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LOU DOBBS TONIGHT

Will Anyone Bail Out the Home Owners of America?

Aired March 24, 2008 - 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: Thank you, Wolf.
Homeowners continue to struggle to stay out of foreclosure. The federal government bailing out one of the nation's largest banks, but is anyone coming to the aid of working men and women in this country and trying to fix this nation's failing public schools? One of the nation's largest school systems wants to pay teachers for performance. The superintendent of that school and the head of the teachers union will be among my guests here tonight.

And Detroit's mayor charged with perjury, obstruction of justice, misconduct in office for allegedly lying about an affair with one of his aides and the firing of two Detroit police officers. The reporters who broke this story wide open will be among our guests here tonight; 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 Monday, March 24. Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody. Senator Clinton today proposed a plan to deal with the nation's economic crisis calling upon President Bush to appoint an emergency panel to confront the crisis and establish confidence in the economy. Senator Obama's campaign called the plan, quote, "more repackaged ideas", end quote.

Where is the love? The campaign rhetoric between the Obama and Clinton campaigns turning even nastier. There's concern now that the disarray within the Democratic Party will carry over into the general election. We have extensive coverage tonight on the campaign trail beginning with Dan Lothian in Philadelphia. Dan?

DAN LOTHIAN, CNN CORRESPONDENT: Well, Lou, you know, this is a critical state with that upcoming primary April 22nd. That's why Senator Hillary Clinton was here today reaching out to voters in this state. And frankly, to voters all across the country and what she was telling them essentially is that when it comes to coming up with solutions to repair the economy and to fix the mortgage crisis, she's the best candidate to get the job done.

(BEGIN VIDEOTAPE)

HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Our economic crisis is at its core a housing crisis.

LOTHIAN (voice-over): Senator Hillary Clinton tackling the economy on the campaign trail in Philadelphia, unveiling a four-point economic plan that she says will help restore confidence in a battered economy and a housing market drowning in foreclosures.

H. CLINTON: Our housing crisis is at heart an American dream crisis. Your home isn't just your greatest asset, your greatest source of wealth; it's your greatest source of security.

LOTHIAN: Senator Clinton wants President Bush to appoint an emergency working group with top financial experts like Alan Greenspan, Robert Rubin and Paul Volcker, finding new ways to deal with the housing crisis. She revisited last week's proposal of a second stimulus package; at least $30 billion to help hard hit states and communities fight foreclosures. But to Senator Barack Obama Clinton's plan sounds like a loud echo. Here's what his campaign manager told reporters on a conference call.

VOICE OF DAVID PLOUFFE, OBAMA CAMPAIGN MANAGER: Most of them are repackaged ideas we've talked about making the same solutions.

LOTHIAN: The Obama campaign says Clinton's emergency working group sounds like what they proposed a year ago in this letter to Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson. Putting out a strong message on the economy and the mortgage crisis is critical not only for Obama and Clinton, but Senator John McCain because for voters, both Republicans and Democrats, it's issue number one.

In opinion pieces in "The Washington Post" advisers for all three campaigns made their case for turning things around. But is what they're offering enough to tackle this monumental problem long term. Bill Rosenberg is a political science professor at Drexel University.

BILL ROSENBERG, DREXEL UNIV.: The candidates are doing somewhat a good job at addressing this but not a completely great job. You need to change the way business is being done, that we really can't have a mortgage industry that's left unbridled.

(END VIDEOTAPE)

LOTHIAN: Now Rosenberg says one of the things that neither of the candidates is really talking about that much is education. And he says that's bad because he believes that education is really a key component of any long-term economic strategy -- Lou.

DOBBS: Dan, thank you very much. Dan Lothian.

Campaign surrogates for Senators Clinton and Obama taking negative rhetoric to a new high level. Serious accusations are now flying between the two campaigns. Senior Democrats are trying to figure out just how to hold the party together while those two campaigns are tearing it apart. Jim Acosta has our report.

(BEGIN VIDEOTAPE)

(APPLAUSE)

JIM ACOSTA, CNN NATIONAL CORRESPONDENT (voice-over): On their daily conference calls, the Obama campaign...

PLOUFFE: I think, you know, questioning patriotism is something that we don't think has a place in this campaign.

(APPLAUSE)

ACOSTA: And the Clinton campaign came out swinging.

VOICE OF PHIL SINGER, CLINTON CAMPAIGN MANAGER: It's now clear that the Obama campaign is being fueled by insults and slander.

ACOSTA: It is a smack down that intensified three days ago with Bill Clinton in North Carolina.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I think it would be a great thing if we had an election with two people who love this country and were devoted to the interests of the country.

ACOSTA: Obama surrogate retired Air Force General Tony McPeak immediately went nuclear. Off camera McPeak accused the former president of Cold War McCarthyism.

GEN. TONY MCPEAK (RET.), OBAMA SUPPORTER: I'm saddened to see a president employ these kinds of tactics.

ACOSTA: The Clinton campaign cried foul, drawing this response from former Iowa Democratic Party Chairman and Obama supporter Gordon Fischer who said in his blog, "This is a stain on the former president's legacy, much worse, much deeper than the one on Monica Lewinsky's blue dress."

