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Lou Dobbs Tonight

Arizona Nuclear Power Plant Locked Down; White House Nearing Victory in Attorney General Battle?

Aired November 02, 2007 - 18:00   ET

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

LOU DOBBS, CNN ANCHOR: Tonight, what appears to be an astonishing breach of ethics in Washington -- imagine that -- top government safety officials accepting overseas trips from the very same toys companies they're supposed to regulate. We will have complete coverage.
Also tonight, the backlash over Governor Spitzer's outrageous plan to give away New York driver's licenses to illegal aliens. The backlash just keeps growing. There are charges the federal government has ignored the backlash and is helping the governor weaken the REAL I.D. Act. We will have that story.

And a small town in Pennsylvania threatened by potentially lethal gases. Even more disturbing, government officials charged with protecting the town and its residents failed to warn them about the dangers they now face. We will have that special report, all the day's news and much more, with a strong emphasis on what are politics at its best this week, straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Friday, November 2.

Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

This country's largest nuclear power plant is locked down tonight after a bomb alert. Security guards at the Palo Verde nuclear station in Arizona found an explosive device in a contract employee's truck. Security teams immediately started a sweep of the entire plant.

Kelli Arena has our report now from Washington -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Lou, here's what happened.

A contract worker was stopped and detained at a routine security checkpoint where a pipe bomb was found in his truck. Now, officials say that he didn't try to hide this device and they have no indication that this event has any connection to terrorism.

The bomb itself is described as very small, but, still, the man is in custody and is being questioned and his apartment is being searched.

(BEGIN VIDEO CLIP) CAPTAIN PAUL CHAGOLLA, MARICOPA COUNTY SHERIFF'S DEPARTMENT: It is an out of state subcontractor who was working at the plant. He resides in the Phoenix area at an apartment complex. So, our investigation is much more widespread than just what we're dealing with at the plant itself.

(END VIDEO CLIP)

ARENA: The security checkpoint is about a half mile away from the plant and officials there say there was never any danger, but, still, as you mentioned, Lou, they locked everything down until a security sweep is completed.

Now, officials will not I.D. the worker, nor will they say which company employs him. All they will say is that anyone who does have access to the plant must submit to a background check. And this plant, by the way, Lou, supplies electricity to about four million customers.

DOBBS: Now, Kelli, they say that it was an explosive device. Do they say what kind, what the power, the potential power of the device?

ARENA: They said it was very small. It's a pipe bomb that was, they think, thrown into his truck. They're not exactly sure how it got there.

But one official that we spoke to, Lou, said that it was not big enough to actually even blow up the truck that it was in, yet alone do any more damage than that. So, we're very talking very, very small explosive here.

DOBBS: All right, Kelli, thank you very much -- Kelli Arena from Washington.

The Bush White House tonight appears to be winning the battle over the nomination of Judge Michael Mukasey to become the U.S. attorney general. Two Democrats, Senator Chuck Schumer and Senator Dianne Feinstein, today said they will support Mukasey. That means the Senate Judiciary Committee is all but certain to support his nomination.

Earlier, President Bush again called upon the Senate to confirm Mukasey.

Suzanne Malveaux reports from the White House -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, really shy of some sort of Republican revolt over the weekend, it's all but a shoo-in here that Mukasey is going to go ahead and move forward with that nomination, those two critical Democrats that got his support today.

Now, why did all of this happen? Publicly, you heard the president as well as White House officials say he was an excellent candidate. He was also a compromise candidate, someone that the Democrats and Republicans rallied behind from the very beginning until this all kind of deteriorated over the last week or so.

But privately, Lou, what was happening as well the White House was making two other points. And that is if you don't get Mukasey, what is the alternative? That being an acting attorney general for some 14 months. This is someone who doesn't have to go before the Senate at all to answer any questions about water-boarding or torture or anything like that, essentially would cut out the Senate from the process.

And, secondly, it was very clear that this White House was not going to send up a nominee who was going to answer that question, whether or not water-boarding was considered illegal. Mukasey set the bar for that. The White House was not going to send up anybody who could really address that particular issue. So, we heard from Senator Chuck Schumer who said this was a very difficult decision.

He released a statement saying that: "Judge Mukasey is not my ideal choice. However, Judge Mukasey, whose integrity and independence is respected even by those who oppose him, is far better than anyone could expect from this administration."

But what about the water-boarding, the torture issue? He addressed in his letter as well, saying that he talked to Mukasey, met with him this afternoon, and he was reassured. He says that, "I'm confident that this nominee would enforce a law that bans water- boarding, as I hope it will."

We also heard from Senator Dianne Feinstein. She explained it kind of a lesser of two evils, essentially saying that Mike Mukasey is not Alberto Gonzales.

So, Lou, the White House is not yet celebrating this. They're trying to keep an even tone about this. As one White House official put it here in Washington, Tuesday is a long ways away -- Lou.

DOBBS: And this is the kind of thing that passes for high drama in this day and age in Washington, D.C., over the confirmation and potential confirmation of a judge to become U.S. attorney general.

Thank you very much. Appreciate it, Suzanne Malveaux, from the White House.

A federal judge today ruled Secretary of State Condoleezza Rice can be subpoenaed in an espionage case. The judge said Rice and other current and former government officials can't refuse to give their testimony in the trial of two former pro-Israel lobbyists. Those lobbyists face charges they passed classified information to an Israeli official and the media.

Attorneys for the pro-Israel lobbyists say the Bush administration regularly used the two men as intermediaries with Israel.

