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LOU DOBBS TONIGHT

Fighting Escalates in Iraq; McCain's Policy: Keep U.S. Presence in Iraq; Will Wall Street Regulation Help Economy?; Olympic Backlash Grows After Violence in Tibet

Aired March 26, 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: Wolf, thank you very much.
Treasury Secretary Henry Paulson calling for more regulation of Wall Street firms, a sign of just how serious our economic crisis is.

And police in Washington, D.C. want to go door to door searching people's homes for illegal guns. What happened to the Constitution, the Fourth Amendment to be specific?

And the State Department overwhelmed with problems in its passport and visa programs, our national security at risk as the State Department is outsourcing its most important work; all that, all the day's news and much more, straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Wednesday, March 26. Live from New York, Lou Dobbs.

DOBBS: Good evening everybody.

Senator Obama back on the campaign trail today, lashing out immediately at Senators Clinton and McCain. Obama again vigorously defending his ties to his controversial former pastor as well.

Senator McCain today stood by his plan for Iraq and blasted both Democratic candidates on the issue of the war in Iraq. Meanwhile, President Bush was at the Pentagon discussing a possible pause in troop withdrawals as a new wave of fighting is sweeping Iraq.

We begin our coverage tonight with Barbara Starr at the Pentagon -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Lou, it is a critical time in Iraq. The stakes could not be higher.

(BEGIN VIDEOTAPE)

(SHOTS)

STARR (voice-over): Fierce fighting continues in the southern Iraqi city of Basra. Shia militias, rogue forces supported by Iran and criminal gangs are pitted against Iraqi security forces struggling to control an oil rich region. The Bush administration coordinating the message it's an Iraqi-led operation.

MAJ. GEN. KEVIN BERGNER, U.S. MILITARY SPOKESMAN IN IRAQ: Prime Minister Maliki specifically said that he took these actions because quote, "the lawlessness is going on under religious or political cover."

UNIDENTIFIED MALE: Prime Minister Maliki should be commended for taking the initiative and going after the extremists and criminals in Basra.

STARR: Pentagon spokesman Geoff Morrell countered questions the current plan to draw down U.S. troops is at risk because of the recent fighting.

GEOFF MORRELL, PENTAGON SPOKESMAN: It looks as though it is a byproduct of the success of the surge in the sense that the Iraqi government has grown and increased in capability to the point where they now feel confident going after extremists.

STARR: Ensuring success, making certain the surge troops can return home by summer was the priority for President Bush's Wednesday meeting with the Joint Chiefs of Staff at the Pentagon. The chiefs agree with plans for a pause and further troop cuts this summer to make sure security holds, but can it? A cease fire with Muqtada al- Sadr's Mehdi Army fighters is on the verge of collapse; Prime Minister Nuri al-Maliki's ability to control the country is on the line.

MAJ. GEN. DON SHEPPERD (RET.), CNN MILITARY ANALYST: It looks like the surge is working. Violence is coming down and now with infra (ph) Shiite struggles going on it can break down in many of the big population center.

(END VIDEOTAPE)

STARR: The Joint Chiefs of Staff also told the president they want to see the troops home so they can get them trained up for a potential next crisis and many here worry that next crisis could be the need to send more troops to Afghanistan -- Lou.

DOBBS: Thank you very much, Barbara.

Barbara Starr from the Pentagon.

Three more of our troops have been killed by insurgents in Iraq; 30 of our troops have been killed so far this month, 4,003 of our troops killed since the war began, 29,496 of our troops have been wounded and 13,189 of them seriously.

Senator McCain today used one of his biggest foreign policy speeches yet to press support for a continued American military presence in Iraq. Senator McCain said Democrats are arguing for a course that would draw us into a wider war. Senator McCain also drew a sharp contrast between himself and the current president, effectively telling his supporters I am no George Bush.

Dana Bash traveling with the McCain campaign in Los Angeles with our report.

(BEGIN VIDEOTAPE) DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): John McCain's emphatic support for keeping troops in Iraq defines his candidacy, but defies public opinion. Here he tried to explain.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I hold my position because I hate war. And I know very well and very personally how grievous its wages are. But I know too that we must sometimes pay those wages to avoid paying even higher ones later on.

BASH: In his first major foreign policy address as presumptive Republican nominee, McCain used his son of veteran's background and experience as a Vietnam POW as a contrast to Democrats he calls naive.

MCCAIN: I believe a reckless and premature withdrawal would be a terrible defeat for our security interests and our values.

BASH: He called staying in Iraq a moral responsibility, sounding a lot like George W. Bush. But this speech was mainly an attempt to highlight a McCain world view quite different from the president's.

MCCAIN: Our great power does not mean we can do whatever we want whenever we want.

BASH: Insisting he will abandon the president's perceived go it alone mentality.

MCCAIN: When we believe international action is necessary, whether military, economic or diplomatic we will try to persuade our friends that we are right, but we in return must be willing to be persuaded by them.

