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Lou Dobbs Tonight
CIA Director Defends Iraq Intelligence; Interview With Senator Jay Rockefeller
Aired February 05, 2004 - 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.
(BEGIN VIDEOTAPE)
LOU DOBBS, CNN ANCHOR (voice-over): Tonight, CIA Director George Tenet defends his agency's record on Iraq, one year to the day after Secretary of State Powell made the case for war at the United Nations.
GEORGE TENET, CIA DIRECTOR: They never said there was an imminent threat.
DOBBS: Senator Jay Rockefeller, the vice chairman of the Senate Intelligence Committee, joins us tonight.
And in "Exporting America," an American company, a world leader in technology, it's sending $600 million to cheap labor markets overseas.
BOB BAUGH, INDUSTRIAL UNION COUNCIL: It is the outsourcing and Wal-Marting of America.
DOBBS: Martha Stewart on trial. Defense attorneys today try to destroy the credibility of the prosecution's star witness.
And illegal immigration, it is not only a problem for border states. It is now a national crisis.
(END VIDEOTAPE)
ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, February 5. Here now, Lou Dobbs.
DOBBS: Good evening.
CIA Director George Tenet today delivered a forceful and detailed defense of his agency's work leading up to the war against Saddam Hussein. Tenet insisted, the CIA made an objective assessment of the threat from Iraqi weapons of mass destruction before the war. Tenet delivered his speech one year to the day after Secretary of State Colin Powell went before the United Nations to say that there was compelling evidence that Iraq had chemical and biological weapons.
Today, the CIA director said it will take time to reach final conclusions.
(BEGIN VIDEOTAPE)
DOBBS (voice-over): CIA Director George Tenet on the defensive. TENET: Unfortunately, you rarely hear a patient, careful or thoughtful discussion of intelligence these days. But these times demand it, because the alternative, politicized, haphazard evaluation, without the benefit of time and facts, may well result in an intelligence community that is damaged and a country that is more at risk.
DOBBS: Tenet, in careful terms, admitted making mistakes.
TENET: We do not yet know if any reconstitution efforts had begun, but we may have overestimated the progress Saddam was making.
DOBBS: But Tenet strongly defended his analysts' work.
TENET: They never said there was an imminent threat. Rather, they painted an objective assessment for our policy-makers of a brutal dictator who was continuing his efforts to deceive and build programs that might constantly surprise us and threaten our interests.
DOBBS: Senator Tom Daschle was unconvinced.
SEN. TOM DASCHLE (D-SD), MINORITY LEADER: It's clear that there was nothing new from the speech provided today. And I think that it's also clear that he hasn't changed anybody's attitude.
DOBBS: And the chairman of the Senate Intelligence Committee said the CIA was not alone in making intelligence mistakes.
SEN. PAT ROBERTS (R), KANSAS: I think there's been an overall global intelligence community failure in regards to the statements made in reference to the stockpiles.
DOBBS: Chairman Roberts also agreed with George Tenet's claim that the weapons hunt is far from finished.
(END VIDEOTAPE)
DOBBS: Tenet also sees the opportunity to take credit for some event milestones in the war on terror, including Khalid Shaikh Mohammed's arrest, Libya's abandonment of its weapons of mass destruction program, and the dismantling of the Pakistani nuclear black market.
I'm joined now from our bureau in Washington, D.C. by national security correspondent David Ensor.
David, it was an extraordinary speech by George Tenet George Tenet, extraordinary because it was necessary as well. Why did Tenet choose today to defend his agency so forcefully?
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, it was very necessary at this point, Lou.
The last couple of weeks, the agency has been under sort of frontal attack, in part by one of its former employees, David Kay, the weapons inspector, who was blaming the CIA and U.S. intelligence for the failure, what he called intelligence failures prior to the war.
And Tenet himself has been under a fair amount of criticism. There have been those, including the Democratic Party front-runner at the moment, who have been calling for his resignation. So it was time to get out a response. He couldn't wait until the hearing February 24, which will be the next time he's scheduled to speak in public, Lou.
DOBBS: David, as you know, some of the CIA's most severe critic have accused the agency of not doing enough to develop human intelligence against those who would threaten our national security. What did Tenet have to say about that?
ENSOR: He forcefully depended the record under his tenure. He admitted there had were not enough spies when he started working. He said they recruited a great many more. He cited some examples that we hadn't heard of before.
He said that it was a CIA spy who led the U.S. to Khalid Shaikh Mohammed. He said that it was a penetration of their network through which they were getting equipment that led to the intelligence about Libya. The CIA confronted Libya with that intelligence. And that led to Libya's decision to give up its weapons of mass destruction.
And he said that the U.S. and its allies had penetrated the nuclear black market activities of Dr. A.Q. Khan in Pakistan, leading to the exposure of them as well.
DOBBS: David, as you mentioned, Khan, the scientist who sold nuclear technology to other countries, President Musharraf pardoning him selling to countries such as Iran and North Korea. Did Tenet address that subject today?
ENSOR: He didn't address the pardon. He did talk about the CIA's efforts against this network. And, in some ways, he raised more questions than he answered, talking to analysts outside the government there, saying fascinating that U.S. intelligence had people in on this network and knew what was going on. How long ago did they know?
After all, this is a network that may be responsible for the nuclear weapons in Iran, for an effort to sell them to Iraq, for an effort to get them to Libya, and maybe even some of the contributions to North Korea. So this is a very, very big story. And there will be a lot more on this Pakistan matter.
DOBBS: And led by agents of the British intelligence service.
David, thank you very much -- David Ensor, our national security correspondent.
Well, later in the hour, I'll be joined by the vice chairman of the Senate Select Committee on Intelligence, Senator Jay Rockefeller, to give us his assessment of Tenet's speech today.
President Bush delivered another vigorous defense of his decision to go to war against Saddam Hussein. President Bush strongly criticized those politicians who opposed the war in a speech in South Carolina that laid out many of his election themes as well.
White House correspondent Suzanne Malveaux has the report -- Suzanne.
SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Lou, it is really part of an aggressive White House strategy.
President Bush, earlier today at Charleston, South Carolina, that is where he made it absolutely clear that he is standing by his man, CIA Director George Tenet, also standing by the case, the administration's case for war. He was not apologetic about it, rather, the strategy, of course, to make some sort of acknowledgement that, while weapons of mass destruction have not yet been found, that there is still a lot of work to be done and that the policy of preemption still stands.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: As the chief weapons inspector said, we have not yet found the stockpile of weapons that we thought were there. Knowing what I knew then and knowing what I know today, America did the right thing in Iraq.
(CHEERING AND APPLAUSE)
(END VIDEO CLIP)
MALVEAUX: And, Lou, another part about strategy, of course, is where the president is taking his message. A couple weeks ago, it was in New Hampshire, today, South Carolina, and next week, in Missouri, of course.
This is noteworthy because all of these states, the locations of Democratic primaries recently. So, of course, the president taking a pounding in some of those places. They want to answer their critics. I should also let you know, as well, that, tomorrow, that the president is going to be announcing, formally announcing those on his commission to investigate prewar intelligence. Sources and administration officials tell us that Senator John McCain will be on that commission.
Not surprising. He's one of the top Republicans who made that recommendation for an inquiry -- Lou.
DOBBS: Thank you, Suzanne.
On Capitol Hill today, authorities reopened the first of three Senate buildings closed by the poison attack earlier in the week. Investigators still do not know where the poison, ricin, came from. Health officials say no one who works on Capitol Hill has fallen ill.
(BEGIN VIDEO CLIP)
DR. JOHN EISOLD, ATTENDING PHYSICIAN: Happy to report that, despite the people we did have who were potentially exposed to this toxin, we have been continuing to monitor over the past couple of days. We still have no one who is sick or ill at this point. And, based on what we know about how the toxin works, we're confident that, at this point, we will not see anyone who has any difficulty at all with poisoning from ricin.
(END VIDEO CLIP)
DOBBS: More than 500 people are now involved in that investigation, including a contingent of U.S. Marines.
Still ahead, a huge investment by an American manufacturing company, but not a penny of it in this country. In "Broken Borders" tonight, illegal immigration is now a national crisis. It is no longer simply a border state problem.
And in the Martha Stewart trial today, defense attorneys trying to destroy the credibility of the government's star key witness.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: In "Exporting America" tonight, yet another dramatic and a very disturbing example of why manufacturing in this country is in such a state of crisis. Corning, it's a 150-year-old American company. It's planned a huge investment in one of the fastest-growing areas in technology, the production of flat glass used in computers and television sets. Unfortunately for American workers, the new investment will be entirely in Asia.
Peter Viles reports.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT: This should be good news for the American economy. Those flat screen TVs are the hottest thing in retail. And an American company, Corning, dominates production of the glass that's used in those high-end liquid crystal displays. And Corning is spending $600 million to expand production.
Here's the bad news. None of that expansion is in the United States. It's all in Taiwan and Japan.
BAUGH: It's another example of American domestic corporations investing overseas to export right back into the domestic market. It is the outsourcing and Wal-Marting of America.
VILES: Corning says it is not about cheap labor. It makes some flat glass in Kentucky, but says it wants to be close to its customers, the Asian factories where flat-screen TVs are made.
JOSH BIVENS, ECONOMIC POLICY INSTITUTE: It would be much more convincing that they were moving to market reasons if they weren't shipping all of this glass, whether in TVs or in other components, back to the United States eventually. So I think it's more about labor cost savings.
VILES: Within the industry, this is business as usual, produce in Asia, sell in the United States.
GARY SHAPIRO, PRESIDENT, CONSUMER ELECTRONICS ASSOCIATION: Consumers vote with their pocketbook. And that's what makes this country great. And when they go to Wal-Mart and they buy their products, the odds are pretty heavily they are buying a product that was manufactured elsewhere, but some of the components and certainly a lot of the innovation may have come from the United States.
VILES: By one estimate, the flat panel industry is a $30- billion-a-year market and will double in size in three years. But there is not a single U.S.-owned company that makes LCD televisions.
