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LOU DOBBS TONIGHT

Retired Customs Agent Discusses Border Corruption; New Cases of Food Poisoning in Nebraska and Illinois; Episcopal Church Fights With U.S. Tax Officials

Aired September 18, 2006 - 18:00   ET

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


LOU DOBBS, CNN ANCHOR: Tonight, religion, politics, war, nationalism, Muslim rage escalating around the world over the pope's comments on Islam. Also, tonight, President Bush prepares to defend his conduct of the war on terror in a major speech to the United Nations. And insurgents in Iraq kill another of our troops, more than 20 Iraqis killed in coordinated bomb attacks. All of that, a great deal more, straight ahead here TONIGHT.
ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Monday September, 18. Live in New York, Lou Dobbs.

DOBBS: Good evening, everybody.

Tonight, the pope has failed to stop rising Muslim fury over remarks he made about Islam and violence. The pope says he is deeply sorry for the reaction his remarks have caused, but protestors across the Islamic world outraged, and an Al Qaeda group in Iraq is now threatening to wage war until Islam takes over the world.

In Iraq today, insurgents killed 22 people in a series of coordinated suicide bombings in the Western part of the country. Police also found more bodies apparently the victims of sectarian killings.

Alessio Vinci reports tonight from Rome on the pope's failure so far to contain rising Muslim rage. Michael Ware reports tonight from Baghdad on the escalating insurgent attacks in Iraq. And Suzanne Malveaux here with a report on the president's efforts to defend his policies in the global war on terror and against radical Islamist.

But first, many Muslim leaders tonight are refusing to accept the pope's apology for his comments Iraq, demonstrators burned an effigy of the pope. They also burned the American flag. Other demonstrations against the pope took place in Indonesia and Syria today. The supreme leader of Iran tonight said the pope's comments are proof of what he calls a crusade against Muslims.

And the murder of an Italian nun in Somalia appears to be a revenge attack against the pope for his speech. Alessio Vinci in Rome reports on the escalating crisis.

(BEGIN VIDEOTAPE)

ALESSIO VINCI, CNN CORRESPONDENT, LOU DOBBS TONIGHT (voice over): In an unusual move the Vatican expressed regret three times in three days for a quote Pope Benedict referred to in a speech, a sign perhaps of the Vatican's concern not to jeopardize an already difficult dialogue between Muslims and Christians. Followers of Islam were outraged last week when the pope quoted a Byzantine emperor who described some of the teachings of Prophet Mohammad as evil and inhuman.

POPE BENEDICT (through translator): I am deeply sorry for the reactions in some countries for a few passages of my address at the University of Regentsburg which were considered offensive to the sensibilities of Muslims.

VINCI: Benedict said the quote did not reflect his personal thoughts and Vatican officials explained it was taken out of context. The second highest ranking official of the Vatican, meanwhile, has instructed Vatican ambassadors in Muslim countries to explain the church's position to political and religious leaders, especially keeping in mind the context of the speech. However, no Vatican official has yet explained why that specific controversial quote was chosen.

Speaking from his summer residence outside Rome on Sunday, the pope hopes to appease hearts and clarify the true meaning of his address. An address, by the way, in which he also called on believers of different faiths to open a frank and sincere dialogue.

UNIDENTIFIED FEMALE: I find it very sad that religion causes so many problems. I'm sorry for the Catholicism and for Islam.

VINCI: From Cairo, Egypt's Muslim Brotherhood said it was not a sufficient apology, after first saying it was. The pope spoke amid tighter security than usual as both Italian and Vatican officials raised the alert level around Vatican sites.

The pope is due to make a trip to Turkey in late November, his first trip to a Muslim country. For the time being, Vatican officials say the visit is still on. Alessio Vinci, CNN, Rome.

(END VIDEOTAPE)

DOBBS: Joining me now, our Faith and Values Correspondent Delia Gallagher.

Delia, the pontiff, in making these rashes, what is your best guess as to what he was trying to achieve -- originally?

DELIA GALLAGHER, CNN FAITH & VALUES CORRESPONDENT: Well, in the original speech, of course, he was making comments about the West and science and faith and reason, entirely other things. But he did use this example of Islam and he was fully aware he was using it. I don't think he was aware of the consequences it would have.

But he used it for a purpose and he wanted to bring up the role of violence in religion and ask the question, and put the challenge to Islamic authorities, let's discuss it. We want to have a dialogue. Let's start at this point because this is very important. Do we all believe in the same kind of rational god? Do we have a point of departure here, for dialogue?

DOBBS: That's an abstraction, the reality is he has set offer a firestorm in the Islamic world. It's a firestorm that some critics of the pontiff, and Vatican, say was simply unnecessary.

GALLAGHER: Well, there is the perception of what has happen and then there's the reality. I think he thinks he stands by his words, which is why in the apology you saw that he's not apologizing --

DOBBS: Interestingly, he apologized for the reaction to his words, but not for the words.

