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LOU DOBBS TONIGHT

Iran Fails to Meet U.N. Deadline on Nukes; Rising Concerns About Chemical Attacks in Iraq

Aired February 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, bluster and apparent bluff in the escalating nuclear confrontation with Iran. The United Nations admits Iran is defying the world. U.S. policy on Iran is at a pivotal point.
We'll have complete coverage.

And corporate America is making a new effort to push amnesty legislation for illegal aliens through the Democratically-controlled Congress. And corporate elites are escalating the war on the middle class and, by the way, writing the legislation.

We'll have that special report.

And you won't believe how many of our children are drinking alcohol. Thirteen thousand of our children take their first drink of alcohol each and every day.

And tonight, I'll also have some thoughts about the ambiguity and confusion in what is passing for U.S. foreign policy.

And a few thoughts about Cardinal Roger Mahony's interference in illegal immigration and our lack of border security.

We'll have all of that and a great deal more straight ahead here tonight.

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

Live in New York, Lou Dobbs.

DOBBS: Good evening, everybody.

The United Nations today admitted Iran has defied the world once again over its nuclear weapon program. Iran has missed yet another U.N. deadline to suspend the nuclear program. The United States tonight appears absolutely to have absolutely no clear strategy to respond to Iran's bluster and bluff in this dangerous nuclear crisis.

At the same time, insurgents in Iraq have launched another chlorine bomb attack. There are concerns tonight that insurgents could soon use chemical weapons against our troops in Iraq.

Suzanne Malveaux tonight reports from the White House on whether the United States can do anything at all to stop Iran's nuclear weapons program. Kitty Pilgrim is here tonight with a special report on the United Nations' complete failure to force Iran to comply with its ultimatum.

And Michael Ware tonight reporting from Baghdad on the disturbing increase in the number of chlorine bomb attacks in Iraq.

We turn first to Suzanne Malveaux at the White House -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, officials announced, as well as Under-Secretary of State Nick Burns, that they're going to be in London on Monday, meeting with the representatives of the five permanent members of the U.N. Security Council, plus Germany, to talk about further sanctions against the Iranian regime for not actually cooperating here in giving up its nuclear program.

Now, we have heard this before, Lou. And essentially, why is the White House doing this? They are buying time.

They know they have the support of the Brits, as well as the French. But convincing the Chinese and the Russians is going to be very difficult. They've been very reluctant to talk about, or even to pursue these additional sanctions against the Iranian regime. So it is far from certain whether or not this administration is going to be able to pull this off.

The other question, of course, Lou, is how much time are they talking about here? You get all kinds of different signals here.

On the one hand, this is a process through the U.N. Security Council, perhaps taking weeks, even months. You hear from nuclear experts who say that Iran perhaps is years away from obtaining a nuclear weapon.

And then there are also officials here who indicate that, look, this may be not in the hands at all of the United States, but the Iranian elite, as well as the students, the young people there that they are counting on there to turn against the regime, Mahmoud Ahmadinejad --- Lou.

DOBBS: And the Bush administration, Suzanne, has sent absolutely contradictory and, at best, confusing signals. Saying at first all options are on the table when it comes to Iran and its failure to meet the U.N. ultimatum. And now its officials, including the president, saying that there is absolutely no intention whatsoever of going to war or committing to military action against Iran.

Is the White House satisfied with what appears to be a foreign policy only in name only?

MALVEAUX: Well, Lou, I think there is a certain sense of frustration here, but it is not surprising that the Iranians have not cooperated at this point. I think what they are counting on right now is really trying to push the Chinese and the Russians.

It is far from certain whether or not they're going to be successful on that front. So it may be just kind of waiting and seeing what the Iranians are going to do.

DOBBS: Well, that gives us the Iranian perspective. In terms of the White House staff itself, are they aware of the fact they look absolutely unthought out and unresolved on this issue?

MALVEAUX: Well, I guess Lou, I would say that Bush administration officials would disagree with that. I mean, I'm sure that that is the debate.

They think that they're being consistent, at least when it comes to diplomacy here. That they're going to wait it out, they're going to take the kind of time necessary to prove that they're not going to go after Iran militarily. That they want this to work with other allies.

DOBBS: Thank you very much.

Suzanne Malveaux from the White House.

Iran appears to have absolutely no intention of complying with any United Nations' demand to suspend its nuclear weapon program. But Secretary of State Condoleezza Rice says international diplomacy can still convince Iran to negotiate a deal, despite all evidence to the contrary and no evidence to support that view.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice over): Iran completely ignored the U.N.

TOM CASEY, STATE DEPT. SPOKESMAN: It's very clear that the -- none of the requirements of the resolution have been met.

PILGRIM: Now the U.S. is consulting with allies before deciding what to do next. But the U.S. has been held hostage to the glacial U.N. process and tepid European negotiations with Iran. And after three years, the IAEA, the U.N. nuclear watchdog agency, has achieved nothing and now suggest a time-out for more talks.

PETER BROOKES, HERITAGE FOUNDATION: Time is on Iran's side. Unless you're able to prevent them from getting the materials they need or the financing they need to move this program down the road, that time is on their side. And one morning we'll wake up and Iran will have tested a nuclear weapon.

