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Shakeup at the Air Force; Ending Corruption; Senator Clinton's Next Move; Congress Withholds Mexico's aid Package; America for Sale

Aired June 5, 2008 - 19:00   ET


LOU DOBBS, CNN ANCHOR: Thank you, Wolf.
Tonight the Obama and McCain campaigns responding to my challenge to end the influence of lobbyists on presidential administrations. We'll tell you what the campaigns had to say.

Also tonight, communist China outmaneuvering the United States and Europe in almost every quarter of the world. China has already established economic dominance over the rich resources and minerals of sub-Saharan Africa. We'll be examining China's threat with the editor and the reporter of "Fast Company".

Tonight a secreted foreign hedge fund trying to take control of one of this country's biggest railroads, a company that does military work, transports nuclear materials and is a national security asset, all of that, all the day's news and much more, with an independent perspective, straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Thursday, June 5. Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

A stunning shakeup today in the leadership of the Air Force. Defense Secretary Robert Gates, today, fired Air Force Secretary Michael Wynne and Chief of Staff General Michael Moseley. Secretary Gates fired those officials after a highly critical report on the security of our nuclear weapons.

Jamie McIntyre has our report from the Pentagon -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Lou, some history, some ignominious history was made here today as Defense Secretary Gates fired those two top leaders, saying he was striking a blow for accountability, and he's not done yet.


MCINTYRE (voice-over): In the words of one top Pentagon official, the report on the mishandling of nuclear weapons is damning, showing a significant failure. It prompted Defense Secretary Robert Gates to take the unprecedented step of forcing both the top Air Force General Michael Moseley and his civilian Michael Wynne to step down.

ROBERT GATES, DEFENSE SECRETARY: And mistakes do occur. However, they mistakes are not acceptable when shipping and controlling sensitive classified parts.

MCINTYRE: First there was the embarrassing revelation that last August a B-52 bomber took off from North Dakota with six nuclear- tipped cruise missiles that no one knew were live weapons until after the plane landed in Louisiana. Then came word that the Air Force mistakenly shipped fuses that are used in nuclear weapons to Taiwan in 2006 in crates believed to be containing helicopter batteries.

GATES: Both events involved a chain of failures that led to an unacceptable incident. The investigation determined the Air Force does not have a clear dedicated authority responsible for the nuclear enterprise.

MCINTYRE: But Gates in declassifying just a small portion of the investigation revealed the problems were deeper and more troubling.

GATES: Rather than an isolated occurrence the shipment of the four forward sections assemblies to Taiwan was a symptom of a degradation of the authority, standards of excellence and technical competence within the nation's ICBM force.


MCINTYRE: Now Gates issued a stinging rebuke to Air Force seniors for failing to act until he intervened and he warned, "a substantial number of Air Force general officers and colonels have been identified as potentially subject to disciplinary measures ranging from removal from command to letters of reprimand (ph)."

And Lou, you know the old saying, to ere is human, to forgive divine. Apparently neither is Pentagon policy under Bob Gates when it comes to nuclear weapons.

DOBBS: Yes and I would think most people would applaud Secretary Gates for establishing accountability within the U.S. military, particularly over the course of the conduct of the war in Iraq, Afghanistan, and certainly in the handling of these issues. It's also important to remember Secretary Gates removed the head of the Army after those deplorable conditions were found at Walter Reed Medical Center.

This is the beginning of a new approach in that Pentagon, is it not?

MCINTYRE: Well it certainly is Robert Gates' style and he is winning plaudits on Capitol Hill, particularly from members of Congress like Carl Levin and others who say he's distinctly different from Rumsfeld when it comes to handing out accountability for things that are not going right.

DOBBS: Thank you very much.

Jamie McIntyre reporting from the Pentagon.

On another matter with the Air Force that tanker aircraft contract that was to go to EADS, the consortium that builds Airbus, that $35 billion contract, well the Economic Policy Institute has completed its review and in their report today found that 14,000 American jobs will be lost if, indeed, that contract is awarded to Airbus rather than to Boeing and U.S. defense manufacturers.

Turning now to presidential politics, Senator Barack Obama today ordered the Democratic National Committee not to accept contributions from lobbyists and political action committees. The senator's announcement designed to demonstrate that he is serious about ending corruption in Washington.

Bill Schneider has our report from Washington.


WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): Barack Obama wants to change how politics is done this country. He doesn't take money from registered federal lobbyists or special interest political action committees. Now he's insisting the Democratic Party do the same.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: The Democratic National Committee will uphold the same standard. We will not take a dime from Washington lobbyists or special interest (INAUDIBLE).

SCHNEIDER: Will the change have a major financial impact on the party?

SHEILA KRUMHOLZ, CENTER FOR RESPONSIVE POLITICS: Lobbyists and particularly registered lobbyists don't make up so much of their overall take. Pacts made up less than 10 percent in 2004.

SCHNEIDER: But Obama's move is politically significant. He's trying to institutionalize a new model of political fund-raising. The old model was fat cat fundraising, a small number of large contributions from rich people and special interests.