BASH: Suggesting an end to so-called cowboy diplomacy.

MCCAIN: We need to listen to the views and respect the collective will of our democratic allies.

BASH: An attempt to show his commitment to restoring America's tarnished reputation, McCain repackaged a list of other differences with the president, a treaty on climate change, nuclear disarmament and closing Guantanamo Bay.

(END VIDEOTAPE)

BASH: McCain also broke with President Bush by reiterating his tough stance on Russia, saying that country should not be allowed into the G-8 alliance, but all in all, as people if people are looking for new McCain foreign policy proposals, they didn't hear any in this speech. Instead what they heard is very much a benchmark on all issues with regard to his stance on the world stage that can be used to really look at it if he does actually become president -- Lou.

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

Senator Obama back on the campaign trail today after a brief vacation, he wasted no time striking at Senator McCain and Senator Clinton. Obama ridiculed Senator McCain's new economic proposals. Senator Obama also had sharp words for Senator Clinton and her criticism of his relationship with the controversial pastor, Jeremiah Wright.

Suzanne Malveaux reports now from the campaign trail which has led her to Greensboro, North Carolina.

(BEGIN VIDEOTAPE)

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): A warning to Senator Hillary Clinton.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I'll take on anybody. If I have got the American people behind me, I fear no man and I fear no woman.

MALVEAUX: Far from shying away from Clinton's criticism of Obama's controversial pastor, Obama offered this.

OBAMA: I hope people don't get distracted by that. We cannot solve the problems of America if every time somebody somewhere says something stupid everybody gets up in --

MALVEAUX: Before a largely African American audience, who occasionally offered Obama an amen, the senator tried to put his black congregation in Chicago into a larger more inviting context.

OBAMA: Everybody is welcome to come to Trinity United Church of Christ on 95th Street. It is a wonderful, welcoming church. The United Church of Christ, by the way, is a 99 percent white denomination.

MALVEAUX: Obama needs white voters to support him in the contest ahead. Most immediately in Pennsylvania where polls show Clinton has an edge. Obama saved his most pointed criticism for the presumptive Republican nominee John McCain who he mocked as just another version of President Bush, neglecting those who are struggling economically.

OBAMA: George Bush called this the ownership society, what he really meant was you're on your own society. If you lose your job, you're on your own. If you got lured in by deceptive mortgage practices, you're on your own. John McCain wants to continue this.

MALVEAUX (on-camera): Obama went on to criticize McCain saying that earlier McCain admitted he didn't know much about the economy. And Obama said that he proved that in his speech on the housing crisis. Clearly this is an issue that they believe resonates with the voters.

Issue No. 1 -- the economy. But it's also clear that the campaign believes there are still unanswered questions and concerns about the former pastor of Barack Obama, so they continue to address that, while at the same time urging voters not to let this to become a distraction.

Suzanne Malveaux, CNN, Greensboro, North Carolina.

(END VIDEOTAPE)

DOBBS: For her part, Senator Clinton today made it clear she has no intention of dropping out of the race for the Democratic nomination. Senator Clinton needs to win two-thirds of the delegates in all remaining states to overtake Senator Obama. But she said that pledged delegates are not bound by primary election results and are free, in her words, to make up their minds however they choose.

Clinton supporters blasted House Speaker Nancy Pelosi as well for Pelosi's comments that party super delegates should not overturn pledge delegates. Senator Clinton's backers saying that position is at odds with the original intent of the super delegates to support the candidate who would be the party's strongest nominee.

Up next here we'll have the very latest developments from the campaign trail. Treasury Secretary Paulson, he does something I liked, he is calling for more regulation of Wall Street.

Christine Romans will have our report -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, when a former investment banker in this pro business administration asks for more regulation, more oversight, well it's a dramatic reversal of years of policy.

DOBBS: And a welcome reversal, if I may say so. Christine, thanks. We look forward to your report.

And new findings about passport and visa problems at the U.S. State Department raising red flags about our national security, we'll have that special report.

And more talk of boycotting the Beijing Olympics. Not from the Bush administration, however, we'll tell you why. Stay with us. We're coming right back.

(COMMERCIAL BREAK)

DOBBS: New home sales hit a 13-year low in the month of February, the fourth straight month of declines and the latest evidence of the housing slump, as if we needed it. The Northeast the hardest hit, new homes sales down there more than 40 percent. Meanwhile, home prices continue to free fall. In California, prices on existing homes fell more than 26 percent over the last year.

Treasury Secretary Henry Paulson today shocked almost everyone today calling for more regulation, I said more regulation of Wall Street investment banks as the impact of our mortgage crisis continues (INAUDIBLE). Secretary Paulson is the former CEO of Goldman Sachs and today he said banks that receive emergency loans from the federal government -- that is investment banks should also be subject to regulation and supervision, just like commercial banks.

Christine Romans has our report.

