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Lou Dobbs Tonight

President Bush Set to Hold Prime-Time News Conference; 9/11 Commission Blasts FBI

Aired April 13, 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, U.S. Marines hunt foreign terrorists in Iraq. Their mission, to capture or kill one of al Qaeda's top leaders.

DAN SENOR, COALITION PROVISIONAL AUTHORITY: Fallujah right now is a hotbed for foreign fighters

DOBBS: Iraq is likely to be the No. 1 issue when President Bush holds a prime-time news conference tonight. We'll have a preview and three of this country's top political journalists join me.

The 9/11 Commission blasts the FBI. A former FBI director says America does not need a new domestic intelligence agency.

LOUIS FREEH, FORMER FBI DIRECTOR: Americans, I don't think, like secret police.

DOBBS: Tonight, 9/11 Commission member and former Deputy Attorney General Jamie Gorelick is our guest. And former Attorney General Dick Thornburgh will also be here.

And in making the grade, our special report on education in America. Tight budgets mean tough choices for our schools and fewer choices for our children.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, April 13. Here now for an hour of news, debate and opinion, Lou Dobbs.

DOBBS: Good evening.

Tonight, the United States says al Qaeda's top man in Iraq, Abu Musab al-Zarqawi, is hiding in Fallujah. U.S. Marines surrounding Fallujah today said they captured two known terrorists in a raid, but U.S. military authorities have so far declined to offer any details on the identity of those terrorists captured. South of Fallujah, American troops are massing near Najaf. They seem to be preparing for a showdown with the radical cleric Muqtada al-Sadr.

Jim Clancy reports now from Baghdad -- Jim.

JIM CLANCY, CNN CORRESPONDENT (voice-over): Lou, the first thing I want to look at is the situation in Fallujah. Yes, there is a nominal cease-fire in place. But some of the videotape coming out of there from our U.S. television pool indicates that at times it doesn't look like any cease-fire at all. U.S. Marines suffer casualty in the last 24 hours, two dead, seven others wounded in some of that fighting. It's a situation where the Marines say they are not taking any offensive action, but at the same time today they were taking defensive action. They were taking preventative action to try to control some of the fire coming at them.

There is mortar fire directed at them, as well as machine gun fire, small-arms fire along their fires. They also got out today and fanned out across the area of the city they control to do some searching, some cordoned searching. It's not clear if that was one of the areas in which these two terrorists were picked up, part of those operations.

For days, they had been getting more and more information that there were foreign fighters inside that city. And that is what is leading Dan Senor, the spokesman for the coalition here in Baghdad, to say they believe that Abu Musab al-Zarqawi is in that city of Fallujah or they said nearby. It's a big city, though, Lou. And there's a lot of ground for the Marines to cover. The question is, what will come of negotiations? Will handing over the foreign fighters be a part of any deal?

Meantime, just west of Baghdad, a helicopter shot down. This was a special Sikorsky helicopter designed for use by special operations troops. The helicopter was completely destroyed after it was hit by a rocket-propelled grenade, according to one of the insurgents. But then, when I say completely destroyed, the men on board that helicopter then detonated charges in order to further destroy it, so there would be nothing of use left.

The three men on board were wounded, but they were rescued. Sadly, one U.S. Marine was killed, several others wounded as they were evacuating the people that had been on board the helicopter as they came under mortar fire. Also, looking to the south in Najaf that, is the holy city where the Imam Ali shrine is. That is also where Muqtada al-Sadr, the radical young Shia cleric, is holed up. He is wanted on murder charges, where one year ago, it is charged that he and his followers assassinated a rival Shia Muslim cleric who was backed by the West.

Well, the situation in Najaf is one tonight where U.S. troops have gathered in large numbers around that city, ratcheting up the pressure, if you will, Lou, ratcheting up the pressure for him to reach some kind of a deal. You have to remember, though, that there's a lot at stake here. And U.S. forces may not want to go into Najaf unless they absolutely have to -- Lou.

DOBBS: Jim, the coalition now saying dozens of foreign nationals are being held hostage by the insurgents. What is the very latest you have for us on that?

CLANCY: Well, the very latest we have are the indications of what is behind it all. Taxi drivers in Amman, Jordan, say they were offered $10,000 if they had any Americans, $5,000 for non-American expatriates.

Clearly, Lou, there's a monetary incentive here that is coming into play. The area where all of these hostages have been taken, the area of Abu Ghraib, is famous in Iraq for criminal activity. And there have been organized team of kidnappers there preying on Iraqis for months, if not the entire year since the U.S. entered into Iraq. So you have a situation here, a very dangerous one. On one hand, people are being taken.

On the other hand, it's discouraging international involvement, Lou, a lot of people leaving, some people saying they are not coming in.

DOBBS: Jim Clancy reporting live from Baghdad.

Tonight, the State Department said the unidentified remains of four bodies have been discovered in Iraq. Halliburton and its subsidiary, Kellogg, Brown and Root, said they cannot confirm that those bodies are of KBR employees. Two U.S. soldiers and seven civilian employees of KBR were reported missing after an attack on a supply convoy near Baghdad last Friday.

In less than 2 1/2 hours, President Bush will attempt to answer critics of his Iraqi policy during a rare prime-time news conference. President Bush is also expected to talk about his administration's response to the al Qaeda threat before the September 11 attacks.

Senior White House correspondent John King has the report -- John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: And, Lou, this will be the third prime-time news conference of the Bush presidency, just the 12th formal news conference held by this president.

And consider the challenge. The death toll is rising in Iraq. The generals are asking for more troops at a time in which President Bush had hoped to be bringing U.S. troops home in advance of the presidential election in this country. And recall it was just under a year ago. In two weeks, we will mark the one-year mark from when Mr. Bush went aboard that aircraft carrier and said major combat operations in Iraq were over, many questioning whether that was a dramatic misstatement by the president.

Because of that and because of the recent bloodshed and the stakes in Iraq, we're told the president will deliver an extraordinary long opening statement, perhaps as long as 18 minutes in length, offering his assessment of the situation on the ground in Iraq. One challenge for the president is to explain the violence to the American people. Another is to explain how the United States can still turn over sovereignty in Iraq just 78 days from now when there is this precarious security situation and still no firm plan on just who, just what the new Iraqi government will look like when that transfer of sovereignty takes place.

So Iraq the biggest challenge for the president tonight, but he is also expected to face questions about the work of the ongoing 9/11 Commission, the testimony today by his own attorney general, the testimony last week by his national security adviser, Condoleezza Rice, and continuing criticism that this president and this administration did not act urgently enough when presented with evidence of the al Qaeda threat here in the United States.

And, Lou, as the president deals with the 9/11 Commission and with the Iraqi crisis, we are, of course, 202 days away from a presidential election. That will be the backdrop, a very high-stakes moment for the president in the East Room tonight, Lou.

DOBBS: Absolutely, John.

Are we receiving any kind of guidance as to whether or not the president will make any sort of change in policy or call for any change in the structure and the mission of U.S. intelligence agencies?

KING: We are told and the president himself said yesterday that he is open to looking at some new arrangement for the intelligence agencies of the United States, but he says he wants to wait until the 9/11 Commission finished its work and until an internal administration review is under way.

One of the questions, of course, do you come up with some sort of internal domestic intelligence agency, like Great Britain has? The administration has resisted that as recently as when the Homeland Security Department was created. So that is going to be another interesting question the president is likely to face tonight. Exactly what does he mean when he talks about additional reforms for U.S. intelligence and would he support some sort of essentially domestic spy service?

Again, the president has said no in the past. But we are told that all options are on the table and that the president does want the input of this 9/11 Commission.

KING: John, thank you. John King, senior White House correspondent.

And we will, of course, be carrying the president's news conference live here tonight at 8:30 Eastern time. CNN's coverage begins with a special preview at 8:00 p.m. Eastern. Please be with us.

The 9/11 Commission today strongly criticized the FBI for failing to deal with the growing threat of al Qaeda before the September 11 attacks. The 9/11 Commission also said Attorney General John Ashcroft did not make counterterrorism a top priority. Ashcroft testified that the United States was blind to its enemies for nearly a decade before September 11.

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

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Lou, the attorney general offered a feisty defense of his and the Bush administration's handling of terrorism issues before and since 9/11. Going a little on the offensive, he made public a classified 1995 memo in which a wall was increased between FBI criminal investigators and FBI counterterrorism teams, a legal wall, keeping them out of each other's files. This memo was written by one of the commissioners, Jamie Gorelick, when she was deputy attorney general.

Another commissioner, however, got former acting FBI Director Thomas Pickard to say, in effect, that Ashcroft's interest in counterterrorism before 9/11 seemed pretty limited to him.

(BEGIN VIDEO CLIP)

RICHARD BEN-VENISTE, 9/11 COMMISSION: Mr. Watson had come to you and said that the CIA was very concerned that there would be an attack. You said that you told the attorney general this fact repeatedly in these meetings. Is that correct?

TOM PICKARD, FORMER ACTING FBI DIRECTOR: I told him at least on two occasions.

BEN-VENISTE: And you told the staff according to this statement that Mr. Ashcroft told you that he did not want to hear about this anymore. Is that correct?

