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Lou Dobbs Tonight

Iraq Study Group Prepares Final Report on Iraq War; Border Fence Firm Probed for Hiring Illegal Aliens

Aired November 27, 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, eight more of our troops have been killed in Iraq, hundreds of Iraqis killed. Sectarian violence has escalated to the worst level since this war began.
We'll have reports from the Pentagon and Baghdad tonight.

Also, a company that built part of a fence along our southern border with Mexico is now under investigation by federal authorities. That's right, for hiring illegal aliens.

And from Moscow to Massachusetts, two of the country's leading experts on Russia join us for analysis of the Litvinenko assassination and the future of U.S. relations with Putin's new Russia.

All of that and a great deal more straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Monday, November 27th.

Live in New York, Lou Dobbs.

DOBBS: Good evening, everybody.

The White House tonight acknowledged that the violence in Iraq has entered a new phase. Sectarian violence has escalated sharply over the past week. Our troops now appear to be the only military force in Iraq capable of stopping the country from sliding into all- out civil war.

President Bush today arrived in Estonia for the first of a series of high-level talks about the wars in both Iraq and Afghanistan. Today the Iraq Study Group met in Washington, D.C., to discuss U.S. strategy and options in Iraq.

Jamie McIntyre tonight reports from the Pentagon on the study group's struggle to come up with a strategy for the war in Iraq.

Suzanne Malveaux reports from Estonia on the president's efforts to win support of key allies for his policies in the war on terror and against radical Islamists.

And Arwa Damon tonight reporting from Baghdad on the rising preparations of the Iraqi people for what appears to be a full-scale civil war about to be unleashed.

We turn first to Jamie McIntyre at the Pentagon -- Jamie. JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Lou, a lot of people are looking toward the Baker-Hamilton Commission for salvation when it comes to Iraq. But here at the Pentagon, they're not expecting any miracles.

(BEGIN VIDEOTAPE)

MCINTYRE (voice over): For the Iraq Study Group, coming up with a winning strategy is a chicken or egg proposition. Which comes first? Is more stability need to allow for fewer U.S. troops, or would fewer U.S. troops force Iraq to create more stability?

GEORGE MITCHELL, FMR. MIDEAST NEGOTIATOR: Every course of action has a high degree of risk and is not guaranteed to succeed. But I think that there has to be a process that will force the Iraqis to make the difficult decisions they've so far refrained from making.

MCINTYRE: A draft proposal now being debated by the Iraq Study Group reportedly frames the argument around the wisdom of a phased withdrawal, as well as engaging Iran and Syria in direct talks. The problem is U.S. commanders, including top commander General John Abizaid, have already rejected the idea of either adding a lot more American troops or any precipitous pullout. So any radical shift in strategy risks running roughshod over the best advice of the U.S. military.

LT. GEN. DANIEL CHRISTMAN, U.S. ARMY (RET.): I think we're setting up an incredible clash between the senior uniformed military and our civilian community.

MCINTYRE: To avoid that, many observers believe the study group will advocate a gradual pullout not linked to any firm timetable, along with increased training for Iraqi forces. That option is also favored by America's closest ally, Great Britain, which is anxiously eying the door.

DES BROWNE, BRITISH DEFENSE SECRETARY: I can tell you that by the end of next year, I expect numbers of British forces in Iraq to be significantly lower by a matter of thousands.

MCINTYRE: Like the U.S., Britons says future troop reductions would be conditions permitting. Still, the coalition is slowly shrinking.

Poland is withdrawing its 1,000 troops next year. Italy's 1,400 will be out this year. And Ukraine, the Netherlands and Spain have already left.

That will leave South Korea and Australia as the only countries besides the U.S. and Great Britain with more than 1,000 troops in Iraq, a total of 13,000 troops from 26 countries, down from more that 20,000 a year ago.

(END VIDEOTAPE)

MCINTYRE: Now, the Iraq Study Group is meeting this week in Washington. Its deliberations are shrouded in secrecy. But whatever it comes up with, it is expected to present to the outgoing Congress before it leaves on its holiday recess early next month -- Lou.

DOBBS: Jamie, thank you very much.

Jamie McIntyre from the Pentagon.

Insurgents in Iraq have killed eight more of our troops. Four were killed in Baghdad, the others were killed in operations elsewhere in Iraq. Sixty-one of our troops have now been killed so far this month.

2,881 of our troops have been killed since this war began. 21,778 of our troops wounded, 9,977 of them so seriously they could not return to duty.

A U.S. Air Force F-16 fighter aircraft today crashed near the city of Falluja, west of Baghdad. One pilot was aboard. The military did not say whether the pilot survived the crash or whether the crash was caused by enemy fire.

More than 100 Iraqis are being killed in Iraq now each and every day. Many of those Iraqis are victims of terrorists who appear determined to push Iraq even closer to full-scale civil war.

