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Lou Dobbs Tonight

Rove and CIA Leak; Under Fire; Terror Hunt; Illegal Immigration

Aired July 12, 2005 - 18:00   ET

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


LOU DOBBS, CNN ANCHOR: Good evening, everybody. Tonight, why is the White House refusing to answer questions about the role of Karl Rove and the leak of a CIA officer's identity? What are the implications for Rove and the Bush White House?
My guest tonight, John Dean, who served as White House counsel to President Nixon during Watergate.

Also, major developments tonight in the widening hunt for radical Islamists who carried out the terrorist bombings in London.

And the first shuttle flight since the Columbia disaster is now less than 24 hours from launch. There may be some last-minute problems. We'll have a live report for you from the Kennedy Space Center.

We begin tonight with a second day of the Bush administration's refusals to answer questions about Karl Rove and his role, if any, in the leak of a CIA agent's identity. President Bush ignored a question today about Rove during a photo opportunity at the White House, and White House Press Secretary Scott McClellan did not single out Rove when he declared the president has confidence in all those who work in the White House.

Suzanne Malveaux reports from the White House.

(BEGIN VIDEOTAPE)

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): President Bush was asked directly whether he would carry out his pledge to fire anyone caught leaking, including his top political adviser, Karl Rove.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Thank you very much. Thank you.

MALVEAUX: Mr. Bush did not respond. White House Press Secretary Scott McClellan was pummeled for a second day over whether he misled the public for the numerous statements he made over the last two years, insisting Rove wasn't involved in the leaking of the covert CIA agent Valerie Plame.

HELEN THOMAS, JOURNALIST: Has he apologized to you for telling you he is not involved?

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Helen, I'm not going to get into any private discussions.

THOMAS: I mean, he put you on the spot. He put your credibility on the line.

MCCLELLAN: You all in this room know me very well. And you know the type of person that I am.

MALVEAUX: Rove's critics have seized on the issue.

SEN. JOHN KERRY (D), MASSACHUSETTS: The White House's credibility is at issue here.

MALVEAUX: Questions about the Bush administration's credibility about intelligence on Iraq is how this controversy started. In his 2003 State of the Union Address, the president uttered a 16-word sentence that had to be taken back.

BUSH: The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa.

MALVEAUX: Former Ambassador Joe Wilson wrote that he was sent by the CIA to investigate whether it was true that Iraq was trying to buy uranium in Africa. Wilson concluded that the administration had twisted the intelligence to exaggerate the Iraq threat.

According to Rove's lawyer, Rove then spoke to "Time" magazine's Matt Cooper to downplay Wilson's accusations, making the point Wilson's wife worked at the CIA and she authorized the trip.

(END VIDEOTAPE)

MALVEAUX: The big concern now here at the White House is just how much and how long this is going to be a distraction when it comes to pushing forward President Bush's domestic agenda. Case in point, the president met with both Republican and Democratic leadership here at the White House to talk about a Supreme Court nominee, as well as his energy legislation policy. Neither one of those issues got much attention today.

Lou.

DOBBS: Suzanne, thank you. Suzanne Malveaux from the White House.

White House Press Secretary Scott McClellan has steadfastly over the last several days refused to comment on Rove's involvement in the leak of the CIA agent's identity despite a barrage of questions from the press corps. Those reporters stepped up that questioning of McClellan today.

(BEGIN VIDEO CLIP)

QUESTION: What was Karl Rove trying to accomplish by having the conversation he did?

MCCLELLAN: That's a question related to an ongoing investigation. The investigation continues, David. I think you know that very well. I've responded to that question. And if I were to start commenting on news reports, or things related to the investigation, I'm getting into prejudging the outcome of that investigation. I don't want to do that from this podium.

The best way to help the investigation come to a successful conclusion is for me not to get into discussing it from this podium. I don't think that helps -- wait -- I don't think that helps advance the investigation.

QUESTION: All right. Are you behind the scenes directing a response to this story?

MCCLELLAN: What I know is that the president directed the White House to cooperate fully with the investigation. And as part of cooperating fully with that investigation, that means supporting the efforts by the investigators to come to a successful conclusion. And that means not commenting on it from this podium.

QUESTION: At the very least, though, Scott, could you say whether or not you stand by your statement of September 29, 2003, that it's simply not true that Karl Rove disclosed the identity of a CIA operative?

MCCLELLAN: John...

QUESTION: Can you stand by that statement?

MCCLELLAN: John, I look forward to talking about this at some point. But it's not the appropriate time to talk about those questions while the investigation is continuing.

THOMAS: People are on the record, one quote after another.

MCCLELLAN: The president wants to get to the bottom of it. We're just not going to comment on the investigation that continues.

And I think you've heard me explain why I'm not going to do that. I do want to talk about this...

QUESTION: Do you feel you've put yourself out on a limb, Scott?

MCCLELLAN: I do want to talk about this, and we will talk about it once the investigation is complete.

(END VIDEO CLIP)

DOBBS: In all, Scott McClellan fielded 28 questions about Rove today, and he is certain to face many more on the issue in the days ahead.

It was two years ago this week that conservative columnist and CNN contributor Robert Novak wrote the column that named Wilson's wife, Valerie Plame, as a CIA operative.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Two years ago there were suspicions immediately that Karl Rove was somehow involved in an attempt to discredit White House critics. Ambassador Joe Wilson made that claim within days of the Novak article. But the White House adamantly denied any involvement.

September 16, 2003...

