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Lou Dobbs Tonight
Port Deal Dead; Congress Responds To Will Of People On Ports; Minding Our Business; Pete King Interview; Duncan Hunter Interview; Some Say Administration Puts Commerce Over Foreign Policy Interests, Trade, And Security
Aired March 09, 2006 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Thursday, March 9.
Live in New York, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening, everybody.
Tonight, a stunning defeat for President Bush on the Dubai Ports World deal. Congressional outrage over the sale overwhelmed the White House, as Congress finally responds to the will of the people.
We'll have reports on Capitol Hill and the White House.
Also tonight, the White House still insists the Dubai port deal is good for the country. Is the White House so determined to put commerce and so-called free trade ahead of the national interest that it's lost sight of reality? Some say that is the case.
We'll have a special report.
Democrats respond to Dubai's retreat by saying the devil is in the detail. Among my guests tonight, a leading Democrat who was among the first to lead the fight against the port sale, Senator Robert Menendez.
I'll also talking with three of the most outspoken House opponents of the Dubai deal. The chairman of the House Armed Services Committee, Congressman Duncan Hunter, the chairman of the Homeland Security Committee, Congressman Pete King, Democratic Congressman Barney Frank all join us here.
And for more on what has been an incredible day for democracy in this country, two top political analysts, Democratic political consultant and strategist, Hank Sheinkopf, "Wall Street Journal" columnist John Fund, and CNN Senior Political Analyst Bill Schneider.
All of that and much more ahead here tonight.
We begin with what is a tremendous defeat for the White House on the Dubai Ports deal. Senate majority leader, Senator Bill Frist, and House speaker, Congressman Dennis Hastert, today told President Bush they did not have enough votes to push the deal through. Shortly afterwards, Dubai Ports World announced that it will transfer its operations in this country to what it called a U.S. entity. The collapse of the deal suggests that Congress for the first time in recent memory is responding to the will of the American people.
We have four reports tonight from Dana Bash, at the White House; Ed Henry, on Capitol Hill; Lisa Sylvester in Washington; Casey Wian, in Long Beach, California.
We turn first to Ed Henry on Capitol Hill.
(BEGIN VIDEOTAPE)
ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Lou, after nearly a month of fierce inter-party squabbles, marked by veto threats and ferocious political maneuvering, this controversial port deal came crumbling down in one fell swoop today. That grim news was delivered directly to the president in a dramatic White House meeting by congressional Republican leader Speaker Dennis Hastert, Senate Majority Leader Bill Frist, who for the last five-and-a-half years have marched virtually in lockstep with this president on his entire agenda, but not this time.
They declared they had enough votes in the House and Senate to kill this port deal and, more importantly, they had enough votes in both chambers to override the president's threatened veto of this legislation. That became crystal clear yesterday after the House Appropriations Committee voted 62-2 to kill this deal.
Senator Frist, meanwhile, in his chamber, had Democrats breathing down his neck to do the same thing there. After this stunning White House meeting, Republican Senator John Warner, who had been working furiously in recent days, through the night last night into the wee hours, desperately trying to come up with some sort of compromise to save this deal, he headed down to the Senate floor to read the company's press release and basically admit defeat.
SEN. JOHN WARNER (R), VIRGINIA: DP World has decided to transfer fully the U.S. operation of P&O Ports North America to a United States entity. This decision is based on an understanding that DP World will have time to effect the transfer in an orderly fashion and that DP World will not suffer economic loss.
We look forward to working with the Department of Treasury to implement this decision.
HENRY: That sparked some confusion, though, because the company was only saying that it would be transferring the operation of U.S. ports rather than saying that it was actually selling them off, making sure they would not have any direct control. Later in the day, though, the office of Senator Warner said that basically a company lawyer had come forward to say that in fact DP World would be issuing a "full divestment" of the U.S. portion of the P&O deal, about 10 percent of the deal.
That part is, in fact, dead. The other 90 percent of the deal, they're going to try to move forward on that. But Democrats like Chuck Schumer say they want to see the fine print just to be sure.
SEN. CHUCK SCHUMER (D), NEW YORK: Nobody knows any details of it. I spoke to Senator Frist. He said he doesn't know the details of it.
To simply say that the U.S. entity will be separate isn't enough. How is it separate? How thick is the wall? And until we have all of those details, we can't say anything.
I'm dubious of anything where the United Arab Emirates has any control at all. And I think my colleagues would join me in that sentiment.
HENRY: Democrats now see a real political opening on what is supposed to be the president's strong suit, security. And you're going to see the Democrats trying to pivot off this entire port controversy to level the charge that the president has dropped the ball on a whole range of security issues. Democrats hoping that will be a potent argument in the midterm elections.
Ed Henry, CNN, Capitol Hill.
(END VIDEOTAPE)
DOBBS: As we reported, one of the most senior members of Congress, Senator John Warner, was first to deliver news of the Dubai Ports World retreat by reading a company press release from the floor of the U.S. Senate. It was a spectacle few have ever seen in the Senate.
(BEGIN VIDEO CLIP)
WARNER: Sheikh Mohammed Al Maktoum, prime minister of UAE, has advised the company that in the interest of the UAE, the nation and the United States that this action is the appropriate course to take in the future.
