Lou, there have been oh so many of these suicide bombings in Israeli towns and Israeli cities. And you kind of get used to the scenes.

But this one was particularly gruesome, particularly devastating, particularly moving, perhaps because there were so many children on the bus, perhaps because it was people were coming home from prayers at the Western Wall of Judaism, a holy site, and heading here. And just inside this ultra-Orthodox neighborhood of Jerusalem, the Mea Shearim neighborhood, the ultra-religious are, where the bomber blew himself up, that's where the devastation and the death occurred.

And we do know that at least 18 people have been killed, more than 100 wounded. And many of those are fighting for their lives. Some of the dead are children. Some of the wounded and some of those who were seriously hurt are children. We're hearing heartrending stories all the time coming in of a baby in a hospital and they haven't found the parents yet and they haven't been able to find out whether the parents are alive.

The bus was absolutely packed as it headed here into this neighborhood from the Western Wall when the bomber blew himself up -- the bomber identified now as a 29-year-old man from Hebron on the West Bank. Islamic Jihad and Hamas, the two militant Islamic groups, are both claiming responsibility for this attack. But they say that they're still holding firm to the self-proclaimed cease-fire that they announced seven weeks ago.

They say this was only a revenge action for Israel's initiated actions which resulted in the killing of their people over the last several weeks. And that's what they told Mahmoud Abbas, the Palestinian prime minister, with whom they were meeting at the very time that the bomber struck here in Jerusalem aboard bus No. 2.

Be that as it may, Israel has declared that it has called off the talks tonight, of course, with Palestinian officials and suspended -- the word used is suspended -- the transfer of towns on the West Bank to Palestinian control.

Devastating human incident and possibly a devastating incident for the nascent peace process known as the road map -- Lou.

DOBBS: Jerrold Kessel, thank you very much, reporting live from Jerusalem.

In this country, police in West Virginia today said they have several solid leads in their investigation of three sniper attacks that left three people dead. Jeanne Meserve is in Charleston, West Virginia, and has the live report for us -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Lou, still no ballistics results that definitively link these three shootings and still no communication from anyone authorities believe is the sniper.

But today, the sheriff's department talked about a possible drug connection.

(BEGIN VIDEO CLIP)

PHIL MORRIS, CHARLESTON POLICE CHIEF: In this area, there is a lot of drugs that have been bought and sold. And the public here is concerned.

MESERVE: What kind of drugs are we talking about?

MORRIS: Methamphetamines.

(END VIDEO CLIP)

MESERVE: The area that the sheriff's -- police chief was talking about is Campbells Creek. One of the victims was shot there. Another victim grew up there. Authorities aren't saying if the third victim had any ties there.

They're also not speculating on whether any of these victims had ties to drugs. But the grandfather of one of them, Okey Meadows Jr., said his grandson was a fine young man.

(BEGIN VIDEO CLIP)

KENNETH TINSLEY, GRANDFATHER OF VICTIM: My grandson was a good boy. He never fooled with drugs, never drank, never smoked, and went to church.

(END VIDEO CLIP)

MESERVE: Some people close to this investigation say the dark truck that was spotted at one of the scenes is the most likely key to this case. Authorities report no progress on finding that -- Lou, back to you.

DOBBS: Jeanne, thank you very much -- Jeanne Meserve reporting from Charleston, West Virginia.

Coming up next here: California politics. The governor is now trying a new strategy. And his lieutenant is out on the campaign trail with a different strategy. Bob Franken will have the live report for us.

And this country's "Shaky Foundations." Our series of special reports on the nation's infrastructure continues tonight. We look at dangers to the national water supply.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: California Governor Gray Davis tonight will give his first speech responding to the recall that could remove him from office. Governor Davis is expected to take some responsibility for California's budget crisis.

Today his lieutenant governor, who hopes to replace Davis, outlined his plan to fix the deficit.

