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Tom DeLay Faces Criminal Indictment for Alleged Conspiracy in Campaign Finance Scheme; Road to Recovery; The Fight for Iraq

Aired September 28, 2005 - 18:00   ET


LOU DOBBS, CNN ANCHOR: Good evening, everybody.
Tonight, one of this country's most powerful politicians, House Majority Leader Tom DeLay, faces a criminal indictment for alleged conspiracy in a campaign finance scheme. DeLay immediately and strongly announced he's temporarily stepping aside as leader of the House and denied all charges. DeLay declared he didn't break any laws and said today's indictment is part of a political vendetta.

DeLay was indicted by a grand jury on one conspiracy charge after a three-year investigation by a Democratic district attorney in Texas, Ronnie Earle. The indictment accuses DeLay of breaking Texas campaign finance laws by steering corporate money to political candidates, a charge DeLay angrily denied.


REP. TOM DELAY (R),TEXAS: This is one of the weakest, most baseless indictments in American history. It's a sham, and Mr. Earle knows it. This act is the product of a coordinated, premeditated campaign of political retribution. The all-too-predictable result of a vengeful investigation led by a partisan fanatic.

I am innocent.


DOBBS: Joe Johns tonight reports on today's fast moving developments on Capitol Hill. Bill Schneider reports on the huge political fallout expected as a result of this indictment. And Jeffrey Toobin reports on the legal battle now facing DeLay as he tries to clear his name. And Suzanne Malveaux reports on White House reaction to the loss of a key ally of the president, if only temporarily.

We begin with Joe Johns on Capitol Hill. Joe?

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Lou, the bottom line is prosecutor Ronnie Earle says Tom DeLay conspired to use campaign funds to violate Texas law. It all started back in 2002. This was a time when a political action committee set up by Tom DeLay got about $190,000 and funneled that money from Texas up here to the Republican National Committee in Washington, D.C., and back to candidates for the Texas legislature. As we all know, those candidates in the Texas legislature won big for Republicans in 2002. The next year, those numbers in the legislature were used to redraw congressional lines, effectively giving Tom DeLay more power up here on Capitol Hill. Tom DeLay says everything he did was legal. He accuses Ronnie Earle of a political vendetta.


DELAY: Over the course of this long and bitter political battle, it became clear that the retribution for our success would be ferocious. Today, that retribution is being exacted. Mr. Earle, an unabashed partisan zealot, with a well-documented history of launching baseless investigations and indictments against his political enemies.


JOHNS: Ronnie Earle says he's been on this investigation for years. He also says he's prosecuted a lot of politicians, and says most of them were Democrats.


RONNIE EARLE, TRAVIS COUNTY, TEXAS, DISTRICT ATTORNEY: We have over the years prosecuted a number of elected officials. At last count, that total stood at 15, 12 of whom were Democrats and 3 of whom were Republicans.

Our job is to prosecute abuses of power. And we -- our job is to bring those abuses to the attention of the public through juries. And that's what we do when we find a violation of the law.


JOHNS: So tonight, Tom DeLay has stepped down, at least temporarily, from his position as the majority leader of the United States House of Representatives. The temporary majority leader is Roy Blunt of Missouri.

Sorry. Back to you, Lou.

DOBBS: Joe Johns. Thank you.

The White House today declared DeLay is a good ally of President Bush, as Majority Leader DeLay pushed through key elements of the president's legislative agenda. Those elements including the tax cuts, trade agreements and Medicare prescription plan.

Suzanne Malveaux reports from the White House. Suzanne?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, it really can't be overstated just how important tom DeLay is to this president and to this White House. One official saying that he was the one who really pushed forward the Republicans to vote with the president even when they didn't want to. He is central when it comes to the president's Social Security reform agenda as well. And if you look at the votes, just how close they have been when it comes to Medicare, Head Start, school vouchers for D.C., CAFTA, all of these passing by just one or two votes. Tom DeLay being critical in moving that forward. Now, there was a moment here, of course, back in April, the big question whether or not the president was going to stand by his man. Well, that took place in Galveston, Texas, when the two of them stood side by side. The president praising him when there was first criticism that came out. Also at that time as well, he gave him a ride back on Air Force One, back to Washington, making the point very clear that he has Tom DeLay by his side, he is sticking by him. That is the same message the White House is sending today.


SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Yes. Congressman DeLay is a good ally, a leader who we have worked closely with to get things done for the American people.


MALVEAUX: Of course, Lou, the big question now is whether or not it is going to cripple the president's ability to move forward on his legislative agenda. The White House does not believe so, but that really is an unanswered question.

This is already, in at least some people's view, a weakened president, one who looks at a percentage approval of 40 percent -- also weakened by the hurricanes, as well as those high gas prices, a Social Security agenda that was already somewhat received lukewarm by many lawmakers.

The big question here is just what is going to be the impact now that Tom DeLay is temporarily out of that position.

