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LOU DOBBS TONIGHT

Trouble at the White House

Aired October 21, 2005 - 18:00   ET

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


LOU DOBBS, CNN HOST: Good evening, everybody. Tonight, trouble at the White House. President Bush finishes yet another messy week in Washington with Supreme Court nominee Harriet Miers still being heavily scrutinized and criticized.
One week from today special counsel Patrick Fitzgerald's grand jury expires. Bush adviser Karl Rove and Lewis "Scooter" Libby have both been advised they may be in serious legal jeopardy and on this Friday, former House Majority Leader Tom DeLay and Bush ally made the first of what could be many appearances in a Texas court room, charged with conspiracy and money-laundering.

We have comprehensive coverage tonight from Washington, DC, and Austin, Texas, but we begin with Hurricane Wilma, tonight lashing Mexico's Yucatan Peninsula with powerful winds, torrential rains and 20-foot waves, stranding thousands of American tourists, as well.

Wilma is a highly dangerous Category 4 storm now with sustained winds of 140 miles an hour. The hurricane is likely to smash into Florida's heavily populated south coast on Monday. Emergency officials today issued the first evacuation order for parts of the Florida mainland.

Susan Candiotti in Cancun, Mexico, reports on Hurricane Wilma's destructive trail across the peninsula. Lucia Newman reports from Havana, Cuba where as many as half a million people are being evacuated from Wilma's expected path. Sophia Choi reports from Naples, Florida, where residents are already making preparation for the arrival of the hurricane.

And Chad Myers reporting from the CNN hurricane center on the force, size and direction of Wilma as it moves northward. But first we go to Cancun, Mexico. Susan, just how much damage is this massive storm now causing?

SUSAN CANDIOTTI, CNN CORRESPONDENT: Well you never know until this thing clears over but I can tell you not since Emily which did $96 million of damage has this area felt winds so strong.

As you look behind me the ocean is right over my shoulder but you wouldn't know it. It's almost like a whiteout from a blizzard. The roar wind is so strong I can barely hear (inaudible). It has gotten progressively worse throughout the day. We did take an opportunity earlier to drive around some of the roads impassable, however, the hotels are appeared at that time to be closing up. This is a strip of hotels luxury hotels, that many of the viewers might be familiar with in Cancun. And a very smart (inaudible) by authorities to move them out of here yesterday, some people lucky enough to get out at the airport. Others were bussed to shelters, schools, to other hotels in the center of the city about a half an hour away from here where they are sharing facilities with other hotel guests and are in ballrooms.

Trust me a lot of those people wanted to get out, but could not. The storm surge is supposed to be at least 11 feet. I can't tell what it is at this point. But the waves are extremely strong. They are expecting up to 20 inches of rain by the time all this is out. The eye wall we believe is right near us at this hour, it is really whipping out here.

This hotel in particular 27 feet above sea level. And the sky (ph) roof is above the colonnade, sort of an interior of this area, the windows smashed out. We have been hearing them crash. And (inaudible) the hotel (inaudible). We do believe that the structure here appears to be strong. So this is where we feel relatively safe riding out the rest of the storm. Lou?

DOBBS: Susan, thank you very much. Susan Candiotti from the center of this storm now hitting Cancun Mexico, obviously with very powerful winds and a great deal of rain.

Cuba, to the north has already evacuated 300,000 people from coastal areas. Another 200,000 are being ordered now to leave their homes. Hurricane Wilma is likely to cross western Cuba Saturday as it moves north toward Florida. Lucia Newman reports from Havana now. Lucia?

LUCIA NEWMAN, CNN CORRESPONDENT: Hello, Lou. Well, we're being told now that this hurricane is moving so slowly that it might not even be until Sunday when it reaches the western tip of this island.

But in the meantime it's already raining very, very heavily on that western tip, especially in Pinar del Rio province where at least 300,000 people as you mentioned have already been evacuated.

Here in Havana, it's been raining on and off. It rained most of last night. It's expected to do the same this evening and tomorrow that rain will become more intense.

Authorities are taking absolutely no chances, Lou. They are evacuating people because according to their meteorologist here they are still going to be getting waves up to 20 feet high especially as that rain that still in the Yucatan peninsula starts coming over on the western tip. And the real nervousness comes from the fact that nobody knows exactly what route it is going to take when it finally starts moving in this direction, Lou.

DOBBS: Lucia, thank you very much. Lucia Newman reporting from Havana.

In Florida officials there issued the first evacuation orders for the mainland. Many residents of the Florida Keys have already left their homes and businesses. Governor Jeb Bush has declared a state of emergency and he called up more than 7,000 National Guard troops in preparation for the storm's arrival.

Sophia Choi reports from Naples, Florida.

(BEGIN VIDEOTAPE)

SOPHIA CHOI, CNN CORRESPONDENT (voice-over): Businesses begin to board up as tourist destinations shut down in Naples where a mandatory evacuation is in effect.

Outsiders were ordered out. But many of those who call this area home are staying put for now.

MIKE MURPHY, RESIDENT: We just don't know where it's going. So it's frustrating to be in limbo.

CHOI: Mandatory evacuation for residents of the Keys are postponed but officials are still encouraging people to leave.

