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LOU DOBBS TONIGHT

Bush Nominates Judge Samuel Alito to Supreme Court; Seven More Troops Killed in Iraq

Aired October 31, 2005 - 18:00   ET

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


LOU DOBBS, CNN ANCHOR: Good evening, everybody.
Tonight, seven American troops have been killed in Iraq within the past 24 hours. October has been the deadliest month for our troops in Iraq since January. We'll have a special report.

President Bush has nominated conservative judge Samuel Alito to the Supreme Court. The president's supporters at last are happy, but his opponents, Democrats, are furious. And they are promising a confirmation battle.

And Vice President Dick Cheney's former chief of staff, Lewis "Scooter" Libby, will be in court Thursday to be arraigned in the CIA White House leak case. Tonight, we take a closer look at the political and legal challenges facing the White House.

But we begin with President Bush's nomination of Judge Alito to the Supreme Court. The president chose Alito after the abrupt withdrawal of Harriet Miers amid criticism she was nothing more than a political crony of the president. This time, President Bush has chosen an experienced judge, one with a strong conservative record.

We have two reports tonight on the president's bold new attempt to retain the political initiative. Suzanne Malveaux at the White House. Ed Henry on Capitol Hill.

We start with Suzanne Malveaux -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, you are absolutely right. It is going to be a very contentious battle ahead.

Samuel Alito was once a runner-up, now a frontrunner. Many people considering him to be the anti-Miers.

He was really on the short list for President Bush five years ago when he first took office and then became quickly a favorite after Justice Sandra Day O'Connor announced her resignation. But then took a backseat to John Roberts, as well as to Harriet Miers.

Now, the conservatives, of course, roundly rejected Miers for being someone who was an unqualified Bush crony with a very scant judicial record. President Bush today emphasizing that Alito had the judicial philosophy and the experience he believes will satisfy those conservatives. (BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Judge Alito has served with distinction on that court for 15 years. And now has more prior judicial experience than any Supreme Court nominee in more than 70 years.

(END VIDEO CLIP)

MALVEAUX: And White House insiders say that they believe this is a chance really for the president to do a do-over, or press the reset button here. It is the kind of red meat that some Republican conservatives have been looking for. They believe that it will bring back the base, reunite the party, and of course prevent the president from becoming a lame duck.

(BEGIN VIDEO CLIP)

BAY BUCHANAN, "AMERICAN CAUSE": It's terrific news. And there's real energy in our base again. We're coming home, Mr. President.

(END VIDEO CLIP)

MALVEAUX: And of course, Lou, there are mixed feelings about this. Democrats not happy with this at all. And some political observers say, with the trouble, the growing violence in Iraq, as well as the trouble over the Harriet Miers nomination, but the violence, the slow response to Hurricane Katrina, as well as the indictment of one of his top aides, that all of this will complicate the situation, that what he really needs to do is to appeal to the moderates to push forward his legislative agenda -- Lou.

DOBBS: Thank you, Suzanne.

In Samuel Alito's 29 years as a public servant, he has served as appellate judge, federal prosecutor and attorney in the U.S. Justice Department. Alito has spent the past 15 years on the 3rd U.S. Circuit Court of Appeals, one of the most liberal courts in the country. He is the court's most conservative member, and he's been the lone voice of dissent on a number of key court decisions, including a 1991 abortion case, Planned Parenthood versus Casey.

The 3rd Circuit ruled that a woman does not need the permission of her husband to have an abortion. Alito wrote a dissent.

He has also taken restrictive stances on discrimination and harassment cases, and he wrote an opinion upholding the death penalty in Pennsylvania. But Alito, like Supreme Court Chief Justice Roberts, is not seen as a rigid ideologue. In another abortion five years ago, Alito found a New Jersey law banning late-term abortions unconstitutional.

Alito is 55 years old, a graduate of Yale Law School.

President Bush today declared that he wants the Senate to confirm Judge Alito by the end of this year. Republicans who strongly criticized Harriet Miers are tonight united in supporting a quick confirmation of Alito. But Democrats are already blasting him for what they say are his extreme views.

Judge Alito wasted no time today making courtesy calls on Capitol Hill.

Ed Henry reports.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice over): Judge Alito's first stop in the Capitol, paying his respects to Rosa Parks, the civil rights pioneer, lying in honor under the rotunda, a solemn start to a battle that's getting ugly fast, with Democrats saying symbolism only goes so far.

SEN. CHARLES SCHUMER (D), NEW YORK: His record, as I'm sure Rosa Parks would agree, is much more important. A preliminary review of his record raises real questions about Judge Alito's judicial philosophy and his commitment to civil rights, workers' rights, women's rights.

HENRY: Democrats charge Alito is a sop to conservatives who are irate over the Harriet Miers debacle.

SEN. PATRICK LEAHY (D-VT), JUDICIARY COMMITTEE: I am concerned that the nomination may be a needlessly provocative nomination. The president chose to reward one faction of his party.

HENRY: With Democrats dropping hints of a filibuster, Republicans are already trying to head it off.

