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Lou Dobbs Tonight

Bush Administration Increasing Frustrated With Progress of Iraq War

Aired October 20, 2006 - 18:00   ET

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


LOU DOBBS, HOST: Tonight, rising frustration in the White House over the rising chaos in Iraq. President Bush holding urgent talks with the commander of all our troops in the Middle East.
We'll have live report from the White House, the Pentagon, and Baghdad.

And it's being called an outrageous miscarriage of justice. Two U.S. Border Patrol agents given harsh prison sentences for shooting a Mexican drug smuggler. Federal prosecutors who gave that drug smuggler immunity for their testimony are strongly defending their handling of the controversial case.

That special report and a great deal more straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Friday, October 20th.

Live in New York, Lou Dobbs.

DOBBS: Good evening, everybody.

The Bush administration tonight faces rising pressure to change its strategy in Iraq. President Bush today met with General John Abizaid, the head of U.S. Central Command, to discuss this escalating war and the rising number of American casualties.

Insurgents today took over a key city in southern Iraq in one of the boldest challenges so far to the government of Iraq, and the takeover comes one day after the U.S. military admitted its strategy to defeat insurgents and terrorists in the Iraqi capital has failed.

Suzanne Malveaux reports from the White House on the Bush administration's increasing frustration with the progress of this war.

Arwa Damon reports tonight from Baghdad on the Iraqi government's inability to stop insurgents and terrorists from challenging its authority.

Jamie McIntyre reporting from the Pentagon tonight on Defense Secretary Donald Rumsfeld' apparent determination to stay the course.

We turn first to Suzanne Malveaux at the White House -- Suzanne. SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, I just got a readout from White House officials about that meeting between General Abizaid and the president. It lasted for about 30 minutes.

It was really described as informal discussion. Certainly no decisions that were made. But they did talk about tactics in dealing with Iraq, as well as Afghanistan.

The formal meeting to take place tomorrow, but already the White House has ruled out this kind of phased withdrawal of U.S. troops or any partitioning of Iraq. But it is clear from these urgent talks that President Bush is reaching out to the highest levels of the military for guidance on how to turn things around.

(BEGIN VIDEOTAPE)

MALVEAUX (voice over): With October likely to become the deadliest month for U.S. forces in nearly two years, President Bush held urgent White House talks with his top U.S. commander in the Middle East, General John Abizaid.

TONY SNOW, WHITE HOUSE PRESS SECRETARY: He is eager to hear about other ideas, but leaving is not going to work.

MALVEAUX: Publicly, Mr. Bush remains resolute that his Iraq strategy will not change.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: One of the key issues in this election is, who best sees the future? And who best has a plan to deal with it? I firmly see the threats we face, and the best way for America to protect ourselves is to go on the offense and to stay on the offense.

MALVEAUX: The president is under intense political pressure from critics, now including some prominent Republicans, to change course in Iraq. Saturday, Mr. Bush will hold a videoconference call with his secretary of defense and his Iraq point man, General George Casey. Mr. Bush maintains he will not pull out U.S. troops before Iraqis can govern and protect themselves, but he says he is open to changing military tactics to get the job done.

Skeptical journalists engaged White House Press Secretary Tony Snow in a war of words over the difference between change in strategy and change in tactics.

SNOW: Well, I think what they are talking about...

UNIDENTIFIED FEMALE: What is strategy, in your definition?

SNOW: I think -- I think they will describe as what I described as strategy, which is...

UNIDENTIFIED FEMALE: But you're not going to -- you're not even considering a change in -- no, Tony, sorry. MALVEAUX: Frustration over language in the briefing room, but the question about what is to be done on the ground in Iraq remains unanswered.

(END VIDEOTAPE)

MALVEAUX: And Lou, Tony Snow also dismissed a letter that was sent from the Democratic leadership to the president offering suggestions about how to change the course. One of them holding an international conference of some sort. Tony Snow saying it sounded like cut and run is turning into walk and talk.

The White House also giving us more details about the formal meeting tomorrow. It's going to be the president, the vice president, the secretary of defense as well as the chairman of the Joint Chiefs of Staff, the chief of staff, the national security adviser, and a host of others that are going to be on that conference call and here in the Roosevelt Room to try to come up with different tactics -- Lou.

DOBBS: Suzanne, any sense that the White House is about to reach out to the Democratic leadership in the House and the Senate to involve them in discussions as well about the course of U.S. strategy in Iraq?

MALVEAUX: There's really no indication that that is a move that is afoot to reach out to the Democrats. So far, the only thing it looks like they are doing is that they are reaching out to the military, the top military. As the president has always said, that is where he gets his guidance and advice. And, of course, they are listening to some frustrated Republicans who are worried as well about those midterm elections in a couple of weeks.

DOBBS: Suzanne, thank you.

Suzanne Malveaux reporting from the White House.

New indications today that U.S. strategy in Iraq could be on the verge of failure outright. Hundreds of radical Islamist terrorists today took over the city of Amara. It's located south of Baghdad. They forced Iraqi police to run for their lives. At least 16 people were killed, nearly 100 wounded.

