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LOU DOBBS TONIGHT

Republicans Demand Apology For Stark Remark; Clinton Campaign Receiving Illegal Cash?

Aired October 19, 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: New York's Governor Spitzer standing by his giveaway of driver's licenses to illegal aliens, and the governor's proposal raising nationwide security concerns and outrage.
And tonight, we will also be reporting on America's continued desire to sell away its secrets -- a communist Chinese business planning to buy a stake in a U.S. technology company providing computer security to the Pentagon. Some members of Congress say the deal shouldn't be approved. And the fact is, this government doesn't have a clue what to do about it. We will have the special report.

Another American city taking action on its own, trying to deal with the illegal immigration crisis, its efforts being met, of course, with protests from pro-amnesty advocates and open border advocates and socio-ethnocentric interest groups, of course.

All of that, all the day's news and much more coming up straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Friday, October 19.

Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

Setback after setback for the Democratic congressional leadership this week. Speaker of the House Nancy Pelosi failed to move three major Democratic initiatives past White House resistance. And Republicans are now demanding an apology from Democratic Congressman Pete Stark of California.

Stark said on the House floor that American servicemen are -- quote -- "getting their heads blown off for the president's amusement" -- end quote. And not everyone apparently wants him to apologize.

We begin our coverage tonight with Jessica Yellin on Capitol Hill -- Jessica.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Lou, this week, Nancy Pelosi demonstrated that running Congress is not easy work.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): Nancy Pelosi suffered so many setbacks this week, gleeful Republicans are joking someone should give the Democrats an Alka-Seltzer. The first punch was the Armenian genocide resolution.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: There is reason to bring this to the floor.

YELLIN: But she's backing off that promise after Democratic support fell away.

REP. JOHN MURTHA (D), PENNSYLVANIA: If it were to run today, it wouldn't pass.

YELLIN: Blow number two, Democratic leaders yanked the wiretap bill after Republicans pulled a procedural maneuver that made it seem like the bill would protect Osama bin Laden.

REP. STENY HOYER (D-MD), MAJORITY LEADER: We are going to bring it back. We think it's an excellent bill.

YELLIN: Then there's the Children's Health Insurance Program.

PELOSI: And the next two weeks, we intend to send the president another bill.

YELLIN: Though Pelosi insists yesterday's failure to overcome the president's veto will eventually turn into a win, she did not deliver it this week.

NORMAN ORNSTEIN, AMERICAN ENTERPRISE INSTITUTE: There are some lessons to learn from this about when you schedule things, about how much you look ahead to a train wreck that might happen, about how you frame an agenda.

YELLIN: The speaker insists, these are not unusually hard knocks.

PELOSI: No, this is the legislature process.

YELLIN: And her aides maintain Democrat will eventually win on the wiretap and children's health insurance bills.

Her opponents are pouncing.

REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: Running the House is a difficult job. But trying to run it herself is an impossible job.

YELLIN: But congressional watchers say no one won this week.

ORNSTEIN: It hasn't exactly been a banner week for congressional Republicans or for the president. The president was forced pretty much into a press conference to say, "I'm still relevant here," not a position any president particularly wants to be in.

(END VIDEOTAPE)

YELLIN: Lou, with Congress' approval ratings even lower than the president's, it's clear that the pressure is on Nancy Pelosi now to produce. It's safe to say that a year after she took control of Congress, this is not where Democrats would like to be -- Lou.

DOBBS: And for her to produce, it's almost impossible, given the head count on Capitol Hill, is it not?

YELLIN: It's a huge challenge. And that is the excuse they make all the time, yes.

(LAUGHTER)

DOBBS: Thank you very much, Jessica Yellin, from Capitol Hill.

Well, Senator Mel Martinez today stepped down as Republican National Committee general chairman. Martinez had been on the job year less than a year, about 10 months. Martinez said he is quitting to spend more time focusing on the needs of his Florida constituents, not a bad idea for any senator to pay attention to their constituents.

The senator, the GOP's most prominent Latino spokesman, is up for reelection in 2010. Martinez's position at the RNC is so -- so important that the RNC says it won't even be filled. Go figure.

And Republicans today demanding an apology from Democratic Congressman Pete Stark. Stark blamed the lack of funds for children's health care on the president's spending on the war in Iraq.

Dana Bash now reports on what the congressman said that has Republicans and some Democrats absolutely outraged.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Democrats worked for months to hone their message on children's health. But, when it came to the climactic debate, the most memorable Democratic moment was decidedly off-message.

REP. PETE STARK (D), CALIFORNIA: You don't have money to fund the war or children, But you're going to spend it to blow up innocent people, if we can get enough kids to grow old enough for you to send to Iraq to get their heads blown off for the president's amusement.

BASH: Republicans jumped on the tirade, issuing statement after statement, calling on Congressman Pete Stark to apologize.

But the California Democrat refuses. In an interview with KGO Radio in San Francisco, Stark would only say:

(BEGIN AUDIO CLIP)

STARK: Do I wish that I could have kept the focus more on health care? Absolutely.

(END AUDIO CLIP)

BASH: Repeated answers like that prompted this from the host.

(BEGIN AUDIO CLIP) UNIDENTIFIED MALE: Don't be Clintonesque. I mean, it's just stupid, and it just gives the other side too much ammunition.