SEN. MITCH MCCONNELL (R), KENTUCKY: What we guarantee you is a dignified process here, a respectful hearing, and at the end of that process, an up-or-down vote, as has always been the case on Supreme Court nominees throughout the history of the Senate.

HENRY: Even though that standard did not seem to apply to Miers.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: I felt sorry for the -- Ms. Miers, who really never got a chance to either have a hearing, let alone have a vote.

HENRY: The real power may rest in the hands of the bipartisan gang of 14 moderates who earlier this year averted a nuclear showdown over filibusters against the president's lower court nominees.

(END VIDEOTAPE)

HENRY: Senate Judiciary Chairman Arlen Specter is already declaring that based on the standards of the gang of 14, this nomination should not be filibustered. But we won't hear from the gang until Thursday morning, when they hold their first meeting in John McCain's office -- Lou.

DOBBS: And one member of that gang, Senator Graham, has said pointblank, this should not end in a filibuster or there will be another course taken. Obviously, this is a situation in which the nuclear option, so-called, would be rendered.

HENRY: That's right. And Senator Hatch, another key Republican on Judiciary, today, when asked if there is a filibuster, will Republicans then use a nuclear option and change the Senate rules to stop filibusters? Hatch said, "You bet your life" -- Lou.

DOBBS: Ed Henry on Capitol hill. Thank you.

Later in this broadcast, we'll have analysis of the president's nomination, as well as the latest developments of the CIA White House leak case. I'll be talking with three of the country's top legal and political analysts.

As the president tries to recover from political and legal setbacks, the war in Iraq is escalating. And more lives, more American lives, have been lost.

Another seven Americans have been killed in combat in Iraq. Six of them today. More than 90 of our troops have been killed in Iraq this month, making October the deadliest month since January.

Jamie McIntyre has the report from the Pentagon.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice over): Increasingly sophisticated roadside bombs and suicide attacks are taking American lives in Iraq at the fasted rate in nine months. Six U.S. soldiers killed on the last day of the month, and one Marine who died over the weekend, have pushed the U.S. death toll in Iraq to 92 for October, the highest count since January's 107 U.S. deaths and the fourth highest monthly loss of American life since the initial invasion in March of 2003.

Still, U.S. commanders insist the insurgents are losing support by killing so many fellow Muslims.

MAJ. GEN. JOSEPH TALUTO, COMMANDER, 42ND INFANTRY DIVISION: I think we're getting further division between al Qaeda and Iraq and the Iraq -- and the Iraqi rejectionists or Saddamists. I don't think al Qaeda in Iraq's message is resonating very well, and I think we're seeing, at least in north central, we're not seeing as much of their influence in there.

MCINTYRE: Improvised bombs and suicide attacks remain the number one killer. This video purportedly taken at an Iraqi checkpoint about 10 days ago was posted on an Internet Web site. It shows just how impossible it is to stop a suicide bomber willing to blow himself up along with U.S. or Iraqi troops.

VICTOR O'REILLY, DEFENSE CONSULTANT: They cannot attack us head on and inflict serious damage. They know that. And so they're bright enough to realize that the alternative strategy is just to nibble away at us, pinpricks, death of a thousand cuts, if you will. MCINTYRE: U.S. and Iraqi troops continue to step up counterinsurgency operations in Al Anbar province, the area west of Baghdad that did not approve the new Iraqi constitution and which has seen the most violence. For example, since its arrival in the Persian Gulf earlier this month, the U.S. aircraft carrier Theodore Roosevelt has flown some 250 sorties. Many to conduct air strikes along the Syrian border, where it's believed foreign fighters continue to infiltrate into Iraq and operate from so-called safe houses.

(END VIDEOTAPE)

MCINTYRE: One of the October casualties was the highest ranking member of the U.S. military to lose his life to hostile fire in Iraq. Colonel William Wood was commanding his troops at the scene of a roadside bomb in southern Baghdad when a second explosion went off killing him. Colonel Wood was a career Army officer. He was 44 -- Lou.

DOBBS: We heard the reaction from the military, Jamie, as to -- to their view that there is something of an ebb in the influence of al Qaeda. What is the Pentagon's view in terms of the intensity of the fighting that they're expecting over the next year?

MCINTYRE: Well, they are expecting the insurgency to remain intense, particularly as they come up now for the December elections. That's the next milestone.

But what they continue to look at is the number of Iraqi troops that are growing. And they say despite the fact -- they point out, by the way, that more Iraqis, both civilians and members of the armed forces, are being killed than Americans, and yet they have no shortage of recruits for the new Iraqi army and police.

So they continue to put their emphasis on that, and they say ultimately it will just have to be the Iraqis who will just have to defeat this insurgency sometime in the future. Perhaps after most American troops are gone.

DOBBS: Jamie McIntyre. Thank you.

While the United States fights Syrian-backed insurgents in Iraq, U.S. diplomats are stepping up their campaign to hold Syria accountable for terrorism. Today the United States won the unanimous support of the United Nations Security Council in a resolution on the assassination of the former Lebanese prime minister. Top Syrian officials have been implicated in his murder.

