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LOU DOBBS TONIGHT

War Over Iraq: Bush Seeks Compromise; The Survivor: Gonzales Wins Support; Food Danger

Aired May 10, 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, the Democrats rolling over on the issue of so-called free trade. We'll have complete coverage.
How is this Democratic Congress any different from that Republican Congress? We'll be examining that.

Also, a guilty verdict today in one of the most significant espionage trials in this country in years. A jury convicting a naturalized citizen of passing some of our most sensitive, important military secrets to communist China.

And the Senate holding hearings on the threat to what is left of our middle class. Will the Senate finally turn its back on so-called faith-based economics and help our working men and women and their families?

We'll have the story.

And much of the media facing charges it's hiding the truth about our illegal immigration crisis. Tonight we examine the ties between The Washington Post Company and a pro-amnesty group coaching illegal aliens on how to circumvent U.S. immigration laws.

We'll have all of that and all the day's news and a lot more straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Thursday, May 10th.

Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

President Bush today gave way to mounting political pressure and agreed to set new benchmarks in Iraq. Today's shift by the president comes amid growing public frustration by Republican members of Congress over the conduct of the war in Iraq.

And after a month of hammering on Capitol Hill, embattled attorney general Alberto Gonzales actually won some support today. Republican members of Congress saying enough is enough, demanding that calls to fire Gonzales end. And that approach appears to be working.

Elaine Quijano reports tonight on the president's shift on Iraq.

And Andrea Koppel tonight reporting on the Democrats' next move as the Senate majority leader welcomes the president's newfound willingness to reach some sort of compromise.

Kelli Arena reporting tonight on an attorney general who has been called upon to resign, who now appears to be a survivor.

We begin with Elaine Quijano at the White House -- Elaine.

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Lou, the political pressure over Iraq has been mounting on this White House for some time. The difference now, it's not just coming from Democrats, but now openly from some Republicans.

(BEGIN VIDEO TAPE)

QUIJANO (voice-over): Surrounding himself with top military brass at the Pentagon, President Bush did not mince words on Iraq.

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: There are two clocks -- one ticking here in Washington and one ticking there.

QUIJANO: That Washington clock may be ticking louder for the president after what's been described as a candid and frank discussion Tuesday with 11 Republican lawmakers about frustrations with the war.

REP. RAY LAHOOD (R), ILLINOIS: Members really told the president in, I think, the most unvarnished way that they possibly could, that things have got to change, that we're going to hang with him until September.

QUIJANO: White House Spokesman Tony Snow tried to downplay the meeting's significance.

TONY SNOW, WHITE HOUSE PRESS SECRETARY: Well, that's not a watershed moment. The president has heard real criticism before. He's heard vigorous criticism before. It hasn't all been in the press.

QUIJANO: But some say the Republicans' willingness now to make once private concerns public signals their patience is wearing thing.

UNIDENTIFIED MALE: They are worried sick about how the war in Iraq may drag them down into a small, rather than a competitive, minority party.

QUIJANO: For now Republicans are standing behind the president and his pledge to veto a two stage war funding bill being pushed by House Democrats.

BUSH: I'll veto the bill if it's -- if it's this haphazard piecemeal funding.

QUIJANO: At the same time, the president signaled his support for setting benchmarks for the Iraqis.

BUSH: I've empowered Josh Bolten to find common ground on benchmarks. And he will continue to have dialogue with both Republicans and Democrats. (END VIDEO TAPE)

QUIJANO: The issue now, will those benchmarks be tied to consequences? President Bush did not answer that question today.

Democratic leaders, meantime, insist that any benchmarks must have teeth, and say benchmarks without some kind of enforcement are meaningless -- Lou.

DOBBS: Elaine, thank you.

Elaine Quijano from the White House.

A key test Republican support for the president could come tonight on Capitol Hill. The House of Representatives is expected to vote on a measure that would hold back money for the war. The measure also forces the Bush administration to show just how much progress is being made in Iraq.

Andrea Koppel reports now from Capitol Hill -- Andrea.

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT: Lou -- I'm sorry -- that bill would give the Pentagon less than half the money that it says it wants and needs to keep the wars going in Iraq and Afghanistan. And it would also force President Bush to come back to Congress by the end of July, if he would want, and report on the progress that the Iraqis are making, if he would want to even get the second half of that money.

Needless to say, this whole issue provokes strong emotion today on the floor from both sides of the aisle.

(BEGIN VIDEO CLIP)

REP. LLOYD DOGGETT (D), TEXAS: It is not the enemy that has us pinned down in Iraq today, it is this administration's unwillingness to admit its mistakes and its lies. The intervention in Iraq was this country's largest foreign policy blunder. Now it's time for Congress to intervene. With this war in its fifth year, for Congress not to act now is for Congress to become an enabler and an accomplice to the administration's errors.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REP. JEB HENSARLING (R), TEXAS: Now what we see is, yet again, the Democrats bringing a bill to the floor that our secretary of defense says is even worse than the last one they brought to the floor, as far as time tying the hands of our troops as they attempt to protect our freedom. Once again, we have a slow-bleed strategy for our troops in Iraq.

