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LOU DOBBS TONIGHT

Senate Holds Hearings on Secret Wiretaps; 13 Al Qaeda Terrorists Escape From Yemeni Jail

Aired February 6, 2006 - 18:00   ET

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


KITTY PILGRIM, CNN ANCHOR: Good evening, everybody.
Tonight, frustration on Capitol Hill. Attorney General Alberto Gonzales strongly defends warrantless wiretaps.

Plus, outrage over the president's nearly $3 trillion federal budget, what critics say is a war on middle class Americans. We have a special report.

And a global manhunt for 13 escaped al Qaeda terrorists. The mastermind of the attack on the USS Cole is among them.

All that and more, ahead.

We begin with the attorney general's defense of the president's use of the secret wiretaps in the war on terror. In testimony before the Senate Judiciary Committee, Gonzalez declared the president acted under the authority of both the Constitution and federal law. But Judiciary Committee chairman Arlen Specter and other senators strongly challenged Gonzales.

Ed Henry reports from Capitol Hill -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: That's right, Kitty. In fact, the attorney general came out swinging, asserting that this program is legal and does protect civil liberties. He also lashed out at critics, saying they're misinformed about the program and they could be aiding terrorists.

(BEGIN VIDEOTAPE)

ALBERTO GONZALES, U.S. ATTORNEY GENERAL: Our enemy is listening. And I cannot help but wonder if they aren't shaking their heads in amazement at the thought that anyone would imperil such a sensitive program by leaking its existence in the first place.

HENRY: Democrats insist they want to give the president every tool to fight the war but question the legal justifications for the surveillance program.

SEN. PATRICK LEAHY (D-VT), JUDICIARY COMMITTEE: Mr. Attorney general, in America, our America, nobody is above the law, not even the president of the United States. There's much that we do not know about the president's secret spying program. I hope we're going to get some more answers, some real answers, not self-serving characterizations. HENRY: The attorney general also faced tough questions from Republicans about executive power.

SEN. LINDSEY GRAHAM (R-SC), JUDICIARY COMMITTEE: If you take your inherent authority argument too far, then I am really concerned that there is no check and balance.

HENRY: Republican Arlen Specter called for the administration to get a special court to review the legality, but the attorney general was noncommittal.

SEN. ARLEN SPECTER (R-PA), CHAIRMAN, JUDICIARY COMMITTEE: As a matter of public confidence, why not take it to the FISA court? What do you have to lose if you're right?

GONZALES: What I can say, Senator, is that we are continually looking at ways that we can work with the FISA court in being more efficient.

HENRY: But other Republicans sharply defended the program.

SEN. JEFF SESSIONS (R-AL), JUDICIARY COMMITTEE: We are not going hog wild restraining American liberties. In fact, the trend has been to provide more and more protections. And that can be a danger that we go too far and allow sleeper cells in this country to operate.

HENRY: Democrats pressed Gonzales about his confirmation hearings in which he vowed to inform Congress if the president authorized an action in defiance in a criminal statute.

SEN. RUSS FEINGOLD (D-WI), JUDICIARY COMMITTEE: You let a misleading statement about one of the central issues of your confirmation.

GONZALES: What I said was the truth then, it is the truth today.

(END VIDEOTAPE)

HENRY: Today's grilling of the attorney general just ended behind me. But Democrats and Republicans now plan to bring the attorney general back for a second day of questioning probably next week -- Kitty.

PILGRIM: Ed, is the panel going to press for more witnesses even?

HENRY: Absolutely. You know, Democrats tonight are saying, look, we got so many "I don't knows" from the attorney general, they want to press other officials, including former attorney John Ashcroft. They also want to push for a subpoena of various White House documents to explain this program -- Kitty.

PILGRIM: All right. Thanks very much.

Ed Henry.

Thanks, Ed.

Well, radical Islamist terrorists today killed an American service member in Afghanistan. That was near the border with Pakistan. The military has not released the service member's name or any information about his unit.

Two hundred and fifty-seven Americans have been killed in the war in Afghanistan, 127 of them in combat.

U.S. marshals today removed admitted al Qaeda terrorist Zacarias Moussaoui from a federal courtroom in Alexandria, Virginia. A judge ordered Moussaoui out of the court four times after the September 11 conspirator repeatedly interrupted proceedings.

Moussaoui is the first person to be tried in this country on charges connected to the September 11 attacks. The jury will decide whether Moussaoui is sentenced to death or life in prison.

Iran today escalated its nuclear confrontation with the rest of the world. Tehran ordered the International Atomic Energy Agency to remove cameras and seals from nuclear sites and stop unannounced inspections.

Now, this follows the IAEA's decision to refer Iran to the United Nations Security Council. The Security Council will likely take up the matter in March.

There were violent protests in Iraq today against Denmark. An angry mob attacked the Danish Embassy in Tehran as Muslims across the world protested cartoons of the Prophet Mohammed in a Danish newspaper.

