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Former 9/11 Commissioners Say U.S. Is Not Safe; Accusations of Cronyism, Profiteering in Defense Industry

Aired December 5, 2005 - 18:00   ET


LOU DOBBS, CNN ANCHOR: Good evening, everybody.
Tonight, scathing criticism of this country's defenses against radical Islamist terrorists. Former 9/11 commissioners say this country still isn't safe. My guest, former 9/11 commissioner Slade Gorton.

Also tonight, the president has launched a new effort to convince Americans that he's on the right path. I'll be talking with two top presidential historians who have different views on the president's record and prospects.

Then good news and bad news on the legal front for former House majority leader Tom DeLay. This, as Vice President Dick Cheney is traveling to Houston tonight to make a rare public appearance in support of DeLay.

Plus, accusations of cronyism and profiteering in the defense industry. You won't believe how much money some defense CEOs are making from their Pentagon contracts as our troops fight wars in Iraq and Afghanistan.

And a blatant attempt by communist China to win influence of one of the biggest countries in Europe. We'll have a special report on communist China's bold efforts to challenge U.S. military and economic power.

We begin tonight with homeland insecurity. More than four years after September 11, charges tonight that the White House and Congress are failing to adequately defend this country against radical Islamist terrorists. Former members of the 9/11 Commission say some of their most important recommendations for tightening security have been ignored. The former commissioners declare it's unacceptable that this country still isn't as safe as possible from terrorist attack.

David Ensor has our report.


THOMAS KEAN, FMR. 9/11 COMMISSION CHAIRMAN: Some of the failures are shocking.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice over): In a final salvo, the former 9/11 Commission gave the U.S. government dismal grades on efforts to make the country safer in the last four years.

TIM ROEMER (D), FMR. 9/11 COMMISSION MEMBER: If my children were to receive this report card, they would have to repeat a grade. We can't afford to repeat the lessons of 9/11 and the losses of 9/11.

ENSOR: On the report card, the government got an F for congressional failure to mandate radio channels for first responders, Army, police, fire departments, something Hurricane Katrina showed is needed for every kind of disaster.

JAMES THOMPSON (R), FMR. 9/11 COMMISSION MEMBER: Are we going to send policemen and firemen in this nation into battle against evil without the ability to talk to each other? Are we crazy?

ENSOR: An F, too, for failing to build a single terrorist watch list for airlines. Remember the chilling images of Mohammed Atta making his way through airport security on September 11, 2001? The former commissioner said something like that could happen again.

TOM KEAN (R), FMR. 9/11 COMMISSION CHAIRMAN: It's scandalous that airline passenger are still not screened against all names on the terrorist watch list.

ENSOR: An F, too, for failing to hand out homeland security money for states and cities most at risk.

KEAN: One city used its homeland security money for air- conditioned garbage trucks.

ENSOR: And the Bush administration got a D on its efforts to help secure nuclear materials and other weapons of mass destruction in the former Soviet Union and around the world.

(on camera): Do you think the Bush administration deserves failing grades for its effort on homeland security?

UNIDENTIFIED FEMALE: Well, no, I don't think we deserve failing grades. But I don't think the grades are what's important, David. I think what's important is what we've accomplished and what we've done to secure the nation, and that's an enormous, enormous amount.


ENSOR: The former commissioners are only private citizens now. Their opinions get attention. But heavy lifting, such as getting television networks and stations to give up audio frequency bandwidth earlier, that could take public outrage, which may or may not be forthcoming -- Lou.

DOBBS: David, thank you very much.

David Ensor from Washington.

Secretary of Sate Condoleezza Rice today strongly defended U.S. policy in the war against terrorists and radical Islamists. Speaking before a tour to Europe, Rice declared intelligence gathered by the CIA has saved European as well as American lives. The secretary also said the United States has never transported prisoners from one country to another for the purpose of interrogation or torture.

In Iraq, graphic testimony in the trial of former dictator Saddam Hussein in Baghdad. The first witness in the case described Saddam Hussein's secret police brutality, including the torture of men, women and children after a failed assassination attempt on Saddam. The witness also accused the secret police of rape and murder.

Elsewhere in Iraq, an angry crowd chased former Iraqi prime minister Ayad Allawi out of a mosque in the city of Najaf. Allawi's bodyguards fired warnings shots as they pushed Allawi into an armored vehicle. Allawi called the attack an assassination attempt. He was in Najaf to campaign for the Iraqi elections later this month.

Defense Secretary Donald Rumsfeld today made a new attempt to reshape the debate in the war in Iraq. Rumsfeld gathered the -- declared, rather, the ability of insurgents to inflict casualties should not be seen as evidence that U.S. policy in Iraq is failing. The secretary's comments come days after Rumsfeld insisted insurgents should no longer be called "insurgents," but enemies of the legitimate Iraqi government.

Jamie McIntyre reports from the Pentagon.


JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice over): Even though the military doesn't know the circumstances under which this insurgent video was shot, it does show the magnitude of the kind of homemade bombs the U.S. is up against. But Defense Secretary Donald Rumsfeld argues the inability to stop the almost daily and increasingly deadly attacks in Iraq does not mean the insurgents are winning.

DONALD RUMSFELD, SECRETARY OF DEFENSE: To be responsible, it seems to me one needs to stop defining success in Iraq as the absence of terrorist attacks.

MCINTYRE: Rumsfeld said critics who concentrate on the daily violence miss that Iraq is, in his words, on a vastly different and greatly improved path. And he again argued that withdrawing U.S. troops would turn Iraq into what Afghanistan was before September 11, a haven for terrorist recruitment and a launching pad for attacks against the U.S.

In response, Democratic Senator John Kerry restated his call for Rumsfeld to be fired and accused him of lowering the bar for victory in Iraq. In a statement, Kerry asked, "Does the defense secretary really just throw up his hands and accept that ongoing terrorist attacks are inevitable in Iraq for the foreseeable future? Is he now admitting that the Bush administration's mistakes have made Iraq what it was not before the war, a haven for terrorists?"

Rumsfeld insisted that polls show the U.S. military, the American public, and the Iraqi people are all optimistic Iraq will become a stable democracy. Contrasted that with the pessimism he said pervades what he calls the so-called elites, critics in the foreign affairs establishment, academia and think tanks, fueled by what he called inaccurate reporting by the news media.

RUMSFELD: We've arrived at a strange time in this country where the worst about America and our military seems to so quickly be taken as truth by the press and reported and spread around the world, often with little context and little scrutiny, let alone correction or accountability after the fact.


MCINTYRE: Even as Rumsfeld broadly criticized the news media for lack of context and accuracy, he praised reporters who he said many have risked their lives and some have even died in what he said was a valuable and indispensable role both informing society and holding the government to account -- Lou.

DOBBS: Jamie, to be very clear, the secretary of state accusing the media, or at least apparently most of it, of failing in providing context and accuracy. Is this not the same secretary of defense who described insurgents as "thugs," "dead-enders" and "bitter-enders" at the onset of the insurgency?

MCINTYRE: Well, one of the things that you find when you challenge Rumsfeld on any of these statements he's made before, is that he's someone who tries to take the extreme precise meaning of what he says. For instance, he never said -- we can't find him say that there were only a few "dead-enders." He referred to them as "dead-enders," but he says, "I never said how many there were."

He said he never said it was going to be easy going into the war, even though he made statements that he did expect that the U.S. forces would be greeted as liberators. So...

DOBBS: And he further...

MCINTYRE: ... he's very careful how he parses his words.

DOBBS: You may find that careful, Jamie. I'm not sure that all would.

The fact is that suggesting a war against terrorism should not be measured in terms of terrorist acts carried out, nor should we be guided in our understanding of this war by the number of American casualties now, over 2,100 in Iraq, seems at best Orwellian. Can you perhaps provide context for that statement?

MCINTYRE: Well, I'm not sure I can. But I can point out that it does seem to contradict the message we're getting from U.S. commanders who have talking about the progress they're making in the war, the fact that the number of attacks are down, even though some of the attacks are more lethal. They're talking about defeating the insurgents, and Rumsfeld is talking about not defeating the insurgents, but simply getting to the point where the U.S. can turn it over to the Iraqis so that they can continue to fight for who knows how long.

DOBBS: And to be perfectly clear, if not fair, I would be one of the first to say that an important part of the context in a war against Iraq -- in Iraq would certainly be the number of American lives lost and the number of our troops wounded.

Jamie McIntyre. Thank you very much.

A few minutes ago, we told you about the 9/11 Commission report critical of what they call a lack of action on the part of Congress and the White House. That brings us to the subject of our poll tonight.

Do you have confidence in this Congress and this White House to take the necessary steps to make this country safer, yes or no? Cast your vote at We'll have the results later in the broadcast.

Still ahead, Vice President Cheney makes a rare public appearance tonight. He's pledging support for one of our nation's most controversial politicians who won an important legal battle today.

Also tonight, charges of profiteering in the defense industry as our troops fight wars in Iraq and Afghanistan. That special report coming up.

And communist China using its massive economic strength in a blatant effort to challenge U.S. influence in Europe.

We'll have that story and a great deal more still ahead.

Stay with us.


DOBBS: President Bush today focused on the economy in a new effort to convince Americans that he and the country are on the right course. The president declared this economy as strong and the best days are yet to come. Interestingly, President Bush delivered that speech at a company in North Carolina that is not American owned, but owned rather jointly by the Deere Corporation and Hitachi of Japan.

Dana Bash reports.


DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice-over): In a new effort to talk up pocketbook issues, the president zeroed in on a growing concern among Americans: their company pension won't be there when it's time to retire.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My message to corporate America is you need to fulfill your promises. When you saying to a worker this is what they're going to get when they retire, you better put enough money in the account to make sure the worker gets that which you said. BASH: More than 100,000 United Airlines employees will see smaller pensions because the company defaulted on $9 billion of obligations, the biggest of nearly two dozen companies defaulting on pensions over the last three years. The president pushed lawmakers already working on pension reforms to toughen standards.