Bob Franken is live in Elk Grove, California, and has the latest for us -- Bob.

BOB FRANKEN, CNN CORRESPONDENT: And why Elk Grove is because it's outside the house of Cruz Bustamante, the lieutenant governor, who put out a plan that would erase the deficit he said, combining various tax increases and budget cuts, that type of thing, extra taxes on cigarettes and alcohol. He also gave very faint praise, very faint praise for his fellow Democrat. He claims that he is opposing the recall, but he's making it clear he is running very hard as the alternative to Gray Davis.

And meanwhile, the other candidates, of course, doing their thing. Gray Davis, the governor, is speaking tonight at UCLA. Expected to say there are lessons that are learned but that the recall is an effort to steal the last election. That speech that's going to occur this evening.

Meanwhile, Arnold Schwarzenegger has put out his first ads. He is holding a seminar tomorrow with his top advisers with George Schultz, the former secretary of state, and Warren Buffett, the now controversial financial expert. Then he's holding a news conference afterward amid complaints that up until now he hasn't really dealt with substantive issues.

And Bill Simon, who is an opponent of Schwarzenegger's, and for, that matter, Cruz Bustamante's, and, for that matter, Gray Davis. also put out ads today. He is saying that as the conservative, he is the person who could best turn the state around.

Lastly, there are some court cases we're watching. There is a ruling expected tomorrow by a federal district judge here where he will decide whether to delay the election. A hearing was held yesterday, Lou. A decision was promised by tomorrow. The judge saying he is aware there will be a certain appeal no matter what he rules -- Lou.

DOBBS: That decision on the ballots, in -- is it seven counties -- or six in California? By the same...

FRANKEN: Six that use...

DOBBS: I'm sorry.

FRANKEN: Go ahead. Six that use the punch card machines and anticipating what you were going to say, this is the judge who said that they needed to be replaced by the next election, which was in March. But he was saying that this was really a consent decree and that people should not rely too heavily on that ruling to see how he'll rule in this one.

DOBBS: There wouldn't be any thought of ruling that the election only a year ago that put Gray Davis in office as somehow illegal or inappropriate because they're the same punch cards, right?

FRANKEN: Well, as a matter of fact the judge made that point. For consistency, those who are opposing this election should have opposed that one. But the ones who are arguing that this one should be delayed, namely the ACLU, saying that would be constitutional chaos since all state offices were involved.

DOBBS: (LAUGHTER) FRANKEN: This one doesn't have quite the magnitude that that one did and therefore, the arguments are different.

DOBBS: It's obvious everyone in California wants to avoid chaos.

FRANKEN: (LAUGHTER)

DOBBS: Bob Franken, thank you very much tonight from Elk Grove, California.

Tomorrow we'll be joined by another prominent Republican and citizen of California who also hopes to replace Governor Gray Davis. Former baseball commissioner Peter Ueberroth will join us to talk about his plans and his views on how to fix California's economy and government. Please join us tomorrow night with Peter Ueberroth.

Still ahead here, America's "Shaky Foundations." Our series of special reports continues tonight. We look at dangers to our drinking water, our supplies of water. Casey Wian will report from Los Angeles.

And Jack Hoffbuhr, the executive director of the American Waterworks Association joins us.

And "Why Things Bite Back: Technology and the Revenge of Unintended Consequences." Edward Tenner, the author -- he join us to tell you why progress sometimes, its not all it's cracked up to be.

And top colleges, from parties to sports, even academics. Bill Tucker will tell us who's on top.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight we continue our series of special reports on this nation's infrastructure.

The water infrastructure is in serious need of repair. Some water pipes in this country are more than a century old. And as Casey Wian reports, many communities are struggling to find enough money to pay for needed repairs.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNNfn CORRESPONDENT (voice-over): In Augusta, Georgia this summer, public works officials repaired road cave-ins caused by rusted, decaying water mains. It's been happening for years. This 1995 break left a 15-foot deep crater and flooded homes.