Secretary of State Rice today made a new effort to try to stop Turkey from launching an incursion into northern Iraq. Secretary Rice held talks with senior Turkish officials in the capital of Ankara. And State Department officials said the United States is now offering Turkey incentives, incentives to prevent an incursion.

Turkey has massed now 100,000 of its troops on the border with Iraq. Those troops are preparing to attack Kurdish rebel bases in Iraq.

Senator Barack Obama is stepping up his criticism of the foreign policy of the Bush administration and that of his Democratic rivals as well. Senator Obama is now accusing Democratic front-runner Senator Hillary Clinton of shifting her position on Iran, but it turns out Senator Obama missed a key vote in the Senate on Iran's links with terrorist groups.

Jessica Yellin brings us up to date.

(BEGIN VIDEOTAPE)

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT (voice-over): It's become one of the most consistent themes of Barack Obama's campaign: slamming Senator Clinton for her vote on an Iran amendment. He claims it empowers the president to attack Iran.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: This kind of resolution does not send the right signal to the region. It doesn't send the right signals to our allies or our enemies.

YELLIN: But Barack Obama never voted on that amendment.

UNIDENTIFIED FEMALE: Mr. Obama.

YELLIN: While Hillary Clinton was voicing her support for it, Senator Obama was campaigning in New Hampshire. Obama's campaign says he didn't get enough notice to make it back to the Senate in time. But Clinton and the other Democratic senators running for president did make the vote.

In fact, since returning from the August recess, Senator Obama has missed the most votes of any of the Democratic presidential candidates, nearly 80 percent since September. The others don't have great voting records either.

According to the Obama campaign, he has made the most important votes, including on Iraq and key domestic priorities. He canceled an appearance on "The View" to cast a crucial vote on the children's health insurance measure.

And, his campaign says, if you consider the entire year, Senators Biden and Dodd have been absent more often.

STUART ROTHENBERG, EDITOR AND PUBLISHER, "THE ROTHENBERG POLITICAL REPORT": I think most Americans understand that, if you're running for president, you are going to have to be in Iowa, New Hampshire, and you're not going to make all the votes. And they give candidates slack.

YELLIN: But, facing a mounting fight with the White House over key bills, Harry Reid is putting all the contenders on notice. SEN. HARRY REID (D-NV), MAJORITY LEADER: I'm going to leave here and go call our presidentials, and let them know that they better look at their schedules, because these are not votes you can miss.

(END VIDEOTAPE)

YELLIN: And, Lou, on that Iran amendment, which has become such a key part of Obama's campaign, two Senate Democratic aides tell us that there was notice given to the senators the night before, and Obama should have known that that vote was coming up when he decided to be in New Hampshire anyway. When confronted with this information, the Obama campaign adamantly maintains the senator did not have enough time to return to Washington -- Lou.

DOBBS: Well, my goodness, it is complicated and it's asking so much to ask these senators to manage both their responsibilities to their constituents, those who elected them, and, of course, all of the people that they want to represent as they seek their party's nomination.

Jessica, I mean, this is just silly to hear Stuart Rothenberg saying, well, people will just cut them a little slack, a Democratic set of candidates. I don't think anybody is too thrilled with the performance that any of these candidates have put on. And, I mean, if they're going to miss all these votes, at -- the very least they should do is be providing some sort of compelling public dialogue, a new initiative, innovative leadership.

Instead, what we're watching is a bunch of carping nonsense.

YELLIN: Well, what them campaigns tell us, at least, is that they will be here for those votes that are considered crucial and in which their vote could be decisive.

DOBBS: Oh, well, it's so nice that these people can decide what is crucial and what is not.

(LAUGHTER)

DOBBS: But I have to believe, if you're going to miss 80 percent of the votes, you are probably missing one or two in there that probably is critical.

And, if not, Jessica, I wonder if we shouldn't just send a survey around to these presidential candidates and say, should we cut back the time that these people have to bother with Congress? Maybe we should have Congress only in session 20 percent of the time that it is now, so it will be more convenient for everyone, and perhaps less of a threat to the public well-being if they're not in session.

Jessica Yellin, thanks very much. Appreciate it.

Coming up next, troubling charges that the Bush administration is helping New York Governor Eliot Spitzer roll back the REAL I.D. Act.

Casey Wian has our report -- Casey. CASEY WIAN, CNN CORRESPONDENT: Lou, the REAL I.D. Act is supposed to help prevent terrorists from boarding an airplane or entering a federal building, but now a gleeful ACLU says REAL I.D. is all but dead -- Lou.

DOBBS: Can't wait to hear what the ACLU has to say, always. Thank you. We're looking forward it your report, Casey.

And Governor Spitzer facing a new challenge to his outrageous desire to give driver's licenses away to those illegal aliens. We will have that story.

And startling evidence of the extremely close links between leading toy companies in this country and the federal agency that is supposed to be regulating them and protecting American consumers.

That report and a great deal more coming right up. Stay with us.

(COMMERCIAL BREAK)

DOBBS: New York Governor Eliot Spitzer, one of my very favorite people, is jeopardizing public safety in his state with his outrageous proposal to give away driver's licenses to illegal aliens.

His controversial plan would even allow illegal aliens to buy guns in the state of New York.

As Kitty Pilgrim reports, New York state's sheriffs don't like that idea so much. They have joined what has become a tidal wave of opposition to the governor's plan that includes law enforcement officials from outside the state of New York as well.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Governor Spitzer makes the argument that giving driver's licenses to illegal aliens will help local law enforcement.

