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CIA Leak Probe; China's Threat; California Minutemen; Maytag for Sale; Replacing Justice O'Connor

Aired July 18, 2005 - 18:00   ET


LOU DOBBS, CNN ANCHOR: Thank you, Wolf. And good evening, everybody.
Tonight, the latest on the CIA White House leak. Is Karl Rove in trouble? Where are his vice presidential advisers, Scooter Libby, in all of this?

Is it time to name a Supreme Court nominee? My guest tonight is Ken Duberstein. He was President Reagan's chief of staff.

Two of my other guests have important new books on the separation of church and state. They have different views on the intent of our founding fathers.

And citizen volunteers once again manning the borders to help stop illegal aliens, drug smugglers and possibly terrorists. Their principal opposition right now? Protesters in large numbers who were clearly there to provoke them. We'll have a special report for you from the Mexican border.

And a top Chinese general threatens nuclear strikes against the United States, but Defense Secretary Donald Rumsfeld and other Bush administration spokesmen respond with ambiguity. We'll have that report for you coming up next.

We begin tonight with new comments by President Bush about the White House CIA leak. President Bush today declared he would fire anyone found to have committed a crime. In referring to a crime, President Bush shifted from previous comments, when he had announced he would dismiss anyone who leaked information about the CIA agent. President Bush again declined to answer any questions about the possible role of Karl Rove in the leak.

Suzanne Malveaux reports on the president's comments today. John King reports on White House strategy to contain this building controversy. And Bill Schneider reports on whether the controversy is hurting the Bush administration among voters.

We begin with Suzanne Malveaux at the White House -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, there is still very little information coming from the White House. But interestingly enough, the language of the president seems to be shifting, seems to be changing somewhat, nuanced, if you will, perhaps giving the president, as well as Rove, some legal and political cover.


MALVEAUX (voice-over): In the East Room press conference with India's prime minister, President Bush appeared to change his standard of accountability for anyone involved in leaking the name of covert CIA operative Valerie Plame.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I would like this to end as quickly as possible so we know the facts. And if someone committed a crime, they will no longer work in my administration.

MALVEAUX: Previously, Mr. Bush had said that anyone simply involved in such a leak would be fired, which makes this an important distinction for the White House to make now, legal analysts say.

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: The president's statement was really a gift to Karl Rove, because he said the only way Rove could lose his job is if it's proved that he committed a crime. And that's months, years off, and probably will never happen.

MALVEAUX: Not so, says the White House spokesman.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: I think that you should not read anything into it more than what the president said at this point.

MALVEAUX: But Democrats say this is further proof that the White House is stonewalling.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: Now the president has moved the goalposts. Americans can understand changing the rules of the game. They don't like it. This apparently is now a whitewash.

MALVEAUX: The distinction between involvement and committing a crime comes after news this weekend that in addition to Karl Rove, Lewis Libby, Vice President Cheney's chief of staff, was also named by "TIME" magazine's Matt Cooper as a source. In the fall of 2003, McClellan said that he had spoken to both Libby and Rove and dismissed their involvement in any leaks as ridiculous.

MCCLELLAN: I spoke with those individuals as I pointed out, and those individuals assured me they were not involved in this.


MALVEAUX: Now, with White House credibility being called into question, Bush administration officials say they certainly hope for a speedy investigation and resolution --- Lou.

DOBBS: That speedy investigation, Suzanne, as you know, this investigation has now taken longer than the Watergate investigation. Any signals of any kind as to when it will all be concluded, at least on the part of the special counsel?

MALVEAUX: Well, there are no obvious signals, but certainly the fact that "TIME" magazine's Matt Cooper had testified before the grand jury gives you a sense that the special prosecutor is moving this along, moving it at a fast clip. The White House certainly feeling like it could not be fast enough -- Lou.

DOBBS: Thank you, Suzanne.

The White House is fighting an all-out battle to contain the controversy. And Democrats have mounted an all-out campaign calling for Karl Rove to resign.

John King reports.


JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT (voice-over): The last time Karl Rove talked publicly about any of this was 11 months ago.

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

KING: But suddenly, despite his silence, a more detailed version of Rove's account is available. It began with the first public acknowledgement Rove was a source to "TIME" magazine's Matt Cooper.

MATTHEW COOPER, "TIME": We worked out this waiver agreement with Karl Rove's attorney last week.

KING: Then more, perhaps both ironically and inevitably through more leaks and anonymous sourcing. This account reported Rove also told the grand jury he was a source to columnist Robert Novak. It was attributed to someone who believes "Mr. Rove was truthful in saying he had not disclosed a CIA operative's identity."

Then this Associated Press account of a Rove email turned over to the grand jury quoted legal professionals familiar with Rove's testimony. Once the ink dries on those anonymously-sourced nuggets, Rove allies hit the airwaves with a disciplined message.

KEN MEHLMAN, RNC CHAIRMAN: This past week two things came out, both of which vindicate Karl and say he was not the source of a leak of classified information.

KING: Stressing Rove was not the leak of classified information is different from saying Rove was not a source period, which is what the White House suggested early on.

MCCLELLAN: I always wished I knew I could find out who "anonymous" was.

