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Lou Dobbs Tonight
Investment Bank Getting Federal Help; Bush: Economy Hitting Tough Times; McCain Campaigns Against Earmarks; Congress Considers New Immigration Legislation
Aired March 14, 2008 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, HOST, LOU DOBBS TONIGHT: Wolf, thank you.
Tonight, the Federal Reserve and Wall Street bailing out one of this country's most prestigious investment banks on Wall Street, but is anybody going to bail out working men and women and their families who face foreclosure? We'll have that story, all the day's news and much more, straight ahead here tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT. News, debate and opinion, for Friday, March 14. Live from Washington, D.C., Lou Dobbs.
DOBBS: Good evening, everybody.
One of this country's largest investment banks, Bear Stearns, tonight struggling to survive. The Federal Reserve and a rival bank are giving Bear Stearns emergency aid to prevent its outright collapse. Bear Stearns' problems, a direct result of the worsening housing and mortgage crisis in this country.
And President Bush today acknowledged that, as he put it, times are tough. But the president warned Congress should not do anything, as he put it, foolish, to tackle this crisis.
We have complete coverage tonight, beginning with Christine Romans in New York, on the rescue of the collapsing Bear Stearns -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, Bear Stearns is the bank that made a fortune riding the mortgage boom. It's now desperate to be saved from the mortgage bust.
(BEGIN VIDEOTAPE)
ROMANS (voice-over): A major American investment bank in trouble, running out of money, perhaps on the merge of going out of business. The Federal Reserve and JPMorgan Chase orchestrating a dramatic rescue attempt, allowing Bear Stearns to borrow emergency money to stay alive and prevent a further crisis on Wall Street.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This morning the Federal Reserve was support of the Treasury Department took additional actions to mitigate disruptions to our financial markets.
ROMANS: Bear Stearns lost half its value in the first 30 minutes of trailing on Wall Street. Bear Stearns's CEO, Alan Schwartz, said in a statement, "Bear Stearns has been a subject of a multitude of market rumors regarding our liquidity." Rumors, he said, that were false. "Amidst this market chatter, our liquidity position in the last 24 hours had significantly deteriorated."
On a conference call later, he said, quote, "A lot of people wanted to cash out. A lot of people wanted to protect themselves in case the rumors turned out to be true."
The subprime mortgage crisis first hit Bear Stearns last summer when two of its hedge funds imploded. Bear Stearns, Citigroup, Morgan Stanley, Merrill Lynch all sought cash from foreign governments and wealthy investors to shore up their books. But the credit crisis on Wall Street only intensifies.
SEN. CHARLES SCHUMER (D), JOINT ECONOMIC COMMITTEE CHAIRMAN: Because financial firms have to refinance every day, if people lose confidence in credit, we're going to have trouble beyond Bear Stearns.
ROMANS: Advocates for struggling homeowners seized on the Fed's rescue of an investment bank.
JOHN TAYLOR, NATIONAL COMMUNITY REINVESTMENT COALITION: President Bush has said that it would be a moral hazard to use public funds for what has been described as a bailout.
And I hope that we get that same kind of aggressive help that helps shore up homeownership.
(END VIDEOTAPE)
ROMANS: This crisis at Bear Stearns unfolded very quickly. As recently as Tuesday, the Securities and Exchange Commission said it was comfortable with the liquidity of the five largest investment banks, including Bear Stearns -- Lou.
DOBBS: Well, obviously, it's interesting that neither the Fed nor JPMorgan Chase or anyone else on Wall Street, none of the national news organization are using the expression bank failure, but that's precisely where Bear Stearns found itself -- itself this morning.
ROMANS: It's amazing, Lou. If there wasn't this bailout this morning, this rescue that came in, this is a firm that likely would not have had enough money to stay in business. And the disaster that it would be on Wall Street if you had a big major investment bank going down would have hurt everyone.
DOBBS: The obvious issue now is, what happens next? Does Bear Stearns survive? And is the Federal Reserve and the banking system committed to that survival? Any word on Wall Street as to that?
ROMANS: It's clear that this is a company that is likely up for sale. This -- this agreement today is very short-term. This is a company that's working with JPMorgan, trying to find out what it can do next.
DOBBS: Christine Romans, thank you very much.
Stocks and the dollar plunged on the Bear Stearns news. The Dow Jones Industrials closed nearly 200 points lower on the day. Banks and other financial institutions suffering their worst losses in the stock market today. And the dollar fell even further against the Japanese yen and the euro, already at record lows against the euro.
President Bush today went to the New York Economics Club to warn lawmakers not to overreact to our worsening financial crisis. President Bush also took the occasion to blast critics of his so- called free trade policies.
(BEGIN VIDEO CLIP)
BUSH: I believe it is dangerous for this country to become isolationist and protectionist, and I know it would harm our economic future if we allowed those who believe that walling off America from trade to have their way in Congress.