GOV. ELIOT SPITZER (D), NEW YORK: The DMV database is perhaps the most important database that we use as prosecutors in order to find out who's who, where is somebody, who are they, where are they, where they have they been. To the extent that you have a million people right now who are not in that database, and they're floating out there unbeknownst to us.

PILGRIM: But 58 New York State sheriffs in a closed-door meeting overwhelmingly voted against the governor's plan, saying other state officials have said the opposite.

MICHAEL AMATO, MONTGOMERY COUNTY, NEW YORK, SHERIFF: According to the commissioner of the DMV, the information that they harvest from these driver's licenses will not be shared with local law enforcement right now and it's not going to be shared with anti-terrorism or federal organizations. And that's a concern. They have stated that, if we do want this information, we have to file court papers to request it. PILGRIM: Sheriffs also point out the driver's licenses will help illegal aliens blend into society, open bank accounts, obtain credit cards, and even purchase a gun. They worry New York State will become a magnet for illegal aliens or criminal illegal alien gangs.

(on camera): The implications of New York policy will also be felt in neighboring states, as illegal aliens often move from place to place to find work.

JOHN MORGANELLI, PENNSYLVANIA DISTRICT ATTORNEY: We have reciprocity among our states, particularly Pennsylvania, New York, New Jersey, states that we recognize as our neighbors. They will recognize valid government-issued documents. And a driver's license is a valid document and it gives legitimacy to a group of people that have no legal standing here in the country.

PILGRIM (voice-over): Although Governor Spitzer says a residency requirement will be part of the license process in New York, prosecutors in other states point out, once the license is issued, illegal aliens can move anywhere in the country.

(END VIDEOTAPE)

PILGRIM: The Montgomery County sheriff, Michael Amato, told us the plan goes against the basic role of law enforcement officers in the community. They're there to uphold the law. And illegal aliens are breaking the law and then being basically rewarded with driver's license, a privilege.

Now, the sheriff's association has told the governor they want him to rethink the plan. He has not, however, responded to their concerns -- Lou.

DOBBS: Oh, look, this arrogant excuse for a governor is not going to consider anyone's views other than his own and that of the socio-ethnocentric groups that he's representing here, to the exclusion of the interests of New York State residents and citizens.

I mean, this is incredible, what he's done. And then to suggest that this information, first, to suggest that it's going to be all just hunky-dory, that this information on these illegal aliens would be shared, he knows, he absolutely knows that he's lying through his teeth. And people have got to start saying what they mean in this country.

When a governor lies to the people of the state, he's got to be called for it.

And I'm calling you, Governor Spitzer. You're lying to the New York citizens. And you have got to stop it. It's time to get honest. It's early in your term. You might even be able to turn around what is one of the most abysmal beginnings to a term in office of any governor in this state's history.

But, my gosh, you are going to have to find some kind of religion and discover enough character and capacity to do the right thing. It's insane.

PILGRIM: The sheriffs are quite concerned, because they say it's so time-consuming for an individual to file all the court papers, if they have an individual in custody. And that's the way they are going to have access to this information. And it's been misrepresented to them.

DOBBS: It's just unbelievable. I don't know who is going to talk to this governor. I don't know if his wife can talk to him. I don't know if he has got any friends left who can talk to him, if he would listen to anyone in his own political party.

Now Senator Hillary Clinton is supporting him. So, it seems to me that there are political careers being thrown away left and right to support this nonsense of an issue.

All right, thank you very much, Kitty -- Kitty Pilgrim.

Well, Governor Spitzer's plan to reward illegal aliens with the privilege of a driver's license from New York is linked to the federal REAL I.D. Act. It would require states to issue secure driver's licenses and other forms of identifications. But the security of the REAL I.D. is now in question.

As Casey Wian reports, the Department of Homeland Security is being accused now of watering down REAL I.D.

(BEGIN VIDEOTAPE)

WIAN (voice-over): Starting next year, the REAL I.D. Act requires states to begin issuing secure driver's licenses and other forms of identification. But 2013, the law mandates that everyone in every state will need a secure I.D. to enter a federal building or board a commercial airplane.

But states complain they're being asked to pick up most of the REAL I.D. Act's $11 billion to $15 billion estimated cost. Some are pressuring the Bush administration to delay the program. Others say they won't comply with REAL I.D.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: The law is very clear. If a state doesn't have, at the end of the day, at the end of the deadline, REAL I.D.-compliant licenses, then the state cannot expect that those licenses will be accepted for federal purposes.

WIAN: According to the American Civil Liberties Union, the Department of Homeland Security held a recent conference call with state officials, who now believe crucial parts of the DHS plans for REAL I.D. have been scrapped, including the requirements that all airline passengers show their REAL I.D.s at the gate.

The ACLU, which opposes the program because of privacy concerns, says "REAL I.D. is in its death throes, and any signs of life are just last gasps."

The normally reserved Homeland Security Department issued this statement in response: "The ACLU is living in a fantasy world. They continue to spout off erroneous information to confuse and mislead the public about a core finding of the 9/11 Commission and a mandate from Congress. In this instance, they couldn't be further from the truth."

DHS says it is working with states to implement REAL I.D. For example, last week, Homeland Security Secretary Chertoff appeared with New York Governor Eliot Spitzer to announce a deal.

SPITZER: We have spoken to DHS about our concerns with REAL I.D. and they have assured us that their final regulations that are coming out soon will address the cost, convenience and privacy concerns.

WIAN: DHS says there will be consequences for states that don't comply.