MCCLELLAN: I said it's totally ridiculous.

ROMANS: September 29...

MCCLELLAN: I made it very clear from the beginning that it is totally ridiculous. I've known Karl -- I've known -- I've known Karl for a long time, and I didn't even need to go ask Karl because I know the kind of person that he is. And he is someone that is committed to the highest standards of conduct.

ROMANS: And September 30...

BUSH: If there's a leak out of my administration, I want to know who it is.

ROMANS: As the White House pledged to fire any leaker, the Justice Department opened its investigation, naming U.S. Attorney Patrick Fitzgerald as special prosecutor to investigate the leak.

Rove defended himself last summer with words that now appear carefully constructed.

KARL ROVE, WHITE HOUSE ADVISER: I didn't know her name and didn't leak her name.

ROMANS: Now Rove's attorney says his client discussed Valerie Plame's position, her affiliation with the CIA, but not her name. After almost two years of futile investigation by the special prosecutor, now rapid developments.

"New York Times" reporter Judy Miller is in prison for refusing to reveal her source even though she never wrote a story about it. "Time" magazine turned reporter Matthew Cooper's notes and emails over to investigators.

On July 1, political analyst Lawrence O'Donnell claimed Rove was Cooper's source. It was the next day that Rove's lawyer acknowledged that Rove had talked to Cooper. And now a White House that is vigorous in its defense and notorious for staying on message is suddenly all but mute.

MCCLELLAN: I don't want to get into commenting on things in the context of an ongoing investigation.

(END VIDEOTAPE)

ROMANS: Refusing repeatedly to say whether he stands behind his 2003 comments that Karl Rove's involvement, Lou, is just ridiculous.

DOBBS: There is much about this case that is now, I think, fairly described as ridiculous. It will be interesting to see what the White House position ultimately is.

Christine, thank you. Christine Romans.

Well, whatever else this is, it is political opportunity for Democrats. Leading Democrats today stepped up their demands for President Bush to fire Karl Rove, but the Republican National Committee accused Democrats of engaging in blatant partisan politics.

John King reports.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT (voice-over): Karl Rove would be the first to tell you timing is everything in politics. And at the moment, that leaves the man the president calls "the Architect" at a significant disadvantage.

KERRY: And I believe very clearly, Karl Rove ought to be fired.

UNIDENTIFIED MALE: Senator Clinton, you were nodding. Could you address the camera as well?

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: I'm nodding.

KING: Innocent until proven guilty is the rule in a court of law. But in today's Washington, a deputy White House chief of staff at the center of a grand jury investigation is more than fair game.

QUESTION: When did the president learn that Karl Rove had this...

MCCLELLAN: I've responded to your questions, Dick.

Go ahead.

KING: Especially this deputy White House chief of staff, who has a hand in everything from Social Security to picking a new Supreme Court justice, and whose influence in the Bush White House is rivaled only by the vice president.

DAVID GERGEN, FMR. WHITE HOUSE ADVISER: I just don't think this president's going to do that. He's going to stand by Karl Rove. Karl Rove has stood by him for over 20 years. He's going to stand by him through a storm.

KING: To Democrats, he is a nefarious bogey man, the bad cop, they say, to a gentle president in a script critics say has played out time and time again. One glaring example, a president who says no one should play politics with the 9/11 attacks, and a Rove political strategy in 2002, 2004, and again now anchored on statements such as this...

ROVE: Conservatives saw the savagery of 9/11 and the attacks and prepared for war. Liberals saw the savagery -- savagery of the 9/11 attacks and wanted to prepare indictments and offer therapy and understanding to our attackers.

KING: The Rove controversy comes at a time when the president is already struggling. A majority of Americans now say it was not worth going to war in Iraq. And more than six in 10 Americans disapprove of how Mr. Bush is handling Social Security, the issue at the top of his second-term agenda.

Rove allies call the attacks a Democratic smear campaign.

UNIDENTIFIED MALE: I guess they think if they scream loud enough, if they insult enough people, if they're offensive enough, that people won't hear the fact that they have nothing to say about the American people's lives.

KING: Rove's influence at times seems to take on mythical proportions. At last year's Republican Convention, for example, some Democrats saw in the design of this podium a cross designed to send a message to Christian conservatives, a key Rove target group.

ROVE: My God, where do they come up with this stuff?

KING: Complicating the politics of the moment for Rove is this dynamic: a White House that once adamantly said Rove had no role in the leak at issue has clammed up now that it is clear he did talk to reporters, despite this carefully worded statement last year...

ROVE: I didn't know her name and didn't leak her name.

KING: Rove tells friends he is certain he broke no laws, and is not a target of the investigation.

(END VIDEOTAPE)

KING: And Karl Rove tells those friends and other associates this storm will pass when this investigation comes to a close. But some Republicans, Lou, are more than a little nervous. And as one close Rove associate put it after spending some time with Karl this week, he knows he's going to be a pinata for a while here.

DOBBS: Yes. And the suggestion that this is close to being over seems to be, at best, optimistic and hopeful on the part of Karl Rove and those who are his supporters.

This next step in this is hard to predict. But one would hope a near next step would be some conclusion from the special prosecutor, Fitzgerald. And where do we stand on that part of this entire mystery?