(BEGIN VIDEOTAPE)

PILGRIM (voice over): Tens of thousands of Muslims around the world took to the streets. Danish embassies torched and flags burned -- Syria, Indonesia, Thailand, India, Lebanon, Afghanistan, Iran. The White House today speaking out.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: We condemn the acts of violence that have taken place. There simply is no justification to engage in violence.

PILGRIM: But only a smattering of moderate Muslims have spoken out against the violence.

HAMID KARZAI, PRESIDENT OF AFGHANISTAN: I, as a Muslim, feel very much offended, but I would -- would ask my fellow Muslims around the world, the Prophet Mohammed is much greater a profit to be incensed (ph) by these cartoons. And we as Muslims, got instructs us to forgive.

PILGRIM: Forgiveness is not the order of the day. And some clerics have even tried to capitalize on the turmoil. Middle East analyst Daniel Pipes says many of the protesters were not originally aware of the cartoons until radical clerics circulated them. DANIEL PIPES, MIDDLE EAST FORUM: The most dramatic example is that of a Danish cleric by the name of Abu Laban (ph) who incited public opinion by showing these cartoons around. So, yes, it is a vehicle for some extremists to rally their people and become more agitatedly anti-Western.

PILGRIM: Today the U.S. government complained some countries are also ignoring the violence. For example, the embassies of Norway and Denmark were burned in Damascus.

SEAN MCCORMACK, STATE DEPT. SPOKESMAN: This here is a country where protests don't just occur spontaneously, certainly not of this sort with -- not without the knowledge and support of the government.

(END VIDEOTAPE)

PILGRIM: Now, Middle East analysts point out the time lag between when the cartoons were originally published and this round of violence. The cartoons appeared in a Danish newspaper back in September and were reprinted in a Norwegian paper in January. Now, that time lag to many suggest that they are hoping to keep the cartoon in the headlines for their own political reasons.

Intelligence and law enforcement agencies across the world are hunting 13 al Qaeda terrorists after a jailbreak in Yemen. The 13 terrorists include the mastermind of the attack on the USS Cole that killed 17 Americans. Now, the sophisticated escape came from one of the most heavily guarded buildings in Yemen.

Barbara Starr reports from the Pentagon.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice over): Just two weeks ago, CNN traveled to Yemen to report on the al Qaeda presence in the country. At the time, U.S. Ambassador Tom Kresjki said Yemen was cooperating in the war on terror.

TOM KRESJKI, U.S. AMBASSADOR: I would continue to give them pretty high marks, certainly when you're looking at the most direct threat in Yemen, and that was the threat of al Qaeda being able to build a formidable base of operation here.

STARR: But now a major al Qaeda challenge to the Yemeni government which struggles to control much of the countryside.

This man, Jamal Abadawi, is one of the prisoners who escaped from a Yemeni jail last week. He helped plan the October 2000 attack on the USS Cole that killed 17 sailors.

Intelligence analysts tell CNN the prison break is a significant setback in the war against al Qaeda. Many of the escapees now on the loose have major operational experience in planning attacks, the very experience al Qaeda needs.

Yemeni and U.S. officials believe the men had help from somewhere in the capital city of Sanaa. They escaped from a highly secure prison, through a tunnel more than a football field long. It all happened the day before 15 of the men were scheduled to go on trial for involvement in terrorism.

Just two weeks ago, the Yemeni interior minister, Rashid al- Alimi, told CNN the al Qaeda network in Yemen had been dismantled since the attack on the Cole.

(on camera): Since then, Yemen has established a coast guard. They now have some 50 ships, several hundred personnel. And the Yemen coast guard now regularly patrols these waters, trying to ensure security of the shipping moving in and out of this area.

(voice over): CNN was taken by the new Yemeni coast guard through the port of Aiden to this spot where the Cole was hit. It was part of an effort to show Yemen is secure.

(END VIDEOTAPE)

STARR: And Kitty, as the international manhunt goes on, the U.S. Navy now rethinking its plan that it had in the works to send another Navy warship back into Yemen for a port call, the first time since the attack on the Cole -- Kitty.

PILGRIM: Wow, Barbara. That's significant.

You've just come back to a visit to Yemen, Barbara. How in the world could the terrorists escape? Now, did they receive help from the al Qaeda sympathizers in the Yemeni security services, do you think?

STARR: It certainly seems that that is topping the list of suspicions as to what happened. This was a highly secure prison facility run by something called the PSO, the Political Security Organization, in Yemen. They dug this tunnel, 23 men got out, all at once, and the other end of that tunnel opened up in the floor of a nearby mosque.

So by all accounts, somebody must have given them some help. If nothing else, it was quite an engineering feat for them to manage this -- Kitty.

PILGRIM: Thanks very much.

Barbara Starr.

Thanks, Barbara.

Well, still ahead, the latest assault in the war on the middle class. Billions of dollars in funding for key middle class programs set to be cut in the new budget.

