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Lou Dobbs Tonight

Escalating Insurgency in Iraq; Nuclear Blackmail; A Party Divided; Drugs and Investors; Organized Labor's Troubles; Intelligent Design as Science; NARAL and Roberts

Aired August 10, 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, the insurgency in Iraq is gaining deadly momentum. The insurgents are killing more Americans this month already than last month. We'll have a special report.

And a massive mortgage fraud spreading all across this country. Real estate agents defrauding lenders and earning millions of dollars in commissions.

And debating our origins. The state of Kansas votes to put intelligent design on the public school curriculum. Is this the beginning of a national trend?

And a leading senator demands an investigation of doctors and Wall Street in collusion on clinical drug trials. He's our guest here tonight.

We begin with the escalating insurgency in Iraq and the rising number of American deaths in combat. Insurgents have killed six Americans, four of them in an ambush on a military convoy 100 miles north of Baghdad. Almost as many Americans, 43, in fact, have been killed in the first 10 days of this month than all of July.

Aneesh Raman reports from Baghdad on an insurgency that is gaining in strength, and without doubt, becoming deadlier.

(BEGIN VIDEOTAPE)

ANEESH RAMAN, CNN CORRESPONDENT: The death toll for U.S. forces in Iraq continues to rise. The U.S. military saying that on Tuesday, at least six U.S. military personnel were killed in various incidents. Four of them north of the capital city in the town of Baiji in what the military says was a - quote -- "complex attack."

The Task Force Liberty Soldiers were driving in their armored vehicle to investigate an incident. They hit a landmine, and after the explosion, insurgents came at them with small arms fire.

The latest numbers bring to over 40 the total of U.S. military personnel killed in Iraq just since the start of the month alone. And it comes as a suicide car bomb detonated in the Iraqi capital, targeting a police convoy. At least six people were killed, including two Iraqi police officers. Fourteen others wounded.

All of this as the country tries to forge ahead in writing the constitution. The deadline for that, now just days away.

Aneesh Raman, CNN, Baghdad.

(END VIDEOTAPE)

DOBBS: U.S. military commanders admit the insurgents are using more sophisticated tactics against our troops. Insurgents are also using deadlier weapons.

Barbara Starr has our report from the Pentagon.

Barbara, what are our military commanders doing tactically and strategically to try to contain this escalating insurgency?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Lou, the first thing they say -- in fact, General Richard Myers said it just yesterday -- the insurgency retains the same capacity -- that's his words -- that it had about a year ago tactically, on the streets of Iraq, street by street, collecting intelligence, arresting insurgents. But strategically, the big picture policy simply remains unchanged: train Iraqis, get them trained and ready to defend their own country so U.S. troops can come home.

It is the question of where these weapons are coming from, what types of weapons that is getting a great deal of attention right now. There are indeed more suicide bombs, more car bombs. Those manufactured explosives coming in from Iran that are more sophisticated, more deadly than the types of weapons that the insurgents have been using, those improvised explosives.

Just a couple of days ago, a top general here in the building spoke about this new era of weapons coming into Iraq. Let's listen to what he had to say.

(BEGIN VIDEO CLIP)

BRIG. GEN. CARTER HAM, U.S. ARMY: We are seeing larger amounts of explosives. We are seeing different techniques that are -- that are being used in an effort to counter the efforts of coalition and Iraqi security forces to protect folks while they are moving. Different types of penetrators, different techniques of triggering the events. I mean, again, this is -- this is a very brutal, lethal and adaptive enemy.

(END VIDEO CLIP)

STARR: The very candid Brigadier General Carter Ham laying the situation out there. So why can't the U.S. military really make a significant dent in some of this right now? One of the issues on the table is the insurgency network itself.

What officials are saying and are continuing to say is the insurgency is made up of this adaptive enemy. A lot of cells of insurgents, groups of insurgents moving across Iraq, very fluid, very small groups, without a central command and control structure, Lou. So there's no head to lop off, as it were. No top commander can they capture or kill that will make a substantive difference, because still there will be these insurgent cells across Iraq -- Lou.

DOBBS: Forgive me, Barbara, but at this point, just about two- and-a-half years after the war against Iraq and the removal of Saddam Hussein, to hear U.S. military commanders describe, as the general did, the enemy as a brutal, lethal, adaptive enemy, and for the capacity to be the same today as it was a year ago, sounds like abject failure on the part of the command staff of our military to get the job done in Iraq. Is there a sense within the Pentagon that they should be doing more and be far more effective in their leadership of our men and women in Iraq?

STARR: Difficult question, Lou. Here is what they continue to say. You know, one of the key questions that comes up, would it be more helpful to the U.S. military to put more troops in Iraq? Would that really change the equation here?

