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LOU DOBBS TONIGHT

Deadly Day in Iraq; Selling the War; Critics Blast Bush Recess Appointment of Julie Meyers; Radio Station That Helps People Dodge Immigration Officials May Be Shut Down; Alabama Database May Help Track Illegals; George Mitchell Interview; Wal-Mart May Enter Banking Business; Sanchez Says Iraq May Break Out In Civil War

Aired January 5, 2006 - 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, one of the deadliest days of violence in Iraq in three years. And new fears that Iraq is plunging toward a bloody civil war. We'll be live in Baghdad.

President Bush today launched a new push to sell his strategy for the war in Iraq. We'll tell you how President Bush is trying to reach out to some of his strongest critics.

Israeli Prime Minister Ariel Sharon tonight is fighting for his life. Hopes for Israeli-Palestinian peace at risk. Former U.S. peace envoy George Mitchell joins us.

And a new program to compile information on illegal aliens in the state of Alabama has sparked a storm of protests from groups that say it's OK to break U.S. law.

And Wal-Mart wants to open banks in your neighborhood. Critics say middle class Americans will be paying a high price if it does so. One of those critics is Congressman Barney Frank. He's our guest here tonight.

We begin in Iraq, where five American troops and more than 120 Iraqis were killed today in the worst violence in four months. The wave of deadly bombings comes three weeks after Iraqi elections that U.S. officials had hoped would lead to a reduction in insurgent attacks. These bombings could also shatter hopes the United States may soon be able to withdraw large numbers of our troops.

Jennifer Eccleston reports from Baghdad on today's explosion of violence -- Jennifer.

JENNIFER ECCLESTON, CNN CORRESPONDENT: Lou, January already proving to be a deadly month for Iraqi civilians and American forces. A string of attacks across central and southern Iraq this day.

The U.S. military announced the death of five soldiers after an IED, an improvised explosive device, hit their patrol in Baghdad. But it's the Iraqi civilians bearing the brunt of today's bloodshed.

In the Sunni stronghold of Ramadi, in western Iraq, a suicide bomber detonated an explosives vest during a crowded police recruitment drive. Iraqi police put the number of dead at 80, with over 70 wounded.

And also today, further south, in the holy city of Karbala, another suicide bomber detonated an explosives vest in the pedestrian square between two revered shrines in Shia Islam. Police put the death there at 48, with 82 wounded.

Now, that death toll is so high due to the large number of pilgrims in this square this Thursday. Thursday, of course, is the beginning of the weekend here and the day before the Muslim holy day of prayer.

Now, today's insurgent strikes both in Karbala and Ramadi, both at events which are police by Iraqi forces, are a vivid example of the great lengths security forces still have to go in order to keep the Iraqi people safe -- Lou.

DOBBS: Jennifer, thank you very much.

Jennifer Eccleston from Baghdad.

Despite the escalating violence in Iraq, President Bush today insisted the United States is making what he called good progress. President Bush made those comments after meeting with a long list of former secretaries of state and defense from both Republican and Democratic administrations.

Dana Bash reports from the White House.

(BEGIN VIDEOTAPE)

DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice over): Around the president's table, more than a dozen secretaries of state and defense who advised his predecessors in times of war and peace. Some you may not expect a president critics describe as isolated to hear from.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Not everybody around this table agree with my decision to go into Iraq, and I fully understand that.

BASH: That was the point of the hour-long meeting, disarm critics by reaching out to them.

BUSH: We take to heart the advice. We appreciate your experience and we appreciate...

BASH: On the guest list, Democrats fiercely critical of the foreign policy, like Johnson Pentagon chief Robert McNamara, who directed the Vietnam debacle he openly regrets and some compare to Iraq, and Clinton's secretary of state, Madeleine Albright, who said she gave the president an idea to get more crucial help from Iraq's reluctant neighbors.

MADELEINE ALBRIGHT, FMR. SECRETARY OF STATE: Creating a contact group of regional powers who might be helpful in trying to resolve the issue is something that we did in the Balkans. It's not easy, but it's worth doing.

BASH: Other suggestions ranged from finding better battle plans against insurgents to still better communication from the president. Something veteran Republican Lawrence Eagleburger described in a colorful report.

LAWRENCE EAGLEBURGER, FMR. SECRETARY OF STATE: The thing I thought was most interesting was, it is clear the president has decided -- and for all of you who don't appreciate smoking, you can jump in the lake. But I think the president clearly has decided that he's got to be more open.

BASH: But yet again, a major Bush effort to reshape public opinion about Iraq was overshadowed by violent reality, the bloodiest day by far since elections last month. More than 130 people killed, including five U.S. soldiers by a roadside bomb, and some 80 Iraqis at a police recruitment center in Ramadi.

FRANK CARLUCCI, FMR. SECRETARY OF DEFENSE: Whether people agreed with the decision to go in or not, nobody really feels that we ought to fail at this point. We need to keep pushing ahead.

BASH: The White House took heart in the fact that even more critics at the high-level meeting do not want the president to withdraw troops too soon.