MAX MAYFIELD, NATIONAL HURRICANE CENTER: We really want everybody in the Florida Keys, in the southern portion of the Florida Peninsula to pay very close attention to this. We're almost used to surprises with these hurricanes.

CHOI: Right now, Wilma is hovering over the Yucatan Peninsula, experts say it could be there for days. The longer the better for Floridians as time over land will cause the storm to lose intensity. Florida Gulf Coast University in southwest Florida is plague it safe already canceling classes through Sunday, probably longer.

BENNET HAMMER, STUDENT: It happens quite often here in this area. We had a couple of closings last year, too. So we're getting used to it now.

CHOI: It's a routine getting more familiar to all of us, evacuee traffic increases as gas supplies decrease in an area awaiting a monster storm.

(on camera): Collier County officials are preparing for a Cat 3 storm which could bring anywhere from eight to 15 or 16 feet of storm surge. Now, Naples is nine feet above sea level so if you do the math you can see how flooding and damage is a very real possibility. In Naples I'm Sophia Choi.

(END VIDEOTAPE)

DOBBS: For the latest now on the direction, the force and size of this hurricane, we go to Chad Myers at the CNN hurricane center. Chad, this storm is moving unusually slowly. What can you tell us about the path of the storm and its intensity at this hour?

CHAD MYERS, CNN METEOROLOGIST: In fact, Lou, it's probably slowed down slower than 4 miles per hour where it was at the 2:00 advisory and at the 5:00 advisory. What Lucia and all those people, what they are seeing now what they are going to see for a real long time. Susan Candiotti, if this storm is only moving three miles per hour and it just measured wind gusts in Cancun at 97 miles per hour. It may have the wind in Cancun for the next six hours.

That's duration damage. One shingle comes off and that tears another one and then you lose another one. Then you start to lose the facade as the storm goes by at 10 miles or 20 miles per hour, it's a quick hit. When this wind, Lou, at 130 to 140 miles per hour continues, all night long, the damage is there in Cancun and Cozumel really going to be sustained and heavy.

A Category 1 by the time it exits the Cancun area up to a Category 2 in the Gulf of Mexico and then making landfall on Monday back as a Category 1 but somewhere between 80 and 90 miles per hour, nothing to take for granted. The right side of the eye wall will be the most dangerous and when it crosses the Everglades, basically, not going to slow it down at all. A lot of damage from the back side, from the wrong way, if you will. All the way from about West Palm down through Ft. Lauderdale and even into Miami Dade, as well.

DOBBS: It's expected, Chad, landfall on the western coast of Florida then?

MYERS: Yes, that is exactly correct. As a Category 1 between 80 and 90 miles per hour. Now, if it does hit south of Naples and Naples and Fort Myers will be on easy side of the eye because you add the wind speed. When a storm is spinning 90 miles per hour, let's say, and it's moving ahead at 20 you have to add those two numbers together on the right side of the path. So 110 miles per hour wind gusts.

On the other side you subtract that. Ninety minus 20 because the winds are going in different direction. So you only get a 70 miles per hour wind gust on the easy side of the eye. Then again New Orleans was on the easy side of Katrina.

DOBBS: Chad Myers, thank you very much.

More on the hurricane coming up here. As well, dozens of illegal aliens have been arrested for sex crimes, a shocking example of our immigration crisis and our total lack of border security. We'll have a special report for you and a vast influx of illegal aliens into the Gulf States taking the reconstruction jobs from local residents.

Reverend Jesse Jackson has just returned from Louisiana. He's our guest here and the Coast Guard seizing record quantities of cocaine at sea. How drug smugglers are flooding this country with cocaine. We'll have that report for you coming right up.

(COMMERCIAL BREAK)

DOBBS: In Iraq today, four American troops were killed in combat in two separate incidents. Three marines were killed by a roadside bomb in al Anbar Province. American troops killed two insurgents and captured four more believed to be responsible for that bombing. In Kut, a U.S. soldier by what the military called indirect fire.

A total of 1,989 of our troops have now been killed in Iraq.

The United States has frequently accused Syria of supporting terrorism in Iraq and elsewhere. Now, the United Nations is accusing top Syrian officials of being involved in the assassination of a former Lebanese prime minister but it turns out the names of those Syrian officials were deleted from the final draft of the U.N. report and there is tonight no clear explanation as to why that was done. Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Former prime minister of Lebanon Rafik Hariri was killed along with 20 others in February. Today, a U.N. report says Syria played a major role in the assassination. President Bush called the report deeply disturbing.

PRESIDENT GEORGE W. BUSH, U.S. PRESIDENT: I called Secretary Rice this morning and instructed her to call upon the United Nations to convene a session as quickly as possible.

PILGRIM: The U.N. report, at least the early version, says Syrian President Bashar al-Assad's brother and brother-in-law are implicated. Those names were deleted from a later version.

DETLEV MEHLIS, U.N. INVESTIGATOR: I really don't want to create the impression that anyone influenced this report because this is simply not true.

PILGRIM: But despite that debate over deleted names U.S. officials are clear in their accusation of Syria.

JOHN BOLTON, U.S. AMBASSADOR TO THE U.N.: The assassination could not have been undertaken without the knowledge of senior figures in Syrian intelligence.

PILGRIM: The United States is asking for support from the world community against Syria and its policy of allowing insurgents to travel through its porous border to fight U.S. forces in Iraq. U.S. Secretary of State Condoleezza Rice made an unannounced trip to New York to meet with Secretary General Kofi Annan earlier this week before the report came out.