(BEGIN VIDEOTAPE) ROMANS (voice-over): The Treasury secretary, before the largest American business lobby, called for more oversight of Wall Street.

HENRY PAULSON, U.S TREASURY SECRETARY: This latest episode has highlighted that the world has changed, as has the rule of other non bank financial institutions and the interconnectedness among all financial institutions.

ROMANS: He's talking about the investment houses the fed has desperately tried to stabilize with your money. Paulson says the government needs more access to the financials of some of these firms to see just what sort of risks they're taking, risks as the sub prime mortgage crisis has shown that could slam the overall economy, risks that prompted the taxpayer rescue of Bear Stearns and billions in low interest taxpayer loans to others.

KENNETH ROGOFF, HARVARD UNIVERSITY: You can't both go in and bail them out and let then just let them go gamble it up again and then come bail them out after that. I think the investment banks really were crying out for help. This is the price that they have to pay for it.

ROMANS: But Rogoff warns against overreaching like the (INAUDIBLE) accounting reform law in the wake of Enron much maligned by a big business. At the same time, housing advocates scoff at the administration focus on the big players.

JOSH NASSAR, CENTER FOR RESPONSIBLE LENDING: What's been missing in the administration's announcements are bold plans to help the home owner and that is fundamentally what is needed.

ROMANS: The Center for Responsible Lending estimates 20,000 home owners with sub prime loans are losing their homes each week.

(END VIDEOTAPE)

ROMANS: And they say if banking regulators had done their job in the first place, they do have consumer protection responsibilities, well then this crisis could have been averted, so a little more regulation now. Maybe if Washington had been doing a little more oversight in the first place, we would not be here.

DOBBS: If this administration had done its job in almost any quarter, we could safely say that. But the idea that this administration continued to perpetuate the myth that these markets, these financial institutions do not require careful regulation is monstrous intellectual dishonesty and it's irresponsible governance on any basis.

But I have to say, Henry Paulson, I have said almost everything uncomplimentary one can say about a Treasury secretary in regard to you. I would like to say, thank you for at last coming to your senses and uttering a straightforward truth in the job you hold. It is refreshing. It must feel good for you. It must feel very good, don't you think for the Treasury Secretary to speak honestly and forthrightly and responsibly -- what a departure. ROMANS: We'll see. There is going to be a blueprint made by the end of the month about what kind of new financial regulations they think, financial market oversight, a lot of regulators, it will be interesting to see what the Treasury and the Fed come up with.

DOBBS: For the moment I'm going to exempt Treasury Secretary Paulson from the statement. Let's hope these idiots understand that you can't pump hundreds of billions of dollars into Wall Street to save the bacon of these investment bankers in particular who have been absolutely irresponsible and these financial firms and not spend hundreds of billions of dollars to shore up the home owner in this country, as we've been declaring here on this broadcast from the outset.

(CROSSTALK)

DOBBS: It is insane.

ROMANS: There has been a real aversion in Washington from the administration camp from bailing out a systematic bail out of the home owner and he repeated that today.

DOBBS: Well he can keep repeating it. But he's going to be precisely where he is today, at some point in the near future, I hope, for the benefit of the million, just about a million home owners are going to lose their homes over the next four months.

And that is he's going to have to acknowledge an economic reality. The way to shore up the system is to shore up the defrauded and I mean defrauded home owner who has taken on these mortgages that were absolutely callously and deviously put forward to the consuming market.

Christine, thank you very much. Christine Romans.

That brings us to our poll question tonight: Do you think it is inherently unfair -- this is sort of a basic American question I think, my favorite kind of question -- do you believe it is inherently unfair to bail out risky behavior by banks, mortgage lenders and investment banks but not bail out home owners? You know, people?

Yes or no? Cast your vote at loudobbs.com. We'll have the results here later.

New evidence tonight that our government is putting expediency ahead of national security once again. The State Department is outsourcing the manufacturer of American passports to foreign countries and at the same time doing little or nothing to enforce visas into the United States. It always seems to get just better and better.

Louise Schiavone has our report.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): New findings about passport security breaches and visa over stakes are raising red flags about national security. "The Washington Times" reports batches of blank passports have been shipped to several countries, including the Netherlands, Israel and Germany and then on to Thailand for processing.

MICHAEL CUTLER, FORMER INS AGENT: Would they do this with money that's being minted in the United States or being printed in the United States? The passport is as vital a document as is our currency. This should never been outsourced to any foreign company. This should be done by the American government.

SCHIAVONE: The outsourcing decision was made by the Government Printing Office, which the report states reaped huge profits in over charges to the State Department. GPO says it couldn't find a U.S. company capable of assembling the latest state of the art passports and that perceived profits were due to accounting procedures and GPO says, "The materials are moved via a secured transportation means including armored vehicles."

Meanwhile, a former U.S. consular officer has just completed a report on visa violations noting various estimates that a quarter to half of the nation's 12 million-plus illegal immigrants are visa overstays, also...