KING: Cooper says he told the grand jury Rove was his anonymous source back in July 2003, and the subject was Ambassador Joseph Wilson's wife.

COOPER: After that conversation I knew that she worked at the CIA and worked on WMD issues. KING: Rove attorney Robert Luskin acknowledged to CNN some differences in Rove's recollection of the Cooper conversation, but said they are not at all significant to the legal questions at the heart of the investigation. The immediate White House strategy is to rebut any suggestion Rove broke the law and should immediately lose his job.


KING: And then, of course, there is also the political problems, squaring two years of White House denials of any involvement in the leaks with what we know now. But Lou, White House political advisers tell us they believe those questions will fade fairly quickly, they say, if as Rove's lawyer predicts, he is cleared of any criminal wrongdoing -- Lou.

DOBBS: They might fade were it not for the recollection amongst those of us in the news business in this country that Scott McClellan, the White House press secretary, saying straightforwardly that Scooter Libby, that Karl Rove, no one in the White House had anything to do with this leak.

KING: Well, Lou, there's no question they would have some explaining to do. They believe if they clear that legal question first, and no one is charged with any wrongdoing, that, yes, they'll have some political explaining to do. There will be questions about White House and the president's credibility, but they also believe that the interest in the story will fade then as long as nobody is heading into court.

DOBBS: John King, thank you.

The widening investigation into the leak of the CIA agent's identity has become a huge issue for Washington politicians and the national media. Our senior political analyst, Bill Schneider, joins us now to look at the effect on the public at large.

What impact is this having amongst those now being surveyed in public opinion polls -- Bill.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, there's been one poll from ABC News that just came out a few hours ago. That poll indicates there's evidence of damage here that Americans do take this issue very seriously, and they are following it.

Three-quarters of Americans told ABC News that they believe if Karl Rove leaked classified information, he should be fired. As you see, 75 percent say, yes, he should be fired, 15 percent no. That's a 5-1 margin. What's interesting is, Republicans and Democrats agree in about equal numbers that he deserves to be fired if he did that.

Then is the question whether the White House is cooperating fully with the investigation. And the answer is no.

Almost 50 percent say no. Forty-seven percent, only a quarter of Americans, believe the White House is cooperating fully with this investigation.

Lou, what we're seeing is that most Americans say that they are following this at least somewhat closely, and those who are following it, and there are about equally Democrats and Republicans, take it more seriously, are more likely to believe that Rove should be fired and less likely to believe that the White House is cooperating.

DOBBS: Bill, the question is posed in that poll that -- as to a leak of classified information. Implicitly, that suggests a crime, does it not?

SCHNEIDER: Well, it suggests a crime, but I think more important to public opinion is, it suggests a national security violation. Which my guess is, the American public takes more seriously even than a crime.

To most Americans this rises or appears to rise above the level of politics as usual because it involves national security, CIA agents. It all started with the war in Iraq and the possible misuse of intelligence information. Those are very serious matters. They're not just politics.

DOBBS: Our colleague, John King, is there, as you know, has covered the White House for some years.

This poses -- as you focused on the strategy, if we're seeing this kind of damage as a result of these polls, is it sufficient for this White House to simply let the matter pass and hope for the best, if I can sort of paraphrase what the strategy appears to be?

KING: Well, Lou, there's certainly the big question mark. We don't know how the criminal investigation will turn out. We do not know if the special prosecutor will charge anybody.

This is a very loyal president, and Karl Rove has been critical to his success for 20-some years now. So the president has sent a clear signal he will stand by Karl Rove.

But Bill I think was just hitting on a key point.

This is a second-term president who is already having problems selling his agenda to the American people, and he has a very unpopular war in Iraq going on now, very unpopular -- growing unpopular with the American people. Leadership has since 9/11 been the pillar of the Bush presidency and the pillar of his political support. Leaders tell the truth. If the American people believe this White House is not telling the truth, this president will have a problem that goes way beyond this investigation.

The White House says this will pass. But that is a key question.

DOBBS: And Bill, as you look at these numbers, also in this -- in this issue, of course, is the fact that tonight and for the past 12 days "New York Times" reporter Judy Miller has been in prison. Has there been any polling on the public perception of what is happening to her as right now the only -- the only victim in this entire two- year ordeal?

SCHNEIDER: Yes. The ABC News poll did ask whether Americans thought she was doing the right thing by going to prison, or to jail, actually, rather than reveal her sources. And 60 percent of Americans, I was a bit surprised by that -- 60 percent of the Americans say, yes, that she is doing the right thing. They think she's right to...

DOBBS: Well, why in the world were you surprised, Bill?

SCHNEIDER: Well, because Americans rarely side with journalists, particularly in the matter of national security. If they consider this a very serious matter and they want to get to the bottom of it, she's going to jail to -- not to talk about it. And yet Americans believe that protecting sources is a very important principle.

DOBBS: I know you don't mean to imply this, but it's been my experience, and I think probably yours, too, that over the course of a career, the public is, as the saying goes, a damn sight smarter than generally given credit for by television programmers and producers.

SCHNEIDER: Well, I won't comment on that.

DOBBS: I did for both of us. Thank you, Bill. Bill Schneider.