KING: Well, Lou, the Justice Department, the investigators are being very quiet about this. Although they have said, and they have told many of the lawyers involved in this case, the significant holdup to finishing the investigation was to get the testimony of Matt Cooper and Judith Miller. They will get the testimony from Cooper presumably this week, if it hasn't happened already this week. They -- of course Judy Miller is in jail. They have not received any agreement from her to testify as yet. But several attorneys I've talked to -- and the FBI does not deny this -- say that the investigation is very close to over.

Now, how long does it take to have a report? Will charges be brought? All of that remains a legal mystery as we have this political fallout.

DOBBS: As David Gergen said to me here last night, much of politics and law turns on subtle distinctions. But the broad and bold truth here is there's one person in jail -- that is, Pulitzer Prize- winning "New York Times" reporter Judith Miller.

We don't even know if a crime has been committed. We don't know why this special prosecutor in two years of investigation can't bring it to conclusion, nor why the White House can't be forthright about what is going on here. Why?

KING: Lou, it's a very tough case. And the White House is now, you know, saying it can't discuss an ongoing investigation. And of course, the critics are howling, because both the president and Scott McClellan have discussed this case in the past during that investigation.

I've covered this investigation to a degree. I was at the White House during the Ken Starr investigation of Bill Clinton. These things sometimes take very unpredictable terms - turns. And the hardest thing of all is to try to say it's almost over, because, of course, if somebody testifies and new evidence comes up, new information comes up, it can go on and on and on.

When will it end? You know, the three words least spoke in Washington: I don't know.

DOBBS: John King, we thank you for reporting what you do know from Washington.

KING: Thank you.

DOBBS: That brings us to the subject of our poll question tonight. Do you believe the White House should immediately disclose to the American people everything it knows about this national security leak, yes or no? Cast your vote at LOUDOBBS.com. We'll have the results later in the broadcast. We promise.

We also want to give you the results of last night's poll, which I mistakenly forgot to report to you. The question was, should U.S. taxpayers be footing the bill for Israel's pullout from Gaza? That is a request for more than $2 billion in addition to the almost $3 billion it receives.

Ninety-four percent of you replied, no, Israel should not be receiving that money. Six percent said they should.

More now on the investigation of the special prosecutor into the CIA leak just ahead. I'll be talking with John Dean, counselor to President Nixon during Watergate. He has already condemned the Bush administration for its imperialism and its secrecy. He's the author of "Worse than Watergate: The Secret Presidency of George W. Bush."

Also, major developments tonight in the widening hunt for radical Islamist terrorists in Britain. Police now claim that investigation into the London bombings is moving at great speed. And they appear to be near a breakthrough. We'll have the latest for you.

And the forgotten war against drugs in this country. One of the U.S. agencies responsible for stopping the flow of illegal drugs into this country admits that it is simply overwhelmed, and that the United States is losing the war. A special report next.

(COMMERCIAL BREAK)

DOBBS: We can report tonight that there is an apparent breakthrough in the investigation of the radical Islamist terrorist bombings in London. More than 50 people were killed in those bombings, more than 700 others wounded. But now police have identified the four suspected terrorists, one of whom they believe is dead, the fate of the other three unknown. Another suspect has been arrested in northern England.

Alessio Vinci reports from London.

(BEGIN VIDEOTAPE)

ALESSIO VINCI, CNN ROME BUREAU CHIEF (voice-over): In London, Metropolitan Police say they are investigating four men they believe met at King's Cross Station shortly before 8:30 the morning of the attacks. Police say the men were seen on closed circuit security cameras.

PETER CLARKE, ANTI-TERRORISM BRANCH, METROPOLITAN POLICE: We have since found personal documents bearing the names of three of those four men close to the seats of three of the explosions.

VINCI: The fourth suspect was reported missing by his family Thursday night.

CLARKE: As regard to the man who was reported missing, some of his property was found on the Route 30 bus in Tavistock Square.

VINCI: Investigators say three of the suspects came from West Yorkshire, 200 miles north of London.

Tuesday morning, police conducted several raids there and arrested one man in connection with the bombings. He is being questioned in London.

Police officials called these significant but early leads, and the investigation will continue in the days and weeks to come.

VINCI (on camera): Top political officials say they are confident perpetrators of the attacks will be tracked down. At the same time, they warn that cities like London, or even New York, remain at risk, and another attack here is likely. They just can't say when.

Alessio Vinci, CNN, London.

(END VIDEOTAPE)

DOBBS: The BBC tonight is facing criticism in the U.K. for reports that it edited some of its coverage to avoid calling the perpetrators of the London attacks "terrorists." "The Daily Telegraph" newspaper reported the BBC's Web site initially used the word "terrorists." But later in the day, the same coverage used the word "bombers" instead.

Tonight, the BBC tells us here that the word "terrorist" is not banned on the BBC. A spokesman declared BBC guidelines are intended to cover a wide spectrum of global and political scenarios -- whatever that means.

In the Netherlands tonight, a guilty plea on a hate crime that rocked Europe and the world. A radical Islamist terrorist pleaded guilty to murdering Dutch filmmaker Theo Van Gogh last year. He said he acted out of religious conviction. He said he would do it again if he had the chance.

Van Gogh, the descendent of painter Vincent Van Gogh, who had released a film before his murder called "Submission" criticizing Muslim fundamentalism and its treatment of women.

Israel is blaming radical Islamists for a deadly attack in northern Israel today. A suicide bomber walked into a shopping mall in the seaside town of Netanya and detonated his explosives. Two people were killed, 30 others were wounded.

No one has claimed responsibility. But Israel is blaming the terrorist group Islamic Jihad. Israel says terrorists carried out that attack to prevent Israel from pulling out of Gaza next month.