(END VIDEO CLIP)
DOBBS: We should point out, of course, and I do, that Senator Warner was one of the very few lawmakers on either the Senate or the House to speak out in favor of the Dubai deal, and, in fact, was negotiating with the company himself.
White House officials say Dubai's retreat will put an end to the uproar over security in our nation's ports. But there is little doubt the controversy has damaged the president's image as a strong leader on the issue of national security.
Dana Bash reports from the White House -- Dana.
DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, just a couple of hours after John Warner gave that statement on the Senate floor, President Bush left the White House. Reporters were yelling questions about this dramatic development. He put his hand to his ear. You see there, pretended -- or perhaps he couldn't hear the questions. But the political reality, Lou, is loud and clear.
The president stood up to his own party on what has been his issue. And he basically lost this issue.
White House spokesman Scott McClellan tells CNN tonight that this does provide a way forward, something that they can live with. It allows them to continue to work on other issues before the country.
They also are saying here at the White House that this is UAE's decision, something that reflects their understanding of the importance of a broader relationship and continuing to work to strengthen that relationship. So making it clear here at the White House in public, at least, Lou, that this was very much the decision by the company.
But I can tell you, in private over the last -- certainly over the last couple of weeks, but particularly over the last 24 hours, close allies of the White House have been trying very, very hard to make something like this happen. But it was very unclear even just a couple of hours before this announcement was made whether or not this would happen or what would happen.
Specifically, you heard Ed Henry talking about this dramatic meeting inside the White House, in the Oval Office, where the president was confronted by Republican leadership telling him the bottom line, the cold hard facts are that this is something that he simply can't overcome. But even then, we're told by senior officials in the meeting, they still didn't know exactly what the outcome would be.
It was very unclear whether the company would agree to do this. But in the end, it did, and certainly this White House is hoping for now, Lou, that this political nightmare is behind them, but this certainly does open up a whole different relationship with -- between this president and his own party and Congress. The kind of thing that we have certainly, as we have been talking about extensively, have not seen in the five-plus years since this president has been in office.
DOBBS: Does the White House staff, Dana, acknowledge, first, the political mishandling of this issue? And secondly, the reflection in the part of the reaction of the public and certainly the Congress, both Democrats and Republicans, that greater care is going to have to be given to what seems to be an imbalance in concerns about commerce and so-called free trade in the national interest?
BASH: They absolutely recognize that this was not -- this was -- this could be a case study in how not to handle things politically and in terms of communication. You know, they gave you lots of reasons why this happened, but the bottom line is, it was -- it was a political nightmare. It has been a political nightmare for them.
But in terms of the deal, Lou, still, even to this very minute, despite where we are right now, they still fundamentally say that the president of the United States believes that on the policy issue he was right, and that he thinks that supporting this deal, whether or not issuing a veto threat was a good idea politically -- some would argue that perhaps it wasn't -- but in terms of the fundamental policy decision to stick with this, they still say that he believes that that was the right thing to do.
DOBBS: Dana, thank you very much.
Dana Bash from the White House.
It became apparent to many days ago that the Dubai Ports World deal was a political disaster in the making for the Bush administration. But President Bush stood firm throughout in his defense of this deal and, obviously, as Dana Bash reported, until the very end he did so.
The president found himself increasingly isolated from members of his own party and the American people as he defended business interests against the issues of concern for the national interest.
Lisa Sylvester reports.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice over): It began with public outrage over the sale of U.S. port terminals on television and Main Street.
DOBBS: We've received literally thousands and thousands of e- mails on this deal.
Paul in Illinois wrote in to say, "Is this administration out of their minds?"
SCHUMER: Every day it becomes clearer and clearer and clearer that this issue is not going away.
SYLVESTER: Night after night, poll after poll, public outcry.
DOBBS: ... say you're outraged...
SYLVESTER: President Bush dug in, threatening to use his veto power for the first time to get the deal through.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If there was any chance that this transaction would jeopardize the security of the United States, it would not go forward.
The more people learn about the transaction that has been scrutinized and approved by my government, the more they'll be comforted.
SYLVESTER: But members of President Bush's own party were not comforted.
REP. DUNCAN HUNTER (R), CHAIRMAN, ARMED SERVICES COMMITTEE: And we are announcing the introduction today of a bill that will do several things, the foremost of which is to stop the Dubai Ports transaction.
SEN. SUSAN COLLINS (R), CHAIRMAN, HOMELAND SECURITY COMMITTEE: We need to take a look at these transactions when a state-owned firm is going to buy critical American assets.
SYLVESTER: February 21, Republican Senate Leader Bill Frist first appeared staunchly opposed to the deal. But five days later, Frist waffled under pressure from President Bush's inner circle. That coincided with a DPW public relations blitz headed by a team of lobbyists, including former Senator Bob Dole.
Democrats kept up the pressure.
SEN. ROBERT MENENDEZ (D), NEW JERSEY: The reality is that the deal is moving forward. The reality is the administration's unwilling to stop it.
SYLVESTER: Some using it as an election campaign theme. Republicans watching the president's ratings slide by this week were worried about their own political clout months before crucial elections.
This past Tuesday, the Republican House leadership defied the White House and unanimously endorsed a plan to derail the deal. By Wednesday, the House Appropriations Committee voted 62-2 to scuttle the sale. Thursday, it was apparent there were more than enough votes to override a presidential veto, and the company backed down.