(END AUDIO CLIP)

BASH: But Stark's Northern California district is one of the most Democratic in the nation. He says his constituents do not want him to apologize.

Stark even logged on to the liberal blog Daily Kos, where his remarks are a hit.

Stark wrote, "Wanted to drop by, say hello, and thank you for your kind words of support."

STARK: Bush just likes to blow things up in Iraq.

BASH: This outburst is not Stark's first, not even close. The 34-year House veteran is known for having perhaps the most explosive mouth in Congress. During a committee hearing two years ago, Stark called Republican Scott McInnis a "little wimp" and a "fruitcake."

And Stark has also accused Connecticut Republican Nancy Johnson of being a "whore for the insurance agency."

(END VIDEOTAPE)

BASH: But suggesting that the president blows people heads off for amusement is a remark that Democratic leaders are now publicly calling totally inappropriate and a distraction.

And CNN is told that several Democratic congressmen called Congressman Stark today, complaining to him and saying that he is hurting their cause. But it is very clear, both in Congressman Stark's public statements and private statements, he has no intention of saying he's sorry -- Lou.

DOBBS: Why in the world would a man with any sense of civility, irrespective of his politics, or wherever he falls on an ideological spectrum, or what district he might represent, not apologize for such just disgusting language and totally inappropriate comments?

BASH: That is a question that he is being asked pretty much up and down, up and down Congress, inside his own caucus, Democrats and Republicans. And his answer, on the radio today, he basically said that he stands by the theme of what he's saying.

Maybe his words were inappropriate. But I can tell you, even in looking at some of those comments, this is something that Pete Stark is essentially known for, saying things that are pretty outrageous -- Lou.

DOBBS: Well, not only outrageous, utterly, utterly, just simply inappropriate and certainly lacking the dignity that would be required of anyone representing constituents, an elected official sitting on Capitol Hill. Certainly, anyone -- and no one, I think, is probably a greater critic of this administration on a host of issues that I am -- that he definitely, without any equivocation, owes the president and I think his party and certainly the leadership of the House an outright apology.

Thank you very much, Dana Bash.

DOBBS: Well, President Bush today imposed new sanctions on Burma's military regime, the move to punish Burma's leaders for their recent violent crackdown on pro-democracy protesters.

There are no accurate reports of just how many people have been killed or wounded in the California, the president ordering the Treasury Department to freeze financial assets of the country's leaders, tighten controls on U.S. exports to Myanmar, as Burma is sought to be called by the ruling junta.

Coming up here next: America's secrets are for sale. There's nothing new about that. What is new is a company providing computer security for the Pentagon is up for sale. And the Chinese, the communist Chinese, our good trading friends, want it. And the good White House officials who believe in free trade at any cost, they want to oblige.

Christine Romans will have the story -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, 14 senators today expressing grave concerns over a Chinese company's plans to take a stake in 3Com, which provides computer security to the Pentagon -- Lou.

DOBBS: Look forward to the report. I'm sure that the government has this just absolutely under control. Thank you, Christine.

Governor Spitzer of New York, he wants to get those illegal aliens all the New York driver's licenses he possibly can, no matter that he would be jeopardizing national security and turning back the clock years on security for identification and voter fraud possibilities that he would open up without reservation.

Good going, Governor Spitzer.

We will have the report.

And questions raised about donations to Senator Clinton's campaign. Some listed donors couldn't be found. Some might even be, well, illegal. We will have the report.

Stay with us. We're coming right back.

(COMMERCIAL BREAK)

DOBBS: New York's Governor, Eliot Spitzer, charging right ahead with his outrageous proposal to give away driver's licenses to illegal aliens. The governor's policy goes into effect in December. And, as Bill Tucker now reports, Spitzer today made it perfectly clear that nothing and no one will stop him.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): New York Governor Eliot Spitzer has this to say to those who oppose his plan to give driver's licenses to illegal aliens.

GOV. ELIOT SPITZER (D), NEW YORK: If you don't like our policy because of your immigration politics, that's fine. There's probably nothing I can do to change your mind.

TUCKER: That could be a lot of minds; 72 percent of those asked in his own state are opposed to the plan. So says a poll by the Siena Research Institute. It's a poll this politician doesn't bother with.

SPITZER: I don't make security decisions about the state of New York based on poll numbers. When I decide something is important for our security, I will do it.

TUCKER: The governor argues, the plan will give the state a chance to document people who are here undocumented. But critics say giving illegal aliens driver's licenses will create a market for fraudulent I.D.s, making the state less secure.

The governor did not address the fact that all of the documents used to get the licenses by illegal aliens will be destroyed after the application is approved, and that the license for an illegal alien will look exactly like one for a citizen or a legal resident, two more sticking points for critics.

The governor dismisses concern about voter fraud, even though voter registration is part of the New York State driver's license application. And he dismisses the state's legislature, which wants to weigh in on the issue.

SPITZER: There was no need, nor is there any need, to go to the legislature.

TUCKER: There is one thing Spitzer would like to see changed.

SPITZER: It would be good if the level of -- if the tonality of the discourse could change a little bit, because I would prefer that the focus be facts and rational discourse, rather than what sometimes we have heard.

