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Lou Dobbs Tonight
Guerrilla War in Iraq Continues; Deadly Crash in Santa Monica Farmers Market
Aired July 16, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, July 16. Sitting in for Lou Dobbs, Jan Hopkins.
JAN HOPKINS, GUEST HOST: Good evening, everyone.
We will bring you continuing coverage of a developing story in Santa Monica, California, where a driver slammed into a farmers market, injuring dozens, but first, guerrilla war in Iraq.
The new head of the Central Command, General John Abizaid, said today that U.S. forces are facing a classic guerrilla campaign. Another U.S. soldier was killed in combat today, the 148th to die from hostile fire since the conflict began in March. That is the same number of battle deaths in the first -- as in the first war against Iraq in 1991.
Senior Pentagon correspondent Jamie McIntyre joins me live -- Jamie.
JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Jan, another convoy attack and another grim scene in Baghdad, as U.S. soldiers cover the body of a comrade along the side of the road after that attack, the latest victim in what the Pentagon is no longer denying is a deadly guerrilla war.
It's a war, as you said, that's claimed at least 148 American live. And new threats abound. Plans to reopen the Baghdad International Airport have been delayed, after a C-130 crew reported a shoulder-fired missile fired at its plane as it was landing, again, the Pentagon no longer mincing words about what kind of a conflict it's involved in.
(BEGIN VIDEO CLIP)
GEN. JOHN ABIZAID, COMMANDER, U.S. CENTRAL COMMAND: I would describe as a classical guerrilla-type campaign against us. It's low- intensity conflict in our doctrinal terms, but it's war, however you describe it.
(END VIDEO CLIP)
MCINTYRE: So the U.S. is digging in for the long haul, working out a rotation plan to maintain a force of about 160,000 U.S. and coalition troops. And it's considering one-year tours of duty for American forces. As for the war-weary 3rd Infantry Division, it now has a new promise. It will be on the way home by September, a year after it was deployed, even though the top commander today expressed his displeasure with some of the griping, especially a TV report in which a soldier said, if Donald Rumsfeld was there, he would ask for his resignation.
(BEGIN VIDEO CLIP)
ABIZAID: None of us that wear this uniform are free to say anything disparaging about the secretary of defense or the president of the United States. We're not free to do that. It's our professional code.
(END VIDEO CLIP)
MCINTYRE: Now, the complaining soldiers could be reprimanded by their commanders, but it's unlikely anything much will happen to them. The Pentagon recognizes, they're doing dirty and dangerous work. The frustration is somewhat understandable.
And the Pentagon also today admitted it has to do a better job of telling troops when they'll be home. General Abizaid said he'll be meeting with commanders in Iraq, working out a plan, so that each and every sailor, soldier, Marine, airman has a good idea of when their end date is -- Jan.
HOPKINS: Jamie, one-year tour of duty, that's the longest since Vietnam, isn't it?
MCINTYRE: Well, actually, in Bosnia, the 1st Armored Division did deploy for a year in Bosnia. But generally speaking, the tours of duty have been more like -- for ground troops, three, six, even nine months has been pretty long. So it's a long tour of duty. But the point is, the Pentagon is going to be in Iraq for some time and that, at least if you know it's a year, you know exactly how long you're going to be there. You can figure out -- you can deal mentally with how long you're going to be there, just like many of the soldiers did in Vietnam.
HOPKINS: Thanks very much, Jamie McIntyre, at the Pentagon.
CIA Director George Tenet went to Capitol Hill today for a showdown with senators on the intelligence used to justify the war against Saddam Hussein. Democrats are trying to use the issue to question the credibility of President Bush. Republicans want to know why Tenet did not stop the president from using faulty intelligence in his State of the Union speech.
Jonathan Karl joins us live from Capitol Hill -- Jonathan.
JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Jan, the CIA director arrived here on Capitol Hill 3 1/2 hours ago. He is still in these closed-door hearings, taking some tough questions, we are told, from both Democrats and Republicans about that faulty intelligence that got into the president's speech. One Republican, though, just a few minutes ago came out, Mike DeWine of Ohio, to say that he has complete confidence in George Tenet, that he is answering questions in a very satisfactory way and has been a leading figure in the fight against terrorism for many years, a very strong and unequivocal statement of support for George Tenet from one of the top Republicans on that committee.
But even before this hearing got under way, John Edwards, who is both on the committee and a Democrat running for president, came out and said this is about much more than George Tenet. He pointed the finger not at the CIA, but down at 1600 Pennsylvania Avenue and the president.
(BEGIN VIDEO CLIP)
SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE: I have some very serious questions about what I think are one of the most important issues there can be, which is the credibility of the president of the United States. When the president speaks, he speaks on behalf of the American people. George Tenet has accepted his responsibility, and that's good. But, at the end of the day, the president, when he speaks, has to take responsibility for what he says.
(END VIDEO CLIP)
KARL: And that has really been the unifying theme for Democrats here, both those running for president and those simply serving in Congress, saying that this is really about the president, about his failure to present an honest interpretation of what was going on before the war with Iraq, an honest case, suggesting that he distorted the facts, distorted the intelligence.
There's been some strong pushback from Republicans on this, however. One Republican who is also on the Intelligence Committee came out and said there are some very tough questions, important questions, that need to be asked of the CIA director and perhaps others in the administration. But he came right out and said the Democrats here are simply playing politics with a very important issue.
(BEGIN VIDEO CLIP)
SEN. SAXBY CHAMBLISS (R), GEORGIA: The presidential candidates, the Democratic Senatorial Committee, continues to politicize this issue. And the issue simply is not about the credibility of George Bush. It's about the credibility of the intelligence community. And that's what we're about establishing.
(END VIDEO CLIP)
KARL: The hearing is still going on. It's expected to go on for at least another hour. And the -- several members of the committee have told me that they expect George Tenet will be back again before this committee. You can bet he'll also be back before the House Intelligence Committee and that there will be open hearings, as well as the closed hearings that we're now seeing -- Jan.
HOPKINS: Jonathan Karl on Capitol Hill, thank you.
And while the CIA director was on Capitol Hill, the White House launched a counterattack against Democrats who have criticized the president. Administration officials say that the last thing Democrats should do is politicize the issue of Saddam Hussein's weapons of mass destruction.
White House correspondent Suzanne Malveaux has the story -- Suzanne.
SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Jan, the White House is certainly fighting back, taking on those Democrats who've been pulling into question President Bush's credibility, those who have been making charges that he exaggerated intelligence about Iraq's weapons programs to make his case for the war, White House spokesman Scott McClellan saying that he was using a different strategy, a different tactic, rather, using the Democrats' own words against them.
(BEGIN VIDEO CLIP)
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: The last thing anyone should do is politicize this issue by rewriting history. There are some where the present rhetoric does not match their past record. So look back at past comments. Look back at past voting records.
Congress overwhelmingly, in a bipartisan way, passed a resolution supporting the steps that we are taking and approving the use of force, if it was necessary, after 12 years of Saddam Hussein's deception and denial, to confront that threat.
(END VIDEO CLIP)
MALVEAUX: Now, McClellan singles out two of the most vocal critics of the president, one of them, Senator Carl Levin. He said in a letter to President Clinton back in 1998 -- he quotes him here as saying that he urged Clinton to take necessary actions to respond effectively to the threat posed by Iraq's refusal to end its weapons of mass destruction.
He also pointed to statements made by Senator John Kerry, who voted for President Bush's war resolution, again, going back to 1998, saying that he said Saddam Hussein had already used these weapons and had made it clear that he has the intent to continue to try. He called it a threat to the stability of the Middle East.
Now, Democrats are countering that this is five years ago, that it is out of context. And they say it still does not explain why the president created this sense of urgency, this imminent threat against the United States, that the administration still has many questions to answer -- Jan.
HOPKINS: Suzanne Malveaux at the White House, thanks.