(END VIDEOTAPE)
VILES: And the economic fallout from these foreign investments goes far beyond lost jobs. Because much of this glass is ultimately coming to the United States, it will eventually ultimately add to the huge trade deficit in this country -- Lou.
DOBBS: It just goes on and on.
VILES: Yes.
DOBBS: The fact is that, in the television market, as you reported, zero representation, Corning, with every opportunity here to serve this market and this country, choosing to make an investment overseas.
VILES: A big investment. It's not the first one. This is the second or third big investment in Taiwan and Japan. They also produce in South Korea.
DOBBS: Pete, thank you very much.
Well, foreign competition, unfair trade practices, have combined to create a worsening problem for this economy. We went to the source of this story tonight to find American small-business owners who are suffering under unfair trade practices. And I will tell you, we hear on this broadcast from literally tens of thousands of people who have lost their jobs, who have lost their businesses, who are on the brink of losing their businesses. This is not about statistics.
My first guest tonight founded his own tool and die company and was, for three decades, living, as he put it, the American dream. Now his business is in danger of failing. He's had to lay off nine of his 12 employees. He says NAFTA and the World Trade organization are to blame. I am joined tonight by Jim Tillmann. He's the founder of Tillmann Tool and Die. And he joins us tonight from Breckenridge, Minnesota.
Jim, good to have you with us.
JIM TILLMANN, FOUNDER, TILLMANN TOOL & DIE: Thanks, Lou. Thanks for having me. My pleasure.
DOBBS: You are struggling right now with your business. What is, in your judgment, the principal reason for it?
TILLMANN: Well, it's definitely the NAFTA and the WTO that -- we're dealing against unfair tariffs. If I build a tool that goes to China, that they charge us a 29.9 percent tariff on anything that goes over there. Anything coming in from China, there's a 3.3 percent tariff. That's got to be stopped immediately. I don't know how much longer we can hang on with that kind of injustice.
It's just -- it's not fair trade. I don't know how they labeled it free trade, but that's what they labeled it, I guess.
DOBBS: We had a viewer write in, Jim, said, if this is free trade, then I want to see that free lunch that everybody told me didn't exist.
When you lay off nine out of 12 workers, is this saying that you really are close to closing your business?
TILLMANN: Well, I don't know. Maybe I'm not a real smart businessman. I probably should have shut the doors two years ago, but I feel that's really -- that's really hard to do. I was laid off once. And I found out on Friday I didn't have my job on Monday and I know how that feels. So I have just been limping along. And I had a few other investments that I sold just to keep the shop going.
And it's not like it sounds. I haven't laid off nine people, per se. We rotated people. And they took turns. And they started finding other jobs. And most of them found jobs that are lesser paying than what they were getting here. So I'm down to three people. And they are good people. They are all good people. I hated to lose any one of them. I had people -- I had a person that was here 18 years. And he was one of the best toolmakers you could find. And he's no longer here.
DOBBS: You're talking about fair trade agreements. Congress enacted the fast track authority, so that Robert Zoellick, the U.S. trade representative, could negotiate on the president's behalf these trade agreements. Do you think that was a mistake?
TILLMANN: Well, the fast track might have been all right if we had some strong leadership in the Congress, the Senate and the Congress, where, you know, it is thumbs up or thumbs down. They can't put any amendments under the fast track.
I know Senator Dorgan -- I got an eight-page congressional record from him. And he's really good about it. I guess he's on your show tomorrow night. I wish you would ask him, how come he doesn't put thumbs down on some of these and make Ambassador Zoellick go back to the drawing board and negotiate these equal tariffs.
And we're not even talking yet about wages, where they are paying 16 cents and hour and we're paying $20 an hour here. And we're not talking about OSHA.
(CROSSTALK)
TILLMANN: Pardon me?
DOBBS: I'm sorry. I didn't mean to interrupt you. Go ahead.
TILLMANN: So, there's many things that enter into this. We have to contend with OSHA.
For instance, I have used trichloroethylene one year for cleaning molds. If I dump that outside, I go to jail. Down in Mexico, they do that all the time. And that's why there are kids born down there without arms and legs. We don't have the same playing field. And now Clinton in 1992 or '93, I guess it was, signed the NAFTA agreement. And, you know, if it would have been retroactive until the year 2050, so it has people like my age could get out and people could think about it for 30 years before they got into it, it would be fair.
It's like you and I playing Monopoly and, all of a sudden, halfway through, I change the rules on you, Lou. There's no way you could win. And this was my American dream, to own my own business. And they just cut it out from under me. It's my own country and I'm embarrassed for my own country.
DOBBS: Well, you have a lot of company in that respect, Jim, as you well know.
The president's trade negotiator I know you are critical of, and understandably so, given your experience. What bothers, I will tell you, personally, me, just talking to you Jim -- and we've had the opportunity to communicate here over the last couple of days in various ways -- but you're in the tool and die business. Your industry is the foundation of manufacturing in this country.
TILLMANN: That's right. That's right.
DOBBS: Irrespective of the industry, you're the foundation of the wealth creation of this country in the real economy.
TILLMANN: That's right.
DOBBS: What do you think the future holds for this country?
TILLMANN: Well, at the present rate, it isn't very good.
I just like to say a little story. When I was an apprentice in 1967, I worked at FMC in Minneapolis as an apprentice. And we made missile launchers for the Navy during the Vietnam crisis. And I had a guy that was 60 years old come up to me and he said to me, he says, don't you ever let happen to this country what my generation let happen to this country.
And I looked at him real strange and I said, what's that? And he says, back in 1939, we let the machine shops and the foundries go down the tube. They were very obsolete. And it took us three years. We put women to work 12 hours a day for the war production. It took us three years to catch up to the Germans and the Japanese for the war. And that's what is happening right now in this country. If we continue to let the tool and die shops and the mold- building shops go under, that's exactly what is going to happen. And history will repeat itself. And for the people that don't -- that don't remember the past, we will surely relive it. And I'm afraid, if we have another 1939 again, we're in big trouble. If everything is going to be manufactured in China, if they are going to manufacture our missiles, some day, we're going to get them back here and they are going to be airmailed to us.
DOBBS: Jim Tillmann, we thank you very much for being with us. And we wish you all the very best under what we know are difficult, challenging, tough circumstances. Thank you, Jim.
TILLMANN: Well, thank you. Thank you for having me. Appreciate it, Lou.
DOBBS: Coming up next, "Broken Borders," the influx of illegal aliens into this country affecting not only those who live in our border states, but communities all across the nation. We'll have a special report on a widening national crisis.
And, after the CIA director launches a new defense of his agency and U.S. intelligence before the war in Iraq, we'll be talking with the ranking Democrat on the Senate Intelligence Committee, Senator Jay Rockefeller.
And Wal-Mart fights back against a growing wave of criticism. It's enlisting the help of some powerful allies and friends -- that and a great deal more still ahead here.
Please stay with us.
(COMMERCIAL BREAK)
DOBBS: We report extensively here about the as many as 12 million illegal aliens who are in this country and the tremendous effect that they are having in our border states. But that is only part of the story. Many illegal aliens have settled in our nation's heartland, from rural areas in the Midwest to small Southern towns. And they are having a profound impact on those communities.
Lisa Sylvester has the story.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The once sleepy town of Gainesville, Georgia, has transformed in the last decade into an immigrant city. Signs are now in Spanish and English. Strip malls are full of stores catering to Hispanics. The same is true for nearby Gwinnett County, where the Hispanic population jumped seven-fold between 1990 and 2000.
D.A. King, who grew up in the area, says it had a negative impact, falling wages and a drain on the area's hospital and schools.
D.A. KING, AMERICAN RESISTANCE FOUNDATION: Illegal immigration accounts for most of the immigration to this county and to this area and to this country. More than half of our immigration is legal. It is changing the face of our country.
SYLVESTER: Illegal immigration used to be a worry primarily for border states, but now illegal aliens are fanning across the country, to the meat-packing plants in Nebraska, where the illegal population has quadrupled in the last decade, to the tobacco farms in North Carolina, where the illegal population has groan tenfold.
STUART ANDERSON, NATIONAL FOUNDATION FOR AMERICAN POLICY: I think it's a combination of people seeking work, but I think employers, if they are looking to expand, one of the ways of being able to expand in a restaurant and other industries is by being able to hire more people.
SYLVESTER: But immigration reformers argue, hiring illegal workers pushing down wages for low-skilled American workers.
ROY BECK, NUMBERSUSA: The people who are the poorest, the most vulnerable among our population, are the people who are hurt the most by this flow. It's their wages that are being driven down the most.
SYLVESTER: No state has been left untouched, as illegal aliens flow to wherever there are jobs.
(END VIDEOTAPE)
SYLVESTER: Critics say new laws are not needed; it's the current laws that are not being enforced, and that, even if local law enforcement officers were able to arrest all the illegal aliens, they would have nowhere to put them. So, instead, Lou, nothing is done.
DOBBS: Lisa, thank you very much -- Lisa Sylvester, reporting tonight from Washington.
Coming up next here, CIA Director George Tenet defending prewar intelligence that his agency gathered. We'll be talking to the ranking Democratic on the Senate Intelligence Committee, Senator Jay Rockefeller.
And it's do or die tonight for Howard Dean. The struggling presidential candidate gives himself an ultimatum. Senator John Kerry expected to win a key endorsement from a former candidate.
And defense attorneys in the case against Martha Stewart, well, they go after the government's key witness -- that and a great deal more still ahead here.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Word tonight that Democratic presidential candidate Senator John Kerry will win at the endorsement of one of his former rivals. Congressman Dick Gephardt, who abandoned his quest for the Democratic nomination two weeks ago, to endorse Kerry tomorrow, that according to Democratic Party sources. Senator Kerry this week won the Democratic primary in Gephardt's home state of Missouri, a key battleground. And Kerry today, campaigning in Maine and Michigan, where a total of 152 delegates are at stake in contests this weekend.
Howard Dean, meanwhile, the one-time front-runner in this race for the nomination of the Democratic Party, is giving himself an ultimatum, win the Wisconsin primary in two weeks or drop out altogether. On his Web site today, Dean said: "The entire race has come down to this. We must win in Wisconsin." Dean says victory there will carry his campaign through Super Tuesday two weeks later. Dean is hoping to launch a major media campaign in Wisconsin beginning next week.