(END VIDEOTAPE)

TUCKER: But Mr. Spitzer himself is avoiding a basic fact to this debate, the fact that the people he wants to hand the driver's licenses and identification cards to are here illegally. He just won't discuss it.

On Monday, the state senate will convene a special session to try and block the governor's policy directive. And, Lou, we will be there for that.

DOBBS: Well, and, by the way, we want to give credit to "The New York Times." "The New York Times," which took exception to our referring to this policy directive, whatever the heck it is this governor did, as an executive order. They said that we had done so inaccurately.

And we pointed out that they had been doing the same thing in their own reporting. And they were -- I have to give them credit at "The New York Times." They did a correction of their attempt to correct us and stood up and said they were correcting themselves as well. So, that's very nice of "The New York Times" and a modest move forward in the illegal immigration debate.

This governor, he wants a change in tonality, huh? This is the same, the same Governor Spitzer, speaking of tonality, who referred to anti-immigrant who were opposed to his little proposal. He referred to all of us as anti-immigrant, knowing full well that we're anti- illegal immigration.

And his construction of this thing is not worthy of a governor. It is -- and his just pathetic suggestion of a change in tonality, when he is arrogantly, unilaterally changing New York State policy for one purpose and one purpose only, and that is to appease and appeal to those socio-ethnocentric groups that supported him and to whom he promised exactly what he's delivering, irrespective of the wishes of the citizens in New York or the security concerns or what is simply right and lawful in New York State.

TUCKER: He just says he is fulfilling a campaign process, Lou.

DOBBS: He's fulfilling a campaign process. He's not fulfilling his office, his duties or his oath of office. And, frankly, a lot of people are figuring out, if New York hands out these driver's licenses, they're acceptable in every state in the union as identification.

So, this governor, he is not kidding anyone. And it is going to be interesting to see where this arrogant -- by the way, if this were the only instance of his arrogance in the short time he has been in office -- it will be interesting to see where it all leads him.

Thank you very much, Bill Tucker.

Well, Democratic presidential candidate Senator Hillary Clinton says the governor's proposal to give away driver's licenses to illegal aliens -- quote -- "makes a lot of sense." But while the senator is for the governor's policy, it appears she may also be against it, the senator from New York telling a New Hampshire newspaper that individual states shouldn't try to reform immigration laws. Instead, the federal government, she says, should pass what she calls comprehensive immigration reform legislation.

You know, I just can't even begin to tell you what I think of every single one of the Democratic presidential candidates, their positions on illegal immigration, border and port security. They are a crying, pathetic, joke in terms of border security, port security and immigration policy.

And this is an absurdity, for her to make such a recommendation. I think that the American people -- this is my forecast, and you can write this one down. I think that Democrats and Republicans, working men and women in this country, just about every one in this country has had a bellyful of the sophistry and the specious nonsense emanating from our elected officials in Washington, Democrat or Republican.

And I think there will be consequences as a result. I may be wrong, but that's my forecast. And I think that every American should make it his and her business to make certain that there are definitely political consequences at the polls.

Well, another community in this country is trying to fight back against our illegal immigration crisis, Orange, California, wanting to restrict where illegal alien day laborers can gather to work and look for work.

As Casey Wian now reports, once again, the open borders advocates, the amnesty advocates and activists are protesting mightily.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Day laborers united will never be defeated, just one of the slogans chanted during a protest march by day laborers and open borders activists in Orange, California.

City officials say 80 percent of the day laborers here are illegal aliens. More problematic for the city is their conduct and complaints from local business owners, who say as many as 100 day laborers at a time gather in front of some stores and drive away customers.

CAROLYN cabbie, MAYOR OF ORANGE, CALIFORNIA: We have people driving in, in cars being swarmed. We have sidewalks being blocked. We have increases in shoplifting. We have narcotic transactions going on. We have fighting going on. We have littering. We have loitering. We have urinating in public.

WIAN: The city's police department says it is overwhelmed by citizen complaints, so this month Orange began requiring day laborers to present two forms of identification and fill out a federal I-9 form in order to use the city's official work solicitation site. Fewer than a dozen have complied and even more than ever are seeking work on the streets.

UNIDENTIFIED MALE: We're already feeling the consequences, the effects of this decision, because we're not getting work.

UNIDENTIFIED MALE: We're only looking for work, work, work. We want to work.

WIAN: Also participating in the march, the ACLU, an increasingly frequent presence at demonstrations favoring expanded rights for illegal aliens.

HECTOR VILLAGRA, AMERICAN CIVIL LIBERTIES UNION: The ACLU has long fought to ensure the protections of the Bill of Rights and not only to protect those rights, but to make sure that they are extended to all people in this country.

WIAN: Orange city officials say they recognize court rulings allowing people to solicit work on public streets. The city is considering other measures, such as requiring day laborers and businesses that allow them to solicit on their property to obtain permits.

(END VIDEOTAPE)

WIAN: Meanwhile, here at the city's official day laborer site, it sits empty most of the time, now that workers here must prove they are in the United States legally -- Lou.

DOBBS: Well, how did there get to be something called an official day laborer site?

WIAN: Well, back in the 1990s, the city of Orange faced a similar problem with illegal aliens and others congregating on the street seeking work. So, the solution then was to allow day laborers to come to one specific site that was sort of away from traffic, away from homeowners.

(CROSSTALK)

DOBBS: Accommodating.

