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LOU DOBBS TONIGHT

New Iraq Violence After Attacks on U.S. Troops; Top GOP Senator Now Opposes Troop Rise; Border Drug War

Aired January 22, 2007 - 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, insurgents kill nearly 100 Iraqis in the worst bomb attack in two months after one of the deadliest days for our troops in this war.
We'll have a special report from Baghdad, another from the Pentagon.

And rising outrage tonight over state laws intended to favor illegal aliens in public colleges over out-of-state American students.

We'll have that special report, all of the day's news, a great deal more, straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Monday, January 22nd.

Live in New York, Lou Dobbs.

DOBBS: Good evening, everybody.

Insurgents today launched a series of deadly attacks in Iraq in a new effort to provoke all-out civil war. In the worst bombing, insurgents killed 88 people in a market in a mainly Shia area of Baghdad. Today's attacks coming after insurgents killed 27 of our troops over the weekend.

Those increasing casualties in Iraq coincide with a rising revolt within the Republican Party against the president's conduct of this war. One of the Senate's most influential Republican lawmakers, Senator John Warner, today said he opposes the president's plan to send reinforcements to Iraq.

Arwa Damon reports from Baghdad on today's attacks.

Jamie McIntyre, at the Pentagon tonight, reporting on new information about one of the deadliest attacks our troops.

And Dana Bash reporting from Capitol Hill on the widening Republican revolt in the Congress.

We turn to Arwa Damon first -- Arwa.

ARWA DAMON, CNN CORRESPONDENT: Lou, violence across Iraq killed at least a hundred innocent civilians and wounded nearly double that number. The deadliest attack happening in the capital, Baghdad.

(BEGIN VIDEOTAPE) DAMON (voice-over): Familiar sights and sounds in the Iraqi capital: explosions, sirens, mayhem.

Insurgents striking once again in the heart of Baghdad. This time, hitting one of the city's main marketplaces for the third time in as many months, an area mainly frequented by Baghdad's impoverished Shia population, leaving scores dead and wounded.

Two mid-day car bombs exploding seconds apart, tearing into the second-hand clothing section of the market. The dead and wounded rushed to hospitals already stretched to the limit. Here at al-Kindi (ph) Hospital, frantic efforts to save lives. It's the same hospital where just days ago medics battled to treat the casualties from twin bombings at a university that killed at least 70 students and employees and wounded over 160.

Arwa Damon, CNN, Baghdad.

(END VIDEOTAPE)

DOBBS: The U.S. military today launched an investigation into a bold insurgent attack that killed five of our troops in a supposedly secure area. The insurgents successfully passed through Iraqi checkpoints in the city of Karbala, south of Baghdad. The attackers posing as American troops.

Jamie McIntyre reports now from the Pentagon.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice over): In Karbala, a destroyed American Humvee is hauled away as part of a an intense investigation into a Saturday attack that set a new high for audacity. Apparently, all it took to fool Iraqi troops manning a key checkpoint was some American-looking SUVs, some American-style uniforms, and some American-sounding English.

Flashing fake IDs, the convoy carrying about 30 gunmen was able to pass through a series of Iraqi checkpoints and get right to a building where about a dozen U.S. troops were reviewing security plans for an upcoming religious pilgrimage to the city. According to the U.S. military, what's called a provisional joint coordination center, a place where the U.S. routinely meets with local Iraqi forces, was hit with grenades and small arms fire. Five U.S. soldiers were killed, three more wounded.

The U.S. said the attack was aimed at both coalition and Iraqi forces. But Iraqi officials said it appeared only Americans were targeted and the gunmen seemed to know where the Americans would be.

In fact, a local police spokesman told CNN the Iraqi police didn't interfere, because "They assumed it was American-on-American violence and wanted to stay out of it." The U.S. troops did return fire, and when five of the suspect vehicles were later located to the north in Babil Province, two wounded gunmen were captured, according to Iraqi police. BRIG. GEN. JAMES MARKS (RET.), CNN MILITARY ANALYST: What I see is a continuation of the enemy's ability to adapt and find weakness and exploit those weaknesses without a moral forum.

MCINTYRE: The brazen attack raises real questions about checkpoint procedures. Iraqi troops know that U.S. forces don't like to be delayed and searched at checkpoints where they can be vulnerable to the attack. So the standard procedure is to wave them through after a quick check.

(END VIDEOTAPE)

MCINTYRE: The U.S. military says its investigation is still under way. It's looking both at the procedures at the checkpoints and the performance of Iraqi troops. But one conclusion doesn't require a formal investigation. Insurgents are becoming increasingly adept at finding loopholes in Iraqis' security and exploiting them to deadly effect -- Lou.

DOBBS: Jamie, thank you.

Jamie McIntyre from the Pentagon.

Insurgents in Iraq today killed another of our troops. A soldier killed by a roadside bomb in northern Iraq.

Fifty-six of our troops have been killed so far this month, 28 of them over the past three days. 3,056 of our troops have been killed since the beginning of the war. 22,951 wounded, 10,218 of them so seriously they could not return to duty within three days.

