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LOU DOBBS TONIGHT
Missile Threat; War in Iraq; Genocide on Tape; Michael Jackson Trial; Gutierrez in China
Aired June 3, 2005 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KITTY PILGRIM, CNN ANCHOR: Good evening, everybody. Tonight, genocide on tape. Never-before-seen pictures of the worst massacre in Europe since World War II. Thousands slaughtered in cold blood.
Student numbers soar to their highest level ever. Many of our high schools and elementary schools are simply overwhelmed.
And one of this country's most bizarre trials ever nears a climax. The Michael Jackson jury finally begins to consider its verdict.
Our top story tonight is the escalating missile threat from three of this country's most dangerous enemies. North Korea, Iran and Syria are all rapidly developing new technology for their ballistic missiles. That technology could make it nearly impossible for U.S. satellites to find them.
Barbara Starr reports.
BARBARA STARR, CNN PENTAGON CORRESPONDENT: North Korea's firing of a Russian-designed SS-21 surface-to-surface missile like this last month was likely its first successful test of a missile totally reliant on solid fuel, U.S. officials tell CNN.
JOHN MCLAUGHLIN, CNN NATIONAL SECURITY ADVISER: If the North Koreans have mastered solid fuel rockets, that would be an important development.
STARR: North Korea's current liquid-fueled missiles use a combination of gasoline and kerosene. Satellites can watch for days as they are set up on launch pads with fuel trucks and hoses.
With new solid-fueled missiles, there are no trucks and hoses. The solid fuel has a consistency like cookie dough. The fuel can stay inside the missile for years. U.S. satellites have much less ability to watch for a launch.
MCLAUGHLIN: They're much harder to detect. They can be moved more readily, and they're more portable, of course. And they can be launched with much less notice and less time than liquid-fueled rockets.
STARR: Another urgent U.S. intelligence concern? Syria's missile program. U.S. intelligence officials confirm Syria took the highly unusual step of test-firing three Scud missiles last week. The test of so many missiles at once is seen as defiance of U.S. criticism of Syria's role in Lebanon and its support of the Iraq insurgency. And U.S. intelligence believes North Korea aided the Syrian test. One official points out one of the missiles was a North Korean design.
(on camera): There is more. Iran now says it's adding solid fuel to one of its missiles that is capable of hitting Israel. All part of the concern that a new round of missile threats is emerging.
Barbara Starr, CNN, the Pentagon.
PILGRIM: In Iraq, the U.S. military has sent large numbers of additional troops to the border with Syria. Those troops are trying to stop insurgents and foreign terrorists from slipping into Iraq from Syria. Meanwhile, U.S. and Iraqi troops elsewhere in Iraq are also conducting offensive operations.
Jennifer Eccelston reports from Baghdad.
JENNIFER ECCLESTON, CNN CORRESPONDENT: Two days of violence demonstrated the insurgents' ability to keep up attacks despite a week-old security operation in Baghdad called Operation Lightning, billed as the most aggressive, and according to a senior U.S. military official, the most successful operation by Iraq's new government and its military.
Now, according to Iraqi officials, the checkpoints and raids brought all roads in and out of the capital under their control. The action meant to expose the insurgents' hideouts and capture those involved in wreaking havoc across this country.
Now, the interior ministry saying that the security in Baghdad has improved 60 percent since the beginning of the offensive. And a senior military official tells CNN that Operation Lightning's number one objective is to stem the tide of vehicle-borne improvised explosives, or VBIEDs, and said Lightning is making headway there and that it's also a small-scale operation, a series of small scale operations that will go on for a period of time, one that is sustained and not a single show of force.
Still, the violence continues in the capital city. A car bomb exploded as a U.S. military convoy past by in western Baghdad, missing the convoy but wounding four Iraqis.
And near Balad, north of Baghdad, late yesterday, a suicide bomber attacked a residence, killing 10 Iraqis and wounding 12 others. And we're beginning to see a clearer picture of the frequency of such attacks in this country.
According to a senior military, U.S. military source, the weekly average hovers around 60 attacks. And from the end of April to the end of May, there were 143 vehicle-borne explosives, IEDs and suicide bombings.
Jennifer Eccelston, CNN, Baghdad.
PILGRIM: The first video tonight of the worst massacre in Europe since World War II. The video shows six Bosnian Muslims being murdered in cold blood by Serb paramilitaries called The Scorpions. Now, the video was shown at the war crimes trial of former Serb leader Slobodan Milosevic. He's accused of a direct link with the massacre of more than 7,000 men and boys in Srebrenica 10 years ago. The United Nations has declared Srebrenica a safe haven.
Lindsey Hilsum of ITN reports. And we do warn you, her report does contain graphic images.
