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Broken Borders; FBI Investigates Possible Terrorist Threat in Baltimore; Cheney and CIA Leak; Wal-Mart Wants To Get Into Bacon; Waiver Of Davis-Bacon Act Angers Some

Aired October 18, 2005 - 18:00   ET


LOU DOBBS, CNN ANCHOR: Good evening, everybody.
Tonight we're following two rapidly-developing stories. First, we're watching Hurricane Wilma in the Caribbean. The National Hurricane Center now says Wilma could strengthen to a major hurricane within the next few days, and could then turn toward Florida.

And tonight we're monitoring what is a badly-damaged dam in Taunton, Massachusetts, that the mayor now says could break at any time. A break would flood hundreds of homes and businesses with as much as six feet of water. At least 2,000 people have already been evacuated. We'll have the latest for you.

But we begin tonight with what is nothing less than a remarkable reversal on the part of the Bush administration on the issues of border security and illegal immigration. A top government official who serves in an administration that has failed to establish border security or to enforce our national immigration laws made today's announcement. Homeland Security Secretary Michael Chertoff today declared he wants every single illegal alien caught in the United States to be deported without exception.

Lisa Sylvester reports.


LISA SYLVESTER, CNN CORRESPONDENT (voice over): Two members of the president's cabinet made one thing clear, amnesty is not on the table for a comprehensive immigration bill.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: Clearly, amnesty would be an affront to the rule of law, it would be an affront to those who are legal who are waiting their turn.

ELAIN CHAO, LABOR SECRETARY: There should not be a pathway to citizenship.

UNIDENTIFIED MALE: There should not be?

CHAO: There should not be an automatic pathway to citizenship.

SYLVESTER: Homeland Security Secretary Michael Chertoff in his prepared statement articulated a hard line against non-Mexicans, who, because of a lack of detention space, have been allowed to stay in the United States. "Our goal at DHS is to completely eliminate the catch- and-release enforcement problem and return every single illegal entrant, no exception."

The administration wants to pair tougher border and interior enforcement with a guest worker program. Under the plan, foreign workers would be matched with willing employers as long as Americans are not available to work. They could stay for three years with a three-year extension. Afterward, they would be required to go back to their home country. Illegal aliens already in the country would have to pay a fine and get back in line behind others waiting to enter.

Immigration reform groups say the administration talks the game when it comes to enforcement, but the political will is not there.

MARK KRIKORIAN, CENTER FOR IMMIGRATION STUDIES: It's clear that the enforcement talk is just that, it's spin in order to lull people into the -- into a sense of security that this immigration wave that they want to unleash won't cause problems when, in fact, it will.


SYLVESTER: And ultimately, the decision on what's in the final bill rests with Congress. Both the House and the Senate are leaning toward legislation that has new border enforcement measures and leaves off the guest worker idea. And that reflects the views shared by many constituents who want the broken borders fixed first before addressing bringing in guest workers.


DOBBS: That appears to be the direction of both the House and even the Senate, that border security must be established before any attempt at immigration reform.

Lisa Sylvester. Thank you very much.

It appears tonight that two leading senators with an immigration plan that has won widespread support among liberals have now joined forces with one of the country's most powerful business groups. Senators John McCain and Edward Kennedy and the U.S. Chamber of Commerce want to make it easier for illegal aliens who have broken the law to enter this country to stay in this country and to have the same rights as U.S. citizens. Today, at an event sponsored by the U.S. Chamber of Commerce, Senator McCain strongly criticized any suggestion that illegal aliens should be deported.


SEN. JOHN MCCAIN (R), ARIZONA: As you've heard the opposing proposal, and I understand articulated by the administration today, is send them back before they can come back and work in this country. First all, somebody's going to have to explain to me how you do that. Is it some massive airlift?


DOBBS: Tonight, Congressman Tom Tancredo, one of the strongest critics of the administration's failed immigration policies, declared the Bush White House now admits at least there is a problem. Congressman Tancredo said - quote -- "It is no longer just the conservative base angry about illegal immigration. There's widespread discontent about our broken system from coast to coast."

We also asked the Mexican Embassy to comment on Secretary Chertoff's testimony. But the Mexican Embassy would not reply to our calls.

Later here in the broadcast, my guests will be Senator Jon Kyl of Arizona, Senator John Cornyn of Texas. They've introduced what is the strongest and potentially most effective plan for border security and immigration reform.

Our border crisis is the subject of our poll tonight. Do you believe that every illegal alien caught in this country should be deported, yes or no? Cast your vote at We'll have the results later here in the broadcast.

Turning now to a terrorist threat in Maryland today that closed a major tunnel in Baltimore and partially closed another. More than 100,000 people were delayed by the security alert which lasted nearly two hours. And tonight, we've learned that law enforcement agencies in Maryland are questioning a number of people about an alleged terrorist plot involving Egyptian citizens.

Jeanne Meserve has the report. Jeanne?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Lou, also tonight, U.S. intelligence officials say they have serious questions about the credibility of the threat information which was received by U.S. government officials in a phone call from overseas. But the investigation is continuing.