Arwa Damon reports.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN CORRESPONDENT (voice over): ... to be secure. Secure enough to be an example of how Iraq's armed forces could eventually keep the peace across the country.

For five weeks after British forces left it stayed peaceful. Until Wednesday. That's when a bomb killed the provincial intelligence chief.

Thursday, members of his tribe stormed the offices of the Mehdi militia, kidnapping the brother of a senior commander. Outraged by that kidnapping, members of the Mehdi militia, loyal to radical Shia cleric Muqtada al-Sadr, attacked two Iraqi police stations, triggering a fierce two-day gun battle.

Ultimately, the Iraqi police fled. And the supposedly secure Amara was in Mehdi militia hands. By the time the fighting stopped, at least 16 people were dead and more than 90 wounded.

Then, Friday, as Iraqi police arrived with reinforcements, the Mehdi militia disbursed and the town was back in government hands.

MAJ. CHARLIE BURBRIDGE, BRITISH MILITARY SPOKESMAN: This represents is very serious test, and the Iraqi security forces passed it, just. But there is some development yet to go.

DAMON: What wasn't clear was whether the government won back control because of overwhelming force, or whether it was because Muqtada al-Sadr told his militiamen to behave.

Meanwhile, in Ramadi, gunmen briefly paraded down a main road, waving weapons and banners that read, "We announce the establishment of the Islamic Republic of Iraq," signed by the Mujahedeen Shura Council, the umbrella group led by Al Qaeda in Iraq. No one tried to stop them.

(END VIDEOTAPE)

DAMON: The incident raised these questions: Who controls the streets of Iraq? And, are the insurgents and militias flexing their muscles to prepare for a much bigger struggle over who controls the country?

Lou.

DOBBS: Arwa Damon reporting from Baghdad.

Two more of our soldiers have been killed in Iraq, one killed by a roadside bomb near Baghdad, the other killed in a road accident in the Iraqi capital. Seventy-five of our troops have been killed so far this month in Iraq, one of the highest monthly death rates of the entire year -- 2,788 of our troops have been killed since this war began.

Defense Secretary Donald Rumsfeld today declared the Iraqi government must take full responsibility for security in Iraq sooner rather than later, in his words. Rumsfeld's comments indicate that he at least has no intention of changing the Pentagon strategy in Iraq, despite increasing evidence that U.S. policy and strategy are not working.

Jamie McIntyre reports from the Pentagon.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice over): With another Iraqi city falling at least for a time, out of control of Iraqi forces, the questions about whether the U.S. strategy needs a major shift are taking on added urgency. Amara now joins Ramadi and Balad as cities where Iraqi forces are supposed to be standing up, but instead have fallen down in their ability to contain sectarian fighting.

At the Pentagon, Defense Secretary Donald Rumsfeld argued those setbacks are temporary and may be a result of a deliberate challenge to the U.S. plan to gradually cede areas to Iraqi control.

DONALD RUMSFELD, SECRETARY OF DEFENSE: It might be because the enemy said, well, fair enough. They've passed that over to the Iraqi forces, let's focus on that, increase the effort against them, and see if we can't take it away from them, so that the press of the world will notice that we've taken it away. They are smart, the enemy. They've got brains and they use them.

MCINTYRE: Rumsfeld's conference with top generals John Abizaid and George Casey by video hookup hours before Abizaid was summoned to Washington for more meetings with President Bush and his national security team. Rumsfeld described the hastily-called session as a regular meeting, insisting it was nothing unusual. And he carefully parried questions about whether the overall strategy is under review.

(on camera): Mr. Secretary, can you just say plainly whether you believe a course correction is needed in Iraq or not?

RUMSFELD: I think the way I'll leave it is, I prefer to give my advice to the president rather than you, Jamie. I'm old-fashioned.

MCINTYRE: Don't you think the American public deserves to know whether you're considering making major adjustments, rather than just refining tactics?

RUMSFELD: I mean, no one on the National Security Council or a commander in the field makes a decision and sets a course, and then puts their brain at rest.

(END VIDEOTAPE)

MCINTYRE: Rumsfeld continues to counsel patience, arguing that given enough time, the Iraqi government will come together and Iraqi forces will rise to the challenge. But Lou, the question is, how much patience does President Bush and, for that matter, the American public have for Rumsfeld's strategy, which so far is not producing the desired results?

DOBBS: It's -- it's remarkable, at least in my opinion, Jamie McIntyre, that the defense secretary, his -- his counsel to the American people is patience, rather than assurance of victory.

Jamie, thank you very much.

Jamie McIntyre, reporting from the Pentagon.

Another major issue for the Pentagon is communist North Korea's rising nuclear challenge and threat. The North Korean leader, Kim Jong-il, today reportedly said he is sorry for conducting the nuclear test that he carried out, and he said he has no plans to conduct more tests.

That news released by a South Korean news agency as Secretary of State Condoleezza Rice met to discuss the Korean crisis with Chinese leaders in Beijing. It is unclear tonight whether the North Korean leader's statement is a genuine concessions or simply an attempt to appease its principal ally, communist China, or if indeed anyone at this point anyone understands exactly what he is saying in any fashion.