Senior Republican members of Congress are expressing new concerns tonight about the rising number of American casualties in Iraq and the president's conduct of this war. A top Republican senator, Senator John Warner, today declared he opposes the president's troop increase in Iraq. And the Republican leadership in the House today demanded more congressional oversight of this war.

Dana Bash reports from Capitol Hill -- Dana.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, Lou, those two significant events you just talked about here on Capitol Hill today show how shaky the president's political standing is on the eve of his State of the Union Address and how far Republicans are willing to go to distance themselves from the president on Iraq.

First, let's start in the Senate. And a very influential member of the Senate, John Warner, along with two other Republicans and a Democrat, introduced a resolution saying, "The Senate disagrees with the plan to augment our forces by 21,500."

Now, Warner said it is wrong to send more GIs into a sectarian fight and wants the president to consider an alternative.

(BEGIN VIDEO CLIP) SEN. JOHN WARNER (R), VIRGINIA: The purpose of this resolution is not to cut our forces' current level or to set any timetables for withdraw. But rather to express the genuine, and I repeat, the genuine concerns of a number of senators from both parties about the president's plan.

(END VIDEO CLIP)

BASH: Now, at very same time over in the House, Republican leaders there said that they do support the president's plan to send more troops to Iraq, but with conditions. They say that there should be benchmarks, that the Iraqi government and the administration should meet, and that the White House should issue monthly progress reports to Congress on how things are going.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R), MINORITY LEADER: There are a lot of members of our party who are skeptical that the plan will work because of its dependence on the Iraqi -- the new Iraqi government stepping up its activities.

(END VIDEO CLIP)

BASH: Now, what you just heard there is a Republican leader, actually the Republican leadership in the House, struggling to find a way to maintain their support and loyalty to their Republican president, but still answer the calls of many in their rank and file, Lou, who are very much watching the public opinion polls whether it comes to Iraq and the president's new plan, and want their leadership do something that they hadn't done over the past several years, which is really challenge the president in some way, at least conduct some sort of oversight.

And that's what you saw the Republican leadership do. And actually, they challenged the new Democratic leadership to do the same -- Lou.

DOBBS: Which probably doesn't require that request.

Thank you very much.

Dana Bash from Capitol Hill.

The Senate Intelligence Commit has heard testimony that al Qaeda operatives in Iraq may be planning an attack against the United States. The director of the Defense Intelligence Agency, Lieutenant General Michael Maples, said that al Qaeda documents indicate terrorists may be planning to use student visas with which to enter the country. That, of course, is the same method employed by the 9/11 hijackers.

Intelligence officials tell CNN the new al Qaeda threat is more aspirational, however, than operational, as they put it. And there no indication of a specific threat.

Iran today escalated its confrontation with the rest of the world. Iran has barred 38 United Nations nuclear inspectors from entry into Iran. The decision appears to be retaliation for the U.N.'s limited sanctions against Iran for its nuclear weapons program. And separately, Iran has begin a new series of military maneuvers, including the use of short-range missile tests. The maneuvers are taking place in a remote area southeast of the capital of Tehran.

Community China tonight is still refusing to provide any details about its anti-satellite missile test earlier this month. That test demonstrates Beijing has the capability to destroy U.S. military spy satellites in low Earth orbit.

Despite the test, China insists it has no intention of militarizing space. And separately, the Chinese prime minister says China plans to diversify the use of its foreign exchange reserves. That move could have major implications for this country.

Beijing has more than a trillion dollars of foreign exchange reserves. More than two-thirds of those reserves in U.S. dollars.

Still ahead here, Venezuela's anti-American president, Hugo Chavez, launches a blistering new verbal assault against the United States and Condoleezza Rice.

We'll have a special report.

And Mexico stepping up its effort to stop cross-border drug trafficking. But is the government of Mexico really committed to ending drug violence on our border?

We'll have that story.

And new outrage over convicted members of Congress receiving federal pensions and healthcare. One lawmaker demanding an end to those pensions, Congresswoman Nancy Boyda, is among our guests here tonight.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Mexico is the largest source of major drugs into this country -- methamphetamine, marijuana, heroin, and cocaine. It now appears Mexico may be taking initial steps to try to bring drug gang violence on our southern border under control. Mexico's says it has cracked down on drug cartels and over the past few days, in fact, has extradited four drug lords to this country.

Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice over): Osiel Cardenas is the alleged kingpin of Mexico's powerful Gulf drug cartel which the DEA says moved four to six tons of cocaine into the United States monthly while his Zeta (ph) paramilitary force turned much of the Texas-Mexico border into a war zone. He's now in U.S. custody, extradited along with 14 other Mexican suspects wanted from New York to California. U.S. officials say Mexican president Felipe Calderon's crackdown is unprecedented.

PRESIDENT FELIPE CALDERON, MEXICO (through translator): In our battle against crime, it is indispensable to counter with as many resources as possible.

WIAN: Friday, Calderon deployed 7,600 troops to the state of Guerrero, where beheadings and other violence have plagued the resort of Acapulco. Two days earlier, Calderon's first arrest of a drug kingpin, Pedro Diaz Parada in Oaxaca. And he sent 10,000 soldiers to battle drug cartels and crooked local police in Michoacan and Tijuana.