PICKARD: That is correct.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

JAMES THOMPSON, 9/11 COMMISSIONER: Acting Director Pickard testified this afternoon that he briefed you twice on al Qaeda and Osama bin Laden and when he sought to do so again, you told him you didn't need to hear from him again. Can you comment on that, please?

JOHN ASHCROFT, ATTORNEY GENERAL: First of all, Acting Director Pickard and I had more than two meetings. We had regular meetings. Secondly, I did never speak to him saying that I did not want to hear about terrorism.

(END VIDEO CLIP)

ENSOR: Ashcroft said that, as far back as March 2001, he proposed to Condoleezza Rice, the national security adviser, that the policy of trying to capture Osama bin Laden, with his killing allowed if need be, be replaced with a more robust order to the CIA to simply try to kill the al Qaeda leader.

Commissioners sharply questioned former FBI and CIA senior officials today on how they failed to stop the attack. The former counterterrorism chief of the CIA said Congress and the nation simply didn't make the commitment needed.

(BEGIN VIDEO CLIP)

COFER BLACK, FORMER DIRECTOR, CIA COUNTERTERRORISM CENTER: The shortage of money and people seriously hurt our operations and analysis. In CTC, we heard our director's call. I have heard some people say this country wasn't at war. I want to tell you, Mr. Chairman, the Counterterrorism Center was at war. We conducted ourselves at war. And that's the way it is.

(END VIDEO CLIP)

ENSOR: And the FBI director scheduled to speak tomorrow. These increasingly dramatic hearings are coming to a conclusion pretty soon. The 9/11 Commission's report and its recommendation, Lou, are due in late July.

DOBBS: Was there any resolution, David, in the encounter with Attorney General Ashcroft, as to who is right, the attorney general or Pickard, as to whether or not further information about al Qaeda was rejected by Attorney General Ashcroft?

ENSOR: I think the best way to put it is that memories differ, Lou.

DOBBS: As they do occasionally during the course of these hearings.

David Ensor, thank you very much.

DOBBS: Next, I'll be joined by a member of the commission, Jamie Gorelick. She was deputy attorney general during the Clinton administration.

Also, reforming our intelligence agencies, does America need a new domestic intelligence agency? We'll have a special report. And former Attorney General Dick Thornburgh will be here.

Israeli Prime Minister Ariel Sharon has arrived in Washington to seek American approval for his controversial peace plan. Stephen Cohen, president of the Institute for Mideast Peace and Development, is our guest.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: As we've reported, the focus of the 9/11 Commission hearings today and tomorrow is FBI, CIA and Justice Department activity before the terrorist attacks of September 11.

My next guest is a member of the commission who knows firsthand the counterterrorism tactics of the Justice Department. Jamie Gorelick served as well as deputy attorney general under President Clinton. She has recused herself from parts of the investigation that cover the Justice Department and the questioning in fact today.

Jamie Gorelick joins us tonight from Washington, D.C. Good to have you with us.

JAMIE GORELICK, 9/11 COMMISSION MEMBER: Hi, Lou. DOBBS: Let's begin with first a rather contentious dispute over which administration is most to blame for 9/11, because that seemed to be direction today, unlike, in my opinion, at least, other days. Did we get anywhere today?

GORELICK: I don't really think the focus was on which administration is most to blame.

Actually, today was rather thematic. It is, what are the abilities of the FBI, what were they before 9/11 under either of the current or the past administrations and the same with the CIA? So I don't really see it that way.

DOBBS: Well, let me quote Attorney General John Ashcroft, saying that the government blinded itself to our enemies by separating counterterrorism from criminal investigation, citing flawed legal reasoning and pointing to a 1995 memorandum written none other than Jamie Gorelick.

GORELICK: Well, yes, except that his deputy attorney general, one of my successor, Larry Thompson, wrote a memo before 9/11 in August of 2001 leaving those policies in place and just reiterating the aspects of them that indeed allow and in fact require sharing of information between the intelligence and the criminal side.

Slade Gorton pointed out in his exchange with John Ashcroft, a fairly tough exchange, I might say, that in the four areas that Attorney General Ashcroft says were problematic and that he inherited, he left three of them in place.

DOBBS: Let me ask you as well, former Acting FBI Director Thomas Pickard has questioned your role on the commission itself. You recused yourself today because of your association and work with Attorney General Janet Reno, suggesting that you should not be on the commission at all. Your response?

GORELICK: Actually, I'm not aware of that. I'm totally unaware of that.

I questioned -- I recused myself from matters having to do with the first Clinton administration, but almost all the work of the commission is post-'98. And I was long gone. And so I have participated fully.

DOBBS: You left government service in, what, 1997?

GORELICK: In March of '97.

DOBBS: Right.

GORELICK: And I did cross-examine Pickard. I thought I had reasonable questions for him and he had reasonable answers.

DOBBS: Reasonable answers, many of them offered, and I know in talking with you and a number of other commissioners that there is a sincere, honest hope that this will be a nonpartisan result after the process has ended.

It is fairly clear to, it would seem to me, almost anyone that the United States did not have the FBI as an organization under control during the Clinton administration, nor during the Bush administration leading up to September 11. It was without a director for months preceding September 11. It was frankly understaffed in terms of the agents, as even Director Freeh said today. Is it your sense that from this commission is going to come a plan for the FBI that goes beyond whatever reforms Robert Mueller has put forward?

GORELICK: Well, Lou, let me say two things. Let me talk about both the past and then the future.

It is interesting that acting Director Pickard said that he was prohibited from talking to the White House in the Bush administration without having the permission of the attorney general or his deputy. In the Clinton administration, that was true with the exception of national security information, and Director Freeh testified that there was no inhibition on his sharing information or discussing matters with the president, with the vice president, with the national security staff.

No. 2, in terms of facilities, in terms of personnel, certainly both -- all of the incumbents in the FBI and the CIA say we don't have enough money. And so the question for us is to ask, well, did you properly allocate the resources that you had? And did you make the case that you needed to make for the resources that you think that you needed? So that's the past.

DOBBS: That is the past. But the fact is, the 9/11 Commission is all about the past.

GORELICK: No, no, no.

DOBBS: Well, if I may finish.

GORELICK: I'm sorry.

DOBBS: All about the past in terms of all that you're going through here, the events, activities, the thinking, the mind-set leading up to September 11. So that seems to me to be reasonable grounds, so long as we're setting the basis for a secure future for this country going forward.

And to hear the men and women who are responsible for managing these agencies and organizations telling us all what a great job they did, in point of fact, it's clear that there were serious management, mismanagement in some cases, and serious management issues, were there not?

GORELICK: Absolutely. And we need to understand what went wrong in order to determine what ought to be fixed.

So we need to do both. If we were just a group of people popping off on policy, I don't think we would do anyone any good. And, by the same token, if we just went around and found fault, that wouldn't help the country much either. Our idea and in fact our statutory charter is to look across the board at all of the elements of government that are supposed to keep us secure, evaluate what they did, and then make recommendations for the future based on what we find.

DOBBS: Commissioner Gorelick, we are out of time, but I've got to go back to something you just said. You said that Pickard said that, under the Bush administration, that no one could advance from the FBI to the president's office directly.

While it's correct that, as you said, that Louis Freeh did not find that to be an inhibition, as I listened to his testimony today, what I thought he said was, in the instances where he did have something that he thought it was important to the White House, he went first to the attorney general and together they approached the White House. I didn't see a distinction frankly operationally between what Freeh said and Pickard.

GORELICK: Well, that may well be, but there was no inhibition. And there was no prohibition on his doing so.

DOBBS: Jamie Gorelick, we thank you very much, as always. Appreciate it -- Commissioner Jamie Gorelick.

Well, one of the many questions the 9/11 Commission hopes to answer for us is whether this country needs a new intelligence agency, as well as reform of old ones. When we continue, we'll have a special report on the many options to improve American intelligence.

And then President Bush is preparing for his first formal news conference this year, including expected remarks about the increasingly violent situation in Iraq. We'll examine the political implications with our panel of top political journalists tonight.

All of that and a great deal more still ahead here. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: One of the question questions for the 9/11 Commission is whether America's intelligence agencies need to be reorganized. Possible reforms include giving the director of central intelligence more power and establishing a domestic intelligence service, much like Britain's MI5.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Intelligence failure. Witness after witness to the 9/11 Commission point to what the FBI knew, but didn't act on and the lack of resources devoted to counterterrorism.

PHILIP ZELIKOW, EXECUTIVE DIRECTOR, 9/11 COMMISSION: On September 11 2001, only about 6 percent of the FBI's total personnel worked on counterterrorism. PILGRIM: The solution, among the options being discussed, to create a separate intelligence agency outside the FBI, like the MI5 in Britain, with no law enforcement duties, just intelligence, create a more distinct intelligence unit within the FBI, or transfer to and expand domestic intelligence functions under the CIA.

Former FBI Director Louis Freeh Tuesday clearly against the separate agency.

FREEH: A brand new domestic intelligence agency would take a decade and we would lose very precious time at a very dangerous time.

PILGRIM: Former Attorney General Janet Reno worried about coordinating information between agencies.