WIAN: Accommodating them.

Then they initially -- then they sort of toughened the regulations to require more identification. Some of the illegal aliens and other day laborers who came here didn't want to abide by those regulations. So, they started increasing their presence on the street. And now there's hardly anyone here at the official site.

DOBBS: So, basically, part of the lesson here for communities like orange, California, and others is, the more you accommodate those who break the laws and the more you permit our laws in this nation, whether they be immigration laws or local ordinances, to be violated, there is really no reason to expect people to either uphold the law or to honor the law.

WIAN: And, in fact, you can expect protests like the city received today and implied threats of lawsuits by groups like the ACLU.

DOBBS: And the ACLU is taking a remarkably activist role in immigration matters. It has moved from what one might call a civil rights organization. It is an outright activist now in the immigration, amnesty and open borders debate.

WIAN: Lou, I wish I could tell you that the ACLU is working on behalf of the citizens and the business owners who were victimized by all these crimes that the mayor detailed that illegal immigrants and other day laborers commit, but, unfortunately, I can't.

DOBBS: Well, you can't. And the fact of the matter is that this has gone on all across the country. And unless the American people wake up and demand law and order, that our laws be enforced, both at the border, and at our ports and our immigration laws, we're in for some tumultuous times.

It is absolutely a matter of great concern to anyone who cares about this great nation and what's happening to it. The arrogance is breathtaking. The indifference and the apathy in communities permitting this to go on is breathtaking.

The utter ignorance of our elected officials in Washington, of course, I think we probably could just say is now I guess only to be expected, hopefully to be rejected at some point at the polls.

Thank you very much, Casey Wian, reporting from Orange, California.

Up next here, reports that Senator Hillary Clinton's presidential campaign has received illegal cash. We will have that report.

And perhaps we should call the border fence being built along our border with Mexico the Great Wall of China. We will explain in a full report.

And we're selling our secrets in this country. Oh, but we like to sell them most of all to the communist Chinese, a communist Chinese company buying a U.S. technology company. And our federal government says what? Don't worry. No problem. A few people in Congress are rising up to block that deal. We will be telling you about the deal and those opponents.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Today, 14 U.S. senators expressed grave concern that a Chinese company with deep ties to the communist People's Liberation Army could threaten U.S. national security if a purchase they plan goes ahead.

As Christine Romans now reports, the Chinese company interested in an American firm that provides computer security to the Pentagon.

(BEGIN VIDEOTAPE)

ROMANS (voice-over): In a letter to the Treasury Department, 13 Republican senators and one Democrat questioned Huawei's ties to China's military and raised concerns about a deal in which Bain Capital acquires 3Com and gives a minority stake to Huawei. 3Com provides computer security for the Pentagon.

Quote: "Because of this longstanding and apparently deeply ingrained relationship between Huawei and the People's Liberation Army, we are concerned about the national security implications of this acquisition for the United States."

National security experts say Huawei was developed from the I.T. division of China's army and is now run by a former senior general.

JOHN TKACIK, HERITAGE FOUNDATION: And while Huawei may, with a straight face, argue that they have no financial ownership by the Chinese military, there is no question I think in anybody's mind that the Chinese military has full access to all of Huawei's technologies and services.

ROMANS: Bain Capital says: "Huawei will not have any access to sensitive U.S.-origin technology or U.S. government sales as a result of this transaction."

But Huawei will have three seats on the board of 3Com.

JOHN PIKE, GLOBALSECURITY.ORG: I think that you have to be concerned to make sure that this transaction somehow or another does not facilitate the Chinese military, Chinese intelligence being able to get access to American computers in a way that they currently cannot.

ROMANS: If those assurances can be made, Pike thinks regulators will allow the deal to proceed. But a resolution by eight Republicans in the House said the Huawei deal should not be approved.

Such a resolution, some argue, is protectionism.

TODD MALAN, ORGANIZATION FOR INTERNATIONAL INVESTMENT: We have a process in the United States when it comes to foreign investment that says we welcome foreign investment, but we're going to screen these things for national security, of course.

ROMANS: Yes, review of the deal, he says, but don't just block it.

(END VIDEOTAPE)

ROMANS: It's drawing parallels to the furor last year over a Dubai-government-owned company's effort to operate American ports, an outcry that led Congress to revamp the oversight of such deals.

The White House, Lou, promises a thorough and diligent national security review, but the Treasury Department chairs this security review and treasury secretary...

(CROSSTALK)

DOBBS: Under the Committee For Foreign Investment in the United States.

ROMANS: Foreign Investment in the U.S.

The treasury secretary will not be overseeing that. The letter from the...

DOBBS: Why not?

ROMANS: Well, because he had to recuse himself...

DOBBS: Oh, no.

ROMANS: ... because of his ties to Goldman Sachs, the bank that is advising on the deal.

DOBBS: Oh, no, you mean that Henry Paulson is the CEO of Goldman Sachs and they're advising on the deal with Huawei and with 3Com.

ROMANS: So he has recused himself.

DOBBS: What about Bain and Mitt Romney and their connections and -- how do those firms feel?

ROMANS: Oh, I haven't asked them specifically about that, I'm afraid.

DOBBS: Oh. You know, because I feel so much better that we've got oversight now and that CFIUS and the -- what was the gentleman's name from the Committee for International...