(END VIDEO CLIP)

KOPPEL: Now, even though this short-term funding bill is expected to pass the House later this evening, even Speaker Pelosi herself admitted that it's not necessarily -- and she doesn't expect that it will be included -- in a final bill that would make it to President Bush's desk.

In the meanwhile, Senate Democrats continue their negotiations with Republicans and the White House today about possibly including benchmarks or some kind of gauge on Iraqi progress in that bill -- Lou.

DOBBS: Andrea, thank you very much.

Andrea Koppel.

Insurgents in Iraq have killed two more of our troops. A marine in Al Anbar province, west of Baghdad. Another of our soldiers killed in Baghdad.

Thirty-one of our troops have now be killed in Iraq so far this month, 3,382 of our troops killed since the beginning the war. 25,245 of our troops wounded, 11,270 of them seriously.

After weeks of grilling from both parties on Capitol Hill, Attorney General Alberto Gonzales actually won some support today from members of Congress. The attorney general was back on the Hill facing another round of tough questioning. This time in the House of Representatives, over the firing of U.S. attorneys.

But as Kelli Arena now reports, the attorney general didn't add much, if anything, to his previous descriptions to his role in the affair. But apparently, he did win some supporters.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice over): Attorney General Alberto Gonzales finally feeling some love. Republicans on the House Judiciary Committee say they've heard enough about fired prosecutors and pushed hard to change the subject.

REP. LAMAR SMITH (R), TEXAS: If there are no fish in this lake, we should reel in our lines of questions, dock our empty boat, and turn to more pressing issues.

ARENA: But Democrats say they won't stop asking questions until they get to the bottom of why those prosecutors were fired and whether any crime was committed.

REP. ROBERT WEXLER (D), FLORIDA: With all due respect, Mr. Attorney General, you won't tell the American people who put Mr. Iglesias on the list to be fired. It's a national secret, isn't it?

ALBERTO GONZALES, ATTORNEY GENERAL: Congressman, if I knew the answer to that question, I would provide you the answer.

ARENA: There was even another call for Gonzales to resign.

REP. ADAM SCHIFF (D), CALIFORNIA: I hope you will reconsider your decision. And I hope you will resign, because the department is broken and I don't think you're the one to fix it.

ARENA: The Democrats' disdain for the attorney general was palpable and matched by the Republican disdain for the subject.

REP. DAN LUNGREN (R), CALIFORNIA: We're acting around this place like U.S. attorneys are product of the immaculate conception, and once they've been created they cannot be undone.

(END VIDEOTAPE)

ARENA: Now, there's little chance of getting Democrats to let go of this issue, Lou. Especially because there are new allegations to deal with.

Now, lawmakers are investigating new charges that yet another U.S. attorney, a guy by the name of Todd Graves, was pushed out for political reasons.

DOBBS: Thank you very much.

Kelli Arena, from Washington.

Still ahead, a verdict tonight in one of the most important national security cases in this country in a generation. We'll be live outside the federal courthouse in southern California.

Also ahead, the war on the middle class. It's on Capitol Hill. Will these newly-elected Democratic leaders put the people ahead of corporate interests?

We'll have the story.

And how safe is our food? The latest on dangerous food imports from communist China coming up next.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: The Senate today taking up an issue that most of the country understands very well. Our middle class is in trouble, wages stagnant at best, prices rising. And as Christine Romans now report, the senators heard that more and more of our families can barely make ends meet.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): For Montana social worker Sarah Blackburn, a daughter in college means dipping into the family savings and raiding retirement.

SARAH BLACKBURN, SOCIAL WORKER: It is becoming more and more difficult to maintain a lifestyle commensurate with our education and work ethic.

ROMANS: From tuition, to gas, child care, health care, and mortgages, more questions than answers.

SEN. DEBBIE STABENOW (D), MICHIGAN: How do we really address creating jobs in America and American businesses?

SEN. MAX BAUCUS (D), FINANCE COMMITTEE CHAIRMAN: Americans are just having that tough time today, compared with an earlier time in our history. And the question is, what's going to be done about it?

ROMANS: Harvard's Elizabeth Warren notes a seismic shift over the past generation.

ELIZABETH WARREN, HARVARD UNIVERSITY: Today's families have no savings and is spending money it doesn't have.

ROMANS: Since 1970, growth in family income has climbed, she said, because mothers have entered the workplace, but men's incomes have remained flat.

Yet, the economy is strong and household income has been rising. Tax Foundation president Scott Hodge says simplify the tax code and all families will benefit.

SCOTT HODGE, TAX FOUNDATION: I think we can actually do more for working families by doing less for them. The current tax basis is so carved up right now, that trying to achieve more social policy through the tax code will be like pushing on a string.