In Beirut today, a car bomb tore through a motorcade carrying Lebanon's pro-Syrian defense minister. He was injured. Another person was killed in the attack. Officials blame the attack on anti-Syrian factions. The attack raising fears that Lebanon could be near plunging into a new civil war.

There were new terrorist attacks in Iraq today. Two Iraqis died in a car bomb explosion in Kirkuk. A third Iraqi civilian was killed in Tal Arar near the border with Syria. An Iraqi police captain was killed in Baghdad.

And new terrorist attacks in Europe. Four bombs exploded near a power station in Spain's Basque region. Basque separatists warned of the attacks ahead of time. No one was injured in the explosions.

Coming up next here, the war on drugs forgotten. Why U.S. officials now say they simply don't have the resources to stop millions and millions of dollars in illegal drugs now flooding into this country. We'll have a special report. And then, the current White House scandal in the eyes of one central figure from Watergate. Former White House Counsel John Dean, the author of the book "Worse than Watergate," is our guest here next.

And late-breaking developments in what could be the first space shuttle launch since the Columbia disaster. And why is NASA inspecting now some of the shuttle's protective tiles? We'll have that report from the cape.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: This nation's war on drugs has become a forgotten war. The U.S. Coast Guard says it is under-funded and understaffed in the fight against smugglers and it can't keep up with the new generation of criminals with last century's technology.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): This is what it looks like when U.S. officials get it right -- good intelligence that pinpoints the location of a drug shipment, air surveillance in the right place. and a Coast Guard cutter to bust the smugglers. But nearly 80 percent of the time, it doesn't quite work out that way. The drug runners get away.

REP. MARK SOUDER (R), INDIANA: Often we have a tip that this is going to be loaded on a ship. We can see the ship start to move. Then we either don't have Coast Guard equipment to interdict it or an airplane to interdict it.

SYLVESTER: According to the Coast Guard, in one transit zone last year, law enforcement officers knew of 331 drug shipments coming in. But they were able to stop only 70. The problem, limited number of planes and boats to fight the war on drugs.

Resources have been diverted to hot spots, Iraq and Afghanistan, and to securing the coastal harbors from terrorism. The Coast Guard's aging cutters try to keep up with the drug smugglers' state-of-the art go-fast boats. But with six million square miles of ocean, drug runners often elude authorities.

VICE ADM. HARVEY JOHNSON, U.S. COAST GUARD: Well, right now we operate Coast Guard cutters that are 38 years old. And those Coast Guard cutters don't always have the endurance, or the speed, or the sensors that we would like for them to have to be the -- optimally effective at drug interdiction.

SYLVESTER: The Coast Guard did manage to stop a record 240,000 tons of cocaine last year. But many more tons made it across U.S. borders, headed for all 50 states.

(END VIDEOTAPE) SYLVESTER: The Government Accountability Office has said the Coast Guard's fleet is not safe and not effective. Congress is currently reviewing a proposal called Deep Water to spend as much as $25 billion over the next two decades upgrading the Coast Guard cutters -- Lou.

DOBBS: There are times that one can only wonder, is anyone in Washington paying any attention at all?

SYLVESTER: Well, this is certainly one of those cases, Lou, where you clearly have a problem with just the sheer number and the amount of drugs coming in. And for whatever reason, Congress has decided not to fully fund these requests by the Coast Guard for it to upgrade their equipment.

In one example, for instance, this current allotment of $900 million is what they're seeking to upgrade this year's current cutters. But instead, the House appropriators are only giving $500 million -- Lou.

DOBBS: Lisa Sylvester, thank you.

In the southeastern United States tonight, more than 250,000 people have no power after Hurricane Dennis. That storm flooded homes, businesses and farms in Georgia. Dennis and Tropical Storm Cindy dumping more than a foot of rain in Georgia over the past two weeks.

The storm caused more than $1 billion in damage in Georgia, Florida, Alabama and Mississippi. Hurricane Dennis also slammed into this brand new $1 billion oil rig off the coast of Louisiana.

British Petroleum's Thunder Horse platform is, as you can see there, now tilted about 30 degrees in the Gulf of Mexico. The platform, fortunately, was evacuated before Hurricane Dennis hit. The company says it's far too early to tell how the damage will affect the production slated to begin later this year, or what is necessary to repair this rig.

The next tropical threat is already formed and on the way. Tropical Storm Emily has triggered hurricane warnings in the eastern Caribbean. The storm has sustained winds now of 50 miles an hour and is expected to gain strength substantially.

A different kind of threat tonight in Colorado, where a massive wildfire is spreading. It's now burned 12,000 acres. The fire has forced 5,000 people to abandon their homes. Firefighters hope cooler temperatures will help them contain at least some of that fire. So far there have been no reports of injuries.

Up next here, the White House and the CIA leak. The Bush administration tight-lipped again today about a Karl Rove connection. Is there one? Is this a dangerous White House strategy? Former Nixon White House Counsel John Dean is my guest.

And a last-minute problem may delay the launch of the Space Shuttle Discovery tomorrow. We'll have the latest for you. A live report from the cape coming up.

Two fiercely-opposed political groups squaring off in the battle over who will succeed Supreme Court Justice Sandra Day O'Connor. A heated debate over the future of our highest court, coming up.

(COMMERCIAL BREAK)

DOBBS: More tonight on the top story of the day, did Karl Rove leak the identity of a covert CIA agent in order to discredit a critic of the White House?