DAVID SEMINARA, FORMER FOREIGN SERVICE OFFICER: Also does not quantify the huge amounts of foreign nationals that come to the U.S. with tourist visas and work illegally and come back and forth to the United States from their countries and work illegally in the U.S. for several months per year.

SCHIAVONE: Cleared through by time-pressured consular officials after what he says are on average two to three-minute interviews.

UNIDENTIFIED MALE: The way that those consular officials have to process the applications for visa, it's kind of like Lucy at the Bonbon factory.

SCHIAVONE: The State Department would not comment on the visa overstay issue.

(END VIDEOTAPE)

SCHIAVONE: But Lou on the matter of overseas passport assembly the State Department insists there's nothing to fear. However Congress is asking for a full accounting of what passport components are made overseas and whether that could threaten national security -- Lou.

DOBBS: Well if there's nothing to fear, why should there be any concern about the fact that one of the principal firms involved in this had its technology stolen by the communist Chinese?

SCHIAVONE: That's right. SmartTrac in Thailand pled a case at The Hague last year that the Chinese had in fact stolen its patented technology. So this is an issue that has lots of potential for violating national security. DOBBS: You know the question becomes, if the State Department is outsourcing visas and if the State Department is outsourcing passports, if the State Department can't get much of anything else done around the world, I mean why do we have a State Department? Even their briefings by their spokesmen are boring nonevents with very little information?

SCHIAVONE: We asked this question, Lou, and you know what our answer is -- no comment.

(LAUGHTER)

DOBBS: Brilliant. Thank you very much, Louise Schiavone.

Up next here, new momentum, new pressure to boycott the Olympic Games in communist China. That's right. We call it communist China here because China is communist. President Bush finally picked up the phone and talked with the Chinese leader in person. We'll tell you what they discussed.

And the Democrats, well they are at it again, they have done it again, will the bitter divide between Senator Clinton and Senator Obama ensure another Republican administration. Can't these Democrats get along? I mean let's see, there is Senator Obama, Senator Clinton and that very nice fellow Howard Dean over at the Democratic National Committee. It just doesn't make sense, does it?

And we'll give you new clues in one of the FBI's most notorious hijacking case -- cases. We'll have the latest for you, a lot more coming right up.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: After nearly two weeks of violence demonstrations and protests in Tibet, President Bush today finally put in a telephone call to Chinese president, Hu Jintao. President Bush told the communist leader he's concerned about Beijing's crackdown and oppression and urged him to open a dialogue with the Dalai Lama. Meanwhile, a new swell of support to boycott China's Olympic Games and many are wondering why President Bush is still intending to attend.

Kitty Pilgrim has our report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The communist Chinese government released these pictures out of Tibet today. The police along the road claim they were just traffic cops.

UNIDENTIFIED MALE (through translator): We are just here to apprehend people who have no licenses or are speeding.

(SHOUTING) PILGRIM: It's been a little less than two weeks since these pictures came out of the area, a brutal crackdown by Chinese police on pro democracy protesters in Tibet. The human rights abuses there are generating talk of a boycott of Beijing's Olympics.

France's president, Nicolas Sarkozy, says his country may boycott the opening ceremonies because of the abuses. President Bush still says he plans on attending the Olympics, saying the games are about the athletes, not politics.

The Chinese Ministry of Foreign Affairs said the same thing. We must follow the purpose of the Olympics and not politicize the games. Today the president's national security advisor wouldn't even discuss the Olympics.

STEPHEN HADLEY, NATIONAL SECURITY ADVISOR: Olympics (INAUDIBLE) Olympics, these are important issues that need to be addressed.

SHARON HOM, HUMAN RIGHTS IN CHINA: There is no way that the president of the United States can go anywhere as just a sports fan. He will be sending a very negative message if he attends without any strong message of concern for the human rights situation.

PILGRIM: Human rights activists say an Olympic boycott is called for over atrocities in Darfur and China support for the Sudanese government. Filmmaker Steven Spielberg withdrew as artistic adviser of the opening ceremonies because of that issue.

(END VIDEOTAPE)

PILGRIM: And various U.S. government agencies have issued warnings about the severity of the human rights violations by the communist Chinese government. But to President Bush, it seems the games are not related to those abuses, Lou.

DOBBS: Stephen Hadley, I mean just dismissing there. I mean I like that. That was sort (INAUDIBLE).

PILGRIM: Yes, he just jumped right past it.

(CROSSTALK)

PILGRIM: Olympics aside.

DOBBS: Olympics aside. Stephen Hadley aside, soon arrogant member of Bush administration, consistent theme, arrogance, arrogance, arrogance -- ridiculous, unbelievable.

Thank you very much, Kitty Pilgrim.

Time now for some of your thoughts.

Imperious, I mean I just -- that just aggravates the dickens out of me the way he did that. A public servant my -- anyway thousands of you sending us your thoughts and telling us we missed an important choice in our poll last night. Yes, it appears pretty clearly from your comments that we made a mistake.

