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Lou Dobbs Tonight

New Jersey Governor Comes Out, Resigns; More Than One Million Evacuate Florida's West Coast; U.S. Troops on the Offensive in Najaf

Aired August 12, 2004 - 18:00   ET

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


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


(BEGIN VIDEOTAPE)
LOU DOBBS, HOST: Tonight, the governor of New Jersey delivers a bombshell announcement with his wife standing beside him. Governor Jim McGreevey today declared he is gay and is resigning from office.

GOV. JIM MCGREEVEY (D), NEW JERSEY: I engaged in adult consensual affair with another man, which violates my bonds of matrimony.

DOBBS: More than a million people evacuating Florida's west coast as Hurricane Charlie accelerates.

UNIDENTIFIED MALE: This is a serious, serious storm.

DOBBS: We'll have the latest on Hurricane Charlie, and I'll talk with Mayor Rick Baker, of St. Petersburg, one of the cities directly in the hurricane's path.

American troops on the offensive in Najaf. U.S. Marines have stormed the home of radical Cleric Muqtada Al Sadr. We'll have the report from Najaf.

Missiles, terrorism and possibly soon, nuclear weapons, Iran rapidly becoming one of the most serious threats to this country.

Defense Secretary, Donald Rumsfeld says he's concerned.

In our "Broken Borders" report tonight, California Governor Arnold Schwarzenegger, who blocked one plan to give drivers to licenses to illegal aliens, now faces massive pressure to reconsider.

And the government has exempted Mexicans and Canadians from its new plan to deport illegal aliens. Jeanne Butterfield of the American Immigration Lawyer's Association, says that plan is unfair to all illegal aliens. Jean Butterfield, is our guest.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, August 12. Here now for an hour of news, debate and opinion, Lou Dobbs.

DOBBS: Good evening. Tonight a stunning admiration from Governor James McGreevey. Today, the governor resigned from office and announced that he is gay. Governor McGreevey, the twice-married father of two, admitted he had an extramarital affair with a man.

Alina Cho joins me now with the story -- Alina.

ALINA CHO, CNN CORRESPONDENT: New Jersey Governor James McGreevey announced late this afternoon, proudly I am a proud gay American. He admitted he engaged in what he called, "a consensual affair with a man," and because of the rumors that would follow, he would step down as governor, effective November 15.

McGreevey, as you see there was, flanked by his wife Dina, at a hastily called news conference in Trenton today. He said he had grappled with his identity for years, was forced into what he called, an acceptable reality.

McGreevey, has two daughters, has been married twice. And asked his current wife, Dina, for forgiveness, then tendered his resignation.

(BEGIN VIDEO CLIP)

MCGREEVEY: At a point in every person's life, one has to look deeply into the mirror of one's soul and decide one's unique truth in the world. Not as we may want to see it or hope to see it, but as it is. And so my truth is that I am a gay American.

(END VIDEO CLIP)

CHO: Really a stunning announcement. McGreevey, also said what he said was wrong and foolish, that he accepts total and full responsibility for his actions. And the right course of action was to resign. Going forward, McGreevey's resignation is effective November 15. And under New Jersey state law, New Jersey Senate president Richard Cody, who is also a Democrat, will take his place, until McGreevey's term expires in January of 2006.

DOBBS: Alina, I realize that these are very -- well, these are breaking developments. Do we understand yet why November 15 was chosen rather than an earlier date?

CHO: Well, under New Jersey State law, had he resigned before September 15 -- effective September 15, there would be a special election in November. Of course, the aim, one would suspect, is to keep a Democrat in the office until the end of his term.

DOBBS: Other politicians, other elected officials, heterosexual or gay, have admitted extramarital affairs.

Why did the governor feel moved to resign?

CHO: You're right, the timing of this is very, very interesting. There are reports, several reports that a lawsuit is pending against the governor. It was expected, reportedly, that he was going to address that lawsuit during this hastily called news conference in Trenton today. He did not, and we are still trying to get the details of that pending lawsuit. DOBBS: The governor today not only admitting that he is gay, but acknowledging he has led a life of quiet deception, if not desperation.

Does he have support of gay rights' groups?

What is in the offing here?

CHO: His stance. He is -- has come out against gay marriage, but for same-sex partnerships. In fact, Lou, just in January, New Jersey became the fifth state in the nation to support same-sex partnerships. And at that time, McGreevey came out and urged gay couples to take advantage of it.

DOBBS: Alina Cho, thank you very much.

We'll have much more on this story, the story of Governor McGreevey's shocking resignation today, and his admission that he his gay, when we're joined by Karen Tumulty of "Time" magazine, Chrissy Gephardt of the National Stone Wall Democrats, and CNN political analyst Carlos Watson, coming up later here in the broadcast.

Turning now to another big story tonight, Hurricane Charlie. More than a million people are evacuating coastal areas in Florida tonight, as Charlie barrels towards the United States.

Officials say Hurricane Charlie will slam into Florida's west coast tomorrow. With it, it brings heavy rains, tornadoes, and a massive storm surge. Hurricane Charlie, will be the second major storm to hit Florida in the past 24 hours, the first time that's happened in nearly a century.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): Tropical Storm Bonnie hit the Florida Panhandle and moved up the East Coast with heavy rain and 50 mile per hour winds. But Bonnie was just the opening act. Hurricane Charlie is packing wind of more than 100 miles an hour. The National Hurricane Center says, once it crosses Cuba and turns northeast, Hurricane Charlie will gather strength in the Gulf of Mexico. Storm surges as high as 12 feet are expected. Florida is now in a state of emergency. Residents are boarding their up homes and businesses.

UNIDENTIFIED FEMALE: We only have five more to go.

DOBBS: On Sanibel Island, workers are trying to reinforce houses under construction.

UNIDENTIFIED MALE: (UNINTELLIGIBLE) you've got to go as quick as possible. Unfortunately, you know, mother nature is not really cooperating today with us too much.

DOBBS: Officials have asked for more than a million people in the areas along the Florida coast, from the Keys to Tampa Bay to leave. This is the biggest evacuation ordered since 1999. GOV. JEB BUSH (R), FLORIDA: This is a serious, serious storm. The implications are serious for Florida's families. We are prepared to do whatever it takes in conjunction with our federal partners. We appreciate the federal government's support in anticipation of the impacts of this storm.

DOBBS: If Hurricane Charlie hits the peninsula, officials say it could be the worst hurricane for the state in nearly half a century.

UNIDENTIFIED MALE: Previously, the big storm that cut across the state was Hurricane Donna. And Donna produced damage well inland, all the way to the other coast. We had power outages. Literally, we're talking that -- for -- if you want numbers, we're talking millions of people are going to be impacted on this storm if it hits the peninsula.

DOBBS: The National Hurricane Center now projects, Hurricane Charlie, will hit the Florida Keys tomorrow morning.

(END VIDEOTAPE)

DOBBS: Officials in St. Petersburg, have ordered residents there to evacuate low-lying areas. Officials now say, a storm surge as high as 20 feet could hit the coast. That would flood many areas, even perhaps turning St. Petersburg into an island.

Joining me now is the mayor of St. Petersburg, Rick Baker. And Mr. Mayor, its' good to have you with us.

I know the situation there tonight has got to be tense. And is it your judgment that you're prepared for what appears to be a very, very strong storm in the hours ahead?

Mr. Mayor, can you hear me?

Mayor Rick Baker of St. Petersburg, obviously we do not have audio. We will try to correct that problem. We apologize to you and to the mayor. We'll be back with him as soon as we can establish that contact.

Still ahead here, thousands of troops are tonight in an all-out battle for control of the Iraqi City of Najaf, the hometown of radical Shiite Cleric Muqtada Al Sadr.

Also ahead here, the benefits of citizenship without any of the responsibility. That is exactly what illegal aliens in California now say they deserve, and some lawmakers in California agree, perhaps a governor as well.

And a new reality show, demonstrating nothing but, quote "contempt for immigrants," end quote, according to immigrants rights groups. Now want it yanked off the air and immediately.

(COMMERCIAL BREAK)

DOBBS: As we reported, St. Petersburg and its residents and its mayor, Rick Baker, are preparing for a direct hit from Hurricane Charley. We, I now understand, have established contact with Mayor Baker. Good to have you with us, sir. I know it's a tense situation there tonight. How well prepared -- you haven't had a hurricane of this magnitude certainly hit your area in decades. How well prepared are you, do you believe?

MAYOR RICK BAKER, ST. PETERSBURG, FLORIDA: Yeah, we haven't had a direct hit from a hurricane in over 80 years here in St. Petersburg, Lou, but we're as prepared as you can be. We've ordered an emergency evacuation for three levels within the community. We have 350,000 people undergoing evacuation right now, so we're taking it very seriously.

DOBBS: Three hundred and fifty thousand. I know you're being updated minute by minute as to the direction and the projected landfall of this hurricane. What is your -- what guidance are you being given, just how severe will this hurricane be when it strikes you, if current projections hold true?

BAKER: Well, right now, as I understand it, it's a category III hurricane possibly could hit us sometime tomorrow afternoon, and so that's a very serious hit, if it hits right in, especially if it comes in, it could fill up the water in Tampa Bay and cause a lot of flooding. So if it -- if the path continues the way it is right now, it is going to be a very serious storm for St. Pete.

DOBBS: If the storm surge reaches 20 feet, that is extraordinarily high and potentially incredibly destructive. How are the residents of your city and nearby residents reacting, not having had a hurricane? Are they taking these warnings seriously? These orders and directions for evacuation seriously?

BAKER: Lou, I believe they are. I, on the way over to the studio tonight, we went by two of the bridges, and both of the bridges are absolutely filled with cars going east across the bay. So they are in the process of leaving the city, which is a good thing. It has actually has traffic backed up quite a bit, but I'm fine with that, because it means our residents are taking the orders to evacuate seriously.

DOBBS: Mayor Rick Baker, we thank you very much, and we of course wish you and all the residents of your city and all of Florida all the best as you prepare for the onset of this storm. Mayor Rick Baker, St. Petersburg.

