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LOU DOBBS TONIGHT

Bush Faces Rising Outrage Over Commuting Libby's Sentence; State, Local Lawmakers Take Action to Deal With Illegal Immigration Crisis

Aired July 3, 2007 - 18:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


KITTY PILGRIM, CNN ANCHOR: Tonight, President Bush faces rising outrage after commuting the prison sentence of Scooter Libby. The president's decision sparking fury among supporters of imprisoned border patrol agents Ramos and Compean. Also, rising evidence of Iran's dangerous alliances with some of this country's most aggressive enemies. We'll have a special report. And more state and local lawmakers are taking action to deal with our illegal immigration crisis. Also, I'll be talking with Congressman Steve King about the failure to verify the legal status of thousands of its employees. All that and more straight ahead tonight.
Good evening, everybody. President Bush today raised the possibility of a full pardon for former White House aide Scooter Libby. One day after commuting Libby's 30-month prison sentence, the president said he would not rule in or rule out a pardon. Democratic lawmakers are furious with the president for commuting Libby's sentence. Libby was convicted of obstructing an investigation into the leak of a CIA officer's identity. Ed Henry reports. Ed?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Kitty, the fireworks were flying at the White House today when Tony Snow faced a lot of skepticism by claiming that the president had not handed Scooter Libby a political favor.

(BEGIN VIDEOTAPE)

HENRY (voice-over): The president handed out purple hearts to wounded soldiers at Walter Reed Army Medical Center, one day after commuting the prison sentence of Lewis Scooter Libby, who helped leak the identity of former CIA operative Valerie Wilson, whose husband publicly questioned the White House's case for the Iraq war.

BUSH: I took this decision very seriously on Mr. Libby.

HENRY: Mr. Bush left the door wide open to a full pardon.

BUSH: As to the future, I'm, you know, ruling nothing in and nothing out.

HENRY: The president said the jury verdict that Libby lied to the FBI should stand, along with the $250,000 fine and two years of probation.

BUSH: But I felt like the 30 months sentencing was severe and made a judgment, a considered judgment, that I believe is the right decision to make in this case. And I stand by it.

HENRY: Spokesman Tony Snow struggled to answer a barrage of questions, such as whether Vice President Cheney went to bat for his former chief of staff.

Did the vice president weigh in?

TONY SNOW, WHITE HOUSE PRESS SECRETARY: My guess is that -- I don't have direct knowledge, Ed. But on the other hand the president did consult with most senior officials.

HENRY: Why did the president ignore his own Justice Department's regular procedure?

HENRY: Normally somebody at least serves a day in jail, a week in jail --

SNOW: Because the president thought the jail time in fact was inappropriate. Therefore, he decided to proceed.

HENRY: I thought he said the jail time was excessive, that this (INAUDIBLE) was excessive, he didn't say it was inappropriate.

SNOW: He said it was excessive and he thought that any jail time was excessive.

HENRY: Or why Karl Rove has not been fired, even though he played a role in the leak.

UNIDENTIFIED MALE: Do you stand by your pledge to fire anyone found to have done so?

BUSH: Yes. And that's up to the U.S. attorney to find the facts.

(END OF VIDEOTAPE)

HENRY: Tony Snow said one of the reasons why the White House did not clear this through the Justice Department is that it's a very new case. It's not an old case where they had to go back to Justice and dig out a lot of details to refresh their memories. The president was very familiar with this case being in the headlines. As for Karl Rove, Snow said the White House is not going to offer any detailed response to his role in all of this case. But the bottom line is that flies in the face of the president offering detailed comments himself yesterday about why he pardoned -- pardon me -- why he commuted the sentence of Scooter Libby. He did that before all of the appeals were exhausted. Kitty?

PILGRIM: Thanks very much, Ed Henry.

Well special prosecutor Patrick Fitzgerald challenged the president's assertion that Libby's sentence was excessive. Fitzgerald said Libby was sentenced under the same laws as other criminals. Fitzgerald said all citizens should "stand before the bar of justice as equals," as he put it. Several Republican presidential candidates are publicly supporting President Bush's decision to commute Libby's sentence. Mitt Romney and Rudy Giuliani both called President Bush's decision, "reasonable." And former Senator Fred Thompson, a likely Republican presidential candidate, said the president's move "will allow a good American who has done a lot for his country, to resume his life." President Bush's show of mercy for Scooter Libby is renewing calls for presidential action in the case of former border patrol agents Ignacio Ramos and Jose Compean. Those agents were given harsh prison sentences for shooting and wounding an illegal alien drug smuggler from Mexico. The agents' supporters are demanding a full presidential pardon. Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): The president decided this White House aide sentenced to 30 months in prison for perjury and obstruction of justice had suffered enough.

BUSH: I felt the punishment was severe.

ROMANS: He commuted his sentence and would not rule out a full pardon.

SNOW: As a felony conviction, it's under $50,000 fine, two years probation, and basically he's lost the way he has built a living his entire life. That is pretty significant punishment.

UNIDENTIFIED FEMALE: Free our border agents!

ROMANS: Supporters of former border patrol agents Ignacio Ramos and Jose Compean are asking for the same compassion. Ramos and Compean are also convicted felons. Their careers also over. They are serving sentences of 11 and 12 years for not following protocol and shooting a fleeing illegal alien drug smuggler in the buttocks.