And she had harsh words against Syria in Senate testimony this week.

RICE: Our policy toward Syria is on the table. And that is we want change in Syrian behavior, we want a change of Syrian behavior on the Iraqi border in regards to Lebanon and in regards to the Palestinians.

UNIDENTIFIED MALE: Are we considering military action against Syria?

RICE: Senator, I'm not going to get into what the president's options might be.

(END VIDEOTAPE)

PILGRIM (on camera): Now, Syrian officials spent the day calling the report inaccurate and biased. The Syrian ambassador denied that Syria tried to impede the investigation. However, U.S. ambassador John Bolton said what is important is to focus on the substance of what is in the report about dramatic news about the extent of Syrian involvement in this assassination, Lou.

DOBBS: Well, Ambassador Bolton couldn't be more correct. In point of fact, this is as straightforward, even with the names deleted, as straightforward effort at investigation by the United Nations that I can recall anywhere at any time.

PILGRIM: Its is very shocking and more will come where a second report is coming out next Tuesday on the situation. So we will have more.

DOBBS: Laying clearly at the feet of the Syrian and Lebanese intelligence agencies responsibility for the assassination of Prime Minister Hariri. The deleted names, when will we have an explanation as to what in the world happened there?

PILGRIM: They spent all day trying to get to the bottom of that. And I don't think there's a timetable. But many people are asking why they were taken out of a report that was widely circulated and then deleted.

DOBBS: We'll continue to add our voice to those questioning what that is all about and why. Thank you very much, Kitty Pilgrim.

Turning now to violent crimes in this country, carried out by in this case illegal aliens. There is shocking new evidence tonight as to how our nation's immigration laws have failed to protect American citizens from violent criminals. Illegal aliens that should have been locked up have been accused of carrying out disgusting sex crimes and effectively getting away with it. Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): A big week for nabbing illegal alien sexual predators.

MARCY FURMAN, U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT: We stopped these predators in the tracks. And the public safety of New York City is better off for it.

ROMANS: In New York this week, 36 rapists and child molesters arrested, all in the country illegally, arrested along with at least a dozen permanent legal residents. More troubling many of these criminal alien sex offenders were free on the streets on probation.

RICHARD LEVY, NYC DEPARTMENT OF PROBATION: These dangerous sexual predators should never have been placed on probation. They are unable to meet one of the most basic conditions of probation, legal employment. ROMANS: Critics say it's yet another example of a broken immigration system. That judges are putting illegal aliens on probation. That sanctuary laws in some states prevent law enforcement from even asking a defendant his legal status because of fears it might be discriminatory. Critics blame policy makers not immigration agents and say there's no political will to enforce immigration laws or deport illegal aliens.

CRAIG NELSON, FRIENDS OF IMMIGRATION LAW ENFORCEMENT: Our immigration system is in a shambles. The agencies are overwhelmed. The administration seems completely absent on any sort of enforcement effort. Congress is being extremely irresponsible.

ROMANS: Case in point he says, a Senate Judiciary Committee this week to turn out 30,000 more temporary work visas so companies can hire foreign workers for jobs, adding even more work to an overburdened agency. Still, even immigration critics are pleased that 50 criminal alien sex offenders were taken off the street this week in New York, of 3,100 criminal alien sex arrested in just over two years.

Of course these arrests and deportations only help public safety if the government makes sure they don't come right back into the country. A success today on the border in Arizona, a Mexican national illegally entering this country, he was stopped and identified as a man deported in 1981 for having sex with a child. The question is, how many other dangerous criminals didn't get stopped? And made it through without any trouble, Lou.

DOBBS: Unfortunately the answer to that question is in terms of estimates quite large in terms of the population of criminal illegal aliens as they are called who have committed serious crimes and sex offenses.

The idea that the country continues to tolerate a border that is absolutely wide open, whether it to be terrorists, illegal aliens, to sex offenders, to criminals of all sorts is extraordinary.

ROMANS: You can see by the action from the Senate this week their concern seems to be making sure there are workers for companies, not to enforce immigration laws that are already on the books.

DOBBS: As Christine Romans reported this week, there is no accounting for most of those receiving visas in this country, our immigration officials, our State Department, homeland security department, none have an accurate count as to the number, the names, or the whereabouts of most of those. Christine Romans, thank you much.

That brings us to the subject of our poll tonight. The question is should sanctuary laws that prevent the apprehension of illegal aliens be abolished? Yes or no. Please you're your vote at loudobbs.com. We'll have the results here later in the broadcast.

Still ahead, a major cocaine bust. Remember the war on drugs? Well, it's still underway. Eleven tons of cocaine seized in the Pacific by the Coast Guard. Three quarters of a billion dollars of the drug that will never hit our streets. And a miserable week for President Bush and even worse one could be ahead. We will be talking with our newsmaker panel tonight.

And Hurricane Wilma, it's battering Mexico right now. Forecasters say it's on its way to Florida but when and what force will it bring with it? A live update coming up next.

(COMMERCIAL BREAK)

DOBBS: Many forget that this country is still engaged in a vast war on drugs. It is a battle that is not often a winning battle for the United States and it is a constant reminder of our porous borders and our lack of security not only at the border but at our ports.

