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LOU DOBBS TONIGHT

War Funding Impasse; Protected Drug Smuggler

Aired November 16, 2007 - 19:00   ET

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


LOU DOBBS, CNN ANCHOR: Wolf, thank you and we're looking forward to you joining us over this next hour to discuss your impressions of last night's debate and the performance of the candidates. By the way, that debate, the most watched primary debate in history.
Good evening. From Palm Beach, Florida, rising outrage tonight in the case of two former Border Patrol agents sent to prison for shooting an illegal alien drug smuggler, to whom the Justice Department gave immunity to testify.

There is new evidence that that immunity -- immunized drug smuggler and illegal alien repeatedly was running drugs across our border with Mexico while he was under immunity from prosecution including the months just before he testified in the case against those two Border Patrol agents, testifying in that trial. Supporters of those agents say they should be released from prison and released immediately. I agree. We'll have complete coverage.

Also, startling new figures tonight on the huge scale of mortgage fraud in this country. We'll have a special report.

And we'll assess the performance of the Democratic presidential candidates in last night's debate. Did those candidates offer any real solutions to the problems facing our middle class? Three of the nation's best political analysts and strategists join me here. We'll have all of that, all the day's news and much more straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Friday, November 16, 2007. Live from Palm Beach, Florida, Lou Dobbs.

DOBBS: Good evening, everybody. Political deadlock in Washington tonight over funding for the wars in Iraq and Afghanistan. Republicans today blocked a new Democratic effort to link war funding with U.S. troop withdrawals from Iraq. It is the latest in as many as 40 defeats for congressional Democrats on the issue of the conduct of the war in Iraq over the past year. But the Bush administration says this defeat could mean the military will run out of money for the wars as soon as February.

Jessica Yellin has the report from Capitol Hill -- Jessica.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Lou, Senate majority leader Harry Reid said Democrats will work to start ending this war the easy way or the hard way. Today it would seem, his options narrowed. (BEGIN VIDEOTAPE)

YELLIN (voice-over): Democrats failed again to force the president to start withdrawing troops from Iraq. Now they say they won't give him any new money for the war until next year. Senate's top Democrats say that won't hurt the troops.

SEN. HARRY REID (D-NV), MAJORITY LEADER: We've been told by the secretary of defense that everything is fine until the end of February and with the Marines until the middle of March.

YELLIN: Republicans see things differently.

SEN. JON KYL (R), ARIZONA: There are serious consequences to not having this money for the troops. It is the same broke (ph) in Congress and we will enter the last two or three weeks of the session going up to Christmas Eve unsure of how we're going to proceed.

YELLIN: There is a word for this, gridlock, and Iraq funding is just one in a series of major issues on which the Senate is at an impasse. They also failed to pass the farm deal or to reach agreement on tax reform for the middle class or on a new energy bill. Senate Republicans accused Democrats of incompetence.

SEN. JOHN ENSIGN (R), NEVADA: We saw in the 2006 elections that the Democrats railed against a do-nothing Congress. They railed against fiscal irresponsibility. And what do we have at this point?

YELLIN: And while Democrats might be getting hot under the collar, they insist the Republicans will suffer for sticking with the White House, especially on spending issues.

REID: If they want to follow the president over the cliff, they're welcome to do that.

YELLIN: Now both sides have left town for two weeks, promising to take care of business after vacation.

UNIDENTIFIED MALE: Thank you very much. Happy Thanksgiving.

(END VIDEOTAPE)

YELLIN: Now, Lou, Democrats say that Republicans will pay a price for what they call their obstructionist ways while Republicans say no, no, it is Democrats who will suffer come election time, meanwhile, both sides have to find agreement on a few issues if they hope to get anything done before Christmas. Lou?

DOBBS: Jessica, the fact is that both parties are correct. It is one of the reasons that Congress has the lowest approval rating in history. Does the leadership of either party reflect on that reality?

YELLIN: Each side is looking at the polls and seeing something that they want to see. They each think that they're doing better and they each think that if they stick to their path, they can communicate to voters, it is the other guy's fault come election time. DOBBS: Jessica, thank you very much -- Jessica Yellin from Capitol Hill.

The White House says the Democratic timetable for withdrawal of U.S. troops leaves the White House very little choice in its position.

Ed Henry has our report from the White House -- Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Lou, it is the gift that keeps on giving to President Bush every time Democrats try and fail to change the direction of the war in Iraq. It gives a weakened president a much-needed boost. And while the Pentagon will not run out of funding for the war until about mid-February, Defense Secretary Robert Gates has warned that it might have to take some very serious steps to try and conserve resources such as furloughing.

Some employees may be also canceling freezing some military contracts in the interim. Here at the White House today, spokesman Tony Fratto (ph) said that military commanders on the ground like General David Petraeus should be concerned about military maneuvers, not accounting maneuvers.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Once again they tried to pass a bill that provides incremental funding, tries to micromanage the war from the halls of Congress. They also know that such a bill will be vetoed should it ever come to the president's desk. They know this because we've been through this dozens of times now with votes on withdrawal from Iraq.

(END VIDEO CLIP)

HENRY: Now perhaps most heartening for the White House tonight is the fact that today there were no new major Republican defections on Capitol Hill. They have been worried about that a few months ago, about Republicans running away from the president on Iraq and said they're sticking with them. But there is one fact that the White House still has to be nervous about tonight.