Clark in Washington, for example, said: "Last night you asked which candidate would best represent the middle class, but you left out one response, none of the above. That was my vote."

And Pete in Virginia along the same lines, along with thousands of others: "Lou, your question for the night doesn't have a field where I would be casting my vote, none of the above. Like you, I don't have a dog in this hunt."

Thanks for the reminder. We apologize for not including that very important choice.

And Richie in Texas said: "Howdy Lou, I love your show. You're a great guy, but next time you do a story about Texas, please practice your 'yee haw' first. You were born here for crying out loud."

My apologies, I promise to do better.

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 each afternoon Monday through Friday for "The Lou Dobbs Show", our new three-hour radio show. Go to loudobbs.com to find local listings for "The Lou Dobbs Show". Please join us for that.

And the FBI now investigating new clues in the 36-year-old mystery of famed skyjacker D.B. Cooper. Back in 1971, Cooper hijacked a Northwest Orient (ph) aircraft claiming he had a bomb. He released all the passengers in exchange for $200,000, about $1 million in today's money and then asked to be flown to Mexico from Seattle.

On the flight south very quickly Cooper then took that cash and jumped from the aircraft taking his parachute and leaping from the back of the 727 somewhere near Oregon's border. Cooper's mysterious disappearance in fact triggered one of the largest FBI manhunts in history and it remains of course unsolved to this day.

But earlier this month some kids playing outside their home in north -- in southwest Washington found an old parachute. They dug it up from the ground. Now the FBI is there and they are investigating, looking for someone with expert knowledge of all chutes to try and confirm whether this is indeed a new clue in this enduring mystery. And just what happened to D.B. Cooper. We will keep you posted.

And up next here and an unlikely group comes to the defense of Detroit's Mayor Kwame Kilpatrick, we will have that story.

And are the Democrats simply self-destructing? We will share with you what new polls are telling us about how voters feel.

And one of the countries most cherished basic constitutional rights under attack. We will have that report and more coming up next. Stay with us. (COMMERCIAL BREAK)

DOBBS: Joining me now is our panel, our political panel, Carol Swain, professor of law, political science of Vanderbilt University, editor of "Debating Immigration." And contributor to LOU DOBBS TONIGHT. Good to have you with us here.

And Michael Goodwin, Pulitzer Prize winner columnist "New York Daily New." And Robert Zimmerman, a Democratic national committeeman for New York and Senator Hillary Clinton supporter. Let's go to Senator Clinton.

My, my, my, she misspoke. You know what Fran said?

PROF. CAROL SWAIN, VANDERBILT UNIVERSITY: She remembered incorrectly.

DOBBS: She said misspeak is an English word for lie. That's why Fran is a humorist.

ROBERT ZIMMERMAN, DEMOCRATIC NATIONAL COMMITTEEMAN: Bottom line is, she misspoke. It was an exaggeration. The sun came up the next day, the campaign continued.

DOBBS: And will continue, despite the fact that we have, Carol Swain, a new poll that shows by my calculation, 22 percent suggesting that Senator Clinton should leave the race and 22 percent saying Obama should leave the race. That seems close to a tie. I'm only a television journalist. What do you make of the race for the Democratic nomination?

SWAIN: I think it's so unfortunate that the voters are being cheated by this contest. That the candidates are not able to focus on the issues. It's unfortunate too that the Democrats that try to talk about multiculturalism, and identity politics and they're the party of minority, they are the ones that have been playing the race card, and also the gender card, the sex card any card that can be played.

DOBBS: There is a full deck in this deal.

SWAIN: Just totally distract and cheats the public.

DOBBS: We're used to being so well rewarded in our presidential contests.

MICHAEL GOODWIN, "NEW YORK DAILY NEWS:" Well one of the things that has happened in this one, is if you remember oh so long ago perhaps two weeks, there were serious debates on NAFTA for example and things like that. But what has happened is that there's no advantage to be had. No real advantage, even in Iraq there is not much of a difference between them, the healthcare not much of a difference. In the end --

DOBBS: You're talking about Obama and Clinton. But the reality is with the exception of Iraq, there's not much difference among these three candidates. ZIMMERMAN: I think John McCain's speech on foreclosure issue. There is a tremendous difference. John McCain had what could have been his Theodore Roosevelt movement, and he ended up speaking like Herbert Hoover. Speaking against government --

DOBBS: You don't support Senator Clinton do you?

ZIMMERMAN: I support Senator Barack Obama's position on this issue, as I do Senator Clinton's.

DOBBS: What a way to bridge the differences between Senator Obama and Senator Clinton.

GOODWIN: I think Lou that is going on here is as Clinton and Obama are sort of in the mud and fighting over these small issues. McCain really is acting presidential. He's had a good two weeks in a row in Europe and the Mid East. I thought he gave an interesting speech yesterday and again today. These are presidential moments for McCain and I think he is standing in good contrast to both Democrats.