(END VIDEO CLIP)
DOBBS: Interestingly enough, the president didn't name a single person who's advocated walling off this country in terms of trade, and we can't think of a single individual ourselves.
President Bush did admit the economy is going through tough times, as he put it, but he rejected calls for massive government intervention.
Elaine Quijano has our report from the White House.
(BEGIN VIDEOTAPE)
ELAINE QUIJANO, CNN CORRESPONDENT (voice-over): Steady hands on the economic wheel, that's what President Bush says Washington needs to provide.
BUSH: When you overcorrect, you end up in the ditch.
QUIJANO: Even as Americans find themselves buffeted by high gas and food prices, the president offered no major new initiatives, telling business and finance leaders at the Economic Club of New York that markets need time to self-correct.
BUSH: Any time the government intervenes in the market, it must do so with clear purpose and great care.
QUIJANO: The president also argued again that Congress should make permanent his tax cuts.
BUSH: If Congress doesn't make the tax relief permanent, they will create additional uncertainty during uncertain times.
QUIJANO: But economist and actor Ben Stein...
BUSH: Ben, you always draw a good crowd. QUIJANO: ... who in 2005 campaigned with the president to overhaul Social Security, blames tax cuts, in large part, for today's economic troubles.
BEN STEIN, ECONOMIST/ACTOR: I love Mr. Bush, and he will always have my vote and he always have my appreciation for the many good things he's done. But I think he did this wrong. And we've had fiscal mismanagement on this -- in this country for a very long time now.
QUIJANO: Stein argues that deficit spending under President Bush's watch has left America's economy weak, which much of the U.S.'s debt owned now by foreign countries.
STEIN: The chickens have come home to roost. We've got to stop. And we owe it to our grandchildren, or else we're going to leave them as colonists -- as peons of the Asians and of the petro states.
(END VIDEOTAPE)
QUIJANO: President Bush and Democrats did agree on a stimulus package to help boost the economy. The president said those tax rebate checks should be in the mail starting in May.
Democrats, though, say that more needs to be done, while the president maintains those rebate checks should first be given a chance to work -- Lou.
DOBBS: Elaine, thank you very much. Elaine Quijano from the White House.
And just a footnote in terms of our financial situation in this country and the deficit. The federal deficit through the first five months of the 2008 fiscal year, now -- it's now at $260 billion. That's just about $100 billion more than the entire 2007 federal budget deficit.
Time now for our poll. The question tonight: Are you outraged that the government would bailout Bear Stearns while allowing middle- class Americans to lose their homes to foreclosure without help?
Yes or no? Cast your vote at loudobbs.com. We'll have the results here later in the broadcast.
On Capitol Hill, a victory for special interests again; a defeat for the common good and the national interests. Senators voted 71-29 to reject legislation that would have banned earmark spending for one entire year. One entire year without pork.
One of the leading supporters of the proposal, Senator John McCain, today made that defeat an issue on the presidential campaign trail.
Dana Bash has our report from Springfield, Pennsylvania.
(BEGIN VIDEOTAPE) DANA BASH, CNN CORRESPONDENT (voice-over): The morning after a one-year ban on lawmakers' pet projects lost and lost big in the Senate, John McCain came to Pennsylvania and used defeat as political opportunity...
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Anyone who had the misfortune of watching it will know that -- how hard it is trying to do the Lord's work in the city of Satan.
BASH: ... suggesting he may be a creature of Washington, but he voted for change.
MCCAIN: The moral of the story is, there's only one place left in America that they don't get it -- they don't get it that pork barrel spending is out of control and Americans want it stop -- and that's in our nation's capital. And I want to tell you as president, we will veto those bills.
BASH: McCain even lambasted fellow Republicans. More than half of GOP senators voted to keep earmarks in place.
MCCAIN: My Republican conference is not responding to the will of the people.
BASH: But the presumptive GOP nominee, still struggling to rally his party behind him, tried to focus on Democratic opponents.
MCCAIN: The first thing they can do if they're against the earmarks is ask that the money that they've gotten, hundreds of millions that they've gotten from pork barrel projects, not be spent.
BASH: Pennsylvania is now the center of the political universe as the next battleground for Democrats, but it's also pivotal for McCain in the general election, and a Republican presidential candidate hasn't won Pennsylvania in 20 years.
MCCAIN: I've got a lot of work to do, a little straight talk. I've got a lot of work to do.
BASH: Yet McCain was careful not to bite when a voter called the Democratic candidates a joke and handed him a Hillary Clinton doll.
MCCAIN: We want to have a humorous aspect to every political campaign, otherwise it gets too boring. But I want to emphasize my commitment to respect my opponents.
BASH (on-camera): Insisting on a respectful campaign is a big focus of the McCain camp right now, especially in light of controversial comments about Barack Obama, even at a McCain rally.
In fact, CNN is told McCain aides are working on an op-ed to be published in McCain's name, warning surrogates not to wage personal attacks against Democrats -- Lou.
(END VIDEOTAPE)
DOBBS: Dana Bash from Springfield, Pennsylvania.