And that's the fact that despite some of the security gains on the ground in Iraq, there still has not been major political progress within the Iraqi government. And that is still a sign the White House has to be worried about, Lou.

DOBBS: Well the White House has to be worried about it. The American people have to be concerned about it. But the reality is in purely military terms, this is without question, empirically, an improving situation for the United States and Iraq. And that should be heartening to the White House.

HENRY: That should be. But you'll remember when the president first announced the surge of U.S. troops he talked about security gains on the ground in Iraq that you just mentioned, giving the Iraqi government political breathing space. Part one of what the president has said has worked out to some extent, but part two has not, Lou. DOBBS: Right. Indeed. But again, the considerable diminishment of the loss of American lives in Iraq, the loss of Iraqi lives in that conflict over the course of the past three months seems to be certainly and no one has certainly been more critical of this president than I have been in the conduct of this war and the general staff, but this is without question empirically and demonstrably an improvement in the military situation.

HENRY: Certainly the military, again, in the military situation. But there is a second part, which is a political situation. And unless there is political progress, the U.S. military is going to have to continue to deal with security. At some point the Iraqi government has to step up as well, Lou.

DOBBS: Yeah, I take that point quite clearly. I thank you very much, Ed -- Ed Henry from the White House.

HENRY: Thank you.

DOBBS: Well another of our troops has been killed in Iraq. The soldier died in a vehicle accident. Twenty-three of our troops have now been killed so far this month. The number of troops killed since the beginning of the war now reaching 3,867 of our troops and 28,489 of our troops wounded; 12,754 of them seriously.

There is new evidence tonight on the huge drain on the Army as a result of the wars in Iraq and Afghanistan, wars that have now lasted longer than World War II. The Army says the number of soldiers deserting their post in fact has risen to the highest level, the number of desertions, the highest level in a quarter century. The number of desertions jumping by more than 40 percent over the past year alone.

Jamie McIntyre has our report from Washington.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well Lou, the numbers show that in the Army, which is the biggest service doing most of the tough fighting over the last six years desertions are at the highest levels since the early 1980s. Since the U.S. invaded Iraq back in 2003, after four years of war, the desertions are up a whopping 80 percent. And the number of desertions have jumped 42 percent over the last year.

Look at the numbers; 3,300 in fiscal year 2006; up to almost 4,700 for this fiscal year which ended in September. Still, those numbers are far less than the kind of rampant desertions that occurred during the Vietnam War when there was a draft. In 1971, for example, 33,000 American soldiers deserted.

That's 33,000, 10 times the number that deserted last year. So what is going on? Well the strain of war is one factor. Some of these soldiers have served multiple tours and have simply had enough. But the Army says 75 percent of the desertions are in their first tour of duty; many of them deserting even before they made it to combat. What does that tell us? Well it could be that in its zeal to make new higher recruiting goals, the Army is taking more people in who just don't work out.

By the way desertion is a crime, but the U.S. military doesn't spend a whole lot of time hunting down deserters or prosecuting. If it finds them or they turn themselves in, they are prosecuted, but mostly they get a less than honorable discharge and interestingly, Lou, the Marines don't seem to have the same problem. Marine desertions show only a very slight increase since 2003. The Navy is actually down and hardly anyone deserts the Air Force. And Lou, you're a Marine. Why do you suppose that is?

DOBBS: Well, you know I don't know. I think it might go to the spirit of the Corps, if you will. And the fact of the matter is that the Marines have a very tough job. It is a very difficult job but it also requires a certain mindset that perhaps -- I mean I can speculate all day but I will leave it to you there in the Pentagon to come up with a definitive answer...

MCINTYRE: Well it is a...

(CROSSTALK)

MCINTYRE: It is a smaller service. And they can be a little bit more selective and of course there is the Marine Corps motto; always faithful.

DOBBS: Semper Fi (ph). Thank you very much. Jamie McIntyre.

Still ahead here, explosive new developments in the case of two former Border Patrol agents given harsh prison sentences for shooting a Mexican criminal illegal alien drug smuggler. Casey Wian will have that shocking report -- Casey.

CASEY WIAN, CNN CORRESPONDENT: Lou, the drug smuggler who helped put former Border Patrol agents Ignacio Ramos and Jose Compean (ph) behind bars is himself in jail tonight. And there is new evidence that he should have been the one in custody all along, not the agents -- Lou.

DOBBS: Thank you, Casey.

And we'll be talking with two leading congressional supporters of those Border Patrol agents, Congressman Dana Rohrabacher, Congressman John Culberson. They are among our guests here tonight.

And there are new and disturbing figures about the massive scale of mortgage fraud in this country to go right along with those massive millions of foreclosures. We'll have the special report and more as we continue live from Palm Beach, Florida tonight.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: The illegal alien drug smuggler whose testimony sent Border Patrol agents Ignacio Ramos and Jose Compean (ph) to prison today was arraigned after his indictment on federal drug charges. The drug smuggler, Esvaldo Aldrete Davila (ph), smuggled drugs repeatedly while he was under immunity from prosecution while he had a government issued border crossing card.

Casey Wian has the report from El Paso, Texas.