There have been no arrests, sources say, and no alleged terrorists have been found. But interviews are being conducted in the Baltimore area.

According to sources, the alleged plot involved the shipment of explosives into Baltimore disguised as cocoa. They would be placed in a truck and driven into an unspecified Baltimore tunnel. The purported scheme involved a small group of Egyptians, officials say.

It was specific enough for Maryland transit authorities to close one tunnel and restrict another for almost two hours, resulting in lengthy traffic delays.

The Department of Homeland Security and FBI said they supported security measures taken by state and local officials out of an abundance of caution. That was a striking contrast to the disagreement over New York's decision to raise security on city transit systems almost two weeks ago.

And there were claims today of good communication among state, federal and local officials, but there was one exception. Some Baltimore officials said they learned about the tunnel closures from television. Lou.

DOBBS: Jeanne Meserve. Thank you very much.

In Washington tonight, the CIA White House leak investigation nears an end. And sources tell CNN that indictments are now expected. And those indictments could come as soon as tomorrow.

And there are indications that special prosecutor Patrick Fitzgerald's investigation is centering on the possible role of Vice President Dick Cheney's office in the leak of the CIA agent's name.

Dana Bash reports from the White House.


DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice-over): Vice President Cheney in the oval office smiled knowing the camera is pointed at him for a reason. Headlines suggesting federal investigators are focused on Mr. Cheney's office, even him personally, in their search for who leaked the name of a covert CIA operative.

The "New York Times'" Judith Miller reported the special prosecutor not only asked about discussions with Cheney Chief of Staff Scooter Libby, but she said Mr. Fitzgerald asked whether Mr. Cheney had known what his chief aide was doing and saying. Miller said her answer was no.

Sources familiar with the grand jury testimony of current and former Bush and Cheney aides tell CNN several were questioned about the vice president's role in rebutting criticism from former Ambassador Joe Wilson, which he says ended up outing his wife's covert identity. But experts urge caution.

KENDALL COFFEY, FORMER U.S. ATTORNEY: The fact that somebody is the subject of questions doesn't mean that they're a target of an investigation. All it means for sure is that the prosecutor is doing his job.

BASH: What Patrick Fitzgerald appears to be probing is motive. Before the war, the vice president asked for more information on a report Saddam Hussein tried to buy uranium from Africa. Without Cheney's knowledge, the CIA responded by dispatching Joe Wilson to find out.

He came back saying the report was false. And in this column mentioning the vice president, Wilson accused the administration of ignoring his findings. The president still used the Africa connection in his case for war.

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: I don't know Joe Wilson. I've never met Joe Wilson.

BASH: On NBC in 2003, Cheney denied knowledge of Wilson's report, or even reading it. Central to the investigation is whether the administration effort to distance Cheney from Wilson, instead steering reporters to the CIA, resulted in the disclosure of his wife's covert identity, which could be a crime.


BASH: And he was not under oath, but the vice president was interviewed by federal prosecutors in June of 2004, 16 months ago, Lou. And administration officials say that was the only time.

DOBBS: And the visibility, Dana, of both Scooter Libby and Karl Rove in recent days at the White House?

BASH: Well, officials here insist that Karl Rove is still very much active in all of the things that fall under his portfolio, which, as you know, is quite a lot -- quite a lot of things. In terms of public view, we haven't actually seen him very much. And as a matter of fact, he was supposed to go to outside events of the White House around town -- two of them last week -- that he didn't go to. He sent other people in his place.

DOBBS: Dana Bash. Thank you, from the White House.

While the White House is preparing to deal with whatever political fallout results from the White House CIA leak investigation, it is simultaneously trying to stave off criticism of the president's Supreme Court nominee, Harriet Miers. Miers today went back to Capitol Hill, trying to win the support of skeptical senators. In a new attempt to win over disappointed and angry conservatives critical to the success of the nomination, the White House gave senators a questionnaire on abortion that Miers had completed back in 1989. But Miers' answers to that questionnaire may have angered many Democrats.

Ed Henry reports from Capitol Hill.


ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Senator Arlen Specter is growing frustrated that Harriet Miers' nomination is getting bogged down.

SEN. ARLEN SPECTER (R-PA), CHAIRMAN OF THE JUDICIARY COMMITTEE: I'm becoming more and more concerned that Harriet Miers is being tried in the media. And there is one place to have this determined and that's in the Judiciary Committee hearing, and I intend to get that on the road just as soon as I can.

HENRY: The latest blowup over abortion. The White House gave Specter's committee documents, including a questionnaire Miers filled out in 1989 while running for the Dallas City Council in which she supported a constitutional ban on abortion.

Some White House allies are circulating the document to convince restless Republicans she will support their agenda. That mission became more critical after Specter said Miers privately told him a key Supreme Court decision, the underpinning for legalized abortion, was rightly decided. Miers claims Specter misunderstood her, though the senator stands behind his version and refused a White House request for a correction. SPECTER: It seemed to me that the best course is to accept her view and to defer getting into it any more deeply until the hearing.