And a footnote, again, if I may. Senator John McCain is the only senator, to my knowledge, to avoid any earmark. He has not accepted any earmark, nor has he initiated a request for an earmark at any time for the state of Arizona in his entire tenure over four terms in the U.S. Senate.
Coming up next, lawmakers struggling to come up with a plan to deal with our illegal immigration crisis.
Casey Wian will have our report -- Casey.
CASEY WIAN, CNN CORRESPONDENT: Lou, the Senate has passed an amendment to crack down on illegal immigration and improve border security. It also passed a competing amendment that ignores both. We'll try to explain, coming up.
DOBBS: That's our Senate, led by the inimitable Senator Harry Reid. He's the majority leader. Thanks, Casey. We look forward to that.
Also, stunning new evidence of unbelievable security lapses in federal buildings. We'll have that special report. Just how safe is the homeland.
Senator Barack Obama finally criticizing stunning anti-American remarks by his longtime pastor. What took the senator so long to respond? We'll examine the issue of race and politics, group and identity politics, in the 2008 presidential campaign.
We'll be right back.
(COMMERCIAL BREAK)
DOBBS: Incredibly, there are new and apparently sincere efforts on Capitol Hill to try to deal with the illegal immigration crisis.
Two legislative measures, each taking an entirely different approach, cleared the U.S. Senate yesterday. One amendment that would crack down on illegal immigration, as those aliens are apprehended crossing our border. The other targeting the illegal employers of illegal aliens. Imagine.
Casey Wian has our report.
(BEGIN VIDEOTAPE)
WIAN: Alabama Senator Jeff Sessions acknowledges that Americans are tired of waiting for border security and immigration law enforcement.
SEN. JEFF SESSIONS (R), ALABAMA: This Congress, this Senate has repeatedly voted on issue after issue after issue that would move us toward a lawful system of immigration. But for one reason or the other, those votes have not been translated into action or funding. As a result, we have not made the progress we should have made. We have created a lack of confidence in the American people who are cynical about what we do here.
WIAN: The Senate Thursday passed a Sessions-sponsored amendment that could help change that perception. It would provide funding to expand Operation Streamline, which prosecutes nearly every illegal alien caught crossing the southern border, instead of merely sending them back.
The program and its so-called zero tolerance policy already exists in 24 of the Border Patrol's 20 sectors, and it has reduced illegal crossings there by an estimated 60 percent.
The measure would also complete funds to complete 700 miles of border fence and continue the deployment of 6,000 National Guard troops, who are scheduled to be pulled off the border this July.
But the Senate also passed a competing amendment by New Jersey Democrat Robert Menendez that, instead, targets employers of illegal aliens.
SEN. ROBERT MENENDEZ (D), NEW JERSEY: What we do is actually go after the magnet that brings people to this country, and that's jobs and those who employ them illegally. And so we have the ability under this amendment to pursue civil penalties against bad actor employers.
WIAN: Menendez called Sessions' emphasis on border security part of the same old tired way that hasn't produced results.
(END VIDEOTAPE)
WIAN: The zero-tolerance policy is producing results. Illegal aliens are avoiding those sectors, because once they've been prosecuted for illegal entry and served up to 15 years in jail, the second offense carries a two-year prison term, Lou.
DOBBS: And that's exactly right. I don't know why Senator Menendez would say that, because as you've reported a number of times, that program is working, that zero-tolerance policy in those sectors.
But it is striking that Senator Menendez would introduce legislation that would seriously go after illegal employers of illegal aliens. That would be quite a reversal from his position, historically, on illegal immigration and open borders.
WIAN: Absolutely. But the proposal, the amendment that he introduced leaves a lot up in the air. It doesn't call for specific penalties. It doesn't earmark any specific amount of money for these enforcement programs. It basically says, "We support cracking down on employers, and we'll figure out the details later," Lou.
DOBBS: Yes. And the way Senator Menendez has proceeded -- and I would be delighted to have the senator join me here to explain -- but typically, his position has been one of effectively gaming the system on the issue of illegal immigration. And I would love to have a discussion with him. If he'd like to join me, we'll make those arrangements, if possible, next week.
Thanks very much, Casey. Casey Wian.
There are clear indications tonight that amnesty for illegal aliens could have the support of our next president. Two of the three candidates, senators Obama and Clinton, have aligned themselves with pro-amnesty forces in the Senate and those forces in the votes yesterday.
The third, Senator John McCain, he left town before the votes, leaving his intentions in question but his record, quite clear.
Louise Schiavone has our report.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT: If either Barack Obama or Hillary Clinton captures the presidency, the budget votes they cast this week could signal a White House agenda that would ease pressure against illegal immigrants.
ROY BECK, NUMBERSUSA: Clinton and Obama are voting to make sure that anybody who provides awards or safe harbor to illegal aliens is protected. The Clinton/Obama policy is rewards for illegal immigration, try not to enforce the law.