The president's closest ally, British Prime Minister Tony Blair, is under even greater pressure over intelligence about Iraq's weapons of mass destruction. Blair arrives in Washington for a summit with President Bush tomorrow. Today, Blair faced tough questions in the British Parliament from lawmakers critical of his policies.
Another visitor to Washington this month will be the Palestinian prime minister, Mahmoud Abbas. Today, he said that he will hold talks with President Bush on July 25, a date the White House has not yet confirmed. It would be the first meeting between the president and the Palestinian prime minister since their talks in Aqaba, Jordan, on June 4. Israeli Prime Minister Ariel Sharon will also be in Washington at the end of this month. So far, there is no indication if the two leaders will meet.
The United States is also stepping up efforts to try to end the crisis over North Korea's nuclear weapons program. Secretary of State Colin Powell today said he expects some developments soon. His comments follow reports that North Korea has completed reprocessing spent fuel into materials for nuclear weapons.
(BEGIN VIDEO CLIP)
COLIN POWELL, SECRETARY OF STATE: We have taken note of the recent visit of the Chinese vice foreign minister to Pyongyang, which was reported on in the press this morning. And I had a long conversation with the Chinese foreign minister last evening, where he gave me an update on those conversations.
So the diplomatic track is alive and well and I expect to see some developments along that track in the very near future.
(END VIDEO CLIP)
HOPKINS: And tonight, the State Department said that a senior Chinese official will visit Washington this week for talks on North Korea.
We take you now to the scene of an incredible tragedy in Santa Monica, California. At least eight people are dead tonight after a speeding car plowed through a crowded farmers market. The car traveled several blocks through the crowd, knocking people to the ground. As many as 40 more have been injured, at least 14 of them critically. Witnesses say the driver of the car appeared to be an elderly man who may have been suffering some kind of medical problem at the time. We'll have an update on this story in just a few minutes.
Still ahead tonight: The "Food Fight" stretches overseas in our series of special reports on genetically modified food -- tonight, Europe and the United States on the brink of a trade war.
And later: funding terrorism. Seemingly harmless everyday purchases financing international terror?
That story and much more all ahead.
(COMMERCIAL BREAK) HOPKINS: Now, the driver of this car apparently was having some kind of a medical problem? Is that what you've ascertained?
JAMES BUTTS, SANTA MONICA POLICE CHIEF: We have various statements. We have hundreds -- over 100 witnesses. We're attempting now to ascertain exactly what happened, whether this was an accident or whether it was a criminal act, either through negligence or deliberation.
HOPKINS: But, at this point, you can't say? The driver is in custody. Is that right?
BUTTS: The driver is being detained by investigators at the station. He's been treated at a local hospital. And we do know that there's no alcohol or psych meds in his bloodstream.
HOPKINS: And he was an elderly person? Is that correct?
BUTTS: Male in his 80s.
HOPKINS: James Butts, the police chief in Santa Monica, California, thanks very much for joining us.
BUTTS: You're welcome.
HOPKINS: Let's turn now to Wall Street.
The head of the world's largest financial services company is stepping down. Citigroup Chairman Sanford Weill will leave his position as CEO by the end of the year. He plans to remain chairman for the next three years. Weill will be replaced by longtime lieutenant Charles Prince. In a memo to Citigroup employees, Weill said the time is right for transition. He said -- quote -- "We've dealt with painful issues and have demonstrated our commitment to being the best practice leader in every business. Our team is ready."
Three months ago, Citigroup agreed to pay $400 million, more than any other bank, in the global settlement over faulty stock research.
Citigroup's stock fell more than $1 after that announcement. Overall, it was a losing day on Wall Street. The Dow fell 34 points. The Nasdaq lost 5, and the S&P 500 down six.
Christine Romans is here with the market -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Well, Jan, the second- quarter numbers weren't too bad, but it's the third quarter, the outlook, that really spooked investors today, got all the attention on Wall Street.
Intel shares soared 5 percent, after its net income doubled in the second quarter. But cautious third-quarter views from Lucent and Motorola sent those shares and their competitors tumbling. And after several days of stellar bank earnings, J.P. Morgan reported a 78 percent gain in profit for its second quarter, driven by mortgage and bond trading businesses. But it was more cautious for the second half, and the stock tumbled 3 percent. Keep in mind, it's still up 55 percent this year.