GALLAGHER: But not for what he said, because he's not so sorry for what he said. He think he really truly believes in this need for dialogue about violence in religion, but there's a huge lakunai (ph) a the Vatican as far as their media.

DOBBS: Their what?

GALLAGHER: There is a huge -- uh, lapse at the Vatican far as their media, their media apparatus really is wanting at the moment, because this has been going for almost a week now and it seems with the reaction to be getting worse.

DOBBS: With that reaction, other critics of Islam are saying this simply validates and demonstrates clearly what the pontiff was asserting in those comments.

GALLAGHER: Well, ironically yes. He was trying to address the very thing about violence and religion. On the other hand you have to say well, he's the pope, he's on a world stage. He's not a professor any longer at a German University, and he has to be more careful about what he puts out there.

DOBBS: And as for each of us he needs to say what he means, mean what he says, right?

GALLAGHER: Yes, I think he does.

DOBBS: Delia Gallagher, thank you very much.

Later here, more religious organizations in this country are trying to gain political power and influence in a rising number of cases, those organization may in fact be violating the law, and our national traditions, we'll have that special report coming here.

Insurgents in Iraq today killed more than 40 people; 22 of them in suicide bomb attacks. Iraqi police also found more victims of sectarian killings. Michael Ware reports from Baghdad.

MICHAEL WARE, CNN CORRESPONDENT, LOU DOBBS TONIGHT: Lou, the violence continued in Iraq, in what's considered a comparatively quiet day; a reflection of the true levels of the violence in this country.

Fourteen tortured and executed bodies were found this morning across the capital. Bringing the total since Tuesday to 198 victims of what is believed to be the sectarian violence plaguing Iraq. This is up from last week's total of 150.

Elsewhere, in the northern town of Talafa, on the Syrian border, a town held up by President Bush as a mark of American success, a suicide bomber struck a marketplace killing as many as 20 people, according to local police. Though, the death toll has yet to be finalized.

Elsewhere in Ramadi, in the country's west, the Al Qaeda front line in Iraq, a double suicide bombing attacked a key police station. This police station is manned by members of tribes, which have committed themselves to the U.S. campaign in that country.

We've had reports in the last 24 hours of more than a dozen sub tribes from Ramadi swearing to oppose the al Qaeda dominance of their city. The level of violence is continuing in the lead-up to what is expected to be the fourth Ramadan or holy month offensive here in Iraq, as the security crackdown begins to tighten on the capital and across the country -- Lou.

DOBBS: Michael Ware reporting from Baghdad.

Insurgents have killed another of our troops in Iraq, a sailor serving with the U.S. Marine Corps killed in Al Anbar Province west of Baghdad, Saturday; 39 troops -- 39 of our troops have been killed so far this month; 2,682 killed since this war began.

U.N. Secretary-General Kofi Annan today declared that the conflict in Iraq is what he termed grave danger of escalating into a full scale civil war. The secretary-general said Iraq could break apart if this violence continues. And, Annan called on Iraq's neighbors and the international community to help stabilize Iraq, and to do so immediately.

President Bush tonight is in New York City preparing for a major speech to the United Nations on his policies in the war on terror, and his conduct of the war against radical Islamists. The president's speech tomorrow comes as the president's policies in the Middle East, and elsewhere, are facing rising criticism in both this country and around the world.

Suzanne Malveaux is here in New York traveling with the president and a preview of the president's speech as well.

Suzanne, what does the president hope to achieve at the United Nations?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT, LOU DOBBS TONIGHT: Well, as you know, the president really has a credibility problem with many of these nations. It was last year when he addressed the United Nations General Assembly, and he was essentially thanking these leaders for helping, or offering to help, the with Hurricane Katrina.

He is trying to trying to sell the war on terror. This is something that we've seen with the domestic audience. This is something that will surely or at least the administration believes will help Republicans for the midterm elections. But he also hopes too, that this is going to be kind of this broader campaign, this is not just about Iraq.

But he's going to convince them -- or try to convince them -- that this is a so-called freedom agenda. That they have a role to play when had it comes to Iraq or when it comes to Lebanon or the Palestinian Authority, that all of them have to get involved.

DOBBS: And at a time when the secretary-general of the U.N. is saying, point blank, that Iraq is on the verge of civil war, the timing could not be better -- nor could Annan be acting more, or at least speaking more in concert with the president.

In terms of Iran, with that issue before the United Nations, with the president of Iran also in New York, at the same time. What will the president do? What does he hope to achieve in the case of Iran, and principally, the Iranian president?

MALVEAUX: Well, this is kind of a strange kabuki dance that these two are doing. Because obviously the president does not want to meet face to face with president Mahmoud Ahmadinejad. I asked him on Friday, point blank, whether or not he was going to meet with him face to face and he said, no.

What the president is trying to do is kind of stick this hard line -- at least publicly -- saying, look, I'm not going to meet with you, or your government until you stop or suspend enriching uranium.