And a so-called temporary U.S. visa program for hundreds of thousands of Central American workers, it's still in operation years later. We'll have a special report on that coming up.

Also, the Border Patrol now looking for a few good recruits. The new Border Patrol ads coming up.

(COMMERCIAL BREAK)

PILGRIM: Well, President Bush today sent Congress a massive $2.8 trillion budget that keeps the United States strong militarily but some say cuts into social programs crucial to our nation's elderly, the poor and the middle class.

Dana Bash reports.

(BEGIN VIDEOTAPE)

DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice over): The White House delivered a budget it says focuses on the president's top priority, what Republicans still call their best political asset, national security. The Pentagon is the biggest winner in the $2.77 trillion Bush budget, up about 7 percent from last year.

To fund the fight on terrorism, the Department of Homeland Security would get a nearly 8 percent increase. And there's a sober reminder the Iraq war price tag is far bigger than Bush officials ever anticipated -- $120 billion more for Iraq and Afghanistan, on top of $250 billion already spent in Iraq.

JOSH BOLTON, DIRECTOR, OMB: The costs of the war are what they are. It's been a very expensive undertaking and essential undertaking.

BASH: Escalating more spending means this year's deficit will explode again up to a record $423 billion, a figure the White House calls unwelcome but also blames on an unexpected $100 billion price tag for hurricane relief.

To reign in government spending that has rank and file Republicans furious, Mr. Bush proposes a $36 billion cut in Medicare over five years, and saving $15 billion in eliminating or slashing 141 government programs from community policing to drug-free school zones.

But last year he vowed to cut 154 programs. Congress cut only 89. And some conservatives say the election year Bush blueprint still allows too much red ink.

REP. JEFF FLAKE (R), ARIZONA: The consequences are devastating for Republicans. We are the party of limited government, of so we say. And if we can't deliver on that, I think we're history.

BASH: The budget would make the first-term Bush tax cuts permanent at a 10-year cost of $1.4 trillion, money Democrats say could better be spent on Medicare and other needs now or used to shrink the deficit tab down the road.

SEN. KENT CONRAD (D), NORTH DAKOTA: This will be a legacy of deficits and debt that this president will leave behind.

(END VIDEOTAPE) BASH: And despite the fact that the deficit projector -- projection is higher than it was expected, the White House insisted today that they still will meet the president's goal of cutting that in half by the time he leaves office. But Kitty, the White House in this budget also estimated the national debt will, long term, maybe not so long term, in about four years, explode to $11.5 trillion -- Kitty.

PILGRIM: That's not a long period of time at all.

Thanks very much.

Dana Bash.

Well, critics are saying the federal budget is further proof of this administration's growing disdain for the middle class. This proposed budget which slashed key middle class programs is certain to face intense congressional opposition in this midterm election year.

Louise Schiavone is live in Washington.

Louise, where is the biggest impact here?

LOUISE SCHIAVONE, CNN CORRESPONDENT: Kitty, the toughest cut would be in Medicare, where growth would be restrained by roughly $36 billion over the next five years. Besides the restraint in Medicare growth, there are other efforts to pull back spending that affect the broad middle class. They include proposed reductions in the growth of federal pay, in education programs, and in parts of the National Institutes of Health, including cancer and heart disease research.

But there is some good news for most taxpayers. President Bush is proposing to extend his program of tax breaks and to help take the bite out of the cost of self-funded health insurance.

Now, Kitty, all of this assumes, of course, the Congress will accept the budget numbers that President Bush has proposed, and that is a big assumption in what's shaping up as a tough election year -- Kitty.

PILGRIM: It is going to be quite a fights.

Thanks very much.

Louise Schiavone.

That brings us to tonight's poll. Now, do you believe it's possible to run a truly effective federal government for $2.8 trillion? Cast your vote at LouDobbs.com. We'll bring you the results a little bit later in the broadcast.

Still ahead, we'll take a look at some of your e-mails.

Plus, how communist China is rapidly gaining on the United States in yet another key category. And Fidel Castro strikes back. The communist Cuba leader's response to a message of hope and freedom from the United States. We're live in Havana, coming up.

(COMMERCIAL BREAK)

PILGRIM: In California tonight, a massive wildfire is burning through Cleveland National Forest. It has destroyed 1,200 acres so far.

Now, it's being fueled by Santa Ana winds. The fire is just east of Orange County suburb of Los Angeles. And fire officials say a voluntary evacuation is under way from about 300 homes. More than 300 firefighters are trying to put out the flames there.

Tonight, Los Angeles County, prisons under partial lockdown after a deadly race-related riot over the weekend. Four hundred inmates have been segregated following violence between black and Hispanic inmates. One black inmate was killed at the North County Correctional Facility on Saturday. The violence spread to an adjacent jail yesterday and dozens of inmates were injured.

Well, it's time now to take a look at some of your thoughts. We love this.

