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CNN IN THE MONEY

President Bush Trumpets War Success; 'Bin Laden' Tape Released

Aired September 10, 2003 - 18:00   ET

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

LOU DOBBS, CNN ANCHOR: Still a war and still at large. President Bush trumpets success in the war on terror.
A new bin Laden tape emerges urging guerrillas to bury American troops in Iraq. National security correspondent David Ensor with a report.

"A Changed Nation," how September 11 has redefined U.S. foreign policy. Kitty Pilgrim has the special report. How does the world view America? Two very different perspectives.

And "Islam and Democracy," our special report in conjunction with "The Economist" magazine. Tonight: Egypt, the largest Arab country, America's No. 1 ally in the region, destined for dictatorship or democracy?

ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, September 10. Here now, Lou Dobbs.

DOBBS: Good evening.

President Bush today said the United States will pursue terrorists on every front. The president said this country will never be complacent in the war on terror. And he called upon Congress to pass new anti-terrorist laws on the eve of the second anniversary of the September 11 terrorist attacks. The president's speech today coincided with the release of a new videotape that purports to show Osama bin Laden and his top deputy.

Senior White House correspondent John King has the story and joins me now -- John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Lou, the president was at the FBI Academy, Quantico, Virginia.

Word of those tapes were distributed to the White House press corps. They asked the president. He simply said -- quote -- "Haven't seen it." They are analyzing that tape, of course. But Mr. Bush, perhaps underscoring the message of the tape, the unfinished business in his speech at Quantico, paying tribute to the families of the 9/11 victims, saying the war on terrorism continues and that, for all of the progress the administration is claiming, Mr. Bush says the hunt must continue until more terrorists are captured.

The president also responding to his critics today, many saying the president lost focus in the war on al Qaeda by going to war in Iraq. Mr. Bush was quite defiant, using his remarks to say that, no, he believes the Iraq war was justified and that Iraq now is the central front in the global war on terror.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The terrorists have lost a sponsor in Iraq. And no terrorist networks will ever gain weapons of mass destruction from Saddam Hussein's regime. That regime is no more.

(END VIDEO CLIP)

KING: Mr. Bush disputing, though, also any criticism that he has lost focus on al Qaeda, saying the administration continues to pursue -- quote -- "the evil serpents" who planned and carried out the September 11 attacks two years ago.

And as for the war on terrorism here at home, the president appealing in that speech also for new powers for the government. He says the government should be able, in some terrorism cases, to issue subpoenas without going to a judge and should have broader powers to hold some terrorism suspects without bail and to subject them to a death penalty. That is a continuing debate with the Congress, Lou, and with some groups in this country who say the administration is going too far and stripping away civil -- Lou.

DOBBS: John, thank you.

I understand there's been a change in the vice president's plans to be in New York tomorrow for ceremonies commemorating September 11. What can you tell us about that?

KING: A change at the request of Mayor Michael Bloomberg, Lou. The vice president was to be at the morning memorial service at the World Trade Center site, where they will read the names of the victims. Many of the families went to the mayor's office, the mayor says, and says they thought there would be too much security with the Secret Service involved in a vice presidential visit.

So the vice president will not attend that morning event, but he will still be up in New York. He will attend a later memorial service at the Port Authority for the fallen officers and other Port Authority employees who were killed in the attacks two years ago.

DOBBS: John, thank you -- our senior White House correspondent, John King.

Terrorists in Iraq have killed another two American soldiers; 289 U.S. troops have now died in Iraq since the start of the war against Saddam Hussein, 185 of them in combat. Central Command today said four U.S. military intelligence officers were wounded in the car bomb attack in Irbil in northern Iraq yesterday.

Walter Rodgers in Baghdad has the report.

(BEGIN VIDEOTAPE)

WALTER RODGERS, CNN CORRESPONDENT: Perhaps it's coincidence, perhaps not, but tomorrow is the anniversary of 9/11. And here in the Iraqi theater, there has been a spike, a surge, in the number of attacks against U.S. and coalition military personnel in the last 24 hours.

This morning here in Baghdad, another American serviceman killed. He was trying to diffuse an improvised explosive device, a roadside bomb. I heard a loud boom, ran to my window, looked out. A cloud of smoke was rising less than a mile away up Tigris River, the member of this team, this explosives, demolition, ordnance team, trying to disarm the bomb killed. Yesterday, just about 24 hours ago, another U.S. soldier was killed, improvised explosive device again.