The alternative, public financing has never been popular. Only about 10 percent of taxpayers check off the box designating $3 of their tax money for the presidential campaign. How about a large number of small contributions from ordinary Americans? Ironically it was John McCain who helped move the system in that direction.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: And I have a long record of fighting against the special interest. I'm proud of that record.

SCHNEIDER: McCain sponsored a key reform that banned large contributions, so the parties started going after small donors. In 2004 Howard Dean showed the power of the Internet as a way to reach those small donors. Now Obama has taken Internet fund raising to a whole new level. Why? Passion.

Obama is leading something more than a campaign. He is leading a movement. A movement is a cause. If you want ordinary Americans to give money, they have to believe in the cause.


SCHNEIDER: The conservative movement is also a cause. And that's why for decades, the Republican Party has out raised the Democrats in small contributions. And why this year the Republican Party is out raising John McCain, who is not a favorite of movement conservatives. With the Democrats, the situation is reversed. Obama is the movement politician who has raised much more money than his party -- Lou.

DOBBS: All right. Bill, thank you very much -- Bill Schneider.

Senator Obama or Senator McCain for that matter will have a tremendous task trying to end corruption in our nation's capital. The simple fact is that lobbying firms are a huge industry in the capital and as we've reported here before, there are now 41,386 lobbyists registered with the Senate Public Records Office.

That is 77 registered lobbyists for each and every one of the 535 members of Congress and the Senate. And no one surely imagines all those lobbyists are going to disappear whoever is our next president, but it would be nice to see them at least fade a bit.

Time now for our poll.

The question is: Do you believe the Republican National Committee should follow the Democratic National Committee and refuse to accept lobbyist contributions?

We'd love to hear from you on this. Yes or no? Cast your vote at We'll have the results here later.

Well the Obama and McCain campaigns today both responded, sort of, to my challenge here to end the revolving door between presidential administrations and lobbyists. I challenged both candidates to insist that anyone in their administration will not be allowed to serve as a lobbyist for five years.

And I said the next president should make that a legislative priority in his first 100 days in office. The Obama campaign directed us to its Web site. The Web site quoting its policy of no political appointees being permitted to work on regulations or contracts directly and substantially related to their prior employer for two years.

The Obama campaign said, "no political appointee will be able to lobby the executive branch after leaving government service during the remainder of the administration." Well, that's a good start, but it isn't sufficient and Senator Obama clearly has not accepted my challenge, but I got to give him great credit.

That is a lot better than what we're getting now, but let's go all the way. As for the McCain campaign, they said they would pass on my challenge today, so let me repeat the challenge for both candidates.

Stop anyone serving in your administration from becoming a lobbyist for a period of five years and make it a legislative priority in your first 100 days in office. By the way, let me just be very direct. Good beginning, Senator Obama. Senator McCain, you got a lot of work to do.

Senator Obama today told CNN he is in no hurry to choose a vice presidential candidate. Senator Obama said everybody needs to settle down, as he put it. A senior Clinton adviser today said Clinton would accept the job if Obama offered it, but the adviser said Senator Clinton does not believe that's likely to happen.

Our Suzanne Malveaux reports.


SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): In the lead up to Hillary Clinton's endorsement of Barack Obama, Clinton's most loyal supporters, her New York delegation, got behind her rival.

UNIDENTIFIED MALE: Outstanding candidate and our collective opinion, he has won the nomination.

MALVEAUX: Thursday's event is part of a highly orchestrated public effort to make the best of what some saw as a serious Clinton blunder, her decision not to concede the race Tuesday night.

REP. CHARLES RANGEL (D), NEW YORK: The New York congressional delegation are with her to the end, but we thought the end was the end.

MALVEAUX: Clinton loyalist Congressman Charlie Rangel helped negotiate where that end would be. Wednesday in a series of conference calls with Hillary Clinton, Rangel expressed lawmaker's private frustrations that some were ready to quickly endorse Obama and move on. Clinton aides tried to convince the delegation to wait until after Clinton herself gave Obama the nod, the compromise, this tortured announcement today.

RANGEL: We come here collectively to endorse the decision that's been made by our fearless leader who comes as a member of the state of New York that makes us so proud.

MALVEAUX: Friday, New York State officials will hold a similar event in Manhattan. In the meantime, Clinton has designated two of her top advisers, Bob Barnett and Cheryl Mills, to negotiate with the Obama camp over such things as how she would campaign, what role she'd play at the convention, how to wipe out her debt, and whether she would get an official campaign title.

Meanwhile, her campaign put out a statement today distancing Clinton from reports that she's actively seeking the vice presidency. However, sources close to the Clintons say she not only would accept the offer if it came, but initially she was not discouraging supporters from pushing her candidacy.

(END VIDEOTAPE) MALVEAUX: And Friday night Clinton will have her staff over for dinner at her home, but all eyes of course are going to be on Saturday when she publicly goes before her supporters and calls for party to unite around Barack Obama, Lou, so it'll be very interesting to see the tone.