SCHIAVONE: Both Senate Democrats voted to essentially kill a proposal barring federal funds for cities giving sanctuary to illegal aliens. They said no to additional funding for border security, immigration enforcement, and deportation of criminal aliens, and no to a proposal directing federal dollars to English classes for non- English speaking workers.
BRIAN DARLING, HERITAGE FOUNDATION: This is a pitted battle, and these are proxy wars. All these votes are proxy wars on what's going to happen in the future, on comprehensive immigration reform.
SCHIAVONE: Missing from all the immigration votes, Republican John McCain, who left town for a fund-raiser.
STEVE CAMAROTA, CENTER FOR IMMIGRATION STUDIES: You would think this would be an easy chance for McCain to demonstrate what he's claimed, that he gets it, he wants enforcement, and he doesn't even show up to vote.
(END VIDEOTAPE)
SCHIAVONE: Lou, analysts say the votes all cast on a nonbinding budget resolution show just how tough it will be in this pre-election congressional session to get anything done on immigration reform.
DOBBS: As you say, but the other side of it is that senators Obama and Clinton are making it very clear where they stand: not for border security, for open borders, and for amnesty. And if everyone -- let's all be very clear about it. That's where they are. And Senator McCain, with an opportunity to demonstrate his statements that he gets it, that it will be border security first, and that he has recanted his amnesty legislation that he cosponsored with Senator Kennedy 2 1/2 years ago. That looks suspect, doesn't it?
SCHIAVONE: That's the most striking thing about it, to me. Because Obama and Clinton, they voted the way they're always going to vote. But McCain, he just seems to be at sea at this point or at least can't go on record on what he actually thinks of the issue at this point.
DOBBS: I said I would take the man at his word that he would insist upon security first, but that, based on his failure to vote on those -- those pieces of the budget legislation, that's in question, at least tonight. Hopefully it will be resolved. It would be nice to find a politician we could trust in this country running for president.
Louise Schiavone, thank you very much.
Coming up next, what took Senator Obama so long to renounce those inflammatory remarks by his long-term pastor, such as these remarks?
(BEGIN VIDEO CLIP)
REV. JEREMIAH WRIGHT, BARACK OBAMA'S PASTOR: They want us to sing God bless America, no, no, no! Not God bless America, God damn America -- that's in the Bible -- for killing innocent people. God damn America!
(END VIDEO CLIP)
BECK: The federal government may also be failing to protect government buildings and employees who work there. We'll have that special report. Stay with us.
(COMMERCIAL BREAK)
DOBBS: As I noted at the outset of this broadcast, we're in Washington, D.C., tonight. And you might be forgiven if you thought protecting federal buildings in this town would be a high priority for the Department of Homeland Security. But we're learning tonight that budget cuts are hampering the very agency created to protect these potential targets.
Homeland security correspondent, Jeanne Meserve, has our report.
(BEGIN VIDEOTAPE)
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice-over): This building houses the Los Angeles bureau of the FBI, but it is not completely secure.
Last May, CNN has learned, thieves drove into the loading dock, hitched up an FBI trailer, and made off with almost half a million dollars worth of surveillance equipment. Cameras on the building caught the whole thing.
MARK GOLDSTEIN, GOVERNMENT ACCOUNTABILITY OFFICE: Clearly, someone was watching it happen, because they zoomed -- they changed the angles and zoomed in.
MESERVE: But the building's private security guards didn't stop the theft. In fact, they didn't even report it until three days later, when the FBI went looking for the trailer.
Shocked? It gets worse. In the summer of 2007, Eric Howell's (ph) decomposing body was found in an empty federal building in Kansas City. It had laid there undiscovered for an estimated three months, because there were no security patrols.
The Federal Protective Service is responsible for securing federal buildings, but the Government Accountability Office says it has been cut back so harshly since merging into the Department of Homeland Security that federal facilities are at a greater risk of crime or terrorist attack.
REP. ELEANOR HOLMES NORTON (D), DISTRICT OF COLUMBIA: We're seeing the near-collapse of the Federal Protective Service, comparable to what we saw with FEMA.
MESERVE: The 1995 Oklahoma City bombing killed 168 people and showed what a tempting target a federal building could be.
But in the last three years, FPS has lost 20 percent of its workforce. Right now there are only 756 FPS officers to secure 8,800 federal buildings around the country.
(on-camera) Can that many people protect that many buildings?
DAVID WRIGHT, UNION PRESIDENT: Absolutely not. It's impossible.
MESERVE (voice-over): Homeland security is adding 150 new officers, but says it is simply too expensive to field an army of government guards.
MICHAEL CHERTOFF, SECRETARY OF HOMELAND SECURITY: There's a way to blend some federal authority in federal buildings with private guards so you can leverage the federal authorities but have the resources of the private guards.
(END VIDEOTAPE)
MESERVE: But critics say private guards don't patrol around buildings looking for suspicious activity and usually don't have the authority to detain or arrest. If they call FPS for assistance, the agency is stretched so thin, critics say it could take hours, even days, for officers to respond -- Lou.