These are very lethal against U.S. service personnel. A U.S. military patrol north of Baghdad riding along a road, roadside bomb improvised device throws deadly shrapnel into the soft-skinned vehicle, one soldier wounded, another killed, two dead Americans in the last 24 hours.

And in Irbil in northern Iraq, there was a deadly explosion late Tuesday. That explosion was a bomb that was hidden in a Toyota SUV outside a building which is leased by the Americans for operations in the northern Iraqi theater. The strategy here in Iraq on the part of the insurgents and the military Islamists appeared to be, make the Americans bleed, because the Islamists and the insurgents do not believe that the Americans have the staying power to last in Iraq.

They point to the Americans being driven out of Beirut in the early '80s by bombs. They talk about the Americans driven out of Somalia and also almost out of Afghanistan, reduced presence there. This is their strategy. It remains to be seen if it will work.

Walter Rodgers, CNN, Baghdad.

(END VIDEOTAPE)

DOBBS: Nonetheless, Defense Secretary Donald Rumsfeld today said the coalition is making good progress in Iraq, compared with international efforts to rebuild other countries. Secretary Rumsfeld said the United States has no interest in occupying Iraq.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: Our goal is not to create a dependency in Iraq by flooding it with Americans. Our goal is to get a still broader international face on it and then a considerably greater Iraqi face on it, as they contribute more and more to their own political future and their own economic future.

(END VIDEO CLIP)

DOBBS: Tonight, CIA analysts are examining new evidence that the leadership of the al Qaeda terrorist network may still be alive.

The Al-Jazeera television network today broadcast what it says is new video of Osama bin Laden and his top lieutenant. The network also aired an audiotape attributed to those two men. The tape called upon Muslims to "devour" the Americans.

National security correspondent David Ensor has the report -- David.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, Lou, CIA analysts are looking at that audiotape, listening to that audiotape, Very closely.

Within a day or two, they'll be able to say whether the voices really are those of Osama bin Laden and his deputy, Ayman al-Zawahiri. Officials say their preliminary view is that the videotape was not recorded recently. Al-Jazeera television, which first broadcast the tape, said it believes the tape was produced in late April or early May of this year.

And there are some clues in the way the vegetation looks to suggest that may be about right. Whoever made the tape, and whenever, it was designed to get attention around the second anniversary of the 9/11 attacks. One intelligence official I spoke to called it a -- quote -- "a P.R. ploy" designed to draw attention to -- quote -- "their standard rhetoric."

U.S. officials will be analyzing the tape for clues as to where it was filmed, though they believe by now the two al Qaeda leaders must be far from that location. They continue to tell us their best estimate is that bin Laden and al-Zawahiri are somewhere along the Afghan-Pakistani border on one side or other of that border. The two have apparently given up using modern communications methods of any kind, officials say.

So, if they are directing al Qaeda's operations directly anymore, it's being done with notes, spoken messages and, of course, these tapes -- Lou.

DOBBS: David, any indication that U.S. intelligence, U.S. special forces, are at all near reaching out to any source that has knowledge about the whereabouts of Osama bin Laden?

ENSOR: The short answer, I'm afraid, Lou, as far as we know publicly, is no.

There has been some pretty tough fighting along the border on the Afghan side recently between U.S. troops and Taliban retreads, as one official put it. And a lot of the Taliban were killed in those -- in that fighting. Some prisoners may have been taken. There may be some interesting lines of inquiry that they can make. These people may have come over from Pakistan and might know something. But, in public, we do not know of any promising leads -- Lou.

DOBBS: David, thank you -- David Ensor, our national security correspondent.

Another Israeli airstrike today on a leader of the radical Islamist group Hamas. The strike followed the suicide bombings in Jerusalem and Tel Aviv yesterday. An Israeli aircraft dropped a bomb on the Hamas leader's house in Gaza. That bomb exploded. It wounded the leader and at least 20 other people. The man's eldest son and a bodyguard were killed in the strike.

Those suicide bombings yesterday killed 15 Israelis. Hamas claimed responsibility for both attacks. Today, Hamas said it will step up its terrorist campaign by targeting Israeli houses and apartments.

Coming up next: "A Changed Nation" and a changed world. Kitty Pilgrim will report tonight on the profound impact of September 11 on U.S. foreign policy.