My guest tonight is John Dean, who served as White House counsel to former President Richard Nixon. He has written several books for counting his days in the Nixon White House during Watergate, and "Worse than Watergate: The Secret Presidency of George W. Bush," a criticism of what he styles as the imperialism and secrecy of the Bush administration.

Joining us tonight from Los Angeles, John Dean.

Good to have you here. As we look at an investigation that, now has lasted longer than that into Watergate, what do you make of what's going on?

JOHN DEAN, FMR. NIXON WHITE HOUSE COUNSEL: Well, I've certainly had some flashbacks to memories of days past, when I saw that press conference yesterday and again today. I was all but waiting for Scott McClellan to make it an inoperative situation like Mr. Ziegler did.

DOBBS: The -- referring to Ron Ziegler, the press secretary for President Nixon and his famous response about those statements being, instead of false, inoperative, I believe was the way he put it.

DEAN: That's what he said.

DOBBS: The Democrats have already taken hold here. They're on the attack. The White House is hunkered down, if not bunkered down. What is, to you, the rational response here on the part of the White House?

DEAN: Well, they're obviously doing the classical defense of the stonewall and you know, keep it up, keep the front up and hope that some intervening news story is going to come along and take attention away from this, which can always happen.

They've been very fortunate in the past of that indeed happening -- when people got too close to issues they didn't want them to get close to, that some intervening story has relieved them. And that's what I think their game plan is.

DOBBS: And Karl Rove in this -- his attorney now admits and in a perhaps bizarre piece, it appears that "Time" magazine leaked some material to "Newsweek" magazine. I can't say that for certain, but it appears that way. The fact is, it's unclear whether -- what Karl Rove may or may not have done here is even illegal.

DEAN: That's right. It isn't clear. DOBBS: What's your sense of that?

DEAN: I -- we can't tell on the facts we have alone, whether we have a law that's been violated or which laws have been violated. The attention is focused on the CIA Identities Protection Act and that hasn't really been my concern.

I don't -- I think probably the lawyers involved in this case are looking at the other potential concerns. You take the prima facie facts we have, and this could very well be a couple statutes that are involved with Mr. Rove.

He could be, well, converting government information to his own political uses and putting it out, and that is a violation of the law. It could be the statute that got a lot of those of us involved in Watergate, which is if he is conspiring with others to do what he's not being paid as a government employee to do, which it would be in this instance, to leak information for political purposes. That in turn could be a violation as well.

DOBBS: Effectively, fraud and conspiracy.

DEAN: Yes.

DOBBS: The idea here, though, that we don't even know whether a crime has been committed. We don't know what in the world takes two years to investigate about what is pretty much a straightforward leak. And we have a Pulitzer-prize-winning "New York Times" reporter, Judith Miller, who is not being exactly treated like Woodward and Bernstein here for her role. In point of fact, she is the only -- at this point, clear victim in this entire proceeding. Your thoughts?

DEAN: No question. It's a travesty that she's in jail at this point and she's protecting some source, who is not in jail or who is not even fessing up to relieve her of that responsibility.

But you know, there are a lot of potentials here that -- how this may unwind. And the reason I think the fact that there's more to happen, is that when I read the opinion of Judge Hogan in the contempt proceeding, and I read the court of appeals decision of Judge Tatel...

DOBBS: Judge Hogan, the judge who sentenced Judith Miller for contempt.

DEAN: Correct. And Judge Tatel was the -- on the Appellate Court that reviewed that decision before it went to the Supreme Court. And both of them have looked at the sealed record. And in that record, which they redacted in their opinion, but in their look at it, they said, this case is not where it started, it has made a dramatic turn, and this information that is now being requested by this Special Counsel Fitzgerald, is needed.

And therefore, they could see no basis to get around the problem of holding her in contempt or Cooper, if he wasn't willing to testify. So, something's happened in this case, Lou, that we don't know. And that's why I think it may be -- well, it may be close to being over, we -- the fat lady hasn't gotten near the stage yet.

DOBBS: Yes. And I said that Judith Miller was the only victim in this. I should say there are two other victims.

One, a press that does need the ability to protect its sources; not to be above the law, but to be able to enforce a pledge of confidentiality.

And of course, the public's right to know, which is being confounded here by both government and an inability on the part of a number of people to be forthcoming.

John Dean, we thank you for being here tonight.

DEAN: Thank you, Lou.

DOBBS: A reminder now to vote in our poll: Do you believe the White House should immediately disclose to the American people everything it knows about the CIA leak case? Yes or no. Please cast your vote at LOUDOBBS.com. We'll have the results here later in the broadcast.

Tonight, South Korea has offered a new incentive to North Korea to end its nuclear ambitions. South Korea has offered North Korea huge amounts of free electricity. Earlier, South Korea offered the North Koreans 500,000 tons of rice. South Korea's offer comes just days after Pyongyang said it would return to the negotiating table, and join six-nation talks later this month.

Coming up after this break, the Space Shuttle Discovery may not launch as planned tomorrow. Shuttle tiles have apparently been damaged. We'll have a live report for you on these late-breaking developments from the cape.

Also, fierce debate at a government summit on illegal aliens. Officials can't agree on how to battle a problem that they've all ignored for far too long. We'll have that live report from Flagstaff, Arizona, coming right up.