PILGRIM: The U.N. process is bogged down by Russia and China. They already have deep economic interests in Iran, and are even now rushing through billion-dollar energy and arms deals with Iran.

DANIELLE PLETKA, AMERICAN ENTERPRISE INST.: We're really going to have to test our allies and see whether or not they're willing to go outside the U.N. framework and actually agree to tighten up sanctions on the Iranians without the Russians and the Chinese.

PILGRIM: But Europeans also have extensive business and trade ties with Iran.

(END VIDEOTAPE)

PILGRIM: Now, it looks like it's going to be talk and even more talk going forward. Secretary Rice has said the U.S. is probably going to press for another U.N. resolution. That's even though the last one didn't work. And U.S. allies want to keep negotiating with Iran. But as Peter Brookes and others told us today, Lou, time is on Iran's side here.

DOBBS: And for all the world, the U.S. policy in the Middle East, whether it is on the issue of Iraq or Iran, there could not be more confusion at this time. How concerned are the experts that you're talking with about this?

PILGRIM: They're quite concerned. They say Russia and China absolutely will not give -- because they're right in the process of negotiating deals.

DOBBS: And did they leave out the fact that Russia, in point of fact, is providing missiles to Iran?

PILGRIM: Yes.

DOBBS: Thank you very much.

Kitty Pilgrim.

Well, in a few moments here, I will have a few words of my own about what is passing for U.S. foreign policy in the world and how the United Nations is acting in its usual dysfunctional way. And just exactly what is the Bush administration doing here?

U.S. troops in Iraq tonight are trying to prevent insurgents launching more deadly chlorine bomb attacks. Iraqi police call those weapons dirty bombs. There are fears insurgents are trying to use chemical weapons to inflict greater casualties on a scale never before seen in this war.

Michael Ware has the story from Baghdad -- Michael.

MICHAEL WARE, CNN CORRESPONDENT: Lou, in the war in Iraq this week, the specter of chemical weapons has been raised with two insurgent attacks against largely civilian populations involving chlorine gas. As a result of both of the attacks, one in Baghdad and one just north of the capital, in the town of Taji, as many as 11 people have died and more than 220 have been hospitalized or affected by chlorine gas.

This is the third such attack involving chlorine gas in the past several weeks. A previous attack in the western city of Ramadi late last month saw 16 people killed. However, it's unknown how many of that 16 died from the blast and explosion and how many were actually affected by the gas.

Whilst this is a powerful weapon of terror, the use of any kind of chemical, he reality is the use of chlorine as a weapon is extremely difficult. And indeed, questions have been raised about the impact of these weapons. Not so much as a weapon of an attack, but as a weapon of terror -- Lou.

DOBBS: Michael Ware reporting from Baghdad.

Insurgents in Iraq have killed two more of our troops -- one south of Baghdad, the other west of the Iraqi capital. Sixty-eight of troops have been killed so far, 3,150 of our troops since the beginning of the war. 23,677 of our troops wounded, 10,509 of them so seriously, they could not return to duty within three days.

U.S. military commanders say the recent wave of attacks on our helicopters in Iraq is the result of a new insurgent tactic. Those commanders say insurgents are adapting their tactics to inflict high- profile losses on U.S. troops. But the military says it is changing tactics as well.

Jamie McIntyre reports from the Pentagon.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice over): There's not much debate anymore about whether this February 7th attack in which a Marine Corps helicopter was shot out of the sky was part of a trend. Eight helicopters downed by hostile fire in just four weeks is a trend. In fact, more helicopters have been shot down so far this year in Iraq than in all of 2006.

It's a pattern that's making the already-dangerous mission of flying over Iraq even more deadly, according to one veteran Army pilot.

CWO5 RAY JOHNSON, BLACK HAWK PILOT INSTRUCTOR: I don't know if they've changed their tactics or what's happened over there, but obviously something's gone wrong.

MCINTYRE: The U.S. thinks tactics are the same, but the level of effort is greater.

LT. GEN. RAY ODIERNO, COMMANDER, MULTINATIONAL FORCE, IRAQ: There were probably some sort of ambush sites that were set up by -- by some of our foes. We are studying those intently and we're trying to learn from those, and we will learn from those. And we will adapt our tactics.

MCINTYRE: In Iraq, the vast majority of casualties are from roadside bombs. And that's forced the U.S. to rely more on helicopters to get around. In fact, the military says the number of helicopter flying hours has jumped nearly 70 percent since 2005. That makes for what the military calls a target-rich environment.

MAJ. GEN. WILLIAM CALDWELL, SPOKESMAN, MULTINATIONAL FORCE, IRAQ: They're watching what we do. They're paying attention to it. They're very patient. And we, in turn, are modifying our flight routes, our tactics, our formations, our altitudes, our time of flight, and a lot of other things in order to offset what they're intending to do against us.

(END VIDEOTAPE)

MCINTYRE: And the U.S. is also on a counter-offensive, hunting down cells they believe are targeting U.S. aircraft. In fact, in recent raids, at least two suspects have been arrested believed involved -- one the U.S. military says has confessed to his role in targeting U.S. helicopters -- Lou.

