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LOU DOBBS TONIGHT

Number Two at Justice Department Resigns; Three U.S. Soldiers Missing After Convoy Ambushed in Iraq; More Troops to Diyala to Quell Rising Violence

Aired May 14, 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: And tonight, breaking news. The number two man at the Justice Department, Paul McNulty, has resigned. We'll have the details of that breaking story.
A chilling message from insurgents in Iraq about our three missing soldiers. The Pentagon now says al Qaeda abducted our troops after their patrol was attacked south of Baghdad.

We'll have the very latest for you.

Also tonight, the Senate taking up its so-called comprehensive immigration reform legislation, a plan that would give amnesty to millions of illegal aliens.

We'll have complete coverage.

And Border Patrol chief David Aguilar facing a direct challenge from his own agents. First, they approved a no-confidence vote against Aguilar. Now they filed an unfair labor claim against him.

We'll have that report.

I'll also be joined here by Reverend Al Sharpton. We'll be talking about race, religion and more.

We'll have all of that, all the day's news, much more, straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Monday, May 14th.

Live from New York, Lou Dobbs.

DOBBS: Breaking news tonight. Upheaval at the Department of Justice.

Just a short time ago, the department announced the resignation of Deputy Attorney General Paul McNulty. McNulty becomes the highest- ranking casualty in the controversial firing of U.S. attorneys.

Also tonight, a chilling message from insurgents believed to have captured three of our troops in Iraq. An al Qaeda-backed group says they abducted those soldiers after ambushing the patrol south of Baghdad. Four other soldiers killed in that attack. We begin tonight with Kelli Arena -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Lou, Paul McNulty says that he's leaving for personal reasons; namely, he's got kids to put through college and he's been working for the government for two decades. But Lou, as you know, McNulty was caught up in that U.S. attorney controversy, testifying before Congress that those eight prosecutors were fired for performance, not political reasons.

Now, he had to go back and correct that testimony, telling lawmakers that he wasn't given the right information. And Lou, people close to him say that he was raging mad at the time.

When asked if McNulty's departure had anything to do with that U.S. attorney mess, the White House, of course, denied that, saying that they would take McNulty at his word, that it was for personal reasons. But Senator Chuck Schumer isn't having any of this. He put out a statement saying that it's ironic that McNulty, who actually tried to level with Congress, is leaving, while Gonzales, who he says stonewalled lawmakers, is still in charge -- Lou.

DOBBS: Kelli, thank you very much. And we should point out that Senator Chuck Schumer has, of course, called for the resignation of Attorney General Alberto Gonzales.

Kelli, thank you very much.

Kelli Arena reporting from Washington.

Thousands of our troops tonight are searching for those three soldiers kidnapped Saturday in Iraq.

Hugh Riminton has the report -- Hugh.

HUGH RIMINTON, CNN CORRESPONDENT: Lou, nightfall here once again, but the search, this enormous search, continues. Operations under way right at the moment as the U.S. military, with Iraqi army backup, continues to look for these three missing men.

(BEGIN VIDEOTAPE)

RIMINTON (voice over): Even as the search continues, a taunting message from the al Qaeda-backed Islamic State of Iraq. On an insurgent Web site, "Searching for your soldiers will exhaust you and bring you misery... your soldiers are in our hands. If you want their safety, do not search for them."

Now in its third day, the search around Mahmoudiyah in an insurgent stronghold south of Baghdad known as the Triangle of Death has brought no apparent breakthrough.

MAJ. GEN. WILLIAM CALDWELL, SPOKESMAN, MULTINATIONAL FORCE, IRAQ: At this time, we believe they were abducted by terrorists belonging to al Qaeda or an affiliated group. And this assessment is based on highly credible intelligence information. RIMINTON: The capture of U.S. personnel touches the most sensitive nerve in the U.S. military -- the determination to leave no one behind. "We know," says the al Qaeda-based group, "you would rather have your entire army die than have one crusader in captivity."

CALDWELL: We are doing everything we can to locate our soldiers, who did nothing but come here to serve our country and to help the Iraqi people.

RIMINTON: It plays here on every American mind.

MAJ. CHIP DANIELS, U.S. ARMY: It's horrible for me to think about what they are going through right now. And I pray that we can figure out where they are at and get them back.

CALDWELL: The three missing men have not been seen since their two-vehicle team was ambushed. Four other U.S. soldiers and an Iraqi were killed at the scene of the predawn attack. Analysts say there is little to no hope of negotiating their release.

PETER NEUMANN, KING'S COLLEGE: Al Qaeda, of all the various insurgent groups in Iraq, they are probably the most fanatical. And it is very unlikely that they can be bought off with money or they can be persuaded to compromise on other terms.

(END VIDEOTAPE)

RIMINTON: The U.S. military says they are getting good cooperation from the Iraqi public. They say they have received tips that have led to operations against what the U.S. military has called targets of interest -- Lou.

DOBBS: Hugh Riminton reporting from Baghdad.

Fourteen more of our troops have been killed by insurgents in Iraq. Four of those troops, as Hugh Riminton just reported, killed in that attack in which those three soldiers were abducted.

Forty-nine of our troops have been killed so far in Iraq this month, 3,400 of our troops have been killed since the beginning of the war. 25,245 of our troops wounded, 11,270 of them seriously.

The U.S. commander in northern Iraq is deploying more troops to control the escalating violence in the Diyala province, west -- rather northeast of Baghdad. Major General Benjamin Mixon says those units are already in Iraq and are not a new deployment of troops.