Arwa Damon reports now from Baghdad -- Arwa.

ARWA DAMON, CNN CORRESPONDENT: Lou, the U.S. and Iraqi governments continue to insist that Iraq is not in a civil war, but most Iraqis here look at the bloodshed around them and say that the civil war started a long time ago.

(BEGIN VIDEOTAPE)

DAMON (voice over): In the religiously charged atmosphere of Baquba, blindfolded and handcuffed bodies contorted in death arrive at the morgue. After Thursday's attack in Sadr City that killed at least 200 Shia, the government imposed a three-day curfew in Baghdad, keeping the body count relatively low. But there was no curfew in Baquba, and the slaughter went on.

"Why, why?" this woman shouts.

The Sadr City bombing, the single deadliest sectarian attack of the war, enraged Shia militias and sent the sectarian bloodletting to a whole new level. As one man told us, out here it's now each man for himself.

Sunni Web sites urge their so-called brothers to carry weapons and share details about attacks in their neighborhoods. Fact or fiction, the Internet traffic is fueling fear, hatred and encouraging violence.

And this video posted on an extremist jihadi Web site shows a new level of brutality. The Mujahideen army from Adamiya (ph), a Sunni neighborhood, prepare to behead this man whom they claim is with the Shia Mehdi militia. The killing, moments later, takes place as people record images.

And throughout Iraq, the agony of loss. The failures of the government now painfully obvious as the country comes even closer to full-scale civil war.

Arwa Damon, CNN, Baghdad.

(END VIDEOTAPE)

DOBBS: The Iraqi government of Prime Minister Nouri al-Maliki is incapable of stopping the escalating sectarian violence. One reason may be the close ties between al-Maliki's government and radical Islamists led by the anti-American cleric Muqtada al-Sadr.

Michael Ware in Baghdad with our report.

Michael, is the Iraqi government powerless? Is anyone paying any attention to the Iraqi prime minister?

MICHAEL WARE, CNN CORRESPONDENT: Well, Lou, the first question, really, is there an Iraqi government at all? Beyond the office of Prime Minister Nouri al-Maliki and his national security adviser, this government is more an alignment of Shia militias than it is any kind of effective administration.

Many of the elements within the ministries dominated by these militias take the accused not from a relatively powerless prime minister who himself does not have men at arms, the currency of political power in Iraq. But they take those cues from their militia leaders and their political party leaders.

Many of them, according to U.S. and British intelligence, backed by Iranian revolutionary guard, could force (ph) specialist intelligence officers. So whether anyone's following the directives of the prime minister really is not that much in question.

Maliki is trying to make an imprint on the violence here and on the militias, the fundamental building blocks of this government. Yet, as you can tell with the escalating bloodshed, there is very, very real limits to what power he has -- Lou.

DOBBS: Michael Ware from Baghdad.

The White House today admitted the violence in Iraq has entered what it described as a "new phase." But the White House stopped short of calling this conflict civil war.

President Bush today arrived in Estonia. He will be there for one day. He then travels to Latvia for a NATO summit. Later in the week the president will go to Jordan, there to meet with Iraqi Prime Minister al-Maliki.

Suzanne Malveaux reports now from the Estonia capital of Tallinn -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, President Bush has arrived in Tallinn, Estonia. It's his first stop in this high-stakes diplomatic offensive.

Of course his next stop is going to be Riga, Latvia, for the NATO summit. But all eyes on that critically important meeting between President Bush and Iraqi Prime Minister Nouri al-Maliki. It will take place in Amman, Jordan, and already National Security Adviser Stephen Hadley, aboard Air Force One, giving a preview of this discussion, of these meetings.

He said first the two leaders would discuss the appropriateness, whether or not the United States should reach out to its nemesis, Iran, in discussing the situation in Iraq. Hadley saying he believed that Maliki felt that Iraq should be the one to have those direct talks with Iran and Syria and take the lead on that matter.

Secondly, Hadley described the situation in Iraq as entering a new phase when it comes to violence. But he denied that it was a civil war.

And third, he said there would be no discussion about U.S. troop levels between the two leaders when they meet, but rather how to build up those Iraqi security forces.

And as you know, the credibility, the legacies of both these men is on the line. There is much at stake. And that is why Bush administration officials setting the bar very low for these discussions in case things get much worse in Iraq before they get better -- Lou.

DOBBS: Suzanne Malveaux from Tallinn, Estonia.

Now for tonight's poll. The question: Do you believe it matters whether the news media refers to the Iraqi conflict as insurgency, sectarian violence or civil war? Yes or no?

Please cast your vote at loudobbs.com. We'll have the results here later.

Coming up next, our panel of high-ranking former military leaders join us to discuss what the United States should do next in Iraq and what the options might be.