(BEGIN VIDEOTAPE)

WIAN (voice-over): It's been nearly three years since Esvaldo Aldrete Davila (ph), an illegal alien and admitted drug smuggler was shot and wounded while fleeing Border Patrol agents, Ignacio Ramos and Jose Compean (ph). Now he is being prosecuted. His testimony helped put Ramos and Compean behind bars for 11 and 12 years. But Davila has been a free man until he was apprehended this week by DEA agents at the (INAUDIBLE) Texas border crossing. Aldrete Davila now faces charges of drug smuggling and possession that could result in a prison sentence of five to 40 years.

REP. DANA ROHRABACHER (R), CALIFORNIA: Ramos and Compean were put in prison and convicted by a false image that was created by the U.S. Attorney's office. When they sided with the drug dealer and then they kept information about the drug dealer's other shipments of drugs across the border, from the jury.

WIAN: According to a federal indictment that echoes what LOU DOBBS TONIGHT has reported, Aldrete Davila smuggled a second load of drugs into the United States while he was under federal immunity from prosecution in exchange for his testimony against the Border Patrol agents. And it says Davila smuggled a third load of drugs while under the protection of Texas U.S. Attorney Johnny Sutton. Former Texas judge and now U.S. Congressman Ted Poe says it is likely Ramos and Compean would not have been convicted had their jury known about Aldrete Davila's drug smuggling, even while under the protection of federal prosecutors.

REP. TED POE (R), TEXAS: I think if the jury would have known about the background of Aldrete that he is a professional drug dealer, brought in drugs after he made a deal with the U.S. Attorney's office. He made the statement that he didn't have a gun. The border agent said they thought he did. Certainly the jury should be able to consider that. And I think the outcome probably would have been different.

WIAN: Ignacio Ramos' attorney said in a statement, "If in fact the indictment's allegations against Davila are accurate, it would appear logical to conclude that certain aspects Davila's testimony at the trial of Agents Ramos and Compean may well have been less than candid and perhaps even knowingly false and perjured."

For example, in his trial testimony the accused drug smuggler claimed he didn't know he was transporting marijuana and didn't know how Mexican traffickers packaged illegal drugs. In a statement, U.S. Attorney Sutton said, "I have repeatedly said that if we obtained sufficient, competent and admissible evidence against Aldrete, we would prosecute him just as Aldrete's alleged illegal conduct did not excuse the crimes committed by Compean and Ramos, likewise, their crimes will not excuse his." Sutton's office would not disclose details of Aldrete Davila's arrest.

(END VIDEOTAPE)

WIAN: The National Border Patrol Council and others supporters of Ramos and Compean said they're very happy that Aldrete Davila, the smuggler, is in jail tonight. But they're also suspicious about the timing of his arrest, which comes less than three weeks before a key appeals court hearing in the case. And one other thing, Lou, I spoke with Monica Ramos (ph) tonight, Nacho Ramos' (ph) wife. She was actually visiting him in jail in Arizona and told him the news that Aldrete Davila is in jail. She says that Nacho (ph) was elated but very skeptical about the prospects for his release -- Lou.

DOBBS: Well he and Compean have no reason in the world to be optimistic here and no reason for elation no matter what the developments because the Justice Department itself, as well as our system of justice, has utterly betrayed two law enforcement officers serving the nation. I mean, this is outrageous.

And what in the world does U.S. Attorney Johnny Sutton mean that the actions of the two Border Patrol agents will not excuse an illegal alien drug smuggler? What in the world -- what does he -- what is he thinking?

WIAN: I wish I knew. We tried to ask him but his spokeswoman said that U.S. Attorney Johnny Sutton is not talking about this latest development, Lou.

DOBBS: Well, we have a new U.S. attorney general; perhaps we can hear something new out of the Justice Department, maybe something about justice at least, at least for these two agents who have been betrayed by that department. It seems clear to a number of us, including these two congressmen who lead the efforts to free Ramos and Compean and have been doing so for some time.

I'm joined now by Congressman Dana Rohrabacher. He is in Irvine, California near his home district. And Congressman John Culberson, he is joining us from Capitol Hill tonight, congressman from the state of Texas. Good to have you gentlemen here.

Congressman Rohrabacher, your reaction to what -- if these charges are true, what is an outrageous development.

ROHRABACHER: Well if there were ever grounds for an attorney general to do a reexamination of some decisions of a prosecutor under his authority, this has got to be it. Obviously, this drug dealer has been playing our prosecutors, our federal prosecutors as suckers. We ended up giving this man a free pass to get across the border to come and testify against two law enforcement agents. We gave him a free pass to come across the border and he used it to smuggle more drugs into the country. He is playing it like suckers. Bad decisions were obviously made to prosecute these two Border Patrol agents in the first place.

DOBBS: Right.

ROHRABACHER: And this deserve -- now with this evidence that they kept from the jury. Obviously we need to reexamine this case.

DOBBS: Congressman Culberson, you've said point blank that this indictment is overdue. What is your reaction while Ramos and Compean remain in prison?

REP. JOHN CULBERSON (R), TEXAS: I think this arrest confirms that outrageous miscarriage of justice against Ramos and Compean, Lou, and I agree completely with Dana. We need to I believe ratchet up the heat on the White House. If ever there was a time to commute the sentences of Ramos and Compean, this is it. This arrest confirms that everything we have said about this disgraceful drug dealer who was lying, abusing the -- I mean just disgraceful that Johnny Sutton would give this guy a free pass to enter the United States and the drugs that he is alleged to have been carrying.