ROMANS: But the message was clear.

GARY BURTLESS, BROOKINGS INST.: And to pretend otherwise, to say that, no, the middle class has no problems because average income statistics for the country as a whole show that there's a rise in real incomes, I think completely loses sight of this human side of making ends meet in this country.

ROMANS: Too many are in illness, divorce, or job loss away from economic disaster.

(END VIDEOTAPE)

ROMANS: And Sarah Blackburn, the social worker, testified to the Senate committee that she's all too aware of that looming threat over her own family -- Lou.

DOBBS: Well, Christine, it's encouraging that people are starting to look at the real needs and the forces working against families in this country. Now we ought to see if anything is done about it.

Christine, thank you.

Christine Romans.

The FDA under fire tonight for what's been called a slow at best response to the discovery of melamine-contaminated food brought into this country from communist China. The ingredients are believed to have killed thousands of pets in the United States. Those toxins have also entered the human food chain.

And as Kitty Pilgrim now reports, Congress has begun to demand answers.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice over): It's been two months since the poison pet food was discovered. The Chinese contaminants were fed to millions of chickens in February. Thousands of hogs were just investigated in the United States. And now this week, FDA officials revealed farmed fish were fed contaminated fish food.

Congress questioning government agencies why products from China are not screened more carefully.

REP. DAVID SCOTT (D), GEORGIA: Here we've got China, that you seem to think it has it under control now. But this isn't the first time. China is notorious in contaminated food products.

PILGRIM: Even now, assurances that home food is safe were feeble.

REP. BOB ETHERIDGE (D), NORTH CAROLINA: Can either of you tell me with any degree of certainty that this product has not entered into the human food supply chain?

DR. DAVID ACHESON, FOOD AND DRUG ADMINISTRATION: Let me respond to that first.

ETHERIDGE: Yes or no?

ACHESON: Yes.

PILGRIM: But that answer is not valid.

SCOTT: Now, Mr. Acheson, those hogs and chickens are going to make it on to somebody's table.

PILGRIM: And the FDA still doesn't know how many fish are contaminated.

REP. RANDY NEUGEBAUER (R), TEXAS: We don't need to wait until animals start dying or, god forbid, people start dying or having health issues to determine, hey, we need to monitor that.

PILGRIM: A key question, should China take more responsibility for the safety of its products?

REP. CHARLES BOUSTANY (R), LOUISIANA: Given that the investigating is still ongoing, are the Chinese cooperating?

ACHESON: Very much so, yes.

PILGRIM: But the Chinese at first denied the melamine contaminations and only recently acknowledged they were the source of the problem.

Now, FDA officials insist China is being cooperative in the melamine investigation. But when the U.S. investigators got to China, the factories had been cleaned up, shut down, the machinery dismantled, and the factory managers were taken away before U.S. officials could talk to them.

So, U.S. investigators will not be able to run independent tests. Instead, they'll have to accept the results of the Chinese investigation.

And Lou, the FDA calls that Chinese cooperation.

DOBBS: What's the name of the fellow who decided the answer to that was yes?

PILGRIM: That was the head of the FDA. So...

DOBBS: Well, that fellow, if I may say, needs to get an appreciation. You said that it wasn't valid, his response.

PILGRIM: Yes.

DOBBS: That's a straight out -- I mean, that's a lie. What he said was a lie, wasn't it?

PILGRIM: Yes, it really -- it is absolutely in the human food chain at this point. It is in chickens, it is in hogs, it is in fish.

DOBBS: How in the world could he say the opposite of what's true, if one wants to be very kind and gentle about it, and then in the next breath in you report also say that the Chinese are cooperating?

PILGRIM: From -- it wasn't a very forthcoming hearing, I think.

DOBBS: Forthcoming? He wasn't a very straightforward, truthful witness before that. And they tolerated that?

PILGRIM: That's why we highlighted the...

(CROSSTALK)

DOBBS: Yes. It's incredible. Incredible.

Democracy in action? I don't know what you'd call it.

Thank you.

Kitty Pilgrim, thank you very much.

Time now for some of your thoughts.

Tim in Wisconsin, "The Bush administration doesn't allow prescription drugs from Canada because they could be unsafe. However, they do allow poison food additives from China. I think I prefer Canadian drugs."

And John in California said, "The president wants to install a democratic government in Iraq. That's commendable. However, wouldn't it be appropriate to install one here first? At the moment, we don't have a democracy. We have a corpocracy."

And Nancy in Texas said, "Lou, thank you for all you do for America. Yours is about the only newscast I can stomach these days. Don't let the naysayers get to you. We've got your back, Lou."

And I appreciate it.

We'll have more of your thoughts coming up here later in the broadcast.

And next, a victory for the U.S. government tonight in one of the country's most important espionage cases in years.

We'll have that story.

And floodwaters continue to rise tonight in the Midwest. Hundreds of wildfires raging across Florida as well.