(END VIDEOTAPE)
SYLVESTER: Now both Democrats and Republicans are claiming credit for killing the Dubai deal. But in reality, it was a bipartisan effort to defeat this. It's a rare opposition, and even rarer victory of Congress over the Bush White House -- Lou.
DOBBS: Thank you very much.
Lisa Sylvester from Washington.
Throughout this broadcast tonight, you will hear from many of the central figures who fought tirelessly against the Dubai Ports world deal. I'll be talking with Congressman Duncan Hunter, the powerful chairman of the House Armed Services Committee; Congressman Pete King, chairman of the House Homeland Security Committee, who was among the first to come out of the deal and was at the White House today as this deal collapsed; Senator Robert Menendez, who continues his fight to block all foreign governments from controlling our ports or any key infrastructure assets, including the Port of Newark in his home state, and certainly among the first to oppose this deal; Congressman Barney Frank, of Massachusetts, who says Congress must continue to fight against the dominance of big interest -- big business interest acting against the national interest.
Coming up tonight, lawmakers say no more delays. They insist this nation upgrade its port security now and Coast Guard operations immediately. We'll have the report as you will learn the shocking truth about the level of inspections of container cargo coming into this country.
Also tonight, the Bush administration remains loyal to Dubai until the end. How President Bush continues to put commerce ahead of the national interest in the minds of many.
And who says states can't make money from their port operations? We will report tonight on a dangerous myth about port operations and port security.
All of that and a great deal more still ahead here.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Throughout the Dubai Ports World controversy there was a great campaign of misinformation and disinformation. And there remains a growing debate as to whether or not ports are actually profitable, whether terminals can be operated profitably without foreign investment.
Dubai Ports World supporters saying throughout that America has no choice but to sell or lease its ports facilities to foreign firms or foreign governments. Well, those big business interests and supporters couldn't be more wrong, as Bill Tucker now reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice over): The debate over whether a foreign government should be allowed to take over port operations in American ports was never of any concern to the Port of Charleston.
LUCY DUNCAN-SCHEMAN, PRESIDENT & CEO, SAFE PORTS: It just can't happen here because of the way our port is authorized to operate. It is not a landlord port.
TUCKER: That's because the Port of Charleston is owned and operated by the state of South Carolina. It's what's known as an operating port.
Charleston is the biggest such port in America. It operates the cranes, loads and unloads the ships, it's responsible for port security. It has an operating profit margin of 30 percent.
BERNARD GROSECLOSE, PRESIDENT & CEO, STATE PORT AUTHORITY: Last year alone, we increased our container volumes by over 14 percent. Our revenues went up 18 percent. And our operating expenses went up less than one-third of 1 percent. So it is a very effective model.
TUCKER: Maersk, the world's largest shipping line, acknowledged that fact by recently naming Charleston it's second most productive port in the world.
There are roughly 30 operating ports in America, according to the American Association of Port Authorities. Charleston is one. The port of Savannah, another, and the Port of Norfolk, Virginia, yet another.
The difference between these ports and the Port Authority of New York-New Jersey, which is a landlord port, is that landlord ports lease out control of operations to outside companies. Operating ports don't. Control is central.
ROBERT BRAY, EXECUTIVE DIRECTOR, VIRGINIA PORT AUTHORITY: The operating port has been by far the better way to go, because we were able to control the operation, which means you control the service to your ship line customers. And then we were also able to rationalize a service that we didn't have to build any more facilities that were absolutely necessary. And that, of course, with the security concerns we have, we're able to control the security environment.
(END VIDEOTAPE)
TUCKER: But there is only so much that ports can do in regards to security. And port operators say the single biggest issue they face, Lou, is the absolute failure by the federal government to take port security seriously.
DOBBS: It is the single biggest threat to the American people. And point of fact is, the failure to provide what is called homeland security.
Bill Tucker, thank you very much.
With a rejection of the Dubai Ports deal, it is clear that the people and Congress are now fed up with the administration's inability or unwillingness to fix gaping holes in this nation's national security line of defense, particularly in the instance of port security. Lawmakers are now demanding answers, and they're not satisfied with what they call the excuses they're hearing.
Casey Wian reports from the Port of Long Beach, California -- Casey.
CASEY WIAN, CNN CORRESPONDENT: Lou, the Coast Guard admits that illegal drugs and illegal aliens enter the United States in shipping containers like these behind me every day.
(BEGIN VIDEOTAPE)
WIAN (voice over): It's mainly because only 5 percent of the 11 million containers entering our ports each year are physically inspected. Now homeland security officials admit far few containers are scanned for potential nuclear bomb-making materials. Lawmakers are outraged.
REP. JERROLD NADLER (D), NEW YORK: What percentage of all containers are screened by gamma ray technology and by radiation scanners.
JAY AHERN, CUSTOMS AND BORDER PROTECTION: One percent.
NADLER: One percent of all containers are screened in a way that would assure us that you no nuclear materials are aboard?
AHERN: That is the correct number today, yes.
NADLER : One percent. And when are we going to get to 100 percent?
AHERN: As we continue to deploy additional resource and technologies in these ports.
NADLER: I asked for a date.
AHERN: A specific timeframe, I don't have that.
