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Helping Homeowners; Blagojevich Scandal and Obama Team; Auto Industry Bailout

Aired December 12, 2008 - 19:00   ET


LOU DOBBS, CNN ANCHOR: Thank you, Wolf.
Tonight, the Blagojevich scandal, questions about the Obama's team involvement with the governor still unanswered. Obama's chief of staff Rahm Emanuel refusing to answer reporter questions but declared not a target of the investigation. We'll have complete coverage.

And tonight a critical moment for the auto industry after the Senate kills that bailout. The White House finding a way to step in and could keep the carmakers alive until a new administration. We'll have the story from the White House for you.

And, tonight, communities all across the country battered by the mortgage crisis have nowhere to turn for help. What will it take to convince the government to finally step in and help those losing their homes to foreclosure and to help out the entire housing industry?

We'll have that report and a great deal more, all the day's news, from an independent perspective, straight ahead, here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT. News, debate and opinion for Friday, December 12th.

Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

Tonight, in his first public comments and a scandal that's rocked the political world, a defiant Rod Blagojevich ignored calls to step down as governor of Illinois.

Speaking exclusively to CNN's Drew Griffin, the governor said he would speak at, quote, "the appropriate time."


DREW GRIFFIN, CNN SPECIAL INVESTIGATION UNIT: Drew Griffin with CNN. Can you say anything to the people of the state of Illinois, sir? Do you have anything to say?

GOV. ROD BLAGOJEVICH, ILLINOIS: I will at the appropriate time, absolutely.

GRIFFIN: Are you going to resign, sir?

BLAGOJEVICH: I'll have a lot to say at the appropriate time. GRIFFIN: Governor, are the authorities right in their petition, that criminal complaint? Did you do what they say you did? Governor, just 30 seconds for anybody? For the state of Illinois?


DOBBS: Illinois's attorney general today asked the state Supreme Court to remove the governor from power. The governor's chief of staff, who was also arrested Tuesday, resigned.

Drew Griffin has our report.


GRIFFIN (voice over): In perhaps a sign he has nowhere else to turn for help, pastors of local churches showed up at the governor's door this morning, emerging to say they came to offer support.

LEONARD BARR, FELLOWSHIP MISSIONARY BAP. CHURCH: Have prayer -- have a prayer with the governor. He called me.

UNIDENTIFIED FEMALE: What was your prayer, what did you say?

BARR: And he continues to be a great governor. Stay in course.

GRIFFIN: The governor waved to the press and waved off any questions on what he is going to do. At the downtown office building where the governor works, Illinois's attorney general announced she had filed a motion with the state Supreme Court to have the governor stripped of his power.

LISA MADIGAN, ILLINOIS ATTORNEY GENERAL: We think it is very clear that he is incapable of serving and we are certainly hopeful that the Illinois Supreme Court will hear this matter and appoint Lieutenant Governor Quinn as the acting governor.

GRIFFIN: Behind the screen, the legislature is gearing up to start their own removal procedures. Meeting on Monday, the House and Senate are expected to take up motions to strip the governor of his ability to name a U.S. senator to the vacant seat prosecutors say he was trying to sell.

And Democratic House members are circulating this letter, asking colleagues to join them in impeaching the governor.

But that will take time. Politicians agree the best thing for the state is for the governor to resign. And while his accused chief of staff, John Harris, did submit his letter of resignation, the governor apparently is still on the job, working and not telling his press secretary much else.

LUCIO GUERRERO, BLAGOJEVICH PRESS SECRETARY: People are trying to deal with today's issues as opposed to what's been going on this whole week.

(END VIDEOTAPE) GRIFFIN: Somewhat defiantly, Lou, some would say, the governor was in his office and actually signed a bill into law today, giving children with autism insurance coverage. But he's likely to face even more pressure on Monday when he sees just how swiftly the legislature's expected to move on two avenues, one stripping away his power to appoint a U.S. senator, and two, perhaps, beginning impeachment proceedings. Lou?

DOBBS: And Drew, the lieutenant governor has been nothing if not somewhat aggressively anxious for the governor to step away. He seems rather eager to step in to that role. Is there some reaction there in Chicago to that?

GRIFFIN: Everybody seems to think Pat Quinn, a longtime politician here in this state, is a pretty good guy to handle this transition. And it's interesting, Lou, the day I got here, on Tuesday, I went to a news conference with Lieutenant Governor Quinn, and he was saying the governor might just step aside, not resign, retain his salary, and he was chastised for that since then.

He's now out and out saying Governor Blagojevich needs to go, needs get out of the office, and needs to, at least temporarily, make him the governor of this state.

DOBBS: All right. Drew Griffin, thank you very much.

Drew Griffin reporting from Chicago.

The president-elect's chief of staff Rahm Emanuel has been noticeably absent from public view since this scandal broke. There are new questions about whether Emanuel is the Obama adviser named in the criminal complaint against the governor.

"Chicago Times" reporter Fran Spielman caught up with Emanuel at Chicago city hall. He was there to listen to his children perform in a school concert.

Emanuel's response to Spielman, quote, "You're wasting your time, I'm not going to say a word to you, I'm going to do this with my children." Spielman then asked, "Can't you do both?" to which Emanuel replied, "I'm not as capable as you."