(END VIDEOTAPE)

BASH: And participants in the unusual meeting here say that the president heard things he liked and things he didn't like, but he took notes on many of the suggestions he got. The open question from Madeleine Albright and others here is whether he'll actually follow up on the advice he got and whether in the future he'll come back and ask for more -- Lou.

DOBBS: And the fact is, President Bush has, for the past month, broken with the bubble approach, if you will, and is actually talking to groups that have not been heavily screened by the White House and others. Is this an approach we're going to see this president take in the days and weeks ahead?

BASH: They say that this is exactly the kind of thing that they learned, a lesson that they learned from 2005, that the president perhaps did appear to be more -- too isolated, that he did appear, as you say, to be in too much of a bubble, and that he does need to hear and engage with people like what you saw today outside of the inner circle, people who are with him day in and day out, both from Democrats and Republicans.

This is, as you say, very much like we saw at the end of December for members of Congress, both Democrats and Republicans. They say that they hope to continue this. We'll see -- Lou.

DOBBS: Dana Bash from the White House.

Thank you, Dana. With Congress out of session, President Bush has appointed Julie Meyers to head up the U.S. Immigration and Customs Enforcement Agency. Meyers is a well-connected member of the Washington ruling elite, with close family ties to the Bush administration, but she has virtually no experience in dealing with our nation's border emergency. Her dead- of-night appointment shows once again that political connections can put almost anyone on the inside track to an inside job in Washington.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice over): Julie Meyers is a 36-year-old attorney who has held a number of key government positions, but critics say she does not have the experience to head up the nation's second largest law enforcement agency. At her most significant job at the Commerce Department, she had 170 employees under her. At Immigration and Customs Enforcement, she will head 20,000 employees.

Her budget at Commerce, $25 million. At ICE, $4 billion.

BOB WILLIAMS, CENTER FOR PUBLIC INTEGRITY: This wouldn't happen in the private sector because people will be far too concerned about it. It's, you know, only in government this sort of thing can happen.

SYLVESTER: Democrats have questioned her credentials.

SEN. FRANK LAUTENBERG (D), NEW JERSEY: Her answers didn't give us any confidence that she had either the experience or knowledge to take on this kind of an assignment.

SYLVESTER: And so have conservatives. The "National Review" ran an editorial saying the appointment "smacks of cronyism."

Julie Meyers is the niece of Richard Meyers, former chair of the Joint Chiefs of Staff. She is married to John Wood. Wood is Homeland Secretary Michael Chertoff's chief of staff. She will report to Chertoff, who is her former boss.

The Department of Homeland Security defends Meyers, pointing to her resume handling money laundering and other financial case. The agency says her experience will help crack down on crime syndicates bringing in illegal aliens.

"When you understand the ICE mission, she is an extraordinarily well-suited candidate for this position."

But agents on the ground are not convinced.

TJ BONNER, NATIONAL BORDER PATROL COUNCIL: I have never seen morale any lower than it is now. And this certainly can't help, having someone come in who has less experience with immigration than a first-year trainee.

(END VIDEOTAPE) SYLVESTER: DHS says that marital or family connections have no bearing on Meyers' appointment, but perception goes a long way. We all remember another well-connected political appointee, FEMA's Michael Brown. After his credentials were tested, he is now out of the government -- Lou.

DOBBS: I'm sorry, Lisa, who was it who said her connections have nothing to do with her appointment?

SYLVESTER: It was actually Ross Knocke (ph). He's one of the spokesmen at DHS.

DOBBS: Yes.

SYLVESTER: And what he was -- the point that he's trying to make is that she has this experience fighting financial crimes, and he says that will translate over well to her new job.

DOBBS: Someone should perhaps put the gentleman on a lie detector, because if he did that with a straight face, it's remarkable. Cronyism is straightforwardly cronyism.

Thank you for the report, Lisa.

Lisa Sylvester from Washington.

Senate Minority Leader Harry Reid is calling for the resignation of Homeland Security Secretary Michael Chertoff. In a dispute over federal grants for anti-terrorist measures, Senator Reid, who represents, of course, Nevada, is furious that Homeland Security Chertoff has dropped Las Vegas from a list of cities eligible to receive anti-terror funds. Senator Reid said, "Anyone who can't see that Las Vegas is a high-risk area doesn't deserve to serve in a position like that."

Our nation's lawmakers were hard at work once again today giving back tainted campaign money from lobbyist Jack Abramoff and his clients. Since Abramoff's guilty pleas, many of our nation's most powerful lawmakers have quickly tried to distance themselves from what is a growing, widening scandal.

Those giving back Abramoff-related cash so far include the current House majority leader, Roy Blunt, former House majority leader Tom DeLay, Senate Majority Leader Bill Frist, House Speaker Dennis Hastert, Democratic Senator Hillary Rodham Clinton, Senate Minority Whip Dick Durbin. Seventeen Senate Republicans have announced Abramoff-related give-backs so far, as well as nine Senate Democrats.

In the House it gets better. Thirty-five Republicans and seven Democrats are handing back their cash.