DOBBS: Senator John Edwards taking on an issue that we have reported on extensively in this broad, the exporting of America. The shipment of American jobs to cheap overseas labor markets. The senator today promised his supporters in Tennessee that as president he will reform U.S. trade policies to keep jobs in this country.
As we reported earlier in the broadcast, CIA Director Tenet today delivered a forceful defense of his agency's record on prewar intelligence on Iraq.
I'm joined now by Senator Jay Rockefeller. He is the vice chairman of the Senate Select Committee on Intelligence.
Senator, good to have you with us.
SEN. JAY ROCKEFELLER (D), WEST VIRGINIA: Thank you, Lou.
Are you persuade bid the CIA director's speech today?
ROCKEFELLER: I'm not. And for sort of a philosophical reason. I think that the intelligence community has to fess up to the fact that it made a mistake and a pretty big one. I think the Congress has to fess up to the fact that we made a mistake, and a pretty big one. I think the president of the United States has to fess up to a fact that he made a pretty big mistake taking us to war, making that decision. If we can get that past us, Lou, we can stop worrying about the blame game and try and fix intelligence and fix domestic security and fix the PATRIOT. Act, all the things we have to do.
DOBBS: Do you still have confidence in Director Tenet?
ROCKEFELLER: I do but I don't put knit that context. It's like saying, I don't know, I...
DOBBS: Let's put knit your context, Senator.
ROCKEFELLER: I was going to give you a baseball analogy and you would have lost 30 percent of your viewership. He isn't what counts. The fact he defended and has said I wouldn't change a word of what's been said, in intelligence, does not impress me. He himself is impressive. He's very bright, he knows the system. He knows the hill. And, again, we're all wrong on this thing, and we made a terrible mistake. And people are paying for it, and it's unacceptable. Let's get past it and fix it.
DOBBS: Senator, let me put it -- if I may, create a context here for you to give a response. Resolution 1441 accepted by all of the members of the security council. Every intelligence agency of the so- called coalition before the war, signing off that, Saddam Hussein had weapons of mass destruction particularly biological and chemical weapons. Regime change was the first articulation of policy by the Bush administration. Is it in fact perhaps a lost in all of this the fact Saddam Hussein had his destiny in his control at any time company have declared himself leading up to the beginning of the war?
ROCKEFELLER: Absolutely. Of course that's true. But the problem, Lou, as you know very well what we're facing is the fact that we -- that I, myself, I now regret that vote, based upon what I know in intelligence now, but you know we voted to go to war based upon a grave and growing threat, I.E. nuclear about to arrive, chemical/bio about to arrive right here in the United States or whatever, and that has been proven wrong. That is a -- that is -- that's a century making mistake. And it's not something just to debate about. It's something we have to make sure never happens again. I'm on the intelligence committee and I'm on it for a reason that is to bring the truth out and to make sure that we fix our intelligence system so that it works, which it doesn't.
DOBBS: As you say, Congress, the executive branch, intelligence agencies, made mistakes, need to own up to them. Which seems to me a rational beginning point to examine what should be going forward. Defense -- CIA Director Tenet says that he has and has had adequate human intelligence.
Do you believe that the agency is properly oriented toward human intelligence at this point?
ROCKEFELLER: That's a classified subject in absolute terms but I will tell you that for the last number of years, certainly during the years that Bob Graham was chairman of the committee and slightly before that, there has been a sharp increase in the budget for human intelligence and, therefore, you know that the product follows a number of years later. But clearly that has been a distinct inadequacy on our part. And clearly, human intelligence is the most profound and fundamental way that intelligence is carried out.
DOBBS: Senator Jay Rockefeller, vice chairman of the Senate Select Committee on Intelligence thanks for being here.
ROCKEFELLER: Thanks, Lou.
DOBBS: Turning now to the case against Martha Stewart. Defense attorneys today fired back at the government's star witness, the defense team for Stewart's former broker cross examined Douglas Faneuil after his damaging testimony yesterday. At the heart of the defense's position questions about Faneuil's credibility.
Mary Snow joins us now from the federal courthouse in Lower Manhattan with today's development -- Mary.
MARY SNOW, CNN CORRESPONDENT: Lou, one of the things that the defense did to try to poke holes in Doug Faneuil's credibility was to try for show that he had an axe to grind with Martha Stewart. Two E- mails were produced. Two E-mails written by Doug Faneuil to friends about Martha Stewart. One, said I have never, ever been treated so rudely on the phone by a stranger. A second E-mail, in which he refers to himself as baby red, PS, Martha yelled at me again today but I snapped in her face and she actually backed down. Baby put Ms. Martha in her place.
It was also revealed that Faneuil told the government about a phone conversation he had with Stewart when he was working as his stockbroker assistant to his then boss Peter Bacanovic. Bacanovic put Martha Stewart on hold and asked Faneuil to pick up. Faneuil claims when he picked up Martha Stewart was upset about the hold music and she told him she would leave both her stock broker and Merrill Lynch if they didn't do something about the hold music. Faneuil admitted he never told Bacanovic that story, saying that was one conversation I chose not to share with him. That story even brought a smile to the face of Peter Bacanovic the co-defendant in this case. His attorney did cross examination today -- Lou.
DOBBS: Mary, thank you very much. Mary Snow.
"Tonight's Thought" is on crime. "Commit a crime, and the world is made of glass. There is no such thing as concealment." Those are the words of Ralph Waldo Emerson.
Coming up next "Exporting American." We introduce you to someone who helps American companies ship American jobs overseas and he says it's very good business. It's good bussiness.
And Wal-Mart, fighting back against growing criticism of its practices as it becomes one of the country's largest political donors.
UNIDENTIFIED MALE: It's very important for these companies have friends in Washington. Wal-Mart has a lot of issues it has to be concerned about now.
And "Grange On Point" tonight. The growing debate over whether the Pentagon should permanently increase the size of our army. That and a great deal more still ahead.
(COMMERCIAL BREAK)
DOBBS: The world's largest retailer Wal-Mart said its sales reached a staggering $18.5 billion. Wal-Mart's incredible success has helped it dominate retailing and it's also the nation's top employer. But while it's influence has grown dramaticly, so has the public scrutiny and criticism against.
Bill Tucker reports.
(BEGIN VIDEOTAPE) BILL TUCKER, CNN CORRESPONDENT (voice-over): Wal-Mart is more than just a super center, it's becoming a super target. It's under investigation for using illegal aliens to clean its stores and accused of locking those workers in its stores overnight.
JAMES LINSEY, PLAINTIFFS' ATTORNEY: They're locking in people who don't speak English. They're locking in people when they tell them don't go out. Don't open the doors for any reason other than possibly for fire. And it's unconscionable.
TUCKER: Wal-Mart says no employees have ever been locked in a store without a supervisor on site with keys. Critics blame the company for dragging down the wages of American workers. In a event study by the Los Angeles Economic Development Commission did find, that the committee pays wages $2.50 to $3.50 less than similar union jobs. And community activists argue Wal-Mart takes more out of the community than it adds.
REV. ALTAGRACIA PEREZ, COMMUNITY ACTIVIST: Whatever taxes are gained from Wal-Mart coming in are lost from other stores coming down. And whatever jobs come in, there's a loss because of jobs of poverty wage jobs instead of living wage jobs.
TUCKER: Wal-Mart defends itself by saying it pays competitive wages and provides employees low cost, catastrophic healthcare coverage. Now Wal-Mart is the second largest contributor to political campaigns with $1 million in contributions, second only to Goldman Sachs.
LARRY NOBLE, CT. FOR RESPONSIVE POLITICS: Wal-Mart has a lot of issues it has to be concerned about now. Obviously concerned about immigration issues. It's concerned about labor issues. It's concerned about health issues and, like all companies, it's concerned about tax issues. What they see now is that it's important to be a player in Washington.
TUCKER: The company also has trade issues. It and its suppliers imported $15 billion worth of low-cost goods last year at the expense of many American manufacturers who can't compete with low wage overseas factories. And Wal-Mart has to be concerned about more than just Washington.
(END VIDEOTAPE)
TUCKER: Many local communities are passing zoning regulations prohibiting stores larger than 100,000 square feet aimed at keeping out super center stores. Wal-Mart's latest super center which just opened down in Tampa, Lou, is 99,995 square feet.
DOBBS: Well, there's an ample evidence of the reasons for Wal- Mart's success, that would be one of them. Of those contributions, what percentage go to Republicans, what percentage to Democrats?
TUCKER: Break out unusually biased in the giving, 85 percent to Republicans, 15 percent to Democrats.
DOBBS: Bill, thank you very much, Bill Tucker.
Well my next guest here hosted a conference last month to help American companies shift those jobs overseas. It was a seminar to teach American corporate executives how to ship those jobs overseas. He says globalization will ultimately help us all. That offshore outsourcing is not to blame for the loss of jobs in this country. Now joined by Atul Vashistha. He says it's a misconception. And welcome.
And how is it a misconception?
ATUL VASHISTHA, CEO & FOUNDER NEOIT: Thanks, Lou.
It's a misconception because if you look at what offshore outsourcing is doing for America it is actually helping American companies stay competitive. It is helping them lower the cost of products and services. And actually it is improving the buying power in nation.
DOBBS: How does it -- I think I understand, if you will, the premise of what you are saying. But when we watch and as we document here, literally hundreds of thousands of jobs being shipped to cheap overseas labor markets, those jobs are replaced typically by salaries that are 30 percent lower and there is no migration up the value chain, it's down the value chain. So, how does that help America?
VASHISTHA: There's no denying that, in the short term we have a problem. I think the industry, the government and the companies are still not doing enough. What I can tell you is that our clients are starting to do things to combat that.
DOBBS: Like what?
VASHISTHA: For example, some of the things our clients are doing, they are actually putting money into retraining. We cannot be competitive in this new global economy if our workers don't continue to update their skills, even if your are a software programmer.
DOBBS: Let me ask you this, engineering, software programming, have unemployment rates, approaching double digits in this country. What in the world are you going to train them for?