HENRY: Even as Miers' allies try to shore up conservative support, they angered Democrats like Dianne Feinstein, who charged the questionnaire raises "very serious concerns about whether Miers will be biased on the abortion issue."

(on camera): Democrat Chuck Schumer said that after all the back and forth, senators in both parties are more confused than ever about exactly where Harriet Miers stands on abortion.

Ed Henry, CNN, Capitol Hill.


DOBBS: Coming up, Hurricane Wilma headed for possible weekend landfall in Florida. We'll have the latest for you on this dangerous storm.

And a new assault on the U.S. middle class. Millions of U.S. technology jobs could be lost to cheap foreign labor at the request of American business. A special report coming up.

And the store that wants to sell you everything now wants to be your banker as well. Why shoppers may one day be doing their banking, as well as their grocery shopping and just about everything else, at Wal-Mart. And why many people are up in arms.


DOBBS: Three American troops have been killed in combat in Iraq. Two of our Marines were killed in a firefight in the town of Rutba in western Iraq, and an American soldier was killed in a shooting incident in Mosul. In Balad, 10 of our soldiers were wounded there in a roadside bombing.

The number of American troops now killed in Iraq numbers 1,982.

Meanwhile, the attorney representing Saddam Hussein says he wants a three-month adjournment in the former dictator's trial in Baghdad. That trial is scheduled to begin tomorrow. Saddam Hussein is charged with ordering a massacre of civilians in 1982. He is charged with crimes against humanity.

CNN will have complete coverage of Saddam Hussein's trial when it begins early tomorrow morning, sometime shortly after 2:00 a.m. Eastern.

Defense Secretary Donald Rumsfeld is tonight in Beijing, there focusing on communist China's rising military power. Before he landed, Rumsfeld told reporters that China is understating the true extent of its military spending. But the secretary appeared to be much less critical of China than he was in a speech he made four months ago.

Jamie McIntyre reports from the Pentagon. (BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice over): Even before he stepped off his plane in Beijing, Defense Secretary Donald Rumsfeld was setting a conciliatory tone for his three-day visit to China.

DONALD RUMSFELD, SECRETARY OF DEFENSE: But obviously it's up to the People's Republic of China to make its decisions as to how it wants to arrange itself from a political and an economic and a security standpoint. But as they make those decisions, the rest of the world sees those decisions and makes judgments about it.

MCINTYRE: Just four months ago in a speech in Singapore, Rumsfeld was challenging the Chinese government with pointed questions. "Why is China's military spending much higher than it admits? Why is it expanding its missile forces to target countries beyond the Pacific? Why a massive military build-up if no nation threatens China?"

But with President Bush scheduled to visit China next month, and Rumsfeld now on Chinese soil for the first time since he took over the Pentagon in 2001, Rumsfeld is taking a more diplomatic approach, urging the Chinese to work with the U.S. in a spirit of mutual respect and friendship.

A Pentagon report released just this summer estimated China's defense budget at $90 billion a year, and concludes the buildup was aimed at either intimidating or invading Taiwan, which Beijing claims is a renegade territory.

KURT CAMPBELL, CSIS: It's one of the most significant military modernizations in history. And anyone who would deny that I think is simply trying to avoid a difficult truth.

MCINTYRE: But Kurt Campbell, a former deputy assistant secretary of Defense, argues, unlike the old Soviet Union, China can't be contained.

CAMPBELL: And we shouldn't be thinking about a relationship with China in which containment is the watch word. Containment belongs to a bygone era, with a different kind of strategic foe in the Soviet Union, which China just does not approximate.


MCINTYRE: In another speech last month, Deputy Secretary of State Robert Zoellick argued that the U.S. needs China for everything from battling Islamic extremists to convincing North Korea to give up its nuclear weapons. The U.S. policy, he said, is not to fence China in but to try to draw it out.


DOBBS: Interesting statements by the undersecretary. The fact is that Zoellick is the architect of every failed free trade policy over the course of the past five years. In point of fact, China has not been helpful in concluding any sort of agreement with North Korea. In point of fact, he's not been successful on any level. Why such a -- such a statement?

MCINTYRE: Well, the U.S. still believes that if anyone has influence over North Korea, it is China. And it could still be helpful in that form.

The U.S. also believes that, if unlike, for instance, the case of the Soviet Union, with the flow of information into China, that if they can maintain the sort of progress, and if China really wants economic prosperity, that the forces within China could contribute to an eventual democracy there. But, you know, it's a slow process.

DOBBS: Is anyone...

MCINTYRE: You have to take the long view of it, they say.

DOBBS: A long view indeed, because the short and immediate view is that China is cracking down on a free press that does not exist, in point of fact, in China -- cracking down on the media, rolling back. It's a totalitarian state, it's a communist nation. A little bizarre, this talk of democratization.

MCINTYRE: Well, the Pentagon is not ignoring the military threat. In fact, they're quite concerned about it. And the U.S. is taking steps to improve its military posture in the region. But again, they don't see an immediate threat from China. They do see a potential threat down the road.

DOBBS: Jamie McIntyre from the Pentagon. Thank you, Jamie.