DOBBS: In the war in Iraq, the past three days have been among the bloodiest in more than two years. Over the weekend, more than 200 people were killed, 90 of them in a suicide bombing south of Baghdad.

Today, insurgents launched a new wave of attacks against Iraqi security forces and government officials. At least 24 Iraqi police, soldiers and civil servants were killed in the attacks.

Defense Secretary Donald Rumsfeld today declined to criticize a top Chinese general who threat nuclear strikes against the United States. The secretary of defense merely declared it would be interesting to see whether the general's remarks reflect the views of the Chinese government. The Chinese general's threat came just days before the Pentagon is expected to release a report on China's rising military power, a report that has been delayed now for more than three months.

Jamie McIntyre reports from the Pentagon.


JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice-over): Anyone keeping tabs on China's arms buildup in recent years won't be surprised by the overall conclusion of the Pentagon's long-delayed annual report to Congress; namely, that China continues to aspire to superpower status and is spending the money to get there.

DONALD RUMSFELD, DEFENSE SECRETARY: I've read it, and it's a very straightforward description of what you described, a significant military buildup that's been taking place.

MCINTYRE: Like the U.S. military, China's armed forces are transforming. The number of ground troops in the Red Army is being cut, and instead China is plowing money into amphibious assault ships, aircraft and other high-tech weaponry aimed at extending its reach beyond the region.

In particular, China continues to build up its nuclear forces, developing new mobile and submarine-based missiles that increase its ability to target American cities. Just last week, a Chinese general who claimed to be expressing his personal view said if the U.S. were to defend Taiwan against a Chinese invasion, China would have to go nuclear.

"If the Americans draw their missiles and position guided ammunition onto the target zone on China's territory, I think we will have to respond with nuclear weapons," he said. That contradicts China's stated no first use policy, and for now Pentagon officials are reacting cautiously.

RUMSFELD: It will be interesting to see to what extent his remarks do or do not reflect the views of his government. And I think I'd prefer to wait and see what transpires there.

MCINTYRE: Australia's prime minister, who met with Rumsfeld at the Pentagon, called the general's threat irresponsible, but argued war is not in China's self-interest.

JOHN HOWARD, AUSTRALIAN PRIME MINISTER: China is a country that is growing in power and economic strength, but understands that military conflict of any kind is not conducive to medium and longer- term goals.


MCINTYRE: Lou, it's expected that this report will offer the most sobering assessment of China's growing military might of any in the last five years. And it's also expected to contain some possible scenarios about how war between the United States and China could theoretically come about -- Lou.

DOBBS: And the temper of the remarks and conclusions of this Defense Department assessment, the suggestion is that the Pentagon has been in a conflict amongst those who want to water down these -- the report in terms of expressing the true degree of the potential threat of China, versus those who want to focus on the commercial relationship between China and the United States.

MCINTYRE: Well, there's been some debate about what to include in the report, particularly some of the more speculative stuff, such as scenarios that may or may not ever take place. And some of the more bellicose comments have been made from Chinese generals. And, of course, one of the big questions is not just the extent that those remarks reflect the Chinese government, but what does the military think, because, of course, we know in China the military holds a lot of political power. DOBBS: Indeed it does. And as we talked about General Zhu Chenghu, who made those threats last week, it's important to note while some have chosen not to note it he has been promoted rapidly twice last year. Jamie, thank you very much.

MCINTYRE: You're quite welcome.

DOBBS: Jamie McIntyre from the Pentagon.

In tonight's poll, which of these strong reaction to China's threat of nuclear strikes is the most appropriate from the world's only superpower: A, the State Department response that the threat was highly irresponsible; B, that the remarks were unfortunate; C, the Pentagon response that the threat is hypothetical; or Defense Secretary Rumsfeld's recommend that we wait and see/ Cast your votes at We'll have the results later.

Coming up next, Hurricane Emily is nearing south Texas and northern Mexico. How strong will it be when it gets there? We'll have an update for you.

And clashes in California as a new citizens group, a new citizens volunteer group has begun patrolling our broken border with Mexico. Why the California Minutemen, those volunteers sparked such a violent response from protesters. We'll have the story.

And a bidding war for U.S. appliance maker Maytag. Three bids are now on the table, including one from China, one from Whirlpool. How China is now at the center of a takeover war and how this well may be a metaphor for failed U.S. so-called free trade policies and a diminishing U.S. manufacturing base.

Stay with us.


DOBBS: Hurricane Emily weakened considerably in the Gulf of Mexico today, but the storm still taking aim at northern Mexico and south Texas after hitting the Yucatan Peninsula. Emily is now only a Category 1 storm. Winds of 75 miles an hour expected to make landfall tomorrow night near the Mexico-Texas border.

It could well strengthen, we're told, to a Category 2 storm before arriving. Hurricane warnings have been put up for parts of northern Mexico. A hurricane watch up for southern Texas.

In Washington tonight, a bold new effort to solve our nation's border crisis. Congressman Tom Tancredo of Colorado, Senator James Inhofe of Oklahoma today introduced what they called a landmark immigration reform bill. It's called the Real Guest Act, which would raise border security by adding the number of Border Patrol agents on duty.