VASHISTHA: Lou, technology as you know is changing every year.
DOBBS: I do, indeed.
VASHISTHA: If four years ago you were doing HTML, or Web based programming, you need to do a lot of different things today, because that technology is old now.
DOBBS: Right.
VASHISTHA: I did my engineering degree and my MBA, I went back to Harvard last year to educate myself again. And I think that's something we absolutely have to do.
DOBBS: That's boffo (ph). But let's talk about those hundreds of thousands of jobs -- people glibly talk about training. Men and women who have trained themselves in a variety of skills who have a variety of educational pursuits and degrees, I hear people start talking about training as if that's a panacea.
What jobs should they train themselves for? We are shipping high value jobs overseas to India, to the Phillipines, to Ireland, to Poland, to Russia, for crying out loud. What in the world are we supposed to train them to do?
Now, I understand the profit motive, as a matter of fact, no one is more pro business, pro American free enterprise than I am, but I'm also pro American worker. What in the world -- you talk about pain (ph), we're seeing evidence of it every day.
VASHISTHA: But Lou, if we don't focus on our investment on training we can't just put up our borders and imagine that these job will stay. In fact, companies are going bankrupt because they are not taking advantage of these lower co-markets.
DOBBS: Because somebody else is, is that right?
VASHISTHA: Right, exactly. So there's...
DOBBS: So what you end up is, a race to the bottom as it's been styled. Because if one company is go over to India to get a job, to pay a salary that is a tenth of what they would be paying in this country. They are forced to compete. Is not free trade. This is not comparative advantage, as envisioned by David Ricardo, this is the wholesale exportation of American wealth.
VASHISTHA: Lou, the difference here is that this is a global economy.
DOBBS: I understand that. But these are old saws (ph) -- globalization has been a fact since 1987.
VASHISTHA: Right, Lou, take a look at what happened to the buying power in our country. It's significantly gone up. And I know in the last 2 years, 3 years...
DOBBS: Consumption power in this country for the last three decades have declined over the past three years has actually fallen even more dramatically than that average over three decade. It is quite the inverse.
VASHISTHA: Lou, you know, I'm sorry, I beg to differ.
DOBBS: Please.
VASHISTHA: If you take a look at the buying power of our country. Let's take a look at the last two decades. We created 22 million excess jobs than we're destroyed (ph) in this country. This is a Bureau of Labor Statistic numbers for the last two decades.
DOBBS: We created 22 million jobs during the course of the Clinton administration, 1992 to 2000. VASHISTHA: Right. So we created surplus jobs. I'm talking about economy changed, we actually created more jobs than we lost. At the same time the buying power in this country...
DOBBS: What sort of evident 22 million jobs.
VASHISTHA: Right -- just so what is happening today is I think this is the next evolution in the global economy.
DOBBS: That's wonderful. Great evolution, if you believe that the United States should be shipping its wealth, its jobs, standard of living and quality of life to third world countries where there are no regulations for environment, no regulations for labor, no standards that is a requirement here in this country.
The logical extrapolation it seems to me, Atul, is that if we are going to compete fairly, with fair trade and a globalized market, it seems to me that India, the Phillipines, Mexico, a Central American nation should have the same standards, otherwise we're competing simply on the price of labor.
VASHISTHA: Lou, I absolutely agree with you. In fact, if you look at the service industry which we participate in, these companies are paying higher average wages than the local counterparts. I mean so if you look at what is happening in India or China.
DOBBS: You're saying American companies are page higher wages in other countries than native companies.
VASHISTHA: American companies and the local companies that participate in this business. So companies like Infosys or Whipper (ph), or all these companies in India they are paying better wages than the average people get in that country.
DOBBS: The average Indian company.
VASHISTHA: Absolutely.
DOBBS: But why in the world do ten million Americans who are unemployed in this country, give a damn?
VASHISTHA: Well, Lou, here's why they give a damn, because if we don't do this, it we don't continue to innovate and let our companies be successful, we will lose more jobs.
DOBBS: Wait a minute. You are not innovating. You are not being more efficient. You are talking about hiring cheaper labor. Those are only code words for cheap labor. McKenzie did a study, as you're aware of, in what is the bulk of the gain for American companies?
VASHISTHA: Well, it's...
DOBBS: All in labor savings.
VASHISTHA: A bulk. DOBBS: The bulk, as in 70 percent of it.
VASHISTHA: Right. Lou, what happens to the money that comes back?
DOBBS: What money?
VASHISTHA: The money that is being repatriated back to this country? The savings that happen.
DOBBS: We should ship all our jobs then, because it sounds like a highly profitable enterprise.
VASHISTHA: Lou, it's easy to take a look at this...
(LAUGHTER)
DOBBS: Atul, I understand your position. I understand the profit motive, but corporations have a stake in this country do they not?
VASHISHTHA: I absolutely agree.
DOBBS: And they have a stake in the community, in investing in their people. They have a responsibility, because they are the beneficiary of this national American economy.
VASHISTHA: Lou, I absolutely agree with you. In fact, one of the things that has not happened yet is the industry, the associations and the companies have not come together to address the displaced workers. Now I can tell you, like I was telling you before, some of our companies are doing that. Apart from training...
DOBBS: That's a wonderful paternal outlook. But what I would much prefer to hear business people, men and women in this country running corporation and folks like you trying to make a dollar, you have a responsibility to this national economy. This is not just a market place. It's a nation. Right?
VASHISTHA: Absolutely.
DOBBS: I would love to have you come back and talk some more, we're out of time. Will you come back? We'll have more discussion.
VASHISTHA: Absolutely, Lou. Thank you.
DOBBS: Atul, thank you very much.
Coming up, "Grange On Point." The Defense Department authorizing thousands of troops for the army, it's an increase. Does this mean government officials are finally saying a larger military is needed? You bet. After they denied it for nearly a year. We'll talk about that question and a great deal more with CNN military analyst General David Grange. Stay with us.
(COMMERCIAL BREAK) DOBBS: In "Grange on Point" tonight, Defense Secretary Rumsfeld authorized a temporary increase on the size of the army. 30,000 troops. However he remains firmly opposed to any permanent increase. General David Grange is our expert on the military. General, this sounds like quite a reversal from what is more than six months of saying we don't need more troops.
BRIG. GEN DAVID GRANGE, CNN MILITARY ANALYST: The chief of staff of the army asked for 30,000 more under the emergency powers that the president has delegated down to the secretary of defense to fill some near term needs. But, in fact, most of the troops won't arrive for maybe one to three years.
DOBBS: So, why -- what kind of game is being played here? The Pentagon says they don't need more troops. They hold reserves, they hold national guardsmen. Now they are asking for 30,000 more in a temporary increase. Why in the world, not come clean say we need more troops to carry out the responsibilities this government has established for the U.S. military globally and get real, if you will?
GRANGE: There's two reasons for this show game or whatever is going on, whatever you want to call it. One is if Congress pushes to increase permanently the size of the military the concern is that money to pay the troops at about $100,000 each would come out of modernization and training funds. That's happened in the past and it's a good possibility it would happen again. So if Congress asks for an increase they must also resource the increase which is very expensive.
But you have to do all of it, you have to pay people, you have to modernize, you have to train for readiness. You can't just do one and not the other. The other piece is the bet is that this is a spike. It will not continue on with this pace into the future. We are already planning up to 2006 if not longer on future rotations and operations around the world. So get on with it, increase the military permanently, and then if you have to take it down in the future, do it like you did after the Berlin Wall came down with Congress.
DOBBS: The Pentagon says they are going to pull troops out of Europe, General. Most of them apparently to come out of Germany where we have 80,000 troops stationed now. Won't that solve a big part of the problem?
GRANGE: Well, most of those troops are already in Iraq or getting ready to go to Iraq, coming back from Iraq, or elsewhere. What it will do, though, it will bring back about 40,000 heavy mechanized armored forces back to the United States to be turned into the army's expeditionary force where they will move out for shorter periods of time and temporary bases around the world close to hot spots. I believe that's a good idea. It's going to be very tough on the Germans. Very tight relationships over the last 60 years have been established with the American GIs.
DOBBS: General David Grange, as always, we thank you for being here to keep us straight. Coming up next, we'll share some of your thoughts about broken borders and exporting America. But first updating our list of companies we have confirmed to be exporting America. These are companies either sending American jobs overseas to cheap labor markets or employing cheap foreign labor instead of American workers. Our additions include A.G. Edwards, FairIsaac, Infogain, Weyerhaeuser, and shoemaker, Wolverine Worldwide.
Please go to the complete list CNN.com/lou. We'll continue in just a moment. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: Let's take a look at some of your thoughts on "Broken Borders." To begin with Bill Gray, Flagstaff, Arizona. "Soon my well-paying carpenter job will be performed by an illegal alien from Mexico instead of raising the standard of living in other nations, it seems our leaders are bent on lowering ours."
Dan Bromley of Spade, Texas. "This latest amnesty policy proposed by the president is just another way to lower U.S. workers' wages and allow CEOs to get bigger packages."
Many of you wrote in about our poll question last night asking how confident you are about whether either political party will work effectively in your best interest.
Walter Abbott, Chesapeake, Virginia. "Lou, I'm a long-time Republican and middle manager for a Fortune 500 company. However, I'm game for a change. I think corporate America is more important to the politicians than the good of the American people.
Charlie, Abingdon, Virginia. "Regardless of the party, I'm very sure they will work in their own best interest and in the interest of their largest contributors."
And on "Exporting America."
Art in Greenfield, Ohio said, "I found it odd listening to President Bush today telling me how good the job market was and is going to be when a Danish container ship was passing in the background."
Art, as we've reported here on this broadcast for some time, not one of the top ten international shipping companies in the world is American-owned.
We love hearing from you. Send us your thoughts at loudobbs@CNN.com. That's our show for tonight. We thank you for being with us. Tomorrow, I'll be joined by Senator Byron Dorgan. He will release an exclusive report on this show tomorrow night. That report documenting which companies are the worst offenders when it comes to exporting American jobs. Please join us for that.