DOBBS: With the indictment, Suzanne, of top lobbyist Abramoff, and the top federal procurement officer in this administration, his resignation, Bill Frist's problems now in terms of selling HCA stock, and now Tom DeLay, how concerned is the White House right now about the momentum of these -- these developments?

MALVEAUX: Well, Lou, you certainly see the Democrats are already taking advantage of that. What they are trying to do is paint a broad brush stroke, if you will, of the president's party, the Republican Party, as being tainted by corruption here.

The White House is trying to make sure that that doesn't happen. They have moved forward. They are working very closely with the Republicans to put them out front and center, to give this message that this is not going to affect their legislative agenda.

But Lou, I can tell you, there are people who are concerned, who are worried here. When you look at those poll numbers and you look at what the president is up against before this even happened, there is reason to be concerned.

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

Joining me now for more on the implications of the DeLay indictment, our senior legal analyst Jeffrey Toobin, and our senior political analyst Bill Schneider.

Let me turn to you first, Jeffrey. This -- this indictment three years in the making. Isn't that an extraordinarily long process for an investigation of such a prominent political figure?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: White collar investigations traditionally take a long time. This is a very long time. And there have been other charges, but it has been a slow moving investigation.

And -- bad news for Tom DeLay -- it's going to be a slow move to trial. So he's going to be in suspended animation for many months.

DOBBS: And Bill Schneider, DeLay says categorically this is politically motivated. He declares that he is innocent, categorically, he says, not relying, he says, in his defense on any sort of nuance or gamesmanship or parsing of language. He says he's absolutely in the clear.

What does he do facing now what looks to be, as Jeffrey said, a protracted legal process?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, I think he worries about it, and the legal system will have its say. It is up to a judge, it's up to possibly up to a jury, to see if the charge that this is all partisan politics will hold up or whether they'll take this more seriously.

That's the question. Is this going to be considered partisan? That's a legal question now, not a political question.

DOBBS: Well, let's -- let's explore the legal and the political issues here.

Jeffrey, this is a conspiracy charge. It is not a direct charge of wrongdoing against DeLay, just a participation charge. That's considered to be a very weak approach for a prosecutor, isn't it?

TOOBIN: And it's only one count. Many indictments are multiple counts.

I mean, here you have a very narrow crime charged in what -- in almost an abstract charge. They don't even accuse DeLay of violating the campaign finance laws. They accuse him of agreeing to violate the laws.

It looks like a thin charge, but it's a real charge. And all that matters now is what a judge thinks and what a jury thinks.

DOBBS: All right. It is a weaker charge, if you will. Is it also at the same time possibly an easier charge for the prosecutor to prove?

TOOBIN: That's why prosecutors like conspiracy charges, because all you need to prove is that there's an agreement to do something illegal, and one act in furtherance of the conspiracy. That's easier than proving an out-and-out crime.

DOBBS: Bill Schneider, the politics of this? Travis County, Texas, Ronnie Earle, a longtime Democrat. Today he had a -- he had pretty good list of names that he's prosecuted -- not names, but numbers. Fifteen, he said. Thirteen of them -- 12 of them Democrat, three Republicans. But those Republicans included Kay Bailey Hutchison, the senator from Texas, back in 1993.

SCHNEIDER: And that was thrown out fairly quickly as an insubstantial case. So, you know, you've got arguments on both sides.

He is a Democrat, he's indicted Democrats, as well as Republicans. Some of the cases he's put forward haven't really been able to go very far.

Look, you know, you don't need an ironclad case to matter politically. Remember the House banking scandal back in 1992? Nobody really violated a law. There was -- members of Congress were writing bad checks. They were overdrawing their accounts at the House Post Office...

DOBBS: Right.

SCHNEIDER: ... which was allowed under the law. But you know what? Fifty-four of them resigned.

DOBBS: Fifty-four resigned. Also -- it's also interesting to put in context here, Tom DeLay stepping down as the leader in the House because of rules that require anyone accused of a felony to step down from leadership positions, Bill Schneider. People may not remember that less than a year ago Republicans returned home from a Christmas recess with every idea, anticipating just what happened today, of removing that requirement for the leadership to step down, faced -- just because they faced an indictment. They backed away from that quickly.

What will be the reaction here?

SCHNEIDER: I think the reaction will be public interest, public anger. Tom DeLay is a very controversial figure. You say Tom DeLay's name to most Americans and you know what image comes forward most quickly? Terri Schiavo.

He was the leader of the effort to keep Terri Schiavo alive. Very, very controversial. Very divisive in this country. A lot of people disagreed with that effort, but that's what most Americans remember.

DOBBS: Right. And you say Tom DeLay and Texas, and most Democrats will say gerrymandering.


DOBBS: The prospects from here, can a judge at this point move this indictment aside? Or is this now moving to trial? TOOBIN: He can get it thrown out by a judge, but even that will take several months. And he will fight very hard to get rid of it before it ever gets anywhere near a jury.