What military officials say is, no, it would simply provide more troops to be a target. They believe the fundamental difference is if they can get those Iraqi troops trained and make them really part of the security equation. Whether that's really happening or not remains very problematic. But because by all accounts there are not really a substantial number of Iraqi troops that can take on the job and operate independently of the U.S. operation -- Lou.

DOBBS: Barbara, I understand the Pentagon, and a number of our senior officials have used that expression that simply providing more troops in Iraq would provide more targets to the enemy. That is on its face Orwellian in its logic and inverted in its reason. But the fact is, it is also defeatist in that more troops, it seems straightforwardly, would provide greater security for the troops we have there.

How is it that this -- that the top Pentagon officials are allowed to continue, if you will, to speak in such circular and obfuscatory terms?

STARR: Well, Lou, I'm just probably not in a position to explain that very well. But how are they allowed to? It is very clear that that is simply Bush administration policy.

What is very interesting to note -- because we ask a lot of military officials, what is the ultimate goal here, what is the mission, how will you know when you have achieved success? And what they talk about is this question of Iraqi security forces.

DOBBS: Right.

STARR: No one really talks about the question of a decisive U.S. military victory against the insurgents. No one is talking about the U.S. military defeating the insurgents.

That is not part of U.S. strategy right now by the Bush administration. They have no intention of staying there long enough to defeat the insurgents at the hands of the U.S. military. Their plan is to turn it over to the Iraqis and bring U.S. troops home just as quick as they can -- Lou. DOBBS: Barbara Starr. Thank you. Reporting from the Pentagon.

Yesterday, Defense Secretary Donald Rumsfeld declared Iranian weapons have been smuggled into Iraq and used against our troops. Today, Iran denied those U.S. assertions that American weapons are being used to kill American troops. The Iranian foreign ministry declared, in fact, Rumsfeld is trying to cover what Iran calls "U.S. mistakes in Iran." The Iranian spokesman offered no explanation of how powerful explosives from Iran's Revolutionary Guard have entered Iraq.

Iran also challenging the United States and Europe on Iran's nuclear program. The Iranians today broke U.N. seals on equipment at a critical nuclear plant, ignoring protests from western countries that say Iran is trying to develop nuclear weapons.

At the same time, a top Iranian official said Iran would strike back if the west tries to block its nuclear ambitions. That official declared Iran could push world oil prices even higher. Today, by the way, oil prices hit a new record of just under $65 a barrel.

Walt Rodgers has the report from Vienna.

(BEGIN VIDEOTAPE)

WALTER RODGERS, CNN SR. INTERNATIONAL CORRESPONDENT (voice over): What one western diplomat in the discussions called a thinly-veiled threat came from this man, Cyrus Nasseri, Iran's chief delegate to the International Atomic Energy Agency in Vienna. Nasseri told the IAEA, "Iran is a major oil and gas producer, and is determined to become a major player in nuclear energy," according to these same sources.

Later he told CNN...

CYRUS NASSERI, CHIEF IRANIAN DELEGATE: I really would consider that it would be best for you to think twice before moving towards any action that would be deemed to be coercive, because that would be a course of action that would end to a situation where everybody would lose.

RODGERS: The Iranian warning of even higher oil prices came one day before the seals were removed on the Iranian nuclear installation at Isfahan, where a disputed fuel conversion process was restarted.

Iran also played the Iraq card, privately suggesting it could be cooperative and helpful with the west woes in Iraq, Afghanistan and Syria. But a diplomatic source told CNN the Iranians are also implicitly hinting it could make trouble there if there's any confrontation over Iran's nuclear energy program.

Walter Rodgers, CNN, Vienna.

(END VIDEOTAPE)

DOBBS: In this nuclear crisis, China is supporting Tehran. China today declared the United Nations Security Council should not take any action to stop Iran's escalating nuclear ambitions. China's ambassador to the United Nations said the International Atomic Energy Agency alone should be dealing with the issue.

China, of course, is a permanent member of the U.N. Security Council, which means China could veto any U.N. Security Council resolution that would introduce sanctions against Iran and increase U.S. frustration over how to stop Tehran's nuclear initiatives.

Still ahead here, a party divided. The Republicans splitting over immigration reform and border security. Our senior political analyst reports.

And, how realtors across the country are defrauding lenders and making millions of dollars in commissions in the process.

And the crisis in organized labor in this country. Fewer workers belong to unions now. Do unions have a future in this country. I'll be talking with a leading Democrat and former House majority leader, Dick Gephardt, next.

(COMMERCIAL BREAK)

DOBBS: A Republican Party that once stood united on major policy issues is being rended tonight over the issue of illegal immigration. Deep divisions are now obvious in forming within the party over a crisis that has become a national concern, a top voter concern. And Republican leaders are now openly breaking with the White House.

Bill Schneider reports.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice over): The stakes in the debate over illegal immigration have escalated. It had been a local issue here in the town of Herndon, Virginia, where day laborers, many of them illegal aliens, gathered daily at a convenience store parking lot to solicit construction work in the booming Washington, D.C., area.

