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LOU DOBBS TONIGHT

Army Surgeon General Forced out Over Walter Reed Scandal; Hillary Clinton and Iraq; Alberto Gonzales Under Fire

Aired March 12, 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, disturbing new charges that insurance companies are masking the true extent of alcohol abuse in this country, the national crisis over drinking and driving.
We'll have that special report.

Also, outrage after the oil services company Halliburton announces it will move its corporate headquarters from Texas to Dubai. One leading lawmaker calls Halliburton's move an insult.

We'll have the story.

And a courtroom showdown over illegal immigration that could affect communities all across the country. The little town of Hazleton, Pennsylvania, is literally under siege in federal court for trying to stop the harsh effects of illegal immigration.

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

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Monday, March 12th.

Live in New York, Lou Dobbs.

DOBBS: Good evening, everybody.

New turmoil tonight in the Department of Defense over the Walter Reed scandal. The Pentagon has forced the Army's surgeon general, Lieutenant General Kevin Kiley, to quit for his failure to fix the appalling living conditions at Walter Reed. At the same time, there are rising demands tonight for the resignation of Attorney General Alberto Gonzales. Democrats are furious with Gonzales over the feds' abuse of powers at the FBI and the abrupt dismissal of some U.S. attorneys.

Jamie McIntyre tonight reports on the Walter Reed scandal. There are new concerns about mental disorders as well among our troops.

Kelli Arena reports on the rising pressure on Attorney General Gonzales to resign.

Andrea Koppel with a report on Senator Hillary Clinton's shifting position on U.S. strategy in Iraq.

We turn first to Jamie McIntyre -- Jamie. (BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice over): A senior Pentagon official says Kiley was asked to step down as surgeon general over the weekend, but Kiley says he requested immediate retirement because, in his words, "It should not be about one doctor."

General Kiley's firing came as a new study concludes the wars in Iraq and Afghanistan have produced an epidemic of mental illness, the kind that can sometimes kill. Take the case of Specialist Jason Cooper, profiled by CNN last year. The young soldier hanged himself after returning from combat. His mother says he was never the same.

TERRI JONES, JASON COOPER'S MOTHER: Soldiers are in distress. They're taught to be tough. They're taught to go into combat. And when the tears come, they're not taught how to survive that.

MCINTYRE: The primary factors, say the study's authors, U.S. troops are subjected to multiple tours of high-intensity guerrilla warfare and face the constant threat of death or dismemberment from improvised bombs.

According to a review of more than 100,000 veterans of Iraq or Afghanistan who were seen at V.A. hospitals between 2001 and 2005, it's taking a heavy toll. One quarter, 25 percent, have been diagnosed with some form of mental disorder. Include psychosocial problems such as domestic violence, and the percentage jumps to almost one third.

Not surprisingly, younger troops, 18 to 24-year-olds, who often draw the deadliest front-line duty, are the most at risk.

Post-Traumatic Stress Disorder is the biggest problem, diagnosed in 13 percent of returning veterans, followed by anxiety, problems adjusting, depression, and substance abuse. More than half of the 100,000 suffered two or more problems.

(END VIDEOTAPE)

MCINTYRE: The biggest difference between now and the Vietnam War is the prevalence of what's become known as the signature wound of the Iran and Afghanistan wars, traumatic brain injury. It causes not only physical damage, but often mental injuries, as well -- Lou.

DOBBS: Jamie, thank you very much.

Jamie McIntyre from the Pentagon.

Another four of our troops have been killed in Iraq, three in combat, one in a non-combat-related incident. Thirty of our troops have been killed in Iraq so far this month, 3,193 killed since the beginning of the war. 23,294 of our troops wounded, 10,627 of them seriously.

Democrats seem incapable of presenting a united front in the political showdown over the conduct of the war in Iraq. House Democrats are now demanding the withdrawal of all U.S. combat troops by August of next year. Senator Hillary Clinton, a presidential candidate, of course, is demanding an even earlier withdrawal.

As Andrea Koppel reports, Senator Clinton is now being accused by some in her own party of changing her position.

(BEGIN VIDEOTAPE)

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT (voice over): In between hugging babies...

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: We're going to be here week after week after week.

KOPPEL: ... and courting Democratic bigwigs in New Hampshire, Senator Clinton explained why she believes Congress must now set a deadline, March 31, 2008, as a goal for U.S. combat troops to leave Iraq.

CLINTON: A goal to try to move the president to understand what needs to be done in order to change the mission in Iraq and begin to bring our troops home.

KOPPEL: Clinton says her position has not changed, but just listen to what she told CNN in January.

CLINTON: I am not advocating a date certain and immediate withdrawal from Iraq.

KOPPEL: Last month, Clinton was criticized by some in New Hampshire for refusing to apologize for voting to authorize the war in 2002, as John Edwards has done. Independent voter Matt Van Wagner says that still bothers him, but he appreciates the senator is now taking a stand.

MATT VAN WAGNER, NEW HAMPSHIRE VOTER: Whether it's the right stand or not, at this point I'd almost just as soon the military guys tell us when we should come and when we should go.

