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Lou Dobbs Tonight

California Recall Court Challenge Fails; Baghdad Bombing Investigation Continues

Aired August 20, 2003 - 18:00   ET

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

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


LOU DOBBS, CNN ANCHOR: Tonight: Court challenges to the California recall fail. The judge says the election is on. Bob Franken reports.
In his first national television interview, Peter Ueberroth joins us tonight. The former Major League Baseball commissioner and head of the Los Angeles Olympics says he's the one to fix California.

Should we re-regulate our power utilities in this country? In our "Face Off" tonight, two sharply different views.

And the 10 Commandments, a controversy in Alabama over stone tablets and whether they are religious in nature or the foundation of Judeo-Christian law. The Supreme Court weighs in.

ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, August 20. Here now, Lou Dobbs.

DOBBS: Good evening.

U.S. officials tonight are saying there is a clear link between international terrorism and the massive truck bombing in Baghdad. The U.S. administrator in Iraq, Paul Bremer, said that attack is part of the global war on terror. Pentagon officials say a radical Islamist group linked to the al Qaeda is a top suspect in the attack. At least 17 people were killed, including the United Nations top envoy in Iraq, Sergio Vieira de Mello.

National security correspondent David Ensor reports from Washington -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, Lou, U.S. investigators have two main suspects in the U.N. bombing, the hard-line supporters of Saddam Hussein and Islamic groups like al Qaeda or Ansar al-Islam, as you mentioned.

For starters, FBI officials are saying that a large quantity of military-grade munitions were used, over 1,000 pounds. And that might suggest Saddam loyalists, who could have access to such weapons. But officials are saying that, in chaotic postwar Iraq, terrorist groups like the pro-al Qaeda Republican Ansar al-Islam could also have had access to this sort of weapon.

Now the FBI team is trying to figure out whether the driver of the truck carrying the bomb died in the blast or not. There have been reports that he did, quoting bystanders, but an FBI special agent told reporters he does not know of a reliable eyewitness on that question.

(BEGIN VIDEO CLIP)

TOM FUENTES, FBI: We are not certain yet whether the human remains belong to the driver of the truck or not. We'll be conducting chemical examinations of the components of the inside of the truck, including the foam padding from the driver's seat.

(END VIDEO CLIP)

ENSOR: Many observers say, if the FBI lab tests do show that it was a suicide attack, that would point to Islamic terrorists, since Saddam supporters do not have a history of suicide attacks to achieve mass casualties.

Experts are also saying, though, that Iraq has become a magnet for Islamic extremists from various countries, including Saudi Arabia, Egypt and others. Some defense officials are telling CNN tonight that master bomb-makers from al Qaeda, Hamas or Hezbollah may now be in Iraq. Investigators will closely examine what's left of the bomb's detonator for clues as to who made it -- Lou.

DOBBS: Ansar al-Islam, the radical Islamist organization, as you say, linked to al Qaeda, was, at least a good segment of it, decimated during the war against Saddam Hussein. Is there any indication of the strength of that group now in Iraq?

ENSOR: No clear indication, no, Lou. But there are some officials who suspect that some of the Ansar people who were up in that enclave in the north that the U.S. cleaned out during the war may have slipped into Iran and may now have slipped back into Iraq and could be involved in these attacks. That's just a theory.

There are other officials who tend to lean more towards the idea of Saddam loyalists. But either case could emerge. A lot depends -- in the analysis depends on whether or not the driver was a suicide bomber -- Lou.

DOBBS: David Ensor, thank you very much.

U.N. Secretary-General Kofi Annan today said, the United Nations will not be driven out of Iraq by terrorists. In Baghdad, rescuers today continued to search through the rubble for more victims of the explosion.

Ben Wedeman joins us now live with a report from Baghdad -- Ben.

BEN WEDEMAN, CNN CORRESPONDENT: Yes, Lou, those rescue workers are working as hard as they can under very difficult conditions, under extreme heat, to find if there are any survivors from this blast.

Today, however, all we saw was one body removed from the ruins. Now, according to U.N. officials, they believe that there are still several people inside the ruins. They don't want to say at this point whether they think they are dead or alive. They do believe that, at this point, the death toll from the blast yesterday will exceed 20. Also, and about 100 people were wounded in this attack as well, some of them, U.N. employees, arrived in Jordan today, flown there for continued medical care there. Now, the investigation, which, of course, is being led by the U.S. Federal Bureau of Investigation, they found car parts -- or truck parts, rather -- that they believe were part of the vehicle that delivered this bomb to the U.N. headquarters yesterday afternoon, Baghdad time.

According to the chief FBI investigator, that bomb was as much as half a ton in weight, containing explosives that were culled from old armaments, grenades, artillery rounds, as well as one aircraft bomb that weighed as much as 500 pounds. Now, investigators here on the ground, in fact, are shying away from speculating about who might be behind the bombing. The chief American official here, Paul Bremer, saying it could be foreign fighters.

And many Iraqis we spoke to in Baghdad today say that they would seem to -- believe the same thing, saying that Iraqis would not go after the sort of organization that provided the food aid and facilities that allowed them to survive more than 12 years of U.N.- imposed sanctions -- Lou.

DOBBS: Ben, in Baghdad itself, is there an indication today of higher security, greater effort to maintain law and order there on the part of U.S. troops?

WEDEMAN: There certainly is.

For instance, just to get to this hotel, the Palestine Hotel, we've seen much more stringent searches and checks of vehicles. Outside the ruined U.N. headquarters, the Americans are now putting up concrete barriers. One might say that's a bit too late. But, certainly, there is a much more heightened sense of the need for more security.

We know, for instance, the World Bank has suspended its operations in Iraq because of security concerns. We understand that, across the board, all nongovernmental international organizations are reviewing their security measures, just so this sort of thing doesn't happen again to them -- Lou.

DOBBS: Ben, thank you very much -- Ben Wedeman reporting from Baghdad.

Defense Secretary Donald Rumsfeld today said, no more U.S. troops are required in Iraq at the moment. The defense secretary made his comments during a visit to Honduras. The Pentagon is under rising pressure to increase the size of the military in Iraq.

Today, Senator Kay Bailey Hutchison said the United States definitely more troops or fewer missions.

Pentagon correspondent Barbara Starr has the report -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Lou, the day after the bombing in Baghdad, no indication, as you say, that the administration is about to change its policy, no indication that more U.S. troops will be on their way to Iraq any time soon.

Indeed, traveling in Honduras, Defense Secretary Donald Rumsfeld gave every indication the administration is going to stick with its current plan.

Here's a bit of what he had to say.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: I spoke with the deputy secretary of defense this morning. He had just completed a call with the military commanders in Iraq. And they reiterated their belief that the size of the forces in Iraq is appropriate today. And I would just simply reiterate the fact that the president has said we'll have whatever forces are necessary to get the job done.

(END VIDEO CLIP)

STARR: Lou, the administration believes it is just not possible to put enough troops on the ground to thoroughly protect everything in Iraq, every building, every mile of oil pipeline, every key infrastructure. They just don't think that's the answer. So their plan remains to put what you would call an Iraqi face on the operation.

There are several aspects to that, of course. They're looking for a police force of 40,000 officers. Some more than 30,000 are now on duty, 6,500 in Baghdad alone. The question, of course, how effective can they be? There is another element to the Iraqi face on security. That's a civil defense force and additional forces to help with security and protection of key infrastructure.

A key question there, will those people be scared off by the attacks? Will they want to do the job? Will more Iraqis seek to work in this security arena? So no change in U.S. policy, other than to keep moving ahead on that front, but perhaps, we are told, in the next several days, a beefed-up effort by the administration to try and work with the international community to get more coalition forces on the ground in Iraq beyond the 20,000 or so that are currently there -- Lou.

DOBBS: Barbara, if it is the position of the administrator in Iraq and the defense secretary in this administration that more troops will not be helpful to establishing law and order, why will it be helpful to bring in coalition troops, rather than American troops?

STARR: Well, what they want to do at this point is not necessarily bring in more troops, but broaden the international face. If they get more coalition troops, it is possible, in the future, that would lead to downsizing the number of U.S. forces.

The point right now is, there's about 140,000 U.S. troops, about 20,000 coalition forces. So the occupation force, if you will, really has an American face on it. The feeling is, that is drawing some of the opposition in Iraq from opposition groups. What their hope is -- they don't know if it will work, but their hope is, if they get more coalition forces, more non-U.S. troops, there will be less of an American face on the occupation, plus the Iraqi face on domestic security, and perhaps that this will lead to a reduction in the attacks in Iraq.

Remains to be seen, Lou, if it works, but that's the plan they're going with.

DOBBS: As you say, it remains to be seen whether it would work. And the logic is, at the very least, interesting.

Barbara Starr, thank you very much, reporting from the Pentagon.

Tomorrow here, we'll be talking about the size of our armed forces in Iraq, our armed forces, in fact, around the world, and whether there are enough men and women in uniform to fight the global war on terror. We'll be talking with one of the leading advocates of raising the number of forces, Senator Kay Bailey Hutchison of Texas.

The number of troops, U.S. troops, in Iraq is the topic of our poll tonight. The question: Should the United States send more troops to Iraq to establish law and order, yes or no? Please cast your vote at CNN.com/Lou. We'll have the results later in the show.

The White House today said President Bush did not mislead the American people when he said, major combat in Iraq was over. Hostile fire has now killed 60 soldiers since that announcement on the 1st of May. Today, gunmen killed a U.S. citizen working as a translator. Another soldier was killed in an accident after terrorists attacked their convoy.

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

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Lou, President Bush met with his national security team through a video conference call at his Crawford ranch earlier today, on that call, very significant, the U.S. civil administrator inside of Iraq, Paul Bremer, as well as General Abizaid, the head of Central Command, to talk strategy.