The issue? Whether the town should support a tax-supported labor site where contractors and homeowners can find workers.

MAYOR MICHAEL O'REILLY, HERNDON, VIRGINIA: If we have too many people standing on the street corner, we have to rely on whatever resources we have available to us to try to solve that problem.

SCHNEIDER: A purely local issue, right? Not anymore.

This week, Jerry Kilgore, the Republican candidate for governor, came out in opposition to taxpayer-funded work sites unless they verify the legal status of the workers. A legislative ally who made the announcement with Kilgore says...

DAVE ALBO (R), VIRGINIA HOUSE OF DELEGATES: What we're trying to do is we're trying to preserve our taxpayer resources to help citizens and legal immigrants. SCHNEIDER: That seems to put Kilgore at odds with President Bush, who has never supported punitive measures against illegal aliens. GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Many undocumented workers have walked mile after mile through the heat of the day and the cold of the night.

SCHNEIDER: Kilgore and his allies oppose President Bush's plan to give temporary amnesty to illegal aliens.

ALBO: Jerry Kilgore and myself believe we should be taking a more aggressive role in kicking them out of the country.

SCHNEIDER: The Virginia campaign has turned the spotlight on the issue of illegal immigration, an issue that is splitting the Republican Party.

There's Republican Congressman Tom Tancredo of Colorado, a critic of President Bush's immigration policy. He's considering running for president in 2008.

There's Russell Potts, a Republican state senator who's running for governor of Virginia as an Independent this year. He claims he's closer to President Bush on immigration than Kilgore, the Republican contender.

RUSSELL POTTS (R), VIRGINIA STATE SENATOR: President Bush, I think, has a very logical view of this, that the fact of the matter is, our economy is growing, and we need people on a day-to-day basis to do a lot of the construction jobs and caregivers.

SCHNEIDER: In the middle there's President Bush. His advocates say his guest worker program is both pro-immigrant and pro-border control.

KEN MEHLMAN, RNC CHAIRMAN: We need to deal with the question of a temporary worker program because that will take some pressure off the border.

(END VIDEOTAPE)

SCHNEIDER: President Bush is likely to campaign in Virginia this fall. And if he goes to Herndon, it could make the split in the Republican Party painfully apparent -- Lou.

DOBBS: Bill, let's talk about a couple of these issues. You're reporting on Ken Mehlman. He also said today, we need more Border Patrol, more money, more technology. We've got to control our borders.

Now Bill, that's remarkable coming from the Republican National Committee chairman supporting a president who's done just about everything he can to avoid the issue, proposed only 200 Border Patrol agents, in point of fact, in this budget. This is getting, again, Orwellian. What in the world is going on?

SCHNEIDER: Well, you heard Ken Mehlman in my piece say that he thought the guest worker program would aid border control, which is just the opposite of the way most people read that. They think it will... DOBBS: That also defies logic at the same time.

SCHNEIDER: Yes, that's right. Well, look, Lou, the basic point is, Jerry Kilgore would not be seizing on this issue if he didn't think it had potential as a voting issue in the election this year in Virginia.

Virginia isn't even a border state. But there are a lot of illegal aliens in Virginia, in a town like Herndon. It's 26 percent Hispanic. There are a lot of illegal aliens, as well as migrant workers who work there. And clearly, Kilgore thinks this is an issue that can get him elected.

DOBBS: You left out one name today that I would like to bring up and see how important you think it is. And that is Tom DeLay.

Tom DeLay, returning home to Houston, has taken a very strong position. One assumes it's a sincere position against illegal aliens and illegal immigration. What's your reaction?

SCHNEIDER: Again, my reaction is, he's reading the same constituency tea leaves, he's listening to the same complaints that Jerry Kilgore is listening to. This is an issue that appears to be a real grassroots issue. I spoke to a group of congressmen months ago who say, when they go home, this is the only issue they hear about.

DOBBS: Well, we, as always, Bill, appreciate your insight. Thank you very much.

SCHNEIDER: Sure.

DOBBS: Bill Schneider.

And it's now your chance to weigh in on this important question. And our poll question tonight is, do you believe illegal immigration should be a major issue in next year's elections, yes or no? Please cast your vote at LOUDOBBS.com. We'll have the results here later in the broadcast.