Secretary Rumsfeld arrived in China just as Treasury Secretary John Snow was leaving. Secretary Snow seemed nothing short of just enamored with the Chinese after his one-week visit. In fact, Secretary Snow gave a speech today praising China for what he called its economic reforms.

But Secretary Snow made little, if any, reference to our nation's exploding trade deficit with China, the most unbalanced trade relationship in the history of the world. He also failed to mention China's dismal human rights record, as well as the loss of 5,000 American jobs to China's cheap labor markets.

Still ahead, Wal-Mart, the big box retailer, wants to be your big box bank as well, and a whole bunch of other stuff. We'll have a special report on Wal-Mart's controversial new business plan.

And the California flood watch -- massive mudslides and new threats of flooding.

Stay with us.


DOBBS: There's shocking new evidence tonight that high-paying U.S. technology jobs face a continued and growing threat from cheap foreign labor markets. Foreign competition that has already decimated our nation's manufacturing workforce is now threatening the jobs of middle class technology workers.

Christine Romans has the story.


CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): The middle class American technology worker is under siege. In the last year, more job losses for workers in computer chip manufacturing and electronic components, and barely any growth at all in telecommunication. In fact, according to Challenger, Gray & Christmas, job cuts in technology are up 20 percent this year over last.

JOHN CHALLENGER, CHALLENGER, GRAY & CHRISTMAS: It looks as though the middle class, these tech workers, just aren't participating in the recovery that's been going on.

ROMANS: He says even as technology spending grows, executives prefer to add workers through outsourcing and mergers. It's why the unemployment rate for computer programmers is worse than the national average.

Yet, as jobs are scarce in information technology, the Senate Judiciary Committee is considering letting more foreign workers in to do those jobs by raising the number of H1B visas sold to foreign workers. Under a draft of the proposal obtained by LOU DOBBS TONIGHT, those visas would be sold for $500 each to 60,000 workers each year for the next five years. That's on top of the annual cap of 65,000 a year.

Critics say essentially it is selling visas at the expense of American workers.

KIM BERRY, THE PROGRAMMERS GUILD: And to have these congressmen, many of them quite rich, to be even sitting behind closed doors or open doors, to consider whether or not to sell out another 60,000 U.S. workers for $500 each is simply outrageous.

ROMANS: He suggests raising the fee for H1B visas to $5,000, making companies more likely to at least consider Americans for tech jobs first.


ROMANS: Numerous sources, including a Senate Judiciary Committee staffer, tell us Senator Arlen Specter is the architect of this proposal to offer more H1B visas. Despite several calls, his office would not comment to the program.

But critics say given higher-than-average unemployment in some computer careers, and fraud, frankly, in the H1B visa program, it just doesn't make any sense, Lou, to let more foreign workers in when there's a scarcity of these jobs in the first place. That's just putting American workers at a disadvantage. DOBBS: Again, and still. And the fact is, the only sense it does make is the sense it's prevailing. That is, that it's providing cheap labor instead of quality, but more expensive labor. Imagine that -- paying a prevailing wage to hard-working middle class Americans.

I can't wait to see whether or not the Senate Judiciary Committee and Senator Specter's office will see fit to respond us to, because when you start talking about stripping 60,000 jobs from the technology industry that should be going to Americans, that does require some explanation.

Thank you very much, Christine Romans. Amazing.

Just ahead tonight, a state of emergency. Days of heavy rains and flooding threatening to break a nearly 200-year-old dam in Massachusetts. The town protected by that dam is preparing for the worst. Evacuations have already taken place. We'll have that live report for you next.

And then, another hurricane could be just days away from striking the United States. We'll have the latest on where and when Hurricane Wilma could strike.

Stay with us.


DOBBS: Tonight, in Taunton, Massachusetts, an almost 200-year-old wooden dam is in danger of collapse after heavy rains. The next couple of hours could decide whether the town of 56,000 residents can escape major flooding.

Adaora Udoji is live in Taunton tonight. She has the latest for us. Adaora?

ADAORA UDOJI, CNN CORRESPONDENT: Good evening, Lou. We're standing right next to the Mill River, a very bloated Mill River. And the big question for people in this very small city, especially for those 2,000 people who were evacuated, is whether or not the dam, which is just up a little bit, is going to hold up, whether it will stay together.

As the floodwaters have been rising -- I'm sorry -- all the rain in the last couple of days has caused quite a bit of rising waters. And so, the mayor says that the dam has deteriorated significantly in the last eight to 10 hours, the Whittendon Pond Dam, and it was that rain forcing those levels up that increased pressure on the dam that triggered some leaks yesterday that was of great concern.

Now, the center of downtown would suffer a direct hit if that dam collapsed and forced water down the Mill River, which is why the mayor issued an evacuation order, a voluntary evacuation order for the low- lying areas in downtown. That would be hundreds of businesses and homes leading to those roughly 2,000 people, the mayor is telling us, that have evacuated to safer and higher ground. Still, the city is under a state of emergency, as you mentioned. And the mayor spoke late this afternoon, and this is what he had to say.


