Return to Transcripts main page
Lou Dobbs Tonight
U.S. Launches Air Strike on al-Zarqawi; Congresswoman Jane Harman Says More Money Is Needed for Intelligence
Aired June 25, 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.
KITTY PILGRIM, GUEST HOST: Tonight, target al Qaeda. The United States launches an air strike on al Qaeda's leader in Iraq. We will have the latest from the Pentagon, and I will also talk with "TIME" magazine's bureau chief in Baghdad, Michael Ware.
President Bush arrives in Ireland to rally European support for Iraq and the global war on terror. We'll have a report.
And I will talk with Congresswoman Jane Harman, ranking Democrat on the House Intelligence Committee. Congresswoman Harman says the United States must spend more money to defeat international terrorism.
Also tonight, a special report on a U.S. company's fight against the export of American jobs to cheap overseas labor markets.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We'll keep the jobs here. We make money. The customers are happy.
(END VIDEO CLIP)
PILGRIM: And the inspiring story of a soldier rebuilding his life after a bomb explosion in Iraq.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I'm going to deal with this injury. My personality hasn't changed, and that's one thing that I always want to keep.
(END VIDEO CLIP)
PILGRIM: Tonight, Specialist Carl Covington in Heroes.
ANNOUNCER: This is LOU DOBBS TONIGHT for Friday, June 25. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs who is on vacation, Kitty Pilgrim.
PILGRIM: Good evening.
Tonight, a dramatic attempt to kill al Qaeda's leader in Iraq. A senior Defense Department official says a U.S. air strike in Fallujah today came "very close" to killing Abu Musab al-Zarqawi. The strike came one day after insurgents launched a series of attacks in five Iraqi cities. David Ensor reports from the Pentagon -- David.
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Kitty, this strike was in Fallujah, just northwest of Baghdad, a Sunni stronghold, and what we're told by a senior defense official is that the attack that hit this house you see here in Fallujah nearly killed, they believe -- nearly killed -- Abu Musab al-Zarqawi, the terrorist leader who the U.S. has been trying to get for some time now.
Apparently, he drew up in a convoy of cars just as the bombs were dropping. He was knocked on the ground by the impact, but his bodyguards were able to push him back into the car and get him away alive. At least that is the belief of this senior U.S. defense official with whom we spoke.
Now this all-out attempt by the United States to try to get Zarqawi comes after a spat of attacks that are attributed to the group that he is in charge of.
(BEGIN VIDEO CLIP)
RICHARD ARMITAGE, DEPUTY SECRETARY OF STATE: I think there is a central nervous system to the Zarqawi network. I found rather remarkable yesterday the timing, et cetera, of the car bombs in several different locations, which indicates to me a certain degree of command and control.
Now I don't think it's the command and control that we traditionally think about in our own military, but someone's giving general orders, and other people are following them. I think that's fairly clear.
(END VIDEO CLIP)
ENSOR: Officials we've spoken to decline to say, but the amount of detail and the type of detail appears to indicate that, at the time of the impact of these bombs, there were either eyewitnesses that the U.S. is in touch with or there may have been surveillance Predator drones in the area watching closely.
In any case, it would seem clear they're hot on the trail of Zarqawi, and there may be additional attacks yet to come -- Kitty.
PILGRIM: All right. Thanks very much.
David Ensor.
U.S. and Iraqi troops today stepped up security after the insurgent offensive. Iraqi officials today said the attacks killed 93 Iraqis and three American soldiers. More than 300 people were wounded.
Christiane Amanpour reports from Baghdad.
(BEGIN VIDEOTAPE) CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT (voice-over): Iraq's new defense and interior ministers are appealing to their people for information on the terrorists, and they speak of an imminent showdown.
HAZEM SHALAN AL-KHUZABI, IRAQ INTERIM DEFENSE MINISTER (through translator): We will go and attack the enemy before it attacks us. We have plans in that regard so that we can curtail their sabotaging efforts. We will carry out raid operations.
AMANPOUR: There were no details, no talk yet of martial law, but the U.S. general in charge of setting up Iraq's new forces says, even after the hand-over, American troops won't be too far away.
LT. GEN. DAVID PETRAEUS, OFFICE OF SECURITY TRAINING: In some cases with them, in some cases around the corner from them, certainly, they are to provide backup. One of the critical components of what must happen in the days and weeks ahead is that there must be a sense of Iraqi security forces that, if they get in trouble, coalition forces will come to the rescue, if need be.
AMANPOUR: Iraqi forces have just received an emergency delivery from the United States: 56,000 sets of body armor with another 12,000 to follow next week, 60,000 Kevlar helmets, more than 600 radios and 1,000 vehicles.
UNIDENTIFIED MALE: Go, go, go!
AMANPOUR: Plus, heavy machine guns, RPGs and ammunition. Welcome news at training bases like this one, run by a unit of the Arkansas National Guard.
LT. MICHAEL SCOTT, ARKANSAS NATIONAL GUARD: We've secured the freedom of Iraq, but it's these people, these soldiers that we're training now that are going to have to fight to keep it, and that's what we're trying to prepare them for.
AMANPOUR: American soldiers say that, with the right equipment, the Iraqis could do the job.
Meantime, more Iraqi police and army checkpoints are going up around Baghdad with U.S. military support. It's a firewall against insurgents the U.S. admits are a serious threat.
Up north in Mosul, U.S. commanders say they're pleased that it was Iraqi forces who responded first to the suicide bombings that killed more than 60 people on Thursday.
Christiane Amanpour, CNN, Baghdad.
(END VIDEOTAPE)
PILGRIM: The chairman of the Joint Chiefs, General Richard Myers, today admitted the insurgent attacks appear to be coordinated, but General Myers said the level of coordination is "unknown." The general was one of several top administration officials giving testimony to the Senate Armed Services Committee.
Deputy Defense Secretary Paul Wolfowitz said a much bigger American force in Iraq would not guarantee victory against the insurgents.
(BEGIN VIDEO CLIP)
PAUL WOLFOWITZ, DEPUTY DEFENSE SECRETARY: There's no reason to think that we would have had any better luck catching these people where they hide if there was a heavy American presence -- I mean, a heavier American presence. It was pretty heavy, and what we need is better intelligence.
(END VIDEO CLIP)
PILGRIM: And Wolfowitz also said one of the keys to better intelligence is to have more Iraqis serving in the front lines.
Joining me now for the very latest from Iraq is Michael Ware. He is the Baghdad bureau chief of "TIME" magazine.
Michael, let's start with today's air strike in Fallujah. Just how important is it for the coalition to kill or capture al Zarqawi?
MICHAEL WARE, "TIME" MAGAZINE: Well, obviously, that's a vital objective. Given the role that it is now believed that Zarqawi is playing in helping guide and shape the resistance and the insurgence against the coalition, it can't be underestimated.
Today's strike was yet another hit on what is understood to be a safehouse used by Zarqawi's network known as Tawhid wa al-Jihad. This is the third in a week. The first two were successful strikes. I've had it confirmed to me by the Iraqi resistance that both hit their targets.
The first, an Iraqi safehouse, in which at least 18 fighters died, eight of them foreigners. The second hit was on a car sales lot where Arab Mujahadeen jihadis were gathering, trading and collecting, and this, too, was another direct hit.
PILGRIM: Michael, we had today a discussion of command and control. Richard Armitage using that word. How much is Zarqawi in charge, do you think? You've spent -- and I ask you this with considerable base knowledge. You've spent since 2001 in Iraq and Afghanistan on and off assignments.
So you speak from a considerable base of experience. How much is it your impression that this is something that's being controlled by Zarqawi, and how much do you think, in your opinion, is coming from other insurgents?
WARE: Well, from the beginning here in Iraq, we've had two wars running simultaneously. One is the terrorist war. That's the high- impact, mass-casualty, symbolic political strikes, the car bombings, the assassinations, the suicide attacks. That from the beginning has been led by Zarqawi. Other groups have participated, but he's been the driving force behind that.
We then had a guerrilla insurgency, the daily drip feed of attacks, which has been killing U.S. boys. That principally has been run by nationalist insurgency, those who believe they're fighting a war of liberation.
What we're starting to see is a blurring between those two lines. So I think that we're going to find very soon that Zarqawi is playing a greater and greater role in the theater here in Iraq.
PILGRIM: We hear him taking credit for Nicholas Berg and the death of Kim Sun-il. Is this a psychological game also?
WARE: Very much so. What Zarqawi is doing, not only by committing these acts, but by having the audacity, the brazenness to film them and then immediately post them on the Internet for all to see -- he's sending a double message. It's twofold.
The first is to the West. It's to the coalition partners. He's striking the coalition at its joints, at its alliances, trying to carve off partners, such as Spain, targeting Japan, targeting South Korea. That's the first message.
The second is to the global jihad community. He's branding himself. He's saying, look at me. I'm here. He's attracting attention, building a profile, which has a number of benefits.
PILGRIM: Michael Ware, thank you very much for your analysis tonight.
Michael Ware reporting from Baghdad.
While the world watches Iraq, another war is going on in Afghanistan, and, today, the military said two U.S. Marines were killed in the fighting near the border with Pakistan. A third Marine was wounded.
About 20,000 American troops are fighting al Qaeda and the Taliban in Afghanistan. The United States has nearly doubled the number of American troops ahead of the national elections in September.
Now Afghanistan and Iraq are two key issues on President Bush's agenda in Europe this weekend. The president arrived today in Ireland for a summit with European Union leaders. And, later, he will go to Turkey to meet with NATO leaders.
(BEGIN VIDEOTAPE)
PILGRIM (voice-over): President Bush will spend the next two days trying to win some promises of support in Iraq from the 25 members of the European Union. President Bush was challenged about the war in Iraq by an Irish television reporter before he even left the United States.
UNIDENTIFIED FEMALE: Mr. President, the world is a more dangerous place today. I don't know whether you can see that or not.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Why do you say that?
UNIDENTIFIED FEMALE: There are terrorist bombings every single day. It's now a daily event. It wasn't like that two years ago.
BUSH: What was it like September the 11th, 2001? It was a relative calm. We thought...
UNIDENTIFIED FEMALE: But it's your response to Iraq that's...
