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Lou Dobbs Tonight

Driver's Licenses For Illegal Aliens?; Mattel Apologizes to China

Aired September 21, 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, a stunning apology by the world's biggest toy brand over dangerous imports, this time not to American consumers, but to communist China.
Also, outrage after the state of New York allows illegal aliens to apply for driver's licenses. Critics say it's yet another assault on laws by our laws of a pro-amnesty lobby.

And tensions rise sharply on the presidential campaign trail. Three of the nation's best political analysts and strategists will join me -- all that, much more, straight ahead tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Friday, September 21.

Live from New York, sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening, everybody.

We begin tonight with new evidence that Iraq appears incapable of taking over security from our troops. A senior U.S. commander today said Iraqi forces are in the lead in less than 10 percent of Baghdad neighborhoods and less than half the Iraqi capital is under the control of U.S. or Iraqi troops.

On Capitol Hill today, Senate Republicans blocked a new attempt by Democrats to set a deadline for the withdrawal of our troops.

First, Jamie McIntyre reports from the Pentagon -- Jamie.

MCINTYRE: Well, Kitty, the U.S. commander in charge of U.S. troops in Baghdad continued to voice optimism today, even as he gave a report on progress in Baghdad that was somewhat disappointing.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: You're clear to engage building 223-Charlie with Hellfire.

MCINTYRE: South of Baghdad this week, a U.S. airstrike takes out a suspected insurgent bomb factory with a one-two punch. But making Baghdad's streets safe is not something that can be done from the sky.

MAJOR GENERAL JOSEPH FIL, COMMANDER, MULTI-NATIONAL DIVISION BAGHDAD: In this theater, combat power is certainly measured by boots on the ground. MCINTYRE: Thanks to the surge, Major General Joseph Fil has a lot of those boots, two-and-a-half extra brigades, nearly 9,000 additional soldiers. Still, progress is frustratingly slow.

FIL: It's been a long, tough fight. We have reduced al Qaeda down to where they're dug in, in several neighborhoods.

MCINTYRE: Eight months after the surge began, less than half, 46 percent, of Baghdad is under control, with Iraqi forces in a leading role in only 8.2 percent of neighborhoods. Most of west Baghdad is still a battle zone, with 16 percent of city neighborhoods rated as in disruption.

So, even while arguing the trends are good, attacks in the Iraqi capital are at a 10-month low, the Baghdad commander concedes, when the surge end, the fighting won't. There are some areas he just can't secure.

FIL: Sadr City, for example, is an area in which we do not have extensive forces right now. We have one corner of it.

MCINTYRE: It's the same old problem. Iraqi troops are better, but too few. Fil says his main focus right now is targeting factories like this one, which make the IEDs that are still the biggest killer of his troops. Baghdad has been designated a top priority to get the new MRAP armored vehicles, but none has yet arrived. The Pentagon says they will get there by the end of the year, just as some troops are leaving.

(END VIDEOTAPE)

MCINTYRE: For all of Baghdad's problems, General Fil remains guardedly optimistic, saying that he senses a real shift in the mood of the city residents. He noted that 8,000 or so have volunteered to defend their homes and he said that could be a catalyst for what he called enduring change -- Kitty.

PILGRIM: Thanks very much, Jamie McIntyre.

In Iraq, two more of our troops have been killed, one in combat and the other in non-battle-related incident. Now, 52 of our troops have been killed so far this month, 3,794 of our troops killed since the war began, 27,936 troops wounded, 12,537 seriously.

The political battle over Iraq continued on Capitol Hill today. Once again, Democrats failed to convince the Senate to set a deadline for the withdrawal of our troops. Democrats appear incapable of winning the support of Republicans who are skeptical about the president's conduct of the war.

Jessica Yellin reports from Capitol Hill.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: On this vote, the yeas are 47. The nays are 47. The amendment is withdrawn. JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT (voice-over): For Democrats, it's zero for three, three Iraq votes, three losses in a week. Today's defeat, an amendment that would have required most U.S. troops leave Iraq in nine months. The co-sponsors of today's failed measure admit:

SEN. CARL LEVIN (D-MI), ARMED SERVICES COMMITTEE CHAIRMAN: Obviously, the vote is not what we had hoped it to be. We had hoped that we would have actually picked up a little ground.

YELLIN: But insist they're not going to give up.

SEN. JACK REED (D), RHODE ISLAND: Now, we will renew this fight and we will continue to push on.

YELLIN: They're not-so-new plan, attract more Republican votes with softer language, setting a goal date for withdrawal, rather than a hard deadline, but that kind of compromise was considered and rejected by Democratic leaders earlier in week.

Across the aisle, moderate Republicans who would like to see an Iraq proposal they can get behind are lashing out at the Democrats.

SEN. GORDON SMITH (R), OREGON: I, frankly, am disappointed in the management of the 110th Congress. It seems to be all politics all the time.

YELLIN: And Republican Lamar Alexander today said, "Harry Reid has called up the same amendments for the same votes, and gotten the same results, more gridlock on Iraq."

At least one Republican who supports the current strategy is gloating. At an event today, Senator McCain told anti-war hecklers:

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Well, my friends, we beat you yesterday. We beat you the day before. We will beat you today, and we will beat you tomorrow.

(CHEERING AND APPLAUSE)

MCCAIN: We won't choose to lose. We won't choose to lose this conflict.

(CHEERING AND APPLAUSE)

(END VIDEOTAPE)

YELLIN: So, it is back to the drawing board for Democrats. This weekend, they're going to powwow and see if they can't solve what has become an enduring mystery on Capitol Hill. Is it possible to fashion a measure that will both change the course of the war in Iraq and win enough votes to get through the Senate? -- Kitty.