(END VIDEOTAPE)

WIAN: In practical terms, it means residents in states without REAL I.D.-compliant licenses will need a passport or a military I.D. to board an airplane or enter a federal building -- Lou.

DOBBS: Casey, what in the world is the ACLU saying, that they really don't want to have security on our aircraft? They don't want to have secure identification in this country? Is that inconvenient to their activism to keep our borders open, to drive socio- ethnocentric activism that seems clearly part of their principal agenda?

WIAN: They're not saying that explicitly. Their concern has always been the privacy of Americans, as it relates to the REAL I.D. Act. But you can certainly infer from their opposition to this effort that that may be what they support, Lou.

DOBBS: Well, I have to say, as you pointed out, the Department of Homeland Security, usually reticent, Milquetoast, and its comments watered down into bureaucratese, being very clear about the ACLU. I will give them credit for that.

I just have one little question. It's now more than six years since September 11, and we won't see REAL I.D. fully implemented for another six years?

WIAN: That's correct, Lou. And it could even be delayed another two years, if you believe the ACLU. The Department of Homeland Security says it's trying...

DOBBS: Then somebody needs to take this gang of fools, both political parties, Congress, and the White House and run them out of town.

Well, we might have that opportunity in just about a year from now. What do you think?

Rhetorical question, Casey. Thank you very much.

(LAUGHTER) WIAN: OK.

DOBBS: Casey Wian.

Time now for some of your thoughts.

Mike in Florida: "Hi, Lou. I'm joining the ranks of Lou's voters. I will be an independent as soon as the mailman delivers my registration form to the supervisor of elections office."

Good for you, and welcome aboard. Independents, here we come.

Anne in Colorado: "Dear Lou, you asked for names, other than idiot for the idiots in government," because that's -- I'm just using it too much. "Sophomoric comes to mind, also nincompoop, imbecile, obtuse, moronic, and asinine. The list goes on. Keep up the good work."

And thank you for your help. We are going to need a lot of help.

Chuck in Florida said, "Lou, my suggestion for a new name for the governor of New York is blockhead."

I think that's entirely serviceable. And we appreciate your suggestion.

We will have more of your suggestions here later.

Our poll question tonight is, which issue is most important to you in this presidential campaign? And I know there may be many besides these four, but we wanted to look at these four and just see what your thoughts were. And, if you will, just choose amongst these, Iraq, the economy, illegal immigration/border security, and health care. Cast your vote at loudobbs.com. We will have the results coming up here later.

Next, an apparent violation of ethics -- top officials at the Consumer Product Safety Commission taking trips paid for -- oh, my gosh -- taking trips paid for by the industries they're supposed to regulate. We will have that story and a great deal more.

Stay with us. We're coming right back.

(COMMERCIAL BREAK)

DOBBS: Just what we needed, another outrageous display of government arrogance. Top officials at the Consumer Product Safety Commission accepted trips and perks from the industries they're supposed to be regulating.

Acting Chairman Nancy Nord and her predecessor, Hal Stratton, took almost 30 trips paid for by the trade associations and manufacturers they regulate.

As Lisa Sylvester now reports, that agency is trying to defend its policies. (BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Official government records obtained by CNN show the acting head of the Consumer Product Safety Commission, Nancy Nord, and her predecessor, Hal Stratton, have traveled around the globe, dozens of trips paid for by the industry groups that they are in charge of regulating.

In February 2006, Nord spoke at the Toy Industry Association's annual conference in New York. The toy group picked up her travel expenses, including a two-night hotel stay. Former CPS Chairman Stratton went on more than 25 trips, including to China, Spain and Key Largo, Florida. The cost of these trips has exceeded $60,000 since 2002.

CRAIG HOLMAN, PUBLIC CITIZEN: One of these trips even included where the lobbyist association provided their own private corporate jet to fly the regulator to the event. We're talking about an appearance of corruption here.

SYLVESTER: If true, this is not illegal, but raises ethical questions. Congressional lawmakers have already been calling for Nord's resignation over the recent recalls of products and a budget fight she's having with Congress. Some are demanding an inspector general investigation.

SEN. SHERROD BROWN (D), OHIO: These were trips paid for by the toy industry, the industry now under scrutiny for cutting corners, cutting corners that earn big profits for industry CEOs and send toxic toys into our children's bedrooms.

SYLVESTER: The Consumer Product Safety Commission says -- quote -- "Travel by all employees at the CPSC goes through the agency's painstaking review by the Office of General Counsel before any trip is approved. That process has been in place for 14 years."

But public watchdog groups say, while it's important regulators travel to learn about industries, there's a conflict of interests when those special interest groups pay for those trips.

MASSIE RITSCH, CENTER FOR RESPONSIVE POLITICS: It's an appearance problem, because you have got the people who are in charge of regulating an industry being very chummy with it in this industry. They're going on trips together. They're talking to each other. And other voices are excluded from the conversation.

SYLVESTER: The special interest groups make no apologies, the Toy Industry Association saying the trips are consistent with -- quote -- "the agency and the industry's goal of educating the industry on standards. It further demonstrators that the agency does need additional funding, and we would support that."

(END VIDEOTAPE)

SYLVESTER: Former Consumer Products Safety Commissioner Hal Stratton did not want to be interviewed or issue a statement. The current acting CPSC chairman, Nancy Nord, says she is asking the Office of Government Ethics to conduct a complete review of the agency's travel procedures -- Lou.