But that's not all. Take Hillary Clinton supporter James Carville's attack on former Bill Clinton cabinet member Bill Richardson's endorsement of Obama. The New Mexico governor's endorsement, said Carville, came right around the anniversary of the day when Judas sold out for 30 pieces of silver. Richardson fired back.

UNIDENTIFIED MALE: Well, I'm not going to get in the gutter like that. You know, that's typical of many of the people around Senator Clinton. They think they have a sense of entitlement to the presidency.

ACOSTA: The battle royal has some analysts wondering whether the two campaigns are starting to inflict permanent damage on the party.

LARRY SABATO, UNIVERSITY OF VIRGINIA: Many of these insults will be used again against the eventual nominee. This isn't the last we've heard of these exchanges. And they will have added credibility because the Republicans will say, we didn't say this, fellow Democrats said this about your nominee.

(END VIDEOTAPE)

ACOSTA: As for Gordon Fischer's riff on Monica Lewinsky, the former Iowa Democratic Party leader says he has removed the remark from his blog and apologized calling his comments tasteless -- Lou.

DOBBS: Were there any dissenting votes on that that caused him to take that off? I mean, my gosh, it's there. It's done. McPeak's McCarthyism comment, this was a general in the United States military.

ACOSTA: That's right.

DOBBS: I mean we're watching a depth I can't recall ever seeing in presidential politics.

ACOSTA: And there are real fears in this party that either nominee is going to be damaged goods come August in Denver if this keeps up.

DOBBS: How could they not be? Jim, thank you very much. Jim Acosta.

Well the Republicans' presumptive nominee, Senator John McCain today picked up campaigning in California, although most attention is focused on the contentious Democratic contest, McCain is still firing away, defending his support of the war in Iraq and blasting the Democrats' position on the war. McCain this week also will unveil a new economic plan; one his supporters say will draw the spotlight from the Democrats. Dana Bash has our report.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Just back from his eighth trip to Iraq, John McCain returned to the campaign trail with last week's words from Osama bin Laden in hand.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: He urged Palestinians and people of Syria, Lebanon and Jordan and Saudi Arabia to, quote, "help in support of their mujahideen brothers in Iraq, which is the greatest opportunity and the biggest task."

BASH: Proof, he argued, that Democrats are, quote, "dead wrong about the war."

MCCAIN: My Democrat opponents who want to pull out of Iraq refuse to understand what's being said. The central battleground is Iraq in this struggle against radical Islamic extremism.

BASH: Absent from McCain's remarks to California veterans was any mention of the new death toll, 4,000 U.S. troops in the war zone he just visited.

(on camera): I'm wondering why in a room at this VFW post you decided not to mention the new grim death toll in Iraq, the 4,000 dead.

MCCAIN: I wear a bracelet on my hand because not only is it a symbol of the sacrifice that a brave young man named Matthew Stanley (ph) made, but that of nearly 4,000 other brave young Americans who have served and sacrificed. BASH (voice-over): McCain is stepping up his challenge to Democrats to admit that the military strategy in Iraq is working. Still, privately, some McCain supporters tell CNN they worry the campaign is not using this time wisely in other ways. Slow to develop a clear message. McCain advisers insist they're on track.

MCCAIN: We all know that America's hurting now.

BASH: With plans to unveil new policy ideas this week on the economy, one of McCain's weak spots, and a speech on what aides call his strength, national security.

(END VIDEOTAPE)

BASH: And from here, John McCain headed to a fund-raiser. In fact, Lou, it is his second fundraiser here in California today. It is part of what has really been an aggressive fund-raising strategy since he effectively became the Republican nominee about six weeks ago. Still even so, even though he's doing all that fundraising, last month Hillary Clinton out-raised John McCain by about three to one, Barack Obama by about five to one, and on the one hand, McCain advisers say that money -- there's been proof this year that money has not mattered as much in years past during this campaign. On the other hand, Lou, they insist that this month, the month of March, they're going to do much better in their fundraising -- Lou.

DOBBS: Dana, thank you very much. Dana Bash.

Up next, the nation's foreclosure crisis is showing no signs of easing. Christine Romans will have that report for us -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, a real sense of urgency on how to fix the housing crisis. There are lots of proposals on how to do it and no time to lose.

DOBBS: Christine, we look forward to the report.

And Detroit's mayor hit with a dozen charges including perjury and obstruction of justice. The reporters who broke the story join me here later in the broadcast.

More violent protests over communist China's crackdown in Tibet and new calls for a boycott of the Beijing Olympics, we'll have that report and a great deal more. Stay with us. We're coming right back.

(COMMERCIAL BREAK)

DOBBS: Well, it appears the Democrats have a very, very difficult position to defend, according to the latest opinion polls. Majority of Americans now struggling to stay afloat say they want to hold on to those income tax according to that new poll. Fifty-four percent, in fact, want the federal income tax put into place by President Bush to become permanent. Just like the president, just like Senator John McCain. That according to the latest CNN opinion research poll. Those tax cuts are due to expire in the next several months and the Democratic candidates saying they want them to expire. More bad news in the housing market tonight, a record decline in home prices over the past 12 months prices plunging more than 8 percent. Existing home sales rose almost 3 percent, however, from January to February. The pace of sales was still 24 percent less than the same time a year ago. But nonetheless, an increase in sales and that is very important.