(COMMERCIAL BREAK)

DOBBS: Liftoff for the Space Shuttle Discovery is still officially set for tomorrow afternoon at the Kennedy Space Center, but a "last-minute" has occurred. A problem that could well delay this mission and return to space, after the Columbia disaster just two years ago.

Miles O'Brien is now live at the Kennedy Space Center and has the latest developments for us -- Miles?

MILES O'BRIEN, CNN CORRESPONDENT: Well, the current thinking, Lou, is the problem, which they're dealing with on the launch pad right now, may not be anything that will cause any sort of delay on this launch, which is now about 21 hours away.

First of all, let me take you live to the launch pad - Launch Pad 39-B -- where two-and-a-half-years ago the Space Shuttle Columbia launched, the last time there was a launch here, of course.

And from that location, you can see that the launch pad is ready. It's actually a nice evening right now, although there is some concern about the weather. What you can't see, is some furious work under way to try to fix some tiles that are at the base of the Space Shuttle Orbiter Discovery.

Let me just show you on this model and I give you a sense of what's going on here. There are covers over all the windows at this point in the countdown and the cover for this particular window, Lou, number seven, not that, that matters to anybody, fell down on top of this bumpy thing. It's called the Orbital Maneuvering System. It's a big rocket. It caused some damage to the tiles right in this spot right here.

The beauty of this situation, if you have to have a problem like this, have something fall 100 feet like that, is that these particular tiles are in a place that they're on so-called carrier panels. In other words, they're bolted on to a thing that's screwed in. So, they don't have to glue the tiles back on, they just take a new carrier panel and screw it back in.

That's happening right now. The thinking is that, that will solve the problem. The big question is, how did it fall off? Why wasn't it tethered? Some safety issues which crop into mind for that, but nevertheless, kind of too early to say whether there is a delay. We're getting a news conference in about 20 minutes, Lou, and we will keep you posted.

DOBBS: Well, as you know, I was supposed to be talking with Michael Griffin earlier here tonight. We had to change things because of technical developments on the launch. We have no further sense as to how important, Miles, this will be?

O'BRIEN: It's hard to say right now, Lou. You know, tile repair is obviously a very important thing. And whenever you start talk about falling debris of any kind, immediately we think back to two-and-a- half years ago, to Columbia, and the foam which came off and hit the left wing.

DOBBS: Right.

O'BRIEN: So clearly, NASA is very sensitive to this. They should be. This is a very critical part. That's a hot portion of the orbiter as it comes in. Critical part.

DOBBS: Absolutely.

O'BRIEN: So they need to take care of it.

DOBBS: They need to take care of it. And Miles, you and I and everyone else knows how hard the people of NASA work, and how much of their stomach lining they leave on every one of these launches. But with all that has transpired over the past two years, for something like this to happen, it's almost, you know, forgive me for saying this, I would just like everybody to take a deep breath and look for the next window, frankly, because this is inexplicable that this could happen, at least to me.

O'BRIEN: Well, and you know what, Lou? Maybe that will be ultimately the decision, because of its parallels to what we saw here happen two-and-a-half years ago. Put it in the category of bad omens, if nothing else.

But clearly, I think there is a lot of apprehension here anyway, Lou. And the fact is, this shuttle launch team is not going to do anything that is just against the launch rules.

DOBBS: Absolutely. And Eileen Collins, one of NASA's most highly regarded, highly experienced commanders, she and her crew will be playing an important role in that decision as well, as you well know.

Miles O'Brien, we look forward to your coverage and anchoring CNN's coverage throughout this launch. We thank you for your coverage here tonight.

O'BRIEN: All right. You're welcome, Lou.

DOBBS: Coming up at the top of the hour here on CNN, ANDERSON COOPER 360. Anderson has a preview for us.

Anderson.

ANDERSON COOPER, HOST, ANDERSON COOPER 360: Thanks very much. Yeah, tonight on 360, starting at 7:00 Eastern, more on the shuttle problems. NASA is holding a press conference at 7:00. We're going to have the latest on that.

Also, the latest on Tropical Depression Emily. Hurricane watch is in Barbados and elsewhere tonight. How strong is this storm and when is it going to get here? We'll have that.

Also ahead, the White House circling its wagons around Karl Rove, and they are staying on message. Tonight, we deconstruct their talking points, and what they said then and what they're saying now.

Lou.

DOBBS: Look forward to it, Anderson. Thank you.

Coming up next here, the governor of Arizona calls a summit on U.S. border security. But critics wonder if she's really committed.

And the supreme battle. My two guests tonight face off on who should be the next Supreme Court justice. Should the president actually have a role in deciding? The answer to that question, stay with us and find out.

(COMMERCIAL BREAK)

DOBBS: The governor of Arizona has called a summit that's supposed to address the problems of illegal immigration and border security. Improving cooperation was the idea among federal, state and local agencies. But critics charge that the governor's commitment to the issue is so weak that it has simply deteriorated into political squabbling.

Casey Wian reports now from Flagstaff, Arizona.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): More than 100 police chiefs, sheriffs and federal agents from Arizona met to try to end years of frustration over their failed efforts to control the illegal immigration. But before the immigration enforcement summit even started, a tense standoff unfolded as several state lawmakers were denied access to the meeting.

UNIDENTIFIED MALE: We're asking that the Department of Public Safety follow the laws of the state of Arizona and allow public -- members of the public and especially members of the legislature who have responsibilities over the state laws and the use of state resources to attend a public meeting.

WIAN: Some lawmakers said they were prepared to be arrested, but eventually backed down.