We'll have the latest.

All of that and more straight ahead. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: The wildfire that burned more than 800 acres of Los Angeles' Griffith Park is mostly contained tonight. Fire officials say that blaze is expected to be fully contained later this evening.

Firefighters in Florida now are working to contain more than 230 fires all across that state. The fires burning from the Florida Panhandle, all the way down to the southern part of the state, which is also in the grip of a drought. That extreme drought and high winds making it difficult for crews to contain the fires. Wildfires have scorched almost 90,000 acres.

Rising floodwaters continue to plague parts of the Midwest tonight. Several communities in northwest and central Missouri are literally submerged tonight. Last weekend's heavy rains sending the Missouri River and other waterways over their banks.

State officials say parts of the rivers will be at flood stage or higher, at least until the weekend. Those floods are the worst since 1993.

A victory today for federal prosecutors as a former defense industry engineer, Chi Mak, was found guilty of conspiring to export U.S. defense technology to communist China. Mak, a naturalized American citizen born in China, was also convicted of being an unregistered foreign agent.

Casey Wian reports from outside the courthouse in Santa Ana, California.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice over): Naturalized American citizen Chi Mak could spend the rest of his natural life in a federal penitentiary after his conviction for sending critical U.S. military technology to the government of his communist Chinese homeland. After a two-year investigation, six-week trial, and nearly four days of deliberations, jurors convicted the 66-year-old Mak on five charges -- conspiracy to violate export control laws; two counts of attempting to export a defense article to the People's Republic of China; acting as an agent of a foreign government; and making false statements to the FBI.

GREGORY STAPLES, ASST. U.S. ATTORNEY: We won this conviction because of the professional work of the FBI, Naval Criminal Investigative Service, and the Department of Homeland Security did a fantastic job investigating this case. The evidence was there. We just had to put it on.

WIAN: Evidence included secret audio and recordings inside Mak's drab 700 square foot house, where he and his wife copied computer disks containing restricted military technology. Mak showed no emotion when the verdict was read, but later had to be consoled by defense attorneys. They say Mak was only sending documents to friends and relatives in China for commercial and academic use.

RON KAYE, DEFENSE ATTORNEY: He has done -- committed his life to advancing engineering and to advancing the defense of the United States of America. And we believe that this was -- that this -- that to hold this man accountable for insecurities and fear of the government is a travesty.

WIAN: Military officials say the only travesty is the advantage Mak gave the communist Chinese. Some of the documents were part of the U.S. Navy's effort to design Stealth submarines and warships.

(END VIDEOTAPE)

WIAN: Mak faces a maximum of 45 years in prison. He will be sentenced in September. Four of his relatives charged as accomplices in the case are scheduled to go on trial next month -- Lou.

DOBBS: This was a very important case for the federal government, obviously. The reaction there?

WIAN: The federal prosecutors are thrilled. As you mentioned, this was an important case. They had lost several other prosecutions of accused Chinese spies.

They were very careful in this investigation. That's why it took so long. That's why they were thorough. And that's why they didn't charge him with espionage. They charged him only with those crimes they thought they could get a conviction on -- Lou.

DOBBS: Casey, thank you very much. Casey Wian, from Santa Ana, California.

Thanks, Casey.

Up next here, "The Washington Post" supporting an organization advising illegal aliens not to talk to federal immigration law enforcement agents. Is there a line crossed here? We'll have the report.

And we'll hear from two congressional opponents of the Bush administration's so-called free trade agenda -- Senator Byron Dorgan and Congressman Sander Levin.

And filmmaker Michael Moore under federal investigation tonight for a trip to Cuba.

We'll have that story. Why?

Stay with us.

(COMMERCIAL BREAK)

DOBBS: "The Washington Post" chairman, Donald Graham, trustee of a charitable fund, along with other "Washington Post" executives, under scrutiny today by a media watchdog group that fund, gives financial assistance to CASA of Maryland. CASA publishing a booklet advising illegal aliens not to cooperate with federal government immigration authorities.

Lisa Sylvester has our report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice over): The Philip L. Graham Fund operates out of "The Washington Post" building. It gives money for the arts, education, and community endeavors. The trustees include Donald Graham, the current chairman of "The Washington Post". The other trustees are either current or former "Post" employees.

Two contributions made by the foundation are now raising questions. A total of $50,000 given to a group called CASA de Maryland. CASA runs day laborer centers in the state and recently published a guide that coaches illegal aliens how to avoid deportation.

The conservative group Accuracy in the Media says the donations send the wrong message.

CLIFF KINCAID, ACCURACY IN MEDIA: And it makes me wonder about what's affecting the news coverage in this paper and whether there's a bias that comes from the very top.

SYLVESTER: Kincaid has studied "The Washington Post's" coverage of the immigration issue and says it's not entirely unbiased. "The Post" responded noting that, "The Philip L. Graham Fund, a private foundation, is independent of The Washington Post Company and 'The Washington Post' newspaper..." and that their reporters are not influenced by the foundation.