MAYOR ROBERT NUNES, TAUNTON, MASSACHUSETTS: The condition of the dam at Whittendon Mills is still being monitored by dam officials and officials from the Taunton Fire Department and Taunton Police Department. There are no significant changes to the structure of the dam. The water level has not receded. There is excessive vibration, which is a concern.

Again, we encourage the residents who live along the Mill River to evacuate. All streets in the downtown area are closed.


UDOJI: Now, the mayor saying over and over again that they are erring on the side of caution. They've brought in roughly two dozen National Guard. There are all kind of rescue workers who are on standby to rush in if there is any problem with that dam and it begins to leak, or perhaps collapse, forcing all kinds of water down Vista Way. So, Lou, lots of anxiety here in Taunton tonight.

DOBBS: Understandably so. Adaora Udoji in Taunton, Massachusetts. Thank you very much.

Tonight hundreds of residents are returning to their homes in Burbank, California, after torrential rains and mudslides. Mudslides slammed into Burbank neighborhoods, turning streets into filthy, raging rivers yesterday. More than three feet of mud is still being cleared from some roadways. This gushing water, filled with sediment, in the streets of Burbank. And rain is still falling in the Los Angeles area tonight. Flood watches remain in effect. More than 10,000 people lost power in yesterday's Southern California storms.

Turning now to our nation's latest hurricane threat. It is Hurricane Wilma. Wilma strengthened into the 12th hurricane of this season earlier today. Wilma is a slow-moving Category 1 storm right now. It has sustained winds of 80 miles an hour. But Hurricane Wilma is expected to pick up speed and intensity later in the week.

Forecasters are expecting Wilma to make landfall Saturday. The most probable target tonight? South Florida. But Wilma could shift course and hit further west along the storm-ravaged Gulf Coast. It is far too early to tell. And it could hit as a dangerous Category 3 storm or higher, according to the National Hurricane Center.

More now on our top story tonight: The Senate Judiciary Committee hearing on our nation's border crisis. My next guests are members of the committee, who have introduced their own plan for immigration reform, a plan that, if implemented, has the best chance of asserting border security and stopping the massive invasion of illegal aliens.

Senator Jon Kyl of Arizona and Senator John Cornyn of Texas join us now from Capitol Hill.

Gentlemen, after today's hearing, what is your reaction to Secretary Chertoff's remarks?

SEN. JON KYL (RAZ), JUDICIARY COMMITTEE: Well, I'll start with that. Secretary Chertoff focused on the Department of Homeland Security appropriation bill, which President Bush signed this afternoon, and noted that it is a huge step forward in enabling us to get control of the border and also provide better security within the country. It's an appropriation bill that will now fund most of the activities that we've been lobbying for, for a long time, in a very robust way.

And what it goes to demonstrate is that you don't have to wait for immigration reform legislation to pass to begin really going after the enforcement issue, which is what this appropriation bill will do.

DOBBS: Senator Cornyn, we had heard officials before, certainly not from this administration, talk about border security. These were certainly the strongest statements I've heard from anyone in this administration about border security. This was also a day in which the president, talking about that very same legislation on Homeland Security, saying that we have border security. Were you taken aback just a bit by the president's words?

SEN. JOHN CORNYN (R-TX), JUDICIARY COMMITTEE: Well, I actually did not hear specifically what the president said, but what we heard today from Secretary Chertoff and Secretary Chao is an unequivocal commitment to obtaining operational security of our border. And I'll tell you, Lou, the best news I heard today is that Secretary Chertoff said the catch-and-release policy of the United States government was intolerable, and it was going to be ended as soon as absolutely possible.

DOBBS: Is it coincidental, gentlemen, that the secretary's remarks come, and Senator Bill Frist, the Senate majority leader's remarks of last week come as most congressmen and senators are returning from their districts, their home states, and have heard constituents say they're sick and tired of the issue of illegal immigration and the continued permission that the federal government is giving to absolutely ignore U.S. laws?

KYL: Well, from my perspective, Lou, I've just spent the last week out in Arizona announcing my candidacy for reelection, and I say there are three issues in Arizona. It's immigration, immigration and immigration. And everybody is upset about it, and they do want the laws enforced first. They think some kind of a guest worker program is important, but they want to see a commitment to enforce the laws, which would include ensuring that a guest worker program is properly enforced.

DOBBS: A guest worker program that is not an amnesty program, as clear a statement from an administration official that there will be no amnesty today. Senator Cornyn, your thoughts?

CORNYN: Well, Secretary Chao got a little pushback from members of the committee about that, wondering why we couldn't have a path to citizenship under this temporary worker program. I was glad to see her emphasize the principle of work and return, not work and stay, which characterizes the proposals Senator Kyl and I have made, which is not designed to be an alternative path to citizenship, but merely to ameliorate the other concerns, the economic concerns, the workforce concerns without creating amnesty.

DOBBS: Gentlemen, is it your -- is it your view that the administration is prepared to support your legislation in the Senate, which requires first border security, and then dealing with the issue of immigration reform?