Now, I've been speaking with White House officials. And senior administration officials are talking about strategy. They're ruling out a couple of things. First of all, as Barbara had mentioned before, there's absolutely no talk of increasing U.S. troops on the ground, boots on the ground, inside of Iraq. Also, however, there is no talk of actually expanding the U.N. role inside of Iraq. There had been some discussion about whether or not there should be some sort of U.N. mandate at least giving the blessing for a peacekeeping force.

Well, senior U.S. administration officials say that the security, the peacekeeping effort, will stay under the auspices of the United States. The strategy that does seem to be emerging, however, is really putting more focus, more responsibility on the Iraqi people, calling for them to take a greater role in civil security matters. And the Bush administration was quite defensive in reacting to some of the criticism, particularly from Democrats, that it did not and is not prepared for the danger ahead and that it did not prepare the American people as well.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: We've been very straightforward about where we are in terms of the theater in Iraq. Again, this is one of the theaters in the war on terrorism in Iraq. And the president was very clear that major combat operations were over.

He did not say that the fighting was over, by any means. That fighting continues. And I think that yesterday's attack crystallizes the true nature of terrorism for the world to see.

(END VIDEO CLIP)

MALVEAUX: And, of course, Lou, the big gamble here is whether or not the Bush administration can really hold on to the international support. We've heard from a lot of leaders throughout the day, talking about -- really condemning this attack against the United Nations. But what really is going to be the true test is whether or not those countries are going to remain involved, remain engaged, inside of the country for the long term when it comes to Iraqi reconstruction -- Lou.

DOBBS: Suzanne, the president, as you said, on May 1, made the statement about major combat operations. But also, on that day, as he landed on that aircraft carrier, there's a big banner, as you can see and our viewers can see. It said "Mission accomplished" as the president set down in the aircraft on the decks of the Lincoln.

How much of a problem is that for the president, because the mission is far from accomplished, it looks like, at this point?

MALVEAUX: One of the major concerns that White House aides actually had right before that day coming up to that speech was just what was the president going to say. They had conversations about this.

And, of course, the debate was whether or not they were going to say the war was over or major combat operations essentially had come to a conclusion. They decided on major combat operations as opposed to saying the war was over, specifically because of that concern that there might be additional attacks and that Americans would turn to the president, turn to the administration and say: Hey, we thought this was over. You said that the war was over.

It was clear that they thought and that they needed to change the language in that way, because it may not be over, that the administration recognizes that there are continuous dangers and there will continually be dangers along the way. That's something that they were aware of for quite some time.

DOBBS: And, Suzanne, is there, amongst the staff of the White House, the president's advisers, some concern about the fact that, in Iraq, whatever else the judgment is, aside from all of the politics, in almost three months since the end of major combat operations, as the president put it, the effort to rebuild Iraq is, at the very least, a disappointment. Is that now becoming a primary concern for the staff of the White House?

MALVEAUX: Well, what it is becoming a concern about is that, of course, this is going to become a very political issue. The Democrats have already seized on what has happened so far. And this is well going to play out into the election season. This is something that's not going to go away any time soon.

DOBBS: And that deadly bombing in Jerusalem yesterday. The president talked with Prime Minister Ariel Sharon today of Israel. Any suggestions about the influence on the Mideast process, the road map negotiations?

MALVEAUX: Well, what really is significant here is that, yes, he did speak with Israeli Prime Minister Ariel Sharon, but who he didn't speak with is the Palestinian leader Mahmoud Abbas. That is notable, because he used his surrogates, Secretary Powell, as well against national security adviser, to have those type of discussions.

Clearly, from the Bush administration, there's a lot of pressure now that is being put on the Palestinian Authority to act immediately and try not only to enforce the cease-fire, but also to dismantle these terrorist organizations. That's where all the pressure is being put on now. We have John Wolf, who is back in the region -- he is the U.S. ambassador -- really trying to jump-start those talks again. And so far, it is very much unclear whether or not the Israelis and Palestinians will be speaking any time in the future.

But the Bush administration is really focusing now on the responsibility of the Palestinian Authority to dismantle those terrorist groups. White House officials -- State Department officials coming out today saying that they are clearly not doing enough -- Lou.

DOBBS: Suzanne, thank you very much -- White House correspondent Suzanne Malveaux.

Still ahead here tonight: Governor Gray Davis says Republicans are trying to steal his office. But Davis' biggest opponent could be his own record. Bob Franken will have a live report for us from Los Angeles.

And other states of discontent. Gray Davis is certainly not alone, nor California, when it comes to unpopular governors and disgruntled voters. Peter Viles reports.

And to re-regulate or not? That's the question in tonight's "Face Off." What could prevent another massive power failure?

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Developments galore today in the California recall. Candidate Arnold Schwarzenegger gave his first speech on plans to fix California. Some even called it an economic summit. And a federal judge made a key ruling on the timing of the election.

Bob Franken is live in Los Angeles and has the report for us -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Where do we start, Lou?

Well, let's start with the federal judge and the fact that his ruling today means that, at least for now, this election goes on full- tilt, heading toward October 7, is the election date. He turned down an American Civil Liberties Union request to delay it because six of the most populous counties still use the discredited punch card ballots, saying that there is an overwhelming interest and, in this case, an unprecedented exercise of public sentiment, therefore, a strong public interest in promptly determining whether a particular elected official should remain in office.

And, of course, that elected official is Governor Gray Davis, who has taken to the offensive a little bit, telling various audiences that, yes, he made mistakes, but the Republicans are trying to steal the election.

Now, among the Republicans who is in fact trying to become governor, of course, is the one that's caused all this interest, Arnold Schwarzenegger, who held, as you pointed out, his economic summit today, complete with financial advisers, including Warren Buffett. You're seeing him in a campaign commercial here. But the summit today included Warren Buffett, his now controversial investment guru/adviser, along with his less controversial former secretary of state adviser George Shultz.

The summit produced no specifics, except that Schwarzenegger did tell reporters that whatever plan he comes up with will not include cutbacks on education, will include some cuts to the state budget, would not include any tax increases. Did that mean he was saying no tax cuts ever? He said, you never say never. So that's what Arnold Schwarzenegger was not saying today.

Peter Ueberroth had his own news conference to announce his specifics. The most notable one, Lou, was a pledge that he would come up with a tax amnesty program. In other words, people would not be prosecuted for their tax delinquencies if they paid up. He said that could bring up $5 billion to $6 billion. But it is kind of a staggering problem in this state. They're facing at least an $8 billion deficit -- Lou.

DOBBS: Bob, thank you very much -- Bob Franken from Los Angeles.

Later tonight, Republican candidate for California governor Peter Ueberroth will be joining us. Tonight will be his first nationally televised interview since he announced his candidacy for the top job in California.

Gray Davis is not the only governor who has fallen out of favor with voters. Financial and personal crises have put several other governor on the outs as well.

Peter Viles reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Now, Gray Davis has a ton of problems, but here's what he never had, never had to apologize for cheating on his wife.

GOV. PAUL PATTON (D), KENTUCKY: I now apologize to the people of Kentucky and ask for your forgiveness. And I do believe that now I am on the right path.

VILES: That's Kentucky Governor Paul Patton. And this is ex- mistress, Tina Conner. She spilled state secrets on "Dr. Phil," dished the dirt on live TV back home, even sued the governor after the affair ended.

TINA CONNER, HAD AFFAIR WITH GOVERNOR PATTON: I feel very guilty and embarrassed about the whole situation.

VILES: Other governors in trouble, Bob Wise, West Virginia same issue, cheating on his wife.

GOV. BOB WISE (D), WEST VIRGINIA: More than a month ago, I had to tell my family the most painful thing I could ever imagine doing. I had to tell them that I had been unfaithful in my marital relationship. And I told them that.

VILES: Patton gave up plans to run for the U.S. Senate and Wise will not run for reelection.

STUART ROTHENBERG, CNN POLITICAL ANALYST: Maybe you can get away with that in some states or parts of this country, but you can't in Kentucky and West Virginia.

VILES: Elsewhere, the big problem is money. Alabama, Bob Riley, elected as a Reagan conservative, then angered his party by pushing the biggest tax increase in Alabama history.

GOV. BOB RILEY (R), ALABAMA: When Ronald Reagan was first elected governor of California, he faced a similar crisis. When asked why he was raising taxes, he replied, "Because I have no other choice." Neither do we.

VILES: In New Jersey, Democrat Jim McGreevey also off to a very shaky start.

LARRY SABATO, UVA CENTER FOR POLITICS: Probably the best comparison to Gray Davis is Governor Jim McGreevey in New Jersey. He was elected in a massive landslide in 2001 and, within a few months, had become unpopular for lots of different reasons, but mainly because of a bad economy.

VILES: Young Republicans in New Jersey have started a movement to recall McGreevey. They want to draft Bruce Willis to run for governor.

(END VIDEOTAPE)

VILES: Times so tough for governor right now, there's a joke making the rounds first told by Arkansas Governor Mike Huckabee. He told newly elected governors, the smartest thing they could do, first, demand a recount and then hope that it shows that you actually lost -- Lou.

DOBBS: Bruce Willis has got to be getting a little nervous right now. Governor Riley in Alabama, he has a remarkable resemblance to the governor and president that he quoted.

VILES: Not by a chance. He models himself after the president. His campaign literature showed him atop of a horse, very Reaganesque pose. He has Reagan on his desk. And he is pushing what is eight times bigger than the previous largest tax increase in Alabama history.

DOBBS: Some might call that political courage. Others would probably have a different expression.

Pete, thanks very much -- Peter Viles.

Still ahead here: Church and state converge, a free speech fight in Alabama tonight. Fredricka Whitfield will have a live report for us from Montgomery.

And new information tonight has police hunting a single sniper. Jeanne Meserve will have a live report for us with the very latest from West Virginia.

Our special report tonight on the shabby state of this country's infrastructure. Jan Hopkins reports tonight on dams in danger.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: New developments tonight in the West Virginia sniper case. Police say the shootings were not random, that the same gun was used in at least two of the murders. They may also have found a link between the three killings.