DOBBS: Do we have a government department of just common sense and basic decency that, perhaps, she could consult or, perhaps, other agency heads -- I mean how smart do you have to be, how concerned about ethics do you have to be, not to have your trips paid for by the organizations that you are regulating?

SYLVESTER: You know, Lou, a number of folks today have said this is something that just does not pass the smell test. They're not quite sure what the CPS -- both the current, the acting chairwoman was thinking. And they don't know what Hal Stratton was thinking. But I think that office of common sense would probably apply to a number of different agencies here in Washington -- Lou.

DOBBS: And, remember, this is the same acting head of the agency who said they didn't need any more money. It seems like that money could have been used for a lot of trips and exploration. I think we ought to just name a few of these public watchdog groups -- Public Citizen, Consumers Union, the Center for Public Integrity, the Center for Responsive Politics. These watchdog groups playing an important role here. And our hats are off to them for continuing to focus on these issues.

Thank you very much, Lisa.

And we thank you for keeping your focus on them, certainly.

Keep up the great reporting.

Up next, Senator Hillary Clinton -- she supports Governor Spitzer's outrageous proposal to give driver's licenses to those illegal aliens. It took a while for us to figure out where she stood, but that's where she is as of the last reading. Three of the country's top political analysts and strategists join me to assess the Clinton strategy and what in the world is going on with this election campaign.

And Senator Barack Obama -- he's accusing Senator Clinton of playing the gender card?

Oh, I can't imagine that.

And an entire town in Pennsylvania threatened by deadly gases.

And guess what?

The residents who could be killed by those gases -- government entities knew about it and didn't bother to tell them.

We'll have that report and more.

Stay with us.

(COMMERCIAL BREAK) DOBBS: Federal and state officials have a lot of explaining to do about withholding vital information about toxic gases. Residents in a small Pennsylvania town were aware that gas was venting from an old underground methane well.

But as Jim Acosta now reports, officials never told the residents of Versailles, Pennsylvania about another gas venting from beneath their homes and their streets.

(BEGIN VIDEO TAPE)

JIM ACOSTA, CNN NATIONAL CORRESPONDENT (voice-over): Versailles Pennsylvania, has been sitting on top of trouble for decades -- ever since they abandoned these methane gas wells that once fueled their homes. To this day, these gases can rise to the surface.

(on camera): What is that thing?

MAGGIE EROS, VERSAILLES RESIDENT: They put in that vent to ventilate the methane, but it's not going to solve the problem.

ACOSTA (voice-over): Maggie Eros worries the methane seeping into her backyard could easily build up in her home and become explosive with the flip of a light switch. The problem forced her neighbors to evacuate their home.

EROS: I don't feel safe in my own home. I really don't. I feel that some day it's going to blow up.

ACOSTA: But what she and her neighbors did not know until recently is the federal government had stumbled upon another dangerous gas in Versailles. Late last year, according to documents obtained by CNN, engineers with the National Energy and Technology Laboratory studying the methane problem discovered toxic levels of hydrogen sulfide -- levels so high they could cause unconsciousness, organ damage and possibly death. But the National Lab didn't bother to tell Versailles borough council president.

(on camera): Was this town properly notified?

WALT WINKLER, VERSAILLES BOROUGH COUNCIL PRESIDENT: No, I don't believe so.

ACOSTA (voice-over): Now, hydrogen sulfide detectors and warning signs are posted in town.

W. WINKLER: I can't say for sure we don't or do -- do have a toxic town.

LINDA WINKLER, WALT WINKLER'S WIFE: We just wonder why they didn't -- why they didn't tell you.

ACOSTA: The lab did release this statement to residents, saying the borough police chief, a council member and the town's secretary were notified.

(on camera): We talked to voters officials in this town and they have told us that they were not notified.

BRAD TOMER, NATIONAL ENERGY & TECHNICAL LABORATORY: They were not notified of what?

ACOSTA (voice-over): While we pressed National Lab Spokesman Brad Tomer for answers, another man chimed in off camera.

(on camera): Because I don't know if I've ever had an interview like this before where I'm asking this guy the questions over here and the guy who says he notified the town is behind the camera.

Who did you notify?

WILLIAM SCHULER, EG&G TECHNICAL SERVICES: I called -- I talked to this -- I walked up there and I talked to the office and I told them that -- and I talked to the maintenance people.

ACOSTA (voice-over): William Schuler, the private government contractor who was hired to monitor methane levels, claims he told town officials. But he insists there never was any danger because the hydrogen sulfide was found in this well.

Finally, both men did admit to CNN, contrary to that lab statement, town leaders were not properly notified.

SCHULER: In hindsight, maybe I should have sent a letter to them or somebody should have sent a letter to them.

TOMER: The communication could have been handled better, absolutely.

ACOSTA (voice-over): Mining engineering Professor Raj Ramani says notification is a no-brainer.

PROF. RAJ RAMANI, PENN STATE UNIVERSITY: It's common sense that when you are likely to be in harm's way, you should be told don't do that.

ACOSTA (on camera): It doesn't take a professor to figure that out.

RAMANI: No. Certainly not.

ACOSTA (voice-over): As it turns out, the National Lab did notify the Pennsylvania Department of Environmental Protection in this e-mail obtained by CNN. But even the state decided not to inform borough officials.

KATHLEEN MCGINTY, PENNSYLVANIA DEPARTMENT OF ENVIRONMENTAL PROTECTION: I will not alarm the public where we have no evidence that there is a public health or safety threat.

ACOSTA (on camera): Would you live there?

MCGINTY: I think it's a challenging question.