DOBBS: Jeffrey Toobin, Bill Schneider, thank you both.


DOBBS: Coming up next here, is New Orleans ready? Mayor Ray Nagin is urging more residents to return, again. Critics say New Orleans is still not livable. We'll have a live report for you from New Orleans.

And more Americans are falling seriously behind on credit card debt. More than ever before, in fact. The rising cost of gasoline partly to blame. We'll have a special report for you on this latest assault against our middle class, and a great deal more.

Stay with us.


DOBBS: The mayor of New Orleans, Ray Nagin, today announced a major expansion of his program to allow residents and business owners to return to the city. But there are still immense problems with the drinking water and mountains of debris covering much of the city.

Mary Snow has our report now from New Orleans. Mary?

MARY SNOW, CNN CORRESPONDENT: Lou, Mayor Ray Nagin seemed defiant and expressed frustration, saying that he's concerned some officials in Louisiana are giving the impression that it is not safe to move back into New Orleans. He is giving the green light to business owners in eight targeted zip codes in drier parts of this city to come back tomorrow, on Friday.

Residents in those same zip codes, he's saying that if a house has a green sticker on it, it is safe to stay. If it has a red sticker, there is a hazard in the house.

This, as he says there's been progress on water. This was a big problem. He is telling residents that it is OK to bathe with the water, but don't drink it.


MAYOR RAY NAGIN, NEW ORLEANS: Hopefully by next week, if I could have any help from the state officials up there -- up here, is to help us to make sure that the state comes out and expeditiously tests the water so we can fully certify it.


SNOW: This, as the city has big hurdles ahead. The city's first hospital to reopen since Katrina, Touro Infirmary, opened its emergency services today. Another sign of some progress, it was reported that the Superdome now has been cleaned out. This is the initial cleanup. Also it's been sanitized. This as officials try to determine the future of the Superdome. They say they have removed up to 3,000 tons of debris. The mayor is now saying that by next Wednesday, he is hoping to open full access to the city. By that time perhaps remove the checkpoints.


DOBBS: All right. Mary, I don't want to put you on the spot, but you are -- you are on the spot. You're right in the center of New Orleans. You're covering this story. You're talking with public safety officials, first responders, the men and women who have to keep the city safe and working. What is their reaction to Mayor Nagin calling for people to be back?

SNOW: Behind the scenes, Lou, in terms of emergency workers, some of the business owners I've spoken to, they say it is going to take a long time. And some have said that they don't think that the city is ready to take so many people back in.

A lot of people have said that they feel somewhat safe that the National Guard and Army is here. They are expressing concerns, though, about things like drinking water and, you know, electricity coming to their homes. So behind the scenes, there is some doubts. Some are positive, saying it's time. Others say it's not time yet.

DOBBS: Mary Snow from New Orleans. Thank you, Mary.

Governor Kathleen Blanco of Louisiana today appeared on Capitol Hill to give testimony about the massive reconstruction effort that will be required to rebuild the Gulf Coast. She declined to respond to criticism directed at her by former FEMA Director Michael Brown. Yesterday, he accused her of being too slow to order evacuations and called Louisiana dysfunctional.

Governor Blanco told the Senate Finance Committee she came to Capitol Hill to talk about job creation. She said there will be plenty of time to talk about other issues.

As our nation questions how to afford the hundreds of billions of dollars that we're told will be needed to rebuild the Gulf Coast, the head of NASA is out with a stunning admission -- a charge against the agency now leads.

NASA Administrator Michael Griffin says the U.S. space shuttle program and the International Space Station program -- those cost U.S. taxpayers a quarter of a trillion dollars -- were, in his judgment, colossal mistakes. Griffin, in an interview with "USA Today," says NASA completely lost its way in the '70s when those two programs were approved.

Griffin says, "It is now commonly accepted that was not the right path. We are now trying to change that path while doing as little damage as we can." Griffin now wants to spend more than $100 billion over the next decade so that NASA can return to the moon and begin deep space exploration.

In tonight's poll, our question is, do you agree with NASA Administrator Michael Griffin that the space shuttle and the International Space Station were mistakes? Yes or no? Cast your vote at We'll have the results later.

Still ahead, the middle class in this country is under assault, this time from those high gasoline prices. New concerns that Americans are maxing out their credit cards to pay for this record energy spike.

And the U.S. Border Patrol under funded, overworked and now without a leader. Our special report on the latest crisis facing our nation's broken borders and immigration policies.

Stay with us.


DOBBS: President Bush today addressed the escalating violence in Iraq. But President Bush, facing rising public concern and criticism about the war, declared the United States will prevail and will defeat the terrorists. President Bush delivered his warning in the White House Rose Garden after a briefing from U.S. military commanders.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The terrorists have a history of escalating their attacks before Iraq's major political milestones. Two key elections are fast approaching. As these milestones approach, we can expect there to be increasing violence from the terrorists.