JANET RENO, FORMER ATTORNEY GENERAL: Don't create another agency. The worst thing that you could recommend, the worst thing you can do is create another agency and then we'll be back talking about whether they can share here or there or what...

PILGRIM: But some in Congress are saying give the FBI more money to create a crack intelligence unit within the agency.

REP. FRANK WOLF (R), VIRGINIA: It would be a service, an organization, if you will, within the FBI with its own career track, its own linguist, its own analysts, its own agents that would focus like a laser beam on this issue of intelligence and terrorism.

PILGRIM: The FBI budget has increased by 50 percent since fiscal year 2000, from $3 billion to a little less than $5 billion. The agency has hired more than 1,000 new agents, analysts and upgraded information technology.

(END VIDEOTAPE)

PILGRIM: Creating a domestic terrorism agency patterned on the British MI5 would be highly controversy in this country. Former FBI Director Louis Freeh said today he felt that would be in effect a secret police agency -- Lou.

DOBBS: Kitty, thank you.

That brings us to the topic of tonight's poll. The question: Do you believe President Bush should recommend creating a separate agency to gather domestic intelligence, yes or no? Please your vote at CNN.com/Lou. We'll have the results later in the broadcast.

Tonight, the president will address the nation, holding his first solo news conference in more than four months.

Joining me now, our panel of top political journalists. Ron Brownstein is the national political correspondent for "The Los Angeles Times," Karen Tumulty, the national political correspondent for "TIME" magazine, Roger Simon, political editor "U.S. News & World Report," all joining us tonight from the nation's capital. Let me begin with you, Roger. The president's in fact only third formal press conference of his presidency, what are the political implications?

ROGER SIMON, POLITICAL EDITOR, "U.S. NEWS & WORLD REPORT": It's a White House in trouble.

It's a president who has had a very bad week and a very bad month who is facing terrible statistics from Iraq, 48 dead last week, 80- plus dead this month. He's got a 9/11 Commission presenting evidence on at least a weekly basis that shows that there were errors of judgment, dots that were not connected that might have been able to prevent 9/11.

All in all -- and his poll ratings continue to sink below the magic 50 percent that most incumbent presidents need for reelection. So, he's doing what he can. And what he can do is hold a press conference to try to turn things around.

DOBBS: Karen, well, this press conference, does it have the capacity to turn things around for the president?

KAREN TUMULTY, NATIONAL POLITICAL CORRESPONDENT, "TIME": Well, the pressure is going to really be on the president tonight. And, by the way, as he's doing the thing he likes just about least of all is standing up in front of a bunch of reporters who he thinks are probably just there to preen in front of the cameras is one reason that he hates this, but the bar is going to be high and it is going -- the pressure is going to be on him to show that he, in fact, has a plan for here on out.

He has -- the White House has already let it be known he is going to make a relatively lengthy statement going into the press conference in which he's probably going to make some sort of news, maybe some sort of appointment, some sort of plan, and he is going to try to set the tone and try to put the focus on a plan from here on out rather than a lot of explaining on how we got here.

DOBBS: Karen, I assume when you talked about journalists preening in front of the cameras you are referring to magazine journalists, is that correct? Ron, let me ask you, what do you believe the president must do tonight in order to be successful -- what Karen has outlined?

RON BROWNSTEIN, CNN POLITICAL ANALYST: I think in order to be successful he has to be successful. I'm not trying to be cute there. In the end I think argument is only going to take him so far and not very far. He will make good arguments about his policy in Iraq or he will make bad arguments about his policy in Iraq. In either case whatever argument he makes will be overwhelmed by the actual reality on the ground in Iraq.

I think it is very clear that public opinion in the U.S. is enormously sensitive to how things are going there. Much more mutable than the ratings on terrorism which tend to be above 50 percent on an ongoing basis or on the economy where he's had trouble picking them up. On Iraq people are very sensitive to events. And I think that ultimately more important than any kind of case he makes tonight is can he develop a strategy that brings more stability to the region and that gives him a better chance of success after the June 30 handover of power which he seems committed to.

DOBBS: If I could ask, let's call up a couple of those poll numbers that you -- each of you referenced. The policy in Iraq, how the opinion has swung, if we could take a look at that, please. That graphic. Well apparently we can't take a look at that -- there it is.

Current U.S. military policy in Iraq. Back in January, 59 percent approved of the Bush administration's policy. That has dropped to 48 percent. The disapproval has risen to 45 percent. That is a significant shift coming as you referenced again on what the administration has called a bad week in Iraq. In fact, the bloodiest month already this month since the war began. What's your reaction? Can he move those numbers again, Ron?

BROWNSTEIN: Look, Lou, there is a fine line between resolve and intransigence and like most people the president's strengths are his weaknesses. What people have liked in him post 9/11, is a sense that he's a decisive leader who sets a course and sticks to it. That becomes less attractive if it appears like the course is going off the rails. That's the perception he now faces from much of the country about Iraq. They argue the things -- he has been saying things aren't that bad, we're going to come through this.

The danger to him is that if in fact events don't cooperate in that description he will seem out of touch. I think that will be a very dangerous place for him to be. So The question for the president, to me, is not can he find an argument that gets him through tonight because I think he's going to make a very firm statement about why we need to do this. The question is can he make events better on the ground there?

DOBBS: Karen, Roger, I would like you to take a look, if this next graphic showing the view of what the Bush administration has a clear plan on Iraq, that number is at 43 percent. 51 percent say the Bush administration does not. Can tonight, the president reverse those numbers?

TUMULTY: Well, that's why I think that he is going to try to use this opening statement in particular to make some kind of news, to give some sort of tangible development there, that hopefully can give a line of questioning, that does sort of focus on the future. You know, just making more statements about this was a bad week, this is, you know, a flare-up, some of the other inartful terms that the administration officials have been turning to is not going to get him very far. As Ron says, what has got to change here is not the stagecraft, it has got to be the reality.

DOBBS: The reality in Iraq, absolutely, painful. More Americans dying today. Others held hostage. Their fate unknown. Roger, what should the president do to reconcile reality with his administration's policy in Iraq? SIMON: Well, it is unlikely that the reality in Iraq is going to change much between now and November 2. We are there. We are going to stay there. Ron mentioned a hand-over of power on June 30. But we can't even tell people to whom we are handing over power. And, secondly, U.S. troops are going to remain after June 30. More than a hundred thousand of them will remain there. So they will still be targets.

I'm not sure President Bush can hope for much improvement in Iraq except to say that we're there, we're going to stick it out. We're doing the right thing. But tonight he does to some extent have to indulge in stagecraft. He is selling himself tonight. And he's coming off two badly reviewed public performances. His State of the Union was not well received. His performance, if you will, on "Meet the Press" with Tim Russert did not get good reviews. This is his third big performance of the year and he simply has to do a lot better than what he has done so far.

DOBBS: Roger, thank you very much. Karen, Ron, we thank you for being with us.

Still ahead here the 9/11 commission questions Attorney General John Ashcroft about whether the Justice Department could have done more to stop radical Islamist terrorists on September 11. We'll be talking with former attorney general Richard Thornburgh, and then our Special Report, making the grade, education in America. Budget cuts forcing many schools to kill programs proven to making our children far more successful. That and a great deal more still ahead here. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: The central focus of the 9/11 commission hearing today was the cooperation or lack of it between law enforcement and intelligence agencies leading up to 9/11. My next guest served as attorney general under President George H.W. Bush. Dick Thornburgh also served two terms as governor, state of Pennsylvania, joining us from Washington, D.C. Good to have you with us.

Governor, how is it a possible -- well, I guess I can just say to you, I'm absolutely flabbergasted to hear construction that there was no communication between the CIA and the FBI then testimony today that there was terrific communication between the two at least as represented by the heads of the FBI and the Justice Department. What is your reaction?

RICHARD THORNBURGH, FMR. U.S. ATTORNEY GENERAL: Well, I think what we're seeing are the fruits of a long struggle between the law enforcement function and the intelligence gathering function that really dates back to the post-Watergate era when people were concerned about civil rights and civil liberties infringements. Over the three decades since that time, there's been a strong effort to separate intelligence gathering from law enforcement. And they are quite different, as you know.

Law enforcement seeks to gather legally admissible evidence to present to a judge and jury to prove a violation of the law. Intelligence folks try to gather information from wherever, whether admissible or not to try to thwart some terrorist attack. And that tension has existed for sometime. It's been resolved in part by the passage of the Patriot Act, but clearly during the period in question at the hearings today that tension existed and was manifest in the testimony.

DOBBS: Then we heard Louis Freeh the former direct of the FBI saying the role and relationship between investigation and counter terrorism wasn't so stark as one might assume, in fact, talked about a world that would -- seemed to me, at least, in listening to his testimony had melded to support the interest of national security.

What was your reaction?

THORNBURGH: I think that's what most Americans expect, they think that when information comes into one cubbyhole in the government it is shared across the government, particularly when our national security is at stake. I can tell you on the basis of my own experience that's not always been the case. It's the reason why the Patriot Act was passed to begin to break down those walls that were described by John Ashcroft in his testimony today. That doesn't cure all the problems to be sure, because there are still cultural differences between the intelligence community and the law enforcement community.