Jamie McIntyre has our report -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Lou, just days after a U.S. commander said he needed more troops to battle insurgents in Diyala province -- that's the area northeast of Baghdad where the violence has spiked since the crackdown has driven militants out of the capital -- well, he's got those troops now.

Major General Benjamin Mixon told CNN's Barbara Starr this morning that as of today, he has an additional Stryker brigade. That's roughly 1,500 to 2,000 additional troops, along with their armored Stryker vehicles. Their mission is to cut off escape routes the insurgents have been using to get around.

(BEGIN VIDEO CLIP)

MAJ. GEN. BENJAMIN MIXON, COMMANDER, MULTINATIONAL DIVISION, NORTH: It's important to understand that the battle for Baghdad extends outside of Baghdad. Everybody focuses on Baghdad as a little concentric circle, but it's important to control all the avenues of approach. That is, the roadways that lead into Baghdad and the activity that's in the surrounding provinces, particularly Diyala.

(END VIDEO CLIP)

MCINTYRE: Those extra troops are already being deployed in Diyala province. And it is tough, dangerous duty, as that incident Saturday night with the U.S. troops west of Mahmoudiya points out.

Those troops, of course, were on an observation post looking for insurgents who were planting IEDs when they were ambushed. The search is on for them. But that's exactly the kind of dangerous situation that some of these troops are in, in Diyala, which is a wide open province, unlike Baghdad, which is an urban area.

But again, General Mixon believes that as the insurgents are squeezed out of Baghdad, he needs to be cracking down on them in other places like Diyala -- Lou.

DOBBS: Thank you very much.

Jamie McIntyre from the Pentagon.

And just a few hours ago is, Senator Harry Reid introduced two new bills to fund the war in Iraq. President Bush, of course, earlier vetoed a spending bill that would have required our troops to begin leaving Iraq as early as July, and by October at the latest. Now, of the two bills introduced by Senator Reid today, the first Senate bill keeps the same cutoff dates, but does give the president the authority to wave them. The second bill denies all American combat troops any funding after March of next year.

Those two measures provide more than $120 billion for the conduct of the wars in Iraq and Afghanistan, as well as various domestic projects.

Vice President Cheney today wrapped up his trip to the Middle East. The vice president lobbying Arab nations to support stability in Iraq. The vice president saying he received positive responses.

Ed Henry has our report -- Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Lou, as part of those efforts to try and stabilize Iraq in what can only be a called a dramatic shift for this White House, President Bush has now authorized U.S. officials to meet with their Iranian counterparts, try to open up a diplomatic initiative, try and help stabilize Iraq. The talks, of course, will occur in Baghdad in the next few weeks between Ryan Crocker, the U.S. ambassador to Iraq, and an Iranian official.

Those talks will be narrowly focused on trying to get Iran to stop sending bomb components into Iraq. Those components, of course, used for those deadly roadside bombs that have killed so many U.S. soldiers, as well as maimed them. But the vice president trying to tamp down any speculation that this shows the U.S. is going soft on Iran, insisting that the U.S. will also make sure that Iran ends its nuclear ambitions.

(BEGIN VIDEO CLIP)

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: We'll stand with our friends an oppose an extremism and strategic threats. We'll disrupt attacks on our own forces, and we'll stand with others to prevent Iran from gaining nuclear weapons and dominating this region.

(END VIDEO CLIP)

HENRY: Now, once seemed unthinkable that the Bush administration would sit down for direct talks with Iran -- they had repeatedly refused to do that -- of course, the president famously labeling Iran as part of the "Axis of Evil," but the U.S. had also said it would not sit down with Syria. It's now done that in the last month.

It's a sign clearly that the U.S. realizes it's very much on the defensive in Iraq. It's willing to try all kinds of things it wouldn't do before to try to stabilize the situation -- Lou.

DOBBS: Ed Henry, I wonder if it's worth noting that it appears the administration is now following the counsel of the Iraq Study Group, the so-called Baker-Hamilton study group that recommended precisely this action. That is, discussions with both Syria and Iran, and to reach out to the Arab states that neighbor Iraq to reach a some part of a political reconciliation and their investment in Iraq.

HENRY: Certainly those were two of the key findings of the Iraq Study Group. That report is now collecting dust.

A lot of its recommendations were refused by the administration, but the administration has also been pointing to the fact that that study group said there should not be a precipitous withdrawal of U.S. troops, and so they say we've been following that. But clearly, this diplomatic initiative something that was laid out by that study group -- Lou.

DOBBS: Thank you very much. Ed Henry from the White House.

Secretary of State Condoleezza Rice says there is no new Cold War mounting between the United States and Russia. Rice is in Moscow tonight. She is trying to cool the rhetoric in U.S.-Russia relations.

Russia's President Putin is increasingly stepping up his criticism of the Bush administration, principally over U.S. plans to install a new missile defense system in central Europe. Russia threatening to suspend its participation in a treaty that would limit military deployments in Europe over that very issue.

Up next here, Senate leaders trying to put a fresh face on last year's so-called comprehensive immigration reform bill that would give amnesty to millions of illegal aliens.

We'll have complete coverage of that and an assessment of the prospects.

Democrats turning their backs on the very people who put them in office. They're not keeping promises made to the middle class on the high cost of free trade.

We'll have that special report.

And more than 200 wildfires continue to rage throughout Florida. High winds now adding to the threat to homes and woodlands.