For all of us here, good night from New York. "ANDERSON COOPER" starts right now. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Senator Jay Rockefeller>
Aired February 5, 2004 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
LOU DOBBS, CNN ANCHOR (voice-over): Tonight, CIA Director George Tenet defends his agency's record on Iraq, one year to the day after Secretary of State Powell made the case for war at the United Nations.
GEORGE TENET, CIA DIRECTOR: They never said there was an imminent threat.
DOBBS: Senator Jay Rockefeller, the vice chairman of the Senate Intelligence Committee, joins us tonight.
And in "Exporting America," an American company, a world leader in technology, it's sending $600 million to cheap labor markets overseas.
BOB BAUGH, INDUSTRIAL UNION COUNCIL: It is the outsourcing and Wal-Marting of America.
DOBBS: Martha Stewart on trial. Defense attorneys today try to destroy the credibility of the prosecution's star witness.
And illegal immigration, it is not only a problem for border states. It is now a national crisis.
(END VIDEOTAPE)
ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, February 5. Here now, Lou Dobbs.
DOBBS: Good evening.
CIA Director George Tenet today delivered a forceful and detailed defense of his agency's work leading up to the war against Saddam Hussein. Tenet insisted, the CIA made an objective assessment of the threat from Iraqi weapons of mass destruction before the war. Tenet delivered his speech one year to the day after Secretary of State Colin Powell went before the United Nations to say that there was compelling evidence that Iraq had chemical and biological weapons.
Today, the CIA director said it will take time to reach final conclusions.
(BEGIN VIDEOTAPE)
DOBBS (voice-over): CIA Director George Tenet on the defensive. TENET: Unfortunately, you rarely hear a patient, careful or thoughtful discussion of intelligence these days. But these times demand it, because the alternative, politicized, haphazard evaluation, without the benefit of time and facts, may well result in an intelligence community that is damaged and a country that is more at risk.
DOBBS: Tenet, in careful terms, admitted making mistakes.
TENET: We do not yet know if any reconstitution efforts had begun, but we may have overestimated the progress Saddam was making.
DOBBS: But Tenet strongly defended his analysts' work.
TENET: They never said there was an imminent threat. Rather, they painted an objective assessment for our policy-makers of a brutal dictator who was continuing his efforts to deceive and build programs that might constantly surprise us and threaten our interests.
DOBBS: Senator Tom Daschle was unconvinced.
SEN. TOM DASCHLE (D-SD), MINORITY LEADER: It's clear that there was nothing new from the speech provided today. And I think that it's also clear that he hasn't changed anybody's attitude.
DOBBS: And the chairman of the Senate Intelligence Committee said the CIA was not alone in making intelligence mistakes.
SEN. PAT ROBERTS (R), KANSAS: I think there's been an overall global intelligence community failure in regards to the statements made in reference to the stockpiles.
DOBBS: Chairman Roberts also agreed with George Tenet's claim that the weapons hunt is far from finished.
(END VIDEOTAPE)
DOBBS: Tenet also sees the opportunity to take credit for some event milestones in the war on terror, including Khalid Shaikh Mohammed's arrest, Libya's abandonment of its weapons of mass destruction program, and the dismantling of the Pakistani nuclear black market.
I'm joined now from our bureau in Washington, D.C. by national security correspondent David Ensor.
David, it was an extraordinary speech by George Tenet George Tenet, extraordinary because it was necessary as well. Why did Tenet choose today to defend his agency so forcefully?
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, it was very necessary at this point, Lou.
The last couple of weeks, the agency has been under sort of frontal attack, in part by one of its former employees, David Kay, the weapons inspector, who was blaming the CIA and U.S. intelligence for the failure, what he called intelligence failures prior to the war.
And Tenet himself has been under a fair amount of criticism. There have been those, including the Democratic Party front-runner at the moment, who have been calling for his resignation. So it was time to get out a response. He couldn't wait until the hearing February 24, which will be the next time he's scheduled to speak in public, Lou.
DOBBS: David, as you know, some of the CIA's most severe critic have accused the agency of not doing enough to develop human intelligence against those who would threaten our national security. What did Tenet have to say about that?
ENSOR: He forcefully depended the record under his tenure. He admitted there had were not enough spies when he started working. He said they recruited a great many more. He cited some examples that we hadn't heard of before.
He said that it was a CIA spy who led the U.S. to Khalid Shaikh Mohammed. He said that it was a penetration of their network through which they were getting equipment that led to the intelligence about Libya. The CIA confronted Libya with that intelligence. And that led to Libya's decision to give up its weapons of mass destruction.
And he said that the U.S. and its allies had penetrated the nuclear black market activities of Dr. A.Q. Khan in Pakistan, leading to the exposure of them as well.
DOBBS: David, as you mentioned, Khan, the scientist who sold nuclear technology to other countries, President Musharraf pardoning him selling to countries such as Iran and North Korea. Did Tenet address that subject today?
ENSOR: He didn't address the pardon. He did talk about the CIA's efforts against this network. And, in some ways, he raised more questions than he answered, talking to analysts outside the government there, saying fascinating that U.S. intelligence had people in on this network and knew what was going on. How long ago did they know?
After all, this is a network that may be responsible for the nuclear weapons in Iran, for an effort to sell them to Iraq, for an effort to get them to Libya, and maybe even some of the contributions to North Korea. So this is a very, very big story. And there will be a lot more on this Pakistan matter.
DOBBS: And led by agents of the British intelligence service.
David, thank you very much -- David Ensor, our national security correspondent.
Well, later in the hour, I'll be joined by the vice chairman of the Senate Select Committee on Intelligence, Senator Jay Rockefeller, to give us his assessment of Tenet's speech today.
President Bush delivered another vigorous defense of his decision to go to war against Saddam Hussein. President Bush strongly criticized those politicians who opposed the war in a speech in South Carolina that laid out many of his election themes as well.
White House correspondent Suzanne Malveaux has the report -- Suzanne.
SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Lou, it is really part of an aggressive White House strategy.
President Bush, earlier today at Charleston, South Carolina, that is where he made it absolutely clear that he is standing by his man, CIA Director George Tenet, also standing by the case, the administration's case for war. He was not apologetic about it, rather, the strategy, of course, to make some sort of acknowledgement that, while weapons of mass destruction have not yet been found, that there is still a lot of work to be done and that the policy of preemption still stands.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: As the chief weapons inspector said, we have not yet found the stockpile of weapons that we thought were there. Knowing what I knew then and knowing what I know today, America did the right thing in Iraq.
(CHEERING AND APPLAUSE)
(END VIDEO CLIP)
MALVEAUX: And, Lou, another part about strategy, of course, is where the president is taking his message. A couple weeks ago, it was in New Hampshire, today, South Carolina, and next week, in Missouri, of course.
This is noteworthy because all of these states, the locations of Democratic primaries recently. So, of course, the president taking a pounding in some of those places. They want to answer their critics. I should also let you know, as well, that, tomorrow, that the president is going to be announcing, formally announcing those on his commission to investigate prewar intelligence. Sources and administration officials tell us that Senator John McCain will be on that commission.
Not surprising. He's one of the top Republicans who made that recommendation for an inquiry -- Lou.
DOBBS: Thank you, Suzanne.
On Capitol Hill today, authorities reopened the first of three Senate buildings closed by the poison attack earlier in the week. Investigators still do not know where the poison, ricin, came from. Health officials say no one who works on Capitol Hill has fallen ill.
(BEGIN VIDEO CLIP)
DR. JOHN EISOLD, ATTENDING PHYSICIAN: Happy to report that, despite the people we did have who were potentially exposed to this toxin, we have been continuing to monitor over the past couple of days. We still have no one who is sick or ill at this point. And, based on what we know about how the toxin works, we're confident that, at this point, we will not see anyone who has any difficulty at all with poisoning from ricin.
(END VIDEO CLIP)
DOBBS: More than 500 people are now involved in that investigation, including a contingent of U.S. Marines.
Still ahead, a huge investment by an American manufacturing company, but not a penny of it in this country. In "Broken Borders" tonight, illegal immigration is now a national crisis. It is no longer simply a border state problem.
And in the Martha Stewart trial today, defense attorneys trying to destroy the credibility of the government's star key witness.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: In "Exporting America" tonight, yet another dramatic and a very disturbing example of why manufacturing in this country is in such a state of crisis. Corning, it's a 150-year-old American company. It's planned a huge investment in one of the fastest-growing areas in technology, the production of flat glass used in computers and television sets. Unfortunately for American workers, the new investment will be entirely in Asia.
Peter Viles reports.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT: This should be good news for the American economy. Those flat screen TVs are the hottest thing in retail. And an American company, Corning, dominates production of the glass that's used in those high-end liquid crystal displays. And Corning is spending $600 million to expand production.
Here's the bad news. None of that expansion is in the United States. It's all in Taiwan and Japan.
BAUGH: It's another example of American domestic corporations investing overseas to export right back into the domestic market. It is the outsourcing and Wal-Marting of America.
VILES: Corning says it is not about cheap labor. It makes some flat glass in Kentucky, but says it wants to be close to its customers, the Asian factories where flat-screen TVs are made.
JOSH BIVENS, ECONOMIC POLICY INSTITUTE: It would be much more convincing that they were moving to market reasons if they weren't shipping all of this glass, whether in TVs or in other components, back to the United States eventually. So I think it's more about labor cost savings.
VILES: Within the industry, this is business as usual, produce in Asia, sell in the United States.
GARY SHAPIRO, PRESIDENT, CONSUMER ELECTRONICS ASSOCIATION: Consumers vote with their pocketbook. And that's what makes this country great. And when they go to Wal-Mart and they buy their products, the odds are pretty heavily they are buying a product that was manufactured elsewhere, but some of the components and certainly a lot of the innovation may have come from the United States.
VILES: By one estimate, the flat panel industry is a $30- billion-a-year market and will double in size in three years. But there is not a single U.S.-owned company that makes LCD televisions.
(END VIDEOTAPE)
VILES: And the economic fallout from these foreign investments goes far beyond lost jobs. Because much of this glass is ultimately coming to the United States, it will eventually ultimately add to the huge trade deficit in this country -- Lou.