But "The Washington Post" is not the only news organization being accused of practicing advocacy journalism. The Spanish language network Univision has started a massive campaign to sign up eligible Latinos living in the United States to become citizens.

The company told "The Wall Street Journal," this is a nonpartisan effort. But one special interest group will clearly benefit. A media critic says news organizations need to be more transparent.

GENEVA OVERHOLSER, UNIVERSITY OF MISSOURI: I think there are different ways to do journalism legitimately. But you have to be straightforward about what it is you're doing. And not pretend that you're doing objectivity when you're not. I think that's key.

(END VIDEOTAPE)

SYLVESTER: Now, this broadcast has been the target of frequent critics who have labeled this advocacy journalism, but it's also been very transparent. Accuracy in the Media says some of the mainstream newspapers have taken an angle in the debate, but they're not as upfront about their positions. Cliff Kincade, the editor of Accuracy in the Media, confronted Donald Graham about the donations to CASA at a shareholder's meeting today. And graham told him he knew nothing about the contributions, Lou.

DOBBS: Or about, presumably, the booklet. You're suggesting that I do advocacy journalism here, Lisa Sylvester?

SYLVESTER: I'm suggesting I think we all do. I think there are a number of people. But you got to take a stand in this world, Lou.

DOBBS: Amen, Sister. Thank you very much, Lisa. Lisa Sylvester from Washington.

Time now for tonight's poll. Do you believe most news organizations have an institutional bias in favor of illegal alien amnesty and open borders? And against border security and the enforcement of our immigration laws? Yes or no. Cast your vote at loudobbs.com. We'll have the results here coming up later.

And the impact of illegal immigration on small business. The subject of a House committee hearing today. As Bill Tucker reports, that hearing less of an impact on small business than a meeting to gather momentum for amnesty and comprehensive immigration reform.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice over): The bias of the hearing was clear at the start. It was never a question of do we have an adequate work force, because we don't, in the eyes of the committee. And access to more foreign-born workers is all that stands between a struggling small business and a booming one.

REP. NYDIA VELAZQUEZ (D), CHMN., SMALL BUSINESS CMTE.: It is clear their services are needed. But with the current system, it is hindering entrepreneurs ability to grow and is creating enormous paperwork burdens.

TUCKER: Congressman Luis Gutierrez came to testify that his brand of comprehensive immigration reform is necessary.

REP. LUIS GUTIERREZ, (D), ILLINOIS: Our economy creates about 400,000 low-wage, low-skilled jobs a year. But we only off 5,000 visas for low-skilled, low-wage workers.

TUCKER: And lobbyists were there to back up the argument.

CRAIG SILVERTOOTH, NAT'L. ROOFING CONTRACTORS ASSN: Foreign-born labor, the ability to access when there are not American workers available, is absolutely critical. And if -- if we're not able to do that, our industries are going to atrophy.

TUCKER: He made no mention of the fact that between 2000 and 2006, inflation-adjusted wages in the overall construction industry fell almost by 2 percent. The fall was more dramatic in roofing. Inflation adjusted wages fell there more by more than 6 percent. High- tech was there to request more H1B visas because no qualified American are available.

RALPH FOLZ, CEO, MOLECULAR: My company's missed business opportunities because we couldn't hire professionals with specific skill sets to do the work.

TUCKER: And the Small Business Committee learned that the enforcement of immigration law hurts small business the most.

BEN JOHNSON, IMMIGRATION POLICY CTR.: Small companies are the least able to overcome the loss of a large share of their workforce due to raids.

TUCKER: For what was supposed to be a hearing on the impact on small business, most of the discussion centered on the issues and politics of comprehensive immigration reform.

(END VIDEOTAPE)

TUCKER: Which may be the clearest indication yet that, at least in the House, the real agenda is comprehensive immigration reform, Lou. And they're coming out swinging and pushing this legislation as hard as they can.

DOBBS: Actually, they're before Congress, a congressional committee hearing of the United States Congress, they neglected to point out that wages in the four industries in which illegal aliens are hired primarily --

TUCKER: Correct.

DOBBS: -- that is leisure/hospitality, that's restaurants and hotels, that sort of thing; landscaping and construction, have been declining over the past five years, they didn't take note of that or its impact on small business? TUCKER: No, nor did they have any small businesses owners there who say they were adversely impacted by the use of illegal labor, by their competitors, who were driving --

DOBBS: So this was like a full, free democratic hearing? I got it.

TUCKER: Yes, it was.

DOBBS: I got it. All right. Thanks a lot, Bill Tucker.

Still ahead here, the Bush administration redefining what it calls success in Iraq. We'll be talking to one of the country's most distinguished foreign military leaders, General David Grange, about what that means.

And one lawmaker suggesting a merit system be used to fix this broken immigration system, one in fact, that's in crisis. I'll be talking with Senator Jeff Sessions about his proposal.