DOBBS: You talked about hostile fire. What are -- what weapons are being fired against those helicopters? Missiles, RPGs, what?

MCINTYRE: Well, all of those. In fact -- but, actually, most of the helicopters have been brought down by small arms fire because of the position they were in, either engaged in combat and subject to this sort of intense ground fire. So the U.S. is varying its tactics. It's trying to be more unpredictable and it's trying to use intelligence to go after these cells on the ground.

DOBBS: Jamie, thank you.

Jamie McIntyre at the Pentagon.

Well, on the war in Iraq and U.S. policy toward Iran, and the United Nations' lack of response to Iran's defiance of the deadline to end its nuclear program, there is a common theme that is apparent to the rest of the world, if not to our own government and to the Bush White House. And that is the all but complete ambiguity and confusion of U.S. foreign policy and a transparent inability to pragmatically define U.S. national interests in our foreign policy.

If this government cannot formulate a strategy for success in Iraq and the Middle East, this government should reconsider its options in Iraq and the region. If this government had no intention of acting on its declaration that Iran must end its nuclear program, then it should have addressed the issue quietly, not belligerently, and never should have pursued an ultimatum at the United Nations.

Our foreign policy, it seems to me, is inconsistent and it is outright contradictory. And that not only embarrasses us, but it emboldens the United States adversaries of which there are a rising number. And that fact is the best measure of what is now a failed foreign policy.

Still to come here, federal agents launching nationwide raids in a crackdown on a company that employs illegal aliens.

We'll have the story.

Also, corporate elites and their friends in the Senate moving ahead with amnesty for illegal aliens.

We'll have that special report.

As business, that's right, big business, writing more legislation in this new Democrat Congress, it makes you feel like it's old times, doesn't it?

The war on the middle class coming up.

And the national crisis over underage drinking. You won't believe how many of our children are drinking liquor and how young they are when they begin.

All of that and more straight ahead.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: In what could be called a limited crackdown on companies that hire illegal aliens in this country, federal prosecutors today indicted three top executives of a nationwide cleaning service. The federal investigation also led to the arrest of about 200 illegal aliens working for the company.

Bill Tucker has the story.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice over): ESPN Zone, Hard Rock Cafe, Planet Hollywood, FOX Sports Grill, Dave and Busters all suddenly found themselves thrust into a negative spotlight. The company which provided them cleaning services was raided and charged with hiring illegal aliens.

Sixty-three raids were carried out by Immigration and Customs Enforcement. They involved restaurants in 40 cities and 17 states. Dubbed "Operation Cleanup," investigators closed in on RCI Inc., a Florida-based janitorial services company.

JULIE MYERS, ICE: This morning, company president Richard Rosenbaum was arrested on numerous criminal charges, including conspiracy to defraud the United States, harboring illegal aliens for profit, and evading payment of federal employment taxes. The company's vice president and the comptroller have also been indicted.

TUCKER: They face a 23-count indictment. Their motivation?

JOHN IMOFF, CHIEF OF INVESTIGATIONS, IRS: It's all about the money. In this case, about $18 million. Worth about $18 million in federal employment taxes that should have been withheld from the employees' wages and turned over to the IRS to pay income, Social Security, Medicare taxes, and unemployment taxes.

TUCKER: One hundred and ninety-five illegal aliens were arrested in raids Wednesday night. Their home countries are Mexico, Honduras, Guatemala, El Salvador and Haiti. The chief investigator for the IRS called them an exploited workforce. The assistant U.S. attorney for Michigan put a finer point on it.

HAGEN FRANK, ASST. U.S. ATTORNEY, WESTERN MICHIGAN: Because this workforce was basically off the books. They were easy to hire and fire, and it was easy to avoid paying employment taxes on them. And the indictment alleges that the defendants made themselves millionaires through doing this at the expense of the U.S. taxpayer.

TUCKER: The 20-month investigation hinged on a single local police department asking a single question.

(END VIDEOTAPE)

TUCKER: This whole operation, Lou, was kicked off when the Grand Rapids Police Department in Michigan arrested an illegal alien, a single illegal alien. And they turned him over to ICE. When ICE Interviewed the illegal alien, they learned of document fraud and they initiated the investigation into RCI, Inc.

Lou, clearly Grand Rapids is not a sanctuary city.

DOBBS: And a shining example to sanctuary cities all over the country.

Bill Tucker, thank you very much.

TUCKER: You're welcome.

DOBBS: Corporate lobbyists and special interest groups are helping Senator Edward Kennedy write legislation that would give millions of illegal aliens amnesty. The legislative work is being done in secret.

Taxpayers who will ultimately have to pay for that legislation for amnesty will not have a voice. But guess who does? You thought this was a Democratic Congress and would be unlike the Republican Congress? Well, get ready.

The Chamber of Commerce and groups like it have been allowed to hijack a large part of the process and even write part of the legislation.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice over): Senator Ted Kennedy and his staff have been quiet on the details of their new immigration proposal. It's by invitation only.