LINDSEY HILSUM, REPORTER, ITN (voice-over): The video shows six young Muslim men in the back of a military truck. They're hauled out by member of The Sorpions, the paramilitary unit. The Serbs shout insults, and it seems the Muslims are about to be shot.
These horrific pictures were aired on Serbian television. The pictures were taken by a member of The Scorpions. Its existence has being rumored for years, but never before has it been shown in public.
A shot is fired over the heads of the Muslim victims. Faces of the perpetrators can be clearly seen. The paramilitaries where a black uniform with a red beret. Dark green and camouflage were the uniforms of the Yugoslavia army, the JNA, which was under President Milosevic's command.
The young men are led away to a clearing. They were amongst up to 7,000 who lost their lives at Srebrenica. We won't show the men being killed, but they did show it on Serb TV.
A poll last month suggested that half the Serbian population still don't believe there ever was a massacre at Srebrenica 10 years ago. Maybe this evidence that will change some minds.
Two men are made to carry the bodies of their dead comrades. Even Serb TV found it too horrific to show the video of their torture and murder.
President Milosevic conducts his own defense, denying responsibility, often denying that atrocities ever happened in Bosnia. Eight members of The Scorpions were arrested in Belgrade. But the direct link to the former president still needs to be proved.
U.N. troops failed to prevent the massacre. The Bosnians who survived want justice for those who died, and they want ordinary Serbs to acknowledge what happened at Srebrenica.
PILGRIM: That was Lindsey Hilsum reporting.
Well, the two Bosnian Serb leaders directly responsible for ordering the massacre are still fugitives from justice. Radovan Karadzic and Radko Mladic have evaded capture despite a widespread NATO manhunt. Officials believe they are in the Serb area of Bosnia, or in Serbia itself.
The Dutch troops who were in Srebrenica say they felt powerless to stop the Serbs. NATO planes were never order to help the soldiers.
(BEGIN VIDEO CLIP)
JAAP DE HOOP SCHEFFER, NATO SECRETARY-GENERAL: They did what they could do, but -- there's an important "but" -- they were not supported, and they should have been supported by air strikes and the bombing of the Serb troops. It would have been possible.
It did not happen, for political reasons it did not happen. That's the shame of Srebrenica.
(END VIDEO CLIP)
PILGRIM: The NATO secretary-general also offered logistics help for the African Union troops in the Darfur region of Sudan. Those troops are protecting refugees from Arab militias accused of rape and murder.
The U.S. deputy secretary of state, Robert Zoellick, is visiting Darfur. Zoellick called on the Sudanese government to disarm the militias. About 3,000 African troops are -- African Union troops are in Darfur, and the region is about twice the size of Colorado. The African Union plans to increase the number of troops to 7,000.
Coming up, a population boom in our nation's schools. We'll tell you why our schools are becoming more and more crowded and what it means for our children.
And modern-day slavery. Millions of people are sold into slavery every year. And tonight, one former slave's shocking story of survival.
Stay with us.
PILGRIM: A warning tonight from the makers of Tylenol. Johnson & Johnson is recalling its Children's Tylenol Meltaways and Soft Chews. That's because of a possibly confusing packaging information.
Now, the recall was triggered by concerns that blister packs contain two pills. That would lead consumers to believe that two tablets contained 80 milligrams, when, in fact, each tablet contains 80 milligrams. The company says it has not received any reports of series adverse effects related to dosing. The United States is in the midst of a student population boom. Enrollment at our nation's schools is at an all-time high, in part because a surge of immigrants and illegal aliens.
Louise Schiavone has more on the student surge and the problem its creating.
CHILDREN: I pledge allegiance to the flag...
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): When classes begin at elementary schools and high schools across the nation, a record 49.5 million students report to their teachers.
JOHN SEAGER, POPULATION CONNECTION: One of the great challenges we have is that the weight of these enrollment changes often falls most heavily on communities that are least well-equipped to deal with it.
ROY BECK, NUMBERS USA: Except for these long-declining little towns in the prairies, there's really no good news in this at all. This is not a -- some kind a sport's contest in which ever having ever-higher numbers translates into a better quality of life.
SCHIAVONE: Unlike the last surge in education in 1970, when the baby boomers were in school, today's boom is profoundly influenced by immigration. And the issue of English proficiency is a particular challenge.
The most recent report shows almost 10 million students speak a foreign language at home. That's nearly a fifth of the total student population. Just under three million kids speak English with difficulty. That's up 124 percent since 1979.
GROVER WHITEHURST, INSTITUTE OF EDUCATION SCIENCES: There's just no question that it's a challenge for the states that are dealing with an influx of families with school-aged children who don't speak English and, in many cases, don't have adequate preparation for the demands of schooling.