BAKER: Thank you, Lou. Thank you, Lou.

DOBBS: Turning to developments overseas, thousands of American and Iraqi troops launched their long-awaited offense in Najaf. During today's operations, U.S. Marines stormed the house of the radical cleric Muqtada al Sadr, but he was not in the building. Al Sadr's gunmen had been defying the Iraqi government in Najaf no more than a week. Matthew Chance reports from Najaf.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Go, go, go!

MATTHEW CHANCE, CNN CORRESPONDENT (voice-over): In a dramatic development, CNN has got these exclusive pictures of a U.S. Marines raid on the house of Muqtada al Sadr in Najaf. The Marines say they knew the leader of the Mehdi Army was not at home at the time, at least they suspected he wouldn't be at home, however, they wanted to go in anyway, in the area where there had been very serious confrontations between the Marines and the Mehdi Army in the hours before.

They wanted to go into his house to see what they could find. It doesn't seem they found very much. Clearly Muqtada al Sadr has left his home, has fled from there and is in hiding somewhere else in Najaf, according to the Marines that we've spoken to.

But nevertheless, they're sending a clear message to Muqtada al Sadr, to the leadership of the Mehdi Army, that the top leadership will and could be targeted in this very intensive campaign now to break up this illegal militia, in the words of the Iraqi interim government on the streets of Najaf.

Matthew Chance, CNN, in Najaf.

(END VIDEOTAPE)

DOBBS: Matthew Chance with the Marines in Najaf. Joining me now for more on the battle for Najaf, General David Grange. "Grange On Point" tonight, joining us from Chicago. General, good to have you with us.

BRIG. GEN. DAVID GRANGE (RET), CNN MILITARY ANALYST: Good evening.

DOBBS: This attack on Najaf, long-awaited after days, more than a week now, of defiance of Muqtada al Sadr, his followers in Najaf, and in other parts of Iraq. Is this a final battle in your judgment?

GRANGE: Well I hope it is, Lou. If it's put off again like it was in April and June, they're just going to come back to fight again. It's time to put it to an end.

The Prime Minister Allawi has said he's going to use a strong fist. That he cannot tolerate a separate enclave in the state of Iraq. And it's time to cut the head off the snake and resolve this thing.

DOBBS: The Iraqi forces, there are reports that the Iraqi forces are taking the lead in this assault. Is that your understanding, and what are your thoughts?

GRANGE: Taking the lead in the fight near the sensitive areas, like the mosque. As you saw, the Marines went into Sadr's house, and the film clips we just saw, but I think the U.S. is going to be there, obviously, to back them up.

It's a new army, it's a new police force starting from scratch. So it's the responsibility of the U.S. to back them up the best they can, and that will happen. It will be a combined fight.

DOBBS: With indication that the Imam Ali Mosque, only the Iraqis would enter the mosque, yet the video we have reported to our viewers here tonight of U.S. Marines taking -- attempting to capture Muqtada al Sadr at his home, should that, in the interest of sensitivity in these matters, should that have been a matter for the Iraqi forces?

GRANGE: It could have been. And the idea would be, it would be advantageous to have Iraqi forces do that. However, it may have been because of the locale of this home that U.S. forces did it.

I have a feeling this raid's going on in other areas that we haven't seen yet and it's a combination of U.S. and Iraqi forces, depending on the location of the target.

DOBBS: Does this represent, General Grange, again in your best analysis, a change in the approach of the United States and the Iraqi government in dealing with insurgents, particularly the followers of Muqtada al Sadr?

GRANGE: Well, I think it's time that they put it to an end. You know, Fallujah, Najaf, Kufa, they can't become these separate enclaves of resentment to the government. And so I think this is an example where the government has to get tough, the people understand toughness in this part of the world, and it's probably the only course of action for the longevity of Iraq to do this right now.

DOBBS: General David Grange, thank you. And as would be normally the case, we would be reporting on the casualties in this engagement, but this engagement under way, and we do not have information on casualties in this battle as of yet.

Still ahead here tonight, immigrant rights groups demanding California Governor Arnold Schwarzenegger give driver's licenses to illegal aliens. Tonight, we report on the growing controversy in our "Broken Borders" segment. And Jeanne Butterfield, of the American Immigration Lawyers Association says new deportation rules are unfair to illegal aliens. She's our guest.

And outrage over a story we reported to you last night on a new reality show that helps illegal aliens win green cards. We'll tell you what some are doing to try to pull off that feat, "Gana la Verde." And to take the show off the air now.

Then, New Jersey Governor James McGreevey has resigned from office unexpectedly. He says he's been living a lie. We'll have reaction to the shocking announcement, the political fallout, the cultural impact. Those stories and much more still ahead here tonight.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Here now for more news, debate, and opinion, Lou Dobbs.

DOBBS: Immigrants rights groups, tonight and legal organizations, are protesting the Spanish language reality TV show "Gala la Verde," or "Win the Green." As we reported here exclusively last night, contestants on that game show are illegal aliens competing for access to an immigration lawyer, in the hopes that they can gain legal residency.

Seven different organizations have sent a joint letter demanding to Burbank based, KRCA TV, demanding that the station pull the show off the air. In a strongly worded letter, the group claims the show offers illegal aliens false promises and takes advantages of their fears. The letter also says, every day that the show is on the air demonstrates the station's contempt for immigrants.

California lawmakers are now challenging governor Schwarzenegger to approve state driver's licenses for illegal aliens. That bill, supporters says, people who come to this country illegally deserve the right to drive, so they can earn a living. Governor Schwarzenegger says, his first obligation is to ensure our national security is not compromised.

Casey Wian, reports from Los Angeles.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT, (voice-over): Supporters of driver's licenses for illegal aliens are turning up the heat on California Governor Arnold Schwarzenegger. They're marching on the state capital, demanding that the governor make good on a deal he made with Latino law makers last year.

GIL CREDILLO, CALIF. STATE SENATOR: We have a bill that strengthens national security, strengthens highway and community safety, and promotes citizenship. Now's the time for him to do this, and do so in a non-discriminatory way.

WIAN: State Senator Gil Cedillo, who told Spanish language radio, he'll fight for illegal alien driver's licenses until he dies, is the main force behind the proposed law. Schwarzenegger repealed one verse after his recall election last year, but promised to reconsidering if law makers came up with a version that addressed homeland security concerns. Cedillo's bill would allow Mexican metricala consular ID cards, to be used as proof of identity for illegal aliens applying for driver's licenses.

Schwarzenegger, says that's not good enough, because the FBI says half of those are phony.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: I want them to have driver's licenses. I want to have people be able to drive legally, but under the circumstances the way it's right now, they would not have the same driver's license as everyone else in California. I will not endorse that.

WIAN: One idea being considered is an identifying mark on driver's licenses, granted to illegal aliens. But illegal alien advocates contend, that would be discriminatory. Activists who favor strict immigration law enforcement want the governor to reject any deal.

RON PRINCE, SAVE OUR STATE: I want to see him to say, no, I'm sorry, illegals cannot be trusted and we're not going to give licenses to illegals period. And when he says, well, we're going to try to make a deal. We're going to try to do this, we're going to try to do that, it doesn't add up right.

WIAN: Another number that doesn't add up, 70 percent of the California voters who elected Schwarzenegger, say they're opposed to driver's licenses for illegal aliens.

(END VIDEOTAPE)

WIAN: The deadline for a deal is August 31st when the state legislature adjourns for the year. Meanwhile, the governor's office says a press release issued by the state Senator Cedillo claiming a deal is near, is not true. Cedillo's representatives did not return our calls -- Lou.

DOBBS: Casey Wian, thank you for updating us.

That's the subject also of our poll tonight. The question, do you believe illegal aliens should be given state driver's licenses. Cast your vote at cnn.com/lou. We'll have the results for you coming up here, later.

As we reported, the Department of Homeland Security, this week announced new plans to expedite the deportation of some illegal aliens in this country. That plans applies to only aliens caught within 100 miles of the border, within 14 days of their arrival. Mexican and Canadian illegal aliens are exempt from the new plan. By the way, those Mexican illegal aliens make up the vast majority of illegal aliens captured by U.S. Authorities.

My next guest, however, says that the new orders will impact them and all illegal aliens unfairly. Jeanne Butterfield is executive director of the American Immigration Lawyers Association, joining us tonight from Washington.

Jeanne, good to see you again.

JEANNE BUTTERFIELD, EXEC. DIR., AMERICAN IMMIGRATION LAWYERS ASSOCIATION: Good to see you, Lou.

DOBBS: The idea that is this is unfair to illegal aliens, why?

BUTTERFIELD: Well, I think, first and foremost, the measures that were announced this week are new band-aids. We all know the system is broken. We all know our borders need to be under control. We don't need new band-aids, we need a cure. And I think that the best way to control our borders is to enact real immigration reform. It's to reform our system of legal entry.

DOBBS: Reform it -- now, reform can mean a lot of things to a lot of different people. In my mind, for example, when you say reform our border security, that means to enhance our border security, to make sure we control the number of people that cross our borders. That we make a decision as a government, and a people and democracy, about who will be granted citizenship.

Is that what you mean?

BUTTERFIELD: Exactly. We're talking about border security and we're talking about regularizing and legalizing the flow. We have people trying to come into our country, who want to come here to work and to contribute. We have jobs here that need those workers. We need to make it possible for people to come here legally to fill a needed niche in our economy, not to sneak across illegally. That would take the huge haystack, that's presently trying to coming across the border illegally, and make it legal. It reduces the size of the haystack, and then it lets us focus on real security measures.

DOBBS: But Jeanne, it sounds to me like they way you're saying to end the issue with illegal aliens is to say the border is open, come on over, we've got a job.

BUTTERFIELD: Not at all, Lou. I think we're talking regulation and control, numerical limits. We're talking about what the president talked about back in January, when he called for reforming our laws to provide some work visas. That's what we need, in part. And then let me talk about the security issues, if I may for a moment.