Tonight, officials are uncovering a massive multimillion-dollar fraud that involves illegal aliens in the real estate industry. It is, in fact, a national fraud. Officials say real estate agents all across the country are stealing identification and forging documents to help illegal aliens qualify for low-income home mortgages. And when these mortgages go bad, banks and taxpayers are stuck with the bill.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): In Colorado, this home and this one were bought by illegal aliens with fake documents and federally-backed loans. Colorado investigators say this realtor placed Spanish language ads offering no money down and cash back on closing. And with the help of these loan officers manufactured fake documents to secure FHA insured low-interest loans. SCOTT STOREY, D.A., JEFFERSON CITY, COLORADO: The movers and shakers in this whole criminal enterprise, in my mind, were the realtors and the loan officers. And they'd get large commissions from their efforts, and the home buyer would then have a house that he or she did not have to put any money down on, that he or she could not qualify for if you went through the legitimate loan process.

ROMANS: Sixteen million dollars in fraudulent loans uncovered in Denver so far. Investigators say thousands of area homes were likely acquired illegally.

BOB BROWN, COLORADO BUREAU OF INVESTIGATION: It's the realtor. It's the mortgage broker. It's the processor. It's the underwriter. It's the homeowner themselves, the illegal alien. They know when they go to closing that the documents that are referred to in closing are fictitious.

ROMANS: In Kansas City last month, this man and an accomplice pleaded guilty to securing 24 FHA loans for illegal aliens. And in Utah, the state attorney general says illegal aliens used stolen Social Security numbers to buy 87 homes, costing the government $2.5 million.

ROY COLE, CRIMINAL DEFENSE ATTORNEY: One word: money. It comes down to the almighty dollar. The people I'm dealing with were selling these loans to these Hispanics and these other illegals. They just don't care. It's a matter of, hey, look, here's some -- here's another market to exploit.

ROMANS: In Colorado, investigators say they suspect the scope of the trend nationwide is staggering.

BROWN: There's a homeland security issue that probably hasn't been addressed. We have hundreds of thousands of people in this country that have established identifies in homeownership who don't belong here. And that's problematic.

(END VIDEOTAPE)

ROMANS: And there are no nationwide numbers. But judging from the reported cases, crooked real estate agents are earning millions of dollars in commissions across the country on untold thousands of homes to illegal aliens.

DOBBS: This is remarkable. And as one looks at the illegal alien crisis in this country, the illegal immigration crisis, it just pervades the entire country. We're talking about outright corruption on the part of the mortgage system, the real estate industry itself.

How can this be tolerated?

ROMANS: It's absolutely intolerable when you talk to some of these people who are watching it spread. The investigators say they know there's a lot more out there than has been detected. They say they're just beginning to sort of uncover it all. And it's frightening when you think how deep it can go and that it's gone on under the nose of regulators maybe for years.

DOBBS: Under their nose almost implies that it's also not with their permission. In point of fact, the FDIC and some of these other agencies are encouraging this.

ROMANS: Encouraging homeownership to the entire Latino population, as the FDIC points out. That is documented and undocumented. And some of these unscrupulous real estate brokers, they'll tell illegal aliens, the government wants you to have a loan. Everyone wants you to have a loan. Here, I'll give you one.

DOBBS: You know, that is such a patronizing attitude on the part of the government to talk about the Latino population. It's an insult to Hispanic citizens of this country for the United States government to combine illegal aliens with the Hispanic community in terms of policy. It is utter madness. It is hard to believe.

ROMANS: The banks do it, too. It's just a big -- one big market to them.

DOBBS: Well, I know you're going to continue to dig into this.

ROMANS: Sure.

DOBBS: And we're going to find out just how pervasive it is nationwide. Thanks very much. Christine Romans.

ROMANS: You're welcome.

DOBBS: Coming up next here, stunning charges of fraud inside our nation's medical research institutions. Are doctors selling secrets to Wall Street for money? Senator Chuck Grassley is our guest.

And no energy relief in sight for us as oil prices rise to a record $65 a barrel. Even the White House is now admitting its new energy bill is out of gas when it comes to easing Americans' energy bills. A special report on our energy drain next.

And President Bush signs the highway bill he once correctly described as being stuffed with pork. Tonight, we'll show you some of the thousands of pork barrel projects that make up this massive $286 billion piece of legislation.

And a partisan new ad urging the defeat of Supreme Court nominee John Roberts.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: President Bush has signed into law an unprecedented $286 billion transportation bill. It is the most expensive public works bill in this country's history.

President Bush signed the bill today at a Caterpillar plant in Chicago. The legislation includes some 6,000 pet projects for lawmakers -- read pork -- worth about $24 billion.

Among those projects, $230 million for the infamous bridge to nowhere that connects Gravina Island, population 50, with the Alaskan mainland; $4 million to develop bicycle paths and public park space adjacent to the New River in California; $2.3 million to add landscaping enhancements along the Ronald Reagan Freeway in California -- that's for, by the way, aesthetic purposes.

Those bike paths may come in handy if the price of gasoline doesn't decline soon. Gasoline prices have been hitting record since President Bush signed the massive new energy bill into law.