PILGRIM: Thanks very much, Jessica Yellin.

Secretary of State Condoleezza Rice today promised what she called a full review of the use of private security contractors to protect U.S. diplomats in Iraq. Now, this review follows the death of as many as 20 Iraqis in a shooting incident that involved Blackwater USA. Blackwater USA, which is based in North Carolina, provides security for U.S. diplomats and Iraq.

The company today began to resume its operations in Iraq after the shootings in Baghdad.

Secretary of State Rice today also declared the United States and France agree on a strategy to stop Iran from building nuclear weapons. After a meeting in Washington, Rice and the French foreign minister both said there must be new sanctions against Iran.

Now, France has hardened its position since Iran since Nicolas Sarkozy became president last May.

The FBI tonight appears to be moving rapidly forward in its bribery and corruption investigation into one the country's most powerful GOP senators. Now, this follows reports the FBI taped conversations between Senator Ted Stevens and an oil company executive.

Senator Stevens is refusing to comment on the FBI tapes.

Brian Todd has our report.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): A powerful U.S. senator brushes off CNN's questions about FBI recordings of him in a bribery case.

SEN. TED STEVENS (R), ALASKA: I said, its a nice day. I hope you enjoy it. Have a good day. I'm having a great day.

TODD: Ted Stevens, the longest-serving Republican in the Senate, is on FBI tapes speaking with Bill Allen, the former head of an oil services company who's pleaded guilty to bribing Alaska state officials. That's according to a source with knowledge of the investigation.

Not known, what's on the tape, how many recordings there were or when they were made. Allen, a longtime contributor to Stevens' campaigns, admitted in court that his oil firm, VECO, helped remodel Stevens' home outside Anchorage, which was searched by federal agents this summer.

(BEGIN AUDIO CLIP)

BILL ALLEN, DEFENDANT: I don't think there was a lot of material. There was some labor.

UNIDENTIFIED MALE: So, you -- there wasn't a lot of material, but you paid some labor bills that went into remodeling Senator Stevens' house?

ALLEN: Yes.

(END AUDIO CLIP)

TODD: One contractor involved in the renovation told CNN, he sent his bills directly to Allen's oil company, but he was paid by Senator Stevens. Stevens said this about the work.

(BEGIN AUDIO CLIP)

STEVENS: Every bill that was presented to us has been paid, personally, with our own money.

(END AUDIO CLIP)

TODD: Stevens has not been charged and there's no evidence of so-called quid pro quo, that Stevens gave VECO something in return for work on the house. But experts say, if investigators can prove intent for that:

JEFFREY JACOBOVITZ, CRIMINAL DEFENSE ATTORNEY: He doesn't have to have performed it in the bribery case or in a gratuity case, but in fact if he knew he was getting the money to do something to further their interests, then in fact, Senator Stevens has some issues.

(END VIDEOTAPE)

TODD: And that may be where these FBI tapes prove critical one way or another. We tried to contact Stevens' attorney regarding the taped conversations. He did not return our calls. This investigation has already led to bribery and conspiracy charges against three current and former Alaska lawmakers -- Kitty.

PILGRIM: Brian, is Senator Stevens' son involved in this also?

TODD: He is. Ben Stevens, a former Alaska state senator, had his offices raided by the FBI last year. But he, too, has not been charged in this case as of yet.

PILGRIM: All right, thanks very much, Brian Todd.

A project championed by Senator Stevens that became a national symbol of congressional excess has been abandoned by the governor of Alaska. Governor Sarah Palin said the so-called bridge to nowhere is not the answer to the transportation problems of southeastern Alaska.

The bridge had a price tag of almost $400 million. That is almost half-a-billion dollars.

Still to come, the state of New York rewards illegal aliens who have broken our laws.

Jim Acosta will have the report -- Jim.

JIM ACOSTA, CNN CORRESPONDENT: Kitty, just as states across the country are cracking down on illegal immigration, New York is giving illegal aliens the green light. I will explain coming up. PILGRIM: Thanks, Jim.

Also, America's so-called toughest sheriff escalates his campaign to stop illegal immigration. We will have that report.

And an astonishing act of appeasement to communist China by the world's leading toy brand in the crisis over dangerous imports.

Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Outrage tonight over a policy change in New York State. It makes it easier and legal for illegal aliens to obtain driver's licenses.

Now, critics say putting illegal aliens in the driver's seat is another assault on our broken borders by actually rewarding them with legal identity, after they illegally enter the United States.

Jim Acosta reports.

(BEGIN VIDEO CLIP)

UNIDENTIFIED PROTESTERS: ... New York. The people, united. We will be driving in New York.

ACOSTA (voice-over): It may be the most applause the DMV has ever had. Activists for undocumented workers cheered in both English and Spanish as New York's governor made it official. The 500,000 to one million illegal immigrants in the state can be licensed to drive.

GOV. ELIOT SPITZER (D), NEW YORK: We are proud to say to them, you are welcome, and we will not create in the DMV a barrier to your participation in our society.

ACOSTA: By next April, applicants for driver's licenses in New York will no longer have to prove their legal status. Instead, they will simply check a box that states they are not eligible for a Social Security number.

Spitzer insists it's not his fault. Federal immigration officials have, as he put it, failed to do their job.

SPITZER: The INS is a broken organization. I will not, as the governor of New York, let them shift the burden of taking their job and put it on the shoulders of every agency of the state of New York. That's wrong. We're not going to do it.