Quietly what is happening, however, and it's interesting to follow Secretary Rice's -- her activities, not within the next 48 hours, but within the next couple of weeks in New York, that is where European counterparts are quietly trying to figure out a way to negotiate with Iran, to bring them back to the table here. So that you've got this dual track that's happening, tough talk from the president, but really a little bit soft manipulation that is happening behind the scenes.

DOBBS: And what appears to be a massive shift in policy on the part of this administration, towards embracing the U.N. the multi- lateral approach, is this political expediency as we move to the midterm elections? Or is it heartfelt and sincere intellectual, political -- geopolitical effort to make right policies that seem to have gone wrong?

MALVEAUX: I think part of it is political reality that the White House does realize they have to work closer with those in the United Nations. That it doesn't help them to take them on in that we or to disparage them, as he did four years ago; but I think, make no mistake, part of this audience, he's talking to world leaders is the domestic audience.

That is trying to convince the Americans to focus on the war on terror, don't focus on the unpopular Iraq war, this is something the Republicans do very well with in the polls, they've already gotten a bump just over his public relations campaign over the last couple of weeks. And they hope to keep the majorities in the Senate and House, and that's also what they're counting on as well.

DOBBS: The president, tomorrow, may in effect be bestowing a relevance that he had denied the United Nations for some time.

Thank you very much, Suzanne Malveaux, traveling with the president.

MALVEAUX: Thank you.

DOBBS: Thank you.

There is rising concern tonight on Capitol Hill over the effectiveness of Capitol Hill security, and there certainly should be. Officials are now asking how an armed man was able to successfully crash his SUV into the Capitol Hill barricades today and then rush into the Capitol Building.

The gunman reached the third floor of the capitol before police were able to apprehend him. Brian Todd has the report from Capitol Hill -- Brian.

BRIAN TODD, CNN CORRESPONDENT, LOU DOBBS TONIGHT: Lou, we've got several details -- new, to us just now -- from the acting police chief of Capitol Hill, Chief Chris McGaffin.

That fact that the gunman got to the third floor was actually just the beginning of his breach into the Capitol building, he actually accessed the building on the third floor and traveled down a couple of floors, at least 150 yards into the building, before he was apprehended at the flag room, which is actually on the opposite side, inside the Capitol building from where he entered.

We do have a couple of extra details now from the police chief. This happened at 7:47 a.m. this morning. The suspect now identified as Carlos Green was driving a stolen SUV, crashed through police blocking vehicles that were blocking a gate to a construction area, where they're building the visitors center. Drove several yards, then crashed into a skylight or at least a wall protecting a skylight.

He then ran up the up the stairs, accessed the capitol on the third floor as we mentioned. Somehow got down at least one floor, and we believe now, possibly two, and across the building. This, all the time carrying a handgun, and what we're told is a small amount of crack cocaine.

When we pressed the acting chief about this breach, this is what he had to say.

(BEGIN VIDEO CLIP)

CHRISTOPHER MCGAFFIN, ACTING CHIEF, U.S. CAPITOL POLICE: This was unacceptable by my expectation for the Capitol Police. It was an unfortunate breach of our security, but it wasn't a total breach. The interior security protocols were executed and worked at a 100 percent satisfactory level. We isolated this individual, we subdued him, he is under arrest, no one was hurt. (END VIDEO CLIP)

TODD: But police are in the words in Chief McGaffin, conducting what they call a security assessment of just how this happened, how he was able to punch through the police blocking vehicles, get so close to the Capitol, get up the stairs. And once he was inside, Lou, get about 150 yards into the building and down a couple of floors before he apprehended by the Flag Room inside the building.

DOBBS: Right, did we just hear the acting commander say it was satisfactory, the security standards?

TODD: Well, he said it was not satisfactory by his standards but he said the internal mechanisms for their security were acceptable, that the police did everything right once he got into the building. There's still a lot of questions about that though, Lou, the police chief did say he was being tracked, as long as he was inside the building, he was being tracked by surveillance cameras, they knew where he was every step of the way, but still he got quite a ways inside this building.

DOBBS: Let me share my opinion, if I may, on this issue. The commander needs to take leave of some time around all of the politicians in that city, and look at the objective reality. This should be a terribly alarming breach of security by any definition at any time.

Brian Todd, thank you, sir.

TODD: Thank you.

DOBBS: Still ahead, rising criticism among both active duty and retired military officers about the president's policies on the treatment of terrorism suspects, roll back the Geneva Convention? They say, no.

Also disturbing new evidence about massive waste and corruption among U.S. contractors in Iraq. Imagine that.

And a growing number of religious organization trying to gain political power and influence in this country, some are breaking the law in doing so. That special report, and more, straight ahead.

(COMMERCIAL BREAK)

DOBBS: New developments tonight in the showdown between the White House and leading Republican senators over the president's request to change the Geneva Convention, and the treatment of foreign terrorism suspects. The Senate Armed Services Committee, which had rebuffed the White House, says the White House is now sending new proposals to Capitol Hill in an effort to apparently try to break the deadlock.