DOBBS: That's incredible. Utterly incredible. Do they really still call it the Department of Homeland Security?
MESERVE: They do, indeed. Part of this comes down to a funding issue, that FPS money comes through money that's collected from those agencies that are being protected. And it's just not enough of a funding stream.
There are a lot of people out there saying what we should be doing is allocating money to FPS, just like we do to every other division in the Department of Homeland Security.
DOBBS: The rough math that I did on your report, that basically, one guard for every ten to 11 buildings?
MESERVE: That's right. And -- and the buildings are spread far and wide. Sometimes they're in different states. That's why, if a private guard calls for assistance, it sometimes take so long for them to get it.
DOBBS: Well, does anyone in this town get that the Department of Homeland Security is a pure sham? That they're not protecting our borders, they're not protecting our ports, they're not protecting federal buildings? It leaves open the question, what are they doing?
MESERVE: Well, I'm not going to even try to answer that one for you.
DOBBS: Well, I tell you, I -- you've raised some critically important questions. I hope some of the people in this town that are paid to do so will come up with some answers.
Jeanne, thank you very much. A troubling, but outstanding report. Thank you, Jeanne Meserve.
Time now for some of your thoughts. Thousands of you are e- mailing us about Microsoft's Bill Gates calling upon our Congress to raise the number of foreign worker visas that companies can use to bring cheaper labor into this country.
Shirl in South Carolina, for example: "Lou, I'm not sure who nauseated me more, Bill Gates, one of the richest men in the world, begging for more cheap labor or the fawning members of Congress, acting like star struck teenagers instead of representatives for the American people."
Ralph in Arizona: "Lou, is there any way that we can 'outsource' Bill Gates on one of those visas?"
Not likely.
And Armena in Texas: "Lou, I love your show. I am proud to say that I am an independent at the age of 16."
Thank you for doing so. Congratulations.
We love to hear from you. Please send us your thoughts to loudobbs.com. Each of you whose mail is read here receives a copy of my book, "Independents Day: Awakening the American Spirit."
And don't forget to join me weekday afternoons for "The Lou Dobbs Show" on the radio, my new three-hour radio broadcast. Go to loudobbs.com to find the local listings for "The Lou Dobbs Show."
Up next here, President Bush admitting our economy faces what he calls tough times. But will President Bush do anything more to help our struggling middle class? I'll be joined by three of the very best political analysts here.
And rising concerns tonight that the federal government is trying to erode one of our most basic freedoms: the right to bear arms. That report.
And Senator Barack Obama responding to outrageous anti-American statements by his long-time pastor. What in the world took Senator Obama so long? We'll be looking at that and a great deal more.
Stay with us. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: It may be at a relatively late stage, but we are now learning more about the man Senator Barack Obama once called his spiritual adviser. The Reverend Jeremiah Wright, a clergyman who has what is nothing less than a disgraceful record of making racially charged statements, inflammatory statements about this country, inflammatory to say the least.
(BEGIN VIDEO CLIP)
WRIGHT: They wants us to sing God Bless America! No, no, no! Not, God bless America, God damn America, that's in the Bible, for killing innocent people! God damn America.
It just came to me within the past few weeks, you all, why so many folks are hating on Barack Obama. He doesn't fit the model. He ain't white. He ain't rich. And he ain't privileged. Barack knows what it means to be a black man living in a country and a culture that is controlled by rich, white people!
(END VIDEO CLIP)
DOBBS: Jeremiah Wright. Today, we did get a response from Senator Obama because of a special report on ABC News and also an editorial in "The Wall Street Journal" written by my guest, tonight, Ronald Kessler.
The senator says he, quote, "strongly condemns the statements at the core of this controversy," but this has been going on, now, for years and among the questions tonight that I believe are fair to ask, certainly among them, why did it take so long for the senator to come out against these outrageous remarks? Was he simply hoping it would go away?
Joining me now Ronald Kessler, chief Washington respondent for newsmax.com and also author of this morning's editorial, op-ed piece in the "Wall Street Journal."
Ron, good to see you. And in New York, "New York Daily News" columnist and LOU DOBBS TONIGHT contributor, Errol Louis.
Errol, good to have you with us.
ERROL LOUIS, "NEW YORK DAILY NEWS": Good to see you.
DOBBS: Let me begin, Errol, with you. Those remarks, as I hear them, you can hear the -- you can call it frustration, you can call it passion, whatever, but those remarks about America leave me really gut-sick when I hear them.
LOUIS: That's rough stuff. Listen, you get a passionate preacher whether you're talking about Jeremiah Wright or any of thousands of others that we can name. You're going to find some rough stuff, whether you're talking about what's in the Old Testament, the New Testament, the Koran, the Book of Mormon, you've got a lot of controversial stuff there.