SCHIAVONE: The West saw the sharpest rise in this group, with almost a third of all students in the region speaking a language think ooernr English at home.
SCHIAVONE: Kitty, at the end of the baby boom, the school-age population had dropped to about 40 million. Now it's steaming toward 50 million and expected to continue to increase until the year 2014 -- Kitty.
PILGRIM: Thanks very much, Louise Schiavone. Thanks, Louise.
Well, that brings us to the subject of tonight's poll. Have you been personally affected by overcrowding schools in your area? That's a yes or no vote. Cast your vote at LouDobbs.com. We'll bring you the results a little bit later in the broadcast.
Tense times over the Atlantic today when a Virgin Airways jet sent out a false hijack alert. Now, the jet was on its way to New York's Kennedy's Airport from London when it sent out an urgent code 7500 signal.
Fighter jets scrambled and diverted the plane to Halifax, Nova Scotia. The jet made an emergency landing at Halifax, and police went on board to investigate. None of the 273 passengers on board was hurt, and the plane took off soon after. It landed late this afternoon at Kennedy.
Virgin is still trying to figure out what set off the false alarm.
Up next, modern slavery. A shocking new report that shows millions of people continue to be sold into slavery. And among the most disturbing findings, many of them are children.
And later, a remarkable story of survival. A 21-year-old Marine severely wounded in Iraq is now planning the next phase of his life. Our hero of the week is just ahead.
PILGRIM: A new report tonight by the State Department reveals over 12 million people continue to be sold into slavery. More than half a million people are trafficked across international borders. Most are women, half are children, and many are forced into prostitution, others work against their will.
Andrea Koppel reports from the U.S. State Department.
ANDREA KOPPEL, CNN STATE DEPT. CORRESPONDENT (voice-over): For this teenager growing up in West Africa's Ivory Coast, the promise of studying in the United States and a part-time job convinced her in 1997 to leave her home and family. The reality?
"I felt look a slave," she says. "I felt like a complete prisoner."
For six years, Sarah -- we've changed her name to protect her privacy -- says she was forced to work around the clock at a domestic servant for a couple from the Ivory Coast. They had her passport, she couldn't leave.
"It was suffering," she says. "It was nightmares."
In return, Sarah says her parents got $50 a month, or just $1.61 for every day she worked.
CONDOLEEZZA RICE, SECRETARY OF STATE: Trafficking human beings is nothing less than a modern form of slavery. KOPPEL: For the fifth year in a row, the State Department rolled out its annual report on the buying and selling of mostly women and children around the world.
(on camera): The U.S. estimates that up to 800,000 people are trafficked across international borders every year. Millions more are trafficked domestically. The victims forced to work as servants, on farms, or in sweatshops.
(voice-over): But most trafficking involves sexual exploitation of women.
UNIDENTIFIED MALE: How old are you? Eight? Both 8-year-olds?
KOPPEL: As this undercover video show, little girls as young as 5 forced to work as prostitutes at this brothel in Cambodia, one of 14 countries singled out by the U.S. for not doing enough to end trafficking.
SHARON COHN, ATTORNEY, INTERNATIONAL JUSTICE MISSION: And they've got posters on the wall like your teenager might, sort of, a teen idol, while there are condoms on the floor.
KOPPEL: Sharon Cohn helped rescue dozens of victims in Cambodia and collected evidence used by Cambodian authorities to convict the brothel owners and other traffickers.
COHN: And that promotes a lot of conversation among criminals, among themselves, about what kind of crimes can you get away with in Cambodia? And if it turns out that selling children is not something you can get away with, they're just going to go do something else.
KOPPEL: In the last year alone, there have been 3,000 convictions in trafficking-related cases around the world. And also, there have been 39 countries that have beefed up their laws on trafficking as well. That is a big change over the last five to 10 years.
Now, as for Sarah, about two years ago, she finally summoned the courage to escape from her employers and is now living alone, basically, in the Washington area. She is working now for another employer that she says is paying her the salary that she deserves -- Kitty.
PILGRIM: Well, at least we have that to report. Thanks very much. Andrea Koppel.
Coming up, target Iraq. Worries over a new likely target for insurgents in Iraq.
Also ahead, the jury in the Michael Jackson trial has started deliberations, and we'll have a live report from the courthouse in California.
And how is the government's much-hyped war on corporate crime doing? We'll have a special report.
ANNOUNCER: News, debate and opinion continues. Sitting in for Lou Dobbs is Kitty Pilgrim.
PILGRIM: Seventy-nine U.S. troops were killed in Iraq last month, and hundreds of Iraqi civilians. Now, despite the grim figures, my next guest says the U.S. has the upper hand in the fight. But he says rebels could still pull off bold attacks this summer, and that could set back U.S. forces substantially.