BUSH: I'm not going to sign a bill that weakens pension funding for the American workers.

BASH: This was just one part of a broader speech aimed at highlighting an improving economy.

BUSH: Our economy has added nearly four and half million news jobs. Americans are buying homes. The economy grew at 4.3 percent last quarter.

BASH: Frustrated, Bush allies say that kind of talk is long overdue. Last week, House Speaker Dennis Hastert and Senate Majority Leader Bill Frist complained privately to top Bush officials public anxiety about the economy is still high because the White House was not taking advantage of good news.

In the latest "TIME" magazine poll, only 29 percent of Americans think economic conditions are good, while 66 say the economy is only fair or poor.

DAVID WINSTON, REPUBLICAN POLLSTER: When people are worried about the economy, they're unsettled as voters. They're not sure what they're looking for in terms of policy. And obviously for an incumbent party that is not a good situation.

BASH: And while they're relieved sky-high gas prices have come down a bit, Republicans fear more anger as winter heating bills come to mount. The government estimates those with natural gas will pay an average of $306 more this winter. Those with oil heat, an average of $325 more.


BASH: And American anxiety about the direction of the economy and the direction of the county is at the highest point of the Bush presidency. Republican strategists say it is because of the Iraq war that really makes up the bulk of that anxiety, but they also hope that if the president can convince the American people that the economy is doing better, their party could gain a little bit -- Lou.

DOBBS: Dana, did the president talk about record trade deficits, record federal budget deficits, flat wages over the course of the past decade, really, but certainly over the course of the past two years? Any discussion of those issues?

BASH: I'll take them one at a time, I guess. Trade, he did talk about, sort of suggested that he understands that it's something that needs to be worked on.

Behind the scenes, the president's aides made clear that they get the fact, particularly with China, that it's -- we're headed towards a $200 billion deficit, and that is -- it's definitely still an issue.

Wages, they contend here that wages are better than people think, although it is probably a statistic that's hard to quarrel with, that wages are lower than they were before.

And general -- forgive me, I can't remember the third part of your question. I think it was on the budget deficit.

DOBBS: Correct.

BASH: The big -- the big thing here at the White House that they are saying over and over again is that the deficit is still big, but they are on track to cut it in half by 2009. And the message the president had today was basically for his fellow Republicans and Democrats, that they need to keep spending low in Congress.

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

BASH: Thank you.

DOBBS: As the president talks up the economy, communist China is working hard trying to replace the United States as the world's preeminent economic and trade power. Today, China made a bold effort to buy influence in France by placing a huge order for commercial aircraft, as if, by coincidence, France stepped up its calls for an end to Europe's arms embargo against China.

Christine Romans reports.


CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): The French and the Chinese trading money and influence. Communist leader Wen Jiabao will buy $10 billion worth of Airbus planes. In return, the French will build a high-tech assembly plant in China, its first ever outside Europe.

And China and France will collaborate on developing a new six-ton helicopter. Plus, France renewed its call to drop a European arms embargo enforced against China, calling that embargo an anachronism. An embargo in effect since the Tiananmen Square massacre of 1989, an embargo France wants to scrap even as Chinese human rights violations and security concerns mount.

FRANK GAFFNEY, CENTER FOR SECURITY POLICY: I'm sorry to say that the French have been willing to sell just about anything to just about anybody as long as they have cash.

ROMANS: And the Chinese have cash, hundreds of billions of dollars from their trade surplus with the United States. France apparently eager for some of that cash itself, some say become a lobbyist for China.

PAUL FREEDENBERG, FMR. UNDER SECRETARY OF COMMERCE: The Chinese are very much interested in acquiring aerospace technology, so they are willing to reward those who are interested in doing manufacturing in China.

ROMANS: An executive of the European Aeronautic Defense and Space Company denied any link between these aerospace deals and France's vigorous appeal to drop the arms embargo and said no military technology would leak to China in that new helicopter development deal.


ROMANS: But security experts scoff at that. The Chinese have been enormously successful in getting sensitive, banned technology any way they can. Military experts say their arms buildup is full of products stolen, pirated or illegally bought, technology that is critical to China's national strategy. And now that national strategy is to buy the technology outright, buy the friends and influence you need to get it.

DOBBS: And, in point of fact, the technology for Airbus, for the joint venture on the helicopters. All of that will then be in China. I wonder how difficult it will be for the French to get that back.

ROMANS: Well, we're hearing that they don't think any sensitive technology is going to be passed. But we know by...

DOBBS: Well, we know how sensitive the French are on such issues.

Christine Romans. Thank you.

Still ahead here, why the boom in defense spending has some accusing defense executives in this country of war profiteering.

And then, a critical report from the 9/11 Commission, who said the U.S. government has failed to adequately prepare for another terror attack. Commission member Slade Gorton my guest here next.