We'll have the very latest for you and a great deal more straight ahead.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: New developments tonight in the push on Capitol Hill to give amnesty to millions of illegal aliens. President Bush over the weekend sent his staff members to Capitol Hill, there to meet with Republicans and Democrats to advance his so-called comprehensive immigration reform legislation. A compromise we're told could be reached as early as tomorrow.

We have two reports tonight. Dana Bash on Capitol Hill, reporting on the senators' plan to push that legislation through Congress. And Lisa Sylvester reporting on how opponents will try to stop that agenda.

We begin with Dana Bash on Capitol Hill -- Dana.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, Lou, within the next 48 hours or so, we could know whether or not comprehensive immigration reform, one of George Bush's top priorities, has any chance of becoming law during his presidency. Sources involved in these bipartisan talks tell us, sources on all sides of the talks tell us, that they are increasingly optimistic they can reach a deal ahead of the deadline of Wednesday, that the Senate majority leader, Harry Reid, set for this debate to start on the Senate floor.

Now, we never can know how sure that these negotiators are that they can find a deal, because it's in their interests to say that they have momentum. But this is a group of senators and administration officials that represent a wide range of points of view when it comes to immigration.

They've been meeting intensely for months now, and they do say that they are getting closer on the big issue, what to do with the millions of illegal immigrants in this country. They say that they have generally agreed to allow a path to citizenship, but only, only after they have very specific requirements that are met to secure the border.

Now, that is just one of a host of issues. We are told by sources involved in these negotiations they're going to have another big bipartisan meeting tomorrow -- Lou.

DOBBS: Dana, thank you very much.

Dana Bash, the idea as I've said on this broadcast numerous times over the years, you cannot reform immigration law if you cannot control immigration. You cannot control immigration unless you control our ports and our borders.

Why in the world would this Congress, irrespective of whether it's Republican or Democratic leadership, not simply say we're going to secure first those borders and ports and move to control of immigration, and then deal with this issue?

BASH: Well, if you talk to some of the senators, the Republican who agree with you on that issue, like Senator Jon Kyl, for example, who has been very involved in these talks, he says that's exactly what they're going for within this framework of this deal, is to say, you can have this path to citizenship, but we want to make sure to require that the homeland security secretary makes sure -- to certify, I should say -- that there are various steps to secure the border before that can even start.

DOBBS: Dana Bash from Capitol Hill.

Thank you.

And Lisa Sylvester now reporting on why the amnesty agenda has so many opponents on Capitol Hill.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice over): Rewind the clocking to last May. The Senate passed an immigration bill 62-36. But that legislation was branded "amnesty" and went nowhere in the House. That's not stopping Senate leader Harry Reid from using it as the starting point for this year's debate.

Critics say it was a bad bill then and it's a bad bill now.

SEN. JEFF SESSIONS (R), ALABAMA: Last year's bill was a fatally flawed piece of legislation. It had no mention, no movement whatsoever to a skill-based immigration system. It paid Social security benefits out for people with illegal work histories. It would have tripled the current legal immigration rate in America.

SYLVESTER: The Senate bill would have created a tiered system that allowed illegal aliens in the United States five years or longer to stay. Those here two years or less would have to return home. And it called for a program for guest workers who would be able to bring in their families and eventually petition for permanent legal status. Twenty-three Republicans sided with Democrats to pass the bill last year. But times have changed. Some supporters like Senator Bill Frist have since left Congress. Others like Arlen Specter are now threatening to filibuster the bill if it comes up again.

ROY BECK, NUBERSUSA: I think there definitely will be a filibuster attempt, and I think there's a better chance than even that the filibuster will hold, that this bill will not be brought to the floor for debate.

SYLVESTER: Senator Charles Grassley says he learned amnesty does not work. He voted against last year's Senate bill, but he did vote for amnesty in 1986, when there were only three million illegal aliens in the United States.

SEN. CHARLES GRASSLEY (R), IOWA: You know what I found out? If you rewarding illegality, you get more of it. And now we have a 20 million illegal alien problem.

SYLVESTER: A mistake he and some of his Senate colleagues don't want to repeat.

(END VIDEOTAPE)

SYLVESTER: Two Republican presidential candidates who voted for the Senate bill last year have since backed away from it. Senator Sam Brownback says that he would not vote for it again. And Senator John McCain, who was a cosponsor of that bill, he signed a letter urging Senate Leader Harry Reid not to bring up last year's bill again, and instead to allow more time to come up with some kind of a new compromise -- Lou.

DOBBS: And one of the extraordinarily disappointing aspects of last year's legislation that succeeded by that vote, as you reported, Lisa, is the fact that not -- to our knowledge, not a single senator had the opportunity to read that 700 pages of legislation before it was passed. And -- and, there is yet -- there has not been a fiscal impact statement around the cost to the nation should they pursue that very same legislation.

SYLVESTER: And you know, Lou, that if they take up -- even if they do come up with a compromise, we could find ourselves in the exact same situation because they want to pass this by the end of next week, where you could have a 600, 700-page bill again, and no one's read this thing.

DOBBS: Lisa Sylvester, thank you, reporting from Washington, D.C.

For the first time ever in this country, voters, not politicians, voted to crack down on illegal immigration. Saturday, residents of Farmers Branch, Texas, a suburb of Dallas, Texas, overwhelmingly voted to stop landlords from renting to most illegal aliens. Opponents fighting that ordinance say it regulates immigration, which is the exclusive duty of the federal government. California's senator, Barbara Boxer, agrees. She told CNN's "LATE EDITION" Sunday that people should be able to rent in a free market, and if aliens break another law, then federal immigration authorities should enforce that.

