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Lou Dobbs Tonight

Federal Judge Blocks Illegal Immigration Laws in Pennsylvania Town; Congress Seeks Perjury Investigation of Attorney General Alberto Gonzales

Aired July 26, 2007 - 18:00   ET

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


LOU DOBBS, CNN ANCHOR: Tonight: a stunning legal decision against a small town in Pennsylvania trying to curtail the impact of illegal immigration, a federal judge ruling against Hazleton's new ordinances. The mayor of Hazleton, Lou Barletta, and top official of the ACLU, one of the groups suing Hazleton, join us here tonight.
Also, rising anger after pro-business senators try to weaken a government program to help American workers whose jobs have been exported to cheap overseas labor markets. We will have that report for you.

And security breaches, long lines, canceled and delayed flights creating chaos at our nation's airports this summer. Is our civil aviation system on the brink of outright collapse? What does it all mean to air travelers?

We will have the full report, 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 Thursday, July 26.

Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

We begin tonight with the escalating political showdown over the conduct of Attorney General Alberto Gonzales. Leading Democrats today demanded a perjury investigation of the attorney general for giving Congress what they call half-truths and misleading statements.

Meanwhile, FBI Director Robert Mueller apparently contradicted congressional testimony by the attorney general earlier this week. Mueller said the government's terrorist surveillance program was the subject of the controversial meeting some three years ago. Gonzales said the meeting was about other intelligence activities.

Dana Bash has our report from Capitol Hill.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The truth, the whole truth.

BASH (voice over): It is a very serious charge. Senate Democrats say the attorney general may have committed a crime by lying to them under oath.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: Obfuscation, prevarication and untruths from the leader of this huge and critical department.

BASH: Democrats want a special counsel to investigate whether Alberto Gonzales perjured himself or misled Congress during several combative hearings. For example, Gonzales testified that he did not talk to his aides about an inquiry into fired federal prosecutors.

ALBERTO GONZALES, U.S. ATTORNEY GENERAL: I haven't talked to witnesses, because of the fact that I haven't wanted to interfere with this investigation.

BASH: But one of his top aides later said they did discuss it and it made her uncomfortable.

MONICA GOODLING, FMR. JUSTICE DEPT. COUNSELOR: He laid out his general recollection of...

UNIDENTIFIED MALE: Recollection of what, Ms. Goodling?

GOODLING: Of some of the process. And I just thought maybe we shouldn't have that conversation.

BASH: On another controversial issue, warrantless wiretapping, Democrats accused the attorney general of lying about the subject of a 2004 congressional meeting and contradicting himself about whether administration officials had disagreements about the surveillance program.

Gonzales last year:

GONZALES: There's not been any serious disagreement about the program that the president has confirmed.

BASH: Gonzales this week:

GONZALES: Mr. Comey had informed us that he would not approve the continuation of a very important intelligence activity.

SEN. CHARLES SCHUMER (D), NEW YORK: Those are not misleading. Those are deceiving. Those are lying.

BASH: Even GOP senators who want Gonzales to resign call a perjury investigation pure politics.

SEN. ARLEN SPECTER (R-PA), JUDICIARY COMMITTEE RANKING MEMBER: Senator Schumer is not interested in looking at the record. He's interested in throwing down the gauntlet and making a story in tomorrow's newspapers.

BASH (on camera): And Democrats launched another attack on the White House today, sending a subpoena to the president's political adviser Karl Rove to talk about his role in firing federal prosecutors. Dana Bash, CNN, Capitol Hill.

(END VIDEOTAPE)

DOBBS: The White House today declared the Congress is -- quote -- "a little more out of control every day." The White House again accused congressional Democrats of neglecting important issues, issues important to American citizens.

Suzanne Malveaux has our report from the White House -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, it really was a one-two punch today, but the White House is hitting back, the president really embracing a familiar strategy, that is to back Attorney General Alberto Gonzales.

His spokesman, Tony Snow, saying earlier today: It's a very complex issue, but the attorney general was speaking consistently. The president supports him. I think at some point this is going to be something where members are going to have to go behind closed doors, have a full discussion of the issues. But I can't go any further than that.

But, Lou, Republican strategists, friends of the White House who I talked do go further than that. They say this was not a good day for Gonzales. They say that his chances of survival are bleaker today than yesterday. They say they don't have very many friends, including people in this building.

But they say he does still have the support of the most important friend, and that is the president. In terms of the subpoena of Karl Rove, White House officials believe that they are on solid legal ground, that the president invoking executive privilege is protecting a very important principle to allow and have those conversations with advisers in confidence -- Lou.

DOBBS: Suzanne, thank you very much -- Suzanne Malveaux from the White House.

Turning now to the war in Iraq, the military today reporting the deaths of another eight of our troops; 66 of our troops have been killed so far this month in Iraq, 3,645 of our troops since the war began; 26,953 of our troops have been wounded, 12,115 of them seriously.

The month of July so far has been the least deadly month of the entire year for our troops in Iraq. The number-two commander in Iraq, frankly, General Ray Odierno, said the decline in the casualty rate is what he termed a sign of success in the surge strategy over the past month.