And there's some legal problems, a lot of intelligence information can't be used in a criminal prosecution, for example, because it might compromise sources and methods, that is real life people who provided information to the intelligence agencies and sophisticated intelligence gathering devices. Same things on the other score that law enforcement reluctant to give up information to the intelligence community for fear of jeopardizing ongoing investigations. It's going to take some strong leadership to work all these problems out.

DOBBS: Dick Thornburgh, as you're well aware is a world that Louis Freeh apparently didn't manage at the FBI, given his testimony today. The fact that the FBI did not have a state of the art, they did not have a primitive, e-mail system and communication system...

THORNBURGH: Yes.

DOBBS: ... in 2001, smacks of something that to me at least that every director of the FBI that serves since that opportunity was available to the men and women of the FBI necessary for communication for one of the most important agencies in government they should be fired.

THORNBURGH: Well, looking forward I think you can credit Bob Mueller doing a lot to untangle that situation. He's brought in people from the outside who are skilled in these areas. He made it a high priority to complete the trilogy program that Attorney General Ashcroft referred to and I think the FBI is now finally in the 21st century when it comes to their information technology capability. But that's only half the fight. DOBBS: Very quickly, Dick -- Dick Thronburgh, were out of time. But are you optimistic, are you hopeful that we're going to see real results from the commission's work?

THORNBURGH: I am optimistic for a number of reasons. I think this commission is going to settle down to write a report that's forward looking rather than finger pointing. I'm confident in the leadership that Bob Mueller is providing to the FBI in terms of modernizing their operation and I'm confident in our political process, the American people expect more of their government than some of the sorry things that have been played out in this testimony.

DOBBS: And as I know you and I would agree they deserve quite a great deal more.

THORNBURGH: Yep.

DOBBS: Dick Thornberg, thank you very much, sir. Good to have you with us.

THORNBURGH: Thank you, Lou.

DOBBS: "Tonight's Thought" is on the power of the truth in this country. "I am a firm believer in the people. If given the truth they can be dependent upon to mean any national crisis. The great point is to bring them to real facts." Those are the words of Abraham Lincoln.

Still ahead here, the Middle East in crisis, President Bush and Israeli Prime Minister Sharon meet to discuss a controversial proposal by the Israeli leader.

Stephen Cohen of the Institute for Middle East Peace is our guest.

And making the grade, school administrators facing tough choices, tight budgets and our children will have fewer choices as a result. We'll have a special report. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Israeli Prime Minister Ariel Sharon is in Washington. They will be talking about the details of his plan to withdraw from Gaza and parts of the West

Bank. Joining me now is Stephen Cohen, president of the Institute for Middle East Peace and Development.

Stephen, good to have you here.

STEPHEN COHEN, PRESIDENT, INSTITUTE FOR MIDDLE EAST PEACE AND DEVELOPMENT: Thank you.

DOBBS: This meeting between Sharon and President Bush very important because it is at least one way, if successful, and by that I mean accepted by the Likud Party, it is a way to begin that process that we called the road map a year ago. What's your outlook?

It has to be acceptable, not only to the Likud Party, but also acceptable enough to the Palestinian Authority that it actually leads to something. If they balk at it, if this becomes a big issue between the Arabs and the United States at this time, it will not have that positive effect. President Bush has to be sure that he has in mind as he goes into the meeting two goals at the same time. He wants to show friendliness to Prime Minister Sharon and Israel. At the same time he has to show the Arab world he is serious about what that road map was.

DOBBS: Well, that road map has been all but lost. Alon Pinkas, the U.S. consul general was here last night agreeing in effect the road map was in at that timers, shambles and all but forgotten. For the Palestinian state to be created there has to be a basic condition of peace. The Sharon plan which is unilateral withdrawal from Gaza is now coupled with the retention of six major blocks on the West Bank that incorporates about half of the Israeli population there.

Is that not correct?

COHEN: Yes. That is his proposal. It cannot be what President Bush formally gives Israel at this time because if he does, it will undermine the possibility of real negotiations.

DOBBS: The Palestinians would never accept that.

COHEN: Never accept it.

DOBBS: So why is -- what is the thinking on the part of the Sharon government that there is this -- on the one hand a unilateral gesture that looks intelligent, it looks correct, it looks positive. And at the same time linking it to that which is absolutely rejected on its face.

COHEN: I think that what the prime minister of Israel has in mind is to tie the hands of the next administration for its first year and a half.

DOBBS: Are you talking about the next administration of the Israeli...

COHEN: Whether it's Bush or Kerry. In other words, I think that what Sharon became afraid of in the last several months is that because he has been pushing off the road map month after month and now year after year, so that there has been no peace progress at all in the first term of George Bush, that he would be facing a situation whether it's Kerry or whether it's Bush that next march the United States looking around at its situation in the Middle East, after all the difficulty the United States has been in, because of al Qaeda, because of Iraq.

DOBBS: Radical Islamist terrorism throughout the region and even our shores.

COHEN: That we could not tolerate a long period of no progress on Arab Israeli issues and that at that point the United States would come out with its own proposal.

DOBBS: How does this proposal by Mr. Sharon bind the hands of any American president, this one or any potentially subsequent president?

COHEN: Because what he wants from the president tomorrow, is that not only that the president will give sign of approval to his idea of withdrawal from Gaza, but that the president will say that with this withdrawal of Gaza, the United States will not put on the table any other ideas about peace until this is completed which will take over a year and, also, he would like the president to commit himself to ideas that Israel wants to establish for permanent status, including changes of the boundaries and including statements of the future of refugees.

DOBBS: We have just a few seconds left. Where are the Europeans here? Where are the Arab states? Where is Egypt, where is Saudi Arabia?

COHEN: That is the point. The president of Egypt met with the president of the United States yesterday and it was if it did not happen. It was totally ignored. And that is the problem that the Arabs have now. The United States is deeply involved in the Middle East, it is engaged in a war there. It is engaged in a peace process there. It is engaged in trying to claim that the rest of the Arab world has to change toward democracy and we do not have a serious Arab partner. We are not listening to the Arabs. And we do not pay much attention to them.

DOBBS: That has to change.

COHEN: It has to change if we want to have positive change in the region.

DOBBS: Stephen Cohen, good to have you with us. Thank you.

Still ahead, our series of special reports, making the grade, education in America. Tonight when arts programs face budget cuts and they are often the first to face the cuts it is math scores that plunge. A special report on unlikely and unintended consequences for our school children. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight in our special report, Making the Grade, Education in America, music and art programs are being wiped out in schools all across the country. Rising student enrollment and declining tax revenue are leaving many schools with tremendous budget shortfalls and difficult choices for their administrators. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT: What if someone told you there was something you could do for your kid that would increase her math and reading scores? What if someone told you that something was music?

MARY LUEHRSEN, SUPPORTMUSIC.COM: The most dramatic change that happens when a program comes into a school where it hasn't been for years is the overall achievement level of all children tends to go up.

TUCKER: Sound flaky? Well, the numbers back it up. SAT scores are higher and not just by a little bit when the kids taking the test report having had music or music appreciation classes. Neurologists found second graders who are piano/keyboard trained do better in math.

A study titled Champions of Change found sustained involvement in music and theater is highly correlated with success in math and reading. And these changes occur regardless of whether it's kids in poor school or kids in rich districts.

BETTY JOHNSON, PRINCIPAL, BARRETT ELEMENTARY, DENVER: If we did not have music I think I would lose a lot of my children. As well as my parents, the community. They want music. They look forward to music.

TUCKER: There are lots of theories of why art makes such a difference. Art promotes complexity of thought and music teachers rules for without them, there can be no song.

ELIZABETH SCHNEIDER, 8TH GRADE TEACHER, NEW YORK CITY: They really understand what they are reading more. They are able to express themselves in writing. You know, some of the best writing I have ever seen from students is process writing about what they have done in art and in music and in dance because they are writing from the heart.

TUCKER: But tight budgets often mean art programs suffer. To balance the schools' budget in New York City, funding for the arts education in public schools is down $7.5 million from two years ago.

(END VIDEOTAPE)

TUCKER: But responses do vary. In Denver where budgets do have to be tightened as well, voters last November passed funding to guarantee music and art teachers in every elementary school in the Denver public school system and they are hiring the teachers now, Lou.

DOBBS: Well it is good to hear some positive news in education despite the tough choices facing most schools. Bill Tucker, thank you.

Still ahead here, the results of our poll tonight. But first a reminder to check our website for the complete list of corporations we've confirmed to be exporting America. CNN.com/lou. We continue in a moment. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of tonight's poll. 16 percent of you say President Bush should recommend creating a separate agency to gather domestic intelligence. 84 percent of you say you should not. That's our show for tonight. We thank you for being with us. Please be with us tomorrow. President Bush and Israeli Prime Minister Sharon meeting to discuss withdrawal from Gaza. Israeli ambassador to the United States Daniel Ivry will be my guest and "New York Times" columnist Paul Krugman, a frequent critic of the president will also be here. For all of us, thanks for being with us. Good night from New York. "ANDERSON COOPER 360" is next.