NADLER: I think it's absurd. The same department that determined that the Dubai deal is not high risk determines which containers are high risk.
WIAN: At a hearing on foreign operation of U.S. ports and port security, lawmakers of both parties hammered the White House.
UNIDENTIFIED MALE: I don't see any sense from the administration that you've changed your tone deafness on this issue of the Dubai Ports, in specific, or the port security in general.
WIAN: Congress is angry that provisions of the 2002 Maritime Security Act are not being enforced, including long-range tracking of commercial ships and secure IDs for port workers.
UNIDENTIFIED MALE: I find it totally unacceptable that the department has allowed this program to be delayed for this long, clearly not giving it any priority.
WIAN: Stewart Baker is the homeland security official who approved the Dubai Ports deal without consulting superiors. Lawmakers asked him about the lack of background checks for port workers, and reports that murders, sex offenders, ID thieves and MS-13 gang members were found working at East Coast ports. Baker blamed local officials and questioned the character of port workers.
STEWART BAKER, ASST. SECRETARY, HOMELAND SECURITY: There are not a lot of former choir boys who sign up to be longshoremen, and the longshoremen are concerned that irrelevant criminal behavior far in the past might be considered disqualifying.
WIAN: Union leaders didn't address that claim but said port workers often uncover security breaches and are told to ignore them by terminal operators.
(END VIDEOTAPE)
WIAN: The Department of Homeland Security's response to all this, they admit a lot more work needs to be done. But they say they've made a lot of progress in improving port security since 9/11 -- Lou.
DOBBS: And it's clear that the focus on our port security has only begun. For that, I suppose, we should, Casey Wian, thank Dubai Ports World and the Committee on Foreign Investment in the United States. At least there is that positive from all of this.
Casey, thank you.
WIAN: Absolutely.
DOBBS: Casey Wian from the Port of Long Beach.
That brings us to our poll tonight. The question is: Are you stunned that our elected officials in Washington have actually listened to the concerns of the American people? Cast your vote at loudobbs.com. We'll have the results here later in the broadcast.
Coming up next, powerful lawmakers who fought against the Dubai Ports World deal from day one will be my guest. Congressman Duncan Hunter, Congressman Pete King, Senator Robert Menendez, Congressman Barney Frank join us.
And President Bush, who finds himself isolated from Congress and many of the American people after proposing the Dubai Ports deal, he still has friends, though. And we're going to be telling you about them. Those friends in big business.
Our special report on the White House, Inc. coming up.
(COMMERCIAL BREAK)
DOBBS: The fight to kill the Dubai Ports World deal might never have gained traction if it were not for the tireless work of a number of our representatives and senators. Among them, Congressman Pete King, the chairman of the House Homeland Security Committee.
Congressman King's earlier opposition to the deal convinced other powerful lawmakers to join the cause in support of national security. Congressman King also working with the White House to come up with a compromise. And he was at the White House today as the deal fell apart.
He joins us here tonight.
Congressman, good to have you with us. What was the president's reaction when he got the bad news?
REP. PETE KING (R-NY), CHAIRMAN, HOMELAND SECURITY COMMITTEE: Lou, I actually sensed it was a feeling of relief. I saw the president. I asked, you know, shortly after the announcement was made, and he said, you know, "There's news for you, today," he said to me. And I said, "Yes, Mr. President, I know."
And then he sort of took like a playful poke at me. And he said, "Good work." And he shook hands, and he...
DOBBS: Now you're sure it was playful?
KING: Oh, I'm saying that. Yes, I'm -- I think so. No, it was. No, actually, I sensed -- really, I didn't sense any anger or antagonism at the White House today, because Speaker Hastert was there also, and John Boehner, the majority leader. What I sensed more than anything was a sense of relief among the president and also the White House staff.
DOBBS: Is this -- and if I may just try to project a little bit here, is this a suggestion that the Congress -- I'm going to speak specifically of the House here -- is becoming more responsive to what is the known will of the American people, and that there is not going to be a rubberstamp approach to an administration agenda or an issue?
KING: Yes, I think this is one real wakeup call. The American people, I have never seen them speak with such unanimity.
Congress did hear it. I think it could mark a turning point in the relationship between the people in the Congress and also between the Congress and the administration. And I mean that both ways in that, if anything really good comes out of this, it's that we realize the importance of having closer communication with the White House and they certainly realize the importance of having more communication with us.
And also, I think the White House will realize that they have to be more sensitive to public opinion. Now, you can't always cave into public opinion. You can't always give into hysteria. You should never give into hysteria. But in this case, it was one time where really enlightened public opinion was ahead of the -- for most part, ahead of most elected officials.
DOBBS: You know, when you say you can't always give into the will of the people, the problem is there's an old expression. None of us is as smart as all of us. And the American people, wouldn't you agree, are a hell of a lot smarter than they're ever given credit for, generally in the national media and in Washington?
KING: Well, if you have to balance out who's right more often, the people or the politicians, the people are.
No, the point I'm making is that it's not your job in elective office just to immediately go with the popular will. There are times when you have to stand back and make your -- you know, really make a reasoned decision.
This is one case in particular where, you know, the people really saw this up front as to what it was. And I never saw really a case where so many people were so perspective. And so many people in high office just didn't get that -- you know, just didn't grasp it the same way.