One Republican governor also giving back Abramoff-related money, Robert Ehrlich, Jr. of Maryland. And there are still some lawmakers who have decided against giving back their Abramoff-related donations altogether, including none other than Senate Minority Leader Senator Harry Reid. He received some $61,000 worth of Abramoff-related money. Turning now to the crisis in Israel over the hospitalization of Prime Minister Ariel Sharon after he suffered a massive stroke, Sharon remains in the hospital in Jerusalem. He is in critical condition tonight. Doctors say that Sharon is on life support after his surgery and he will be in a medically-induced coma for at least another 24 hours.

Sharon's grave illness has created a dangerous political vacuum in Israel. Sharon is Israel's most popular politician, and his stroke came less than three months before the Israelis hold elections.

Coming up here in the program, I'll be talking about the geopolitical impact of Sharon's illness with the former U.S. peace envoy, former Senate majority leader, George Mitchell.

Also tonight, new developments in the fight to save the life of the sole survivor of the Sago Mine disaster in West Virginia.

And a victory for common sense and the rising controversy over school vouchers and support for public education. We'll have that story for you.

And drastic steps in in this country in an effort to prevent an outbreak of the deadly bird flu.

We'll have that special report and a great deal more still ahead right here.

(COMMERCIAL BREAK)

DOBBS: Tonight, the sole survivor of the Sago coal mine disaster in West Virginia has been transferred to a hospital in Pittsburgh for specialized medical treatment. Doctors tonight are concerned that the survivor, Randal McCloy, may have suffered brain damage.

Meanwhile, family members of the 12 miners who died are struggling to understand how the disaster occurred and why the rescue attempt failed.

Brian Todd has the report from Tallmansville, West Virginia -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Lou, there are still some complications in trying to find those answers for the families. A short time ago, we spoke to federal and state mining officials, as well as officials from the International Coal Group, the company that owns the Sago Mine here.

They tell us that the investigation will begin in earnest next week, and that will include interviews of personnel involved in this tragedy, as well as inspections of equipment, but also, they have to re-ventilate the mine itself to determine the ignition source of that explosion this week and where the miners were at time that that explosion occurred.

Now, back to Randal McCloy. As Lou mentioned, he was being moved this afternoon. We were told just a few moments ago that he has arrived in Pittsburgh at Allegheny Medical Center there.

A short time ago, a doctor at the West Virginia University Medical Center gave an update on Randal McCloy's condition.

(BEGIN VIDEO CLIP)

DR. JOHN PRESCOTT, DEAN OF WEST VIRGINIA UNIVERSITY SCHOOL OF MEDICINE: In some of the body functions we've seen some improvement in his pulmonary functions and the way his lungs are working. We've seen improvement also with the way that his kidneys are functioning. Some improvement with his heart functioning, and some improvement with his liver.

We have not seen much of a change in his neurological status, and that's been something that we are closely monitoring also.

(END VIDEO CLIP)

TODD: That neurological status is key here, because that is the reason he is being moved to Pittsburgh. He is going to be undergoing what they call hyperbaric oxygen therapy, and that is said by doctors to help his neurological recovery.

We won't have some answers on that for a little while. But that Pittsburgh hospital, Allegheny Medical Center, is the closest medical center to this area that has the capacity to give him that hyperbaric oxygen therapy -- Lou.

DOBBS: Brian Todd. Thank you very much.

A U.S. citizen accused of terrorism charges tonight being transferred from military to civilian custody. The terrorist suspect, Jose Padilla, was escorted to court in Miami to face a U.S. magistrate.

Padilla has been held in a military brig in Charleston, South Carolina, now for almost four years. Padilla was indicted in November on charges of conspiring to murder American citizens and providing material support to terrorists. The Justice Department wants Padilla in civilian custody so that he can face trial.

Senate Democrats today have announced new plans to hold up the confirmation process for Supreme Court justice nominee Judge Samuel Alito. Democrats say they plan to delay a Senate Judiciary Committee vote on Alito's nomination for at least a full week.

Senate Minority Leader Harry Reid says his party has every right to hold up that committee vote. And Senator Reid says the Democratic leadership is ready to go down that road because of its opposition to Alito's nomination.

Confirmation hearings for Judge Alito are set to begin Monday. The Senate leadership had been hoping for a full Senate vote by the 20th of this month. President Bush nominated Judge Alito way back on October 31, now 67 days ago. God bless the Supreme Court of the state of Florida, all rise. The high court today struck down our nation's only statewide school voucher program, declaring it unconstitutional.

The high court ruled 5-2 that those school vouchers undermine public education because they finance a private alternative to public schools. An attorney who challenged the program called the decision a victory for every public school in America.

Coming up tomorrow on this broadcast, I'll be talking with Ron Meyer and Barry Richard, the attorneys representing both sides of the Florida school voucher public school case. That's tomorrow night here.

And we'd like to know your thoughts on the decision by the Florida high court on school vouchers and public education. Do you agree with the Florida Supreme Court that school vouchers undermine public education and violate that state's requirement to provide a uniform system of free publication?

Cast your vote at LouDobbs.com. We'll have the results coming up later in the broadcast.