KOPPEL: This was Senator Clinton's third visit to the Granite State as a presidential candidate, but for the first time during a sold-out speech at the state Democratic Party's premier fund-raiser, she made a direct comparison between her candidacy and John F. Kennedy's.

CLINTON: And a lot of people back then said, well, you know, America will never elect a Catholic as president. So when people tell me or one of the pundits says it, "I don't think a woman can be elected president," I say we'll never know unless we try.

KOPPEL (on camera): Clinton aides say the reason she made the comparison was that the group she spoke to, the 100 Club of New Hampshire, was established back in 1959 to help the candidacy of JFK.

Andrea Koppel, CNN, Capitol Hill.

(END VIDEOTAPE)

DOBBS: Democrats tonight are demanding changes at the Justice Department. Democratic lawmakers calling for the dismissal of Attorney General Alberto Gonzales after the firing of eight U.S. attorneys and a scandal at the FBI. Gonzales is also facing criticism for describing gang members in southern California as "individuals who have run into a spell of bad luck."

Gonzales also under fire for strongly defending the prosecution of two former Border Patrol agents sentenced to prison for doing their jobs. A drug dealer given immunity to testify against them.

Kelli Arena has the report.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice over): Some senior Democrats say justice would be better served if Alberto Gonzales resigned as attorney general.

SEN. JOSEPH BIDEN (D), DELAWARE: He's got some real problems here. There's very little credibility in the Justice Department right now.

ARENA: The rumblings of discontent go all the way back to memos crafted while Gonzales was White House counsel. Memos that some say condone torture. Then, controversies over civil liberties, from secret wiretaps to charges of abuse under the Patriot Act.

But it's the allegation that Gonzales fired eight U.S. attorneys for not doing the administration's bidding that has the Democratic leadership all riled up. Gonzales has repeatedly denied political motivations.

ALBERTO GONZALES, U.S. ATTORNEY GENERAL: I want to reassure the American people that we in no way have made decisions to politicize these offices.

ARENA: His supporters say it wouldn't be possible anyway.

RICHARD CULLEN, FMR. U.S. ATTORNEY: Every single U.S. Attorney's Office is run and manned by career professionals who do not care one wit who is in power in the White House.

ARENA: Still, many Democrats aren't buying it. They see a pattern of political behavior under Gonzales and his predecessor, John Ashcroft, citing a study that shows U.S. attorneys have been targeting Democrats more than Republicans.

The study shows that between 2001 and 2006, 79 percent of investigations or indictments of public officials were directed against Democrats. Just 18 percent against Republicans.

JOHN CRAGAN, STUDY CO-AUTHOR: Our research can't prove motive. You know, our research doesn't get inside of Attorney General Gonzales' head. But the statistics point out that it's pretty likely that this was intentional.

(END VIDEOTAPE)

ARENA: Intentional or not, Lou, Democrats are looking for payback and Gonzales' head. Now, Gonzales has said that he will one day return to Texas. There's just no indication he's packing his bags just yet.

Back to you.

DOBBS: Kelli, that 79 percent statistic is overwhelming. How would that compare to Democratic administrations and prosecutions of Republicans, say, in the Clinton administration?

ARENA: Well, Lou, interestingly enough, there was no such study done during those administrations. This study was done by two professors who say that the search engines that they used just were not available during that time period.

They looked at indictments and they looked at press reports where there were leaks about investigations. And that's how they came up with those numbers.

DOBBS: Thank you very much, Kelli.

ARENA: You're welcome.

DOBBS: Kelli Arena.

Still ahead, a major new controversy for Halliburton. Already facing charges of profiteering and mismanagement, well, now they have some more explaining to do.

We'll have a special report.

Also, the illegal alien lobby and open borders lobby and their supporters in federal court trying to block one small town's efforts to stop the harsh effects of illegal immigration in their community.

We'll have that story.

And the Bush administration and Democrats continuing to demand amnesty for illegal aliens despite the huge number of American citizens who remain unemployed.

What's going on? And who cares?

We'll have a special report and a great deal more straight ahead.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: The oil services company Halliburton, already accused of profiteering and mismanagement in the war in Iraq, tonight faces a major new controversy, and it's all the company's doing. Halliburton is moving its CEO and corporate headquarters from Houston, Texas, to Dubai. One leading senator today describing Halliburton's announcement as an outright insult.

Christine Romans now reports on the rising furor over Halliburton.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): Dubai: best known for indoor skiing, luxury shopping, and the self-described best hotel in the world. Soon home to Halliburton's executive suite.

Halliburton's chief executive is moving from Texas to Dubai in the United Arab Emirates. CEO Dave Lesar says, "The Eastern hemisphere is a market that is more heavily weighted toward oil exploration and production opportunities." But where Halliburton sees opportunities, its critics see an insult.

Halliburton last year was the Army's top contractor and the sixth biggest contractor for the Defense Department.

CHARLIE CRAY, HALLIBURTONWATCH.ORG: Taxpayers have underwritten a great deal of Halliburton's growth over the past decade. This is why this company is so well known.