DOBBS: In Iraq, six more Americans have been killed in combat. Three of our troops were killed near Safwan in southern Iraq. Two others died of their wounds in a Baghdad hospital. And a U.S. marine was killed in Ramadi.

A suicide bomber today killed five Iraqis in a bomb attack on an Iraqi army recruiting center in Tal Afar. U.S. and Iraqi troops have just completed a major offensive against insurgents in the town and region.

Terrorists in Baghdad are launching more attacks against the majority Shiite population, trying to incite civil war. Those attacks often take place in neighborhoods where residents come from all of Iraq's ethnic groups.

Jennifer Eccleston reports from one such district, the Al Doura neighborhood in western Baghdad.

(BEGIN VIDEOTAPE) JENNIFER ECCLESTON, CNN CORRESPONDENT (voice over): It has the reputation of being one of Baghdad's most violent places. On this day, the Al Doura neighborhood is eerily calm. Children play in the street, and no violence greets the American soldiers on patrol.

It's not always that way.

CAPT. TIM GROVES, U.S. ARMY: Different areas get notorious for being the worst, the most dangerous. Every neighborhood throughout the city of Baghdad, there are the bad times or the good times. And when an area gets hot for a few days, it then becomes notorious or well known.

ECCLESTON: No doubt Al Doura has been hot for the better part of this year. Hundreds and hundreds of attacks, insurgents taking aim at local politicians, civilians and Iraqi security forces.

(on camera): This is a scene of one of many insurgent attacks in the Al Doura neighborhood. And what happened here, there was an Iraqi police patrol stationed outside of this house, and a suicide car bomber attacked them. A number of them were killed. But as you can see, it didn't only affect the Iraqi police. It affected those who lived in this house.

Wurud Ahmad escaped injury, but she's still scared.

WURUD AHMAD, BAGHDAD RESIDENT (through translator): We are sleeping and waking up to explosions and blood, and our buildings are destroyed. We are defeated. Our souls are defeated.

ECCLESTON: Despite today's deceptive calm, the American forces who patrol Al Doura know the insurgents may be laying low but are not defeated. At any time they could resume their deadly campaign to divide and intimidate this ethnically mixed neighborhood where Sunni, Shiite and Christian live side by side.

ALI KHADEM, BAGHDAD RESIDENT (through translator): For 35 years there was no such thing as Sunni or Shia. But now there have been things happening. There are people that are creating conflict.

ECCLESTON: The majority of the residents we spoke to this day refused to identify themselves as either Sunni or Shiite. Today they are simply Muslims, Iraqi Muslims.

One of the wildcards in Al Doura is whether that sense of unity can endure. In the calm streets today, it seemed so, but for how long? Jennifer Eccleston, CNN, Baghdad.


DOBBS: Coming next, as oil companies post record profits, new charges of price gouging. I'll be talking with the one attorney general in the country who has filed suit against major oil firms.

And the Louisiana congressional delegation under attack and criticism. Some saying their $250 billion request for hurricane reconstruction aid is absurdly high. I'll be talking with Senator David Vitter of Louisiana next.

Stay with us.


DOBBS: Middle class families in this country are already under assault on all fronts. Now the hurricanes that have battered the Gulf Coast are adding to the pressures on hard-working families. Record high fuel costs and rising interest rates are leading to mounting debt and leaving too many families unable to make ends meet.

Kitty Pilgrim reports.


KITTY PILGRIM, CNN CORRESPONDENT (voice over): For many middle class people, life these days is a financial juggling act. With higher gas prices, higher borrowing costs and the prospect of higher home heating bills, things are getting tight.

UNIDENTIFIED MALE: I get on the bus right now. I get on the train. I let my car stay parked.

UNIDENTIFIED FEMALE: But I'm definitely trying to combine all my trips together to cut back on gas.

UNIDENTIFIED FEMALE: And when you do go out, you've got to cut down on what you spend on eating, what you spend on buying stuff at the grocery stores.

PILGRIM: The percentage of overdue credit card payments hit a record high in the second quarter of the year. More people were also late on auto loans, home equity loans and other kinds of consumer loans.

UNIDENTIFIED MALE: I'm not able to pay off my balance right now.

PILGRIM: Consumer confidence is at its lowest level in 15 years. Natural gas prices are expected to skyrocket by as much as 70 percent in some areas this winter. More than half of the homes in the country are heated with it. And the rise in electric costs could be nearly 20 percent. Even before the hurricanes, cash registers were ringing up fewer sales. Housing and education costs have climbed steadily. New home sales dropped by 10 percent last month. And expect higher costs for lumber, cement and shingles as supplies are diverted to the Gulf Coast for rebuilding. Credit card companies will start asking for higher payments under new banking rules.

MIKE SULLIVAN, TAKE CHARGE AMERICA: Those families earning from $50,000 to $80,000 a year, those are the folks that have the housing problems, they have the car problems, they have the education problems.