REP. DUNCAN HUNTER, (R) PRESIDENTIAL CANDIDATE: Clearly if Scooter Libby deserves a commutation, I would hope that the White House on this July 4th, tomorrow, would fully pardon Compean and Ramos. Ramos has already been beaten up in prison by some of the inmates who recognized him as a border patrol agent. I think they have been punished enough.

ROMANS: While the president has declared the 30-month sentence of a former aide excessive, he has let stand long prison sentences for the agents. The pardon is an exclusive power of the executive branch and scores of lawmakers have demanded Bush add the convicted agents to the list. Bush has pardoned at least 10 convicted drug offenders, in addition to counterfeiters, embezzlers, tax evaders and moon shiners. President Clinton pardoned 396 criminals most famously, fugitive financier Mark Rich and his own brother. This president's father pardoned only 74, but Reagan pardoned 393, among the 382 Ford pardoned, one was for his predecessor Richard Nixon.

(END OF VIDEOTAPE) ROMANS: President Bush is being assailed by Democrats for commutation of Libby's sentence just as Clinton was criticized by conservatives for his pardon of Mark Rich. And this only befits the beltway Scooter Libby, Kitty, was once a lawyer for Mark Rich in Washington.

PILGRIM: Thanks very much, Christine Romans.

Well President Bush today also focused on Iraq. In a telephone conversation with the Iraqi prime minister, the president blasted outside countries for meddling in Iraq and one of those countries is Iran. U.S. officials say Iran is training and equipping insurgents for attacks against our troops. Michael Ware reports from Baghdad.

(BEGIN VIDEOTAPE)

MICHAEL WARE, CNN CORRESPONDENT (voice-over): These American soldiers might not know it, but they have a bounty on their heads, according to U.S. military intelligence. A senior U.S. military official tells CNN Iran's Quds force is offering reward money to Iraqi militia who killed GIs. The Quds force is an elite unit of Iran's revolutionary guard. U.S. officials are unwilling or unable to offer details of the bounty claims but with Iranian-made bombs tearing into American armor and plots to kidnap coalition solders unfolding, the threat is being taken seriously. Much clearer, say U.S. officials, is Iran's chain of command. They insist Iran's supreme leader, Ayatollah Ali Khomeini and other senior Iranians know the Quds force is involved in killing coalition soldiers. And the Quds appear to have help. CNN broke the story that this man, a Lebanese Hezbollah special operations commander was arrested inside Iraq by U.S. forces in March. His name, Ali Mussa Daqduq. U.S. officials say he was working with Iranian- backed militia known as the special groups. The U.S. military says the interrogation of the Iraqis he trained as well as documents found with them have provided the most striking evidence yet linking the Quds force to violence in Iraq.

BRIG GEN. KEVIN BERGNER, MULTINATIONAL FORCE - IRAQ: He was directed by Iranian Quds force to make trips in and out of Iraq and report on the training and operations of the Iraqi special groups.

WARE: The role Iran wants to play in Iraq might not be one America decides it can live with. Michael Ware, CNN, Baghdad.

(END OF VIDEOTAPE)

PILGRIM: The U.S. military said two of our troops were killed in Iraq yesterday. A soldier north of Baghdad and also a marine in al Anbar Province west of the Iraqi capital. Seven of our troops have been killed so far this month. 3,585 of our troops killed since this war began, 26,558 troops wounded, 11,959 seriously. Iran not only challenging U.S. policy in Iraq, but also on other fronts. Tehran is still refusing to abandon its nuclear weapons program and Iran is forming alliances with some of this country's most dangerous enemies.

(BEGIN VIDEOTAPE) PILGRIM (voice-over): This week Mahmoud Ahmadinejad and Venezuelan President Hugo Chavez stood together to bash the United States and proclaim a so-called axis of unity.

PRES. MAHMOUD AHMADINEJAD, IRAN: Here we tell you, the United States who are angry with the friendship and brotherhood of nations to die of this anger.

PRESIDENT HUGO CHAVEZ, VENEZUELA: Both of our countries are united and will defeat the imperialism of North America.

PILGRIM: Venezuela wants to bail out America's number one adversary, the country's energy minister told an Iranian newspaper that Venezuela had agreed to sell Iran gasoline. The news comes at a critical time for Ahmadinejad. Last week his government started rationing fuel, prompting a violent response from angry Iranians.

ILAN BERMAN, AMERICAN FOREIGN POLICY COUNCIL: The Iranians know that they are vulnerable. The real Achilles' heel of the regime is the intersection of very poor economic planning where they provide pretty heavy subsidies for gasoline and the fact that they have to import a lot of that gasoline from abroad. They're very concerned about sanctions and they know that they have to have a secure supplier.

PILGRIM: Iran is OPEC's second largest oil producer but because of low refining capacity must spend billions each year to import gasoline. Hugo Chavez is all too eager to help.

REP. DAN BURTON, (R) INDIANA: What the free world's been trying to do with Iran is put pressure on them to change their policies toward a nuclear development. What Hugo Chavez is doing is actually fighting what the rest of the world wants, and that is a nuclear-free Iran.