Even moderate Republicans like Senator Arlen Specter have not been offered a seat at the table. But the Chamber of Commerce and other special interests are having a hand in offering the legislation.

One Republican Hill staffer complained, "The Chamber has seen more than the senators when it comes to the actual writing on paper."

ROY BECK, NUMBERSUSA: Senator Kennedy has been inviting the stakeholders of this bill to come in. So that's the Chamber of Commerce. And it's the National Council of La Raza, and it's the immigration attorneys. Basically, the stakeholders are people who make money or gain power off of it. But how about the American people?

SYLVESTER: Kennedy's new bill will be introduced as early as next week. It may closely parallel legislation he offered last year with Senator John McCain. That was more generous to illegal aliens than anything that passed the House or Senate.

Under the previous proposal, all illegal aliens would be allowed to stay in the United States. After six years, they could pay a $1,000 fine and apply for a green card. A new guest worker program would be established, and most companies would not be required to check work eligibility of future workers.

If the new immigration plan reflects the old, it could put off swing lawmakers.

REP. BRIAN BILBRAY (R), CALIFORNIA: You're seeing Republican senators who had supported the concept before backing away off on this, because they went home in December and actually got an earful form their constituents. And you're seeing a lot of members of the Senate that had supported Kennedy before are not going to buy off on this now.

(END VIDEOTAPE)

SYLVESTER: The Senate picks up the debate next Wednesday, when secretaries Michael Chertoff and Carlos Gutierrez testify before the Judiciary Committee.

A Democratic staffer said they want the Bush administration to go on record. And they signal they expect the president to use more of his political capital to get an amnesty bill through Congress this year -- Lou.

DOBBS: This president has political capital to use?

The other part of this is, what is the difference between this Democratic Congress and the Republican Congress? Putting the Chamber of Commerce in the position of writing legislation, putting all of these interest groups at the table, writing legislation, there's one stakeholder left out of this, Lisa, and it's pretty clear -- the American middle class, the American citizen.

What in the world is the Democratic leadership doing?

SYLVESTER: This is almost identical to what we saw last year. And despite the election in which the people spoke loudly and clearly, we are seeing more of the same when it comes to letting special interests dictate that what ultimately is the policy on immigration in this country -- Lou.

DOBBS: When I watch this, I'll tell you, Lisa, it makes me proud to be an independent populist and to -- I mean, as we talk about, and have talked about for some time, these two parties have become just opposite wings of the same bird. And we know who is getting the bird in this country right now.

Thank you very much.

Lisa Sylvester.

That brings us to the subject of our poll tonight.

Do you believe the Chamber of Commerce, the number one big business lobby in this country, should be writing the Democratic immigration reform legislation? Yes or no?

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

Democracy in action.

Up next, Jonathan Cowan of The Third Way, a progressive think tank, he joins me. He says America's middle class has never had it better. I think he's wrong. And we'll discuss that.

Teens and alcohol, surprising facts on where our kids are getting their first drink, and how many of them.

We'll have that special report on "The War Within."

And did Scooter Libby lie or just forget? That's what the jury in the CIA leak trial is trying to figure out.

We'll have a report.

And yet again, the Catholic Church involved in the debate over amnesty for illegal aliens. This time, Los Angeles Cardinal Roger Mahony -- I'll have a few words for the cardinal on his idea of Lent and sacrifice later here in the broadcast.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Did Lewis "Scooter" Libby lie, or did he have a memory lapse? And what was the timeline of events? Those are among the key questions jurors in the White House-CIA leak trial are deciding.

Brian Todd now reports on the jury's second day of deliberations -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Lou, the jury just went home a short time ago. They have not asked any questions of the judge in a little more than 11 hours of deliberations.

What they have asked for are some Post-it notes, some masking tape, a flip chart, and some pictures of witnesses, indicating that they might be trying to set up some kind of a timeline or a chart of who Scooter Libby talked to and when. The jury, as we just said, deliberating now for a little bit over 11 hours. They will be back at it first thing tomorrow. We did see Scooter Libby walking around the halls today, waiting on this verdict. We saw the attorneys on both sides, Ted Wells, Scooter Libby's lead attorney, plus prosecutor Patrick Fitzgerald, chatting with each other very amiably in the hallway. They have been very cordial to each other throughout this trial.

So it is a waiting game. We feel like we're in the eye of the storm here. Any moment, this very, very important verdict is going to come. It could come tomorrow, it could come next week.

So those are what we can tell you right up to the moment as this jury deliberates -- Lou.

DOBBS: Brian, you reported that one of those jurors is a former colleague of Bob Woodward and Walter Pincus, both of "The Washington Post."

How in the world was that juror selected for this case?

TODD: It's something we've been asking since he was selected. As you just mentioned, he was a former reporter of "The Washington Post, "he worked under Bob Woodward there. He is said to be friendly with Walter Pincus.

Bob Woodward and Walter Pincus two defense witnesses. In addition to that, this gentleman, up until six months ago, said that he lived next door to Tim Russert, a prosecution witness.

So, yes, we are asking that question ourselves. How did he get on the jury?