ROMANS: Well known, this long-time Halliburton critic says, for allegations of misuse and waste of those American taxpayer dollars. Halliburton has denied any wrongdoing. But just last month, federal investigators alleged Halliburton was responsible for $2.7 billion of the contractor waste and overcharging in Iraq.

TOM DONALDSON, WHARTON BUSINESS SCHOOL: I think it may cause some resentment in the U.S., in part because Halliburton has incredibly good government connections, and those government connections will continue to benefit Halliburton even it as it deals in petroleum with local heads of state in the Middle East.

ROMANS: A Halliburton spokeswoman said she expects no tax benefits from the move, insisting Halliburton is maintaining its legal registration in the United States. The company did not disclose whether Halliburton was offered any incentives to move to the United Arab Emirates.

(END VIDEOTAPE)

ROMANS: Halliburton was awarded almost $12 billion in DOD contracts in the past two years. Its subsidiary, Kellogg, Brown and Root, has long been the recipient of those riches. Now Halliburton it spinning that company off and intends to focus on oil and gas and growth in the Middle East.

And Lou, the company is very, very picky about the language here, saying they're maintaining their principal executive offices in Houston. They will be adding a corporate headquarters in Dubai. But headquarters is headquarters. The CEO is moving to Dubai. DOBBS: That is -- I mean, this company is run by some of the most interesting people, I must say -- $2.7 billion they're charged with overcharging the United States government at a time of war, profiteering. This company is -- I can't even imagine the thinking.

And if the idea is that an oil and gas company needs to be close to its sources, I guess ExxonMobil, all of the other major oil companies, should move to Dubai. I mean, this is an absurdity.

ROMANS: The company says its CFO and COO will remain in Houston at the principal executive offices in Houston. The CEO will be at the new corporate headquarters, where apparently he can chase after the state of the oil company business there, where the growth is.

DOBBS: And Wall Street must love this idea, huh?

ROMANS: The critics, they say -- one analyst said it's hot air to criticize it. They like...

DOBBS: Oh, hot air.

ROMANS: Yes. Well, of course, you know, Wall Street likes to run after the shareholder value, Lou. You know that.

DOBBS: I just don't understand how this is running after shareholder value, because the furor this is going to kick and has already kicked up on Capitol Hill...

ROMANS: It sure has.

DOBBS: ... is -- it may not mean as much to "an oil and services company" as if KBR was still part of Halliburton. But I have to believe the impact will be significant.

This is another case of being too clever by half, it appears to me. And, you know, really lousy corporate citizenship. People will hear more corporate -- CEOs talk about corporate citizenship in the days and weeks ahead, in part because of Halliburton.

Christine, thank you.

Christine Romans.

That brings us to the subject of our poll tonight.

Do you believe Halliburton's decision to move its CEO and headquarters to Dubai is an insult to the American people? Yes or no? Cast your vote at LouDobbs.com. We'll have the results here upcoming.

The Bush administration and business leaders continuing their push to expand their so-called guest worker program. They say foreign workers will do jobs Americans won't do, and a guest worker program, in their tortured reasoning, in my opinion, seem to think that would assure border security. But as Lisa Sylvester reports, critics now say those programs encourage business to replace Americans with foreign workers who work for lower wages. (BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice over): Thirty-seven- year-old Caffrey Russell was displaced by Hurricane Katrina. He moved to Georgia and has been looking for a delivery or warehousing job, really anything he can get his hands on.

CAFFREY RUSSELL, JOB SEEKER: It's hard being an evacuee and still looking for a job. You know, I'm not a bad person at all. I just think it's being stereotyped.

SYLVESTER: His story is not unique. The national unemployment rate for black men is 8.3 percent, compared to Hispanic men at 5.4 percent and white men at 4.5 percent. For black male high school dropouts in their 20s, an astounding 72 percent are jobless.

The issue has the attention of Senator Chuck Schumer, the head of the Congressional Joint Economic Committee.

SEN. CHUCK SCHUMER (D), NEW YORK: To have a large segment of our society just not having any jobs whatsoever is a real problem for the whole of society.

SYLVESTER: Schumer does not support the guest worker provisions proposed last year because it would bring in tens of thousands of foreign workers to compete with Americans who are already struggling to find work. The Bush administration has argued that foreign workers would be filling jobs Americans "won't do," but critics point out the U.S. immigration system encourages a substitution effect to replace legal Americans with illegal workers who are willing to be paid much less.

FRANK MORRIS, DIVERSITY ALLIANCE: Outrage is a benign term for what's happening. We're the only country in the world that gives a preference for non-citizens over our own citizens.

SYLVESTER: At the Georgia Department of Labor, there are others looking for work -- black, white, men and women. Regardless of income or education, they agree it can be hard to find a job in America that pays a decent wage.

(END VIDEOTAPE)

SYLVESTER: There is a growing list of Democrats coming out against a guest worker program. Also, one major union, the Teamsters, opposes a guest worker plan because it would take away American jobs and put downward pressure on wages for Americans -- Lou.

DOBBS: And incredibly, big unions, the biggest, AFL-CIO, supporting these ridiculous policies. In terms of guest workers, amnesty, it's a mind-boggling contradiction within organized labor today.