President Bush almost missed the last thrilling seconds of the Texas Longhorns victory the at the Rose Bowl last night. President Bush apparently fell asleep during the game. The president says he woke up in time to catch the dramatic finale, and dramatic it was.

Longhorn quarterback Vince Young scrambling for a touchdown with 19 seconds left on the clock. The president, a rabid Longhorns fan, waited until 6:00 this morning to congratulate Longhorns coach Mack Brown. This time it was Brown who was fast asleep.

Still ahead here, how one U.S. radio station is helping illegal aliens stay a step ahead of the law, and what one Texas attorney is trying to do about it. I'll be talking with that attorney here tonight.

And the fight against the deadly bird flu. Emergency steps being taken tonight to stop this disease from hitting the United States.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: In the United States tonight, new emergency measures are being taken to protect Americans from bird flu. The new steps are being announced as the bird flu threat is spreading around the globe and in Turkey tonight, where two have died from the deadliest strain of that disease.

Kitty Pilgrim has the report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice over): Ninety percent of the U.S. poultry industry has just signed up for avian flu testing before their chickens come to market. That's nine billion birds a year.

RICHARD LOBB, NATIONAL CHICKEN COUNCIL: Sporadically, we'll have small outbreaks of milder forms of the disease, and so we're trying to head off any such outbreaks and, of course, to keep the Asian bird flu out of the United States.

PILGRIM: The mild form of the disease hit Maryland, Delaware, and Texas in 2004. Farms had to be quarantined and chickens killed.

But the worry now is the deadly Asian variety of bird flu could come to the states through migratory birds. It has been found in birds that flew from China to Russia, and Russia reported it in two dozen wild bird species so far. Those birds potentially could come the 55-mile distance across the Bering Strait to Alaska. The U.S. government wildlife monitors are already testing wild birds there.

Meanwhile, human case of bird flu caught from chickens are skyrocketing in Asia and Europe. Turkey has reported a new outbreak in humans. Two deaths, but dozens of people are critically ill.

DR. HENRY NIMAN, RECOMBINOMICS: I will not be surprised if the number of cases in Turkey really skyrocket within the next even week or two. I think the world hasn't really realized that most of these patients that have been admitted almost certainly have H5N1. So officially, there is only three confirmed cases and two deaths. But I think those numbers will go up tenfold, probably in the next three or four days.

(END VIDEOTAPE)

PILGRIM: Now, most countries like Turkey quickly report their outbreaks in birds and humans. But this past weekend, the head of the World Health Organization in Asia said China has so far refused to share any of the virus samples from the more than 30 outbreaks it had last year -- Lou.

DOBBS: The expectation that those numbers will rise tenfold in Turkey, that -- hat's alarming.

PILGRIM: It certainly is. It's one of the biggest outbreaks we've seen so far. It's quite alarming.

DOBBS: Kitty, thank you very much.

Kitty Pilgrim.

Coming up next here, Mexico's hypocrisy over our border security and the right of our U.S. border patrol agents to defend themselves. We'll have the story and one sheriff's plan to fight illegal immigration. We'll have a special report.

And Wal-Mart wants to open big-box banks all across the country. Congressman Barney Frank will tell us why middle class Americans will be paying a high price if big-box Wal-Mart is allowed to do it. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Still ahead here, one man's crusade to stop a radio station in Texas from helping illegal aliens avoid the law.

But first, let's take a look at this hour's news headlines.

You're looking live at pictures of Hadassah hospital in Jerusalem where the outlook remains grim at this hour for Israeli Prime Minister Ariel Sharon. Sharon remains in critical condition and on life support after suffering a massive stroke. Doctors say chances of his recovery are less than 50-50.

The United States will soon take custody of one of Britain's most prominent radical Islamist terrorists. A British judge today ruled Haroon Rashid Aswat can be extradited to the United States. Aswat has been linked to last year's subway bombings in London. He's wanted in this country for allegedly trying to set up a terrorist training camp in Oregon.

And new wildfires tonight are breaking out in drought-stricken Texas and Oklahoma. Three new wildfires are burning out of control in Texas. More than 300 acres now in flames. Two dozen grass fires burning in Oklahoma.

And tonight, the government of Mexico once again displaying stunning if not surprising hypocrisy. Mexican officials are criticizing the United States over the shooting death of an illegal alien smuggler who attacked a U.S. border patrol agent. At the same time, the government of Mexico has refused to do anything about the escalating violence from Mexican criminals against U.S. law enforcement officers.

Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice over): It's all too common along the heavily-guarded border near San Diego. An illegal alien climbs a makeshift ladder like this one, then throws large rocks at a border patrol agent. The tactic is designed to distract agents so a larger group of illegal aliens can cross elsewhere. But the assaults are potentially deadly, and last weekend a border patrol agent defended himself against an 18-year-old Mexican national.

LT. KEVIN ROONEY, SAN DIEGO POLICE DEPT.: The agent then pulled out his duty weapon, and as the male threw the rocks at him, the agent fired back.

WIAN: The alien smuggler fled back into Tijuana, where he later died. Now the Mexican government is using the shooting to pressure the United States to drop its plans for beefed-up border security.