The nuclear confrontation with Iran is escalating, and Tehran today made new threats against the rest of the world. Iran's president, Ahmadinejad, today called Israeli leaders "a group of terrorists." He also said Europe could pay what he called a heavy price for its support of Israel.

Iran has refused to abandon its nuclear program. The United States and your Europe say that program is designed to manufacture nuclear weapons.

Still ahead here, fury over the harsh sentences handed down to two U.S. Border Patrol agents who shot a Mexican drug smuggler. Prosecutors trying to defend themselves after they gave that drug smuggler immunity, and they are defending themselves against what is mounting criticism.

We'll have that special report.

And communities all across the country trying to deal with our worsening illegal immigration crisis. But civil liberties groups are outraged, and they are suing.

We'll have their story.

And fear factor. The Republican Party trying to scare you into supporting its candidates in the upcoming election?

We'll find out in our next special report.

(COMMERCIAL BREAK)

DOBBS: The government today answers critics of its decision to prosecute two Border Patrol agents who were sentenced to more than 10 years in prison for shooting a drug smuggler that was given immunity by the prosecutors. And illegal aliens tonight receiving another helping hand from the ACLU.

Casey Wian reports on federal prosecutors who now claim they had no choice but to offer a drug smuggler immunity and no choice but to prosecute two U.S. Border Patrol agents.

We'll find out.

And Bill Tucker tonight reports on the ACLU's latest effort to undermine the efforts of local governments trying to deal with the illegal immigration crisis.

We begin tonight with Casey Wian in Los Angeles -- Casey.

CASEY WIAN, CNN CORRESPONDENT: Lou, federal prosecutors are finally talking about their case against two Border Patrol agent who shot a Mexican drug smuggler. As you mentioned, prosecutors said they had no choice to offer that drug smuggler immunity from prosecution but throw the book at the agents.

(BEGIN VIDEOTAPE)

WIAN (voice over): Hours after the sentencing of former Border Patrol agents Ignacio Ramos and Jose Compean to 11 and 12-year prison terms respectively, federal prosecutors defended their controversial case. U.S. attorney Johnny Sutton also complained about critics of his department's prosecution of the agents, while granting immunity to the man they are convicted of shooting in the buttocks, admitted drug smuggler Oscar Aldrete Davila.

JOHNNY SUTTON, U.S. ATTORNEY: Some in the media have suggested that Agent Compean and Agent Ramos should get medals for shooting this drug suspect. I disagree.

I think that this jury did exactly the right thing by holding these two agents accountable for what they did. The United States of America is a country where the rule of law applies. It applies to all citizens. It applies to police officers.

WIAN: But apparently not to drug smugglers. Sutton claims investigators had no case against Aldrete Davila, even though there's no dispute he was driving this van loaded with 743 pounds of marijuana, ignored agents' repeated orders to stop, scuffled with Agent Compean, and fled back across the border.

Sutton says there was no case, because no fingerprints were found in the van, and agents couldn't identify Aldrete Davila.

SUTTON: I feel no sympathy for this alien. I feel that he deserves to be in prison. If we ever find him again smuggling drugs into this country, we will happily put him there.

WIAN: Sutton says he had no evidence to substantiate reports Aldrete Davila was caught smuggling drugs into the United States a second time after his confrontation with agents Ramos and Compean. An El Paso homeland security official read this statement from DHS inspector General Richard Skinner...

JAY SMITH, DHS OFFICE OF INSPECTOR GENERAL: "These two agents have betrayed the trust placed in them by the Department of Homeland Security, their fellow agents, and the public. I again commend the United States Attorney's Office for their successful prosecution of this important case."

WIAN: Prosecutors say the 11 and 12-year sentences are just, but when asked why the agents were originally offered plea bargains of one-year prison sentences, Sutton would not answer.

The convictions will be appealed while Ramos and Compean for now remain free on bail.

(END VIDEOTAPE)

WIAN: That appeal is expected to focus on a decision by Judge Kathleen Cardone to dismiss a motion for a new trial based on new information from three jurors who now say they were coerced to vote guilty.

Meanwhile, family members and others involved in the defense side of the case say the best hope for the agents right now might be a presidential pardon -- Lou.

DOBBS: A presidential pardon. The idea -- that becomes somewhat problematic given the relationship between President Bush and President Fox, and the suspicion in many quarters, and critics of this case, that this prosecution was carried out primarily to satisfy the interests of the Mexican government.

What do you think?

WIAN: Well, defense attorneys say they can't figure out why the government was so insistent on prosecuting this case. You know, raising the question of offering these agents one year in prison as a plea bargain and then, you know, going -- going completely the other side. There sure is a lot of speculation about pressure from the Mexican government, though we have not seen any direct evidence of it.

DOBBS: Absolutely. And there is also considerable speculation down there on the border, in El Paso, that -- that the drug cartels in Mexico hold immense influence on the northern side of the border, and are also playing a role in some of the political decisions that are being made there.

We're going to be investigating that as well in this broadcast for some time to come. It's going to take a while, but we're going to continue along both of those lines.

I'm interested in something that the U.S. attorney, Casey, said about the rule of law applying. Did -- did anyone ask the U.S. attorney why the federal government then is not enforcing U.S. immigration law?