ACOSTA (voice-over): Maggie Eros feels betrayed.

EROS: Are we supposed to sit here and wait until my house blows up and then them do something?

I'll be dead. My kids will be dead.

ACOSTA: Residents say that fear is spreading -- just like the "for sale" signs in what may be a toxic town.

(END VIDEO TAPE)

ACOSTA: And as for that lab statement claiming leaders in Versailles were notified, there is no official letterhead on that document and it was signed by no one -- Lou.

DOBBS: An incredible story, Jim.

And the state taking no responsibility. This town is left in a toxic limbo.

What is, what can be done here?

Can the federal government come in and help?

Can the state government come in and help?

ACOSTA: Well, right now they're studying the problem. And that study has actually been delayed. It was supposed to come out earlier this year. And the people in that town are still waiting for some answers. There may be a solution to the methane problem in this town, but nobody knows about the hydrogen sulfide problem in this town because they don't know exactly if they found all of it.

DOBBS: I love the response from the woman -- the state official saying, when you asked would you live there, that's a challenging question.

ACOSTA: I think that's government speak for I don't think so.

DOBBS: Yes. Or, hell no.

ACOSTA: Yes.

DOBBS: Perhaps, Governor Rendell would like to get involved here, because it looks to me like this is just -- this is, you know, we look at the federal government. I think all of America is now awakening to the fact that our federal government is basically dysfunctional. But to see this happening in Pennsylvania, which is, as the woman put it -- the woman official -- a lot of challenging issues -- this is ridiculous, to leave American citizens in this kind of vulnerable and dangerous position.

ACOSTA: It's about the right to know.

DOBBS: Absolutely. And about the right to expect your government to function on behalf of the citizens it's supposed to serve -- at whatever level -- local, county, state or federal government.

ACOSTA: Yes. This should go in a textbook on how not to inform the public of a health threat.

DOBBS: That is going to be a very large -- my guess is there will be many volumes to that textbook over the course of the next decade, if, indeed, it is written.

Jim Acosta, thank you very much for contributing your chapter.

ACOSTA: You bet.

DOBBS: We appreciate it.

Coming up here next, Senator Hillary Clinton under fire over her muddled, confusing statements about her support for the governor's plan -- the governor of New York's plan to give driver's licenses to illegal aliens. She's for it. We'll tell you what that means.

And a new Harvard study finds that the national media is biased.

We'll discuss all of that and much more with our distinguished panel of political analysts.

This, by the way, is a Harvard study -- so it couldn't be wrong, could it?

Stay with us.

We'll be right back with that.

(COMMERCIAL BREAK)

DOBBS: I'm joined now by three of the best political analysts and strategists in the country.

Ed Rollins, Republican strategist, former White House political director.

Michael Goodwin, Pulitzer Prize winning columnist, the "New York Daily News".

Democratic strategist Robert Zimmerman. Robert also a National Democratic Committeeman and supporter of Senator Hillary Clinton.

Why don't we begin with you. It's been sort of your week.

(LAUGHTER)

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: Did I miss something?

DOBBS: I bet you didn't.

What in the world was she thinking?

And now she's is out behind Governor Spitzer, going against public opinion, basic decency and the law.

ZIMMERMAN: Welcome to professional baseball. Exhibition games ended Tuesday night at that debate. And very simply put...

DOBBS: Is she going back to the farm club?

ZIMMERMAN: No. She's -- she's in the majors and she's going to be with all the other candidates, who have also all -- except for Chris Dodd -- supported Eliot Spitzer's position.

DOBBS: Yes.

ZIMMERMAN: They're going to have to explain themselves. They've taken their position and they're going to have to move forward with that and discuss the other issues.

DOBBS: Do you think she's going to be able to explain that position, plus her support of The DREAM Act, plus her vote for the Comprehensive Immigration Reform Act -- which, poll after poll shows the vast majority of Americans oppose, period.

MICHAEL GOODWIN, "NEW YORK DAILY NEWS": Well, I think the licensing thing, in particular, is a big problem for her politically.

I'm not even sure it works in the Democratic primary. But, certainly in the general election, I think it's a disaster. So she's going to have to find some way between now and next year to get away from it, I would suspect.

DOBBS: You looked upon all of this, I'm sure, with great glee, Mr. Republican.

ED ROLLINS, REPUBLICAN STRATEGIST: You know, she basically has had things going very well for her. And this was a major stumble and I think she has complicated it by her staff going out the next day and attacking Tim Russert and what have you. The bottom line is she should have just basically this is what I stated, move on and get back in the game the next day. And she didn't do that. I think she's shown a real vulnerability and I think the -- I think what she's done is she's encouraged the other candidates now to come after her.

(CROSSTALK)

ZIMMERMAN: But that's the reality of being a frontrunner. Let's be realistic, the whining frontrunner...

DOBBS: Wait a minute. Wait a minute. Wait a minute. Wait a minute. I need to talk here.

ZIMMERMAN: OK.

DOBBS: Taking a position has nothing to do with being a frontrunner. She took a position...

ZIMMERMAN: Right. DOBBS: ...that is in line with the rest of those Democratic candidates. It's going to be a fissure line, I'm sure, in this -- in the primaries for the Democratic Party. But I want to turn to Chris Dodd, who showed great capacity, great integrity and the courage to separate himself from the rest of those, you know, sort of pandering souls who want to be president of the United States without any character and said, no...

ZIMMERMAN: Maybe...

DOBBS: You know, driver's license are not the right answer.