DOBBS: Sure. Sure. But before you do that, Jeanne, if I may ask this question. If we're going to have that kind of control over the flow of immigrants, they wouldn't be illegal aliens, they would be immigrants at that point. They would have to be going through checkpoints and ports of entry, not crossing the Rio Grande illegally at night, not breaking across the Arizona desert.

How do you stop that, by your plan?

BUTTERFIELD: Exactly. I mean, first, Lou, you take the pressure off that border flow, which right now is illegal, by providing some legal means for many of those people to come, within limits, within controls, within screening, within presenting people at ports of entry, and allow them to come in knowing who they are, giving them permission.

That increases our security, and it reduces the pressure on the border. And then, secondly, let's take that reduced haystack, those who may still try to come illegally, and let's apply really security measures that really have some chance of making us safe. We're talking about here, in part, being more effective at a North American security perimeter. We need to make sure the bad guys don't get on the airplanes and get into Canada and Mexico.

DOBBS: Whoa, whoa, Jeanne, that's very nice. That's very nice. But we can't even stop them at our own borders. Now to take on the additional mantle of taking responsibility for Canada's security and Mexico, seems to be a bit of a strain, if I may say.

BUTTERFIELD: I'm talking cooperation, Lou. Because we have to see our borders as the last line of defense, not the first line. We need to push that perimeter out. We need to cooperate with pre-flight clearance and pre-inspection. We need to know who's on those airplanes and have the confidence that Canada and Mexico...

DOBBS: But these -- but the illegal aliens are crossing the Mexican border, and more recently suspected terrorists who have crossed the Mexican border are not coming to the United States in aircraft. They're crossing the border at the Rio Grande, and across the borders of California, and Arizona, and New Mexico and Texas.

BUTTERFIELD: Exactly. Exactly. But what I'm saying, Lou, is our borders are our last line of defense. Lets make sure that we work with Canada and Mexico, to make sure that they're doing the proper screening, so that bad guys don't even get there, let alone get to the Rio Grande.

DOBBS: How about this, would you endorse this idea?

Because improvised people in Mexico, Central and South America trying to cross our borders, trying to find work illegally, crossing our borders illegally, finding work illegally, would you endorse a plan -- in which we punished, actually enforced immigration laws, and labor laws and employment laws in this country for those who would hire illegal aliens, illegally?

BUTTERFIELD: I think first we need real reform. We need to take that flow, we need to sort it out and make sure that people are given an opportunity to come legally. Then we can talk about enforcing our law. And yes, those who don't...

DOBBS: How many people do you think should be allowed into this country every year?

BUTTERFIELD: Well that's a debate I think many wiser than myself are having and net to have. We need to assess our labor market needs. We need to assess what kind of work shortage...

DOBBS: See, I have a little trouble with that one. I really think we ought to talk about our national interests, not the interests of employers, not the interests of corporate America or others who would hire illegal aliens.

We ought to be talking about our national interest and those people aren't any wiser than you and me, Jeanne, so we're going to have you back and we're going to take that up next time.

Jeanne Butterfield, we thank you for being with us.

BUTTERFIELD: Thank you, Lou.

DOBBS: Let's take a look now at some of your thoughts on this issue.

D. Corbin in Clarksville, Tennessee said, "Lou, we have no problem with our federal immigration laws. The only problem is, the laws are not enforced. All the greedy businesses in this country cheat our government and its citizens out of billions and billions of dollars a year by hiring these illegal aliens."

J. Schenkel in Marietta, Ohio, "Border patrol with its hands tied; a billion dollars for hospitals to treat illegal aliens; I.D. cards for illegals to work. Could there be a link between these developments and the fact that the majority of battleground states in the upcoming election have the highest Latino population?

Jerry Skott of Menomonee Falls, Wisconsin, -- and if I messed that up, I apologize to all of you there -- "Giving illegal immigrants free hospitalization while our jobless American citizens go without and having the rest of us pay for it is simply insane. I had to check my remote and make sure I was not watching the Comedy Channel."

And Bill Schmidt of Los Angeles, "Why do you only share emails on your show from people who support your views? Are you afraid to let viewers hear opposing opinions? I really find your anti-immigrant rants sickening. Sometimes I don't even think you believe what you are saying."

Well, Bill, if I do rant, it is against those who break U.S. immigration laws by crossing our borders illegally. I am not anti- immigrant. I am anti-illegal alien. And if I do rant, it is against idiotic immigration policies and the failure of our government to enforce our immigration laws.

And yes, Bill, I say what I mean, and I mean what I say.

We love hearing from you, all views, even those well, somewhat different than my own are welcome. Please send them to us at loudobbs@cnn.com.

Coming up next here: the bombshell announcement from New Jersey's Governor Jim McGreevey. He's resigning. That's just the beginning of today's stunning revelations. We'll have reaction, the political impact, the cultural significance.

And Senator Kerry calls for a more sensitive war on terror and sets off a war of words with Vice President Dick Cheney.

And the nuclear threat from Iran. Stanford Professor Larry Diamond says it is an imminent crisis. He's our guest.

(COMMERCIAL BREAK)

DOBBS: Vice President Dick Cheney today criticized Senator John Kerry for saying he would fight, quote, "A more sensitive war on terrorism." Senator Kerry, meanwhile, trying to keep the tension on the final stops of his two-week long cross-country tour.

John King reports from California.

(BEGIN VIDEO CLIP)

JOHN KING, CNN CORRESPONDENT (voice-over): California is the biggest prize in presidential politics. At the moment, things here look good for John Kerry. And where you're up by more than 10 points, strategy gets pretty simple: play to your strengths.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL NOMINEE: We believe that a stronger America is in fact, built on a strong middle class.

KING: But the other side has other ideas, believing Senator Kerry created an opening by promising to wage a more sensitive war on terror.

DICK CHENEY, VICE PRESIDENT, UNITED STATES OF AMERICA: Those who threaten us and kill innocents around the world do not need to be treated more sensitively. They need to be destroyed.

KING: Senator Kerry made no mention of the attack in his economics speech and aides said he had no intention of personally responding. But when pressed after the speech, he took issue with the Vice President's tone, not his criticism.

KERRY: You know, it's sad that they can only be negative. They have nothing to say about the future vision of America. I think Americans want a positive vision for the future.

KING: In the speech at issue a week ago, Senator Kerry vowed to destroy terrorist networks and aides say by promising to be more sensitive, he simply meant more diplomatic with other countries, much as President Bush used the term six weeks after taking office.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Precisely because America is powerful, we must be sensitive about expressing our power and influence.

KING: The Bush campaign attacks are designed to protect a critical campaign edge: a 13-point advantage over Senator Kerry when voters are asked, "Who would better handle terrorism?"

Another Bush-Cheney strategy is daily questions about Senator Kerry's vote in favor of the Iraq war. That is more risky. It was Mr. Bush who launched the war and nearly half of Americans now think it was a mistake to send troops to Iraq.

But just among Democrats, 74 percent called the war a mistake. And the White House thinks the more Senator Kerry has to explain his vote, the more anti-war Democrats might become disillusioned with his candidacy.

Senior Kerry advisors concede the Bush-Cheney campaign has had some success in raising questions, if not doubts, about Senator Kerry's views on Iraq and his broader approach to the war on terrorism. These Kerry aides attribute those attacks to a worried Bush White House, but concede they need to do a better job in answering them.

John King, CNN, Carson, California.

(END VIDEO CLIP)

DOBBS: California's Supreme Court today voided 4,000 same-sex marriages that were granted in San Francisco earlier this year. The high court ruled San Francisco's mayor overstepped his authority when he ordered city officials to issue marriage licenses to same-sex couples.

Couples from across the country traveled to San Francisco and some waited for hours to be married. Mayor Gavin Newsom today said he will respect the court's judgment.

Returning now to our top story, New Jersey's Governor James McGreevey today resigned from office; announced he's gay. McGreevey said he had an extramarital affair with another man that could interfere with his ability to lead.

(BEGIN VIDEO CLIP)

MCGREEVEY: I realize the fact of this affair and my own sexuality if kept secret, leaves me, and most importantly the governor's office vulnerable to rumors, false allegations and threats of disclosure.

So I am removing these threats by telling you directly about my sexuality.

(END VIDEO CLIP)

DOBBS: McGreevey is a Democrat who has said he's opposed to gay marriage.

Joining me now, for more on the political and the cultural impact of this story: Karen Tumulty, National Political Correspondent for "Time Magazine"; Carlos Watson, Political Analyst for CNN.

Let me begin, if I may with you, Karen. This was a bombshell announcement by any standard. Did you have any inkling that this was coming?

KAREN TUMULTY, NATIONAL POLITICAL CORRESPONDENT, "TIME MAGAZINE": Well, you know it was interesting because when word started circulating mid-afternoon that there was a resignation in the offing in New Jersey, I think most people thought that it was likely to be as a result of any number of sort of, garden variety political corruption financial scandals that really had been circulating around the McGreevey administration, almost from the moment he took office in 2002.

DOBBS: The fact that he announced today, with his wife at his side, that he is gay: does it follow politically that he had to resign?

TUMULTY: Oh absolutely not. And I think we are going to know a lot more about this story in the next couple of news cycles.

Because, also, as these reports began to circulate, there were also reports by some local news announcements, that, in fact, there was a sexual harassment lawsuit in the offing. Again, this was just reports and there are now all sorts of rumors swirling around Washington.

So, I think this is going to turn out to be a much more complicated story even than it already appears.

DOBBS: Carlos, is this the end, in your judgment, of McGreevey's political career?

CARLOS WATSON, POLITICAL ANALYST, CNN: For a career that really took flight, he ultimately beat his opponent by 15 points several years ago to win the governorship, it probably is.

For John Kerry, though, New Jersey's still probably a good state. The most recent polls show John Kerry up by 13, and in one case, 20 points over George Bush.

WATSON: So, McGreevey's clearly hurt but brother Democrat that's not clear that will have a strong, immediate ripple effect.