ROMANS: Oh, Tom (INAUDIBLE). Well, he's concerned that we're going to be -- seem like we're closed to foreign investment -- DOBBS: Oh, I know.

which we shouldn't be.

DOBBS: We shouldn't be closed to foreign investment. We should really just give them whatever they want.

I wonder how concerned we should be?

So let's just sort of look at the statistics here. Todd, kind of follow along with me on this one, if you will, partner. CFIUS has reviewed more than 1,500 deals from a national security standpoint. And we are very protectionist country so CFIUS has absolutely come down like a hammer.

Christine Romans, would you just tell everybody how many of those deals -- over 1,500 of them -- CFIUS has been rejected?

ROMANS: Maybe one or two.

DOBBS: One or two.

Todd, do you feel a little better, partner?

Because I want you to know something, I don't. I think CFIUS is a joke. I think the Treasury Department is a joke. I think this letter to Kemmett (ph) because Paulson is recusing himself -- I think the whole process is a joke. And I think these people -- the Bush administration have got themselves in so deep that the only thing they've got to trade now with all of these free trading partners like China are hard assets like real companies in the U.S.

ROMANS: I will point out in, Todd's Malan's defense -- and his organization's defense -- they want to see a review of this. They want to see a security review of this.

DOBBS: Good.

ROMANS: They're not saying there shouldn't be a review...

DOBBS: Yes. But they're worried about protectionism, the little darlings.

And you know what?

Anybody who looks at a trade deficit in this country that we're running, looks at the 31 consecutive years of trade deficits, $6 trillion plus in trade debt. And these idiots are worried about protectionism. These people need to pull their heads into the sunlight and start looking at the reality and soon -- for the benefit of working men and women in this country, for the benefit of a nation that is trying like hell to bankrupt itself.

Thank you very much, Christine. Great reporting.

Keep it up.

Christine Romans.

I know you will.

Concerns about the mortgage crisis.

Remember that?

Oh, yes, and a weak dollar and a dollar that's getting weaker, disappointing earnings and record high crude oil prices -- by the way, crude hit $90 a barrel -- combining to send stock prices slightly lower. Investors apparently are a little concerned. I don't know if it has anything to do with confidence and leadership in Washington or leadership in corporate America, but investors are nervous.

So nervous, in fact, that the Dow Jones Industrials today lost 367 points. The stock market plunged today. It happened, by the way, on the 20th anniversary of something called Black Monday, when the Dow lost more than 500 points, its worst one day plunge.

That brings us to our poll question tonight -- are you excited about the strong economic growth of China and Russia next year?

And, by the way, their economic growth will be far stronger than that of the United States.

Are you excited about them driving a strong global economy that will offset what many expect to be a recession in the United States?

I know the administration is excited about that. I know a lot of people on Wall Street are excited. I'd just love to know if you're excited about our being able to rely on Russia and China for world economic growth next year, as so many analysts are suggesting -- and economists -- that we might be.

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

Let's look at some of your thoughts now.

Jeanette in Georgia said: "What has happened to America? My New York bagel chips are made in Bulgaria. My toothpaste is made in Mexico."

Be glad -- it could be made in China. Whoops.

"My prescriptions and appliances are made in China. The ACLU is defending illegal aliens. I thought the A stood for American. And most of the jobs in my area have gone overseas."

Ah, it's the modern, modern world.

And Elizabeth in New York: "Ramos and Compean in prison almost a year. What does that say about justice in America?"

I don't think we have to spell it out.

And Ronald in Wisconsin: "Chinese steel to build the U.S. border fence? We could call it The Great Wall of China. We probably will -- if we ever see it built."

And let's not hold our breath, as long as these corporatists and socio-ethnic centric groups are running both political parties.

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

Up next, New York's governor, my good buddy, Eliot Spitzer -- he calls himself a steamroller. He's also a railroader. Spitzer trying to fast track the new head of the nation's biggest mass transit system.

Oh, and guess how much this new manager knows about transportation?

We're changing the tonality, governor, of this discussion. We're going to be talking about the way you run a state government and how democratically inclined you really are.

Stay with us for that, governor.

And who's supplying building material for the border fence along our border with Mexico?

Well, you've got to outsource something.

And a fundraising scandal hits the campaign of Democratic presidential frontrunner Senator Hillary Clinton -- again.

We're coming right back.

(COMMERCIAL BREAK)

DOBBS: There's rising outrage in Congress over a story that we actually reported here several months ago. The Department of Homeland Security, as we reported then, is now using Chinese steel in sections of the fence being built along our southern border with Mexico -- another example of the best government money can buy and just sheer brilliance on the part of this administration.

Lisa Sylvester has our report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Sections of the border fence in San Luis, Arizona are made with steel pipes -- not made in America, but made in China -- a major concern for lawmakers who represent the battered U.S. steel industry.

REP. JASON ALTMIRE (D), PENNSYLVANIA: Simply put, this is outrageous, it's offensive and it's unacceptable.

SYLVESTER: Approximately 60 of the 700 posts in San Luis were marked with a "China" stamp. According to the lawmakers, the Department of Homeland Security approved a waiver to bring in the imported steel from China, bypassing "by America" provisions.