Meanwhile, millions of homeowners are struggling to save their homes from foreclosure. There are numerous proposals now on how to deal with the crisis, but as Christine Romans reports middle class families are desperate for those plans to be put into action.

(BEGIN VIDEOTAPE)

ROMANS (voice-over): The foreclosure crisis savaging main street is reshaping this presidential race.

JOHN GEER, VANDERBILT UNIVERSITY: You can easily imagine it playing real havoc on this election because you're talking about people's key asset, the thing that they really care about so much.

ROMANS: In Pennsylvania, Senator Hillary Clinton talked about government billions riding to the rescue of Wall Street.

H. CLINTON: Homeowners, on the other hand, have received next to no assistance. Well, let's be clear. When families are losing their homes that's also a financial crisis.

ROMANS: There are subtle nuances between Clinton and Barack Obama's plans to rescue homeowners and a chasm between the Democrats and Republican Senator John McCain. McCain says he opposes taxpayer bailouts of banks, lenders and homeowners, but supports steps to address, quote, "overall instability of the financial system."

His top economic adviser vows the senator will, quote, "not play election year politics with the mortgage crisis." The cornerstone of the Bush administration's effort is a hot line called Hope Now for homeowners not yet behind in their mortgages.

FAITH SCHWARTZ, HOPE NOW ALLIANCE: We're mailing out outreach letters to all borrowers at risk. And we've had over a million letters mailed out to borrowers at risk who have not been in contact with our servicer (ph).

ROMANS: Homeowner advocates are critical of that effort.

JOHN TAYLOR, NAT'L COMMUNITY REINVESTMENT COAL.: We need speed. Because if we suffer another four months of nothing happening other than voluntary compliance that which is what the administration has called for, we will see another million foreclosures.

ROMANS: And Congressional efforts are under way.

(END VIDEOTAPE)

ROMANS: Democrats Barney Frank and Chris Dodd in the Senate are proposing legislation to expand Washington's ability to stand behind mortgage loans that are modified to more affordable terms for homeowners. Others have proposed amending the bankruptcy code to allow judges to write down the principal on mortgages. There's been a lot of push backs to that one, too, though Lou.

DOBBS: A lot of pushback and I think we ought to be very clear. How many of these plans are now available to the homeowner?

ROMANS: How many different plans?

DOBBS: Yes, right now how many are actually available to the homeowner facing foreclosure?

ROMANS: There's Hope Now and Project Lifeline. You have to be current, and that's kind of the problem here. I mean, the government is sending out letters. However, I mean, somebody who is behind in their mortgage, I mean they're getting foreclosure scam letters.

(CROSSTALK)

ROMANS: Right.

DOBBS: Bottom line. And the fact is that this administration has an opportunity here to step forward. They said they were going to last week. Now, let's see what happens. All right. Christine, thank you very much. But I mean, here we are in March, the end of March, and still no action taken with another million people facing foreclosure over what period of time?

ROMANS: The next four months. John Taylor of NCRC says you're going to see a million foreclosures over the next four months. And there's no time to lose. He says it is not Congressional at this point. You have got to have the administration doing something immediately. And you have these three senators on the campaign trail. One of them will not be a president until next year. This is happening right now.

DOBBS: And the administration has an opportunity to do something right. We thought they were going to take that opportunity last week. Let's see what happens. Christine, thank you. Christine Romans.

Tonight's poll question, do you believe there should be more regulation of our financial markets? Or do you think Mr. Market should just keep on trucking? The question again, do you think there should be more regulation of our financial markets? Yes or no. Cast your vote at loudobbs.com. We'll have the results here later.

Nearly five months after a federal judge in San Francisco blocked the Department of Homeland Security's no match rule, the federal agency has revised its guidelines for enforcement. Open borders and pro amnesty groups oppose that program saying it will create discrimination in the workplace and lead to legal citizens losing their jobs. Louise Schiavone has our report.

(BEGIN VIDEOTAPE) LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): In the face of a federal appeal's court effort to block them, rules against hiring illegal aliens have been revised and reissued by the Department of Homeland Security. DHS remains convinced...

UNIDENTIFIED MALE: The economic engine that brings people into the country is the largest factor in controlling illegal immigration.

SCHIAVONE: Late last year judge Charles Breyer of the 9th Circuit Court of Appeals considered the most sympathetic circuit in the nation when it comes to illegal immigrants, issued a preliminary injunction against the federal no match rule requiring employers to certify that workers' Social Security numbers reflect their true identity, the ruling, sought by the philosophical odd couple of the U.S. Chamber of Commerce and the American Civil Liberties Union.

JENNIFER CHANG, AMERICAN CIVIL LIBERTIES UNION: The U.S. Chamber of Commerce understands the realities of what this rule means for American businesses and for American workers. There is going to be disruption of the American workforce.

SCHIAVONE: Critics say the Social Security database is itself flawed. However the Social Security Administration reports that of the 435 million Social Security numbers on file at last count in November 2005, there were discrepancies in only 4 percent.

JAN TING, TEMPLE UNIVERSITY: If the worker is legal, it's in the worker's own interests to get this problem straightened out because your Social Security taxes are being credited to the wrong number. It's really only the illegal worker who doesn't want this discovered but wants the employer to ignore these no match letters.