One Republican staff member tells us the new proposals will contain, quote, "new language," but has no other details. We'll bring them to you as soon as we have them. A rising number of active duty and retired generals now criticizing the Bush administration's policies on this very issue. Many senior military officers say the president should give up his efforts to, quote, "clarify" the Geneva Convention on the handling of detainees. Barbara Starr has our report from the Pentagon.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN CORRESPONDENT, LOU DOBBS TONIGHT (voice over): President Bush's plan for interrogating Al Qaeda detainees has led to a new round of criticism. This time, it's coming from inside the military.

Legal officers who say the president's plan puts U.S. troops at risk by opening the door to redefining how personnel are treated under the Geneva Conventions. It's a technical legal issue that some say underscores more broadly the senior officer's frustration with the Bush administration over the course of the war.

Growing questions of history: has the military learned what it believes what an essential lesson of Vietnam. Did this Iraqi war generation of generals speak up about this war soon enough?

LT. GEN. DANIEL CHRISTMAN (RET.) U.S. ARMY: Yes. I think the generals think about the legacy of Vietnam and the dereliction of duty mantle, and they don't want to be shackled with that.

STARR: Three retired chairman of the joint chiefs of staff also object to the interrogation plan.

General Colin Powell, "The world is beginning to doubt the moral basis of our fight against terrorism."

General John Vessey, "It could give opponents a legal argument for the mistreatment of Americans held prisoner in time of war."

General John Shalikashvili, "The administration proposal poses a grave threat to American service members." And more questions about whether there were ever enough troops in Iraq. Brigadier General John Kelly says, when he was on the front line from 2003 to 2004, he often had to move his troops around.

BRIG. GEN. JOHN KELLY, U.S. ARMY: We're thankful that things didn't get too ugly, too quickly, because we literally didn't have the Marine or sailor to spare.

STARR: And General Binford Peay, retired head of the Central Command, says he believes far too few troops were sent to Iraq. Peay, now the third recent CenCom chief to criticize the war plan.

(END VIDEOTAPE)

STARR: You know, Lou, this part spring we essentially saw the generals, some retired generals, revolt calling for Defense Secretary Donald Rumsfeld to resign. If this is now a second revolt, analysts say it reflects a broader and growing disenchantment and unhappiness with how the war is going by the senior officer corps -- Lou.

DOBBS: And the continual defense of what has been a three and a half year effort in Iraq with a rising insurgency now, one which the Pentagon defends, which the general staff defends, and which apparently the Congress in its oversight role has chosen not to hold those generals, that general staff accountable, why is that?

STARR: Well, you know, the question in this government, the way it is organized, it is clearly the civilian leadership which controls the U.S. military, the officer corps, the uniform military says it operates under this Constitution at the direction of the uniformed leadership. But almost four years into this war there is simply no question anymore that many senior officers are growing very concerned and make no mistake, many of them that we speak to say the legacy of Vietnam, when have is was a so-called dereliction of duty by senior officers, not speaking up when they might otherwise might have, is a hangover almost a quarter of a century later, Lou.

DOBBS: Unfortunately, an important doctrine, the Powell Doctrine ignored from the outset in our entry into both Afghanistan and Iraq. Barbara Starr, thank you very much, reporting from the Pentagon.

Troubling new evidence tonight about massive waste and corruption by American contractors in Iraq. Nearly $10 billion of U.S. government money in Iraq is unaccounted for, $10 billion. And perhaps even more disturbing, taxpayer dollars enabled many of those contractors in Iraq to have better living conditions than our own troops. Lisa Sylvester reports from Washington.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT, LOU DOBBS TONIGHT (voice over): Iraq is a cash cow for government contractors who collect $10 of millions of U.S. taxpayer dollars, and often don't deliver the goods.

The U.S. government contracted to have a prison built for 4,400 prisoners, the cost, $45 million. The taxpayers ended up paying $48 million for a prison a third of the size. In a separate case, the U.S. government paid the contractor Parsons $200 million to complete 142 health clinics, six were completed.

SEN. BYRON DORGAN, (D) NORTH DAKOTA: I think it's almost unbelievable that the oversight and the accountability is not there, no one seems to give a damn.

SYLVESTER: The Democratic Policy Committee held a hearing accusing the Republican-controlled Congress of not investigating rampant waste and abuse. Julie McBride, a former Halliburton worker testified that that perks meant for the troops were going to Halliburton big wigs.

JULIE MCBRIDE, FMR. HALLIBURTON EMPLOYEE: Halliburton employees also exploit requisitions to obtain luxuries that are not afforded to the troops, one example of this was a Super Bowl party for Halliburton employees only, at taxpayer expense. Halliburton requisitioned a big screen TV and lots of food for the private use of Halliburton employees.

SYLVESTER: Half of the $18 billion in Iraq reconstruction funds are unaccounted for. The special inspector general for Iraq reconstruction has opened up 40 new investigations of alleged fraud and corruption. The money wasted on government contracts comes directly out of the pockets of U.S. taxpayers. But it also costs troop morale.