DOBBS: Let's listen to something. Senator Obama took a couple of days off, enjoyed himself out on the Virgin Islands. I think it was wise. I think each of the candidates would be wise to take a few days off, shut the heck up, give it a rest and seriously, reenergize.

Here's what Senator Obama had to say after being reenergized.

(BEGIN VIDEO CLIP)

OBAMA: They found five or six of the most defensive statements, boiled it into a half an hour sound clip, a half-minute sound clip and played it over and over and over again. Partly because it spoke to some of the racial divisions that we have in the country and tapped into some of those divisions. I hope people don't get distracted by that.

(END VIDEO CLIP)

DOBBS: Takes a couple of days off, rests up, brings Reverend Wright right back into the middle of the campaign. This makes no sense to me.

SWAIN: I guess he thinks it's benefiting his numbers.

DOBBS: Well I think you are probably right. I haven't even thought about it.

SWAIN: I am not saying it is, he thinks it is.

GOODWIN: He was answering a question from the audience. None the less, I think his answer is what is killing him, it wasn't a stupid question, it was a stupid answer, I think he is killing himself by defending Wright in any possible way.

DOBBS: Would you suggest to Senator Obama he quit doing this or would you like him to ratchet it up by three to four times a day? ZIMMERMAN: I have to tell you he gave such an excellent speech last week in addressing this issue and I think his answer tonight really undercuts what his message was in this civil rights address. And what concerns me and I think an issue that has to be addressed is the issue of electability. Senator Clinton has been challenged on that by Senator Obama. And like wise he is going to have to address that issue too.

DOBBS: Terrific. We'll be back with our panel. There are playing so nicely, aren't they? We'll introduce you to a moving new documentary on our border security crises and the impact of drug and human smuggling on our southern border. That and a great deal more still ahead.

Stay with us, we are coming right back.

(COMMERCIAL BREAK)

DOBBS: We're back with Professor Carol Swain, Michael Goodwin, and Robert Zimmerman.

Professor let me ask you. I just don't understand, it is an interesting point, that Obama thinks, maybe, this is helping him somehow to bring Wright back into the middle of this campaign. I mean I can't figure it out, explain what you think is going on here?

SWAIN: We all agree that Senator Obama is a very intelligent man. And for him to bring it up in the way he did, he must think that it's helping him. And I would disagree and I would like to use the opportunity to correct the impression that I believe that some of the commentators have made about the black church. In no way is this church a typical black church.

DOBBS: Reverend Wright's church?

SWAIN: Reverend Wright's church is not a typical black church, I think it does harm to race relations if the deception is left with white America, that this is what takes place on Sunday morning in black churches across the country. If it were my church, I would vote with my feet.

DOBBS: Senator Clinton said the same thing the other day.

GOODWIN: I applaud Senator Clinton for that and I think that is an important statement for all candidates to make. Because I think what Reverend Wright said is anti-American. I think it is important that anyone that wants to be president needs to have the fortitude to say, that's not for me. And that is one of the problems we all have with Obama.

DOBBS: Senator Clinton seemed to be saying that to change the subject.

GOODWIN: She was answering a specific question from a writer in Pittsburgh.

DOBBS: Well thank goodness for those question-askers in Pittsburgh.

GOODWIN: It does get them sometimes.

DOBBS: What do you think? Do you think there is any chance in the world? Let's look at these numbers here real quick. If we could put these up on the Gallop Poll showing what Clinton supporters would do and Obama supporters would do.

This is pretty amazing. How would they vote if your candidate wasn't in the race? Fifty nine percent for Obama, but 28 percent for McCain. That would be historic desertion. How would Obama supporters vote? Seventy two percent for Clinton, 19 percent for McCain? What do you make of that?

ZIMMERMAN: That's up to the political leadership of both the Democratic Party and of these two candidates. We're seeing a very unusual coalition coming together. Bill Clinton never would have been the nominee in 1992 with out the strong support of the African American community. Hillary Clinton has built a coalition together because Barack Obama has done so with the African-American community.

She built a coalition of white and blue collar middle and lower income American Democrats. And that is a vote that's historically been a swing vote. If she is the nominee it's going to be very important for her to bring Obama's people into the circle and like wise the other way. But it is a real challenge --

DOBBS: Do you really think that there is any chance in the world that the Democratic Party can mend itself over the nastiness? I mean forget Wright, with everything else, Senator Obama's camp has been deeply flawed in all of this stuff. .

GOODWIN: Not ready to be commander in chief, that is what she's saying.

DOBBS: The material from both Obama and Clinton you know that there are going to be Republican dollars being spent to buy TV time to put those images and words out there for months.

ZIMMERMAN: There is no question. .Both camps have engaged in excessive rhetoric and rhetoric that is harmful. But the reality is what is going to unite the Democratic to the end and believe they will be united. I think the desire to win and to the fear of a third Bush term in the likes of John McCain.