Now, volume picked up to the best in more than two weeks at the Big Board; 68 percent of that came at lower prices and more than two stocks fell for each that rose. And dividend-paying stocks also grabbed the headlines today: Clorox and Qualcomm the latest to raise their dividends. About a quarter of the S&P companies have raised them this year. And some analysts expect Microsoft to raise its dividend any day now. It's one of seven Dow stocks to report earnings tomorrow, along with General Motors, Coca-Cola, Caterpillar, Altria, Honeywell, and United Technologies.
And tonight, after the bell, IBM reported earnings of 98 cents a share. Now, some of the analysts are noting, that was helped by cost- cutting and acquisitions, sales up about 10 percent. So watch IBM tomorrow, Jan.
HOPKINS: Thanks, Christine Romans.
And still to come: You may be unwittingly funding terror with some unlikely purchases. Deborah Feyerick will have that story.
And then: The combat phase of the war in Iraq is over, but Americans are still dying. Two leading experts face off on the war, the aftermath, and the role of U.S. troops on the ground.
And wildfires on the move in Arizona, sending thousands fleeing from the flames -- we'll have a live report coming up.
(COMMERCIAL BREAK)
HOPKINS: An unusual part of the war against terror: Fake goods support terrorism, that according to Ronald Noble, the secretary- general of Interpol.
Noble testified today at a congressional hearing on intellectual property crimes. He said the link between organized crime groups and counterfeit goods is well established and the sale of such goods is now becoming the preferred method of funding for some organizations.
Deborah Feyerick has our report.
(BEGIN VIDEOTAPE)
DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): You see them on lots of New York City street corners: counterfeit T-shirts, bootleg DVDs, fake designer handbags.
UNIDENTIFIED FEMALE: Eighteen dollars?
UNIDENTIFIED FEMALE: Yes, $18.
FEYERICK: Louis Vuitton for just 18 bucks? Don't think so. The legal lingo for these kinds of knockoffs is intellectual property theft. The International Trade Commission estimates, sales of fake goods worldwide total $350 billion a year, but now claims of a new, more dangerous cost. TIMOTHY TRAINER, INTERNATIONAL ANTICOUNTERFEITING COALITION: There is a very, very strong indication that there would be links to terrorist organizations.
FEYERICK: An industry anti-counterfeiting group claims terrorists are funding operations by selling counterfeit goods. At a hearing on Capitol Hill, the head of Interpol testified, containers of phony products have been confiscated from al Qaeda supporters.
RONALD NOBLE, INTERPOL SECRETARY-GENERAL: If you find one al Qaeda operative with it, it's like finding one roach in your house or one rat in your house. It should be enough to draw your attention to it.
FEYERICK: A report compiled by the trade group cites what they call evidence: a raid on a Manhattan souvenir shop that allegedly turned up counterfeit watches and manuals for Boeing 767s; and the discovery in Denmark of shipping containers filled with counterfeit shampoo and perfume allegedly sent by a member of al Qaeda.
But the claims may be just claims. To date, the Justice Department has brought no charges linking any counterfeit scheme with terrorism. Treasury officials do not discount the claims, but say they've brought no official action to indicate such a link. However, homeland security officials do acknowledge, in the post-9/11 world, they're looking at old-style crimes like counterfeiting and money laundering in a new light.
(END VIDEOTAPE)
FEYERICK: There's still very little hard evidence establishing a direct link between counterfeiting and terrorism.
And there is another possibility. With the government focused on fighting al Qaeda and its allies, some Washington insiders say, to get any attention these days, you've got to show your cause is somehow tied to terrorism -- Jan.
HOPKINS: That's interesting.
Deborah Feyerick, thanks.
The story is the topic of tonight's poll: How important are counterfeit goods in the war on terror, very, somewhat, not at all, or, I buy knockoffs? Cast your vote at CNN.com/Lou. We'll bring you preliminary results later in the show.