Also ahead, the company that built part of a border fence along the Mexican border is under investigation tonight. That's right, for hiring illegal aliens.

We'll have that report.

Leftist governments again on the march in Latin America, and the anti-U.S. sentiment being blamed for the shift. What is the U.S. policy in this hemisphere, if any?

We'll have that report.

And a Russian journalist murdered, a Russian spy poisoned in London, and a CEO sent off to Siberia. Fingers being pointed at Russia's president. Two of this country's top experts on Russia join us, one from Moscow, the other from Massachusetts.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: The company that built a section of fence along our border with Mexico is tonight under investigation for hiring illegal aliens. And communities across the country fighting an influx of illegal aliens find themselves targets of well-organized, well-funded open borders groups.

Casey Wian reports tonight on the fence-building company under investigation for hiring illegal aliens.

Bill Tucker reports tonight on cities with illegal immigration statues facing legal challenges by well-funded activist groups.

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

CASEY WIAN, CNN CORRESPONDENT: Lou, a southern California fence company is under criminal investigation tonight for repeatedly hiring illegal aliens. Incredibly, the company built part of the U.S. border fence with Mexico.

(BEGIN VIDEOTAPE)

WIAN (voice over): The Golden State Fence Company builds fences for homes, military bases, even a portion of the fence guarding the U.S.-Mexico border east of San Diego. The project was completed in 1998.

Since then, federal authorities say Golden State has been busted three times for hiring illegal aliens. And it's the target of an ongoing criminal investigation. Golden State Fence would not discuss the investigation but says it has taken a number of steps to ensure that its employees are legal residents, including voluntary participation in ICE's employment verification system since December.

While there is no evidence Golden State used illegal aliens to build the border fence, some say it's a good idea. Don Goldwater ran for Arizona governor this year and received about 40 percent of the Republican primary vote. He proposed using criminal illegal aliens and other inmate labor to build a border barrier.

DON GOLDWATER, FMR. ARIZONA GUBERNATORIAL CANDIDATE: What we have proposed during the campaign was to set up a tent city down on the border because it's a temporary correctional facility. And then to use inmate labor down on the border to build the wall, clean up the desert, and fix the ranches that the illegals were tearing up.

WIAN: The Golden State Fence investigation grew out of Operation Safe Cities, a San Diego Immigration and Customs Enforcement crackdown on illegal aliens working at facilities critical to national security. In less than three years, ICE has found 870 illegal aliens employed at military bases, the San Diego Airport, even the San Onofre nuclear power plant. In fact, 2.5 percent of the nearly 35,000 employees checked so far were illegally in the United States.

(END VIDEOTAPE)

WIAN: An Immigration and Customs Enforcement spokeswoman says the agency hopes federal charges will be filed against Golden State Fence for violating employment laws -- Lou.

DOBBS: The irony doesn't get much greater than that, does it, Casey?

WIAN: It sure doesn't, Lou.

DOBBS: All right. Thank you.

Cities and towns that have passed measures aimed at cracking down on illegal immigration are facing big challenges, bigger than many realized at first. Well-funded groups such as the American Civil Liberties Union are challenging those measures in court, forcing small towns to find ways in which to raise money to fight those challenges by activist groups.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice over): Officials from cities in Escondido, California; Farmers Branch, Texas; Riverside, New Jersey; and Hazleton, Pennsylvania, all say the cost of illegal immigration are overwhelming their budgets. But their efforts to crack down on illegal immigration are creating large legal problems.

Richly-endowed groups like the American Civil Liberties Union are taking the cities to court, challenging the ordinances that those cities and others like them are proving. It's become a fight of the Davids versus the Goliaths.

MAYOR LOU BARLETTA, HAZLETON, PENNSYLVANIA: Unfortunately, the cost of attorneys' fees can be very substantial, particularly if the case goes to trial. I think it's very reasonable to assume a minimum of $100,000, and likely as much as $2 million or $3 million.

TUCKER: The three groups most active in challenging the cities laws are the ACLU, the Puerto Rican Legal Defense and Education Fund, and the Mexican-American Legal Defense and Educational Fund. The combined assets of those groups, $270 million, with undisclosed pro bono legal help available for member law firms.

And while the towns have to answer to taxpayers, those groups have to answer to donors who usually remain anonymous. And there is a financial incentive for these groups to challenge the laws. Win or lose, their legal fees are usually included in the settlement.

RICHARD SAMP, WASHINGTON LEGAL FOUNDATION: They threaten that a lawsuit involving the city of Hazleton, that they would bankrupt us, thinking that we would roll over and back off. And we really don't have a choice.

TUCKER: Hazleton's collected $50,000 through individual contributions to help defer its legal costs. Mostly in checks for $10 and $20. The largest single donor today is the owner of Geno's Cheesesteaks in Philadelphia. He donated $10,000.