Also ahead: slashing jobs in America. Three American companies today announce thousands of layoffs. Peter Viles will report on exporting jobs and America.

And a long-awaited day for corporate crime watchers. Christine Romans will have that story, as well as more on the battle shaping up over the New York Stock Exchange chairman's excessive pay.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Coming up next: Has the United States' effort to fight a global war on terror turned much of the world against the United States? Two leading experts tonight will face off and share their very different views.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: A major setback today for the White House in its efforts to overhaul labor laws that determine which workers receive overtime pay. Six Republicans joined Democrats in the Senate to vote against those proposed changes. The White House wants employers to reclassify some hourly workers as management, making them ineligible for overtime pay. Democrats and organized labor say the proposals would have deprived millions or workers from receiving extra earnings.

Three U.S. companies today announcing massive layoffs. International Paper plans to cut 3,000 jobs, more than 3 percent of its work force. Levi Strauss plans to cut 650 jobs. And 3Com today said it will eliminate 1,000 jobs, a third of its work force. The struggling networking company also closed its last factory and said it will outsource all of its manufacturing. 3Com does plan, however, to open a new design center and to create new jobs, but they will be in Taiwan.

Peter Viles reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Good news on the job front -- that is, if you're an engineer and you live in Taiwan, where 3Com is hiring. The struggling networking company is cutting 1,000 jobs, mainly by closing its last factory in Dublin, Ireland, also by laying off engineers in the United States and opening a new design center in Taiwan.

3Com is outsourcing all of its manufacturing to two firms, including Flextronics of Singapore, to strategy, to -- quote -- "improve efficiency and reduce costs" is sweeping the American economy, but some analysts believe it will backfire.

ALAN TONELSON, U.S. BUSINESS & INDUSTRIAL COUNCIL: 3Com and all of its other peers think that they can continue to make money by paying their workers Chinese-level wages, but expecting their customers to keep consuming at U.S. levels. But what they don't understand is that they're firing their best customers when they fire their U.S. work force.

VILES: Even Wall Street, which applauds cost-cutting, is beginning to worry about the migration of intellectual property, as research and development jobs flow to Asia.

WES CUMMINS, ANALYST, B. RILEY & COMPANY: Once all of the intellectual property go overseas, I think you have to wonder about what role the U.S. plays in the development, except for capital and marketing to U.S. companies. The role in driving new leading-edge technology may start to lessen in the coming years if this trend continues.

VILES: On the manufacturing side, it is a myth that the jobs America is losing are low-wage, low-technology jobs. Of the 2.7 million factory jobs lost over the past three years, the biggest group, 438,000, are in manufacturing of computers and electronics.

(END VIDEOTAPE)

VILES: American trade policy is becoming a bit of a gamble right now. If these technology jobs are lost forever, as some analysts believe, it's not clear how the U.S. can maintain its leadership in technological innovation -- Lou.

DOBBS: And the Bush administration policy on free trade, on the exportation of these jobs, and on the exportation, in the case of technology and computers, exportation of American intellectual capital?

VILES: They don't have a specific approach to this problem in technology. What they have said is, yes, there's a manufacturing problem. We have had it for 40 years in this country. And we need to train people for better jobs.

But something different has happened in the last couple years with technology. These jobs go quicker overseas. And they're bringing with them R&D jobs.

DOBBS: After 40 years, on a manufacturing basis, being decimated, it's perhaps to time to think about creating a policy. What do you think?

VILES: Well, we'll have a new assistant commerce secretary in a month or so on this issue of keeping jobs. (CROSSTALK)

VILES: Whether we will have a policy on technology, we will have to wait and see.

DOBBS: A job czar.

VILES: A job czar.

DOBBS: Peter Viles, thank you.

Twenty-one months since Enron filed for bankruptcy, and today, the first executive from the scandal-ridden energy trader went to jail. Enron's former treasurer, Ben Glisan, today became the second executive in all of corporate America to be sent to prison in these corporate scandals. Glisan is one of 16 Enron executives charged with a crime; 89 executives in all of corporate America have been charged.

And in another case of investor outrage tonight, the chairman of the New York Stock Exchange, Richard Grasso, today faced one of the harshest critic his $140 million pay package.