But the state of Oklahoma, just like those voters in Farmers Branch, not waiting for federal action, and having a belly full of federal inaction. The governor of Oklahoma signed a bill last week denying jobs and public benefits to more than an estimated 100,000 illegal aliens who now live in Oklahoma. They reportedly cost Oklahoma State taxpayers up to $200 million a year in public benefits, law enforcement costs, and other resources.

Time now for some of your thoughts.

Richard in Virginia said, "I will not vote for a front-runner from either party until someone explains what their actual plan is for winning the war on terror specifics, ending illegal immigration, stopping the free trade, the Security and Prosperity Partnership, the so-called North American Union, and WTO agenda of outsourcing American jobs, and also ending energy dependence."

Those are pretty good issues.

And John in New Jersey, "Lou, what else is new? Democrats are just following the Republicans' lead to sell out the American people on many issues -- amnesty for illegal aliens, free trade, open borders, et cetera. They figure the Republicans have been successful at it for years. Why can't they do the same?"

And Randall in Washington, "Dear Lou, no party represents me, as I am an American. They represent themselves -- large multinationals and/or hot-topic special interests. I haven't left my country. My country has left me."

We'll have many more of your thoughts coming up here later.

And up next, once again the middle class betrayed. This time, Democratic leaders failing to deliver on promises made to the middle class that helped them gain control of this Congress last November.

Also ahead, a pivotal day in Florida. Firefighters there battling huge wildfires statewide in a race to protect homes, property and woodlands.

We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Democrats rode into power in Congress last November on promises they would stand up to the White House's conduct of the war in Iraq and stand up to the White House in the war against our middle class. But now the Democratic leadership is backing down on the very issues that helped get them elected.

Christine Romans reports on what is a -- perhaps what we might call a new axis of evil among the Democratic leadership, the White House, corporate America and special interest groups. The issues that matter most to our middle class.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): A secret deal with House leadership and the Bush administration. It advances trade deals with Peru and Panama, and may set the stage for an extension of the president's so-called Fast Track Trade Authority. Never mind that Democrats campaigned against the president's trade agenda.

ROBERT SCOTT, ECONOMIC POLICY INST.: They've been reaching out to the leadership and been asking for some sort of new approach. And they've been fundamentally turned down here. And I think they have reason to feel sold out.

ROMANS: Forming an alliance with the White House may not play well back home since the new Democratic majority was meant to finally speak for the middle class.

Last week, six House Democrats reminded their party that "Many of the newly elected freshmen campaigned on a platform of ensuring a significant change of course on the past Bush trade policy."

Congressman Mike Michaud worked in a paper mill for 28 years.

REP. MIKE MICHAUD (D), MAINE: For leadership to cut a deal with the White House is very concerning, because those of us who have been involved in the trade issue, who have been dramatically affected by trade, was not part of that so-called deal.

ROMANS: Meanwhile, the party's top promise, a higher minimum wage.

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: The bill is passed.

ROMANS: It's stuck after months of partisan bickering. The Republicans finally winning tax breaks for business. America's minimum wage workers are still waiting for their pay raise.

(END VIDEOTAPE)

ROMANS: But it is on trade that traditional Democratic supporters are most angry this week. Six million union members oppose that deal cut between the White House and the House leadership, Lou. And one leader insider today said it is a complete mystery to them what was going on with that.

DOBBS: Well, let me help them out. The fact is the Democratic Party -- certainly its leadership in Congress -- is demonstrating -- and I'm frankly surprised at some of the people in the leadership who have joined in this -- what is nothing less than assault on working men and women in this country -- but they clearly sold out to K Street, the lobbyists who put the money in the campaign coffers. They've sold out to the multinationals for whom this free trade legacy means that they can outsource millions more of American jobs. And if anybody thinks that there is a discernible difference between the leadership in Congress on the issue of free trade and the 30 consecutive years of trade deficits in this country and the Republican leadership, I think that this alone should disabuse them.

Christine Romans, thank you very much.

That is a tragic, tragic story for American workers, and frankly it's just appalling. I can't say any more about it.

Christine, thank you very much.

Well, I can say more about it, and I ultimately will.

That leads us to the subject of our poll. Have the Democrats, in your opinion, turned their backs on the voters who returned them to power? Yes or no?

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

We've reported extensively here on the abuse of temporary so- called H1B visas. Those visas designed to allow so-called high technology foreign workers into the country to meet a strong demand. Sixty-five thousand of those visas a year.

But as we've reported here, those jobs are far from temporary. They displace American workers. They pay less than the prevailing wage. And by the way, most of them aren't in high technology.

Now two senators are demanding several corporations explain just how they're using those visas. Democratic Senator Dick Durbin of Illinois, Republican Senator Charles Grassley investigating our claims that foreign companies are abusing the temporary visa system.

Those companies include Indian companies Infosys, Wipro and Tata. A measure aimed at limiting their use of H1B visas, we're told, will be offered as an amendment to the Senate immigration legislation that one expects to work its way through the Senate if Senator Reid, the White House and the Democratic leadership have their way on that issue.

Up next, Democratic David Sirota, strategist, analyst, activist says his party's leadership has sold out the American's who put them in control of Congress. He'll be my guest here next.

And internal disarray at the Border Patrol. Agent's not just finding illegal aliens coming across our borders, they're also filing complaints against their boss. We'll have that full report.