PROF. GEORGE GRAYSON, COLLEGE OF WILLIAM & MARY: Felipe Calderon is moving in several areas of the country to take back Mexico for the Mexicans.

WIAN: U.S. Attorney General Alberto Gonzales says, "We recognize the bold stance of President Felipe Calderon... in targeting the drug- related violence and corruption that affects both our nations."

Some of those most directly affected remain skeptical, including U.S. border sheriffs.

SHERIFF LEO SMANIEGO, EL PASO COUNTY, TEXAS: The corruption is almost out of control. And it would be hard for anyone, including the president of Mexico, to come in and try to clean up the problem.

SHERIFF CLARENCE DUPNIK, PIMA COUNTY, ARIZONA: I'm very suspicious of what happens in Mexico.

WIAN: In fact, U.S. officials expect a short-term increase in violence. Many kingpins run their businesses from Mexican prisons, and some of those cartels are now leaderless.

(END VIDEOTAPE)

WIAN: The DEA held a rare conference call for reporters today to underscore its belief that the cooperation from Mexican President Calderon is both extraordinary and significant. Also, one Justice Department official praised the Mexico government for showing what it called courage in taking on drug trafficking organizations -- Lou.

DOBBS: Now, I think certainly it's understandable the skepticism of the border sheriffs. They're living with this -- this violence and this rampant drug trafficking, certainly every day. But the fact that Felipe Calderon has actually taken these steps, including extraditing the four drug cartel members, that is significant.

WIAN: It certainly is. It sure seems to me that Felipe Calderon has done more to combat drug cartels in the two months he's been in office than Vicente Fox did in the six years he was in power -- Lou.

DOBBS: One can only hope this is a genuine change of direction on the part of what has been a corrupt and incompetent Mexican government. And you do have to say that Felipe Calderon has at least signaled a change of direction.

WIAN: Absolutely.

DOBBS: We can only hope that it lasts.

Thank you very much.

Casey Wian, reporting from Los Angeles.

The Los Angeles Police Department is vowing a crackdown on some of the country's most violent gangs, including MS13, many of whose members are criminal illegal aliens. The FBI calls MS13 the most dangerous gang in the world. The latest crackdown prompted by the gang-related murders in Los Angeles of a 14-year-old and 9-year-old girl.

The Chicago Police Department will be served papers this week in a lawsuit that has been followed by the watchdog group Judicial Watch. Judicial Watch is trying to determine whether Chicago's policies of procedures for dealing with suspected illegal aliens are consistent with the requirements of federal law.

The city did not comply with a Judicial Watch request for that information under a Freedom of Information Act. And in a story that we reported last year on this program, we reported the Chicago Police Department are "...under an executive order...not to inquire about the immigration status or enforcing federal immigration laws on behalf of the federal government."

In effect, declaring the city of Chicago to be a sanctuary city. The Chicago Police Department today did not return our calls for comment.

Ten states currently subsidize illegal aliens with in-state tuition to their public colleges and universities, but that may be about to change in at least one state. Efforts are under way in Utah to repeal that in-state tuition benefit because it appears to be an outright violation of federal law.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice over): The idea of taxpayer dollars subsidizing college for illegal aliens is not popular in Utah. A poll done for "The Salt Lake Tribune" found only 35 percent of those asked support for providing in-state tuition rates to illegal aliens wanting to attend college. It's a benefit that's currently offered in California, Texas, New York, Utah, Illinois, Washington, Kansas, Oklahoma, New Mexico, and Nebraska. But that benefit is conditiontrary to federal law.

Title 8 of Section 1623 of the Immigration Reform Act of 1996 states plainly that the benefit is outlawed unless the state providing the benefit makes it available to all citizens and legal residents, regardless of which state they live in. In Utah, there's now a bill in the legislature to repeal the benefit. GLENN DONNELSON, UTAH STATE HOUSE: I'm in contact with state legislators from other states that would like to form a coalition, and we're in the process of forming a coalition to see what we can do.

TUCKER: In Texas, similar legislation is being readied for introduction there. The bill's sponsor says it's just a matter of fairness.

DEBBIE RIDDLE, TEXAS STATE HOUSE: We have got hard-working Texans, hard-working folks here in Texas that are playing by the rules, abiding by the law. It is their tax money that is helping to pay for the college education that folks, quite frankly, should not even be here in Texas or in the United States because they are not here legally.

TUCKER: Those opposed to the benefit point to the irony of the existing laws.

KRIS KOBACH, IMMIGRATION REFORM LAW INST.: If you have a lawful visa to attend school here, or to live here legally, you do not qualify for in-state tuition. Only aliens who break the law get this benefit.

TUCKER: But those argument are not always persuasive.

(END VIDEOTAPE)

TUCKER: And, in fact, Utah governor Jon Huntsman says if the bill repealing the in-state tuition passes, he'll veto it, despite it being contrary to federal law.

And Lou, we did put in a request to Governor Huntsman for a interview and he declined our request.

DOBBS: Well, Governor Huntsman obviously thinks he's above the law, and he also has a far better understanding of what the people of Utah want. That's a really arrogant position for the governor to take, isn't it?

TUCKER: I can't begin to explain what he thinks, because we made a number of phone calls to his office. And he frankly didn't respond and declined an interview.