DOBBS: Are you going to -- we're out time, but are you as the chairman of the House Homeland Security Committee, are you going to drive ahead now to raise what is a pitiful level of port security in this country?
KING: Yes. Lou, I had actually scheduled hearings last month. They start next week.
Congressman Dan Lungren and Congresswoman Jane Harman on my committee are going to be introducing legislation. We will have extensive hearings and a full markup and passage of a bill out our committee by the end of April. It will be the most comprehensive port security bill we've ever done.
DOBBS: Congressman Pete King, good to have you here.
KING: Lou, thank you.
DOBBS: Coming up next, Congressman Duncan Hunter. He is the powerful chairman of the House Armed Services Committee. He will join us. His fight to keep all ports out of the hands of foreign governments and companies continues.
Senator Robert Menendez, who fought early and tirelessly to keep terminals at the Port of Newark out of the control of foreign government-owned companies.
Congressman Barney Frank, the Democrat of Massachusetts, joins us. He says it's outrageous how big business and big capital are controlling the Bush administration.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Key leaders in the House and the Senate, at least initially, stood up to the White House and his -- the president's threat of the veto.
One of those leaders is Congressman Duncan Hunter, the chairman of the House Armed Services Committee, joining us tonight from Capitol Hill.
This is, Congressman, would you say the beginning or the end?
REP. DUNCAN HUNTER (R), CALIFORNIA: Well, I think that the right message has been sent, but these papers haven't been signed yet, and the transfer from Dubai Ports World to this American company has not been completed. So when it's completed, then I think -- then it's over. But it ain't over till it's over, and right now we have a statement from Dubai Ports World and little else. So before we spike the ball in the end zone, Lou, let's watch this thing come through to completion.
But beyond that, we've got lots of critical infrastructure in this country. And I've got a bill that requires the secretary of defense to identify critical infrastructure in America, whether it's ports or power plants or other pieces of infrastructure. And once that's identified by the secretary of defense, in concert with the secretary of homeland security, that has to be American-owned, managed and operated.
DOBBS: What kind of support do you have for that legislation? HUNTER: Well, we've just introduced it. I think at this point, we've got 25 co-sponsors. We get more on every couple of hours, and I think that we're going to be able to get that or something similar through the House of Representatives, and I think through the Senate, because I believe there's some momentum now for really securing this infrastructure.
And that includes -- that includes making sure that we inspect 100 percent of the cargo containers coming through these ports. We've got the -- we're the masters of surveillance, and we ought to be able to inspect these doggone cargo containers. And I look forward to having a good old colonel out of the 101st Airborne coming back from Iraq and being a port director who gets that kind of stuff done.
DOBBS: That's a terrific idea, and I hope your colleagues are listening to you.
I'd like you to, however, listen to something that General John Abizaid, the head of the U.S. Central Command, said just a few hours ago. If we could roll that sound bite.
(BEGIN VIDEO CLIP)
GEN. JOHN ABIZAID, U.S. CENTRAL COMMAND: The United Arab Emirates is absolutely vital to our stake in the Arabian Gulf area, that they have been good partners, good allies. I'm very dismayed by the emotional responses that some people have put on the table here in the United States, that really comes down to Arab and Muslim bashing. That was totally unnecessary.
(END VIDEO CLIP)
DOBBS: What is your reaction to a member of the general staff getting involved in what is, first of all, by the White House's assertion, a commercial transaction, one that would work tirelessly for -- but to hear the head of the Central Command accuse the opponents of this deal of being anti-Arab, anti-Muslim and inject himself into a domestic political discussion?
HUNTER: Well, first, General Abizaid and other generals have said that this -- that the UAE and Dubai have been very cooperative. What they've seen, Lou, is a cooperative side when we're making military operations...
DOBBS: But, Mr. Chairman, if I may interrupt you...
HUNTER: But they don't...
DOBBS: I'm talking about what he said about the critics of this deal. And he injected himself specifically into it. That's got to concern you.
HUNTER: Yes, I can just speak for myself, and that is, I don't know if he's referring to my criticism, but my criticism is based on 66 nuclear triggers being shipped through Dubai while American agents are sitting there asking the Dubai government not to let them go, and they say we don't care what America's position is; they're going. Now, that's not anti-anything expect pro-American security.
DOBBS: Exactly.
HUNTER: I don't think the general knows about those things. I think he sees -- he sees the smiling face of Dubai when we're making military operations.
DOBBS: It is in my judgment, and I will say it this way, and in my judgment it is unseemly to see this administration and this Department of Defense literally -- and I hate to use this, in all respect for the uniform and the men, these men who serve the country so well -- to be trotted out to support a deal that is a commercial transaction and a domestic political issue like this. Does that offend you?
HUNTER: Well, actually, Abizaid, General Abizaid was over here to give his regular briefings to...
DOBBS: No, I understand.
HUNTER: Which he did in private session, and he was asked that question. So to his credit and to Tommy Franks' credit, Lou, those guys have seen when we have been moving men and material into war, they have seen the Dubai government and a UAE that has accommodated us. The problem is they accommodate the bad guys when that's in their interest.
DOBBS: Congressman Duncan Hunter, we thank you for being with us.
HUNTER: Let's stick with this issue, Lou. We've got a lot of work to do.
DOBBS: Thank you, sir. Appreciate you being here.