The Security Council demanded Syria's full cooperation with the U.N. investigation into the killing of Rafik Hariri, but the United States and its allies failed to win Chinese and Russian support for possible sanctions against Syria.

Still ahead here, the fight to make English the official language of one state. It has turned into a pitched ugly political battle. We'll have that special report.

And how millions of middle class Americans could lose their jobs because of a tough new law.

And a highly critical new documentary film takes a tough look at Wal-Mart and its relentless drive to push prices lower at a high social cost.

(COMMERCIAL BREAK)

DOBBS: Tonight, Canada announced that migratory birds on its soil have tested positive for avian flu. Canada says the flu strain found in 33 birds is not the most serious strain of the disease that has killed more than 60 people. But testing of these infected birds continues.

The deadliest strain of avian flu has been detected in 17 countries. Birds in south and eastern Europe have been infected. But this strain has not yet been detected in western Europe or the Americas.

Tomorrow, President Bush is set to go to the National Institutes of Health to detail the White House plan for dealing with an avian flu pandemic.

In Ohio tonight, a highly emotional battle over whether to make English the official language of the state of Ohio. Opponents say making English the language of official state business is intolerant. But those in favor of the bill say so many immigrants don't speak English, something has to be done.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): Ohio is the latest battleground over the English language.

State Representative Courtney Combs...

REP. COURTNEY COMBS (R), OHIO STATE HOUSE: In my district, which is located between Cincinnati and Dayton, Ohio, we have had an influx of about 500 percent increase in the last 15 years of Latinos. And the communication problem between law enforcement and government and human services and those types of things has elevated into a real problem.

ROMANS: He plans to introduce legislation early next year to make English Ohio's official language. A move that has been called insulting, intolerant, xenophobic and nativist.

Benson Wolman is chief executive of the Equal Justice Foundation in Columbus. He says English as the official language sends a bad message.

BENSON WOLMAN, EQUAL JUSTICE FOUNDATION: Essentially, it sounds like those advocates are saying we're going to throw people in cold turkey. We'll throw them into the all-English environment, let them work their way through it. ROMANS: Requiring English for driver's licenses and other state business, he says, is unwelcoming and would shut immigrants out of government services. But proponents say make English official would save cash-strapped states millions of dollars in multilingual services and would encourage immigrants to learn English. And they say just because official business would be in English, it doesn't mean immigrants wouldn't get health care or emergency services in their language, as required by federal law.

K.C. MCALPIN, PROENGLISH: Twenty-seven states have already made English the official language, and it hasn't done anything in terms of being, you know, intolerant or done any harm to any groups.

ROMANS: Proponents also say encouraging English is pro- immigrant. Studies show immigrants who speak English earn 50 percent more than those who don't.

(END VIDEOTAPE)

ROMANS: And that's why people in favor of English as an official language bristle at being called intolerant or racist. They insist that English has always been the unifying language of this country. And encouraging English, they say, is pro-immigrant.

In fact, they charge that immigrant groups are more interested in preserving free government services in Spanish than encouraging immigrants to learn English -- Lou.

DOBBS: The unfortunate part is that's, in many cases, very true. The idea that somehow requiring English as the official language is intolerant is mind-boggling. Who could be more tolerant than the United States, with the millions of illegal aliens that has frankly paralyzed our government for the better part of 15 years, which does not act to enforce laws?

ROMANS: And nobody who is a proponent of English would ever say that they would like 911 operators not to speak Spanish, or Chinese in neighborhoods where that's appropriate, or firefighters not to speak any number of languages in neighborhoods where that's appropriate.

DOBBS: Well, there is an issue here. A basic requirement of citizenship is to understand the English language. That has not been changed, and it's something that some people need to think about.

What becomes difficult for me are the number of rather ethnocentric groups, the open borders advocates, who suggest that to control illegal immigration is somehow racist, or as you pointed out, intolerant, or xenophobic, it's mind-boggling, because the inverse of the corollary is this: what they're saying is, the only way to be judged tolerant in their view is to advocate more open borders, absolute absence of border security, and to permit illegal immigration and perpetuity, and the heck with the consequences.

ROMANS: Indeed.

DOBBS: Christine Romans. An excellent report. Thank you. It will be interesting to see how Ohio goes on this one.

Still ahead, a crucial engine of this nation's economy loses a key lifeline. And middle class jobs hang in the balance. We'll have that special report coming up.

And a dismal week, a dismal month. Can the White House regroup? Three of the country's most distinguished legal and political minds join me to talk about the task ahead for the Bush administration.

And how much would you pay for a rundown shack in Las Vegas? This one in particular? Well, you may not believe just how much the owner wants for it. We'll give you a hint. It's in a great location.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Small business in this country is a critical driver of our economy and our biggest job creator. And small business is facing a critical challenge.

Small businesses employ half of all private sector employees and 80 percent of people employed in inner cities. But new bankruptcy laws now in effect may lead to the failure of many of those businesses and have a chilling effect on job creation.

Kitty Pilgrim has the report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice over): At one time, Wayne Jeffers owned 100 gas stations. But he's now down to 20. After filing for bankruptcy five years ago, he cut his staff in half and reorganized, and still employees 25 people.