Jeanne Meserve joins us from Charleston, West Virginia, with the very latest -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Lou, sources inside the investigation tell CNN's Art Harris that they're working on a composite drawing of a man seen near the scene of one of the shootings.

Now, separate sources tell me that he was not seen at the Speedway in Campbells Creek on the night of the shooting. Rather, he was seen several times in the days leading up to the shooting standing near a truck that meets the description of the one authorities are looking for. He's described as being 6 feet tall, trim and with a beard. Now, there was a description of a heavyset man at a separate shooting scene. A composite of that individual, sources say, has already been done. Meanwhile, word that two of the shootings, those two that took place the same night, have been definitively linked.

(BEGIN VIDEO CLIP)

DAVE TUCKER, KANAWHA COUNTY SHERIFF: The most important thing, the ballistics test has concluded that the bullets that killed Okey Meadows and Jeanie Patton came from the same type firearm, that being a .22-caliber, probably fired from a rifle.

(END VIDEO CLIP)

MESERVE: Authorities today put out an animation of the kind of truck they're looking for. It's a Ford F-150 with an extended cab in a dark color. They say witnesses have now placed a truck like that at two of the shooting scenes.

There was a third shooting. In fact, it was the first shooting here in the city of Charleston. The police chief here in the city says that neither witnesses, nor surveillance tapes have placed the truck at that shooting scene. And ballistics that might or might not link that shooting to the others have still not come back -- Lou, back to you.

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

Tonight in Alabama, tensions are running high. Several people have gathered at the entrance of the state judicial building in Montgomery. They've vowed to block any effort to remove a 10 Commandments monument located there. That monument is a source of controversy that today made its way to the U.S. Supreme Court.

Fredricka Whitfield is in Montgomery and has the story for us -- Fredricka.

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello to you, Lou.

This Alabama judicial building has been a place, a very passionate gathering all day. You can see behind me a few dozen people. Some coming from as far away as California, Kansas and various parts of the deep south. Coming here because they feel very strongly either for what the chief justice has done here or they feel very strongly against what he's done.

Chief Justice Roy Moore two years ago put in place a 2 1/2 ton granite display of the ten commandments inside this building. He has felt very strongly that the state law upholds his right to be able to do so. As a man of the law, he says he must acknowledge God. However, a federal district court has ruled that this is a violation of church and state, that in fact, it is unconstitutional, ordering him to remove the statue by midnight.

To the end, the judge has held his ground. He said that he will take this fight all the way to the top, which is what he did. He took this case to the U.S. Supreme Court. Earlier today the Supreme Court denied his motion. However, earlier today, he made it very clear that he is staying his ground.

(BEGIN VIDEO CLIP)

CHIEF JUSTICE ROY MOORE, ALABAMA SUPREME COURT: The question is, can the federal courts come into the state of Alabama and threaten fines to release our inalienable rights? Are we willing to give up the fact that God gave us our rights of life, liberty and the pursuit of happiness. You see you've got to remember Soledad, it is not about a monument, it is about the fundamental acknowledgment of God of upon which this nation is founded.

(END VIDEO CLIP)

WHITFIELD: Now, what you can't see -- while you see the folks gathering outside, there are also a couple dozen folks who are inside holding prayer around the statue. Well, very quietly, very calmly, the police there tried to send the message to them, it was time to close the building, time to leave. Many of them refused, risking arrest. And so indeed the police then placed the handcuffs around many of them, carting them off, arresting them for refusing to leave the building -- Lou.

DOBBS: Fredricka, any sign at all that there's a compromise in the offing here, that Justice Moore will relent?

WHITFIELD: It's not likely that there is a compromise because really the judge has already used up all of his ammunition. He's no longer going to get the Supreme Court backing. And at this point now, even plaintiffs involved in the three lawsuits against him are now hoping to file a contempt of law complaint tomorrow. And it's likely as early as Friday there just might be a hearing involving the judge.

DOBBS: Does the justice have popular support, or is the public in Alabama against him on this issue?

WHITFIELD: It's pretty close to 50-50. We are talking about the bible belt. We went out and talked to quite a few folks over lunch today and throughout this city, many of whom see where the judge is coming from and they believe that the state constitution supports exactly what he's doing. And they feel that the law here should be supported by a reference to the ten commandments.

And then you've got the other half who say they don't want the ten commandments -- or any representation of religion to be in a federal court building such as this one.

DOBBS: Fredricka, thank you. Fredricka Whitfield from Montgomery, Alabama.

The thunderstorms that pounded Las Vegas yesterday may not have been of biblical proportions, but they certainly produced flash floods that had some people praying for help. What you are looking at are those floods. This woman was rescued from the top of her floating car where she spent several anxious moments.

The storms dumped three inches of rain on the Northwestern part of Las Vegas in just an hour and a half. That knocked out power to thousands. But the Las Vegas casinos, should you be concerned, well, they were unaffected.

When we continue, dams on the brink. Thousands of this country's dams are in danger of utter failure. Lives are in danger. Jan Hopkins reports.

And energy deregulation. Should we reregulate to stave off another massive power failure? Two leading experts on the issue will face off tonight?

And he led Major League Baseball out of its slump. He put on the most profitable Olympics ever. He hopes to lead California to brighter days, Peter Uberroth is running for governor. He's our guest. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight we continue our series of Special Reports on this country's infrastructure. There are literally thousands of dams in this country and the condition of many of them is deteriorating. The lives of millions of people living downstream could well be in danger. Making needed repairs to those dams will run into the billions of dollars. Jan Hopkins has the report.

(BEGIN VIDEOTAPE)

JAN HOPKINS, CNN CORRESPONDENT (voice-over): Heavy rains this summer in North Carolina led to 16 dam failures. No one was killed, but evacuations were necessary. Also this summer, a dam collapsed releasing an 8 billion gallon torrent of water on Marquette, Michigan. It caused $100 million in damage and 2,000 people to be evacuated.

In all there have been 21 reported dam failures in last two years. There are about 78,000 dams across the country. 2600 of them considered unsafe. It would cost $10 billion to make them safe.

BRAD IAROSSI, AMERICAN SOC. OF CIVIL ENGINEERS: Currently at least a third of the nation's 78,000 dams are 50 years old or older. By the time 2020 rolls around, 85 percent or greater of the dams will be 50 years or older. These dams are aging, they're deteriorating.

HOPKINS: But dam repair doesn't make it to the top of the list when it comes to determine state budgets. That's because it's hard to see when a dam needs to be fixed until it is too late.

LORI SPAGENS, ASSN. STATE DAM SAFETY OFFICIALS: People don't think it is an attractive topic. It is not high profile. So we're having a hard time getting their attention to make them realize that these are real problems that are going to affect people across the nation if these dams don't get fixed.

HOPKINS: With a need for more space for housing, more and more people have moved downstream from dams. And sometimes they discover that fact the hard way. In New Jersey, during Hurricane Floyd, water released from a dam up river flooded this area causing $60 million damage to over 1,000 homes.

The flood has galvanized residents and their representatives. New Jersey is now asking voters to approve a $200 million bond issue to help repair dams and control floods.

JOSEPH CONIGLIO, NEW JERSEY STATE SENATE: There were 47 dams that need immediate repair. In the state of New Jersey, there's 187 dams that they consider high hazard which will also need to be repaired over a period of time.

HOPKINS: National groups awaiting for leadership from the federal government. They would at least like a loan program to help dam owners pay for repairs. They would also like the Department of Homeland Security to recognize dam safety as a national security issue.

(END VIDEOTAPE)

HOPKINS: If you repaired all of the 78,000 dams in this country, the price tag would reach $36 billion. Because so much work needs to be done the Society of Civil Engineers gives our dams a grade of D -- Lou.

DOBBS: Lives in danger? Where?

HOPKINS: New Jersey, for example. There are two dams near where you live that are in need of repair and could cause deaths to people if they broke.

DOBBS: Okay. Jan, thank you very much. Jan Hopkins.

Tonight's thought, which applies to this country's failing infrastructure "that which is common to the greatest number has the least care bestowed upon it." That from Aristotle and a thought that we new not like to extrapolate upon for many years to come.

When we continue, face-off power politics. Is deregulation to blame for the power blackout or is it the wave of the future. Two opposing view points.

(COMMERCIAL BREAK)

DOBBS: As U.S. and Canadian officials try to discover the cause of last week's massive power failure, speculation about exactly what went wrong is well under way. Some appointed to utility deregulation as the culprit. Others say a mechanical breakdown is to blame. That brings us to the subject of tonight's face-off.

Branko Turzig, is the Director of Regulatory Services of Deloitte and Touche, former member of the national Energy Regulatory Commission who says power failure has nothing to do with competition.

David Freeman meanwhile says regulated markets worked for years. Why change a good thing? He's the chairman of California's Consumer Power Financing Authority. Thank you both for being with us. Let me turn, if I may, to you, Mr. Freeman. Deregulation has worked for some time. Do you really believe that it's at the heart of what happened in this blackout?

DAVID FREEMAN, CHAIRMAN, CA. POWER AUTHORITY: Well, it worked very badly here in California. I ran the Los Angeles Department of Water and Power and you can ask the businessmen in Los Angeles whether they're happy that we stayed out of it. We did. We didn't have any blackouts. Our rates are stable. The experiment kind of exploded here in California, and I don't know that it's done any good anywhere else.

The -- this blackout occurred in large part because we're moving electricity over a system that wasn't designed for a deregulated market. It is not beefed up to where it can flow anywhere safely. You have to expect that there will be mechanical problems. Equipment can go -- you've got to be two accidents or three accidents away from a blackout. I've run utility system, but what we have done is put the cart before the horse. We've got deregulation in large powerful before we've built the power system to accommodate them.

DOBBS: Mr. Turzic, do you disagree?