DOBBS: That'll be quite a day.

MALVEAUX: And what she actually says.

DOBBS: So Saturday is the date.

MALVEAUX: Saturday is the day when the torch will be passed.

DOBBS: All right. So end of week, as Candy Crowley and Suzanne Malveaux were reporting is the correct statement I believe.


DOBBS: All right. Good job as always.

MALVEAUX: Thank you.

DOBBS: Suzanne Malveaux, thank you.

MALVEAUX: Thank you.

DOBBS: Well I don't often win the support of liberal establishment newspapers, especially when it comes to our reporting here on the issue of illegal immigration. But tonight I'm pleased to tell you that the rather liberal "Washington Post" is defending the record, my record and accusing Senator Obama of what would be described as a whopper.

The controversy began with some rather outrageous comments by Senator Obama at a fund-raiser in Florida last month. Senator Obama attacking me for a third time during this campaign said quote, "There's a reason why hate crimes against Hispanic people doubled last year." He went on to say, "If you have people like Lou Dobbs and Rush Limbaugh ginning things up, it's not surprising that would happen."

Well, as we reported at the time, Senator Obama's facts were utterly and completely wrong. "The Washington Post" has a column called Fact Checker and it reported that Obama statement on the issue was wildly inaccurate, as they put it. So inaccurate and point of fact that "The Washington Post" has given Senator Obama four Pinocchio's in its Pinocchio rating.

That is the worst rating possible and I must say it is nice to be vindicated by "The Washington Post" on this issue. And Senator Obama, I just want you to know, I forgive you. I'm sure that things are going to just improve markedly between the two of us over the course of this campaign.

Still ahead here much more on the campaign, the best political analysts in the country join me and also just outstanding journalists. The Democratic led Congress is holding up a massive USA aid package desperately needed by the government of Mexico. We'll tell you why that delay could jeopardize our national security and the stability of Mexico itself.

And America for sale, well foreigners trying to take control of another critical national security asset and by the way, the Bush administration is just delighted to sell away any part of that apparatus. Stay with us. We'll have that story and a great deal more. As always, it just gets better and better.


DOBBS: Mexican drug cartel violence raging tonight along our southern border threatening American lives. The Bush administration wants Congress to approve almost $1.5 billion aid package to help the Mexican government wage war on those drug cartels. And Democrats in Congress are doing everything in their power to stop that aid.

Louise Schiavone has our report.


LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Against Mexico's bloodied canvas of shootouts between drug cartels assassinations (INAUDIBLE) are more than 4,000 killed in the past year and a half, the Bush administration wants urgent action. It's pressing Congress on the Merida Initiative, a cross border offensive on narco-trafficking and violence.

PAUL ROSENZWEIG, DEPARTMENT OF HOMELAND SECURITY: The same activities used to fund criminal organizations and move contraband can and may be used by terrorists to fund their activities and to move dangerous weapons and people.

SCHIAVONE: The DEA estimates that cartels smuggle between eight and $24 billion in drug profits out of the U.S. every year. Lawmakers agree the threat to Americans may never have been greater that it is now.

REP. MICHAEL MCCAUL (D), TEXAS: The situation at the border, the U.S./Mexico border presents an imminent threat to the security of this nation.

REP. LORETTA SANCHEZ (D), CALIFORNIA: We're really seeing the effects of a real fear of violence or even more importantly more violence and it spilling really over onto the American side of the border.

SCHIAVONE: There's been Congressional resistance to the $1.4 billion Merida plan, which would Mexico, Central America and the Caribbean with training, technology and military equipment. The House and Senate have already signaled the plan is too expensive and some lawmakers say whatever money is spent should be contingent upon a promise that Mexico respect human rights even as its federal police confront heavily armed transnational drug cartels. The White House calls those conditions: JOHN WALTERS, OFFICE OF NATL DRUG CONTROL POLICY: Politically self-defeating in a partnership with a government whose sovereignty, whose people, whose democracy we respect.

SCHIAVONE: And Mexico has indicated the whole initiative is at risk if the U.S. tries to dictate conditions.


SCHIAVONE: Lou, the point was made by one lawmaker that in large measure Americans have themselves to blame. The U.S. is the best customer of Mexico's drug industry, eagerly consuming the cocaine, marijuana and methamphetamines brought to market at the expense of the rest of society -- Lou.

DOBBS: Louise, thank you very much.

Louise Schiavone from Washington.

Well, while the United States, you just heard John Walters, the drug czar, talk about respect for Mexico's sovereignty and its democracy. Mexico not reciprocating in any way toward the United States. In fact to the opposite.

Mexico has gone to the United Nations highest court trying to stop the execution of Mexican citizens who have been sentenced to death in the United States for their crimes. Mexico alleging that American authorities violated an earlier world court ruling that grants criminal suspects access to their consulate. The appeal centers on a case we've reported extensively here on this broadcast.

Jose Ernesto Methuen (ph) is an illegal alien convicted in 1994 of raping and killing two teenage girls in Texas. Methuen is scheduled to be executed on the 5th of August.