Under the old bankruptcy laws he could continue to operate. Under new bankruptcy laws he would have had to close down completely.

WAYNE JEFFERS, BARRIER MOTOR FUELS: They're trying to hold businesses and individuals to a much higher standard, almost as though they were going bankrupt on purpose just to kind of fleece their creditor. Small business are family. You're involved in their lives, and -- as they are in yours. But in business, it's an accounting exercise, and you can only support what the income base allows you to support.

PILGRIM: Small businesses create two-thirds of new private sector jobs in America, employ more than half of all workers, and account for more than half of the output of our economy. But experts say small businesses are getting clobbered by the new bankruptcy laws put in place this month.

ROBERT LAWLESS, UNIV. OF NEVADA, LAS VEGAS: There are tighter deadlines, there are more paperwork requirements, there are more grounds for dismissal. PILGRIM: One study says business bankruptcies are eight times higher than official government statistics because many small businesses file for bankruptcy as individuals. Some business owners use their personal credit cards to try to survive and then default.

If a business files for bankruptcy, it typically takes 12 to 24 months to reorganize and turn a profit. But new rules allow less time.

JONATHAN PASTERNAK, BANKRUPTCY ATTORNEY: For example, if a company shows operating losses for, say, one or two months even in a row, the United States trustee, who is an arm in the Department of Justice and oversees Chapter 11, has a mandate now to bring a motion before the bankruptcy judge to seek the liquidation of a company into a Chapter 7.

(END VIDEOTAPE)

PILGRIM: Now, legal experts say that shortens the grace period for a company to work out a new business plan and it also puts pressure on business owners to risk less, be more conservative, less entrepreneurial. And that, in the end, may cut down on the number of jobs that are created in the economy.

And Lou, this month these are new rules, so we'll be following this as people try to work through these.

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

Anyone looking for evidence of a housing boom in Las Vegas need look no further than the home of Manuel Corcheo (ph). The former waiter has put his 700 square foot Sin City home up for sale.

The price tag? $1.2 million. Cash, please. He bought it almost 30 years ago. He paid $30,000.

Corcheo (ph) says he's been watching multimillion-dollar condominiums go up all around him. He says his price he feels is just about right.

Just ahead here tonight, President Bush draws praise from the conservatives for his newest choice for the Supreme Court. Will Judge Alito help the White House rebound from what is without question the worst months of the Bush presidency? Three of our country's best legal minds join me next.

And then, the U.S. Senate working on the sly to approve more visas for more foreigners. At the cost of whom? Our special report is next.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: After one of the most debilitating weeks of any modern presidency, the Bush White House this week is planning a comeback. Bush officials hope today's nomination of Judge Samuel Alito will help jump-start an administration mired in a serious second term setback.

Dana Bash reports.

(BEGIN VIDEOTAPE)

DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice over): If you listen carefully at just about this moment...

JUDGE SAMUEL ALITO, SUPREME COURT NOMINEE: ... and for honoring me with this nomination.

BASH: ... you may be able to hear a collective sigh of relief inside the White House . With that announcement, they changed the subject. Step one in the post-Harriet Miers, post-indictment White House recovery plan.

ALITO: I really look forward to working with the Senate during the confirmation process.

BASH: With Samuel Alito, the political planets realigned. Beleaguered Bush aides say they can fight who they're supposed to, Democrats, not fellow Republicans revolting against their leader.

But Mr. Bush still faces a long list of problems.

Just Monday, six more troops were killed in the increasingly unpopular Iraq war. And he still has problems in his own party. While conservatives like Alito, they have other complaints.

UNIDENTIFIED MALE: President Bush has not done a good job restraining the growth of government. He has not done a good job securing our borders.

BLITZER: Then there's the matter of the leaks investigation still open.

On this day, Mr. Bush, determined not to step on his new Alito message, would not answer questions about Democratic calls to fire Karl Rove, who escaped indictment but did talk to reporters about classified information. But Republican strategists, especially those familiar with second-term slumps, say the president still must consider replacing some of his tired insular staff.

UNIDENTIFIED MALE: That doesn't mean a wholesale changing of the guard, but it does mean some new energy and some fresh ideas and fresh faces.

BASH: One Bush adviser tells CNN the president is disappointed in staff for missteps. And aides say he will likely make changes at the top as soon as the end of the year.

UNIDENTIFIED MALE: If people have to leave, they'll leave. They will be replaced. The president will move on. There is a lot more that he wants to get done.

(END VIDEOTAPE) BASH: And ten months into the president's second term, no one disputes here the idea that the Bush agenda is largely stalled. But aides say they hope to regain footing one step at a time.

Specifically, Lou, initially focusing on less partisan issues like the bird flu pandemic and coming up with a plan which, of course, we expect him to do Monday. Excuse me, Tuesday.

DOBBS: And, of course, being non partisan it really can't be part of an agenda, can it?

BASH: Well, they certainly, I think, would dispute that here. I think the concept is that they want to focus on, they call it back to basics governing. And if you ask them, they say coming up with a plan to combat the bird flu is pretty important.