Obama has pledged to disclose any interaction between his team and Governor Blagojevich.

Well, new information tonight that Rahm Emanuel is not a target of the corruption investigation, but his refusal to speak to reporters isn't helping resolve serious questions about the relationship between the Obama team and the governor.

Jessica Yellin has our report. Jessica?


A person briefed on the investigation tells me that Rahm Emanuel was told himself by officials that he is not a target of the investigation. This is significant, well, for two reasons. First of all, it does take a bit of the -- air out of the speculations circling Barack Obama and his team.

Quite clearly, investigators believe that there was no wrongdoing on the part of his chief of staff, Rahm Emanuel. But, secondly, presumably, officials would not bother to tell Rahm Emanuel he's not a target unless he did have some contact with the people involved in this case.

And, again, nothing nefarious about that. One would expect the president-elect's top adviser to talk to the governor of the state about the person who would take his seat after he -- after he leaves it.

There are lots of questions at this point and frustration because Barack Obama has not revealed all that he could about who on his team may have had any contact. This really is Barack Obama's style and I guess something we're all going to have to get used to.

He collects the facts, he gets everything in a row, and he releases it on his timetable. They think they really do have one chance to take a bite at this apple, to get it all out there, and they want to have all the information when they do, so we, in the meantime, are left to wait, wonder, and feel a little frustrated. Lou.

DOBBS: And, also, this is a story that, nonetheless, in the media is feeding upon itself. It is also clear...


DOBBS: ... I think, to many, Jessica, that the Obama transition team, which was just hitting about a perfect note, as it established the administration that would be taking office on the 20th of January.

This no longer is under their control, irrespective of what the president-elect says about his schedule. Do you agree?

YELLIN: Yes, this is the first story that they don't get to manage. They have to follow the -- they're controlled by the story. But they're trying to do what they can to manage it by gathering these facts now. And they say they want -- they want to get it all done. They want to make it thorough. And they'll answer questions and be transparent when they're ready.

DOBBS: And I suspect if appropriate sources are saying that Rahm Emanuel isn't a target, there are going to be a lot of other people in Chicago asking the prosecutor to do -- to say precisely the same thing of them.

Thanks very much, Jessica. Jessica Yellin.

Well, the president-elect today expressed his disappointment that the Senate couldn't reach an agreement to help the three domestic carmakers. The president-elect says he hopes the White House and Congress can still find a way to give the industry temporary help. The Bush White House today declared it would come up with a new rescue plan for Detroit. Press secretary Dana Perino said the administration will act to prevent the collapse of the industry and the impact on hundreds of thousands of employees.

Our senior White House correspondent Ed Henry now with the report.


ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice over): Abandoned by his fellow Republicans and now under heavy pressure from Democrats to save the American auto industry on his own, the president is making a U-turn. He's thinking about tapping billions of dollars from the Treasury Department's Troubled Asset Relief Plan to help the big three, a sharp reversal from just a few days ago.

DANA PERINO, WHITE HOUSE PRESS SECY: We have always said the TARP program was passed for a very different purpose and that was to prevent the collapse of our financial institutions.

HENRY: Auto institutions now may need to be helped as well, Dana Perino explained in a written statement Friday. Because, quote, "a precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time."

The president's support in his own party has also destabilized. Intense White House lobbying efforts, including Vice President Cheney on the Hill, and the president on the phone, failed to move enough Republicans to support a legislative bailout Thursday night.

And top Republicans are now warning the White House not to take unilateral action without guarantees the auto companies will become more viable.

SEN. BOB CORKER (R), TENNESSEE: If the White House puts TARP money in on top of GM's $62 billion in debt, OK, and doesn't require all of these things that I'm talking about to happen, OK, all they're doing is throwing good money after bad.

HENRY: Ironically, it's Democrats who are giving the president cover to tap the funds, declaring the situation is dire, not just for automakers, but car dealer, bankers, part suppliers.

SEN. CHRIS DODD (D), CHMN., BANKING COMM.: There is a cascading occurring as you and I are talking. So I'm hopeful the White House will make that decision, send that signal the markets need to hear, before even more damage is done. In a matter of hours now, we're not talking days or weeks now. We're talking hours.


HENRY: Now two senior officials tell CNN that the president could move as early as this weekend to tap these emergency funds, despite those Republican objections. After all, Democrats privately say they hardly believe the president wants to add the depth of GM, an American icon, to his legacy, Lou.

DOBBS: And if this is within the power of the president and the Treasury Department, the question is obvious here, Ed. Why in the world did the White House require this theatrical performance on Capitol Hill and a grilling, grueling experience for the CEOs when he could have simply done this and had Hank Paulson put forward that money weeks ago?

HENRY: Good question the White House doesn't really have an answer for tonight, Lou. For weeks now, they've been saying they did not want to use these funds. They realize a lot of Americans are going through what you might call bailout fatigue, one bail out after another.

So they thought, instead, it should go through the Hill, set up, you know, the protections that some of the Republicans have been talking about. But you're right, after a few weeks, it really ends up in the same spot where we started, which is essentially the White House is probably going to have to end up unilaterally bailing out the companies anyway, Lou.

DOBBS: And Ed, the issue of conditions for this money, because one of the reasons that the Senate Republicans are so adamantly opposed to this is that there are not stringent benchmarks and conditions for this money.