And President Bush's poll numbers at new record lows. Can this administration recover? I'll be talking with two of our nation's most respected presidential historians here coming right up.

Stay with us.


DOBBS: Major developments tonight in the legal case against former House majority leader Tom DeLay. The judge in that case ruled that the DeLay trial will go forward, but the judge threw out the charges of conspiracy in the criminal indictment.

DeLay and his two co-defendants will now be tried on only money laundering charges. The DeLay legal team is hailing today's news as a victory.

Tonight, an interesting piece of political timing. Vice President Dick Cheney is in Houston attending a fund-raiser for DeLay. The vice president sending a clear message that the White House refuses to abandon political allies when in trouble.

Bill Schneider reports.


WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice over): Vice president Cheney is showing up in Texas to help raise money for Tom DeLay's reelection just before a Texas judge decides whether DeLay has to stand trial. Why would Cheney do that?

The White House is not abandoning DeLay. He's carried water for them even at the risk of alienating his fellow conservatives, like a few months ago, when DeLay echoed the White House line that government spending is under control.

DeLay is also a prodigious fund-raiser. According to the Center for Responsive Politics, since 1998, his DeLay's political action committee has contributed about $3.5 million to candidates, nearly all Republicans. President Bush wasted no time condemning representative Duke Cunningham after he pleaded guilty and resigned last week.

BUSH: The idea of a congressman taking money is outrageous.

SCHNEIDER: DeLay has not gun to trial or been convicted. He has stepped down as majority leader temporarily. He sees his indictment as partisan politics.

REP. TOM DELAY, FMR. HOUSE MAJORITY LEADER: This act is the product of a coordinated premeditated campaign of political retribution.

SCHNEIDER: The White House apparently agrees. Cheney showing up to help DeLay sends two messages. The first is loud and clear. This White House does not abandon its friends. The second message is subtle, "We don't expect our friends to abandon us when we're in trouble." Like, for instance, now.


SCHNEIDER: Tonight's event is a fund-raiser. And fund-raisers work best with figures who raise the battle flag on both sides.

John Kerry sent out a fund-raising appeal on behalf of DeLay's Democratic opponent. It's title, "Don't Let Cheney Bail Out DeLay" -- Lou.

DOBBS: It all comes down to the money, doesn't it?

SCHNEIDER: Yes, it always does.

DOBBS: Bill Schneider. Thank you.

Joining me now for more on today's developments in the Tom DeLay case, our senior legal analyst, Jeffrey Toobin.

Jeffrey, first, this has to be very important to Tom DeLay to have that conspiracy charge, at least, thrown out.

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: It's very -- it's very good news for him. It's better legal news than it is political news, because he's still facing a felony count, which means he can't get his job back under the rules of the House as majority leader. But this certainly makes the trial, which will probably be coming up next year, look better for him.

DOBBS: The DeLay legal team wanted this trial to go forward beginning this month. The judge absolutely refused. Is that a matter of law, or is it a matter of some politics in Texas?

TOOBIN: Well, I think this would be very fast under any circumstances to bring a fairly complicated white collar case to trial. But the DeLay legal team feels like they have momentum. This is obviously a big victory for them. So they want to get this thing tried as soon as possible.

They also want to get moved -- moved out of Austin, which is the most liberal part of Austin, in to anywhere else which would be a much more sympathetic jury pool for him.

DOBBS: Their likelihood of doing so?

TOOBIN: Not clear. I don't know. I mean, this has been -- they got a new judge.

DOBBS: Right.

TOOBIN: They've won on that. They've won on getting a conspiracy count taken out. So I think they're on something of a roll, but they haven't gotten their client off.

DOBBS: Texas politics not for the faint-hearted or the lily- livered, I guess.

TOOBIN: Especially in a state where both district attorneys and judges are elected.

DOBBS: Well, it's all part of the legal and political process, at least in Texas.

TOOBIN: Indeed.

DOBBS: Jeffrey Toobin, thank you.

Former members of the 9/11 Commission defended themselves this weekend from charges that they ignored claims made by Able Danger officials. Former 9/11 Commission chairman Tom Kean and vice chairman Lee Hamilton said they studied Able Danger claims extensively and saw no reason to put those claims and charges in the commission's final report.


TOM KEAN, FMR. 9/11 COMMISSION CHAIRMAN: We saw every file. The Pentagon denies it. They say they haven't gotten the information.


KEAN: The White House denies it. Nobody brought the congressional -- investigating any information, nobody gave any information to the 9/11 Commission to back this up. If this is true in any way, it's a monstrous conspiracy, and I haven't seen any evidence to back it up.


DOBBS: Meanwhile, it has been 17 days since Congressman Curt Weldon and more than half of the members of the U.S. House of Representatives sent their Able Danger letter to Defense Secretary Rumsfeld. They're demanding the Pentagon give Able Danger officials permission to testify before Congress.

The secretary of defense has not responded.