But remember, this was a legitimate jury selection process, of course. Both sides vetted this man. The prosecution felt that he was even keeled enough and they let him on. So here he is, and, you know, it's a question that we may be asking for some time.

DOBBS: Two days of deliberation. Yesterday somewhat foreshortened.

Any wags there speculating as to what that means to the possible outcome?

TODD: Well, you know, the handicapping is really going back and forth. There are some people who believe that the longer this goes on, it might benefit the prosecution. But, you know, this is a very, very complicated case.

And if you sat through the closing arguments, you really got a perspective on everything that this jury has had to absorb and everything that they're going to have to go over. They is a very, very torturous, convoluted case. And the fact that it's taken just a little over 11 hours now, certainly not surprising -- Lou.

DOBBS: And bizarre in the fact that the person who did leak the identity of Valerie Plame is not charged with any crime.

TODD: Right.

DOBBS: All in -- all in perfect conformity to the standards of Washington, D.C.

Thank you very much.

Brian Todd.

TODD: Right.

DOBBS: Time now for some of your thoughts.

Barb in Washington said, "Lou, I propose that we allow no more than a 10-month period for campaigning for president. Less for Congress. No wonder so few people vote by the time Election Day is here. We're so sick of it all, we don't want to have anything to do with it."

And Gerald in Texas said, "Just in case Congress is listening during their week of vacation, if you didn't get the message last November, the 2008 elections are coming up. I believe the message will again be loud and clear. The American people are fed up with the tactics of our president, his cabinet and this do-nothing Congress."

Paul in Arizona: "Lou, wouldn't it be great if there was a third political party in the country that believed in America first, one that took care of America's needs before trying to subsidize the world?

I'm tired of paying taxes so our elitist government officials can take care of everyone but Americans."

Send us your thoughts to loudobbs.com. More of your thoughts coming up here later. Each of you whose e-mail is read here receives a copy my book, "War on the Middle Class".

Up next, I'll be going into some discussion, frank and full I assure you, with the head of an advocacy group insisting there's no such thing as a war on our middle class. Really?

I'll tell him he's flat wrong.

Also, rising outrage against U.S. banks providing credit cards and other financial service to illegal aliens. You know they say they're living up to the letter of the law. They wouldn't want to, of course, retire to a higher standard of the spirit of the law. We'll have that report for you.

Underaged drinking, a national crisis. The number of our children who are drinking alcohol is incredible. That coming up in "The War Within".

And the Catholic Church just cannot resist temptation, even during Lent, the temptation to get itself involved in secular politics and our illegal immigration crisis and border security gaps.

All of that and more, including a few words form the good Cardinal Roger Mahoney.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: There's growing consumer outrage tonight over Bank of America's decision to give credit cards to illegal aliens. Bank of America is now the target of an organized boycott. And thousands of its customers are pulling money from Bank of America and other banks that cater to illegal aliens.

Casey Wian has our story.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Bank of America chairman Kenneth Lewis says he knows many customers are outraged by his company's pilot program offering credit cards to illegal aliens. But in a "Wall Street Journal" commentary, Lewis writes, "After a week of listening to our customers, we have made a decision. We will continue our card marketing pilot program in the Los Angeles market. We know some will find this unacceptable."

Clearly.

For example, the political action committee Americans For Legal Immigration has launched a boycott of Bank of America.

WILLIAM GHEEN, PRES., ALIPAC: It's a sense of rage and a sense of dismay, especially since Bank of America answered today and said they didn't really care what the American public thought about this. They're going to continue giving the credit cards and the mortgages to illegal aliens because they feel that they're justified under the law.

WIAN: ALIPAC has also started a website listing nearly 500 banks that either cater to illegal aliens by accepting Mexico's metricular consular I.D. card or don't. The group says the list is a work in progress, is not comprehensive and may not be completely accurate. But it is intended to encourage consumers to pull their accounts from banks doing business with illegal aliens.

Also, some House Republicans are calling for a congressional investigation into Bank of America's illegal alien credit card business.

REP. MARSHA BLACKBURN, (R) TENNESSEE: We look forward to going ahead and beginning some hearings on that so that we can have people come in, deliver their testimony under oath, question them under oath and find out exactly how the banks are circumventing the law and then go in and plug that loophole.

WIAN: Bank of America insists its business practices are legal. Opponents say it could be violating laws prohibiting the aiding and abetting of illegal aliens.

(END VIDEOTAPE) WIAN: Bank of America says the boycott has had no impact on its business. But ALIPAC says it has heard from thousands of customers who have pulled their accounts from B of A and other banks -- Lou.

DOBBS: Ken Lewis, the CEO of B of A, Casey, saying today in that op-ed piece in the "Wall Street Journal" basically saying that they were following the spirit of law. How could that possibly be true, when in point in fact, they're looking at the Patriot Act and looking upon it as a loophole?

WIAN: His argument seemed to be that by getting illegal aliens and others into the financial system, they were preventing them or stopping them in some way from moving money around some other way, and so it's easier to keep track of them. It's an argument that a lot of border security advocates just don't buy, Lou.