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


Aired April 13, 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, U.S. Marines hunt foreign terrorists in Iraq. Their mission, to capture or kill one of al Qaeda's top leaders.

DAN SENOR, COALITION PROVISIONAL AUTHORITY: Fallujah right now is a hotbed for foreign fighters

DOBBS: Iraq is likely to be the No. 1 issue when President Bush holds a prime-time news conference tonight. We'll have a preview and three of this country's top political journalists join me.

The 9/11 Commission blasts the FBI. A former FBI director says America does not need a new domestic intelligence agency.

LOUIS FREEH, FORMER FBI DIRECTOR: Americans, I don't think, like secret police.

DOBBS: Tonight, 9/11 Commission member and former Deputy Attorney General Jamie Gorelick is our guest. And former Attorney General Dick Thornburgh will also be here.

And in making the grade, our special report on education in America. Tight budgets mean tough choices for our schools and fewer choices for our children.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, April 13. Here now for an hour of news, debate and opinion, Lou Dobbs.

DOBBS: Good evening.

Tonight, the United States says al Qaeda's top man in Iraq, Abu Musab al-Zarqawi, is hiding in Fallujah. U.S. Marines surrounding Fallujah today said they captured two known terrorists in a raid, but U.S. military authorities have so far declined to offer any details on the identity of those terrorists captured. South of Fallujah, American troops are massing near Najaf. They seem to be preparing for a showdown with the radical cleric Muqtada al-Sadr.

Jim Clancy reports now from Baghdad -- Jim.

JIM CLANCY, CNN CORRESPONDENT (voice-over): Lou, the first thing I want to look at is the situation in Fallujah. Yes, there is a nominal cease-fire in place. But some of the videotape coming out of there from our U.S. television pool indicates that at times it doesn't look like any cease-fire at all. U.S. Marines suffer casualty in the last 24 hours, two dead, seven others wounded in some of that fighting. It's a situation where the Marines say they are not taking any offensive action, but at the same time today they were taking defensive action. They were taking preventative action to try to control some of the fire coming at them.

There is mortar fire directed at them, as well as machine gun fire, small-arms fire along their fires. They also got out today and fanned out across the area of the city they control to do some searching, some cordoned searching. It's not clear if that was one of the areas in which these two terrorists were picked up, part of those operations.

For days, they had been getting more and more information that there were foreign fighters inside that city. And that is what is leading Dan Senor, the spokesman for the coalition here in Baghdad, to say they believe that Abu Musab al-Zarqawi is in that city of Fallujah or they said nearby. It's a big city, though, Lou. And there's a lot of ground for the Marines to cover. The question is, what will come of negotiations? Will handing over the foreign fighters be a part of any deal?

Meantime, just west of Baghdad, a helicopter shot down. This was a special Sikorsky helicopter designed for use by special operations troops. The helicopter was completely destroyed after it was hit by a rocket-propelled grenade, according to one of the insurgents. But then, when I say completely destroyed, the men on board that helicopter then detonated charges in order to further destroy it, so there would be nothing of use left.

The three men on board were wounded, but they were rescued. Sadly, one U.S. Marine was killed, several others wounded as they were evacuating the people that had been on board the helicopter as they came under mortar fire. Also, looking to the south in Najaf that, is the holy city where the Imam Ali shrine is. That is also where Muqtada al-Sadr, the radical young Shia cleric, is holed up. He is wanted on murder charges, where one year ago, it is charged that he and his followers assassinated a rival Shia Muslim cleric who was backed by the West.

Well, the situation in Najaf is one tonight where U.S. troops have gathered in large numbers around that city, ratcheting up the pressure, if you will, Lou, ratcheting up the pressure for him to reach some kind of a deal. You have to remember, though, that there's a lot at stake here. And U.S. forces may not want to go into Najaf unless they absolutely have to -- Lou.

DOBBS: Jim, the coalition now saying dozens of foreign nationals are being held hostage by the insurgents. What is the very latest you have for us on that?

CLANCY: Well, the very latest we have are the indications of what is behind it all. Taxi drivers in Amman, Jordan, say they were offered $10,000 if they had any Americans, $5,000 for non-American expatriates.

Clearly, Lou, there's a monetary incentive here that is coming into play. The area where all of these hostages have been taken, the area of Abu Ghraib, is famous in Iraq for criminal activity. And there have been organized team of kidnappers there preying on Iraqis for months, if not the entire year since the U.S. entered into Iraq. So you have a situation here, a very dangerous one. On one hand, people are being taken.

On the other hand, it's discouraging international involvement, Lou, a lot of people leaving, some people saying they are not coming in.

DOBBS: Jim Clancy reporting live from Baghdad.

Tonight, the State Department said the unidentified remains of four bodies have been discovered in Iraq. Halliburton and its subsidiary, Kellogg, Brown and Root, said they cannot confirm that those bodies are of KBR employees. Two U.S. soldiers and seven civilian employees of KBR were reported missing after an attack on a supply convoy near Baghdad last Friday.

In less than 2 1/2 hours, President Bush will attempt to answer critics of his Iraqi policy during a rare prime-time news conference. President Bush is also expected to talk about his administration's response to the al Qaeda threat before the September 11 attacks.

Senior White House correspondent John King has the report -- John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: And, Lou, this will be the third prime-time news conference of the Bush presidency, just the 12th formal news conference held by this president.

And consider the challenge. The death toll is rising in Iraq. The generals are asking for more troops at a time in which President Bush had hoped to be bringing U.S. troops home in advance of the presidential election in this country. And recall it was just under a year ago. In two weeks, we will mark the one-year mark from when Mr. Bush went aboard that aircraft carrier and said major combat operations in Iraq were over, many questioning whether that was a dramatic misstatement by the president.

Because of that and because of the recent bloodshed and the stakes in Iraq, we're told the president will deliver an extraordinary long opening statement, perhaps as long as 18 minutes in length, offering his assessment of the situation on the ground in Iraq. One challenge for the president is to explain the violence to the American people. Another is to explain how the United States can still turn over sovereignty in Iraq just 78 days from now when there is this precarious security situation and still no firm plan on just who, just what the new Iraqi government will look like when that transfer of sovereignty takes place.

So Iraq the biggest challenge for the president tonight, but he is also expected to face questions about the work of the ongoing 9/11 Commission, the testimony today by his own attorney general, the testimony last week by his national security adviser, Condoleezza Rice, and continuing criticism that this president and this administration did not act urgently enough when presented with evidence of the al Qaeda threat here in the United States.

And, Lou, as the president deals with the 9/11 Commission and with the Iraqi crisis, we are, of course, 202 days away from a presidential election. That will be the backdrop, a very high-stakes moment for the president in the East Room tonight, Lou.

DOBBS: Absolutely, John.

Are we receiving any kind of guidance as to whether or not the president will make any sort of change in policy or call for any change in the structure and the mission of U.S. intelligence agencies?

KING: We are told and the president himself said yesterday that he is open to looking at some new arrangement for the intelligence agencies of the United States, but he says he wants to wait until the 9/11 Commission finished its work and until an internal administration review is under way.

One of the questions, of course, do you come up with some sort of internal domestic intelligence agency, like Great Britain has? The administration has resisted that as recently as when the Homeland Security Department was created. So that is going to be another interesting question the president is likely to face tonight. Exactly what does he mean when he talks about additional reforms for U.S. intelligence and would he support some sort of essentially domestic spy service?

Again, the president has said no in the past. But we are told that all options are on the table and that the president does want the input of this 9/11 Commission.

KING: John, thank you. John King, senior White House correspondent.

And we will, of course, be carrying the president's news conference live here tonight at 8:30 Eastern time. CNN's coverage begins with a special preview at 8:00 p.m. Eastern. Please be with us.

The 9/11 Commission today strongly criticized the FBI for failing to deal with the growing threat of al Qaeda before the September 11 attacks. The 9/11 Commission also said Attorney General John Ashcroft did not make counterterrorism a top priority. Ashcroft testified that the United States was blind to its enemies for nearly a decade before September 11.

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

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Lou, the attorney general offered a feisty defense of his and the Bush administration's handling of terrorism issues before and since 9/11. Going a little on the offensive, he made public a classified 1995 memo in which a wall was increased between FBI criminal investigators and FBI counterterrorism teams, a legal wall, keeping them out of each other's files. This memo was written by one of the commissioners, Jamie Gorelick, when she was deputy attorney general.

Another commissioner, however, got former acting FBI Director Thomas Pickard to say, in effect, that Ashcroft's interest in counterterrorism before 9/11 seemed pretty limited to him.

(BEGIN VIDEO CLIP)

RICHARD BEN-VENISTE, 9/11 COMMISSION: Mr. Watson had come to you and said that the CIA was very concerned that there would be an attack. You said that you told the attorney general this fact repeatedly in these meetings. Is that correct?

TOM PICKARD, FORMER ACTING FBI DIRECTOR: I told him at least on two occasions.

BEN-VENISTE: And you told the staff according to this statement that Mr. Ashcroft told you that he did not want to hear about this anymore. Is that correct?