Christine Romans is here and has the report for us -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, as reporters pored over 1,200 page documents that the NYSE gave to the SEC about Dick Grasso's pay, Grasso was in Washington on a panel on corporate governance with SEC chief William Donaldson.

Now, he defended his pay, saying he's not only a regulator, but a businessman.

(BEGIN VIDEO CLIP)

RICHARD GRASSO, CHAIRMAN & CEO, NYSE: More than two-thirds of the companies that we are today privileged to trade have joined us in the last 13 years. And so it is both. And it is both that we are very proud to do on behalf of America's 85 million investors.

(END VIDEO CLIP)

ROMANS: Meanwhile, SEC Chief Donaldson urged CEOs to take a hard look at executive compensation. And corporate governance experts took aim at fat retirement packages.

(BEGIN VIDEO CLIP)

NELL MINOW, THE CORPORATE LIBRARY: We go back to the gold watch and nothing else. They don't deserve another thing. After they retire, they can pay for their own offices. They can pay for their financial services. They can pay for their plane tickets, their caterers, their postage stamps. All of that stuff should be on their dime.

(END VIDEO CLIP) ROMANS: Now, Grasso's retirement boon will be based on his three highest-paid years. He made $21.8 million in 2000, more than $26 in 2001, and $12 million last year.

The documents also lay out his armed security, travel and leisure time, exclusive use of private aircraft, and club memberships and cost associated with him that would not be counted as compensation. That's not unusual, really, for many CEOs -- also, retention bonuses of at least $5 million each in 2001 and 2002, although Grasso is saying he will give those up. No other details, though, of his bonuses were provided -- Lou.

DOBBS: You were at the exchange today, Christine. How is the membership feeling?

ROMANS: Many of the members are upset about what they consider as bad press. Many of them are concerned that the No. 2 and three people at the stock exchange might be very highly paid. They're not going to find out about that for sure until the annual report next spring.

Also, a lot of folks talking, Lou, about the plaque, the plaque on the front of the New York Stock Exchange, a plaque that was laid not many days after September 11, you'll recall. Some of the members are saying that the fact that that plaque on the bottom is signed "Dick Grasso" is a sign perhaps he sees himself as too important, with the New York Stoke Exchange being usurped by its leader. The members want to point out that the members own the New York Stock Exchange.

DOBBS: And that plaque commemorating the reopening of the exchange and the tragic events of September 11, there was grumbling, but very quiet grumbling, at the time it went up, no other name going up on the New York Stock Exchange building.

ROMANS: Very quiet grumbling then, but that grumbling is getting louder right now.

DOBBS: Christine, thank you very much -- Christine Romans. We appreciate it.

On Wall Street today, stocks tumbled for a second straight day. The Dow fell almost 87 points, the Nasdaq down 50. The S&P dropped a little over 12 points on the day. Checking where the market stands two years after September 10, the Dow Jones industrial average is down nearly 2 percent. The Nasdaq is up more than 7.5 percent. The S&P 500 is still down 7.5 percent from the average levels just before September 11.

Coming up next: September 11 and its effect on this country's role in the world. Kitty Pilgrim reports on U.S. foreign policy on "A Changed Nation."

And two leading experts on foreign policy face off over how the world views this country. They have two very different perspectives next. And "Islam and Democracy," our series of special reports this week in conjunction with "The Economist" magazine, continues. Tonight, we focus on Egypt. Tonight, we're joined by Senator Richard Lugar, chairman of the Foreign Relations Committee.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: This week, our series of special reports on "A Changed Nation," the many ways in which this country has changed over the two years since September 11. Tonight, we take a look at the United States' relationship with the rest of the world.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): After September 11, the world poured out sympathy. The war against terrorists was defined.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Either you're with us or you are with the terrorists.

PILGRIM: The search for terrorists moved from Afghanistan to Iraq. The U.N. Security Council passed Resolution 1441 unanimously, demanding inspections for Iraq's weapons of mass destruction.

But when the United States moved to military action, much of that solidarity was lost.

BUSH: The course of this nation does not depend on the decisions of others.

PILGRIM: Secretary of State Colin Powell, in recent weeks, put it down to a clear dividing principle.

COLIN POWELL, SECRETARY OF STATE: The national security strategy gained attention in the aftermath of 9/11 because it made explicit the concept of preemption.

PILGRIM: And some say any perception of acting unilaterally carries a consequence.