The legislation would also help U.S. businesses verify their employees are in this country legally. It would penalize employers that knowingly hire illegal aliens. The bill would eventually create a temporary guest worker program, but only after our border has been secured. Congressman Tancredo says the guest worker program would in no way offer amnesty to illegal aliens.

Protests and violence erupting at our border with Mexico as another neighborhood watch group begins in California. Their mission, to protect Americans from the dangers of our broken borders, millions of illegal aliens, possible terrorists and increasingly dangerous drug and human smuggling gangs.

Casey Wian reports from Campo, California.


CASEY WIAN, CNN CORRESPONDENT (voice-over): About two dozen volunteers from the California Minuteman Project began patrolling a 25-mile stretch of the border east of San Diego this weekend. It's an effort to sustain the momentum created by Arizona's Minuteman Project earlier this year. Though there are fewer illegal aliens crossing the border here, it's a popular route for violent drug smugglers.

MIKE LEFEVE, CALIFORNIA MINUTEMAN: We want to get support for these Border Patrol agents. They're understaffed, they're overworked, and they're doing an unbelievable job out here.

UNIDENTIFIED GROUP: Racists go home! Racists go home!

WIAN: Outnumbering the minutemen, a group of aggressive protesters who tried to drive the civilian volunteers away. They included anarchists, communists and advocates of returning the southwest to Mexico.

UNIDENTIFIED MALE: It was stolen by the United States government and we're going to take it back. We're going to smash the border.

WIAN: This local rancher had to be rescued by sheriff's deputies after protesters surrounded his motorcycle. One minuteman did leave his post, but most others stood their ground. This state senator was also harassed by the mob while touring the minuteman outposts.

BILL MORROW, CALIFORNIA STATE Senate: I would respectfully disagree with my president's characterization using the word "vigilante." It's not taking the law into your own hands when you're simply being a good citizen and reporting what is a crime.

WIAN: This California minuteman traveled a thousand miles from Colorado.

JIM HAAS, CALIFORNIA MINUTEMAN: We want to get President Bush and Congress to do their job.

WIAN: James Chase organized this group of minutemen. Only a few of his Arizona counterparts carried weapons. Most of these minutemen are armed.

JAMES CHASE, FOUNDER, CALIFORNIA MINUTEMEN: We're not going to fire first on anyone. But we do reserve the right to stay alive. And that's not all those guns are there for.

WIAN: Chase says federal agents have told him Mexican drug dealers have put a $15,000 bounty on the heads of minutemen.

SEAN ISHAM, U.S. BORDER PATROL: I've heard those reports in the past. This area is very dangerous. There's a lot of narcotics smuggling that does go on here, as well as human trafficking.

The smugglers are ruthless out there. They will do anything to get their cargo through.


WIAN: The California minutemen say they've had several dozen volunteers watching the border, mostly at night since Saturday. Now, the Border Patrol says there have been no apprehensions of illegal aliens as a result of these volunteers so far -- Lou.

DOBBS: Casey, that is a remarkable statement from the Border Patrol, to say that this area is dangerous because of the drug smuggling and the human smuggling going on in that area. He sounded absolutely helpless, and that did not sound like a U.S. border, it sounded like a border between third world countries.

WIAN: I don't know that I would describe him as helpless. Maybe it came across that way. But I will point out that not for from here, just a couple of weeks ago, a Border Patrol agent was shot by a suspected drug smuggler, shot in the leg. He's recovering still in the hospital now, Lou.

So it is very, very violent and very dangerous, despite a fairly heavy Border Patrol presence in this sector.

DOBBS: And the fact that there were so many protesters there, as you point out, as you reported from various groups trying to reclaim the southwestern United States, in their judgment, for Mexico, for communists, what other groups?

WIAN: Well, it's amazing. There were a wide range of groups. Most of them advocating just completely disassembling the borders, doing away with the borders.

I mean, we talk about the open borders crowd on this program. This really was the open borders crowd. They're talking about there should be no border here.

There were also other radical groups. There was one woman during the protest who said, "I'm a feminist single mother, a lesbian feminist single mother. And we've got to protest the minutemen because they're going against us."

So every radical group you could think of it seemed like was represented here this weekend -- Lou.

DOBBS: Casey Wian reporting from the U.S.-Mexican border, Campo, California. Thank you, Casey. The original Minuteman Project in Arizona has gained momentum. It's begun chapters now in 21 states. Many of them far from our border with Mexico. In fact, like the immigration crisis itself, the chapters of the minutemen have spanned the entire country now from Washington, to Minnesota, to Maine. Each of these chapters have anywhere from half a dozen members to hundreds of volunteers.

The minuteman founders tell us volunteers are also gathering in other states and they're encouraging people in all 50 states to join that project.

Still ahead here, a bidding war over an American icon, how communist China is taking the phrase "Buy American" to a whole new level. Just as Americans ignore the concept, the Chinese are paying a lot of attention. We'll have that report.

And the Republicans' desperate attempt to gain support for CAFTA, and how China has been moved into a central role.

Those stories and more still ahead.

Stay with us.


DOBBS: China has moved to the forefront of the debate as the House of Representatives approaches a vote on the Central American Free Trade Act, which may come as early as this week. CAFTA could cost tens of thousands of Americans their jobs. The congressional leadership is trying now to swing CAFTA opponents by promising that they will actually take economic action against China if only those reluctant congressmen will vote for CAFTA.