And my guess is that Barack Obama didn't want to talk about it for the same reason that Mitt Romney didn't want to talk about it, for the same reason Mike Huckabee doesn't want to have theological discussions in the middle of the campaign. It doesn't do you much good and can do a lot of harm.
DOBBS: A lot of harm. What I was talking about is G..D. America, I mean, that hurts, partner.
LOUIS: Yes, well, you know -- look, we've heard a lot of this before of Jeremiah Wright and other ministers have suggested that 9/11 was some kind of divine retribution against a sinful, wicked America. When they say it and mean, they say it the way you heard it, rough stuff.
DOBBS: Very rough.
Ron, your article, coincidentally, the same time that ABC News was filing a report also on Jeremiah Wright. Here's an example of -- well, first, why did you choose to write the editorial at the time you did?
RONALD KESSLER, NEWSMAX.COM: I've been writing about this since early January in Newsmax and had the first story saying that this minister gave an award to Louis Farrakhan, the news media has been ignoring it until now, it's just too sensitive, too explosive, they love Barack Obama. But here's a situation where, first of all, the vast majority of Americans, if they heard their minister saying that we caused AIDS, we train professional killers and on and on and on, these are not religious statements, these are political statements about our country. The vast majority of Americans would walk out, first of all.
Secondly, this is not just a minister, this is Barack Obama's close friend, his sounding board, his adviser. You know, obviously, you don't have an adviser like that unless you agree with a lot of the views. And that's what I think is going on here. DOBBS: Errol, your thoughts?
LOUIS: Well, I don't think there's any basis in Senator Obama's rather extensive and well-researched public history to suggest that he is in league or in any way supportive of those statements. I don't think there's any basis for that at all. And --
DOBBS: What about this, Errol, the fact that -- and I do want to get to Senator Obama's statement here very quickly, but the fact that it has taken so long -- well, let me go to the first point before we got to how long it took for Senator Obama to respond, and that is, what Ron just said.
The media has been loathe to deal with this relationship with Jeremiah -- Reverend Jeremiah Wright between Senator Obama and Wright. He suggests because there's a certain affinity for Obama in the national press corps, do you think he's entirely wrong?
LOUIS: I think he's entirely wrong, yes. Look, the press has been equally loath and certainly Newsmax has been loathe to talk about reverend John Hagee, who stood beside John McCain, endorsed him, has written a million so in books, and it contains a lot of really controversial things. He's calling for the United States to join Israel in a first strike using nuclear weapons against Iran in order to bring about some kind of biblical fulfillment.
DOBBS: What do you think, Ron?
KESSLER: The fact that someone endorses someone is quite different from this situation. This isn't just an endorsement. This is a situation where --
DOBBS: This is a relationship.
KESSLER: This is a situation where Barack Obama has chosen to belong to this church. Michelle Obama's statement, that for the first time she's proud to be an American I think is part of the same mind- set.
DOBBS: And I think as quickly as John McCain and other candidates have been throwing people under the bus here whenever they enter controversy, it's interesting Senator McCain did not throw under the bus ...
KESSLER: I think the difference is it was an endorsement. And Barack Obama's statements about this have been full of falsehoods. For example ...
DOBBS: Let's look at those, I'm sorry, go ahead.
KESSLER: For example, when it came out when Newsmax reported that this award was given to the minister to Farrakhan, Barack Obama said, it was because of his work with ex-offenders, that was not true. It was a lifetime achievement award, had nothing to do with ex- offenders. DOBBS: Let's listen to what Senator Obama said here. If we could have the statement, put that up on the screen, it would be helpful, least part of it.
"I vehemently disagree and strongly condemn the statements that have been the subject of this controversy. I categorically denounce any statement that disparages our great country or serves to divide us from our allies. I also believe that words that degrade individuals have no place in our public dialogue, whether it's on the campaign stump or in the pulpit. In sum, I reject outright the statements by Rev. Wright that are at issue."
Does that end it, as far as you're concerned, Errol Louis?
LOUIS: Well, my prediction is that it won't end it as a topic of discussion, because the political operatives that are out there at Newsmax and elsewhere are going to grab it like a dog with a bone. This is the essence of this denunciation game.
No matter what you say, how you say it, or how many times you say it, there'll be folks that say, I'm sorry, that's not quite enough, you've got one more statement to denounce, you've got to say it louder, you've got to say it prettier, you've got to say it to the exclusion of all other issues. And that of course is the real problem with this. You get away from all of the issues the voters really want to hear about it.
KESSLER: What he is saying ...
DOBBS: You get the last word, Ron.
KESSLER: ... here doesn't denounce the minister, it denounces the statements and the important thing is that for two decades, Barack Obama has belonged to this church, has considered this person a friend, has considered himself -- him an adviser, thinks of himself as a student of this minister. So what he says now is pretty much irrelevant. The important thing is ...
LOUIS: You demand the denunciation and then pronounce it irrelevant. That's exactly what I meant, Lou.