And that is most reflected in McCain's policy towards Iraq. I think there's an opportunity here, I think one of the most effective things that could be done is for the political leadership and the political operatives in the Democratic Party to keep quite and get out of the way and let the primary process go forward. The comments from Nancy Pelosi in particular were not helpful in terms of her trying to handicap the race.

DOBBS: So what's going to happen to Pelosi if Clinton isn't elected president?

ZIMMERMAN: One of the beauties in this political process is they all need each other to survive, so there is no such thing as revenge.

DOBBS: You may call it beauty but I assure you that is purely in the eyes of the beholder.

GOODWIN: It is going to matter how this ends and when it ends. Because there is not a lot of time, if it does go on through the end of the primary process there is not a lot of time the party to unite.

DOBBS: I'm so looking forward to go all the way to the convention in Denver.

Professor you get the last word here tonight.

SWAIN: I think it would be very difficult to mend the party and that they are handing the election to the Republicans and it's up to Senator McCain to blow it. If he continues with some of the positions he's taking, he will blow it.

DOBBS: We have a great opportunity here.

We're going continue, thank you very much, great to have you here in person. We'll continue in a moment. And when we do some amazing footage from a documentary on the border. You don't want to miss it.

We will be right back.

(COMMERCIAL BREAK)

DOBBS: An important new documentary, a documentary brought to us by Chris Burgard, he is a producer, and spent a lot of time pulling together the facts, the reality of the border, without fanfare, without prejudice or an agenda. Simply putting forward the documentary and letting you decide. The movie is called "Border." And it documents some horrific scenes as well, realities. I want to turn to Chris Burgard, joining us from our Los Angeles Bureau.

Chris good to have you with us.

CHRIS BURGARD, FILMMAKER, "BORDER:" Good to be had Lou.

DOBBS: Chris in cowboy talk how long were you down there?

BURGARD: All together, about two and a half months.

DOBBS: Two and a half months you spent all those weeks, you came upon a family with children being smuggled over by a coyote and well as illegals stuck in the desert. What did you take away from the personal experience?

BURGARD: The personal experience was just, the cruelness going on down there, the violence. On both sides, the American ranchers, the American citizens that live near the borders, the Mexicans and the other nationals that are coming across. You wouldn't think that this level of cruelty and humanity could be happening in this country but it is. DOBBS: And it is something the documentary as I said, you talked to several ranchers that own property along the border. This is with what one of them had to say to you.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Just south of the check point, the smugglers drop off their human cargo. Coyotes then lead to the ranch while the now empty vehicle passes safely through the border patrol. The smugglers and illegals then meet back up north of the check point and head to the bus station and the rest of the United States.

(END VIDEO CLIP)

DOBBS: Well, the sound bite that we're looking for, are we going to have that? I'm sorry? OK. We're going to wait for it.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Of course there is. This is why the people that live on these ranches have, have to take measures.

(END VIDEO CLIP)

DOBBS: They have to take measures.

BURGARD: She was answering the question, is there a war going on down here?

DOBBS: That war, you said there's cruelty on both sides. Could you see any reason in the world why we have not secured the border?

BURGARD: Yes, because somebody is making a whole lot of money the way the border is now. They could secure this border tomorrow, this is not rocket science. They've chosen not to.

DOBBS: You and I happen to agree on that. You and I will probably disagree on a couple of other things. But you really believe that on both sides there's cruelty, there is inhumane treatment from the south of the border, north of the border.

You document what's happening to the illegals. Tell us, from, what is the source of most of the cruelty? Talk about raping illegals crossing that border, people being killed. Who are the perpetrators?

BURGARD: Well, in a large part, it's the drug cartels and the whole human smuggling business. What's really changed in the last ten years is the drug cartels have kicked out the mom and pop smuggling operations. And the drug cartels are now making as much money smuggling people as they are product.

And as you see in the movie if they get busted with a load of people coming over, they get sent back and they get to try them again. But if they get the drugs busted, they're out all that money.

DOBBS: When we talk about people making money and that is the reason this border is wide open. What do you mean, drug smugglers, billions of dollars that are being made?

BURGARD: Yes, the drug smugglers and the labor, it's billions of dollars a week. There's a guy in the movie, Reverend Hoover, the very common sense plan on how someone was coming over here to look for work, they could do that. But then if you do that, you are going to have to pay these people competitive wage with the American workers, you are going to have to give them workman's comp. and people in Washington don't want, that's expensive.

DOBBS: The dollar amount is estimated somewhere, I've seen estimates as low as $25 billion in drug trade to as high as $100 billion in drug trade. That's the part people lose sight of. It's not about simply human smuggling. It's not simply about a securing a border because we are in a war on terror. There's the war on drugs. We're wiping out a generation of young people by leaving these borders open.