REP. PHIL ENGLISH (R), PENNSYLVANIA: The notion that we are waiving our own laws in order to create opportunities for foreign producers to send subsidized product into the United States is absurd.

UNIDENTIFIED MALE: The Department of Homeland Security has, the last time I checked, $800 million cash on hand available to build the border fence. So they don't have to go and get cut rate deals to build the border fence.

SYLVESTER: This comes at a time when the U.S. steel pipe industry has lost hundreds of jobs because of Chinese steel products dumped on the U.S. market. Chinese steel tube and pipe imports increased from less than 140,000 tons five years ago to nearly three million tons today, according to the United Steelworkers Union and a major steel company. The union says at issue is not just jobs today, but the ability of U.S. steel makers to continue to supply the U.S. defense industrial base in the future.

TAMARA BROWNE, LAWYER FOR U.S. STEEL INDUSTRY: And removal of the domestic industry from this market supplying our nation's defense will be at a critical juncture. We just simply won't be able to supply it.

(END VIDEO TAPE)

SYLVESTER: A hearing has been scheduled for October 31st and Congressional members have invited DHS Secretary Michael Chernoff to answer some of these questions. The Department of Homeland Security does not deny that Chinese pipes were used to construct the fence. DHS says it is addressing the issue with the contractor. Lisa Sylvester, CNN, Washington.

(END VIDEO TAPE)

DOBBS: I love the Department of Homeland Security, don't you?

Addressing the issue. And in no way using common sense or rational judgment of any kind.

Lawmakers raised another concern, by the way -- the quality of that imported steel. They want assurances that the Chinese made steel meets U.S. safety standards. There are no such assurances at this point. And the attorney representing the United Steelworkers, for example, says she's received four different reports of faulty pipes that are failing those safety tests -- U.S. safety tests, not Chinese safety tests -- U.S. safety tests.

The campaign of Democratic presidential frontrunner, Senator Hillary Clinton, is now in another fundraising controversy tonight. The new accusations surfacing just a few months after Senator Clinton was forced to return money raised by accused swindler, Norman Hsu. This time the Clinton campaign concedes they may have mistakenly accepted contributions from unregistered voters, perhaps -- oh, my goodness -- perhaps even illegal aliens.

Can you say voter fraud?

Jim Acosta reports now on some rich contributions coming from some of the city's very poorest neighborhoods.

(BEGIN VIDEO TAPE)

JIM ACOSTA, CNN NATIONAL CORRESPONDENT (voice-over): New York's Chinatown neighborhood may be more than a good place to find dim sum. For Hillary Clinton's presidential campaign, it's also a hot spot for political contributors -- worth hundreds of thousands of dollars.

"The Los Angeles Times" examined 150 Clinton donors from New York's Chinese community, some at events attended by the candidate. The paper discovered roughly one third of those contributors could not be find. Some had wrong addresses. Others may not be registered to vote. And there were more found working in low paying jobs with questionable immigration status.

We looked up one of those wrong addresses in Chinatown. Not only did we not find the mystery donor, the building says one resident could use some updating.

(on camera): Do you think people here generally have enough money to donate to a political campaign?

SHUI LEUNG, CHINATOWN RESIDENT: A small amount maybe, but not a large amount.

ACOSTA: Small amounts possibly, but not large amounts?

LEUNG: Right. Right.

Because you see this is not a very deluxe building, right?

ACOSTA: This is not a deluxe building is what you're saying?

LEUNG: Yes, right, right. So not many rich people live in here.

ACOSTA: Not too many rich people here?

LEUNG: Right. Right.

ACOSTA (voice-over): Over the years, the Clintons have raised big bucks thanks to their close ties to the Asian-American community. But it's a connection that has also brought about the couple's worst campaign cash scandals -- whether it's convicted fundraiser John Huang during Bill Clinton's presidency or one-time fugitive fundraiser Norman Hsu during Hillary Clinton's campaign.

MASSIE RITCH, CENTER FOR RESPONSIVE POLITICS: This story would appear to be about Chinese immigrants who are making contributions to Hillary Clinton's campaign, some legitimately, some perhaps not legitimately. And that sounds a lot like what happened to Bill Clinton during his campaign, when they there were illegal donations coming from nationals.

So when it sounds very similar, that's the political problem, because voters will say, oh, here we go again.

(END VIDEO TAPE)

ACOSTA: As for Hillary Clinton's Chinatown connection, her campaign officials told us they actually flagged some of these questionable donors and in cases where the contributors' identities could not be verified, donations were returned. But this campaign insists this is a small problem -- Lou.

DOBBS: And an intriguing one that is not resolved.

Where do we go from here?

ACOSTA: Well, where we go from here is essentially the Clinton campaign is going to be closely watched. The Edwards campaign came out today and said this is the reason why Hillary Clinton is not the person to clean up Washington. So not only will the other campaigns be watching, reporters will be watching, as well.

DOBBS: Not much delay in taking political advantage. And certainly no obvious learning curve from her husband's experience while campaigning.

ACOSTA: That doesn't appear to be the case.

DOBBS: Jim Acosta, nice reporting.

Thanks very much.

ACOSTA: You bet.

DOBBS: Appreciate it.

Well, New York's Governor Spitzer facing accusations he's using the power of his office to push through a Democratic fundraiser to chair one of the country's largest transportation agencies.