DOBBS: There's much about this, obviously, that is not clear as this is a developing, breaking story. But, McGreevey, in announcing that he is gay, and stepping down, leading a life of deceit, of lies, at this point is there any suspicion, any likelihood, any expectation that gay rights groups are going to step forward to support him, to in some way provide some sort of support for the governor even as he's resigning? Carlos?

WATSON: You know, you've already heard at least some comments of people saying that coming out is a very sensitive, very difficult process. And so there certainly will be some of that warmth, some of that sympathy probably. It's unclear, though, how much people will actually ultimately champion his cause.

As Karen said before, his poll numbers have plummeted since August when a couple of his major aides were indicted over corruption scandals.

DOBBS: Karen, the president of the New Jersey Senate is, of course, a Democrat, would be stepping in after November 15th. What is your suspicion about how effective that is in announcing a date of November 15th. Will that, in fact, be left up to the governor's judgment given all that surrounds this controversial announcement today?

TUMULTY: Well, he is likely to come under a lot of criticism for pushing the date back for an obviously political move.

DOBBS: Right.

TUMULTY: By pushing it past September 15th, he avoids a special election. But New Jersey is a very, very Democratic state. It's one of the bluest of the blue states. The president of the State Senate, Richard Cody, is someone who's been in the legislature since the 1970s.

So, I think there is going to be some criticism but I'm not sure that, you know, it's going to be enough to derail what would essentially keep the State House in Democratic hands.

DOBBS: Karen Tumulty, Carlos Watson, we thank you both.

WATSON: Good to see you.

TUMULTY: Thank you.

DOBBS: Coming up next, the growing nuclear threat from Iran. Stanford professor Larry Diamond will be here. He says Iran could have nuclear weapons very soon and he says Iran poses an imminent threat.

And foreign money influencing American policy; our special report: The Best Government Money Can Buy. We'll tell you who's buying. Next.

(COMMERCIAL BREAK)

DOBBS: We reported to you here last night, the growing Iranian missile threat to Israel and U.S. bases in the Persian Gulf. As we reported, Iran has successfully test fired a new generation of ballistic missile, with a range of about 800 miles.

Today, without referring directly to the Iranian missile test, Defense Secretary Donald Rumsfeld expressed his concern about Iran during a visit in Azerbaijan.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, U.S. DEFENSE SECRETARY: One of the greatest concerns that the world faces is the nexus between a terrorist state that has weapons of mass destruction and terrorist networks.

(END VIDEO CLIP)

DOBBS: My next guest, Larry Diamond, says Iran is trying to develop nuclear weapons as fast as possible and he says Iran could have a nuclear bomb within five years. He's a Senior Fellow at the Hoover Institution, and he joins us tonight from Stanford University. Professor Diamond, good to have you with us.

LARRY DIAMOND, SENIOR FELLOW, HOOVER INSTITUTION: Nice to be back, Lou.

DOBBS: How imminent do you think the threat is from Iran?

DIAMOND: I'm not a nuclear expert, but people who are following this closely think that Iran is moving at a pace now that might enable it to acquire a nuclear weapon within two to three years.

DOBBS: And given that, how significant is the development of a new generation of missiles that have a range to strike Israel, to strike U.S. bases in the region?

DIAMOND: Well, it's a very, very deep concern, particularly to the state of Israel. But I'll tell you what I worry most about: is not Iran delivering a nuclear weapon via a missile, because then it's going to have a home address and lead to massive retaliation on Tehran.

What I worry about is the Iranian ayatollahs transferring a nuclear device to Al Qaeda or some other terrorist group so that it can be used to wipe out a large section of our capital or downtown Manhattan or some other major city. This would be a catastrophe that would dwarf September 11th.

DOBBS: So what does President Bush, his administration, do about it right now?

DIAMOND: Well, what we're trying to do, the Bush administration, the United States government, is to work with our allies, most of all the three European leaders, on this issue -- Britain, France and Germany -- to really get the Iranians to abide by the stricter protocols of the non-proliferation treaty, and to mobilize the International Atomic Energy Agency to refer this to the U.N. Security Council if Iran doesn't cooperate.

And I think that's the first step. But it can only be the first step. Iran has to know that we are serious about this issue and that it will face enormous negative consequences if it moves forward.

DOBBS: Can we bring about those negative consequences? Should we -- and I'm referring to the world community. Should we decide to do so, are there enough resources left?

Because the Germans and the French have made it pretty clear they're not going to be working with us. The United States has extraordinarily strained resources and manpower in Iraq.

DIAMOND: I think initially, Lou, we're not talking about military force, certainly not military invasion. Although we keep our options in terms of a preemptive strike open, they're not likely to be effective in this issue.

DOBBS: Well, what would be effective, because economic sanctions have not been, as the Bush administration has acknowledged.

DIAMOND: I think we've got two options here: one is to get the Europeans, Russia, China, and Japan to join with the United States in cutting off all nuclear technology to Iran if they don't cooperate; nothing at all.

DOBBS: Larry, as you know, the Russians have been supportive of Iran's search and development of nuclear capability.

DIAMOND: Of course they have, and they need to understand - and China, Japan, all of these actors need to understand that this is now moving to the top of the American diplomatic agenda.

This is the most important priority for the United States, and we will judge our entire bilateral relationship with them on the basis of how responsible they are in dealing with Iran.

DOBBS: Larry Diamond, we thank you for being with us.

DIAMOND: Thank you, Lou.

DOBBS: A reminder now to vote in our poll tonight. The question: do you believe illegal aliens should be given state driver's licenses. Please cast your vote at cnn.com/lou. We'll have the results for you later here in the broadcast.

Coming right up: our series of special reports this week. We're focusing on The Best Government Money Can Buy. Tonight we look at who else is trying to influence U.S. policy besides American interest groups. Details when we continue in just a moment.

(COMMERCIAL BREAK)

DOBBS: We've been reporting to you this week on the tremendous amount of money and effort that lobbyists are expending to win the attention and favor of lawmakers.

Americans spend hundreds of millions of dollars to win influence in Washington, but foreigners are also going to great lengths to influence American policy, and they're doing so with some considerable success. Lisa Sylvester reports from Washington.

(BEGIN VIDEO CLIP)

LISA SYLVESTER, CNN CORRESPONDENT: Johnny Chung, a Taiwanese- American, was a familiar face during the Clinton years. He pled guilty for giving illegal campaign contributions, including $8,000 in 1996 to Senator Kerry.

Kerry returned Chung's donations. Later it was revealed that some of the money came from foreign nationals. Under U.S. campaign finance laws, only U.S. citizens and permanent residents can contribute to political campaigns

But special-interest groups representing foreign interests still try to influence U.S. policy by hiring an army of lobbyists.

STEVE WEISS, CENTER FOR RESPONSIVE POLITICS: The United States is the world's last super-power, and what we do legislatively impacts the world greatly.

That's going to bring a lot of money to this country and a lot of lobbyists as well.

SYLVESTER: Groups advocating on behalf of foreign interests spent $157 million in the first half of 2003, according to a detailed analysis of Justice Department records done by "The National Journal."

Saudi Arabia has been seeking to improve its image since 9/11 with a more than $20 million image face lift. Libya is eager to get into the United States' good graces. Years after the 1988 Lockerbie bombing, it just signed a million dollar contract with a Washington firm. And countries like India are hoping to expand trade even further with the United States. According to Senate records, India's National Association of Software and Service Companies spent $200,000 on lobbying in 2003.

Congressional travel records show the Confederation of Indian Industry sponsored several fact-finding trips to India; including one Representative Joseph Crowley went on earlier this year.

Both Indian groups declined an interview request. Foreign lobbying firms like to keep a low profile quietly influencing policy.

KEVIN MCCAULEY, O'DWYER'S P.R. DAILY: I don't think Americans are aware of that. If they were aware of it, they would be angry about it. I think the more exposure there is on foreign influence in D.C., maybe that would generate interest.

SYLVESTER: Groups representing foreign governments have to register with the Justice Department Office of Foreign Agents Registration Act. But critics say the government does not go out of its way to make the documents accessible to the public.

The Center for Public Integrity sued the government to get a copy of the foreign registry to post on its Web site. What was told:

BOB WILLIAMS, CENTER FOR PUBLIC INTEGRITY: They basically told us was, "We cannot make a copy because this system is so old and so decrepit that we will destroy it literally by making a copy," which is pretty novel argument. You're getting close to the "dog ate my homework" argument.

(END VIDEOTAPE)

SYLVESTER: The $157 million spent on behalf of foreign groups in the first half of 2003 does not include lobbying done by multinational corporations and large retailers like Wal-Mart. These corporate interests also spend tens of millions of dollars pushing their agenda, including the expansion of foreign trade. Lou?

DOBBS: And in 1996, Lisa, as you know, 10,000 lobbyists registered in Washington. Now, eight years later: 25,000. Lisa Sylvester, thank you very much.

Tomorrow on our special report here: The Best Government Money Can Buy, we'll tell you about hundreds of millions of dollars being funneled into political campaigns that are largely unregulated.

And that's after we reformed campaign finance. We'll have that report for you tomorrow evening.

Tonight's thought is on special interests. "The government of the United States at present is a foster child of the special interests. It is not allowed to have a voice of its own. It is told at every move, 'don't do that, you will interfere with our prosperity.' And when we ask: 'where is our prosperity lodged?' a certain group of gentlemen say, 'with us.'" Those, the words of President Woodrow Wilson.

Coming up next: hear the results of our poll tonight and a preview of what we have ahead tomorrow. But first a reminder to check out our Web site with a complete list of companies we've confirmed to be exporting jobs to cheap foreign labor markets; exporting America, cnn.com/lou.

(COMMERCIAL BREAK)

A bad day on Wall Street. Turning now to the results of tonight's poll: 90 percent of you say illegal aliens should not be given state driver's licenses.

We thank you for being with us tonight. Please join us tomorrow. Three of the country's leading journalists will be here to talk about politics, the election, the economy, the war in Iraq, all of the biggest stories of the week.

Also tomorrow, our special weekly feature: Heroes, a young Marine injured in Iraq who is dedicated to helping other soldiers as they return from war.