(BEGIN VIDEO CLIP)

MAJ. GENERAL RAYMOND ODIERNO, COMMANDER, MULTI-NATIONAL CORPS - IRAQ: This is what we thought would happen once we get control of the real key areas that are controlled by these terrorists. And so we will see if the trends continue. It's an initial positive sign.

(END VIDEO CLIP)

DOBBS: General Odierno also strongly criticized the role of Iran in Iraq. The general said insurgent rocket and mortar attacks against the Green Zone in Baghdad have become increasingly accurate because the insurgents are receiving better training inside Iran.

I'm joined now by General David Grange, one of the country's most distinguished former military leaders.

General, good to have you with us.

This is a good sign at least General Odierno can say that something is improving in Iraq, isn't it?

BRIGADIER GENERAL DAVID GRANGE (RET.), CNN MILITARY ANALYST: Well, it is a good sign, Lou, but it's only as good as it is over time. In other words, you're going to have spikes in casualties as a result of aggressive actions by U.S. forces where the enemy has to react because of the success.

And, so, the number of deaths is not really a true indicator but over time, I guess you can say it would be.

DOBBS: And over time we are approaching 4,000 dead in Iraq. The level of success to be determined, in your judgment, on this surge strategy. What will be the determination over the next few months as to whether or not it is succeeding, if not a reduction in American casualties both killed and wounded?

GRANGE: Well, somewhat in a reduction of casualties, both American and Iraqi, of course. But it's not a true indicator. But I think more importantly is can the life of the people within Baghdad, for an example, continue on the way it was, go to the markets, go to school, those type of things?

And the reports that are coming out now in different locales by subordinate commanders, they are saying that is indeed happening, that there are signs of improvement and people feel secure much more than they were, let's say, in 2006.

DOBBS: Very quickly, have you heard any reports from your friends, your former warriors in arms, your brothers in arms, that there is any political pressure to accelerate the surge strategy because of the political divisiveness here at home?

GRANGE: Yes, of course. There's always political pressure in all military operations. And, yes, that is right in the face of G.I.s trying to accomplish their mission. This thing is starting to work. There's some good news. It needs to run its course somewhat longer in order to show some substantial benefit. And I hope that happens.

DOBBS: General, we all do. Thank you very much, General David Grange. President Bush today signed a law to improve government oversight of foreign takeovers of U.S. companies. This law follows the government's failure to fully review the attempted takeover, you may recall, of port facilities by Dubai Ports World. That deal eventually collapsed after this broadcast was the first to report the national security risk posed by the takeover.

Coming up next here, a major legal setback after a court rules against Hazleton, Pennsylvania. We will have the full story.

Also, new moves in Congress to free imprisoned former Border Patrol agents Ramos and Compean.

Our civil aviation system, is it at the breaking point? What is the condition for American air travelers this summer? We will have the full report for you.

Senator Hillary Clinton and Senator Barack Obama escalating their confrontation in the battle for the Democratic presidential nomination -- all of that and more coming right up.

(COMMERCIAL BREAK)

DOBBS: Alarming news about air travel and the airline industry in this country. Increasing delays and cancellations are making this summer one of the worst ever for travel.

According to the Department of Transportation, June in fact one of the worst months for delays and canceled flights. More than 30 percent of all flights were delayed last month. More than a third. Cancellations more than doubled. And despite the long lines and security checks, air travelers aren't any safer.

Christine Romans has our report.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): At Long Beach Airport in California, weary travelers forced into the parking lot for two hours. All because of an unattended bag. Security breaches, long lines, mysterious weather and air traffic delays, it's so bad in June 20,301 flights never left the ground. Canceled flights are up 133 percent from last year. Excessive arrival delays longer than 45 minutes jumped 43 percent.

MEARA MCLAUGHLIN, SPOKESPERSON, FLIGHTSTATS: Whether it's security issues, whether it's weather, whether it's staffing issues at the airline or congestion at the airports or lost baggage, which is at an all-time high, I think the whole system is strained to the breaking point.

ROMANS: The Federal Aviation Administration blames weather for 70 percent of the delays and says airline traffic is up across the system. The FAA estimates there will be 740 million air travelers this year and forecasts one billion by the year 2015. But the antiquated air traffic control system still uses radar technology from the 1950s. Unions say too many jobs have been cut. Security threats make the screening process cumbersome and confusing. And no one is really sure if the longer lines mean better security.

DARRYL JENKINS, AVIATION CONSULTANT: What we need is really one level of security where the travelers always know what to expect at the airport. And if we had that rather than changing it around all the time, we would have much, much better security and actually lines would go faster.

ROMANS: That uneven security on display recently in an Albany sting. A bag of bomb parts was allowed through screening, the bottled water confiscated.

(END VIDEOTAPE)

ROMANS: For the record, bottled water is still forbidden through screening, but lighters are now again allowed on airplanes.

But what could be most troubling of all for travelers may be what they have no control over. That's airlines' use of foreign repair and maintenance stations that are not always supervised by FAA inspectors. That outsourcing, according to the Department of Transportation inspector general, Lou, is on the rise.

DOBBS: And contributory to the problems.

ROMANS: There are so many problems, Lou. I mean, the...

DOBBS: More than doubling the canceled flights over last year? What in the world is the explanation on the part of these airlines?

ROMANS: It's a little bit of everything. They say that it's staffing issues. They say that it's weather. But you compare June to June...