(APPLAUSE)

ACOSTA: But with New York becoming the largest of the eight states offering licenses to the undocumented, illegal immigration critics slam the looser restrictions as another assault on the nation's borders. DAN STEIN, PRESIDENT, FEDERATION FOR AMERICAN IMMIGRATION REFORM: It's fantasy to believe that the federal government, by itself, could ever enforce illegal immigration. If New York State is going to give driver's licenses to illegal aliens, then they are, in our view, breaking the law. They are running their own immigration program, because New York state will be aiding, abetting and encouraging people to come to this country illegally.

ACOSTA: We found one illegal worker from Mexico who's ready to line up for his driver's license photo.

AMILTAR SERRANO, ILLEGAL NEW YORK CITY RESIDENT: I feel happy. I don't have that fear of being like having -- have trouble with the law, basically.

(END VIDEOTAPE)

ACOSTA: As you noticed in that report, Spitzer referred to immigration authorities as the INS. Actually, the again 's name, as you know, Kitty, was changed to ICE four years ago.

Critics of this new policy ask, if the governor can't get the name right, how can he get the law right? -- Kitty.

PILGRIM: Well, let's ask another question. The governor is a lawyer. The Real I.D. Act passed. So, how does this fit with the Real I.D. Act?

ACOSTA: Right.

Just as states are supposed to be upgrading their identity requirements and getting everybody on board with that, here comes Eliot Spitzer and the state of New York saying, no, we're going in the opposite direction, and, as critics of this type of policy would say, perhaps going down the wrong way of a one-way street.

But, having said that, what this does create is the situation where, in other states where these identity requirements are being strengthened, here in New York, they're being loosened.

PILGRIM: That's very disturbing. Thanks very much, Jim Acosta. Thank you.

And several families in New York state have filed a lawsuit to stop federal officials from raiding homes to arrest and deport fugitive criminal aliens or aliens previously ordered to leave the country. Now, the lawsuit claims that Immigration and Customs Enforcement agents force their way into Latino homes without a search warrant, harming citizens and legal residents, as well as illegal aliens.

The families are seeking an order to stop the raids until clear guidelines are developed. And they're also asking for unspecified damages.

Time is running out for employers of illegal aliens in Arizona. Now, a new state law takes effect next year that will harshly punish companies that hire illegal workers.

And, as Casey Wian now reports, one of Arizona's toughest sheriffs will help enforce this measure.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): If you're a business owner in Phoenix, Arizona, who knowingly employs illegal aliens, America's self-proclaimed toughest sheriff would like a word with you. Maricopa County's Joe Arpaio has signed an agreement with the county attorney to help enforce a new state law cracking down on businesses that use illegal alien labor.

ANDREW THOMAS, MARICOPA COUNTY ATTORNEY: In seeing a partner for enforcing Arizona's new employer sanctions law, I found the choice was clear. Sheriff Arpaio and the Maricopa County Sheriff's Office have a proven track record of enforcing our immigration laws and not caving in to political correctness.

WIAN: Arizona's law is scheduled to take effect in January. It requires businesses to verify their workers are legal.

Employers caught knowingly or intentionally hiring illegal aliens would have their business license suspended for 10 days or longer. Repeat offenders could lose their right to do business in Arizona forever. Officials say they will not target honest employers who make a mistake. Investigations will be triggered by citizen complaints.

Arpaio says he has already received 500.

JOE ARPAIO, MARICOPA COUNTY, ARIZONA, SHERIFF: We don't go down knocking doors in. We do it very careful and make we have the proper evidence.

WIAN: The Arizona Chamber of Commerce is opposed to the law. The business lobby group says it supports border security and efforts to ensure a legal work force, but it says this law is flawed, in part because complaints against businesses can be made anonymously.

JESSICA PACHECO, ARIZONA CHAMBER OF COMMERCE: The law says that every single complaint must be investigated. And a complaint is a costly, sometimes very lengthy process. And businesses are going to be put through that legal rigmarole, regardless of what the outcome is. This is making it more expensive and more difficult to do business in Arizona.

WIAN: A lawsuit to block the law on constitutional grounds is pending in federal court.

(END VIDEOTAPE)

WIAN: But Sheriff Arpaio is not waiting for that decision. His Maricopa County Sheriff's Department already has 160 deputies trained by Immigration and Customs Enforcement to apprehend illegal aliens. Those deputies will now be used to investigate alleged violations of the illegal employer law -- Kitty. PILGRIM: Well, it certainly sounds like they're up to the task.

Thanks very much, Casey Wian.

Coming up: Mattel says it's sorry for designing dangerous toys, but the apology wasn't made to American consumers. We will have a special report.

Congress is still trying to revive its failed amnesty agenda, piece by piece. We will have that story.

And GOP presidential candidates vie for support from the National Rifle Association.

We will have a special report on that.

(COMMERCIAL BREAK)

PILGRIM: We have yet another product recall to tell you about tonight. One million baby cribs are being recalled after two children became trapped in the kids and suffocated.

Now, the cribs were sold under the name Simplicity and Graco labels.

And an extraordinary twist tonight in the scandals over dangerous Chinese imports. Toy brand Mattel is apologizing to the Chinese, blaming design flaws, not Chinese manufacturing. Mattel says the company recalled more lead-tainted toys than it needed to.

Christine Romans has the report.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Mattel's CEO in Washington this week apologizing to Congress and the American people for a summer of toy recalls.

ROBERT ECKERT, CHAIRMAN & CEO, MATTEL: Our standards were ignored and our rules were broken.

ROMANS: Apparently not by the Chinese. A senior Mattel executive was in Beijing apologizing to China.

THOMAS DEBROWSKI, EXECUTIVE VICE PRESIDENT, MATTEL: Mattel takes full responsibility for those recalls and apologizes personally to you, the Chinese people, and all of our customers who have received the toys that were manufactured.