SYLVESTER: Lou, this is one of those really big issues, why it is that the unions particularly are supporting a plan that would bring in workers from other countries who would compete with the lowest, the most unskilled workers in this country, those at the bottom of the economic scale. But indeed, you're right. They are supporting that policy -- Lou.

DOBBS: Lisa, thank you very much.

Lisa Sylvester reporting tonight from Washington.

A new report out today called "Close to Slavery" finds guest workers in this country are being exploited. According to the Southern Poverty Law Center, guest workers are routinely cheated out of their wages, held virtually captive by their employers, who seize their documents. They are forced to live in squalid conditions and often denied medical benefits for their injuries.

(BEGIN VIDEO CLIP)

MARY BAUER, SOUTHERN POVERTY LAW CENTER: What we see in guest worker programs that exists here in the United States is that they are perilously close to slavery.

(END VIDEO CLIP)

DOBBS: The report finds that the abuse is not just a few bad employers either, but is common in the guest worker program. The Southern Poverty Law Center concludes Congress should reform our broken immigration system, but reform should not rely on creating a vast new guest worker program.

Coming up next, insurance company policies may be helping to hide the true costs of alcohol abuse in this country. That report, "The War Within," coming up.

And two more Republican contenders poised to enter the presidential race for '08.

We'll have the latest in Hazleton, Pennsylvania's crackdown on the harsh effects of illegal immigration being challenged by well- funded illegal alien and open borders advocacy groups.

We'll have that special report.

And I'll have a few thoughts on the action against Hazleton later here tonight.

Stay with us. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Tonight, "The War Within," our special report on the war against drugs and alcohol abuse and addiction. Approximately 40 percent of patients who go to emergency rooms are there because of an alcohol-related injury. But as Kitty Pilgrim reports, in many states doctors simply will not even test those patients for alcohol because insurance companies will not reimburse those claims.

(BEGIN VIDEOTAPE) KITTY PILGRIM, CNN CORRESPONDENT (voice over): A horrific accident. The driver injured. At the emergency room, doctors don't test for drugs or alcohol because they want to get paid.

DR. LARRY GENTILELLO, UNIVERSITY OF TEXAS MEDICAL CENTER: Once you go to the ER, you're almost sure not to have your blood alcohol level tested because of this law. And so, as a result, many patients cause property damage or severe bodily injuries to other people as a result of alcohol-related crashes. And by going to the ER, they don't get tested and they get away with it all.

PILGRIM: These exclusion clauses, officially called UPPL laws, were passed way back in 1947 to allow insurance companies to avoid paying for alcohol-related accidents. Thirty-four states still have laws allowing insurers to walk away without paying, and 10 other states leave it up to the discretion of the insurers.

Major healthcare organizations and advocacy groups like MADD want UPPL laws repealed. They say alcohol-related accidents are epidemic.

Statistics prove that to be the case. The National Highway Traffic Safety Administration says three in 10 Americans will be involved in an alcohol-related crash at some time in their lives. Thirty-eight percent of all fatal car crashes are alcohol related.

DR. MARK WILLENBRING, NATIONAL INST. ALCOHOL ABUSE: Eighteen thousand young people a year who are dying because of alcohol-related motor vehicle crashes, that's a tremendous loss of life and opportunity, and we really do need to start paying more attention to it.

PILGRIM: Those numbers are likely even higher. The don't ask, don't test policy in emergency rooms gives doctors a financial interest in not reporting alcohol-related accidents. The approach actually generates more accidents because people are never treated for alcohol abuse.

(END VIDEOTAPE)

PILGRIM: Now, advocates for repealing the law say doctors are often very well intentioned because insurers won't pay for the alcohol related injuries and doctors are trying to protect their patients from having to pay the high medical bills on their own. The problem is, Lou, with alcohol abuse, there are more than one victim. This -- if this continues, other people are also injured if they don't...

DOBBS: Well, they're perpetrators and victims alike, and the insurance companies are actually standing between -- 38 percent of all of these are alcohol related based on the current statistics. We have no idea what the real number is, but it has to be substantially higher.

PILGRIM: It's much, much higher. The industry says the -- the insurance industry says the law should be repealed, but then they do nothing to actually advance this. And 34 states still have these laws on their books. DOBBS: Plus 10 others that leave it to the discretion of the insurer.

PILGRIM: That's right.

DOBBS: And I can imagine which way that discretion goes.

PILGRIM: Yes, well...

DOBBS: All right.

It's incredible. The deeper we dig into this issue of alcohol and drug abuse and addiction in this country, it -- I mean, this is really very serious. And one would hope that some would join -- you said the Mothers Against Drunk Driving and other groups.

PILGRIM: There's 30 organizations, major organizations, that want these laws overturned.

DOBBS: Well, why not get it done?

All right. Kitty Pilgrim, thank you very much.

Unless you want to upset an insurance company and avoid that. Or whatever. I can't imagine that being the case.

Thanks.

Coming up next, well-funded national illegal alien activist groups, open border lobbying groups, well, they're in Hazleton, Pennsylvania, a town of about 30,000. They want that small city to end its crackdown on the harsh effects of illegal immigration as a result of the federal government's failure to enforce border security and enforce immigration laws. That report coming up.