SCHIAVONE: DHS would give workers and employers 90 days to explain red flags.

(END VIDEOTAPE)

SCHIAVONE: Lou, Homeland Security says it's not backing down. It intends to pursue enforcement of the no match rule as a vital tool in securing the nation's borders. Lou?

DOBBS: The Chamber of Commerce, the biggest lobby in this country for big business, surely they're interested in the well-being of American workers and therefore would like -- surely I misunderstood. Surely they want to help workers and employees in this country straighten things out with the Social Security Department. Did I misunderstand?

SCHIAVONE: That's the biggest bunch of baloney with this that this is going to somehow hurt American workers, people who have legal documents that it's going to hurt them. When in the meantime, if there was something wrong with your Social Security number, wouldn't you want to know it?

DOBBS: And the ACLU -- never mind, we don't have time for that part of the discussion. Thank you very much, Louise Schiavone. Up next, protesters clashing with police at the Olympic torch ceremony. We'll have the latest for you on a wave of deadly violence ahead of the Beijing Olympics.

And defiance in Detroit, a mayor facing felony charges vows to fight on, those stories and a great deal more straight ahead. Stay with us. We're coming right back.

(COMMERCIAL BREAK)

DOBBS: Dozens of people have been killed in the latest clashes between protesters and Chinese forces in Tibet. Three protesters today were also detained at the beginning of the Olympic torch relay in Greece as officials try to downplay tensions five months ahead of the beginning of the Beijing Olympics. Kitty Pilgrim has our report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): At the lighting of the Olympic torch in Greece today, Tibetan activists protested and demanded a boycott of the Olympics in Beijing because of China's human rights violations. Ten days ago, China's military cracked down on protesters in the Tibetan capital Lhasa. Protests in Chinese cities with Tibetan populations erupted. And in neighboring Nepal today protests have turned Kathmandu into chaos.

PETER BROOKES, HERITAGE FOUNDATION: The international community should certainly speak out about what is going on in Tibet. People are going to have to decide when the Summer Olympics come around this August and September, whether they will attend the opening ceremonies.

PILGRIM: Secretary of State Condoleezza Rice urged China to, quote, "consider a new policy and begin a dialogue with the exiled Tibetan spiritual leader the Dalai Lama." Last week House Speaker Nancy Pelosi met him in India and had no problem being critical of China.

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: The freedom loving people throughout the world do not speak out against China's oppression in China and Tibet; we have lost all moral authority to speak on behalf of human rights anywhere in the world.

PILGRIM: Chinese officials blasted the House speaker as human rights police, saying her views are consistent with politicians and Western media who want to smear China. President Bush says he still plans on attending the Beijing games.

SCOTT GREATHEAD, HUMAN RIGHTS FIRST: Now that there's been an eruption of violence in Tibet, a lot of people are still wondering why he hasn't said anything directly about it.

PILGRIM: And the U.S. State Department today said they will consistently urge China to put its best face forward.

(END VIDEOTAPE) PILGRIM: And China's violation of human rights are growing, there's a news blackout even in Tibet. And China even denies the death toll numbers. The Tibetan government in exile said 80 people have been killed by the police. Chinese officials have said it is more than 20 -- Lou.

DOBBS: Well why wouldn't the Bush administration deal with this straightforwardly?

PILGRIM: There's been just inexplicable silence on this. Secretary of State Rice today said, you know, China should look at their policy, but there's been no real strong statement.

DOBBS: Should look at their policy.

PILGRIM: No strong statement.

DOBBS: The administration has no hesitation at all in telling all of the Middle East how to behave and all of Europe. It doesn't have the guts to say to China, what you're doing is unconscionable?

PILGRIM: Well the State Department -- China should put its best face forward. It's so...

DOBBS: Pitiful, utterly pitiful, as it is in so many ways this administration. Kitty Pilgrim, thank you very much.

A Chinese born U.S. engineer was convicted of conspiring to export U.S. military secrets to communist China. Let's shorten that up and say convicted of spying against the United States. Today he was sentenced in Santa Ana, California. Chi Mak faced a maximum 45 years in prison for conspiring with his family members to steal and smuggle U.S. Navy submarine technology to communist China. Chi Mak today sentenced to 24 and a half years in prison, that is likely tantamount to a life term.

And turning to the government of communist China, it is now calling a U.S. State Department advisory irresponsible. The State Department is warning Americans who plan to travel to Beijing for the Olympics to have no reasonable expectation of privacy, adding that all hotel rooms and offices in China are subject to electronic monitoring and searches at any time.

Today a Chinese foreign ministry spokesman responded by saying the privacy of foreign visitors will be guaranteed, offering that no special security measures will be arranged beyond, quote, "universally adopted international practice", end quote, whatever that means, thank you, State Department and our courageous, courageous federal government.

Time now for some of your thoughts. John in North Carolina, "It would be interesting to hear what Pastor Wright has to stay about his racist sermon and its influence on Obama's campaign. The silence of Reverend Jesse Jackson and Reverend Al Sharpton regarding the racist comments is also deafening." Dave in Florida, "You have converted me to an Independent from a Democrat. Racial divide has taken over the party. News reporters, except for you, will not take Senator Obama on with any negative issues he has. And lord knows there are many. And the Clinton bashing goes on."