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

The Fifth Circuit Court of Appeals tonight turned down a motion to release former Border Patrol Agents Ignacio Ramos and Jose Compean from prison pending the outcome of their appeal. The court said the two men have not shown unique or unusual circumstances that would justify their release.

The former agents were sentenced to lengthy prison terms for the shooting and wounding of an illegal alien drug smuggler, whom prosecutors granted immunity to testify against the agents.

The Roman Catholic Church once again putting itself in the center of a debate over amnesty for illegal aliens. Church leaders in California during Ash Wednesday services called for Catholics to commit themselves to quote, "immigration reform".

In Los Angeles, Cardinal Roger Mahoney told parishioners, quote, "They are innocence impacted by an unjust system that has failed and will continue to fail them and our society until true comprehensive reform is passed by Congress and the president."

Another California bishop called for his parishioners to dedicate a day of fasting during Lent to immigration reform.

Ah, the good Cardinal Mahoney again. A pious man, I'm sure. But his heart rests with those who violate American borders and laws, and not with law-abiding citizens of this great nation, which, by the way, permits him the freedom to put his interests in filling his pews with good Catholics who are here illegally ahead the laws of this land and our national interest.

It's interesting that the good cardinal and his fellow enthusiast for the illegals of Latin American, bishop Jamie Hosoto (ph), say that Lent is the appropriate time for their parishioners of Los Angeles to fill out cards and send them to Congress calling for immigration reform.

Now to me, that seems just a little bit outside the spirit of the Church and Lent. It seems, actually, a bit secular,in fact. Lent is a time, after all, for Catholics to sacrifice. But these two leaders in southern California apparently think sacrifice should be born by all American citizens of every and no faith.

The good cardinal and bishop seem to be enthusiastic about the idea of all of us giving up our national sovereignty for Lent. How's that for sacrifice?

Just ahead, you may be shocked to learn who's supplying alcohol to underaged drinkers in this country. We'll have that report.

And liberal activists Jonathan Cowan says our middle class is doing just fine. I think he's wrong. We'll have a debate.

Stay us for that and a great deal more straight ahead. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Tonight, "The War Within," our special report, looking at this country's battle against both drug and alcohol abuse. Each day, an estimated 13,000 of our children and our teenagers take their first drink. The majority of those children are given that alcohol by their parents or other adults. Now, some states are moving to increase the penalties for adults who provide liquor to underaged drinkers. Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Jeff Levy says parents need to wake up.

JEFF LEVY, CONCERNED PARENT: I also meet a lot of parents that want to be friends with their kids. They don't want to be the bad guy. My problem there is that parents need to be parents.

ROMANS: His teenaged son, Jonathan, drunk and party hopping, was killed in a drunk driving accident.

LEVY: We didn't make a big issue out alcohol. Hey, you know, all the kids drink a little bit. But boy, if it's drugs, we get all serious. The problem is that alcohol kills many more times the number of kids than all the other drugs combined.

ROMANS: He now pushes for parental accountability laws.

An industry group dedicated to curbing underage drinking estimates 65 percent of teen drinkers get their booze from adults.

RALPH BLACKMAN, THE CENTURY COUNCIL: There are parents out across the country who believe that if they can, for instance, control the environment, that they can make underage drinking something that turns out to be safe. We, in fact, think that that's the absolute wrong message to send to young people.

ROMANS: A 2003 study by the National Academies of Science called for better supervision from parents, finding underage drinking cost society $53 billion a year from fatal car wrecks and violent crime.

Meanwhile, there's a mishmash of confusing state laws. In these states, it is illegal under any circumstances to provide alcohol to your kids. In these states, parents can provide alcohol as long as it's in their own home. And here, a parent can give their teen a drink at home, in a restaurant, or at a party.

At the same time, several states have new laws on the books revoking the driver's license of adults who provide liquor to underage drinkers. And hundreds of cities are passing so-called social host laws, giving police the power to enter private homes and break up drinking parties, even fining the parents.

(END VIDEOTAPE)

ROMANS: Many states already have laws like this on the books, but communities are stepping in themselves to make sure they get enforced. They're cracking down on the parents who are providing alcohol to teens in their own homes, because somehow they think it is safe or more controlled in that environment.

DOBBS: Or in many cases, they think they're just being really hip and...

ROMANS: The cool parents. The cool parents.

DOBBS: Yes. Thank you very much, Christine Romans.

If you look at the number of our underage children drinking in this country, the extent of the problem and the way it escalate, it's alarming. Last year, 6 percent of our children in the eighth grade reported drinking alcohol in the past month. By the 10th grade, more than three times as many kids, 19 percent, said they used alcohol in the previous month. And 30 percent, 30 percent of high school seniors reported they had consumed alcohol within the last month.

Research also showing high school students who drink are more likely to turn into binge drinkers in college.

A reminder now to vote in our poll. The question is -- do you believe the Chamber of Commerce, the number one big business lobby in this country, should be writing the Democratic immigration reform legislation? Yes or no? Cast your vote at loudobbs.com. I did say this is a Democratically-led Congress, right? Big business? Imagine that. We'll have the results here in just a few minutes.