And now the final results of yesterday's poll. We asked, what worries you the most? Twenty-six percent of you said North Korea; 56 percent said the U.S. deficit; 16 percent said media concentration. And 2 percent said Internet predators.
And now for a look at some of your thoughts. Many of you wrote in responding to last night's poll on what concerns you most.
Jeri from Florida wrote in to say: "Although the deficit worries me the most, I place media concentration on at least an equal footing, because, without an independent media, we don't get the truth about the deficit or anything else."
And Mary from Florida wrote in to say: "Media concentration worries me more than any of the other contenders. If we continue on the path of media consolidation, we'll be fed only what media conglomerates want us to know. And then we all might be worrying about the wrong things."
In our series "Food Fight" about genetically modified foods, Scott of Pennsylvania writes: "As an American, I have a right to know what is in my food. It is downright un-American to force products on the public without giving them the choice to avoid such products."
And Samir of Texas wrote in to say: "My son is allergic to wheat, shellfish, cheese, and milk. However, when he's overseas, he eats all of the above. The doctors can't explain it. I wonder if it has to do with genetically modified food and how food is processed in the U.S."
And Thomas Carty wrote: "This isn't anything new. Food has been genetically manipulated since Gregor Mendel played with his peas."
And we love hearing from you. You can send us an e-mail at LouDobbs@CNN.com.
More now on the breaking news from California. Eight people were killed when a driver crashed into a farmers market in Santa Monica.
Dan Lothian joins us on the phone now.
Dan, what's the latest?
DAN LOTHIAN, CNN CORRESPONDENT: Well, Jan, it continues to be a chaotic scene here in this farmers market. This is also a very popular tourist attraction.
It is, according to the police chief, the worst disaster that he has ever seen in this city -- as you mentioned, eight people confirmed dead, 15 people in critical condition taken to area hospitals, an additional 20 to 40 people also hospitalized with moderate to minor injuries, we are told. One of the hospitals locally here, St. John's Hospital, doctors who normally would not be working, other emergency personnel, have arrived, so that they could help out in this tragedy that has happened here.
Officials are telling us that, at this point, it's too early to tell whether this was an accident or whether the driver plowed into the people in this farmers market intentionally. All that they tell us is that the driver is a man who appears to be in his 80s. He did sustain some injuries. And police hope to be interviewing him to find out exactly what is behind this accident.
But, certainly, it is a chaotic scene here, as the rain now has been coming down. About 100 or so emergency personnel are involved in carrying the folks to the hospital, the injured to the hospital, and also securing the scene. We're told that there have been about 100 witnesses who police plan to interview in order to get to the bottom of this case, to find out why this man drove into these people on this road.
This farmers market always occurs on Wednesdays, usually between 9:00 in the morning until 2:00 in the afternoon. And according to police authorities, it was just about wrapping up, about 1:47 Pacific time, when this accident, what appears to be an accident, at least at this point, occurred.
So, once again, the latest numbers that we have: eight people killed -- one of those is a 2-year-old girl -- 15 people in critical condition, 20 to 40 with moderate to minor injuries.
That's the very latest from the scene -- now back to you.
HOPKINS: Thanks, Dan Lothian, on the phone from Santa Monica.
And still to come: The fight over genetically modified food extends overseas -- in our series of special reports, a brewing trade war between Europe and the United States.
We'll have the story.
(COMMERCIAL BREAK)
HOPKINS: In news "Across America": A Maryland nurse has been suspended while officials investigate whether she helped at least one critically ill patient die. Hospital officials say that they were tipped off by fellow nurses in the intensive care unit.
The trial of sniper suspect John Allen Muhammad is moving to Virginia Beach. A judge thought it would help him receive a fair trial. Muhammad is charged with murder in last year's sniper spree.
Jimmy Hoffa has been missing for 28 years. Today, investigators were digging outside a home not far from Detroit, where Hoffa disappeared. They were looking for evidence into his disappearance. Authorities were acting on a tip from an informant.