This new law gives energy companies some $15 billion in tax breaks while Americans are being squeezed at the pump by those record gasoline prices. And even President Bush admits the new energy plan won't fix those problems, certainly overnight.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice over): The price at the pump showing no mercy. And what goes into the tanks comes out of the economy. Americans are now paying $400 million more per day in gasoline prices than they were three years ago.

Throw jet fuel and diesel into the mix, and the number rises to $700 million per day. That's almost $5 billion a week more for fuel.

The energy bill does nothing to lower that number. Nor does it add refining capacity to a system already at maximum output.

PETER BEUTEL, CAMERON HANOVER: We were running at 98 percent on July 1. We were pumping out enough gasoline to meet demand. But because of the strains on the systems and because of Tropical Storm Cindy, in particular, we have not been able to keep that gasoline coming.

TUCKER: Beutel notes that we've lost half a million barrels a day in gasoline production since then. If we have a storm on the scale of Hurricane Ivan last fall, he believes oil could hit $80 per barrel.

Meanwhile, the energy bill provides enormous subsidies for oil companies, perhaps leaving a reasonable person to wonder why a company posting record profits would be given taxpayer dollars. And while giving money away, the bill fails to set fuel efficiency standards for cars and trucks known as cafe standards, disappointing environmentalists. For others, the bill is disappointing not only for the corporate subsidies, but for the consumer tax incentives it contains.

JERRY TAYLOR, CATO INSTITUTE: The fact is, when gasoline prices are this high, nobody needs to have the government tell them that they might want to spend their money a bit more wisely when it comes to energy purchases. We have all the incentives in the world to conserve.

(END VIDEOTAPE)

TUCKER: And with oil hitting $65 a day, and closing at a record high of $64.90 a barrel, the argument here is that there are plenty incentives in the market for companies to develop market alternative fuels. And Lou, plenty of reasons why consumers would want to buy those presumably cheaper fuels.

DOBBS: Now, this is a remarkable piece of legislation for its lack of focus on the problem. And that is creating alternate energy sources and dealing with the existing, what is now becoming a price crisis for consumers.

Bill Tucker. Thank you.

An astonishing new report in the "Seattle Times" alleges that doctors are selling critically important secret drug research to elite private investors and Wall Street analysts before that information becomes public. The goal, of course, to give analysts and hedge fund investors, for example, the opportunity to manipulate drug stocks for their own gain.

Senator Chuck Grassley, the head of the Senate Finance Committee, is leading the fight to stop this outrageous abuse. The senator has called upon the Securities and Exchange Commission and the Justice Department to launch an immediate investigation.

Senator Grassley, how has this practice been allowed to continue unchecked until now?

GRASSLEY: Well, I suppose because we have confidence that the Securities and Exchange Commission is going to be on top of everything. And quite obviously they aren't on top of this.

And I think also that there's people within medical research that aren't entirely ethical, and they violate that confidentiality rules, and you would assume that doctors would abide by the ethics of their profession and their confidentiality rules with the companies that they're doing research with. And they don't happen to be.

DOBBS: These doctors involved in clinical trials, are they moving this information from the secret and confidential basis in which they participate at the behest of the pharmaceutical companies themselves, in your opinion?

GRASSLEY: Based upon what the "Seattle Times" has said, it's very obvious in those instances. I don't know how widespread it is, and consequently, that's why I've asked the Securities and Exchange Commission to investigate it for two reasons.

Number one, we want to make sure that there's public confidence in our marketplace; in other words, that the market's going to find its own level without being influenced.

And we also -- and maybe even more importantly -- we want to maintain confidence in the public integrity of our research, medical research so that we get all the advances in medicine that we can. We don't want that compromised.

And I think when you have information like this being leaked by doctors, and particularly when they're paying for it and in violation of their confidentiality rules, the public's going to lose confidence in the medical research, and it's going to be withdrawn.

DOBBS: There are an estimated two lobbyists for every congressman in Washington representing just the pharmaceutical industry. Is this influencing some of the -- just absolutely, if not absolutely illegal practices, certainly questionable practices that are going on in the pharmaceutical industry and whether we've talked about the Federal Drug Administration and clinical trials -- just how widespread do you think this is? And is that lobbyist influence one of the contributing causes?

GRASSLEY: Well, I think that you raise a legitimate question about the influence of the lobby generally in pharmaceutical policymaking. I don't have any evidence, though, that that's related to this lack of enforcement of these exchanges between doctors and hedge fund operators.

I think this might be something that is new, brought to attention, something that probably the Securities and Exchange Commission and the attorney general should have been on top of but aren't.

But I don't have any information that this sort of lobbying is influencing this at this point.

Now, if we start to do something about it -- which we'll wait until we get the investigation done to make that determination -- but if we do something about it and it's done through Congress and I get pressure on me not to have hearings on it, or if there's some law that's got to be changed, then we'll find out if that influence is as great as you suggest.

In other areas, I would suggest that you're right.