KYL: Let me answer that two ways. First of all, by signing the legislation today, that really puts us on a path toward enforcement, the administration is acknowledging, and the president said as much this afternoon, that it starts with enforcement. And then, probably it's going to be next spring before we actually get immigration reform legislation passed, and that's when a temporary worker program would then go into effect.

The proposal that Secretary Chao talked about today is pretty close to what Senator Cornyn and I have introduced. Not exactly -- not exactly like it, but in terms of the key proposals, no amnesty and work in return, it's pretty close.

DOBBS: Senator Kyl, Senator Cornyn, we thank you both for being here.

CORNYN: Thanks, Lou.

DOBBS: A reminder now to vote in our poll -- do you believe that every illegal alien caught in this country should be deported, yes or no? Cast your vote please at We'll have the results coming up later in the broadcast.

Still ahead, Wal-Mart wants to have an even more dominant presence in communities, if you can imagine that, in communities all over the country. We'll have the latest for you on the big box retailer that wants to be a big box banker and just about everything else.

And in New Orleans, a city where there is no prevailing wage, two men who said they were fired and replaced by low-wage foreign workers. They're our guests coming up next.

Stay with us.


DOBBS: As we've reported, Homeland Security Secretary Michael Chertoff today said his goal is to expel every single illegal alien caught in this country. My next guest feels quite differently from Secretary Chertoff and countless American citizens on the issue of illegal immigration.

Senator Richard Durbin of Illinois and other Democrats have asked Secretary Chertoff to promise not to deport any illegal alien found seeking aid in the wake of the Gulf Coast hurricanes.

Senator Durbin, a member of the Judiciary Committee where Secretary Chertoff testified before today, joining us from Capitol Hill.

Senator, there are estimates that run as high as 20 million illegal aliens in this country, three million crossing just last year. Why would you make such a request of Secretary Chertoff?

SEN. RICHARD DURBIN (D-IL), JUDICIARY COMMITTEE: It's the same thing we did after 9/11. After the 9/11 crisis, this same administration announced that, when it came to the people coming forward who were victims of 9/11 or members of their families seeking assistance from this government, this same administrations said, we're not going to deport you.

Now the rules have changed. I asked Secretary Chertoff, why change it? He said, I wasn't aware they were changed.

DOBBS: In your judgment, why would it be important to do that in the wake of Hurricane Katrina, quite a different disaster, quote a different circumstance?

DURBIN: Well, of course, but we had at least five different instances where people went to basic shelters for food and for water and for just some roof over their head for their children, and they were deported for turning up and asking for that. It seems harsh to me. And why would we do -- take on a policy so inconsistent with what we did just a few years ago?

DOBBS: One is that, since 2001, we have seen illegal immigration skyrocket in the country, three million illegal aliens successfully entering this country last year. We have 150,000 other-than-Mexican illegal aliens crossing our borders, at least, who have been captured, perhaps three times that many successfully entering the country.

My question, I guess, Senator, is why would there be a focus on this issue rather than the fact -- the incredible burden that those who hire illegal aliens in this country are placing upon the middle class, depressing wages, costing billions of dollars in social and health services across the country?

DURBIN: Lou, were you aware of the fact this same administration, when it came to Hurricane Katrina, said that they were going to waive employer sanctions for those who hired the undocumented?

DOBBS: Senator, I'm not only aware of it; I have criticized this administration roundly for rolling back Davis-Bacon in an effort not to pay a prevailing wage in the very area that's been decimated by these disasters. The very suggestion is obscene when, at the same time the federal government is putting out cost-plus contracts to construction and contractors.

DURBIN: Well, right on.

DOBBS: I find it absolutely deplorable. DURBIN: But if you think that this policy on Hurricane Katrina from this administration is hard to follow, maybe unintelligible, the same thing can be said of our immigration laws. My point is this: I don't understand the Katrina policy and neither of the secretaries today could explain it -- why you say to employers, go ahead and hire the undocumented in one instance and then when a person shows up with a child in a shelter asking for food and water, they're saying, we're deporting you right now. That doesn't make sense.

But let me just concede the obvious. This immigration system is not working. It has failed. But we've also got to acknowledge the fact that we have some 10 million Americans who are now undocumented and a part of our economy in the United States. We have people who are a major part of the economy in the city of Chicago.

DOBBS: When you say a major part -- excuse me, Senator. But you know, I've heard this line of reasoning from too many people, suggesting they're a major part of the economy.

What they are is a way in which employers manage to pay less than fair wages so that they have labor, rather than paying prevailing wages to U.S. citizens. You know, this nonsense that illegal aliens do work that Americans won't do -- that is utter nonsense.

DURBIN: Well, I'm sorry, but I have to disagree with you.

DOBBS: Americans will do work at the wages that are being offered.

DURBIN: I have to disagree with you. There is exploitation. There is no doubt about the exploitation. I'm not sitting here trying to defend it any way.

But I will just tell you, point blank, go to a major city in America -- certainly a major city in my state -- and ask restaurant owners and hotel owners how their businesses would fare without undocumented workers, and you'll see the harsh reality.

These men and women are doing things in jobs every single day. They're an important part of the economy. And if you had your wish and they all left tomorrow, it would have a dramatic negative impact.