Ten Republicans voicing interest in being their party's presidential candidate in 2008. We'll have a report on which one appeals to GOP voters.

And I'll have a few thoughts tonight on a few pressing issues, including the vice president's characterization of Democratic efforts to put some benchmarks on the progress of the war in Iraq. Something to do with unpatriotic, I believe, in the mind of the vice president.

That's later here in the broadcast.

Stay with us. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: A small Pennsylvania town forced by federal inaction to protect its citizens on its own from the crisis caused by illegal immigration, and now facing a challenge in federal court from a host of well-funded organizations. National organizations.

And Hazleton, Pennsylvania, is being funded by those illegal alien advocacy groups and open border groups, those who are taking issue with the city's efforts to control the harsh effects of illegal immigration.

Bill Tucker is in Scranton, Pennsylvania, where today's hearing was held. He has the latest for us -- Bill.

BILL TUCKER, CNN CORRESPONDENT: Lou, the action inside the court today matched the anticipation outside of it, as the attorneys inside got down to business in a hurry.

(BEGIN VIDEOTAPE)

TUCKER (voice-over): With protesters outside the courtroom, the action inside got underway with a surprise announcement in opening arguments. Lawyers for the city of Hazleton announced it would change a section of its ordinances.

MAYOR LOU BARLETTA, HAZLETON, PENNSYLVANIA: We're going to remove the word solely and primarily to eliminate another one of their claims.

TUCKER: The new ordinance will read: "A complaint which alleges a violation on the basis of national origin, ethnicity or race shall be deemed invalid and shall not be enforced."

KRIS KOBACH, ATTORNEY FOR HAZLETON: Because they choose to read it in such an unreasonable way, we've taken out any words they could possibly find objectionable just to clarify this case.

TUCKER: It was a move that the plaintiffs immediately seized on as a concession that cut to the heart of one of their arguments with Hazleton, that the ordinances aimed at illegal aliens are little more than an effort to force 10,000 Latinos living there to leave.

ANTHONY ROMERO, ACLU: Changed language doesn't mean very much for the meaning of the ordinance. It's really clear from the beginning that the Hazleton ordinance was about promoting discrimination. It created a climate of xenophobia. It turned citizen against citizen and immigrant against citizen.

TUCKER: Hazleton's answer was to point out that their arguments rest on law, in presenting legal precedents which they say supports the city's right to draft ordinances, creating regulatory penalties based on existing federal law and that redrafting part of the ordinance was intended to make that clear.

Much of the time in court today was testimony from witnesses called by the plaintiffs.

Bill Tucker, CNN, Scranton, Pennsylvania.

(END VIDEOTAPE)

DOBBS: And joining us now with more on Hazleton's day in court is Mayor Lou Barletta.

Mayor, good to have you with us.

BARLETTA: Thanks, Lou. Nice to be here.

DOBBS: How would you characterize the proceedings today in court?

BARLETTA: Well, I'm very confident and impressed with our legal team. Although we're outnumbered, as 25 lawyers are lined up against us, our five I think did an outstanding job today. The stories today I thought were interesting but irrelevant to the law that we passed.

DOBBS: The stories being that going to the -- to the paragraph that we just reported on, the idea that national origin could not be a basis, national origin, ethnicity or race. Why would that even be an issue?

BARLETTA: Well, it shouldn't be an issue. And they continuously try to twist the words of the ordinance to make it seem like we're discriminating against people. They also want people to believe that we have chased legal Hispanics out of Hazleton when that's not true. Just the opposite, Lou.

Today we heard symptom rebuttal of what the plaintiffs are claiming when in fact, over 20 new Hispanic businesses have opened since we passed the ordinance. So clearly, people that left were illegal aliens and legal Hispanics that want to make Hazleton their home continue to do so.

DOBBS: Give us -- give us a picture, if you will, of Hazleton, Mayor, its diversity, the races, the ethnicity that make up Hazleton.

BARLETTA: That's the great part about Hazleton, it's so diverse and the ethnic boundaries of the individuals that live there and the history of Hazleton. It's heavily Irish, Italian, Slovaks.

And again, everyone is welcome. We are not rolling up the welcome mat. However, illegal aliens are much different than legal immigrants.

DOBBS: Right.

BARLETTA: And as soon as we divide the two, we're talking about two different groups of people.

DOBBS: You have -- you have already lost a battle over the injunction against the ordinance. What do you expect to transpire tomorrow?

BARLETTA: Well, again, we'll hear some more stories from the plaintiffs and again, I'm sure they'll be very interesting, but I again believe they'll be irrelevant to the -- what the case really is about. And that's the law, the legality. It's not about ethnicity; it's about legality.

You know, Lou, we went into this with our hands tied somewhat behind our back. Many of the plaintiffs who are suing us are legal aliens who have gone by Jane and John Does, and they also have been -- will not be testifying here, which means that we won't be able to cross-examine them.

But I'm very confident in our legal team, and I think we'll be able to prove that we have the right to do what we're doing.