Able Danger Army intelligence officials said they identified 9/11 mastermind Mohammed Atta and other 9/11 radical Islamist terrorists more than a year before 9/11, and they say the Pentagon prevented them from sharing the information with the FBI.

Joining me tonight to discuss the latest Able Danger developments is Peter Lance. He is the author of the book Cover Up: What the Government is Hiding About the War on Terror." He has also testified before the 9/11 Commission.

Good have you here.

You said the Able Danger controversy is the last best hope for an honest, open reinvestigation of September 11. Why?

PETER LANCE, AUTHOR, "COVER UP": It's like a six-foot pry bar, Lou. It's the first time people on the political right, like Ollie North, are agreeing that the 9/11 Commission is essentially -- was a whitewash joined by the Jersey Girls, the widows who campaigned for John Kerry.

The truth is that there was a cover-up with the 9/11 Commission. They moved the origin of the 9/11 plot forward several years. Now, that's the most important question.

DOBBS: To 1996?

LANCE: 1996 from 1994. And what the Able Danger information does is corroborate that. That, in fact, there was, according to Lieutenant Colonel Anthony Shaffer and Scott Philpot, that ran the operation, a direct relationship between al Qaeda and the Brooklyn cell of Ramzi Yousef and Sheikh Omar Abdel Rahman.

I contend in both of my books, and I think I've proven, that the World Trade Center bombing conspiracy was directly funded by al Qaeda, and that Yousef himself was the architect of the second attack, the 9/11 plot, which was carried out by his uncle. So, in pushing the plot forward two years, investigators like Dietrich Snell, who himself should have been a witness before the commission, what they did was they distorted the truth between when the plot started. Therefore, you don't know when it starts, you can't hold accountable the intelligence agencies for failing to stop it.

DOBBS: You can't hold them accountable, but you can't also hold what would be effectively the Bush administration, Bush I, the Clinton administration, and the current Bush presidency accountable either, can you?

LANCE: No, exactly. And I think that -- I had a source inside the commission, I met with him every single week, Lou, from -- from the fall of '03 into the spring of '04. He told me they were cherry- picking evidence on both sides of the aisle. They had agreed -- and these are Democrats and Republicans -- prior to going forward with the commission, had agreed to limit the investigation to the last few years, from '96 forward.

Where as I've shown in my two books that the FBI's New York office, the bin Laden office of origin, had the al Qaeda cell, that did the first bombing, on their radar as early as the summer of '89, when Bush 41 was in the White House.

Then, they could have stopped Ramzi Yousef. I proved this in my book. In the fall of '92, going into early '93, just when Clinton was taking over, prior to the first bombing.

DOBBS: To narrow this just a bit here, Peter, the claim by Able Danger officials, Shaffer and Philpot, principally. That they had that information and were denied the opportunity to share that information with the FBI, the CIA, or other government agencies.

Narrowing it to that specific charge, much has been made of this broadcast at least, by other 9/11 Commission members that they never saw the chart, the so-called chart outlining this. They had no physical evidence. How do you respond to their remarks?

LANCE: The chart is a red herring, Lou. I presented evidence to Dietrich Snell when I testified in March 15th of '04 of a link chart. The link chart was made by the Defense Intelligence Analysis Center, showing a direct connection between al Qaeda and the New York cell of the blind sheikh.

Whether or not there was a later link chart that had Atta's picture is irrelevant. There wasn't an -- as Governor Kean said, all the evidence turned over. There were two briefcases. Tony Shaffer said that's one-twentieth of the evidence that they had available. So how can the 9/11 Commission have made an effective evaluation on the scope of that limited evidence?

DOBBS: We talk about one-tenth, we should also put that in some context, because the Able Danger Pentagon intelligence unit had 2.4 terabytes, 2,400 gigabytes, of information stored that they destroyed. The amount of information that they had accumulated was extraordinary by any measure. LANCE: Equal to one quarter of the books in the Library of Congress. And what's amazing is that this system could work today, Lou. It's a very inexpensive system that basically calls the Internet.

And Congressman Weldon, who I really commend for pushing this, has proposed that for $50 million they reinitiate this program at a critical time. The FBI has not reformed. The 9/11 Commission clearly -- you know, they're a little disingenuous today saying we're at great risk when they told half of the story in their report.

DOBBS: Peter Lance, Congressman Weldon, who, with whom -- I agree with you absolutely, he is a man to be greatly credited for trying to get to the truth here.

What do you think the odds are that the secretary of defense will respond to more than half of the members of the U.S. Congress demanding hearings on Able Danger?

LANCE: Well, it all comes down to what Monica Gabriel said today about the 9/11 report, one of the widows. There has to be public outrage. The people have to finally say, "we are at risk. They are going to hit us again, and there hasn't been sufficient reform."

The people who've got to get into the streets, they've got to contact Congress, in order to get this new investigation. But Able Danger is the last best hope of prying open that investigation.

DOBBS: Peter Lance, thanks for being here.

LANCE: Thank you.