The summit was called by Arizona Governor Janet Napolitano, because law enforcement agencies in Arizona are routinely at odds over what to do with illegal aliens. Often, Department of Public Safety officers detain illegal aliens, but are forced to release them, because federal immigration officials either don't have the manpower or the motivation to pick them up.

UNIDENTIFIED MALE: If you have 10 or 12, they're probably not going to come out. If you have 20 to 30, they're probably going to come out.

WIAN: This month, Napolitano agreed to partner only a dozen of Arizona's 1,100 state police officers with Border Patrol agents. Their main target will be illegal alien smugglers.

The Maricopa County sheriff has agreed to provide detention space at his tent city jail.

Napolitano's opponents say that and the immigration enforcement summit are a political ploy to appear tough on illegal immigration.

UNIDENTIFIED MALE: I'm glad to see her get on board as modest as it is. But there's so much more that she can and should be doing. And if the voters allow her to get away with it, shame on them.

WIAN: Pierce (ph) says Napolitano has fought Arizona's Proposition 200, which denies state benefits to illegal immigrants, and vetoed a law that would have given state lawmakers more power to arrest illegal aliens.

Pro-illegal alien activists also protested outside the summit.

(END VIDEOTAPE)

WIAN: Conspicuously absent from the meeting she called was Governor Napolitano. Her staff said she never intended to be here, because she's on vacation this week. Her opponents say it's another sign that she's not willing to get tough on illegal immigration.

Lou.

DOBBS: And you say there were pro-illegal alien demonstrators there as well?

WIAN: Absolutely. About 20 of them.

DOBBS: Let's be fair and balanced. What were they protesting?

WIAN: They had signs saying that Latinos were being singled out by these law enforcement efforts to crack down on -- and I should be clear that the law enforcement agencies are not talking about going after all illegal aliens; they're only talking about going after the low-hanging fruit, if you will -- the car thieves and the coyotes, the immigrant smugglers. So they were protesting against something that's not even happening yet, Lou.

DOBBS: All right. Casey Wian, reporting from Flagstaff, Arizona. Thank you.

An astonishing admission today by the man in charge of the U.S. Border Patrol. David Aguilar testified before Congress that the number of people from countries other than Mexico, so-called OTMs, who were trying to cross our southern border, has almost doubled this year. Aguilar said that Border Patrol has detained nearly a million illegal aliens so far this year -- about 125,000 of those illegals, non- Mexican citizens.

As millions of illegal aliens flood across our borders, our nation's largest businesses are blatantly profiting from illegal aliens. And our nation's largest business magazine, "BusinessWeek," apparently considers it all part of a legitimate new business trend and opportunity.

"BusinessWeek" magazine's latest cover story is called, astoundingly, "Embracing Illegals." "BusinessWeek" says companies that market insurance, credit cards and home loans to illegal aliens are jumping on -- quote -- "a hot new market in the making. Companies feel no need to rationalize. They see opportunity and no reason not to grab it."

A reminder, illegal aliens are illegal. U.S. companies are breaking the law by hiring them. It will be interesting to see whether "BusinessWeek" will be focusing on that element of the story.

We will also be talking with the author of the "BusinessWeek" article, Brian Grow. He will be our guest here tomorrow.

Up next, the battle over the next Supreme Court justice. Who should President Bush choose and how will his choice affect us? Two Americans with very different opinions on that, next.

And the results of tonight's poll. A preview of what's ahead tomorrow.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: President Bush today met with Senate leaders about the vacancy on the Supreme Court. The senators, including Majority Leader Bill Frist, Minority Leader Harry Reid, offered suggestions on who the president might nominate to replace Justice O'Connor.

The president didn't offer up any idea as to who he might be considering.

My next guest, at the forefront of the battle already under way over the person who will succeed Sandra Day O'Connor, the president of the People For the American Way, Ralph Neas, says replacing O'Connor with a strict conservative would create what he calls, a Constitutional catastrophe.

The chief counsel for the American Center for Law and Justice, Jay Sekulow, says liberal calls for a consensus nominee are nonsense and the president should be able to choose whichever candidate he wants. We hope he will be with us in just a moment.

Ralph, let me turn to you. You have been quoted saying that you've been working on this for the past five years, getting ready for this battle. Are you ready?

RALPH NEAS, PEOPLE FOR THE AMERICAN WAY: Lou, I've been working on this since my years with Senator Edward W. Brook, the Republican from Massachusetts, in the 1970s. We are ready. We do not want a fight. We hope these consultations are real, that the president wants to work with Republicans and Democrats and come up with a unity candidate, a consensus candidate.

As you know, we have called for someone in the mold of Sandra Day O'Connor: A mainstream conservative. She has been the fifth and decisive vote on dozens and dozens of key Constitutional issues.

DOBBS: Right.

Ralph, you also have said that you've raised $5 million getting ready to defend the filibuster. Are you still ready for war?

NEAS: Lou, we did raise $5 million, and we spent $5 million on the effort to save the filibuster and defeat the nuclear option, which of course, would have ended the filibuster and overturned about 218 years of Senate history.

But we are ready, but we don't want a fight. We hope there's going to be a consensus nominee, so we don't have to spend any money at all. And all those 20 or 30 millions of dollars that our friendly adversaries have raised won't have to be spent either.

DOBBS: Jay Sekulow, Ralph says you can save all that money, that everything is going to be fine. Just put together a mainstream moderate conservative.

JAY SEKULOW, AMERICAN CENTER FOR LAW AND JUSTICE: Consensus candidate.