UNIDENTIFIED MALE: This is devastating. It took us six to eight months to get straightened out the last couple of times.

WIAN: In California's Imperial Valley, so much water leaks out of the all-American canal into Mexico that Mexican farmers have become dependent on it to grow their crops. And in the Northeast, some water mains are more than a century old. The Environmental Protection Agency estimates fixing the nation's aging water infrastructure would cost between $200 billion and $500 billion more than is budgeted over the next two decades.

TRACY MEHAN, EPA/OFFICE OF WATER: It's clear we're falling behind. And in 20 years, we could be up to, say, 44 percent of our infrastructure being poor, very poor in terms of quality. So the time to act is now as a society so we avoid a really serious problem down the road.

WIAN: Americans now drink nearly $8 billion of bottled water annually. Per capita consumption has doubled since 1992, even though tap water quality has improved during that same time, according to the Natural Resources Defense Council. But it found more frequent temporary spikes in drinking water contaminants, an indication of poor infrastructure.

Water industry officials say the Clean Water and Safe Drinking Water Acts are partly to blame.

WILLIAM SCHATZ, WATER INFRASTRUCTURE NETWORK: We have continued to upgrade our facilities to meet these regulatory requirements. And what has happened is, because of the lack of sustainable federal funding, or any funding source, we have been unable to spend all of the dollars that need to be spent for these additional capital projects.

WIAN: Most of the money for water infrastructure improvements, like this water filtration plant under construction in Southern California, comes from the 70,000 local water treatment facilities and community water districts spread throughout the United States. Because of that decentralization, the nation's drinking water delivery system is not likely to suffer a catastrophic breakdown similar to last week's blackouts.

ANTON GARNIER, PRES. & CEO, SOUTHWEST WATER: When you produce an electronic electricity, it has to go to a -- it has to be delivered. It has to go to a customer. When we produce a gallon of water in the water industry . If it doesn't go to the customer, it can go to a reservoir such as behind me here and we can store it and use it at a later date.

WIAN: But without infrastructure improvements, local problems like this could become a familiar site.

(END VIDEOTAPE)

WIAN: Water industry officials say they need more federal money. But the EPA says water districts aren't charging customers enough, noting that most American households spend less for water than they do for soft drinks or cable TV -- Lou.

DOBBS: Casey, thank you very much. Casey Wian reporting from Los Angeles.

Well, our nation's water supply is the topic of tonight's poll. Tonight's question is, "Which do you and your family prefer? Tap water, filtered tap water, or bottled water?" Cast your vote at cnn.com/lou. We'll have the preliminary results later in the show.

And this week, we continue our report on the nation's infrastructure and earlier I talked about the issue with Jack Hoffbuhr, the executive director of the American Waterworks Association. We talked about how much money it's going to take to fix the country's water systems.

(BEGIN VIDEOTAPE)

JACK HOFFBUHR, EXECUTIVE DIRECTOR, AMERICAN WATER WORKS ASSOCIATION: Lou, we estimate that in the next 30 years, water utilities are going to have to invest in the neighborhood of $250 billion, and that's just to replace the aging mains that we have buried in our streets and all over our countryside. That does not include any improvements to treatment to account for increasing regulations, nor does it include any funds to expand the system to account for new population growth.

DOBBS: Obviously, that's very troubling. That's concerning, particularly at a time we have so many demands on budgets, both local, state and federal. Who is going to pay for it?

HOFFBUHR: Well, obviously, we are. The people are going to pay for it one way or another and I think we've got to remember that water, drinking water, is a huge bargain right now. On average, we're paying about $1.50 for 1,000 gallons of water in the United States, and...

DOBBS: If you don't bottle it.

HOFFBUHR: If you don't bottle it. That's correct. And that's far less than what people in Europe and other places pay for water, and we have got to value our water differently.