DOBBS: Well, and that seems to be part of this, the denunciation, for me, the difficulty is that it comes so late, not that he -- and I think it's terrific that he does so, but I think there should be greater specificity, Errol, to be honest.
I think we should hear far more from the senator on these issues. For me I accept it, if he's denouncing outright Reverend Wright's comments, that's good enough for me but I would like to know why it took so long.
KESSLER: When we judge these candidates, we have to look at more than what they say on TV. We have to look at their character and track record and I think it's very relevant to determining who this person is ...
DOBBS: I'm going to give Errol Louis the last word now. I mean it this time, Errol.
LOUIS: Look, I would suggest that if we're going to do, we should have one standard. We'll look at Hagee, we'll look at all of the controversial ministers and we'll include Dobson and everybody else. If that's what we're going to do. I think, personally, it's a political dead end, it doesn't do much for the public.
DOBBS: It does do one thing. It does make me a little nervous about what's going on in pulpits across the country, whether on the left or the right, and I sure hope that we can continue to examine this clearly.
Ron Kessler, we thank you for being with us. I mentioned you were the editor at Newsmax, and you're also, we want to point out, that you're the author of "Terrorist Watch: Inside the Desperate Race to Stop the Next Attack." Thanks for being with us.
Errol Louis, as always, good to see you, my friend.
KESSLER: Thank you.
DOBBS: Thanks for being with us.
Up next, we'll have much more on the issue of race, politics, three of the country's best political analysts will join me here in the Nation's Capital. Yes, I had the courage to actually come to Washington, DC.
And a basic American freedom at risk, the right to bear arms. Our report continues tonight. Stay with us. You don't want to miss it.
(COMMERCIAL BREAK)
DOBBS: The conviction of a Wisconsin gun owner on federal weapons charges is raising serious questions underlining the constitutional right to bear arms and bringing disproportionate -- the disproportionate weight of the federal government down on one of our citizens? Last night we reported to you on the arrest and trial of Army veteran David Olofson, the father of three, a family man in Wisconsin in a community of 5,500 people.
Tonight we look at what some are calling the questionable methods used by the federal government to pursue the case and to prosecute Mr. Olofson. Bill Tucker has our report.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT: David Olofson's defense at his trial in January was simple. He had lent his Olympic Arms AR-15 to be used on a firing ranges. The 20 year old gun fired two separate rounds with multiple shots and jammed each time. Olofson's lawyer argued this is a problem in older AR-15s, not a crime. Initial testing by the Bureau of Alcohol, Tobacco, Firearms and Explosives agreed. BRIAN FAHL, FEDERAL DEFENDER SVCS. OF WISC.: The field agent for ATF didn't like that. Go test it again and use this different ammunition, which is easier to cause multiple firings if you have a malfunction.
TUCKER: A gun maker and an expert witness for the defense is critical of ATF's testing procedures.
LEN SAVAGE, HISTORIC ARMS LLC: The problem is they don't have any written firearm testing standards. They decide the testing criteria on a case-by-case basis.
TUCKER: The ATF did find a malfunction. It's called a hammer follow and it can cause a semiautomatic weapon to fire multiple rounds, just like it did in this semiautomatic test of a different gun fired by this ATF agent.
It was enough to convince a jury to find Olofson guilty on the charge, transferring a machine gun. But the malfunction can also cause other problems, some of which can cause the gun to explode, a simple enough argument for fixing it, argue gun owners.
What no one can or will explain is why the government brought the full power of the federal authorities down on Olofson, an honorably discharged Army veteran, a man who was serving in the Army Reserves at the time of his conviction, a man who still believes he will be cleared.
DAVID OLOFSON, CONVICTED GUN OWNER: I still have confidence that the legal system will work. We're not done with it yet. The process still has a couple more steps to go through. As far as my opinions of how things have been handled up to this point, we'll have to wait before I can give you those.
TUCKER: There are efforts underway in the Congress to correct the testing irregularities pointed out by the defense. The bill as known as the Fairness in Firearms Testing Act or HR-1791. It would require all firearm testing and examinations be videoed by the ATF.
(END VIDEOTAPE)
TUCKER (on-camera): Now, LOU DOBBS TONIGHT contacted the Bureau of Alcohol, Tobacco, Firearms and Explosives who declined comment on the case, noting that it is still pending until Olofson is sentenced. Likewise, the attorney's office in Milwaukee also declined comment.
Olofson's sentencing is set for May 15. He's facing somewhere between 18 months and just over six years in prison along with a possible fine of $250,000. And Lou, just a few moments ago I did spoke with the ATF agents again. They just say simply on the record they stand by their prosecution of Olofson, noting that they did prevail in court with a jury in finding the conviction.
DOBBS: We've heard that before, unfortunately, and as much respect and regard we have for the agents of ATF, someone, whether it's a U.S. attorney in Wisconsin, whether it is the senior levels of ATF, it seems, has made a completely disproportionate judgment on prosecution here. This makes no sense on any level that we have been able to find.