BRANKO TERZIC, DIR. GLOBAL ENERGY RESOURCES GRP. DELOITTE AND TOUCHE: Well, I do disagree. California is not an example of anything having to do with deregulation with respect to the electric transmission grid. The transmission grid which failed in this case is fully regulated. It has always been fully regulated. Today's Wall Street Journal, Nobel Prize winner Vernon Smith says California only proves that when you design a market badly, it works badly.

So the misnomer deregulation really refers to the introduction of competition in generation. And Los Angeles power district sold power and made a lot of money into that market. So we think that's a good thing. Competition works.

FREEMAN: We did not go into the deregulation, that was a decision that I made that saved the city from getting into the blackout, being gouged business. What you ignore is that this deregulation phenomenon was promoted by FERC, the market design that we filed was approved by FERC. Certainly California went into it on its own initiative as a big fat mistake. It was designed and paraded as saving 20 percent and ended up with the rates going up 40 percent.

You know, the one thing that united Republicans and Democrats in California for a while was our anger toward FERC and our anger toward the gougers that took $27 billion away from us.

TERZIC: Let's correct some things here. The FERC did not deregulate anywhere in the country. The 1992 Energy Policy Act passed by Congress opened up the transmission grid. The FERC never ordered competition. As a matter of fact, the '92 policy act prohibits the FERC from using any of its authority to have retail competition. California chose retail competition on its own. The California Commission, the California Legislature, the California Congressional Delegation told the FERC, approve the design the way we did it here in California.

DOBBS: Let me ask you both, gentlemen, from your obviously different and opposing viewpoints on the issue. The transmission grid, the regional grids around the country, we are being told by a number of people that further failure is to be expected. The American people are going to have to pay for that improvement in the grid regionally and nationally. Should they do so as rate payers or should they do so as taxpayers? If tax payers, as federal taxpayer or state and local? I'll ask you first Mr. Freeman.

FREEMAN: The consumers pay for everything. And the rate payers ought to pay for everything that goes into the cost of electricity. I don't think that's an item of great debate. The real issue is who's going to be responsible for beefing up these transmission grids so they can accommodate these wild and unpredictable flows of power caused by deregulation. The deregulation folks just got the cart before the horse.

DOBBS: What do you say, Mr. Terzig?

TERZIC: Well, there's been no evidence that the cause of this blackout had anything to do with deregulation. We'll let the engineers, my fellow engineers, find out what the cause was. If it was a mechanical cause, we'll find out what it costs to fix it. If it was an operational cause, we'll improve operation. If it was human error, we'll going to have to train the operators better. But let's find out what the cause is on the transmission...

DOBBS: You will admit, we've got an estimated 50 million people affected by this blackout. A little unrealistic to go RTO, by utility, by transmission provider across that region and say, would you please think about improving things. It has got to come down to somebody making a decision to do so.

TERZIC: And authorities have that. I was the state commissioner in Wisconsin. Every one of those state commissioners in all the states affected has control over the transmission grid in their state when it comes to investment.

FREEMAN: But they don't have control over cascading power coming from elsewhere and knocking out all the generating stations. I was there.

DOBBS: I'm sorry, we'll have to break off. We thank you very much for your time. We're just out of time.

FREEMAN: Surely.

DOBBS: David Freeman and Branko Terzic.

Coming up, next here, the recall race is on here in California. A sports icon and nationally known figure has decided to run, former major league commissioner Peter Ueberroth makes his bid for California governor official.

(COMMERCIAL BREAK)

DOBBS: My next guest says his campaign for California governor will hold to three principles" truth, substance and specifics. Peter Ueberroth is a Republican. He's a successful businessman, formerly commissioner of Major League Baseball. He organized and ran the most successful Olympics in modern history in Los Angeles in '84. That achievement, in fact, won him "TIME" magazine's "Man of the Year." Almost 20 years later Peter Ueberroth is considered a strong contender in the race and he joins us tonight from our bureau in Los Angeles.

Good to have you with us, Peter.

PETER UEBERROTH, CALIFORNIA GOV. CANDIDATE: Good to be here.

DOBBS: What we needed here was one more candidate. You are immensely successful, wealthy. You have had amazing achievements, why do you want to do this now?

UEBERROTH: Well, I'm designed to do the job. I've been practicing for a long time and it's three years and a quarter that somebody's got to go to Sacramento, stop the spending, make sense of the revenues, not raise taxes and make California friendly again to employers so that we get back on track. And I'll be focused to do that. And I think through the din of all this stuff, the voters will understand it.

DOBBS: You came out immediately. You said set a tax amnesty in California, which estimates run as high as $6 billion could be raised against what is at least an $8 billion short-term deficit issue. You talk about freezing the salaries of state employees. Why not raise taxes?

UEBERROTH: Well, frankly, if the numbers are right, if both Democrats and Republicans are quoting and if people believe that it's an 8 to $10 billion shortfall, waste, fraud, lots of thing, hammering on a spending cap, we can get there. But if it's a lot more, we're going to have to look all over the place to make California more efficient. But the key thing is California's dependent upon jobs, good jobs. And we have to reverse the trend for good jobs to leave the state and not so well-paying jobs coming into the state.

DOBBS: Peter, the anti-business climate of California has worsened over the years. Can -- and I don't mean simply you, but can any candidate effectively, quickly change that climate in California that would embrace business, entrepreneurialism, innovation?

UEBERROTH: We have to play to our strengths and California is a great place. And it's a great place for entrepreneurs. And you know and the listeners know that in our country, that it's small and medium-sized business that brings any recovery in any cycle. We've got to do that and we've got to do it very well. And it's only taken two or three years to make California an unfriendly place by passing laws, passing regulations, making workers comp into a situation which is not even describable by any means of communication. We've got to reverse that. We've got to attack it. And you need someone who pays attention to it, focused and goes and does it. And when the voters get through with this, all of the fanfare, they're going to make a decision. Do they want somebody who has trained for this job, I didn't know I was training for it over the last 25 years, pick someone like that or they're going to pick somebody else. And that will be how it all turns out.

DOBBS: Are you going to spend only your money on this campaign or are you going to accept donations?

UEBERROTH: Yes, I'm going to accept donations from some friends, people who believe in me, but that's not going to be the way we get it done all together. And it's -- I only have one special interest group. Everyone has special interests groups, we have just one and that's jobs. Jobs -- good jobs for people in California. And you get the -- taxpayers pay the bill, after all, Californians are taxed in every which way. We've got to -- incidentally, raising taxes won't solve any problems in California.

DOBBS: You're arrayed against a vast field. Should the recall against Governor Davis succeed, Arnold Schwarzenegger, Senator Tom McClintock, Arianna Huffington and a host of others, is there some strategy here that says you can overcome the celebrity of Schwarzenegger, the bedrock pragmatism, if you will, of Senator Tom McClintock, what is the approach here?

UEBERROTH: Well, I think what the approach is, is -- first of all, I respect -- no negatives on any of those people or on the present administration. Anybody who is willing to be a public servant gets my respect and I'm going to stay out of that kind of fight. They'll take punches at me, but I'm not going to punch back. But they are going to -- the big difference is, you mentioned an awful lot of people, to do this job, someone who's trained, who has worked with Democrats and Republicans, pull it together. Tom Bradley was my partner in the Olympics. He's probably the finest mayor that most any city has ever had in California. And I couldn't have done it without him. That's what it's going to be.

DOBBS: Peter Ueberroth, if anyone had a doubt about your campaign being well under way, as you stayed on message, I don't think those doubts linger. Thank you very much for being with us, Peter Ueberroth.

UEBERROTH: Thank you.

DOBBS: When we continue, the results of "Tonight's Poll." Also "Your Thoughts" on America's crumbling infrastructure. Christine Romans will have, as always, the market.

(COMMERCIAL BREAK)

DOBBS: The results of "Tonight's Poll," should the United States send more troops to Iraq to establish law and order? Thirty seven, percent of you have voted, yes, 63 percent say absolutely not.

On Wall Street, the major averages were mixed. Nothing mixed about Christine Romans who has the market for us.

CHRISTINE ROMANS, CNNFN CORRESPONDENT: First down day for the Dow in about five. But the internals looked good. More than 250, two-week highs, only nine lows. And more stocks rose than fell at the big board. But volume, Lou, was light. Not even 1.2 billion shares of the New York Stock Exchange. The tenth day of volume below the three-month average. If history is a guide, volume will pick up again after Labor Day. Last year activity picked up about 5 percent September in four of the last five years action has grown further into October. That's a look ahead. Here is a look in the rear-view mirror. July, money flowed into stock mutual funds into what is usually an unremarkable month into mutual fund flows. At $21 billion July's inflows were second only to 1997. And it was the largest outflow of bonds since 2000. Also the first outflow of money market accounts in 15 years -- Lou.

DOBBS: Setting the stage, possibly, for good times ahead.

ROMANS: Possibly.

DOBBS: Christine Romans, thank you.

Now for some of "Your Thoughts."

Betty Macier of Tempe, Arizona, said "The electric companies should spend some of their profits to update their systems, instead of paying their CEO's outrageous salaries. They want the profits, so let them take the responsibilities of taking care of their systems."

Lou Taylor of Caruthersville, Missouri said, "Greed has taken over this country. We can send our jobs to other countries that work their people like slaves. Our companies can give the profits to their CEOs. The power companies didn't invest in new lines so that they could pocket the profits."

Allen Hawkins of Independence, Oregon, wrote in about last night's poll on which water of your family, you and your family prefer.

"You missed the best of all water in your categories. Cold, clear water drawn from you own private well is the best of all."

Chris of Scotch Plains, New Jersey, "I wouldn't drink the water coming out of my tap if it was free!"

And Y. McIntosh of English, Indiana, "Thank goodness we live in the USA and can drink the tap water. Sometimes we need to count our blessings!"