The Bush administration tonight trying to portray the British decision to withdraw troops from Iraq as a sign of success. Britain is withdrawing 1,600 troops from southern Iraq over the coming months. Nearly all of the British troops will be leaving Iraq by the end of next year. But the withdrawal could leave a dangerous security vacuum in the area.

General David Grange, one of the country's most distinguished military commanders, joins us now. General, good to have you here. It is remarkable, this administration talking about cutting and running, in pulling back any of our troops, and in the case of the British, talking about it as a sign of success. Do you ever, as a warrior, and one the country's most distinguished former military commanders, get a little tired of the political spin?

BRIG. GEN. DAVID GRANGE (RET), CNN MILITARY ANALYST: Well, yes. I don't think this is a good thing, that the British are leaving at this time. I mean, it sends a signal to our adversaries, and actually others in the world that are looking at how well this war is going, that our staunchest ally in fact is leaving, or pulling out part of their force, while we're in the surge.

DOBBS: Do you believe, and even though this is -- there is peculiar and special circumstances, obviously, in southern Iraq, where the bulk of the British troops are stationed and deployed. But do you think that this could lead to even greater Iranian influence within Iraq?

GRANGE: Well, the area is secure when you look at it compared to maybe Baghdad and Anbar province, but they still have some tough problems in Basra and in that area with the Iranian influence. And I think that this will embolden the Iranians to use their proxies to, in fact, entrench even in a stronger manner than they already are.

DOBBS: And turning to the issue of our helicopters, eight of them shot down over the past month. And in nearly every instance, military initially not confirming that they were shot down, even referring to one as a hard landing. In each case, it turns that they were shot down by missiles or RPGs or small arms fire. Why is it taking the military so long to respond to these new aggressive attacks on our helicopters?

GRANGE: Well, actually, the response is already in place. New tactics and procedures are being put into effect because of the shootdowns. I would say, you know, more helicopter operations are ongoing right now. The enemy is using better tactics and techniques and training their people to take down helicopters. And probably most important, they know that it's a high-valued target with tremendous press coverage. So they're going to continue to do it.

DOBBS: Absolutely. All right, well, thank you very much, General David Grange.

Coming up next, my next guest says the war on the middle class is a myth. He joins me for a reality check. Jonathan Cowan of the Third Way. You probably wouldn't want to miss this. Stay with us.

(COMMERCIAL BREAK)

DOBBS: My next guest says there's no war on the middle class. In fact, he says the middle class in this country has never had it better.

Jonathan Cowan is the president of the Third Way. It's a -- calls itself a strategy center for progressives, a think tank. And his group's new report is entitled "The New Rules Economy" and claims, by the way, quote, "Neo-populism is premised on the myths of a failing middle class, a declining America and omnipotent corporations."

Jonathan Cowan joins us here tonight.

Good to have you with us.

JONATHAN COWAN, PRES., THIRD WAY: Great to be here, Lou.

DOBBS: You don't think corporations dominate our -- let's just go through the list. You don't think corporations dominate the political process in this country, both electoral and legislative?

COWAN: Can I make a broader point and then answer your question?

DOBBS: Well, sure. how about doing it this way? You answer my question then make your broader point?

COWAN: You got about it.

I think corporations play significant role in American politics, but I do not think they are the evil, ill-intended entities that you think that they are.

DOBBS: Evil's not a word I would use. I just asked you a simple question. Do you believe corporate America dominates our political system?

COWAN: Sure. We're a capitalistic economy. And...

DOBBS: Yes. But weren't we 30 years ago? Weren't we 40 years ago?

COWAN: ... and I think that's a good thing. Can I make my...

DOBBS: Please.

COWAN: Look, we agree with you very strongly that the middle class is struggling, that there's a lot of middle class anxiety. No question about that.

Where we disagree with you is we do not think there's a war on the middle class, that corporations are waging a war on the middle class. We think the middle class is struggling because everything in the world has changed. Technology's changed. The global economy's changed. And we can't wind the clock back to the 1950s to solve those problems. That's where we disagree with you.

DOBBS: So, it seems to me you're saying the middle class is filled with a bunch of wussies who are overly anxious about their failed perceptive powers, that the fact that millions of American middle class jobs have been outsourced by corporate America, that we've lost 3.3 million manufacturing jobs over the last six years is really no basis for concern, the fact that in point of fact over those six years, we've actually seen wages decline -- median wages decline in this country, the fact that working people in this country have a smaller share of the national income than anytime since 1929 and that corporate America has a larger share than anytime in 50 years is simply -- oh, by the way, with soaring health care costs, with soaring college tuition costs, with, you know, those little concerns that they're somehow confused about what's happening to them.

COWAN: If you look at our report...

DOBBS: I did. I read it entirely.

COWAN: We don't use the word wussy anywhere.

DOBBS: I do give you credit for that.

COWAN: And we don't think the middle class are wussies. We think the middle class is struggling. And they're facing a lot of anxiety. The question is why and what do you do about it? Some of the things we think that you should do that would address some of the issues you raised are middle-class families often have two earners now, so you've got to have family-friendly work places.

People need a college degree. You've got to make sure that they can afford it. People change jobs. They don't sit at General Motors for their entire career. They change jobs. Pensions and health care have to be portable.