DOBBS: It just goes on and on.
VILES: Yes.
DOBBS: The fact is that, in the television market, as you reported, zero representation, Corning, with every opportunity here to serve this market and this country, choosing to make an investment overseas.
VILES: A big investment. It's not the first one. This is the second or third big investment in Taiwan and Japan. They also produce in South Korea.
DOBBS: Pete, thank you very much.
Well, foreign competition, unfair trade practices, have combined to create a worsening problem for this economy. We went to the source of this story tonight to find American small-business owners who are suffering under unfair trade practices. And I will tell you, we hear on this broadcast from literally tens of thousands of people who have lost their jobs, who have lost their businesses, who are on the brink of losing their businesses. This is not about statistics.
My first guest tonight founded his own tool and die company and was, for three decades, living, as he put it, the American dream. Now his business is in danger of failing. He's had to lay off nine of his 12 employees. He says NAFTA and the World Trade organization are to blame. I am joined tonight by Jim Tillmann. He's the founder of Tillmann Tool and Die. And he joins us tonight from Breckenridge, Minnesota.
Jim, good to have you with us.
JIM TILLMANN, FOUNDER, TILLMANN TOOL & DIE: Thanks, Lou. Thanks for having me. My pleasure.
DOBBS: You are struggling right now with your business. What is, in your judgment, the principal reason for it?
TILLMANN: Well, it's definitely the NAFTA and the WTO that -- we're dealing against unfair tariffs. If I build a tool that goes to China, that they charge us a 29.9 percent tariff on anything that goes over there. Anything coming in from China, there's a 3.3 percent tariff. That's got to be stopped immediately. I don't know how much longer we can hang on with that kind of injustice.
It's just -- it's not fair trade. I don't know how they labeled it free trade, but that's what they labeled it, I guess.
DOBBS: We had a viewer write in, Jim, said, if this is free trade, then I want to see that free lunch that everybody told me didn't exist.
When you lay off nine out of 12 workers, is this saying that you really are close to closing your business?
TILLMANN: Well, I don't know. Maybe I'm not a real smart businessman. I probably should have shut the doors two years ago, but I feel that's really -- that's really hard to do. I was laid off once. And I found out on Friday I didn't have my job on Monday and I know how that feels. So I have just been limping along. And I had a few other investments that I sold just to keep the shop going.
And it's not like it sounds. I haven't laid off nine people, per se. We rotated people. And they took turns. And they started finding other jobs. And most of them found jobs that are lesser paying than what they were getting here. So I'm down to three people. And they are good people. They are all good people. I hated to lose any one of them. I had people -- I had a person that was here 18 years. And he was one of the best toolmakers you could find. And he's no longer here.
DOBBS: You're talking about fair trade agreements. Congress enacted the fast track authority, so that Robert Zoellick, the U.S. trade representative, could negotiate on the president's behalf these trade agreements. Do you think that was a mistake?
TILLMANN: Well, the fast track might have been all right if we had some strong leadership in the Congress, the Senate and the Congress, where, you know, it is thumbs up or thumbs down. They can't put any amendments under the fast track.
I know Senator Dorgan -- I got an eight-page congressional record from him. And he's really good about it. I guess he's on your show tomorrow night. I wish you would ask him, how come he doesn't put thumbs down on some of these and make Ambassador Zoellick go back to the drawing board and negotiate these equal tariffs.
And we're not even talking yet about wages, where they are paying 16 cents and hour and we're paying $20 an hour here. And we're not talking about OSHA.
(CROSSTALK)
TILLMANN: Pardon me?
DOBBS: I'm sorry. I didn't mean to interrupt you. Go ahead.
TILLMANN: So, there's many things that enter into this. We have to contend with OSHA.
For instance, I have used trichloroethylene one year for cleaning molds. If I dump that outside, I go to jail. Down in Mexico, they do that all the time. And that's why there are kids born down there without arms and legs. We don't have the same playing field. And now Clinton in 1992 or '93, I guess it was, signed the NAFTA agreement. And, you know, if it would have been retroactive until the year 2050, so it has people like my age could get out and people could think about it for 30 years before they got into it, it would be fair.
It's like you and I playing Monopoly and, all of a sudden, halfway through, I change the rules on you, Lou. There's no way you could win. And this was my American dream, to own my own business. And they just cut it out from under me. It's my own country and I'm embarrassed for my own country.
DOBBS: Well, you have a lot of company in that respect, Jim, as you well know.
The president's trade negotiator I know you are critical of, and understandably so, given your experience. What bothers, I will tell you, personally, me, just talking to you Jim -- and we've had the opportunity to communicate here over the last couple of days in various ways -- but you're in the tool and die business. Your industry is the foundation of manufacturing in this country.
TILLMANN: That's right. That's right.
DOBBS: Irrespective of the industry, you're the foundation of the wealth creation of this country in the real economy.
TILLMANN: That's right.
DOBBS: What do you think the future holds for this country?
TILLMANN: Well, at the present rate, it isn't very good.
I just like to say a little story. When I was an apprentice in 1967, I worked at FMC in Minneapolis as an apprentice. And we made missile launchers for the Navy during the Vietnam crisis. And I had a guy that was 60 years old come up to me and he said to me, he says, don't you ever let happen to this country what my generation let happen to this country.
And I looked at him real strange and I said, what's that? And he says, back in 1939, we let the machine shops and the foundries go down the tube. They were very obsolete. And it took us three years. We put women to work 12 hours a day for the war production. It took us three years to catch up to the Germans and the Japanese for the war. And that's what is happening right now in this country. If we continue to let the tool and die shops and the mold- building shops go under, that's exactly what is going to happen. And history will repeat itself. And for the people that don't -- that don't remember the past, we will surely relive it. And I'm afraid, if we have another 1939 again, we're in big trouble. If everything is going to be manufactured in China, if they are going to manufacture our missiles, some day, we're going to get them back here and they are going to be airmailed to us.
DOBBS: Jim Tillmann, we thank you very much for being with us. And we wish you all the very best under what we know are difficult, challenging, tough circumstances. Thank you, Jim.
TILLMANN: Well, thank you. Thank you for having me. Appreciate it, Lou.
DOBBS: Coming up next, "Broken Borders," the influx of illegal aliens into this country affecting not only those who live in our border states, but communities all across the nation. We'll have a special report on a widening national crisis.
And, after the CIA director launches a new defense of his agency and U.S. intelligence before the war in Iraq, we'll be talking with the ranking Democrat on the Senate Intelligence Committee, Senator Jay Rockefeller.
And Wal-Mart fights back against a growing wave of criticism. It's enlisting the help of some powerful allies and friends -- that and a great deal more still ahead here.
Please stay with us.
(COMMERCIAL BREAK)
DOBBS: We report extensively here about the as many as 12 million illegal aliens who are in this country and the tremendous effect that they are having in our border states. But that is only part of the story. Many illegal aliens have settled in our nation's heartland, from rural areas in the Midwest to small Southern towns. And they are having a profound impact on those communities.
Lisa Sylvester has the story.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The once sleepy town of Gainesville, Georgia, has transformed in the last decade into an immigrant city. Signs are now in Spanish and English. Strip malls are full of stores catering to Hispanics. The same is true for nearby Gwinnett County, where the Hispanic population jumped seven-fold between 1990 and 2000.
D.A. King, who grew up in the area, says it had a negative impact, falling wages and a drain on the area's hospital and schools.
D.A. KING, AMERICAN RESISTANCE FOUNDATION: Illegal immigration accounts for most of the immigration to this county and to this area and to this country. More than half of our immigration is legal. It is changing the face of our country.
SYLVESTER: Illegal immigration used to be a worry primarily for border states, but now illegal aliens are fanning across the country, to the meat-packing plants in Nebraska, where the illegal population has quadrupled in the last decade, to the tobacco farms in North Carolina, where the illegal population has groan tenfold.
STUART ANDERSON, NATIONAL FOUNDATION FOR AMERICAN POLICY: I think it's a combination of people seeking work, but I think employers, if they are looking to expand, one of the ways of being able to expand in a restaurant and other industries is by being able to hire more people.
SYLVESTER: But immigration reformers argue, hiring illegal workers pushing down wages for low-skilled American workers.
ROY BECK, NUMBERSUSA: The people who are the poorest, the most vulnerable among our population, are the people who are hurt the most by this flow. It's their wages that are being driven down the most.
SYLVESTER: No state has been left untouched, as illegal aliens flow to wherever there are jobs.
(END VIDEOTAPE)
SYLVESTER: Critics say new laws are not needed; it's the current laws that are not being enforced, and that, even if local law enforcement officers were able to arrest all the illegal aliens, they would have nowhere to put them. So, instead, Lou, nothing is done.
DOBBS: Lisa, thank you very much -- Lisa Sylvester, reporting tonight from Washington.
Coming up next here, CIA Director George Tenet defending prewar intelligence that his agency gathered. We'll be talking to the ranking Democratic on the Senate Intelligence Committee, Senator Jay Rockefeller.
And it's do or die tonight for Howard Dean. The struggling presidential candidate gives himself an ultimatum. Senator John Kerry expected to win a key endorsement from a former candidate.
And defense attorneys in the case against Martha Stewart, well, they go after the government's key witness -- that and a great deal more still ahead here.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Word tonight that Democratic presidential candidate Senator John Kerry will win at the endorsement of one of his former rivals. Congressman Dick Gephardt, who abandoned his quest for the Democratic nomination two weeks ago, to endorse Kerry tomorrow, that according to Democratic Party sources. Senator Kerry this week won the Democratic primary in Gephardt's home state of Missouri, a key battleground. And Kerry today, campaigning in Maine and Michigan, where a total of 152 delegates are at stake in contests this weekend.
Howard Dean, meanwhile, the one-time front-runner in this race for the nomination of the Democratic Party, is giving himself an ultimatum, win the Wisconsin primary in two weeks or drop out altogether. On his Web site today, Dean said: "The entire race has come down to this. We must win in Wisconsin." Dean says victory there will carry his campaign through Super Tuesday two weeks later. Dean is hoping to launch a major media campaign in Wisconsin beginning next week.