Larry in Alaska writes us, "Let me see if I understand this. We need to allow illegal immigration to fill the jobs we don't want to do and to increase the number of H1B visas to fill the jobs that we don't have enough skilled workers to fill. So what does that leave us to become? Politicians?"

Cynthia in New Hampshire says, "What is going on in this country when, according to President Bush, we don't have the workforce to fulfill simple manual jobs on one hand and high-tech jobs on the other?"

And martin in Utah writes, "President Bush states NAFTA and CAFTA will allow the world to buy American products. Now, what products haven't already been outsourced? All we have to sell is wheat, corn and politicians."

We love hearing from you. Our address is loudobbs@cnn.com. And we'll share more of your e-mails later in the show.

Still ahead, the U.S. attorney general lashes out at critics of the secret wiretap program. I'll be talking with James Bamford, who is a plaintiff in a lawsuit challenging the NSA's wiretaps.

And a sizable increase in the Bush administration's U.S. Border Patrol budget. But is it enough to fix our broken borders?

And communist China gaining quickly on the United States in technology. The number of Chinese patents are soaring. A special report ahead.

(COMMERCIAL BREAK) PILGRIM: Attorney General Alberto Gonzales today strongly defended the government's secret wiretap of some Americans in testimony before Congress. Now, Gonzales said the wiretaps are lawful and necessary. But the chairman of the Senate Judiciary Committee, Senator Arlen Specter, said the president does not have a blank check.

Ed Henry reports from Capitol Hill -- Ed.

HENRY: Good evening, Kitty. That's right, the grilling of Alberto Gonzales, the attorney general, ended in just the last half- hour. And as you noted, the headline really here is it was not just Democrats doing that grilling, it was also Republicans, including the chairman, Arlen Specter, as you noted. But also Republican Lindsey Graham saying he believes that if you take the attorney general's argument of inherent authority of the president to the extreme, that could result in no check, no balance at all on the executive branch.

The attorney general, though, sharply defended the domestic surveillance program, terrorist surveillance program, according to the administration. Basically, he said that it is legal, it does protect civil liberties.

He also lashed out at critics, saying that they could be aiding terrorists by leaking out this information, but also by taking shots at this program. And Democrats tried to respond by basically saying over and over that while they want to give the president all the tools he needs to fight the war on terror, they want to make sure those tools are legal.

They also pressed Gonzales about statements he made at his confirmation hearing last January in which he suggested he would inform the Congress if such a program hypothetically came up. Of course he did not inform the Congress. He faced sharp questioning about that, but insisted he was truthful last year and was truthful today as well.

But the committee is going to call him back for a second day of questioning probably next week -- Kitty.

PILGRIM: Ed, any indication how long these hearings might last?

HENRY: Well, it could go on for some time. We're hearing form Democrats that they want to call a series of other witnesses, potentially former attorney general John Ashcroft. And the Republican chairman, Arlen Specter, who has a lot more power than the Democrats, has agreed that he could see a whole bunch of witnesses coming, not just experts, but maybe even former presidents like Jimmy Carter, who was actually the president who signed into law the Foreign Intelligence Surveillance Act.

So I would expect these hearings are going to go on for a while, and you also could end up seeing some subpoenas that has been pushed for by Democrats. Republican chairman Specter has kept that option open, hasn't said it's likely, but kept the door open to possibly issuing subpoenas to get the White House to turn over some documents -- Kitty. PILGRIM: Interesting stuff. Thanks very much.

Ed Henry.

Well, my guest was on Capitol Hill today for much of the attorney general's testimony before the Senate Judiciary Committee. James Bamford is the author of "A Pretext for War: 9/11, Iraq and the Abuse of America's Intelligence Agencies." He's also a plaintiff in an ACLU suit challenging the NSA's wiretaps.

Thanks very much for being with us, James.

JAMES BAMFORD, AUTHOR, "A PRETEXT FOR WAR": My pleasure, Kitty.

PILGRIM: First of all, were you surprised by the initial point of contention about swearing in Mr. Gonzales? Why -- what was that about?

BAMFORD: I was surprised. I mean, I thought of all the points of conflict, that would be the least of them. But for some reason, Senator Specter didn't want to have him sworn in.

I would assume -- I've testified before Congress a number of times, I've always been sworn in. I don't know why -- and the Democrats objected and wanted him sworn in, and we're going have key testimony on a very critical issue involving whether the president broke the law. I would think, if anything, that would be critical to have sworn testimony.

PILGRIM: Yes. It was an interesting note to start on.

Now, was there anything in Mr. Gonzales' testimony which deviated from his continuing support of the president's post-9/11 position?

BAMFORD: No, it was just complete stonewall the whole afternoon -- the whole morning and afternoon. He would never answer any questions whatsoever regarding the project, the program, the actual eavesdropping program.

So the key questions were never answered, which is what happens when a name goes into the big vat of information and it turns out that the person never was involved in anything? Does the name stay there forever, or does the name go to other agencies?