DOBBS: Unbelievable that these states would put an illegal alien who's obviously the definition of breaking the law in a superior standing to a lawful immigrant in this country.

TUCKER: Exactly.

DOBBS: Not to mention the citizens of every other state in the union. Amazing. You've got to love America.

Thank you very much.

Bill Tucker.

That brings us to the subject of our poll. Do you believe illegal aliens should be eligible for in-state tuition at U.S. colleges and universities? Yes or no?

Governor Huntsman would like to know what you think.

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

So would all of we.

And coming up next, former Border Patrol agents Compean and Ramos have begun serving their sentences, but the fight to free the two men is certainly under way. T.J. Bonner, the president of the National Border Patrol Council joins us.

Venezuela's President Chavez, strong words for Condoleezza Rice as he tells the United States to stay out of his country's affair.

We'll have that report.

And all of a sudden the field of announced candidates for the 2008 presidential race has become, at this early date -- no other way to say it, it's crowded.

We'll have the special report.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Venezuela's President Hugo Chavez blasted the United States today for criticizing his plan to create what amounts to a new dictatorship. Chavez said, "Go to hell, Gringos!" And Chavez called Secretary of State Condoleezza Rice, "My little girl" during his weekly radio and TV address.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): Vintage Chavismo. First, he called George Bush "the devil" and America "an evil imperialist empire."

And now...

PRES. HUGO CHAVEZ, VENEZUELA (through translator): Why the hell should the gringos be worried about the laws in Venezuela? That is a sacrosanct legal authority of Venezuela.

Go to hell, gringos! Go home! Go home!

ROMANS: And a message for the secretary of state...

CHAVEZ: Oye, Condoleezza. How are you?

ROMANS: ... who he has already famously called a little girl.

CHAVEZ (through translator): You've forgotten about me, Condoleezza. Condoleezza said it very clearly, the United States is going to create new geopolitics in the Middle East. Just like that they want to get our brother Bashar al-Assad out of there

ROMANS: The State Department has been careful to ignore his insults. Today a spokesman laughing off the latest.

SEAN MCCORMACK, STATE DEPT. SPOKESMAN: If I spent all of my time responding to these very sort of outrageous remarks, then, you know, I'd be up here for hours on end.

ROMANS: Beyond calling him a negative force for the region and criticizing his ties with Cuba, Iran and Syria, the U.S. tends to speak with diplomatic nuance on Chavez, staying above the fray. The reality, some say, is Washington is in no position to antagonize Chavez. Venezuela is the U.S.' fourth largest source of crude oil, boasting a $27 billion trade surplus with the United States.

DAN ERIKSON, INTER-AMERICAN DIALOGUE: And as long as the United States remains dependent on foreign oil, we're going to have to deal with leaders of many countries which we don't particularly like. And now Venezuela's one of them.

ROMANS: And with his most recent re-election, that means putting up with him until at least 2013.

(END VIDEOTAPE)

ROMANS: And he is consolidating power. The concern now is Chavez is carefully using democracy to set back democracy, clamping down on the opposition press, changing his country's flag, even nationalizing assets -- Lou.

DOBBS: Well, he's certainly active. What set him off here?

ROMANS: What set him off was a question in the State Department briefing on Friday, where we asked, "What do we do about this guy who's very carefully using democracy to thwart democracy?" And the State Department said, you know, it is odd that he's doing that. And just that small bit of diplomatic speak was enough to set him off.

DOBBS: Diplomatic speak. I wonder what you -- Sean McCormack talked about not spending his time dealing with Hugo Chavez. You wonder what they do spend their time dealing with down there.

I have never heard anything but the most tepid and -- well, blather, really, emanating from the State Department about anything. At least their spokesmen.

ROMANS: There's some blather south of the border as well, as you can see.

DOBBS: You got it.

Thank you very much, Christine Romans.

Now Hugo Chavez, for his part, tends to be rather direct, doesn't he? ROMANS: Yes, he is.

DOBBS: Thank you, Christine.

Time now for some of your thoughts.

Dick in Idaho said, "Lou, why would anyone be surprised that Congressman Duncan Hunter beat Senator John McCain in Arizona? Arizona is crying out for help with their illegal alien problem. And what has McCain done for them? He is pushing for a guest worker program and amnesty while the people of Arizona are paying millions to support the illegal aliens."

Michael in Pennsylvania, "Lou, did you really expect this president to pardon the Border Patrol agents when he called the Minutemen 'vigilantes' in front of President Vicente Fox?"

Send us your thoughts to loudobbs.com. We'll have more of your thoughts coming up here later. Each of you whose e-mail is read here receive a copy of my book "War on the Middle Class."

Next, imprisoned Border Patrol agents Compean and Ramos. T.J. Bonner, the president of the National Border Patrol Council, joins me.

And three more candidates have entered the race for the White House. And the field, well, some think it's already crowded. We think it's going to get a lot bigger.

We'll have that report.

The president will report on the state of our union tomorrow, and there may be some changes in policy coming.

We'll have that story.

And a freighter runs aground off southwest England. Some of the ship's cargo is washed ashore, and residents have been helping themselves. And guess what? Because of events like this, science is actually learning something.