We've got have a system. We've got have a system that enforces our laws, but creates a means by which people can earn their way to legal residency if they work hard and pay taxes, they're good citizens, and basically follow the rules.

DOBBS: Senator, they broke the law and they violated every aspect of our immigration laws.

DURBIN: Lou, I wish you could sit in my office.

DOBBS: I wish you would come to my office.

DURBIN: I wish you would sit in my office and hear some of the cases. What about an 18-year-old girl who came from Korea at the age of two, whose parents didn't file the necessary and proper paperwork? She learns at age 18 she is undocumented.

DOBBS: Senator, come to my office and listen to the thousands of people who are lined up to get immigration -- legal immigration into the country, who are absolutely distraught. You and everyone in the United States Senate who is not dealing with this issue -- the United States Congress and this White House -- have effectively put Vicente Fox in charge of America's immigration.

DURBIN: Don't overstate my position because I haven't really been asked to explain it. But I will tell you what I feel.

First, the system is terrible. It needs to be enforced for our security and for our economy. There is no question about it.

Secondly, if the system is going to work to get 10 million plus to come forward and to make certain we know who they are, where they are, where they're working and when they're going to stay or go home, then we've got to have a system that doesn't basically say, if we catch you, you're gone.

And I think the systems that we've heard may make us feel good, that we're getting tough. But I don't think they answer that basic question.

DOBBS: And the basic question that I was waiting to hear asked of Secretary Chertoff testifying before your committee today: Secretary of Homeland Security, Mr. Secretary, how can the president of the United States talk about border security? How can you be the secretary of the Department of Homeland Security and permit three million people to enter this country illegally?

DURBIN: Well, I think the reality is that is one of the national security issues that we have to own up to. It's a real one, and it's a legitimate question. But let's also be very candid about this. The idea that we can close our borders to Canada and Mexico and keep everyone out is not a realistic proposal.

DOBBS: Should we just, then, surrender?

DURBIN: No, of course not.

DOBBS: Well, then why in the world can't the greatest superpower on the face of the Earth, the greatest economy, the greatest society and democracy, have the leadership and the will to provide security for its borders? We're spending $200 billion a year on a war against terror and we don't have the capacity to protect our own borders?

DURBIN: We do have that capacity to some extent.

DOBBS: Why don't we do it?

DURBIN: But to say that we can keep every person out who wants to cross a 2,000 mile border is unrealistic. What we've got say is, once you're here, those who want to go to work -- we're going to hold employers responsible for hiring undocumented people. We've not done that. I think that's got to be part of the enforcement of this. We also have to understand 10 million are here. What are we going to do to move to where we want to be?

DOBBS: Senator Durbin, it is good to have you with us. We're out of time.

At least it appears an awakening has begun on the part of the administration. Hopefully, it will be a profound and real one. We thank you.

DURBIN: Thanks, Lou.

DOBBS: Still ahead, Wal-Mart wants to have an even greater dominant presence in your community -- interviews (ph) all over the country, in fact.

The outrageous story tonight of two men who were hired to help New Orleans rebuild saying that they were fired after three weeks, taught some other people how to speak the language and were then replaced by those lower-paid foreign workers. We'll find out the truth. I'll be talking with them next.

Stay with us.


DOBBS: Tonight, Wal-Mart critics say they have new reasons to worry about the company's -- what shall we call it -- aggressive growth strategy? Wal-Mart wants to expand its reach into banking. Critics say if Wal-Mart has its way, local banks will go the way of local retailers, run out of business by Wal-Mart. Your community will be a Wal-Mart community.

Kitty Pilgrim has the story.


KITTY PILGRIM, CNN CORRESPONDENT: Wal-Mart wants to go into banking. It has filed with the FDIC to process the debt and credit card transactions for its own stores, 3,500 of them across the country, to cut down on its bank fees, adding "the savings from capturing these fees could be returned to customers in the form of lower prices."

But a number of professional and consumer groups say while Wal- Mart is talking about only limited banking operations now, it could expand into other banking areas.

CAMDEN FINE, IND. COMM. BANKERS OF AMERICA: That plan can always be amended or modified and future Wal-Mart management say in the year 2010, 2012, could say we want full-blown banking operations.

PILGRIM: Watchdog groups and legislators worry that Wal-Mart may overpower small commercial banks as it has with small businesses in many towns across the country. CHRIS KOFINS, WAKEUPWALMART.COM: This is another step in another dangerous direction where Wal-Mart would be able to have unprecedented economic power. The sad reality here is Wal-Mart is not only interested in monopolizing the American economy, they're interesting in monopolizing the American way of life, right down to where we bank.

REP. BARNEY FRANK (D-MA), FINANCIAL SERVICES CMTE.: Wal-Mart is a troubling institution. When I talk to people in my district who are smaller business people, retailers, local home builders, they want to have a local bank to deal with.

PILGRIM: Congress held hearings today, during which banks objected to Wal-Mart's plan.

UNIDENTIFIED MALE: We're not afraid of competition, we're afraid of the consequences of the mixing of commerce and banking. That's what we're afraid of.