PICKARD: That is correct.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

JAMES THOMPSON, 9/11 COMMISSIONER: Acting Director Pickard testified this afternoon that he briefed you twice on al Qaeda and Osama bin Laden and when he sought to do so again, you told him you didn't need to hear from him again. Can you comment on that, please?

JOHN ASHCROFT, ATTORNEY GENERAL: First of all, Acting Director Pickard and I had more than two meetings. We had regular meetings. Secondly, I did never speak to him saying that I did not want to hear about terrorism.

(END VIDEO CLIP)

ENSOR: Ashcroft said that, as far back as March 2001, he proposed to Condoleezza Rice, the national security adviser, that the policy of trying to capture Osama bin Laden, with his killing allowed if need be, be replaced with a more robust order to the CIA to simply try to kill the al Qaeda leader.

Commissioners sharply questioned former FBI and CIA senior officials today on how they failed to stop the attack. The former counterterrorism chief of the CIA said Congress and the nation simply didn't make the commitment needed.

(BEGIN VIDEO CLIP)

COFER BLACK, FORMER DIRECTOR, CIA COUNTERTERRORISM CENTER: The shortage of money and people seriously hurt our operations and analysis. In CTC, we heard our director's call. I have heard some people say this country wasn't at war. I want to tell you, Mr. Chairman, the Counterterrorism Center was at war. We conducted ourselves at war. And that's the way it is.

(END VIDEO CLIP)

ENSOR: And the FBI director scheduled to speak tomorrow. These increasingly dramatic hearings are coming to a conclusion pretty soon. The 9/11 Commission's report and its recommendation, Lou, are due in late July.

DOBBS: Was there any resolution, David, in the encounter with Attorney General Ashcroft, as to who is right, the attorney general or Pickard, as to whether or not further information about al Qaeda was rejected by Attorney General Ashcroft?

ENSOR: I think the best way to put it is that memories differ, Lou.

DOBBS: As they do occasionally during the course of these hearings.

David Ensor, thank you very much.

DOBBS: Next, I'll be joined by a member of the commission, Jamie Gorelick. She was deputy attorney general during the Clinton administration.

Also, reforming our intelligence agencies, does America need a new domestic intelligence agency? We'll have a special report. And former Attorney General Dick Thornburgh will be here.

Israeli Prime Minister Ariel Sharon has arrived in Washington to seek American approval for his controversial peace plan. Stephen Cohen, president of the Institute for Mideast Peace and Development, is our guest.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: As we've reported, the focus of the 9/11 Commission hearings today and tomorrow is FBI, CIA and Justice Department activity before the terrorist attacks of September 11.

My next guest is a member of the commission who knows firsthand the counterterrorism tactics of the Justice Department. Jamie Gorelick served as well as deputy attorney general under President Clinton. She has recused herself from parts of the investigation that cover the Justice Department and the questioning in fact today.

Jamie Gorelick joins us tonight from Washington, D.C. Good to have you with us.

JAMIE GORELICK, 9/11 COMMISSION MEMBER: Hi, Lou. DOBBS: Let's begin with first a rather contentious dispute over which administration is most to blame for 9/11, because that seemed to be direction today, unlike, in my opinion, at least, other days. Did we get anywhere today?

GORELICK: I don't really think the focus was on which administration is most to blame.

Actually, today was rather thematic. It is, what are the abilities of the FBI, what were they before 9/11 under either of the current or the past administrations and the same with the CIA? So I don't really see it that way.

DOBBS: Well, let me quote Attorney General John Ashcroft, saying that the government blinded itself to our enemies by separating counterterrorism from criminal investigation, citing flawed legal reasoning and pointing to a 1995 memorandum written none other than Jamie Gorelick.

GORELICK: Well, yes, except that his deputy attorney general, one of my successor, Larry Thompson, wrote a memo before 9/11 in August of 2001 leaving those policies in place and just reiterating the aspects of them that indeed allow and in fact require sharing of information between the intelligence and the criminal side.

Slade Gorton pointed out in his exchange with John Ashcroft, a fairly tough exchange, I might say, that in the four areas that Attorney General Ashcroft says were problematic and that he inherited, he left three of them in place.

DOBBS: Let me ask you as well, former Acting FBI Director Thomas Pickard has questioned your role on the commission itself. You recused yourself today because of your association and work with Attorney General Janet Reno, suggesting that you should not be on the commission at all. Your response?

GORELICK: Actually, I'm not aware of that. I'm totally unaware of that.

I questioned -- I recused myself from matters having to do with the first Clinton administration, but almost all the work of the commission is post-'98. And I was long gone. And so I have participated fully.

DOBBS: You left government service in, what, 1997?

GORELICK: In March of '97.

DOBBS: Right.

GORELICK: And I did cross-examine Pickard. I thought I had reasonable questions for him and he had reasonable answers.

DOBBS: Reasonable answers, many of them offered, and I know in talking with you and a number of other commissioners that there is a sincere, honest hope that this will be a nonpartisan result after the process has ended.

It is fairly clear to, it would seem to me, almost anyone that the United States did not have the FBI as an organization under control during the Clinton administration, nor during the Bush administration leading up to September 11. It was without a director for months preceding September 11. It was frankly understaffed in terms of the agents, as even Director Freeh said today. Is it your sense that from this commission is going to come a plan for the FBI that goes beyond whatever reforms Robert Mueller has put forward?

GORELICK: Well, Lou, let me say two things. Let me talk about both the past and then the future.

It is interesting that acting Director Pickard said that he was prohibited from talking to the White House in the Bush administration without having the permission of the attorney general or his deputy. In the Clinton administration, that was true with the exception of national security information, and Director Freeh testified that there was no inhibition on his sharing information or discussing matters with the president, with the vice president, with the national security staff.

No. 2, in terms of facilities, in terms of personnel, certainly both -- all of the incumbents in the FBI and the CIA say we don't have enough money. And so the question for us is to ask, well, did you properly allocate the resources that you had? And did you make the case that you needed to make for the resources that you think that you needed? So that's the past.

DOBBS: That is the past. But the fact is, the 9/11 Commission is all about the past.

GORELICK: No, no, no.

DOBBS: Well, if I may finish.

GORELICK: I'm sorry.

DOBBS: All about the past in terms of all that you're going through here, the events, activities, the thinking, the mind-set leading up to September 11. So that seems to me to be reasonable grounds, so long as we're setting the basis for a secure future for this country going forward.

And to hear the men and women who are responsible for managing these agencies and organizations telling us all what a great job they did, in point of fact, it's clear that there were serious management, mismanagement in some cases, and serious management issues, were there not?

GORELICK: Absolutely. And we need to understand what went wrong in order to determine what ought to be fixed.

So we need to do both. If we were just a group of people popping off on policy, I don't think we would do anyone any good. And, by the same token, if we just went around and found fault, that wouldn't help the country much either. Our idea and in fact our statutory charter is to look across the board at all of the elements of government that are supposed to keep us secure, evaluate what they did, and then make recommendations for the future based on what we find.

DOBBS: Commissioner Gorelick, we are out of time, but I've got to go back to something you just said. You said that Pickard said that, under the Bush administration, that no one could advance from the FBI to the president's office directly.

While it's correct that, as you said, that Louis Freeh did not find that to be an inhibition, as I listened to his testimony today, what I thought he said was, in the instances where he did have something that he thought it was important to the White House, he went first to the attorney general and together they approached the White House. I didn't see a distinction frankly operationally between what Freeh said and Pickard.

GORELICK: Well, that may well be, but there was no inhibition. And there was no prohibition on his doing so.

DOBBS: Jamie Gorelick, we thank you very much, as always. Appreciate it -- Commissioner Jamie Gorelick.

Well, one of the many questions the 9/11 Commission hopes to answer for us is whether this country needs a new intelligence agency, as well as reform of old ones. When we continue, we'll have a special report on the many options to improve American intelligence.

And then President Bush is preparing for his first formal news conference this year, including expected remarks about the increasingly violent situation in Iraq. We'll examine the political implications with our panel of top political journalists tonight.

All of that and a great deal more still ahead here. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: One of the question questions for the 9/11 Commission is whether America's intelligence agencies need to be reorganized. Possible reforms include giving the director of central intelligence more power and establishing a domestic intelligence service, much like Britain's MI5.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Intelligence failure. Witness after witness to the 9/11 Commission point to what the FBI knew, but didn't act on and the lack of resources devoted to counterterrorism.

PHILIP ZELIKOW, EXECUTIVE DIRECTOR, 9/11 COMMISSION: On September 11 2001, only about 6 percent of the FBI's total personnel worked on counterterrorism. PILGRIM: The solution, among the options being discussed, to create a separate intelligence agency outside the FBI, like the MI5 in Britain, with no law enforcement duties, just intelligence, create a more distinct intelligence unit within the FBI, or transfer to and expand domestic intelligence functions under the CIA.

Former FBI Director Louis Freeh Tuesday clearly against the separate agency.

FREEH: A brand new domestic intelligence agency would take a decade and we would lose very precious time at a very dangerous time.

PILGRIM: Former Attorney General Janet Reno worried about coordinating information between agencies.