In Arizona tonight, the wildfire at Fort Apache Indian reservation has doubled in size overnight. More than 12,000 acres have now burned. And there is concern tonight that the fire is far from over.
Steve Bodinet of CNN affiliate KTVK joins us from White River, Arizona.
Steve, what are the conditions tonight?
STEVE BODINET, KTVK REPORTER: Jan, it has not been a good night up here to fight the fire. They said they did OK -- firefighters, that is -- but not as well as they hoped for.
You mentioned 12,000 acres. They just told us, this fire is now at 16,000 acres up here. A lot of dry air helped that fire to grow. Right now, it's just smoky here. But a while ago, a giant plume going 25,000 feet into the atmosphere. Plume fires are tough fires. That means it's burning up a lot of acreage up there.
Again, they said they worked throughout the night, firefighters did -- 600 of them still on this fire, trying to get some lines, especially to the northeast. They want to block that from the towns of Pinetop-Lakeside, Honda up there, and a little town called McNary. That would be a real problem going up into that area. They did pull off 15 crews on this fire today and sent 11 of those to other fires in the area. We've got a lot of dry area here. There are still 5,000 people evacuated from their homes. Jane, they're hoping that those folks will be able to go home two, three days at the minimum. They are making some progress here, but they do have a long way to go on this fire.
HOPKINS: Turning now to our series of special reports on the rise of genetically modified food. Tonight we examine the trade debate. While Americans have for the most part quietly accepted genetically modified foods, many Europeans are passionately against them. It's an issue that's causing broader strains in the trade relation between Europe and the United States.
Peter Viles has our report.
(BEGIN VIDEOTAPE)
PETER VILES, CNNfn CORRESPONDENT (voice-over): Here's something you won't see back home: protests over food. European consumers campaigning against genetically modified foods from America and starting a long-distance food fight. Europe has put a moratorium on genetically altered crops. The Bush administration believes that's an illegal trade tactic and has filed suit with the World Trade Organization.
Now, Europe says it will lift the ban but replace it with a strict labeling system that would identify genetically modified foods.
DAVID BYRNE, EU COMMISSIONER, HEALTH AND CONSUMER PROTECTION: The purpose of this legislation is to inform consumers about the exact nature and characteristics of the food to enable them to make informed choices. The purpose of labeling is not to inform the consumer about the safety or lack of safety of a food. If a food is unsafe, it cannot be placed on the market at all.
VILES: But American farmers say labeling is unfair and unworkable and the issue has degenerated into name calling.
SEN. KIT BOND (R), MISSOURI: Unfortunately, the ludites in Europe who are against this new science and technology have spread their eurosclerosis to countries like Africa. The total hypocrisy of the Europeans is shown by the fact that they excluded from labeling the fact that their cheese is made from genetically engineered enzymes.
VILES: The money at stake is not huge, at least not yet. The ban affects mainly corn, costs American corn farmers roughly $300 million a year. That's just 5 percent of America's corn exports and less than 1 percent of American food and agriculture exports. European consumers appear to be so adamant in their views, however, that former Agriculture Secretary Dan Glickman believes Americans will probably have to compromise and accept some system of labeling.
DAN GLICKMAN, FORMER SECRETARY OF AGRICULTURE: What you've got here is a situation in Europe where the European people culturally are averse to genetically engineered foods. And it's almost as if the facts don't matter. And their governments over there reflect that popular opposition to genetically modified foods. And that's what makes it so difficult for us here in our country to deal with the issue.
VILES: The farm lobby is holding fast and bracing for an escalating trade war.
RON GASKILL, AMERICAN FARM BUREAU: I don't expect the E.U. To really comply with the WTO decision. I'm not trying to be pessimistic, but I just -- hopefully I'm just being realistic. I think ultimately the U.S. is going to be in a position to request retaliatory tariffs.
(END VIDEOTAPE)
VILES: This is an unusual trade dispute because it's being driven in part by public opinion rather than economic policy, and public opinion is something that politicians and diplomats cannot negotiate -- Jan.