DOBBS: Former 9/11 Commission member Slade Gorton will be joining me here in just a few minutes. We'll be talking about Able Danger, the charges and the commission's viewpoint.

He'll also be talking about the commission's final troubling report on the failure to make this country safe against radical Islamist terrorism. Also ahead here tonight, charges some executives of the United States, defense contractors, are making big bucks on the war. Accusations, as well as just outright profiteering. That special report is coming up next

And then, rating President Bush. Two of the country's most distinguished presidential historians join me here with two very different views on the Bush presidency, its record, and its prospects. Stay with us.


DOBBS: The increase in defense and security spending in recent years has been nothing less than a boon for defense contractors, big and small. Excessive salaries for defense executives and excessive perks for at least one current lawmaker are the result. Critics call it nothing less than war profiteering. Lisa Sylvester reports.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): This yacht was former Congressman Randy Duke Cunningham's Washington home, one perk provided by defense contractor MZM. Cunningham admitted he accepted $2.5 million in bribes. The case sheds light on the cozy relationship between defense contractors and Washington insiders.

KEITH ASHDOWN, TAXPAYERS FOR COMMON SENSE: This is a case where a rookie firm, not ready for prime-time, got a no bid contract. And nobody knew why, at that point.

SYLVESTER: In a second unrelated case, newspapers had a field day, reporting the $10 million Bat Mitzvah for the daughter of defense contractor David Brooks. The party featured performances from among others, Aerosmith and 50 Cent. Brooks is the head of DHB Industries, which makes body armor for U.S. troops. The Marines recalled more than 5,000 vests after safety questions were raised. But Brooks has still done very well with a $3 million salary in 2004 and tens of millions of dollars in stock options.

SARAH ANDERSON, INSTITUTE FOR POLICY STUDIES: He is spending that, flaunting it, in ways that I think most people see as not only tasteless, but really giving a bad message to the troops on the front lines.

SYLVESTER: A spokesman for DHB says "the $10 million figure for the party is greatly exaggerated." The company's profit margin over the last three years is 28 percent. "Any suggestion that this is excessive is unjustifiable and inaccurate."

But many say the Cunningham and Brooks cases, although though very different, both highlight excess. They show how the defense contracting industry has become a high-stakes business since 9/11. And congressional oversight has lagged.

LARRY NOBLE, CENTER FOR RESPONSIVE POLITICS: This money is coming from somewhere. And where is it coming from? It's coming from the taxpayers. Because again, when you're dealing with defense contractors, and dealing with defense, who's paying for it? The Treasury is paying for it. Where does the Treasury get its money? It gets its money from us, from our taxes.


SYLVESTER: And no one doubts that our U.S. troops should get everything they need to fight the war in Iraq. But the concern is that taxpayers are being fleeced. That many of the contracts are done in secret, no bid. And no one's really keeping an accounting of how the money is being spent. And I should mention that we called MZM, they did not return our calls, and we were not able to reach Duke Cunningham. Lou?

DOBBS: Lisa Sylvester. Troubling. Thank you very much.

Still ahead here, failing grades for the government from the 9/11 Commission. I'll be talking with commission member Slade Gorton here next.

Also, grading the Bush administration. Two of the nation's leading presidential historians join me here. Next, please be sure to watch that, coming right up. Stay with us.


DOBBS: Former 9/11 Commission members tonight are blasting Congress and the White House for already forgetting key lessons in the war against radical Islamist terrorism and specific recommendations by the 9/11 Commission.

The members say a mere four years after the 9/11 attacks, our nation is still unable to defend itself adequately against another terrorist attack.

The commission is giving an F to the government on homeland security for cities most at risk. An F for improving radio communications for emergency response personnel, and an F for the recommendation that airline passenger pre-screening be put in place.

And it gave the government only one A, an A minus, for White House efforts to curb terrorist financing.

Former Senator Slade Gorton, who served on the 9/11 Commission, joins us tonight from Washington.

Slade, it's good to have you here.

This is like a lousy report card, but when we're talking about the safety of American citizens, it is frightening. It is dismal. It's disgusting, and how in the world can we tolerate it?

SLADE GORTON, FMR. 9/11 COMM. MEMBER: It is a terrible report card. And one of the reasons we gave it today is that at least two of the Fs can be made into passing grades in the course of the next two weeks.

Congress is going to vote on whether or not to stop distributing its money to states and local governments on a pure pork barrel basis and start doing it on the basis of risk. That vote is going to take place in the course of the next week.

Congress is going to vote in the course of the next week or ten days on whether or not actually to turn over the kind of spectrum that our first responders, our police and firefighters, need.

Unfortunately, the bill they're going to vote on doesn't make that transfer take place until the year 2009, which is a lot too long but at least it's better than nothing.

And but that F that they got from the point of view of aircraft screening, we still haven't gotten the situation in which the Transportation Security Administration knows the names of the very people we think are potential terrorists and keeps them off aircraft. That's inexcusable. DOBBS: It's inexcusable. It is unfortunately also part of a broad pattern. When we look at all that the commission did, in terms of looking at the security screenings for our ports, airports, for border protection. I mean, this is a sad joke.