And I was interested to see a DHS official there. Did anyone ask him to explain why this government is not securing our southern border with Mexico?

And thirdly, what, then, makes this case against two U.S. Border Patrol agents who served with distinction so important?

WIAN: Well, to take your last question, first, they say it's important because police officers, federal agents, anyone who has the authority to shoot someone under the color of law has a higher responsibility to obey the letter of that law. They pointed to what they call the cover-up in this case, and they say that that's why this case needed to be prosecuted the way it was. As to the broader question of border security, that didn't come up. But the Homeland Security Department official and Johnny Sutton both said that they are proud of Border Patrol agents who put their lives on the line every day to defend this nation, yet they said they had no choice but to prosecute these two.

DOBBS: Did they explain why they had no choice but to give this drug smuggler immunity in order to carry out the prosecution? Because the reason I ask that is, I'm sure that U.S. attorney Johnny Sutton knows that the top three revenue sources for a corrupt and incompetent government in Mexico are oil revenues, remittances primarily from illegal aliens in this country, and tens of billions of dollars in drug money that flow across that border.

WIAN: No, they -- the only thing they said about the decision to offer him immunity and to not prosecute him was they didn't have enough evidence to make a case against the smuggler. And they said his testimony was critical to convicting these two agents. It sure seems to me that they put that interest before the interests of enforcing the law against the drug smuggler -- Lou.

DOBBS: And this question is going to be followed, of course, by congressional investigators. At least two dozen congressmen saying that they are going to proceed with an investigation of this case. A case that many are calling an outright travesty of American justice.

We thank you very much.

And that goes to the subject of our poll.

Casey Wian, thank you.

Do you believe the prosecution of U.S. Border Patrol agents Ramos and Compean to more than 10 years in federal prison a travesty of American justice? We'd like to know what you think. Yes or no?

Cast your vote, please, at loudobbs.com. The results coming up here later.

Next, the ACLU defends illegal aliens again, filing more lawsuits.

Also ahead, the risks from electronic voting. States are just now looking for the experts they'll need to protect those machines against fraud and manipulation on Election Day.

We'll have that report.

And war on the middle class. Congressmen who supported the export of American jobs to cheap labor markets are feeling the heat.

We'll have that report.

And terror the theme of a new GOP campaign ad. Bill Schneider will be here to report on the effectiveness of fear as a campaign device. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Attempts by local communities to deal with illegal immigration are now under attack by the American Civil Liberties Union. The town of Riverside, New Jersey, has been hit with a lawsuit that seeks to overturn its ordinance aimed at preventing employers of illegal aliens and preventing landlords from renting to them.

Riverside is hardly alone. Dozens of towns and cities across the country have drafted measures and efforts to deal with the failure of the federal government to secure our borders and enforce our immigration laws.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice over): The township of Riverside, New Jersey, passed its ordinance in the face of loud demonstrations. Now it's staring into the teeth of a lot of lawyers who want the city to back down from its attempt to prohibit local employers from hiring illegal aliens and landlords from renting to illegal aliens.

The American Civil Liberties Union, along with the Puerto Rican Legal Defense Fund, People for the American Way and other attorneys say Riverside can't pass or enforce such an ordinance.

JAMES KATZ, ACLU ATTORNEY: Municipalities are creatures of state law. They only have those powers that the legislature affords them. And they simply have no authority to be involved in regulating matters of immigration.

TUCKER: To the contrary, argue the lawyers from the other side. They say Riverside and communities like it are following the letter of the law.

CHRIS KOBACH, IMMIGRATION REFORM: Federal law, it says, you can't make this is a city crime to hire an illegal alien, but you can impose other sanctions, including taking away the business's license. And so that's what these cities are doing, is they are closely conforming to federal law and saying, OK, well, if we can't make it a crime, can we at least take away the license? That's what we'll do.

TUCKER: In other words, create regulations that are in line with federal law. The Immigration Reform Law Institute has served as legal counsel to the communities of Hazleton, Pennsylvania, and Escondido, California, among others.

(END VIDEOTAPE)

TUCKER: We contacted Riverside's attorney today, who says the current ordinance is being amended and should be approved this coming Wednesday to put in it line with the ordinance in Hazleton, Pennsylvania. A legal challenge to that ordinance, Lou, is expected within two weeks before it goes into effect.

DOBBS: What's the ACLU representing here? Who? What's the interest here?

TUCKER: The plaintiffs in this case, they say, are the immigrants in the community...

DOBBS: Oh, they're using...

TUCKER: ... who face possible discrimination.

DOBBS: So they are representing the illegal alien, is that correct? Or are they just using immigrant -- how are they using them? Are they making any distinction between illegal immigrant and immigrant?

TUCKER: No, they are not.

DOBBS: Good work, ACLU. Thank you.

Coming up next, Republicans using scare tactics to try to win a vote. Ah, you don't believe it either, do you?

We'll have that special report.

And President Bush campaigning for GOP candidates, but will the Republican Party win these elections? Three of the country's top political analysts join us.

And the threat to our democracy from e-voting. Election officials scrambling to prevent these elections from turning into a debacle.

We'll have that special report, a great deal more, straight ahead. Stay with us.