DOBBS: Senator Grassley, we thank you for being with us here. Appreciate it.

GRASSLEY: Thank you.

DOBBS: Coming up next, a multi-million dollar advertising campaign that seeks to portray Judge John Roberts, the president's nominee to the U.S. Supreme Court, as an anti-abortion zealot. True? False? Outrageous misrepresentation? We'll find out. And former House Majority Leader Dick Gephardt will be talking about the crisis of organized labor in this country and the state of his Democratic Party.

And should intelligent design be taught in our nation's schools? Kansas officials say yes. We'll be talking about whether that is the beginning of a national trend.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: There's considerable controversy tonight over an ad that opposes the Supreme Court nomination of Judge John Roberts. This ad, by the nation's leading abortion rights group, the National Association of -- NARAL accuses Roberts of supporting violent anti- abortion fringe groups. This ad appears on several cable networks, including this one.

John King has the report.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CORRESPONDENT (voice-over): It opens with powerful images, a bombed abortion clinic and levels an emotional charge.

EMILY LYONS, CLINIC BOMBING VICTIM: The bomb ripped through my clinic. I almost lost my life. I will never be the same.

ANNOUNCER: Supreme Court nominee John Roberts filed court briefs supporting violent fringe groups and a convicted clinic bomber.

KING: The half-million dollar NARAL pro-choice America ad campaign is an effort to paint Judge Roberts at an anti-abortion zealot.

The Bush White House calls it a reckless smear. And in the words of the independent group, FactCheck.org, "the ad is false."

BROOKS JACKSON, DIRECTOR, ANNENBERG POLITICAL FACT CHECK: False is strong language and we use it very seldom. Usually ads are misleading, twisted, distorted. But this one is just downright wrong in the total impression it tries to create.

KING (on camera): Let's take a closer look. The abortion clinic bombing at issue happened, as the ad notes, back in 1998, but the Roberts court brief the ad cites was in a separate case in 1991 -- seven years before that bombing.

(voice-over): Despite that fact, the ad suggests Roberts defended the bombers and their cause.

LYONS: I'm determined to stop this violence on speaking, so I'm speaking out.

ANNOUNCER: Call your senators. Tell them to oppose John Roberts. America can't afford a justice whose ideology leads him to excuse violence against other Americans.

KING: But the facts do not show that Roberts - quote -- "excused violence."

He did argue for the first Bush administration in the 1991 case that, violent abortion clinic protesters had not violated federal anti-discrimination laws, saying such crimes should be prosecuted in state courts -- Virginia in that specific case. The White House also points to this Reagan administration memo Roberts drafted in 1986, saying, abortion clinic bombers should be prosecuted to the full extent of the law. No matter how lofty or sincerely held the goal, those who resort to violence to achieve it are criminals.

Roberts' allies are firing back with an ad of their own...

ANNOUNCER: A far-left Democratic group is making a desperate and false attack recklessly distorting Judge Roberts' record.

KING: NARAL insists it is not a distortion, that the position Roberts took in 1991 denied federal protection to abortion clinics under siege.

(END VIDEOTAPE)

KING: And NARAL not only defends that ad as - quote -- "completely accurate," it is, perhaps in a sign of the times, looking to profit from this controversy. It's using its Web site now to try to raise more money for its part, Lou, in this intensifying TV ad war over the Roberts nomination.

DOBBS: John, you just hit upon something very important. A number of these groups, left and right, pro and against Judge Roberts -- basically much of this, whether false claims or simply overheated rhetoric, is designed to excite their supporters and to raise money. Is it not?

KING: It is indeed. In fact, if you talk to many Democrats and these liberal interest groups privately, in off-camera conversations, they will essentially concede the point that Judge Roberts is going to be confirmed, and that they are going to use the hearings first to try to probe him, try to get some answers on key policy questions. They say that is a legitimate policy issue, if you will.

But they also say, make no mistake about it. They believe this is in part a warm-up for the next Supreme Court fight, and a warm-up for these interest groups to get their troops geared up for the 2006 mid- term elections. And in the process to raise some money, on both sides, Lou.

DOBBS: And CNN, we should point out, its policy on this, even as you reported, the ad is absolutely wrong, according to the Annenberg watchdog there. CNN says, it accepts advocacy advertising from responsible groups from across the political spectrum who wish to express their views and their opinions about issues of public importance, so the viewers can further research claims made within the ads. The messages must identify the name of the sponsoring organization, usually by displaying a Web site address.

John King, I want to thank you for helping our viewers ascertain the validity of the claims of that particular ad. We hope you will do so with more to come. I'm sure there will be.

KING: Thank you. It's good to see you. DOBBS: Good to see you, John. John King.

KING: Up next here, my guest is Dick Gephardt, the former Democratic House majority leader. We'll be talking about the break-up of America's largest organized labor institution and the future, if any, of unions in this country.