You're so right. Send us your thoughts, loudobbs@cnn.com, we enjoy hearing from you. That's our show for tonight. Thanks for being with us. For all of us here, good night from New York.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com




Investigation Continues>


Aired August 20, 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: Court challenges to the California recall fail. The judge says the election is on. Bob Franken reports.
In his first national television interview, Peter Ueberroth joins us tonight. The former Major League Baseball commissioner and head of the Los Angeles Olympics says he's the one to fix California.

Should we re-regulate our power utilities in this country? In our "Face Off" tonight, two sharply different views.

And the 10 Commandments, a controversy in Alabama over stone tablets and whether they are religious in nature or the foundation of Judeo-Christian law. The Supreme Court weighs in.

ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, August 20. Here now, Lou Dobbs.

DOBBS: Good evening.

U.S. officials tonight are saying there is a clear link between international terrorism and the massive truck bombing in Baghdad. The U.S. administrator in Iraq, Paul Bremer, said that attack is part of the global war on terror. Pentagon officials say a radical Islamist group linked to the al Qaeda is a top suspect in the attack. At least 17 people were killed, including the United Nations top envoy in Iraq, Sergio Vieira de Mello.

National security correspondent David Ensor reports from Washington -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, Lou, U.S. investigators have two main suspects in the U.N. bombing, the hard-line supporters of Saddam Hussein and Islamic groups like al Qaeda or Ansar al-Islam, as you mentioned.

For starters, FBI officials are saying that a large quantity of military-grade munitions were used, over 1,000 pounds. And that might suggest Saddam loyalists, who could have access to such weapons. But officials are saying that, in chaotic postwar Iraq, terrorist groups like the pro-al Qaeda Republican Ansar al-Islam could also have had access to this sort of weapon.

Now the FBI team is trying to figure out whether the driver of the truck carrying the bomb died in the blast or not. There have been reports that he did, quoting bystanders, but an FBI special agent told reporters he does not know of a reliable eyewitness on that question.

(BEGIN VIDEO CLIP)

TOM FUENTES, FBI: We are not certain yet whether the human remains belong to the driver of the truck or not. We'll be conducting chemical examinations of the components of the inside of the truck, including the foam padding from the driver's seat.

(END VIDEO CLIP)

ENSOR: Many observers say, if the FBI lab tests do show that it was a suicide attack, that would point to Islamic terrorists, since Saddam supporters do not have a history of suicide attacks to achieve mass casualties.

Experts are also saying, though, that Iraq has become a magnet for Islamic extremists from various countries, including Saudi Arabia, Egypt and others. Some defense officials are telling CNN tonight that master bomb-makers from al Qaeda, Hamas or Hezbollah may now be in Iraq. Investigators will closely examine what's left of the bomb's detonator for clues as to who made it -- Lou.

DOBBS: Ansar al-Islam, the radical Islamist organization, as you say, linked to al Qaeda, was, at least a good segment of it, decimated during the war against Saddam Hussein. Is there any indication of the strength of that group now in Iraq?

ENSOR: No clear indication, no, Lou. But there are some officials who suspect that some of the Ansar people who were up in that enclave in the north that the U.S. cleaned out during the war may have slipped into Iran and may now have slipped back into Iraq and could be involved in these attacks. That's just a theory.

There are other officials who tend to lean more towards the idea of Saddam loyalists. But either case could emerge. A lot depends -- in the analysis depends on whether or not the driver was a suicide bomber -- Lou.

DOBBS: David Ensor, thank you very much.

U.N. Secretary-General Kofi Annan today said, the United Nations will not be driven out of Iraq by terrorists. In Baghdad, rescuers today continued to search through the rubble for more victims of the explosion.

Ben Wedeman joins us now live with a report from Baghdad -- Ben.

BEN WEDEMAN, CNN CORRESPONDENT: Yes, Lou, those rescue workers are working as hard as they can under very difficult conditions, under extreme heat, to find if there are any survivors from this blast.

Today, however, all we saw was one body removed from the ruins. Now, according to U.N. officials, they believe that there are still several people inside the ruins. They don't want to say at this point whether they think they are dead or alive. They do believe that, at this point, the death toll from the blast yesterday will exceed 20. Also, and about 100 people were wounded in this attack as well, some of them, U.N. employees, arrived in Jordan today, flown there for continued medical care there. Now, the investigation, which, of course, is being led by the U.S. Federal Bureau of Investigation, they found car parts -- or truck parts, rather -- that they believe were part of the vehicle that delivered this bomb to the U.N. headquarters yesterday afternoon, Baghdad time.

According to the chief FBI investigator, that bomb was as much as half a ton in weight, containing explosives that were culled from old armaments, grenades, artillery rounds, as well as one aircraft bomb that weighed as much as 500 pounds. Now, investigators here on the ground, in fact, are shying away from speculating about who might be behind the bombing. The chief American official here, Paul Bremer, saying it could be foreign fighters.

And many Iraqis we spoke to in Baghdad today say that they would seem to -- believe the same thing, saying that Iraqis would not go after the sort of organization that provided the food aid and facilities that allowed them to survive more than 12 years of U.N.- imposed sanctions -- Lou.

DOBBS: Ben, in Baghdad itself, is there an indication today of higher security, greater effort to maintain law and order there on the part of U.S. troops?

WEDEMAN: There certainly is.

For instance, just to get to this hotel, the Palestine Hotel, we've seen much more stringent searches and checks of vehicles. Outside the ruined U.N. headquarters, the Americans are now putting up concrete barriers. One might say that's a bit too late. But, certainly, there is a much more heightened sense of the need for more security.

We know, for instance, the World Bank has suspended its operations in Iraq because of security concerns. We understand that, across the board, all nongovernmental international organizations are reviewing their security measures, just so this sort of thing doesn't happen again to them -- Lou.

DOBBS: Ben, thank you very much -- Ben Wedeman reporting from Baghdad.

Defense Secretary Donald Rumsfeld today said, no more U.S. troops are required in Iraq at the moment. The defense secretary made his comments during a visit to Honduras. The Pentagon is under rising pressure to increase the size of the military in Iraq.

Today, Senator Kay Bailey Hutchison said the United States definitely more troops or fewer missions.

Pentagon correspondent Barbara Starr has the report -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Lou, the day after the bombing in Baghdad, no indication, as you say, that the administration is about to change its policy, no indication that more U.S. troops will be on their way to Iraq any time soon.

Indeed, traveling in Honduras, Defense Secretary Donald Rumsfeld gave every indication the administration is going to stick with its current plan.

Here's a bit of what he had to say.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: I spoke with the deputy secretary of defense this morning. He had just completed a call with the military commanders in Iraq. And they reiterated their belief that the size of the forces in Iraq is appropriate today. And I would just simply reiterate the fact that the president has said we'll have whatever forces are necessary to get the job done.

(END VIDEO CLIP)

STARR: Lou, the administration believes it is just not possible to put enough troops on the ground to thoroughly protect everything in Iraq, every building, every mile of oil pipeline, every key infrastructure. They just don't think that's the answer. So their plan remains to put what you would call an Iraqi face on the operation.

There are several aspects to that, of course. They're looking for a police force of 40,000 officers. Some more than 30,000 are now on duty, 6,500 in Baghdad alone. The question, of course, how effective can they be? There is another element to the Iraqi face on security. That's a civil defense force and additional forces to help with security and protection of key infrastructure.

A key question there, will those people be scared off by the attacks? Will they want to do the job? Will more Iraqis seek to work in this security arena? So no change in U.S. policy, other than to keep moving ahead on that front, but perhaps, we are told, in the next several days, a beefed-up effort by the administration to try and work with the international community to get more coalition forces on the ground in Iraq beyond the 20,000 or so that are currently there -- Lou.

DOBBS: Barbara, if it is the position of the administrator in Iraq and the defense secretary in this administration that more troops will not be helpful to establishing law and order, why will it be helpful to bring in coalition troops, rather than American troops?

STARR: Well, what they want to do at this point is not necessarily bring in more troops, but broaden the international face. If they get more coalition troops, it is possible, in the future, that would lead to downsizing the number of U.S. forces.

The point right now is, there's about 140,000 U.S. troops, about 20,000 coalition forces. So the occupation force, if you will, really has an American face on it. The feeling is, that is drawing some of the opposition in Iraq from opposition groups. What their hope is -- they don't know if it will work, but their hope is, if they get more coalition forces, more non-U.S. troops, there will be less of an American face on the occupation, plus the Iraqi face on domestic security, and perhaps that this will lead to a reduction in the attacks in Iraq.

Remains to be seen, Lou, if it works, but that's the plan they're going with.

DOBBS: As you say, it remains to be seen whether it would work. And the logic is, at the very least, interesting.

Barbara Starr, thank you very much, reporting from the Pentagon.

Tomorrow here, we'll be talking about the size of our armed forces in Iraq, our armed forces, in fact, around the world, and whether there are enough men and women in uniform to fight the global war on terror. We'll be talking with one of the leading advocates of raising the number of forces, Senator Kay Bailey Hutchison of Texas.

The number of troops, U.S. troops, in Iraq is the topic of our poll tonight. The question: Should the United States send more troops to Iraq to establish law and order, yes or no? Please cast your vote at CNN.com/Lou. We'll have the results later in the show.

The White House today said President Bush did not mislead the American people when he said, major combat in Iraq was over. Hostile fire has now killed 60 soldiers since that announcement on the 1st of May. Today, gunmen killed a U.S. citizen working as a translator. Another soldier was killed in an accident after terrorists attacked their convoy.

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

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Lou, President Bush met with his national security team through a video conference call at his Crawford ranch earlier today, on that call, very significant, the U.S. civil administrator inside of Iraq, Paul Bremer, as well as General Abizaid, the head of Central Command, to talk strategy.