Angus in Texas, "Thank you for your continued commentary defending America's diminishing middle class. At times I'm befuddled by the level of apathy in this country. Having lived and traveled around the world, I find it increasingly disheartening and frustrating that we haven't overthrown our arrogant government and reclaimed our rights."

That is I would have to grant you, absolutely inexplicable. We'll have more of your thoughts here later in the broadcast. Each of you whose e-mail is read here receives a copy of my book "Independents Day."

And please join me on the radio Monday through Friday afternoons for "The Lou Dobbs Show", a new three-hour radio show. Go to loudobbs.com to find local listings for that broadcast.

And coming up here next, Detroit's mayor charged for lying under oath and obstruction of justice. The reporters who broke the story wide open will be among our guests and a bold new plan to turn around failing public schools. The superintendent of one of the nation's largest and the head of its teachers union join me. Stay with us.

And Senator Clinton laying out an economic plan, the Obama campaign says they're his ideas repackaged. He says that, by the way, from vacation in the Virgin Islands. And where is Senator McCain? Oh yes, California. We'll be right back with more on the presidential campaign. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The popular mayor of Detroit, Kwame Kilpatrick, will be arraigned tomorrow on perjury charges accusing him of lying in court about an affair and the firing of two Detroit police officers. Prosecutors today charging Kilpatrick and his former aide with several felony counts for allegedly giving false testimony in a lawsuit filed by those two former police officer. The men claim Kilpatrick fired them for cooperating in an investigation of possible misconduct by the mayor's security unit mayor himself. Two weeks ago, Kilpatrick responded to a city council vote that called for his resignation.

(BEGIN VIDEO CLIP)

MAYOR KWAME KILPATRICK (D), DETROIT: In the past 30 days, I've been called a (EXPLETIVE LANGUAGE) more than any time in my entire life. In the past 3 days, I've received more death threats than I have in my entire administration. I've heard these words before, but I've never heard people say them about my wife and children.

I have to say this because it's very personal to me. I don't believe that a Nielsen rating is worth the life of my children or your children. This unethical, illegal lynch mob mentality has to stop.

(END VIDEO CLIP)

DOBBS: Prosecutors started investigating Kilpatrick in January after the Detroit Free Press published excerpts of text messages contradicting the testimony of both Mayor Kilpatrick and his former chief of staff.

Joining me now from Detroit, the two reporters that broke that story, M.L. Elrick and Jim Schaeffer of the Detroit Press.

Good to have you with us.

JIM SCHAEFFER, DETROIT FREE PRESS: Good to be here.

M.L. ELRICK, DETROIT FREE PRESS: Thanks for having us.

DOBBS: Are you surprised? Let me start with you, 12 counts. I mean that's a big deal.

ELRICK: Well you know, we'd heard that there might be as many as six counts against each of these guys. So we had -- we're in the ballpark. But at the same time, when you hear a Detroit mayor is being charged with a crime for the first time in the city's 300-year history, that's still pretty startling stuff.

DOBBS: Let's hear what Mayor Kilpatrick's response was today in refusing to step down. Here's what he said.

(BEGIN VIDEO CLIP)

KILPATRICK: I'm deeply disappointed in the prosecutor's decision. I can't say that I am surprised, however. This has been a very flawed process from the very beginning.

(END VIDEO CLIP)

DOBBS: Jim Schaeffer, wow, a flawed process from the beginning. What in the world is he trying to say there?

SCHAEFFER: Well, I think he's trying to defend himself. I mean, the mayor has been very defiant from the very beginning when we published our first story on this issue. And he's maintained his desire to stay in the job. I mean, some people here have called for his resignation, but he has maintained that he is not leaving. And today he reaffirmed that.

DOBBS: The Wayne County prosecutor, the city council of Detroit have said, get out of here, basically. Why in the world -- explain the politics to all of us here, if you two would, in Detroit, I mean this mayor has admitted he lied, he has admitted he's had the affair, he's admitted in effect that he absolutely destroyed the careers of two police officers through his actions. I mean, I don't see much -- help educate me. I don't see much more to be proved here.

ELRICK: Well, it's very interesting when he talks about the flawed process. The last time our mayor talked about a flawed process, he was talking about the civil trial in which a civil jury ordered him to pay $6.5 million to these cops. He said he would appeal this to the highest court. In the end, he struck a secret bargain with the cops' lawyer to pay these cops $8.4 million.

When he says that's a flawed process, it's sort of like our political system in Detroit. Is it flawed? Does it work for us? What will happen? You kind of don't know. You have to sit to see the end credits on the movie to see how it will turn out.

But this is a city that has had a lot of problems with racial politics. But now we have the police officers were black, the mayor's black, the prosecutor's black. What's flawed about this? It seems to be that there was a very thoughtful investigation that was undertaken and now I guess he wants his day in court. He's certainly entitled to that.

DOBBS: Absolutely.