Over the past 12 months some 330 tons of cocaine with an estimated street value of nearly $20 billion has made it on to our streets. Today, drug officials announced a record breaking cocaine bust in California. One they say will make a dent in the staggering flow of drugs across our broken borders. Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Bale after bale of cocaine seized from a Colombian fishing vessels and two flagless smuggling ships, all bound for the United States. The ships carry a total of 11.5 tons of cocaine with a street value of three quarters of a billion dollars.

UNIDENTIFIED MALE: I tell you, it's destined for the streets of America and those streets can be anywhere across our entire country. It's grown in South America and it comes up through distribution chains, the drug guys have a business. And their business is to distribute and so this would have gone all across America.

WIAN: Most of the cocaine destined for the United States comes from Columbia. Most of that is shipped by sea and land through Mexico. In the past year maritime cocaine seizures by the Coast Guard set a record of 156 tons worth nearly $10 billion. That's up 32 percent from the previous year. While seizures are up the numbers game continues to favor drug smugglers. Nearly two thirds of the cocaine bound for this country escapes seizure.

That means about 330 tons finds its way on to U.S. streets every year. For the Coast Guard the task is complicated by its added responsibilities as part of the Department of Homeland Security. On top of its traditional duties it's fighting drug smuggling, human trafficking and terrorism, providing port and coastline security and rescuing hurricane victims.

(END VIDEOTAPE)

WIAN (on camera): The Coast Guard is receiving more resources including a half billion budget increase this year and next. The question is will that be enough to keep up with the drug smugglers and other threats overseas, Lou? DOBBS: Again as persuasive an argument as one could imagine as to the need for border security and port security which this nation, for this government I should not say nation, this government continues to avoid. Casey, thank you very much. Casey Wian.

As we have been reporting to you the Minuteman Project is now six months old and it is expanding. This weekend volunteers are expecting to be patrolling New York State's border with Canada. The group will be based near Massena and the St. Regis Indian Reservation.

And now an update on our top story tonight, Hurricane Wilma which made landfall on the Yucatan Peninsula in Mexico. The eye of the storm passing over the island of Cozumel first pounding that area with torrential rains and sustained winds of up to 141 miles an hour.

The National Hurricane Center is now saying the storm is an extremely dangerous Category 4 hurricane. We will be taking you back live to Chad Myers at the CNN hurricane center here in just a few minutes in bringing also you the very latest information on this storm.

Just ahead tonight another bad week at the White House. It could actually get worse. Most expect it to do so. I'll be talking with two former presidential advisers and a leading political columnist here next.

And Tom DeLay as the first of what is likely to be many appearances in a courtroom. But the proceedings today hit a snag. We're live with the story in Austin, Texas.

And the Reverend Jesse Jackson among the millions of Americans now outraged at the wages being paid to workers rebuilding the Gulf Coast. Outraged many of those workers are not in this country legally and residents of Louisiana are being shut out of the federal reconstruction project.

Reverend Jackson just returned this hour from New Orleans. He joins us next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The White House today asserted that Supreme Court nominee Harriet Miers has no plans whatsoever to stop visiting with U.S. senators even though many of the senators are now expressing skepticism, some outright opposition to her nomination. The Miers nomination is only one of a number of major difficulties now facing the White House as it tries to combat impressions the Bush presidency is out of touch, adrift and on the verge of President Bush being rendered a lame duck.

Dana Bash reports from the White House.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CORRESPONDENT (voice-over): At the Reagan Library, a nostalgic tribute to the Gipper. The irony here is a lesson Republicans learned from Ronald Reagan is causing one of this president's many headaches -- don't trust Supreme Court picks with thin records.

The White House tried to re-launch Harriet Miers' embattled nomination this week by talking up her resume instead of her religion.

But several GOP sources tell CNN her meetings with key senators looking for evidence she grasps complex constitutional issues did not go well, producing lukewarm statements like this.

SEN. JOHN THUNE (R), SOUTH DAKOTA: But it certainly isn't determinative in terms of where I may end up coming down on this.

BASH: One long-time Bush family friend compared picking the unknown Miers to putting Dan Quayle on the ticket -- a decision by an insulated staff who didn't contemplate how hard it would be to sell.

But privately some Bush aides admit a key problem lies in their own ill-prepared, even clumsy sales plan.

SEN. ARLEN SPECTER (R-PA), CHMN., JUDICIARY CMTE.: I think it's been a chaotic process very candidly.

BASH: An exasperated Bush source said this, No one is in charge. Top aides are overwhelmed with monumental troubles -- from hurricane missteps to the war in Iraq to a criminal investigation.

And some Republicans say the president's sinking approval means he's lost his leverage -- simmering frustration is now bubbling over.

REP. CHRIS SHAYS (R), CONNECTICUT: I think this White House, unfortunately, has come across as very arrogant, and so they have a lot of people that are pretty angry at them.

BASH: It's taking a toll inside the White House.

A former senior Bush official told CNN the circle around the president is too small, top aides have been in their jobs too long and they're tired, and the biggest source of anxiety is something they cannot control -- whether Karl Rove or any other key figures will soon be indicted.

CHARLIE BLACK, REPUBLICAN STRATEGIST: I do not think that they are letting the nervousness that might be there about the special prosecutor interfere with getting their jobs done.