Congress today finally acted on the will of the people and killed the Dubai Ports World deal. As Congress sides with the public, the Bush administration has consistently put commerce over foreign policy interests, trade interests over domestic security.
The administration is so committed to its big business friends, apparently, that in many cases it's lost sight of what is best for America and Americans.
Christine Romans has the report.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Call it White House, Inc. This administration, single-minded in its defense of free capital flows.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It would send a terrible signal to friends and allies not to let this transaction go through. ROMANS: Even though in this transaction, it's private capital from an un-democratic regime. But the White House and its business allies brand criticism of the ports deal "protectionist," and "harmful to foreign investments."
REP. FRANK LOBIONDO (R), NEW JERSEY: The administration and the Treasury Department will have to start to differentiate between critical infrastructure and just ordinary foreign investment.
ROMANS: Business groups unflinching in their support of the president. And the Business Roundtable vowing to, quote, "speak up more on this."
Make no mistake, in Washington, the voice of business is heard loud and clear. The Medicare prescription drug plan was a boon for drug companies, just as the energy bill gave billions in subsidies to enormously profitable oil companies.
And president's American Jobs Creation Act, a rewriting of the corporate tax code, which likely created more jobs overseas.
And the corporate tax rate is near the lowest level in history.
PETER MORICI, UNIVERSITY OF MARYLAND: It seems as though George Bush's behaving like a president of a multinational corporation and not like the president of the United States. He seems to be more concerned about the vitality of larger American multinationals with significant positions in places like China and Europe, and not at all concerned about the security of the United States, American workers or so forth.
ROMANS: That's where the outrage over the trade deficit and this ports deal merge.
(END VIDEOTAPE)
ROMANS: Because of our trade policies, the trade deficit with China, for example, last month alone was almost $18 billion. And the fact is, increased budget deficits mean the U.S. is in desperate need of foreign capital to keep the nation running -- Lou.
DOBBS: And as a footnote, an important one, the trade deficit last month was $68.5 billion. And if you're keeping track, that is a record monthly trade deficit.
Thank you very much, Christine Romans.
Congressman Barney Frank is a strong opponent of the Dubai Ports deal. He said -- he has said repeatedly big business interests in this country are hijacking the national agenda and putting all Americans at risk. He joins us tonight from Washington, D.C. It's good to have you with us, Congressman.
REP. BARNEY FRANK (D), MASSACHUSETTS: Thank you, Lou.
DOBBS: What is your reaction to the collapse of the deal today? FRANK: Cautious optimism. I believe that this means that we've gotten past this one problem. And I am hopeful that they have learned from their political mistakes -- and I mean by this the Bush administration -- not to get cute on this one, but to have a genuinely independent private company running this.
I also, though, think it reinforces the view that we should proceed with legislation I co-sponsored today with Congresswoman Mahoney, a bill to change this whole process. It shouldn't take this kind of extraordinary degree of exertion on the part of a whole lot of people, yourself and a lot of others, to get this deal undone. We should have a process that would have nipped something like this in the bud.
I mean, I agree with the president that it's probably done some damage to relations with some of the Arabs, but that's entirely his fault. If they had any sensitivity, they would have told Dubai last October, you know what, why don't you go out and buy a chain of movie theaters, why don't you go out and buy some commercial real estate, why don't you go out and buy a factory making DVDs. This is not the right time for you to run this.
DOBBS: It is -- the discussion of the political tone-deafness on the part of the administration is one issue.
The other issue is, as we have been reporting here for some time, is the dominance of business interest over the political system in this country. Do you have any sense that that is going to change, at least in this election year?
FRANK: No.
DOBBS: And that we'll see some balance and proportionality for the national interest?
FRANK: Well, that's up to my Republican colleagues. To be honest, they have been pretty supine up until now. You know, I'm afraid they have previously allowed ideology and partisanship to trump the constitutionality -- the constitutional separation of powers.
The problem now for them, Republicans, is George Bush is never going to run for anything again; my Republican colleagues are. That may be why you're beginning to see a separation for the first time, because you are absolutely right, the policy of this administration has been that the way for the rest of us to prosper is for the owners of capital basically to get a totally free hand.
And, obviously, we all want the owners of capital to be sufficiently rewarded so that our economic system functions, but giving them literally a totally free hand is a problem, and I think that's what happened here. The president didn't focus on the fact that this was owned by a government. This is one private company buying another and in this administration, that's OK.
DOBBS: However, on the other hand, if the owners of capital in this country had received the same return and appreciation on that capital as working men and women have seen in their average wages over the course the last 30 years, we would have a severe reaction I'm sure within this economic system. Congressman Barney Frank, we thank you for being here.
FRANK: Thank you, Lou.
DOBBS: Still, ahead, Senator Robert Menendez, one of the first to oppose the Dubai Ports World deal. He's our guest here next. Please stay with us.
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DOBBS: The Dubai Ports World deal would have transferred, amongst others, port operations in Newark, New Jersey, to the company owned by the government of Dubai.
Senator Robert Menendez said that was simply unacceptable and, along with Governor Jon Corzine, he fought on behalf of New Jersey constituents against a deal that, in his judgment, would have put their safety at risk. He continues to fight against foreign port ownership tonight.
Senator Menendez, good to have you with us.