AMBASSADOR THOMAS PICKERING, FORMER UNDERSECRETARY OF STATE: There is an in-built difficulty with being the biggest kid on the block. And there are differences about how to do this. In some cases, I do believe a confrontational style, in the short term, gets you places, but you pay over the longer term.

PILGRIM: The war was quickly over, declared a victory, Saddam Hussein deposed, mission accomplished, but, it seems, the task of winning the war easier than keeping the peace. That reality came slowly, after much devastation. BUSH: I recognize that not all our friends agreed with our decision to enforce the Security Council resolutions and remove Saddam Hussein from power. Yet we cannot let past differences interfere with present duties.

PILGRIM: There are signs of international cooperation. Positions have softened. The Arab League recognized the new Iraqi Governing Council. The United States discusses an international force in Iraq. China steps forward to broker peace on the Korean Peninsula.

(on camera): None of those steps are easy. The United States continues in its role of unrivaled strength, but now with emerging signs of increased international cooperation.

Kitty Pilgrim, CNN, New York.

(END VIDEOTAPE)

DOBBS: And tonight, in our "Face-Off": the United States' relationship with the rest of the world at a time when six in 10 Americans say the United Nations is doing a poor job. That, by the way, is the highest negative rating for the United Nations in Gallup's polling history.

We're joined now by Clyde Prestowitz, who says the Bush administration has alienated many of this country's friends over the past two years. He's the author of "Rogue Nation: American Unilateralism and the Failure of Good Intentions." And Michael Ledeen says, over the past two years, the United States has not alienated anyone that wasn't alienated before. He's a fellow at the American Enterprise Institute. And both join us tonight from our studios in Washington, D.C.

Gentlemen, let me start straightforwardly.

Have we really seen a significant change in the way in which our allies deal with us over the course of the past two years?

Let me start, if I may, with you, Clyde.

CLYDE PRESTOWITZ, AUTHOR, "ROGUE NATION": Yes, Lou.

Our problem is not so much that people dislike us, but it's more in sore sorrow than in anger. What we have seen is a situation in which our friends, the people who have been our longest allies, people like the Turks, the Canadians, have turned and said, we're afraid of where you're going. We don't understand what you're doing.

We have seen our favorable ratings in international polls drop precipitously, even in countries that have been longtime friends of ours. We have seen leaders who have been longtime friends of the U.S., staked their careers on being friends of the U.S., turn around and say, listen, we don't understand where America's going and where you're going is a place that looks scary to us.

DOBBS: Michael, you don't see it that way at all, do you? MICHAEL LEDEEN, AUTHOR, "THE WAR AGAINST THE TERROR MASTERS": No.

I think, basically, that France and Germany have alienated the rest of Europe. They're the ones who have been more unilateral than anybody else. And the French invaded the Ivory Coast, never once went to the Security Council, never once even went to the European Council. And nobody said boo. So what we're seeing here is just the usual ebb and flow of political concerns, varying from one government to another.

The anti-Americanism of today is nothing compared to anti- Americanism back in the 1970s during Vietnam or even in the 1980s, towards the end of the Cold War.

DOBBS: With the Reagan administration driving defense spending and tearing down walls.

Clyde, how do you respond to that?

PRESTOWITZ: Well, my response is that we don't want to go back to where we were in Vietnam and the anti-Americanism that was created by the fact of the Vietnam exercise.

But I think what's more important here is, again, I come back to this point that we -- our longtime friends, leaders who have been staunchly pro-American throughout those periods of anti-Americanism, are now turning around and saying, we think you're on the wrong track. And it's not so much anti-American as it is, we're your friends, but you're on the wrong track. Friends don't allow friends to drive drunk. We think you're driving drunk.

That's what we're hearing from leaders in Korea and leaders in Canada and leaders in...

DOBBS: Let me ask you both this.

This president campaigned on the issue of foreign policy, saying -- and it is as vivid today as almost the day he uttered the words -- a more humble foreign policy. Is it possible, given a war on terror, for any administration to conduct its foreign policy in a humble fashion?

Michael?

LEDEEN: No, I don't -- it's very hard. I mean, I suppose anything is possible, especially in politics. But that's a very hard act to pull off.

And I think that criticism of American is one thing. But what we really have to avoid, above all, is contempt for American. So, the most important thing for this administration right now is to make sure that it wins the war. And some people now have growing concern that we're TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com



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