And documentary fill maker, Michael Moore, under federal investigation tonight, what he did while making a movie about 9/11 first responders could land him in trouble with the federal government. Look out, Michael. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Well, we want to go to Washington where there have been a number of officials, including Treasury Secretary Paulson, Henry Paulson. You see him there speaking now to the Ways & Means Committee Chairman Charlie Rangel. Let's listen in. They're discussing about a major bipartisan agreement on free trade agreements.

(BEGIN VIDEO CLIP)

REP. CHARLES RANGEL (D-NY), CHMN., WAYS & MEANS CMTE.: But it's not in a form to say anything other than this is the United States Congress trade policy that has been agreed upon by the United States trade representatives and the secretary-treasurer.

And as the speaker said, whatever influence they have in support of this, they would express that in their own way. But we are very comfortable with their reception.

(END VIDEO CLIP)

DOBBS: Charlie Rangel may be comfortable with that, but a lot of Democrats certainly are not. Political Reporter David Serrotta's blog today actually disclosed that Charlie Rangel, the chairman of the powerful Ways & Means Committee was caving in, undercutting some of his democratic colleagues, cutting a deal with the White House and K Street lobbyists.

It appears that certainly some of deal has been cut. And this is likely to create a lot of dissension, because when this Congress, this Democratic Congress was elected, it was clear that certainly one of the motivating forces in that election, was that the Democratic Congress would be focusing on middle class values; worrying about American workers and their families.

And it appears that this is not only paving the way for more of the same free trade deals as passed by the Republican Congress and led by the Republican president, of course, it's beginning to look like at this early stage, that the Democratic leadership is following suit, just as did the Republican Congress.

At issue here also, so-called trade promotion authority. Fast- track authority, which gives the president the right to make trade deals that are voted on by the Congress only in an up and down vote. Rather that, as many believe, the constitutional requirement of the United States Congress be a full and equal partner in such agreements and treaties.

Senator Levin is there now, Democrat, and also proponent of the deal obviously cut with Chairman Charlie Rangel. The Ways & Means Committee, Nancy Pelosi there, Henry Paulson. And the U.S. trade representatives, Susan Swab.

This may go down pretty poorly with a lot of Democrats, and amongst those is one of the leading proponents of fair trade, balance, reciprocal, mutual trade. And that is, of course, Senator Byron Dorgan. This is what he said to me just yesterday.

(BEGIN VIDEO CLIP)

SEN. BYRON DORGAN (D-ND): I'm going to try to block fast track under any conditions. It's undemocratic. It's been a demonstrable failure. And I agree with Sandy, let's straighten out the trade agreements, for a change, let's negotiate something that strengthens this country.

(END VIDEO CLIP)

DOBBS: And at issue, of course, is whether or not those labor standards would apply to the United States. Many look at the details, obviously, the details are not out yet on what has been agreed to. But it appears that both organized labor and a sizable number of Democrats -- and some of whom nearly elected -- are going to be very displeased with the direction that their leadership is taking them, in working with the White House on what has been for the past 30 years one-way free trade.

Federal officials today investigating filmmaker Michael Moore to determine whether he broke the law when he recently went to Cuba. Moore reportedly took a group of September 11 responders suffering from a variety of illnesses to Cuba for medical treatment, as part of his documentary about the state of health care in this country.

A letter from the Treasury Department posted on Moore's website warns that travel to Cuba is prohibited. We talked with the Treasury Department and they would not comment nor confirm whether they sent that letter. A statement on Moore's website says, in part, quote, "The efforts of the Bush administration to conduct a politically motivated investigation of Michael Moore and his movie, "Sicko" will not stop us from making sure the American people see this film."

Defense Secretary Robert Gates has a new definition of success in Iraq, a definition that does not include a significant reduction in violence. Secretary Gates says success simply requires progress toward political reconciliation. The secretary's comments came as the military reported a sharp increase in suicide bomb attacks in Iraq.

Joining me now one of the country's most distinguished former military leaders, General David Grange.

General, good to have you with us.

I have to say, as you and I discussed, when he was appointed to his post and confirmed, Secretary Gates held out for candor and straightforward talk. Do you want to adjustment your reading?

BRIG. GEN. DAVID GRANGE, (RET.), CNN MILITARY ANALYST: I think what's going on, Lou, is the National Security Council, which obviously includes the Department of Defense, is re-evaluating what the success criteria would be for U.S. troops to withdraw from Iraq.

DOBBS: Dave, let's talk really straight, when the secretary of Defense, when the administration, when the Pentagon cannot define consistently what success is, and success is at best, ambiguous by whatever definition they're employing this particular week, or that, maybe it is time to say we need new leadership. Or we need a new direction. What do you think?

GRANGE: Well, maybe so. But we don't know what the benchmarks are. At least I don't. So I think maybe what should happen first, before we make that decision is to have that briefed to the American people.