Water is valuable, as the people in Cleveland and Detroit found out this last weekend. When it's not there, then we realize the importance of it, and we've got to start making this investment so it will always be there.

DOBBS: So should the investment come in rate-payer dollars? Should it come in federal taxpayer dollars, state taxpayer dollars, or what?

HOFFBUHR: Well, I think -- and the association believes that this is the responsibility of the rate payers to pay for their own drinking water.

DOBBS: What about the issue between cities, suburbs, and rural areas in the country? Where does the burden fall most heavily?

HOFFBUHR: Well, right now, I'd say the burden falls most heavily probably on -- will fall most heavily probably on people in the core areas of some of our older cities. They've suffered population decline as much as 25 percent over the last couple of decades, and now there are fewer people to spread that cost of infrastructure replacement around on.

So they're going to pretty much feel a fairly large burden, and that's why I think that the federal government does need to invest some more in revolving loan funds that are already established so that -- to help out these cities as they come up against this bulge of having to replace their aging infrastructure.

(END VIDEOTAPE)

DOBBS: And when we continue, the revenge effect. Our next guest is the author of "Why Things Bite Back." And Edward Tenner says, technology sometimes brings with it unexpected, unintended consequences. Stay with us.

(COMMERCIAL BREAK)

DOBBS: My next guest says the next blackout could extend even farther than the last one. Edward Tenner is the author of the best selling book, "Why Things Bite Back: Technology and the Revenge of Unintended Consequences," and it is good to have you with us, Mr. Tenner.

EDWARD TENNER, AUTHOR: Thank you very much.

DOBBS: Bite back. About 50 million people were bitten just a few days ago. You talk about unintended consequences. We seem to have the most advanced systems in the world. We've got the most sophisticated technology. Why are things biting back?

TENNER: Well, it's because they're so advanced and so sophisticated. If we had simpler systems, there would be shorter blackouts and brownouts. Things would be less secure day-to-day, but we'd be unlikely to have something of this scope, which is the result of all of our safety precautions.

DOBBS: What happened to Six Sigma, to tolerance of zero for defects that we hear from the vaunted technologists and innovators of this country?

TENNER: The problem of the electrical grid is that it is the fundamental technology of them all, and yet it doesn't have that overall supervision that a lot of other critical technologies have. On an aircraft carrier, for example, every person knows their part and they're able to cope with great danger. But the trouble is that with an electrical grid, you have so many people and so many kinds of organizations that it's extremely hard to coordinate them.

DOBBS: Do you have a solution for us?

TENNER: Well, there are -- there is no one solution, but there are quite a few things that we can do. For example, on the demand side, there are lots of little things that people can do to save power, and that can actually make a critical difference in some cases. But I think mostly, it's a matter of working simultaneously on the system and on the human factor, have a system that's built so sturdily... DOBBS: You know, there is an old saying in business management, once you've got people involved, it's automatically screwed up. At some point, we're going to have problems if people are involved. What you're saying, technology is much the same answer.

TENNER: That's right. Neither one in itself will do the job, but you can reduce the risk by having both top-notch training for the people, and more attention to the way that the machines interact.

DOBBS: You've said that you think this next blackout could be even greater, far more extensive. Why?

TENNER: The risk is that every time there is a problem, the network is spread farther and farther to make it more reliable. Again, this is the fundamental source of these big blackouts, that we have spread the risk over a greater and greater area, and that makes it more secure day to day. But the more it spreads, the more riskier it will be.

DOBBS: Let's put you on the spot here as we conclude, Ed Tenner. Why things bite back. What do you think is the next big thing to bite us?

TENNER: I am not so sure that anybody can predict that. If we could predict it...

DOBBS: I know, but I thought we'd put you in an impossible position.

TENNER: Well, it is -- I would say probably that -- that the greatest risk that I see is a new epidemic, probably not related to terrorism, some emerging virus. We've already seen what AIDS can do. We've seen West Nile. So if I had one thing to be afraid of, it would be on the epidemiological side.