The city of Escondido, California, has set up a similar program to solicit funds.

(END VIDEOTAPE)

TUCKER: Tonight officials of the village of Mamaroneck, New York, are meeting to decide whether they will continue to fight their own legal battle to crack down on illegal aliens, one of the major factors in determining whether they fight on, Lou, legal costs involved with carrying on the case.

DOBBS: Well, I think we can say here unequivocally where two sources of that money to those activist groups that are fighting these small communities comes from, two sources. One is the federal government and the other is corporate America. We can say that unequivocally. And should.

Bill, thank you very much.

Bill Tucker.

Coming up next here, the United States is helping communist China, a totalitarian state, train its police. How about that? Democracy at work.

And we'll have that story.

And we'll have the story of Ecuador's leftist presidential candidate basking in the -- in the glory of victory, and that may give another boost to a leftist running for re-election elsewhere in Latin America.

We'll tie all of that together.

And as the situation in Iraq is rapidly worsening, we'll hear from our panel of high-level former military commanders on what the United States should do now in Iraq.

And is this Putin's new Russia? A journalist murdered, a Russian spy assassinated in London.

And we'll have that story. We'll be talking with two of the country's top experts on Russia. David Satter of the Hudson Institute joins us from Moscow. Marshall Goldman, the Davis professor of Russian Economics at Wellesley, joins us from Boston.

Stay with us for all of that, all the day's news, a great deal more, straight ahead.

(COMMERCIAL BREAK) DOBBS: A great democracy helping out a totalitarian state. The United States consulting with communist China on security and anti- terrorist matters. Critics, however, say the Chinese police may be learning advanced law enforcement techniques that could help the communist regime become an even stronger police state.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice over): Beijing is gearing up for their Olympics in 2008 and is worried about security. The U.S. is only happy to help.

In meeting after meeting, top Chinese officials have met with top U.S. security officials, including Department of Homeland Security Secretary Michael Chertoff. The Chinese Embassy Web site boast meeting with the U.S. attorney general, Alberto Gonzales, and signing a joint statement, further strengthening law enforcement cooperation last July.

GORDON CHANG, AUTHOR, "THE COMING COLLAPSE OF CHINA": The latest program has been to train China's police for the 2008 summer Olympics. We have also been training their air marshals before that. But also, in general, we've been doing more garden variety training. So the training is from the most sophisticated to the most ordinary.

PILGRIM: Many China scholars are concerned that U.S. officials may unintentionally enhance China's ability as a police state by consulting on issues such as crowd control.

The violent Tiananmen Square police crackdown displayed how brutal China's security forces can be. And today China is a tinderbox of rural unrest.

Some 40,000 demonstrations took place in China in the first half of this year alone over unemployment, housing and the environment. Some of those demonstrations were brutally suppressed. China critics say the training has dual use.

JOSEPH LIN, THE JAMESTOWN FOUNDATION: The excuse is that they need to establish crowd control to be able to maintain an efficient police force to prevent any sort of instability, any sort of uprisings during the Olympics. But in reality, you know, there's no doubt these techniques will be used to quell a number of their rural protests, which is their main concern.

PILGRIM: The U.S. policy on China is inconsistent and contradictory. The U.S. Commerce Department restricts any exports that are exclusively used for law enforcement because they could enhance the Chinese police state. Yet, the Justice Department and U.S. law enforcement agencies consult and train Chinese security forces.

(END VIDEOTAPE) PILGRIM: Now, the U.S. Justice Department has not returned repeated calls to ask them how -- to comment on how extensive this joint cooperation is. Now, the real question is how this U.S.-China cooperation can be allowed when there are other restrictions on exporting goods that would help law enforcement in China -- Lou.

DOBBS: It is a night for some irony in terms of U.S. policy.

Thank you very much.

Kitty Pilgrim.

Time now for some of your thoughts.

Brian in Florida said, "If the new Congress agrees on an immigration reform bill with a guest worker amnesty program, it will not be a reform. Instead it will be a disaster for working Americans."

And Sandra in New York, "Lou, America used to be a CAN DO nation. Now it seems we are a nation of 'We can't do anything' -- build our 700-mile fence that was passed into law -- no excuses -- become a nation of CAN DO again."

And Dann in Washington, "Lou, are the officers in New York City going to go scot-free for shooting dead the newlywed-to-be while the Border Patrol officers who shot the drug peddler (who is still alive) will be spending a big part of their lives in prison?"

Send us your thoughts to loudobbs.com. We'll have more of your thoughts later here.

Each of you whose e-mail is read here receives a copy of my new book, "War on the Middle Class."

Up next, a shift to the left in Latin America. We'll have a special report on what that means for the United States.

Also, the mysterious assassination of a former Russian spy. I'll be talking with two experts on Russia, David Satter in Moscow, Marshall Goldman in Massachusetts.