Now, I've been speaking with White House officials. And senior administration officials are talking about strategy. They're ruling out a couple of things. First of all, as Barbara had mentioned before, there's absolutely no talk of increasing U.S. troops on the ground, boots on the ground, inside of Iraq. Also, however, there is no talk of actually expanding the U.N. role inside of Iraq. There had been some discussion about whether or not there should be some sort of U.N. mandate at least giving the blessing for a peacekeeping force.

Well, senior U.S. administration officials say that the security, the peacekeeping effort, will stay under the auspices of the United States. The strategy that does seem to be emerging, however, is really putting more focus, more responsibility on the Iraqi people, calling for them to take a greater role in civil security matters. And the Bush administration was quite defensive in reacting to some of the criticism, particularly from Democrats, that it did not and is not prepared for the danger ahead and that it did not prepare the American people as well.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: We've been very straightforward about where we are in terms of the theater in Iraq. Again, this is one of the theaters in the war on terrorism in Iraq. And the president was very clear that major combat operations were over.

He did not say that the fighting was over, by any means. That fighting continues. And I think that yesterday's attack crystallizes the true nature of terrorism for the world to see.

(END VIDEO CLIP)

MALVEAUX: And, of course, Lou, the big gamble here is whether or not the Bush administration can really hold on to the international support. We've heard from a lot of leaders throughout the day, talking about -- really condemning this attack against the United Nations. But what really is going to be the true test is whether or not those countries are going to remain involved, remain engaged, inside of the country for the long term when it comes to Iraqi reconstruction -- Lou.

DOBBS: Suzanne, the president, as you said, on May 1, made the statement about major combat operations. But also, on that day, as he landed on that aircraft carrier, there's a big banner, as you can see and our viewers can see. It said "Mission accomplished" as the president set down in the aircraft on the decks of the Lincoln.

How much of a problem is that for the president, because the mission is far from accomplished, it looks like, at this point?

MALVEAUX: One of the major concerns that White House aides actually had right before that day coming up to that speech was just what was the president going to say. They had conversations about this.

And, of course, the debate was whether or not they were going to say the war was over or major combat operations essentially had come to a conclusion. They decided on major combat operations as opposed to saying the war was over, specifically because of that concern that there might be additional attacks and that Americans would turn to the president, turn to the administration and say: Hey, we thought this was over. You said that the war was over.

It was clear that they thought and that they needed to change the language in that way, because it may not be over, that the administration recognizes that there are continuous dangers and there will continually be dangers along the way. That's something that they were aware of for quite some time.

DOBBS: And, Suzanne, is there, amongst the staff of the White House, the president's advisers, some concern about the fact that, in Iraq, whatever else the judgment is, aside from all of the politics, in almost three months since the end of major combat operations, as the president put it, the effort to rebuild Iraq is, at the very least, a disappointment. Is that now becoming a primary concern for the staff of the White House?

MALVEAUX: Well, what it is becoming a concern about is that, of course, this is going to become a very political issue. The Democrats have already seized on what has happened so far. And this is well going to play out into the election season. This is something that's not going to go away any time soon.

DOBBS: And that deadly bombing in Jerusalem yesterday. The president talked with Prime Minister Ariel Sharon today of Israel. Any suggestions about the influence on the Mideast process, the road map negotiations?

MALVEAUX: Well, what really is significant here is that, yes, he did speak with Israeli Prime Minister Ariel Sharon, but who he didn't speak with is the Palestinian leader Mahmoud Abbas. That is notable, because he used his surrogates, Secretary Powell, as well against national security adviser, to have those type of discussions.

Clearly, from the Bush administration, there's a lot of pressure now that is being put on the Palestinian Authority to act immediately and try not only to enforce the cease-fire, but also to dismantle these terrorist organizations. That's where all the pressure is being put on now. We have John Wolf, who is back in the region -- he is the U.S. ambassador -- really trying to jump-start those talks again. And so far, it is very much unclear whether or not the Israelis and Palestinians will be speaking any time in the future.

But the Bush administration is really focusing now on the responsibility of the Palestinian Authority to dismantle those terrorist groups. White House officials -- State Department officials coming out today saying that they are clearly not doing enough -- Lou.

DOBBS: Suzanne, thank you very much -- White House correspondent Suzanne Malveaux.

Still ahead here tonight: Governor Gray Davis says Republicans are trying to steal his office. But Davis' biggest opponent could be his own record. Bob Franken will have a live report for us from Los Angeles.

And other states of discontent. Gray Davis is certainly not alone, nor California, when it comes to unpopular governors and disgruntled voters. Peter Viles reports.

And to re-regulate or not? That's the question in tonight's "Face Off." What could prevent another massive power failure?

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Developments galore today in the California recall. Candidate Arnold Schwarzenegger gave his first speech on plans to fix California. Some even called it an economic summit. And a federal judge made a key ruling on the timing of the election.

Bob Franken is live in Los Angeles and has the report for us -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Where do we start, Lou?

Well, let's start with the federal judge and the fact that his ruling today means that, at least for now, this election goes on full- tilt, heading toward October 7, is the election date. He turned down an American Civil Liberties Union request to delay it because six of the most populous counties still use the discredited punch card ballots, saying that there is an overwhelming interest and, in this case, an unprecedented exercise of public sentiment, therefore, a strong public interest in promptly determining whether a particular elected official should remain in office.

And, of course, that elected official is Governor Gray Davis, who has taken to the offensive a little bit, telling various audiences that, yes, he made mistakes, but the Republicans are trying to steal the election.

Now, among the Republicans who is in fact trying to become governor, of course, is the one that's caused all this interest, Arnold Schwarzenegger, who held, as you pointed out, his economic summit today, complete with financial advisers, including Warren Buffett. You're seeing him in a campaign commercial here. But the summit today included Warren Buffett, his now controversial investment guru/adviser, along with his less controversial former secretary of state adviser George Shultz.

The summit produced no specifics, except that Schwarzenegger did tell reporters that whatever plan he comes up with will not include cutbacks on education, will include some cuts to the state budget, would not include any tax increases. Did that mean he was saying no tax cuts ever? He said, you never say never. So that's what Arnold Schwarzenegger was not saying today.

Peter Ueberroth had his own news conference to announce his specifics. The most notable one, Lou, was a pledge that he would come up with a tax amnesty program. In other words, people would not be prosecuted for their tax delinquencies if they paid up. He said that could bring up $5 billion to $6 billion. But it is kind of a staggering problem in this state. They're facing at least an $8 billion deficit -- Lou.

DOBBS: Bob, thank you very much -- Bob Franken from Los Angeles.

Later tonight, Republican candidate for California governor Peter Ueberroth will be joining us. Tonight will be his first nationally televised interview since he announced his candidacy for the top job in California.

Gray Davis is not the only governor who has fallen out of favor with voters. Financial and personal crises have put several other governor on the outs as well.

Peter Viles reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Now, Gray Davis has a ton of problems, but here's what he never had, never had to apologize for cheating on his wife.

GOV. PAUL PATTON (D), KENTUCKY: I now apologize to the people of Kentucky and ask for your forgiveness. And I do believe that now I am on the right path.

VILES: That's Kentucky Governor Paul Patton. And this is ex- mistress, Tina Conner. She spilled state secrets on "Dr. Phil," dished the dirt on live TV back home, even sued the governor after the affair ended.

TINA CONNER, HAD AFFAIR WITH GOVERNOR PATTON: I feel very guilty and embarrassed about the whole situation.

VILES: Other governors in trouble, Bob Wise, West Virginia same issue, cheating on his wife.

GOV. BOB WISE (D), WEST VIRGINIA: More than a month ago, I had to tell my family the most painful thing I could ever imagine doing. I had to tell them that I had been unfaithful in my marital relationship. And I told them that.

VILES: Patton gave up plans to run for the U.S. Senate and Wise will not run for reelection.

STUART ROTHENBERG, CNN POLITICAL ANALYST: Maybe you can get away with that in some states or parts of this country, but you can't in Kentucky and West Virginia.

VILES: Elsewhere, the big problem is money. Alabama, Bob Riley, elected as a Reagan conservative, then angered his party by pushing the biggest tax increase in Alabama history.

GOV. BOB RILEY (R), ALABAMA: When Ronald Reagan was first elected governor of California, he faced a similar crisis. When asked why he was raising taxes, he replied, "Because I have no other choice." Neither do we.

VILES: In New Jersey, Democrat Jim McGreevey also off to a very shaky start.

LARRY SABATO, UVA CENTER FOR POLITICS: Probably the best comparison to Gray Davis is Governor Jim McGreevey in New Jersey. He was elected in a massive landslide in 2001 and, within a few months, had become unpopular for lots of different reasons, but mainly because of a bad economy.

VILES: Young Republicans in New Jersey have started a movement to recall McGreevey. They want to draft Bruce Willis to run for governor.

(END VIDEOTAPE)

VILES: Times so tough for governor right now, there's a joke making the rounds first told by Arkansas Governor Mike Huckabee. He told newly elected governors, the smartest thing they could do, first, demand a recount and then hope that it shows that you actually lost -- Lou.

DOBBS: Bruce Willis has got to be getting a little nervous right now. Governor Riley in Alabama, he has a remarkable resemblance to the governor and president that he quoted.

VILES: Not by a chance. He models himself after the president. His campaign literature showed him atop of a horse, very Reaganesque pose. He has Reagan on his desk. And he is pushing what is eight times bigger than the previous largest tax increase in Alabama history.

DOBBS: Some might call that political courage. Others would probably have a different expression.

Pete, thanks very much -- Peter Viles.

Still ahead here: Church and state converge, a free speech fight in Alabama tonight. Fredricka Whitfield will have a live report for us from Montgomery.

And new information tonight has police hunting a single sniper. Jeanne Meserve will have a live report for us with the very latest from West Virginia.

Our special report tonight on the shabby state of this country's infrastructure. Jan Hopkins reports tonight on dams in danger.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: New developments tonight in the West Virginia sniper case. Police say the shootings were not random, that the same gun was used in at least two of the murders. They may also have found a link between the three killings.