Hard to imagine, isn't it, that Governor Steamroller would do such a thing?

And Governor Spitzer's good friend, Dale Hemmerdinger, is a real estate developer. Now, he's a real estate developer. He has no experience running a state agency. In fact, during confirmation hearings yesterday, Hemmerdinger admitted his knowledge of transportation issues, by the way, is limited to what he reads in the newspapers. Hemmerdinger does have plenty of experience, however, raising money for Governor Spitzer and other Democrats -- among them, the Democratic Congressional Campaign Committee.

Hemmerdinger's nomination must now be confirmed by New York's Republican-controlled Senate. He sounds like a perfect man for the job. I can see why you would want him, Governor Spitzer, right on the post there -- transportation money. It all works. It's all great.

We'll see what the Senate has to say.

Coming up next, House Speaker Nancy Pelosi suffers a series of political defeats. She has a few thoughts that we will share with you tonight about her week. And I'll discuss that story with our panel of political experts.

Also ahead, God and politics -- GOP hopefuls looking for their religious right. And we're going it find out how the Democrats are doing with God, as well.

Stay with us.

We're coming right back.

(COMMERCIAL BREAK)

DOBBS: Well, joining me now, three of the country's very best political minds.

Ed Rollins, former political director of the White House and Republican strategist.

Errol Louis, "New York Daily News" columnist and a member of the editorial board.

Democratic strategist, Democratic National Committeeman Robert Zimmerman and Senator Hillary Clinton enthusiast and supporter, I think is a fair way to put it.

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: Sure.

DOBBS: We'll be talking about Chinatown later.

Let me turn to you first, Ed Rollins.

This president is a lame duck. He's scaring the Dickens out of a lot of people with 15 months left in office. And yet Nancy Pelosi can't overcome the Republican intransigence, if you will put it that way, or principal, if you prefer, on Capitol Hill.

ED ROLLINS, REPUBLICAN STRATEGIST: Well, she couldn't -- she couldn't obviously bring any Republicans over. The ones who had supported this president are going to go down -- down the cliff with them. I think, to a certain extent, this is a vote that's going to Republicans long-term. Nothing is going to hurt this president. He's done and gone. But these members who are going to have to stand up there, we can (INAUDIBLE)...

DOBBS: Which vote?

Which vote is that?

ROLLINS: Well, I think the one -- the attempt today to override the veto.

DOBBS: Right.

ROLLINS: Before we all start hammering on Robert today, it's his parents' 60th anniversary and I think that...

DOBBS: Outstanding.

Congratulations.

ROLLINS: I think that's a wonderful -- a wonderful accomplishment...

ZIMMERMAN: Thank you.

ROLLINS: ...and they can be very proud of their young son.

Now we can beat up on him.

(LAUGHTER)

ZIMMERMAN: My parents, I know, appreciate your thinking of them.

ROLLINS: I wish them well.

DOBBS: Well...

(CROSSTALK)

DOBBS: And that is terrific. That's outstanding. And you did good, Mr. and Mrs. Zimmerman, because your son is one of our favorite folks.

I'm not sure how well you're going to like to deal with the fact that there is a question about some of the contributions going to your favorite candidate for the Republican presidential nomination...

ZIMMERMAN: Can we talk about my parents' anniversary again?

DOBBS: No.

(LAUGHTER)

DOBBS: We're done with that.

ZIMMERMAN: OK.

DOBBS: With all respect to Mr. and Mrs. Zimmerman.

ZIMMERMAN: Of course.

You know, obviously, the Clinton campaign organization is going to have to do their own due diligence.

But you know something?

DOBBS: But why again?

Why again?

ZIMMERMAN: Why wasn't this -- why was this the case in the Bob Dole campaign, where there were campaign irregularities on every...

DOBBS: Oh, please. You know, I'm not interested in history. History, by the way, is something from which we learn. This senator...

ZIMMERMAN: And what we learned...

DOBBS: This senator has her own experience from her husband. She has experience in the case of Norman Hsu and her husband's case in his campaign, as well as Senator Dole's experience.

The point is why are we seeing this happen again?

ZIMMERMAN: I think you're seeing it for two reasons. One, politically speaking, this is a campaign -- the Clinton campaign -- that has raised an unprecedented, historic amount of money. You've got donors coming in from the Internet...

DOBBS: So there's just much money coming in?

ZIMMERMAN: I'm saying it's hard to track it all and it has to be done better. But the other issue, too, is, Lou, this will never be cleared up until you have public financing of campaigns. It's a systematic problem.

ROLLINS: Well, we have public financing of campaigns. Mrs. Clinton and all of the other candidates chose it not to use it this time.

DOBBS: That's right.

ROLLINS: There's public financing. You could have run with it before...

ZIMMERMAN: But that's partial (INAUDIBLE)...

ROLLINS: No, no, it's -- you're talking about public financing.

DOBBS: But the point is why didn't she do that?

ROLLINS: You're talking about public financing...

DOBBS: Why didn't she do that, Robert?

ROLLINS: Equally as important. ZIMMERMAN: I'm going to speak to it.

ROLLINS: Equally as important -- this is a very important part. When you give a contribution, when you give a contribution as big as they are giving and you're supposed to list you're employer, when someone says a dishwasher and they've just given you $2,300...

ZIMMERMAN: Yes, they're...