We'll also have the latest on the case of an illegal alien who managed to become, of all things, a U.S. Border Patrol agent. It just gets better, doesn't it? Stay with us.

(COMMERCIAL BREAK)

DOBBS: Organized labor in this country is in nothing less than a deep crisis -- three key unions announcing their withdrawal from the AFL-CIO. There may be more and soon. The crisis affects not only the future of organized labor, but also labor's close relationship with the Democratic Party.

Former Democratic House Majority Leader Dick Gephardt is my guest tonight. He's here to talk about labor's future, and the future of the Democratic Party as well.

Dick Gephardt, good to have you here.

DICK GEPHARDT, FRM. HOUSE MAJORITY LEADER: Good to be here.

DOBBS: Right now, fewer than 8 percent of this country's private workforce is represented by unions. Is it over for organized labor in this country?

GEPHARDT: Well, I hope not. I think we need organized support for our workers' rights and workers' concerns. The problem we've got is that we have de-industrialized a lot of America. We've lost lots of manufacturing jobs. Now we're losing other information jobs. So, somebody's got to figure out what the role of labor is, the rightful role of labor in this modern global economy that we're in.

DOBBS: The ironic and tragic thing to me is that at a time when employees need every kind of help they can find in this country, in nearly every industry at all levels, organized labor cannot find traction or a way in which to engage them, or to find a role for itself in a relationship with employers.

GEPHARDT: One of the things that's coming out of this debate is the beginning of a discussion about how do we convince workers that labor is important to them and good for them. There was a poll recently -- I think Zogby did it -- that showed that the majority, the vast majority of people, workers in the country, thought that labor had no positive role to play for them.

DOBBS: Right.

GEPHARDT: So you've got to start with, what's the audience? What do we say to them? And what do we do for them, or what potentially could we do for them that would make them want to be a part of organized labor?

DOBBS: And as we see jobs being outsourced in this country, wages have been static in this country for just about three decades, as you well know. As we're seeing these effectively outsourcing agreements being created, whether it be CAFTA or NAFTA, or any of the bilateral agreements, what is -- let's move from the union, to the worker himself and herself -- what is the future for labor in this country?

GEPHARDT: Well, we've been globalizing our economy for 50 years. And the problem now is that it's happening at warp speed. When you bring China and India onto the stage, which is happening on a daily basis...

DOBBS: Sure.

GEPHARDT: You're in a new world. You're in a quicker process than you were in before. What I've been arguing for, and a lot of labor has been arguing for, is not protection, because you can't really do that in today's world...

DOBBS: It's not realistic.

GEPHARDT: ...but trying to quicken the process of bringing up standards in other countries so that we can have compatibility in the industry..

DOBBS: Like you wanted to do with Mexico in particular with NAFTA in 1992 and 1993.

GEPHARDT: Exactly.

DOBBS: The Democratic Party itself, we have the head of the Democratic National Committee, Howard Dean, saying the Democratic Party needs a message. We just came out of a presidential election. Why would the leadership -- and not just Howard Dean -- be searching for a message for an entire political party in this country?

GEPHARDT: I don't know. I hope that they find that message soon. I think it's out there. I think people desperately want leadership in this country, on all the issues we've been talking about and others -- health care, education, you can go down the list. Tom Friedman has the book, "The World is Flat." Well, it is. The answer to it is, we've got to...

DOBBS: I still insist this world is still a sphere. We've come too far to give it over to flat.

Dick Gephardt, we're out of time. It is always great to see you and talk to you. Please come back soon.

GEPHARDT: Sure will.

DOBBS: The Kansas Board of Education voted to allow greater criticism of Darwin's theory of evolution in the schools, but the board did not simply endorse the Biblical teaching of creationism. Instead, as in many states around the country, the board asked science to embrace a new evolving theory known as intelligent design.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Out of the primordial soup, the theory of evolution, but also the theory of intelligent design, the belief that natural evolution is so complex, it had to be directed, at least in part, by an intelligent creator: a divine force. But many scientists say intelligent design is not a scientific theory, because it cannot be proven.

ALBERT TEICH, AMERICAN ASSOCIATION FOR THE ADVANCEMENT OF SCIENCE: You can mention it in a science classroom in a way that suggests that it is not science, but it's part of the cultural context of science. But it -- once you start saying that this is an alternate theory, an alternate scientific theory, then you get into the realm of religion rather than the realm of science. And that's unfortunate.

PILGRIM: The State Board of Education of Kansas voted 6-4 to have academics review the theory for possible inclusion in school science standards in 2007. If the board gives final approval, the state will then include it in tests for fourth, seventh and tenth graders, with local schools having the final word on what goes on the blackboard.

It's a nationwide debate. A number of states are considering changing how biological evolution is taught. President Bush has said both theories should be properly taught so people can understand what the debate is about.