Those are the kinds of things we've got to do, rather than wishing...

DOBBS: I'll go with that.

COWAN: ... rather than wishing -- see, we can agree -- rather than wishing it were 1950. America dominated the entire...

DOBBS: (INAUDIBLE)

COWAN: I think a lot of neo-populists do.

DOBBS: Well, I'm not a neo-populist...

COWAN: I know. You're an independent populist. I watch the show.

DOBBS: And the fact of the matter is it's 2007 and I hear apologia for corporate America and its idiotic trade policies. It sounds to me suspiciously like the Democratic Leadership Council and the Third Way are afraid the people are waking up to the fact that there's more to this country than capitalism, because we've been a capitalistic country for 200 years.

But there was a time that the rights of citizens and the fundamental value of this country, equality, was preeminent in our political discussion. It no longer is.

Commerce and efficiency of trade, which is absurd.

COWAN: We think that there is -- that there are conservatives who advocate free market, take care of everything...

DOBBS: Oh, yes.

COWAN: ... leave the middle class on their own. They're out of this debate. They're out of this debate.

Neo-populists or independent populists believe in solutions like stopping free trade...

DOBBS: Whoa, whoa, whoa...

COWAN: Hold on...

DOBBS: ... whoa, whoa, partner. You said -- you threw in an independent pops.

COWAN: Neo-populists.

DOBBS: Let me be clear. I believe in increasing exports. I also believe in taking away trade promotion authority from this president, particularly this president, and all presidents and having Congress fulfill its constitutional responsibility in terms of international commerce.

COWAN: But, Lou, we believe -- I think you can agree with this -- the world's changed radically.

DOBBS: Jesus. Of course I believe that.

COWAN: The world has changed radically. The question is...

DOBBS: But it was changing 100 years ago, 200 years ago.

COWAN: ... what are we going to do for the middle class?

And if you believe -- and I'm not saying you do -- but if one believes that the middle class is on the verge of poverty and about to fall into poverty, you'll design the wrong solutions.

If you believe that the middle class -- let's say a two-earner family, between 25 and age 60 is making about $80,000 a year is the median -- if you believe that that's what they're making, you understand what they're struggling with, you can then design solutions that will work for them.

DOBBS: Let me design a solution for you, all right?

Let's start with honesty. More than half the people in this country make less than $35,000 a year. The middle class in this country is confronting a public education system, which is a great equalizer in this system...

COWAN: Can stop on your first step?

DOBBS: Not until I finish my sentence. I didn't interrupt you on any sentence, did? The great equalizer in our society, public education. Corporate America is quite content -- and so have both the Democratic and the Republican parties been content to allow it to fail. This is categorically unfair. It is absolutely wrongheaded in 2007, has nothing to do with rolling time back.

It has everything to do with confronting the future, which is being endangered by people who don't look at the reality, the empirical, independent nonpartisan truth of the time in which we live.

COWAN: Couldn't agree with you more on education. The system does not serve the middle class well and it's got to be changed, regardless of ideology. However...

DOBBS: I'm with you that one.

COWAN: However...

DOBBS: Quickly.

COWAN: However, truth about the state of the middle class, we think is a little more complex than some would make it.

DOBBS: OK, well, I make it as being highly unfair and put the responsibility upon all of us, but predominantly on the corporate America that dominates our political system with indifference to the middle class.

Come back soon.

Jonathan Cowan.

COWAN: Love to. DOBBS: Coming at the top of the hour, the "SITUATION ROOM", Wolf Blitzer -- Wolf.

WOLF BLITZER, CNN ANCHOR: Thanks, Lou.

Iraqi women coming forward as rape victims and they're forcing the country to confront a taboo subject. You might be shocked at some of the reaction they're getting in Baghdad.

Also, Vice President Dick Cheney besieged at home and abroad. We're going to have details of what's fast becoming a political pile- on.

And who won the first verbal fisticuffs in the Democratic presidential campaign? Hillary Clinton or Barack Obama? Our senior political correspondent Candy Crowley has the scorecard.

All of that, Lou, coming up right here in the "SITUATION ROOM".

DOBBS: Thank you very much, Wolf.

The results of our poll are straight ahead. You wouldn't want to miss that, would you? Stay with us.

(COMMERCIAL BREAK)

DOBBS: Now the results of our poll tonight. 98 percent of you responding that the Chamber of Commerce, the No. 1 big business lobby in this country, probably shouldn't be writing the Democratic immigration reform legislation, as they are now doing.

I did say Democrat Congress, that's right.

Time for more of your thoughts.

Carol in Iowa said, "I canceled my Bank of America credit card today. Maybe they should call themselves the Bank of Mexico and President Bush can do commercials for them."

"Lou, I like Harry Truman's 'The buck stops here'. The same goes for me. It damn sure will not be going to the Bank of America."

We love hearing from you. Send us your thoughts to loudobbs.com.

We thank you for being with us tonight.

Please join us here tomorrow.

For all of us, thanks for watching.

Good night from New York.

The "SITUATION ROOM" being right now with Wolf Blitzer -- Wolf.

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