DOBBS: Senator John Edwards taking on an issue that we have reported on extensively in this broad, the exporting of America. The shipment of American jobs to cheap overseas labor markets. The senator today promised his supporters in Tennessee that as president he will reform U.S. trade policies to keep jobs in this country.
As we reported earlier in the broadcast, CIA Director Tenet today delivered a forceful defense of his agency's record on prewar intelligence on Iraq.
I'm joined now by Senator Jay Rockefeller. He is the vice chairman of the Senate Select Committee on Intelligence.
Senator, good to have you with us.
SEN. JAY ROCKEFELLER (D), WEST VIRGINIA: Thank you, Lou.
Are you persuade bid the CIA director's speech today?
ROCKEFELLER: I'm not. And for sort of a philosophical reason. I think that the intelligence community has to fess up to the fact that it made a mistake and a pretty big one. I think the Congress has to fess up to the fact that we made a mistake, and a pretty big one. I think the president of the United States has to fess up to a fact that he made a pretty big mistake taking us to war, making that decision. If we can get that past us, Lou, we can stop worrying about the blame game and try and fix intelligence and fix domestic security and fix the PATRIOT. Act, all the things we have to do.
DOBBS: Do you still have confidence in Director Tenet?
ROCKEFELLER: I do but I don't put knit that context. It's like saying, I don't know, I...
DOBBS: Let's put knit your context, Senator.
ROCKEFELLER: I was going to give you a baseball analogy and you would have lost 30 percent of your viewership. He isn't what counts. The fact he defended and has said I wouldn't change a word of what's been said, in intelligence, does not impress me. He himself is impressive. He's very bright, he knows the system. He knows the hill. And, again, we're all wrong on this thing, and we made a terrible mistake. And people are paying for it, and it's unacceptable. Let's get past it and fix it.
DOBBS: Senator, let me put it -- if I may, create a context here for you to give a response. Resolution 1441 accepted by all of the members of the security council. Every intelligence agency of the so- called coalition before the war, signing off that, Saddam Hussein had weapons of mass destruction particularly biological and chemical weapons. Regime change was the first articulation of policy by the Bush administration. Is it in fact perhaps a lost in all of this the fact Saddam Hussein had his destiny in his control at any time company have declared himself leading up to the beginning of the war?
ROCKEFELLER: Absolutely. Of course that's true. But the problem, Lou, as you know very well what we're facing is the fact that we -- that I, myself, I now regret that vote, based upon what I know in intelligence now, but you know we voted to go to war based upon a grave and growing threat, I.E. nuclear about to arrive, chemical/bio about to arrive right here in the United States or whatever, and that has been proven wrong. That is a -- that is -- that's a century making mistake. And it's not something just to debate about. It's something we have to make sure never happens again. I'm on the intelligence committee and I'm on it for a reason that is to bring the truth out and to make sure that we fix our intelligence system so that it works, which it doesn't.
DOBBS: As you say, Congress, the executive branch, intelligence agencies, made mistakes, need to own up to them. Which seems to me a rational beginning point to examine what should be going forward. Defense -- CIA Director Tenet says that he has and has had adequate human intelligence.
Do you believe that the agency is properly oriented toward human intelligence at this point?
ROCKEFELLER: That's a classified subject in absolute terms but I will tell you that for the last number of years, certainly during the years that Bob Graham was chairman of the committee and slightly before that, there has been a sharp increase in the budget for human intelligence and, therefore, you know that the product follows a number of years later. But clearly that has been a distinct inadequacy on our part. And clearly, human intelligence is the most profound and fundamental way that intelligence is carried out.
DOBBS: Senator Jay Rockefeller, vice chairman of the Senate Select Committee on Intelligence thanks for being here.
ROCKEFELLER: Thanks, Lou.
DOBBS: Turning now to the case against Martha Stewart. Defense attorneys today fired back at the government's star witness, the defense team for Stewart's former broker cross examined Douglas Faneuil after his damaging testimony yesterday. At the heart of the defense's position questions about Faneuil's credibility.
Mary Snow joins us now from the federal courthouse in Lower Manhattan with today's development -- Mary.
MARY SNOW, CNN CORRESPONDENT: Lou, one of the things that the defense did to try to poke holes in Doug Faneuil's credibility was to try for show that he had an axe to grind with Martha Stewart. Two E- mails were produced. Two E-mails written by Doug Faneuil to friends about Martha Stewart. One, said I have never, ever been treated so rudely on the phone by a stranger. A second E-mail, in which he refers to himself as baby red, PS, Martha yelled at me again today but I snapped in her face and she actually backed down. Baby put Ms. Martha in her place.
It was also revealed that Faneuil told the government about a phone conversation he had with Stewart when he was working as his stockbroker assistant to his then boss Peter Bacanovic. Bacanovic put Martha Stewart on hold and asked Faneuil to pick up. Faneuil claims when he picked up Martha Stewart was upset about the hold music and she told him she would leave both her stock broker and Merrill Lynch if they didn't do something about the hold music. Faneuil admitted he never told Bacanovic that story, saying that was one conversation I chose not to share with him. That story even brought a smile to the face of Peter Bacanovic the co-defendant in this case. His attorney did cross examination today -- Lou.
DOBBS: Mary, thank you very much. Mary Snow.
"Tonight's Thought" is on crime. "Commit a crime, and the world is made of glass. There is no such thing as concealment." Those are the words of Ralph Waldo Emerson.
Coming up next "Exporting American." We introduce you to someone who helps American companies ship American jobs overseas and he says it's very good business. It's good bussiness.
And Wal-Mart, fighting back against growing criticism of its practices as it becomes one of the country's largest political donors.
UNIDENTIFIED MALE: It's very important for these companies have friends in Washington. Wal-Mart has a lot of issues it has to be concerned about now.
And "Grange On Point" tonight. The growing debate over whether the Pentagon should permanently increase the size of our army. That and a great deal more still ahead.
(COMMERCIAL BREAK)
DOBBS: The world's largest retailer Wal-Mart said its sales reached a staggering $18.5 billion. Wal-Mart's incredible success has helped it dominate retailing and it's also the nation's top employer. But while it's influence has grown dramaticly, so has the public scrutiny and criticism against.
Bill Tucker reports.
(BEGIN VIDEOTAPE) BILL TUCKER, CNN CORRESPONDENT (voice-over): Wal-Mart is more than just a super center, it's becoming a super target. It's under investigation for using illegal aliens to clean its stores and accused of locking those workers in its stores overnight.
JAMES LINSEY, PLAINTIFFS' ATTORNEY: They're locking in people who don't speak English. They're locking in people when they tell them don't go out. Don't open the doors for any reason other than possibly for fire. And it's unconscionable.
TUCKER: Wal-Mart says no employees have ever been locked in a store without a supervisor on site with keys. Critics blame the company for dragging down the wages of American workers. In a event study by the Los Angeles Economic Development Commission did find, that the committee pays wages $2.50 to $3.50 less than similar union jobs. And community activists argue Wal-Mart takes more out of the community than it adds.
REV. ALTAGRACIA PEREZ, COMMUNITY ACTIVIST: Whatever taxes are gained from Wal-Mart coming in are lost from other stores coming down. And whatever jobs come in, there's a loss because of jobs of poverty wage jobs instead of living wage jobs.
TUCKER: Wal-Mart defends itself by saying it pays competitive wages and provides employees low cost, catastrophic healthcare coverage. Now Wal-Mart is the second largest contributor to political campaigns with $1 million in contributions, second only to Goldman Sachs.
LARRY NOBLE, CT. FOR RESPONSIVE POLITICS: Wal-Mart has a lot of issues it has to be concerned about now. Obviously concerned about immigration issues. It's concerned about labor issues. It's concerned about health issues and, like all companies, it's concerned about tax issues. What they see now is that it's important to be a player in Washington.
TUCKER: The company also has trade issues. It and its suppliers imported $15 billion worth of low-cost goods last year at the expense of many American manufacturers who can't compete with low wage overseas factories. And Wal-Mart has to be concerned about more than just Washington.
(END VIDEOTAPE)
TUCKER: Many local communities are passing zoning regulations prohibiting stores larger than 100,000 square feet aimed at keeping out super center stores. Wal-Mart's latest super center which just opened down in Tampa, Lou, is 99,995 square feet.
DOBBS: Well, there's an ample evidence of the reasons for Wal- Mart's success, that would be one of them. Of those contributions, what percentage go to Republicans, what percentage to Democrats?
TUCKER: Break out unusually biased in the giving, 85 percent to Republicans, 15 percent to Democrats.
DOBBS: Bill, thank you very much, Bill Tucker.
Well my next guest here hosted a conference last month to help American companies shift those jobs overseas. It was a seminar to teach American corporate executives how to ship those jobs overseas. He says globalization will ultimately help us all. That offshore outsourcing is not to blame for the loss of jobs in this country. Now joined by Atul Vashistha. He says it's a misconception. And welcome.
And how is it a misconception?
ATUL VASHISTHA, CEO & FOUNDER NEOIT: Thanks, Lou.
It's a misconception because if you look at what offshore outsourcing is doing for America it is actually helping American companies stay competitive. It is helping them lower the cost of products and services. And actually it is improving the buying power in nation.
DOBBS: How does it -- I think I understand, if you will, the premise of what you are saying. But when we watch and as we document here, literally hundreds of thousands of jobs being shipped to cheap overseas labor markets, those jobs are replaced typically by salaries that are 30 percent lower and there is no migration up the value chain, it's down the value chain. So, how does that help America?
VASHISTHA: There's no denying that, in the short term we have a problem. I think the industry, the government and the companies are still not doing enough. What I can tell you is that our clients are starting to do things to combat that.
DOBBS: Like what?
VASHISTHA: For example, some of the things our clients are doing, they are actually putting money into retraining. We cannot be competitive in this new global economy if our workers don't continue to update their skills, even if your are a software programmer.
DOBBS: Let me ask you this, engineering, software programming, have unemployment rates, approaching double digits in this country. What in the world are you going to train them for?
VASHISTHA: Lou, technology as you know is changing every year.