DOBBS: OK. I was thinking technology, and now you've reintroduced epidemiology.

TENNER: Oh, but that is a consequence of our world transportation system.

DOBBS: Absolutely. You're absolutely right. And I wasn't even thinking of it. And I -- Ed Tenner, it's good to have you with us.

TENNER: It's great to be here.

DOBBS: And let's hope your fears never, never materialize.

TENNER: I certainly hope I'm wrong.

DOBBS: Thank you, Ed Tenner.

TENNER: Thank you.

DOBBS: A reminder now to vote in our poll tonight. The question is, which do you and your family prefer, tap water, filtered tap water or bottled water? Cast your vote at cnn.com/lou, and we'll have the preliminary results in just a few minutes.

Still ahead, whether you're headed for college or about to send your child off, a new set of rankings should help you narrow the selection. From party schools to the best academics and athletics. Bill Tucker brings us up to date on academia. Stay with us.

(COMMERCIAL BREAK)

DOBBS: This weekend and over the next couple of weeks, tens of thousands of students will descent on college campuses all around the country.

For these students, the latest news from the Princeton Review is too late. But for high school seniors, the review is packed with things you might want to consider in making a choice of colleges.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNNfn CORRESPONDENT (voice-over): To party or not to party. That's only one of the questions.

If food is important, Bowdoin College in Maine wins. But if you're a tree-hugging vegetarian, Portland, Oregon is home to your school.

UNIDENTIFIED FEMALE: It's not about the rankings, it's about where you fit, so -- along with the ranking, I've always found the disclaimers.

TUCKER: The happiest students are at Depaul University in Chicago. The least happy can be found in Butte, Montana.

UNIDENTIFIED MALE" I think it was whether or not the university accommodated to students and, like, student life and whether they provided, you know, social activities and things like that.

TUCKER: Penn State ranked No. 1 as jock school and as the school where the most students played intramural sports. That's a sharp contrast from Emerson College in Boston, whose students don't play intramural sports and who are ranked the most likely to be targets for dodgeball practice.

ROBERT FRANEK, PRINCETON REVIEW: The mission statement for the book as well as for the ranking list is to provide a great resource for prospective college students and their families. So pretty much, soup to nuts, anything that you want to know about a particular school might be embarrassed or afraid to ask.

TUCKER: So back to the party question. The University of Colorado is the best party school. It's also the school where the students reported the least number of hours studied.

The most stone-cold sober school? Brigham Young, beating even the military academies for five years running. (END VIDEOTAPE)

TUCKER: And of course, there are the matter of academic to consider as well. And in case you're curious, Yale ranks No. 1 for the best overall academic experience. Harvard had to settle for having the second-best library, Lou.

DOBBS: Second best to whom?

TUCKER: Dickinson.

DOBBS: Dickinson. Well, there's a lot to quibble with in that report. So we'll begin the process another time. Bill tucker, thank you. Very helpful.

Children attending smaller or religious schools are less likely to abuse drugs and alcohol. That's according to a new study by Columbia University. The study also found the kids who are bored, stressed or who have extra money are more likely to smoke, drink or take drugs. The study concludes that the best thing parents can do to keep their kids clean is to stay involved in their lives and to know who the friends of their children really are.

When we continue, the preliminary results of tonight's poll. Also, some of your thoughts about our report this week. Christine Romans, of course, will have the market for us.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Coming up next, your e-mails, your thoughts about this nation's infrastructure. Who should be responsible for keeping this nation's power on and who should be held responsible for blackouts? That and a great deal more still ahead.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Preliminary results of tonight's poll. The question -- "Which do you and your family prefer?" Twenty-nine percent of you say tap water; 35 percent say filtered tap water; 37 percent say bottled water.

Well, on Wall Street today, blue chip and technology stocks rising. The Dow up 16 points. The Nasdaq rose 21.62. The S&P 500, up more than 2.5 points.