PILGRIM: But that pressure is less effective when the rogue regime is bolstered by the likes of Hugo Chavez.

(END OF VIDEOTAPE)

PILGRIM: Venezuela is one of several countries such as China and Russia that put their energy ties with Iran above international efforts to stop Tehran's nuclear weapons program.

Senator Joseph Lieberman says Iran has effectively declared war against this country and the United States should consider a military strike against Iran. Senator Lieberman, who recently visited Iraq, said he has no doubt Iran is conducting a proxy war against the United States. He said the United States should not rule out the idea of striking terrorist targets in Iran.

Still to come -- new security measures in this country after the failed car bomb attack in Britain.

Also, state and local lawmakers take action after the collapse of the senate's amnesty legislation. Also, Senator John McCain is running out of cash for his presidential campaign. Will he drop out? We'll have a special report.

(COMMERCIAL BREAK)

PILGRIM: Senator John McCain's campaign is running out of cash. And he's laid off dozens of campaign staffers in a reorganization effort. What is next for the McCain campaign? Bill Schneider has our report.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN SENIOR POLITICAL ANALYST: The McCain campaign is in trouble. Can it turn things around? In 1980 after losing Iowa, Ronald Reagan roared back to victory in New Hampshire after making this comment at a debate.

RONALD REAGAN: I am paying for this microphone mister.

SCHNEIDER: In 2000, George W. Bush lost New Hampshire to none other than John McCain. Bush then ran a tough, some would say ruthless campaign, to rally conservatives and win South Carolina. In both cases, the establishment candidate rallied the party base to fend off a challenge from an insurgent. John McCain's problem is different. He doesn't really have an ideological base he can rally.

STEPHEN HESS, BROOKINGS INSTITUTION: The problem with John McCain is it's hard at the moment to see his constituency. Who his -- where his base is coming from.

SCHNEIDER: McCain's strategists have figured something out about 2008 -- the political establishment is in trouble, so McCain is repositioning himself to run the same way he did in 2000.

JOHN WEAVER, MCCAIN POLITICAL STRATEGIST: John McCain is the Republican change candidate in a change election cycle, a volatile election cycle.

SCHNEIDER: Wait a minute. Unlike 2000 there's now a Republican in the White House. Can a Republican run as the candidate of change? McCain's strategists think so.

WEAVER: He's going to challenge our party and our country to let him end the out-of-control spending which has shamed the Republican Party and wrecked our country's budget.

SCHNEIDER: They talk about a liberated John McCain, liberated from Washington politics.

SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: We let spending get out of control. We presided over the largest increase in the size of government since the great society and our constituents and our Republicans became dispirited and disenchanted.

SCHNEIDER: The straight talker is back and he's hoping to turn into the comeback kid. (END OF VIDEOTAPE)

SCHNEIDER: It could work for another reason -- the Republican establishment doesn't really have a candidate to rally around. The vice president is not running, conservatives have problems with Rudy Giuliani and Mitt Romney. Fred Thompson? Well, we'll see. Kitty?

PILGRIM: Thanks very much, Bill Schneider.

Rudy Giuliani is leading the Republican pack at fundraising for the second quarter. His campaign brought in $17 million. Mitt Romney's campaign brought in just over $14 million. And as Bill Schneider just reported Senator McCain's campaign about $11 million. For the Democrats, Senator Obama raised over $32 million, topping Senator Clinton, and her campaign raised $27 million. John Edwards follows with $9 million and Bill Richardson, $7 million. The campaigns have until July 15 to file detailed financial reports with the Federal Election Commission.

The Democratic candidates are shuttling between New Hampshire and Iowa. Senator Clinton is in Iowa and will head to New Hampshire with her husband, probably next week. Senator Obama, flush with cash, was in New Hampshire yesterday delivering his message. Mary Snow joins us from Manchester, New Hampshire. Mary, how is Senator Obama's message resonating with the voters there?

MARY SNOW, CNN CORRESPONDENT: Well you know Kitty, the voters we spoke with say they try not to put too much stock in the money raised, although they acknowledged the reality of having to have so much cash to be a viable contender in this race. And as for Democratic presidential hopeful Senator Barack Obama, he too, is trying to play down the dollar signs. He was here in New Hampshire yesterday telling a crowd that really what was not -- what was impressive was not so much the $32.5 million he raised but the number of donors, which topped over 250,000.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: And people said we couldn't compete by trusting in the American people, but we can, because there are a quarter million people who want to see a new health care system out there. There are a quarter million people who want to turn the page on our energy policy. There are at least a quarter million people who are ready to see this war in Iraq brought to an end.

(END OF VIDEO CLIP)

SNOW: Senator Barack Obama trying to stay on the populous theme. He's taken his message to Iowa, where he's having stiff competition for the spotlight there. And that is because Senator Hillary Clinton and her husband, former President Bill Clinton, both campaigning in Iowa. They are in the middle of a three-day campaign swing there. And this is the first time they have campaigned together in a key early state like Iowa. A lot of attention there and you know as Senator Clinton's really been leading in so many of these polls, this is not the case in Iowa, where she's really facing a serious challenge there from former Senator John Edwards, who spent so much time in Iowa, really concentrating on getting votes there. So she is trying to bolster her support. Next week the Clintons will come here to New Hampshire. Kitty?