Retired Marine Colonel and Defense Department consultant Gary Anderson joins me now from Washington.
And thanks for being with us, sir.
COL. GARY ANDERSON (RET.), DEFENSE DEPT. CONSULTANT: Good evening, Kitty.
PILGRIM: You know the summer's a particularly volatile time. Why do you think it may get bad this summer?
ANDERSON: The problem in Iraq during the summer is that it gets obviously very hot there. Very hot, and actually very humid for a desert country, because most of the populated areas are near rivers.
Air conditioning isn't a luxury there. It's really a necessity. And the electrical grids in the country, which I think are particularly vulnerable, are an enticing target for the -- for the insurgents. And I think the government of Iraq and the United States would be well advised to protect them as well as they can during this coming summer.
PILGRIM: What kind of attacks are you expecting?
ANDERSON: Well, there are a number of potential scenarios, but right now, the weapon of choice seems to be the suicide bomber. That makes it a little bit difficult for the -- for the insurgents, if in fact you really protect the key infrastructure of the power grid, the transformer stations, the power-generating plants, and so forth. It's hard for them to get inside of that perimeter if you defend it well.
So I don't think it's going to be a very hard thing to defend against, if in fact the government's aware of it and really makes an effort to understand that there is a threat there.
PILGRIM: Now, as an adviser to the Defense Department, you suggested a strategy. What is that strategy? You think it will be very effective.
ANDERSON: Well, I think, basically, from a perspective of the Iraqi government, which we're trying to become -- or trying to shore up and so forth, it's very important that they maintain credibility. And I think the report card this summer is going to be the ability to keep the air conditioning going, keep the electricity going. And the power grid is tied it so many other things that are tied to jobs, that if they can control that key infrastructure, I think they're going to go a long way to establishing the credibility they need as a government to survive.
PILGRIM: You know, we pulled up some statistics today, and they're really interesting. And the electricity output has diminished in the last year from 4.3 megawatts to 3.7 in 2005.
How much of a problem do you think -- that you say it's really all critical on that, isn't it?
ANDERSON: Well, the problems is, things -- in a lot of ways, things are getting better in Iraq. People are buying air- conditioners. They're buying things that -- televisions and things that eat electricity.
So even if you were increasing the electricity exponentially, there probably still would be enough to go around. So it's very important to increase that electricity as much as you possibly can.
PILGRIM: Ironically, the lifestyle is getting better, and that could cause a bit of a problem.
You know, we have some other statistics I would like to share with you, which I think are really interesting.
Telephone usage of 1.2 million, up to 3.3 million. That's a huge surge. And also Internet use went from 59,000 to 160,000. You don't really think about Internet usage when you see these dusty pictures of Iraq, but it's really coming up.
Life is getting better slowly, isn't it?
ANDERSON: I believe it is. And the problem is, with -- as things get better, the expectations go up, too.
ANDERSON: And if somebody comes in and tries to lower those expectations or take some of that away, the government is -- are the guys that are going to take the blame. It's really important for the government to help convince the population that it's really important for them to help the government keep that electricity flowing.
The Iraqis have got to understand that they've got a stake in this, too. They're not just innocent bystanders.
PILGRIM: Yes. You know, we -- we have some feedback on Operation Lightning, which is an Iraqi-driven security effort this summer. And Iraqi forces have gone from zero, a year ago, to about 50,000 now. It is absolutely critical for the Iraqi forces to be able to control the territory at this point.
How well do you think we're doing?
ANDERSON: Well, I haven't seen the actual -- the figures from what -- how the Iraqi forces performed. But the really key thing is that -- particularly in this type of operation -- if a door's got to be kicked down, it probably ought to be kicked down, and you ought to be able to see an Iraqi face, not an American face doing it. That doesn't do the government or us any good.
The more intrusive we are, our forces are, the more -- the more problems we build up with the population. So I think it's really good that the Iraqis are trying to get out there and take control of this thing. I -- I'm not going to tell you that they -- that they're there yet, but that's a big step forward, to get them in the lead, with us backing them up.
PILGRIM: All right. Thanks very much for being with us. Retired Marine Corps Colonel Gary Anderson -- thank you, sir.
Our quote of the day comes from the former anchor of the CBS Evening News, Dan Rather. In a candid interview with CNN's Larry King, Rather addressed the controversial story that CBS aired about President Bush's National Guard service and this is the quote.
Rather said, "Journalism is not a precise science. It's, on its best day, a crude art. We make mistakes. I make mistakes. With more than 50 years as a journalist, I've had at least the opportunity to blow more stories, make more mistakes than maybe anybody in television."
Well, after defending the story for 12 days, CBS News eventually admitted it could not vouch for the authenticity of the memos used in its report.