GORTON: Lou, probably, from the point of view of danger to the American people, the most serious is not the one that creates the greatest risk. It's the one that creates the greatest danger.

And that's the possibility of terrorists getting ahold of a nuke, and setting it off in one of our cities, or perhaps just to a slightly lesser extent some kind of chemical or biological weapon.

We have a program to try to buy up loose nukes in the Soviet Union and other places, but that program still has 14 years to run. That's not the kind of attention we need paid to an extreme danger to the American people.

DOBBS: Able Danger, you know the allegations, the fact that the commission ignored it, that Dietrich Snell should have paid more attention to it and provided those reports. How do you react to these charges?

GORTON: Very simply, there's a puff of smoke and there's nothing behind the smoke. You know, it all started, Lou, with Congressman Weldon, who came up with a very specific statement that two weeks after 9/11, he gave a chart showing Mohammed Atta as a part of a Brooklyn plot to our deputy national security Adviser.

And it didn't happen. He never gave it to the FBI. He never gave it to us. He never gave it to anyone.

DOBBS: I'm not worried about the chart. I'm not worried about the chart.

GORTON: Oh, but I'm worried about the chart.

DOBBS: OK. You worry about the chart.

Let me tell you what I'm worried about. I'm worried that in point of fact, a military intelligence unit called Able Danger in the Pentagon has been prevented from telling the U.S. Congress what it knows. Doesn't that disturb you as well?

GORTON: Oh, no.

If you are, as I am, in favor of making this public, in favor of having everyone testify who knows anything about it, of course, you are right. The Department of Defense should not prevent people from witnessing.

DOBBS: From your lips to Donald Rumsfeld's ears, Senator Gorton.

GORTON: All I'm saying in that respect is when they do testify, it will all go away in a puff of smoke.

DOBBS: Let the chips fall where they may. But the public has a right to know, I'm glad we agree on that.

GORTON: That's right.

DOBBS: And Slade Gorton, thank you for your service and that of the rest of the members of the 9/11 Commission. Hopefully, those recommendations will be heeded.

Good to have you here, Slade Gorton.

A reminder now to vote in our poll. Do you have confidence in this Congress and this White House to take the necessary steps to make this country a safer place to live? Yes or no. Please cast your vote at The results coming right up.

Still ahead, problems for the Bush administration. Will this administration be a success or a failure? I'll be talking with two highly respected presidential historians, who have a different conclusion on those questions. That's next. Stay with us.


DOBBS: President Bush's standing with the American people remains at an all-time low despite intense efforts by the White House over the past month to revive the president's political fortunes.

A new "Time Magazine" poll shows Bush's disapproval rate at 53 percent. That's even higher than it was in September after Hurricane Katrina, and the failure of the government to respond. Sixty percent of those polled in the "Time" survey say they'll choose a president completely different from George W. Bush in 2008.

Joining me two presidential historians with two very different views of this presidency and the legacy it is creating. Richard Reeves, whose new book, "President Reagan: The Triumph of Imagination" will be out next month. Good to have you here, Richard.


DOBBS: And James Taranto, the editor of "The Wall Street Journal's" and the co-author of the book "Presidential Leadership: Rating the Best and the Worst at the White House." Good to have you here, James.


DOBBS: Let's begin with these are abysmal numbers by any standard.

TARANTO: Well sure, but you can't necessarily go by public opinion polls in judging a president is going to do in history. Warren Harding was terrifically popular when he died in office in 1923, and he's generally considered to be among the worst presidents of the 20th century. On the other hand, Harry Truman had very low ratings when he left office in 1953, and he's generally regarded as near-great. So history takes a longer view. DOBBS: Well, in the shorter view, for folks like me, who want to look at what's happening right now, Richard Reeves, are these numbers really that important, or is it more about policy?

REEVES: No, we're together on that. I don't think numbers -- the numbers are important, in terms of how much power Bush has at this point, and how much flexibility. But they're not going to determine whether, how he'll be viewed in history, which we will disagree on. I think he will be viewed very badly in history, but not because of these poll numbers.

DOBBS: What will be the reason, in your judgment?

REEVES: The reason will be, he took over a country that was the only superpower. Was in many, many ways the most admired nation in the world, and when he leaves, it won't be.

DOBBS: James, your thoughts?

TARANTO: Well, I think the only honest answer to the question of how President Bush will be viewed in history is, we don't know. History has yet to be written. History is the study of the past, and when we talk about -- we're talking about the future, based on our opinions of the president. But he may well be viewed as a great president. It's all going to hinge on the success of Iraq.

DOBBS: On the success of Iraq, but Richard Reeves makes an interesting point. The world's only superpower, yet through trade policies, through tax policies, the United States coffers, its Treasury is being depleted.

The war against terrorism, as well. Look at it, if you will, look to any president in history who's presided over this kind of trend, in which the Treasury of the United States is being expended without apparent achievement?