Lisa Sylvester reports.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): CAFTA supporters are playing up the China card: come down hard on China trade to soften opposition to the Central American Free Trade Agreement. Representative Phil English planned to vote no for CAFTA. He changed to yes after securing support for a new China bill.

REP. PHIL ENGLISH (R), PENNSYLVANIA: This is, I think, exactly the sort of progress we need to be making on the biggest trade issue that America's facing. And accordingly, I am now comfortable voting for CAFTA.

SYLVESTER: But CAFTA's critics question, what does China have to do with Central America? This latest strategy, they say, is a sign of White House desperation.

LORI WALLACH, PUBLIC CITIZEN: So now the administration is both trying to open up the piggybank and make pork barrel deals, and is trying to distract members by trying to focus them on something else: the China trade problem. It's a real problem. But it's a different problem.

SYLVESTER: It only took the Senate a week to approve CAFTA. But after three weeks, it still hasn't made it to the full House because the leadership has not filed a report that would start a do-or-die clock.

REP. BEN CARDIN (D), MARYLAND: Clearly, they didn't follow the committee report because they didn't want the 15 legislative day clock to start. So, yes, they are holding this back, and they're not prepared to say whether we'll take it up before we go into recess. It's a clear indication that they don't have the votes necessary to pass it.


SYLVESTER: The Bush administration needs an estimated two dozen more votes to pass CAFTA in the House. Whether it gets there will likely depend on how many sweeteners are added to get the deal through -- Lou.

DOBBS: This may be the way sausage is made in Washington, but it is certainly, as they say, an ugly process. It's extraordinary that the House leadership is actually saying, we will actually do something about the Chinese trade problem if you'll just go with this on this other problem?

SYLVESTER: What they're doing, essentially, is dangling a carrot and hoping that some of these opponents will actually take this carrot. But if you take a look at the details of the proposal that they're putting forward, it's just that, it's a promise to do -- to take action on China and not actually taking tough action on China -- Lou.

DOBBS: Remarkable. And I know you will continue to follow this, Lisa. And we thank you for doing so. Lisa Sylvester from Washington.

Another major concern for this White House this week is the lone vacancy at the U.S. Supreme Court. President Bush today said he's taking a "very thorough approach" to choosing a nominee to replace retiring Justice Sandra Day O'Connor.

My next guest says the former chief of staff and adviser to President Reagan, who nominated Justice O'Connor in fact to the high court. Ken Duberstein is now a Republican strategist, joining us tonight from Washington. Ken, good to have you here.


DOBBS: This president has a very important choice to make. He has said that he likes the cut of Clarence Thomas and Antonin Scalia. Antonin Scalia, of course, put on the Supreme Court by President Reagan. But at the same time, the chairman of the Judiciary Committee, Arlen Specter, Senator Specter, says he wants to see a moderate. Which way do you think this president should go? DUBERSTEIN: Oh, I think the president very clearly is going to want somebody who can get 70 to 75 votes in the Senate. He does not want to go through a process where he gets 50 or 51, and Dick Cheney becomes the deciding vote, nor does he want a consensus candidate in the definition Teddy Kennedy gave it. I don't think he's going to get anybody who can get 80 or 90 or let alone approaching 100 votes, but somebody who has the judicial temperament, the judicial philosophy that Bush is very comfortable with.

You know, somebody said, what about a Sandra Day O'Connor clone? And I think the reality is that he goes one or two clicks to the right of Sandra Day O'Connor, but not 10 clicks to the right, and I think that gets you 70, 75 votes, which are not only Republican, but obviously a decent percentage of Democratic votes as well.

And I might also say that he's done an awfully good job of consulting, of reaching out. He talked to every member of the Judiciary Committee, and I gather 50 or 60 senators. You know, that is truly remarkable. And if he's taking that kind of an input, I think he's going to wind up with somebody who the American people can rally around, that can be 70, 75 votes in ultimate confirmation in the Senate.

DOBBS: Well, as you know, very well know, both liberals and conservatives on the broader reaches of the political spectrum are mobilizing millions of dollars -- some of that money has obviously already been spent -- for a major battle in the media and on Capitol Hill.

That money has not been raised, because someone expects that consensus approach that the president, as you correctly state, has taken to this point. That consensus can blow up with just the nominee's name being released. You really believe that we're going to see an orderly, civil process on this nominee?

Ken, can you hear me? Something tells me Ken couldn't hear me, because that question was so hard to reframe, because it was so succinct.

Ken, can you hear me now? I'm sorry?

We have lost audio, I'm told. And I would be, of course, amongst the first to realize that. I apologize to you at home. We will try to correct that, and we will try to come back soon, because that question -- we've just -- I'm told now that we have it back.

Ken, can you hear me?

DUBERSTEIN: I can hear you fine, Lou.

DOBBS: What I was asking you, is do you really believe this consensus stuff will last beyond the naming of the president's nominee?

DUBERSTEIN: No, I don't think there will be a consensus, but I think there will be a rallying around. And I think, if anything, the Senate will act in what I would term an adult way in the consideration. Bush has done it very clearly in leading off with a consultation.