(COMMERCIAL BREAK)

DOBBS: With midterm elections now less than three weeks away, a mad scramble to hire technicians and experts who can troubleshoot e- voting machines in these upcoming elections. University computer departments reporting a frenzy to sign up their graduate students and ads are appearing on job Web sites like Monster.com. It's difficult to understand why such efforts are being made just now, so late.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): On the campus of the University of California at Davis, e-mail flyers try to recruit graduate students from one of the top computer security programs in the country. The job pays $350 a day to troubleshoot electronic voting computers at local polling places in Yolo County, California on Election Day. Most poll workers are volunteers, and many are senior citizens with limited knowledge of advanced technology. So, election officials decided to go to the experts for help.

FREDDIE OAKLEY, YOLO COUNTY ELECTION OFFICIAL: Every single day something pops up, and we discover that there's a little software glitch here or a little hardware glitch there.

So I figured graduate students in computer science, they are pretty capable of fixing just about any kind of hardware or software issue that might arise during the day that would cause a delay at the polls. I'm really looking to avoid delays for my voters and to keep these machines secure from tampering.

PILGRIM: California's been on the forefront of working to avoid a disaster, with some of the most extensive rules on electronic voting security. But because of the size and complexity of the election, California is also among the top 10 states expected to have difficulties with new e-voting machines this Election Day.

In past elections and primaries, computer crashes of machines and electronic poll registration have left workers frustrated. In many cases, voters were turned away, and told to come back later. Now, many states are recruiting troubleshooters for Election Day.

On the job search Web site Monster.com, listings entitled extra money working on elections. There are several job postings for positions in counties throughout Maryland. Monster.com tells us there's been a steady increase in postings for computer technicians since September.

(END VIDEOTAPE)

PILGRIM: The election jobs come with eight hours of paid training and the advertisement on the flier in California also reads "it ain't rocket science, but it's too complicated for mere mortals." And the real mystery is why after months of electronic voting problems, all this was left until the final weeks before the election, Lou.

DOBBS: If anyone is not worried about what's going on happen in this election, I admire their confidence. Kitty, thank you very much. Kitty Pilgrim.

The U.S. Supreme Court today said the state of Arizona can require voters to present photo IDs at polling places. Now, the justices caution they were not ruling on the constitutionality of Arizona's election law. That ruling simply allows the elections to take place with the ID law intact.

The high court justices noted that the facts in this case are hotly contested, and that federal courts still have to resolve other lawsuits challenging Arizona's election law, leaving open the possibility that the will of the people might well be expressed in the state of Arizona.

Time now for some of your thoughts.

Charlene in Massachusetts: "If homeland security was a consumer product sold at a local stores, I would be returning it because it just doesn't work as it was advertised."

Blaine in Michigan: "Hey, Lou. You talk about two parties in Washington. When I look at the laws and policies coming out of Washington, I only see one party, the lobbyist party. Something has to change."

Ed in Nevada said, "Lou, this government has failed in its war on poverty, its war on drugs, it's failing miserably in the war on terror and the war in Iraq. Forget the war on crime. But the good, old government of the USA is succeeding masterfully in its war on the middle class."

Send us your thoughts at LouDobbs.com. We'll have more of your thoughts here later. And each of you whose e-mail is read here receives a copy of my new book "War on the Middle Class."

The export of America's jobs to cheap overseas labor markets may be the most important piece of the war on the middle-class. Now, as the election approaches, some Congressmen may be paying the price for their votes to send middle-class American jobs to other countries.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Tom Reynolds said yes to CAFTA.

UNIDENTIFIED MALE: It's not right when Congress passes trade bills that send our jobs overseas.

UNIDENTIFIED MALE: My opponent supported the trade agreements ...

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): They are the trade races, congressional seats that could swing on trade agreements and job protection. In Indiana, Joe Donelly says he wants to bring fair back into the free trade agreement.

JOE DONELLY (D), INDIANA CONG. CANDIDATE: There's a real feeling out here that the lobbyists have taken over, the big companies have taken over.

SYLVESTER: Newcomer candidates are tapping into long-simmering middle class resentment and it's paying off.

CHRIS SLEVIN, CITIZENS TRADE CAMPAIGN PAC: There's increasingly, you know, the high-tech workers in the Northwest, and in North Carolina, and elsewhere, that have -- are feeling really anxious about the global economy and trade agreements, that kind of create incentives for companies to move offshore.

SYLVESTER: North Carolina incumbent Robin Hayes is in a dead heat in his district. Hayes provided a key swing yes vote on the Central American Free Trade Agreement. His challenger, Larry Kissell, is a former textile worker. Representative Charlie Taylor, who abstained from the CAFTA vote, also is in trouble. His opponent has a commanding lead in the polls.

In New York, Tom Reynolds, who has been caught in the Foley page scandal, has been hit hard for his record on trade. He's up against small business owner Jack Davis, who is running on an almost exclusive anti-trade agreement platform.

JIM SCHOLLAERT, AMTAC: Republican incumbents who have been very strong supporters of free trade policy and free trade agreements are actually now behind in their races.

SYLVESTER: Voters, worried about jobs and their slipping standard of living, are finding their voice and holding elected leaders accountable.