And Reverend Al Sharpton joins me here in just a few minutes. A man no stranger to race, religion and politics and more than a few controversies. We'll be talking about that.

And firefighters battling over 200 wildfires tonight in Florida. One fire, however, raging and threatening more than the others. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Florida officials say tonight and tomorrow crucial days for fire crews battling wildfires throughout the state. Rising winds, extremely dry conditions, hampering their efforts to bring more than 200 fires in Florida under control.

Hundreds of people have been evacuated. Heavy smoke from one of those fires forced the closing of a stretch of Interstate I-75. One of the biggest wildfires is raging along the Florida-Georgia border. John Zarrella brings us the latest from Lake City, Florida. John?

JOHN ZARRELLA, CNN CORRESPONDENT: Lou, all day today, the concern has been for the high winds, these increasing winds to cause some problems out in the fire line. Indeed, that's what happened.

On the western side of the fire, we're learning just within the last hour or so that the fire has jumped the line in one spot. Forestry officials are throwing everything they've got at that one spot. There is a little bit of concern that it might cause some further evacuations. The fire is about three to four miles away from any homes right now, but if they can't stop it, then they're going to having to maybe perhaps evacuate some people in those neighborhoods.

(BEGIN VIDEO CLIP)

HARVEY CAMPBELL, COLUMBIA COUNTY SPOKESMAN: We are prepared almost immediately to launch an evacuation should circumstances warrant that. It is not at that point, the jump did not break the trip wire of being two miles within U.S. 441 at which time we would activate additional evacuations.

(END VIDEO CLIP)

ZARRELLA: A lot of the assets they are employing out there to try to stop this one hot spot and other areas on the western edge of the fire are air assets. They've gotten those up today for the first time in days. Spotter planes are out marking hot spots, they've been able to get heavy tankers out with fire retardant chemicals to knock down the flames as well as helicopters that they are using that are carrying buckets of water out there.

So aside from that one spot where they've got some problem on the western edge of the fire, they're telling us that the rest of the fire on the south and the east side is contained right now. And the fire lines are holding. That's about a 50 percent containment right now of this fire. The only problem is the western side and that's the way the wind is blowing. Lou?

DOBBS: John Zarrella reporting Florida fighting 200 wildfires across the state.

On the West Coast, a massive wildfire on Catalina Island off the coast of Southern California is now mostly contained. The fire started late last week, more than 4,000 acres burned. Most of the residents evacuated have now returned to their homes. Some estimates of damage rise to $2 million.

At a time when the effort to secure our borders has reached a critical phase, those responsible for securing our borders are in the midst of a bitter dispute with their leadership. Casey Wian reports now on the rising turmoil in the U.S. Border Patrol.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Today, I will restrict ...

CASEY WIAN, CNN CORRESPONDENT (voice-over): Border Patrol Chief David Aguilar is now the target of an unfair labor practices claim filed by the union representing more than 11,000 agents responsible for securing the nation's borders. Last month, the National Border Patrol Council disclosed the union leadership unanimously approved a no confidence in Chief Aguilar. After the vote, the union says Border Patrol officials visited field offices ostensibly to improve communication between headquarters and the field.

During those visits, they asked individual agents if they had confidence in Aguilar's leadership abilities. A tactic the union says was clearly designed to intimidate employees.

T.J. BONNER, PRES., NATL. BORDER PATROL COUNCIL: Border Patrol management is going around the country at taxpayers' expense intimidating employees, going around essentially saying, here's a can of gas, here's a box of matches, anyone interested in committing career suicide?

WIAN: In their no confidence vote, union reps criticized Aguilar for failing to support Border Patrol agents Ignacio Ramos and Jose Compean who were prosecuted and imprisoned for shooting and wounding an illegal alien drug smuggler and they say field agents are outraged by the chief's support of the Bush administration's guest worker program euphemistically called comprehensive immigration reform.

DAVID AGUILAR, BORDER PATROL CHIEF: A well designed comprehensive immigration reform program that works will mitigate the flow across our borders both north and south.

WIAN: But Border Patrol agents say every time White House officials speak of guest workers or amnesty, the flow of illegal traffic across the border surges.

MICHAEL CUTLER, FORMER INS OFFICIAL: These men and women who are all that stands between us and the lawlessness that we're seeing increasing in Mexico don't believe that they're being supported by their own bosses.

WIAN: The Border Patrol union's unfair labor practice claim has been filed with the Federal Labor Relations Authority. It's entire leadership was appointed by President Bush.

(END VIDEOTAPE)

WIAN (on camera): A Border Patrol spokesman says the agency's management has the inherent right and responsibility to communicate with agents in the field and he says the management visit that prompted the union's unfair labor practice charge was unrelated to the no confidence vote. Lou?

DOBBS: Casey, this is Border Patrol is beset upon from nearly every quarter. I don't know how these agents, serving this nation, with rising violence, a ridiculous set of orders from the Department of Homeland Security, a boss who is involved in the politics of so- called comprehensive illegal immigration, I mean, they're being asked to go well beyond the call of duty here.

WIAN: That's one reason the Department of Homeland Security is having so much trouble filling the open positions for Border Patrol agents, Lou.

DOBBS: Incredible. Casey, thank you very much.

Casey Wian.

Up next here, the always controversial and fascinating Reverend Al Sharpton. He'll be joining me, we'll be talking about race, religion, politics and more. We'll be talking about the controversy over insensitive comments that he made about Republican presidential candidate Mitt Romney, among other things.