SCHAEFFER: Lou, the interesting thing today is that the prosecutor, who is independent, she's an independent party, she doesn't work for the newspaper, doesn't work for the city council, she came out and lectured the mayor today. This was more of a tongue lashing than an announcement of criminal charges. She likened him to an unruly child, an unrepentant child. And basically said that she called his behavior outrageous. So --

DOBBS: In watching her comments today, I have to tell you, gentlemen, you know her far better than I do, but I would not want her coming after me, I'll put it that way.

We thank you very much for being here. We appreciate it. Great work. Great journalism. And we congratulate you and commend you. Thank you very much.

ELRICK: Thanks, Lou. If anybody wants to catch the whole store free the first story the present it is all at freep.com.

DOBBS: Say that again.

ELRICK: The first story to the present story, everything in between, you can find at freep.com.

DOBBS: That's f-r-e-e-p.com is what I was referring to.

SCHAEFFER: A bunch of videos, a bunch of documents they can look at including the documents from today.

DOBBS: Great journalism. Thank you again, M.L. Elrick and Jim Schaeffer from the Detroit free press. Thank you.

Race and politics, more controversial statements from the new pastor, the new pastor of Senator Obama's church. We'll tell you what he had to say.

And a radical proposal to turn around failing public schools. I'll be talking with two educational officials who are not talking, they're getting it done.

Stay with us. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Joining me now three of the best political analysts in country. Here in New York, Keith Richburg, bureau chief here in New York for the "Washington Post," Democratic strategist and LOU DOBBS TONIGHT contributor Hank Sheinkopf, Roger Simon, chief political columnist way down in Washington, D.C. at Politico.com.

Good to have you with us.

Let's start with Mayor Kwame Kilpatrick. Twelve charges, they're coming after him. As I just said to the folks at the Detroit Free Press, that prosecutor looks real serious. What's going to happen?

HANK SHEINKOPF, DEMOCRATIC STRATEGIST: Well, I suspect that if the jury pool doesn't get tainted, which is part of what they're going to try to do by screaming and yelling about lynching and who knows what, he's going to be very well convicted. It is not good for people's confidence in the political system. Any time something like this happens this is the first mayor to be indicted in Detroit's history, pretty extraordinary set of events.

DOBBS: Keith, you're a native of Detroit, it's your town. You know the politics inside out. What is this guy thinking?

KEITH RICHBURG, WASHINGTON POST: Well, what he's thinking is that he can do what past mayors have done in this situation, past politicians, which is try to make it a race issue. He's going to say it's the white media, meaning the Free Press, going after the black mayor and trying to affect our home rule. I don't think it will wash because the prosecutor who is coming after him is black, the city council is majority black that wants him gone.

DOBBS: Start playing the race card with a straight face.

RICHBURG: Because that is what they do in Detroit. That's what works in Detroit. It's a very segregated area. You have the white suburbs, a 90 percent black city. When in trouble, play the race card.

DOBBS: And Mayor Kilpatrick is pretty well connected, too.

RICHBURG: Very well. His mother is chairwoman of the Congressional Black Caucus. Congressman Kilpatrick. He was seen as a rising star in the Democratic Party in the state legislature before basically being anointed in the job the youngest mayor ever. It was a bit of hubris involved in the early days of his administration.

DOBBS: No, I can't imagine a politician in this country committing hubris. Can you, Roger Simon?

ROGER SIMON, POLITICO.COM: Yeah. The problem, Lou, for Mayor Kilpatrick is not that he's being accused of lying under oath about having sex. We've all seen that movie before. The problem for Mayor Kilpatrick is that he's being accused of spending $8.4 million in public tax money to help cover up the fact that he had an affair; just an allegation, not evidence. But still, it's tough to get a jury to send a man to prison for lying about having a consensual affair. It is much easier to get a jury to send a man to prison for using tax dollars improperly.

DOBBS: And also destroying the careers of two Detroit police officers.

SIMON: Absolutely.

DOBBS: While at it. I'm sorry. You were saying?

RICHBURG: I was just going to add, to see his lawyer stand up there before he spoke, before the mayor spoke, to say this is selective prosecution because you normally don't prosecute people for perjury. And I sat back and said, wait a minute. This is a guy that took an oath of office to uphold the law. You should have selective prosecution in that case.

DOBBS: In New York, we have a little different standard in the state of New York. We're not exactly a state that is pure in every respect, are we?

SHEINKOPF: No state is pure, Lou politicians are politicians, power is power and thins happen.

DOBBS: One of the things that happened over the weekend, Barack Obama's new pastor, Reverend Otis Moss defended the Trinity Church saying that recent national scrutiny will only make the church stronger. He added this ..

(BEGIN VIDEO CLIP)

REV. OTIS MOSS III, TRINITY UNITED CHURCH OF CHRIST: When people try to crucify you, when they try to lift you, you end up getting lifted up. And during your crucifixion experience, you will see things that no one else can see.

(END VIDEO CLIP)

DOBBS: Well, that may be true, but Roger Simon, here we go again?

SIMON: That's not Barack Obama's message and that's not the message that the Barack Obama campaign wants at the moment. It does not ...

DOBBS: People try to lynch you?

SIMON: Right. They don't want Barack Obama being portrayed as a victim. They want him to be portrayed as a healer. And to tell you the truth, they would very much like to move beyond race at the moment and get past it. It is, as Senator Obama said in his now very famous speech, an important matter, but it is really a matter that most Americans don't feel comfortable talking about.