ROMANS: In a choreographed and carefully-worded apology, Mattel's vice president of worldwide operations, Thomas Debrowski, told China's product's safety chief, Li Changjang:

DEBROWSKI: But the vast majority of those products that were recalled were the result of a design flaw in Mattel's design, not through a manufacturing flaw in China-run factories. ROMANS: The very public apology highlights just how critical China is for Mattel; 65 percent of Mattel's toys are made there, Mattel, reeling from toy safety scandals, apologizing for damaging China's reputation.

And Mattel also said it recalled more toys than necessary, something a stern-looking Li called unacceptable.

To many, the whole event seemed an effort to appease Beijing.

REP. MICHAEL BURGESS (R), TEXAS: They're doing what they have to do to protect their ability to do business in that country. Fine. I would really like to see them expend some effort on doing business in this country.

ROMANS: Mattel has apologized to American consumers in full-page ads and before Congress.

ECKERT: We were let down and we let you down.

ROMANS: Now Mattel doing its best not to let China down.

(END VIDEOTAPE)

ROMANS: Mattel's apology, of course, doesn't explain the many other unsafe products coming from China, including children's jewelry, tainted food and medicines, defective batteries, faulty tires, and other products -- Kitty.

PILGRIM: This is an astonishing twist. We have a major multinational corporation, a U.S. corporation, apologizing to communist China. It's unbelievable.

ROMANS: It would seem to be an unprecedented move.

But the company, Mattel, is actually downplaying sort of the significance of this choreographed meeting between these two officials, saying, they apologized to the Chinese today, just as they have apologized just to wherever its toys are sold.

But there are a lot of other countries I don't think you are going to see the cameras and the sit-down and the stern look from -- from the communist Chinese leadership.

PILGRIM: Yes.

Thanks very much, Christine Romans.

Well, that brings us to the subject of tonight's poll. Are you outraged that Mattel is apologizing to communist China, yes or no? Cast your vote at loudobbs.com. We will bring you the results later in the broadcast.

And it's not a recall, but California officials are warning about possible lead contaminants in children's lunch boxes. Now, health officials say some of the 56,000 lunch boxes the state passed out to promote healthy eating tested positive for lead. Now, the boxes were made -- you guessed it -- communist China.

Be sure to join us this weekend for "LOU DOBBS THIS WEEK." We will have much more on the product safety crisis, including the proposed legislation to protect you from dangerous imports. The two senators who sponsored the measure and an industry expert will join us for more on the new effort to keep Americans safe. That's on Saturday and Sunday on "LOU DOBBS THIS WEEK."

Time now for some of your thoughts. And we have some e-mails.

Kathy in Pennsylvania wrote: "Is it just me, or does anyone else think that Mattel apologizing to communist China is absurd? They should be apologizing to the American people for taking toy manufacturing jobs out of this country just to save a buck."

And Greg in Wisconsin wrote: "Mattel should be ashamed of itself, first, because they did not inspect the products they are ultimately responsible for, and, second, because Mattel caved to the government pressure not to hold the Chinese accountable for what really amounts to knowingly endangering children."

Ted in California wrote: "You have got to be kidding. Mattel is apologizing to China? No more Mattel in my house."

We will have more e-mails for you later in the broadcast.

Well, it's enough to put the -- it's a new low against the euro, that European vacation a lot more expensive, the dollar trading early today at around $1.40.

And, closer to home, the dollar is trading one-for-one with the Canadian currency. The last time that happened was 1976.

Good news for investors out of London, the price of gold gaining $2.5 over yesterday's price, soaring $7.37 an ounce. Crude oil finally taking a dip today, after an eight-day stretch of record highs, not enough to put an end to the pain at the pumps, however.

A major storm pushing towards the Gulf Coast is also expected to help push oil and gas prices to new highs. What's now a tropical depression could grow into the 10th named storm of the hurricane season. And, if so, that storm will be named Jerry.

Coming up, he said no to amnesty for illegal aliens, but Congress just won't listen. We will have a special report.

Also, gunning for votes. GOP presidential candidates battle for the support of the National Rifle Association.

And Senator Hillary Clinton gives a frank interview to one of this nation's leading gay magazines. And we will tell you what she said.

(COMMERCIAL BREAK)

PILGRIM: Congress is trying to revive its failed amnesty agenda piece by piece. The component now receiving attention is The DREAM Act. Now, it's a plan that could grant citizenship rights to illegal aliens who graduate from college or join the military.

And as Lisa Sylvester now reports, for some, it's just amnesty under a different name.

(BEGIN VIDEO TAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The dream act would put millions of illegal aliens on a path to citizenship if they arrived in the country as a minor and signed up for college or the military.

Senator Richard Durbin is introducing the proposal as an amendment to the Defense Appropriations Bill.

SEN. RICHARD DURBIN (D), ILLINOIS: This is the choice The DREAM Act presents us -- we can allow a generation of immigrant students with great potential and ambition to contribute more to America or give them a future living in the shadows.

SYLVESTER: But critics call The DREAM Act amnesty and say it should be put to rest. Durbin is now struggling to find the 60 votes needed to push the proposal through. Hoping to win new supporters, the Illinois senator this week removed a provision that would have allowed illegal aliens to gain in-state tuition rates and he added an age eligibility cap of 30 years old.

But still he's having a tough time finding many takers. So says one think tank that wants fewer immigrants.

JOHN WAHALA, CENTER FOR IMMIGRATION STUDIES: I think it's telling that even Senator Lindsay Graham, who was an ardent supporter of the amnesty in June has voiced concerns about this. And I think that's a bad sign for those who want this amnesty to go forward.

SYLVESTER: Some of same opponents who defeated the comprehensive immigration bill this summer are working on scuttling The DREAM Act.