Will there be a White House condition, for example, to limit or eliminate the practice of outsourcing of good middle class jobs to cheap labor markets, offshoring of production? Will there be a requirement on CAFE standards? What precisely, if any, conditions are we aware of that the White House will exact for this bailout?

HENRY: They're not putting any of those conditions on the table yet, you won't be surprised to learn, and that's something they're going to be hashing out tonight and over the weekend.

You certainly heard a lot of proposals floating around the Hill, but I seriously doubt they're going to get into that outsourcing issue that you've mentioned. It's not something they've addressed before, Lou.

DOBBS: All right. Ed, thank you very much. Ed Henry, our senior White House correspondent.

While the automakers are desperately fighting for a bailout, many are wondering how $14 billion will go to save the industry. Over the last quarter alone, the big three burned through more than $17 billion in cash.

General Motors and Chrysler both say they can't last a year without federal aid. General Motors is asking for $10 billion, while Chrysler says it needs $4 billion. And the amount of red ink, simply staggering.

Since 2006, Ford and General Motors have lost -- are you ready -- a stunning $86 billion as domestic car sales have fallen to the lowest level in a quarter century. Investors have felt the pain. Shares of General Motors this year plunging 83 percent. Shares of Ford Motor down 56 percent.

Senate Republicans today blamed their failure to approve the bailout on the United Auto Workers Union. They said the union wouldn't agree to a timetable for concessions. The union claims it's been making concessions all along, but the union says it won't cut benefits to older and retired workers.

Bill Tucker has the report.


BILL TUCKER CNN CORRESPONDENT (voice over): For some Republicans in the Senate, the United Auto Workers need a reality check.

CORKER: Is it a better deal for the UAW that these companies limp forward, continue to close plants, lay people off, lose market share? You know, GM had about 30 percent of the U.S. market share a decade ago. They have 21 percent today. And so in a greatly downward trending economy, they're losing market share.

TUCKER: Any loans, they say, must be conditioned on the union agreeing to a date certain that they will become competitive with labor at the foreign automaker plants building cars in America.

It was a challenge laid down in negotiations in general terms, a challenge the UAW says it agreed to.

RON GETTELFINGER, PRES., UNITED AUTO WORKERS: The tentative agreement with Senator Corker also provided that any restructuring plan approved by the auto czar would have to ensure that the wages and benefits paid to active employees at the domestic automakers would be competitive with the compensation paid by the foreign transplants.

TUCKER: What the union says it will not negotiate is a cut in promises to its older and retired workers. The mayor of Lansing, Michigan with two parents who are GM retirees, agrees that's a line that shouldn't be crossed.

MAYOR VIRG BERNERO, LANSING, MICHIGAN: It kills me that senators who are well paid and have the best healthcare stand on the floor of the Senate and -- bemoan and decry the benefits that auto workers receive for working hard.

TUCKER: Critics say the union is not facing reality. Those retiree benefits will have to be renegotiated now or in bankruptcy court.


TUCKER: Now it's estimated that the retiree and benefit cost are roughly $2,000 per vehicle for the big three. As for a date certain, that date actually already existed in legislation passed by the House. It's March 31st, 2009. That's the date that the car czar has to give a thumbs-up or down as to whether the auto makers receiving the bridge loans are headed in the right direction.

The question, Lou, that remains is if it's a thumbs down, how do they get the money back from carmakers who say they can't make it through the end of the year?

DOBBS: It's really sort of a silly requirement because it's unenforceable. And a date certain should be, at the very least, enforceable.

Thank you very much, Bill Tucker.

Well, Toyota overtook General Motors as the world's leading carmaker in April of last year. Now our viewers, whom I've always said are the smartest viewers in television, correctly predicted that that is exactly what would happen more than three years ago.

We asked our audience back on June 7th of 2005, "Do you think foreign carmakers will overtake American carmakers," and 52 percent of our audience responded yes in less than three years. That was in June of 2005 and our audience, as usual, was absolutely right.

In tonight's poll, the question is, "Who do you believe should have received a bailout first, financial firms, carmakers, or homeowners?"

Cast your vote at We'll have there results here later in the broadcast. I -- and I think this is interesting to see what you think about who should have been given priority in this bailout, Wall Street, the homeowners or carmakers. I can't wait to see what you have to say about it.

Up next, a multibillion dollar investment fraud. A former stock exchange chairman accused of running a massive -- and I do mean massive -- Ponzi scheme. In fact, it could be the biggest Ponzi scheme in history.

Sometimes it's a little difficult to tell the difference between Ponzi schemes and some of the -- well, financial vehicles being created and operated around the country. We'll have that story.

Communities across this nation struggling to save their homes now from foreclosure, but there's still no bailout for our nation's homeowners or our battered housing industry. Why not? We'll have that report.

And a major illegal alien smuggling ring has been busted. Will increased immigration law enforcement be part of the Obama administration's policy? Unlikely, but we'll have the story here next. Stay with us. We're coming right back.

ANNOUNCER: LOU DOBBS TONIGHT, brought to you by...


DOBBS: A former chairman of the NASDAQ at the top of a massive Ponzi pyramid. Bernard Madoff tonight is free on bond after being charged with running a multibillion dollar securities fraud, which could be the biggest Ponzi scheme ever.