And later, the Democrats sold out American workers with their new trade agreement compromise with the White House. Author of the book "Hostile Takeover," David Sirota, Democrat with a capital D, joins me. All of that and more straight ahead. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Reverend Al Sharpton of course no stranger to controversy over the past few weeks he spearheaded the drive to oust radio host Don Imus. His comments last week about presidential candidate and Mormon Mitt Romney making headlines and creating quite a stir. And tonight, he is joining me here. Reverend Al Sharpton, to talk about all of that, race, religion, politics, all subjects with which you are intimately familiar. Good to have you here.

REVEREND AL SHARPTON, CIVIL RIGHTS ACTIVIST: Thank you, sir.

DOBBS: Let's start out with the Mitt Romney comment. Let's just -- You said and if we could put this up so everybody knows what we're talking, you said in that debate with Christopher Hitchens and I want to talk to you about what I think his reaction was, "As for the one Mormon running for office, those who really believe in God will defeat him anyways, so don't worry about. That's a temporary situation."

As you know, Romney called it a extraordinarily bigoted kind of statement. You've since apologized to Mitt Romney. I want to say one thing about Christopher Hitchens who wrote the book you were debating in that. You have to look upon him as a standup guy. He took responsibility for broaching the subject that you initially responded to. SHARPTON: I think he did, and I think the tape shows that. Let me correct you. I apologized to any Mormons offended. I didn't apologize to Mitt Romney. I think Mitt Romney attempted to politicize this. It had nothing to do with Romney.

We were debating atheism. He made - he being Hitchens made this broad attack on believers. And in my response, I said no, you're incorrect. Believers did not poison the world and believers, or people that believe in God are going to vote and I don't think Romney is going to be president. It had nothing to do with him being a Mormon, it had everything to do with ...

DOBBS: You said as for the one Mormon ...

SHARPTON: Because as he stated and you just repeated, Hitchens talked about an example of his poison is we have a Mormon and Mormons didn't even believe blacks were equal until 25 years ago.

DOBBS: Let me ask you. You said you apologized to Mormons for what you said but said you didn't want to apologize to Mitt Romney because he politicized it. You know, Al, folks are saying my gosh, Al Sharpton politicizes everything that he gets involved in.

SHARPTON: Well, we were in a debate about atheism, we were not in a debate about politics until Hitchens brought it up.

DOBBS: Do you think that's a little like Imus saying he was a discussion about sports?

SHARPTON: No, because there was nobody saying to Imus anything about these girls' race or anything. He just out of nowhere castigated these girls, even in the comment, nobody called anyone names. Nobody denigrated -- If there was anyone that said anything, Hitchens who admitted it to you castigated the Mormons as racist until the '70s. I responded. So even in that statement, you cannot in any way say that I castigated or denigrated Mormons. I said ...

DOBBS: You were just -- you took on actually Mitt Romney.

SHARPTON: I said I think he's going to lose, I don't think he's going to lose because he's a Mormon.

The fact of the matter is what you have to ask yourself, if we've gone through a year, we're talking about race and politics of seeing people like Keith Ellison who was a Muslim, was he a follower of Louis Farrakhan? Is that religious bigotry?

We've had people ask Barack Obama about sermons of his pastor. Is that religious bigotry? So for Hitchens to make his opinions about Mormons become bigotry, I think that Romney is really playing a real game here.

DOBBS: Actually, Hitchens wasn't accused of bigotry, you were.

SHARPTON: That's why it's politics. If Hitchens told you he brought up the subject and he attacked ... DOBBS: The difference is, Al, and you know this, the difference is Hitchens doesn't like any religion. You pick it, he doesn't like it.

SHARPTON: But is that bigotry? You what I'm saying to you is ...

DOBBS: I consider that universal criticism.

SHARPTON: If a guy attacks a religion, he attacked all religions, but attacks all religions, says they were racist as an example, why wouldn't Mr. Romney attack him? Why would he attack me? Clearly he's trying to break politics because I was a Democratic president last time around. He never said a word about Hitchens who was the one that castigated his religion.

DOBBS: Castigated, if you will, criticized his religion like he does everyone's religion, but he also didn't pick out the one Mormon running for president.

SHARPTON: He's the one who mentioned him.

DOBBS: He did not say pick him out and say he will be defeated by the voters.

SHARPTON: He said he's running and he's a member of a racist sect. That's what he said. If you're going to sake issue, you would take issue with that before you would somebody saying you're going to be defeated.

DOBBS: One of the things I don't have to do is have to defend a host of religions. You put yourself squarely here where you've got to work it out. You've apologized to the Mormons. Are you going out to Utah?

SHARPTON: I talked to two of the members of the church and they were very gracious and said we've been misquoted. We don't know what happened. We'll sit down and talk. Romney was the one that oh, this is bigotry. Well, I asked you when you talk to Mr. Romney, is it bigotry when people raise the questions to the Democratic side, to Mr. Obama or Congressman Ellison.

I want to know are we going to play a game by one set of rules?

DOBBS: I think that's exactly the point. Are we going to play it by one set of rules? You know me. I believe in wide open free expression. You've got -- a lot of people after you went after Imus, the idea that a man makes a mistake in what he utters and you demanded his firing think about what you did, Tawana Brawley. Think what you did ...

SHARPTON: Let me ask you a question. Tawana Brawley happened 21 years ago.