Jeanne Meserve joins us from Charleston, West Virginia, with the very latest -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Lou, sources inside the investigation tell CNN's Art Harris that they're working on a composite drawing of a man seen near the scene of one of the shootings.

Now, separate sources tell me that he was not seen at the Speedway in Campbells Creek on the night of the shooting. Rather, he was seen several times in the days leading up to the shooting standing near a truck that meets the description of the one authorities are looking for. He's described as being 6 feet tall, trim and with a beard. Now, there was a description of a heavyset man at a separate shooting scene. A composite of that individual, sources say, has already been done. Meanwhile, word that two of the shootings, those two that took place the same night, have been definitively linked.

(BEGIN VIDEO CLIP)

DAVE TUCKER, KANAWHA COUNTY SHERIFF: The most important thing, the ballistics test has concluded that the bullets that killed Okey Meadows and Jeanie Patton came from the same type firearm, that being a .22-caliber, probably fired from a rifle.

(END VIDEO CLIP)

MESERVE: Authorities today put out an animation of the kind of truck they're looking for. It's a Ford F-150 with an extended cab in a dark color. They say witnesses have now placed a truck like that at two of the shooting scenes.

There was a third shooting. In fact, it was the first shooting here in the city of Charleston. The police chief here in the city says that neither witnesses, nor surveillance tapes have placed the truck at that shooting scene. And ballistics that might or might not link that shooting to the others have still not come back -- Lou, back to you.

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

Tonight in Alabama, tensions are running high. Several people have gathered at the entrance of the state judicial building in Montgomery. They've vowed to block any effort to remove a 10 Commandments monument located there. That monument is a source of controversy that today made its way to the U.S. Supreme Court.

Fredricka Whitfield is in Montgomery and has the story for us -- Fredricka.

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello to you, Lou.

This Alabama judicial building has been a place, a very passionate gathering all day. You can see behind me a few dozen people. Some coming from as far away as California, Kansas and various parts of the deep south. Coming here because they feel very strongly either for what the chief justice has done here or they feel very strongly against what he's done.

Chief Justice Roy Moore two years ago put in place a 2 1/2 ton granite display of the ten commandments inside this building. He has felt very strongly that the state law upholds his right to be able to do so. As a man of the law, he says he must acknowledge God. However, a federal district court has ruled that this is a violation of church and state, that in fact, it is unconstitutional, ordering him to remove the statue by midnight.

To the end, the judge has held his ground. He said that he will take this fight all the way to the top, which is what he did. He took this case to the U.S. Supreme Court. Earlier today the Supreme Court denied his motion. However, earlier today, he made it very clear that he is staying his ground.

(BEGIN VIDEO CLIP)

CHIEF JUSTICE ROY MOORE, ALABAMA SUPREME COURT: The question is, can the federal courts come into the state of Alabama and threaten fines to release our inalienable rights? Are we willing to give up the fact that God gave us our rights of life, liberty and the pursuit of happiness. You see you've got to remember Soledad, it is not about a monument, it is about the fundamental acknowledgment of God of upon which this nation is founded.

(END VIDEO CLIP)

WHITFIELD: Now, what you can't see -- while you see the folks gathering outside, there are also a couple dozen folks who are inside holding prayer around the statue. Well, very quietly, very calmly, the police there tried to send the message to them, it was time to close the building, time to leave. Many of them refused, risking arrest. And so indeed the police then placed the handcuffs around many of them, carting them off, arresting them for refusing to leave the building -- Lou.

DOBBS: Fredricka, any sign at all that there's a compromise in the offing here, that Justice Moore will relent?

WHITFIELD: It's not likely that there is a compromise because really the judge has already used up all of his ammunition. He's no longer going to get the Supreme Court backing. And at this point now, even plaintiffs involved in the three lawsuits against him are now hoping to file a contempt of law complaint tomorrow. And it's likely as early as Friday there just might be a hearing involving the judge.

DOBBS: Does the justice have popular support, or is the public in Alabama against him on this issue?

WHITFIELD: It's pretty close to 50-50. We are talking about the bible belt. We went out and talked to quite a few folks over lunch today and throughout this city, many of whom see where the judge is coming from and they believe that the state constitution supports exactly what he's doing. And they feel that the law here should be supported by a reference to the ten commandments.

And then you've got the other half who say they don't want the ten commandments -- or any representation of religion to be in a federal court building such as this one.

DOBBS: Fredricka, thank you. Fredricka Whitfield from Montgomery, Alabama.

The thunderstorms that pounded Las Vegas yesterday may not have been of biblical proportions, but they certainly produced flash floods that had some people praying for help. What you are looking at are those floods. This woman was rescued from the top of her floating car where she spent several anxious moments.

The storms dumped three inches of rain on the Northwestern part of Las Vegas in just an hour and a half. That knocked out power to thousands. But the Las Vegas casinos, should you be concerned, well, they were unaffected.

When we continue, dams on the brink. Thousands of this country's dams are in danger of utter failure. Lives are in danger. Jan Hopkins reports.

And energy deregulation. Should we reregulate to stave off another massive power failure? Two leading experts on the issue will face off tonight?

And he led Major League Baseball out of its slump. He put on the most profitable Olympics ever. He hopes to lead California to brighter days, Peter Uberroth is running for governor. He's our guest. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight we continue our series of Special Reports on this country's infrastructure. There are literally thousands of dams in this country and the condition of many of them is deteriorating. The lives of millions of people living downstream could well be in danger. Making needed repairs to those dams will run into the billions of dollars. Jan Hopkins has the report.

(BEGIN VIDEOTAPE)

JAN HOPKINS, CNN CORRESPONDENT (voice-over): Heavy rains this summer in North Carolina led to 16 dam failures. No one was killed, but evacuations were necessary. Also this summer, a dam collapsed releasing an 8 billion gallon torrent of water on Marquette, Michigan. It caused $100 million in damage and 2,000 people to be evacuated.

In all there have been 21 reported dam failures in last two years. There are about 78,000 dams across the country. 2600 of them considered unsafe. It would cost $10 billion to make them safe.

BRAD IAROSSI, AMERICAN SOC. OF CIVIL ENGINEERS: Currently at least a third of the nation's 78,000 dams are 50 years old or older. By the time 2020 rolls around, 85 percent or greater of the dams will be 50 years or older. These dams are aging, they're deteriorating.

HOPKINS: But dam repair doesn't make it to the top of the list when it comes to determine state budgets. That's because it's hard to see when a dam needs to be fixed until it is too late.

LORI SPAGENS, ASSN. STATE DAM SAFETY OFFICIALS: People don't think it is an attractive topic. It is not high profile. So we're having a hard time getting their attention to make them realize that these are real problems that are going to affect people across the nation if these dams don't get fixed.

HOPKINS: With a need for more space for housing, more and more people have moved downstream from dams. And sometimes they discover that fact the hard way. In New Jersey, during Hurricane Floyd, water released from a dam up river flooded this area causing $60 million damage to over 1,000 homes.

The flood has galvanized residents and their representatives. New Jersey is now asking voters to approve a $200 million bond issue to help repair dams and control floods.

JOSEPH CONIGLIO, NEW JERSEY STATE SENATE: There were 47 dams that need immediate repair. In the state of New Jersey, there's 187 dams that they consider high hazard which will also need to be repaired over a period of time.

HOPKINS: National groups awaiting for leadership from the federal government. They would at least like a loan program to help dam owners pay for repairs. They would also like the Department of Homeland Security to recognize dam safety as a national security issue.

(END VIDEOTAPE)

HOPKINS: If you repaired all of the 78,000 dams in this country, the price tag would reach $36 billion. Because so much work needs to be done the Society of Civil Engineers gives our dams a grade of D -- Lou.

DOBBS: Lives in danger? Where?

HOPKINS: New Jersey, for example. There are two dams near where you live that are in need of repair and could cause deaths to people if they broke.

DOBBS: Okay. Jan, thank you very much. Jan Hopkins.

Tonight's thought, which applies to this country's failing infrastructure "that which is common to the greatest number has the least care bestowed upon it." That from Aristotle and a thought that we new not like to extrapolate upon for many years to come.

When we continue, face-off power politics. Is deregulation to blame for the power blackout or is it the wave of the future. Two opposing view points.

(COMMERCIAL BREAK)

DOBBS: As U.S. and Canadian officials try to discover the cause of last week's massive power failure, speculation about exactly what went wrong is well under way. Some appointed to utility deregulation as the culprit. Others say a mechanical breakdown is to blame. That brings us to the subject of tonight's face-off.

Branko Turzig, is the Director of Regulatory Services of Deloitte and Touche, former member of the national Energy Regulatory Commission who says power failure has nothing to do with competition.

David Freeman meanwhile says regulated markets worked for years. Why change a good thing? He's the chairman of California's Consumer Power Financing Authority. Thank you both for being with us. Let me turn, if I may, to you, Mr. Freeman. Deregulation has worked for some time. Do you really believe that it's at the heart of what happened in this blackout?

DAVID FREEMAN, CHAIRMAN, CA. POWER AUTHORITY: Well, it worked very badly here in California. I ran the Los Angeles Department of Water and Power and you can ask the businessmen in Los Angeles whether they're happy that we stayed out of it. We did. We didn't have any blackouts. Our rates are stable. The experiment kind of exploded here in California, and I don't know that it's done any good anywhere else.

The -- this blackout occurred in large part because we're moving electricity over a system that wasn't designed for a deregulated market. It is not beefed up to where it can flow anywhere safely. You have to expect that there will be mechanical problems. Equipment can go -- you've got to be two accidents or three accidents away from a blackout. I've run utility system, but what we have done is put the cart before the horse. We've got deregulation in large powerful before we've built the power system to accommodate them.

DOBBS: Mr. Turzic, do you disagree?