An SEC complaint states that Madoff told his employees that his investment advisory business was a fraud and that he had lost about $50 billion of investor's money. Those investors, among the richest in the country.

Madoff faces 20 years in prison and a $5 million fine should he be convicted.

Well, authorities in Arizona have smashed a major human trafficking operation. The smuggling ring specializing in delivering illegal aliens to communities all across the United States.

This bust comes as local officials are begging the Obama transition team to give them top priority in ending the smuggling of illegal aliens, something the Bush administration, of course, has refused to do.

Casey Wian with our report.


CASEY WIAN, CNN CORRESPONDENT (voice over): They call it "Operation Enfuego," a six-month effort by federal state and local officials in Arizona to dismantle the U.S. portion of an illegal alien smuggling operation.

Authorities allege the Phoenix-based gang drove groups of illegal aliens in mini-vans to 22 U.S. states, primarily on the East Coast. 86 alleged illegal aliens were apprehended. So far untouched, the Mexican smugglers who actually brought them across the boarder.

TERRY GODDARD, ARIZONA ATTORNEY GENERAL: As we take down each link, we're making it more difficult to conduct the total operation.

WIAN: Friday, they announced 35 indictments, 21 arrests, and the seizure of five so-called drop houses used to harbor illegal aliens and drugs, as well as weapons, vehicles and cash.

GODDARD: There is no question this is one of the most lucrative criminal activities you can be involved in.

WIAN: During the first half of the year, authorities in Maricopa County found more than 160 drop houses. Officials began running television ads asking the public to report suspicious activity.


UNIDENTIFIED FEMALE: Illegal immigration is fueling Arizona's violent crime and drug problem. About 90 percent of illegal drugs come from south of the border. Armed gangs involved in human smuggling have made Phoenix the kidnapping capital of America.


WIAN: Phoenix Mayor Phil Gordon, who has been accused by border security activists of being soft on illegal immigration, Thursday spoke with senior members of President-elect Obama's transition team. He asked for more Border Patrol agents and more resources for multi- agency operations near the border. MAYOR PHIL GORDON, PHOENIX: One of the most productive things that the new administration and Congress could do is to continue to fund these joint operations, federal, state and local law enforcement, that go after the heads of the monsters.

WIAN: Alleged leaders of the En Fuego operation face up to eight years in prison.


WIAN: Also this week, the Bureau of Alcohol, Tobacco and Firearms announced the arrest of nine people in two Phoenix suburbs on charges of attempting to smuggle more than 100 weapons, including assault rifles, into Mexico for a drug cartel. Lou?

DOBBS: Well, Casey, that's fascinating to watch the mayor of Phoenix. That's quite an abrupt reversal for the mayor, Phil Gordon. He's been an absolute political battle with Maricopa County sheriff, Joe Arpaio. I mean -- Arpaio has been doing more than anyone in the state of Arizona to enforce immigration law.

What's the deal?

WIAN: Well, it -- sure seems as if Mayor Gordon has had a change of tune on this issue because he was criticized very loudly for Phoenix's former sanctuary policies with the police department there. Perhaps this is something that bodes well nationally.

Arizona Governor Janet Napolitano is going to be the new secretary of the Department of Homeland Security. Barack Obama says he's going to defer to her to determine how -- how fast they're going to continue to build the border fence if at all and how to enforce immigration laws. Perhaps she'll have a change of tune as well, Lou.

DOBBS: Well, one can only imagine why the tune has been what it's been.

Thank you very much, Casey Wian.

Up next, here, still no real assistant for struggling homeowners. And our troubling housing market is not getting much assistance. What some communities are now doing to help themselves.

And there's alarming news on teenagers and illegal drugs. Why is the Bush administration claiming success in our war on drugs? We'll have that special report here next.


DOBBS: The Bush administration is claiming a victory in the war against drug abuse and addiction in this country, and not without some empirical support.

A new report has found a disturbing number of middle school and high school students are still abusing drugs but, at the same time, 25 percent reduction in drug abuse among teenagers over the past eight years.

Lisa Sylvester has our report.


LISA SYLVESTER, CNN CORRESPONDENT (voice over): 17-year-old Elizabeth Maples says she began smoking marijuana when she was only 12. Soon she turned to abusing prescription drugs. Out of control, hooked on drugs, she eventually enrolled in a special Minneapolis school called Sobriety High.

ELIZABETH MAPLES, STUDENT, SOBRIETY HIGH: I just used all the time. And it was nonstop. All of my money was going to drugs and alcohol.

SYLVESTER: A new report finds good news and bad. President Bush quoted a new University of Michigan study of overall drug use among teens in the last eight years. He says it's dropped by 25 percent.

But an alarming number of young people are still using illegal drugs. The study by the National Institute of Drug Abuse finds 10.9 percent of eighth graders reports smoking marijuana sometime in the last year, 23.9 percent of tenth graders, and nearly a third of 12th graders.

Teens today see images of movie stars arrested for using drugs and health experts say that can glamorize drug use. In fact, fewer 8th graders this year compared to last year surveyed see smoking marijuana as harmful.