All of that and more straight ahead.

(COMMERCIAL BREAK)

DOBBS: Tonight's top stories.

Insurgents in Iraq have killed eight more of our troops. The White House admits the violence in Iraq has entered what it calls a new phase as sectarian killings escalate. Three former military leaders join us here later to discuss future U.S. strategy in Iraq.

Also, President Bush arriving in Estonia for the first of a series of high-level talks about the conduct of the wars in Iraq and Afghanistan. The president to meet with the Iraqi prime minister, Nouri al-Maliki, in Jordan later this week.

A company that built part of the fence along our southern border with Mexico to keep illegal aliens out of the country, under investigation tonight for repeatedly hiring -- you guessed it -- illegal aliens.

Other important stories tonight: In Missouri, a fire that killed 10 and injured 24 at a group home for the mentally ill and elderly is being called suspicious. The outer walls all that was left of the Anderson Guesthouse. There were 32 residents, two employees inside when that fire gutted the structure. Police say today's fire may be related to a smaller one that broke out in the home Saturday.

Out West, a potent Pacific storm blanketing much of the region with snow. In Washington state, snowstorms and gusty winds battering travelers. Traffic slowed to a crawl on most major highways. There were dozens of accidents, because, as one state trooper put it, "people simply could not see." And the heavy snow extending to Lake Tahoe in Northern California. Accumulations of a foot or more reported at higher elevations.

The 2006 hurricane season is officially over this Thursday. It's been a surprisingly mild one. After two brutal seasons, only nine named storms formed up this year. Five actually did become hurricanes. None, however, hit the United States. The news isn't all good. Experts say we can expect to see more decades of heightened hurricane activity.

And confirmation tonight of something many of us suspect. A new study indicates that nine out of 10 e-mails are now spam. (inaudible) e-mail security company says the amount of spam has tripled since just June. The firm says criminal charges are responsible for the surge in unwanted e-mail -- mainly peddling sex, drugs and stock tips.

There is a new leftist leader in Latin America tonight, Ecuador's Rafael Correa. Early in his presidential race, Correa called President Bush "dimwitted," and tonight vows to scale back cooperation with the United States on the war on drugs. Just the latest turn to the left in Latin America. Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): In Ecuador, Rafael Correa sweeps to power. He has called President Bush "dimwitted" and promised not to renew U.S. access to a military base for anti-drug operations. He's a protege of Venezuelan President Hugo Chavez, himself running for reelection.

PRES. HUGO CHAVEZ, VENEZUELA (through translator): We are going to defeat the most powerful empire on Earth.

ROMANS: Concerned the United States is losing its influence in a region that benefited from $1.8 billion last year in aid from U.S. taxpayers and enjoyed so far this year an $84 billion trade surplus.

PETER DESHAZO, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: The United States clearly needs to strongly engage in the region, especially in the Andean region, where populism and ultranationalism is running strong.

ROMANS: The view today at the State Department.

SEAN MCCORMACK, STATE DEPARTMENT SPOKESMAN: We're open to working with duly elected governments in the region, that govern democratically, regardless of where they come from along the political spectrum.

ROMANS: He says the U.S. is working with Bolivia, for example, despite its new president's anti-American rhetoric on the campaign trail.

And Undersecretary of State Nicholas Burns says Chavez's influence is waning, highlighting what he calls "responsible left-or- center or centrist candidates winning in Chile, Brazil, Peru, Colombia, Haiti, Costa Rica and Mexico."

But Mexico is no model of stability. In Oaxaca this weekend, homemade rockets rained, leftist protesters hurled rocks, fireworks and gas bombs at federal police.

Meanwhile, failed presidential candidate Lopez Obrador has vowed to lead a shadow government. The more moderate Felipe Calderon faces an ongoing challenge from Obrador's supporters.

And in Nicaragua earlier this month, former Sandinista Daniel Ortega in a presidential victory procession through the streets of Managua.

(END VIDEOTAPE)

ROMANS: Perhaps the most visible example, many say, of the decline of U.S. influence in its own backyard. The State Department says 2007 will be a year for the United States, Lou, to focus on invigorating Latin America.

DOBBS: So that's the timetable. They've taken notice at the State Department, and they're going to pay a lot of attention next year. That's reassuring.

Christine, thanks. Christine Romans.

Coming up next, the violence in Iraq at its worst level since the war began. We'll be joined here by three distinguished former military commanders. We'll be exploring the options for the U.S. now.

And shades of a former Soviet Union. A journalist murdered, a former spy poisoned, and Russia's president implicated. Two of the country's top experts on Russia join us. David Satter of the Hudson Institute joining us from Moscow. Marshall Goldman, professor of Russian economics at Wellesley, joins us from Boston. Stay with us for that and a lot more still ahead.