PILGRIM: A banking industry group said the impact on local communities could potentially be disastrous. They believe that serious regulatory oversight is necessary, and some legislators and bank associations say if the FDIC does not hold hearings, they'll ask for the Federal Reserve to get involved, and there will certainly be more of a move in Congress to take up the issue.


DOBBS: Well, the FDIC will be ruling on this and making a judgment. Have they received some complaints here?

PILGRIM: They have received a record number of protest letters when Wal-Mart filed, yes.

DOBBS: And, I mean, what kind of idiots do you have -- this is just remarkable. Is there anything that Wal-Mart doesn't want to do?

PILGRIM: Well, many people are trying to make this as public as possible to show just where we're going.

DOBBS: Well it's -- that direction is an interesting one to say the very least. Kitty, thank you very much. Kitty Pilgrim.

Turning now to rising outrage in this country over the president's waiver of the Davis-Bacon Act, that waiver has denied the prevailing wage for Americans who will be working to rebuild the Gulf coast following Hurricanes Katrina and Rita.

My next guests know firsthand the devastating impact of that decision as well as the waiver of documentation for the workers. Al Knight and Mike Moran were hired by a Halliburton subsidiary to supply electricians for work at the Belle Chasse Naval Air Station in Louisiana. They were hired at the prevailing wage for 20 months of work, but once they started, they were asked, they say, to train low paid, unskilled workers who spoke no English. After three weeks on the job, they claim they were fired.

Al Knight and Mike Moran testified yesterday about the experience, joining us from New Orleans, of course.

We should mention, we invited the president of the subcontractor who hired you gentlemen, BE&K, to join us tonight but he declined.

Al Knight, let me begin with you. You testified that you believed your workers, who were local, qualified electricians, 92 percent of whom were impacted by the Hurricanes Katrina or Rita, were dismissed as a direct result of the Davis-Bacon Act waiver. Why?

AL KNIGHT, GENERAL MANAGER, KNIGHT ENTERPRISES: Lou, I believe -- hi, Lou, how you doing?

DOBBS: Doing good.

KNIGHT: All right. I believe that the reason why that we were dismissed from the project is probably simply because lower wages being paid to out of state workers on the federal government facility is where we were working with 75 electricians, just by the waiver of the Davis-Bacon Act, invites and opens the doors for a flood of out of state workers.

And the only thing that our workers wanted and we paid was the same wage that they had before the hurricane ever hit. And we're paying the same wage at time that we were hired to do a contract.

DOBBS: And you felt that the BE&K gave you a guarantee that you would have how much work?

KNIGHT: On our original agreement initially, when I called the hall to get 75 qualified electricians, the call was for a 20 month contract, that we're working seven days a week and 12 hours a day.

DOBBS: Let me ask Mike Moran here. You're general foreman there, and you were teaching people English there to -- who you were working with?

MIKE MORAN, GENERAL FOREMAN: Well, between trying to teach them how to do electrical work and teach them how to speak a little English -- I do speak a little Spanish so I could communicate with them on a limited basis.

DOBBS: And now the people you taught both English and electrical work as you put it, are they still employed on the job?

MORAN: We don't know, Lou, we were asked to leave the job on October 1, and we don't know who remains there.

DOBBS: Now, I want to, if I may, Al Knight, read to you a response we got from the company, saying -- if we can pull that screen up so our viewers can see it. And it's a letter you from to BE&K saying we fully understand why Knight Enterprises "released us from the previous task order providing, and agree" -- going on -- "with BE&K's decision reference in the letter." In light of what you experienced and what you're saying here tonight, why would you write such a letter, Al?

KNIGHT: Well, the reason why I wrote that -- yes, the reason that I wrote the letter, Lou, is because in order to -- well, the first thing, and primary thing, in order to receive our last payment for labor that we had on the job, BE&K called me and they said that they were under a congressional inquiry, and that they needed a letter stating that we understood the reason why that we were released from the job. And in order for my funds to flow through, I provided them with a letter.

DOBBS: All right. Well, that's a tough spot to be in. We appreciate you gentlemen being here. We hope that you can continue to shed some light on what is happening down there as we try to rebuild the Gulf. We thank you gentleman for your time here tonight. Al Knight and Mike Moran. Gentlemen, thank you.

Still ahead here, the results of our poll tonight and the preview of what's coming up tomorrow.

Stay with us.


DOBBS: Now the results of our poll tonight. Ninety-one percent of you say that every illegal caught in this country should be deported.

Thanks for being with us tonight. Please join us here tomorrow when our guests will include Congressman Mike Pence, who's introduced a federal shield law to protect journalists.

And a critical test of the controversial No Child Left Behind Act -- tomorrow we'll be talking with the head of the group in charge of grading our nation's schools. Are they making the grade? We'll find our here tomorrow night. Please be with us.

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

ANDERSON COOPER 360 starts right now. Anderson?

ANDERSON COOPER, CNN ANCHOR: Good evening. We are live in New Orleans 50 days after Katrina, 25 days after Rita. How far has New Orleans come, and more importantly, how far does it have to go? Find out tonight. 360 starts now.


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