DOBBS: Governance absolutely, critically important. Not my idea of an agenda. My idea of an agenda is thinks like social security as a private accounts, things like that.

Dana, thank you very much. Dana Bash.

BASH: Thank you.

DOBBS: Well, Lewis Scooter Libby is set to make his first appearance in federal court Thursday after his indictment in the White House CIA leak case. The vice president's former chief of staff will appear before Federal Judge Reggie Walton.

Libby is expected to plead not guilty to five charges of obstruction of justice, perjury and making false statements to a grand jury.

In our poll tonight, we'd like to know what you think. Are you surprised that a special prosecutor after 667 days of investigation could not indict anyone for an underlying crime in the White House CIA leak investigation?

Yes or no. Cast your vote, please, at LOUDOBBS.COM. We'll have the results, of course, later here in the broadcast.

There are new poll numbers of a different kind tonight on Vice President Dick Cheney, and the impact of the White House CIA leak investigation.

Bill Schneider has our report.

(BEGIN VIDEOTAPE)

PATRICK FITZGERALD, SPECIAL COUNSEL: We make no allegation that the vice president committed any criminal act.

BILL SCHNEIDER, CNN CORRESPONDENT (voice-over): Maybe not, but the American public has drawn its own conclusions. The majority of those surveyed believe Libby did something illegal or unethical, and that Vice President Cheney was aware of it. Most Americans for the first time express an unfavorable opinion of Cheney. Is that a problem for Cheney?

Unlike nearly every vice president for the past 70 years, Cheney says he is not running for president.

But, it is a problem for President Bush. Critics and even some supporters say it's time for a shake-up in the White House.

GARY BAUER, PRES. AMERICAN VALUES: The president probably would be well-advised to take a look at bringing in some fresh blood.

SCHNEIDER: The vice president is the only White House official who can't be fired. He was elected by the American people, but we could see Mr. Cheney's influence diminish.

Cheney is the administration official most clearly identified with making the case for war with Iraq.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: There is no doubt that Saddam Hussein now has weapons of mass destruction.

SCHNEIDER: The special prosecutor insisted that his investigation had nothing to do with Iraq.

FITZGERALD: Anyone who is concerned about the war and has feelings for or against, shouldn't look to this criminal process for any answers or resolution of that.

SCHNEIDER: One person is. Former Ambassador Joseph Wilson wrote, they did it as part of a clear effort to cover up the lies and disinformation used to justify the invasion of Iraq. This is the ultimate crime.

Most Americans now endorse the view that the Bush administration deliberately misled the public about whether Iraq had weapons of mass destruction.

(END VIDEOTAPE)

SCHNEIDER: Apparently, many Americans do connect the CIA leak with the war in Iraq. They see it as part of the effort to mislead them--Lou.

DOBBS: Thank you very much, Bill Schneider.

Joining me now, from Washington, D.C., former federal prosecutor Pat Woodward, former Clinton administration White House Counsel Lanny Davis, and here in New York with me, Jeffrey Toobin.

Gentlemen, thank you.

Let me turn to you, first of all, Lanny Davis, you opine this weekend in a commentary that you felt that Patrick Fitzgerald did a good job. Yet, we don't know why there was no finding of either no crime or an exculpation as a result of what he investigated for two years.

LANNY DAVIS, CLINTON WHITE HOUSE COUNSEL: Well, first all, having a prosecutor at a press conference say I'm not going to speak outside of the confines of my indictment, and let me remind you of the presumption of innocence, is, let us say, a slight contrast to Ken Starr when I was at the White House.

I very much appreciated and respected that performance and presentation by Mr. Fitzgerald. Let's remember his analogy, though, to getting at the truth. If there's dirt being thrown in the eyes of the umpire, you're not really sure what the ultimate truth is.

So whether or not Mr. Libby had a motive to lie because he was protecting somebody at a higher level is the big elephant in the room right now.

And that's why in my comments I have said over and over again, Dick Cheney has an obligation to answer the question, what did you know and when did you know it, and what is your role in telling Mr. Libby the name of Ms. Plame in the CIA, and why did do you it?

Unless he answers those questions, President Bush cannot move on with this story in my opinion.

DOBBS: Pat Woodward, let me ask you this because it seems straightforward to me, perhaps incorrectly so.

But charged as he was as special counsel, it seems first there should be determination whether Valerie Plame was a covert operative in the traditional definition of the terminology.

And secondly, if her name, if that were true, and if her name were released by any member of this administration, that seems to me on its face to be criminal.

PAT WOODWARD, FORMER FEDERAL PROSECUTOR: It would be, Lou, and that seems to be his charge. He did not indict anyone for that, and he's left with trying to figure out whether Mr. Libby deliberately lied to the grand jury and lied to the FBI.

Lou, in this case, as in other cases, you don't have any collusion with other people. You don't have any altering of documents like you did in the Martha Stewart case, so he's really left with tying to figure out whether Mr. Libby's memory was just faulty or whether he deliberately lied. And I think he went with the latter.

DOBBS: Jeffrey, would you respond to the same issue?