PILGRIM: Thanks very much, Mary Snow. Thanks, Mary.

SNOW: Sure.

PILGRIM: Coming up -- some disparaging comments about American workers. And you won't believe who made those remarks.

Also, more states are taking action on their own as the federal government takes none to deal with our illegal alien crisis. We'll have a report on that. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: State and local lawmakers are taking steps on their own to crack down on illegal immigration because the federal government is not doing the job. Now the state of Arizona joins Georgia and Colorado in enacting tough legislation on employers who high hire illegal aliens. Lisa Sylvester has our report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Starting next year all Arizona employers must use the federal employment verification system to make sure their workers are in the country legally. Companies that violate the law more than once could lose their business license permanently. In signing the bill, Governor Janet Napolitano wrote, "It is now abundantly clear that Congress finds itself incapable of coping with the comprehensive immigration reforms our country needs. I signed it, too, out of the realization that the flow of illegal immigration into our state is due to the constant demand of some employers for cheap undocumented labor."

RANDY PULLEN, ARIZONA STATE GOP CHAIRMAN: Clearly if you secure the border and you slow down or stop the demand for illegal workers in the workforce, then the attraction will be obviously reduced for them to come here.

SYLVESTER: Napolitano also signed two other immigration bills. One mandates that courts deny bail to illegal aliens charged with a felony. Another requires people to prove legal status before receiving state services. Arizona joins Colorado and Georgia as states with the toughest immigration laws on the books, requiring new work site enforcement. Nearly 1,200 other immigration measures have been introduced on the state and municipal level, according to the National Conference of State Legislatures.

JOHN KEELEY, CENTER FOR IMMIGRATION STUDIES: The states, precisely because the conditions on the ground are so dire, they don't have the luxury of filibusters and back-room deals. They have to address these conditions on the ground there.

SYLVESTER: Business groups say the new laws are an unfair burden.

MAC MAGRUDER, BUSINESS OWNER: I'm calling this bill the immigration drive-thru bill because all a person has to do it seems is drive through another person's business, call the attorney general and they have to be investigated.

SYLVESTER: Although Governor Napolitano signed the bills, she said the new employer law has flaws. She says it doesn't have enough funding for tracking corporate violators and lacks discrimination protection for legal residents.

(END OF VIDEOTAPE)

SYLVESTER: Napolitano sent a letter to House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid asking them to review the federal basic pilot program to ensure that the system can handle the additional workload. Right now 15,000 employers use the basic program nationwide. Arizona alone will add approximately 140,000 new businesses to the system. Kitty?

PILGRIM: Thanks very much, Lisa Sylvester.

Some insulting words aimed at American workers, coming from the secretary of labor. Secretary Elaine Chao told "Parade" magazine that American workers could lose jobs to foreign workers, not because those foreign workers are cheaper but because they have better skills and are more disciplined." "They need anger management skills. They've been able to take directions. Too many young people bristle when a supervisor asks them to do something, she said. A Labor Department spokesperson told us that Secretary Chao has spent years championing American workers." Her comments as they appeared in the magazine were taken completely out of context and are not an accurate reflection of her views."

Time now for some of your thoughts and thousands of you are emailing us about President Bush's decision to commute the sentence of Scooter Libby. Wade in Hawaii wrote, "Lou, President Bush stated Libby's prison sentence was harsh and excessive. Perhaps with the same grace and benevolence he will free our brave border patrol agents. I think I can get a picture of who my president is representing, and it is not the American people." Rachel in Nevada wrote, "Pardon me for saying, but Libby's sentence of 30 months in jail may have seemed like a "harsh punishment" to President Bush, but I bet 30 months would seem like a cakewalk to those two border patrol agents who were sentenced to more than 10 years for doing their job, protecting our borders. And Terry in Wyoming, "Lou, the president just had to give someone amnesty, I guess Scooter Libby is better than 12 million illegal aliens."

We'll have more of your emails later in the broadcast.

Also now tonight's poll -- now do you believe since President Bush found Scooter Libby's prison sentence to be excessive, he should immediately issue pardons to border patrol agents Ramos and Compean who are serving prison sentences for shooting an wounding an illegal alien drug smugger. Cast you vote at loudobbs.com, we'll bring you the results a little bit later in the broadcast.

Coming up -- outrage over the government's employment of thousands of illegal workers. Congressman Steve King is my guest.

Also, do the suspected terrorists in Britain have links with al Qaeda in Iraq? We'll have the story.

And the federal government steps up security in some of our biggest cities over the July 4th holiday.

(COMMERCIAL BREAK)

PILGRIM: U.S. officials say tonight the men accused of trying to explode car bombs in Britain have links to al Qaeda in Iraq. Those officials say al Qaeda may have recruited some of the men when they lived in the Middle East. Eight people are in custody. They are all doctors or other medical professionals. Paula Newton reports from London.