(COMMERCIAL BREAK) DOBBS: British authorities have now discovered a number of new sites with traces of the radioactive material that killed a former Russian spy in London. Alexander Litvinenko died last week as a result of poisoning by Polonium 210. It is a rare radioactive element, usually manufactured in special nuclear facilities. Three other people are now being tested for possible exposure to Polonium 210.

And joining me now to discuss the implication of this -- the implications of this case, two leading authorities on Russia. David Satter of the Hudson Institute joins us tonight from Moscow. His most recent book, "Darkness at Dawn: The Rise of the Russian Criminal State." And from Massachusetts tonight, Marshall Goldman, professor of Russian economics at Wellesley.

Good to have you both here.

David Satter, let me begin with you. The obvious death of Litvinenko being assigned to Russian President Putin is, first of all, highly unusual. What are the implications first, because he is a British citizen, for the U.K./Russian relationship?

DAVID SATTER, HUDSON INSTITUTE: Well, I think that something has happened that if it's confirmed that the Russian intelligence services were involved, literally forces Britain to downgrade its relationship with Russia. And I believe that insofar as Britain is our closest ally, it forces us pretty much to do the same.

They've really outdone themselves this time. And if in fact it's confirmed that the Russian secret services were behind this murder, which is very sadistic murder, then the West simply must react.

DOBBS: And you think react on moral grounds, correct?

SATTER: Exactly, exactly. As a matter of principle. And disregarding any other calculations. Because in fact, in the long run, that's the only thing that can establish a better relationship with Russia and could curtail this kind of behavior.

DOBBS: Professor Goldman, let me ask you this, the U.S. relationship. At this point, the U.S. government has been very constrained. What do you think the -- where are we and where will we be going forward, if indeed it is confirmed that the Russian state in any form had anything to do with this assassination?

MARSHALL GOLDMAN, WELLESLEY COLLEGE: It's going to be very difficult to do much of anything. Russia's too important right now. We need them to help us with Iran. We need them to help us with Iraq. We need them to help us with North Korea.

And more importantly, the Russians have become a major supplier now of energy, particularly natural gas, even to Great Britain. As the North Sea deposits are depleted, the Russians are talking now about selling more and more natural gas to Great Britain. And it's going to be very hard for them to say, we don't want to have anything to do with you. So Russia now is in a very strong position and it's going to be very hard simply to say, you did bad things, go away, we don't want to talk to you anymore.

DOBBS: So the influence of oil and natural gas deposits within Russia will extend, as do those deposits in the Middle East, who influence Western policy, in your judgment?

GOLDMAN: Absolutely. I mean, in case of Germany, for example, Russia supplies 40 percent of the gas that Germany imports. For Europe as a whole, it's over a quarter. Even, for that matter, we're in the United States beginning to import petroleum. And soon the Russians say they'll be selling us natural gas as well, in the form of LNG.

DOBBS: David Satter, Professor Goldman says that there's really politic at work here, that, in fact, Europe certainly is held in some ways captive by its dependency on Russia for energy resources.

You're talking about moral and principle grounds. Is there any, in your judgment, room here to say, we're going to have to exceed, as a matter of real politic, to the fact that all of Europe is virtually dependent on Russia for energy?

SATTER: Well, I really don't think that there is. I disagree with Marshall on this issue. For one thing, Russia needs the income from the sale of oil and gas as much as we need the energy. For another, there are a whole range of measures that the United States and Britain can take which have important symbolic value. For example, excluding Russia from the G8 or downgrading a whole series of relationships in which we're involved with Russia, that would serve as apt punishment, in effect, for this type of behavior.

Very important to bear in mind that, although we've mortgaged our right to criticize what goes on in Russia in the hope that we'll get help from Russia on issues like Iran and North Korea, it's the very state of Russian society, the criminalization of Russian society, which is the root reason why we're not going to get that support from Russia that we need on issues like Iran and North Korea.

The fact is that the present Russian leadership is comfortable with regimes like the regime in Iran and North Korea.

DOBBS: Do you agree with that, Marshall Goldman?

GOLDMAN: Well, not entirely. I agree with David completely that it's unfortunate that the Russians are doing these things and we should stand up and speak out. But I just don't think it's realistic for the Europeans, for example. Already they're beginning to pull their punches. If you look at what the Germans are saying about conditions in Poland and elsewhere. So I agree that David in principle is right, but I'm afraid real politic, as you say, is going to force us to do something else.

DOBBS: The issue of proportionality, which seemingly had been lost every time -- energy, I'll leave it -- I'll restrict it simply to energy needs of Western powers comes into being -- proportionality seems to have dissipated.

Is there a proportionate response, on the part of the British government?

Again, we have no facts to confirm unequivocally that this was carried out by the Russian secret service or any other part of the state.

But is there a proportionality issue here, just as there is in the Middle East, that could be followed by both the British government, European powers as well as the United States?