Because it seems to underlie everything and the frustration that is out there and Lanny Davis alludes to this, is that we are used to independent counsels charged with broader, perhaps if not charged with, accepting a broader mandate, and at least delivering to us a report that is a narrative on the operation of government. And how malfeasance, if that is the case, occurred?

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: Well, that's what's different about Pat Fitzgerald. He is only charged with prosecuting crimes that he can identify.

Let me give you an example. I mean, one of the issues in the Valerie Plame investigation is did the person who disclosed her name know, beyond a reasonable doubt, can be proved beyond a reasonable doubt, that she was undercover, that her name was classified.

DOBBS: That seems straightforward.

TOOBIN: Well, no, it's not. I don't think it is straightforward based on what I've seen.

There was a lot of conversation among Dick Cheney, among other White House...

DOBBS: I mean straightforward in this sense, Jeffrey.

That is, either she is a covert agent, operating undercover.

TOOBIN: Correct.

DOBBS: Or she was not?

TOOBIN: But what did the people who outed her know of her status? Truly...

DOBBS: But gentlemen, help me if I'm being just a mere layman here. Sometimes just I'm left with rudimentary logic.

If they are, in point of fact, covering her identity as a CIA operative. At the Central Intelligence Agency she is by definition a covert operative.

And therefore, if anyone put her name forward.

TOOBIN: This is where the law, it makes it difficult for prosecutors.

In order for it to be a crime, it has to be a knowing disclosure. You have to know that she is a covert operative and then disclose her name. That's the difficult part of this case, proving that say, Scooter Libby knew that she was a covert operative.

DOBBS: Gentlemen, let me turn to the issue of the day, and that is, of course, Judge Samuel Alito.

Lanny Davis, of by appearances of 15 years of tremendous service on the appellate bench, remarkable 29-year career of public service, you have to be thrilled tonight with his qualifications.

DAVIS: Well, I'm not thrilled when I see Pat Robertson run to a microphone and say this has made his day. So, I immediately have my guard up if Robertson is happy.

I don't know whether we should automatically be happy. We've got to look at this very carefully on the Democratic side, not rush to judgment, which I fear too many Democrats are ready to do. But there are some decisions that I've looked at during the day that trouble me. He wrote a dissent that Sandra Day O'Connor helped overrule on a Pennsylvania abortion case.

He also wrote a dissent, in which he would have held, but for Justice Rehnquist, not exactly a great liberal, disagreeing with him, that registering machine gun weapons is not constitutional if Congress says it's within the commerce clause to do so.

That's a view of the commerce clause that goes back to the 1930's where the Supreme Court tried to overturn social legislation by saying the commerce clause doesn't allow Congress to act. A strict constructionist doesn't do that, a liberal activist radical conservative does.

And I'm worried that this is where Judge Alito comes from. He's ready to overturn acts of Congress on an extremely bizarre reading of the commerce clause that has an ideological bent to it.

So, I'm concerned...

DOBBS: You must share Lanny Davis' great concern here, raising as he does, I wish you and the bar could work out with the judiciary this commerce clause. It seems to give you all fits.

WOODWARD: Well, Lou, let me just say, I've spoken to some Democratic friends of mine in New Jersey who know Judge Alito and think very highly of him, and honor his fairness and his judicial temperament.

He's certainly qualified. His 15 years on the bench offer ample opportunity for people to review his jurisprudence. And in addition, he has argued 12 cases before the Supreme Court. So, I don't think we can argue his qualifications.

Now, if you get into arguing his ideology, I don't know if that is the right forum in the advise and consent clause.

DOBBS: Jeffrey Toobin, you get the last word, will he be confirmed and expediently so?

TOOBIN: Going to be tough to beat. The Democrats have to do it entirely on the basis of ideology, because qualifications are completely beyond reproach. One abortion decision that this Casey opinion where he did strike -- he was in turn overturned by the Supreme Court, that's going to be a tough thread to spin out into getting 50 votes, 51 votes against him or to sustain a filibuster among the Democrats. So he got off to a very good start today.

DOBBS: Lanny Davis, Pat Woodward, Jeffrey Toobin, thank you, gentlemen.

UNIDENTIFIED MALE: Thanks, Lou.

DOBBS: Our quote of the day comes in reaction to Judge Alito's nomination. Gary Bauer, the president of American Values said, quote, "At least now the president is having a battle with his political opponents and not with his friends."

Turning now to an extraordinary move in the U.S. Senate, which could result in even more foreigners coming to this country taking more American jobs. The Senate is raising the number of H1-B visas available to foreigners and selling them to companies for $500 apiece. Your government at work. But even more outrageous, the Senate is trying to attach this legislation to a budget reconciliation bill. Bill Tucker has the report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): American jobs are for sale, disguised as a budget bill. The Senate, working with the Senate judiciary committee wants to increase the number of H1-B visas by 30,000 and then it wants to exclude family members of visa holders. Its immigration reform slipped quietly into a budget bill. Opponents, though, refuse to let the bill go quietly through Congress.