(BEGIN VIDEOTAPE)

PAULA NEWTON, CNN CORRESPONDENT (voice-over): On their mission to seek and destroy car bombs, authorities take no chances. Another controlled explosion on a car believed to be linked to this investigation. Searches continue at more than 20 locations throughout Britain and another doctor is under arrest. This time thousands of miles away in Brisbane, Australia.

JOHN HOWARD, AUSTRALIAN P.M.: The man has been taken into custody and questioning is under way.

NEWTON: British media reports have identified the latest suspect as Dr. Mohamed Haneef, who had been working in Britain until last fall. The investigation has now turned to a network of foreign doctors that authorities believe were plotting to attack Britain.

Dr. Mohammed Asha trained in Jordan. Dr. Bilal Abdullah, pictured here after the Glasgow attack studied in Iraq. Two other doctors from Saudi Arabia are in custody, according to British media reports, and two more from India, including Dr. Mohamed Haneef. All have worked as licensed doctors in Britain and friends and family of some, like those of Dr. Asha, say they just don't fit the terror profile.

UNIDENTIFIED FEMALE: He had liberal type of thinking. He was a good Muslim, but never terrorist or such -- involved in such activities.

NEWTON: But for al Qaeda, they would be to-die-for recruits.

JASON BURKE, AL QAEDA EXPERT: Al Qaeda have always looked for people with particular qualities that will help them in their operations. That may be western languages and that may be western passports, indeed. Doctors, obviously, often speak very good English. They can travel widely, they do avoid suspicion. NEWTON: Above suspicion and known as clean skins, no criminal record, no indication they could commit atrocities. The kind of foot soldiers that intelligence reports say Abu Musab Zarqawi, the notorious leader of al Qaeda in Iraq, had been hunting for in his quest to enlist cell leaders.

UNIDENTIFIED MALE: It is true that Zarqawi, before going into Iraq, tried very hard to establish a sort of network in Europe, it is also true since the invasion of Iraq, there has been a sort of supply network that has been established in Europe.

NEWTON: Zarqawi was killed last year but as recently as this spring, the Joint Terrorism Analysis Center or JTAC at Britain's domestic spy agency MI-5 had an intelligence report warning -- al Qaeda leaders in Iraq were planning large-scale attacks in Britain and Europe to quote, "shake the Roman throne," a reference to Christianity.

Intelligence officials say they would not be surprised to learn Zarqawi could have a hold on accomplished physicians.

PAUL WILKINSON, TERRORISM EXPERT: It's the ideology which they were influenced by. And they believe that justifies everything. So the end justifies the means, and their Hippocratic oath which they would have taken as doctors is totally overridden by their belief in their mission to conduct global jihad.

NEWTON (on camera): Despite all of the intelligence reports, a doctor's plot conceived and orchestrated by al Qaeda has just never been explored as a real and credible threat. Paula Newton, CNN, London.

(END VIDEOTAPE)

PILGRIM: In response to the terror alert in Britain, the U.S. government is dispatching special security teams to major U.S. cities for the Fourth of July holiday. Jeanne Meserve reports.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN CORRESPONDENT (voice-over): There are a few more eyes, ears and noses patrolling some of the nation's mass transit systems. In eight of the nation's largest cities, the Transportation Security Administration is deploying its so-called VIPR teams, made up of canine explosive detection units, air marshals, and behavioral observation specialists.

CHRISTOPHER WHITE, TSA SPOKESMAN: We want to provide a very visible deterrent so that people know that it is safe to use these systems and people who may wish to do us harm know that we are out there.

UNIDENTIFIED MALE: At Union Station, Metro and DCA, there were no unusual incidents today.

MESERVE: Officials say there is no specific credible Fourth of July security threat but they are mindful of recent events in the United Kingdom and earlier attacks on mass transit in Britain and Spain and on the Fourth many people will get to celebrations by train, subway and bus. In Washington, DC, where as many as half a million people may gather for a concert and fireworks, more than 20 law enforcement agencies will provide security.

CHIEF DWIGHT PETTIFORD, U.S. PARK POLICE: Is it safe? Yes.

MESERVE: In some cities like Boston, you could already see stepped-up security. Divers went into the Charles River to help ensure the only explosions on the Fourth will be the one you're supposed to see. Law enforcement officials say some security will be invisible. As for what you can see, not everyone is impressed.

UNIDENTIFIED MALE: There's not a lot of security as far as I can tell. No one has asked me what's in my bag, for instance, all day.

(END VIDEOTAPE)

MESERVE (on camera): Officials are urging Americans to keep their eyes open and report anything suspicious that they see, whether they be travelers here at Union Station or elsewhere in the country. They may be the best security measure of all. Back to you, Kitty.

PILGRIM: Jeanne, are they responding to any specific threats or any particular areas that have higher surveillance?

MESERVE: Kitty, I'm having a little bit of trouble listening to you but I think you asked if there was a specific security threat. No, there is not. Officials say they have received no -- no information about a specific, credible threat against this country. They are continuing to follow the investigation in Britain and follow any threads that there may be here. But at this point it's still very much an overseas investigation.

Kitty?

PILGRIM: Thanks very much, Jeanne Meserve.

Coming up -- what does the American public think about President Bush not ruling out a pardon for Scooter Libby? We will find out from four of the country's leading radio talk show hosts.