DOBBS: Let me ask you this, Ken.


DOBBS: President Reagan, when you were in the White House, nominated Scalia, Kennedy, O'Connor. Which of those three do you think represents the best within the spectrum of constrained judicial -- well, we'll just say it another way -- constrained justice rather than judicial activism in terms of their political views and their values? Which do you think represents the best kind of choice for President Bush here?

DUBERSTEIN: Well, I think President Bush needs to go one or two clicks to the right of Sandra Day O'Connor, but not 10 clicks to the right. So it's somewhere between Kennedy and O'Connor and Scalia. Leaning much more toward O'Connor and Kennedy is the way to go.

DOBBS: Ken, thank you very much. Let me ask you one quick question, and that, of course, is on the Karl Rove mess. Any advice for the White House here that you think would be helpful? Any advice to those calling for Karl Rove's resignation?

DUBERSTEIN: I think everybody has to stop hyperventilating right now. Let the special counsel report and his investigation be concluded. You know, everybody says something like this, this feeding frenzy is August in Washington. Well, it's July. So everybody I think just needs to chill out and let things run its course for a while.

DOBBS: Ken, of all the advice I've ever heard a strategist or a counselor give in politics, that ranks among the least likely to be followed advice I've ever heard.

DUBERSTEIN: But I think it's important advice to everybody, stop hyperventilating.

DOBBS: I didn't suggest to you, Ken, that it was not sound advise nor reasoned. We thank you for being here.

DUBERSTEIN: Thanks a lot, Lou.

DOBBS: Coming up next: China's bidding spree for American companies. Tonight, new competition for China's bid to take over one company popular in homes all across this country. Our special report is next.

And then, China's bid for an American oil company, timed as Beijing aggressively builds its military power. I'll be talking with an expert on Sino-U.S. geopolitical military relations, about what it means for U.S. national security.

And a nation divided on the role of religion in politics. A high-level vacancy at the center of the Supreme Court, what will its impact be? I'll be talking with the authors of two new important books on the separation of church and state, with two differing views of its origins and likely course in American history. Stay with us.


DOBBS: China is making an aggressive push to buy U.S. business assets, including oil giant Unocal and appliance maker Maytag.

Maytag is now the target of an apparent three-way takeover battle after a surprise tentative bid by Whirlpool. This takeover battle represents many of the critical issues that characterize America's trade and economic relationship with China, and the outright failures of so-called U.S. free trade. Christine Romans reports.


CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): China is proceeding with its quest to buy Maytag. But China has company. Pursuing the 112-year-old all-American Maytag brand, Whirlpool has proposed a cash and stock deal worth $17 a share.

China's Haier, along with two American private equity firms, are preparing a $16 cash bid.

And Maytag has already signed a $14 a share agreement with New York private equity firm Ripplewood.

Undeterred, China's Haier has been poring over Maytag's books, angering one insider, who says China may not win Maytag, but will still walk away with plenty of sensitive Maytag information.

It all fits into China's single-minded strategy to acquire American companies.

PROFESSOR GEORGE HALEY, UNIVERSITY OF NEW HAVEN: They don't want to build up their own brand, and what Maytag does for Haier is it gives them established distribution channels. It gives them established brands in the West. And it also gives them access to U.S. financial markets.

ROMANS: And whether China gets Maytag or not, this is just the beginning.

DONALD STRASZHEIM, STRASZHEIM GLOBAL ADVISORS: China overall is going to be very inquisitive in terms of looking for American companies over the coming years. The Lenovo purchase of IBM was an example. This Haier attempt to buy Maytag is an example. We've of course got CNOOC trying to buy Unocal now, and there are many, many more of these to follow.

ROMANS: Ironically, Whirlpool's bid would likely face regulatory scrutiny. A merger of the two American brands could raise anti-trust concerns.

As for China's bid, critics call it a complicated consortium of buyers. The offer has not yet been formalized, and now may face even more scrutiny, after a top Chinese general last week warned China would not hesitate to use nuclear weapons against the United States over Taiwan.


ROMANS: The fact is, whether Ripplewood or Whirlpool or China's Haier buys Maytag, this proud American brand could likely be nothing more than a nameplate marketed to Americans and made somewhere else.

Lou, one analyst called China's bid for this company, "a jobs program for the western provinces."

DOBBS: The western provinces of China.

ROMANS: Of China.

DOBBS: It's a remarkable story and the fact that the Whirlpool bid -- an international company, but U.S.-based, could face more regulatory hurdles than Haier, Chinese company, tells you just how far we've come in this world.

ROMANS: It does indeed.

DOBBS: Thank you, Christine. Fascinating. Christine Romans.

We don't often recommend news stories from other news organizations here, but tonight there is one we think is worth your attention. Today's "New York Times" reporting an unbelievable story about China's efforts to stifle free enterprise in its oil industry and to suppress legal rights that it had tried to create apparently.

The "New York Times" reporting the communist Chinese government has seized privately owned oil wells, paid investors and owners only a fraction of the wells' value, and then constricted the legal process that was supposed to exist to protect property rights and in effect, put some of the leading parties in this lawsuit in jail. We don't want to spoil the story for you, just want to recommend it. So if you would, we think it's worth your attention.