REP. TOM TANCREDO, (R) COLORADO: It increase the legal immigration of this country by 35 percent. You couldn't get that passed on its own. So they're hiding it in reconciliation, sticking the $500 fee on there to make it a fiscal issue.

TUCKER: The president of the Programmers Guild, an association of technology workers has an equally straightforward take on the legislation.

KIM BERRY, PRESIDENT, PROGRAMMERS GUILD: This Bill, in essence, sells American jobs for $500 each, but it does not let Americans bid on these jobs. I know of many unemployed Americans, for example the thousands who have been laid off from Hewlett-Packard who would give 500, 1,000 or much more to get back into this profession. But these jobs are not intended for Americans, they're not advertised for Americans, this is onshore offshoring within the U.S..

TUCKER: Ironically, the bill to increase legal immigration is supported by Senate Majority Leader Bill Frist who is calling for immigration reform in this congress and by Texas Senator John Cornyn who has offered his own immigration legislation. Neither senator thought it unusual that stealth immigration reform was taking place in a budget bill.

(END VIDEOTAPE)

TUCKER: Now, the legislation in the Senate must still be reconciled with any budget bill in the House. And those who oppose the visa legislation hope that they can get it stripped down and separated from the budget. But Lou, there was not a lot of optimism, in fact, that it could be done.

DOBBS: Not that it could be done. But isn't anyone, and I perhaps should not be even asking this question, but isn't anyone in the U.S. Senate a little embarrassed at this way of doing business?

TUCKER: Tom Tancredo, Congressman Tancredo is very much embarrassed by it. And there are a couple of others... DOBBS: Of course, he's in the House.

TUCKER: He's over the in House, that's true.

DOBBS: Bill Tucker will look for a senator who's embarrassed at doing the people's business in this fashion. Thank you very much.

Still ahead here, the story of the Herndon, Virginia Minutemen. Residents this week are fighting back against illegal aliens and the rising day labor crisis.

And a new shot fired in the battle over Wal-Mart, and it's a big one. A new movie that says Wal-Mart is destroying small town America, and American small business.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Clearing out or any of those towns up there, and you'll see a Wal-Mart up on the hill, you'll see (INAUDIBLE), maybe a Burger King, and then you will drive further into the town and you'll see an empty town, it looks like a neutron bomb hit it.

(END VIDEO CLIP)

DOBBS: I'll be talking with the producer of "Wal-Mart: the High Price of Low Cost Here Next."

(COMMERCIAL BREAK)

DOBBS: Washington, D.C. suburb Herndon, Virginia, is a city in the midst of an illegal alien crisis. Residents say they feel betrayed by what they say is their city's complete lack of concern over Herndon day laborers, many of whom are in this country illegally. This week, residents begin their own Minuteman movement to rid their city of illegal alien workers. Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): They come by the dozens, laborers swarm this vehicle hoping to be hired for the day. Like many towns Herndon, Virginia has seen a surge in illegal workers. The town council recently approved building a work center for them using taxpayer money over the loud objections of its citizens. Among them, Herndon resident George Taplin. He says he loves the diversity of an immigrant community, but he adamantly opposes law breakers.

GEORGE TAPLIN, HERNDON RESIDENT: I mean, the law is the law. If you're illegal, if your political status is illegal, illegal means illegal. It doesn't mean illegal on Tuesdays and Wendesdays and legal the rest of the time. It doesn't mean illegal when you're at home and legal when you find a job. It means illegal.

SYLVESTER: Taplin is heading a new group of 60 Minutemen in Herndon, inspired by the patrols along the Arizona border. Residents take pictures of day laborers and record the license plate numbers of employers who hire them. TAPLIN: Our real focus is to go after American businessman, American business people that are basically abusing the immigrants for their own benefit. And once we get them to stop doing what they're doing, then there's no reason for the immigrants to be here.

SYLVESTER: While some raised privacy concerns it's all perfectly legal. Immigration reform groups see it as a sign of rising frustration.

MARK KRIKORIAN, CENTER FOR IMMIGRATION STUDIES: As illegal immigration spreads and as local and state governments continue to collude with illegal immigration, we're going to see more citizens coming up with imaginative ways of addressing this problem.

(END VIDEOTAPE)

SYLVESTER: And the Herndon Minutemen will start the patrols on Wednesday. And we'll show them. We'll show you if there are any confrontations. George Taplin says they are taking the nonconfrontational approach. They will be silent observers, just recording what goes on, Lou?

DOBBS: And this is reminiscent of what happened in Jupiter, Florida, there, where our producers, our crews in point of fact were threatened by those hiring illegal aliens. So we want to you be extraordinarily careful.

Lisa Sylvester, thank you.

Coming up next, the director of a new documentary that Wal-Mart doesn't like and doesn't want to you see. And why the company, he says, has had a devastating impact on employees and communities throughout the country. Stay with us.

(COMMERCIAL BREAK)

DOBBS: A new documentary on Wal-Mart creating a firestorm of controversy before it even is seen. It's called "Wal-Mart: The High Cost of Low Prices."

And it accuses Wal-Mart of treating its employees unfairly, destroying communities throughout the country, all in the name of cheap Chinese goods.