We'll share that with you next.

Stay with us.

(COMMERCIAL BREAK)

(COMMERCIAL BREAK)

DOBBS: The race for the White House has become even more crowded. Three more contenders announcing their interests over the weekend. The latest polls may suggest why this field is expanding so rapidly. Bill Schneider has our report.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN POLITICAL ANALYST (voice-over): This presidential race is beginning it look like "American Idol." Two more Democrats just got in. A governor who can claim international experience.

GOV. BILL RICHARDSON, (D) NM: I served this congressman, ambassador to the United Nations and as secretary of energy.

SCHNEIDER: And a senator who can claim white house experience.

SEN. HILLARY CLINTON, (D) NY: If you work hard and play by the rules, you can build a good life for yourself and your family.

SCHNEIDER: She's got the best political adviser money can't buy.

BILL CLINTON, FORMER PRESIDENT: If you work hard and play by the rules you get rewarded.

SCHNEIDER: Hillary Clinton dominates the Democratic field according to this CNN Opinion Research poll. She's followed by Barack Obama at 18 percent and John Edwards at 15. After, that the last two Democratic nominees, neither of whom has declared an intention to run. Obama's the new guy on that list.

SEN. BARACK OBAMA, (D) IL: I've been struck by how hungry we all are for a different kind of politics.

SCHNEIDER: Clinton does especially well with Democratic women. Forty-two percent from women. Twenty-seven from men. Obama is African American. But Clinton leads him by nearly 2-1 among minority Democrats.

In the Republican race, two front-runners, Rudy Giuliani with 32 percent. John mccain with 26. No one else in double digits. Older Republicans prefer McCain, the Vietnam War hero. Younger Republicans prefer Giuliani. The hero of 9/11.

RUDY GIULIANI, FORMER NEW YORK MAYOR: The first report I got of September 11th, back on September 11th was a twin-engine plane hit the North Tower.

SCHNEIDER: Do conservatives prefer one over the other? No. That's the opening Brownback is hoping to exploit.

SEN. SAM BROWNBACK, (R) KS: I am a conservative and I'm proud of being a conservative but I'm a conservative that believes in addressing problems, not ignoring them.

(END VIDEOTAPE)

SCHNEIDER (on camera): There are three front-runners in each party. For the Democrats -- Clinton, Obama and Edwards, and they all face questions about their electability. For the Republicans -- Giuliani, McCain and Romney. And they all face questions about their conservatism. And that's why so many other candidates say, hey, I might have a chance. Lou?

DOBBS: Well, the Republicans may be doing that. But aren't there any Democrats talking about liberalism versus the Republicans conservatism? Isn't that an issue over there?

SCHNEIDER: I think Democrats have gotten beyond political correctness right now. There is a lot of pressure on of course on the Iraq War and over debate on over who is most correct of the Iraq War and some criticism of the various candidates. But I think if you talk about political correctness these days, it's probably as much of a problem as it is for conservatives as it has been for liberals.

DOBBS: Actually, I was just talking about the idea of who is more conservative, is there a discussion amongst Democrats as to who is more liberal?

SCHNEIDER: Well, you're get some of that discussion but I think among Democrats it's focused on the war. Whenever I talk it a Democrat, they always ask one question, can Hillary get elected? And whenever I talk it a Republican, they always ask one question, who can beat Hillary? That seems to be what this race is likely to be about.

DOBBS: It's impressive to see where she stands in these polls. She's dominated over all of the furor what you would call this charisma storm of Obama's. I mean she's dominating.

SCHNEIDER: That's right. And in part because a lot of, among Democrat, there is a lot of Clinton nostalgia out there, among Democrats, who remember the '90s very fondly. If only they liked President Clinton, they liked his wife and they were making a lot money.

DOBBS: Bill Schneider, suggesting that there would be some sort of a material interest in all of this. Shame on you. Thank you, Bill Schneider.

SCHNEIDER: OK.

DOBBS: One of the strongest storms of this winter brought more snow and ice to the West over the weekend. Harsh conditions in the Plains are being blamed for at least 11 traffic deaths. In Colorado, rescuers are looking for a snow-shoer who disappeared on a solo outing. Southern New Mexico picking up nine inches of snow, closing a major interstate, and in Arizona, snow as far south as Phoenix and Tucson.

Salvage crews tonight are preparing to remove fuel from a listing freighter off of southwestern Britain. The grounded freighter was crippled by a storm and deliberately run aground from keeping it from sinking. About 200 containers fell overboard. Dozens of those containers washed up on shore. Local police trying in vain to keep people from looting the contents. Those contents by the way include motorcycles, car part, household possessions. Scientists have monitored by the way were those lost containers drifted to study ocean currents. Containers.

And they're estimated to be a million of those containers that have slipped overboard over the course the years. Those containers filled with things like Nike shoes spilled into the ocean off North Korea and then washed up on the Washington coast beaches giving scientists important information, studying the current flows of the ocean around the world.

President Bush tomorrow delivers his State of Union address to Congress and to the nation. There are some issues in which the president may point in fact reverse course. Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): President Bush on Tuesday is expected to warn the nation the federal budget deficit is out of control. It's a reversal for an administration that has pushed tax cuts and has requested the national debt ceiling be raised four times in the last five years. Now the White House is calling for physical restraint. It's just one of several recent u-turns. On Iraq, a reluctant admission admission, mistakes were made.