Up next, America for sale. A shadowy foreign company wants to take control of critical American infrastructure. We'll have that report.

And Senator Obama and the DNC making a bold pledge that could make a few lobbyists a little nervous in Washington D.C. We'll have the story and a great deal more as we continue. Stay with us.


DOBBS: We've been reporting here for years about the threat of foreign governments buying critical American infrastructure and national security assets. This broadcast the first in fact to report on the Dubai Ports World deal that eventually was blocked.

Tonight there is a new threat to national sovereignty and security. A foreign hedge fund trying to take control of CSX. CSX is a major railroad that does sensitive work for nuclear facilities and the Department of Defense. It is without question a national security asset.

Kitty Pilgrim has our report.


KITTY PILGRIM, CNN CORRESPONDENT (voice-over): CSX Railroad stretches 21,000 miles and 23 states. It connects 13 military bases and 70 ports shipping military equipment. More than any other railroad in the country. But now what appears to be a shadowy investment group called The Children's Investment Fund or TCI has teamed up with another investment group and together they currently have eight percent of the shares of CSX and a $5 billion investment.

They're trying to gain five of the 12 CSX board seats. Six members of the Senate Banking Committee want to know who these investors are and if any foreign governments are involved in this transaction.

SEN. EVAN BAYH, (D) INDIANA: We've asked the company about some of these things which governments are investing in you. They refuse to answer. They say that it's innocuous, but they refuse to actually answer the questions.

PILGRIM: A spokesman for TCI says they don't disclose the names of their investors. But one percent of the fund are sovereign wealth funds. They're not saying which foreign governments are investors. The spokesman for the Children Investment Fund also says it was founded to fund a charity focused on improving the lives of children living in poverty in developing countries.

But the investment fund also is known for its aggressive management restructuring and severe cost cutting. The senators claim TCI wants to cut cost to the bone and are asking the Treasury Department for a CFIUS review, which can limit foreign ownership in investment and strategic assets in the United States.

SEN. ROBERT MENENDEZ (D), NEW JERSEY: We need the CFIUS review. That is the committee on foreign investments in the United States to review this to make sure that a critical asset of the United States doesn't get undermined in terms of our national interests and national security.

PILGRIM: CSX is fighting TCI in court. It says TCI acquired shares in a non transparent way and does not properly disclose their ownership. TCI denies the allegations.


PILGRIM: The Security and Exchange Commission, Lou, today said they don't agree with the CSX lawsuit that says TCI violated securities law by buying shares. But the senators are not arguing about securities law. The say it is a national security issue. And they say any limits on U.S. railroads, growth or capital expenditures will hurt U.S. infrastructure.

DOBBS: Well all I can say is good for Senator Bayh, good for Senator Menendez and the others who are bringing this, taking this on seriously. The idea that the SEC would even begin to discuss this that this administration, which has been absolutely irresponsible in every single instance, in which national security assets were at risk of being purchased by foreign investors who would than have control of those assets -- I mean I can't even imagine anyone taking this administration seriously.

This has to go immediately to CFIUS and the idea that TCI would not respond to the U.S. Senate. You know the heck with them. Dismiss them. Who the heck do they think they are?

PILGRIM: Well these senators want it investigated. Treasury said that they received a letter. They are reviewing it right now.

DOBBS: Well and let's do it quickly. And the idea that -- you know I -- the arrogance of this. And by the way, I want to remind everybody that Henry Paulson, the Treasury secretary is in the Middle East right now trying, trying to get foreign investors to bring their capital here so that they can bail out the very institutions who are in trouble because of the policies of this administration.

It is an absurdity and the sooner these incompetents leave Washington, D.C. in government, the safer the nation will be.

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

Well our railways -- that's my opinion of course and only my opinion. Our railways are not the only critical infrastructure that foreign investors are buying up. Foreign companies are also taking control of this nation's highways, believe it or not.

A Spanish investment group last month agreeing to a $13 billion, 75-year lease of the Pennsylvania Turnpike. Governor Ed Rendell proposed that plan yesterday. The proposal was introduced in the Pennsylvania State House. A vote on the plan is expected in the fall. Good grief. Who paid for that I wonder?

Was it the taxpayers? And so how was it -- well anyway. In 2006, a consortium of Spanish and Australian companies paid nearly $4 billion for the Indiana Toll Road. That same group paid nearly $2 billion for the Chicago Skyway in 2004,

Do you think that the rest of the world is laughing at the United States? No, I'm sure not. That same Spanish company, by the way, Cintra, is funding the construction of the so-called Trans-Texas corridor and then will hold the lease on that highway for up to 50 years.

Chicago's Midway Airport now also taking bids from foreign companies. They're ready to lease that out for 50 years. It's a great country, huh.

Time now for some of your thoughts.