BUSH: Let me finish. Let me finish, please. Please. You asked the questions, and I'll answer them, if you don't mind.
PILGRIM: Thousands of anti-war protesters are expected to march over the weekend in Ireland. More than 6,000 Irish police and troops are on duty.
White House Communications Director Dan Bartlett says, while France and Germany did not support the war, the U.N. Security Council resolution on Iraq's sovereignty has put the issue to rest.
DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR: Now it's time to focus on the future, and the president is confident the international community will come to the aid of the Iraqi people.
PILGRIM: President Bush started the discussions for more support in Iraq at the G-8 meeting in Sea Island, Georgia, earlier this month. This weekend's talks come before the NATO summit in Turkey on Monday. Iraq will be center stage at the meetings.
NICHOLAS BURNS, U.S. AMBASSADOR TO NATO: The Iraqi prime minister, Prime Minister Allawi, has requested NATO to undertake a training mission to help rebuild the Iraqi army. The United States hopes very much that the answer will be positive from NATO on Monday.
(END VIDEOTAPE)
PILGRIM: Now early indications are NATO troops will help train the Iraqi forces, and the Iraqi hand-over is on Wednesday.
Police in Turkey have launched a massive security operation ahead of President Bush's visit. Officers destroyed a suspicious package at an Istanbul airport today. The police have also arrested dozens of people suspected of links with extremist groups. The security measures come one day after a bomb attack in Istanbul killed four people on a bus. A second bomb exploded outside a hotel in Ankara that will be used by President Bush.
Well, still ahead, Democrats say the Bush administration is shortchanging the war on terror, and the ranking Democrat on the House Intelligence Committee, Jane Harman, is my guest.
And confusion in the State Department tonight about what North Korea did or did not say about nuclear weapons and testing them. We'll have a report from Beijing.
And fighting the exporting of American jobs to cheap overseas labor markets. We'll introduce you to a company with an unusual strategy for keeping jobs in this country.
(COMMERCIAL BREAK)
PILGRIM: This week, the House passed record new funding for the nation's intelligence agencies. The vote was 360 to 61. But many Democrats who voted for the bill are speaking out against it.
Earlier, I talked to one of them, Congresswoman Jane Harman, the ranking member of the Intelligence Committee, and I asked Congresswoman Harman why she believes the bill falls short. ` (BEGIN VIDEOTAPE)
REP. JANE HARMAN (D), CALIFORNIA: Well, there's a lot of money in the bill, but it's not in the right places. We are underfunding counterterrorism, which is the core mission of our intelligence community and what we need to be investing in if we're going to win the global war on terror.
PILGRIM: You have said it's about one-third underfunded on counterterrorism. Why do you think we fell so short?
HARMAN: What we worry about is that after the first quarter runs out at the end of this year and the second quarter does not include additional funds, which we think will be the case, then things like the presidential inauguration, the Super Bowl, major events in the United States may have less protection than they would if we had a fully funded counterterrorism effort.
PILGRIM: So they argue if you fund it on a quarterly basis, Congress has more oversight about the money. What do you say to that?
HARMAN: I say to that that we fund most everything else on an annual basis. Why do we single this out? That's number one.
And, number two, all of us feel on the committee, the Republican members as well, that funding by supplemental, which is what this means -- we pass supplemental appropriations bills later -- just cuts out the oversight of Congress. It doesn't increase the oversight. I just find their arguments spurious.
PILGRIM: And supplementals sometimes have time delays, don't they?
HARMAN: You bet. I mean, this is my point. I doubt we'll have another supplemental for the war in Iraq, which might include some additional intelligence funding, until next March or April, well beyond the end of the first quarter for the fiscal year for '05, which starts October 1.
PILGRIM: Let's not get too much into the whole process, but I do -- would like to go into a little bit about the partisan split on this.
HARMAN: Yes.
PILGRIM: And we had Bud Kramer, Collin Peterson and Leonard Boswell proposing an amendment, which didn't get very far. Tell us what that amendment wanted but didn't eventually get in.
HARMAN: They offered an amendment in the Intelligence Committee when we were reviewing the bill, and their amendment, which I strongly supported as the ranking member, was defeated on a party-line vote, which caused all of the Democrats, in an unprecedented vote, to vote against the intelligence bill in committee. I've never voted against an intelligence bill in five terms in Congress, and they hadn't either.
Then, on the House floor, we raised the subject again, and I won't go through all the procedure, but our bottom line argument was and is that we need stronger intelligence and stronger oversight.
There have been massive intelligence failures in the last three years -- and many before that, too, to be fair -- but massive failures at a time when it is critical that we understand the nature of the insurgency in Iraq, so we can protect our forces, that we know how far along Iran is with its nuclear program and North Korea and so forth.
And if we don't have the best intelligence we can field and if we don't fund all of our counterterrorism needs, we're making a huge mistake.
PILGRIM: So it goes back to the funding. Let me go to the substance of some criticism. The Intelligence Committee report on the CIA said we're basically heading over a proverbial cliff. Do you agree with that?
HARMAN: Well, that language was drafted by the majority on the Intelligence Committee. I think that mistakes have been made at the CIA. That's where it was directed. But my view is that there are many good people who take enormous risks there.
What they need is a better structure. The structure of the CIA was developed in 1947 to go against an enemy, the Communist threat, which no longer exists, and it hasn't been modernized.
PILGRIM: You know, you've made some very strong statements about the climate of terrorism now, citing what happened to Nick Berg and Paul Johnson.
HARMAN: Yes.
PILGRIM: Do you think we're in a new reality?
HARMAN: I think we are in a new reality, and I think all of us -- this is one of the things we argued on the House floor -- all of us missed it. We thought that when the Cold War ended, when the wall came down, then the world would be safer. President Bush 41 was in office. He declared a peace dividend. He started cutting -- it was President Bush 41 who started cutting the defense and intelligence budgets in anticipation of a more peaceful world.
Well, guess what? We didn't have that. What we have is a -- I would say a more dangerous world with more diverse and dispersed threats.
PILGRIM: Intelligence Chairman Porter Goss is on the short list of people who might possibly replace George Tenet as the director of the CIA. What's your thoughts on that?
HARMAN: Well, as I told Porter Goss as recently as last night, as we were sitting on the House floor at midnight still voting, my first choice for that job is nobody, and my reason for that is that the job is outmoded. The job should be revised.
I don't think anyone can succeed in that job that was invented in 1947 to fight an enemy that no longer exists. I think the right answer is to change the structure, to build a modern 21st-Century architecture across our intelligence community, which is 15 different agencies.
The director of Central Intelligence doesn't have enough power, either statutory power or budgetary power to do that job.
PILGRIM: All right. Thank you very much for your thoughts...
HARMAN: Thank you.
PILGRIM: ... on the intelligence, the situation of intelligence.
U.S. Representative Jane Harman.
Thank you.
(END VIDEOTAPE)
PILGRIM: That brings us to the subject of tonight's poll. Should the U.S. government spend more on intelligence services? Yes or no? Cast your vote at cnn.com/lou. We'll bring you the results later in the broadcast.
The State Department tonight is trying to play down a report that North Korea has threatened to test a nuclear weapon. Yesterday, administration officials said the threat came during a meeting in Beijing about North Korea's nuclear program. Today, the State Department said the North Korean comments were "not phrased as a threat."
Jaime FlorCruz reports from Beijing.
(BEGIN VIDEOTAPE)
JAIME FLORCRUZ, CNN CORRESPONDENT (voice-over): American and North Korean diplomats, so close and yet so far apart. After three days of talks, U.S. officials say there is still no breakthrough, but the North Koreans are giving serious study to the new U.S. proposal. They downplayed North Korea's reported threat to test a bomb as more a rhetorical flourish. Observers agree it's this Korean-style posturing.
WENFANG TANG, UNIVERSITY OF PITTSBURGH: They want the United States to soften the demand and to negotiate, to make some room for negotiation.
FLORCRUZ: Pyongyang proposes to abandon its nuclear program, but with conditions.
KIM GYE KWAN, VICE FOREIGN MINISTER, NORTH KOREA (through translator): If the United States keeps up its a hostile policy towards us, we are prepared to give up our nuclear weapons program in a transparent way.
FLORCRUZ: The Americans propose giving North Korea three months to freeze all its nuclear program. That includes the uranium- enrichment program that the U.S. claims secretly exists, but North Korea denies.
Even if a package deal can be reached, experts say it can still unravel over the issue of verification.
DAVID SHAMBAUGH, GEORGE WASHINGTON UNIVERSITY: If this agreement is to come to fruition, it must have airtight verification, verification that makes the inspections regime in Iraq prior to the attack on Iraq pale in comparison.
FLORCRUZ: If North Korea will not accept such intrusive inspections, a big breakthrough will remain only a distant possibility.
Jaime FlorCruz, CNN, Beijing.
(END VIDEOTAPE)
PILGRIM: Coming up, we'll share some of your thoughts. Included, several interesting solutions on the problem of illegal aliens and the exporting of America.
And then, an American company is fighting the exports of jobs to cheap foreign labor markets. They have a very simple solution.
Also ahead, the race for the White House and the countdown over the hand-over of power in Iraq.
All this and this week's newsmakers. Three of the country's leading journalists will join us.
And a minister serving God and his country. We'll have his inspiring story.
(COMMERCIAL BREAK) ANNOUNCER: LOU DOBBS TONIGHT continues. Sitting in for Lou Dobbs, Kitty Pilgrim.
PILGRIM: The campaign for the White House today hit two battleground states. Senator John Kerry visited Ohio and held a town hall meeting on the hundreds of thousands of jobs lost in that state. Senator Kerry touted his plans for creating 10 million jobs if he is elected president.
(BEGIN VIDEO CLIP)
SEN. JOHN F. KERRY (D-MA), PRESIDENTIAL CANDIDATE: This is about the United States of America. This is about bringing ourselves together to find the common ground and solve problems. We're here to put Americans back to work in good paying jobs that bring us back the country we know.
(END VIDEO CLIP)
PILGRIM: Now, with President Bush in Ireland, Vice President Cheney today hit the campaign trail in another battleground state, Michigan. Cheney told workers at a roofing company that the economy is "moving in the right direction," but, he said, there is more work to do.