(END VIDEOTAPE)

BASH: But with rampant speculation about everything from potential criminal charges to who would replace Karl Rove if necessary, in the words of one source close to the White House, this is not a very happy place to be -- Lou?

DOBBS: Dana, thank you very much.

Dana Bash from the White House.

For at least one ally of the president, the day not much better for him; in fact, in many ways much worse. A close ally of the president, former House majority leader Tom DeLay was in a Texas courtroom today facing charges of conspiracy and money laundering. But the case was immediately adjourned after Tom DeLay's attorney declared that the judge had contributed money to MoveOn.org, one of the most liberal groups in the country.

DeLay and his attorney have already accused the prosecutor in this case -- also a Democrat -- of blatant partisanship.

Sean Callebs reports from Austin.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): Why is this man smiling, this while facing two criminal indictments in a Texas court?

REP. TOM DELAY (R), TEXAS: You may be surprised to hear this from me today, but I find this is a very good day.

For the first time in over three years, I was provided the opportunity to go before a court and refute these baseless charges.

CALLEBS: Charges which former House majority leader Tom DeLay says are wrong and politically motivated.

DICK DEGUERIN, TOM DELAY'S ATTORNEY: This is what Ronnie Earle wanted.

CALLEBS: DeLay's attorney Dick DeGuerin spent the brief hearing pursuing his claim that his client is the victim of pure politics. He filed a motion to have the judge, Bob Perkins, remove himself from the case -- a request a senior judge will rule on.

In Texas, judges run for office, and Judge Perkins ran as a Democrat.

DeLay's lawyer also pointed out that Perkins donated money to presidential candidate John Kerry, the Democratic National Committee, and gave $200 to MoveOn.org, an organization DeLay's attorneys says is hostile to his client.

DEGUERIN: The judge has every right to be a Democrat or a Republican. That's not what it's about. It's about Judge Perkins having actively supported people who are in opposition to Congressman DeLay.

CALLEBS: DeLay is charged with money laundering and conspiracy. The charges state that a political action committee formed by DeLay and two others illegally funneled money from corporations to Republican candidates running for state offices.

Prosecutor Ronnie Earle has been investigating the allegations for three years. He wants Judge Perkins to remain on the case. RONNIE EARLE, TRAVIS COUNTY DISTRICT ATTORNEY: The judge has a record of fairness to all who come before his bench. And, again, membership in a political party does not determine the quality of justice in this country.

(END VIDEOTAPE)

CALLEBS: DeLay's legal team fired the first salvo but didn't stop there. They went on to say after three years of leaks and innuendo they believe it is impossible for DeLay to get a fair trial here in the Democratic stronghold of Travis County and they are asking for a change of venue.

At the same time, Dick DeGuerin went on to say that he believes this case has no merit and, Lou, he believes it should be thrown out.

DOBBS: And he wants to -- a judge not from Travis County presumably, not a Democrat to hear that argument for his very Republican client.

CALLEBS: Exactly, but he didn't phrase it just like that.

(LAUGHTER)

DOBBS: OK.

Sean Callebs, we thank you very much. Appreciate it.

And we'll be talking about what's been a grim week for the Republican Party and looking forward to the major challenges facing the White House with three of the country's foremost political analysts in our newsmakers coming up.

Turning now from Texas to Louisiana, where tonight there is new evidence that foreign workers, illegal aliens many of them, are being hired for Gulf Coast reconstruction jobs that should be going to displaced Louisiana workers instead. This comes on the eve of an extraordinary vote in Congress that would reinstate the Davis-Bacon Act in the Gulf Coast and force employers to pay the prevailing wage to, of all people, American citizens.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Since Hurricane Katrina, there has been a significant inflow of Hispanic workers in New Orleans. Some may be legal, others are clearly not.

Senator Mary Landrieu in a letter to homeland security chief Michael Chertoff says she's received compelling evidence that U.S. immigration laws are being flagrantly disregarded in the contracting and subcontracting for Hurricane Katrina relief.

Immigration and Customs Enforcement raided the Belle Chasse Naval Facility Thursday and found at least 10 and as many as 150 illegal aliens working on the base.

Louisiana workers say it's about time someone started looking into the background of the new arrivals.

MIKE MORAN, GENERAL FOREMAN: I'm tickled to death. I hope they start policing these jobs with more scrutiny than they have been in the past and maybe our people can get back to work.

SYLVESTER: Union leader Tiger Hammond says a crew of 75 local electricians with Knight Enterprises were called to work at the Belle Chasse base immediately after Katrina hit. But after three weeks he says they were shoved aside, replaced with low-paid workers who spoke no English.

TIGER HAMMOND, UNION LEADER: I could see my rank and file members that were on that job trying to make a good earnest living to rebuild their life, their homes, their future, their loved ones, everything, and to be asked to leave the job when they were already staying in their automobiles? What am I supposed to think?

SYLVESTER: Knight Enterprises general manager appeared on this network Tuesday night to complain of the shabby treatment.

In response, the general contractor BE&K, who fired his workers, called and, according to Al Knight, asked, "How can we make this all go away?"

BE&K denies this charge.

Knight says the problem is larger than one company. He points to the revoking of the Davis-Bacon Act by President Bush that guaranteed workers a prevailing wage.