Please be with us. For all of us here, good night from New York.

"ANDERSON COOPER 360" is coming up 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 August 12, 2004 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
LOU DOBBS, HOST: Tonight, the governor of New Jersey delivers a bombshell announcement with his wife standing beside him. Governor Jim McGreevey today declared he is gay and is resigning from office.

GOV. JIM MCGREEVEY (D), NEW JERSEY: I engaged in adult consensual affair with another man, which violates my bonds of matrimony.

DOBBS: More than a million people evacuating Florida's west coast as Hurricane Charlie accelerates.

UNIDENTIFIED MALE: This is a serious, serious storm.

DOBBS: We'll have the latest on Hurricane Charlie, and I'll talk with Mayor Rick Baker, of St. Petersburg, one of the cities directly in the hurricane's path.

American troops on the offensive in Najaf. U.S. Marines have stormed the home of radical Cleric Muqtada Al Sadr. We'll have the report from Najaf.

Missiles, terrorism and possibly soon, nuclear weapons, Iran rapidly becoming one of the most serious threats to this country.

Defense Secretary, Donald Rumsfeld says he's concerned.

In our "Broken Borders" report tonight, California Governor Arnold Schwarzenegger, who blocked one plan to give drivers to licenses to illegal aliens, now faces massive pressure to reconsider.

And the government has exempted Mexicans and Canadians from its new plan to deport illegal aliens. Jeanne Butterfield of the American Immigration Lawyer's Association, says that plan is unfair to all illegal aliens. Jean Butterfield, is our guest.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, August 12. Here now for an hour of news, debate and opinion, Lou Dobbs.

DOBBS: Good evening. Tonight a stunning admiration from Governor James McGreevey. Today, the governor resigned from office and announced that he is gay. Governor McGreevey, the twice-married father of two, admitted he had an extramarital affair with a man.

Alina Cho joins me now with the story -- Alina.

ALINA CHO, CNN CORRESPONDENT: New Jersey Governor James McGreevey announced late this afternoon, proudly I am a proud gay American. He admitted he engaged in what he called, "a consensual affair with a man," and because of the rumors that would follow, he would step down as governor, effective November 15.

McGreevey, as you see there was, flanked by his wife Dina, at a hastily called news conference in Trenton today. He said he had grappled with his identity for years, was forced into what he called, an acceptable reality.

McGreevey, has two daughters, has been married twice. And asked his current wife, Dina, for forgiveness, then tendered his resignation.

(BEGIN VIDEO CLIP)

MCGREEVEY: At a point in every person's life, one has to look deeply into the mirror of one's soul and decide one's unique truth in the world. Not as we may want to see it or hope to see it, but as it is. And so my truth is that I am a gay American.

(END VIDEO CLIP)

CHO: Really a stunning announcement. McGreevey, also said what he said was wrong and foolish, that he accepts total and full responsibility for his actions. And the right course of action was to resign. Going forward, McGreevey's resignation is effective November 15. And under New Jersey state law, New Jersey Senate president Richard Cody, who is also a Democrat, will take his place, until McGreevey's term expires in January of 2006.

DOBBS: Alina, I realize that these are very -- well, these are breaking developments. Do we understand yet why November 15 was chosen rather than an earlier date?

CHO: Well, under New Jersey State law, had he resigned before September 15 -- effective September 15, there would be a special election in November. Of course, the aim, one would suspect, is to keep a Democrat in the office until the end of his term.

DOBBS: Other politicians, other elected officials, heterosexual or gay, have admitted extramarital affairs.

Why did the governor feel moved to resign?

CHO: You're right, the timing of this is very, very interesting. There are reports, several reports that a lawsuit is pending against the governor. It was expected, reportedly, that he was going to address that lawsuit during this hastily called news conference in Trenton today. He did not, and we are still trying to get the details of that pending lawsuit. DOBBS: The governor today not only admitting that he is gay, but acknowledging he has led a life of quiet deception, if not desperation.

Does he have support of gay rights' groups?

What is in the offing here?

CHO: His stance. He is -- has come out against gay marriage, but for same-sex partnerships. In fact, Lou, just in January, New Jersey became the fifth state in the nation to support same-sex partnerships. And at that time, McGreevey came out and urged gay couples to take advantage of it.

DOBBS: Alina Cho, thank you very much.

We'll have much more on this story, the story of Governor McGreevey's shocking resignation today, and his admission that he his gay, when we're joined by Karen Tumulty of "Time" magazine, Chrissy Gephardt of the National Stone Wall Democrats, and CNN political analyst Carlos Watson, coming up later here in the broadcast.

Turning now to another big story tonight, Hurricane Charlie. More than a million people are evacuating coastal areas in Florida tonight, as Charlie barrels towards the United States.

Officials say Hurricane Charlie will slam into Florida's west coast tomorrow. With it, it brings heavy rains, tornadoes, and a massive storm surge. Hurricane Charlie, will be the second major storm to hit Florida in the past 24 hours, the first time that's happened in nearly a century.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): Tropical Storm Bonnie hit the Florida Panhandle and moved up the East Coast with heavy rain and 50 mile per hour winds. But Bonnie was just the opening act. Hurricane Charlie is packing wind of more than 100 miles an hour. The National Hurricane Center says, once it crosses Cuba and turns northeast, Hurricane Charlie will gather strength in the Gulf of Mexico. Storm surges as high as 12 feet are expected. Florida is now in a state of emergency. Residents are boarding their up homes and businesses.

UNIDENTIFIED FEMALE: We only have five more to go.

DOBBS: On Sanibel Island, workers are trying to reinforce houses under construction.

UNIDENTIFIED MALE: (UNINTELLIGIBLE) you've got to go as quick as possible. Unfortunately, you know, mother nature is not really cooperating today with us too much.

DOBBS: Officials have asked for more than a million people in the areas along the Florida coast, from the Keys to Tampa Bay to leave. This is the biggest evacuation ordered since 1999. GOV. JEB BUSH (R), FLORIDA: This is a serious, serious storm. The implications are serious for Florida's families. We are prepared to do whatever it takes in conjunction with our federal partners. We appreciate the federal government's support in anticipation of the impacts of this storm.

DOBBS: If Hurricane Charlie hits the peninsula, officials say it could be the worst hurricane for the state in nearly half a century.

UNIDENTIFIED MALE: Previously, the big storm that cut across the state was Hurricane Donna. And Donna produced damage well inland, all the way to the other coast. We had power outages. Literally, we're talking that -- for -- if you want numbers, we're talking millions of people are going to be impacted on this storm if it hits the peninsula.

DOBBS: The National Hurricane Center now projects, Hurricane Charlie, will hit the Florida Keys tomorrow morning.

(END VIDEOTAPE)

DOBBS: Officials in St. Petersburg, have ordered residents there to evacuate low-lying areas. Officials now say, a storm surge as high as 20 feet could hit the coast. That would flood many areas, even perhaps turning St. Petersburg into an island.

Joining me now is the mayor of St. Petersburg, Rick Baker. And Mr. Mayor, its' good to have you with us.

I know the situation there tonight has got to be tense. And is it your judgment that you're prepared for what appears to be a very, very strong storm in the hours ahead?

Mr. Mayor, can you hear me?

Mayor Rick Baker of St. Petersburg, obviously we do not have audio. We will try to correct that problem. We apologize to you and to the mayor. We'll be back with him as soon as we can establish that contact.

Still ahead here, thousands of troops are tonight in an all-out battle for control of the Iraqi City of Najaf, the hometown of radical Shiite Cleric Muqtada Al Sadr.

Also ahead here, the benefits of citizenship without any of the responsibility. That is exactly what illegal aliens in California now say they deserve, and some lawmakers in California agree, perhaps a governor as well.

And a new reality show, demonstrating nothing but, quote "contempt for immigrants," end quote, according to immigrants rights groups. Now want it yanked off the air and immediately.

(COMMERCIAL BREAK)

DOBBS: As we reported, St. Petersburg and its residents and its mayor, Rick Baker, are preparing for a direct hit from Hurricane Charley. We, I now understand, have established contact with Mayor Baker. Good to have you with us, sir. I know it's a tense situation there tonight. How well prepared -- you haven't had a hurricane of this magnitude certainly hit your area in decades. How well prepared are you, do you believe?

MAYOR RICK BAKER, ST. PETERSBURG, FLORIDA: Yeah, we haven't had a direct hit from a hurricane in over 80 years here in St. Petersburg, Lou, but we're as prepared as you can be. We've ordered an emergency evacuation for three levels within the community. We have 350,000 people undergoing evacuation right now, so we're taking it very seriously.

DOBBS: Three hundred and fifty thousand. I know you're being updated minute by minute as to the direction and the projected landfall of this hurricane. What is your -- what guidance are you being given, just how severe will this hurricane be when it strikes you, if current projections hold true?

BAKER: Well, right now, as I understand it, it's a category III hurricane possibly could hit us sometime tomorrow afternoon, and so that's a very serious hit, if it hits right in, especially if it comes in, it could fill up the water in Tampa Bay and cause a lot of flooding. So if it -- if the path continues the way it is right now, it is going to be a very serious storm for St. Pete.

DOBBS: If the storm surge reaches 20 feet, that is extraordinarily high and potentially incredibly destructive. How are the residents of your city and nearby residents reacting, not having had a hurricane? Are they taking these warnings seriously? These orders and directions for evacuation seriously?

BAKER: Lou, I believe they are. I, on the way over to the studio tonight, we went by two of the bridges, and both of the bridges are absolutely filled with cars going east across the bay. So they are in the process of leaving the city, which is a good thing. It has actually has traffic backed up quite a bit, but I'm fine with that, because it means our residents are taking the orders to evacuate seriously.

DOBBS: Mayor Rick Baker, we thank you very much, and we of course wish you and all the residents of your city and all of Florida all the best as you prepare for the onset of this storm. Mayor Rick Baker, St. Petersburg.

BAKER: Thank you, Lou. Thank you, Lou.