Yes. Consensus candidate. Now, first of all, this is a nomination of the Supreme Court of the United States. This isn't a candidate for office in that regard and they've turned this into a political campaign.

You had Senator Reid today say that he wants this consensus candidate. The president is the one who gets to make the nomination under the Constitution. The Senate is not a co-nominator here. So this idea that Ralph's been articulating over the last couple of weeks, I think is just Constitutionally wrong.

But let me say something else, Lou, here. This process, despite Ralph saying they want it to work smoothly, they have politicized it. It was reported today that Senator Reid is hiring former Senator Mitchell, who of course, is the co-chairman of the Disney Corporation, which owns "ABC News," among other things, to run the campaign.

What campaign? The president is putting forward a nominee. The Senate should have hearings and vote up or down. They're the ones turning this into a political campaign.

DOBBS: Well, what do you think, Ralph, is it time for you to back off and -- because your friend, the very shy and retiring conservative, Jay Sekulow, says it's really not necessary.

NEAS: My good friend Jay knows that the White House just hired, or has Ed Gillespie and Fred Thompson working for them.

SEKULOW: Yes, but they're the ones making the nomination. Of course they hired somebody. That's normal. You've done that. You've been on that side of it. You know that.

NEAS: I think...

DOBBS: Can I ask you both something, because you both are sitting there, along with your colleagues on the various elements of the political spectrum, exciting the abortion base left and right, exciting the affirmative action base left and right. Are you -- both of you going to make these litmus test issues at least tacitly from the standpoint of your campaigns?

SEKULOW: I don't think it should be a litmus test. I think it should be, the president is going to do exactly what he said. He said he's going to appoint justices -- as he has for the Court of Appeals -- that are going to not going to legislate from the bench; that are going to interpret the Constitution; that are in -- conservative in their judicial philosophy. He has the right to do that as president.

NEAS: Jay, please calm down. The president does have a Constitutional...

SEKULOW: Well, I'm glad you've run out of your $5 million so I can be a lot calmer.

NEAS: Jay, the Constitutional right is the president's to nominate someone.

SEKULOW: Right.

NEAS: Of course, the Senate as a co-equal Constitutional responsibility, can reject that nominee.

SEKULOW: Sure.

NEAS: Especially if the president takes judicial philosophy into account; especially if he does what he says, that you and I and he all agree on -- he has promised, your boss, Pat Robertson and Jerry Falwell and James Dobson, that he will appoint someone in the mold of Thomas and Scalia. We did a study according...

SEKULOW: Justice Scalia, who was confirmed 98-0.

NEAS: Please, James, don't interrupt.

SEKULOW: ... 98-0.

(CROSS TALK)

DOBBS: Let me ask you both one -- because we're just about out of time here, and with these developments today, the admission by Karl Rove's attorney and the reports that he indeed did talk with Matt Cooper, the "Time" magazine reporter; was at least the source on that element of the story.

What's your reaction, to those developments, in the White House effectively taking on a stonewall position?

Let me start with you, Jay.

SEKULOW: I think that number one, there's been no allegation so far, that's proven anything, that Karl Rove did anything illegal or unethical.

DOBBS: No, no. I didn't suggest...

SEKULOW: And you've got -- I know you haven't. But there are a lot of people that have said that and it's just not true.

And secondly, you've got a criminal investigation going on. Let them do their job. The idea that Senator Kerry is calling for the resignation of Karl Rove before the first bit of evidence has been introduced, I think is ridiculous.

DOBBS: After two years, Jay, do you think this investigation -- what do you think, the White House should just come clean, tell everybody what they know?

SEKULOW: Well, I think they're cooperating. There's no indication that the White House isn't doing anything other than cooperating. And I suspect -- I know they are and that's what they're going to do.

DOBBS: Ralph, you get the last 20 seconds.

NEAS: I have no idea whether there's anything illegal by Karl Rove. But if he had anything to do with leaking to the press anything about a covert CIA operative, he should resign or he should be fired by the president of the United States. And the White House should tell everything and be candid with the American people. The public has a right to know.

DOBBS: Ralph Neas, Jay Sekulow, thanks you both for being here.

SEKULOW: Thanks, Lou.

NEAS: Thank you.

DOBBS: Come back soon.

SEKULOW: Good to see you.

DOBBS: The results are of our poll tonight: 96 percent of you say the White House should immediately disclose everything it knows about the CIA leak to the American people. Four percent of you said they should not.

And finally tonight, Pulitzer-Prize-winning "New York Times" reporter Judith Miller has now spent six days in prison protecting her sources. She is there because she refused to reveal her confidential sources to a grand jury in the Valerie Plame case, a story which she never wrote about.

We, of course, here will be continuing to track the number of days that Judith Miller spends in jail. Not in any way suggesting that she is above the law, but reminding everyone the price she is paying for observing the law and her, as she sees it, her professional obligations. --

Thanks for being with us tonight. Please join us here tomorrow. The House Arms Services Committee takes on China's bid for an American oil company. The powerful chairman of that committee, Congressman Duncan Hotter, is our guest.

And, blasting China for its unfair trade practices? Senator Evan Bayh will be here to tell us why he says China is simply cheating.

We'll have the very latest for you on the Space Shuttle Discovery, set to launch in less than 24 hours.

For all of us here, thanks for being with us tonight. Please join us tomorrow.

Good night from New York. ANDERSON COOPER 360 starts right now.

END

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