This was done in October of 2005 prior to the trial. Judge Ted Poe is exactly right. This evidence was kept from the jury. We need to Scooterize (ph) Ramos and Compean, have their sentences commuted. They've suffered enough. And then we need an investigation into Johnny Sutton, our new attorney general needs to investigate this prosecutor.

ROHRABACHER: Lou, remember, if Johnny Sutton and the prosecutors would have gone after the right guy, targeted the drug dealer rather than the law enforcement people...

CULBERSON: Absolutely.

ROHRABACHER: ... there would be 100 kilos less of narcotics that would have been smuggled into our country, because this guy would have been put on trial rather than our defenders.

DOBBS: Well let me ask you both...

(CROSSTALK)

DOBBS: You both referred to Congressman Ted Poe. This is a former Texas judge, a former federal judge and he had this to say about the development concerning Aldrete Davila.

"This shows the attorneys, the U.S. Attorney's office knowingly deceived the jury of the credibility of their witness."

Point blank. Do you think because that the U.S. Attorney, Johnny Sutton, should be investigated? Do you think that this is a responsibility of the new U.S. attorney general to carry out?

CULBERSON: Absolutely, Lou. This U.S. attorney, Johnny Sutton, needs to be investigated. He also prosecuted a deputy sheriff, Fernandez (ph) in Rock Springs (ph) for shooting at a drug dealer's vehicle. We have got a pattern of behavior from this prosecutor of responding to complaints from the Mexican government, prosecuting U.S. law enforcement officers to satisfy the Mexican government, and it is a disgrace. It is an outrage. The prosecutor needs to be investigated.

(CROSSTALK)

CULBERSON: And they're -- Ramos and Compean need to have their sentences commuted.

ROHRABACHER: Yeah. Ramos and Compean should be turned free immediately and Johnny Sutton should be relieved of his job immediately. And there should be a full-scale investigation at the congressional level and by the new attorney general.

CULBERSON: Lou, let me also quickly say that...

DOBBS: I'm sorry, Congressman. We're going to have to break away -- very quickly.

CULBERSON: The jurors interviewed on KACB (ph) radio in Houston said that if they had known that Davila was a drug dealer, that he was carrying a load of dope, they would have come to a different conclusion in that verdict and those interviews are on the record on KACB (ph) radio in Houston.

DOBBS: Good. And as we've reported on this broadcast now for a very long time, three of the jurors from the very instant of the decision said that they regretted the instructions that led them to what they considered to be an incorrect decision.

(CROSSTALK)

DOBBS: Congressman Culberson, Congressman Rohrabacher, we thank you both. Appreciate it.

ROHRABACHER: Thank you, Lou.

CULBERSON: Thank you, Lou, for...

DOBBS: Time now for some of your thoughts.

Let's turn to Charles in Florida who said, "So Davila has finally been charged with the crime that Johnny Sutton told the judge in the Ramos and Compean trial never happened."

And Sophie in New York, "Dear Lou, Incredible, it took how long for our knucklehead officials to realize that an illegal alien drug smuggler was given immunity by that delusional Johnny Sutton. Maybe Bush will finally get it and free our wronged Border Patrol agents."

And Ernie in Delaware, "I support deporting illegal immigrants, but now I think some should be allowed to stay. For example, the drug dealer that they just arrested, who testified against our border guards. He should stay for about 60 years behind bars."

We'll have more of your thoughts later here in the broadcast. Each of you whose e-mail is read here receives a copy of my new book, "Independents Day: Awakening the American Spirit".

And this is enough to lift your spirits, so we wanted to ask you a question. Would you vote for an Independent Populous for president of the United States? Yes or no. Vote at LouDobbs.com. We'll show you the results later in the broadcast and we'll share them with a number of people who seem to be speculating about perhaps a new entry into that. It is fascinating...

(LAUGHTER)

DOBBS: Bordering (INAUDIBLE) I think is a good way to put it.

Coming up here next, winners and losers in last night's Democratic debate, the moderator, our very own Wolf Blitzer, he will be here and has a perspective to share with us.

And why aren't you hearing straight answers from these candidates on the most important issues? We'll have that report. Stay with us. We have a lot more coming right up as we continue from the Breakers Hotel and Resort (ph) right here in beautiful Palm Beach, Florida. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Welcome back to Palm Beach, Florida. We're here at the Breakers Resort (ph).

Last night, CNN presidential Democratic debate ranks as the number one most watched primary debate in cable history. Wolf Blitzer, the moderator of the debate last night in Las Vegas, of course and like all of us on this broadcast, he and all of our colleagues are on the red eyes back east.

Wolf, you did a terrific job, an outstanding job as always. Let me ask you. Who in your judgment was the most effective in breaking through to that audience with their answers and their demeanor?

WOLF BLITZER, CNN ANCHOR: Well I thought Senator Biden did really well. I thought Senator Chris Dodd did really well. Hillary Clinton had to do well because she was coming off a pretty poor performance a couple of weeks earlier at the other Democratic presidential debate. Under the circumstances, she needed to do really well. She did pretty well as well.

She had a lot of support in that audience as well. In that last CNN Opinion Research Corporation poll we did among Democrats, likely caucus goers in Nevada, she got more than 50 percent. And that certainly was reflected in about 2,000 people who were in that audience. And they didn't like it when Senators Obama or Edwards started criticizing her and you could hear that in the hall.