What happens to it? When did it begin? How long is it going to go on? Who runs it? I mean, who within the agency is responsible for it?

So none of those questions were answered.

PILGRIM: It sounds like you're fairly dissatisfied with the course of the proceedings. How long might they go on? And could the program be challenged in court? Is that the way you see it going to your satisfaction?

BAMFORD: Well, that's why I joined the lawsuit. I've been, you know, a big supporter of NSA for many years. I'm still a supporter on what they do.

My problem is where they deviate from the law. And since the Justice Department isn't taking any action, and Congress is taking fairly weak action with just calling Attorney General Gonzales, the only way to possibly stop this operation was through a court challenge. And that's why the ACLU asked me to join and I agreed to join them, because that might be the only way to prevent this from continuing.

PILGRIM: Some suggest that the laws just haven't kept up with the times. Do you think that the laws need to be rewritten?

BAMFORD: The laws are rewritten all the time. This FISA court law, Foreign Intelligence Surveillance Court law, has been rewritten four times since the attack on 9/11. There have been four changes into it. These are sort of living laws, they grow with the times. That's what Congress is for. Congress is there to change it when it needs to be changed, and it did change it.

PILGRIM: What would you like to see added at this point?

BAMFORD: Well, you know, that's the problem. I'm not really looking ahead. I'm looking behind. What happened? Where are we right now? What's going on? I think until you answer those questions, you can't really answer where we should go in the future, because we've got to see how they've abused it in the past in order to see how you can fix it in the future.

PILGRIM: May I point out to you, though, that al Qaeda is probably not looking behind, it's looking ahead. Do you think that we need to be more aggressive in moving forward on the war on terror?

BAMFORD: Well, that's the problem. I mean, this fearmongering. The terrorists are coming, the terrorists are coming. You know, there are other things than democracies stand for, other than fighting terrorism. There's such a thing as civil liberties. And there was one president named Richard Nixon, who did the same thing. He called the director of NSA into his office, he ordered NSA to begin eavesdropping domestically on American citizens, which is not what the NSA was set up to do, and it ended up being one of the counts in his impeachment that came up a few years later.

So this is a very serious matter. I think al Qaeda, as you can see from the various press reports, the track record for this program has been virtually nil. They've targeted up to maybe 5,000 people now, and they've gotten virtually no results from it. As somebody was saying during the hearing today, who has been arrested? We haven't seen a single arrest from any of this.

PILGRIM: Interesting stuff. You give us your insights very well. James Bamford, thanks very much for being with us, sir.

BAMFORD: My pleasure, Kitty.

PILGRIM: Well, later, I'll be talking with the former federal prosecutor Andrew McCarthy, who has a very different perspective on the NSA wiretaps, and we'll discuss that also.

President Bush's $2.8 trillion budget released today calls for a significant increase in funding for border security, and it also includes nearly a quarter of a billion dollars for the president's so- called temporary guest worker program, which is an unworkable program and is still being debated in Congress. Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): At first glance, President Bush's 2007 budget proposal seems to be tough on illegal immigration and border security. It includes a half-billion dollars for 1,500 more Border Patrol agents, $400 million for detention space, in effort to end the outrageous practice of catching, then releasing illegal aliens from countries other than Mexico, and $100 million for new border security technology.

UNIDENTIFIED MALE: They're in the third portion of (INAUDIBLE).

WIAN: Overall, the White House wants Congress to approve $1.5 billion increase in border security funding.

But a closer look shows that the president also wants nearly a quarter of a billion dollars to implement his proposed temporary worker program. Though he denies it's amnesty for illegal aliens, many border security advocates say it's exactly that.

REP. ED ROYCE (R), CALIFORNIA: There is no way that we can handle implementation of this program. They don't have the funds right now to handle their existing responsibilities of making certain that felons and terrorists don't get into the country. So from a national security standpoint, post-9/11, it makes no sense right now to move a guest worker program with an amnesty component.

UNIDENTIFIED MALE: The Border Patrol.

WIAN: Adding 1,500 Border Patrol agents will be difficult. The agency already is having trouble recruiting enough qualified candidates, and has resorted to running these TV ads to attract prospective agents.

UNIDENTIFIED MALE: We protect America. Are you up to the challenge?

WIAN: Another concern, especially in border states, the White House proposes to eliminate about $400 million in federal payments to help cover the costs of jailing criminal illegal aliens. California alone spends nearly double that amount each year. And the budget calls for completing a small portion of border fencing near San Diego, but ignores the 700 miles of additional barriers already approved by the House of Representatives.

(END VIDEOTAPE)

WIAN: Border security activists also say there is no attempt to crack down on employers who hire illegal aliens. Though the president wants more money to improve the employee eligibility verification system for businesses, there's no mention of making it mandatory -- Kitty.

PILGRIM: Casey, why are they having so much trouble recruiting people to the Border Patrol?