DOBBS: Well, don't you always have employees and don't you always have weather, even in the airline industry?

This is...

ROMANS: Aviation experts say it is absolutely a system-wide problem. Every part of the system has a problem from top to bottom. And they say it is going to only get worse from here.

In fact, the aviation experts I talked to today, none of them said that they travel by air themselves from June -- end of May to August.

DOBBS: Aviation officials and the experts you talked with said they don't even travel during those months?

ROMANS: Not the aviation officials -- not the officials from the government. I'm sure they are doing plenty of traveling. But the aviation consultants and experts I talked to, they don't travel themselves in the summer.

DOBBS: Well, maybe there's a little clue for all air travelers, to the best that we can. Just simply curtail travel.

(LAUGHTER)

DOBBS: Is there any movement afoot in the airline industry, on the part of the airline carriers, the air carriers, to perhaps think once again of the people buying those tickets as their customers, their clients to be taken care of, rather than as potential terrorists? Maybe that would help a little. What do you think?

ROMANS: Darryl Jenkins, who I was talking to today, who was in the piece, he said that these airlines are swimming as fast as they can. They really can't even look too far out at this point.

DOBBS: Well, there's one of the problems. They are in the airline business and they are swimming.

(LAUGHTER)

DOBBS: All right, Christine, thanks -- Christine Romans.

Well, time now to take a look at some of your thoughts. Many of you have been writing in about my interview -- and I mean a lot of you -- last night with the president of La Raza, Janet Murguia.

Lori in Ohio write in to say: "Lou, for the first time in a long time, I had to turn you off. It's not that I didn't agree with you. I just could not stand the disrespect you were showing to your guest, Janet Murguia."

Well, I'm sorry you feel that way.

And Kevin in Michigan: "Lou Dobbs is the best thing that has happened to this country. He just gave it to that La Raza woman. He was actually too polite. She is incredibly rude, hostile, and full of lies."

She is actually, by the way, a very nice lady with a very tough job.

And Don in California: "A wave of hate?" -- that the accusation of one the senior officials of La Raza, claiming that that's the reason amnesty failed in the Senate. But he goes on to say: "Racist? What? Don't these people understand that we really love them? We would love them to be here legally. We would love our government to make our southern border secure. It's all about love."

And Chad in Florida: "Lou, how can a representative from a group named 'The Race,' La Raza, accuse anyone else of racism?"

William in New York said: "As a Hispanic American, let me state without equivocation that Janet Murguia, the president of La Raza, does not speak for me, nor I suspect the majority of Hispanic Americans who entered this country legally." We will have more of your thoughts coming up here later in the broadcast.

There's new hope tonight that former Border Patrol agents Ignacio Ramos and Jose Compean may soon be freed from prison. The House of Representatives last night approved an amendment blocking federal funds from being spent on their incarceration.

As Casey Wian now reports, congressman after congressman stood and voiced their support for these two men.

(BEGIN VIDEOTAPE)

REP. VIRGIL GOODE JR. (R), VIRGINIA: If you believe that our borders should be secure, and if you believe that those who enforce our borders should be stood up for, you need to vote yes for this amendment.

CASEY WIAN, CNN CORRESPONDENT (voice-over): After an hour of intense debate...

UNIDENTIFIED MALE: The ayes have it.

WIAN: ... the House passed by voice vote an amendment that could free former Border Patrol agents Ignacio Ramos and Jose Compean.

REP. DUNCAN HUNTER (R-CA), PRESIDENTIAL CANDIDATE: They have been given time in excess of the average convicted murderer in the United States. That's what makes this case so extraordinary.

WIAN: The amendment, sponsored by (r)MD-BO¯Ted Poe, Duncan Hunter and Tom Tancredo, is attached to a bill funding the nation's federal law enforcement agencies. It prohibits federal money from being spent to enforce the 11- and 12-year sentences Ramos and Compean are now serving for shooting and wounding an illegal alien drug smuggler.

REP. SAM FARR (D), CALIFORNIA: I think that this amendment and the Congress bringing this up, in my opinion, is an abuse of power.

WIAN: If approved by the Senate, the bill would force President Bush to either block all funding for the Justice and Commerce Departments next year or allow the agents to go free.

REP. TED POE (R), TEXAS: The president mentioned Scooter Libby had been punished enough and suffered enough, and he had not even been in custody. Both of these men have been in custody and mostly in solitary confinement now for almost seven months. And so, we would just like to see their sentences commuted. This is one way to do that and preventing federal funds, taxpayer money, to be used to incarcerate them.

WIAN: There are questions, however, about the amendment's constitutionality.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: This amendment could set off a constitutional confrontation, because Congress has the right to decide how money is spent. But the executive branch has the right to decide who gets prosecuted and how those people are treated in jail.

WIAN: Supporters say if the amendment succeeds, Ramos and Compean could be set free this fall.

Casey Wian, CNN, Los Angeles.

(END VIDEOTAPE)

DOBBS: That sounds to me, if I may say, like a confrontation between the executive and the legislative that I would be delighted to see before the Supreme Court, one well worth having.

And action on the Ramos and Compean case continues in the House. Next week a House committee will hold hearings on the prosecution of these two former agents. And we, of course, will be in Washington, D.C., covering those very important hearings.