And also the nation's largest employer of illegal workers comes under fire. We are going to have the details on that. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: As we reported on this broadcast last week, one of the largest, perhaps the largest employer of illegal workers is the federal government. My next guest is demanding action on this issue from President Bush and House Speaker Nancy Pelosi. Joining me now, Congressman Steve King. And thanks for being with us, sir.

REP. STEVE KING, (R) IA: Thank you. I'm glad to be with you. PILGRIM: I would like to read an excerpt from a letter you sent to President Bush and House Speaker Nancy Pelosi. And it really takes to task this real problem in the government.

"As the government body empowered by the Constitution of the United States to enforce laws, it is imperative that you demonstrate to the nation that you are not above the law. We must set a good example to the nation."

Now, according to a 2006 inspector general audit of the Social Security Administration and government agencies, including the federal government, workers who are not authorized to work in this country are working for the federal government. How do you think that that can happen?

KING: Well, I think it's obvious that the federal government has just decided that they are not going to police their own forces. That they will hire indiscriminately without using the basic pilot program, which we have been asking employers to use across this country for more than 10 years. And I think it shows, also, the attitude that comes from the White House, that we are going to be pretty lax about this and maybe if the problem gets big enough, then we can advance the amnesty. Now the shoe is on the other foot. The broader immigration reform policy is dead. Now we all need to focus on the enforcement of the existing laws we have and this is the most egregious that I know of.

PILGRIM: Certainly enforcement should never have been abandoned. And it really is interesting, you talk about the pilot program. This is a program where an employer can cross-check a Social Security Number. The Department of Homeland Security and the Social Security Administration have the tools to actually do this cross-checking. Why aren't they doing it?

KING: I have no idea why. And we raised this issue now for a few days. Of course, the letter will then hit the president's desk soon, and as soon as we turn this around after the Fourth of July. I think not only should he issue directive to all of his offices and use the basic pilot and clean up the illegal employees that they have and the most likely number we can see out of this sample is perhaps 11,000 workers working for a government who are not authorized to do so in the United States, but I think he should issue an executive order directing every one of the department heads to use all of the resources at their disposal to enforce the law and see to it that those people who have violated the law working for the United States are punished according to the law and not just simply given a pass.

PILGRIM: You know, let's take a look at some numbers. The report shows that between 2001 and 2003, over 49,000 non-citizens with non-work Social Security cards were working for government agencies. Several federal agencies, seven state agencies and three local agencies.

The magnitude of this is astonishing. Do you believe that non- citizens working for the federal government or any government organization, is a security risk? KING: I absolutely believe it's a security risk. And this doesn't show us how many are working for the Department of Defense, for example. There's another report there that would indicate you might be able to conclude about 2,000 could be working for the Department of Defense. We have over 1,177,000 -- excuse me -- 1,777,000 that are civilians working for the federal government somewhere along the way.

And in there also are many from Iran, many from the People's Republic of China as well as the big numbers that come through our 15 members of the intelligence community. We don't know how many can be working for the CIA, the FBI, defense intelligence. The Department of Defense I gave some numbers to. But this list goes on. I want to have a clean look at all of this. I want to see how many of the non- work Social Security Numbers are there and how many are not authorized and how many of them are in sensitive positions.

But the federal government and all government has a responsibility to abide by the laws. And they are not doing that. They need to be held accountable and needs to start on the 5th of July, not the Fourth of July.

PILGRIM: You're suggesting that we don't even know the magnitude of this problem despite this study. Is that right?

KING: I have looked at these numbers and rolled them around over and over again trying to put some linkages together where I can say to the American people we have X number of government employees, which are around 21 million. And this report has what government often has as deniable links in there so that you can't link it and say we can extrapolate out a certain number or certain percentage of all employees. It's only a certain percentage of a sample.

So we can't know and we can't get access at these numbers. The federal government has the data, though, between the Social Security Administration and Department of Homeland security. They just need to run those databases against each other. And by the way, the IRS needs to come into this picture. That's the other entity out there that has data that needs to be linked together. I want all three of them working together to enforce our immigration laws and they need to clean up their standards before they are going to impose a policy on America to say that it can be done in a far greater magnitude than the employees for the government of the United States today.

PILGRIM: We certainly commend you on your vigilance and thank you very much for coming on the program tonight to discuss it. Representative Steve King. Thank you, sir.

KING: Thank you.

PILGRIM: A reminder now to vote in tonight's poll. Do you believe President Bush should immediately issue pardons to Border Patrol agents Ignacio Ramos and Jose Compean who are serving prison sentences for shooting a wounded an illegal alien drug smuggler? Cast your vote at loudobbs.com and we'll bring you the results in just a few minutes. Now, there are new concerns tonight about dangerous imports. Sixty-eight thousand toy castles manufactured in China are being recalled. Counting beads on the toy could become loose and create a choking hazard to small children. These toys were sold at Wal-Mart, Target and other toy retailers. So far this year, about 60 percent of product recalls announced by the Consumer Product Safety Commission have been for products imported from China.

And up next -- presidential candidate Senator Hillary Clinton and former President Bill Clinton are on the campaign trail together in Iowa. But will the former president help or hurt the senator's campaign? Our panel of radio talk show hosts will join us.