Ron in Texas: "Since our presidential candidates are talking about change, how is this for an idea? Get rid of all the lobbyists in Washington and let our elected officials listen to what we the people have to say." I think it's a great idea. And by the way, I don't think they're going to be paying as much attention to us until they do get rid of those lobbyists. You're spending -- well as we reported here, about 77 lobbyists for every one of the members of the Senate and the U.S. Congress. And they spend in just about -- just under $3 billion a year to get their point across or as it's put in the Constitution, to petition our government.

Ann in Texas: "Lou, if we want real change we need some new policies and leaders. It's time for an Independent in the White House. I'm a proud Texan that has just turned from Democrat to Independent."

Congratulations and welcome.

And Karen in Florida: "I went today to change my party affiliation to Independent. It may be of interest to you that your book sold out in at least one Florida bookstore. I wonder why. We never miss your show and truly appreciate your views."

Thank you very much. And we appreciate your thoughts. We'll have more of them later here in the broadcast.

And a reminder to join me on the radio, Monday through Friday for "The Lou Dobbs Show". Tomorrow a full wrap-up of what has been a week of tremendous political news. Among my guests, Daniel Henninger of "The Wall Street Journal" editorial page, Jonah Goldberg, editor-at- large for "The National Review" online, Mark Halperin from "Time" magazine.

And go to to get the local listings for "The Lou Dobbs Radio Show".

Up next, hear Senator Obama says he'll clean up Washington. Guess what? He took an important step today. Not enough, but a good beginning. Is it genuine reform? Is it political rhetoric or perhaps genuine reform? Could evolve into that, I'll bet.

And China has established dominance over the rich resources and minerals of a good part of Africa. We'll be telling you about that.

And compelling new evidence that our public school system continues to fail American students.

We'll be right back.


ANNOUNCER: This is LOU DOBBS TONIGHT. News, debate and opinion. Here again, Mr. Independent, Lou Dobbs.

DOBBS: Well, Defense Secretary Gates today fired his Air Force secretary Michael Wind and his chief of staff, General Michael Moseley.

Gates fired those top officials of the Air Force after a highly critical report on the security of our nuclear weapons.

Senator Obama today offering -- ordering, rather, the Democratic National Committee not to accept contributions from lobbyists and political action committees. Obama trying to demonstrate he is the only candidate who's not under the influence of lobbyists and in that, in my opinion, he has a head start.

Senator Clinton is making preparations for a speech Saturday where she will, apparently, endorse Senator Obama. Meanwhile her campaign is playing down any speculation that she would be Senator Obama's running mate.

Well, now we'll join three of my very favorite analysts and journalists, by the way, Errol Lewis -- he's "New York Daily News" and "LOU DOBBS TONIGHT" contributor and columnist for "The New York Daily News," Jeffrey Toobin, senior political analyst -- good to have you with us -- and Candy Crowley, senior political correspondent.

Candy, you're the only one here who interviewed Senator Barack Obama today. Let's start with you. What did he say about the rampant speculation of the Obama/Clinton ticket?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Let me say it is fairly safe that he is saying the same thing over and over, although in different ways. This is a topic he doesn't want to address, he wants to give Hillary Clinton some room, and at the same time, he wants to give himself some room. He doesn't want to get boxed in.

So no matter how you went at the question, Lou, he really didn't want to answer it.

DOBBS: Well...


OBAMA: I think everybody just needs to settle down. We've just completed the arduous process. It's only been two days. And you know, I think it's both not just in my interest and Senator Clinton's interest, but in the Democratic Party's interest and the country's interest to make sure that I make this decision well.

Then I've -- will be deliberate and systematic about it because this will be my final counselor when I'm making decisions in the White House. And I want to make sure that I get it right.


CROWLEY: We also talked, Lou, about a number of different foreign policy issues, about his statement yesterday that Jerusalem should remain undivided -- he sticks by that -- and always about Iraq.

I asked him about his trip -- his planned trip to go back over there and look at things on the ground and asked him whether anything might change his mind.


OBAMA: I never say there's nothing or never or no way in which I'd change my mind. You know, obviously, I'm open to the facts and to reason. And there's no doubt that we've seen significant improvements in security on the ground in Iraq. And our troops and General Petraeus deserve enormous credit for that.

I have to look at this issue from a broader perspective, though. And in terms of long-term strategy, I am absolutely convinced that the best thing we can do is to set a clear timetable, tell the Iraqis, we are going start pulling out, do it in a careful fashion.


CROWLEY: And because Guantanamo Bay trials began today, Lou, I did ask him. He has always said that he wanted to shut down Gitmo. I said, "Well, what would you do with all those prisoners?" He said, "I'd put them in military prisons. I would try them in military tribunals. If they're not guilty we set them free. If the -- we are, we mead out punishment. We did it after the Trade building was hit the first time, and we can do it again." Lou?

DOBBS: All right, Candy. Thank you very much.

Let me turn to you, Jeffrey Toobin. Did it sound like a change of position on the part of Senator Obama on the issue of Iraq?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Not to me. I -- any politician is going to say I have to listen to what I'm going to hear when I go there. But he has a political position in favor of withdrawal. I don't imagine that that is going change. But he's certainly going to listen to what the people have to say there.