JOHN WALTERS, DRUG CZAR: Marijuana is, among the illegal drugs, the huge problem. And it's the one that's not going down.

SYLVESTER: The study also found prescription drug abuse among teens remains a serious concern. Nearly 1 out of 10 high school seniors reported using Vicodin without a prescription in the last year. Nearly 1 in 20 abusing Oxycontin.

LLOYD JOHNSTON, NATIONAL INSTITUTE ON DRUG ABUSE: These drugs, unlike the hallucinogens, are not at low points by a historical comparison in their -- near their (INAUDIBLE).

SYLVESTER: For Elizabeth, it's a new start. She said she's looking forward to graduating from high school now that she's clean and sober.

(On camera): The report found while prescription drug abuse among teens have not fallen, fewer teens are drinking alcohol and cigarette smoking is at the lowest level in years.

Lisa Sylvester, CNN, Washington.


DOBBS: Fourteen members of an ecstasy drug ring have been indicted in San Diego. Prosecutors there say the defendants made a number of trips to the Chinese city of Guangzhou to arrange ecstasy shipments to Southern California. Those defendants are also accused of trying to buy firearms while in China. All but one of the defendants now in custody.

One of Colombia's biggest drug traffickers extradited to the United States today. Diego Montoya was on the FBI's most wanted list when he was arrested last year. Colombian authorities say Montoya ran a crime ring during the 1990s that replaced the notorious Cali and Medellin cartels. They also say Montoya controlled 70 percent of the cocaine ultimately sold in the United States and Europe.

Time now for some of your thoughts. Ken in Wisconsin said, "I am confused. Why is it that when Wall Street needs money it only takes Congress a week for them to give them $700 billion, with no questions asked, but when the auto manufacturers need a loan of $25 billion, they cannot get it without giving away the farm?" A very relevant question.

And Katherine in California said, "I'm looking forward to hearing what perks our Congress is going to give up in these tough economic times." Please don't hold your breath.

And Ann in Texas, "Lou, I heard on the radio this morning that Congress has approved a bailout of Santa's warehouse so Christmas is still on this year." Absolutely.

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

Many of you written in on a report, Monday, by Lisa Sylvester, on the Stiffler family of Mansfield, Ohio. Tina Stiffler is one of thousands of Americans who lost their manufacturing jobs and a fund has been set up to help the Stiffler family. And if you'd like to help, donations will be sent to FBO Tina Stiffler, Richland bank, 3 North Main Street, Mansfield, Ohio, 44902. The address will be found on our Web site at, as well. And you can watch Lisa Sylvester's full report on our Web site, as well.

Up next, Obama's chief of staff declared not a target of the Illinois corruption scandal, but he's still refusing to answer questions. Three of the best political analysts join me here next to talk about corruption and politics or whatever the difference may be between them.

Also, homeowners across the country asking for help to save their homes from foreclosure. Why won't the government step in and help? We'll have that special report. And charges tonight that Republican senators sold out American workers for political gain. And charges that the union sold out its members. We'll have the story, next. We're coming right back.


DOBBS: Welcome back. There is considerable anger and frustration on Capitol Hill over the failure of the multibillion dollar auto industry bailout. Some members of Congress charge that Republican senators, particularly from the South, sold out American workers for political gain in the North. Bill Schneider has our report.


BILL SCHNEIDER, CNN SR POLITICAL ANALYST (voice-over): Senate Republicans took a big risk by killing the auto rescue deal.

SEN HARRY REID (D), MAJORITY LEADER: This is going to be a very, very bad Christmas for a lot of people as a result of what takes place, here, tonight.

SCHNEIDER: Republicans defied the White House, but President Bush is a lame duck and not particularly a hero to his party. Senate Republicans insisted they were taking a stand on principle, fiscal responsibility.

SEN TOM COBURN (R), OKLAHOMA: You'll never see the money back and you will create an opportunity for us to spend a whole lot more money.

SCHNEIDER: But opposition to the rescue had as much to do with regional interest as with ideology. Opposition was spear-headed by Republicans from states like Alabama and Tennessee where foreign automakers have made major investments.

SEN RICHARD SHELBY (R), ALABAMA: This is a huge proposed bailout and I fear it's just the down payment on more to come next year.

SCHNEIDER: But a lot of state tax money was used to attract foreign investment, the president of the autoworkers argues.

RON GETTELFINGER, UAW PRESIDENT: Our taxpayers have put over $3 billion that we know of -- and this is money on the top -- to subsidize the foreign brands to come here.

SCHNEIDER: Critics respond that foreign automakers are making cars Americans want to buy.

SEN MITCH MCCONNELL (R), MINORITY LEADER: A very few of us had anything to do with the dilemma that they've created for themselves.

SCHNEIDER: The vote was a showdown with the United Autoworkers Union, which heavily supported democrats this year.

SEN BOB COCKER (R), TENNESSEE: And it came down to one thing, and that was just getting the UAW to agree to a date certain that they would be competitive...


SCHNEIDER: Next year, we are expecting a major political fight over legislation that would make it easier for labor unions to organize. Thursday's vote could help Republicans raise money from business, but probably not from American automakers -- Lou.