DOBBS: Right.

GRANGE: And then make our choices.

DOBBS: At what point -- yeah, this administration is telling the North Koreans they're getting impatient. The Iranians they're getting impatient. Telling the Iraqi al-Maliki government they're impatient. With certain and full knowledge that the American people have just about had a belly full, after four, better than four years of this conflict.

And to be still redefining the term, success, strategy, goals, mission. It is not time for a real serious discussion amongst the military leaders and the civilian leadership and -- all of us in the country -- and the body politic, what about in the world we're doing with our military? About what our leaders are doing, and whether or not this is the kind of mission that we should ever, ever consider?

GRANGE: Well, I think the whole wagon full of leadership should in fact have this discussion. And, again, it should be shared with the American people. Because if the intent of why we're engaged is not clear, then nothing else happens from there effectively. And so proper communication equals trust and trust equals commitment, loyalty and commitment. And so that has to happen.

DOBBS: And one of the best definitions of leadership I ever heard, and you as a decorated leader of men and women in uniform. One of the best definitions I ever heard of leadership, is those actions which command respect on the part of subordinates. Do you think this is the kind of leadership which is worthy of our troops, in which our troops truly respect?

GRANGE: Well, I don't think you're ever going to find the 100 percent model for troops.

DOBBS: I'm not a man, Dave, who looks --

GRANGE: They demand --

DOBBS: Dave, I'm not a man who looks for 100 percent on anything. I'm not a man that looks for perfection. I know what kind of a world it is. I know what kind of human being I am, you, and the rest of us. Just my question, I'm just curious about the answer to that.

GRANGE: Sure, sure. You know, the troops deserve the very best this nation can provide, because the stakes, obviously, are quite high, life and death. So there should be no compromising in giving the troops the best leaders, the best rifles, the best equipment, whatever it takes to accomplish that mission.

DOBBS: Dave Grange, thank you very much for being with us. General Dave Grange.

GRANGE: My pleasure.

DOBBS: A reminder to vote in our poll, the question is, do you believe most news organizations have an institutional bias in favor of illegal alien amnesty and open borders; and against border security and the enforcement of our immigration laws. We'd like to hear from you on this. Yes or no. Cast your votes on loudobbs.com. We'll have the results here coming.

Next, Senator Jeff Sessions joins me. He says people should be given permanent residence in this country based on skills and merit not family ties or nation of origin. Imagine that. Senator Sessions joins us here next, stay with us.

(COMMERCIAL BREAK)

DOBBS: Well, it may seem like a revolutionary idea to some in Washington, D.C.: award those green cards on the basis of merit, national need, instead of family ties, country of origin, the broken immigration system that is employed now. Joining me is Senator Jeff Sessions. He's the man who has proposed such a merit system for green cards.

Good to have you with us, Senator.

SEN. JEFF SESSIONS (R), ALABAMA: Thank you, Lou. It's good to be with you.

DOBBS: The point system that you have laid out makes a lot of sense. It resembles in part, that of Australia and the United Kingdom. What do you hope to accomplish with it?

SESSIONS: It was amazing to me that they talked last year about a comprehensive immigration plan and never even considered what they're doing in Canada, which is clearly a merit-based system. It's also in Australia, and the united kingdom, as you noted.

Developed nations around the world, evaluate applicants based on who can best enjoy the Canadian experience. Instead of -- you know, who can most flourish. Who can do the best in their countries. It only makes sense to me.

DOBBS: I suspect, not only does it make sense to you but millions of Americans who are watching this travesty take place in Washington, D.C. The Senate last year, passed that comprehensive immigration -- I love that mouthful -- comprehensive immigration reform legislation -- amnesty legislation. One couldn't find much reform in it.

Now, because of all of the talks that have been going -- what -- since February, behind closed doors, Senator Reid, the majority leader has thrown his hands up and said well, you guys could not come to a consensus, despite meeting day after day, hours after hours, he's opening with the McCain-Kennedy -- or Kennedy-McCain bill from a year ago. What's going to be the reception?

SESSIONS: I don't believe it's going to succeed. They'll have to file a motion to procedure the bill and I think it will be blocked. People like Senator Martinez or Senator Graham, who supported that last year and who have said they do not want to go back to that bill.

That they want to proceed with a new framework that is being talked to in a bipartisan basis that really would be, if they did what they say, Lou, a real improvement over last year's bill. And include much of what I suggested. We're just going to have to read the fine print. We can't go by a few generalized promises about what's in the bill.

DOBBS: You and I -- and I should point out Senator Sessions is an attorney, a former prosecutor, and what he puts emphasis on -- if they do what they say, it's advisable to note that caveat. I think most of us understand, Senator, that they're not likely to do, if history and experience is any guide, what they say they will do.

Let's hear what Senator Reid today, if I may ask you to listen to this along with all of us -- what Senator Reid said today about a Republican filibuster.