(COMMERCIAL BREAK)

PILGRIM: Joining me now, four of the country's top radio show hosts. So here in New York we have Steve Malzberg of WOR in New York. Roland Martin of WVON in Chicago. And Roland is also a CNN contributor. And from Raleigh, North Carolina, we have Warren Ballentine of Syndication One. And from Phoenix, Charles Goyette of KFNX. And welcome to you call.

CHARLES GOYETTE, KFNX RADIO HOST: Hi, Kitty.

PILGRIM: Hello. We have to start with the Scooter Libby news, which was a very big jolt this week. Let's starts with Steve. President Bush today saying he wouldn't even rule out a full pardon. This is like this rolling decision. What do you think about the way it has been rolled out.

STEVE MALZBERG, WOR RADIO HOST: Well, I think he did the right thing. I think he absolutely did the right thing. I think there is no call for jail time for what Scooter Libby did. Basically his conviction was based on a difference in a story between Tim Russert and himself. The news media portraying it as he helped leak the name of a CIA agent. He nothing to do with that. He was never accused of that. Nobody was prosecuted for that. No one was found guilty of that. It was just he said/she said. They convicted him of lying and I think the president did the absolute right thing.

ROLAND MARTIN, WVON RADIO HOST: Wow. Law and order Steve? He is now believing that? Now he said it was really no big deal. Let's see, Attorney General Mitchell, obstruction of justice, went to jail. Martha Stewart, obstruction of justice went to jail. Rapper Li'l Kim lied to a grand jury and went to jail. So always other people ...

MALZBERG: Henry Cisneros pardoned by Clinton, 18 counts he was indicted on and he pled guilty to lying to the FBI, pardoned by Clinton. What's the difference?

UNIDENTIFIED MALE: Are you kidding? Are you kidding me here?

WARREN BALLENTINE, SYNDICATION ONE: I agree with Roland martin when he's talking about Martha Stewart and others but basically this is Tony Soprano taking care of his own. President Bush is basically. He is doing this for a reason. The reason is this -- if Scooter Libby goes to jail, he is going to tell the true story. He is going to tell what is really going on in his administration. Let me tell you something, this administration is faulty but also this Congress, it's not just the Republicans, it's the Democrats, all of them are dropping the ball here. Nancy Pelosi, she's a joke. She takes off the table impeachment of the president. He's Tony Soprano now.

MALZBERG: Radical left dreaming.

PILGRIM: Let's talk about the American public. Hang on one second. Let me talk about the American public. Seventy-two percent say that President Bush should not pardon Scooter Libby. What do you think of that, Charles?

GOYETTE: Well, I don't think the American public really roused from their slumber. Look, you have a renegade administration here. You have the new fourth branch of government, the bunker/Cheney branch of government. You have got 5 million White House emails that suddenly disappeared. You have got apparently two standards of justice. The danger to America, though, is that with Scooter Libby on the loose, some defense contractor that has profiteered on this war will endow a chair at the American Enterprise Institute.

MALZBERG: Oh, my God! The ranting and raving ...

GOYETTE: Another couple of unnecessary wars.

MALZBERG: The ranting and raving of the radical left. And the reason the polls show that this whole case has been misrepresented. They think Scooter Libby leaked the name of a covert CIA agent which was not even leaked.

PILGRIM: So you're suggesting, Steve, that the American public doesn't understand the details of this case.

MALZBERG: Right, because it wasn't presented in a fair manner in the mainstream media.

PILGRIM: Roland ...

MARTIN: Kitty ...

PILGRIM: Hang on. We're letting Roland get in on this.

MARTIN: Kitty. I want to read this. "My responsibility is to ensure our law and enforce fairly and evenly without preference or special treatment." This is what Governor George W. Bush said when he would not commute the sentence of Karla Faye Tucker when he was governor of Texas.

Now it is interesting he would say fair treatment. OK. You explain to me somebody who is not chief of staff on the V.P., who was to get this kind of ...

MALZBERG: The FALN terrorists got it. FALN terrorist got it from Bill Clinton! How is that?

PILGRIM: Let's get Charles in on this. Charles, go ahead. Charles?

GOYETTE: Kitty, I really remember because I was in talk radio at the time. I remember all of the conservative talk show hosts and the Kool-Aid drinkers, the Stepford talk show hosts, talking about the rule of law. And it's too damn bad Bill Clinton lied, and if you lie, you go to jail, you get perjury, obstruction of justice. Let me tell you something, the same talk show hosts, the same Stepford talk show hosts, now all of a sudden aren't so interested in the rule of law, are they?

BALLENTINE: Kitty ...

GOYETTE: This is a partisanship that Lou talks about on his show.

PILGRIM: Let's let Warren in on this. Warren, go ahead.

BALLENTINE: This is the one thing we're missing here. Again, I'm not just a talk show host. I'm a lawyer. The reason this happened the way it happened today is because Scooter Libby lost his appeal in the district courts. Now it's not unusual what President Bush did. In fact a lot of presidents -- President Reagan gave 392 pardons, I believe. It's not unusual. And him commuting someone is not unusual. He did it to three other people. What's unusual is that Scooter Libby never spent one day in jail.