The bizarre trial that gripped Americans for months is nearing a conclusion. Jurors in the Michael Jackson molestation trial began deliberations today. A guilty verdict could put the pop star in jail more than 20 years.
Rusty Dornin is live from Santa Maria, California at the courthouse where the jury has gone home for the weekend -- Rusty.
RUSTY DORNIN, CNN CORRESPONDENT: Well, Kitty, after 3 1/2 month of testimony and more than 130 witnesses, it was really the last time that either side could give those arguments and try to sway the jury toward their point of view.
Now, defense attorney Thomas Mesereau gave his final plea in just under two hours. He has again and again hit upon the credibility of the accuser and his family. He did that, of course, again and again in his closing arguments today calling them con artists, actors and liars. He said that the accuser could not be believed.
Now, in this case of course, the last words are by the prosecution. And Ron Zonen talked about how it was unbelievable. And asked the jury to question how they could believe how a middle-aged man could sleep with a 13-year-old boy? And sometimes perhaps for even a year at a time and claim it was not sexual?
(BEGIN VIDEO CLIP) MICHAEL CARDOZA, LEGAL ANALYST: I think both sides could be right here, strangely enough. Because the prosecution may have proved to this jury that Michael Jackson is a pedophile. But did they prove this case beyond a reasonable doubt? And that's what the defense was trying to do, was to focus them on this case. And not look at the past acts of sexual misconduct.
(END VIDEO CLIP)
DORNIN: Now, the jury did deliberate for a little less than two hours. And as you said, they've gone home for the weekend. It turns out that Michael Jackson can also go home during the deliberations. The judge is giving him one hour to appear back in court for the verdict. And Neverland is about half hour from the courthouse.
So right now, his fate is in the jury's hands. And we'll have to wait and see what happens -- Kitty.
PILGRIM: And we will be watching. Thanks very much, Rusty Dornin.
Well, a new billboard welcoming drivers to New Jersey may have them thinking twice about doing business there. This billboard announces "Welcome to New Jersey. A horrible place to do business." And it continues, D.E.P. Nightmare State, which refers to the Department of Environmental Protection. And it finishes off, can Senator Corzine's office really do anything?
Well the billboard has little to do with Corzine, whose office declined to comment. It was put up by a developer who's angry with the D.E.P. About 23,000 drivers see the billboard each day as they cross the Delaware Memorial Bridge into New Jersey.
Up next, "Heroes," an incredible story of survival in Iraq. How one U.S. marine found the will to survive despite devastating wounds.
And new signs tonight that the war on corporate crime may not be succeeding. We'll have a special report.
PILGRIM: In "Heroes" tonight, our weekly salute to our men and women in uniform. The story of Marine Lance Corporal David Coleman. Well, just days after beginning an important mission in Iraq, he found himself fighting for his life. Doctors never thought he'd survive, but David Coleman proved them wrong.
Casey Wian reports.
CASEY WIAN, CNN CORRESPONDENT (voice-over): Lance Corporal David Coleman looked forward to going to war, but when the call came to go to Iraq this 21-year-old Marine was told his mission would be guarding the Jordanian border. LANCE CPL. DAVID COLEMAN, U.S. MARINE CORPS: Going it Iraq, watching the border seems pretty relaxed to what other Marines were doing. Going into Fallujah and Baghdad and Tikrit and just taking entire towns. And that was the fun stuff, but we got stuck with the boring duties. See we figured, we'll be all right.
WIAN: Being far from combat, Coleman never imagined his life would be on the line. Yet just ten days into the mission, an attack changed everything.
COLEMAN: You didn't hear no boom. I mean, you heard something click. You heard it click. But just wind everywhere. I mean, I didn't feel any pain, any fire just -- you know, wind.
WIAN: Coleman's Humvee had been hit by a roadside bomb.
COLEMAN: Every one tries to get up. And figure out what just happened. And I don't get up. I try, but I fall down. And it wasn't till later they realized both my legs were shattered. That I'd lost 70 percent of my lower right leg in the blast. And on the left leg, the bone had shattered and jaunted up through the skin. And it was actually poking a little hole through my uniform.
WIAN: As Coleman was medevac'd out, he faced a harsh reality.
COLEMAN: I thought I was going to die. Severely injured is an understatement. I mean will to live, I had no will to live. I'm like, this is it. I'm not coming back home. I'm going to die.
WIAN: It would be two months before Coleman would believe he was going to survive. It's taken 30 surgeries to reconstruct his legs.
COLEMAN: The blast took off, like, all of this. It was gone. There was nothing here. You could swipe your hand through it. And when I got to Bethesda, the doctors I put the muscle in which covered this whole part of it.
WIAN: Walking is slow, but Coleman is hopeful for a day he won't need crutches and grateful to be alive.