LUIS CABRERA, MEXICAN CONSUL GENERAL: We condemn the use force. We condemn this incident.

VICENTE FOX, MEXICAN PRESIDENT (through translator): We have already requested to the proper channels a complete and total explanation regarding the shooting.

WIAN: Some Mexican politicians say that's not enough, call the Fox administration's response to the shooting spineless. Even pro- illegal alien groups in the United States are complaining.

CHRISTIAN RAMIREZ, AMERICAN FRIENDS SERVICE COMMITTEE: His only crime was to come to the United States to find a better life for himself. He should not be punished by death.

WIAN: Actually, the Border Patrol says the man had been apprehended 11 times for illegal alien smuggling inform recent years, the Border Patrol has gone to great lengths to find non lethal deterrents to rock throwing illegal aliens, including the use of guns that fire pepper powder and steel caged vehicles.

NICHOLAS COATES, SENIOR BORDER PATROL AGENT: Assaults in this area occur every day, several times a day. And our assault numbers, especially in this area, have gone up dramatically in the last year.

WIAN: It's also true elsewhere. Texas Border Patrol agents report they've been shot at 35 times in the past week by drug or alien smugglers from across the Rio Grande.

(on camera): While the Mexican government is quick to criticize any use of force by the U.S. Border Patrol, it's done almost nothing to stop the rising wave of violence initiated by criminals operating on Mexican soil.

Casey Wian, CNN, Los Angeles.

(END VIDEOTAPE)

DOBBS: Illegal aliens in San Antonio, Texas have been dodging immigration officials for years with the help of a radio station. KROM is a Spanish language station. It's owned by Univision. The station runs a recurring segment which listeners call in and report where they have seen so called limones verdes, green limes, the code name for immigration agents who wear olive green uniforms and drive around in green vehicles.

My next guest is outraged by the segment on that radio station and he began a campaign to shut down the radio station altogether. Joe Blalack is a retired attorney. He joins us tonight from Houston. Thanks for being here. Why do you feel so strongly about this?

JOE BLALACK, TRYING TO SHUT DOWN KROM: Well, I feel it's an open act of defines defiance on our laws, especially hindering, impeding the enforcement of our immigration laws in our state.

DOBBS: You filed your objections with the FCC. What has been the reaction of the government? BLALACK: I have not heard. It is still in abeyance at this point. There is supposed to be a hearing scheduled, as I understand, after the first of this year, probably in February or March. I've been advised by the office of Senator John Cornyn of Texas that they're awaiting the final report of the Homeland Security Agency to submit to the FCC in this matter.

DOBBS: Senator Cornyn's office said today when we asked them for their role in the view of the senator on this. The office said we initiated the contact on your behalf, Joe, hard to say exactly but we expect answers very soon, has Senator Cornyn been helpful here?

BLALACK: Yes, sir, he has. I must commend him. He has responded, he's responded to my inquiries. Responded to my letters.

DOBBS: What's the reaction of the station itself, the station management? But clearly as they go about identifying these agents, that's a very serious thing.

BLALACK: Well, in my opinion, it's one of arrogance, it's open, bizarre (ph) and inconsistent with the public policy, our public interest of the American people, and its laws. This is the test that the FCC applies to any of the actions of a radio station. Is an inconsistent with public interest?

DOBBS: Isn't there general outrage that a radio station whether Spanish language or English language, whatever the language in the United States is telling illegal aliens where Border Patrol agents and immigration agents are so that they can be avoided? That seems like a clear cut, it seems illegal, first of all?

BLALACK: Well, that's going to be the question for the FCC to decide in renewing this license of KROM. Now, I've got a lot of response in this matter, much more than I thought I would and I think that the American people are definitely aware now of a possible danger in these hundreds upon hundreds non-English speaking radio stations that are operating here on our American soil.

DOBBS: Just for our viewers' information, which is what the whole broadcast is here for, we just want you to know that we did try to reach Univision which owns the station, we tried to talk with the management of KROM. They referred us to their filings before the FCC, which were basically, let's say non-responsive to your charges. Joe Blalack, we thank you very much for being here. We appreciate your being here.

BLALACK: Thank you, Lou.

DOBBS: In Alabama, a sheriff there has a new plan to fight our border crisis. He is now keeping track of the explosion of illegal aliens in his community who, until now, were living in his county anonymously. But a lot of people don't like what the sheriff is doing. Christine Romans tells us all why.

(BEGIN VIDEOTAPE) CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Sheriff Mike Hale is using this database to compile information about any illegal alien who comes in contact with his deputies. Information that has until now languished in police notebooks.

SHERIFF MIKE HALE, JEFFERSON COUNTY, ALABAMA: An arrest report. Whether it be an incident offense report, traffic accident, a patrol request, information on crime, vice and narcotics crime, in the regular course of business, if my deputies suspect or believe that the person that they're talking to is an illegal alien, then what we're going to do, we're going to capture that information.

ROMANS: He will share it with federal agencies. Just has his drug task force shares information with the DEA. But Jefferson County commissioner Larry Langford is outraged.