DOBBS: Turning to developments overseas, thousands of American and Iraqi troops launched their long-awaited offense in Najaf. During today's operations, U.S. Marines stormed the house of the radical cleric Muqtada al Sadr, but he was not in the building. Al Sadr's gunmen had been defying the Iraqi government in Najaf no more than a week. Matthew Chance reports from Najaf.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Go, go, go!

MATTHEW CHANCE, CNN CORRESPONDENT (voice-over): In a dramatic development, CNN has got these exclusive pictures of a U.S. Marines raid on the house of Muqtada al Sadr in Najaf. The Marines say they knew the leader of the Mehdi Army was not at home at the time, at least they suspected he wouldn't be at home, however, they wanted to go in anyway, in the area where there had been very serious confrontations between the Marines and the Mehdi Army in the hours before.

They wanted to go into his house to see what they could find. It doesn't seem they found very much. Clearly Muqtada al Sadr has left his home, has fled from there and is in hiding somewhere else in Najaf, according to the Marines that we've spoken to.

But nevertheless, they're sending a clear message to Muqtada al Sadr, to the leadership of the Mehdi Army, that the top leadership will and could be targeted in this very intensive campaign now to break up this illegal militia, in the words of the Iraqi interim government on the streets of Najaf.

Matthew Chance, CNN, in Najaf.

(END VIDEOTAPE)

DOBBS: Matthew Chance with the Marines in Najaf. Joining me now for more on the battle for Najaf, General David Grange. "Grange On Point" tonight, joining us from Chicago. General, good to have you with us.

BRIG. GEN. DAVID GRANGE (RET), CNN MILITARY ANALYST: Good evening.

DOBBS: This attack on Najaf, long-awaited after days, more than a week now, of defiance of Muqtada al Sadr, his followers in Najaf, and in other parts of Iraq. Is this a final battle in your judgment?

GRANGE: Well I hope it is, Lou. If it's put off again like it was in April and June, they're just going to come back to fight again. It's time to put it to an end.

The Prime Minister Allawi has said he's going to use a strong fist. That he cannot tolerate a separate enclave in the state of Iraq. And it's time to cut the head off the snake and resolve this thing.

DOBBS: The Iraqi forces, there are reports that the Iraqi forces are taking the lead in this assault. Is that your understanding, and what are your thoughts?

GRANGE: Taking the lead in the fight near the sensitive areas, like the mosque. As you saw, the Marines went into Sadr's house, and the film clips we just saw, but I think the U.S. is going to be there, obviously, to back them up.

It's a new army, it's a new police force starting from scratch. So it's the responsibility of the U.S. to back them up the best they can, and that will happen. It will be a combined fight.

DOBBS: With indication that the Imam Ali Mosque, only the Iraqis would enter the mosque, yet the video we have reported to our viewers here tonight of U.S. Marines taking -- attempting to capture Muqtada al Sadr at his home, should that, in the interest of sensitivity in these matters, should that have been a matter for the Iraqi forces?

GRANGE: It could have been. And the idea would be, it would be advantageous to have Iraqi forces do that. However, it may have been because of the locale of this home that U.S. forces did it.

I have a feeling this raid's going on in other areas that we haven't seen yet and it's a combination of U.S. and Iraqi forces, depending on the location of the target.

DOBBS: Does this represent, General Grange, again in your best analysis, a change in the approach of the United States and the Iraqi government in dealing with insurgents, particularly the followers of Muqtada al Sadr?

GRANGE: Well, I think it's time that they put it to an end. You know, Fallujah, Najaf, Kufa, they can't become these separate enclaves of resentment to the government. And so I think this is an example where the government has to get tough, the people understand toughness in this part of the world, and it's probably the only course of action for the longevity of Iraq to do this right now.

DOBBS: General David Grange, thank you. And as would be normally the case, we would be reporting on the casualties in this engagement, but this engagement under way, and we do not have information on casualties in this battle as of yet.

Still ahead here tonight, immigrant rights groups demanding California Governor Arnold Schwarzenegger give driver's licenses to illegal aliens. Tonight, we report on the growing controversy in our "Broken Borders" segment. And Jeanne Butterfield, of the American Immigration Lawyers Association says new deportation rules are unfair to illegal aliens. She's our guest.

And outrage over a story we reported to you last night on a new reality show that helps illegal aliens win green cards. We'll tell you what some are doing to try to pull off that feat, "Gana la Verde." And to take the show off the air now.

Then, New Jersey Governor James McGreevey has resigned from office unexpectedly. He says he's been living a lie. We'll have reaction to the shocking announcement, the political fallout, the cultural impact. Those stories and much more still ahead here tonight.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Here now for more news, debate, and opinion, Lou Dobbs.

DOBBS: Immigrants rights groups, tonight and legal organizations, are protesting the Spanish language reality TV show "Gala la Verde," or "Win the Green." As we reported here exclusively last night, contestants on that game show are illegal aliens competing for access to an immigration lawyer, in the hopes that they can gain legal residency.

Seven different organizations have sent a joint letter demanding to Burbank based, KRCA TV, demanding that the station pull the show off the air. In a strongly worded letter, the group claims the show offers illegal aliens false promises and takes advantages of their fears. The letter also says, every day that the show is on the air demonstrates the station's contempt for immigrants.

California lawmakers are now challenging governor Schwarzenegger to approve state driver's licenses for illegal aliens. That bill, supporters says, people who come to this country illegally deserve the right to drive, so they can earn a living. Governor Schwarzenegger says, his first obligation is to ensure our national security is not compromised.

Casey Wian, reports from Los Angeles.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT, (voice-over): Supporters of driver's licenses for illegal aliens are turning up the heat on California Governor Arnold Schwarzenegger. They're marching on the state capital, demanding that the governor make good on a deal he made with Latino law makers last year.

GIL CREDILLO, CALIF. STATE SENATOR: We have a bill that strengthens national security, strengthens highway and community safety, and promotes citizenship. Now's the time for him to do this, and do so in a non-discriminatory way.

WIAN: State Senator Gil Cedillo, who told Spanish language radio, he'll fight for illegal alien driver's licenses until he dies, is the main force behind the proposed law. Schwarzenegger repealed one verse after his recall election last year, but promised to reconsidering if law makers came up with a version that addressed homeland security concerns. Cedillo's bill would allow Mexican metricala consular ID cards, to be used as proof of identity for illegal aliens applying for driver's licenses.

Schwarzenegger, says that's not good enough, because the FBI says half of those are phony.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: I want them to have driver's licenses. I want to have people be able to drive legally, but under the circumstances the way it's right now, they would not have the same driver's license as everyone else in California. I will not endorse that.

WIAN: One idea being considered is an identifying mark on driver's licenses, granted to illegal aliens. But illegal alien advocates contend, that would be discriminatory. Activists who favor strict immigration law enforcement want the governor to reject any deal.

RON PRINCE, SAVE OUR STATE: I want to see him to say, no, I'm sorry, illegals cannot be trusted and we're not going to give licenses to illegals period. And when he says, well, we're going to try to make a deal. We're going to try to do this, we're going to try to do that, it doesn't add up right.

WIAN: Another number that doesn't add up, 70 percent of the California voters who elected Schwarzenegger, say they're opposed to driver's licenses for illegal aliens.

(END VIDEOTAPE)

WIAN: The deadline for a deal is August 31st when the state legislature adjourns for the year. Meanwhile, the governor's office says a press release issued by the state Senator Cedillo claiming a deal is near, is not true. Cedillo's representatives did not return our calls -- Lou.

DOBBS: Casey Wian, thank you for updating us.

That's the subject also of our poll tonight. The question, do you believe illegal aliens should be given state driver's licenses. Cast your vote at cnn.com/lou. We'll have the results for you coming up here, later.

As we reported, the Department of Homeland Security, this week announced new plans to expedite the deportation of some illegal aliens in this country. That plans applies to only aliens caught within 100 miles of the border, within 14 days of their arrival. Mexican and Canadian illegal aliens are exempt from the new plan. By the way, those Mexican illegal aliens make up the vast majority of illegal aliens captured by U.S. Authorities.

My next guest, however, says that the new orders will impact them and all illegal aliens unfairly. Jeanne Butterfield is executive director of the American Immigration Lawyers Association, joining us tonight from Washington.

Jeanne, good to see you again.

JEANNE BUTTERFIELD, EXEC. DIR., AMERICAN IMMIGRATION LAWYERS ASSOCIATION: Good to see you, Lou.

DOBBS: The idea that is this is unfair to illegal aliens, why?

BUTTERFIELD: Well, I think, first and foremost, the measures that were announced this week are new band-aids. We all know the system is broken. We all know our borders need to be under control. We don't need new band-aids, we need a cure. And I think that the best way to control our borders is to enact real immigration reform. It's to reform our system of legal entry.

DOBBS: Reform it -- now, reform can mean a lot of things to a lot of different people. In my mind, for example, when you say reform our border security, that means to enhance our border security, to make sure we control the number of people that cross our borders. That we make a decision as a government, and a people and democracy, about who will be granted citizenship.

Is that what you mean?

BUTTERFIELD: Exactly. We're talking about border security and we're talking about regularizing and legalizing the flow. We have people trying to come into our country, who want to come here to work and to contribute. We have jobs here that need those workers. We need to make it possible for people to come here legally to fill a needed niche in our economy, not to sneak across illegally. That would take the huge haystack, that's presently trying to coming across the border illegally, and make it legal. It reduces the size of the haystack, and then it lets us focus on real security measures.

DOBBS: But Jeanne, it sounds to me like they way you're saying to end the issue with illegal aliens is to say the border is open, come on over, we've got a job.

BUTTERFIELD: Not at all, Lou. I think we're talking regulation and control, numerical limits. We're talking about what the president talked about back in January, when he called for reforming our laws to provide some work visas. That's what we need, in part. And then let me talk about the security issues, if I may for a moment.

DOBBS: Sure. Sure. But before you do that, Jeanne, if I may ask this question. If we're going to have that kind of control over the flow of immigrants, they wouldn't be illegal aliens, they would be immigrants at that point. They would have to be going through checkpoints and ports of entry, not crossing the Rio Grande illegally at night, not breaking across the Arizona desert.