DOBBS: I do, indeed.
VASHISTHA: If four years ago you were doing HTML, or Web based programming, you need to do a lot of different things today, because that technology is old now.
DOBBS: Right.
VASHISTHA: I did my engineering degree and my MBA, I went back to Harvard last year to educate myself again. And I think that's something we absolutely have to do.
DOBBS: That's boffo (ph). But let's talk about those hundreds of thousands of jobs -- people glibly talk about training. Men and women who have trained themselves in a variety of skills who have a variety of educational pursuits and degrees, I hear people start talking about training as if that's a panacea.
What jobs should they train themselves for? We are shipping high value jobs overseas to India, to the Phillipines, to Ireland, to Poland, to Russia, for crying out loud. What in the world are we supposed to train them to do?
Now, I understand the profit motive, as a matter of fact, no one is more pro business, pro American free enterprise than I am, but I'm also pro American worker. What in the world -- you talk about pain (ph), we're seeing evidence of it every day.
VASHISTHA: But Lou, if we don't focus on our investment on training we can't just put up our borders and imagine that these job will stay. In fact, companies are going bankrupt because they are not taking advantage of these lower co-markets.
DOBBS: Because somebody else is, is that right?
VASHISTHA: Right, exactly. So there's...
DOBBS: So what you end up is, a race to the bottom as it's been styled. Because if one company is go over to India to get a job, to pay a salary that is a tenth of what they would be paying in this country. They are forced to compete. Is not free trade. This is not comparative advantage, as envisioned by David Ricardo, this is the wholesale exportation of American wealth.
VASHISTHA: Lou, the difference here is that this is a global economy.
DOBBS: I understand that. But these are old saws (ph) -- globalization has been a fact since 1987.
VASHISTHA: Right, Lou, take a look at what happened to the buying power in our country. It's significantly gone up. And I know in the last 2 years, 3 years...
DOBBS: Consumption power in this country for the last three decades have declined over the past three years has actually fallen even more dramatically than that average over three decade. It is quite the inverse.
VASHISTHA: Lou, you know, I'm sorry, I beg to differ.
DOBBS: Please.
VASHISTHA: If you take a look at the buying power of our country. Let's take a look at the last two decades. We created 22 million excess jobs than we're destroyed (ph) in this country. This is a Bureau of Labor Statistic numbers for the last two decades.
DOBBS: We created 22 million jobs during the course of the Clinton administration, 1992 to 2000. VASHISTHA: Right. So we created surplus jobs. I'm talking about economy changed, we actually created more jobs than we lost. At the same time the buying power in this country...
DOBBS: What sort of evident 22 million jobs.
VASHISTHA: Right -- just so what is happening today is I think this is the next evolution in the global economy.
DOBBS: That's wonderful. Great evolution, if you believe that the United States should be shipping its wealth, its jobs, standard of living and quality of life to third world countries where there are no regulations for environment, no regulations for labor, no standards that is a requirement here in this country.
The logical extrapolation it seems to me, Atul, is that if we are going to compete fairly, with fair trade and a globalized market, it seems to me that India, the Phillipines, Mexico, a Central American nation should have the same standards, otherwise we're competing simply on the price of labor.
VASHISTHA: Lou, I absolutely agree with you. In fact, if you look at the service industry which we participate in, these companies are paying higher average wages than the local counterparts. I mean so if you look at what is happening in India or China.
DOBBS: You're saying American companies are page higher wages in other countries than native companies.
VASHISTHA: American companies and the local companies that participate in this business. So companies like Infosys or Whipper (ph), or all these companies in India they are paying better wages than the average people get in that country.
DOBBS: The average Indian company.
VASHISTHA: Absolutely.
DOBBS: But why in the world do ten million Americans who are unemployed in this country, give a damn?
VASHISTHA: Well, Lou, here's why they give a damn, because if we don't do this, it we don't continue to innovate and let our companies be successful, we will lose more jobs.
DOBBS: Wait a minute. You are not innovating. You are not being more efficient. You are talking about hiring cheaper labor. Those are only code words for cheap labor. McKenzie did a study, as you're aware of, in what is the bulk of the gain for American companies?
VASHISTHA: Well, it's...
DOBBS: All in labor savings.
VASHISTHA: A bulk. DOBBS: The bulk, as in 70 percent of it.
VASHISTHA: Right. Lou, what happens to the money that comes back?
DOBBS: What money?
VASHISTHA: The money that is being repatriated back to this country? The savings that happen.
DOBBS: We should ship all our jobs then, because it sounds like a highly profitable enterprise.
VASHISTHA: Lou, it's easy to take a look at this...
(LAUGHTER)
DOBBS: Atul, I understand your position. I understand the profit motive, but corporations have a stake in this country do they not?
VASHISHTHA: I absolutely agree.
DOBBS: And they have a stake in the community, in investing in their people. They have a responsibility, because they are the beneficiary of this national American economy.
VASHISTHA: Lou, I absolutely agree with you. In fact, one of the things that has not happened yet is the industry, the associations and the companies have not come together to address the displaced workers. Now I can tell you, like I was telling you before, some of our companies are doing that. Apart from training...
DOBBS: That's a wonderful paternal outlook. But what I would much prefer to hear business people, men and women in this country running corporation and folks like you trying to make a dollar, you have a responsibility to this national economy. This is not just a market place. It's a nation. Right?
VASHISTHA: Absolutely.
DOBBS: I would love to have you come back and talk some more, we're out of time. Will you come back? We'll have more discussion.
VASHISTHA: Absolutely, Lou. Thank you.
DOBBS: Atul, thank you very much.
Coming up, "Grange On Point." The Defense Department authorizing thousands of troops for the army, it's an increase. Does this mean government officials are finally saying a larger military is needed? You bet. After they denied it for nearly a year. We'll talk about that question and a great deal more with CNN military analyst General David Grange. Stay with us.
(COMMERCIAL BREAK) DOBBS: In "Grange on Point" tonight, Defense Secretary Rumsfeld authorized a temporary increase on the size of the army. 30,000 troops. However he remains firmly opposed to any permanent increase. General David Grange is our expert on the military. General, this sounds like quite a reversal from what is more than six months of saying we don't need more troops.
BRIG. GEN DAVID GRANGE, CNN MILITARY ANALYST: The chief of staff of the army asked for 30,000 more under the emergency powers that the president has delegated down to the secretary of defense to fill some near term needs. But, in fact, most of the troops won't arrive for maybe one to three years.
DOBBS: So, why -- what kind of game is being played here? The Pentagon says they don't need more troops. They hold reserves, they hold national guardsmen. Now they are asking for 30,000 more in a temporary increase. Why in the world, not come clean say we need more troops to carry out the responsibilities this government has established for the U.S. military globally and get real, if you will?
GRANGE: There's two reasons for this show game or whatever is going on, whatever you want to call it. One is if Congress pushes to increase permanently the size of the military the concern is that money to pay the troops at about $100,000 each would come out of modernization and training funds. That's happened in the past and it's a good possibility it would happen again. So if Congress asks for an increase they must also resource the increase which is very expensive.
But you have to do all of it, you have to pay people, you have to modernize, you have to train for readiness. You can't just do one and not the other. The other piece is the bet is that this is a spike. It will not continue on with this pace into the future. We are already planning up to 2006 if not longer on future rotations and operations around the world. So get on with it, increase the military permanently, and then if you have to take it down in the future, do it like you did after the Berlin Wall came down with Congress.
DOBBS: The Pentagon says they are going to pull troops out of Europe, General. Most of them apparently to come out of Germany where we have 80,000 troops stationed now. Won't that solve a big part of the problem?
GRANGE: Well, most of those troops are already in Iraq or getting ready to go to Iraq, coming back from Iraq, or elsewhere. What it will do, though, it will bring back about 40,000 heavy mechanized armored forces back to the United States to be turned into the army's expeditionary force where they will move out for shorter periods of time and temporary bases around the world close to hot spots. I believe that's a good idea. It's going to be very tough on the Germans. Very tight relationships over the last 60 years have been established with the American GIs.
DOBBS: General David Grange, as always, we thank you for being here to keep us straight. Coming up next, we'll share some of your thoughts about broken borders and exporting America. But first updating our list of companies we have confirmed to be exporting America. These are companies either sending American jobs overseas to cheap labor markets or employing cheap foreign labor instead of American workers. Our additions include A.G. Edwards, FairIsaac, Infogain, Weyerhaeuser, and shoemaker, Wolverine Worldwide.
Please go to the complete list CNN.com/lou. We'll continue in just a moment. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: Let's take a look at some of your thoughts on "Broken Borders." To begin with Bill Gray, Flagstaff, Arizona. "Soon my well-paying carpenter job will be performed by an illegal alien from Mexico instead of raising the standard of living in other nations, it seems our leaders are bent on lowering ours."
Dan Bromley of Spade, Texas. "This latest amnesty policy proposed by the president is just another way to lower U.S. workers' wages and allow CEOs to get bigger packages."
Many of you wrote in about our poll question last night asking how confident you are about whether either political party will work effectively in your best interest.
Walter Abbott, Chesapeake, Virginia. "Lou, I'm a long-time Republican and middle manager for a Fortune 500 company. However, I'm game for a change. I think corporate America is more important to the politicians than the good of the American people.
Charlie, Abingdon, Virginia. "Regardless of the party, I'm very sure they will work in their own best interest and in the interest of their largest contributors."
And on "Exporting America."
Art in Greenfield, Ohio said, "I found it odd listening to President Bush today telling me how good the job market was and is going to be when a Danish container ship was passing in the background."
Art, as we've reported here on this broadcast for some time, not one of the top ten international shipping companies in the world is American-owned.
We love hearing from you. Send us your thoughts at loudobbs@CNN.com. That's our show for tonight. We thank you for being with us. Tomorrow, I'll be joined by Senator Byron Dorgan. He will release an exclusive report on this show tomorrow night. That report documenting which companies are the worst offenders when it comes to exporting American jobs. Please join us for that.
For all of us here, good night from New York. "ANDERSON COOPER" starts right now. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Senator Jay Rockefeller>