Casey Wian, CNN, reporting.
PILGRIM: Lance Corporal Coleman hopes to attend the University of Southern California film school when his rehabilitation ends. And we wish him all of the best.
Well, here's a reminder to vote in tonight's poll. And here is the question. "Have you been personally affected by over crowded schools in your area? Yes or no." Cast your vote at loudobbs.com. We'll bring you the results in just a few minutes.
A jury in Alabama's having a trouble reaching a verdict in the corporate crime trial of the former CEO of Healthsouth. And tonight, there are serious questions about the success of the governments fight against corporate crime. Christine Romans is here with that report now -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Well Kitty, earlier today this jury said it is deadlocked. The judge told these men and women to go back to work. And tonight, Richard Scrushy is very confident.
ROMANS: This former CEO of Healthsouth is accused of a $2.7 billion accounting fraud. Prosecutors say he cooked the books so he could get rich off the stock. Shareholders were outraged by his lavish spending. And prosecutors had boasted about they're strong case. But now, it's Scrushy who is boasting.
RICHARD SCRUSHY, FORMER HEALTHSOUTH CEO: We would like to get a verdict today or soon, and we believe we will have that. We think it will be a not guilty verdict. We'll have full acquittal on all the counts, because there is no evidence that says it should go any other way. So we anticipate that and expect it, and just pray that God will bless us with that real soon.
ROMANS: Fifteen former executives pleaded guilty and implicated their boss. But the man prosecutors say was driven by greed and love of power is portraying himself as a devout Christian. His defense team admits it wanted as many Christians on the jury as it could get, and Scrushy began hosting a religious TV show and joined a predominantly black church, whose pastor likened his trial to a modern-lay lynching.
His opponents say he's wrapping himself in the church as a PR move.
If this case falls apart, the first CEO to be charged under Sarbanes-Oxley reform rules will deliver the government's first Sarbanes-Oxley defeat.
J. BOYO PAGE, ESQ., PAGE PERRY: Again, another major setback. I think this has been a week of major setbacks for the government's efforts in prosecuting corporate crime.
ROMANS: A week that saw the government's first big prosecution, Arthur Andersen, overturned by the Supreme Court. Tyco, finally in the hands of a jury again after three years and two trials now. The SEC's top corporate crime cop is leaving after two-and-a-half years, and this first Sarbanes-Oxley prosecution, some say looks like it might be falling apart, Kitty.
PILGRIM: And remember all that tough talk? This is the second trial for Kozlowski, too.
ROMANS: It is the second trial for Kozlowski. Richard Scrushy, it looks as though this jury is having trouble reaching -- reaching a verdict on one of the charges, the conspiracy charge. There was a lot of tough talk about two-and-a-half, three years ago about the government prosecuting corporate crime, Kitty, and now a lot of the people who are watching these trial say, the government's having a really hard time.
PILGRIM: And now the juries have gone home for the weekend.
ROMANS: They have gone home for the weekend for Scrushy and the Tyco jury. That's the Swartz, Mark Swartz, the former CFO, and also Dennis Kozlowski, the former CEO. They'll be back to work next week.
PILGRIM: And we'll be watching. Thanks very much, Christine Romans.
ROMANS: We will.
PILGRIM: Coming up, he's trying his best to explain U.S. trade policy in China, but are the Chinese listening? We'll look at the tough sell facing our commerce secretary in Beijing.
Plus, do U.S. workers have the right stuff to compete in the 21st century and fight outsourcing? We'll talk to the author of a book who says it has to do with the right side of the brain. Author Daniel Pink will explain that.
PILGRIM: Job growth slowed considerably last month, raising new concerns about the health of our economy. The Labor Department says employers created only 78,000 non-farm jobs in May; that is the slowest rate in almost two years.
It's much weaker than April's growth of more than 270,000 jobs, and way below economists' forecasts.
Well, a continued labor market worry, manufacturing. Seven thousand factory jobs were lost last month, and in the meantime, the nation's unemployment rate dropped to an almost four-year low, 5.1 percent. Treasury Secretary John Snow says the number still shows the economy is on track.
(BEGIN VIDEO CLIP)
JOHN SNOW, TREASURY SECRETARY: I wouldn't put much weight on one month's numbers, but I will say, I think the trend line continues to be very good for jobs and very good for compensation, and good for growth.
(END VIDEO CLIP)
PILGRIM: The bond market appears to think differently. Yields on the 10-year note fell to a 14-month low today, and that suggests that bond traders fear an economic slowdown.