(END VIDEOTAPE)

SYLVESTER: And the trade issue resonates with many voters from union members to fiscal conservatives who are concerned about a ballooning trade deficit that stands at $790 billion and is on track to set a fifth consecutive annual record -- Lou.

DOBBS: It's amazing and part of certainly the war on the middle- class, as is corporate support for illegal immigration, free trade, the idea that we can tolerate failing public schools, the list goes on. Thank you very much, Lisa. It will be interesting to see what happens on Election Day in so many ways. Thank you, Lisa Sylvester.

Up next, the Republican Party's fear factor in the upcoming campaign -- or elections. Imagine that. We'll have the story.

And Democrats demanding Senator John Kerry give back millions of dollars in campaign contributions the from his 2004 presidential campaign. We'll tell you what that's all about.

And it's a little more than two weeks until Election Day. Our political experts join us to take a look at what is becoming a very nasty campaign. Stay with us.

(COMMERCIAL BREAK)

DOBBS: It's getting tough out there. Democrats want John Kerry to give some money back. A new grassroots Web site, HeyJohn.org, demands that Kerry return to the party some of the more than $8 million left over from his 2004 presidential campaign.

Senator Kerry has faced criticism for holding on to the money from that campaign. Democrats nationally this year are strapped for cash. Kerry's spokesman said Web site's information is misleading and that Senator Kerry has given over $2 million to Democrats over the past two years.

A new Republican campaign television ad is tying the threat of terrorism to this election. The ad may be new, but the approach is not. It is the latest in a long line of fear-provoking, fear-evoking campaign spots.

Bill Schneider reports.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Republicans won the 2002 and 2004 elections on the terrorism issue. Now the Republican National Committee has made an ad which they say will run on national cable TV, including CNN, Sunday and Monday. The ad has sound effects but no spoken words.

And this phrase used in the final frame: "These are the stakes." The same words used in one of the most famous political ads in American history.

UNIDENTIFIED FEMALE: Eight, nine -- nine ...

UNIDENTIFIED MALE: Five, four, three, two, one ....

UNIDENTIFIED MALE: These are the stakes. To make a world in which all of God's children can live or to go into the dark.

SCHNEIDER: The 1964 ad aired only once but it was highly controversial. So is the new Republican ad. The Democratic National Committee calls it, quote, "A shameful ad invoking the image of despicable terrorists to scare the American people."

Ads that evoke fear always attract attention and controversy, like this ad from the 1984 Ronald Reagan campaign.

UNIDENTIFIED MALE: There's a bear in the woods. For some people, the bear is easy to see. Others don't see it at all.

SCHNEIDER: And this one from the 2004 Bush campaign.

UNIDENTIFIED FEMALE: And weakness attracts those who are waiting to do America harm.

SCHNEIDER: We asked an advertising professional does fear work? With some people, it does.

ROBBIE VORHAUS, PRES., VORHAUS COMMUNICATIONS: If they're trying to reach people who continue to believe that this war is about terrorism and that there are people lurking in the shadows ready to take our lives, then it's effective. If you're a person who believes, as many do, that we've got better things to do than worry about this type of fear, it's going to backfire.

(END VIDEOTAPE)

SCHNEIDER: We're now in the fourth year of the war in Iraq. Voters say it has not made them feel more secure. And that makes this election very different from the last two -- Lou. DOBBS: It's interesting, using the same language as the Democratic ad from 42 years ago, yet the Democratic National Committee unhesitatingly criticizing it, sort of closing a four-decade loop on the issue.

SCHNEIDER: Yes, that's right. It is the same language, it's eerily familiar. That ad was controversial. This ad is controversial. That, of course, took a poke at the Republican, Barry Goldwater, who the Democrats regarded as reckless and this, of course, takes a poke at the Democrats, arguing that they are weak and won't protect the country.

DOBBS: Bill Schneider. Thank you.

Coming up next here, both parties making an all-out effort, of course, to win this election. Three of the country's very best political seers will join us here to tell us exactly, of course, which party looks like it will win right now. We'll find out. Stay with us.

(COMMERCIAL BREAK)

DOBBS: A reminder now to vote in our poll. The question tonight -- do you believe the prosecution of U.S. Border Patrol agents Ramos and Compean to more than 10 years in federal prison is a travesty of American justice? Cast your vote at LouDobbs.com. We'll have the results in just a few moments.

Iraq, midterms, political scandals, all on the table tonight for three of the best in politics: James Taranto, editor of opinionjournal.com; Michael Goodwin, columnist "New York Daily News"; and Robert Zimmerman, Democratic strategist. And we are glad to have you here.

Let me start out with this ad. I mean, I -- the Democratic Party is shocked that the ...

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: Not shocked.

DOBBS: ...Republicans would do such a thing.

ZIMMERMAN: Not shocked. There's this old expression in politics, when you can't run on the issues, you try to run over your opponent, and this ad just speaks to the desperation of the Republican Party. You know, the reason it won't work is because they don't have any credibility.

DOBBS: But the Democrats ran the same ad 40 years ago.

ZIMMERMAN: They did, indeed. And it was wrong then, and it's wrong now.