DOBBS: Yeah. I wondered what your reaction was. And as you were speaking, Congressman Kucinich, he was I have to say, I thought rather rude as he approached you from his stand there. I mean, how did -- what was your sense of what in the world he was doing?

BLITZER: Well he was obviously frustrated that he wasn't getting as much time as some of the other candidates were, but he didn't like it when I called illegal immigrants illegal. He said they're not illegal. He didn't like the use of that word. (CROSSTALK)

BLITZER: You know he believes that they should be able to get citizenship right away. And he's just very much on a -- you know he has got a very hard-felt view on the whole subject of illegal immigration, so he said he took issue with the premise of my question.

When I spoke -- when I asked him about whether drivers' licenses should be issued to illegal immigrants and he said I take -- I'm paraphrasing it -- I take issue with the premise, the whole notion of illegal which he didn't buy into.

DOBBS: Yeah, the only aliens that Congressman Kucinich recognizes apparently are extraterrestrial. It was fascinating to watch these candidates, Wolf, as you tried to get a yes or no answer. The squirming and the just, the sad resistance, in some cases. Senator Obama, who has been on the attack, really to give you a straight answer. He looked to me like he was heading into the same abyss that senator Clinton had entered two weeks ago.

BLITZER: And I spoke to one of the top campaign managers, strategist David Axelrod, earlier today and I pointed out. I said you know this was obviously going to be an issue. The whole issue of driver's licenses for illegal immigrants because Hillary Clinton had stumbled on this question. She didn't deliver a forthright answer. She seemed to be taking both sides of the debate two weeks ago as her position evolved. Yesterday when I asked her point blank yes or no, do you support giving driver's licenses to illegal immigrants, she said no. That was that. But Senator Obama was not necessarily all that clear cut; although, he has taken a clear cut position. He favors giving driver's licenses to illegal immigrations and eventually that came out but it took a little while.

DOBBS: Let me ask you this very quickly. Who is the winner in your judgment?

BLITZER: In the big picture, you have to say Hillary Clinton because she needed to come back after a setback. She did come back. I think most of the pundits are suggesting she was the winner. We'll see though in the coming days. There will be a whole bunch of polls. Forget about the national polls. Let's look at Iowa, New Hampshire, South Carolina, Nevada. Look at the state polls and we'll see if her performance last night made a difference.

DOBBS: All right. I would have to say that you were an absolute winner as moderator. Outstanding job. Thanks for taking time after a very long day, night, and previous day to join us here. Thanks Wolf.

BLITZER: Thank you, Lou.

DOBBS: Up next, more of last night's debate. As we heard the candidates, making a new effort to clarify the positions on illegal immigration and border security. Did they succeed? We'll have that special report and we'll be assessing who won the debate. Who lost. Three strategists and analysts at the top of their game will tell how the candidates made. Stay with us. And I'll be talking about Michael Bloomberg, himself an independent. He had a message for me today about whether or not should I run for president. I can't wait to hear what he had to say. Stay with us as we continue live from Palm Beach, Florida.

(COMMERCIAL BREAK)

DOBBS: Welcome back to beautiful Palm Beach, Florida at the Breakers Resort here. In Las Vegas last night, the democratic candidates facing off once again in what turned out to be a heated debate at a number of instances. While those candidates stepped up their attack partiuclalry against Senator Clinton, few offered any solutions to the serious issues facing this nation, especially the issue of illegal immigration. Kitty Pilgrim has our report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT: In the Nevada debate, a simple question.

BLITZER: Do you support or oppose driver's licenses for illegal immigrants?

PILGRIM: Senator Clinton was finally clear.

SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: No.

PILGRIM: Senator Dodd, a no.

SEN. CHRIS DODD (D), PRESIDENTIAL CANDIDATE: I think driver's licenses are the wrong thing to be doing.

PILGRIM: Senator Biden.

SEN. JOE BIDEN (D), PRESIDENTIAL CANDIDATE: No.

PILGRIM: Clear yeses, Governor Richardson, a border state governor, said he approved driver's licenses for illegal aliens.

GOVERNOR BILL RICHARDSON (D), PRESIDENTIAL CANDIDATE: We need to have it in this country. I did it four years ago.

PILGRIM: Senator Obama, who supported it in Illinois, thrashed around on the topic.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: I've voted to require that illegal aliens get trained, get a license, get insurance to protect public safety.

PILGRIM: Then tried to squirm around the issue.

OBAMA: Undocumented workers don't come here to drive. In stead of being distracted by what has now become a wedge issue, let's focus on actually solving the problem.

BLITZER: Do you support or oppose driver's licenses for illegal immigrants? OBAMA: I am not proposing that that is what we do.

BLITZER: This is the kind of question that is sort of available for a yes or no answer. Either you support it or you oppose it.

OBAMA: Yes.

PILGRIM: Senator Edwards' first answer?

SEN. JOHN EDWARDS (D), PRESIDNETIAL DEBATE: No.

PILGRIM: Turned into a hedge.

EDWARDS: Anyone who is on the path to earning American citizenship should be able to have a driver's license.

PILGRIM: Congressman Kucinich playing word games.

REP. DENNIS KUCINICH (D), PRESIDENTIAL CANDIDATE: I take issue with your description of people being illegal immigrants. There aren't any illegal human beings.