JANET RENO, FORMER ATTORNEY GENERAL: Don't create another agency. The worst thing that you could recommend, the worst thing you can do is create another agency and then we'll be back talking about whether they can share here or there or what...

PILGRIM: But some in Congress are saying give the FBI more money to create a crack intelligence unit within the agency.

REP. FRANK WOLF (R), VIRGINIA: It would be a service, an organization, if you will, within the FBI with its own career track, its own linguist, its own analysts, its own agents that would focus like a laser beam on this issue of intelligence and terrorism.

PILGRIM: The FBI budget has increased by 50 percent since fiscal year 2000, from $3 billion to a little less than $5 billion. The agency has hired more than 1,000 new agents, analysts and upgraded information technology.

(END VIDEOTAPE)

PILGRIM: Creating a domestic terrorism agency patterned on the British MI5 would be highly controversy in this country. Former FBI Director Louis Freeh said today he felt that would be in effect a secret police agency -- Lou.

DOBBS: Kitty, thank you.

That brings us to the topic of tonight's poll. The question: Do you believe President Bush should recommend creating a separate agency to gather domestic intelligence, yes or no? Please your vote at CNN.com/Lou. We'll have the results later in the broadcast.

Tonight, the president will address the nation, holding his first solo news conference in more than four months.

Joining me now, our panel of top political journalists. Ron Brownstein is the national political correspondent for "The Los Angeles Times," Karen Tumulty, the national political correspondent for "TIME" magazine, Roger Simon, political editor "U.S. News & World Report," all joining us tonight from the nation's capital. Let me begin with you, Roger. The president's in fact only third formal press conference of his presidency, what are the political implications?

ROGER SIMON, POLITICAL EDITOR, "U.S. NEWS & WORLD REPORT": It's a White House in trouble.

It's a president who has had a very bad week and a very bad month who is facing terrible statistics from Iraq, 48 dead last week, 80- plus dead this month. He's got a 9/11 Commission presenting evidence on at least a weekly basis that shows that there were errors of judgment, dots that were not connected that might have been able to prevent 9/11.

All in all -- and his poll ratings continue to sink below the magic 50 percent that most incumbent presidents need for reelection. So, he's doing what he can. And what he can do is hold a press conference to try to turn things around.

DOBBS: Karen, well, this press conference, does it have the capacity to turn things around for the president?

KAREN TUMULTY, NATIONAL POLITICAL CORRESPONDENT, "TIME": Well, the pressure is going to really be on the president tonight. And, by the way, as he's doing the thing he likes just about least of all is standing up in front of a bunch of reporters who he thinks are probably just there to preen in front of the cameras is one reason that he hates this, but the bar is going to be high and it is going -- the pressure is going to be on him to show that he, in fact, has a plan for here on out.

He has -- the White House has already let it be known he is going to make a relatively lengthy statement going into the press conference in which he's probably going to make some sort of news, maybe some sort of appointment, some sort of plan, and he is going to try to set the tone and try to put the focus on a plan from here on out rather than a lot of explaining on how we got here.

DOBBS: Karen, I assume when you talked about journalists preening in front of the cameras you are referring to magazine journalists, is that correct? Ron, let me ask you, what do you believe the president must do tonight in order to be successful -- what Karen has outlined?

RON BROWNSTEIN, CNN POLITICAL ANALYST: I think in order to be successful he has to be successful. I'm not trying to be cute there. In the end I think argument is only going to take him so far and not very far. He will make good arguments about his policy in Iraq or he will make bad arguments about his policy in Iraq. In either case whatever argument he makes will be overwhelmed by the actual reality on the ground in Iraq.

I think it is very clear that public opinion in the U.S. is enormously sensitive to how things are going there. Much more mutable than the ratings on terrorism which tend to be above 50 percent on an ongoing basis or on the economy where he's had trouble picking them up. On Iraq people are very sensitive to events. And I think that ultimately more important than any kind of case he makes tonight is can he develop a strategy that brings more stability to the region and that gives him a better chance of success after the June 30 handover of power which he seems committed to.

DOBBS: If I could ask, let's call up a couple of those poll numbers that you -- each of you referenced. The policy in Iraq, how the opinion has swung, if we could take a look at that, please. That graphic. Well apparently we can't take a look at that -- there it is.

Current U.S. military policy in Iraq. Back in January, 59 percent approved of the Bush administration's policy. That has dropped to 48 percent. The disapproval has risen to 45 percent. That is a significant shift coming as you referenced again on what the administration has called a bad week in Iraq. In fact, the bloodiest month already this month since the war began. What's your reaction? Can he move those numbers again, Ron?

BROWNSTEIN: Look, Lou, there is a fine line between resolve and intransigence and like most people the president's strengths are his weaknesses. What people have liked in him post 9/11, is a sense that he's a decisive leader who sets a course and sticks to it. That becomes less attractive if it appears like the course is going off the rails. That's the perception he now faces from much of the country about Iraq. They argue the things -- he has been saying things aren't that bad, we're going to come through this.

The danger to him is that if in fact events don't cooperate in that description he will seem out of touch. I think that will be a very dangerous place for him to be. So The question for the president, to me, is not can he find an argument that gets him through tonight because I think he's going to make a very firm statement about why we need to do this. The question is can he make events better on the ground there?

DOBBS: Karen, Roger, I would like you to take a look, if this next graphic showing the view of what the Bush administration has a clear plan on Iraq, that number is at 43 percent. 51 percent say the Bush administration does not. Can tonight, the president reverse those numbers?

TUMULTY: Well, that's why I think that he is going to try to use this opening statement in particular to make some kind of news, to give some sort of tangible development there, that hopefully can give a line of questioning, that does sort of focus on the future. You know, just making more statements about this was a bad week, this is, you know, a flare-up, some of the other inartful terms that the administration officials have been turning to is not going to get him very far. As Ron says, what has got to change here is not the stagecraft, it has got to be the reality.

DOBBS: The reality in Iraq, absolutely, painful. More Americans dying today. Others held hostage. Their fate unknown. Roger, what should the president do to reconcile reality with his administration's policy in Iraq? SIMON: Well, it is unlikely that the reality in Iraq is going to change much between now and November 2. We are there. We are going to stay there. Ron mentioned a hand-over of power on June 30. But we can't even tell people to whom we are handing over power. And, secondly, U.S. troops are going to remain after June 30. More than a hundred thousand of them will remain there. So they will still be targets.

I'm not sure President Bush can hope for much improvement in Iraq except to say that we're there, we're going to stick it out. We're doing the right thing. But tonight he does to some extent have to indulge in stagecraft. He is selling himself tonight. And he's coming off two badly reviewed public performances. His State of the Union was not well received. His performance, if you will, on "Meet the Press" with Tim Russert did not get good reviews. This is his third big performance of the year and he simply has to do a lot better than what he has done so far.

DOBBS: Roger, thank you very much. Karen, Ron, we thank you for being with us.

Still ahead here the 9/11 commission questions Attorney General John Ashcroft about whether the Justice Department could have done more to stop radical Islamist terrorists on September 11. We'll be talking with former attorney general Richard Thornburgh, and then our Special Report, making the grade, education in America. Budget cuts forcing many schools to kill programs proven to making our children far more successful. That and a great deal more still ahead here. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: The central focus of the 9/11 commission hearing today was the cooperation or lack of it between law enforcement and intelligence agencies leading up to 9/11. My next guest served as attorney general under President George H.W. Bush. Dick Thornburgh also served two terms as governor, state of Pennsylvania, joining us from Washington, D.C. Good to have you with us.

Governor, how is it a possible -- well, I guess I can just say to you, I'm absolutely flabbergasted to hear construction that there was no communication between the CIA and the FBI then testimony today that there was terrific communication between the two at least as represented by the heads of the FBI and the Justice Department. What is your reaction?

RICHARD THORNBURGH, FMR. U.S. ATTORNEY GENERAL: Well, I think what we're seeing are the fruits of a long struggle between the law enforcement function and the intelligence gathering function that really dates back to the post-Watergate era when people were concerned about civil rights and civil liberties infringements. Over the three decades since that time, there's been a strong effort to separate intelligence gathering from law enforcement. And they are quite different, as you know.

Law enforcement seeks to gather legally admissible evidence to present to a judge and jury to prove a violation of the law. Intelligence folks try to gather information from wherever, whether admissible or not to try to thwart some terrorist attack. And that tension has existed for sometime. It's been resolved in part by the passage of the Patriot Act, but clearly during the period in question at the hearings today that tension existed and was manifest in the testimony.

DOBBS: Then we heard Louis Freeh the former direct of the FBI saying the role and relationship between investigation and counter terrorism wasn't so stark as one might assume, in fact, talked about a world that would -- seemed to me, at least, in listening to his testimony had melded to support the interest of national security.

What was your reaction?

THORNBURGH: I think that's what most Americans expect, they think that when information comes into one cubbyhole in the government it is shared across the government, particularly when our national security is at stake. I can tell you on the basis of my own experience that's not always been the case. It's the reason why the Patriot Act was passed to begin to break down those walls that were described by John Ashcroft in his testimony today. That doesn't cure all the problems to be sure, because there are still cultural differences between the intelligence community and the law enforcement community.