DOBBS: Well, American automakers and American autoworkers, those autoworkers, working for foreign companies, as well as American companies, it gets a little bit contorted, doesn't it? SCHNEIDER: It certainly does. And a lot of people wonder, you know, if you were buying a foreign car, is it really a foreign car? Some of them are made overseas. A lot of them are made here in the United States. There are headquarters of foreign companies in Tennessee.

DOBBS: Now real quick, let's do a quick quiz. What is the percentage of domestic manufactured content in domestic cars?

SCHNEIDER: Well, it's only a guess...

DOBBS: That's right, because that's all any of us can do.

SCHNEIDER: Yeah, I would guess about half.

DOBBS: We don't know.

SCHNEIDER: I don't know.

DOBBS: I would join you in that guess. But it is, again, like I say, we don't even know, because the conditions that are going to have to be met here, I would be extraordinarily disappointed in the Obama administration, the Democratic Party, the Republican Party if we don't see serious, serious conditions established for the bailout of Detroit. And amongst those would be constraining, the outsourcing of middle class jobs, the off shoring of production in the supply chain, in particular, for Detroit and for a rollback, considerable concessions, by the United Autoworkers Union. Because this is going to be a significant change in the way Detroit does business and it means sacrifice for everybody.

SCHNEIDER: Yeah, one interesting point, I looked at all the polls over last week to see how much public support there was for this bailout. Actually, we couldn't find a single poll in which most Americans supported it. There was only one poll, "NBC News" and the "Wall Street Journal," that showed a narrow plurality, this week, 46- 42 favoring it, but never a majority.

DOBBS: Yeah, I guess I missed that poll because everything else I saw showed something like -- in the neighborhood of 60 percent opposition.


DOBBS: And, you know this -- this Congress has got to understand, this cannot be, you know, a handout to the unions without a quid pro quo and that means severe concessions. It cannot be a bailout to the -- the Chrysler, Ford and General Motors. There has to be a quid pro quo and hopefully an awakening on the part of Congress and the next administration on the proper course of trade policy and public policy in general when it comes to an industrial strategy. Thank you very much, Bill Schneider. Appreciate it.


DOBBS: Joining me now, three of the best political analysts in the country. Pulitzer Prize winning columnist, "New York Daily News," CNN contributor, Michael Goodwin. Keith Richburg, New York bureau chief, "Washington Post," and syndicated columnist ,CNN contributor, and also professor of journalism at Leeman College in New York, Miguel Perez. Good to have you with us.

Let's start with -- and I think -- if you have not seen and heard this, it's really -- I think in one -- this doesn't happen often, but in one expression, Governor Blagojevich two years ago, at a September fund-raiser, Democratic Party fund-raiser, revealed himself, the context of politics in Illinois, and perhaps even a little bit of his character fate and the thinking of the audience he was speaking to. Listen in.


GOV RON BLAGOJEVICH (D), ILLINOIS: She said, "Son, now that you've won, whatever you do, be honest," and I told her, "of course, mom, I'll be honest, because that's how you raised me." She said, "that's good, son, I know you will. Let me ask you another question." I said, "what's that?" "Promise me, son, you'll never take bribes." I said, "of course, I'll never take bribes. Not only would that be dishonest, it would be illegal and I would never do anything to dishonor the memory of my father."


DOBBS: Well, that's -- unfortunate we don't have all of that sound bite, because he goes on to talk about -- as a matter of fact, do we have the rest? We don't. I apologize. But, that give us some sense of what's happening. I mean, what's your reaction - Miguel.

MIGUEL PEREZ, SYNDICATED COLUMNIST: Well, you know this governor, anything can be expected from him and at this point, it's a question of who he is going to take down with him. Just today he made a statement, Lou, where he said, he's going to be doing a lot of talking. And once he does that, if...

DOBBS: That probably has a few people in Illinois nervous.


PEREZ: Absolutely. And if he decides to start, you know, if he fesses up and he says, listen, I was selling the position, but all these people knew about it, then we have a can of worms, here.

DOBBS: You know, Barack Obama and his transition team were doing about as well as any -- well, certainly, I think, doing as well as -- doing better than nearly everyone, except Reagan, doing certainly as well as Reagan, in my judgment, in managing this transition. He's been knocked completely off course, here. An immense distraction, if not more, for this administration, because -- especially when we have such challenges. But, what are your thoughts?

MICHAEL GOODWIN, NEW YORK DAILY NEWS: Well ;look, I think first of all, he waited 24 hours to say anything -- you know, that first day, he said, I have no contacts, then rushed away. But he, right there, he should have said something forceful about Blagojevich's behavior. And then the second day when he did give -- or the third day, when he did give, I thought, a good, smart commentary, the passion wasn't really there. There's no denunciation of the behavior, he's appalled and disappointed.

And then thirdly this issue of who else had contacts, is sitting out there and starting to smell a little bit. And all of the reports coming from Chicago is that Rahm Emanuel almost certainly had direct conversations with Blagojevich.

DOBBS: Yeah, but he's also declared not to be a target.

GOODWIN: Oh, no, I don't think he's a target, but there seems it's something embarrassing, almost, it gets in the way, now.

DOBBS: I guess one of the things that -- you know, knowing who we, in the national media are, you know darn well if he had come out and said, you know, it's reprehensible and my people didn't have a thing to do with it, and it turns out there are two people who did have a discussion at the periphery, at the margin, my god, the national media would have made a circus out of that. So, what the dickens is this guy to do? Or any guy in this similar situation?