AL KNIGHT, GENERAL MANAGER, KNIGHT ENTERPRISES: That just opens up the door for people not to ask all of the proper questions and everything else that they need in order to hire illegal individuals in this country. And that's what's going on. The same flood of folks -- you're going to find them going from place to place no matter where this happens.

(END VIDEOTAPE)

SYLVESTER: A BE&K spokeswoman maintains that none of its workers or subcontracted workers has been found to be in the country illegally as of today at least.

And the company adamantly denies replacing Knight workers with lower-paid employees, adding the vast majority of their workers are from states impacted by the hurricanes -- Lou?

DOBBS: Lisa, did BE&K say that they had checked to find out whether they were from other countries and here legally?

SYLVESTER: They say that they scrutinize and that they do a background check... DOBBS: Well, I didn't ask about scrutinize and all of that, because we all know what that -- that's code for many companies to say, We just did what is the least and perfunctorally (ph), and didn't even ask because in many cases it's discriminatory, you know, to ask somebody their citizenship.

SYLVESTER: Well, when I talked to the BE&K spokeswoman, you know, she emphasized this one particular phrase, "as of today."

She even told me, you know, five minutes from now it is possible that they could find out after the fact that some of their workers were, in fact, not in the country illegally -- were in the country illegally. So they're trying...

(CROSSTALK)

DOBBS: Did we find out how they came into contact and happened to hire these workers that replaced the people at Knight?

SYLVESTER: They're not sharing that information. They're citing privacy claims and the like.

So at this point, Lou, your guess is as good as mine.

DOBBS: Well, we're going to do a little better, as we always do, than guess.

We're going to find out and we will be turning to you and all our colleagues to do just exactly that as we try to unravel what is exactly happening in the Gulf Coast, as this administration has seen fit to roll back Davis-Bacon and suspend requirements for documentation for employees.

Thank you very much. Lisa Sylvester.

Reverend Jesse Jackson says he can give us proof that businesses are now hiring illegal aliens for Gulf Coast reconstruction. He has just returned from Louisiana. He says this is taking place because President Bush waived the Davis-Bacon Act.

Jesse Jackson has, as I said, just returned. He's our guest here tonight.

Jesse, first, thanks for being here on such short notice. I appreciate you being here.

What did you see? Specifically in terms of the hiring and the use of illegal aliens?

REV. JESSE JACKSON, RAINBOW/PUSH COALITION: First, you know, the weight should not be put on imported, exploited workers. When Mr. Bush suspended prevailing wages and environmental protections and veteran preferences and preferences for displaced workers, it opened the door for these labor brokers to exploit workers. And I might add, they are not just from Central America, from Guatemala and Honduras and Salvador and Maguiladora, but as far away as Eastern Europe and Australia as well. There's no commitment at this point to pay prevailing wages, and in fact to prioritize displaced citizens from the Gulf area.

DOBBS: Well, Jesse, in point in fact, did you actually see these companies bringing illegal aliens, these people, in? (INAUDIBLE) and putting them to work?

JACKSON: You know, I prefer the term, I do, undocumented workers rather than illegal aliens.

DOBBS: That's fine. Well, you use your word and I'll use mine.

JACKSON: In this case, you don't have people I think running across the borders in great numbers. They are being sent for and recruited by these companies. The same ones that got no-bid contracts rather than low-bid contracts. They feel now kind of open season on I think exploitation. Many of these workers are working in hazardous environmental conditions without face masks, without proper gear. So in many ways, they are being exploited, and some are played off against displaced citizens.

DOBBS: Oh, absolutely.

JACKSON: And that must not be allowed to happen.

DOBBS: By the way, you and I can argue about terminology here. I call them what they are. They are illegal aliens. You call them undocumented. In point of fact, they've got plenty of documents, they're just many of them -- most of them fake.

JACKSON: But the point is...

DOBBS: The point is -- they point is, they are being exploited.

JACKSON: ... they are being recruited.

DOBBS: These people are being exploited...

JACKSON: They've been recruited...

DOBBS: ... by employers who want to go for the cheapest possible labor.

JACKSON: That's right. They have been recruited and exploited, and subjected to very hazardous conditions and very low wages. And it's unfair to them and it's unfair to the American workers.

DOBBS: The waiver of the Davis-Bacon Act, the waiver by this administration of the requirements for documentation, as you say, this is not really about the people themselves, the illegal aliens who crossed the border illegally, at the behest and for the purpose of exploitation by the employers. It's about an administration that first of all will not put forward border security, will not put forward port security, will not enforce immigration laws. And employers who are just riotously, without conscience or concern for the national interest, exploiting these people by hiring them. JACKSON: Well, actually, anti-labor and pro-rich tax cuts have been anti-poor. So it's open season on exploiting workers at the bottom of the economy. And I would hope that not only would we enforce the law, but those citizens who -- those who do work must get paid and have health protections.

You must understand, we have displaced people in 41 states around the country. There is no plan for them to return home, live closer to home, and have priorities on reconstruction of their own areas.

DOBBS: Is the city of New Orleans, what in the world is the city and Governor Blanco, the governor of Louisiana, what are they doing to help bring those people back so that they can participate in this reconstruction? As you say, I mean, the delegation from Louisiana is perfectly fine with using $250 billion worth of taxpayer money, but say they just want the market to work here.