SEN. ROBERT MENENDEZ (D), NEW JERSEY: Good to be with you, Lou.
DOBBS: Your reaction to the end of the deal? What appears to be the end the deal, I should say, with all caution?
MENENDEZ: Right. Well, we're cautiously optimistic. If this means real divestiture, which means no ownership, no control, no operations, it's a victory for the American people and for our security. And that will be phase one, but it won't be the end of the debate, Lou.
I appreciate what you and your program have done to rivet the attention of the American people first and foremost on this Dubai ports deal and secondly, on the broader question of port security and foreign ownership of U.S. ports and operations.
DOBBS: Well, that's kind of you, Senator. What is next in your fight for port security? What do you think should be the next steps to assure, improve security at -- lamentably slack security at our nation's ports?
MENENDEZ: Well, two things I think -- three things I think that need to happen as a result of what we have all learned. Number one is, we should pass the Menendez-Clinton legislation that I offered at the very beginning of this debate that says no foreign government should have the operational capacity or ownership of the terminals at the ports of the United States. Pure and simple.
Secondly, we should make sure that the Committee on Foreign Investments in the United States should be totally overhauled, and that security should be job one. And, lastly, we should do what I offered today in the Budget Committee, that Republicans rejected to my chagrin, which is to have the security enhancements at the ports of the United States and to use the technology both that is available and developing to make sure that we get to 100 percent review of all of the cargo, not just five percent.
DOBBS: And I should point out that Senator Chuck Schumer's amendment will be moving to a vote in the Senate which is a positive development, don't you agree?
MENENDEZ: Absolutely. I mean, that will be focused strictly on the Dubai port deal. It's a good thing to make sure that we've actually nailed this coffin shut. But then we want to move to a vote that says that it will be the law of the United States that port terminal operations cannot be in the hands of a foreign government.
DOBBS: Senator Robert Menendez, good to have you with us.
MENENDEZ: Good to be with you, Lou.
DOBBS: And I want to, while we -- in addition to the people that you're seeing on this broadcast this evening who led the fight against the Dubai Ports World, we could not appropriately leave out the name of Congressman Jerry Lewis who led the House Appropriations Committee vote 62-2 which was critically important in this outcome.
A reminder to vote in our poll tonight. Are you stunned that our elected officials in Washington have actually listened to the concerns of the people? Cast your vote at loudobbs.com. We'll have the results coming up here in just a few minutes.
Still ahead, more of your thoughts on the ports deal in a stunning defeat for the White House. I'll be talking about the implications with some the country's sharpest political minds and analysts.
The military speaking out on domestic politics -- it could be in violation of military regulations. Is it a matter for concern? Stay with us.
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DOBBS: "THE SITUATION ROOM" at the top of the hour coming up with Wolf Blitzer. Wolf, what do you got?
WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou.
Republican revolt -- we'll have a lot more on the White House being handed another stunning defeat. The port deal looks like it's dead in the water. Has the president become a lame duck in the process? David Gergen and Jeff Greenfield standing by.
Plus, bird flu coming to America -- health officials warning it could hit the United States over the next six months. What will that do to the nation's chicken farms? Also, unlikely allies. Hillary Clinton teaming up once again with another arch-conservative, Trent Lott, for a specific cause. Anderson Cooper looking into this story. Why is she teaming up with conservatives once again?
And war of words, find out who Condoleezza Rice now says is the greatest challenge to the United States. Lou, all that coming up in a few moments.
DOBBS: Thank you very much, Wolf.
The rejection of the Dubai ports deal by Congress represent a triumph of the popular will of defeat for the Bush administration. Joining me now, Hank Sheinkopf, Democratic political consultant and strategist. Bill Schneider, our senior political analyst, John Fund, columnist "Wall Street Journal" and CNN military analyst General David Grange.
Gentlemen, good to have you with us. Hank, let me turn to you first. What does this deal mean?
HANK SHEINKOPF, DEMOCRATIC POLITICAL CONSULTANT: What it means is that the Republican Congress is afraid that they're going to lose their jobs come November and they're going to stand up, not so much to the president, but walk away from the president when required to protect themselves.
DOBBS: Does this render President George W. Bush a lame duck?
SHEINKOPF: It certainly makes it more problematic that he'll get anything done, that it is all controversial and could interfere with his fellow party members in the legislature.
DOBBS: Bill Schneider, is -- are we going to see more expression of the people's will and response to it in Congress as a result?
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Certainly if the president is on one side, the people on the other, Congress is going to side with the people because they're going to have to face the people in November. And that's exactly what happened here. When the people are activated and energized, as they were on this issue, they will be heard.
DOBBS: John Fund, many have said that this was a collision between commercial and trade interests and the national -- the national interest, the national security. What is your judgment about the outcome and its implications?
JOHN FUND, COLUMNIST, WALL STREET JOURNAL: Lou, you've heard nine voices different from mine tonight, so in fairness, I hope I can finish my thought. National security -- national security is important and if we're going to say Dubai is a threat to our national security, let's talk about another threat.
Right now, last year the Justice Department career prosecutors filed a RICO racketeering suit against the International Longshoremen's Union and its 31-member executive council saying they were completely infiltrated by the Gambino and Genovese families. It said that Genovese crime families controlled the Manhattan, Staten Island and Miami ports and other ports were controlled by organized crime.