Well, fears of unemployment today on the other side of the world, in China. A vigorous debate over the flood of Chinese textiles into the United States since the quotas were lifted in January. Commerce Secretary Carlos Gutierrez went to a Beijing university. He expected to discuss broad ideas with the students; instead he found himself trying to defend the U.S. trade position. (BEGIN VIDEOTAPE)
PILGRIM (voice-over): The Tsinghua University students did not hold back in the question-and-answer session with the visiting U.S. commerce secretary. The overriding concern: The quotas imposed by the U.S. to stem the flood of cheap Chinese textiles that have decimated the U.S. textile industry.
UNIDENTIFIED FEMALE: It is a bad sign. It is a sign of trade war.
PILGRIM: Another economic student asked if the U.S. was ill- prepared for the onslaught of Chinese imports.
CUI WEN ZHI, TSINGHUA UNIVERSITY STUDENT: As I know, the U.S. government had been given 10 years' time to prepare for today's complete barrier abolishment. So but as I know also, and unfortunately, the U.S. government failed to do proper preparation.
PILGRIM: And then there was this.
UNIDENTIFIED MALE (through translator): If you were China's commerce minister, what would you do about China's workers?
CARLOS GUTIERREZ, U.S. COMMERCE SECRETARY: I would be -- I would be worried.
PILGRIM: American textile workers already have plenty to worry about. Thirty-five percent, 374,000 textile workers have lost their jobs in this country since 2001; 16,000 since January when the quotas were lifted. It's not hard to see why that business goes overseas. U.S. textile and apparel workers make between $8 and $13 an hour; the same jobs in China pay between 35 cents and 80 cents per hour.
Advocates for textile workers say the quotas are crucial.
AUGGIE TANTILLO, EXEC. DIRECTOR, AMTAC: A lot of people who are working today in textile factories will lose their jobs in very short order if the U.S. government doesn't take a tough stand with the Chinese on these textile quotas.
PILGRIM: Back in China, the commerce secretary did leave the university students with this lesson in trade relations.
GUTIERREZ: Sometimes China will do some things that the U.S. doesn't like, and sometimes the U.S. does things that China doesn't like, but if every time we're going to act like the relationship is going to collapse, then what kind of a future do we have?
PILGRIM: At the American Chamber of Commerce in Beijing, Secretary Gutierrez said we believe what we did on textiles was very much our right to do under the World Trade Organization agreements. Our Chinese partners don't agree. We'll have to sit down and look at the language that's negotiable. Well, our next guest says that to survive economically, the United States needs to rely less on left-brain, white-collar jobs. These include jobs in law, engineering, accounting, computing, which are rapidly moving overseas. Instead, he says Americans need to train for new jobs that involve more creative right-brain thinking, jobs which are harder to outsource.
Daniel Pink, the author of "A Whole New Mind," joins me now from Washington. And thanks for being here, Daniel. Intriguing concept. Is it scientifically based?
DANIEL PINK, AUTHOR, "A WHOLE NEW MIND": Sure. Well, I'm using the two sides of our brain as a metaphor for understanding the contours of our time. The left hemisphere of our brain is linear, logical, sequential, analytical, did very well on the SATs. The right hemisphere marches to a different drummer. It is artistic, empathic, big picture, about synthesis rather than analysis, and that metaphor can help us explain what's going on in the economy today.
In a sense, the scales are tilting. The abilities that used to get people ahead, those kind of logical, linear, SATs, spreadsheet, zero in on the right answer abilities are still necessary, but they are no longer sufficient, and the abilities that matter most are more characteristic of the right hemisphere -- artistry, empathy, inventiveness, and seeing the big picture. And those are the source of jobs that are going to make up the bulk of the U.S. economy over the next few decades, and it's already started to happen today.
PILGRIM: You say that the foreigners do the left-brain work cheaper, and so this country should focus on the right-brain work and do it better. But can you build an entire economy on right-brain work? Do you think so?
PINK: I think you can. And it's actually -- it's an intriguing question, because we have seen this movement before. This is a pattern in history as economies evolve.
And when we move from a manufacturing-center economy, to a services-centered economy, to an information-centered economy, there all -- all of this alarm about how we can't have an economy where everyone is just running around giving each other haircuts and in fact we did because people have a bottomless amount of ingenuity, and grit, and gumption, and capacity to surprise us.
So, I really do think that we can ever-more build an economy on these sorts of things. In fact already you have an America more Americans working in art, entertainment, and design than work as lawyers, accountants and auditors.
And lawyers and accountants, those are the sorts of left-brain high SAT jobs that our parents all told us to get.
PILGRIM: OK, our parents are wrong. You know, historically I am intrigued because in the 18th century, we had the agricultural society, mostly farmers. Then we moved to the industrial revolution and we had factory workers. Then we went into the information age and we had knowledge workers and now we'll go into, what you call the conceptual age and yet you also include things like, nursing and caregivers.
PINK: Sure, yes.
PILGRIM: Explain that a bit.