DOBBS: You know, I beg to differ. Senator Obama, in my opinion, Keith, has lost the opportunity to be the moderator here. In my humble opinion, his church's pastor has lost the opportunity. We can all participate in this without benefit of a moderator. What in the world is going on when this kind of language comes right back into a clutch which has already embarrassed this senator? What in the world is going on in this church in this town with this senator?

RICHBURG: I think in the community of south side Chicago, this is probably happening in a lot of black churches around the United States.

DOBBS: Do you really think that?

RICHBURG: I really do think that this kind of split going on here. Because you've got this world that Obama came out of, this kind of south side Chicago world now kind of ...

DOBBS: Wait a minute, Senator Obama came out of Indonesia, Hawaii, prep schools, Princeton -- not Princeton, Harvard and occidental.

RICHBURG: But he made his base in the south side of Chicago.

DOBBS: That's what he came out of. What is going on? Have we reached a point in this society where we're going to talk about race with the doors closed here for the black community and the doors closed over here for the white community? Because I'm going to tell you something, I haven't heard a single white person in 40 years -- I'm going to say 40 because that's safe, utter anything close to what Reverend Wright uttered in a pulpit in a black church in south Chicago. And I don't understand what's happening.

SHEINKOPF: What is happening here is that people are saying what's on their mind. Maybe they ought not to. And maybe they should be quiet and let Barack Obama be the nominee. Lou, wait.

DOBBS: This is America.

SHEINKOPF: Then don't be surprised when in a general election if he's the nominee, the Midwest and the south gang up and say, guess what? We're not going to live this way.

DOBBS: By the way, I don't think anybody's going to live this way in this country by preference. Anybody I know. I've got to be honest with you. Do you know somebody who wants to say these horrible things about any other race, about any other people in this country? I mean, I literally do not.

RICHBURG: I think there are a lot of people that want to move beyond that kind of ugliness and get away from that.

DOBBS: They continue to perpetrate the ugliness.

SHEINKOPF: Keith's right. People do want to get past this. Every time there's a day comes back, some lunatic shows up and starts it all over again. It is not helping Barack Obama or the United States to get past this.

DOBBS: We'll talk about that in just one moment. We're going to hear Roger Simon.

First let's check in with Campbell Brown.

Campbell, what are you working on?

CAMPBELL BROWN, CNN ANCHOR: Hey there, Lou.

At the top of the hour on "CNN ELECTION CENTER," we're going to dig into the specifics of Hillary Clinton's big speech on the mortgage crisis to see had if her four-point plan really can make a difference.

Also, John McCain is back home from Iraq and back on the campaign trail. He says there is new proof the Democrats are wrong about setting deadlines to end the war.

We'll see you at the top of the hour.

DOBBS: You got it. Thank you.

A reminder now to vote in tonight's poll. Do you believe there should be more regulation of our financial markets, yes or no? We'd love to hear from you on this. Cast your vote at LouDobbs.com. We'll have those results in just a few minutes.

We'll have much more with our panel. We'll be going to Roger Simon next and we'll be taking a look at a new plan to pay teachers to work.

Stay with us.

(COMMERCIAL RBEAK)

DOBBS: I'm back with Keith Richburg, Hank Sheinkopf and Roger Simon.

Roger, as the saying goes, you were about to say?

SIMON: I was about to say even though Senator Obama's speech was a success and it won over his base, which is the American media, it did raise certain problems. Some people who support Barack Obama view him sort of as a post-racial figure. Certainly he's a black man. But they don't view him in the same way they view Al Sharpton or Jesse Jackson. And they were hoping that he would be a redemptive figure, a healing figure. And I think that's what he wants to be. He is not helped, however, when his minister, old or new, makes him into a victim. Victimology is not the path that Barack Obama can follow to the white house.

DOBBS: Keith, do you agree?

RICHBURG: I agree 100 percent. He would love to get this argument or this conversation moved on so he can talk about Iraq, talk about the housing crisis and other things. But this new pastor saying these things brings this back up again. It reminds people that he comes out of this south Chicago world of black politics. He was a community organizer there ...

DOBBS: You and I will argue again about what he comes out of. What he comes out of is the finest schools in the country, the finest education and privilege in point of fact, anyway you look at it, with -- so he chose ...

RICHBURG: He chose to make that his base.

DOBBS: And some might, if they were somewhat cynical, might say he chose, according to his political ambitions, just as you might consider that John McCain chose to run for congress at a certain point in his career or that Senator Clinton somehow out of ambition found the state of New York and decided to get elected senator there. I don't, by the way, assume any accident from the histories of these personal biographies from these politicians.

RICHBURG: I recall that Barack Obama first decided to get involved in politics because the rap against him was he wasn't black enough in the black community. He had to establish his street cred because here's a guy who came out of Harvard from Hawaii, born in Hawaii, lived in Indonesia. He had a funny name. He wasn't seen as black enough. That was in the black community. Now he's on the national stage, the danger for him is among some who don't like that, he's going to be seen as too black.