(BEGIN VIDEO CLIP) SEN. HARRY REID, (D-NV) MAJORITY LEADERS: I think it would be a tragedy for the American people that the Republicans would block this very important legislation.

Everything is on the table. Nothing is off the table.

(END VIDEO CLIP)

DOBBS: This very important legislation. We don't even know what it is.

SESSIONS: Well, we know what it is, Lou. It's the bill he brought up. Last year's bill that was absolutely, should never, ever, ever become law. And everyone that was associated with it knows it was flawed. And they want to even do better. And he's -- that's the only bill that's pending now.

DOBBS: Well, Senator Specter --

SESSIONS: And he called it up.

DOBBS: Well, Senator Specter had something like, at the last moment, there were over 100 pages of amendments. The legislation took up 700 pages. I'd like to ask you a question, in an honest nonpartisan answer. How many of your colleagues, I won't ask you, but how many of your colleagues, in your judgment, do you think read that legislation that was passed by the Senate last year?

SESSIONS: Less than 2 percent.

(LAUGHTER)

SESSIONS: That's probably generous. I mean, staffs have read it. And looked over it and raised points. But in terms of actually sitting down, or even having an opportunity really to do so, we didn't have it. And this year, you can see it go even much faster if we do a complete substitute, which some are suggesting may occur.

DOBBS: Give us your best judgment. Because this is obviously a very serious issue in terms of border security, which we lack. A reform of our immigration laws and enforcement of those immigration laws, which we desperately require.

What do think the odds are that we will see people in the United States Senate of good-faith, honesty and commitment to executing whatever is agreed upon, come together and actually try to resolve this pragmatically, rationally, effectively?

SESSIONS: I believe that that is possible. I won't say it's 50/50. But it's absolutely possible. Some good discussions on a bipartisan basis have been occurring. But if we don't come up with the fine -- print. You know, the fine print that actually effectuates the goals that have been stated, which are good goals, much better than last year, then we're going to have a problem.

DOBBS: And finally, your proposal on a merit-based system for green cards, what do you believe the odds are that in some way the merit-based approach would be moved into the immigration law?

SESSIONS: Absolutely, it's got to be. I believe it will be. The question is how much. Canada says 60 percent of the people that come to Canada, at a minimum, should be based on skills that Canada needs for their economy and their lifestyle and their government.

We need to move in that direction. Whether we get there, how close we get there is -- remains to be seen. But I think we will see progress in that area. If a compromise bill comes forward. And that's not certain yet. Because Senator Kennedy and has pulled back and said certain stakeholders are objecting. I don't know who they are. But they weren't elected to the Senate.

DOBBS: No. Well, Senator Jeff Sessions, we thank you for being here. We appreciate you for taking the time.

SESSIONS: Thank you, Lou.

DOBBS: Coming up here in a just few moments I'll be joined by my colleague as he brings you THE SITUATION ROOM -- Wolf.

WOLF BLITZER, CNN ANCHOR, THE SITUATION ROOM: Thanks very much, Lou.

That's right, powerful new talk of impeachment. We'll tell you what a former aid aide to Colin Powell is now saying about President Bush and Vice President Cheney, on issue of high crimes and misdemeanors.

And plus, the actress Drew Barrymore, on her life and death role. She's trying to help ease hunger around the world. She's now a special U.N. envoy.

And a startling comment from the Russian President Vladimir Putin, a comparison -- get this -- between the U.S. and Nazi Germany. All that, Lou, coming up right here in THE SITUATION ROOM.

DOBBS: Wolf, thank you very much. Coming up here next, the results of our poll. More of your thoughts right after we return. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: The results of our poll tonight: 91 percent of you say most news organizations have an institutional bias in favor of illegal alien amnesty and open borders; and against border security and the enforcement of our immigration laws.

Let's take a look at some more of your thoughts. Noel in New Mexico said: "I wonder how Cardinal Mahony would take to open church borders? What if Protestants, Jews, Muslims, Buddhists, Hindus and Rastafarians invaded the Catholic Church, insisted on being allowed to take communion and demanded the mass be changed to accommodate their collective beliefs?"

Interesting question. And Joann in California: "I got to church to hear the word of God, not politics. No church should be telling its members how to vote and for whom to vote."

Mark in Pennsylvania: "If organized religion wants to continue driving political agendas, perhaps they should also start paying Uncle Sam!"

And along the same thought, Stuart in Arizona said, "Religions that want to enter the political process should be taxed accordingly and be registered as lobbyists."

And Steve in Illinois: "Hi, Lou. Hurray for free trade and a global economy. Not only is melamine in fish but also in our poultry and pork. All we can hope for is that our politicians eat all three on a regular basis."

We love hearing from you, send us your thoughts at loudobbs.com. We thank you for being with us tonight. Please joins us here tomorrow. For all of us, thanks for watching. Good night from New York. "The Situation Room" begins now with Wolf Blitzer -- Wolf.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.voxant.com

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