GOLDMAN: Well, I think certainly there will be some things we can do. But in terms of the overall impact, I don't think it's going to really lead to a basic change in policy. We'll be slapping their hands, but I don't think we'll be undercutting their existence. And I think this -- the fact that Putin is putting in place many of his colleagues from the KGB, it's really not a very healthy environment.

DOBBS: David Satter, as you've pointed out, those colleagues and members -- former members of the KGB, in particular, that he has put into power throughout the Security Council and a large part of the national security apparatus of Russia, what does this spell to you in terms of the future of the relationship between Russia, Western Europe and the United States, if we could ask you to give us your answer in a relatively order?

SATTER: Well, I think that there's a specific mentality that's associated with the KGB. And that mentality is amoral. And I think we're seeing signs of that right now. The Politkovskaya murder was followed up with the murder of Alexander Litvinenko at a time when the world was still outraged over the killing of Politkovskaya. That should tell you something.

DOBBS: Unfortunately, the suggestions are ominous.

And we thank you both for being with us tonight to assess what is going on between Russia, Europe and the United States.

Thank you both, Marshall Goldman and David Satter in Moscow tonight.

GOLDMAN: Thank you.

SATTER: Thank you.

DOBBS: I know it's very late for you there, and we appreciate your staying up to talk with us. Thank you.

Coming up next, we'll be talking with a panel of distinguished former military leaders as the violence in Iraq has reached new heights. We'll be discussing what options are available to the United States in Iraq.

Stay with us.

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DOBBS: Our troops in Iraq tonight are struggling to stop escalating sectarian violence. Politicians in Washington, divided over U.S. strategy in Iraq. Many, calling for a timetable now for withdrawal. Some, however, saying the United States should raise the number of troops in Iraq, particularly Senator John McCain.

Joining me tonight, three of the country's most distinguished military analysts, all decorated combat veterans. Major General Paul Eaton, responsible for training Iraq's security forces in 2003 and 2004.

General, good to have you with us.

Lieutenant General Bernard Trainor, author of "Cobra II," one of the most authoritative accounts of this ware.

And Colonel Thomas Hammes served in Iraq two years ago, author of "The Sling and The Stone: On War in the 21st Century".

General, Colonel, thank you very much for being here.

General Trainor, let me begin with you. The White House declines to say that this is a civil war at this point. U.N. Secretary General Kofi Annan does as well. Does it matter what we call it?

LT. GEN. BERNARD TRAINOR, U.S. MARINE CORPS (RET.): Lou, I don't think it really is. It's a semantic game. Whether it's a civil war or whether it's a sectarian war or a religious war, the fact is, it's a bloody conflict of retribution between the two major factions within Iraq, the Shias and the Sunnis...

DOBBS: Senator Chuck...

TRAINOR: ... does that constitute civil war or not I think is incidental.

DOBBS: Senator Chuck Hagel, of course, Congressman, John Murtha, both now calling for withdrawal.

General Trainor, should we?

TRAINOR: Well, that's an option, obviously. But there's the danger that you're jumping out of the frying pan into the fire if you all of a sudden abandon, or even abandon Iraq on some sort of a timetable. The president clearly has made it known that he's going to hang tough there and depend upon the emergence of an effective unity government and most importantly, an effective Iraqi military force to take the burden off the Americans and assume the responsibility of a nation state.

DOBBS: General Eaton, is that good enough? Is it time -- as General Trainor's put it, the president's hanging tough, but he's also asking 140,000 of our troops to do so. What do you think is the smartest thing the United States can do now, and is there anything smart we can do now?

MAJ. GEN. PAUL EATON (RET), U.S. ARMY: Lou, there is. If we're going to admit that Iraq is going to remain a state in the status that it is right now, the one nation with three major entities, we've got to get after the security forces, and we've got to get after it in a far more serious approach, a far more fundamental approach than we've embarked upon yet.

DOBBS: Define fundamental?

EATON: We've got to put far more U.S. soldiers directly involved with the preparation and the training of the Iraqi security forces. Larger units -- right now, the 10-man teams per a battalion is just insufficient. Lieutenant Colonel Doug Ollivant has an approach he's written in "Military Review," and that's to put battalions integrated into Iraqi divisions and brigades. And if we get after it in that approach, it's a distribution or a redistribution of American forces with intent to provide security.

DOBBS: Colonel Hammes, do you agree?

COL. THOMAS HAMMES (RET), U.S. MARINE CORPS: I think if we're going to make any success, we've got to get serious about the security forces. We've also got to get serious about providing our own forces the equipment they need. The administration's made a fundamentally immoral decision to not provide equipment to save money. We need to provide equipment.

DOBBS: Say that again.

HAMMES: They made a decision to not provide equipment...

DOBBS: The Bush administration.