Senator David Vitter calling it an invitation for fraud.

SEN. DAVID VITTER (R), LOUISIANA: There is no real proof requirement. It could simply be an affirmative statement of themselves -- no other required proof. So this is open-ended. This is unenforceable and it is a significant amnesty.

SYLVESTER: Senator Vitter has introduced his own amendment that says The DREAM Act cannot go into affect until new border security measures are in place.

(END VIDEO TAPE)

SYLVESTER: Now The DREAM Act has still not been called up onto the Senate floor, pushing the debate now into next week. Some Republicans say without the votes needed, Durbin really only has two choices -- call up the amendment and risk a defeat or pull his amendment all together -- Kitty.

PILGRIM: Lisa, in addition to offering amnesty, it also could potentially serve as a draw with this college education component.

SYLVESTER: It does. In fact, that was one of the reasons why Senator Durbin -- and there was -- this particular measure was really roundly criticized because it would give in-state tuition to illegal aliens when out of state U.S. residents would not be entitled to that. And that is why he decided to pull that aspect of it -- Kitty.

PILGRIM: Thanks very much.

Lisa Sylvester.

In presidential election politics, candidates today aimed for votes from the National Rifle Association.

As Bill Schneider now reports, the audience had their sights set on a former mayor who championed gun control in the past.

(BEGIN VIDEO TAPE)

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice over): The National Rifle Association is a tough crowd for the former mayor of New York. But Rudy Giuliani showed up anyway.

RUDY GIULIANI (R) PRESIDENTIAL CANDIDATE: There are probably a few things we disagree about, but there are many more things that we have in common.

SCHNEIDER: There were flyers available detailing things the NRA and Giuliani might disagree about, like this Giuliani press release from 2000: "I am pleased to announce that the City of New York filed a lawsuit against two dozen major gun manufacturers and distributors."

Giuliani's Republican rivals got their digs in without naming names.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: A number of big city mayors decided it was more important to blame the manufacturers of a legal product than it was to control crime in their own cities.

FRED THOMPSON (R), PRESIDENTIAL CANDIDATE: My philosophy does not depend on my geography. And I thought it was time I laid down that marker early on.

SCHNEIDER: Giuliani challenged the NRA audience to look at the whole list of commitments he is making in his campaign.

GIULIANI: If you look at these and you agree with most of these, then I would ask you to support me. If you disagree with most of these, I would ask you to vote against me, because I'm actually going to do them.

SCHNEIDER: The audience seemed willing to listen.

UNIDENTIFIED MALE: I believe he's on the right street. He may need do a little polishing, though.

UNIDENTIFIED MALE: He said all the right things. I'm tickled to death with it.

SCHNEIDER: This week, the co-chairman of the Hillary Clinton campaign threatened to go after Giuliani's family life.

Could this be Giuliani's answer?

GIULIANI: This is my wife calling, I think.

Hello, dear.

I'm talking -- I'm talking to the members of the NRA right now.

Would you like to say hello?

I love you and I'll give you a call as soon as I'm finished.

OK?

(END VIDEOTAPE)

SCHNEIDER: Well, it's no crime to carry a concealed cell phone, especially if you're talking to the NRA -- Kitty.

PILGRIM: Thanks very much.

Bill Schneider.

SCHNEIDER: OK.

PILGRIM: Well, as Bill just reported, Rudy Giuliani shouldn't have expected too warm a welcome from the NRA members today. The former New York mayor didn't answer questions about the lawsuit that seeks to hold gun makers financially liable for the acts of criminals. Now, the suit was filed in 2000, when Giuliani was still mayor. It is now making its way through federal courts.

Giuliani said he doesn't comment on pending lawsuits.

Coming up, Dan Rather still insisting his story on President Bush's National Guard service was correct.

And Senator Clinton gives a straight answer to a not so straight question. That story and our distinguished panel of political analysts coming up next.

Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Senator Hillary Clinton tonight is responding to a gay magazine asking if she is a lesbian. The senator says flatly it's just not true.

In an interview with "The Advocate," the senator was asked how she responds to rumors she is gay. And the senator says she is not a lesbian, but she can't control what people say about her. Clinton added, she doesn't pay attention to the rumors.

Well, joining me now are three of the best political analysts in the country.

Ed Rollins, Republican strategist and former White House political director under Ronald Reagan.

Syndicated columnist Miguel Perez.

And Michael Goodwin, columnist for the "New York Daily News".

Gentlemen, thanks for being with us.

You know, we have a new report, the Pentagon saying that Iraqi forces are in control of only 8 percent of Baghdad and that U.S. and Iraqi forces only about half of Baghdad. This is very disturbing. The surge clearly is not, you know, as successful as we would like it to be. We hopefully would have Baghdad under more control.

Your comments, Miguel, on...

MIGUEL PEREZ, SYNDICATED COLUMNIST: Well, certainly not in Baghdad. That's what those figures show. And it's -- it is very discouraging. And we're wondering when it is that we're going to get some results out of the surge and sacrificing so many American lives.

PILGRIM: It also contracts very sharply with some of the comments that General Odierno said earlier this week.

Michael?

MICHAEL GOODWIN, "NEW YORK DAILY NEWS": It actually doesn't surprise me, because I mean I've never heard the number put that way. But Baghdad was always the issue. And that's where the surge has taken place. It was always because Baghdad was a mess -- the sectarian killings. I think that's -- it's one measurement. There are many other measurement -- car bombs, bodies turning up, that sort of thing.

So it is disturbing, but I don't find it surprising because I think it just sort of think it fits with what was going on in Baghdad.

PILGRIM: And, also, it contrasts with the comments the president made in his national address recently.