DOBBS: Jeff, was there in his statement -- how much difference -- how much light was between that and the statement of -- that he would listen to General Petraeus and others and the statement made by George W. Bush that he's going to listen to the commanders on the ground?

TOOBIN: Well, George W. Bush said he was going to listen to and follow the advice of the commanders on the ground. Barack Obama made no such commitment. And I think it's apparent his position is largely contradictory to General Petraeus's. And that's why he's running for president.

DOBBS: All right. You agree?

ERROL LOUIS, "NEW YORK DAILY NEWS": Well, absolutely. I think -- I mean I see in both of those statements him asserting himself. He has a number of different roles. He's the commander in chief and he's the titular head of the party. And in both statements he said, I'm not going to be rushed on my vice presidential pick, I'm not going to be rushed into or out of Iraq.

DOBBS: I love the way he said it. Everybody needs to settle down. LOUIS: That's exactly right.

DOBBS: That was a very smart way to put that in my opinion.

LOUIS: I hear -- I see it as a clear leadership statement. I will not be bullied by generals or Clintons or anybody else. I'm going to run the show.

TOOBIN: And this from a guy who says he doesn't watch cable news. Imagine if he was watching cable news with all of us crazed about the vice presidential race all the time. He'd really want to slow down.

DOBBS: Well, the thing I'm crazed, as you put it about, is the fact that Obama's campaign, asking today -- the Democratic National Committee -- to push back against lobbyist money, to refrain from taking PAC money.

Candy Crowley, I'm going to say this right now. I have just challenged both campaigns yesterday on the issue of pushing back against lobbyists. This isn't as far as I would like them to go, but it's a beginning and it's a huge differentiater right now with Senator McCain.

CROWLEY: Well, and that's really the point here, because, as you know, John McCain has made a big deal about the fact that he believes Barack Obama committed to federal funding, and that is limiting spending, sticking with those federal funds.

So this is sort of a pushback at that. It also sort of displays for Barack Obama that he's going to be a different kind of guy, and he's going to listen to people, instead of PACs. I will also tell you that, as you say, doesn't quite go the whole distance.

DOBBS: Right.

CROWLEY: He has, in this campaign, taken money from lobbyists' wives and children and things like that. And he's taken some state lobbyist money. So we're not quite there yet, but he's definitely made a statement here by forcing this on to the DNC.

DOBBS: Well, we're going to give him -- and Senator McCain every opportunity to be straightforward and, let's say, finite on that five- year end to the revolving door and putting end on making it a legislative priority in the first hundred days.

Errol, your reaction?

LOUIS: Just a very smart political move. He not only takes the step in the direction of reform, he starts as opponent of funds, in effect, basically because if he tries -- if McCain tries to do the same, he'll been at even more of a financial disadvantage.

It also puts a negative spotlight on the people who are running McCain's campaign. I mean it's kind of a triple and really at no risk or cost to Obama. TOOBIN: It's a virtuous circle. He doesn't have to give up any money because he's already raised fantastic sums not from PACs and lobbyists.

DOBBS: Well, that virtuous circle -- we want to expand, of course. We hope that that'll happen.

Let's go to the last thing here. I want you to get -- you get the final word here tonight. Here is the national general election poll of polls showing the registered voters' choice for president. Obama, 47 percent, McCain, 45 percent, unsure, 8 percent.

Wow. This looks like a race.

TOOBIN: Sounds like it will be fun to cover.

DOBBS: All right. That'll be our last word.

Thank you very much, Jeffrey. Thank you, Candy. Nice job with Senator Obama. Thank you for being with us, Errol Louis, as always. Thank you, sir.

Up next, Communist China looting Africa's natural resources. I'll be joined by the author and editor of one of the most important magazine articles in years.

And this nation's high school drop out rate -- not improving. Our public school system failing a generation of students.

We'll be right back. You don't want to miss it.


DOBBS: Communist China is the most aggressive investor in all of Africa. But critics say the Chinese are simply pillaging sub-Saharan Africa's vast natural resources and the United States partly to blame, while also derelict in pursuing national interest.

All of that part of the subject of an important and provocative new article in the June issue of "Fast Company" magazine. "China Storms Africa," a 20-plus page analysis of Communist China's, quote, "commercial invasion" of Africa.

Author Richard Behar, magazine editor, and Bob Safian joining me now.

Good to have you both here, which I got to say this, straightforwardly, a wonder piece of reporting. Important, important reporting. My congratulations.

The idea that we are being and permitting the outmaneuvering of the U.S. government in Africa -- Europe doing the same thing -- the Chinese make us look absolute fools and dupes when it comes to their carrying out their strategy there.

RICHARD BEHAR, AUTHOR, "CHINA STORMS AFRICA": We are absolutely asleep at the switch and have been for years as China has aggressively moved into one country after another, scooping up long-term deals -- oil, timber, copper, you name it.