DOBBS: You say crime is one of the primary reasons you have created that ordinance and seek to enforce it. Kris Kobach, representing your town in this trial, has said over the past six years, all the murders in Hazleton have been committed by illegal aliens. Is that correct?

BARLETTA: Well, we've had -- we've had some very serious crimes being committed, some murders. The recent murders that have been illegal aliens have been involved in one way or the other.

May 10 was the breaking point in Hazleton when a 29-year-old was shot between the eyes by two illegal aliens. By the way, Lou, the shooter in that incident was arrested eight times before he came to Hazleton and committed that murder.

This is a small town where we might have one murder every seven years. And that has changed. We're seeing gangs and some very violent vicious crimes. And I've had enough. You know, we welcome people in Hazleton, but we're not going to allow those to come in and destroy the quality of life that we have.

DOBBS: And it's your contention that those gangs are all made up of illegal aliens?

BARLETTA: No, that's not true. Not all the gangs are made up of illegal aliens. What I am trying to contend is that small towns such as ours have a very limited budget to work with. Every crime committed by an illegal alien is money and manpower that we should be using somewhere else.

We're watching our budget being literally drained of the resources that we should be using in fighting some of the gangs. We've arrested MS-13 members. As know, that is a gang that is made up of illegal aliens. We can't sit back and just allow these gangs to come in and take over our city.

DOBBS: And I know that you have to be as frustrated as other -- as leaders of other communities and residents of those communities across this country. You wouldn't even be embroiled in this fight if the U.S. government, the federal government were doing its job at both the border and in enforcing U.S. immigration laws.

BARLETTA: You're absolutely right. The federal government hasn't done anything. I'll disagree and argue with I'll anyone that wants to make the argument that this issue, immigration, is a federal issue, but this issue that we're talking about, illegal aliens is not a federal issue. It's also a local issue.

I live with it every single day. I deal with the families of those that are victims of crimes committed by illegal aliens. And I can't sit back any longer and watch my town being destroyed.

DOBBS: Mayor Lou Barletta of Hazleton, we thank you very much for being with us here tonight.

BARLETTA: Thanks, Lou. Thank you.

DOBBS: About 80 towns and cities across the country have now passed some form of legislation similar to that Hazleton ordinance. The communities, abandoned by Washington, D.C., are on their own, trying to fight the crisis on their own.

They're also facing the same kind of legal firepower as Hazleton. So tonight's case is being closely watched all over this nation.

Up next, I'll have a few thoughts on the town of Hazleton's battle over illegal immigration and its impact. The fight between the vice president and Democrats over the conduct of the war in Iraq. And the race for the White House and those nasty, brutish people over at FOX News and how they've upset some Democrats.

Also, is ten too many? Bill Schneider tonight takes a look at an increasingly crowded field of Republican presidential contenders.

And one of the world's top historians is our guest here tonight. We'll be discussing the war in Iraq and the politics of creating strategy in Washington, D.C. Stay with us.

(COMMERCIAL BREAK)

DOBBS: New polls out tonight of Republican voters and what they think of the party's presidential candidates so far. But with 10 people already in the running, Bill Schneider takes a look at whether Republican voters are saying yet "Enough already."

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN POLITICAL ANALYST (voice-over): Only two Republican candidates show support in double digits: Rudy Giuliani and John McCain. In January, Giuliani was six points ahead of McCain. Now Giuliani leads McCain by 16 points. McCain's support is at its lowest point in six months.

Republicans like Giuliani. They really like him: 72 percent favorable. Giuliani's leadership after 9/11 looks like a transcendent issue.

RUDY GIULIANI (R), PRESIDENTIAL CANDIDATE: And you achieve peace through strength and through having very, very strong objectives and not going back to the kind of defense that we played before September 11.

SCHNEIDER: Do Republicans like McCain? Yes, but not quite as much: 56 percent favorable. People's view of McCain is linked to how they feel about President Bush's troop buildup in Iraq.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: There are some small glimmers of success already. Let's give it a chance, give this great general and these young people a chance to succeed in Iraq.

SCHNEIDER: Are Republicans happy with the candidates they've got? Sixty-two percent say they have not definitely made up their mind to support anybody. It's early. They're open to new choices.

How about a lawyer turned actor turned senator turned actor?

FRED THOMPSON (R), FORMER SENATOR: Don't know. I think it will become apparent. I think it will become apparent a little later on this year.

SCHNEIDER: Or a conservative who's been critical of the war in Iraq? Does he want to be the decider? He can't decide.

SEN. CHUCK HAGEL (R), NEBRASKA: I'm here today to announce that my family and I will make a decision on my political future later this year.

SCHNEIDER: Not much market for that message among Republicans right now. Eight percent have a favorable opinion of Chuck Hagel, 15 percent unfavorable. Three-quarters say they don't know much about the Nebraska senator.

(END VIDEOTAPE)

SCHNEIDER: Here's another reason why McCain could be having trouble. Immigration. Among Republicans who say immigration is an extremely important issue, McCain runs 14 points behind Rudy Giuliani. Among Republicans who are less concerned about immigration, McCain and Giuliani are tied -- Lou.