ZIMMERMAN: Maybe -- while I respect Chris Dodd's integrity and character -- maybe the others responded in a different point of view with the same character and integrity. The bottom line is, they have to get out there and explain themselves and also not let this issue paralyze their campaigns. I agree with Ed. Hillary Clinton (INAUDIBLE)...

DOBBS: What issue isn't paralyzing their campaign?

Which issue is driving these candidates right now in the Democratic Party?

Because it's not Iraq. Because now we know that Iraq means -- whether you're a Democrat or a Republican -- these parties we -- if any voter is paying attention to these candidates as we go through these debates, we have got the Republicans and Democrats acting as simply opposite wings of the same bird.

ZIMMERMAN: Well, I think Joe Biden has put out -- put forth some very serious proposals for alternative strategies in Iraq...

DOBBS: His isn't the most intelligent analysis...

ZIMMERMAN: Yes.

DOBBS: ...of the tripartite resolution...

ZIMMERMAN: That's right.

DOBBS: ...that might likely come. But still, it's not about a withdrawal from Iraq, which was the driving impulse of the 2006 midterm elections.

GOODWIN: Ed, you know...

(CROSSTALK)

ROLLINS: I'm sorry. Go ahead.

GOODWIN: Go ahead.

ROLLINS: The truth of the matter is, we're getting close to when voters are actually going to participate in this process. And we've gone through this very long year-long process. And I think to a certain extent, the last impressions that you make are the first impressions you're going to have to answer. And I think, to a certain extent, I would not want to be Mrs. Clinton and go into Iowa and defend driver's licenses for illegals. I don't think people in Iowa care about that. I don't think the people in New Hampshire -- I think they care about it. I think they care about it in an opposite position that she's taken.

I think the bottle line here is that -- this race -- I think she's the frontrunner. She's got lots of resources. But this -- it's still a race. And I think on our side, it's still a race.

GOODWIN: Right. Right. Well, and Ed says, on the driver's license, I think it is, really, the worst thing.

But what struck me about that debate was there was a whole series of issues where she was not clear, where she did kind of mumble and try to straddle the fence.

DOBBS: All right, well, let's be fair here.

Which of the other candidates were clearer?

Senator Barack Obama, for crying out loud.

GOODWIN: Well, well...

DOBBS: Everyone keeps talking about he's Mr. Charisma.

GOODWIN: Well...

DOBBS: I mean he can take a vacant lot and render it absolutely boring beyond belief...

(LAUGHTER)

DOBBS: ...and create no edifice of excitement of any kind in its stead.

GOODWIN: But with Hillary Clinton, as with Bill Clinton, straddling the fence is a character issue. And what she has been trying to do during the campaign and what that debate was about...

DOBBS: You've dismissed nearly every politician in this country with that.

GOODWIN: But what -- but what that debate was about was ripping -- ripping that mask...

DOBBS: Which is not a bad idea, Michael.

GOODWIN: ...but ripping the mask off of her straddles and forcing her to take a position. And when she takes a position, we see how bad it is, because she just wants to straddle.

ZIMMERMAN: But, Mike, here's the mistake candidates make strategically. Iowa Democratic caucus voters have a very -- have a great intolerance for negative campaigning. In fact, Bill Schneider did a very good report pointing out four years ago at this time, Howard Dean was solidly in first, Dick Gephardt was solidly in second place, Kerry and Edwards trailing. Dean and Gephardt went to war with each other. Kerry and Edwards...

(CROSSTALK)

DOBBS: When we come back, we're going to go to war over this very issue.

We'll be back with our panel in just one moment.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Coming up at the top of the hour, "THE SITUATION ROOM" and Wolf Blitzer -- Wolf.

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

Ralph Nader here in "THE SITUATION ROOM."

He's suing the Democratic Party now, but will he run for president himself?

We'll get his answer tonight.

The other Bush -- Jeb Bush -- is speaking out about the Republicans running for president -- what he thinks about them and what he's refusing to say. That's coming up, as well.

And it happens every election -- presidential candidates, they're very busy campaigning instead of voting on Capitol Hill. But one Democrat has been a no show more often than most this fall. We're going to take a look at the records.

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

DOBBS: Wolf, thank you very much.

Let's go to, if we can, to Ed Rollins -- and who's been looking at what's happening in California in terms of the electoral vote process there, who is looking at what's happening with this entire process with primaries.

It's going to be splendid. We'll know who's going to be the nominee, it looks like, for both parties by, say, 3:00 in the afternoon on the fourth of February.

(LAUGHTER)

ROLLINS: I'm not sure of that. I think the reality is Hillary showed that she's going to be in a competitive race. Iowa is very, very close for her. It's very close for Republicans. Iowa is now January 3rd. February 5th is going to be the big date. But you've got a whole month. And you've got Michigan and you've got South Carolina. And you're going to have New Hampshire in there. And a lot can happen in a month, in which people get to pay a whole lot of attention to the candidates.

DOBBS: But the Democrats are going to ignore Michigan because it really doesn't amount to much, does it?

ZIMMERMAN: No. The Democrats are not ignoring Michigan. Michigan voted the rules that they wanted -- they voted for rules they now want to change. But that's not even the issue.

Ed's point about the process is very significant, because I will (INAUDIBLE)...

DOBBS: I'm going to let you dodge the issue...

ZIMMERMAN: I knew (INAUDIBLE)...

(LAUGHTER)

DOBBS: I'm going to let you do this just because you're having a bad week.