How do you stop that, by your plan?

BUTTERFIELD: Exactly. I mean, first, Lou, you take the pressure off that border flow, which right now is illegal, by providing some legal means for many of those people to come, within limits, within controls, within screening, within presenting people at ports of entry, and allow them to come in knowing who they are, giving them permission.

That increases our security, and it reduces the pressure on the border. And then, secondly, let's take that reduced haystack, those who may still try to come illegally, and let's apply really security measures that really have some chance of making us safe. We're talking about here, in part, being more effective at a North American security perimeter. We need to make sure the bad guys don't get on the airplanes and get into Canada and Mexico.

DOBBS: Whoa, whoa, Jeanne, that's very nice. That's very nice. But we can't even stop them at our own borders. Now to take on the additional mantle of taking responsibility for Canada's security and Mexico, seems to be a bit of a strain, if I may say.

BUTTERFIELD: I'm talking cooperation, Lou. Because we have to see our borders as the last line of defense, not the first line. We need to push that perimeter out. We need to cooperate with pre-flight clearance and pre-inspection. We need to know who's on those airplanes and have the confidence that Canada and Mexico...

DOBBS: But these -- but the illegal aliens are crossing the Mexican border, and more recently suspected terrorists who have crossed the Mexican border are not coming to the United States in aircraft. They're crossing the border at the Rio Grande, and across the borders of California, and Arizona, and New Mexico and Texas.

BUTTERFIELD: Exactly. Exactly. But what I'm saying, Lou, is our borders are our last line of defense. Lets make sure that we work with Canada and Mexico, to make sure that they're doing the proper screening, so that bad guys don't even get there, let alone get to the Rio Grande.

DOBBS: How about this, would you endorse this idea?

Because improvised people in Mexico, Central and South America trying to cross our borders, trying to find work illegally, crossing our borders illegally, finding work illegally, would you endorse a plan -- in which we punished, actually enforced immigration laws, and labor laws and employment laws in this country for those who would hire illegal aliens, illegally?

BUTTERFIELD: I think first we need real reform. We need to take that flow, we need to sort it out and make sure that people are given an opportunity to come legally. Then we can talk about enforcing our law. And yes, those who don't...

DOBBS: How many people do you think should be allowed into this country every year?

BUTTERFIELD: Well that's a debate I think many wiser than myself are having and net to have. We need to assess our labor market needs. We need to assess what kind of work shortage...

DOBBS: See, I have a little trouble with that one. I really think we ought to talk about our national interests, not the interests of employers, not the interests of corporate America or others who would hire illegal aliens.

We ought to be talking about our national interest and those people aren't any wiser than you and me, Jeanne, so we're going to have you back and we're going to take that up next time.

Jeanne Butterfield, we thank you for being with us.

BUTTERFIELD: Thank you, Lou.

DOBBS: Let's take a look now at some of your thoughts on this issue.

D. Corbin in Clarksville, Tennessee said, "Lou, we have no problem with our federal immigration laws. The only problem is, the laws are not enforced. All the greedy businesses in this country cheat our government and its citizens out of billions and billions of dollars a year by hiring these illegal aliens."

J. Schenkel in Marietta, Ohio, "Border patrol with its hands tied; a billion dollars for hospitals to treat illegal aliens; I.D. cards for illegals to work. Could there be a link between these developments and the fact that the majority of battleground states in the upcoming election have the highest Latino population?

Jerry Skott of Menomonee Falls, Wisconsin, -- and if I messed that up, I apologize to all of you there -- "Giving illegal immigrants free hospitalization while our jobless American citizens go without and having the rest of us pay for it is simply insane. I had to check my remote and make sure I was not watching the Comedy Channel."

And Bill Schmidt of Los Angeles, "Why do you only share emails on your show from people who support your views? Are you afraid to let viewers hear opposing opinions? I really find your anti-immigrant rants sickening. Sometimes I don't even think you believe what you are saying."

Well, Bill, if I do rant, it is against those who break U.S. immigration laws by crossing our borders illegally. I am not anti- immigrant. I am anti-illegal alien. And if I do rant, it is against idiotic immigration policies and the failure of our government to enforce our immigration laws.

And yes, Bill, I say what I mean, and I mean what I say.

We love hearing from you, all views, even those well, somewhat different than my own are welcome. Please send them to us at loudobbs@cnn.com.

Coming up next here: the bombshell announcement from New Jersey's Governor Jim McGreevey. He's resigning. That's just the beginning of today's stunning revelations. We'll have reaction, the political impact, the cultural significance.

And Senator Kerry calls for a more sensitive war on terror and sets off a war of words with Vice President Dick Cheney.

And the nuclear threat from Iran. Stanford Professor Larry Diamond says it is an imminent crisis. He's our guest.

(COMMERCIAL BREAK)

DOBBS: Vice President Dick Cheney today criticized Senator John Kerry for saying he would fight, quote, "A more sensitive war on terrorism." Senator Kerry, meanwhile, trying to keep the tension on the final stops of his two-week long cross-country tour.

John King reports from California.

(BEGIN VIDEO CLIP)

JOHN KING, CNN CORRESPONDENT (voice-over): California is the biggest prize in presidential politics. At the moment, things here look good for John Kerry. And where you're up by more than 10 points, strategy gets pretty simple: play to your strengths.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL NOMINEE: We believe that a stronger America is in fact, built on a strong middle class.

KING: But the other side has other ideas, believing Senator Kerry created an opening by promising to wage a more sensitive war on terror.

DICK CHENEY, VICE PRESIDENT, UNITED STATES OF AMERICA: Those who threaten us and kill innocents around the world do not need to be treated more sensitively. They need to be destroyed.

KING: Senator Kerry made no mention of the attack in his economics speech and aides said he had no intention of personally responding. But when pressed after the speech, he took issue with the Vice President's tone, not his criticism.

KERRY: You know, it's sad that they can only be negative. They have nothing to say about the future vision of America. I think Americans want a positive vision for the future.

KING: In the speech at issue a week ago, Senator Kerry vowed to destroy terrorist networks and aides say by promising to be more sensitive, he simply meant more diplomatic with other countries, much as President Bush used the term six weeks after taking office.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Precisely because America is powerful, we must be sensitive about expressing our power and influence.

KING: The Bush campaign attacks are designed to protect a critical campaign edge: a 13-point advantage over Senator Kerry when voters are asked, "Who would better handle terrorism?"

Another Bush-Cheney strategy is daily questions about Senator Kerry's vote in favor of the Iraq war. That is more risky. It was Mr. Bush who launched the war and nearly half of Americans now think it was a mistake to send troops to Iraq.

But just among Democrats, 74 percent called the war a mistake. And the White House thinks the more Senator Kerry has to explain his vote, the more anti-war Democrats might become disillusioned with his candidacy.

Senior Kerry advisors concede the Bush-Cheney campaign has had some success in raising questions, if not doubts, about Senator Kerry's views on Iraq and his broader approach to the war on terrorism. These Kerry aides attribute those attacks to a worried Bush White House, but concede they need to do a better job in answering them.

John King, CNN, Carson, California.

(END VIDEO CLIP)

DOBBS: California's Supreme Court today voided 4,000 same-sex marriages that were granted in San Francisco earlier this year. The high court ruled San Francisco's mayor overstepped his authority when he ordered city officials to issue marriage licenses to same-sex couples.

Couples from across the country traveled to San Francisco and some waited for hours to be married. Mayor Gavin Newsom today said he will respect the court's judgment.

Returning now to our top story, New Jersey's Governor James McGreevey today resigned from office; announced he's gay. McGreevey said he had an extramarital affair with another man that could interfere with his ability to lead.

(BEGIN VIDEO CLIP)

MCGREEVEY: I realize the fact of this affair and my own sexuality if kept secret, leaves me, and most importantly the governor's office vulnerable to rumors, false allegations and threats of disclosure.

So I am removing these threats by telling you directly about my sexuality.

(END VIDEO CLIP)

DOBBS: McGreevey is a Democrat who has said he's opposed to gay marriage.

Joining me now, for more on the political and the cultural impact of this story: Karen Tumulty, National Political Correspondent for "Time Magazine"; Carlos Watson, Political Analyst for CNN.

Let me begin, if I may with you, Karen. This was a bombshell announcement by any standard. Did you have any inkling that this was coming?

KAREN TUMULTY, NATIONAL POLITICAL CORRESPONDENT, "TIME MAGAZINE": Well, you know it was interesting because when word started circulating mid-afternoon that there was a resignation in the offing in New Jersey, I think most people thought that it was likely to be as a result of any number of sort of, garden variety political corruption financial scandals that really had been circulating around the McGreevey administration, almost from the moment he took office in 2002.

DOBBS: The fact that he announced today, with his wife at his side, that he is gay: does it follow politically that he had to resign?

TUMULTY: Oh absolutely not. And I think we are going to know a lot more about this story in the next couple of news cycles.

Because, also, as these reports began to circulate, there were also reports by some local news announcements, that, in fact, there was a sexual harassment lawsuit in the offing. Again, this was just reports and there are now all sorts of rumors swirling around Washington.

So, I think this is going to turn out to be a much more complicated story even than it already appears.

DOBBS: Carlos, is this the end, in your judgment, of McGreevey's political career?

CARLOS WATSON, POLITICAL ANALYST, CNN: For a career that really took flight, he ultimately beat his opponent by 15 points several years ago to win the governorship, it probably is.

For John Kerry, though, New Jersey's still probably a good state. The most recent polls show John Kerry up by 13, and in one case, 20 points over George Bush.

WATSON: So, McGreevey's clearly hurt but brother Democrat that's not clear that will have a strong, immediate ripple effect.

DOBBS: There's much about this, obviously, that is not clear as this is a developing, breaking story. But, McGreevey, in announcing that he is gay, and stepping down, leading a life of deceit, of lies, at this point is there any suspicion, any likelihood, any expectation that gay rights groups are going to step forward to support him, to in some way provide some sort of support for the governor even as he's resigning? Carlos?