The Mexican drug money manager who was, if you can call him that, captured in Maryland earlier this week is scheduled to appear in court again tomorrow. Now the Mexican government says it will use the $206 million that was seized at his home to fight drug addiction and organized crime. It is the largest amount of drug money ever confiscated.

Up next here, Senator Clinton's response to Senator Obama's charge. She's Bush/Cheney-lite, says the senator from Illinois.

And the ACLU fighting the will of a small community. Who is right, and who will prevail? We will be talking with two of the principals in this contest.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Well, American consumers are in real trouble, a government that is not protecting them and now stunning new accusations that the Food and Drug Administration is trying to muzzle its own employees. Those charges come as the FDA continues to face sharp criticism over its failure to protect American consumers and our food supply.

Kitty Pilgrim has our report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): FDA employees rated their own agency with failing grades at a House Food Safety Committee hearing. On a scale of one to 10, they rated the FDA five or below.

CAROL HEPPE, CINCINNATI FDA: I would probably give it a five because we do not have enough resources. BELINDA COLLINS, DENVER FDA: I would probably give it a three or four. However, if we lose the expertise that we have in the field right now, I would give it probably a minus-two.

PILGRIM: Now those employees are being slammed by their own boss. An FDA associate commissioner, Margaret Glavin, blasted a memo to the entire staff: "I am deeply saddened by this assessment, because I know it not an accurate reflection of the FDA's Office of Regulatory Affairs' performance, adding, "I know many of you were also disappointed, and perhaps even angry, at this erroneous assessment."

The committee chairmen, Congressmen Bart Stupak and John Dingell, wrote an outraged letter to the FDA Commissioner Andrew von Eschenbach: "Despite your personal assurances to this committee offered under oath that you would not countenance retaliation against FDA employees testifying before Congress, one of your senior staff immediately began a campaign of intimidation and retaliation."

Congresswoman Rosa DeLauro asserts there's a strong FDA pattern of denial and intimidation.

REP. ROSA DELAURO (D), CONNECTICUT: Intimidation is unacceptable. But you begin -- that intimidation is connected with the public health, that is outrageous. And that is why that culture and that agency has got to change.

PILGRIM: She wants the appropriations bill to create a performance plan for the agency.

(END VIDEOTAPE)

PILGRIM: Now, the assessment of the FDA employees is completely in line with a GAO report last January that found the food inspection system is at high risk. This is an assessment that neither the USDA nor the FDA secretaries have addressed -- Lou.

DOBBS: Well, Congress and obviously Congressman Stupak, Congressman Dingell, Congresswoman DeLauro among those who are driving the initiative to take some serious oversight of this agency and make it work.

The idea that this agency is intransigent -- it has been confronted with criticism on almost every conceivable front. What in the world is going on?

PILGRIM: Well, it's very funny, because this memo goes on to say, let's continue to do an excellent job, as we have been doing. And it's complete denial.

DOBBS: It's -- well, denial. It is utterly maddening that this White House is tolerating American consumers at risk, whether it's food imports, inspections of food, whether it is the drug agency responsibilities in pharmaceuticals. It goes on and on with their own employees saying we have got to change the culture of this agency and its effectiveness.

Thank you, Kitty. Follow this one through, as I know you will.

As we have reported, Senate Democrats are accusing Attorney General Alberto Gonzales of perjury. That is the subject of our poll tonight: Do you believe Attorney General Alberto Gonzales should now just simply resign, yes or no? Cast your vote at LouDobbs.com. We will have the results here later.

Up next: new tensions between Senator Clinton and Senator Obama. It's not pretty.

And a very important court ruling affecting hundreds of communities, if not thousands, across this country. My guests tonight, among them, the mayor of Hazleton, the city at the center of this legal battle, and one of the leading officials with the ACLU that prevailed in its suit against the community.

We will be right back with that and a lot more. Stay with us.

(COMMERCIAL BREAK)

DOBBS: A federal court today ruled that Hazleton, Pennsylvania's Illegal Immigration Relief Act is unconstitutional.

That law aimed to hold landlords and employers responsible if they did business with illegal aliens. More than 120 communities across the country have passed similar legislation and local laws in the fight against the impact of illegal immigration, a crisis caused by the federal government's unwillingness to and enforce border security and existing U.S. immigration law.

A federal court ruled that Hazleton's Illegal Immigration Relief Act is unconstitutional.

Bill Tucker has our story.

BILL TUCKER, CNN CORRESPONDENT: Lou, Judge Munley wrote a carefully worded and carefully argued 200-page plus ruling. But it really came down to just one word -- unconstitutional.

(BEGIN VIDEO TAPE)

TUCKER (voice-over): The mayor of Hazleton was clearly disappointed.

MAYOR LOU BARLETTA, HAZLETON, PENNSYLVANIA: I'm very disappointed in Judge -- that Judge Munley has ruled against all legal residents of the City of Hazleton. This fight is far from over. I have said it many times before, that Hazleton is not going to back down.

TUCKER: The court ruled that the City of Hazleton has no right to enact any ordinances dealing with illegal immigration because they conflict with the supremacy clause of the United States constitution, a clause which says that a state cannot pass laws which interfere with or violate federal law.