TUCKER: No. It would be one thing if they could point to something and say, look at this. And they ...
DOBBS: Well, we're going to look at this and continue to look at this. We'll be talking with the National Rifle Association next week. We'll be talking about with the congressional delegation of Wisconsin about this and the U.S. senators of Wisconsin about this and see what in the world is going on. It might not be happening to a citizen in 2008 and it should in any year not happen to a citizen in the United States of America. Bill Tucker, thank you.
Up next here, President Bush blasting critics of his free trade policies. He's offering no solutions, however. Barack Obama denouncing his longtime pastor's controversial comments. Has the damage already be done? I'll be joined by three of the best political analysts in the country.
Stay with us. We're coming right back.
(COMMERCIAL BREAK)
DOBBS: Well, joining me now, three of the best political analysts in the country, Diana West, Tom DeFrank, Washington bureau chief, "New York Daily News," Jonathan Martin, senior political reporter, politico.com.
Thank you all for being here.
How big is this problem for Barack Obama?
TOM DEFRANK, "NEW YORK DAILY NEWS": Well, it's a problem, but I don't think it's a lethal problem, but it's not helpful. No right- minded human being can feel good about what his minister has said. He's not running for president and Geraldine Ferraro's not running for president, but it's still a problem for Obama and the Obama people know that.
DIANA WEST, UNIFICATION CHURCH: I think it's existential, because this minister is part and parcel of Barack Obama's development, his identity, his own evolution of his thought, and I think he can't run away from it in the way you could possibly run away from a country club that has a black and Jew exclusive policy. This man helped form him. And so it's not just a matter of disavowing a few statements. It's very much part of his --
DOBBS: When you say a country that is exclusionary, the fact is, you could lead that country club and that would, I think, wash the sin away, wouldn't it?
WEST: Yes, I do. I think that's true, but I don't know that he can leave this man he spent 20 years in his church.
JONATHAN MARTIN, POLITICO.COM: It's better in March than October. This is a big problem for Obama and these comments probably will come back this fall, should he be the nominee. You can see it now. As some third party group will get a hold of 30 seconds or a full minute of these comments Wright made on the pulpit throw it on a TV spot, and that's a very, very tough commercial.
DOBBS: It's a tough commercial. It's also a tough situation. Let me ask you the fundamental question. Are we being fair to Senator Obama? Now, admittedly, he's a longtime pastor, had an important role somehow in the evolution of his political thinking and his political career, but are we being fair here to even -- is it really so profoundly relevant to appropriately be something that could be near fatal to his nomination chances?
DEFRANK: I don't think it's near-fatal. But it's a question of damage control, and I think his damage control maybe has been a little too slow. But in an election like this that could end up being very close, everything counts, and this is going to be a negative and there's no way to get around it.
WEST: Particularly because he's supposed to be the candidate of post-racial unity in America, the biracial candidate. So exposing this very racial minister as part of his background is more than just an association. This is something very bad for him.
DOBBS: I think it's fair to say in my opinion, Jeremiah Wright's remarks rise to the level of racist, not simply racial. He's putting squarely blacks in this country in the most inflammatory terms that one could. I mean, I literally mean, and I literally, it makes me gut-sick to hear a man talk the way he did, about this country.
DEFRANK: Especially a holy man.
MARTIN: It's somewhat similar to the case John McCain with the questions about the alleged relationship with a lobbyist, John McCain's entire candidacy is staked on his personal relationship, honor and integrity, and when those values are challenged, it strikes at his hopes. Same thing with Obama. His campaign is staked on being this post racial candidate, post partisan candidate above the fray. When he's tied to somebody so close to him like that that is offering rhetoric in a direct contradiction to that sort of candidacy, it's a problem.
DOBBS: I want to be absolutely straightforward. I didn't think there was any way in the world that a Republican could possibly win the White House after eight years of George W. Bush. What we're walking in group and identity politics between Senators Obama and Clinton, I'm not certain that the Democratic Party -- I would love to hear what you think. Can the Democratic Party recover from this kind of divisiveness.
DEFRANK: Overnight is a lifetime in politics and we've had eight times of lifetimes left to go. Things are going to happen that we can't even speculate things. They could fundamentally affect the thing.
But this race, I think you're right, Lou, in this respect. The Democrats are behaving towards each other the way they usually accuse the Republicans of behaving towards them. And that can't be good, especially in a year where they think they can smell the White House.
WEST: We thought it was a runaway, and now it's certainly not.
MARTIN: It's going to be a very, very competitive race, regardless of what happens. As tom said, there's a very long way to go and there will be more gaffes to come.
DOBBS: Thank you all for being here. We appreciate it, look forward to talking to you again soon. Thank you.
Up next, the results of our poll. Stay with us. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: Ninety-two percent of you are outraged that the government would bail out Bear Stearns while allowing middle class Americans to lose their homes to foreclosure. We thank you for being with us tonight. Good night from WASHINGTON.
"THIS WEEK IN POLITICS" begins right now.
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