TARANTO: Well, FDR presided over wartime and ran huge deficits.

DOBBS: No, no, no, I didn't say that. I said, a war that the secretary of defense tells us, cannot be measured in terms of either American lives lost, or the number of terrorist incidents eliminated.

How does one justify that kind of Treasury; $200 billion a year in a war in which we are told there is no way to measure success or failure?

TARANTO: Well, I think we'll know how to measure success or failure as events unfold. I mean, we do seem to have brought some form of nation democracy to Iraq, and the strategy here is to transform the political culture of that part of the world, that brought violence to our shores, four years ago. We'll see if it succeeds.

REEVES: Well, we have seen some of it in the past. I mean, we're repeating 19th century British colonial history. And we saw what it did to them, and it's doing the same thing to us. I mean, Bush's problem is the general decline of the United States on his watch.

DOBBS: That's an interesting point. But as we look at this economy, 3.8 percent GDP growth. We're looking at a stock market, which it is not setting records, it's still positive and firm. We're looking at huge corporate profits.

Basically four million, little over four million jobs created over the course of this presidency, despite nearly three years in which this president couldn't catch a break on anything, in terms of the economy. There are some extraordinary positives here as well.

REEVES: I think that those numbers represent something in the past, a different kind of economy. You don't -- despite the fact the numbers are certainly good enough, historically, to make him look like a good economic president.

If you go out and talk to people and words like pension and security begin to come up, people no longer see the economy in terms of those numbers. The unemployment number may be good, but people are wondering what kind of life they'll be living ten years from now.

TARANTO: Well, but a feeling of insecurity is to be expected at a time of change. It doesn't necessarily mean that we're in decline. Remember in the 1980s, we kept hearing Japan was going to take over the world. America was in decline. It didn't happen. I'm not sure it's going to happen now.

DOBBS: Do you see a similarity between the late 1980s and ultimately what became the bust of 1990 in Japan, and what we're experiencing now? Because you said something interesting about this superpower in decline. What do you think is the strongest evidence of that fact?

REEVES: I think the strongest evidence is when you're outside the United States and people use the word superpower, about half the time now they're talking about China.

DOBBS: You get the last word, James Taranto?

TARANTO: I don't know, the French still call us a hyperpower. I think we're still the only superpower and if we weren't, there wouldn't be so much anti-Americanism against the world. They resent us for us for our power.

DOBBS: Why would I take greater assurance from your words if you had not just suggested that they come from the French? James Taranto, Richard Reeves. We thank you both for being here.

REEVES: Thank you.

DOBBS: Take care.

Still ahead, a tribute to our troops, some of the men and women who worked so hard in service to this country. We'll be hearing from some of them next. Stay with us.


DOBBS: Now the results of our poll, 98 percent of you responded saying you are not confident that this Congress and this White House will take the necessary steps to make this country a safer place.

And finally tonight, a deserved tribute, of course, to our troops. More than 200,000 of our troops around the world will be spending this holiday season away from home. Beginning tonight and every night on this broadcast, we want to share some thoughts from just a few of the brave men and women who serve this country so well.


UNIDENTIFIED MALE: Hi, I'm Lieutenant Patrick Hatchison (ph), stationed here in Iraq. I just want to say happy holidays to my beautiful wife Chrissy and my baby daughter Ella in Baltimore, Maryland. I miss you and I love you very much.

UNIDENTIFIED MALE: Hi, I'm Master Sergeant Robin Krieger (ph). I'd like to wish Anne Marie and Mark Wheeler (ph) and my beautiful granddaughter Ellie (ph) a merry Christmas from Taji (ph). Wish I could be with you. Have a good one.

UNIDENTIFIED MALE: Hi, this is Lieutenant Commander Keith Mayberry (ph), stationed here in Djibouti, Africa. With a comfort detachment EMF, I would like to wish my family back in Rockville, Maryland, merry Christmas to my wife Amy, my children, Michael, Jimmy, Nicky and Brian. Merry Christmas, guys. I love you and miss you.

UNIDENTIFIED MALE: Hi, this is Commander Rob Douglas (ph) from Kabul, Afghanistan. Wishing my wife, Sheila and my son Jeremy in Herndon, Virginia, a happy New Year and a wonderful Christmas. I love you and miss you.

UNIDENTIFIED MALE: Hello, this is Lieutenant Colonel Paul R. Bassler (ph) here in Kuwait. I'd like to say merry Christmas and happy New Year to my family and friends back in Reading, Pennsylvania.


DOBBS: To all of our troops and your families, we wish you the very best merry Christmas and happy holidays. And most of all, we thank you for your service. That's our show for tonight. Thanks for being with us. Please be here tomorrow when our guests will include the U.S. ambassador to the United Nations, John Bolton. And James Gilchrist, co-founder of the Minuteman project and candidate for the U.S. Congress. Please be with us. For all of us here, thanks for joining us tonight. Good night from New York. THE SITUATION ROOM begins right now with Wolf Blitzer -- Wolf.


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