And there's some legal problems, a lot of intelligence information can't be used in a criminal prosecution, for example, because it might compromise sources and methods, that is real life people who provided information to the intelligence agencies and sophisticated intelligence gathering devices. Same things on the other score that law enforcement reluctant to give up information to the intelligence community for fear of jeopardizing ongoing investigations. It's going to take some strong leadership to work all these problems out.

DOBBS: Dick Thornburgh, as you're well aware is a world that Louis Freeh apparently didn't manage at the FBI, given his testimony today. The fact that the FBI did not have a state of the art, they did not have a primitive, e-mail system and communication system...

THORNBURGH: Yes.

DOBBS: ... in 2001, smacks of something that to me at least that every director of the FBI that serves since that opportunity was available to the men and women of the FBI necessary for communication for one of the most important agencies in government they should be fired.

THORNBURGH: Well, looking forward I think you can credit Bob Mueller doing a lot to untangle that situation. He's brought in people from the outside who are skilled in these areas. He made it a high priority to complete the trilogy program that Attorney General Ashcroft referred to and I think the FBI is now finally in the 21st century when it comes to their information technology capability. But that's only half the fight. DOBBS: Very quickly, Dick -- Dick Thronburgh, were out of time. But are you optimistic, are you hopeful that we're going to see real results from the commission's work?

THORNBURGH: I am optimistic for a number of reasons. I think this commission is going to settle down to write a report that's forward looking rather than finger pointing. I'm confident in the leadership that Bob Mueller is providing to the FBI in terms of modernizing their operation and I'm confident in our political process, the American people expect more of their government than some of the sorry things that have been played out in this testimony.

DOBBS: And as I know you and I would agree they deserve quite a great deal more.

THORNBURGH: Yep.

DOBBS: Dick Thornberg, thank you very much, sir. Good to have you with us.

THORNBURGH: Thank you, Lou.

DOBBS: "Tonight's Thought" is on the power of the truth in this country. "I am a firm believer in the people. If given the truth they can be dependent upon to mean any national crisis. The great point is to bring them to real facts." Those are the words of Abraham Lincoln.

Still ahead here, the Middle East in crisis, President Bush and Israeli Prime Minister Sharon meet to discuss a controversial proposal by the Israeli leader.

Stephen Cohen of the Institute for Middle East Peace is our guest.

And making the grade, school administrators facing tough choices, tight budgets and our children will have fewer choices as a result. We'll have a special report. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Israeli Prime Minister Ariel Sharon is in Washington. They will be talking about the details of his plan to withdraw from Gaza and parts of the West

Bank. Joining me now is Stephen Cohen, president of the Institute for Middle East Peace and Development.

Stephen, good to have you here.

STEPHEN COHEN, PRESIDENT, INSTITUTE FOR MIDDLE EAST PEACE AND DEVELOPMENT: Thank you.

DOBBS: This meeting between Sharon and President Bush very important because it is at least one way, if successful, and by that I mean accepted by the Likud Party, it is a way to begin that process that we called the road map a year ago. What's your outlook?

It has to be acceptable, not only to the Likud Party, but also acceptable enough to the Palestinian Authority that it actually leads to something. If they balk at it, if this becomes a big issue between the Arabs and the United States at this time, it will not have that positive effect. President Bush has to be sure that he has in mind as he goes into the meeting two goals at the same time. He wants to show friendliness to Prime Minister Sharon and Israel. At the same time he has to show the Arab world he is serious about what that road map was.

DOBBS: Well, that road map has been all but lost. Alon Pinkas, the U.S. consul general was here last night agreeing in effect the road map was in at that timers, shambles and all but forgotten. For the Palestinian state to be created there has to be a basic condition of peace. The Sharon plan which is unilateral withdrawal from Gaza is now coupled with the retention of six major blocks on the West Bank that incorporates about half of the Israeli population there.

Is that not correct?

COHEN: Yes. That is his proposal. It cannot be what President Bush formally gives Israel at this time because if he does, it will undermine the possibility of real negotiations.

DOBBS: The Palestinians would never accept that.

COHEN: Never accept it.

DOBBS: So why is -- what is the thinking on the part of the Sharon government that there is this -- on the one hand a unilateral gesture that looks intelligent, it looks correct, it looks positive. And at the same time linking it to that which is absolutely rejected on its face.

COHEN: I think that what the prime minister of Israel has in mind is to tie the hands of the next administration for its first year and a half.

DOBBS: Are you talking about the next administration of the Israeli...

COHEN: Whether it's Bush or Kerry. In other words, I think that what Sharon became afraid of in the last several months is that because he has been pushing off the road map month after month and now year after year, so that there has been no peace progress at all in the first term of George Bush, that he would be facing a situation whether it's Kerry or whether it's Bush that next march the United States looking around at its situation in the Middle East, after all the difficulty the United States has been in, because of al Qaeda, because of Iraq.

DOBBS: Radical Islamist terrorism throughout the region and even our shores.

COHEN: That we could not tolerate a long period of no progress on Arab Israeli issues and that at that point the United States would come out with its own proposal.

DOBBS: How does this proposal by Mr. Sharon bind the hands of any American president, this one or any potentially subsequent president?

COHEN: Because what he wants from the president tomorrow, is that not only that the president will give sign of approval to his idea of withdrawal from Gaza, but that the president will say that with this withdrawal of Gaza, the United States will not put on the table any other ideas about peace until this is completed which will take over a year and, also, he would like the president to commit himself to ideas that Israel wants to establish for permanent status, including changes of the boundaries and including statements of the future of refugees.

DOBBS: We have just a few seconds left. Where are the Europeans here? Where are the Arab states? Where is Egypt, where is Saudi Arabia?

COHEN: That is the point. The president of Egypt met with the president of the United States yesterday and it was if it did not happen. It was totally ignored. And that is the problem that the Arabs have now. The United States is deeply involved in the Middle East, it is engaged in a war there. It is engaged in a peace process there. It is engaged in trying to claim that the rest of the Arab world has to change toward democracy and we do not have a serious Arab partner. We are not listening to the Arabs. And we do not pay much attention to them.

DOBBS: That has to change.

COHEN: It has to change if we want to have positive change in the region.

DOBBS: Stephen Cohen, good to have you with us. Thank you.

Still ahead, our series of special reports, making the grade, education in America. Tonight when arts programs face budget cuts and they are often the first to face the cuts it is math scores that plunge. A special report on unlikely and unintended consequences for our school children. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight in our special report, Making the Grade, Education in America, music and art programs are being wiped out in schools all across the country. Rising student enrollment and declining tax revenue are leaving many schools with tremendous budget shortfalls and difficult choices for their administrators. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT: What if someone told you there was something you could do for your kid that would increase her math and reading scores? What if someone told you that something was music?

MARY LUEHRSEN, SUPPORTMUSIC.COM: The most dramatic change that happens when a program comes into a school where it hasn't been for years is the overall achievement level of all children tends to go up.

TUCKER: Sound flaky? Well, the numbers back it up. SAT scores are higher and not just by a little bit when the kids taking the test report having had music or music appreciation classes. Neurologists found second graders who are piano/keyboard trained do better in math.

A study titled Champions of Change found sustained involvement in music and theater is highly correlated with success in math and reading. And these changes occur regardless of whether it's kids in poor school or kids in rich districts.

BETTY JOHNSON, PRINCIPAL, BARRETT ELEMENTARY, DENVER: If we did not have music I think I would lose a lot of my children. As well as my parents, the community. They want music. They look forward to music.

TUCKER: There are lots of theories of why art makes such a difference. Art promotes complexity of thought and music teachers rules for without them, there can be no song.

ELIZABETH SCHNEIDER, 8TH GRADE TEACHER, NEW YORK CITY: They really understand what they are reading more. They are able to express themselves in writing. You know, some of the best writing I have ever seen from students is process writing about what they have done in art and in music and in dance because they are writing from the heart.

TUCKER: But tight budgets often mean art programs suffer. To balance the schools' budget in New York City, funding for the arts education in public schools is down $7.5 million from two years ago.

(END VIDEOTAPE)

TUCKER: But responses do vary. In Denver where budgets do have to be tightened as well, voters last November passed funding to guarantee music and art teachers in every elementary school in the Denver public school system and they are hiring the teachers now, Lou.

DOBBS: Well it is good to hear some positive news in education despite the tough choices facing most schools. Bill Tucker, thank you.

Still ahead here, the results of our poll tonight. But first a reminder to check our website for the complete list of corporations we've confirmed to be exporting America. CNN.com/lou. We continue in a moment. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of tonight's poll. 16 percent of you say President Bush should recommend creating a separate agency to gather domestic intelligence. 84 percent of you say you should not. That's our show for tonight. We thank you for being with us. Please be with us tomorrow. President Bush and Israeli Prime Minister Sharon meeting to discuss withdrawal from Gaza. Israeli ambassador to the United States Daniel Ivry will be my guest and "New York Times" columnist Paul Krugman, a frequent critic of the president will also be here. For all of us, thanks for being with us. Good night from New York. "ANDERSON COOPER 360" is next.

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