LARRY LANGFORD, JEFFERSON COUNTY COMMISSIONER: At rate we're going in this country, all of us are eventually going have papers just to walk down the streets in this place. This is frustrating and very dangerous.

ROMANS: He charges this sheriff with racial profiling.

LANGFORD: I didn't say he was a racist. What I said was he has isolated the Hispanic community. And that's profiling.

HALE: My deputy are not going up and because of how they look, their race, their speech. If we don't have a lawful reason in the regular course of business to talk to them, we're not documenting that.

LANGFORD: Isabel Rubio is the executive director of the Hispanic Interest Coalition of Alabama. A group that also opposes the sheriff's database.

ISABEL RUBIO, HISPANIC INTEREST COALITION OF ALABAMA: We're definitely opposed to any database that tracks people simply because of documentation status. Being in this country without proper documentation is a misdemeanor, we've got a lot better things to do with our limited resources and time with state and local law enforcement than people who earn a living for their families.

ROMANS: Those same critics worry the sheriff's database will drive illegals further into the shadows.

HALE: I'm sympathetic, I'm empathetic to that, but that's a social problem. The answer to this dilemma is making a conscious decision to be in this country legally through a visa or whatever. All the other things, the rhetoric is being said is really excuse- making.

(END VIDEOTAPE)

ROMANS (on camera): And he says it takes 90 seconds to enter the information into the computer it. It makes their crime fighting easier, more efficient, it doesn't take anybody away from solving crimes, he says there are now 20,000 people in his county illegally and it's growing, and immigration officials say they welcome local cooperation, and have even recently trained 45 Alabama State troopers are able to enforce immigration laws.

DOBBS: It's incredible, this country is in a heck of a mess. When a county sheriff trying to do the right thing is basically called a racist because he's trying to find out whether somebody who is a criminal suspect is in the country illegally. I mean, it's mind- boggling.

ROMANS: He started this after September 11th, thought that finding out who is in his community anonymously and keeping track of them was a good idea.

DOBBS: It's interesting, on the FBI's most wanted list, prominently illegal aliens. I wonder how they found out that they were illegal aliens? Amazing.

Christine, thank you. Christine Romans. Just ahead here, the scandalous wall of a onetime high powered Washington lobbyist has a lot of lawmakers scurrying. Capitol Hill bracing for the fallout. Congressman Barney Frank has a few ideas about some solutions, and he's going to be our guest.

And then the most deadly day of violence in Iraq in four months. One U.S. military commander says Iraq is now on the verge of civil war. I'm joined by General David Granger, next.

(COMMERCIAL BREAK)

DOBBS: Doctors tonight say that if Ariel Sharon does survive the massive stroke, it's unlikely he will ever return to public life. And his passing from the political scene is certain to add more uncertainty to the Middle East. Joining me tonight with his insight on the Middle East, the war in Iraq and the Bush administration's new efforts to approach at least a bipartisan tactic in dealing with the war, former Senate majority leader, U.S. peace envoy, George Mitchell. Good to have you here.

GEORGE MITCHELL, FORMER SENATE MAJORITY LEADER: Thanks, Lou.

DOBBS: It is clear that Ariel Sharon will no longer be leading the nation of Israel. Your assessment of the impact?

MITCHELL: High degree of uncertainty on top of an already complicated and difficult situation, because you now have a uncertainty on both sides. The Israeli government, of course, will function, will continue, it's a democracy, they have laws of succession and there will be a new leader chosen, probably on the date of the previously scheduled election in late March.

DOBBS: Three months from now. Benjamin Netanyahu. Now, the standard bearer for the Likud Party, presumably, he is the favorite now, even as we're trying to assess what is going to happen?

MITCHELL: Well, I just saw a news report the first snap poll taken in Israel indicated that Ehud Olmert, who was the deputy prime minister and now the interim prime minister maintains the same margin, now that may be sympathy for Sharon's party, but Olmert, don't count him out, he's the former mayor of Jerusalem, he's been in the parliament for a long time. He was deputy prime minister. He's an able guy.

DOBBS: And the Labor Party as well will focus some of the votes in that direction, but meanwhile, the withdraw from Gaza, the process itself, give us your assessment what you think the next few months hold here?

MITCHELL: I don't think much will occur in the next few months, have you had Palestinian elections set, Abbas is trying hard but is having difficulty establishing law and order in the Palestinian territories and among Palestinian societies. The uncertainty in Israel. So I don't think you'll see much movement in a few months. I think in end there will be movement because it's in the interest of both sides, but getting there will be very tough.

DOBBS: Turning to this country and a certain amount of uncertainty that surrounds our democratic process, Abramoff's guilty pleas, the widening scandal. This is a Washington right now that is very nervous. What do you think is going to happen here, what's the likely fallout?

MITCHELL: The likely fallout, I think, is clearly - or likely some convictions, probably some resignations from Congress. You have already seen a movement among top Republicans to get Tom DeLay out of leadership race, not to try to come back again, that's the first casualty, I think, before there is any results from Abramoff's talking. I think you're likely to see a rush to change the law now to make some changes ...

DOBBS: I've got to ask you this.

MITCHELL: Yeah.