WIAN: Well, these jobs are very, very difficult, and increasingly dangerous jobs. They don't pay all that well, and they are located in remote areas along the border, where a lot of folks don't want to live.

Also since 9/11, there have been other jobs opened up with the Department of Homeland Security, and the Border Patrol Agency has lost a lot of folks to those jobs. So multiple problems.

PILGRIM: Thanks very much, Casey Wian.

Well, over the past decade, hundreds of thousands of Central Americans have been allowed to stay and work in this country on a temporary basis and because of the crisis conditions in their country. Now, after years of extension, that temporary status may be running out. Most of these so-called temporary workers have no intention of returning home. Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): When Hurricane Mitch struck Honduras and Nicaragua in 1998, President Bill Clinton granted something called temporary protective status, allowing more than 100,000 people to stay here another 18 months without risk of deportation.

Eight years and five extensions later, a majority of those with temporary status remain. Seventy thousand Hondurans and 3,600 Nicaraguans are still here, with the right to work. And 222,000 Salvadorans are still here, temporarily working, five years after two earthquakes devastated El Salvador.

PAUL DONNELLY, IMMIGRATION POLICY CONSULTANT: We've tended to have this endlessly temporary situation, which is not what the word means. It's not what the program was for. And we should just recognize that temporary means it comes to an end.

ROMANS: But it has not come to an end, and it's unlikely most will leave.

ANGELA SANBRANO, CARECEN: Many of them have already built their lives, their homes, and they're part of the community in the United States.

ROMANS: She wants the government to give those here temporarily a pathway to citizenship.

But even if their status expires, there's little chance they will be deported, since Immigration and Customs Enforcement's stated focus is national security and violent criminals. It raises questions about just how workable any so-called guest or temporary worker program can be.

The president's pet project, a massive guest worker program with six-year temporary cards, will be overseen by an agency already strapped with an alphabet soup of temporary worker plans. In fact, the new director of U.S. Citizenship and Immigration Service, Emilio Gonzalez, during his Senate confirmation process said, quote, "I don't think the system's -- in fact, I know the systems that exists right now wouldn't be able to handle it."

(END VIDEOTAPE)

ROMANS: As for talk that the Central Americans here temporarily will lose their status, perhaps later this year, a government spokesman calls that "hype." No decision has been made yet whether to grant another extension on these temporary permits -- Kitty.

PILGRIM: If the temporary program runs out, will they be deported, or are they answering that?

ROMANS: The short answer, no. The short answer is no. They will revert back to their prior status; in many cases, it was illegal. These people were here illegally in the first place. There was a natural disaster in their home country. They got temporary protective status. Now they've had children, they've been in this country for several years. Some of them have been here for decades. Becomes very, very difficult to remove them, unless, for some reason, major criminal, national security threat. That's when they would be removed. Even all this fear and this talk about, oh, a lot of people are going to be deported, no one really thinks they will be.

PILGRIM: What does this portend for President Bush's guest worker program?

ROMANS: Well, it shows here, you've got almost a half a million people over the past decade who have been here on a temporary basis working, and 60 percent, 70 percent, 80 percent of these different nationalities have never left. So it shows perhaps that temporary workers are anything but temporary. They're human beings who come here for a life, start a family. There's no intention to leave.

PILGRIM: Thanks very much, Christine Romans, thanks.

Now, a reminder now to vote in tonight's poll. Do you believe it's possible to run a truly effective federal government for $2.8 trillion? Cast your vote at loudobbs.com. We'll bring you the results in just a few minutes.

And still ahead, red storm. China is becoming one of the world's fastest growing patent holders, with the help of non-Chinese companies. We'll have a special report on that.

And Fidel Castro's campaign against the United States and free speech. We'll have the story live from Havana, coming up. Stay with us. (COMMERCIAL BREAK)

PILGRIM: Earlier in this broadcast, we talked to James Bamford who believes warrantless NSA wiretaps are illegal. Well now we have an opposing view from former federal prosecutor Andrew McCarthy, who followed today's NSA debate on Capitol Hill. He's also a senior fellow at the Foundation for the Defense of Democracy. Thanks for being with us.

ANDREW MCCARTHY, FORMER FEDERAL PROSECUTOR: Nice to be here, thanks.

PILGRIM: You know, during the hearings today, Senator Kennedy said the eavesdropping program would actually weaken national security. This is how contentious these hearings got. What do you have to say to that?

MCCARTHY: I think it's an unfortunate comment. This administration has actually used the statute that there's controversy over the FISA statute, Foreign Intelligence Surveillance Act, more than any administration in the history of the country.

PILGRIM: Well you could argue that the times call for more use, also.

MCCARTHY: Well sure. But the point is, that in addition to this, they are also doing this NSA program which is another layer of protection. Now, I think you could have a spirited argument as we've had for about seven weeks now, about the legality of that.

But the question of whether we're covering more people than we've ever covered before in terms of trying to protect the country, I think is indisputable. So I don't really understand Senator Kennedy's point about the compromise of national security.