On warantless wiretapping the Bush administration has agreed to court reviews. On energy, the president who has gone to bat for oil companies is expected to make a vigorous pitch for alternative fuel. So what accounts for the change?

STEPHEN WAYNE, GEORGETOWN UNIVERSITY: Popularity in the low 30s. Democratic takeover of both houses of Congress. And continued drop in public approval of the war in Iraq.

SYLVESTER: But White House critics say hold on. They're worried the Bush administration is dishing out plenty of new rhetoric with no results.

REP. PETE DEFAZIO, (D) OR: There's a big difference between a rhetorical u-turn and an actual u-turn. Actually all of the president's policy still reflect stay the course. Stay the course.

SYLVESTER: Skeptics point to last year's State of Union address. President Bush had his famous line.

GEORGE W. BUSH, U.S. PRESIDENT: America is addicted to oil.

SYLVESTER: Little was done t to wean the country off of that addiction. But this time there is a difference. Last year President Bush was addressing a Republican Congress. This year, it's a Democratic congress.

(END VIDEOTAPE)

SYLVESTER (on camera): And that means more oversight and more accountability. Democrats will be watching to make sure what President Bush says in tomorrow's State of the Union address. That there is actually a follow-through and not empty promises. Lou?

DOBBS: And, Lisa, you have to admire the irony with Republican lawmakers now calling upon the Democratic Congress to exercise more oversight. You've got to love that.

SYLVESTER: Indeed, Lou. There are a lot of changing places going on in here in Washington these days. DOBBS: Well, after 12 years I guess it's time for a little oversight in the mind of some of those Republicans. Thank you very much, Lisa Sylvester.

There's nationwide outrage as former Border Patrol agents, Jose Compean and Ignacio Ramos serve their harsh prison sentences for the shooting and wounding of a Mexican drug dealer given immunity by the U.S. attorney to testify against those agents.

The efforts to free them are in intensifying. T.J. Bonner is the president of the National Border Patrol Council. He joins us here tonight. Good to have you with us, T.J.

T.J. BONNER, NATIONAL BORDER PATROL COUNCIL: Great to be here, Lou.

DOBBS: Let's go to what Dana Rohrabacher. Everybody can hear what Dana Rohrabacher, Republican congressman from California had to say on this issue and the issue a pardon on these agents by President Bush.

(BEGIN VIDEO CLIP)

REP. DANA ROHRABACHER, (R) CA: Shame on you, Mr. President, for allowing these two brave heroes to go to jail. And permitting the drug dealers and the terrorists an open border to the United States.

(END VIDEO CLIP)

DOBBS: Do you agree with Congressman Rohrabacher?

BONNER: Absolutely. It's shameful, absolutely shameful.

DOBBS: Do Border Patrol agents share that view in their opinion?

BONNER: They do. The front line agents, almost to a person, absolutely share that.

DOBBS: And the idea that Johnny Sutton, the U.S. attorney, the western district of Texas, who brought this action, he issued a lengthy statement. And I'd like to put this up, in part what he did have to say about comparing, as he put it, the myths and the realities of this prosecution.

One of the myths presented is that former Border Patrol agents Ramos and Compean were simply doing their job. Sutton states -- and I would like to put that up if we could so that everybody could see it.

"In America law enforcement officers do not get to shoot unarmed suspects who are running away, lie about it to their supervisors and file official reports that are false. That is a crime and prosecutors cannot look the other way."

BONNER: I absolutely agree with that. But facts of this case do not bear out Mr. Sutton's version. The medical evidence from the army colonel who removed the slug shows that that person wasn't running away. He was turned at the agents just like they said pointing a gun at them. In essence, Johnny Sutton took the word of a drug smuggler over the word of two sworn law enforcement officers.

DOBBS: And took on, really, quite a vigorous prosecution here. Because that really is the only evidence he had. Is the word of that drug dealer.

BONNER: Right, not just a prosecution, it was a persecution of two innocent men.

DOBBS: The idea that this could happen is just, to me, astonishing. Let's go to another aspect of this. In which Sutton says, "My office would have much preferred see Aldrete convicted and sent to prison," referring to the drug smuggler that had to be given extended immunity because have been given immunity on the million dollars of drugs in the incident with Compean, subsequently had to extend that to another effort to bring more drugs into the country, "because the agents could not identify him, found no fingerprints, could not tie him to the van and did not apprehend him after shooting him, the case against Aldrete could not be proven."

BONNER: Well, Johnny Sutton had no problem locating him in Mexico and offering him immunity, why couldn't he issue a warrant for his arrest?

Certainly he would have been back in the new future as soon as law enforcement officials found him, charged him with that and throw him in prison.

DOBBS: The idea that this Border Patrol is now, actually notice has been served. U.S. Attorney's Office doesn't care about $2 million in drugs. Doesn't care about an illegal alien drug smuggler but does care about two agents who serve the public, served honorably in the Border Patrol. There's no -- now, let's get this straight. There's no previous blemish on either of these agent's records is that correct?