Federal District Court Judge Munley wrote: "Whatever frustrations the City of Hazleton, Pennsylvania may feel about the current state of federal immigration enforcement, the nature of the political system in the United States prohibits the city from enacting ordinances that disrupt a carefully drawn federal statutory scheme."

He went on to add: "Even if federal law did not conflict with Hazleton's measures, the city could not enact an ordinance that violates rights the constitution guarantees to every person in the United States, whether legal resident or not."

The ruling cheered the plaintiffs, who immediately claimed it sends a clear message to other communities across the country.

DR. AGAPITO LOPEZ, HAZLETON LATINO ASSOCIATION: From farmers' rights in Texas to Florida, there's about 120 cities that have been waiting to see if they can enact their own immigration laws. This is something that pertains to the Congress.

GEORGE BARRON, PLAINTIFF'S ATTORNEY: We hope other municipalities who have enacted similar ordinances will take this as -- will heed this warning and will eliminate those ordinances as soon as possible.

TUCKER: But the City of Hazleton is not done yet.

KRIS KOBACH, ATTORNEY FOR HAZLETON: With all due respect to Judge Munley, this 204-page opinion begs for an appeal. This decision is extraordinary. This decision is activist and it is a decision that will not stand up on appeal, nor is it entirely unexpected.

TUCKER: The lawyers pointing out that, among other things, that the judge declares "no one is illegal until an immigration judge finds them illegal."

(END VIDEO TAPE)

TUCKER: Lou, the case will now go to the 3rd Circuit Court of Appeals in Philadelphia. Attorneys for both sides estimate that it will probably be at least eight to nine months before the case is heard -- Lou.

DOBBS: Well, to my knowledge, Bill Tucker, that's the first time I've ever heard any judge say that no -- no one is in this country illegally until an immigration determines that.

TUCKER: Well, he spent seven pages of his 206-page ruling explaining why he feels that way.

DOBBS: Well, this is -- it is, as the other attorney pointed out, quite a remarkable document.

Thank you very much.

TUCKER: You're welcome.

DOBBS: Bill Tucker in Hazleton, Pennsylvania.

And the mayor of Hazleton, Lou Barletta, joins me now. Good to have you with us, Mr. Mayor.

BARLETTA: Hi, Lou.

Nice to be here.

DOBBS: You're disappointed at this decision.

Are you surprised?

BARLETTA: No, I'm not surprised, Lou.

We are, obviously, disappointed, but not surprised. The judge has really shown throughout the course of this trial that he was not in favor of what the City of Hazleton was doing. And I say that just by the fact that some of the illegal aliens who were suing the City of Hazleton who have gone by the name of John and Jane Doe, their identities were protected by the judge. They did not have to show up for the trial. I never saw the people who were suing us. And, obviously, I feel that this was an injustice not only to the city, but to those around the country.

DOBBS: Right. It's -- that is sort of remarkable but it also -- is the situation what you've said all along, you're going to appeal.

What's your next legal step?

BARLETTA: Well, we're going to appeal to the 3rd Circuit Court of Philadelphia, where we feel that this will be overturned. And from there, Lou, I'm prepared to fight this all the way to the Supreme Court.

Today was a slip and not a fall, and this battle is far from over.

DOBBS: There was this -- we last reported from Hazleton -- there was a general belief expressed to us, as we were there in the community, that this district court judge, that there was way in the world, given his political -- his perceived political viewpoints and ideology -- that he could possibly rule in the favor of the city.

The idea that this would be politically based, do you reject that, even though you're disappointed with the decision?

BARLETTA: Well, you know, I would hope that that wouldn't be the case, Lou. But it's -- it's almost amusing to me that the judge would say we can't do what the federal government should be doing when, in fact, the federal government is not doing it. And if they were doing their job, obviously, I wouldn't have to take this stand.

But I'm going to continue to fight for the people of this community and other cities around the country.

DOBBS: Mayor Lou Barletta, we thank you very much.

BARLETTA: Thank you. DOBBS: And, of course, we'll be following the progress of the next legal development, as you pursue your course.

BARLETTA: Thanks, Lou.

DOBBS: Up next here, I'll be talking with one of the heads of the ACLU that sued Hazleton.

Also, pro-business senators who are trying to weaken a program that would help American workers and their families.

And Senator Clinton responds to Senator Obama's charge. That's after Senator Obama responded to her charge. The latest charge was Obama's. We'll tell you all about it and tell you how this little feud is going here next. It's getting to be quite something.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: The American Civil Liberties Union one of the groups suing the City of Hazleton and today winning a legal victory.

The legal director of the Pennsylvania ACLU joins is Vic Walczak.

He joins us tonight from Pittsburgh.

Good to have you with us.

VIC WALCZAK, ACLU: Good to be here.

Thank you, Lou.

DOBBS: We'll begin with a congratulations.

And at this point, what do you think the impact of this decision will be?

WALCZAK: Well, we hope that this decision sends a blaring red light to any local elected officials around the country who may be thinking of passing a similar law. You know, I found it curious both Mayor Barletta and his lawyer were so soundly attacking not just Judge Munley's opinion, but also Judge Munley himself, and suggesting there was politics involved.

You know, this is the first court to rule on one of these ordinances after having had a full trial. We had a two week trial back in March...

DOBBS: Right. Nationwide. Nationwide, we should point out.

WALCZAK: Right, nationwide.