If we're worried about national security, let's take care of it. Let's improve our port container security, but let's also address the on the waterfront union problem, which is also a threat to national security.
DOBBS: If you think you're going to hear from me, I don't know if any other people want to respond, but blow it up. If there is a quick Mafioso anywhere, blow it up.
FUND: But Lou you have done 37 reports on this port deal, you have not done a single one on the union angle, not one.
SHEINKOPF: It is a religious argument for the following reason. The average American in the heartland is not thinking about comparing that kind of criminality to international terrorism.
DOBBS: Hank, I hate to interrupt you, but I've got to correct John Fund. In point of fact, we have reported on that issue right here on this very broadcast and we did it tonight as a matter of fact.
FUND: Yes, 16 seconds, I timed it, 16 seconds.
DOBBS: But wait a minute, you knew that, and then you still misstated the fact?
FUND: No, no, I said you have not -- Lou, you have done not one complete story.
DOBBS: John, you can attack me later, I know that you want to.
FUND: You have not done one complete story on this subject.
DOBBS: You can attack me...
FUND: ... I'm not attacking you, I'm asking for fairness.
DOBBS: I would like to take up the time here for the issues that we came together to discuss, if you don't mind, John.
FUND: Sure.
DOBBS: And one of those issues that I'd like to discuss is General Abizaid, General Grange, standing up and talking, basically suggesting that critics of the Dubai ports deal, many were in fairness as he's put it were anti-Arab and anti-Muslim and thereby injecting his uniform into this debate.
FUND: It is a problem. We now have severed a lot of...
DOBBS: ... I'm sorry, I was talking -- John, I appreciate it, but I was talking to General David Grange. FUND: Oh, I'm sorry.
BRIG. GEN. DAVID GRANGE, CNN MILITARY ANALYST: Thank you, Lou, I think it's my turn. I would say that it's OK for the general to talk about UAE as an ally and a benefit in that region, but uniformed services do not want to get involved in any political debate or the perception thereof and something like this port deal.
DOBBS: And do you think that it's appropriate for this administration and I'm going to ask you -- the country has not produced a finer warrior than you -- do you think it's appropriate for this administration, whatever the issue, domestic politics, because this was a commercial contract, to move out men who are so distinguished, so distinguished in the service to the country, like General Abizaid, to promote a position taken, a political position taken?
GRANGE: I hope that was not the intent. I don't believe it was. The problem is, if it looks like you have the military doing some type of political statement or posturing, that perception, the military service of the American people, the military does not represent the American people in Washington D.C.
DOBBS: Bill Schneider, we're talking about the idea that ports have -- or as John Fund was suggesting, infiltrated by Mafioso, as Casey Wian reported here, other undesirables, I think that is the kindest word to put on it.
How is that we can be four and a half years since 9/11, and have any issue of port security? Casey Wian reported one percent of the containers being screened for radioactive material. This looks like a fraud upon the American people to even call the Department of Homeland Security, homeland security.
SCHNEIDER: Those figures are shocking. Americans, I thought the figure was five percent. You say we've reported it's one percent.
Americans are familiar that tiny percentage of the cargo going through our ports is really inspected. It frightens Americans. And what it has done really is drive down President Bush's ratings on his signature issue, which is national security and Republicans won on that issue in 2002. They won on that issue in 2004. They are very worried about losing that issue in 2006.
DOBBS: In 2006, midterm elections, do you think this Republican revolt will work against those Republicans in the House and Senate running for re-election? Of course all of them in the House, or do you think in a strange way, it might be beneficial to them, despite the fact that the Democrats have asserted themselves on the issue of national security?
SHEINKOPF: It's far better for the Republicans themselves to revolt against this. They can't control the economic argument. They always lose on it. They can't control soft issues. They used to own, as Bill notes, national security issues. They have to grab that territory back or they're going to get beat very badly. DOBBS: Let me ask each of you and this issue according to John Castellani, the president of the U.S. Business Roundtable representing 160 of the biggest corporations, said "that the issue is troubling because the U.S. needs foreign investment. We need to invest around the world. It is an election year, but we hope to remind people what is at stake and how important foreign investment is."
John Fund, what's your reaction?
DOBBS: Dubai bought 42 Boeing 777's last year. Now there's kind of a bit of 50 planes, they can either buy from Airbus or they can buy from Boeing. Lou, if they buy from Airbus, I hope you interview one the workers at Boeing who's going to be out of a job because of it.
DOBBS: And that's an interesting reaction. Dave Grange, yours?
GRANGE: My reaction is the first priority is homeland defense, this homeland. The relations overseas are very important but then homeland comes first.
DOBBS: Amen, brother. Thank you all for being here. We appreciate your thoughts.
Coming up next, the results of our poll tonight. Please stay with us.
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DOBBS: We're just about out of time. I don't have time to go to all of your e-mails. We're going to do that tomorrow, I promise, and I apologize for not having them. Our poll, huge response to the poll tonight, 95 percent of you saying -- and we're doing this, with I assure you a warm and open heart.
You say you are stunned that our elected officials in Washington have actually listened to your concerns of the American people. Only five percent of you not. We thank you for being with us tonight. For all of us here, thanks for watching. Good night from New York. "THE SITUATION ROOM" and Wolf Blitzer, right now -- Wolf.
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