WATSON: You know, you've already heard at least some comments of people saying that coming out is a very sensitive, very difficult process. And so there certainly will be some of that warmth, some of that sympathy probably. It's unclear, though, how much people will actually ultimately champion his cause.

As Karen said before, his poll numbers have plummeted since August when a couple of his major aides were indicted over corruption scandals.

DOBBS: Karen, the president of the New Jersey Senate is, of course, a Democrat, would be stepping in after November 15th. What is your suspicion about how effective that is in announcing a date of November 15th. Will that, in fact, be left up to the governor's judgment given all that surrounds this controversial announcement today?

TUMULTY: Well, he is likely to come under a lot of criticism for pushing the date back for an obviously political move.

DOBBS: Right.

TUMULTY: By pushing it past September 15th, he avoids a special election. But New Jersey is a very, very Democratic state. It's one of the bluest of the blue states. The president of the State Senate, Richard Cody, is someone who's been in the legislature since the 1970s.

So, I think there is going to be some criticism but I'm not sure that, you know, it's going to be enough to derail what would essentially keep the State House in Democratic hands.

DOBBS: Karen Tumulty, Carlos Watson, we thank you both.

WATSON: Good to see you.

TUMULTY: Thank you.

DOBBS: Coming up next, the growing nuclear threat from Iran. Stanford professor Larry Diamond will be here. He says Iran could have nuclear weapons very soon and he says Iran poses an imminent threat.

And foreign money influencing American policy; our special report: The Best Government Money Can Buy. We'll tell you who's buying. Next.

(COMMERCIAL BREAK)

DOBBS: We reported to you here last night, the growing Iranian missile threat to Israel and U.S. bases in the Persian Gulf. As we reported, Iran has successfully test fired a new generation of ballistic missile, with a range of about 800 miles.

Today, without referring directly to the Iranian missile test, Defense Secretary Donald Rumsfeld expressed his concern about Iran during a visit in Azerbaijan.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, U.S. DEFENSE SECRETARY: One of the greatest concerns that the world faces is the nexus between a terrorist state that has weapons of mass destruction and terrorist networks.

(END VIDEO CLIP)

DOBBS: My next guest, Larry Diamond, says Iran is trying to develop nuclear weapons as fast as possible and he says Iran could have a nuclear bomb within five years. He's a Senior Fellow at the Hoover Institution, and he joins us tonight from Stanford University. Professor Diamond, good to have you with us.

LARRY DIAMOND, SENIOR FELLOW, HOOVER INSTITUTION: Nice to be back, Lou.

DOBBS: How imminent do you think the threat is from Iran?

DIAMOND: I'm not a nuclear expert, but people who are following this closely think that Iran is moving at a pace now that might enable it to acquire a nuclear weapon within two to three years.

DOBBS: And given that, how significant is the development of a new generation of missiles that have a range to strike Israel, to strike U.S. bases in the region?

DIAMOND: Well, it's a very, very deep concern, particularly to the state of Israel. But I'll tell you what I worry most about: is not Iran delivering a nuclear weapon via a missile, because then it's going to have a home address and lead to massive retaliation on Tehran.

What I worry about is the Iranian ayatollahs transferring a nuclear device to Al Qaeda or some other terrorist group so that it can be used to wipe out a large section of our capital or downtown Manhattan or some other major city. This would be a catastrophe that would dwarf September 11th.

DOBBS: So what does President Bush, his administration, do about it right now?

DIAMOND: Well, what we're trying to do, the Bush administration, the United States government, is to work with our allies, most of all the three European leaders, on this issue -- Britain, France and Germany -- to really get the Iranians to abide by the stricter protocols of the non-proliferation treaty, and to mobilize the International Atomic Energy Agency to refer this to the U.N. Security Council if Iran doesn't cooperate.

And I think that's the first step. But it can only be the first step. Iran has to know that we are serious about this issue and that it will face enormous negative consequences if it moves forward.

DOBBS: Can we bring about those negative consequences? Should we -- and I'm referring to the world community. Should we decide to do so, are there enough resources left?

Because the Germans and the French have made it pretty clear they're not going to be working with us. The United States has extraordinarily strained resources and manpower in Iraq.

DIAMOND: I think initially, Lou, we're not talking about military force, certainly not military invasion. Although we keep our options in terms of a preemptive strike open, they're not likely to be effective in this issue.

DOBBS: Well, what would be effective, because economic sanctions have not been, as the Bush administration has acknowledged.

DIAMOND: I think we've got two options here: one is to get the Europeans, Russia, China, and Japan to join with the United States in cutting off all nuclear technology to Iran if they don't cooperate; nothing at all.

DOBBS: Larry, as you know, the Russians have been supportive of Iran's search and development of nuclear capability.

DIAMOND: Of course they have, and they need to understand - and China, Japan, all of these actors need to understand that this is now moving to the top of the American diplomatic agenda.

This is the most important priority for the United States, and we will judge our entire bilateral relationship with them on the basis of how responsible they are in dealing with Iran.

DOBBS: Larry Diamond, we thank you for being with us.

DIAMOND: Thank you, Lou.

DOBBS: A reminder now to vote in our poll tonight. The question: do you believe illegal aliens should be given state driver's licenses. Please cast your vote at cnn.com/lou. We'll have the results for you later here in the broadcast.

Coming right up: our series of special reports this week. We're focusing on The Best Government Money Can Buy. Tonight we look at who else is trying to influence U.S. policy besides American interest groups. Details when we continue in just a moment.

(COMMERCIAL BREAK)

DOBBS: We've been reporting to you this week on the tremendous amount of money and effort that lobbyists are expending to win the attention and favor of lawmakers.

Americans spend hundreds of millions of dollars to win influence in Washington, but foreigners are also going to great lengths to influence American policy, and they're doing so with some considerable success. Lisa Sylvester reports from Washington.

(BEGIN VIDEO CLIP)

LISA SYLVESTER, CNN CORRESPONDENT: Johnny Chung, a Taiwanese- American, was a familiar face during the Clinton years. He pled guilty for giving illegal campaign contributions, including $8,000 in 1996 to Senator Kerry.

Kerry returned Chung's donations. Later it was revealed that some of the money came from foreign nationals. Under U.S. campaign finance laws, only U.S. citizens and permanent residents can contribute to political campaigns

But special-interest groups representing foreign interests still try to influence U.S. policy by hiring an army of lobbyists.

STEVE WEISS, CENTER FOR RESPONSIVE POLITICS: The United States is the world's last super-power, and what we do legislatively impacts the world greatly.

That's going to bring a lot of money to this country and a lot of lobbyists as well.

SYLVESTER: Groups advocating on behalf of foreign interests spent $157 million in the first half of 2003, according to a detailed analysis of Justice Department records done by "The National Journal."

Saudi Arabia has been seeking to improve its image since 9/11 with a more than $20 million image face lift. Libya is eager to get into the United States' good graces. Years after the 1988 Lockerbie bombing, it just signed a million dollar contract with a Washington firm. And countries like India are hoping to expand trade even further with the United States. According to Senate records, India's National Association of Software and Service Companies spent $200,000 on lobbying in 2003.

Congressional travel records show the Confederation of Indian Industry sponsored several fact-finding trips to India; including one Representative Joseph Crowley went on earlier this year.

Both Indian groups declined an interview request. Foreign lobbying firms like to keep a low profile quietly influencing policy.

KEVIN MCCAULEY, O'DWYER'S P.R. DAILY: I don't think Americans are aware of that. If they were aware of it, they would be angry about it. I think the more exposure there is on foreign influence in D.C., maybe that would generate interest.

SYLVESTER: Groups representing foreign governments have to register with the Justice Department Office of Foreign Agents Registration Act. But critics say the government does not go out of its way to make the documents accessible to the public.

The Center for Public Integrity sued the government to get a copy of the foreign registry to post on its Web site. What was told:

BOB WILLIAMS, CENTER FOR PUBLIC INTEGRITY: They basically told us was, "We cannot make a copy because this system is so old and so decrepit that we will destroy it literally by making a copy," which is pretty novel argument. You're getting close to the "dog ate my homework" argument.

(END VIDEOTAPE)

SYLVESTER: The $157 million spent on behalf of foreign groups in the first half of 2003 does not include lobbying done by multinational corporations and large retailers like Wal-Mart. These corporate interests also spend tens of millions of dollars pushing their agenda, including the expansion of foreign trade. Lou?

DOBBS: And in 1996, Lisa, as you know, 10,000 lobbyists registered in Washington. Now, eight years later: 25,000. Lisa Sylvester, thank you very much.

Tomorrow on our special report here: The Best Government Money Can Buy, we'll tell you about hundreds of millions of dollars being funneled into political campaigns that are largely unregulated.

And that's after we reformed campaign finance. We'll have that report for you tomorrow evening.

Tonight's thought is on special interests. "The government of the United States at present is a foster child of the special interests. It is not allowed to have a voice of its own. It is told at every move, 'don't do that, you will interfere with our prosperity.' And when we ask: 'where is our prosperity lodged?' a certain group of gentlemen say, 'with us.'" Those, the words of President Woodrow Wilson.

Coming up next: hear the results of our poll tonight and a preview of what we have ahead tomorrow. But first a reminder to check out our Web site with a complete list of companies we've confirmed to be exporting jobs to cheap foreign labor markets; exporting America, cnn.com/lou.

(COMMERCIAL BREAK)

A bad day on Wall Street. Turning now to the results of tonight's poll: 90 percent of you say illegal aliens should not be given state driver's licenses.

We thank you for being with us tonight. Please join us tomorrow. Three of the country's leading journalists will be here to talk about politics, the election, the economy, the war in Iraq, all of the biggest stories of the week.

Also tomorrow, our special weekly feature: Heroes, a young Marine injured in Iraq who is dedicated to helping other soldiers as they return from war.

Please be with us. For all of us here, good night from New York.

"ANDERSON COOPER 360" is coming up next.

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