They're dealing with all the societal problems. They're the ones commuting to work. They don't have the other assets to fall back on. Those are the folks that are really going to get hurt. PILGRIM: Leading to the question, with the bills spread out all over the kitchen table, what gets paid first?


PILGRIM: New bankruptcy laws take effect on October 17. If people earn more than the median income in their state and declare bankruptcy, they'll be forced to repay their debt. So the escape hatch for many of these families, Lou, is closing very fast.

DOBBS: Yes, this is utterly an assault on the middle class right now. It is absolutely unconscionable what Congress did with the bankruptcy law. Is it a travesty by any standard.

And the idiots at the U.S. Treasury Department suggesting raising minimum payments on credit cards at this point when so many families are strapped in this country is utterly, utterly mindless.

PILGRIM: Many of the debt experts are saying this is the perfect storm. This is a disaster for middle America.

DOBBS: It's just imperfect leadership on the part of our elected officials, storm or not. Thank you very much.

Tonight New Jersey becomes the first state in the Union to formally charge the oil industry with price gouging. As energy bills soar for Americans, New Jersey says gas stations and oil firms are illegally raising prices and trying to profit from our nation's disasters. New Jersey's attorney general, Peter Harvey, joins me here tonight. Mr. Attorney General, good to have you with us.

PETER HARVEY, N.J. ATTORNEY GENERAL: Thank you for having me.

DOBBS: You have taken on the oil companies. I have to say -- and first, I congratulate you on your courage because I have talked with a number of attorneys general and the governors, who say there is price gouging in their states but they can't deal with it.

HARVEY: Well, it's a gap in the law. Fortunately, New Jersey has a Motor Fuels Act which prohibits a change in the price of gasoline more than once in a 24-hour period. Some other states don't have it.

But we used our Consumer Fraud Act here just as well. Some stations posted one price to lure consumers in, and had another price at the pumps. That you can charge as deceptive advertising, as we have. But it's tough.

DOBBS: It's tough. The case you have brought against some of the major oil companies -- if I could, I would like to share with our viewers here, some of the reaction from the oil companies.

And the first one from Shell Oil Company. Shell saying that "Shell and Motiva have a history of being sensitive to price changes during significant events such as Hurricane Katrina." Going on to say "we're reviewing the information from the state and can't comment further at this time." Sunoco, with a statement. "Sunoco's examining the gas pricing allegations," concluding, "we're fully cooperating with government at all levels that are looking into gasoline pricing allegations.

Amerada Hess -- recently Amerada Hess was charged by the state of New Jersey with unconscionable and fraudulent commercial practices. They go on to conclude, "we believe these charges are extremely misleading to the public and would like to set the record straight."

Are those charges in point of fact misleading?

HARVEY: No and they'll get their chance to set the record straight. Look, we sent inspectors from the Office of Weights and Measures and the Division of Consumer Affairs in our office today to visually observe what was going on and to document it.

Not only were some of these stations raising prices three, four times in the single day, but when we asked them for the documentation, which the law requires that they keep, they didn't keep the documentation, they didn't have it to show to us. And that's on top of some of these stations that, again, advertised one price and charged a second one at the pumps.

DOBBS: What will be the impact should you prevail against these oil companies?

HARVEY: Well, the fines in these statutes are not great. And certainly you can't fine an oil company enough to really hurt them. The goal here to is stop the practice.

DOBBS: Particularly not with the current profits.

HARVEY: Well, that's correct. The goal here is to stop the practices in these particular stations, stop other stations from doing it, and to try to get some restitution.

DOBBS: Do we need in this country, a federal price gouging law?

HARVEY: Yes. And I think most states need a price gouging law. We can use the Consumer Fraud Act in New Jersey to go after pure price gouging, but we need to declare a state of emergency to do it.

DOBBS: Well, it is good to have you here. We thank you for being with us. Peter Harvey, New Jersey's attorney general.

HARVEY: Thank you.

DOBBS: Still ahead, a new direction inside our nation's Department of Homeland Security and a new distraction. Robert Bonner, the man who said he was making progress on our nation's border crisis, is now stepping down. We'll have a special report for you.

And the so-called FedEx bandit is behind bars. The story of how one illegal alien was able to sneak into this country repeatedly. He just pulled off about 43 bank robberies. We'll explain how he did that and what's next for the FedEx bandit. Stay with us. (COMMERCIAL BREAK)

DOBBS: Louisiana's congressional delegation is asking for a quarter of a trillion dollars in taxpayer money to rebuild after Hurricanes Katrina and Rita. Senator Vitter and Senator Landrieu of Louisiana say the disaster is an unprecedented tragedy for their state and it requires an unprecedented response.

But the senators' request has run into strong opposition. The ""pecial reportovernors, who says__________________________________________________________________ ______________________________Washington Post" this morning in an editorial headlined "Louisiana's Looters" declared the Louisiana legislators are out to grab more federal cash than they could possibly spend usefully.

Joining me now is one of those Louisiana legislators, the distinguished member of the delegation, Senator David Vitter.