DOBBS: Absolutely. Were you fired? SHARPTON: Yet Hitchens - did I not suffer in terms of those that support our organization? People that disagreed with me did what was available to them to do. His job, had he problems. He had made a public proclamation with Clarence Paige he would never do it again. He did it again. His advertisers had to write when the complaint was brought to say did you it again. He -- to compare calling women in no way of discussion ...

DOBBS: Do me a favor. Don't repeat that expression.

SHARPTON: Called them a denigrated name doesn't compare to Mr. Hitchens' attacking his religion and i respond by saying he's going to lose the election. That's a temporary problem.

How do you make that attack other than you want a political fight?

DOBBS: OK. The fact of the matter is what I'm trying to get to is perspective, proportion and reason.

It seems to me that you all last a great opportunity. The fact is, Don Imus, you know, I don't know the man personally, I've been on his broadcast. Do you really believe he's a racist?

SHARPTON: No, I believe what he did was abuse his job, and he should lose his job. Just like I think the guys just did the rape of Condoleezza Rice on radio should lose their job. There's certain things you shouldn't do ...

DOBBS: But you set a standard there. You said public airwaves and they're on satellite, for crying out loud. That's the distinction they're making.

SHARPTON: They are asking the public, they are asking government to let them merge when they would control all of the paid public airwaves.

DOBBS: I couldn't agree with you more it was repugnant and stupid. But you know what? You want to shut down hip-hop? You want to ...

SHARPTON: I want to see that stopped. I want to see the use of certain terms.

DOBBS: Here's where -- people are going to sit there, Al Sharpton, Lou Dobbs are debating. I come up on the other side of that issue. I don't want you or anybody else interfering with creative freedom in this country.

SHARPTON: We're not talking about creative freedom.

DOBBS: If we're going to be moral, let's be moral as individuals. Let's make our disciplined decisions, I think they should ...

SHARPTON: Lou, I think there are certain words that shouldn't be allowed.

DOBBS: I think -- I agree with you. But I don't believe that you should first infringe on the First Amendment to do it. Secondly, secondly, why not let the morality of the public express itself in individual actions.

SHARPTON: It was the public.

DOBBS: Why do we have to make it some sort of herd.

SHARPTON: It was the public. It was many public groups started by the National Association of Black Journalists then National Action Network and other civil rights groups came in.

DOBBS: And Jesse.

SHARPTON: And we all said as the public, this guy made a commitment. He didn't keep it. We support your products. You're advertising on his show. We're not part of the public?

DOBBS: You're not part of the public, you are the public.

SHARPTON: Our organizations?

DOBBS: Absolutely.

SHARPTON: I have chapters in 30 cities, offices in five. Our people said wait a minute, you've got to deal with this. This guy is castigating these girls. He said he wouldn't do it. He did it again.

DOBBS: My question is, have you ever made a mistake?

SHARPTON: Absolutely and paid for it.

DOBBS: And you've paid for it publicly and the fact of the matter is Don Imus apologized. He went on your show in what I think was a crazy thing to do, given your attitude, the man was a mensch, apologized to you.

SHARPTON: Lou, you and I talked once. Let me give you an example. I went to Vieques, let's not even use an African American case. I protested the Navy bombing of Vieques, I decided to protest, went over ...

DOBBS: The weapons range in Puerto Rico.

SHARPTON: Correct. I went over the fence, a judge said you broke the law, whether the cause is good or not. He gave me 90 days in jail. I did every day. I mean, you pay for what you do. I lost three months of my life in jail because I did what I believed.

DOBBS: But you made a conscious decision to do that.

SHARPTON: And he made a conscious decision.

DOBBS: Do you really believe that? Do you think he made a conscious decision?

SHARPTON: He said -- He himself apologized. He should pay for it. Anything I did, I paid.

DOBBS: But that's different from saying he made a conscious decision to offend somebody.

SHARPTON: I paid for it.

DOBBS: Or break a law.

SHARPTON: I didn't say you should never have a career, never be allowed on radio. He abused that job, he paid for it.

DOBBS: You know what let's do. The fact of the matter is you're a man of God. You believe in forgiveness?

SHARPTON: I do. Forgiveness is not amnesty, though. You're the great one with amnesty.

DOBBS: Oh, absolutely, absolutely.

SHARPTON: Forgiveness is not amnesty. Even in the Bible that I believe in.

DOBBS: Absolutely.

SHARPTON: We do not get amnesty. Moses never saw the Promised Land. And God forgave him.

DOBBS: You're getting a little ecclesiastical on me because I'm just a poor country boy.

SHARPTON: But you raised up my sense of belief. You said forgiveness, man of God. Let's quote what forgiveness is.

DOBBS: Good for you. Now let's get to it. Why in the world did you want him fired instead of suspended? Because you know what? I talked to a lot of folks, including prominent African American leaders. They thought that he should be suspended. Why in the world would you ...

SHARPTON: We disagreed because we felt that those of us that was in the groups and there were many groups, it wasn't just African American, NOW, the National Organization of ...

DOBBS: They got there so late it was ridiculous.

SHARPTON: The whole thing only lasted eight days. So how could it be late? But everyone said he had done this before. If you read the statements of the two employees that fired him that's what they said. This was a pattern. You can't keep saying I'm sorry, I'm sorry, I'm sorry. At what point do you make a joke out of your advertisers and employee.

DOBBS: What was the last time had he made that mistake. SHARPTON: You'd have to ask the employees. He was clearly out of line.

DOBBS: I'm asking you because you said.