DOBBS: Senator, as you look back over your career in Washington, campaign finance reform following Watergate. We've had the McCain- Feingold legislation. It all is nothing more than a fig leaf, greatest of intentions on the part of the sponsors and some who support it. This is a kabuki dance, and it is -- it does not pass a smell test on any level in any quarter of Capitol Hill, Democrat or Republican does, it?

MITCHELL: Well, I -- in the debate that I participated in trying to change the law, I said the system stinks, so I can't disagree with you ...

DOBBS: I kind of paraphrased you ...

MITCHELL: ... about the smell test.

Lou, it gets down to money in the end. There's too much money in the system, and too many members of Congress spend too much of their time chasing that money. In the end, that's the change that's got to be made.

DOBBS: George Mitchell, thank you very much for being here. Appreciate it.

MITCHELL: Thanks for having me.

DOBBS: Tonight I want to share with you what I consider to be a despicable comment from Christian Broadcasting founder Pat Robertson. Robertson suggested that the massive stroke suffered by Israeli Prime Minister Ariel Sharon is punishment from God. Robertson told his viewers of his "700 Club," quote, "God has enmity toward those who 'divide my land.' He," Sharon "was dividing God's land and I would say woe unto any prime minister of Israel who takes a similar course." End quote.

A man of God speaking.

Coming up at the top of the hour here on THE SITUATION ROOM, THE SITUATION ROOM WITH WOLF BLITZER. Tonight from Jerusalem, Wolf?

WOLF BLITZER, CNN HOST: Thanks very much, Lou. We're going to have all the latest information here in Jerusalem, and all the latest from West Virginia. We'll hear from the miner who made it out of the West Virginia coal mine alive immediately after the blast. We'll find out what it was like when the explosion actually happened.

Plus, a miner's last moments. The letter he wrote to his family before his death. We'll find out why they're finding comfort in his words.

Also, why we're here, live in Jerusalem, we're following the grave condition of the Israeli Prime Minister Ariel Sharon. A condition that threatens to send the Mid-East peace process into a tailspin.

And finally, did Jesus exist? The battle in Rome over the basic foundation of Christianity. It's now in the hands of a court. All that, lots more, Lou, coming up, right at the top of the hour. Back to you.

DOBBS: Looking forward to, it Wolf, thank you.

Still ahead, Wal-Mart's bid for a banking charter, the decision could come in the next month. Why the big box bank could be bad news for middle class Americans. I'll be joined by Congressman Barney Frank who says it is a very bad idea.

A view of the Jack Abramoff scandal as well, when I talk with Congressman Frank. A lot more coming up. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Wal-Mart could receive permission to enter banking as soon as next month. Opponents say this could decimate local banks and hurt the middle class. Joining me tonight is Congressman Barney Frank, and we thank you for being with us, congressman. Why do you oppose this move?

FRANK: Well, Wal-Mart wants to take advantage of a loophole that exists in a couple of states, Utah mostly. It wasn't California, they tightened it up. They want to become what's called an industrial loan corporation, that's a bank that only has only got a small part of assets in financial service. Our general position has been as a country that, remember, when you start a bank, you're just not on your own, have you Federal Deposit Insurance, in case your depositors need it.

You have got access to the Federal Reserve window, you get a lot of help, and return we say you know what? We want you not to be very risky, we want your focus to be on banking. The problem is if you've got a company, Wal-Mart or any other company that runs a bank and a major company there's a problem because that bank might literally become the bank for the company.

And so we have tried to say that this shouldn't happen. Now ...

DOBBS: Let me ask you this, congressman. Not only Wal-Mart, and should I point out in terms of banking, I'm a minor investor in some small banks, and the fact is that Sears, Target, Toyota, General Electric, many others have bank charters, what's the difference here?

FRANK: Well, what we are saying is no one should have a bank unless they're at least 80 percent in the financial business. And some of what has happened in the past, frankly, sometimes you learn about dangers after a while. And just because you haven't been able to stop something from the beginning, doesn't mean you shouldn't try to plug the hole.

You also have, as you said, a threat to smaller banks, and smaller banks - frankly one of the things that worries me about what's gone on in New Orleans is I'm afraid all the smaller banks are going to literally go under because their borrows have lost everything, and I don't want to see an America which all we have is a Bank of America and Citicorp, et cetera. They're nice people, but we don't want to not have local institutions that are responsive to local needs.

DOBBS: Well, congressman, in some ways one can only almost imagine an America that has a Wal-Mart for everything, and I'm sure that would please them.

FRANK: Well it would, but it would also - we've learned this, they're not people who have shown a sense of social responsibility. You talk about immigration. They're one of the great abusers and misusers of illegal immigrant labor to the detriment of other people. That downgrades the work conditions.

DOBBS: They also have a track record of bringing very low prices as they are constantly reminding all of us.

FRANK: They do, here's a question in America. Is a couple of cents off on a fairly small purchase worth the evisceration of the middle class? As you know, a lot of our jobs have gone overseas, you've documented that well. Banking is one of the places where people can get reasonably good jobs. If you follow the Wal-Mart model what you then do is you further erode a source of reasonable employment for that Wal-Mart model which is yes, they get the low prices by a variety of means, but terrible working conditions.