JACKSON: Well, Karl Rove is in charge of the reconstruction. He's about as qualified for reconstruction as Mr. Brown was of FEMA. And his issue is political restructuring, not economic reconstruction. This is not a Karl Rove agenda. And to that extent, when the secretary of HUD says that New Orleans will not become majority black again anytime soon, we will not rebuild the 9th Ward, there's a bigger agenda here on political restructuring than fair economic reconstruction, and citizens who have been misplaced are not the priority in the reconstruction, as workers or as contractors.

DOBBS: Reverend Jesse Jackson. Thanks for being here.

JACKSON: Thank you.

DOBBS: Turning now to the top story of the evening, Hurricane Wilma. It is now a highly dangerous Category 4 storm. It is pounding the Yucatan Peninsula in Mexico. That hurricane is packing sustained winds of 140 miles an hour. Thousands of tourists, many of them American, are riding out this storm. They are tonight in shelters.

Wilma is expected to smash into the Florida coast Monday now. Officials have already ordered some residents in the Naples area to evacuate their homes.

For the latest on a storm that is slowly moving across the Yucatan, we go to Chad Myers at the CNN Hurricane Center. Chad, bring us up to date, just how expansive is this storm? How dangerous is it in terms of intensity, and where do you expect it to move this evening?

CHAD MYERS, CNN SEVERE WEATHER EXPERT: Lou, there are thunderstorms in Savannah, Georgia from this storm. And it's in Cancun, and that's a long flight. That outer band, the final outer band is all the way up into Georgia now.

The worst possible scenario is happening right now for Cancun and Cozumel. Destructive winds, 130 miles per hour, and a storm that looks like it just stopped. And then the winds are coming offshore, pounding Cozumel, and that's where the city is, on the west coast of the city. Winds there at 114 miles per hour.

There's the radar, Lou, pounding Cancun, pounding Cozumel. The eyewall, the eye itself went right over the island, and then it stopped.

And now it is going to have to pick up some speed. This is why it's going to take so long for it to go from Saturday to Sunday, an excruciating wait for the folks in southern Florida, to see where the storm finally goes on its landfall, which is now projected for Monday afternoon, as a Category 1 -- 90 miles per hour, 80 miles per hour -- but still, we know what a Category 1 did to Miami, which was Katrina, with 1.5 million people without power, nine dead.

DOBBS: Absolutely. But Category 1, just about the only good news you've got for us there, Chad, we'll take it.

Thank you very much, Chad Myers from the CNN Hurricane Center.

Still ahead here, the arraignment is now under way in the murder case of Pamela Vitale, wife of defense attorney Daniel Horowitz. We'll be going live to California for the very latest on this story as it develops.

Also, Karl Rove and Lewis "Scooter" Libby. Will these men be under indictment next week? Our newsmaker panelists will join us with their views on what is happening to the body politic. Stay with us.

(COMMERCIAL BREAK)

DOBBS: More now on what has been another difficult week for the White House and the Republican Party. The Harriet Miers nomination has gained little, if any, support and a great deal of opposition. And the White House is now awaiting a decision as to whether or not any of its staff members will be indicted in the CIA-White House leak case.

Joining me now are John Fund. He's columnist for "The Wall Street Journal." Ed Rollins political consultant, former presidential adviser. From Boston tonight, former presidential adviser, now professor of the Kennedy School of Government, David Gergen. Gentlemen, thanks for being here.

Ed, let me turn to you first, because when we talked last week, it looked pretty bad. It doesn't look any better after this week, does it, for this White House?

ED ROLLINS, FORMER PRESIDENTIAL ADVISER: It's been a terrible week. If anything, it looks like the move from the original charges to talking in terms of obstruction of justice or cover-up, or lying, or what have you on Rove and Libby -- and you know, obviously we won't know until the special prosecutor comes forward -- but the kinds of words that are being used certainly aren't helpful.

DOBBS: John Fund, you wrote this week about Harriet Miers. You had nothing good to add to the body of public knowledge about Harriet Miers, focusing on her role in the Lottery Commission and all the questions that arise from that. What is the fate of her nomination? How much is it affecting the fortunes of this White House?

JOHN FUND, WALL STREET JOURNAL: Harriet's problem is that her record is so scant and the paper trail so nonexistent that something fills the vacuum. So rather than have great debates about constitutional issues, and we can't really, because we don't yet know if she has any views, or what her views are, peripheral issues like the Lottery Commission, a scandal that she had down in Texas 10 years ago, which I think the Democrats of this committee are going to want to bring up.

DOBBS: Well, it looks like they are going to want to bring up a great deal.

FUND: I have an opinionjournal.com piece right now which details all of the Democratic strategies to use these hearings to embarrass the Bush administration even more than they are now.

DOBBS: David Gergen, can this administration be more embarrassed than it is right now?

DAVID GERGEN, FMR. PRESIDENTIAL ADVISER: Well, yes we can still have indictments, Lou, and that's the big question, of course, hanging over. But, I -- you know, there's a connection between the indictment, the problem of potential indictments and Harriet Miers and that is it's a distraction over the leak investigation, I think has contributed significantly to the clumsiness of how they have handled Harriet Miers.

And now, they are in a situation where both sides, both issues may go down on them. If they get these -- I think they got -- we don't know if they are going to get the indictments. But, if they come that's going to be a big blow.