Many educators say the various viewpoints can be accommodated. All interest groups should be included in setting academic standards, and the current debate is healthy.

MICHAEL HILL, NATIONAL ASSOCIATION OF STATE BOARDS OF EDUCATION: This is a democratic process of working our way toward accommodating for all people and some way of doing this that will satisfy everyone. And I think we can do that.

(END VIDEOTAPE)

PILGRIM: Now, the debate has intensified with increased emphasis on science requirements in the No Child Left Behind program. Both sides argued for increased scientific literacy, but many scientists argue that evolution is the only pure science and then, others say intelligent design broadens out the scientific curriculum. So they're both claiming it.

DOBBS: Well, as intelligent people would irrespective of their belief, but the fact is that there are holes in terms of scientific, quantitative evidence in evolution. It's a -- certainly a holistic and coherent scientific theory, but it's being taught as if in every respect it's perfect.

PILGRIM: Yes.

DOBBS: It is not.

PILGRIM: No, I...

DOBBS: Intelligent design and creationism, we step to another area, which, you know, it gets more difficult.

PILGRIM: Exactly right.

DOBBS: Kitty, thank you very much. Kitty Pilgrim.

Coming up next here, the astonishing story of an illegal alien who used a fake I.D. to become a U.S. Border Patrol agent. Tonight, new revelations about his remarkable deception.

Stay with us, because it just gets better and better.

(COMMERCIAL BREAK)

DOBBS: An illegal alien charged with using a fake I.D. to get a job with the U.S. Border Patrol was denied bail today at a court hearing in California.

As we reported here last week, illegal alien Oscar Antonio Ortiz, used his Border Patrol badge to smuggle other illegal aliens into the United States, allegedly. Officials now say Ortiz was also serving for four years in the U.S. armed forces.

Casey Wian has the report.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): The story of the illegal alien Border Patrol agent has spread to another federal agency critical to the security of this nation, the United States Navy.

As we reported, prosecutors allege that Oscar Antonio Ortiz, a 28-year-old Border Patrol agent, is actually an illegal alien himself and they allege he and another Border Patrol agent conspired to smuggle scores of illegal aliens across our southern border while they were on duty. Now, Ortiz's attorney says before he joined the Border Patrol, Ortiz was a Navy veteran.

STEPHEN WHITE, ORTIZ ATTORNEY: He served four years on the USS Tarawa, which was based here in San Diego. He was -- he received various commendations throughout his four years of service and was honorably discharged as an E-4.

WIAN: Ortiz allegedly used a phony birth certificate to claim he was born in Chicago, not Tijuana, his actual birth place. The allegation that that's all it took to fool both the Navy and Border Patrol is another example of how pervasive document fraud is in this country. And it's another argument against President Bush's proposed guest worker program, says this former immigration agent.

MICHAEL CUTLER, FORMER INS AGENT: If we can't properly screen and determine the identity of the Border Patrol and other law enforcement officials and members of the military, what kind of scrutiny do you think these aliens will come under when we give them official I.D.?

WIAN: The Border Patrol says background checks for its agents are performed by the Federal Office of Personnel Management, which then subcontracts much of the work out to private companies.

The Border Patrol says it doesn't have the manpower to perform those checks itself.

(END VIDEOTAPE)

WIAN: Now, as you mentioned, Lou, a federal judge today denied bail for Ortiz -- the judge, ruling that Ortiz is in fact a flight risk. Now, in June, as this criminal case was unfolding, Ortiz was suspended by the Border Patrol and he was ordered to report to his supervisors on a daily basis. Prosecutors say he did not do that and instead fled to Mexico temporarily -- Lou?

DOBBS: You know, Casey, with all that we report on here in the issues of illegal immigration, you've just introduced another part of a -- just a web of dilemmas. That is, the Border Patrol itself and the Federal Office of Personnel don't do their own background checks for those who serve the U.S. government. In the case of law enforcement, the Border Patrol, men and women with badges aren't reviewed by the United States government?

WIAN: And they haven't been for years. That work has been subcontracted out for a long time. And because of the resource strain on these agencies, there are no plans at this point to revisit that, Lou.

DOBBS: The resource strain on these agencies, yet the government has enough money to hire outside contractors; outsource, if you will, the job.

WIAN: Right. Right.

DOBBS: Remarkable. Casey, thank you. Casey Wian.

Still ahead, we'll have the results of our poll tonight and we'll take a look at what's ahead tomorrow. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of our poll tonight: 96 percent of you say illegal immigration should be a major issue in next year's elections.

Judith Miller, the Pulitzer Prize-winning "New York Times" reporter has now been in prison for 35 days. Joining us tomorrow, the attorney for Judith Miller.

And ANDERSON COOPER 360 is about to begin. For all of us here in New York, good night -- Anderson?

END

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