And separately, the sex scandal surrounding Illinois Senate candidate Jack Ryan today prompted him to abandon his campaign. Ryan said he didn't want to take part in a "scorched-earth campaign." No word tonight on who Illinois Republicans will choose to replace him.
Tonight's thought is on political campaigns. "There are many elements to a campaign. Leadership is number one. Everything else is number two." And that from German poet and playwright Bertolt Brecht.
And joining me now for more on the campaign and the other news of this week is our panel of newsmakers. Ron Brownstein is the national political correspondent for the "Los Angeles Times." He's in Washington. And, also in Washington, is Michael Weiskopf. He's senior correspondent for "TIME" magazine. And joining me in New York is Jim Ellis, chief correspondent for "BusinessWeek."
And thank you for joining us, all of you.
Jim, since you're with me in person, let's start with you. Iraq has been very, very bad this week. A lot of casualties. Yesterday, one of the bloodiest days ever. And there's some talk of martial law. The administration does not want this.
JIM ELLIS, "BUSINESSWEEK": Right.
PILGRIM: How realistic do you think this is?
ELLIS: I think that there's going to be continued escalation up until the hand-over, and I think that actually the bigger issue is what happens after the day. We're putting a lot on what happens next week, but I think that that's not going to stop the insurgents. I think that what they want to do is to show that there's a general sort of lawlessness there that's going to keep Americans far deeper in this than we want to be and that the president wants to be in politically right now. So I have a feeling that it's not reasonable for us to expect that all of a sudden next week we're out of the woods.
PILGRIM: Yes. I mean, Ron, what about this countdown? It seems -- and no one's sugarcoating this. Everyone says this may be a tough, tough period, even after the turnover. What are your thoughts, Ron?
RON BROWNSTEIN, "LOS ANGELES TIMES": I agree with Jim that it's a critical period both on the ground in Iraq and politically here in the U.S. I think there's a broad expectation in both parties that the hand-over in effect gives President Bush an opportunity to turn the page.
Americans are aware of this date, aware of the transition that's coming, and it offers them an opportunity to reverse the perception that things are going in the wrong direction in Iraq.
The risk to him is that if events continue to deteriorate over the summer, there's really not something else he can point to down the road as the point where this will turn around.
So I think the stakes are being raised for the president, both potentially on the up side, but also on the down side if things don't get better.
KITTY PILGRIM, HOST: Michael, your thoughts on Iraq and the situation.
MICHAEL WEISSKOPF, "TIME" MAGAZINE: The events of the last few days are going to put a very fine political point on this issue as well as military.
And that is that the incoming government of Iraq is considering fairly repressive measures in the name of security. And it puts 140,000 U.S. troops in a very sticky position of trying to enforce the very kind of measures they were sent to prevent and to roll back. And that was repression through the regime of Saddam Hussein.
And while U.S. troops already there are raiding homes and stopping traffic, some of the measures being contemplated go much farther. And they go to questions of rights of assembly, rights of freedom of the press. And these are freedoms treasured right now by Iraqis, and it could really explode on both the administration and on the incoming government.
PILGRIM: All right. Let's talk about support at home. And a "USA Today"/CNN/ Gallup poll released Thursday shows considerable deterioration. Fifty-four percent of Americans said sending U.S. troops to Iraq was a mistake.
Let's start with our folks in Washington and start with you, Ron. BROWNSTEIN: Well, you know, it took -- As Gallup pointed out, it took until August of 1968 for a majority of Americans to say during the Vietnam War, three years after major commitment of troops to say it was a mistake to send the troops.
We're at a majority a little over a year after what the president declared the end of major combat operations. It's a mark of how quickly debate moves.
It's also a mark of how much of a danger Iraq at the moment is to the president. Clearly with the economy improving, it is the biggest obstacle he faces to re-election.
We've had a number of polls now saying in the last few weeks a majority did not think it was worth it, and he does not -- he has a majority disapproval for his handling of the situation.
Right now, I think what he needs above all is a sense that it is moving in the right direction. People don't expect it to be solved overnight, as Jim said, but I think the American public wants some evidence that there is light at the end of the tunnel or at least progress.
And as I said before, the risk to him is that, with this -- an increased focus on the June 30 period, if we don't show improvement, I think that there will be a growing sense of pessimism about whether it can be pulled out in the end.
PILGRIM: While we're talking about polls, we also have Bush 48 percent, Kerry 47 percent. But they -- the interpretation, Republican interpretation, anyway, is this indicates a problem with the Kerry campaign.
Michael, let's get your thoughts on that.
WEISSKOPF: Clearly, this is a reflection of sagging fortunes of this president, because he's rested his campaign fortunes on his fight against terrorism, and he sees the war in Iraq as a larger extension of that.
And so as these poll numbers go down, they undermine his position. They reflect concern that we entered this war without clear direction, without justification and without a plan to pull off an occupation.
PILGRIM: Jim, despite the erosion of support for the war, still a dead heat in the presidential race. Does that seem like a contradiction to you?
JIM ELLIS, "BUSINESSWEEK": Well, it does seem like a contradiction. The thing that's going for the president right now is still that the economy has come back rather strongly.
I mean, if you look at it, especially as a shareholder, I mean, it's been a great time to be an American. I mean, corporate profits are way up. What's happened, however, is that hasn't been shared by wage growth, and I think that that's the thing that the administration really has to worry about.
You would think that normally a Republican administration during a war could count on the national defense issue to pull it through. That's not going to happen this time. It is eroding support for the Iraqi situation, and it's only going to get worse.
And so instead, he's going to have to depend on what's happening here with the economy. And right now, the economy, the best growth of the economy is probably behind us. And so we seem to have peaked.
We've seen now with GDP growth being revised from earlier this year, it's still very robust, but it's not what we had six months ago. We're going to calm down now. And now he's got to face up to the fact that a lot of Americans still are wondering was it worth it overseas? And is my paycheck going to be better next month?
PILGRIM: GDP, we should point out, revised from 4.4 percent down to 3.9 percent.
Let's talk about partisanship. And in fact, it's been rife -- Washington has been rife with it.
And Ron, I'd like to get your thoughts on the Senate class photo incident and the Cheney incident that caused a little bit of a stir in Washington this week. What do you think of all this?
BROWNSTEIN: I don't know whether it was Ronald Reagan said to Tip O'Neill or Tip O'Neill said to Ronald Reagan, "Politics ends at 5 p.m. Our differences end at 5 p.m." That seems a very long time ago.
This unfortunate incident between Senator Leahy and the vice president I think really just dramatizes where we are in Washington now. We are at a state of intense partisanship. We have been this way for years in the House, in part because redistricting creates safe districts and reduces the incentive for people to move toward the middle and work together.
Now that same virus is present more and more in the Senate. Senate conference committees can't function often because of question about whether Democrats will be appointed. This is an intensely polarized city in an intensely polarized country.
And I think what the incident between the two doesn't really advance that. It just pulls back the curtain on it and shows the country where we are.
I think most people think it's unfortunate. They would like to find a way to roll back some of this partisanship, but no one really has found a way to do that yet.
PILGRIM: Let's hope they do. I'm sorry we're out of time, gentlemen. Thank you for helping me sort it out. Ron Brownstein, Michael Weisskopf and Jim Ellis, thank you. In "Exporting America" tonight an American company that is fighting back against the exporting of jobs to cheap foreign labor markets.
Now, the management of Ormec Systems in Rochester, New York, is committed to keeping American jobs in this country. They're finding it is good for business.
(BEGIN VIDEOTAPE)
PILGRIM (voice-over): Ormec Systems provides the brains and muscles behind numerous manufacturing machines. The company writes computer software that makes machines run and creates the motors that run inside the machines. Just the type of work being outsourced overseas.
And Ed Krasnicki is constantly being tempted to do the same.
EDWARD KRASNICKI, CEO, ORMEC: I routinely get phone calls from both the software side as well as our hardware design and production side to outsource. These calls or e-mails come in on a weekly basis. And we do not do that.
PILGRIM: Ormec says it doesn't do that because it creates customized products that must be delivered quickly.
So instead of sending jobs overseas, it redesigned work flows, instituted new manufacturing techniques, and cross-trained workers, all to lower costs, increase efficiency and ensure jobs stay here.
CHRIS SUFLITA, MANUFACTURING MANAGER, ORMEC: In the last year and a half, we have taken 40 percent of our cycle time, the actual amount of time required to build product, out of our products overall. That goes directly to the bottom line.
So we keep the jobs here. We make money. The customers are happy. And in the end, that's the only important thing.
PILGRIM: Employees are also happy that Ed continues to ignore the calls urging him to outsource their jobs. And they do what it takes to get the job done. So now the business decision to keep the jobs in the U.S. is part of the reason for the company's success.
KRASNICKI: We feel a very strong competitive advantage for us to have our employees, therefore our talent base, our knowledge base, and our technology, here in Rochester.
(END VIDEOTAPE)
PILGRIM: Ed Krasnicki also said his decision not to outsource is partially motivated by patriotism. He believes strongly that the United States must retain its manufacturing capability, and he's just doing his part to make that happen.
Still to come tonight, "Heroes." A soldier severely wounded in Iraq is struggling to adjust to life after war, and we'll have his extraordinary story.
Plus a National Guardsman and minister prepares to leave his congregation and family for Iraq. We'll have his story and a great deal more still ahead here tonight.
(COMMERCIAL BREAK)
PILGRIM: Tonight in "Heroes," we share the inspiring story of Specialist Carl Covington. He's learning to go walk again after a bomb in Iraq nearly cost him his life.
Lisa Sylvester has his story.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Carl Covington was a certified lifeguard when he joined the Army just out of high school just three years ago. Now he's swimming for therapy, trying to build back the muscles in legs that were shattered by an explosion in Iraq.
The blast happened as his unit was setting up a highway checkpoint.
SPC. CARL COVINGTON, U.S. ARMY: We felt like we were the biggest targets, standing out in the middle of the road for 12 hours in a war zone. We thought we were going to get attacked from the sky. We didn't know what was going on.