BONNER: That's correct.

DOBBS: They've been described as rogue agents by those pushing this investigation. Do you know how that could come to be?

BONNER: Only if you believe the word of a drug smuggler over the word of two agents and ignore all the physical proof can you come to that conclusion. It's just remarkable that they would grant this drug smuggler immunity, not once but twice for smuggling millions of dollars worth of drugs into the country. It sends a terrible message not just to the Border Patrol, Lou, but to every law enforcement officer in America.

DOBBS: You have suggested that there is evidence that was not presented in the trial that would basically have given these men their freedom. What is that evidence? Why wasn't it presented?

BONNER: This was sealed evidence. There is evidence and I'm not sure if I can really get into this because some of the evidence has been under a gag order and those who are aware of the evidence were threatened with contempt of court.

DOBBS: By whom, the judge?

BONNER: By the judge, yes.

DOBBS: And the federal court on a criminal trial, they're threatened with contempt of court.

BONNER: Yes.

DOBBS: Why?

BONNER: One can only wonder. It seem it's you know, I'm not one of these black helicopter conspiracy people. But one can only wonder.

DOBBS: Well, let's go beyond wonder. Why -- can you give us a sense of what this information goes to?

BONNER: Well, some of the information goes to the sealed indictment regarding the second load of marijuana, of about a thousand pounds of marijuana. DEA agents were involved in that arrest. And there were other people who were called as witnesses for the defense but not allowed to testify.

DOBBS: But not allowed to testify. For reasons of? I mean ...

BONNER: For reasons I can't even begin to imagine. Why not give these agents a fair trial and give them the opportunity to present their best case?

DOBBS: And how many people would know about what is in this sealed evidence?

BONNER: I would imagine that there is a fair number of people because it was a fairly large bust. So you had DEA agents involved. You had other co-conspirators.

DOBBS: And meanwhile, against this backdrop in which you absolutely believe 100 percent in the innocence of the two officers, Border Patrol agents, against that backdrop Mexico remains largest source of methamphetamine, cocaine, heroin and marijuana into this country. And yet Border Patrol agencies to this very day are proscribed from enforcing the law in stopping illegal immigration into this country. That's the reality.

BONNER: That is the reality, Lou and it's a very sad reality for every American that there are forces at play that want our borders wide open.

DOBBS: And not least amongst those who want to keep it wide open, although this is never the discussion when homeland security tries to explain why it leaves our borders and ports wide open. Not least of the considerations of course as anywhere from 25 to 125 -- The estimates range widely -- billion dollars a year in illegal drugs coming into this country.

And meanwhile, these two men are paying a high price for, in my opinion, an absurd prosecution. You get the last word here, partner. What would you like it see happen?

BONNER: I would like to see the president of the United States pardon these men. Every day they remain in prison, they're in jeopardy. Right now they're in lock-up, isolation for 23 hours a day, Lou. It's criminal what has happened to these two fine heroes.

DOBBS: And we know where the responsibility rests. T.J., thank you very much. T.J. Bonner.

If you would like to help the Ramos and Compean families, contribute to their defense fund, you can send your contributions to the Border Patrol Agents Legal Defense and Relief Fund, P.O. Box 47208, Tampa, FL, 33647

That information and other ways you can help the agents can be found on our Web site, loudobbs.com.

Now to be clear, we have asked and we did ask U.S. Attorney Johnny Sutton who prosecuted this case to join us here on this program. He's declined. Our invitation remains wide open. We want to extend that to Alberto Gonzales, the U.S. attorney general, the president of the United States, whoever in this administration like to respond to what in the world that Justice Department is doing and why they think this is in some way helpful to enforcing our borders and shutting down the drug traffic and supporting our law enforcement officers.

A reminder now to vote in today's poll. Do you believe illegal aliens should be eligible for in-state tuition at U.S. colleges and universities? Yes or no. Please cast your vote at loudobbs.com. The results coming up here momentarily.

Up next, best selling author, historian Michael Oren joins with us some very blunt words about our prospects in Iraq. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The president, the military, the Congress all trying to figure out how to reduce the levels of violence in Iraq. My guest tonight brings a unique perspective to involvement, America's involvement in that region. The author of a new book "Power, Faith and Fantasy: America in the Middle East, 1776 to Present."

Michael Oren joins us here. Good to have you with us, Michael.

MICHAEL OREN, AUTHOR, "POWER, FAITH AND FANTASY: Good evening, Lou.

DOBBS: A fascinating book. A fascinating treatise. The history I think every reader will find revelatory and surprising. Let's go first to the issue at hand. Iraq, reinforcements, staying the course, new strategy. Your take.

OREN: My take is that it's not the number of troops in Iraq, it's what those troops do. And what American troops could do to Iraq I don't think American society could sustain. Speaking as a historian I know how Iraq was created by the British. How it was sustained by Saddam Hussein. Always by preponderance of central brutal force, people basically had a gun to their heads. The British said to them, you're going to be part of Iraq or you're going to die. And I don't see America being in a position to do that.

DOBBS: Not with our national values. Yet the effort to bring democracy certainly would be consonant with those national value, they're actually in conflict here.