DOBBS: There's nothing like righteousness achieved over time.

JAMES TARANTO, EDITOR, OPINIONJOURNAL.COM: But a majority of Democrats in both houses of Congress voted against legislation to allow for aggressive interrogation of captured terrorists.

DOBBS: You mean -- do you mean torture?

TARANTO: No, I mean aggressive interrogation. No, torture is illegal under existing laws.

ZIMMERMAN: You're referring to the legislation that Senator Specter said was patently unconstitutional.

TARANTO: Well, I think Senator Specter for it.

ZIMMERMAN: And he also said the same thing.

TARANTO: But, look, the majority of Democrats voted against this legislation that authorized the kind of interrogation of people like Khalid Shaikh Mohammed and Abu Zubaydah that prevented many terrorist attacks.

ZIMMERMAN: Democrats don't want to see more legislation knocked out by the courts, so once again the Bush administration's incompetence hurts us in the war on terror.

DOBBS: So it's a time saving issue from the court?

ZIMMERMAN: We want to get legislation that's going to hold up in the court so we can go after terrorists.

DOBBS: Michael Goodwin, you have got to intercede.

(CROSSTALK)

MICHAEL GOODWIN, "NEW YORK DAILY NEWS": On the one hand, on the other hand. I do think the ad could be effective among certain voters, because I do think that in -- it's crude, it's heavy-handed, but it is intriguing.

DOBBS: But affective. It's America.

GOODWIN: But it should be the defining issue in the campaign, which is who is going to keep us safer. Now, I think that there are certain dangers for Bush to bring this up, since he hasn't really done such a good job in terms of catching Osama bin Laden and in terms of what's going on in Iraq.

DOBBS: Not such a good job?

GOODWIN: Yes.

DOBBS: Wanted dead or alive five years later.

GOODWIN: He could be opening the door to reminding people, but on the other hand, that is the issue.

DOBBS: Tony snow today, addressed a strategy to achieve the goal that Iraq government can sustain itself. Let's hear this sound bite real quickly, if we could. (BEGIN VIDEO CLIP)

TONY SNOW, WHITE HOUSE PRESS SECRETARY: I think you'll find Democrats and Republicans generally will at least agree that you cannot do it strictly through military operations. You need a political component, you need an economic component.

(END VIDEO CLIP)

DOBBS: What in the world is he talking about?

TARANTO: Well, I think he's just stating a truism.

DOBBS: Well, but what is its relevance?

TARANTO: I don't know what question he was asked, but I don't think he said very much ...

DOBBS: Yes, I just ...

TARANTO: ...with that statement.

DOBBS: I just find it interesting that we keep hearing from the generals that this is not just a military approach and there really doesn't seem to be much else to do there given that you can't build if you can't secure and stabilize the country. What in the world is going on?

GOODWIN: I think that the meetings this weekend, with Abizaid coming back and with Casey over the teleprompter -- or whatever -- teleconference are really critical, and I think that clearly we're running out of time, clearly the Iraqi government can't stand much longer, and I think very quickly we've either got to show some success. And I think that frankly we are almost -- it's almost impossible, at this point, to secure Baghdad. That's the message.

ZIMMERMAN: There's also another perspective, too. You're seeing a coalition building in the Congress now between Republican leaders like Senator Warner and Senator Hagel standing with the Democrats, over the fact there has to be a strategy for redeployment. There has to be a strategy to empower the Iraqi government. And either they step up or, in fact, if they don't -- if they can't step up, there can't be a sustained peace there.

TARANTO: But the enemy in Iraq has been stepping up violence in the hopes of influencing the midterm elections, they are not stepping up violence in the hopes of helping Republicans.

ZIMMERMAN: And the Iraqi people are now, according to Pentagon's polls, want to see American soldiers attacked. We clearly by our own intelligence estimates have produced more terrorists than we've, in fact, captured or killed.

GOODWIN: I think you make a good point, Robert, about centrist Democrats working with Republicans. That's why I don't understand why the Democratic Party wants to throw Joe Lieberman out. He's precisely the kind of senator the United States needs right now, who can bridge the gap, and that's the problem with the Democratic Party, is they have thrown themselves so far to the left, that I think they don't really have a...

(CROSSTALK)

DOBBS: Let me ask you this.

TARANTO: A reality check for the Democrats.

DOBBS: You're talking about the centrists. The conservatives in the Republican Party are furious with this administration. It looks as though this president is going to be blamed for the Republican loss of power in the House and possibly the Senate. What would you -- what do you think has driven off the conservatives most effectively, James?

TARANTO: Probably the biggest issue is spending. The Republican Congress has spent like a drunken sailor, as they say, and the president hasn't done much to restrain them. I think in certain parts of the country, immigration is a big issue.

DOBBS: Immigration or illegal immigration?

TARANTO: Illegal immigration.

DOBBS: Illegal immigration or this administration's refusal to deal with it?

TARANTO: Right.

DOBBS: Border security, and this administration ...

TARANTO: And to some extent, the sense that the war isn't going well.

DOBBS: The sense that the war -- that is as delicately postured, I think, as we can...

TARANTO: I'm a sensitive guy.

DOBBS: You are.