But there have been six or seven other decisions by judges around the country, on a preliminary basis...

DOBBS: Yes.

WALCZAK: ...and they -- every single one of them has ruled the same...

DOBBS: Right.

WALCZAK: ...and has rejected the arguments...

DOBBS: Rt.

WALCZAK: ...that, you know, the mayor thinks are so strong for them.

DOBBS: Well, in fairness, not each of those ordinances is the same. There are now some very similar to that and -- as Hazleton's.

But you say not political. Mayor Barletta saying that this judge managed, in a 207-page opinion, to include concerns about whether the government of Mexico would get mad and would have an influence on U.S. foreign policy.

I mean help me out there.

WALCZAK: Yes...

DOBBS: Why he would he do that?

WALCZAK: Well, you know, with -- again, with all due respect to Mayor Barletta, that is testimony that was in the record. And, in fact, it came in to show that immigration requires a careful calibration between lots of interests, including foreign policy, the national economy, individual rights.

DOBBS: Well, Vic, if I may say...

WALCZAK: And those are considerations...

DOBBS: If I may say, balderdash. U.S. immigration law and the U.S. constitution should not be swamped by that sort of absolute balderdash.

WALCZAK: Well, it...

DOBBS: I mean that's absurd.

WALCZAK: No, I'm...

DOBBS: Are you saying that there has to be reciprocity and mutuality...

WALCZAK: No...

DOBBS: ...in immigration law before it can be enforced?

You know better than that.

WALCZAK: No, I'm sorry, Lou. I -- I mean you asked me to come on this show.

DOBBS: Sure.

WALCZAK: You asked me a question and I thought you wanted to hear the answer. So...

DOBBS: Well, I want to hear the answer.

WALCZAK: ...it...

DOBBS: I just want to hear you make some sense on the thing.

WALCZAK: Well, if you'd let me finish...

DOBBS: OK, then please.

WALCZAK: ...and not distort what I'm saying...

DOBBS: Please, please.

WALCZAK: Right.

DOBBS: Please.

WALCZAK: And I'm sorry, you know...

DOBBS: No, no. Please.

WALCZAK: I know I'm a guest...

DOBBS: Hey.

WALCZAK: I'm a guest on your show.

Look, the point is...

DOBBS: Go for it, partner.

WALCZAK: The point is, the reason that it is so important for the federal government to be making decisions about immigration is that it affects a lot of national interests like foreign policy, like how are you going to affect the national economy?

How are you going to deal with individual rights?

And Congress has to calibrate those things. And, in fact, it is those considerations that have prevented Congress from coming up with any kind of legislation.

The point the judge is making, which was reflecting...

DOBBS: Whoa, whoa, wait, wait, wait, wait, wait...

WALCZAK: ...which is reflecting argu...

DOBBS: now you're putting forward a political opinion and I'm asking you for a -- a few legal -- a legal analysis.

WALCZAK: Well, the legal opinion...

DOBBS: So let's go back to your political point now.

The ACLU would recommend to those communities -- and I know that the ACLU is every bit as concerned about the impact of illegal immigration, just as concerned as any American in this country about the fact our borders are not secure, that a million illegal aliens, as many as a million illegal aliens are entering this country illegally.

What would be the ACLU's advice and counsel -- legal advice and counsel -- to mayors and city councils and small towns all over the country who, as you say, might be contemplating an ordinance like this, what would you have them do?

What's your best counsel to them to deal with the impact of a government that will not enforce existing U.S. immigration laws, the impact of a government and an administration that will not secure the borders, even though we're in a global war on terror?

WALCZAK: Right.

First of all, Lou, I'm a -- I'm a trial lawyer. I'm a constitutional lawyer. I'm probably not the kind of immigration expert that you are. And I'm going to talk about a position on the borders. The ACLU has not taken a position on that.

In terms of what...

DOBBS: You could have fooled me.

WALCZAK: Well -- no, I mean I think that's -- that's accurate, that we have not taken a position on what to do with the borders.

DOBBS: I understand.

WALCZAK: You know, my job in this case was to look at this local ordinance...

DOBBS: Sure.

WALCZAK: ...and try to help the judge determine whether or not it's constitutional or not.

DOBBS: Right.

WALCZAK: We think it's very difficult for municipalities to...

DOBBS: Well, let me ask you this, then, if you want to defer on that.

What counsel would you give to Americans...

WALCZAK: Oh, I can't answer it.

(LAUGHTER)

DOBBS: I'm sorry?

WALCZAK: I thought I was trying to answer that.

DOBBS: Well, I thought you had. If you hadn't, please, go ahead.

WALCZAK: What local municipalities need to do is first put pressure on their Congressional representatives to try to come up with some kind of solution. And I know that's partly a dodge.

The second point that's really important is that I think if we're going to have a discussion about immigration in this country, it's very important...

DOBBS: All right...

WALCZAK: ...that we deal with facts and not myths and propaganda.

DOBBS: Oh, partner, I couldn't agree with you more.

So let's term the question just a little differently...

WALCZAK: OK.

DOBBS: ...since you have only partially dodged the -- the question. And this I know you won't want to dodge.

Is there any legal recourse to the American people, U.S. citizens, against a government and an administration, executive departments, particularly at Homeland Security, the Justice Department, when they refuse to enforce existing U.S. law, when they refuse to enforce the border?