OREN: They're definitely in conflict and I think my book is trying to stress that these themes of power and faith in America's involvement in the Middle East over the course of 230 years, sometimes they're in harmony but often in conflict but here is definitely the case of the conflict of the two.

DOBBS: "Power, Faith and Fantasy," I compliment you on -- first an extraordinary book but an extraordinary title. Because it absolutely coalesces around the situation we found ourselves in Iraq. The extrication?

OREN: Difficult. America is going to have to find itself some type of milestone that is going to allow itself to pull out of Iraq gradually. But as an historian I look upon this in the long view. America's involved in a protracted struggle with hostile elements in the Middle East. This is not end of that struggle. It is the first round in that struggle, perhaps. This is more like the Battle of the Bull Run and not Gettysburg. More like the Battle of Bataan and not Midway.

America's going to have to regroup and rethink the way it's going to carry on this struggle in the future.

DOBBS: And the enemy is?

OREN: The enemy in this is Islamic extremism. The obvious is terror. This is not analogous to Vietnam in the sense you could push those helicopters over the side of the aircraft carrier and go home, confident the Vietnamese are not going to follow you.

Here you could pull out of Iraq and there will be these hostile violent elements in the Middle East that will follow you.

DOBBS: Why is, and put this in some historical context if it's relevant, why is this administration reluctant? Why are so many reluctant to say this is a war against radical Islamists rather than their preference to call a war on terror? It's almost like saying in World War II it was not a war against the Nazis. Or the Japanese. But rather a war against battles. It's an absurdity.

OREN: To the credit the administration they stress this war is not against Islam but against people who have distorted the true meaning of Islam. And there's a departure from traditional American policy if you look back to what the founding fathers had to say about Islam, Thomas Jefferson, if you look at John Quincy Adams even, wrote a 40- page paper against Islam. Terrible paper against Islam. Bashing Islam. Probably never met a Muslim in his life. The Americans today, I think much to their credit have drawn this distinction again and again that we are engaged in a brutal fight in the Middle East but we're not engaged against the Islamic faith nor all the adherents of that faith.

DOBBS: And that's a bit patronizing. The audience is a very sophisticated audience. The nation, the American people are very sophisticated. To say that protecting Islam, Islam is not under issue here. But radical Islamists are. And to talk about terror as some sort of ambiguous, amorphous entity that no one can sort of focus on sort of puts the lie to what we're doing. We're engaged against an ideology.

OREN: Against theology. We're engaged against a theology. I'm personally of the opinion if we're going to conduct this fight successfully in the future, America's going to have to get down into the nitty-gritty of theology.

Up to now, we've been fighting this theology with an ideology. With western concepts of freedom and democracy. But from my own point view I see no reason that the United States can't get involved in the business of promoting a more reformist, a more tolerant form of Islam.

DOBBS: Michael Oren, thank you very much. The book is "Power, Faith and Fantasy." A lot of exercise of all three under way at this time. We thank you for being here.

OREN: Thank you.

DOBBS: Coming up next, results of our poll, more of your thoughts. Stay with us.

(COMMERCAL BREAK)

WOLF BLITZER, CNN CORRESPONDENT: I'm Wolf Blitzer in Washington. Coming up at the top of the hour, the blood of civilians spills in Baghdad. Where twin attacks in open air markets kill at least a hundred people. Is the insurgency becoming more lethal and more sophisticated? We'll ask the "New York Times" Baghdad bureau chief John Burns.

Anatomy of a smear. Rumors flying about Senator Barack Obama's early education but CNN travels the globe to get the real story.

And Americans say they are ready for a woman to be the commander in chief but is Senator Clinton the right woman for the job? We'll take a closer look. Some of the possible potholes for Senator Clinton for the road to the White House.

And the speaker's daughter. Alexander Pelosi is on the road covering the religious right. We'll have the preview of her new film. All of that coming up right here in THE SITUATION ROOM. LOU DOBBS TONIGHT continues right after this.

(COMMERCIAL BREAK)

DOBBS: Congresswoman Nancy Boyda (ph) was supposed to be here tonight as we discussed her plan to deny federal pensions to convicted lawmakers. She was delayed by urgent business on the floor of the House and she'll be joining us very soon. And now the results of our poll. Ninety-seven percent of you say illegal aliens should not be eligible for in-state tuition at colleges and universities. And more of your thoughts.

Roxana in Arizona. "Lou, President Bush has show us what side of the fence he is on. President Bush has an agenda and this agenda does not favor America. Open borders, big business, the American people be damned."

Ann in California. "Lou, Democrats should have made their first priority to seal our borders and enforce immigration laws. Instead, the Senate race to give blue cards to illegal aliens."

And Don in New York. "The Pentagon is searching Americans' financial records in the name of national security but at the same time sells used parts to arms dealers that then show up in Iran. Why are they watching us and not themselves."

We love hearing from you. Send us your thoughts at loudobbs.com. We thank you for being with us tonight. Please join us here tomorrow. We will be reporting from Washington ahead of the president's State of the Union address. Among our guests, Senator Johnny Isakson and A lot more.

For all of us, thanks for watching tonight. Good night from New York. THE SITUATION ROOM begins now with Wolf Blitzer. Wolf?

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