PILGRIM: You know, you can understand though why average American citizens are worried why the term domestic spying is surfacing. Is there a way to rewrite these laws or to enforce the laws that are already on the books more effectively, to allay these concerns and still protect national security? What are we doing wrong here? Why should this be a seven-week debate?

MCCARTHY: Well I think in the first instance, part of what we're doing wrong here is capturing what's actually going on with our rhetoric. I don't really think it is a domestic spying program.

The administration calls it a terrorist surveillance program. I think that's closer to accurate than domestic spying because we know that one terminus, one end of the call, is always overseas. And there has to be a reasonable basis to believe that we're dealing with an al Qaeda associate in order to be on the call.

I think for the most part, the American people want us on those phone calls. And I just wonder whether this isn't one of those controversies that's of more interest in New York and Washington than it is in the great out there of the country because it's a very procedural thing to have a scandal over.

PILGRIM: Nevertheless, we are talking about some very fundamental rights of Americans citizens, not to have their conversations overheard. And it strikes a cord with everyone to be talking about this, even though the political debate has gone on in Washington. It is a very basic fundamental right in America.

MCCARTHY: But war fighting is very basic and fundamental too as is national security. The penetration of enemy communications is as old as war fighting itself. And the ability to do that electronically, is as old as we've had that ability.

I think the American people, particularly after 9/11, understand that No. 1, al Qaeda is moving heaven and earth to try to hit us here and they can't do it unless they have operatives in the United States working toward that goal.

Those operatives have to communicate with people overseas so in many ways, the calls that make us most vulnerable, the communications that make us most vulnerable, are actually the ones that come from overseas into the United States. I think people understand that.

PILGRIM: Let me ask you a real quick one. And they're telling me I'm out of time but I asked Mr. Bamford if there was some element that he'd like to see inserted to sort of clear this up. Is there a quick fix in your mind?

MCCARTHY: No.

PILGRIM: There is not.

MCCARTHY: No, I don't. I mean, look at what we've gone through, the Patriot Act, I think, is less controversial in many ways than FISA and we can't even get that renewed.

PILGRIM: Andrew McCarthy, thank you very much for being with us. An illegal wire tap scandal continues to unfold in Hollywood tonight. Also, federal officials today unsealed a 105-count indictment against disgraced Hollywood private eye Anthony Pellicano. And they say he illegally bugged the home of actor Sylvester Stallone and sought confidential information on actors Garry Shandling and Kevin Nealon and some others. Now prosecutors say Pellicano used his contacts in Los Angeles and the Beverly Hills Police Departments to illegally gain access to confidential records for his clients. Pellicano today pleaded not guilty to all charges.

Coming up at the top of the hour, we here on CNN, THE SITUATION ROOM with Wolf Blitzer. Wolf, what are you working on?

WOLF BLITZER, CNN ANCHOR: Thanks very much, Kitty. We're working on several stories, including Senator Hillary Clinton. Is she too angry to be the voice of the Democratic Party, or is this just the latest Republican spin? We're going to take a closer look at that. Plus, Oprah Winfrey's moving comments in Atlanta today honoring Coretta Scott King. We're going to have that for you. Plus, killer bees mating with regular honey bees here in the United States. Could you tell the difference and what does it mean? Those stories, much more ahead here in THE SITUATION ROOM -- Kitty?

PILGRIM: Thanks very much, Wolf. Well tonight Communist China has earned a new distinction that might sound unusual for a country that refuses to enforce intellectual property rights. The number of patents filed in China surged last year. That makes China No. 10 on the global patent list. And even more amazing, China earned that distinction with the help of American and other non-Chinese companies. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): China's policy of foreign investment is bearing fruit for China. As a condition of investing and doing business in China, companies must make commitments to research and develop in China. The companies must also agree to share ownership of any patents they file with the Chinese.

ADAM SEGAL, COUNCIL ON FOREIGN RELATIONS: There's always been a strong pressure on foreign firms to transfer technology as the price of doing business in China. The WTO was supposed to make that harder, but clearly, American and other foreign companies are still complaining that that is a basic precedent of doing business in China.

TUCKER: Yet those companies continue to do business and transfer technology into China, even though they're not allowed to own a majority interest in their joint ventures.

PETER MORICI, UNIVERSITY OF MARYLAND: We could not do anything more to facilitate the ascent of a fascist power in the East than we're doing right now. Basically we buy their products, we provide them with the dollars to industrialize, and we're giving away our technology.

TUCKER: The United States still owns the No. 1 spot in patent applications, but in the last five years, the number of patents filed in China has risen 212 percent.

(END VIDEOTAPE)

TUCKER: Ironically, China can expect that its growing patents will be respected and protected in the United States, yet foreign companies cannot yet say expect that their intellectual property will enjoy the same protection in China, Kitty.

PILGRIM: Hardly seems fair. Thanks very much, Bill Tucker. Well still ahead, more of your thoughts on the war on our nation's middle class and also Communist Castro unveils his answer to a message of freedom from the United States. We'll have a live report from Havana.