Still ahead here: God, politics, the Supreme Court. And I'll be joined by a political and military expert on si -- the soviet -- Sino- American relations. Why he says China's bid for Unocal has set off an examination of the bigger problems that now exist between the United States and as I was saying, God, politics and government.

How important is the role of religion in choosing the next Supreme Court justice? What is the future of the separation of church and state in this country? I'll be talking with two authors and former clerks of the Supreme Court next.

Stay with us.


DOBBS: China's rising economic power is matched by its increasing military threat to this country in the minds of many. Last week a top Chinese general threatened nuclear strikes against the United States in any confrontation over Taiwan.

And the general declared China could destroy hundreds of American cities. Until now, China's maintained a no-first-strike policy for nuclear weapons. Another major concern for the country is China's rapidly expanding navy. The Chinese navy now buying sophisticated Russian warships and submarines. Joining me now, David Finkelstein, an Asia expert at the Center for Naval Analysis. Good to have you with us.


DOBBS: Let's first deal with the threat that was explicit last week. Given an opportunity, General Zhu Chenghu did not back down whatsoever, according to the "Wall Street Journal's" deputy editor in Asia. This looks like a pretty serious statement.

FINKELSTEIN: Well, of course, it's a very serious statement and you know, it's very bizarre -- the timing of this statement, is very bizarre, given all the other issues in the U.S.-China relations. But I think we have to be careful about determining or making the adjudication as to whether this was one individual speaking at a school, with a lot of personal gusto, or whether it actually represents an official policy on the part of China. Those of us...

DOBBS: David, you've covered China for a long time. You've -- as a scholar in the United States military -- How many renegade top generals have you seen in the PLA?

FINKELSTEIN: Well, renegade -- I'm not sure I'd use that term.

DOBBS: Well, my point being: This man has been promoted twice over the last 12 months; one of the most rapidly advanced general staff officers. It's unlikely he's a renegade, wouldn't you say?

FINKELSTEIN: Absolutely. I don't think that he's a renegade at all.

DOBBS: And I'm trying to put that in some context. Let's turn to the quadrennial defense assessment and this delay since March. Why in the world is it taking so long and is it excusable in any manner?

FINKELSTEIN: Well, there's a lot of issues on the table here. Clearly, the basic analysts who put this together have to gather the facts, get them vetted and do the best possible job they can in telling the story of China's modernization efforts since the last report in 2004. But I think we're it probably gets hung-up...

DOBBS: David, they put deadlines for these things for a reason. I mean, we do it in the news business. Surely, the military dealing with the national security, can meet a deadline of this critical nature.

FINKELSTEIN: Well, I'm sure they could, if it didn't get hung-up in the policy circles and that's where most of us suspect this is being hung-up: In the policy circles, not in the analytic circles. DOBBS: How concerned you -- the secretary of defense has referred to the building Chinese threat -- the amount of the buildup of the China military -- How concerned are you?

FINKELSTEIN: Well, I think that we have to give credit, where credit is due. I think that over the last few years, the Chinese People's Liberation Army has made very credible progress across the board in all of the efforts they have been making in weapons, doctrine, personnel. So, there's a lot to be looked at here. They're doing a very credible job of reforming themselves.

DOBBS: All right. Dave Finkelstein, we thank you for being here. Appreciate it.


DOBBS: A reminder now to vote in our poll. Which of these strong reactions to China's threat of nuclear strikes is the most appropriate in your judgment, from the world's only super power: A. the State Department response: The threat is highly irresponsible; the remarks were unfortunate; or C the Pentagon response that the threat was hypothetical; or Defense Secretary Rumsfeld's recommendation that we wait and see. Cast your vote, please, at

Now, coming up at the top of the hour, "ANDERSON COOPER 360" and here to tell us all about it: Heidi Collins -- Heidi?


Coming up next on "360:" Hurricane Emily hits the Yucatan and rolls toward another landfall. We'll bring you the latest storm-track and assess the damage to Mexico.

Also: Tracking the movements of terrorists. British investigators move closer to a possible al Qaeda link in the London bombings.

And a lawyer's tool of the trade could be his health's worst enemy. We'll have all that and much more -- Lou?

DOBBS: Looking forward to it, Heidi. Thank you very much.

Coming up next here: A major divide in this country between religion and law, between state and religion, or not. I'll be talking with the authors of two important new books on the issue and the intent of our Founding Fathers, next.

Stay with us.


DOBBS: President Bush could choose his next Supreme Court Justice nominee as soon as this week. Conservatives pushing for a candidate that will uphold religious values that they believe have been ignored by the courts for years, courts that they deem to be judicially active to excess.

But should religion play any role in this judicial debate and then government itself. Joining me now the authors of two important new books on the separation of church and state with differing views on the founding fathers' intent on the role of religion in our society. Joining me now New York University law professor, Noah Feldman. The author of the book "Divided by God: America's Church State Problem and What We Should Do About it." Also a former law clerk to Supreme Court Justice David Suter.