HAMMES: ... for American forces and Iraqi forces. We have equipment backed up at repair depots, and repair depots have been told not to work overtime, or at least they are not working overtime. So we have young men and women training to go into a fight with no equipment.

DOBBS: And I just learned today that we have fundraisers going on in this country to provide body armor for our troops. Let me -- the idea that we are sitting here talking about the geopolitical and military aspects of this war at a time we're approaching -- it's now lasted longer than World War II, at a time when we're approaching four years from the invasion date. This is -- this goes beyond geopolitics and military strategy at this point, it seems to me. This is a question of fundamental competence on the part of the U.S. military. Am I wrong?

HAMMES: No, I think you're right. I don't see any excuse that we have not -- if the military can't get the funds for it, then they've got to make that known. And we have to provide for the troops going into the fight.

DOBBS: General Eaton, both you, General Petraeus, highly regarded, highly respected officers, training Iraqis in different roles, but training those Iraqi forces. How is it that we can be at this point where they're not adequately trained? EATON: Lou, it's a fundamental issue with the government of Iraq. The king of Jordan, King Abdullah, has asked his military to put a pin on their uniform, the Jordanian flag with the No. 1 superimposed. And that's not we're No. 1, that's Jordan first. And when the Iraqi soldier believes that he is a viable representative of the government for the security of the Iraqi people, then you'll see the Iraqi security forces stand up. When they are properly equipped, you'll see a better performance.

DOBBS: General Trainor, to be at this position -- Colonel Hammes saying that this administration has made an immoral decision not to fully train, equip, repair equipment. Does that mean the general staff of the United States military has also made an immoral decision not to rankle and to bridle and to deal with that issue?

TRAINOR: I don't want to deal with moral judgments. But let me say something, Lou. For three and a half years, we have tried to put an effective Iraqi field force out there, and we haven't done very well. They haven't stood up.

Now, I don't know if it's feasible, but it would seem to me that it might be useful to try to put together a model unit. In other words, take our best advisers and trainers and put them with a unit -- if you could get some very bright people both on the Sunni side and the Shia side, and train those people, aside from everything else going on, so that you get an effective unit out there, effectively supported, not only by the advisers but with the necessary equipment, and put them in the field and get them in that first fight and show that they can win. And then they become a symbol for the rest of the Iraqi armed forces.

DOBBS: General Trainor, didn't we know this, good Lord, three and a half years ago?

TRAINOR: Well, I have to tell you, Lou, I'm surprised that we didn't do better than we've done. I mean, General Eaton is in a better position to answer that question than I am.

DOBBS: General Trainor has handed it off to you. Very quickly, General Eaton.

EATON: Lou, it has been a half-hearted effort from the very beginning. We've failed to mobilize the nation and mobilize the requisite number of forces and dollars, I can't put it more simply than that, to provide for the Iraqi security forces.

DOBBS: Colonel Hammes, you get the last word here. What is -- do we have an intelligent, effective option left here, or are we looking at a question of withdrawal, it's just a question of time?

HAMMES: I think all the options -- it's just a matter of picking the least bad option. We raced into this fight because we only had one view of how Iraq would turn out. If we are going to talk about withdrawal, then we have to look at the various things that could happen. You hope for...

DOBBS: Your recommendation?

HAMMES: We stay, we prepare the Iraqi armed forces. We also plan for total civil war, and what we do if we have to get out.

DOBBS: Colonel Hammes, General Eaton, General Trainor, thank you, gentlemen, for being here.

HAMMES: Thanks, Lou.

DOBBS: Even if we have to look at, as you put it, some very bad choices straight in the face. Thank you, gentlemen.

Coming up shortly here, "THE SITUATION ROOM" with Wolf Blitzer -- Wolf.

WOLF BLITZER, HOST, SITUATION ROOM: Thanks, Lou. Good discussion.

Three kisses between Iran and Iraq. The leaders of the two nations meet ahead of a visit by President Bush to the region. A look at Iran's growing influence as a power player in the region. We'll have that.

Also, more on the civil war of words over Iraq. The fight over semantics as the death toll continues to mount.

Plus, Michael Richards. Our interview with the former "Seinfeld" star after his racist rant.

And blond Bond. The new spy icon gets revenge on his critics. Jeanne Moos is on the story. All that, Lou, coming up at the top of the hour.

DOBBS: Jeanne Moos on the story, all right. Thank you very much, Wolf.

Still ahead here, we'll have the results of our poll. Stay with us.

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DOBBS: Our poll, 58 percent of you say it does not matter whether the news media refers to the Iraqi conflict as insurgency, sectarian violence or civil war.

Time for just one quick e-mail here. Tom in Ohio writes -- "Hi, Lou. All I want for Christmas is something new, to have our representative government really represent us, the middle class and protect our borders and jobs."

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

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