PILGRIM: A bomb hit the vehicle Covington was riding in. A large piece of metal sliced through his left leg, severing arteries and leaving a gash a foot long.
COVINGTON: I knew I was hurt; I just didn't know how bad.
PILGRIM: Fellow soldiers applied tourniquets to stop Covington from bleeding to death and medivacked him to the nearest hospital. As doctors went to work, suddenly the pain was the worst he'd ever felt.
COVINGTON: OK. What else is going to happen? Am I going to see the light? It's like, what else? It was like I'm ready -- I was ready to go.
And then the chaplain comes in and says, "Are you a man of God? Do you believe in God?"
And I'm like, "Oh, Jesus, I'm not going to make it. I'm not even going to make it."
PILGRIM: It's taken 17 surgeries to save Covington's legs. Almost three months later, he's learning to walk again.
LINDA COVINGTON, MOTHER: The way he has healed from gaping wounds, things that are unimaginable to us. It's a miracle. His faith and determination; he's doing this himself.
PILGRIM: With the support of his family and community, Carl Covington is optimistic for the future.
C. COVINGTON: I'm going to deal with this injury, but my personality hasn't changed. And that's the one thing that I always want to keep is the way I am.
SYLVESTER: And he's looking forward to going to college to become an architect.
Lisa Sylvester, CNN, reporting.
(END VIDEOTAPE)
PILGRIM: Now we turn to the story of a National Guardsman who's about to make the long journey to Iraq and serve his country. But at home he has devoted his life to his family and the church.
Dana Bash reports.
(BEGIN VIDEOTAPE)
(MUSIC)
DANA BASH, CNN CORRESONDENT (voice-over): These days Kent Berry's story is a familiar one: small town National Guardsman called for duty in Iraq. But he's not just from any small town. He's from Crawford, Texas, home of the commander-in-chief.
UNIDENTIFIED MALE: Still making plans, huh?
KENT BERRY, NATIONAL GUARD: Yes, yes. They've got me -- they've got me locked and loaded and chambered.
BASH: Berry is a Methodist minister. One of his two churches is up the road from the president's ranch. Lately, his preaching hints at the sacrifice he's about to make.
K. BERRY: Life really is a battle. It reminds me very much of the person who once said that when the church is on fire, everyone carries a bucket.
BASH: This weekend, he reports to the 386th Combat Engineers Battalion to serve as chaplain, 18 months away from home, a full year in Iraq.
(on camera) Are you scared?
BERRY: Well, you know, it's scary. You know, anyone that's involved in this would -- if they have any sense about them at all, would know that. Should feel that, yes.
BASH (voice-over): His wife and three kids are frightened, but mostly they're upset about what Dad's going to miss.
BETHANY BERRY, DAUGHTER: He's going to be gone my senior year. So I was like I don't want him to go, because I want him there for those memories. But, I mean, he's got to go. He's got to take his -- take his turn.
BRITTANY BERRY, DAUGHTER: I'm just sad that he's not going to be at my basketball games, and if I'm in track, then he won't be there either to see me run.
BENJAMIN BERRY, SON: He's so supportive of me, of everything I do. I just love him so much. It makes me sad.
BASH: Vicki Berry backed the war her husband's now being sent to and still does.
VICKI BERRY, WIFE: It was right for us to go in and to do what we've done. And we're right to stay and try to finish the job, if at all possible.
BASH: Berry's congregants are anxious about their pastor going to Iraq but proud he'll be ministering to young troops who will need him.
UNIDENTIFIED FEMALE: He nurtures his flock, and he will nurture his flock in Iraq.
BASH: Despite diminishing support the president now faces over whether the Iraq war was necessary, this hometown pastor is matter of fact.
K. BERRY: This is not something that we want, you know. This is something that we're doing.
BASH: It is, he says, simply his duty.
Dana Bash, CNN reporting.
(END VIDEOTAPE)
PILGRIM: When we return, we take a look at a new film that eyes capitalism's most prized institution, the corporation.
Plus Eric Clapton is making records, but not the kind you listen to. We'll have the details in a moment.
(COMMERCIAL BREAK)
PILGRIM: The controversial new documentary that is the darling of film festivals opens tonight in San Francisco, and it's not Michael Moore's "Fahrenheit 9/11."
But like that film, it does cast a caustic eye at a powerful entity. In this case, capitalism's most prized institution.
Susan Lisovicz reports on "The Corporation."
(BEGIN VIDEOTAPE)
ANTHONY HOPKINS, ACTOR: What's your worst memory of childhood? SUSAN LISOVICZ, CNN CORRESPONDENT (voice-over): It is a favorite character of Hollywood fright films, the psychopath whose criminal or amoral behavior is committed without remorse.
But this summer's scary movie may be a low budget documentary with a new kind of psychopath.
UNIDENTIFIED MALE: What is a corporation? It is, under the law, a legal person.
UNIDENTIFIED MALE: These are a special kind of persons who have no moral conscience designed by law to be concerned only for their stockholders.
LISOVICZ: And that definition, the filmmakers say, not only enables but encourages corporations to achieve profit at all costs. But their very power is positioning them for a fall.
UNIDENTIFIED FEMALE: They present the corporation as a paradox, an institution that creates great wealth but causes enormous and often hidden harms.
JOEL BAKAN, CO-CREATOR, "THE CORPORATION": The corporation is like the church or like the monarchy, or for that matter, like the Communist Party. It's a dominant regime that we have and a dominant institution.
And when you look at history, what becomes very clear is that no dominant regime has been immune to the march of history.
LISOVICZ: The corporate crime wave that followed the great bull market of the '90s has spawned a tsunami of its own in books and movies, critical of capitalism's greed.
MORGAN SPURLOCK, FILMMAKER: Could I get an Egg McMuffin Extra Value Meal?
LISOVICZ: But some critics say the media's tendency to demonize is as excessive as was its adulation of just a few years ago.
BEN EDWARDS, "THE ECONOMIST": I do not -- I do not subscribe to this view that, you know, we as voters and we as citizens, we as consumers are, you know, passive victims of a conspiracy against us.
You know, we have this idea going round at the moment that McDonald's is super sizing us all. Well, you know, I've put on a few pounds, but I don't blame McDonald's for super sizing me.
LISOVICZ: For all its grimness, "The Corporation" does have a happy ending. It profiles an executive who has a moral epiphany.
UNIDENTIFIED MALE: I said to myself, my goodness someday people like me will end up in jail.
LISOVICZ: And the film itself, which cost just over $1 million to make, is expected to make a big profit for its privately held distributor.
Susan Lisovicz, CNN, New York.
(END VIDEOTAPE)
PILGRIM: Now a follow up to the story from last night.
Rock legend Eric Clapton's favorite guitar sold for nearly $1 million last night. As we reported, Clapton auctioned some of his most prized guitars to benefit the drug treatment center he founded in Antigua.
And one particular guitar, nicknamed "Blackie," was Clapton's favorite for about 15 years.
Christie's auction house had estimated it would sell between $100,000 and $150,000, and the actual selling price was more than $950,000. It easily beat the previous record for one of Clapton's guitars, nearly half a million dollars for the guitar nicknamed "Brownie" that sold in 1999.
Overall, last night's sale raised a staggering $7.4 million to benefit the Crossroads Drug Treatment Center.
A reminder now, vote in tonight's poll. Should the U.S. government spend more on intelligence services? Yes or no. Cast your vote at CNN.com/Lou. We'll bring you the results later in the broadcast.
Still ahead, we'll share some of your thoughts on the exporting of America.
And a brutal week for the nation's largest retailer, ending with a multimillion-dollar settlement. We'll have details when we return in just a moment.
(COMMERCIAL BREAK)
PILGRIM: Stocks fell today on Wall Street. The Dow lost almost 72 points. The NASDAQ added about 10. And the S&P lost 6.
And more trouble for Wal-Mart.
Christine Romans is here with the report on that -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Kitty, a miserable week for Wal-Mart shares, down to about almost a seven-month low this week. Slowing sales, class action sex discrimination suit.
And today Wal-Mart settled allegations it filled prescriptions halfway and billed the government health insurance for the whole bottle of pills: $2.8 million there. Rite Aid settling similar charges for $7 million.
And Kitty, a wacky week overall. Stocks stuck in neutral, but a taste of the old bubble days when a big IPO soared 56 percent on the first trading day, even though the company has restated earnings and the CEO hyped the stock during the SEC's quiet period.
You'd think it was 1989 if it weren't for the news that Comdex, that -- remember the industry trade show, Comdex? It was canceled for the year.
Also canceled, plenty of jobs. MCI will cut 2,000 jobs in call centers in four states. That brings MCI to more than 15,000 job cuts just this year. And Campbell's Soup also axing several jobs. It's one of several food companies, five or six food companies this week, announcing they are raising prices because of higher commodity prices.
PILGRIM: Thanks very much, Christine Romans.
Some of your thoughts on exporting America. Let's take a look.
Pauline Zoll from Tampa, Florida, says, "Show me any elected official whose livelihood is threatened by job outsourcing or the flood of illegal immigrants. Until those who make and enforce the laws suffer consequences, nothing will change."
And Melanie of Long Beach, Washington: "I have the solution for the illegal Mexican problem and the outsourcing of jobs to America. The United States should buy Mexico. The illegals would be legal. The outsourced jobs would no longer be outsourced. And the current administration would be delighted to add to the national debt."
And Sandee Lakind from Sun City, Arizona, says, "Outsourcing jobs is just another way to hurt Americans who are looking to support their families. Tax loopholes and tax breaks for those who escape into the waters are hurting us as well. It has to stop."
Peyton G. of Louisville, Kentucky: "Lou, if we can have a government by the people for the people, then why can't we have an economy by the people for the people, instead of by the people and for China, India, and Mexico?"
We love hearing from you. Send us your thoughts at LouDobbs@CNN.com. Still ahead. The results of tonight's poll.
(COMMERCIAL BREAK)
PILGRIM: The results now of tonight's poll, "Should the U.S. government spend more on intelligence services?" Seventy-one percent of you said yes and 29 percent said no.
Thanks for joining us tonight. Please join us on Monday. Donna Brazile will be here to talk about her new book, "Cooking with Grease: Stirring the Pots of American Politics." And our special report on the challenges facing Iraq after the handover of power just five days from now.