ROLLINS: Or a chef or what have you, you ought to basically pay attention to that.

ERROL LOUIS, "NEW YORK DAILY NEWS": There's no shortage of people who can program a computer to sort of flag exactly those kind of discrepancies.

DOBBS: Right.

LOUIS: That this is coming out of a low income census track, a low income zip cope and somehow they've come up with $2,300...

ZIMMERMAN: Very quickly (ph).

DOBBS: Nancy Pelosi -- Armenian genocide, 95 years ago, what in the world is going on?

LOUIS: Why they chose this week, this time, of all times, to deliver this symbolic history lesson, I have no idea. I know that it has nothing to do with what really needs to happen in that part of the world, which are very pressing problems when we have 160,000 troops on the ground.

DOBBS: And we're going to be back with our political panel. More discussion on this issue and quite a few others.

Robert Zimmerman and Ed Rollins will have to explain their parties fully.

Stay with us.

We're coming right back.

(COMMERCIAL BREAK) DOBBS: Well, Nancy Pelosi gave us a statement where she said she's just doing terrifically. And so we're going to accept her view of what she's doing.

I don't think the Republicans are doing so terrifically, either. The fact is that Mel Martinez -- Senator Martinez is stepping down as GOP chairman and nobody is replacing him.

What the heck is that about?

ROLLINS: It says everything you need to know about Mel Martinez's tenure as the chairman. This was a Karl Rove move to put a high level ranking Hispanic to supposedly get the Hispanic vote. He didn't do a thing for the party. The party is in desperate shape, relative to the money and everything else.

DOBBS: Desperate shape?

ROLLINS: It's in desperate shape. And Senator Martinez is a fine man who needs to get back and focus on Florida issues to get himself re-elected in four years.

DOBBS: All right. And we don't have to worry about 12 Congressmen and women getting themselves elected. Congressmen -- and Republican Congressmen, five senators, Republican senators.

What in the world -- the Republicans are bailing out as fast as -- I mean it's unseemly almost.

ROLLINS: They don't like being in the minority.

(LAUGHTER)

ZIMMERMAN: Neither does Bush.

LOUIS: Well, there's a -- there's a collapse that we haven't seen in a long time, where the party is collapsing. And it did have to do with, I think, with Karl Rove's very ambitious attempt to try and create a longstanding fundamental realignment. He tried to take elderly voters by reforming Social Security and he tried to get Hispanic voters...

(CROSSTALK)

LOUIS: It just didn't work.

ZIMMERMAN: Ultimately, he victimized his party with his own extremist tactics. And this is a party now that belongs now to the extreme right-wing. And you're seeing, in fact, now the Republican Congress members are going to run with their record of keeping staying the course with George Bush in Iraq and now helping to support President Bush in vetoing health insurance for middle income working families' children.

DOBBS: Wow!

You know, for a Democrat, you're extraordinarily well informed on the Republican Party now.

ZIMMERMAN: I try to keep up.

(LAUGHTER)

ROLLINS: (INAUDIBLE) are talking points. You seldom use them. You used to use the Democrats', but that's OK.

(LAUGHTER)

DOBBS: Well, and preferring, at least tonight, perhaps, the Republican points over the Democrat.

ROLLINS: It's the Republican Party because -- because of the demise of the president and his war policy. It's going to be an every man for himself 2008 election.

DOBBS: Right.

ROLLINS: We've got a very bitter primary to move forward. And, at the end of the day, we're going to find candidates running about local issues, local strengths.

DOBBS: Well, it's -- one of the things that's going to be fun, Ed, as you and I have discussed earlier, right now I am so proud to be an Independent populist and to watch you partisans of the Democratic and...

ROLLINS: I've always been an independent Republican.

(LAUGHTER)

DOBBS: Good to have you on.

Thank you very much.

Appreciate it.

Robert and Errol, thank you very much.

Ed, thank you.

ROLLINS: Thank you.

DOBBS: Up next, "THE SITUATION ROOM WITH WOLF BLITZER" -- Wolf.

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

Her cover was blown in the CIA leak scandal. Now the former operative, Valerie Plame, is going public with the damage. Find out what she's saying that the country suffered as a result.

Also, new questions about some of Hillary Clinton's mysterious donors.

Did the Democratic presidential candidate's campaign take money from undocumented immigrants?

Plus, Rush Limbaugh auctioning off what he calls a smear letter from the Senate majority leader, Harry Reid. The final selling price -- unbelievable. All the money going to charity.

All that, Lou, and a lot more, coming up in "THE SITUATION ROOM."

DOBBS: And one of the things I forgot, because Eliot Spitzer -- Governor Spitzer, if you're listening, the panel agrees on one thing -- you're a disaster. We didn't have time to go in-depth on it, but I wanted to at least put the headline out there for you to think about.

Coming up next, the results of our poll.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Now the results of our poll -- only 93 percent of you are not excited at the strong economic growth of China and Russia next year will offset what many expect to be a recession in the United States. A lot of the brilliant economists on Wall Street think we should be really reassured by the fact that China and Russia will lead world growth next year.

Thanks for being with us.

Join us here tomorrow.

And we appreciate it.

For all of us, here comes "THE SITUATION ROOM" and Wolf Blitzer.

Good night from New York -- Wolf, take it away.

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