ED ROLLINS, REPUBLICAN STRATEGIST: Well, the critical thing here is they haven't stepped up. They have, allegedly, 400,000 people who we've been training now for four years. And I mean it's, you know, we train a kid in 16 weeks and put him on a plane and send him over there and expect him to do battle and he's out of there in a year. It's been four years.

PILGRIM: Yes.

ROLLINS: And, you know, we have all these contractors that are running around to protect our embassy. It's just an absurd process. And I'm not sure they're ever going to step up to the plate.

PILGRIM: Yes, it's difficult to figure out that political equation the way it stands now.

You know, I have another question to ask you, Ed.

Senate Democrats this week failed to pass any measures to change the course the war.

What's your prognosis on this?

ROLLINS: My prognosis is they've lost this battle. They had one option and the option was the attempt to cut off funds. They didn't do that. They didn't have the guts to do that and then they started tinkering. And I think that this would have been a very bad vote to basically say how you can use your troops as long as you're there.

So I think it was -- I think it was a good vote for the Pentagon, a bad vote for Democrats. And I think at this point, they have no place to go.

PILGRIM: There's a big pow-wow this weekend to try to strategize.

Do you think anything will come of it, Michael?

GOODWIN: Well, as I had said, there isn't -- there aren't many places to go. There aren't many techniques left, any strategies, any resolutions. I mean, I think the Democrats have -- have -- are boxed in. And had the surge not shown some evidence, had Petraeus not been such a good witness before Congress, I think things could have moved.

But, in fact, I think it's turned back against the Democrats. They're in a worse position now than they were six weeks ago. And so I think that now we're going to have to see, will the Iraqi government step up?

Will the Iraqi military step up?

And can the violence continue to fall?

I think that's the game right now. That's what we're all watching to see. PILGRIM: You know, you bring up this whole issue of Petraeus. The Senate this week voted 75-26 to condemn the anti-war ads against Petraeus. And President Bush also criticized the Democrats for not failing to condemn the ads.

Let's listen to what president had to say about it.

(BEGIN VIDEO CLIP)

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: Most Democrats are afraid of irritating a left-wing group like MoveOn.org -- or more afraid of irritating them than they are of irritating the United States military.

(END VIDEO CLIP)

PILGRIM: Now, Miguel, does this ad backfire on MoveOn.org?

Does this damage the credibility of the organization?

MARQUEZ: Absolutely. Absolutely it has backfired. They're definitely -- the extreme left is not helping the Democrats here. They're helping the Republicans. And that's what's ironic about this whole thing.

PILGRIM: And the power of this organization, do you think it's in any way diminished, gentlemen?

ROLLINS: I don't think -- I mean it

spent $30 million, $40 million last time. It'll spend it again. It has a new ad up today already. But I think at the end of the day that they went way beyond the pale and I think they -- any time a military person -- and especially these generals who have all these ribbons and great years of bravery in history, and they put them up there and they lecture them from the podium or you attack them, the country really gets worked up.

GOODWIN: Yes, I think one of the real casualties of this is Hillary Clinton. She voted against the resolution that passed. She was one of 25 votes against it. So a number -- I think 20 Democrats voted with Republicans to condemn the ad and to support Petraeus.

She couldn't bring herself to vote for it. And I think this is the kind of thing that marginalizes her, pushes -- it defines people in a way that everyday rhetoric can't. She's now, I think, defined as being on the far left -- as President Bush, I think, correctly said, more afraid of MoveOn.org than of their own military. That's a bad place for somebody who wants to become commander-in-chief.

PILGRIM: Yes, it's a difficult thing to swallow.

Let me just tell you about a new Zogby Poll that came out this week. And let's put it up for our audience. I'm sure you've seen it, but our audience has not.

President Bush at -- let's see -- 29 percent approval rating. Congress at 11. We're really talking about the bottom of the barrel.

Miguel?

MARQUEZ: Well, you know, in the last round of elections, we expected a lot more out of the Democrats. We thought that they were going to have the power to end this war somehow. They haven't done -- they haven't been able to do anything. And so, you know, it's logical that the people are disappointed, both with the president and the Democratic-controlled Congress.

PILGRIM: What does this mean politically?

What does this mean for anyone who's sitting in a seat?

ROLLINS: Well, the interesting thing is Republicans rate the Congress higher than the Democrats do. So the 11 percent is even a higher number than the number of Democrats that are disappointed in their own party. They think they didn't perform. They think they made promises in 2006 and they voted them in expecting them to do something and they haven't done something.

PILGRIM: Well, you know, the magic wand that was expected to be waved over Congress, how realistic was that?

GOODWIN: Well, but I think that's part the problem. The Democrats didn't really run on anything. They ran on anti-bush. And, you know, since they didn't really define their mandate, the voters didn't give them one. They just put them in there because they were saying nasty things about Bush.

OK, now what are you going to do with the power?

They didn't really have a plan.

PILGRIM: This is the problem with a negative campaign...

GOODWIN: Right.

PILGRIM: ...that you have to have a solution...

GOODWIN: That's exactly right.

PILGRIM: ...ultimately.

UNIDENTIFIED MALE: Yes.

PILGRIM: And unfortunately in Iraq and in this war, solutions are pretty hard to figure out.

Gentlemen, we'll take a quick break and we'll come back.

Ed Rollins, Michael Goodwin and Miguel Perez.

We'll be right back in a moment.

Stay with us. (COMMERCIAL BREAK)

PILGRIM: We're back with three of the best political minds in the country -- Ed Rollins, Miguel Perez and Michael Goodwin.

You -- we had quite an interesting campaign week.

Hillary Clinton calling Dick Cheney Dan Rather and...