For all of us here, have a great weekend. 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 June 25, 2004 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KITTY PILGRIM, GUEST HOST: Tonight, target al Qaeda. The United States launches an air strike on al Qaeda's leader in Iraq. We will have the latest from the Pentagon, and I will also talk with "TIME" magazine's bureau chief in Baghdad, Michael Ware.
President Bush arrives in Ireland to rally European support for Iraq and the global war on terror. We'll have a report.
And I will talk with Congresswoman Jane Harman, ranking Democrat on the House Intelligence Committee. Congresswoman Harman says the United States must spend more money to defeat international terrorism.
Also tonight, a special report on a U.S. company's fight against the export of American jobs to cheap overseas labor markets.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We'll keep the jobs here. We make money. The customers are happy.
(END VIDEO CLIP)
PILGRIM: And the inspiring story of a soldier rebuilding his life after a bomb explosion in Iraq.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I'm going to deal with this injury. My personality hasn't changed, and that's one thing that I always want to keep.
(END VIDEO CLIP)
PILGRIM: Tonight, Specialist Carl Covington in Heroes.
ANNOUNCER: This is LOU DOBBS TONIGHT for Friday, June 25. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs who is on vacation, Kitty Pilgrim.
PILGRIM: Good evening.
Tonight, a dramatic attempt to kill al Qaeda's leader in Iraq. A senior Defense Department official says a U.S. air strike in Fallujah today came "very close" to killing Abu Musab al-Zarqawi. The strike came one day after insurgents launched a series of attacks in five Iraqi cities. David Ensor reports from the Pentagon -- David.
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Kitty, this strike was in Fallujah, just northwest of Baghdad, a Sunni stronghold, and what we're told by a senior defense official is that the attack that hit this house you see here in Fallujah nearly killed, they believe -- nearly killed -- Abu Musab al-Zarqawi, the terrorist leader who the U.S. has been trying to get for some time now.
Apparently, he drew up in a convoy of cars just as the bombs were dropping. He was knocked on the ground by the impact, but his bodyguards were able to push him back into the car and get him away alive. At least that is the belief of this senior U.S. defense official with whom we spoke.
Now this all-out attempt by the United States to try to get Zarqawi comes after a spat of attacks that are attributed to the group that he is in charge of.
(BEGIN VIDEO CLIP)
RICHARD ARMITAGE, DEPUTY SECRETARY OF STATE: I think there is a central nervous system to the Zarqawi network. I found rather remarkable yesterday the timing, et cetera, of the car bombs in several different locations, which indicates to me a certain degree of command and control.
Now I don't think it's the command and control that we traditionally think about in our own military, but someone's giving general orders, and other people are following them. I think that's fairly clear.
(END VIDEO CLIP)
ENSOR: Officials we've spoken to decline to say, but the amount of detail and the type of detail appears to indicate that, at the time of the impact of these bombs, there were either eyewitnesses that the U.S. is in touch with or there may have been surveillance Predator drones in the area watching closely.
In any case, it would seem clear they're hot on the trail of Zarqawi, and there may be additional attacks yet to come -- Kitty.
PILGRIM: All right. Thanks very much.
David Ensor.
U.S. and Iraqi troops today stepped up security after the insurgent offensive. Iraqi officials today said the attacks killed 93 Iraqis and three American soldiers. More than 300 people were wounded.
Christiane Amanpour reports from Baghdad.
(BEGIN VIDEOTAPE) CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT (voice-over): Iraq's new defense and interior ministers are appealing to their people for information on the terrorists, and they speak of an imminent showdown.
HAZEM SHALAN AL-KHUZABI, IRAQ INTERIM DEFENSE MINISTER (through translator): We will go and attack the enemy before it attacks us. We have plans in that regard so that we can curtail their sabotaging efforts. We will carry out raid operations.
AMANPOUR: There were no details, no talk yet of martial law, but the U.S. general in charge of setting up Iraq's new forces says, even after the hand-over, American troops won't be too far away.
LT. GEN. DAVID PETRAEUS, OFFICE OF SECURITY TRAINING: In some cases with them, in some cases around the corner from them, certainly, they are to provide backup. One of the critical components of what must happen in the days and weeks ahead is that there must be a sense of Iraqi security forces that, if they get in trouble, coalition forces will come to the rescue, if need be.
AMANPOUR: Iraqi forces have just received an emergency delivery from the United States: 56,000 sets of body armor with another 12,000 to follow next week, 60,000 Kevlar helmets, more than 600 radios and 1,000 vehicles.
UNIDENTIFIED MALE: Go, go, go!
AMANPOUR: Plus, heavy machine guns, RPGs and ammunition. Welcome news at training bases like this one, run by a unit of the Arkansas National Guard.
LT. MICHAEL SCOTT, ARKANSAS NATIONAL GUARD: We've secured the freedom of Iraq, but it's these people, these soldiers that we're training now that are going to have to fight to keep it, and that's what we're trying to prepare them for.
AMANPOUR: American soldiers say that, with the right equipment, the Iraqis could do the job.
Meantime, more Iraqi police and army checkpoints are going up around Baghdad with U.S. military support. It's a firewall against insurgents the U.S. admits are a serious threat.
Up north in Mosul, U.S. commanders say they're pleased that it was Iraqi forces who responded first to the suicide bombings that killed more than 60 people on Thursday.
Christiane Amanpour, CNN, Baghdad.
(END VIDEOTAPE)
PILGRIM: The chairman of the Joint Chiefs, General Richard Myers, today admitted the insurgent attacks appear to be coordinated, but General Myers said the level of coordination is "unknown." The general was one of several top administration officials giving testimony to the Senate Armed Services Committee.
Deputy Defense Secretary Paul Wolfowitz said a much bigger American force in Iraq would not guarantee victory against the insurgents.
(BEGIN VIDEO CLIP)
PAUL WOLFOWITZ, DEPUTY DEFENSE SECRETARY: There's no reason to think that we would have had any better luck catching these people where they hide if there was a heavy American presence -- I mean, a heavier American presence. It was pretty heavy, and what we need is better intelligence.
(END VIDEO CLIP)
PILGRIM: And Wolfowitz also said one of the keys to better intelligence is to have more Iraqis serving in the front lines.
Joining me now for the very latest from Iraq is Michael Ware. He is the Baghdad bureau chief of "TIME" magazine.
Michael, let's start with today's air strike in Fallujah. Just how important is it for the coalition to kill or capture al Zarqawi?
MICHAEL WARE, "TIME" MAGAZINE: Well, obviously, that's a vital objective. Given the role that it is now believed that Zarqawi is playing in helping guide and shape the resistance and the insurgence against the coalition, it can't be underestimated.
Today's strike was yet another hit on what is understood to be a safehouse used by Zarqawi's network known as Tawhid wa al-Jihad. This is the third in a week. The first two were successful strikes. I've had it confirmed to me by the Iraqi resistance that both hit their targets.
The first, an Iraqi safehouse, in which at least 18 fighters died, eight of them foreigners. The second hit was on a car sales lot where Arab Mujahadeen jihadis were gathering, trading and collecting, and this, too, was another direct hit.
PILGRIM: Michael, we had today a discussion of command and control. Richard Armitage using that word. How much is Zarqawi in charge, do you think? You've spent -- and I ask you this with considerable base knowledge. You've spent since 2001 in Iraq and Afghanistan on and off assignments.
So you speak from a considerable base of experience. How much is it your impression that this is something that's being controlled by Zarqawi, and how much do you think, in your opinion, is coming from other insurgents?
WARE: Well, from the beginning here in Iraq, we've had two wars running simultaneously. One is the terrorist war. That's the high- impact, mass-casualty, symbolic political strikes, the car bombings, the assassinations, the suicide attacks. That from the beginning has been led by Zarqawi. Other groups have participated, but he's been the driving force behind that.
We then had a guerrilla insurgency, the daily drip feed of attacks, which has been killing U.S. boys. That principally has been run by nationalist insurgency, those who believe they're fighting a war of liberation.
What we're starting to see is a blurring between those two lines. So I think that we're going to find very soon that Zarqawi is playing a greater and greater role in the theater here in Iraq.
PILGRIM: We hear him taking credit for Nicholas Berg and the death of Kim Sun-il. Is this a psychological game also?
WARE: Very much so. What Zarqawi is doing, not only by committing these acts, but by having the audacity, the brazenness to film them and then immediately post them on the Internet for all to see -- he's sending a double message. It's twofold.
The first is to the West. It's to the coalition partners. He's striking the coalition at its joints, at its alliances, trying to carve off partners, such as Spain, targeting Japan, targeting South Korea. That's the first message.
The second is to the global jihad community. He's branding himself. He's saying, look at me. I'm here. He's attracting attention, building a profile, which has a number of benefits.
PILGRIM: Michael Ware, thank you very much for your analysis tonight.
Michael Ware reporting from Baghdad.
While the world watches Iraq, another war is going on in Afghanistan, and, today, the military said two U.S. Marines were killed in the fighting near the border with Pakistan. A third Marine was wounded.
About 20,000 American troops are fighting al Qaeda and the Taliban in Afghanistan. The United States has nearly doubled the number of American troops ahead of the national elections in September.
Now Afghanistan and Iraq are two key issues on President Bush's agenda in Europe this weekend. The president arrived today in Ireland for a summit with European Union leaders. And, later, he will go to Turkey to meet with NATO leaders.
(BEGIN VIDEOTAPE)
PILGRIM (voice-over): President Bush will spend the next two days trying to win some promises of support in Iraq from the 25 members of the European Union. President Bush was challenged about the war in Iraq by an Irish television reporter before he even left the United States.
UNIDENTIFIED FEMALE: Mr. President, the world is a more dangerous place today. I don't know whether you can see that or not.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Why do you say that?
UNIDENTIFIED FEMALE: There are terrorist bombings every single day. It's now a daily event. It wasn't like that two years ago.
BUSH: What was it like September the 11th, 2001? It was a relative calm. We thought...
UNIDENTIFIED FEMALE: But it's your response to Iraq that's...
BUSH: Let me finish. Let me finish, please. Please. You asked the questions, and I'll answer them, if you don't mind.