It's not all just filmmakers is it.
PINK: Not at all.
Not at all, it's really an economy of creators and empathizers.
Again, the key is that you have to be able to succeed today -- and a very important lesson for all of the kids who are graduating from college around this season -- you have to be able to do something that people overseas can't do cheaper, and that computers and software can't do faster.
And increasingly, if you're an accountant you face competition from a chartered accountant if India who makes $500 a month and from software like Turbotax.
But something like nursing, something like care-giving, something like counseling, those kind of things are very difficult to outsource or automate.
And the other thing is, they're increasingly in demand because despite all of these pressures, we have a very, very materially- prosperous society, deep into the middle-class.
We have more automobiles than we have licensed drivers. We have 10 million Americans who are doing meditation, 15 million Americans who are doing yoga. As people seek something more than a paycheck out of their work and out of their life.
PILGRIM: You make us sound so subjective.
You know what's interesting, Daniel, you say that outsourcing in the short-term -- outsourcing to Asia in the short-term is over-hyped.
Yet in the long-term you say it's under-hyped.
PINK: I think that's right, Kitty and there are a couple of reasons for that. Basically, today, any job -- the one watch word for everybody is the word routine.
Any job that is routine that is, can be reduced to a spec sheet, to a script, to a set of rules, that can be outsourced or automated.
And so today, outsourcing has had a relatively small, short-term effect on the economy. But over time, as, you know, India rises as a power, as the cost of communication with Asia essentially drops to zero, you're going to have very, very large numbers of people who are able to do this kind of routine, brain power, white-collar work cheaper than Americans and Canadians and western Europeans can. And in a market economy, that's where the work will go.
PILGRIM: Do you think would it be smart to switch what our children are studying right now?
PINK: Well, I mean I think...
PILGRIM: ... it's a big step
PINK: I think that, again, you need the basics. You need those basic left-brain abilities: literacy and numerary.
But the future increasingly depends on a set of abilities we've often over-looked and under-valued. Things like design, story, empathy as we were talking about earlier before, big-picture thinking, play and joyfulness.
Those are the sorts of things even though they sound a little bit squishy, those are the sorts of things that are increasingly the source of wealth in our society. Again, if you look at the entertainment industry, the video game industry; if you look at the biggest shortage in this country, in the work force, it's not of computer programmers, it's of nurses.
So again, the things you can -- things that someone overseas can't do cheaper and that computers can't do faster and that satisfies some of these broader yearnings of this very abundant age, those are the sorts of jobs that are going -- really going to matter the most -- already and in the years to come.
PILGRIM: Well, you have given us a lot to think about.
Thanks very much Daniel Pink.
PINK: Thank you, Kitty.
PILGRIM: All right, still ahead, the results of tonight's poll and the question is have you experienced school overcrowding where you live?
All that, plus a look at stories we are working on for Monday coming up, so stay with us.
PILGRIM: Now, the results of tonight's poll question: Have you been personally affected by overcrowded schools in your area?
Fifty-four percent of you said yes, you have. Forty-six percent said no. Well, while we're at it, let's take a look at some of your thoughts and e-mails.
Irene from New York wrote in to say: "I'm glad parents are standing up to the school boards in the area of sex education. It's time we take back our schools and give responsibility back to the parents. We know what's best for our children."
Jeanne Stapleton, of New Hampshire, wrote: "In the past, a parent who objected to certain facts (i.e. discussion of AIDS or sex) would choose for their child to opt out of the lesson. Now instead of their choice to opt out, the religious conservatives are declaring their right to keep factual health information from all children in the school. I studied chemistry in school, but I didn't run out and create a chem bomb."
And Roy Downey, of South Carolina, writes: "I admire you and your staff for your efforts to try to save America but I think you're whipping a dead horse. America is no longer the land of the free and the home of the brave. We are controlled by corporate America and our elected officials in Washington are only puppets for big business."
And Major Gregory Prado, of the United States Air Force, wrote into ask: Why don't we offer those crossing the border illegally the option to join our U.S. armed forces for six years? They'd be clothed, fed and paid at a wage that they could obtain in their own country and we'd reduce the burden on all the current all-volunteer military. As a part of the deal, after a six year tour of duty and an honorable discharge, I'd be happy to offer them legal residence in this country."
Well, we love hearing from you.
Send us your thoughts at LOUDOBBS@CNN.COM.
We very much thank you for being with us tonight.
Please join us Monday and here's a lineup of our stories -- living dangerously, scientists are making dire predictions about the future of our planet.
We'll go through some of their theories.
We'll have a special report on that.
And we hope that you will join us for that.
Also good news, Lou will be back on Monday and we look forward to that.
For all of us here, have a great weekend.
Good night from New York.
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