GOODWIN: Well, I think we do want to see him succeed. And you're right, the public does really approve of how he's -- I like a lot of his choices. I think he's done a very good job and I think...

DOBBS: You know, I dislike a lot of his choices, as well as like a lot of his...

GOODWIN: Yeah, well te main ones, I think, are well done, I mean, defense and the economic team, right?

DOBBS: It's his choice, mean...

GOODWIN: But, I think those are really good choices for the country. So I agree with you. He's been doing well. He ought to get out in front the story and not be trailing it.

KEITH RICHBURG, WASHINGTON POST: I agree. He was in a bit of a catch-22, here. Because if he had come right out and said, we had nothing to do with this, nobody on my team has anything to do with it, and then 48 hours later it turns out some junior aide had actually had a conversation with Blagojevich, it would have been bad.

DOBBS: What's the deal with the press covering him? Four questions on this finally, yesterday. There wasn't a single follow-up question. He danced, he spun, he ignored, and moved on and there wasn't a single reporter with him in that conference who chose to follow up on a single question. They let him -- I mean this has got to stop.

RICHBURG: But, I think you're seeing a little bit more, now, aggressive questioning of him in...

DOBBS: Man., I didn't see it. They looked to me like trained circus animals out there. When he snaps his fingers, they heel to.

RICHBURG: It's a lot tougher then they had been before that. The first press conference where it was things he didn't want to talk about and the questions were directed that way. But you know, there are going to be some contacts that come out. You know, Rahm Emanuel had to call the governor and say, I'm resigning my House seat. You know, Obama had to have some contact through intermediaries to say I'm resigning my Senate seat...

DOBBS: The point is, the national media, these guys, it's one thing for them to be in the tank for a year through the campaign, but now we're getting serious. This is about governance, this is the real deal. I mean...

PEREZ: And the media should have been questioning all -- and ever since this exploded in our faces a couple of days ago, we should have been all over the story, challenging everyone in the coming administration.

DOBBS: Let me ask you, are you embarrassed by the tenure, the approach here by the national...

PEREZ: We're in a honeymoon and we don't seem to be able to get off it.

DOBBS: You know, the honeymoon is -- I think we're all hopeful. This country's gone through a lot. I don't think anyone -- I won't say that because it's not true -- certainly inaccurate...

RICHBURG: Somebody...

DOBBS: I don't think many of us would want anything other than this deal with Blagojevich to turn out extremely well for this -- we don't need another mess in the White House, but we also don't need a mess to continue in the White House press corps and this presidential politics. Are you -- how do you react? I mean, I'm really put off by it.


And I want to say to my friends and colleagues in the national media, you know, they can jump me all they want, but I got to tell you, you're not doing it.

GOODWIN: Well, look, I think that this is the one story that sort of challenges the Obama control apparatus. They've been very good, almost no leaks during the whole thing. Now I think the press corps is going to have to get aggressive and have to develop sources who will sort of go off the reservation and tell them facts Obama doesn't want said.

DOBBS: And maybe actually, actually, even if they don't have leaks from the Obama administration, at least know the facts so they can demand accountability.

GOODWIN: Can I make one quick point, Lou?

DOBBS: Well, you know what? You can't.


DOBBS: Not right now. But, you know what? When we come back from this break, you certainly may.

GOODWIN: All right.

DOBBS: All right, and we'll wait for that. Michael Goodwin going to make a very important point. We'll have more with our panel in just a moment. Still ahead, the federal government not helping homeowners on our struggling housing market and guess what, Ben Bernanke, the chairman of the Federal Reserve, is still telling you and me, all of us in this country, to stick it. We'll be right back.


DOBBS: Well, we're back and Michael Goodwin is about to make a very important point. And we were talking about Chicago and the scandal.

GOODWIN: Yes. Well, the point about why Obama needs to move quickly to clear this up is that in the report, for example, Fitzgerald, the U.S. attorney, says these are not all the calls. So, there's speculation, even possibility that say Emanuel was picked up on a wiretap talking to Blagojevich. Now, that's pure speculation, but that's the sort of thing that will happen the longer it goes on. That's why Obama does have to get the facts out quickly and not sit there and be the target of speculation.

RICHBURG: Just to add, you know, talk about the press getting more aggressive, I think you're going to start seeing it this weekend, perhaps Monday. Obama promised that they're going to give a list of all the contacts it is made. Well, it' is Friday night, now, and we haven't seen that list. Is it going to come out over the weekend? Is it going to come out Monday morning?

So, until that comes out or the long this period goes by, I think you're going to start seeing people asking: where's the list, who had contact?

to start seeing it this weekend. They're g oing give a list of all the contacts it is made. It is Friday night now and we haven't seen that list. Is it going to come out over the weekend, the morning. Until that goes out or the long they are period goes by, you'll see people asking where's the list? Who had contact?

DOBBS: Do you remember back when Ronald Reagan took office, won the election in 1980, came in and first thing that his press secretary did was announce to all of the folks in the White House press corps, enough with this. You're not going to be misbehaved. You're going treat me with respect, the president and the White House with respect. And I think that's an appropriate -- and I'm not suggesting anything but that, but I'm also saying that there should be great respect for the press, here.