ROLLINS: Darth Vader.

PILGRIM: Darth Vader.

ROLLINS: Darth Vader.

PILGRIM: Dan Rather.

Why did I say Dan Rather?

(CROSSTALK)

ROLLINS: That would be a real insult, to call him Dan Rather.

(LAUGHTER)

PILGRIM: No, I was thinking of asking you about Dan Rather next.

All right, Darth Vader.

So let's hear what Hillary Clinton had to say.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: You can always tell when the Republicans are restless because the vice president's motorcade pulls in to the Capitol and Darth Vader emerges.

(END VIDEO CLIP)

PILGRIM: OK, Darth Vader.

What do you think of that?

MARQUEZ: Well, you know, I think that it's uncalled for because, you know, we should be -- these candidates should be discussing the issues. It's kind of funny and I guess that's what she was trying to accomplish, to, you know, to throw a joke at a crowd that sympathizes with that kind of mentality.

But, you know, it's -- let's talk about the issues.

PILGRIM: It's a little bit like standup, actually, when you watch it.

GOODWIN: Yes, it didn't bother me. I mean he is Darth Vader. I agree.

PILGRIM: You agree with her?

OK.

ROLLINS: Actually, he himself...

(CROSSTALK)

ROLLINS: He himself called himself Darth Vader. He said I'm not what they say, I am not hiding over in a hole and I come out and I'm Darth Vader. So she was sort of repeating it, when it comes to the Hill.

I think Miguel's point is Hillary needs to really focus on the issues and she needs to be responding with a lot of things relative to her own campaign. And, you know, she can't do anymore damage to Dick Cheney. He and this administration are pretty well damaged and they need to basically move forward on their own issues.

PILGRIM: Yes. A fairly established antipathy between the two parties.

Anyway, now let's talk about Dan Rather. And he is sticking by his story about President Bush's National Guard service.

Here's what he said on LARRY KING LIVE.

(BEGIN VIDEO CLIP FROM "LARRY KING LIVE")

LARRY KING, HOST: Do you think the report was correct?

DAN RATHER: Yes. And I think most people know by now that it was correct. Keep in mind that Colonel Killian -- he's the deceased commander of George Bush -- his secretary said took a look at the document and said everything in here is true. Yes, that's what he thought. Everything outlined in here. And, by the way, I think there was a lot more in the president's military record that we don't know about.

(END VIDEO CLIP)

PILGRIM: So we're revisiting this whole issue again.

Ed, what do you think?

ROLLINS: I think it's going to be to Dan Rather's detriment. I mean the bottom line is he was sitting on top of one of the major news organizations in the country. If the story was there, he could have gotten it. He was -- he was in a rush -- a rush to get Bush. I don't think it matters. I think the country has moved past Bush. And at this point in time, they want to get us into dry dock and pass the baton.

PILGRIM: Yes. And politically for Bush, you don't think it's -- that... GOODWIN: Dan Rather is sort of like MoveOn.org. I mean he's -- he's so radioactive, I think, journalistically and politically, that he helps anybody he attacks.

PILGRIM: Oh, that's interesting.

Miguel?

MARQUEZ: The country has moved on. Dan Rather, as well.

GOODWIN: Right. Yes.

MARQUEZ: I mean we -- you know, we -- it's -- it's old news.

GOODWIN: He's not a relevant figure anymore.

ROLLINS: And quite the contrary. I mean you have to remember, he took one of the most legendary men in the news business, Walter Cronkite, and not only pushed him out, he never let him back in the door. And I think, to a certain extent, Dan Rather is getting his own just reward. And it's -- it's unfortunate.

PILGRIM: Speaking of radioactive people, President Ahmadinejad is coming to New York. It has created an incredible furor, especially with Columbia University, who is rejecting calls to cancel his speaking engagement to the students.

What do you think is -- first let's handle the Columbia University issue.

I mean do you think he should be speaking to American students or not, Ed?

ROLLINS: Yes, I think -- I believe in freedom of speech. I don't think there's anything this man can say that's going to give him any credibility.

But I do -- this is one of the irritations I have about having the United Nations here. They can come through, they can tear this town apart, they can say whatever they want and they're only paid attention to because they're here in New York City. If they were somewhere else, we wouldn't pay a bit of attention to them. And I think that's one of the unfortunate things of having it here.

GOODWIN: Yes, I don't think it's a free speech issue at all. There's no -- I mean Ahmadinejad has no problem getting a crowd. He can speak anywhere he wants.

I think the issue is simply should Columbia give him the forum?

It's not necessary. I mean he could, as they say, get a soap box on the corner and have a speech and thousands of people would show up to listen. I'm not sure what Columbia achieves by injecting itself into this.

PILGRIM: The whole Ground Zero issue was a very big issue in New York this week.

GOODWIN: I should say, too, I'm a -- Columbia is my own alma mater. I still feel that way.

PILGRIM: As it is mine.

(LAUGHTER)

PILGRIM: Well, we speak frankly at this table...

(CROSSTALK)

MARQUEZ: Columbia is my alma mater.

(LAUGHTER)

MARQUEZ: But I would only be happy if he gets introduced this way -- here's a man who deprives his own people of the freedom we are about to give him to speak freely.

PILGRIM: OK.

Rudy Giuliani.

Let's talk about that -- addressing the NRA. He once branded the group as extremists. Now he seems to want to court them -- four-and-a- half million members.

What's that all about, Ed?

ROLLINS: Well, first of all, he announced earlier in the week that he's one of the four or five most famous Americans in world. And I think Madonna and Muhammad Ali and the two presidents that...

(CROSSTALK)

PILGRIM: ...get that sorted out, you know?