BURGARD: You know you will see in the movie, they bring the drugs over on mule trains. It is something that ranchers on the border put up with it on a nightly basis. These are not people you want to mess around with. Some of these guys carry automatic weapons. You will see that the fellows that we filmed had on uniforms, were carrying automatic weapons. It's very dangerous.

DOBBS: Chris Burgard, award winning filmmaker for the documentary, "Border." You can find out far more about the film and buy the DVD at Bordermovie.com. Put that up. Chris we thank you very much. It's an important contribution to everyone's understanding.

BURGARD: Let's hope our presidential candidates start talking about this. I would like to send help to the ranchers.

DOBBS: I think we all would to be honest with you. The reality is frankly, these folks, well, we'll see, cross our fingers. How's that.

Chris, thank you very much.

Up next, the latest threat to your privacy. Your most basic constitutional right, you still have them. Let's try to hang on to them. We will have a special report in just a moment.

Stay with us we are coming right back.

(COMMERCIAL BREAK)

DOBBS: Well, Washington, D.C. has the toughest handgun ban in the country. Constitutional rights of all kinds are under attack in that city. D.C. police now are watching an aggressive and some say purely illegal plan to search homes for illegal handguns.

Bill Tucker has our report.

(BEGIN VIDEO CLIP)

BILL TUCKER, CNN CORRESPONDENT (voice over): Police in Washington, D.C. are getting ready to go door to door in high crime neighborhoods asking to search for illegal guns and drugs. The response from community activists and the ACLU is simple and blunt.

UNIDENTIFIED MALE: Do not let the police inside your house.

TUCKER: Critics don't want constitutional rights sacrificed for some quick fix as they call the police plan.

JOHNNY BARNES, ACLU: If the founding fathers were not concerned with the British troops coming into their homes, we would not have the Fourth Amendment. That is why we have it. And they condition passage of the Constitutuiop on passage of the Bill of Rights. This is not something to be taken lightly.

TUCKER: The Fourth Amendment guards against unreasonable surges. Directs that search and warrants only be granted only for probable cause. We have a description of what is being sought. Those rights can be waived but only if consent is informed and not coerced.

TRACI HUGHES, D.C. METROPOLITAN POLICE DEPT: This is program that people have been asking us to implement, we are doing it, and it is entirely voluntary. No constitutional rights are going to be violated.

TUCKER: Some of the community does support the program.

TIJWANNA PHILLIPS, ADVISORY NEIGHBORHOOD COMM.: The good people make up the majority and the good people are tired of living where we feel like we are subject to those that are committing crimes in our community.

TUCKER: But many are wary. They know that while people consenting to searches of amnesty, that amnesty is void if a gun is discovered in search is found to have been used to commit a crime.

RONALD HAMPTON, NATL. BLACK POLICE ASSN.: We shouldn't be letting the police in. I served there for a quarter of a century. I wouldn't let the police in my house.

TUCKER: Police say the Safe Homes initiative won't begin until the officers it selects are well-trained in how to carry out the program.

(END VIDEOTAPE)

TUCKER: Gun surrender programs call for people to voluntarily turn in illegal guns in return for amnesty or cash, sometimes both. There is very little precedent for programs like the one in D.C. Boston has been trying to implement a similar program since late last year, but haven't been able to because of community resistance. St. Louis did implement one in the mid '90s, Lou, but it abandoned the plan.

DOBBS: Well you know how I hate to take a position, but what idiot came up with this direct assault on constitutional rights? I mean, what -- the people of Washington, D.C. ought to be telling somebody to stick it big time.

TUCKER: Well, the communities so far have. I asked them where they got this idea. They said we got it from St. Louis and we got it from Boston. Both --

DOBBS: Well wait a minute. Who in Washington -- who in Washington got this idea? The mayor? Who is this? The chief of police?

TUCKER: This is the chief of police.

DOBBS: The chief of police -- these are the people who don't trust the people of Washington, D.C. to have a gun to protect themselves in their own homes.

TUCKER: And then -- they will tell you -- the chief and police will tell you they got it from the people, Lou.

DOBBS: Yes, well -- I'll tell you what the chief and whoever is with the chief on this -- go read the Constitution of the United States. You are out of your mind. Cut it out. This shouldn't even be a matter to take up with the ACLU or anyone else. How about that simple decency, intelligence and common sense? How about just the absolute enrapture that you might have with American values?

The idea you would knock on a man or woman's home, on their door, unbelievable. These -- what are these people -- what are they doing? They are not going to just let this stand, surely.

TUCKER: Well, they haven't been able to implement it, Lou. They keep trying to and they keep backing off implementing the program because resistance from the community, the one whose idea this was, has been so strong.

DOBBS: Well -- who is the one idea? Who is the one person with this idea? There's always one person. I'd like to know who the hell that fool is. So to speak.

Bill Tucker, thank you very much.

Our poll results tonight -- 93 percent of you say it's inherently unfair to bail out risky behavior by banks, mortgage lenders and investment banks but not homeowners.

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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