SHARPTON: I think about a year or so before that.

DOBBS: Clarence Page what, did he say? Did he think he should be fired?

SHARPTON: Clarence Page, I didn't talk to him but I saw him on television say he said this before. And I think something has to be done.

DOBBS: Clarence said that he thought he should have been suspended. We're going to pick this up tomorrow morning on CBS Radio and we'll have a discussion.

SHARPTON: Let me say this. I think it's fair we have a discussion but I want to make it clear. I believe Mormons are believers in God. There are others that question him in a religious world. And even those that question them are not bigots. I think Romney's trying to play a little religious game that Congressman Ellison and others did not play when their religions were questioned.

In American politics, you have to defend what you believe. When I ran for president, all kinds of groups asked me, you're a preacher, what do you believe? I didn't call it bigotry.

DOBBS: Let's pick that up. I happen to agree with you. I think the bigotry line is a little strong. What I do think is dangerous is for folks to start acting like cops when it comes to free speech in this country.

SHARPTON: We'll pick it up there. As long as you're agreeing with me it's a little strong on one side. I'm not a sergeant. I'm not a sergeant.

DOBBS: Reverend Al Sharpton. Good to have you.

SHARPTON: All right. Nice seeing.

DOBBS: Coming up next, the Democrats sell out the very middle class voters who sent them to office. I'll be talking with author, blogger, Democratic strategist, activist David Sirota. I don't think he's too happy with House Speaker Pelosi or treasury secretary Henry "Hank" Paulson.

SHARPTON: Is that bigoted?

DOBBS: Stay with us.

(COMMERCIAL BREAK)

DOBBS: Coming up at the top of the hour, SITUATION ROOM with Wolf Blitzer. Wolf? WOLF BLITZER, CNN HOST: Thanks very much, Lou. The first lady, Laura Bush, shining a spotlight on an issue close to her heart and the heart of every woman. She sits down for a one on one interview with our chief medical correspondent Dr. Sanjay Gupta.

Also deadly fighting between rival factions as a cease-fire collapses. Are Palestinians spiraling toward their own civil war? Plus, the battle for Gotham. Are New Yorkers backing their current or former mayor in the race for the White House? We have some new poll numbers that might surprise you. All that, Lou, coming up right here in THE SITUATION ROOM.

DOBBS: Looking forward to it, Wolf, thank you. House Democratic leaders under fire for coming up with a compromise trade deal that many Democrats look upon as a sellout of American working men and women and families.

My next guest among those and a critic of that deal. David Sirota, he's writer of the blog, Sirota Blog, his new book "Hostile Takeover: Big Money Conquering Our Government and How We Can Take It Back."

David, good to be with you. Great job in reporting on this trade compromise. What is the motivation for the leadership to sell out many of their own members in the Democratic Party on Capitol Hill?

DAVID SIROTA, AUTHOR, "HOSTILE TAKEOVER": I think it's money. You know, somebody said to me, looking at this trade deal, that the one thing that seems to be able to bring together Democratic leaders on Capitol Hill and this president, one of the most unpopular presidents in a generation is big money. I think that that's really what's gone on here. Labor representing six million, eight million workers, environmental groups were cut out of the process as were basically rank and file Democrats. So this is an issue of big money.

DOBBS: An issue of big money and as you know, I've been saying for some time, the only difference between Republicans and Democrats, they're opposite wings of the same bird as my friend James Intoome (ph) first said to me sometime back. This is ugly. There are huge implications for the Democratic Party here. There are huge implications for the Democratic side of the aisle on Capitol Hill.

SIROTA: Absolutely. You know, this is a party that went out and campaigned against lobbyist written trade deals. There's a number of economists who say that we've got a record trade deficit and all the Democrats really need to do is just not pass a number of trade deals in order so that we get a pause. Hillary Clinton has proposed a pause. Economists have proposed a pause. And what we see here is a group of Democrats pushing more of these trade deals and going against what they were elected on in the 2006 election.

DOBBS: You know, the idea that they would do this is to me shocking. We had Paul Krugman, the columnist for the "New York Times" today had this to say, if we could put that up. And it really sums up where a lot of Democrats seem to be. "So what's the answer? I don't think there is one as long as the discussion is restricted to trade policy. All out protectionism isn't acceptable and labor standards in trade agreements will help only a little."

What you've got is - Paul Krugman speaking like his columnist Alan Blinder, the terrific economists. They're saying they want free trade. They're by principle and history committed to it but the fact is they can't find a solution.

Why in the world isn't it straightforward what we need to do in this country?

SIROTA: Well, again, because money clouds the debate and I think on the economists' side, economists are sort of theoreticians. They're not really necessarily practical folks.

I think what we can hope for is a group of Democrats coming forward, the populists who ran in 2006 saying this is unacceptable and we are going to fight for what we campaigned on.

DOBBS: Well, are you ready to join me as an independent populist?

SIROTA: I'm still a Democrat.

DOBBS: I had to ask ...

SIROTA: I still have faith that there are good Democrats out there.

DOBBS: To the DNA I know that you're a Democrat. A Democratic populist. It's good to have you with us, David Sirota.

SIROTA: Thanks for having me.

DOBBS: The results of our poll tonight. Eighty seven percent of you say the Democrats have turned their backs on the very voters who returned them to power.

We thank you for being with us tonight. Please join us here tomorrow. For all of us, thanks for watching. Good night from New York. THE SITUATION ROOM with Wolf Blitzer begins now. Wolf?

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