ROLLINS: Clearly this is -- yes, that needs to be sorted out a little bit.

(LAUGHTER)

ROLLINS: And those words will come back to haunt him. You know, this audience is not going to -- this is a very active political organization. They know who their friends and their enemies are. And Rudy has been at the top of the enemy's list. And to come make one speech and say oh, I've seen the light and I'm going to change, you know, it showed some bravery going there. But at the end of the day, it's not going to make any difference.

PILGRIM: Do you think he'll persuade any other conservative members?

GOODWIN: Well, I think what was interesting about the week for him was not so much the speech in itself, but I think the trip to London and meeting with Thatcher and Brown and Blair and Churchill's granddaughter. I think, as someone said, it was -- he touched all the erogenous zones this week -- going after MoveOn, going after Hillary, meeting with British prime ministers. It was a very good week for him.

As for the NRA meeting, I would just give him one advice -- turn off the cell phone.

PILGRIM: Yes. Yes.

MARQUEZ: Well, my phone...

(LAUGHTER)

PILGRIM: That's unfortunate.

His phone just rang, actually.

MARQUEZ: My phone rang a second ago and I turned it off. I mean I...

PILGRIM: You didn't take the call, Miguel.

MARQUEZ: No, I did not take the call and I'm not running for president but...

GOODWIN: Was it your wife?

MARQUEZ: I don't know. I mean I have -- I didn't even look.

(LAUGHTER)

PILGRIM: We'll find out later.

MARQUEZ: But it looked like -- this whole phone call thing, it looked like it was all staged and it did not come out right. I think he's trying to pretend like he's a real family man. This is not the way to do it.

PILGRIM: I don't know if it was staged, but it sure was good shtick.

Anyway...

ROLLINS: Well, he's a multi-family man.

GOODWIN: Yes.

(CROSSTALK)

ROLLINS: ...family man.

(LAUGHTER)

ROLLINS: The other thing that sort of got lost in all of this is he's hired onto his campaign, which he's still not expanded much beyond his city hall group, he hired a couple of the British operatives this week, who are coming in to advise him on foreign policy or what have you. And I think -- I think that's a rather unique thing and not very beneficial, in the long run, to Republican credentials. We're not -- we're not part of the Labor government.

PILGRIM: All right, gentlemen, we have to hold it there.

Ed Rollins, Michael Goodwin, Miguel Perez, thank you very much.

We'll find out what that phone call was in a minute.

And we'll be right back with Heroes -- our tribute to the men and women who are serving this country in uniform.

Stay with us.

(COMMERCIAL BREAK)

PILGRIM: And now Heroes. It's our tribute to men and women who serve this country in uniform.

Tonight we honor Staff Sergeant Kimberly Mahan. She enlisted in the Air Force after graduating early from high school. Awarded a Bronze Star for exceptional service, our hero tonight has never wavered in her commitment to serve this country.

Philippa Holland reports.

(BEGIN VIDEO TAPE)

PHILIPPA HOLLAND, CNN SENIOR PRODUCER (voice-over): Nearly 70 percent of American troops killed in combat during Operation Iraqi Freedom have died insurgent IED attacks like this -- more than 1,900 fatalities.

STAFF SGT. KIMBERLY MAHAN, U.S. AIR FORCE: You've just got to work with your shoulders.

HOLLAND: Staff Sergeant Kimberly Mahan, an Air Force explosive ordinance disposal team leader, knows that danger all too well. Mahan executed more than 30 combat missions to diffuse or destroy IEDs and weapons caches during her 2006 deployment to Iraq. She was awarded a Bronze Star for her exceptional service.

MAHAN: We removed or disposed of roughly 35,000 pieces of ordinance, basically keeping it out of the hands of people that would make an IED with it.

They're definitely unstable. You could look at it funny and it might go off.

HOLLAND: As her second deployment nears, Mahan stays sharp by instructing junior members of her team how to operate a bomb disposal robot and the proper use of the protective bomb suit and helmet.

MAHAN: I get called crazy a lot. But I guess most of us are just confident, keep our cool when it's -- the pressure is on. We're actually pretty laid back in general. So I guess this is where my excitement gets to come in.

It's always nice to think that you're -- you're saving someone else's life. But when you're over there, you just let -- you see -- you're in your frame mind. You're doing your job.

HOLLAND: Despite the intense pressure and the searing desert heat she knows she'll soon face, Staff Sergeant Mahan is enthusiastic about her mission.

MAHAN: The best part about being EOD is knowing you could come to work and blow something up. I think that's what all of us really love about the job.

HOLLAND: That attitude helped ensure the safety of coalition forces, contractors and civilians in and around Balad during her deployment.

Philippa Holland, CNN.

(COMMERCIAL BREAK)

PILGRIM: Staff Sergeant Mahan is one of about 1,000 explosive disposal airmen who have been deployed in Iraq. And this week, the Air Force celebrated its 60th birthday. So we congratulate our Air Force and Airman Mahan.

Now the results of tonight's poll -- 96 percent of you are outraged that Mattel is apologizing to Communist China.

We do have time for some more of your thoughts.

Mary Beth in New York writes: "Lou, feel better each day and hurry back. We need you."

Now, as we have reported, Lou had a tonsillectomy. And we're happy to tell you he's doing very well and will return very soon.

Bill in Pennsylvania writes: "Lou, get well soon. We need you in our fight to return sanity and common sense thinking to this country."

And Lou will be back real soon.

Send us your thought at loudobbs.com.

Thanks for being with us tonight. Please join us tomorrow.

For all of us here, thanks for watching.

Good night from New York.

And right now, now from CNN's Special Investigations Unit, "Judgment In Jena".

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