SEN. DAVID VITTER (R), LOUISIANA: Good to be with you.

DOBBS: Senator, it's good to have you here. You now are going to be called upon to justify this huge sum of money for reconstruction. Can you?

VITTER: Yes, we absolutely can. But I wouldn't get hung up on this overall figure. This was always meant to be a blueprint, a menu of options. It's never going to move as one complete bill because it would have jurisdiction of every committee.

So we're going to break it up into discreet portions and focus on those key priorities. Top on my list are real hurricane and flood protection, coastal restoration and also bringing jobs and businesses back, particularly through private sector incentives, depreciation allowances, things like that because we can build infrastructure all we want, but unless we bring the jobs and businesses back, the people won't come back.

DOBBS: Well, Senator, for example, in the request $40 billion for the U.S. Army Corps of Engineers. That's 10 times the annual budget for all the projects that the U.S. Army Corps of Engineers has under way each year.

VITTER: Yes, but Lou, I've got to tell you, the Corps has been dramatically under funded for decades in every administration. Part of the reason we're in the crisis we're in is because we haven't done the job through Corps projects in terms of hurricane flood protection and many other things. It's a big number, clearly, but there are enormous needs in terms of real hurricane and flood protection. We really saw that from the storm.

DOBBS: You said this is going to be an incremental and gradual approach in terms of what's introduced and what is spent. When you say it's not going to amount to that much, do you mean it's not going to amount to that much at all once? Or do you mean that this is as the "Post" suggested, a bargaining ploy, the first -- the initial bargaining position for the state of Louisiana?

VITTER: Well, Lou, yes what I mean is this was meant to be a blueprint, a menu of options. It's never going to move as this big mega bill because it would be sent to 10 or 15 different committees. So, we will break out discrete portions. I'm meeting daily with committee chairman to talk about the key priorities in their areas of jurisdiction, like hurricane flood protection with the chairman of the EPW Committee, like real incentives to bring businesses and jobs back with the chairman of the Finance Committee.

DOBBS: And Senator, rolling back -- the White House rolling back Davis-Bacon, removing requirements for documentation for those working in reconstruction while pushing through no-bid contracts. Aren't you concerned that the people of New Orleans and the area that's been so hard hit in your state will not be fully participating?

Because the great fear, I will tell you, elsewhere is that the White House has just rolled back worker protections, won't even give Louisiana a prevailing wage mark, and the Louisiana prevailing wage is 20 percent below the national average. It doesn't look good for the folks who are in New Orleans and your state who are going to be participating in reconstruction.

VITTER: Well, the Davis-Bacon issue I can probably live with. What I'm very concerned about, though, is the other part of your question -- Louisiana participation, Louisiana workers, Louisiana business being involved, because that has to be a big part of the economic recovery. Unfortunately, what I've seen so far out of FEMA contracts is these huge, usually no-bid contracts, going to big national entities, and Louisiana workers...

DOBBS: But what about your workers there, Senator, what about those folks who are not even going getting a prevailing wage thanks to the White House decision?

VITTER: Well, I would like them to get some wage, for starters, is what I'm saying.

DOBBS: How about a prevailing wage, sir? Isn't it unconscionable to you that in an aftermath of a disaster, people talking about $750 trillion (ph) and you don't even want to provide prevailing wages in the state of Louisiana to those rebuilding?

VITTER: Lou, I'm a free market person. I think the prevailing wage is what the market bears. But I think Louisiana workers and businesses should be fully invested and involved. And unfortunately, we haven't seen that. We've also seen a bunch of mega no-bid contracts. And I do not think that's healthy at all.

DOBBS: Senator David Vitter, thank you for being here.

VITTER: Thank you, Lou.

DOBBS: Rush Limbaugh tonight is still the target of an intense investigation by Florida prosecutors over his use of prescription painkillers. The Florida state attorney's office now wants to subpoena Limbaugh's doctors and their employees as they have for some time. Limbaugh has now been under investigation since December of 2002 for what those prosecutors call doctor shopping or attempting to find a doctor who would prescribe drugs illegally.

Limbaugh admitted to an addiction to the painkiller OxyContin back in October of 2003, just about two years ago. He went into a rehabilitation clinic. He underwent treatment for five weeks. Investigators have seized medical records from four of Limbaugh's doctors, that back in November of 2003. After almost three years of investigation, not a single charge has been filed against him.

Coming up next, another shake-up in the Department of Homeland Security. Yet another high ranking official has decided to step down. We'll tell you how it could have a direct impact on our border security, our national security and a disturbing example of just how insecure those borders are tonight. We'll have that story for you and more coming right up.

Stay with us.


DOBBS: After four years, Customs and Border Protection Commissioner Robert Bonner today announced his resignation. Bonner's departure throws the Department of Homeland Security into even greater turmoil on the issue of border security. Three top positions within this critically important department charged with protecting our national security are now vacant.