PILGRIM: Thousands of anti-war protesters are expected to march over the weekend in Ireland. More than 6,000 Irish police and troops are on duty.
White House Communications Director Dan Bartlett says, while France and Germany did not support the war, the U.N. Security Council resolution on Iraq's sovereignty has put the issue to rest.
DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR: Now it's time to focus on the future, and the president is confident the international community will come to the aid of the Iraqi people.
PILGRIM: President Bush started the discussions for more support in Iraq at the G-8 meeting in Sea Island, Georgia, earlier this month. This weekend's talks come before the NATO summit in Turkey on Monday. Iraq will be center stage at the meetings.
NICHOLAS BURNS, U.S. AMBASSADOR TO NATO: The Iraqi prime minister, Prime Minister Allawi, has requested NATO to undertake a training mission to help rebuild the Iraqi army. The United States hopes very much that the answer will be positive from NATO on Monday.
(END VIDEOTAPE)
PILGRIM: Now early indications are NATO troops will help train the Iraqi forces, and the Iraqi hand-over is on Wednesday.
Police in Turkey have launched a massive security operation ahead of President Bush's visit. Officers destroyed a suspicious package at an Istanbul airport today. The police have also arrested dozens of people suspected of links with extremist groups. The security measures come one day after a bomb attack in Istanbul killed four people on a bus. A second bomb exploded outside a hotel in Ankara that will be used by President Bush.
Well, still ahead, Democrats say the Bush administration is shortchanging the war on terror, and the ranking Democrat on the House Intelligence Committee, Jane Harman, is my guest.
And confusion in the State Department tonight about what North Korea did or did not say about nuclear weapons and testing them. We'll have a report from Beijing.
And fighting the exporting of American jobs to cheap overseas labor markets. We'll introduce you to a company with an unusual strategy for keeping jobs in this country.
(COMMERCIAL BREAK)
PILGRIM: This week, the House passed record new funding for the nation's intelligence agencies. The vote was 360 to 61. But many Democrats who voted for the bill are speaking out against it.
Earlier, I talked to one of them, Congresswoman Jane Harman, the ranking member of the Intelligence Committee, and I asked Congresswoman Harman why she believes the bill falls short. ` (BEGIN VIDEOTAPE)
REP. JANE HARMAN (D), CALIFORNIA: Well, there's a lot of money in the bill, but it's not in the right places. We are underfunding counterterrorism, which is the core mission of our intelligence community and what we need to be investing in if we're going to win the global war on terror.
PILGRIM: You have said it's about one-third underfunded on counterterrorism. Why do you think we fell so short?
HARMAN: What we worry about is that after the first quarter runs out at the end of this year and the second quarter does not include additional funds, which we think will be the case, then things like the presidential inauguration, the Super Bowl, major events in the United States may have less protection than they would if we had a fully funded counterterrorism effort.
PILGRIM: So they argue if you fund it on a quarterly basis, Congress has more oversight about the money. What do you say to that?
HARMAN: I say to that that we fund most everything else on an annual basis. Why do we single this out? That's number one.
And, number two, all of us feel on the committee, the Republican members as well, that funding by supplemental, which is what this means -- we pass supplemental appropriations bills later -- just cuts out the oversight of Congress. It doesn't increase the oversight. I just find their arguments spurious.
PILGRIM: And supplementals sometimes have time delays, don't they?
HARMAN: You bet. I mean, this is my point. I doubt we'll have another supplemental for the war in Iraq, which might include some additional intelligence funding, until next March or April, well beyond the end of the first quarter for the fiscal year for '05, which starts October 1.
PILGRIM: Let's not get too much into the whole process, but I do -- would like to go into a little bit about the partisan split on this.
HARMAN: Yes.
PILGRIM: And we had Bud Kramer, Collin Peterson and Leonard Boswell proposing an amendment, which didn't get very far. Tell us what that amendment wanted but didn't eventually get in.
HARMAN: They offered an amendment in the Intelligence Committee when we were reviewing the bill, and their amendment, which I strongly supported as the ranking member, was defeated on a party-line vote, which caused all of the Democrats, in an unprecedented vote, to vote against the intelligence bill in committee. I've never voted against an intelligence bill in five terms in Congress, and they hadn't either.
Then, on the House floor, we raised the subject again, and I won't go through all the procedure, but our bottom line argument was and is that we need stronger intelligence and stronger oversight.
There have been massive intelligence failures in the last three years -- and many before that, too, to be fair -- but massive failures at a time when it is critical that we understand the nature of the insurgency in Iraq, so we can protect our forces, that we know how far along Iran is with its nuclear program and North Korea and so forth.
And if we don't have the best intelligence we can field and if we don't fund all of our counterterrorism needs, we're making a huge mistake.
PILGRIM: So it goes back to the funding. Let me go to the substance of some criticism. The Intelligence Committee report on the CIA said we're basically heading over a proverbial cliff. Do you agree with that?
HARMAN: Well, that language was drafted by the majority on the Intelligence Committee. I think that mistakes have been made at the CIA. That's where it was directed. But my view is that there are many good people who take enormous risks there.
What they need is a better structure. The structure of the CIA was developed in 1947 to go against an enemy, the Communist threat, which no longer exists, and it hasn't been modernized.
PILGRIM: You know, you've made some very strong statements about the climate of terrorism now, citing what happened to Nick Berg and Paul Johnson.
HARMAN: Yes.
PILGRIM: Do you think we're in a new reality?
HARMAN: I think we are in a new reality, and I think all of us -- this is one of the things we argued on the House floor -- all of us missed it. We thought that when the Cold War ended, when the wall came down, then the world would be safer. President Bush 41 was in office. He declared a peace dividend. He started cutting -- it was President Bush 41 who started cutting the defense and intelligence budgets in anticipation of a more peaceful world.
Well, guess what? We didn't have that. What we have is a -- I would say a more dangerous world with more diverse and dispersed threats.
PILGRIM: Intelligence Chairman Porter Goss is on the short list of people who might possibly replace George Tenet as the director of the CIA. What's your thoughts on that?
HARMAN: Well, as I told Porter Goss as recently as last night, as we were sitting on the House floor at midnight still voting, my first choice for that job is nobody, and my reason for that is that the job is outmoded. The job should be revised.
I don't think anyone can succeed in that job that was invented in 1947 to fight an enemy that no longer exists. I think the right answer is to change the structure, to build a modern 21st-Century architecture across our intelligence community, which is 15 different agencies.
The director of Central Intelligence doesn't have enough power, either statutory power or budgetary power to do that job.
PILGRIM: All right. Thank you very much for your thoughts...
HARMAN: Thank you.
PILGRIM: ... on the intelligence, the situation of intelligence.
U.S. Representative Jane Harman.
Thank you.
(END VIDEOTAPE)
PILGRIM: That brings us to the subject of tonight's poll. Should the U.S. government spend more on intelligence services? Yes or no? Cast your vote at cnn.com/lou. We'll bring you the results later in the broadcast.
The State Department tonight is trying to play down a report that North Korea has threatened to test a nuclear weapon. Yesterday, administration officials said the threat came during a meeting in Beijing about North Korea's nuclear program. Today, the State Department said the North Korean comments were "not phrased as a threat."
Jaime FlorCruz reports from Beijing.
(BEGIN VIDEOTAPE)
JAIME FLORCRUZ, CNN CORRESPONDENT (voice-over): American and North Korean diplomats, so close and yet so far apart. After three days of talks, U.S. officials say there is still no breakthrough, but the North Koreans are giving serious study to the new U.S. proposal. They downplayed North Korea's reported threat to test a bomb as more a rhetorical flourish. Observers agree it's this Korean-style posturing.
WENFANG TANG, UNIVERSITY OF PITTSBURGH: They want the United States to soften the demand and to negotiate, to make some room for negotiation.
FLORCRUZ: Pyongyang proposes to abandon its nuclear program, but with conditions.
KIM GYE KWAN, VICE FOREIGN MINISTER, NORTH KOREA (through translator): If the United States keeps up its a hostile policy towards us, we are prepared to give up our nuclear weapons program in a transparent way.
FLORCRUZ: The Americans propose giving North Korea three months to freeze all its nuclear program. That includes the uranium- enrichment program that the U.S. claims secretly exists, but North Korea denies.
Even if a package deal can be reached, experts say it can still unravel over the issue of verification.
DAVID SHAMBAUGH, GEORGE WASHINGTON UNIVERSITY: If this agreement is to come to fruition, it must have airtight verification, verification that makes the inspections regime in Iraq prior to the attack on Iraq pale in comparison.
FLORCRUZ: If North Korea will not accept such intrusive inspections, a big breakthrough will remain only a distant possibility.
Jaime FlorCruz, CNN, Beijing.
(END VIDEOTAPE)
PILGRIM: Coming up, we'll share some of your thoughts. Included, several interesting solutions on the problem of illegal aliens and the exporting of America.
And then, an American company is fighting the exports of jobs to cheap foreign labor markets. They have a very simple solution.
Also ahead, the race for the White House and the countdown over the hand-over of power in Iraq.
All this and this week's newsmakers. Three of the country's leading journalists will join us.
And a minister serving God and his country. We'll have his inspiring story.
(COMMERCIAL BREAK) ANNOUNCER: LOU DOBBS TONIGHT continues. Sitting in for Lou Dobbs, Kitty Pilgrim.
PILGRIM: The campaign for the White House today hit two battleground states. Senator John Kerry visited Ohio and held a town hall meeting on the hundreds of thousands of jobs lost in that state. Senator Kerry touted his plans for creating 10 million jobs if he is elected president.
(BEGIN VIDEO CLIP)
SEN. JOHN F. KERRY (D-MA), PRESIDENTIAL CANDIDATE: This is about the United States of America. This is about bringing ourselves together to find the common ground and solve problems. We're here to put Americans back to work in good paying jobs that bring us back the country we know.
(END VIDEO CLIP)
PILGRIM: Now, with President Bush in Ireland, Vice President Cheney today hit the campaign trail in another battleground state, Michigan. Cheney told workers at a roofing company that the economy is "moving in the right direction," but, he said, there is more work to do.