PATRICK CAMPBELL, IRAQ-AFGHANISTAN VETERAN: Soldiers don't have a whole lot when they're sitting in 20-man tent, and when they see KBR employees driving around in their personal vehicles, and eating better food than them, it just totally drives you down.

SYLVESTER: So, far the Justice Department has not brought any civil or criminal cases to recover for contracting fraud in Iraq.

(END VIDEOTAPE)

SYLVESTER: Halliburton responded to today's hearing saying it takes any charges of improper conduct seriously. The company's code of conduct, quote, does not allow unethical business practices -- Lou?

DOBBS: And what about the issue of those contractors receiving better treatment, food, housing, living conditions than our troops in Iraq? Any investigation under way there?

SYLVESTER: This is a huge problem. It's one that many soldiers, and that our troops will come back, and we often hear these stories, anecdotally. As far as what Halliburton says, is it says that it is allowed to provide for the morale of its employees, but there clearly is a discrepancy in the way Halliburton has been treating its employees versus how and some of the services that the troops have been receiving, Lou.

DOBBS: That's a combat theater and I think the generals would have some explaining to do on that issue as well. As well as the issue, in this administration, in terms of the pay of private security forces and their living conditions as compared to American troops are doing the tough, tough job of trying to stabilize Iraq.

Lisa, thank you very much. Lisa Sylvester reporting from Washington.

Still ahead here, I'll be joined by former DEA Agent Lee Morgan, the author of a provocative new book on corruption on our southern border.

And religious organizations across the country are increasing their efforts to gain political influence and power, and they are increasingly being accused of violating the law. Those tore stories and a great deal more, straight ahead.

(COMMERCIAL BREAK) DOBBS: Health officials in Nebraska and Illinois tonight are reporting new cases of food poisoning linked to E. Coli contaminated Spinach. At least 111 people in 21 states have been sickened by this E. Coli outbreak. One person has died. The Food and Drug Administration tonight is warning consumers to avoid eating all fresh Spinach until its investigation into contaminated bagged Spinach is completed.

The FDA says it does not believe the contaminated Spinach was tampered with, but it, in fact, doesn't know. It says it still has no idea how E. Coli found its way into the Spinach products and the investigation goes on.

There is a widening debate in this country over whether religious institutions should lose their tax exempt status for promoting political causes and involving themselves in politics. In California tonight, an Episcopal Church, opposed to the war in Iraq, is fighting to retain its tax exempt status with the IRS. Its battle comes as conservative religious institutions are increasingly promoting their causes from the pulpit.

Tonight, Peter Viles reports from Los Angeles on the Episcopal Church's fight with U.S. tax officials. Casey Wian tonight reports on the rising influence of religion in American politics today. We begin with Peter Viles, Pete.

PETER VILES, CNN CORRESPONDENT: Lou, All Saints Episcopal, this church in Pasadena taking the national lead on this issue, strongly suggesting it will not cooperate with the IRS. It thinks the issue is so important, it should be settled in open court.

(BEGIN VIDEOTAPE)

VILES (voice-over): At All Saints Church in Pasadena traditional sermon first start with a joke.

REV. EDWIN BACON, ALL SAINTS EPISCOPAL CHURCH: I want to begin this sermon by once again expressing my gratitude to the Internal Revenue Service.

VILES: Then get right to the point.

BACON: This entire case has been an intrusion, in fact an attack, upon this church's first amendment rights to the exercise of freedom of religion and freedom of speech.

VILES: At issue is an IRS investigation of a sermon preached here on the eve of the 2004 presidential election. The IRS says it received a tip that the sermon, quote, took a position in opposition to the candidate George W. Bush and in support of the candidate John Kerry. It further reminds the church that as a tax exempt organization it is, quote, expressly prohibited from intervening in any political campaign. The church has long maintained the sermon was anti-war but not anti-Bush.

REV. GEORGE REGAS, RECTOR EMERITUS: I did not violate the tax law. I did not explicitly say vote for Kerry.

VILES: The IRS is demanding numerous church documents and wants church officials to appear at a private hearing. The church is digging in its heels.

BACON: I would rather have a judge making this decision in a free and open court than in a closed hearing with the IRS.

VILES: And to demonstrate that he will not be silenced, Reverend Bacon lashed out at the way the country is being governed.

BACON: I think we're seeing a slow train wreck of democracy in the past five years since 9/11 and I'm very concerned, both as a Christian, as a believer and as an American.

(END VIDEOTAPE)

VILES: Now back to that sermon two years ago, the preacher argued from the pulpit that Jesus, if he were alive today, would oppose the war in Iraq and would be very upset about the pro-life movement. It quotes Jesus as saying, if he were alive today, quote, shame on all those conservative politicians. So no question this was a political sermon, the question, Lou, is did it cross that line and specifically endorse or oppose one candidate or another. Lou?