Lisa Sylvester reports.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Less than a week ago, Robert Bonner praised his department's strategy for reducing the flow of illegal aliens into the country.

ROBERT BONNER, COMMISSIONER, CUSTOMS AND BORDER PROTECTION: We're making progress. We're moving in the right direction.

SYLVESTER: Today, the head of Customs and Border Protection abruptly stepped down. Bonner's resignation now leaves three top posts at the Department of Homeland Security vacant: Customs and Border Protection, Immigration and Customs Enforcement, and FEMA. Bonner insists he was not forced out or asked to resign.

BONNER: It is just time. I mean, I didn't come back here to serve a life tenure. I came back to serve. And I have put in four solid years. I think I've done my duty. And it's a good time to move on.

SYLVESTER: During his tenure, he and the Bush administration were not always on the same page. Bonner supported using civilian Minutemen along the border to assist agents. The White House publicly swatted that idea down.

Problems plague the nation's border system. Illegal immigration continued to creep up with more people entering the country illegally than those who went through the proper channels. The governors of Arizona and New Mexico declared states of emergency along their borders.

Bonner received a lot of flak, but many lawmakers say he did not have his boss' support.

SEN. JEFF BINGAMAN, (D) NEW MEXICO: Unfortunately, the whole issue of the border and immigration and Customs has not had the priority attention that it deserves during the time he's been there. And we seem to always be running along behind the problem trying to catch up and trying to do what should have been done before.

SYLVESTER: Bonner will stay on the job for a couple of months to ensure smooth transition.


SYLVESTER: The inspector general of the Homeland Security Department is about to issue a report that reportedly recommends combining Immigration and Customs Enforcement and Customs and Border Protection, two separate agencies. Several sources are speculating that Bonner may have perhaps seen the handwriting on the wall that he was not going to be selected to head the new department and chose to walk away instead. Bonner denies that this issue has had anything to do with his decision, though.


DOBBS: Bonner, Robert Bonner is an able public servant committed, a sincere man, who has done a lot in the service of his country. In point of fact, he was rebuked for his support of bringing about a volunteer force, at least considering it. He's a man who's been open to the use of technology and focused on border security. He was undercut at every move by an administration that has been absolutely derelict, negligent to the point of criminality in ignoring border security in this country. He's got to be one disgusted human being.

SYLVESTER: Well, when I talked to him today, he was being very careful with his words. I asked him, was it a problem of resources? He said, you know, they could have always used more resources. But you could see that he was dancing a very delicate balance.

This is a man who obviously knows how the political game is played. So, I don't think he wants to come out and blasting even his current bosses at this point. But I think it was clear to observers even on Capitol Hill that this keep -- he was put in a very difficult position.


DOBBS: Yeah. Robert Bonner has been a team player. He has done everything that is asked of him in service of his country. He is a Republican and has been loyal to the party and to this administration. But the fact is that this Republican Party, this Bush administration and this Republican-led Congress have sold out border security, and for them to even suggest otherwise with a straight face is beyond comprehension.

SYLVESTER: I had someone tell me today the fact that Robert Bonner is leaving, it says a lot. It tells you that this -- the Department of Homeland Security when it comes to border protection is not taking this very seriously, Lou.

DOBBS: Perhaps, as they would with ICE, they will find a 36-year- old without any experience to manage it. Thank you very much, Lisa Sylvester.

As our nation finds itself without a head of border security, tonight a new example of the extent of our broken borders crisis, as if we needed another. A 40-year-old Iranian national is charged with using a false identity to repeatedly sneak into the United States and rob banks in California. He was pretty good at it, too.

Casey Wian reports.


CASEY WIAN, CNN CORRESPONDENT (voice-over): Farzad Naroii is an Iranian illegal alien who authorities say has confessed to a string of 43 bank robberies in Southern California during the past two years. He's known as the FedEx bandit, because he instructed tellers to put cash in a FedEx envelope.

Incredibly, investigators say he was living in Tijuana, Mexico, and crossed the border dozens of times to commit his armed bank heists. He then crossed back into Mexico with a total of $300,000. Naroii often used the identity of Ernest Lozano, an infant from San Antonio, Texas, who died years ago.

MICHAEL UNZUETA, ICE: Just like a big onion peeling back all the false identities that this guy had.

WIAN: How does an Iranian national living in Mexico come across the border 40-some times to rob banks without being caught?

UNZUETA: Well, you got to remember, this guy had been in the United States since about 1979. So he assimilated into our culture pretty easily. He speaks very fluent English. Coming through the port of entry, it might appear as if you or I were coming through the port of entry.

WIAN: In fact, Customs and Border Protection officers stopped Naroii at the port of entry this summer and ordered him to the secondary inspection area. Instead, he sped away and escaped.

The key break in the case came in June when Naroii robbed this bank in Del Mar. In this surveillance photo, you can see a cell phone in his hand. He left it behind after the robbery.

UNIDENTIFIED MALE: We were able to take the information off that cell phone, exploit it and then it subsequently led to his identification.