It strikes me that the Harriet Miers nomination is in such deep trouble that we're moving now toward a withdrawal.

DOBBS: Our White House Correspondent David -- Dana Bash reporting for years from the White House saying, basically that the tension and the atmosphere is palpable at the White House, the lack of organization, the lack of focus, moving forward, the tension there. She put it one staffer, if I can paraphrase what she quoted, it ain't fun.

GERGEN: It's never fun and, you know, Ed Rollins knows this so well too, we've been through a lot of wars together. In this situation it's very tough going. You like to pretend that you go on with business as usual, but the truth is everybody is deeply worried. They are anxious, they have to start thinking about the future.

They have to start thinking about a White House post Karl Rove, that's just unimaginable because he's been so central to the White House, you know. Karl Rove is George W. Bush's right arm. And it's very hard to climb out of a hole without your right arm.

ROLLINS: Equally important to stay on this note, this -- it's hard to fight on two fronts at the same time. And they are battling not well on both of these fronts.

And they have to make a decision, I think, if they move forward and let her have these hearings just as John has pointed out, and they don't think they are going to get this thing through, they got to get out of this thing before they start those hearings.

They have two weeks of public hearings. They get bloodied, she then just can't withdraw. I mean they got to make this decision this week, is the support there to get her through or is it not. If not, then they basically better wave the white flag.

DOBBS: John Fund wants to say something, but if I may, John, let me just ask you to hold for two seconds. We're going to take a quick break. We're going to be right back with David Gergen, Ed Rollins, John Fund stay with me.

(COMMERCIAL BREAK)

DOBBS: "The Wall Street Journal's" John Fund thinks that the prospect of indictments may be a little overdone by the national media, John.

FUND: Well, the best legal minds believe that there was no underlying crime in the CIA leak investigation, the law didn't apply or it's not going to be applied.

So, if it is conspiracy or perjury those are charges that require an awful lot of evidence. What I'm hearing from the prosecutor's office, there's a lot of doubt, murky memories, murky notebooks. If a prosecutor is looking at that he errs on not bringing indictments.

DOBBS: All right, do you concur David?

GERGEN: I think John Fund has some very good sources recently. And so, I put a lot of weight in what he just said. But, what we do know I have never thought the underlying case was very strong. But, I don't think we know enough about whether there has been perjury or if somebody mislead the FBI.

DOBBS: Well, if someone in this administration was stupid enough to try to cover up either through perjury or obstruction they were not very good students or very good people but certainly not very good students of history.

David, let me ask you, all of this talk about what is happening in Washington, a bad week for the White House, American consumers are paying just about $3 a gallon for gasoline.

The American middle class in this country is getting kicked while they are down. Tuitions continue to fly. Everywhere you turn there is a problem for working men and women in this country.

And I can't bring it upon myself to start weeping at the travails of the Republican party or the Democrats or anyone else while the larger problems that face the greatest number of people, the backbone of the country are going through all but unnoticed. GERGEN: I agree with you. You have got a very good point, Lou. But, remember this, these political struggles now are having a dampening effect on consumer sentiments. Consumer confidence now has dropped to the lowest level in a dozen years.

What that could mean is a slowdown in the economy. It certainly has already been a slowdown in the investment community. So, there's a ripple effect out of Washington.

When you have a disabled president and things -- this sort of miasma form and there's a wait and see attitude in the investment community, that's not healthy for economic development and economic growth.

DOBBS: So, for the good of the economy and working men and women we shouldn't tolerate these kind of politicians probably in either party is that right, Ed?

ROLLINS: Well that's -- I think that's one of the frustration the public has, is why they hold both the president and certainly the Congress in very low esteem.

DOBBS: Twenty-nine -- as bad as the numbers are for President Bush, 29 percent approval rating for this Congress.

ROLLINS: And 30 percent say the economy is the number one problem facing them today, not the war.

FUND: Well, there are some things that could be done. The permanent tax cuts that the president wants should be adopted because if we don't cut taxes that will send a signal to the market that taxes are probably going up. And that is something that no market likes.

DOBBS: It may not be that a market likes it, but as I, one of those who believes that democracy makes capitalism and free markets possible rather than free markets make democracy possible, isn't it about time that, irrespective of your political views, gentlemen, isn't about time we started talking about taking care of the people that make the country work? Isn't it about time we started talking about basic value?

FUND: We need to cut the deficit by having some spending cuts and finally some members of Congress are listening, finally.

ROLLINS: But, they couldn't get the 218 Republicans this week to basically go vote for the reconciliation.

FUND: If they don't, they are going to get into deeper trouble.

ROLLINS: And they have to come together, they have to start talking.

DOBBS: David Gergen, if you can give us a quick last word, we'll call that even.

GERGEN: Clean up the mess in Washington, the economy will also get stronger from that.

DOBBS: Amen, brother. David Gergen, thank you very much. Ed Rollins, John Fund, gentlemen, thank you, look forward to talking to you soon.

The results of our poll tonight, 90 percent of you say sanctuary laws that prevent the apprehension of illegal aliens should be abolished. Ten percent disagree.

Thanks for being with us tonight. Please join us next week. Have a great weekend. "Anderson Cooper 360" starts right now -- Anderson.

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