DOBBS: Did the minister suggest why he was focusing on that issue rather than more sectarian issues, more matters of the spirit, rather than involving himself in conservative versus liberal, war or peace?

VILES: Well, we haven't heard a full explanation of why he close those issues. But he chose three, the war on terrorism, which he said Jesus would oppose, as it's being fought. Also poverty, he said neither candidate was saying enough about poverty and the third issue was abortion. And he did lash out at conservative politicians explicitly on that third one, Lou?

DOBBS: All right, Peter Viles, thank you very much.

Well, as the congregation, that congregation, fights the Internal Revenue Service, religious leaders all across this country are increasingly preaching politics from their pulpits. Some religious leaders are, in fact, breaking laws that do not fit their doctrine and urging others to do so as well. Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT: President Bush's narrow victory in Ohio in 2004 was assisted by a get out the vote effort from conservative Christian churches. This year, the IRS completed an investigation of politicking by tax exempt religious groups in 2004. And concludes there's a disturbing amount of political intervention by religious organizations in the United States.

REV. BARRY LYNN, AMERICANS UNITED FOR SEP. OF CHURCH AND STATE: What houses of worship cannot do, under federal law, is to endorse or oppose candidates for public office. They may not use their resources to intervene in a partisan race. Houses of worship cannot become kogs in anyone's political machine.

WIAN: That's exactly what Lynn says has become of James Dobson's conservative Christian group, Focus on the Family. It's distributing voter guides in eight states. Lynn claims its goal is maintaining Republican control of the Senate.

TOM MINNERY, SR. VP. GOVERNMENT & PUBLIC OPINION: We would never ask anybody to vote one way or another. For one thing it's illegal for us to do that. We just lay out the issues, have people informed about what's up and let them exercise their right as they wish to do it on election day.

WIAN: Though evangelical Christians may be the most visible political clerics, they're hardly alone.

CARDINAL ROGER MAHONEY, LOS ANGELES ARCHDIOCESE: This month particularly, we pray for a just immigration reform.

WIAN: The Catholic church openly lobbies for illegal alien amnesty. the Mormon church helps pro-amnesty incumbent congressman Chris Cannon with a get out the vote campaign and a Methodist church in Chicago harbors a fugitive criminal illegal alien. The Californian anti-war church says it's the victim of a political campaign by the Bush administration's IRS.

BACON: Our faith mandates that always stopping short of endorsing or opposing political candidates, this church can neither be silenced nor indifferent when there are public policies causing detriment to the least of these.

WIAN: The IRS says it investigates churches across the political spectrum. Its examination of the 2004 political cycle found nearly five dozen churches and charities violating laws against political activities.

(END VIDEOTAPE)

WIAN: Now this year, the IRS has put churches on notice, it will be watching them closely. The agency tells me tonight that there are now 40 active investigations into church politicking, Lou?

DOBBS: Perhaps there should be congressional hearings, Casey. It's perhaps somewhat concerning that the Internal Revenue Service would be the agency to take up the issue itself.

The idea that we evangelicals, we have the so-called right wing churches, if you will, involved in politics, whether through the issue, issues which can be used to lead certain parishioners and the membership toward a particular candidate, whether it's the Catholics or the Muslims in this country, this is leading to some very, very serious questions about the role of religion in politics and the role of politics in religion in this country?

WIAN: And it's absolutely created some very strange bedfellows. As you mentioned, the influence of the conservative Christian churches and then the Pasadena minister who is definitely what you would call a liberal.

DOBBS: Thank you very much, Casey Wian reporting from Los Angeles tonight.

That brings us to the subjects of our poll tonight. We would like to know whether you believe that we should be as assertive in keeping religion out of government as we are at keeping government out of religion? Yes or no. Please cast your vote at LouDobbs.com. We'll have the results coming right up.

Up next, the very latest from Coushatta, Louisiana where a white school bus driver forced black students to the back of the bus. The community trying to heal.

The granddaughter of a political icon says the GOP has hijacked her grandfather's conservatism. We'll be talking with her.

And he's been shot, clubbed, slashed, all in the line of duty. We'll talk with a former U.S. customs service special agent about his new book here next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Retired customs special agent Lee Morgan has been nicknamed the serpico of the desert for his efforts to expose rampant corruption on our border with Mexico. Morgan says this nation's border has become one of the most violent, corrupt places on earth. He's written a provocative new book exposing the real truth about this nation's border crisis. The book is entitled "The Reaper's Line: Life and Death on the Mexican Border." Lee Morgan joins us here tonight. Lee, good to have you with us.

LEE MORGAN, AUTHOR: Thank you for having me.

DOBBS: Let's start out with the fact that it's become the most violent place on earth. That being the case, why aren't more people focusing on that very fact?

MORGAN: Because we have the war going on in Iraq. So that's -- there's some issues there that are taking precedence, naturally. And other than that, we don't hear enough in the news media these days about the dying that is going on on the Mexican border. I don't know why.