PILGRIM: In the end, refusing to be pinned down.

KUCINICH: You give people a path to legalization and you work to make sure that you don't criminalize their status any further.

PILGRIM: It is an issue LOU DOBBS TONIGHT has been underscoring for years, brought out during the debate by a member of the audience.

GEORGE AMBRIZ, UNLV GRAD. STUDENT: It seems that many political commentators such as Lou Dobbs are guiding the debate and strongly shaping U.S. policy on immigration.

PILGRIM: Where did the democratic hopefuls come down on comprehensive reform which many critics call amnesty?

OBAMA: What we have to do is create a comprehensive solution to the problem.

EDWARDS: What I will do as president of the United States, move this country toward comprehensive immigration reform.

UNIDENTIFIED MALE: The answer is comprehensive immigration.

(END VIDEOTAPE)

PILGRIM: Senators Clinton, Biden and Obama supported the dream act. It is clear that the democratic hopefuls have been on the side of the open border advocates on the issue of comprehensive immigration reform.

Lou?

DOBBS: Kitty, thank you very much. Joining me now with their views on this performance of these candidates and the direction of this campaign, three of my favorite folks and the country's most distinguished political analysts and strategists. Errol Louis, columnist, New York Daily News; syndicated columnist Miguel Perez and Ed Rolling, republican strategist, former white house political director joining us from New York. I'm sorry you couldn't be here to enjoy the weather down here in Florida. But did you enjoy the debate last night? And do you think the republicans should be scared to death?

ED ROLLINS, REPUBLICAN STRATEGIST: It was a great debate. If I was running one of the presidential campaigns from our side, I'd re- run that portion of the debate you just showed about 10 times everywhere. You've gone from one no in the first debate to three nos and four maybes. And I guess we really don't know and I think Obama got Hillary's notes on the yes, no that she did so well last time. I think the debate was tiring. I think at the end of the day, they didn't add any new dialogue to the mix. I think she did better than she did in the last debate. As a front-runner, that's a good place to be.

DOBBS: Harold, your thoughts?

ERROL LOUIS, NEW YORK DAILY NEWS: I thought the debate showed one of the basic dynamics that's been going on the democratic side all along, which that Obama is an exciting candidate but as he novice in a lot of ways. He can't afford to make mistakes. If he ran a flawless campaign, he would be giving Hillary a real run for her money. As we saw last night, he hasn't run a flawless campaign. He slid around on that question.

DOBBS: He went into the abyss after watching Senator Clinton go in.

LOUIS: After criticizing her for it.

DOBBS: What in the ...

LOUIS: Jumped off the same ...

DOBBS: By the way, you say he's an exciting candidate. Is it me or does he seems to become more tedious in his answers? He becomes more labored. And deliberate. If you're finding excitement there, you're seeing more than I am.

LOUIS: It is when he gives these speeches. And this goes all the way back to that 2004 convention speech that he gave. I was in the hall for. It was an exciting, electrifying speech.

DOBBS: Compare that for us to what you're hearing over the past weekend last night.

LOUIS: That's right. It is like night and day.

DOBBS: There you go. Miguel, your thoughts.

MIGUEL PEREZ, SYNDICATED COLUMNIST: I thought it was hilarious. Straight answers to tough questions over Obama's head that he really needed to deliver. And then he fumbled the ball right there. I mean I never expected that Senator Obama to turn into Hillary Clinton two weeks later. That's exactly what we saw happened.

DOBBS: Well, these candidates -- and by the way, just so everybody, I want everybody, full disclosure, I'm an independent populist. I've got no dog in this hunt, democrat or republican. We will deal with republicans on debates when it is their turn. But let's focus on the democrats. I mean it looked to me as though the idea of attacking viscerally, the idea of attacking Senator Clinton just blew up in the faces of Edwards and Obama particularly.

ROLLINS: It did. When you get booed by a democrat audience, this audience was hand picked by the various candidates. When they boo you for being on the attack against Hillary, certainly it proves that she is the front-runner and this party will unify behind her when she wins this thing. I think at the end of the day, this strategy is not working. And particularly Edwards is getting more and more strident each day as a populist. I think he is diminishing by the day.

DOBBS: I have to tell you, as a populist, I thought much of his message is important. I think it is absolutely correct. Yet he achieves no attraction. Let me ask you this, Errol. Of these candidates, let's approach this another way. We now have the democratic candidates, everyone on record despite two defeats in the United States senate over the course of two years. We have a party that is committed itself to something that the congressional budget office said would be only 25 percent effective in dealing with illegal immigration, would be extraordinarily costly. What in the world are these people doing?

LOUIS: Well, I think what you're seeing is the difference between campaigning and governing. This is clearly, transparently to me, candidates saying they think what the voters want to hear in order to get past the first two states and the next two states to get into office.

DOBBS: When you say voters, are we talking about vote errs or the left wing of the Democratic Party that will be won by the primaries.

LOUIS: In primaries, it is the activists that come out. How many people are going to troop out in the snows in January in Iowa to sit for hours and hours and cast a vote. It's going to be the activist wing of the party

DOBBS: And we're going to be back. Miguel Perez will be dealing with the same issue when we come right back. We want to - and so will Ed Rollins but first, a reminder to vote in our poll. The question is tonight, would you vote for an independent populist for president of the United States? Yes or no? Cast your vote at LouDobbs.com. We're going to show what some people are saying about certain independent populists. At least one who to my knowledge has no intention of running for any kind of office anywhere any time. That's just speculation on my part. Stay with us. We'll continue in a moment.