And world health officials arrive in Iraq today to try to stop what could be another outbreak of the deadly bird flu. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: President Bush's new budget includes $2.65 billion to fight the spread of deadly bird flu. Now, the proposal comes as officials from the World Health Organization arrive in Iraq to study several suspected cases of the bird flu.

Laboratory tests confirmed last week that a teenage girl died from the bird flu in Iraq last month. The disease has killed at least 86 people in seven countries around the world.

The battle in communist Cuba is escalating over an eye-catching message board outside of the United States mission in Havana. This sign has been educating the Cuban people about the principles of democracy, much to the outside of communist Fidel Castro. Today, he unveiled his response to the sign.

Lucia Newman reports from Havana.

(BEGIN VIDEOTAPE)

LUCIA NEWMAN, CNN CORRESPONDENT (voice-over): It began last when the Cuban sky line lit up with a bright red, electronic ticker. Human rights messages and news flashed from the fifth floor of the U.S. diplomatic mission for all to see.

Night after night the five foot, or 120 centimeter-tall, ticker rolls out comments like, "Why aren't Cubans allowed to stay at tourist hotels," or "Read what you like, say what you think."

Infuriated by what he calls a treacherous and unacceptable provocation from the diplomatic mission, Cuban communist leader, Fidel Castro began building his response a few days later.

This is a provocation from that nest of cockroaches. Excuse me for offending the cockroaches, said President Castro as he inspected the construction site almost on the door step of the U.S. intersection.

For nearly two weeks laborers have worked around the clock to build what Castro calls with relish a surprise. A surprise consisting of at least 130 flag poles that once fully mounted could at least partially block the view of the anti-Castro sticker which, U.S. officials say, aims to communicate with the Cuban people.

(END VIDEOTAPE)

Kitty, we now know that what that surprise is. It was unveiled, as you said, a short while ago by President Fidel Castro in front of the U.S. intersection building that you see right behind me. It's 138 flag poles, carrying black flags with white stars representing what Cuba calls its martyrs, people who died in terrorist attacks, including a bombing on a Cubana Airlines Plane in the 1970's. Cuba, of course, says that the United States aided and abetted the culprits.

Now, it's hard to say, Kitty, how effective this is going to be in blocking the famous ticker. It's still ticking away, I can still see it pretty well.

PILGRIM: It's in Spanish. What is it saying at this point? NEWMAN: All right. It started off -- yes, I can see it. If I would have been keeping tabs on the messages, it started off by notifying people that the price of crude oil had gone up. Now it's saying there is a book fair going on here in Cuba. It asks why isn't the book fair selling books of Cuban dissidents.

A short while ago, there was also a saying of Martin Luther King talking about liberty and freedom

PILGRIM: That's interesting. How long do the U.S. diplomats say they're going to keep this ticker going?

NEWMAN: They say they're going to keep it going indefinitely. That they have no plans to take it down. In fact their going to come up with new and more ingenious ways, those are their words, to communicate with the Cuban people?

PILGRIM: What are you hearing from the Cuban people about this ticker war?

NEWMAN: It's a mixed review. Some people think it's outrageous, that it's insolent, that it's simply undiplomatic behavior even if they don't particularly like the Cuban government. Others are very curious. They try to drive down the Malecon (ph) seaside drive where the building and ticker is located.

You can actually see the ticker from pretty far away. But to read what it says, you have to get up close. For the last few weeks, nobody has been able to get up close since they've been building this big park or this response. We'll see whether tomorrow that will change and people can walk in front of it again easily.

PILGRIM: Thanks for taking a crack at reading it for us. Lucia Newman. Thank you, Lucia.

Still ahead, more of your thoughts on how you voted in our poll. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Now, the results of tonight's poll, 57 percent of you believe it is possible to run a truly effective federal government for $2.8 trillion. Here's more of your thoughts. Mel in Pennsylvania writes, "Regarding the intelligence community complaining that congress is getting in the way of them doing their job, I don't see how it could be any worse. They missed the fall of Russia, they messed 9/11, they missed on WMD in Iraq. They messed on the Palestinian elections. Do they get their lunch orders right?"

Jean in Idaho writes, "In the State of the Union address last week, President Bush wants to promote the engineering field as a viable career field for our children. We have three family members in the electrical, civil and mechanical engineering field. Every one of them have lost their jobs to outsourcing. What fields of engineering is President Bush speaking about?" John in Texas says, "I can't believe I heard President Bush say that he is in favor of removing all caps on H1b visas. The big reasons corporations want these people is because they are cheap. Period. I thought that our elected officials were supposed to take care of America first not India or China."

Send us your thoughts at loudobbs.com. Thanks for being with us tonight. Please join us tomorrow. For all of us here, good night from New York. "THE SITUATION ROOM" starts right now with Wolf Blitzer -- Wolf.

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