DOBBS: You report from Mozambique, Zambia, the democratic republic, and let's put up, if you will, this map from the article from the magazine. Equatorial Guinea, the places where communist China -- and there's the number -- Communist China's exports from Africa have risen 2,126 percent since 1998.

That little sliver you see on the left side of your screen representing the growth of the U.S. during the same period.

My gosh. I mean, how could people not notice?

BEHAR: America's been busy, right?


BEHAR: We had a war in Iraq and we have been sending aid, of course, to Africa. But where's the investment? Where's the trade? It's just not happening at the level it should be.

DOBBS: You know, I got turn to Bob Safian. He is the managing editor. I mean the longest -- this is biggest article in the history of the magazine.


DOBBS: I mean that's a courageous thing for any editor to do but to go after the story. What's -- what you -- what set you on the scent of it?

SAFIAN: Well, the idea actually came from executive editor Will Born who's -- who brought Rich to us and had the idea for the story. And that the starting really was that we are potentially on a course where there are not enough resources across the globe to meet the rising needs of our planet and of our people. And where could we look at that potential showing its face?

And China's activity in Africa was a way for us to point a spotlight at it and it's a globally important issue.

DOBBS: A globally important issue and what you just said is critically important for everyone to understand that this is now a contest, a critical contest. It's more than a competitive contest -- let's hope it remains only that -- for increasingly scarce resources, minerals, commodities across the world.

And China, as you point out, Richard, starts off with a war chest of $1.65 trillion compared to $62 billion for the United States.

Hardly a fair fight, would you say?

BEHAR: Hardly a fair fight today. We also got to keep in mind that China has such a corrupt business culture at this point in its development and so does the sub-Sahara for all sorts of reasons. And when you combine that recipe, it can pretty explosive. And we're seeing that today with a lot of the minerals going to China, oil going to China.

SAFIAN: When American companies try to do deals in China, we set rules. We want certain quid pro quos on human rights and other things that the Chinese are just not asking for. And it becomes very easy for the African countries to do deals with China. They just make it very easy.

DOBBS: In places where, as you examine, documented report, like Equatorial Guinea, where the United States has sort of doing with a wink and a nod accepted a less-than-ideal human condition -- human rights conditions and that's been very nice.

The Communist Chinese have shown everybody how to do business and as you suggest, will likely will overtake the United States in Equatorial Guinea. Have already done so in the Congo and the Zambia and Mozambique.

BEHAR: Mozambique with timber. And most of the timber leaving Mozambique for China is moving out illegally. Most of the copper moving out of Congo to China is moving out illegally.

SAFIAN: Now one of the great things about Richard's story is that he points that, of course, a lot of that timber that's going to China is ending up back here in America in our floorings, in our walls in our -- you know that there's a certain complicity that we have as well in all...

DOBBS: And of course, our furniture as well.

SAFIAN: And our furniture, yes.

DOBBS: As our brilliant trade policies continue to -- well, create consequences.

Richard Behar, Bob Safian, thank you very much. This article, I want to say to you, is, without question, deserving of your time, your attention. China invades Africa, "Fast Company" magazine, June issue. I urge you to read it. It is very, very important.

Thank you, gentlemen. Appreciate it.

Coming up at the top of the hour, "THE ELECTION CENTER" with Campbell Brown.

Campbell, tell us what you're working on.


Well, tonight, on "THE ELECTION CENTER," Barack Obama tells CNN that everybody needs to settle down. He is not ready to choose a running mate.

We're going to have our interview with Barack Obama. Candy Crowley sat down with him. And then we're -- I'm going to ask our experts to rate Hillary Clinton's chances, plus what both parties should look forward to in a vice president.

We are also keeping an eye on what's happening out in the Midwest tonight, as you probably know, Lou, watching this tornado threat that is very serious.

We're going to have all that at the top of the hour -- Lou.

DOBBS: Look forward to it, Campbell. Thank you.

Up next here, more than a million students will not graduate from high school this year. Why are we failing so many of our high school students?

And monthly troop deaths are down sharply in Iraq. One of the country's most respected former military commanders, General David Green, joins me.

Stay with us. We're coming right back.


DOBBS: As I've said quite often, public education in the country is the great equalizer. But our public school system is failing a generation of American students.

A troubling new report tonight finding more than a million students won't graduate this year. That's nearly 33 percent of the class of 2008.

Christopher Swanson is the director of the Editorial Projects and Education Research Center, which published this report, "Diplomas Count."

In the DOE count, I want to start with some good news here because there's so much bad news. But going through these numbers, Detroit, moving up significantly. And this is -- I mean it's horrible, but it is not as horrible as it was. Moving from 25 percent to a 30 -- and what you're looking at here is -- we seem to be going through a number of slides.

So we're going to try to ask everybody to kind of come back here on camera. Come back to me. There you go. And we'll talk about those things in just a minute.

But the graduation rate in Detroit has moved from -- well, 25 percent to 37.5 percent. I want to seize on that good news because that is -- it's almost a 50 percent improvement.