DOBBS: Congressman, I got to talk to you about somebody who had a very good job, apparently, Jack Abramoff, you have come forward now with a plan to roll back at least the power of lobbying. What do you think the response will be?

FRANK: Well, a month ago when my colleague Dave Obey and I and others brought it forward people were skeptical. But we did get a majority of our Democratic colleagues to sign onto it. And I think now we're going have a lot of new friends because you made a good point before about the campaign finance.

But this is -- Can I say, I want to give credit here where I usually don't. The Bush Justice Department. Because we ought to be clear. This is the Justice Department under President Bush, assistant attorney general, Alice Fisher. They're the ones prosecuting this. And I give them credit this is falling heavily on the Republicans, this is an attack on the Republicans in the House, on DeLay, on the Republican allies like Ralph Reed and Grover Norquist, and I give them good credit for doing it.

DOBBS: Good for you for doing so.

FRANK: What she says is this. Look, this goes just beyond campaign financing. Campaign financing is probably a necessary evil. But you don't have to take trips to Scotland, you don't have to have unlimited free meals. You don't have to have your spouse hired to do, what did Mrs. DeLay do? Give a list of people's charities. So what he did was to go -- He took a system that's got problems, as you said, but greatly exacerbated them.

DOBBS: Congressman Barney Frank, we will be following your proposal, your efforts at reform, at a time when half all congressmen leaving Congress end up working on K Street working as lobbyists, certainly the timing is appropriate.

FRANK: We'll talk about it at dinner and we'll each pay for our own.

DOBBS: There you go. Thanks. Congressmen Barney Frank.

Still ahead here tonight, the most violent day in Iraq in months, 134 people killed, five American soldiers died. General David Grange joins me next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The wave of bomb attacks in Iraq today raising new fears that Iraq is on the verge of a civil war. This week General Ricardo Sanchez, former U.S. commander in Iraq, appeared to contradict the president and his optimistic view on the war. General Sanchez said bluntly, "the country is on the verge of a civil war."

Joining me now, General David Grange. What do you make of General Sanchez's remarks?

BRIGADIER GENERAL DAVID GRANGE (RET), CNN MILITARY ANALYST: Well, Lou, I don't agree we're on the verge of a civil war in Iraq. It's a possibility, of course, it's a strategy of the insurgents. I would rather listen to the on-ground commanders now and get their assessment and I don't think they would agree.

DOBBS: We're seeing violence now. This is the worst violence in some four months. At every plateau, progress as the Pentagon and White House suggest this, is we're seeing more and more deadly, deadly incidents. What are we to make of it?

GRANGE: Tough day, it will be -- it will pass, there will be good days ahead and some more bad days. It's funny, I just received messaging from some soldiers that had been there for about a year. And they say it's amazing, on television you see in a week as much violence as I saw in a year of duty in a very tough part of Iraq. So I guess that's perspective and where you sit. And not arguing it's not a bad day, but, again, it's a lot of successes going on that we're not accounting for.

DOBBS: And do you believe at this point the Pentagon is responding intelligently, effectively, adaptively to the insurgency?

GRANGE: On the military side I'd say yes. I'm not qualified to speak on the economic and political side, I think there are some issues there. But I would say, yes, they are.

DOBBS: General David Grange, as always, good to have you here.

GRANGE: My pleasure.

DOBBS: Tonight, the results of our poll. Eighty-five percent of you agree with the Florida Supreme Court decision today that school voucher undermine public education and violate the state's requirement to provide a uniform system of free, public education.

And finally tonight, a look at some of your thoughts.

D.L. Baker in Arkansas wrote to say, Lou, our government is dropping "buy American" because of fear of offending other nations? What about offending the American taxpayers and citizens?"

Tim and Doreen in Wisconsin. "Before building a border fence along the Mexican border, we should fence in Washington, DC."

And Paul in Iowa said, "It is very easy for some American employers to say that American workers are unskilled when they can hire illegal immigrants at far less pay. It's time to close our Southern border and stop this. To hell with what Bush and Fox think."

Dave in Florida said, "Lou, I'd much rather pay twice as much for a head of lettuce than pay the hospital bills for 11 million criminals and the education bills for all their kids. I had a hard enough time with my own."

And Jerry in California said, "Lou, retired senators and representatives should immediately be made to forfeit their government provided retirement pensions and medical benefits the minute they become lobbyists."

A very compelling idea, thanks for sharing it with us. We love hearing your ideas. Send them to us at loudobbs@cnn.com. Each of you whose email is read here receives a copy of my book, "Exporting America." And you can receive our email newsletter signing up at our Web site, loudobbs.com.

We thank you for being with us tonight. Please join us here tomorrow. We'll have much more on the Florida Supreme Court rejection of school vouchers and support for public education. The attorneys who argued both sides of the case join me and three of the country's top political minds will be here as well. We hope you will too.

For all of us here, thanks for watching. Good night from New York. THE SITUATION ROOM begins right now with Wolf Blitzer in Jerusalem. Wolf?

BLITZER: Thanks very much, Lou.

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