Marci Hamilton is here. She's a law professor at Benjamin Cardozo School of Law. And she is the author of the book "God Versus Gavel: Religion and the Rule of Law." She's a former law clerk to Supreme Court Justice Sandra Day O'Connor. It is good to have you both here.

Let me start if I may, Marci, with you. And that is -- because you reverse your views, as you acknowledge in your book, over time, of course you had originally suggested that religion trump, if you will, legal constraint. You see it quite differently now. Because of the wrongs you see being committed against law itself by religion?

MARCI HAMILTON, PROFESSOR, CARDOZO LAW SCHOOL: Well I was like most Americans 10 years ago. And I just assumed if a religious entity wanted to do something, that was good for you. And then as a result of being involved in a Supreme Court case involving the religious freedom restoration act, I met all the groups that lobby against religion and I learned it was children, it was cities, it was regulatory agencies, all sorts of groups whose causes are worth being behind.

DOBBS: And religion itself, not worth being behind?

HAMILTON: Well, I'm very religious, and my family's very religious. But I think all of us are capable of overstepping. And I think the last 30 years, what we've seen is a religious entities overtake political power that really they should not have taken.

DOBBS: I've got to be honest with you, I don't think I want to go to synagogue, to temple, to church, or mosque with you, because you're going to be very unpopular. Noah, you have a better shot. I might go with you.

NOAH FELDMAN, NYU LAW PROFESSOR: Depends what the topic is.

DOBBS: Exactly. But if it's on this topic, and it is, the separation of church and state, you put forward an idea that I find interesting, and that is basically, if it doesn't cost anything, what's wrong with it.

FELDMAN: I think the framers of the constitution were obsessed with taxation. They fought a revolution over taxes. And they believed very, very firmly that if even a nickel of my tax dollars went to support any religious purposes, that violated religious liberty. That was their most important value. DOBBS: And you're rather sanguine about the idea of displays of religious documents or sculpture or symbols, so long as they don't cost the taxpayer anything, that the government isn't supporting, is that correct?

FELDMAN: Again, the framers had no great objection to religious symbolism. They didn't really know about statuary, that wasn't the religious style of the day. But they would, I think, have no great objection as long as no money was expended. And I think also nobody is coerced in any way by a religious symbol. No one is forced to do anything against his or her will. And I don't think anyone is fundamentally marginalized by other people's religious symbols.

DOBBS: You would disagree with that, obviously.

HAMILTON: I strongly disagree with that. When the government takes up a religious standard, it tells everyone who doesn't believe that particular religious viewpoint that they're not true citizens, that they're not full citizens. And that's not right. We have a country of thousands of religious believers. We have diversity like no other country in history. I think we ought to honor that and the government ought to honor that.

DOBBS: We're primarily still to this day a Protestant, Catholic, Judeo society. The idea of melding all of that into one simple codified set of laws here that take care of every interest is all but impossible. Let me ask you this. Is the framers of the constitution, you suggest, they were more interested in protecting religion from government. You disagree?

HAMILTON: Well, I think it's pretty clear, if you look at the era of the framing, that we had very many religions. And they didn't get along. The Puritans believed in religious liberty that meant if you don't agree with us, you may leave town. That's why we have Rhode Island today. The Baptists were dissenters, they were minorities. They were behind what they called the separation of church and state. So it's a very different era, and they fundamental understood, I think, what this society has forgotten.

DOBBS: Whichever the justice is appointed, whether it is someone close to Sandra Day O'Connor or, as Ken Duberstien said her earlier, two clicks to the right of her, but not all the way clicked out to Antonin Scalia, church and state will be important in this court in your judgment over the next five years?

FELDMAN: It will be central. Because Justice O'Connor was the swing vote, both on religious symbolism questions and on money for religious organizations. The new justice is not going to have the same views as Justice O'Connor, almost certainly.

DOBBS: Do you concur?

HAMILTON: Well I think if the chief had stepped down, I think we might see a big difference with the two of them being replaced. But I think there's a large push to get a moderate in her spot. It's going to be hard to say no to that. And In any event, the business interests are far stronger in Washington than any religious interest.

DOBBS: You know what, that's a point that a lot of people are starting to pay attention to now. But it's somehow -- sometimes more riveting to talk about religion and god and separation between church and state, than the influence of corporate interests on the American public policy. We thank you both for doing all of the above. Terrific books. We thank you.

HAMILTON: Thank you.

FELDMAN: Thank you.

DOBBS: Thanks. Up next, hear the results of our poll tonight. We'll have a preview of what's going to happen here tomorrow, to the degree that we know. You stay with us.


DOBBS: Now the results of our poll tonight. Eighty eight percent of you saying the State Department's response to China's threat of nuclear strikes was highly irresponsible. The most appropriate among those crafted by this government.

And now turning to what comes tomorrow, "New York Times" reporter Judith Miller has now spent thir -- rather, twelve days in prison for refusing to disclose her confidential sources in the CIA White house leak story. And that's our broadcast for tonight. We thank you for being with us. Please join us here tomorrow.

Red Star rising, the Pentagon to release a long delayed report on China's rising military power. What will it mean for our national security, and how will the White House respond. We will be focusing on those issues. Good night from New York.

ANDERSON COOPER 360 starts right now, Heidi Collins is filling in. Heidi?



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