CHRISTOPHER SWANSON, RESEARCH DIR., EDUCATION WEEK: There are some signs of improvement and nationwide, we see some improvement over the, say, the past five years. Graduation rates have increased about 2.5 percent over this period. The bad news, though -- that's right. It's about two-thirds of a percentage point. If we keep on moving at this rate, we're going to get from where we are now, around 70 percent to, say, 90 percent as a nation, it's going the take at least 30 years. And we run the risk of losing another 30 or 40 million students.

DOBBS: And we're talking about the future of the country. Let's take a look now at the -- of 1.23 million students, who failed to graduate. This is who they are by race and ethnicity on a national level.

Now if we could see that screen, please. Well, I guess that's not going to come. So I will just tell you -- white students, the graduation rate is 77.6 percent, black students, 55.3 percent, Hispanic students, 57 percent, 50 percent for American Indian students.

I mean this is crazy. What are we doing?

SWANSON: Well...

DOBBS: We talk about this year after year. Each year you've talked about -- you report these numbers to educators who are elected officials. What are the fools doing?

SWANSON: Well, you know, I think they're not doing enough. But in many cases, they are doing the best they can. But I think the...

DOBBS: How can we say this is the best -- because I understand you're an educator. But if the best we can do is this, we might as well throw our hands up and walk out of here because this society isn't working.

SWANSON: Well, and I think keeping -- putting the issue in front of people is extremely important. One of the things we do in the report this year is we report graduation rates for each of the congressional districts in the country.

This is a year where people are paying attention to politics. Federal lawmakers as well as local officials have a big role to play especially when No Child Left Behind comes up for re-authorization.

It's because No Child Left Behind puts some attention on the issue that we're even talking about this at all.

DOBBS: Well, I want to because -- and I commend you for doing this, because I think you were so smart. It's such a responsible thing to do.

Let's take a look -- because for the first time, Chris's organization has put it in congressional districts. The district with the lowest graduation rate, that is below 25 percent, is in New York's 7th congressional district represented by Congressman Joseph Crowley. 24.5 percent graduating.

Congressman Crowley's office, by the way, says this is, quote, unquote, "an alarming statistic." (INAUDIBLE) cites various actions being taken by the Democratic majority in Congress.

I mean, that's crazy. What a response.

SWANSON: Well, I suspect he probably didn't even know that was the case. You look around at what the congressional districts look like. They get bits and pieces of, you know, particular school districts -- dozens of school districts in some cases. And I think there -- it's just not on their radar screens in the way it should be.

We know that education continues to be an important issue among voters, second only to the economy. But it's not getting traction and you know, despite the good work that you've done. It's not getting the kind of traction it deserves.

DOBBS: Well...

SWANSON: ... when we talk about these issues nationally.

DOBBS: We're going to do more and I want you to come back, if you will, (INAUDIBLE) as we continue to follow this -- you know, it's crazy to say congratulations on this important report which is so devastating, but I mean thank you for doing so.

And I think we should point out, along on the 7th district there in New York, the two U.S. senators who also bear considerable responsibility on the New York governor and state legislatures. Those two senators would be Senator Schumer and Senator Hillary Clinton, I believe.

Thank you very much, Chris Swanson.

Up next, more of your thoughts. The results of our poll. Stay with us. We're coming right back.


DOBBS: And as we conclude here this evening, I want to tell you about a new health care center for our veterans returning from war. The National Intrepid Center for Excellence for Psychological Health and Traumatic Brain Injury will be built in Bethesda, Maryland. You're looking at pictures of groundbreaking today.

The center will focus on the study and care of mental disorders and traumatic brain injuries. A study released in April by the Rain (ph) Corporation found nearly 1 in 5 of our troops returning from Iraq and Afghanistan report symptoms of post traumatic stress disorder or depression. And 1 out of 5 service members say they may have experienced a traumatic brain injury.

So -- our thanks to all of those making that possible.

In tonight's poll results, we want to leave you with, -- 96 percent of you say the Republican National Committee should follow the DNC and refuse to except contributions from lobbyists.

Let's take a quick look at some of your thoughts. Dave in Florida said: "I watch your show nightly as a Democratic. Although you've never convinced me to change to Independent, the DNC decision about what to do with Florida and Michigan did. Tomorrow, I'll be watching your show as an Independent."

Welcome and thank you.

Janet in California said: "I am so disappointed in the Democratic Party. I've been a Democrat my whole life, and now I find out they don't represent me. They don't want to count votes. Hello President McCain."

And David in South Carolina: "Lou, I've run my family-owned and operated small business for a few years and have now joined the ranks of small business owners who can't afford insurance due to high premiums. I have always voted Republican. No more. My family will register as Independent. Keep up the good work."

Well thank you and welcome.

Thanks for being with us tonight. Please join us here tomorrow.

Oklahoma State representative, Brandy Terrell joins will me. We'll be talking about that federal decision -- federal judge's decision to stop Oklahoma's crackdown on illegal immigration.

Please be with us.

For all of us here, thanks for watching. Good night from New York.

The "ELECTION CENTER" with Campbell Brown begins right now -- Campbell.