DOBBS: The idea that as we report on the border, we are assailed by what I call socioethnic centric special interest groups who can't believe we're focusing on the border with Mexico. They want to say it's racist to be concerned about the security of that border, it's racist to be concerned about massive illegal aliens invading this country.

But the fact of the matter is you've lived on that border, you know the power of the drug cartels, the deaths. I mean, the murders that have taken place just so far this year across that border are incredible.

MORGAN: Absolutely. And during the course of my years down there, just in one investigation alone, there was about 25 bodies that were found. There was 11 or 12 dumped at one time into a well.

So it's gotten -- it's gotten -- it has not gotten any better. In fact, I was talking to a journalist that was down in Mexico just a week ago and in one of the local bars down there a drug cartel walked in, threw five severed heads onto a floor as warning to another drug cartel.

DOBBS: Which is what happened just south of San Diego just about two months ago. You've been covering our coverage of the border agents Ramos and Capion (ph) the fact that the U.S. attorney in Texas gave immunity to a drug smuggler to testify against them. What's your reaction to that case?

MORGAN: I tell you, I wasn't there and that's one thing my wife said. All my superiors, when they call me the next morning after a shooting or a bad incident and they will say why did this happen, why did that happen? I say well you weren't out there with me in the middle of the night last night when your mouth is cotton dry, your heart is beating 200 beats per minute and your hands are sweating and you've got one second to make a call of life or death to pull the trigger or not. And you have to live with that decision the rest of your life. So I don't know exactly how it went for these two agents that night. I wasn't there.

DOBBS: Are you impressed with the fact that the U.S. attorney is taking time out to award immunity to a drug smuggler who not only was given immunity for that but a subsequent criminal act? Isn't that an interesting focus on the part of the U.S. attorney?

MORGAN: I already am somewhat confused by it myself. But there again, I'm not the investigator on the case, so I really can't call that.

DOBBS: Well we're going to kind of help as best we can for folks to know as much as they can so they can render review on this case. The idea that -- we're out of time but I think your book, "The Reaper's Line," important examination of the violence and the corruption on both sides of the border and it is something that everyone should really understand about Mexico. By the way, the U.S. State Department has just issued another travelers alert for Americans and the beat goes on. May we thank you for being here, Lee Morgan.

MORGAN: Thank you for having me.

DOBBS: The book is "The Reaper's Line."

New developments tonight in the case of the case of the black students ordered to the back of the bus in Coushatta, Louisiana. A representative of the Department of Justice meeting with residents to discuss the actions taken so far in this case. The school officials behind those conspicuously absent from that conversation. Justice Department officials making it clear at this meeting, this is not the end but rather the beginning of a healing process for the community.

A reminder now to vote on our poll. Do you believe we should be as assertive in keeping religion out of government as we are in keeping government out of religion? Please cast your vote at LouDobbs.com. We'll have the results for you in just a few minutes.

Still ahead, Barry Goldwater, the father of the modern conservative movement, Mr. Conservative. His granddaughter says today's conservative party nothing like what her grandfather was thinking about or believing. C.C. Goldwater joins us. We'll be talking about a wonderful new documentary. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Coming up, "THE SITUATION ROOM" with Wolf Blitzer. Wolf, what have you got?

WOLF BLITZER, CNN ANCHOR: Thanks, Lou. Insurgents and religious violence, we're going to take you to Iraq where al Qaeda apparently gaining strength right now and fueling the bloodshed.

Plus find out what the head of the United Nations is now saying about the threat of civil war in Iraq.

Also, my exclusive in-depth interview with the U.S. military commander of all the troops in Iraq and Afghanistan, among the tough questions I'll ask General John Abizaid, is the U.S. making plans right now to attack Iran.

Plus, protests across the Muslim world over comments by the Pope. Find out why a weekend apology is not stopping the simmering rage. All that, Lou, coming up right here in "THE SITUATION ROOM."

DOBBS: Wolf, thank you very much.

A new documentary about Barry Goldwater, Mr. Conservative, contains new insights in the life and the career of one of this nations most influential conservatives, one of its most influential politician. "Mr. Conservative, Goldwater on Goldwater" premiering tonight on HBO, 9:00 p.m. Eastern time. Barry Goldwater championed issues such as limited government, free enterprise, separation of church and state. He also believed in the right to an abortion. And he supported gays in the military.

Joining me now is the documentary's extraordinary producer. An extraordinary documentary C.C. Goldwater, Barry Goldwater's granddaughter. Good to have you with us.

C.C. GOLDWATER, GRANDDAUGHTER OF BARRY GOLDWATER: Thank you so much.

DOBBS: I want to say to you right out loud what I said to you in private, I think this is just such a moving, important documentary. I just thought it was thrilling to watch it.

GOLDWATER: Thanks, I appreciate that. DOBBS: What inspired you to do it?

GOLDWATER: Well, it was a combination of just the fact that I wanted to do something that was a legacy piece, as well as kind of correct some wrongs and paint the full Barry Goldwater story so that people really knew what Barry was all about, except for the sound bites, you know, besides just the sound bites.