And separately, the sex scandal surrounding Illinois Senate candidate Jack Ryan today prompted him to abandon his campaign. Ryan said he didn't want to take part in a "scorched-earth campaign." No word tonight on who Illinois Republicans will choose to replace him.
Tonight's thought is on political campaigns. "There are many elements to a campaign. Leadership is number one. Everything else is number two." And that from German poet and playwright Bertolt Brecht.
And joining me now for more on the campaign and the other news of this week is our panel of newsmakers. Ron Brownstein is the national political correspondent for the "Los Angeles Times." He's in Washington. And, also in Washington, is Michael Weiskopf. He's senior correspondent for "TIME" magazine. And joining me in New York is Jim Ellis, chief correspondent for "BusinessWeek."
And thank you for joining us, all of you.
Jim, since you're with me in person, let's start with you. Iraq has been very, very bad this week. A lot of casualties. Yesterday, one of the bloodiest days ever. And there's some talk of martial law. The administration does not want this.
JIM ELLIS, "BUSINESSWEEK": Right.
PILGRIM: How realistic do you think this is?
ELLIS: I think that there's going to be continued escalation up until the hand-over, and I think that actually the bigger issue is what happens after the day. We're putting a lot on what happens next week, but I think that that's not going to stop the insurgents. I think that what they want to do is to show that there's a general sort of lawlessness there that's going to keep Americans far deeper in this than we want to be and that the president wants to be in politically right now. So I have a feeling that it's not reasonable for us to expect that all of a sudden next week we're out of the woods.
PILGRIM: Yes. I mean, Ron, what about this countdown? It seems -- and no one's sugarcoating this. Everyone says this may be a tough, tough period, even after the turnover. What are your thoughts, Ron?
RON BROWNSTEIN, "LOS ANGELES TIMES": I agree with Jim that it's a critical period both on the ground in Iraq and politically here in the U.S. I think there's a broad expectation in both parties that the hand-over in effect gives President Bush an opportunity to turn the page.
Americans are aware of this date, aware of the transition that's coming, and it offers them an opportunity to reverse the perception that things are going in the wrong direction in Iraq.
The risk to him is that if events continue to deteriorate over the summer, there's really not something else he can point to down the road as the point where this will turn around.
So I think the stakes are being raised for the president, both potentially on the up side, but also on the down side if things don't get better.
KITTY PILGRIM, HOST: Michael, your thoughts on Iraq and the situation.
MICHAEL WEISSKOPF, "TIME" MAGAZINE: The events of the last few days are going to put a very fine political point on this issue as well as military.
And that is that the incoming government of Iraq is considering fairly repressive measures in the name of security. And it puts 140,000 U.S. troops in a very sticky position of trying to enforce the very kind of measures they were sent to prevent and to roll back. And that was repression through the regime of Saddam Hussein.
And while U.S. troops already there are raiding homes and stopping traffic, some of the measures being contemplated go much farther. And they go to questions of rights of assembly, rights of freedom of the press. And these are freedoms treasured right now by Iraqis, and it could really explode on both the administration and on the incoming government.
PILGRIM: All right. Let's talk about support at home. And a "USA Today"/CNN/ Gallup poll released Thursday shows considerable deterioration. Fifty-four percent of Americans said sending U.S. troops to Iraq was a mistake.
Let's start with our folks in Washington and start with you, Ron. BROWNSTEIN: Well, you know, it took -- As Gallup pointed out, it took until August of 1968 for a majority of Americans to say during the Vietnam War, three years after major commitment of troops to say it was a mistake to send the troops.
We're at a majority a little over a year after what the president declared the end of major combat operations. It's a mark of how quickly debate moves.
It's also a mark of how much of a danger Iraq at the moment is to the president. Clearly with the economy improving, it is the biggest obstacle he faces to re-election.
We've had a number of polls now saying in the last few weeks a majority did not think it was worth it, and he does not -- he has a majority disapproval for his handling of the situation.
Right now, I think what he needs above all is a sense that it is moving in the right direction. People don't expect it to be solved overnight, as Jim said, but I think the American public wants some evidence that there is light at the end of the tunnel or at least progress.
And as I said before, the risk to him is that, with this -- an increased focus on the June 30 period, if we don't show improvement, I think that there will be a growing sense of pessimism about whether it can be pulled out in the end.
PILGRIM: While we're talking about polls, we also have Bush 48 percent, Kerry 47 percent. But they -- the interpretation, Republican interpretation, anyway, is this indicates a problem with the Kerry campaign.
Michael, let's get your thoughts on that.
WEISSKOPF: Clearly, this is a reflection of sagging fortunes of this president, because he's rested his campaign fortunes on his fight against terrorism, and he sees the war in Iraq as a larger extension of that.
And so as these poll numbers go down, they undermine his position. They reflect concern that we entered this war without clear direction, without justification and without a plan to pull off an occupation.
PILGRIM: Jim, despite the erosion of support for the war, still a dead heat in the presidential race. Does that seem like a contradiction to you?
JIM ELLIS, "BUSINESSWEEK": Well, it does seem like a contradiction. The thing that's going for the president right now is still that the economy has come back rather strongly.
I mean, if you look at it, especially as a shareholder, I mean, it's been a great time to be an American. I mean, corporate profits are way up. What's happened, however, is that hasn't been shared by wage growth, and I think that that's the thing that the administration really has to worry about.
You would think that normally a Republican administration during a war could count on the national defense issue to pull it through. That's not going to happen this time. It is eroding support for the Iraqi situation, and it's only going to get worse.
And so instead, he's going to have to depend on what's happening here with the economy. And right now, the economy, the best growth of the economy is probably behind us. And so we seem to have peaked.
We've seen now with GDP growth being revised from earlier this year, it's still very robust, but it's not what we had six months ago. We're going to calm down now. And now he's got to face up to the fact that a lot of Americans still are wondering was it worth it overseas? And is my paycheck going to be better next month?
PILGRIM: GDP, we should point out, revised from 4.4 percent down to 3.9 percent.
Let's talk about partisanship. And in fact, it's been rife -- Washington has been rife with it.
And Ron, I'd like to get your thoughts on the Senate class photo incident and the Cheney incident that caused a little bit of a stir in Washington this week. What do you think of all this?
BROWNSTEIN: I don't know whether it was Ronald Reagan said to Tip O'Neill or Tip O'Neill said to Ronald Reagan, "Politics ends at 5 p.m. Our differences end at 5 p.m." That seems a very long time ago.
This unfortunate incident between Senator Leahy and the vice president I think really just dramatizes where we are in Washington now. We are at a state of intense partisanship. We have been this way for years in the House, in part because redistricting creates safe districts and reduces the incentive for people to move toward the middle and work together.
Now that same virus is present more and more in the Senate. Senate conference committees can't function often because of question about whether Democrats will be appointed. This is an intensely polarized city in an intensely polarized country.
And I think what the incident between the two doesn't really advance that. It just pulls back the curtain on it and shows the country where we are.
I think most people think it's unfortunate. They would like to find a way to roll back some of this partisanship, but no one really has found a way to do that yet.
PILGRIM: Let's hope they do. I'm sorry we're out of time, gentlemen. Thank you for helping me sort it out. Ron Brownstein, Michael Weisskopf and Jim Ellis, thank you. In "Exporting America" tonight an American company that is fighting back against the exporting of jobs to cheap foreign labor markets.
Now, the management of Ormec Systems in Rochester, New York, is committed to keeping American jobs in this country. They're finding it is good for business.
(BEGIN VIDEOTAPE)
PILGRIM (voice-over): Ormec Systems provides the brains and muscles behind numerous manufacturing machines. The company writes computer software that makes machines run and creates the motors that run inside the machines. Just the type of work being outsourced overseas.
And Ed Krasnicki is constantly being tempted to do the same.
EDWARD KRASNICKI, CEO, ORMEC: I routinely get phone calls from both the software side as well as our hardware design and production side to outsource. These calls or e-mails come in on a weekly basis. And we do not do that.
PILGRIM: Ormec says it doesn't do that because it creates customized products that must be delivered quickly.
So instead of sending jobs overseas, it redesigned work flows, instituted new manufacturing techniques, and cross-trained workers, all to lower costs, increase efficiency and ensure jobs stay here.
CHRIS SUFLITA, MANUFACTURING MANAGER, ORMEC: In the last year and a half, we have taken 40 percent of our cycle time, the actual amount of time required to build product, out of our products overall. That goes directly to the bottom line.
So we keep the jobs here. We make money. The customers are happy. And in the end, that's the only important thing.
PILGRIM: Employees are also happy that Ed continues to ignore the calls urging him to outsource their jobs. And they do what it takes to get the job done. So now the business decision to keep the jobs in the U.S. is part of the reason for the company's success.
KRASNICKI: We feel a very strong competitive advantage for us to have our employees, therefore our talent base, our knowledge base, and our technology, here in Rochester.
(END VIDEOTAPE)
PILGRIM: Ed Krasnicki also said his decision not to outsource is partially motivated by patriotism. He believes strongly that the United States must retain its manufacturing capability, and he's just doing his part to make that happen.
Still to come tonight, "Heroes." A soldier severely wounded in Iraq is struggling to adjust to life after war, and we'll have his extraordinary story.
Plus a National Guardsman and minister prepares to leave his congregation and family for Iraq. We'll have his story and a great deal more still ahead here tonight.
(COMMERCIAL BREAK)
PILGRIM: Tonight in "Heroes," we share the inspiring story of Specialist Carl Covington. He's learning to go walk again after a bomb in Iraq nearly cost him his life.
Lisa Sylvester has his story.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Carl Covington was a certified lifeguard when he joined the Army just out of high school just three years ago. Now he's swimming for therapy, trying to build back the muscles in legs that were shattered by an explosion in Iraq.
The blast happened as his unit was setting up a highway checkpoint.
SPC. CARL COVINGTON, U.S. ARMY: We felt like we were the biggest targets, standing out in the middle of the road for 12 hours in a war zone. We thought we were going to get attacked from the sky. We didn't know what was going on.
PILGRIM: A bomb hit the vehicle Covington was riding in. A large piece of metal sliced through his left leg, severing arteries and leaving a gash a foot long.