On this very day we're watching the National Guard be withdrawn by half from our borders, even though illegal immigration is unabated.

WALCZAK: Right. I mean, ultimately, I'm -- I'm sorry, I don't know whether there is a legal cause of action. The bottom line is that accountability for the president, for members of Congress, lies at the ballot box and, you know...

DOBBS: Well, that's certainly one of them.

WALCZAK: Right.

DOBBS: But we -- we don't want to keep you lawyers out of work. We wouldn't want that to...

WALCZAK: Oh, I...

DOBBS: ...you to be idle.

WALCZAK: I wouldn't worry too much about that.

DOBBS: How about this? How about this -- you're a volunteer organization. You're worried about -- the American Civil Liberties Union.

WALCZAK: Right.

DOBBS: Are our civil liberties being violated by a government that will not enforce border security, that will not enforce existing law, that will not protect local communities and their citizens from the impact of those who have violated the law and from the very need to do so because it is, fundamentally, a failure, a dereliction of duty on the part of the federal government?

WALCZAK: Well, I think, you know, the problem with a legal cause of action there comes from your conservative colleagues on the Supreme Court who have said...

DOBBS: My conservative colleagues?

I'm neither a conservative nor -- nor a justice.

WALCZAK: Well, they are -- well there are -- the conservative folks in this country have helped the Supreme Court and other courts rule that the government is not a guarantor of people's safety. So, you know, I think, frankly...

DOBBS: I'm sorry.

Say that again.

(CROSSTALK)

WALCZAK: The government cannot be held accountable as a guarantor of people's safety.

DOBBS: Yes.

WALCZAK: So in terms of the legal (INAUDIBLE)...

DOBBS: I don't think there are many people in this country looking for a guarantee on either the issue of homeland security, border security or illegal immigration.

But you know what they would like if they can't get a guarantee or a warranty?

They sure would like a best effort.

Do you think we're getting that?

WALCZAK: You know, it -- it does not appear that the federal government is -- I mean I -- you know, I think it's a difficult political situation, Lou.

DOBBS: Yes...

WALCZAK: ...and what's ironic is that some of the... DOBBS: Well, there should be.

Look, can we agree on this as we end?

WALCZAK: Yes?

DOBBS: there should be nothing political about a president and a department head's responsibility to enforce the law. There should be nothing political about a Congress and a president preserving the safety and the security of the American people and enforcing immigration laws.

Can we agree on that?

WALCZAK: Amen, Lou.

DOBBS: Amen, brother.

WALCZAK: How's that?

Yes.

DOBBS: Thank you, sir.

WALCZAK: Good.

Thank you.

DOBBS: Good to have you with us.

WALCZAK: Thank you.

DOBBS: A reminder now to vote in our poll.

Do you believe U.S. Attorney General Alberto Gonzales should just simply resign?

Yes or no?

Cast your vote at loudobbs.com.

We'll have the results for you in just a few moments.

That's, by the way, Mr. Walczak, our conservative question of the day.

And if you want to call the White House and check out my independent populist credentials, I'm sure they'd be glad to give you an answer.

Coming up next, pro-business senators and Congressmen.

And Wolf Blitzer.

He's up next.

WOLF BLITZER, HOST, "THE SITUATION ROOM": Thanks so very much, Lou.

New allegations tonight that our tax dollars could be funding what's being described as slave labor in the construction of the new U.S. Embassy in Baghdad. The Justice Department now investigating.

And Senator Barack Obama and Senator Hillary Clinton are engaged in a verbal slugfest right now. Tonight, you'll see their top aides battle it out, and it becomes rather fiery.

Fidel Castro is noticeably absent from Cuba's annual Revolution Day celebration. His brother is offering a deal to the U.S. with one big condition. We're going to have a report from Havana.

And a catapult into the limelight because of his psychic ability?

Jeanne Moos tells us this most unusual story.

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

DOBBS: After they finish in Iraq looking for the slave labor -- that slave labor evidence, perhaps they could drop by a number of Southwestern border states and see about the impact of illegal immigration and illegal employers.

Coming up next, here pro-business senators threatening to weaken a program designed to protect American workers and their families -- victims of overseas outsourcing. That story coming up.

And fighting words between Senators Obama and Clinton. We'll tell you all about it here next.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: The Senate last night voted for an emergency influx of cash to help secure our borders. The Senate voted 89-1 to add $3 billion to a homeland security bill for next year. That money would then go to hiring more Border Patrol agents and buying equipment for mostly along our Southern border with Mexico, because that's where mostly we have a really big problem.

The additional money, however, isn't a sure thing, as they never are in Washington. The president has already threatened to veto the legislation because of its high cost. And that was before the extra $3 billion was added for border security.

I love Washington.

And two senators who are running for the presidency escalating their war of the words. Senator Clinton responding to Senator Barack Obama's charge that she is Bush-Cheney Lite.

Bill Schneider has our story on the escalating tension -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Right. Obama versus Clinton, next round.

Today, Barack Obama defended his position that he would meet with leaders of unfriendly countries like Syria and Iran, unlike President Bush and Vice President Cheney, and, he insinuated, Hillary Clinton.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), ILLINOIS: I'm happy to look them in the eye and say what needs to be said. I'm happy to tell them what I think. I'm not going to avoid them. I'm not going to hide behind a bunch of rhetoric. I don't want a continuation of Bush-Cheney. I don't want Bush-Cheney Lite. I want a fundamental change.