DOBBS: Well, it's interesting that Senator McCain has got such a clear track record on illegal immigration and, of course, amnesty. Bill Schneider, 10 probably won't be enough. But what do you think? Candidates, I mean.

SCHNEIDER: Well, there probably will be more. I think at least one or two more. Another one got into the race today, Ron Paul, who has a unique voice, too. He's a libertarian Republican congressman from Texas. So he's in the mix. He's got 2 percent, same as Chuck Hagel.

DOBBS: Well, something to shoot for, as they say. Bill Schneider, thank you.

SCHNEIDER: Sure.

DOBBS: Vice President Dick Cheney sharply criticized congressional Democrats today. The vice president saying the withdrawal of our troops from Iraq would invite more attacks on this country.

Cheney's warning coming as Democrats, as well as some Republicans, are preparing to fight the White House over more spending in Iraq. In his speech to the lobbying group, the American-Israeli Public Affairs Committee, Cheney said even the discussion of withdrawal sends the wrong message.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: When members speak not of victory but of time limits, deadlines or other arbitrary measures they're telling the enemy simply to watch the clock and wait us out.

(END VIDEO CLIP)

DOBBS: Well, the vice president's at it again, Cheney saying the Democrats, anti-war strategy, as he put it, isn't supporting our troops but rather undermining them.

Those darned Democrats are undermining our troops by trying to set some standards and benchmarks for execution of the president's strategy in the war in Iraq. And forcing the Iraqi military to actually take responsibility for the war that President Bush has said they must win.

Mr. Vice President, the house Democrats are actually following the guidance of the Iraq Study Group that the Bush administration rejected.

And enough with the "if you don't agree with me, you must be unpatriotic" nonsense.

And Hazleton, Pennsylvania you just heard from the mayor of that little town of 30,000 people. They passed an ordinance requiring employers not to hire illegal aliens and landlords not to rent to them. So now the town is in federal court and arrayed against Hazleton and its citizens are -- are you ready? The ACLU, the ACLU of Pennsylvania, the Porter Regan Legal Defense Fund, the Community Justice project, the law firm of Koze (ph) and O'Connor, the U.S. Chamber of Commerce, the biggest business lobbying group in this country, and the U.S. Counsel of Catholic Bishops. Wow.

That's a pretty impressive show of force against a little town that wouldn't have had to pass an ordinance if the federal government had had the courage, conviction, principal and sense of responsibility to enforce U.S. immigration laws and to secure our borders and our ports.

It's too bad that the federal government can't be sued for nonperformance. This is just plain nuts.

And speaking of nuts, how about John Edwards and those darned Nevada Democrats? Apparently those Nevada Democrats didn't like a joke that FOX News chief Roger Ailes told on Bush but included a reference to Obama. They canceled their debate on the FOX News Channel. John Edwards did the same.

And I'm sorry, Mr. Edwards, but you sound too much like George W. Bush and his foot stamping refusal to talk with the Syrians and the Iranians for me to get too excited now about your candidacy.

What? You're afraid FOX and Roger Ailes will slant the debate in favor of who, Dennis Kucinich, Hillary Clinton? Let's get real here. You think Ailes is too smart, too tough and biased? Well, try out Ahmadinejad, Hu Jintao or Vladimir Putin.

Enough with the sanctimonious, precious copouts. It's a political debate. And in this presidential season, let's hope we have a national debate, for crying out loud. So go debate. Raise hell in the arena and show us what you've got.

Coming up at the top of the hour we'll show you what "THE SITUATION ROOM" has got, and that's Wolf Blitzer -- Wolf.

WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou.

Coming up, a Democrat says this of the vice president, Dick Cheney. Perhaps if he'd gone to Vietnam, the vice president might have, quote, "learned something about war." Those scathing words from former senator, Max Cleland. You're going to also want to hear what else he has to say.

Also, who says Al Sharpton is jealous of Barack Obama? Not only is Al Sharpton saying that's not true, but he's blasting the Democratic senator, saying he won't be intimidated by anyone.

And some are calling him public enemy No. 1, the man who attacked two women, one of them 101 years old. Police are saying what you can do to help catch them right now.

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

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

A reminder to vote in our poll tonight. Do you believe Halliburton's decision to move its CEO and corporate head quarters to Dubai is an insult to the American people? Yes or no? Please cast your vote at LouDobbs.com. The results coming up here in just a few moments.

Up next, the political battle in Washington over the conduct of the war in Iraq, House Democrats going after the vice president over the possible withdrawal of our troops. Niall Ferguson, one of the world's top historians, joins me here next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Joining us now, one of the world's best historians, Niall Ferguson, professor of history at Harvard University, author of "The War of the World: 20th Century Conflict and the Descent of the West".

Good to have you with us, Professor.

NIALL FERGUSON, AUTHOR, "THE WAR OF THE WORLD": Nice to be back, Lou. DOBBS: We are hearing increasingly from the Democrats a date of withdrawal, a deadline, if you will, and benchmarks for the conduct of this war. What's your reaction?

FERGUSON: I'm not sure that exit dates are a good idea, to be honest, Lou. I know that it's not unpatriotic to talk about this. I'd certainly beg to differ with the vice president on that.