And we're losing our respect in the way in which we're handling ourselves and comporting ourselves. This will be the first time, in my opinion, that the national media has literally just sold out the concept of objectivity on a presidential election. There was partisanship rampant through the national news organizations, national newspapers, national news magazines, cable news networks, and the entertainment network news divisions, as well.

PEREZ: What's happening is we all want Obama to do well.

DOBBS: Oh, absolutely.

PEREZ: And those media want him to do well. And so we don't want to deal...

DOBBS: I signed up for that.

PEREZ: Yeah, we don't want to deal with something that may take him off track. And it's unfortunate because it is our responsibility, as journalists. If it takes him off track, unfortunately, we have to report it. But, that's what's happening. It's like we don't want to deal, we don't want to spoil this guy because we're all riding on the same wagon, here, in the whole country in hopes that he does well.

DOBBS: It's -- in an interview with "60 Minutes," I want to turn to something else, Congressman Barney Frank, the chairman of Financial Services Committee, talking with Leslie Stahl said the bailout more about propping up individuals than the companies. Listen in to this.

Oh, I'm sorry. We don't have the sound. So, listen to me read this to you. I apologize. "No, we're not talking of companies. That's your mistake," he said to Leslie Stahl. He said, "We're propping up individuals. The world doesn't consist of companies. The world are people, the people -- the country is people."

So, I mean, when we -- we are not propping up people very effectively. We reported here last night that the Help Now program, the mortgage program, designed to help 400,000 people, you know how many people they helped? One hundred. One Hundred. The government, the federal government remains incompetent, it remains poorly led and we are desperate for leadership and effectiveness and competency.

Do you think that the president-elect will bring that? Is he capable of bringing it in time to deal with this crisis?

PEREZ: Well, he's not president until January 20, as we heard him say too many times and it's basically it's an overstatement because there's no president now. I heard somebody say that the other day. I mean, we have no -- there is a vacuum there. So, yeah...

DOBBS: Until you review the executive orders that he's signing in the dead of night right now, on a host of issues that are absolutely contemptible, it is disgraceful. So, yeah, we've got one. It is just not one we want.

PEREZ: Last minute regulation changes. It happens with every administration.

DOBBS: I don't care. I'm so sick of this cowardly, incompetent, dysfunctional, illogically bound, duplicitous conduct. I can't stand it. But other than that...


GOODWIN: But, Lou, to your question about will Obama be able to do this and effectively implement all these programs? Don't forget, that was the question about him in the campaign. He's never really run anything. He's never been an administrator. He's run a Senate office for a few years basically, so it is going to be a challenge.

DOBBS: You know, when you say that. The echoes come back to me of the CEO president from the election of 2000, George W. Bush went to Harvard business school. You haven't seen an ad from the Harvard business school saying, you know he this is our product -- we got him.


RICHBURG: Yeah, it was said that senators don't make great presidents because they haven't run anything larger than a Senate office, but the American people took a gamble on this guy. I guess we'll wait and see.

DOBBS: Well, quite a gamble. Let's hope that something comes up here with -- let's hope we make our point, as they say, on the crops table, I believe. Thank you, gentlemen. Appreciate it.

Coming up at the top of the hour, Campbell Brown NO BIAS, NO BULL. Campbell, what are you working on?

CAMPBELL BROWN, CNN NEWS CORRESPONDENT: Well Lou, we've got a lot of breaking news happening now on the Blagojevich story. Drew Griffin of CNN goes one-on-one with the governor late today. You're going to hear what the governor had to say. Congressman Jesse Jackson, Jr. sat down for an in depth interview also a little while ago. He talks about exactly what happened in his meeting with the governor on Monday. Plus, of course, we have got the latest on the auto bailout. And 50 billion new reasons to be mad at Wall Street, the inside story of what's being called an epic fraud. We'll talk about that, as well - Lou.

DOBBS: An epic fraud. There are so many to choose from these days.

BROWN: We're not hurting, are we?

DOBBS: Thanks very much, Campbell. Look forward to it.

And a reminder to join me on the radio Monday through Fridays for the LOU DOBBS SHOW. Among our guests, Monday, Congressman Thaddeus McCotter of Michigan. He talks about the politics of this bailout. He's not a man very happy with his party. Go to to get local listings in your area. And we'll be right back with our poll results and some of your thoughts about what has been a very, very busy week.


DOBBS: Well, I know that if you're like me, you've been anxiously awaiting our poll results tonight -- 85 percent of you say you believe home owners should have received that federal bailout first, 10 percent say the carmakers, only eight percent said financial firms. That's an inverse, of course, of relationship to the reality that we find ourselves in.

Let's take a quick look at some of your thoughts. R.J. in North Carolina, "I'm so sick and tired of this sick and tired Congress. They are just throwing away taxpayers' money. Keep up the good work, Lou."

Thank you and let's hope.

Robert in California, "Our representatives should be embarrassed to call themselves representatives of the people and should (for the most part) be fired, the level of incompetence is unbelievable.

Right you are.

To send us your thoughts, please go to We thank you for being with us, tonight. Good night from New York, have a great weekend. Campbell Brown NO BIAS, NO BULL starts right now.