(BEGIN VIDEO CLIP)

DR. JOHN BRUENING, WAL-MART: THE HIGH COST OF LOW PRICES: To even use American with Wal-Mart in the same sentence just-- I don't agree with at all. It's like a Chinese company to me only with American board members.

(END VIDEO CLIP)

DOBBS: Wal-Mart calls this film propaganda.

I'm now joined by Robert Greenwald, who is the producer and the director of the film.

Thanks for being here Robert.

ROBERT GREENWALD, WAL-MART: THE HIGH COST OF LOW PRICE: My pleasure.

DOBBS: The motivation for this film, you ran into somebody and what happened?

GREENWALD: It was a neighbor of mine who had just been hired. He got a job at Wal-Mart, and I congratulated him saying that's great, you'll be able to get health care benefits.

And he said well, no. And he explained. And I don't remember the precise words, but he basically said, it's too expensive and it's too difficult.

But, then he said to me, totally sweetly, but those nice managers are helping me fill out forms, so I can get state aid. And I said wait a minute, the state of California, is going to pay for your health care, and you're working at Wal-Mart, a corporation that made $10 billion in profit?

DOBBS: How prevalent is that?

GREENWALD: Very, very prevalent. We have managers in the movie between employees working six years at Wal-Mart. They tell story after story of doing it.

This is systemic. This is not the rotten apple theory that Wal- Mart would try to convince us.

DOBBS: Let me read to you the Wal-Mart statement. We asked them for a statement in celebration of your appearance here this evening.

They said, "Mr. Greenwald's video is a one-sided, propaganda piece designed to advance a narrow special interest agenda. It already has been discredited. In the trailer alone, Mr. Greenwald makes three major errors in only three minutes."

"The fact is Wal-Mart saves working families hundreds and even thousands of dollars every year. We believe the positive experiences of the 100 million Americans who shop our stores every week speak volumes more than this video."

How do you react?

GREENWALD: Well, it's pretty great that they can call a film that they haven't seen propaganda.

Number one, they've not seen it.

Number two, I asked Lee Scott, CEO of Wal-Mart to be in the film. I asked him twice. He refused twice. Then I said I would publish all of his...

DOBBS: You and I are in good company.

We have asked Lee Scott to join us on this broadcast. I have had, as a matter of fact, I've had dinner with the man. But, he has never agreed to be on this broadcast.

GREENWALD: Well, maybe he'll have dinner with me if he won't be in the movie.

DOBBS: I much prefer candidly that he be on the broadcast.

GREENWALD: But what we did, after he refused to be on the film, and he doesn't know this yet, and maybe tonight will be the time he'll find out. We used clips of Lee Scott, so he's become our narrator for the movie.

DOBBS: Well, as you look at this, I mean, what is your reaction to Wal-Mart? Because Wal-Mart, of course, talks about the fact that they have the lowest prices, they are baffo (ph). How do you respond to that?

GREENWALD: I spent a year, sevens day a week, literally, working on this film. And the stories I've heard, the personal stories, are really quite devastating it.

It goes against everything that I believe, and I believe most Americans believe and care about. They're destroying families. They're destroying communities. They're destroying jobs.

They have a very serious problem because they have two huge groups that they're alienating. Workers and then families all around the country.

DOBBS: Now, the alienation, what bothers me, in point of fact here, is that Wal-Mart will not come on this broadcast and discuss these issues that we raise, which our particular focus and point of fact is on the well-being of the community, the well-being of the middle class of this country.

And there are serious issues in terms of the Chinese products that they--they're the third largest export market for China. What is the cultural -- what makes this culturally possible for Wal-Mart to succeed with the strategy that it employs?

GREENWALD: Well, I think it's a culture that's based-- I mean, there's two issues.

One is they do have a very good and efficient distribution system, but there's a culture sadly that says it's okay to get every nickel out of everybody. And at a certain point when you care about your country, you ask a question, when is it greed?

DOBBS: That's a question we're asking too.

GREENWALD: $100 billion the family has, the Walton family. $100 billion.

DOBBS: When is it greed is the question that is being asked all too often in this country daily.

Robert Greenwald, thank you very much for being here. We look forward to the film.

GREENWALD: Thank you.

DOBBS: Thanks.

Tomorrow, I'll be talking with another director and another producer. This one is called why Wal-Mart works and drives other people nuts. It's creator is Ron Galloway, and he'll be our guest here tomorrow for the good side of Wal-Mart.

Still ahead, the results of our poll. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Well, the results of our poll tonight, 55 percent of you say you're surprised that the special counsel could not indict anyone for an underlying crime in the White House CIA leak case after 667 days of investigation.

Thanks for being with us tonight. Please join us here tomorrow when among our guests will be Senator Trent Lott, who is calling for new blood in the Bush White House. And the creator of a new documentary called, "Why Wal-Mart Works." He'll be with us as well.

We hope you will too. For all of us here good night from New York.

Wolf Blitzer hands off to me each evening. I get to reciprocate tonight. A special edition of "The Situation Room" now with Wolf Blitzer-- Wolf.

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