COVINGTON: I knew I was hurt; I just didn't know how bad.
PILGRIM: Fellow soldiers applied tourniquets to stop Covington from bleeding to death and medivacked him to the nearest hospital. As doctors went to work, suddenly the pain was the worst he'd ever felt.
COVINGTON: OK. What else is going to happen? Am I going to see the light? It's like, what else? It was like I'm ready -- I was ready to go.
And then the chaplain comes in and says, "Are you a man of God? Do you believe in God?"
And I'm like, "Oh, Jesus, I'm not going to make it. I'm not even going to make it."
PILGRIM: It's taken 17 surgeries to save Covington's legs. Almost three months later, he's learning to walk again.
LINDA COVINGTON, MOTHER: The way he has healed from gaping wounds, things that are unimaginable to us. It's a miracle. His faith and determination; he's doing this himself.
PILGRIM: With the support of his family and community, Carl Covington is optimistic for the future.
C. COVINGTON: I'm going to deal with this injury, but my personality hasn't changed. And that's the one thing that I always want to keep is the way I am.
SYLVESTER: And he's looking forward to going to college to become an architect.
Lisa Sylvester, CNN, reporting.
(END VIDEOTAPE)
PILGRIM: Now we turn to the story of a National Guardsman who's about to make the long journey to Iraq and serve his country. But at home he has devoted his life to his family and the church.
Dana Bash reports.
(BEGIN VIDEOTAPE)
(MUSIC)
DANA BASH, CNN CORRESONDENT (voice-over): These days Kent Berry's story is a familiar one: small town National Guardsman called for duty in Iraq. But he's not just from any small town. He's from Crawford, Texas, home of the commander-in-chief.
UNIDENTIFIED MALE: Still making plans, huh?
KENT BERRY, NATIONAL GUARD: Yes, yes. They've got me -- they've got me locked and loaded and chambered.
BASH: Berry is a Methodist minister. One of his two churches is up the road from the president's ranch. Lately, his preaching hints at the sacrifice he's about to make.
K. BERRY: Life really is a battle. It reminds me very much of the person who once said that when the church is on fire, everyone carries a bucket.
BASH: This weekend, he reports to the 386th Combat Engineers Battalion to serve as chaplain, 18 months away from home, a full year in Iraq.
(on camera) Are you scared?
BERRY: Well, you know, it's scary. You know, anyone that's involved in this would -- if they have any sense about them at all, would know that. Should feel that, yes.
BASH (voice-over): His wife and three kids are frightened, but mostly they're upset about what Dad's going to miss.
BETHANY BERRY, DAUGHTER: He's going to be gone my senior year. So I was like I don't want him to go, because I want him there for those memories. But, I mean, he's got to go. He's got to take his -- take his turn.
BRITTANY BERRY, DAUGHTER: I'm just sad that he's not going to be at my basketball games, and if I'm in track, then he won't be there either to see me run.
BENJAMIN BERRY, SON: He's so supportive of me, of everything I do. I just love him so much. It makes me sad.
BASH: Vicki Berry backed the war her husband's now being sent to and still does.
VICKI BERRY, WIFE: It was right for us to go in and to do what we've done. And we're right to stay and try to finish the job, if at all possible.
BASH: Berry's congregants are anxious about their pastor going to Iraq but proud he'll be ministering to young troops who will need him.
UNIDENTIFIED FEMALE: He nurtures his flock, and he will nurture his flock in Iraq.
BASH: Despite diminishing support the president now faces over whether the Iraq war was necessary, this hometown pastor is matter of fact.
K. BERRY: This is not something that we want, you know. This is something that we're doing.
BASH: It is, he says, simply his duty.
Dana Bash, CNN reporting.
(END VIDEOTAPE)
PILGRIM: When we return, we take a look at a new film that eyes capitalism's most prized institution, the corporation.
Plus Eric Clapton is making records, but not the kind you listen to. We'll have the details in a moment.
(COMMERCIAL BREAK)
PILGRIM: The controversial new documentary that is the darling of film festivals opens tonight in San Francisco, and it's not Michael Moore's "Fahrenheit 9/11."
But like that film, it does cast a caustic eye at a powerful entity. In this case, capitalism's most prized institution.
Susan Lisovicz reports on "The Corporation."
(BEGIN VIDEOTAPE)
ANTHONY HOPKINS, ACTOR: What's your worst memory of childhood? SUSAN LISOVICZ, CNN CORRESPONDENT (voice-over): It is a favorite character of Hollywood fright films, the psychopath whose criminal or amoral behavior is committed without remorse.
But this summer's scary movie may be a low budget documentary with a new kind of psychopath.
UNIDENTIFIED MALE: What is a corporation? It is, under the law, a legal person.
UNIDENTIFIED MALE: These are a special kind of persons who have no moral conscience designed by law to be concerned only for their stockholders.
LISOVICZ: And that definition, the filmmakers say, not only enables but encourages corporations to achieve profit at all costs. But their very power is positioning them for a fall.
UNIDENTIFIED FEMALE: They present the corporation as a paradox, an institution that creates great wealth but causes enormous and often hidden harms.
JOEL BAKAN, CO-CREATOR, "THE CORPORATION": The corporation is like the church or like the monarchy, or for that matter, like the Communist Party. It's a dominant regime that we have and a dominant institution.
And when you look at history, what becomes very clear is that no dominant regime has been immune to the march of history.
LISOVICZ: The corporate crime wave that followed the great bull market of the '90s has spawned a tsunami of its own in books and movies, critical of capitalism's greed.
MORGAN SPURLOCK, FILMMAKER: Could I get an Egg McMuffin Extra Value Meal?
LISOVICZ: But some critics say the media's tendency to demonize is as excessive as was its adulation of just a few years ago.
BEN EDWARDS, "THE ECONOMIST": I do not -- I do not subscribe to this view that, you know, we as voters and we as citizens, we as consumers are, you know, passive victims of a conspiracy against us.
You know, we have this idea going round at the moment that McDonald's is super sizing us all. Well, you know, I've put on a few pounds, but I don't blame McDonald's for super sizing me.
LISOVICZ: For all its grimness, "The Corporation" does have a happy ending. It profiles an executive who has a moral epiphany.
UNIDENTIFIED MALE: I said to myself, my goodness someday people like me will end up in jail.
LISOVICZ: And the film itself, which cost just over $1 million to make, is expected to make a big profit for its privately held distributor.
Susan Lisovicz, CNN, New York.
(END VIDEOTAPE)
PILGRIM: Now a follow up to the story from last night.
Rock legend Eric Clapton's favorite guitar sold for nearly $1 million last night. As we reported, Clapton auctioned some of his most prized guitars to benefit the drug treatment center he founded in Antigua.
And one particular guitar, nicknamed "Blackie," was Clapton's favorite for about 15 years.
Christie's auction house had estimated it would sell between $100,000 and $150,000, and the actual selling price was more than $950,000. It easily beat the previous record for one of Clapton's guitars, nearly half a million dollars for the guitar nicknamed "Brownie" that sold in 1999.
Overall, last night's sale raised a staggering $7.4 million to benefit the Crossroads Drug Treatment Center.
A reminder now, vote in tonight's poll. Should the U.S. government spend more on intelligence services? Yes or no. Cast your vote at CNN.com/Lou. We'll bring you the results later in the broadcast.
Still ahead, we'll share some of your thoughts on the exporting of America.
And a brutal week for the nation's largest retailer, ending with a multimillion-dollar settlement. We'll have details when we return in just a moment.
(COMMERCIAL BREAK)
PILGRIM: Stocks fell today on Wall Street. The Dow lost almost 72 points. The NASDAQ added about 10. And the S&P lost 6.
And more trouble for Wal-Mart.
Christine Romans is here with the report on that -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Kitty, a miserable week for Wal-Mart shares, down to about almost a seven-month low this week. Slowing sales, class action sex discrimination suit.
And today Wal-Mart settled allegations it filled prescriptions halfway and billed the government health insurance for the whole bottle of pills: $2.8 million there. Rite Aid settling similar charges for $7 million.
And Kitty, a wacky week overall. Stocks stuck in neutral, but a taste of the old bubble days when a big IPO soared 56 percent on the first trading day, even though the company has restated earnings and the CEO hyped the stock during the SEC's quiet period.
You'd think it was 1989 if it weren't for the news that Comdex, that -- remember the industry trade show, Comdex? It was canceled for the year.
Also canceled, plenty of jobs. MCI will cut 2,000 jobs in call centers in four states. That brings MCI to more than 15,000 job cuts just this year. And Campbell's Soup also axing several jobs. It's one of several food companies, five or six food companies this week, announcing they are raising prices because of higher commodity prices.
PILGRIM: Thanks very much, Christine Romans.
Some of your thoughts on exporting America. Let's take a look.
Pauline Zoll from Tampa, Florida, says, "Show me any elected official whose livelihood is threatened by job outsourcing or the flood of illegal immigrants. Until those who make and enforce the laws suffer consequences, nothing will change."
And Melanie of Long Beach, Washington: "I have the solution for the illegal Mexican problem and the outsourcing of jobs to America. The United States should buy Mexico. The illegals would be legal. The outsourced jobs would no longer be outsourced. And the current administration would be delighted to add to the national debt."
And Sandee Lakind from Sun City, Arizona, says, "Outsourcing jobs is just another way to hurt Americans who are looking to support their families. Tax loopholes and tax breaks for those who escape into the waters are hurting us as well. It has to stop."
Peyton G. of Louisville, Kentucky: "Lou, if we can have a government by the people for the people, then why can't we have an economy by the people for the people, instead of by the people and for China, India, and Mexico?"
We love hearing from you. Send us your thoughts at LouDobbs@CNN.com. Still ahead. The results of tonight's poll.
(COMMERCIAL BREAK)
PILGRIM: The results now of tonight's poll, "Should the U.S. government spend more on intelligence services?" Seventy-one percent of you said yes and 29 percent said no.
Thanks for joining us tonight. Please join us on Monday. Donna Brazile will be here to talk about her new book, "Cooking with Grease: Stirring the Pots of American Politics." And our special report on the challenges facing Iraq after the handover of power just five days from now.
For all of us here, have a great weekend. 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