BRANKO TERZIC, DIR. GLOBAL ENERGY RESOURCES GRP. DELOITTE AND TOUCHE: Well, I do disagree. California is not an example of anything having to do with deregulation with respect to the electric transmission grid. The transmission grid which failed in this case is fully regulated. It has always been fully regulated. Today's Wall Street Journal, Nobel Prize winner Vernon Smith says California only proves that when you design a market badly, it works badly.

So the misnomer deregulation really refers to the introduction of competition in generation. And Los Angeles power district sold power and made a lot of money into that market. So we think that's a good thing. Competition works.

FREEMAN: We did not go into the deregulation, that was a decision that I made that saved the city from getting into the blackout, being gouged business. What you ignore is that this deregulation phenomenon was promoted by FERC, the market design that we filed was approved by FERC. Certainly California went into it on its own initiative as a big fat mistake. It was designed and paraded as saving 20 percent and ended up with the rates going up 40 percent.

You know, the one thing that united Republicans and Democrats in California for a while was our anger toward FERC and our anger toward the gougers that took $27 billion away from us.

TERZIC: Let's correct some things here. The FERC did not deregulate anywhere in the country. The 1992 Energy Policy Act passed by Congress opened up the transmission grid. The FERC never ordered competition. As a matter of fact, the '92 policy act prohibits the FERC from using any of its authority to have retail competition. California chose retail competition on its own. The California Commission, the California Legislature, the California Congressional Delegation told the FERC, approve the design the way we did it here in California.

DOBBS: Let me ask you both, gentlemen, from your obviously different and opposing viewpoints on the issue. The transmission grid, the regional grids around the country, we are being told by a number of people that further failure is to be expected. The American people are going to have to pay for that improvement in the grid regionally and nationally. Should they do so as rate payers or should they do so as taxpayers? If tax payers, as federal taxpayer or state and local? I'll ask you first Mr. Freeman.

FREEMAN: The consumers pay for everything. And the rate payers ought to pay for everything that goes into the cost of electricity. I don't think that's an item of great debate. The real issue is who's going to be responsible for beefing up these transmission grids so they can accommodate these wild and unpredictable flows of power caused by deregulation. The deregulation folks just got the cart before the horse.

DOBBS: What do you say, Mr. Terzig?

TERZIC: Well, there's been no evidence that the cause of this blackout had anything to do with deregulation. We'll let the engineers, my fellow engineers, find out what the cause was. If it was a mechanical cause, we'll find out what it costs to fix it. If it was an operational cause, we'll improve operation. If it was human error, we'll going to have to train the operators better. But let's find out what the cause is on the transmission...

DOBBS: You will admit, we've got an estimated 50 million people affected by this blackout. A little unrealistic to go RTO, by utility, by transmission provider across that region and say, would you please think about improving things. It has got to come down to somebody making a decision to do so.

TERZIC: And authorities have that. I was the state commissioner in Wisconsin. Every one of those state commissioners in all the states affected has control over the transmission grid in their state when it comes to investment.

FREEMAN: But they don't have control over cascading power coming from elsewhere and knocking out all the generating stations. I was there.

DOBBS: I'm sorry, we'll have to break off. We thank you very much for your time. We're just out of time.

FREEMAN: Surely.

DOBBS: David Freeman and Branko Terzic.

Coming up, next here, the recall race is on here in California. A sports icon and nationally known figure has decided to run, former major league commissioner Peter Ueberroth makes his bid for California governor official.

(COMMERCIAL BREAK)

DOBBS: My next guest says his campaign for California governor will hold to three principles" truth, substance and specifics. Peter Ueberroth is a Republican. He's a successful businessman, formerly commissioner of Major League Baseball. He organized and ran the most successful Olympics in modern history in Los Angeles in '84. That achievement, in fact, won him "TIME" magazine's "Man of the Year." Almost 20 years later Peter Ueberroth is considered a strong contender in the race and he joins us tonight from our bureau in Los Angeles.

Good to have you with us, Peter.

PETER UEBERROTH, CALIFORNIA GOV. CANDIDATE: Good to be here.

DOBBS: What we needed here was one more candidate. You are immensely successful, wealthy. You have had amazing achievements, why do you want to do this now?

UEBERROTH: Well, I'm designed to do the job. I've been practicing for a long time and it's three years and a quarter that somebody's got to go to Sacramento, stop the spending, make sense of the revenues, not raise taxes and make California friendly again to employers so that we get back on track. And I'll be focused to do that. And I think through the din of all this stuff, the voters will understand it.

DOBBS: You came out immediately. You said set a tax amnesty in California, which estimates run as high as $6 billion could be raised against what is at least an $8 billion short-term deficit issue. You talk about freezing the salaries of state employees. Why not raise taxes?

UEBERROTH: Well, frankly, if the numbers are right, if both Democrats and Republicans are quoting and if people believe that it's an 8 to $10 billion shortfall, waste, fraud, lots of thing, hammering on a spending cap, we can get there. But if it's a lot more, we're going to have to look all over the place to make California more efficient. But the key thing is California's dependent upon jobs, good jobs. And we have to reverse the trend for good jobs to leave the state and not so well-paying jobs coming into the state.

DOBBS: Peter, the anti-business climate of California has worsened over the years. Can -- and I don't mean simply you, but can any candidate effectively, quickly change that climate in California that would embrace business, entrepreneurialism, innovation?

UEBERROTH: We have to play to our strengths and California is a great place. And it's a great place for entrepreneurs. And you know and the listeners know that in our country, that it's small and medium-sized business that brings any recovery in any cycle. We've got to do that and we've got to do it very well. And it's only taken two or three years to make California an unfriendly place by passing laws, passing regulations, making workers comp into a situation which is not even describable by any means of communication. We've got to reverse that. We've got to attack it. And you need someone who pays attention to it, focused and goes and does it. And when the voters get through with this, all of the fanfare, they're going to make a decision. Do they want somebody who has trained for this job, I didn't know I was training for it over the last 25 years, pick someone like that or they're going to pick somebody else. And that will be how it all turns out.

DOBBS: Are you going to spend only your money on this campaign or are you going to accept donations?

UEBERROTH: Yes, I'm going to accept donations from some friends, people who believe in me, but that's not going to be the way we get it done all together. And it's -- I only have one special interest group. Everyone has special interests groups, we have just one and that's jobs. Jobs -- good jobs for people in California. And you get the -- taxpayers pay the bill, after all, Californians are taxed in every which way. We've got to -- incidentally, raising taxes won't solve any problems in California.

DOBBS: You're arrayed against a vast field. Should the recall against Governor Davis succeed, Arnold Schwarzenegger, Senator Tom McClintock, Arianna Huffington and a host of others, is there some strategy here that says you can overcome the celebrity of Schwarzenegger, the bedrock pragmatism, if you will, of Senator Tom McClintock, what is the approach here?

UEBERROTH: Well, I think what the approach is, is -- first of all, I respect -- no negatives on any of those people or on the present administration. Anybody who is willing to be a public servant gets my respect and I'm going to stay out of that kind of fight. They'll take punches at me, but I'm not going to punch back. But they are going to -- the big difference is, you mentioned an awful lot of people, to do this job, someone who's trained, who has worked with Democrats and Republicans, pull it together. Tom Bradley was my partner in the Olympics. He's probably the finest mayor that most any city has ever had in California. And I couldn't have done it without him. That's what it's going to be.

DOBBS: Peter Ueberroth, if anyone had a doubt about your campaign being well under way, as you stayed on message, I don't think those doubts linger. Thank you very much for being with us, Peter Ueberroth.

UEBERROTH: Thank you.

DOBBS: When we continue, the results of "Tonight's Poll." Also "Your Thoughts" on America's crumbling infrastructure. Christine Romans will have, as always, the market.

(COMMERCIAL BREAK)

DOBBS: The results of "Tonight's Poll," should the United States send more troops to Iraq to establish law and order? Thirty seven, percent of you have voted, yes, 63 percent say absolutely not.

On Wall Street, the major averages were mixed. Nothing mixed about Christine Romans who has the market for us.

CHRISTINE ROMANS, CNNFN CORRESPONDENT: First down day for the Dow in about five. But the internals looked good. More than 250, two-week highs, only nine lows. And more stocks rose than fell at the big board. But volume, Lou, was light. Not even 1.2 billion shares of the New York Stock Exchange. The tenth day of volume below the three-month average. If history is a guide, volume will pick up again after Labor Day. Last year activity picked up about 5 percent September in four of the last five years action has grown further into October. That's a look ahead. Here is a look in the rear-view mirror. July, money flowed into stock mutual funds into what is usually an unremarkable month into mutual fund flows. At $21 billion July's inflows were second only to 1997. And it was the largest outflow of bonds since 2000. Also the first outflow of money market accounts in 15 years -- Lou.

DOBBS: Setting the stage, possibly, for good times ahead.

ROMANS: Possibly.

DOBBS: Christine Romans, thank you.

Now for some of "Your Thoughts."

Betty Macier of Tempe, Arizona, said "The electric companies should spend some of their profits to update their systems, instead of paying their CEO's outrageous salaries. They want the profits, so let them take the responsibilities of taking care of their systems."

Lou Taylor of Caruthersville, Missouri said, "Greed has taken over this country. We can send our jobs to other countries that work their people like slaves. Our companies can give the profits to their CEOs. The power companies didn't invest in new lines so that they could pocket the profits."

Allen Hawkins of Independence, Oregon, wrote in about last night's poll on which water of your family, you and your family prefer.

"You missed the best of all water in your categories. Cold, clear water drawn from you own private well is the best of all."

Chris of Scotch Plains, New Jersey, "I wouldn't drink the water coming out of my tap if it was free!"

And Y. McIntosh of English, Indiana, "Thank goodness we live in the USA and can drink the tap water. Sometimes we need to count our blessings!"

You're so right. Send us your thoughts, loudobbs@cnn.com, we enjoy hearing from you. That's our show for tonight. Thanks for being with us. For all of us here, good night from New York.

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Investigation Continues>