ZIMMERMAN: I think there's a much bigger issue here amongst the conservatives. They see the incompetence of this administration in many ways..

GOODWIN: That's a Democrat.

ZIMMERMAN: No, in many ways what you are really witnessing now is the conservative movement, the neocons versus the conservatives, are all in fact victims of their own rhetoric. They all had expectations that were totally out of touch with mainstream America, and now they see mainstream America turning on them as a result of it.

GOODWIN: Can I give the good news here, Lou?

DOBBS: Sure.

GOODWIN: I think it is good news that we are having serious conversations.

(CROSSTALK)

GOODWIN: We are having serious conversations about Iraq, about spending and things like that, and Mark Foley is not driving this election, which a couple of weeks ago it looked as though he was going to. And I thought that would be a disaster.

If the Republicans lose Congress on Iraq, then so be it, that's a fair test of government. Mark Foley was not a fair test. So at least this is a substantive election.

DOBBS: But we can't really blame that on the Democratic Party, although they were driving it. We in the national media permitted that story to be front and center. It's a nice, simple, pathetic, disgusting story that some are fascinated by.

TARANTO: But Michael was right, if it hadn't gone away, the Republicans would have had an excuse, and I don't think the Republicans should be making excuses if they lose.

ZIMMERMAN: I think on another level, though, it was also the Republican leadership, by covering up the Foley scandal, that also contributed to it as well.

DOBBS: You're such a Democrat.

ZIMMERMAN: I do my best.

DOBBS: What about Nancy Pelosi? The stories that she's not going to be supported for speaker should the Democrats win.

ZIMMERMAN: That's what you call a nonstory and a Republican tactic.

GOODWIN: She's at an undisclosed location.

ZIMMERMAN: She's actually front and center and she has got strong support across the board, as Joe Lieberman does amongst Democrats as well, I might say.

DOBBS: It's amazing how you people have come back to the fold around Joe Lieberman. It's wonderful -- it's wonderful to watch. I love unity, solidarity.

(CROSSTALK)

DOBBS: Nothing succeeds like success. Thank you very much, Robert Zimmerman. We thank you very much, James. Thank you, Michael. Thank you.

Up shortly here on CNN, "THE SITUATION ROOM" and my friend, Wolf Blitzer -- Wolf. WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou. An urgent meeting over at the White House on Iraq. More on that story coming up. President Bush meeting with his top generals to try to sort out the mess on the ground.

Plus, shifting focus. The GOP uses the fear factor to turn out the vote.

Also, a CNN exclusive. Our Zain Verjee speaking with Secretary of State Condoleezza Rice, under pressure over a nuclear North Korea. Zain is in Beijing. We have her exclusive interview with Condoleezza Rice.

And Hillary Clinton in a race that could be a run-up to the White House. We'll take you live to New York, Rochester specifically, for tonight's debate. All that, coming up, right here in "THE SITUATION ROOM" -- Lou.

DOBBS: Looking forward to it, Wolf. Thank you very much.

Still ahead here, the results of our poll tonight and more of your thoughts. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of our poll tonight, overwhelming: 96 percent of you say the prosecution of U.S. Border Patrol Agents Ramos and Campean to more than 10 years in federal prison a travesty of American justice.

Time now for more of your thoughts.

Vince in Pennsylvania wrote in to say: "Lou, what am I missing? Two Border Patrol agents convicted of doing their job, and the U.S. government is protecting the rights of an illegal drug smuggler? What message is being sent to all who are dedicated to protecting our country and its laws?"

Jim in Maine: "Dear Lou, the convictions and sentencing of our two brave Border Patrol agents yesterday is close to treason. Where are the Texas senators and congressmen? On vacation, as usual. Let's face it: El Paso has been a Mexican province for decades. What a travesty of justice."

And Jan in New Jersey: "Lou, loved your special. I appreciate the job you do letting us know what is really going on. I also thumbed through your book, and I want you to know that I'll be registering as an independent right after the election. I hope millions of citizens join me."

And Bonnie Lee in Arizona: "Thank you so much for your town hall meeting on middle class America. I'm glad I grew up when I did. I just wish my children and grandchildren would have just a small bit of a chance that I had when I was young."

Well, they certainly can, and that's where you and I come in. And Don in California: "Your Kansas City War on the Middle Class town hall meeting program was perhaps the best forum show ever. It believably depicted real folks' problems with powerful insights into vital issues seldom mentioned on network news programs. Bravo."

By the way, met a young man there who could use a little help. We've set up a fund to help some of those real folks who were driven into bankruptcy because of just incredible medical costs. We've set up a fund for the Curtis family. If you'd like to contribute, it's the Lendell Curtis Junior Fund, Qualstar Credit Union, P.O. Box 96730. You can get that information on your Web site, loudobbs.com, and of course we'll be donating as well. In fact, we have.

Send us your thoughts at loudobbs.com. Each of you whose email is read here receives a copy of my new book, "War on the Middle Class."

Thanks for being with us tonight. Please join us here Monday. Have a very pleasant weekend. For all of us, thanks for watching. Good night from New York. "THE SITUATION ROOM" begins now with Wolf Blitzer -- Wolf.

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