(COMMERCIAL BREAK)

DOBBS: New York Mayor Michael Bloomberg is an independent. He was asked today about what he thinks about something that's going on. For some reason this week, about 10 to 15 publications have been talking about me running for president. This is what Mayor Bloomberg had to say when he was asked about that prospect.

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG (I), NEW YORK: I've known Lou for a long time. I think Lou Dobbs and I have very different views on what this country needs. Dramatically different views on what this country needs. But one of the nice things about democracy is no matter what your views are, no matter how much somebody may or may not agree with them, you have the opportunity to run. And I think if he wants to do it, I've always said the public should have more choice and not less. I would say if that's what he wants to do, go for it.

(END VIDEO CLIP)

DOBBS: Well, Miguel, what do you think?

PEREZ: When I heard the rumors, I thought you were talking about me. And I wanted to tell you that I wasn't even born in this country. I cannot run for president. Although I'm talented.

DOBBS: The truth of the matter is, I think that's lamentable. The mayor there, Ed Rollins, was he trying to get me to do something he's decided not to do?

ROLLINS: I think the wonderful part of that is you and he together, you running at the top of the ticket, he running as vice president and his billion dollars and me managing your campaign, we would do pretty well.

DOBBS: I think the thing there is Mayor Bloomberg's billions of dollars.

ROLLINS: That's very important to you giving up your day job and being viable.

DOBBS: Well, viable is a huge issue. But has Mayor Bloomberg in your judgment, no one follows New York politics more closely than you, and politics, of course, has the mayor basically destroyed his political future by suggesting he disagrees with my views on most of the issues?

LOUIS: I think he may have seriously ill paired his standing of an independent populist. It is important to note that he is a populist with $13 billion net worth. He is an independent.

DOBBS: By the way, most people who have $13 billion are extraordinarily independent.

LOUIS: In more ways than one. He is, though, I think he is a free thinker. He was a democrat and then a republican and now an independent. From watching him, I can tell you, and this is something you two do have in common. He just kind of works from the facts and arrived at his conclusions with regard to party loyalty. And it is something that has been refreshing in New York. And the nation can probably use a lot more of it.

DOBBS: In that regard, I have to say, Ed Rollins, the truth is I think Bloomberg and I share a great reverence for imperialism. He gets carried away on the issue of illegal immigration for example. There are a number of issues he has a little more affection for the elites than I do.

ROLLINS: If you had $13 billion, you might a little more elitist, too, Lou. Some of the populism goes out when you have that kind of money. I think what has happened with Mike on a serious note is, he had an opportunity here a couple months ago when people had a real fascination with him running as an independent. I think he's told enough people, no, no, no. I'm not going to run. At this point, he could still get in but I think day by day he has thrown water on his possibility of an independent candidacy. I think to a certain extent that is correct does leave a void for someone who may want to run as a populist.

DOBBS: Well, the idea that this country of 300 million people, as I've been traveling around for a week and a half or so, the number of people with candidacies in both parties, he is at the margin at best. I'm talking about the front-runner, overwhelming front runner in the case of Senator Clinton, Miguel, there just isn't that, there doesn't seem to be much satisfaction.

PEREZ: I think I speak for most of the American people when I tell you that I am not hooking for the person I like best. I am looking for the person that I dislike less.

DOBBS: How about you, Errol?

LOUIS: I think the common sense, in fact. There is not a lot of electricity. Even watching the debates last night. Not a lot of electricity in the room. Not a lot of real sort of passion. And then thanks whole range of issues from the meltdown. It isn't even a hot of, use. There are a lot of issues that you have put on the public agenda. I think it shows that there's room for more

ROLLINS: We've reached the fatigue factor. This has gone on so long now and we have been even started counting votes yes. I'm afraid that no new ideas are being offered and I think if none of the above was on a lot of these ballots, it would win and I think that's a very unfortunate thing for this country.

DOBBS: I just want to tell that you, and all of our viewers who are wondering whether or not I'm running for president. Also a lot of the executives and colleagues here at CNN on whether I'm running for president, I want you to know, clearly and unequivocally without hesitation, I won't comment any further after denying any interest in the job until we hear more from the exploratory committees all across the country. Ed Rollins, thank you very much. Miguel Perez, thank you very much. Errol Louis, as always, good to have you guys with us. Thank you, Ed.

And still ahead, mortgage fraud, a massive problem in this country. Mortgage fraud. So large that the FBI is now assigning more than a quarter of its fraud investigators to rout it out, the institutions committing fraud and carrying forward foreclosure actions against millions of Americans. We'll have that story as the war on the middle class continues. We'll be right back in just moments. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Coming up at the top of the hour, "OUT IN THE OPEN" with Rick Sanchez. What have you got for us?

RICK SANCHEZ, CNN ANCHOR: When you think about Barry Bonds, everybody wants to accuse him of things. It is more about what Barry Bonds signifies about us as a nation, about baseball, about greed. Because let's face it. Like what? We didn't know this was going on? We're all supposed to be surprised now? We're going to talk about that, I mean, in depth.