DOBBS: The idea that you wanted to correct some wrongs, what were the most distasteful, irritating wrong that you wanted to correct?

GOLDWATER: I think that he was a bigot and the he was racist and that he wanted to go into Vietnam and he was a proponent to the war. Those were just wrong, wrong truths that were out there. I think this film helps to clarify exactly where he stood on those issues and that's what we were trying to prove.

DOBBS: It absolutely does. Let's roll this from a clip from your mother talking about the issue of abortion. A very poignant moment in this documentary.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: My father, being conservative, he felt that a government should not decide what women do with their bodies or anything else. You know, the government should stay out of all that.

(END VIDEO CLIP)

DOBBS: And who's talking?

GOLDWATER: That's my mom. That was a very powerful story for her to tell. And it took a lot. It was just heart-felt and it was honest and it just shows that Barry was the type of person that was all about truth and just supporting his kids and wanted to make sure that they made the right decision and this film was something that was a labor of love.

I worked with talented people like HBO and Tanny Cohen (ph), who was my co-producer and Julie Anderson, who directed it, and I just, you know, this was a labor of love for all of us.

DOBBS: And here's a man, a general, who loved to fly, as you amply point out. Right up to the B-1, which I did not know, by the way. I thought I knew quite a bit about Barry Goldwater. But the idea that in terms of his grandson.

GOLDWATER: My brother.

DOBBS: Supporting gays in the military.

GOLDWATER: Yes.

DOBBS: And at the same time, you're honest about it, you say that he's not -- You're portrayal of him as a father, as a grandfather perhaps like most of us, a little better as grandfathers than we are as fathers.

GOLDWATER: You know, with that story about my brother, it was really about, my brother was really a way to open my grandfather's eyes about homosexuality, as my brother says, it's really not about sex. If a guy wants to go and fight for our country, they should have the right to do it.

If they want to go over there and be shot and subject themselves to death, then sexuality shouldn't have role in that and you said it earlier, Barry was adamant about the separation of church and state and he was really, really adamant about having politics just stay out of our personal lives.

DOBBS: And Barry Goldwater, in terms of civil rights, he made a political and I think social decision, but on his basis and his reasoning, a constitutional on one. Did he ever express to you just how he felt about that issue? The misjudgment in terms of the '64 civil rights --

GOLDWATER: You know what, we never talked about that particular issue. And that was one thing that I kind of, in hindsight, after doing this film, I wish I would have had more of those political conversations, but from doing this film I get the feeling that, you know, because he was against the public accommodations clause in that bill and that was a very myopic piece of that bill, it was legislation that he just didn't agree on, it was unconstitutional. That's why he voted against it, but they used it to label him as a bigot and racist.

He desegregated the Air National Guard in Arizona before Harry Truman did it nationally. So, for him, you know, he was the farthest thing from what they were saying he was.

DOBBS: And one of the many interesting things, fascinating thins about your grandfather is he made his decisions, he really believed in what he was saying and what he did and he did not always suffer fools lightly and take time to explain it. It's delightful that his granddaughter has taken that time and it's a wonderful insight into the man, to the era, the issue, and C.C. I just congratulate you on such a wonderful documentary.

GOLDWATER: Thank you. I'm so glad you enjoyed it so much.

DOBBS: Absolutely and I think everyone will. Those interested in our history and politics and truth.

GOLDWATER: Yes, that's it.

DOBBS: C.C. Goldwater.

GOLDWATER: Thank you.

DOBBS: "Mr. Conservative."

GOLDWATER: HBO, tonight.

DOBBS: Goldwater on Goldwater. HBO at 9:00. GOLDWATER: 9:00.

DOBBS: Thank you very much.

GOLDWATER: Thank you.

DOBBS: Still ahead, we'll have the results of our poll tonight. We'll have more of your thoughts. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of our poll, 90 percent of you tonight say we should be as assertive in keeping religion out of government as we are in keeping government out of religion.

Now let's look at some more of your thoughts. Howard in Florida, "Lou, with this administration chances are good that the 700 mile fence will be built on a no-bid contract using illegal immigrant labor."

And Mike in North Carolina, "Lou I think that George Orwell should have called his book 2006 and not 1984."

J.R. in New Mexico, "I hope you will deal with the situation that the Pope has gotten himself into by quoting someone who obviously new what he was talking about. What a world we live in. We cannot even tell the truth anymore. The followers of Islam should take look at themselves. They are doing exactly what they are accused of, chopping of heads, really how god-like is that? The Pope owes no one an apology. He was ill-timed but the Muslims have proven him right and I am not a Catholic, for the record."

We thank you for sending us your thoughts. Please send them in to LouDobbs.com. You will receive, if your e-mail is read here, a copy of Senator Byron Dorgan's book, "Take This Job and Ship It." We thank you being with us tonight. We ask you to join us here tomorrow. For all of us, thanks for watching. Good night from New York. "THE SITUATION ROOM" begins right now with Wolf Blitzer, Wolf.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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