But I think it may be a little naive because Iraq is an extremely explosive at the moment. Ethnic cleansing is underway. But setting a date for withdrawal just sets a date for the civil war to explode in -- with all its force. And I think that's an extremely frightening prospect.

DOBBS: We're entering the fifth year of this conflict, which has now lasted longer than World War II. We are hearing from the Iraqi government, from the U.S. government and others that the Iraqi military is not ready to provide its own security.

My goodness. In that time, how is it possible that troops could not have been trained up and leadership, military leadership put into place?

FERGUSON: The problem is that we've trained up the troops to fight a civil war. And we've ended up with armies divided along sectarian lines. I never thought this strategy was a credible one. It smacked of Vietnamization.

The reality is that Colin Powell got it right when he said it's the Poverty Barn rule: you broke it, you own it. The U.S. broke Iraq, and now it does in effect, own its security. It's a fantasy to imagine it can be handed over to the Iraqis anytime soon without unleashing a war that will make Bosnia look like a teddy bear's picnic.

DOBBS: But that seems to be the direction in which this government is headed with the administration making it clear that it wants to as best it can, if the surge strategy, if you can call it a strategy, doesn't work, the military already planning withdrawal.

The Democrats, particularly in the House and now with Senator Clinton today calling for the end of March, 2008 withdrawal. It seems like we're headed in exactly that direction. What is your thought as to the implications and the impact of such a decision?

FERGUSON: Well, I think politicians on both sides have to think very hard whether they want to be responsible for a massive genocide in 2009. And then, of course, the question will be asked, who was ultimately responsible for this genocide?

It's not beyond the bounds of possibility, Lou, that Iraq could end up being the Central Africa of the next decade. And the difference is that the blame will lie fairly and squarely with the United States if that ultimately happens.

DOBBS: With that -- with that responsibility for the war going back to Colin Powell saying that if you break it, it is yours, what do you think is the appropriate approach for the United States to take here? What is the wisest policy course and its consequences?

FERGUSON: Well, I think you have to learn from some imperial history. Nobody likes talking about this, but it's unfortunately the best place to look.

When the British cut and ran from India, when they pulled out very rapidly from Palestine, the result was an extraordinary explosion of violence in both cases. It was particularly bad in the Indian case, where Hindus and Muslims slaughtered one other.

Where the British held on and took their time and defeated the insurgency, though it was a difficult process, I'm thinking here of Malaya, the outcome was a much happier one.

Unfortunately, nobody wants to know this, but the U.S. is almost certainly going to be in Iraq for a whole lot longer than politicians on either side are saying. And that's really the only way I think we have really avoid something that will resemble Rwanda more than Bosnia in the absence of a U.S. presence.

DOBBS: Niall Ferguson, we thank you for being here, author of "The War of the World: 20th Century Conflict and the Descent of the West". Professor, thanks for being here.

FERGUSON: Thanks, Lou.

DOBBS: Still ahead, the results of our poll and your thoughts. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of our poll tonight overwhelming, 94 percent of it you responding that Halliburton's decision to move its CEO and headquarters to Dubai is an insult to the American people.

And time now for some of your thoughts. Sidney in Arizona said, "Hazleton's fight to enforce their laws is more than just for this small town. It is for our survival as a nation of laws. If the ACLU is victorious, they will continue to erode law and order."

And Scott in New York said, "After watching Mr. Romero" -- that's Anthony Romero, the head of the ACLU -- "on your show I'm convinced that the 'A' should be removed from ACLU, because there's nothing American about the action they're taking against legal Americans in these towns."

And Art in New Mexico said, "So President Bush was not very well received in some of the countries he visited south of the border. Not to worry. He's bound to get a great reception when he visits Mexico. After all, those are the people he protects and represents here in the United States."

And Steven in Texas said, "Halliburton has announced it's moving to the Mecca of tax havens in the Middle East. I guess they figure that U.S. taxpayers have paid all they care to for gross over-billing. This truly is a cut and run strategy."

And Rick in Pennsylvania: "If my company had ripped off the American taxpayers for literally billions of dollars, I guess I'd move my company overseas when it looked like Congress may examine the record. Do we have an extradition agreement with Dubai?"

And Dean of Tennessee: "Lou, why doesn't just one presidential candidate have the character and courage to tell the American people they will not campaign until early 2008, because they need to serve the public in the job they were elected to hold?"

That is a very good question.

We love hearing your thoughts. Send them to us at LouDobbs.com. Each viewer whose e-mail is read here receives a copy of my book, "War on the Middle Class".

We thank you for being with us tonight. WE ask you to join us here tomorrow where, among our guests will be Congressman Duncan Hunter. Congressman Hunter is going to update us on his fight for a congressional pardon for imprisoned former Border Patrol agents Ramos and Compean. Congressman Hunter just returned from Iraq, as well. We'll be talking about U.S. strategy.

For all of us here, we thank you for watching. Good night from New York. "THE SITUATION ROOM" begins now with Wolf Blitzer -- Wolf.

BLITZER: Thanks very much, Lou.

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