Also, we're going to talk about the debate last night. What happened with immigration? Interesting the way Hillary Clinton suddenly had stake in the ground on a Lou Dobbs issue and we're going to talk about Barack Obama and his not exactly finding his stake. Also, John McCain, John McCain's backers have been told that they need to go after me, Rick Sanchez, and boy, have they ever. Some have been not well so nice. So tonight I'm going to answer back. All that and a whole lot more including breaking news right here on "OUT IN THE OPEN." Back to Lou Dobbs.

DOBBS: Rick, thank you very much. A reminder now to vote on our poll. The question tonight is, would you vote for an independent populist for president of the United States, yes or no? Cast your vote at LouDobbs.com. We'll have the results here coming up later. And we'll be looking at some of your thoughts and stories in the mortgage fraud in this country. Middle class Americans being hit again. Stay with us. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: We're here in Florida tonight where mortgage fraud is simply skyrocketing as it is in many places across the country. In fact, FBI investigations are rising as millions more of our fellow Americans face the possibility of losing their homes. Bill Tucker now reports on the spiraling cost of mortgage fraud and the foreclosures that often result.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT: This luxury condo development is the epicenter of the mortgage fraud crisis. More than 10 percent of these 643 condos are in foreclosure, foreclosures driven largely by mortgage fraud, defined by the FBI as "the intentional misstatement, misrepresentation or omission by an applicant or other interested parties, relied on by a lender or underwriter to provide or insure a mortgage loan." Miami leads the country in mortgage fraud and has formed its own task force to deal with it.

GLENN THEOBALD, MIAMI MORTGAGE FRAUD TASK FORCE: We've arrested real estate agents. We've arrested mortgage brokers. We've arrested purchasers. We've arrested sellers. We've arrested title attorneys, closing agents, appraisers. I mean, you cross the gamut and there are going to be more that go to jail.

TUCKER: Glenn Theobald's department is currently looking into 1,000 cases of possible mortgage fraud, up from 15 just two years ago. This is not a Miami problem. Florida, California and Ohio lead the country in foreclosures. Mortgage fraud is the primary suspect. The FBI is on the case.

SHARON ORMSBY, FBI: In fiscal year 2003, we had approximately 436 pending mortgage fraud cases in the bureau and as of fiscal year 2007, we had approximately 1210.

REPORTER: Twenty-eight percent of the bureau's agents investigating fraud are now focused solely on mortgage fraud, that number has quadrupled in four years. Fueling the surge, high mortgage brokers pressing for faster reviews of mortgages, more non-traditional mortgage products all on the gamble that prices wouldn't fall and guess what?

ROBERT KUTTNER, "THE SQUANDERING OF AMERICA": Regulators were asleep at the switch because of this ideology of deregulation that you didn't need to protect consumers because markets could regulate themselves and look at all the different kinds of people who are getting hurt. Because obviously this market did not regulate itself.

REPORTER: the FBI calls it a low-risk, high-yield crime.

(END VIDEOTAPE)

BILL TUCKER, CNN, CORRESPONDENT: Little wonder why it is so tempting. Lou, the FBI agents involved in the case now are warning people, desperate homeowners who are looking at foreclosure, to be aware of closure scams.

LOU DOBBS, CNN, HOST: These people come in and promise...throughout the last several weeks the number of - I mean, outrageous illegality in some of those fees by major institutions in point of fact, but what we're talking about here - I don't know, the FBI's got some problems here, the mortgage industry and the housing industry does, but my god, the institutions are sitting there putting out no-doc loans. They're encouraging fraud and it's predatory fraud, I suppose, you could call it as well as predatory lending. No-income verification, no job or employment - I mean, what in the world are they offering loans to illegal aliens in this country. What in the world do they expect to be the result with no money down.

TUCKER: Well, the money was coming in, Lou. Everybody was making money and they looked the other way.

DOBBS: And, of course, I hope, I trust that the FBI and the Justice Department will not be focusing primarily on the people who were involved in the - in buying a home and simply following no documentation, no-income verification. There are literally at the whim of those agents and those mortgage companies and lenders. Incredible. Thank you very much, Bill Tucker. Terrific story. A sad story. It really, a sad story about the state of the country. Thank you.

The result of our poll tonight, 95% of you have concluded you would vote for an independent populist for president of the United States. You are my kind of people. And, you know, populist, imagine that, wanting the people to run this country. Really radical, huh? Thank you for your vote. Time now for a few more of your thoughts.

John in New York wrote in to say "Lou, to you and many of your viewers I'd like to say, 'welcome aboard.' When I became registered to vote in 1968 I registered as an independent. It's been lonely." We're proud and pleased to be bringing you a little company and we hope to bring you a lot more. Jim in North Carolina says, "Lou, please, please run for president. You're the only one I could trust especially after the dems debate last night. There was enough hot air to fill a balloon to go around the world."

I simply, simply cannot resist talking about exploratory committees, but I won't tonight and all of the executives at CNN are so concerned. It's scary. I'm not running for president. Each of you who e-mails us receives a copy of my new book. "Independents Day: Awakening the American Spirit."

Thanks for being with us tonight. Have a great weekend. For all of us here, we thank you for watching and a special thank you to the Breakers Hotel and Resort. Tonight, good night to you from Palm Beach. "Out in the open" with Rick Sanchez begins right now.

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