WIAN: He was finally caught Monday by a Customs and Border Protection officer.

BRUCE WARD, CPB PORT DIRECTOR: The I.D. was not a valid identification card. When he started being questioned he became very, very nervous, he started sweating, no eye contact.

WIAN: Naroii now faces multiple state and federal charges ranging from armed bank robbery to identity theft and bulk cash smuggling.


WIAN: Authorities are also pursuing potential money laundering charges because they still don't know where all of that cash went to. One thing they do say, however, is that there is no evidence that terrorism is involved. Bail for the so-called FedEx bandit has been set at $5 million, Lou.

DOBBS: And he only got $300,000 robbing how many banks, 43?

WIAN: Forty-three banks that they know of, that he admitted to.

DOBBS: That's not a very good take, if I may say it that way.

WIAN: Well, the average bank robbery, if you talk to FBI folks, is relatively small, only about $2,000. So, he wasn't doing that much worse than the average, Lou.

DOBBS: Ten to 20 years in jail for $2,000. Remarkable.

And again, crossing the border not illegally, crossing through the port of entry. A remarkable story. Thank you very much. Casey Wian.

Over the past year, the number of illegal aliens not from Mexico cut along our southern borders surged more than 170 percent. In some many cases these so called OTMs, other than Mexicans, are released and they never appear in court. Often they disappear into our society.

Today, a House Homeland Subcommittee held a hearing on the OTM crisis and how to fix it.

Subcommittee Chairman Congressman Dan Lungren of California joins us tonight. You're looking at expedited deportation of OTMs. Just what does that mean, Congressman?

REP. DAN LUNGREN, (R-CA), CHAIRMAN, SUBCOMMITTEE ON ECONOMIC SECURITY INFRASTRUCTURE PROTECTION AND CYBERSECURITY: Well, it means that instead of catch and release, catch and return. This is a process where they don't have to go through the immigration proceedings as long as we catch them within 100 miles of the border, as long as it is within 14 days of their entry here. We basically keep them, detain them, contact their country, and then send them back.

What has happened is we've had this expedited return program in about four of the sectors along our southern border. It is proven to be very effective, so now we're going to have it over the entire southern border, which is something I've been agitating for some time. DOBBS: This has been tried in both Arizona and Texas -- a pilot program as you alluded to. It was successful. But to carry this program out, we're talking about great cooperation between Immigration and Customs Enforcement, the State Department and obviously the Border Patrol -- that's asking a lot, isn't it?

LUNGREN: Well, it is. And it has been in the past. But at least in the pilot projects, it looks like they have seriously looked at this. One of the concerns I raised today with the State Department people is whether or not they are being strong enough with these countries from which these people come. Many of them from our Central American region, areas that we have just gotten into a treaty with in terms of CAFTA. They at least stated today that they are getting positive responses from these countries.

What happens is we need to have travel documents. We need to have them identify these people as truly their citizens before they can return them. And that's been part of the delay.

DOBBS: Congressman, Robert Bonner, the head of Customs and Border Protection stepping down today. Three basic -- I mean, three important jobs at Homeland Security now vacant. I mean, what in the world -- obviously, no one's serious about providing border security for this nation. Three million illegal aliens crossed it last year. But shouldn't somebody be serious about putting qualified, competent people in those jobs?

LUNGREN: Of course. I'm very disappointed that Rob Bonner is leaving. He's not only a personal friend of mine, but he's someone who has proven that he can do a job in prior jobs and was doing it now. There is some reorganization going on, some recommendation. I recommended that ICE and CBP be put together, seems to me they would function better.

We are putting the pressure on this department, and we'll be continuing to put the pressure on them to make sure they do take it seriously and give us practical application of the law so that we can start controlling these borders in a far greater degree than we have in the past.

DOBBS: Or just simply control our borders and provide the nation border security. We thank you very much.

LUNGREN: Thank you.

DOBBS: Mr. Chairman, Congressman Dan Lungren.

Still ahead, the results of our poll tonight, a preview of what's coming up tomorrow, as best we can determine. Stay with us.


DOBBS: Now, the results of tonight's poll: 58 percent of you agree with NASA Administrator Michael Griffin that the space shuttle and space station were mistakes, 42 percent do not. Finally tonight, Judith Miller, the Pulitzer Prize-winning "New York Times" reporter has been in jail for 84 days for protecting her confidential sources in White House CIA leak case.

By the way, it has now been 637 days since special prosecutor Patrick Fitzgerald was appointed to lead that investigation. And still, no charges have been filed. To put that in some perspective, the investigation into Watergate lasted only 288 days.

Thanks for being with us tonight. Join us here tomorrow. Our guests will include Michael Pillsbury, the leading Pentagon adviser, who warns that China could be this country's greatest challenge. We hope you'll be with us.

For all of us here, thanks for being with us tonight. Good night from New York.

ANDERSON COOPER 360 starts right now. Anderson?


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