(END VIDEO CLIP)

SCHNEIDER: Obama's raising a lot of money, but his poll numbers have not moved much. So he's raising the rhetoric -- I'm for fundamental change, she's a Washington insider too tied to the status quo.

Now her response?

Well, here's what she said to CNN's John King today.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: I've been called a lot of things in my life, but Bush-Cheney Lite has never been one of them before. And, you know, I think it's getting a little bit silly. Let's stay focused on what we would do to pursue a new form of diplomacy. We obviously have a difference about the role that the president should and would play in such a new diplomatic endeavor.

(END VIDEO CLIP)

SCHNEIDER: Now, Clinton is stressing her strength, which is experience, and Obama's weakness, which is his lack of it.

Neither one can afford to back down because then they would be acknowledging a weakness -- Lou.

DOBBS: Well, I guess that's one interpretation. The other is that what Obama said and what Senator Clinton said and what Senator Obama then replied and then Clinton said -- I mean, what's interesting is these are two Democrats taking each other out instead of the administration.

So what's that about?

SCHNEIDER: What's that about is it's a big prize there. They're in a very deep, deep and intense competition for first place. He's stuck in the polls in second place. The only way he can win is to pull her down. So he's doing that.

And she sees a weakness in him, which is his lack of experience. So when he made that comment in the debate, she went right for it and said that's his weakness and I'm going to go for it.

DOBBS: Bill Schneider, we thank you very much, from Washington.

SCHNEIDER: OK.

DOBBS: As always.

There's mounting outrage tonight after a number of senators tried to weaken a federal program designed to help unemployed workers in this country who have lost their jobs to outsourcing.

Lisa Sylvester has the story.

(BEGIN VIDEO TAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Sue Ribbens and her husband are trying to remain optimistic. She was laid-off when the Baker Furniture distribution center in Michigan shut down in December. Operations shifted overseas and to North Carolina.

SUE RIBBENS, LAID-OFF WORKER: You hear so much nowadays about people losing their houses, you know, because they lost a job and they, you know, they're just losing everything. And that is -- it's scary. It really is.

SYLVESTER: Ribbens and her co-workers applied for the Federal Trade Adjustment Assistance Program that provides relief to laid-off manufacturing workers. But the petition was denied.

The Department of Labor classified them as service workers because they delivered the goods and didn't make them. Legislation introduced in Congress would broaden the program.

SEN. OLYMPIA SNOWE (R), MAINE: Well, we can expect to lose more than three million jobs by 2015. So it is very, very important that service sector related job losses are covered under Trade Adjustment Assistance.

SYLVESTER: But convincing Congress is an uphill climb.

UNIDENTIFIED MALE: To expand it to all of the other sectors that are actually growing jobs, it just seems a little backwards. And it's certainly going to cost a lot of money.

SYLVESTER: Other critics, like Senator Charles Grassley, want to tie trade assistance to fast track authority, which expired last month. That authority allows the White House to largely bypass Congress negotiating trade deals. But proponents of trade assistance, which is up for renewal in September, say it should not be held hostage because of a provision that benefits big business.

UNIDENTIFIED MALE: Workers who lose their jobs after that date could be denied assistance. And, again, this could be a major blow to people who are facing a rather substantial financial burden.

SYLVESTER: For Sue Ribbens, finding a new job will be difficult. She's taking a medical transcription course. But the unemployment rate in Michigan is now at 7.2 percent.

(END VIDEO TAPE)

SYLVESTER: The Senate legislation would not only expand the program to service workers, it would also give them additional help covering health care premiums and it would streamline the process, making it easier for entire industries to apply for assistance -- Lou.

DOBBS: Lisa, it is remarkable that there would be any discussion about providing assistance -- and by the way, let's be clear. The federal trade assistance is -- is not that much money. It's about, the last I looked, the program is something under $300 million nationwide. The number of people that have lost their jobs to outsourcing -- the idea anybody would even think about fighting that legislation.

But the other idea, that anybody would think about even continuing these idiotic trade policies that have been driven by this administration and the previous is -- the previous administration -- is just, to me, god awful.

SYLVESTER: Well, and that's why so many people do not want to see trade promotion authority tied to this program, which is supposed to benefit workers -- Lou.

DOBBS: Absolutely.

Thank you very much, Lisa Sylvester, from Washington, my favorite town still.

Up next, the results of our poll. More of your thoughts.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of our poll tonight -- 95 percent of you say U.S. Attorney General Alberto Gonzales should resign.

Time now for some of your thoughts.

Jene in New Mexico: "Thank goodness you're reporting on the Hazleton, Pennsylvania situation, where illegal aliens have more legal rights than the U.S. taxpayers, who fund much of their social wants and needs."

Ellen in New York: "Lou, my small check is in the mail this afternoon to assist Hazleton in their appeal process. Hopefully, millions of other Americans will follow."

We thank you for being with us tonight.

Please join us here tomorrow.

For all of us at ABC News, thank you for watching.

Good night from New York. "THE SITUATION ROOM" begins now with Wolf Blitzer.

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