Christine Romans has the market for us -- Christine. It was a good day after all.

CHRISTINE ROMANS, CNNfn CORRESPONDENT: It really was. You know, it barely made it. But the Dow is up now to a 14 month high, up nine out of past 10 sessions. And the volume today was....

DOBBS: That's two 14-month highs in a row, isn't it?

ROMANS: Yes. And if it's up one point tomorrow, it will be another 14-month high.

There was a brief tumble after that bombing in Jerusalem. That was a problem in the middle of the day. But then the market clawed back into the close.

Second quarter earnings growth, Lou, still coming in strong. Almost all of the S&P 500 companies are reporting, earnings up almost 10 percent compared with a year ago, revenue up more than 7 percent. And the forecast for the third quarter -- this is the surprise -- it's been steadily rising, not falling, as we've been seeing in recent quarters. Third quarter profit growth now expected to be 14.2 percent, 21 percent for the fourth quarter.

Home Depot shares fell 8 percent after it said an accounting charge could trim its 2004 targets. And after the close, Hewlett- Packard reported revenue growth. But Carly Fiorina say the company should have done better.

Housing stocks today were among the best groups after housing starts in July reached a 17-year high.

And the bonds rallied today. Lou, Morgan Stanley told its clients to raise the market allocation in the portfolio. So -- also some (UNINTELLIGIBLE) quality into there. Those bombings rattled some investors today. No doubt about that. You saw that in the bonds.

DOBBS: And looking at those revenue numbers and earnings for the second quarter, that's very impressive.

ROMANS: It is. And the fact that the targets are being raised for the third quarter...

DOBBS: Oh, that's a little troubling. I look out there and I see your projections -- whose projections are these?

ROMANS: First Call. Thomson/First Call.

DOBBS: First Call -- 14 percent for the third quarter, 21 percent for the fourth?

ROMANS: Yes.

DOBBS: This is getting a little exuberant, isn't it?

ROMANS: Well, the financial is supposed to have a very good fourth quarter. We'll see if that follows through.

(CROSSTALK)

ROMANS: But just as estimates have risen about 1.5 points for the third quarter since June, so I mean, the estimates keep going up.

DOBBS: So you're standing by First Call's 21 percent? ROMANS: I'm standing by my reporting of First Call.

DOBBS: You got it (ph). Christine Romans, thank you very much.

Let's take a look now at your thoughts.

Joan of Waldport, Oregon wrote in to ask, "If the blackout is due to a grid problem, why does a government have to pay to reconstruct the grid? Did they not deregulate the utility and privatize the system? Should that not be the responsibility of the owners who will make the profit from the larger output of electricity?"

Good question.

Earl of Chicago writes, "Imagine what we could do by pumping a billion dollars a week into this problem. We need to look out for ourselves, and here's a good place to start."

William Bosch of Spokane, Washington, wrote in about our series of special reports on America's "Shaky Foundations," "Bush's huge tax cuts have done nothing to put people back to work," he says. "Let's cancel the tax cuts, put people to work fixing those 'Shaky Foundations.'"

Terence Curtis of San Jose, California, "Why is the government responsible for fixing everything? Corporate America is responsible. When it fails, tax corporate America to fix it. Stop taxing me for someone else's failings."

And John Bauman of Meriden, Connecticut said, "As we continue outsourcing our high tech jobs and the knowledge to make changes to software controls, one must wonder what we are saving. Companies are systematically replacing the American worker in order to lower the bottom line. But what dangers exist for us as a nation because of this?"

Send us your thoughts to loudobbs@cnn.com. We appreciate hearing from you.

That's our show for tonight. Thanks for being with us.

Tomorrow, in our series of special reports on this nation's infrastructure, we look at the condition and the safety of this nation's dams.

We'll be joined by California gubernatorial candidate, Peter Ueberroth.

For all of us here, good night from New York.

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