DOBBS: I have to tell you, I don't think it is an issue of being black enough or not being black enough. What I think it is a question of tolerating ignorance from the pulpit. I'm going to say that straight out. I don't care. People can call me a racist, whatever they're going to do, but I'm saying to you, wherever we encounter ignorance in this country, we have to lance it, period. And if there's anybody in the church that wants to argue with me about it, come on and let's sit down and talk about it because I disagree.

If we are dividing, when people talk about two Americas, you know, as John Edwards did, we have a thought in terms of economics in populous views of what's happening in terms of income distribution, but if we have people consciously and intentionally separating themselves on the basis of the color of their skin in 2008? God help us. That's the sermon I want to hear from Otis Moss in Senator Obama's church.

SHEINKOPF: The sadness of all this is that this kind of rhetoric from this minister will shut down the discussion we ought to be having because people will run in the opposite direction.

DOBBS: It sure as hell is not going to stop the conversation on this broadcast because any man or woman who doesn't have the heart for the discussion is saying something, too. I think it's time for people to really be honest. We've got to be able to care about one another. And act on it but not because of some political advantage but because that's who we are and the way we ought to be. Roger Simon, you get the last word.

SIMON: I think you pointed out one of the problems that Barack Obama's speech had many positive points. But when he compared his grandmother's sometimes racial -- white grandmother's comments on race that made him cringe to the statements of Reverend Wright, he seems to be equating some insensitive remarks by his grandmother to a man who said the U.S. government invented the HIV virus to kill black people. Those two don't strike people as equitable and fair and one required a greater denunciation than the other.

DOBBS: Yes. That kind of equivalency has no place in anyone's thinking in this country, I don't believe.

Roger, thank you very much, Roger Simon, Politico.com. Keith Richburg, New York bureau chief "Washington Post," and Hank Sheinkopf, Democratic strategist, great time to be a strategist for the Democratic Party.

SHEINKOPF: Great time to be alive.

DOBBS: Through go.

And still ahead, paying teachers more money for performing better in tougher schools. We'll talk with two people who are making it happen.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: A bold new plan tonight to address the education crisis in our public schools, one of the nation's largest school districts launching a pilot program to pay teachers and principals a bonus to work in so called hard to staff schools. As part of this voluntary program, teachers rewarded for improving student performance.

Joining me tonight from Washington, John Deasy, he's superintendent of Prince George's public schools in Maryland and Don Briscoe, president of the Prince George's County Educators Association which represents 10,000 teachers.

John Deasy, let me ask you this, do you -- did you have much trouble getting this sold to your teachers your principals and to the community?

JOHN DEASY, PRINCE GEORGE'S CTY. PUBLIC SCHOOLS: We began from the very beginning and working in program to develop it jointly with our teachers union and our administrators union so we could be one team at the direction of our board of education. So that we had our board, myself, our leadership team and the union on - in complete agreement so that we actually had very little problem selling it.

DOBBS: Donald Briscoe, the teachers' package is made up and let's put this up if we may for our audience is going to get based on 50 percent student performance, 15 percent working in hard to staff subjects, 15 percent evaluation score and 20 percent professional development. You know that seems - usually when I see something like this, Donald, to be honest with you I think well I would have adjusted it around a bit. That looks like a pretty smart layout for a bonus package. Did the teachers come up with that primarily?

DONALD BRISCOE, PRINCE GEORGE'S CTY. EDUCATION ASSN.: Yes. We have -- we are planning together to make sure that we come up with an equal system that will actually work.

DOBBS: And what is your sense? The student performance -- first of all, one of the facts we always need to put out there is half of the public school teachers in this country leave the profession after five years. So when you put them in the position that you all are, in the program you are, you're really asking a lot from them.

John Deasy, how much are they eligible for, teachers, in terms of a bonus?

DEASY: I mean, that's very part of the issue. We want to retain our teachers. We want to attract the best and brightest to Prince George's County, Maryland, and we want teachers differentiated compensation for delivering results in our most difficult schools, with our most challenged youth. And so the maximum bonus teachers can earn is $10,000, and administrators $12,000 on top of base pay.

DOBBS: And graduation rates, 70 percent overall, but for Hispanic students, 56 percent. Whites, 79 percent. African- Americans, 70 percent. And no insult intended to either of you, my guess is that those overall rates, if the experience nationwide is any case, those are a little higher than what, say, the "Education Week" study would have found or the Harvard study. I don't know if that's the case. How much do you think you'll be able to improve them?

DEASY: Well, we certainly are proud of the fact that we are one of the highest-performing rates among the largest of the large urban districts. Our goal is to get a graduation rate to 100 percent, because every single youth matters.

DOBBS: Absolutely. Absolutely. We all can agree on that. Donald Briscoe, you get the last word here.

BRISCOE: OK.

DOBBS: Fire at will.

BRISCOE: OK. I just wanted to let you know that I think it's a great recruitment too if we go through it, the program. We are still planning the program. We are doing it together. Hopefully, if this actually works, we know that it will be something that the whole nation will model.

DOBBS: Absolutely. Donald Briscoe, we thank you very much for being with us. John Deasy, thank you. Thank you both.

And tonight's poll results -- 91 percent of you say there should be more regulation of our financial markets. Thanks for being with us tonight. Good night from New York. "THE ELECTION CENTER" with Campbell Brown begins right now -- Campbell.

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