GOYETTE: Not one.

BALLENTINE: That's what is making it hard for the American public. That's the problem here. When you have got somebody like Genarlow Wilson sitting in jail for 10 years and this president, this government and nobody in Georgia wants to step up to the plate, yeah, it's a hard pill to swallow, yeah.

PILGRIM: One thing this show is asking is why the border agents Ramos and Compean are not being afforded similar leniency?

BALLENTINE: Exactly.

MARTIN: Dick Cheney is not their boss, that's why. The bottom line is the president simply wants to protect his own. And that's what it boils down to. And it's laughable for Tony Snow to stand there and say it's so difficult, he has a wife and kids and he has lost his job. Remember Wed Hubbell? He went to jail for takings about $390,000 and ...

MALZBERG: (inaudible) if you recall, that's what he said.

MARTIN: And he walked out with $500,000 in consulting fees. Trust me, I think Scooter will probably end up being able to pay a $250,000 fine.

MALZBERG: Web Hubbell rolled over for Hillary Clinton. I think the president will eventually pardon the Border Patrol agents once this case sorts itself out a little bit. BALLENTINE: I will tell you, Kitty, my listeners right now, my listeners are interested to see if the president is going to take the next step and pardon him. I'm predicting here, like I did on my show, he is going to pardon this man. Furthermore, what I'm also predicting, this is all happening for a reason. This is not by chance. Don't be fooled to think this is by chance.

When you think about this administration and everything going on. If you connect the dots and you look at what's going on, Scooter Libby was nothing more than a fall guy here. And the American people deserve the truth. They deserve the truth. The problem with the politicians today, it's not authentic anymore.

PILGRIM: Go ahead, Charles.

GOYETTE: Kitty, I had Ambassador Joseph Wilson on the show today, who reminded us that the special prosecutor, Patrick Fitzgerald, pointed out there remains a cloud over the office of the vice president. We apparently are not going to get scooter Libby's testimony to clear up that cloud. So it is going to fall into the laps of Congress now. Americans, just as they turned to their congresspersons on the immigration bill ...

MALZBERG: Nobody was charged of leaking a CIA agent because it wasn't leaked. She didn't qualify.

GOYETTE: To the man -- the cloud being investigated that hangs over the head of the fourth branch of government.

MALZBERG: Right. The cloud. Evil. Darth Vader.

MARTIN: Where is Mr. Law and Order Steve? I'm missing him.

MALZBERG: Where was the crime.

PILGRIM: OK. Let's move on to another topic. That's Senator John McCain. Very timely.

MARTIN: Easy, partner.

PILGRIM: What do you think about his dwindling resources, your prediction?

MALZBERG: No surprise. With him taking the foreign immigration, which was not what the Republican base wanted to see. With him coming out against torturing quote/unquote or using harsh measures attorneys prisoners, if he knew there was a bomb that was going to go off, he said, oh, no, no, the lives we save aren't worth what the world will think. He's dead in the water as far as a presidential candidate.

MARTIN: Senator John McCain made the biggest critical mistake, that is he attached himself to the hip of George W. Bush, not only on immigration but also on the Iraq War. The two biggest issues going on in America. That's why he's failing.

PILGRIM: OK. Let's go to Charles. GOYETTE: Kitty, the American people got a real close look at the straight talk express on CNN when Senator McCain talked about the joys of having the double latte in the streets of Baghdad. And when the camera pulls back we see what straight talk is made of in the McCain campaign. We had a wake for him a week ago, his campaign is over.

PILGRIM: Go ahead, Warren.

BALLENTINE: Kitty, don't be surprised if you see a lot of people falling by the wayside in the next four weeks here. Because the American people are tired. We want straight talk and we want straight answers. We want somebody who is authentic. That's the key to winning this political race, in my opinion.

PILGRIM: Well, gentlemen, I think you all qualify on that score. Thank you very much.

MALZBERG: I can't run though.

PILGRIM: You can't run but we do appreciate your participation tonight. Warren Ballentine, Steve Malzberg, Roland Martin and Charles Goyette. Thank you.

Still ahead, the results of tonight's poll. More of your thoughts. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: OK. The results of tonight's poll. Ninety-nine percent of you believe President Bush should immediately issue pardons to Border Patrol agents Ignacio Ramos and Jose Compean who are serving prison sentences for shooting and wounding an illegal alien drug smuggler.

Well we do have time for some more of your thoughts on the president's decision to commute Scooter Libby's sentence.

Teresa in New York wrote to us. "Now that Bush has pardoned a politician who is a criminal, will he pardon our Border Patrol guards who are protecting this country?"

James in Connecticut. "It is beyond comprehension that Bush would commute the sentence for an official who has lied under oath but he won't pardon border guards who are trying to protect our country against drug smugglers, terrorists and people who are entering illegally."

Jeffery in Texas wrote to us and he says, "It is obvious the Bush administration does exactly what it wants without regard to the American people believe to be morally right. Two Border Patrol agents rot in prison for doing their jobs while Libby goes free."

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

And thanks for being with us tonight. Please join us tomorrow and for all of us here, thanks for watching. Good night from New York. THE SITUATION ROOM starts right now with Suzanne Malveaux. Suzanne?

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