(LAUGHTER)

ZIMMERMAN: I'm having a fine week (INAUDIBLE).

(LAUGHTER)

ROLLINS: He's a member of the National Committee. He voted that Michigan and Florida didn't count for very much.

DOBBS: Well, it's OK. They're small states and believe me...

(CROSSTALK)

ZIMMERMAN: ...voted with me on this, by the way.

DOBBS: Well, their state legislature didn't.

ZIMMERMAN: Well, the Democratic members did.

DOBBS: Ah. Yes, well, that...

ZIMMERMAN: But the point here simply is the early primaries for the Democrats are going to be very decisive in terms of establishing whether Hillary Clinton (INAUDIBLE)...

DOBBS: But the bottom line here is...

ZIMMERMAN: ...or whether Barack Obama can emerge, yes.

DOBBS: Whether what?

ZIMMERMAN: Whether Barack Obama emerges, John Edwards. If they don't emerge in the early primaries, they're going to be very -- they're going to be -- have a very difficult time.

DOBBS: What about Bill Richardson and Joe Biden?

Are you just writing them off?

ZIMMERMAN: Joe...

ROLLINS: He just did.

ZIMMERMAN: You're right about Biden. Keep an eye on Biden. He's drawing great crowds in Iowa.

DOBBS: I keep an eye on all of them.

ZIMMERMAN: He's drawing great crowds in Iowa. He seems to be everyone's favorite second choice. Interesting to watch.

DOBBS: Favorite second choice.

ZIMMERMAN: Yes. And it's the process that counts.

GOODWIN: It's very hard for me to see how anybody overtakes Clinton, despite what I think was a very bad performance and probably the beginning of what's going to be a very rough two months...

DOBBS: What will be the role of the Independents here?

GOODWIN: In the general?

DOBBS: In -- leading up through February 5th.

What's going to be the role of the Independent?

GOODWIN: I don't believe there's going to be a great role.

ZIMMERMAN: Critical...

ROLLINS: ZIMMERMAN: I think critical in New Hampshire.

ZIMMERMAN: Absolutely.

ROLLINS: And there's over a third of the voters who are Independents there. The last time, in 2000 they voted for McCain. That's what gave him his margin of victory. I think they're going to vote in the Democratic primary this time.

ZIMMERMAN: If they do, that's trouble for Hillary Clinton because...

ROLLINS: That's where I -- that's where I differ. I think Independents are going to have a big, big role this time in this.

ZIMMERMAN: Yes, I think if they do vote, they're inclined to vote for Barack Obama right now in most polling. So it could be very significant. And if they don't score for McCain in New Hampshire, he's out. GOODWIN: But, I think, Lou, to your point about Independents, you're looking to somebody who's going to break away from either one of them. And if -- I think if they're shifting within the parties, they're not going to have a dramatic difference in and of themselves. They're going to elect -- they're going to nominate one of the two party nominees.

DOBBS: And is it your sense that we're going to see some of these candidates now drop out over the course of the next few weeks, who have just not been able to break through?

ROLLINS: I don't -- I don't think so. I think they're all going to hang in there, certainly through New Hampshire and the fact that February 5th comes quickly, that as long as they can buy gasoline and have a car to drive there, they'll go through that period. I think they drop out, clearly, after February 5th. I don't think they can compete effectively if they don't do well in Iowa or New Hampshire.

GOODWIN: Yes, I think you'll see them drop -- one -- there will be one or two after the first -- after each primary, I think, just because they (INAUDIBLE)...

ZIMMERMAN: I think, realistically, Edwards, Obama and Clinton can make it through New Hampshire. Dodd and Biden have got to -- and Richardson -- have got to score impressively in Iowa to get to New Hampshire.

DOBBS: And the Republicans?

ZIMMERMAN: Keep an eye on Mike Huckabee.

UNIDENTIFIED MALE: Very impressive.

ROLLINS: Huckabee is moving. The Christian Coalition is starting to find a candidate and he may be their candidate.

GOODWIN: Well, Ed...

DOBBS: You get the last word.

GOODWIN: Ed made a very good point the other day, that basically you have this -- with Fred Thompson's 20 percent -- kind of a free floating 20 percent looking for a candidate to attach itself to.

UNIDENTIFIED MALE: That's true.

GOODWIN: It could -- it could move.

DOBBS: It would be really great to hear us talk about their position on the issues and what's galvanizing the imagination of the American people. That hasn't happened. Well, it happened a little bit with Senator Clinton.

(LAUGHTER)

DOBBS: Thank you very much, Robert. Thank you very much, Michael.

Ed, thank you.

Still ahead, more of your thoughts and the results of our poll.

Stay with us.

We're coming right back.

(COMMERCIAL BREAK)

DOBBS: Among our viewers tonight, the results of our poll -- 80 percent of you saying illegal immigration and border security the most important issue to you in this presidential campaign so far. Ten percent, Iraq. The economy, 5 percent. Health care, 5 percent.

And time now for a few of your thoughts.

Tom in Pennsylvania said: "Lou, you really must stop referring to our elected officials as idiots. It gives all of the other idiots a bad name."

And Frank in California: "Lou, to help you with your response, you are right, they are not idiots. They just don't seem to demonstrate any of the qualities that you would associate with a person that wasn't.

We thank you for your thoughts, your sense of humor and for being with us tonight.

And Monday we begin at a new time, 7:00 Eastern, 4:00 Pacific.

Thanks for watching.

Good night from New York.

"THE SITUATION ROOM" begins now with Wolf Blitzer -- Wolf.

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