HOPKINS: But Pete, how much of this is political? how much of it is the Europeans trying to protect their own market for their own goods?
VILES: It's almost entirely political in the sense that they are responding to pressure. But most of the pressure, as we understand it, is coming from consumers. Consumers in Europe are distrustful of the government on food safety issues in a way that we don't really relate to in this country.
HOPKINS: Peter Viles, thank you.
Tomorrow in our series of special reports, "Food Fight," ending world hunger. We'll explore the debate over whether to use genetically modified food to fight the -- or rather to feed the hungry and get rid of hunger. Kitty Pilgrim will have that report.
That brings us to tonight's thought on the value of trade in a global economy. "It used to be said that when the U.S. sneezed, the world caught a cold. The opposite is equally true today. Our prosperity is linked to the maintenance of a strong world economy, an open international trading system and stable global financial market." That's from former Treasury Secretary Lawrence Summers.
Still to come, face-off: the U.S. role in Iraq. Is the Bush administration policy on track or off the rails? Two leading experts will join us with opposing views. And later, trade outrage. Rules intended to keep the Chinese weapons trade in check are instead putting the pinch on American companies. Louise Schiavone will have that report.
(COMMERCIAL BREAK)
HOPKINS: Democratic presidential candidate Senator John Kerry today accused President Bush of having a credibility gap on national security. Kerry said that the president has failed to follow through on his promises to make the country safer.
However, Kerry and other Democrats are facing their own credibility issues following the war on Saddam Hussein. Bill Schneider has the report.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): It wasn't supposed to be like this. Last October, when many Democrats in Congress supported the war resolution, they figured they'd take national security off the political agenda and change the subject to the economy.
That didn't happen. President Bush surprised Democrats by making national security the focus of the midterm campaign and winning big.
Four Democrats running for president voted for the war resolution. They figured the U.S. would bring down Saddam Hussein. They'd have political cover and antiwar candidates like Howard Dean would fade away. That didn't happen.
What did happen is that Iraq has become more controversial. Polls show more and more Americans turning against the war and strong opposition from Democrats.
Now, President Bush is facing a credibility problem over the war and so are pro-war Democrats running for president.
HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: I think those who voted for the war in Iraq are on very thin ice. They did not exercise their senatorial requirement to advise and consent knowing all the facts.
SCHNEIDER: Dean hasn't served in Congress and didn't have to vote on the war, which he has always opposed. But those Democrats in Congress who voted for the war now find themselves on the defensive.
SEN. JOE LIEBERMAN (D-CT), PRESIDENTIAL CANDIDATE: I respect your position. Let's disagree respectfully. Let me finish my remarks.
SCHNEIDER: They have to face hostile Democratic audiences.
UNIDENTIFIED MALE: (UNINTELLIGIBLE) does not bring people back from the dead.
REP. DICK GEPHARDT (D-MO), PRESIDENTIAL CANDIDATE: All I'm saying is that I did the best I knew how to do in my judgment, in my heart, in my mind for what it would take to keep our people safe.
SCHNEIDER: They have to backtrack.
SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: They assured us they had a plan. It is now evident they didn't have a plan.
SCHNEIDER: While Howard Dean has become Mr. I told you so.
DEAN: I believe that the evidence was not there. I refuse to change my view and as it turned out I was right.
(END VIDEOTAPE)
SCHNEIDER: The script said the U.S. would win the war, then the war issue would fade away and anti-war Democrats like Dean would disappear. But the war is still controversial, Dean is thriving, and a lot of Democrats are frantically trying to rewrite the campaign script -- Jan.
HOPKINS: Very interesting. Bill Schneider, thanks.
SCHNEIDER: Sure.
HOPKINS: That brings us to tonight's face-off topic, which is, is the Bush administration on track with its Iraq policy? Katrina Vanden Heuvel says no and adds that America's legitimacy is being questioned. She's editor of the "Nation." Cliff May says yes, the administration is on track. He is president of the Foundation for the Defense of Democracies, a policy institute focusing on terrorism.
Katrina, let's start with you. Why do you think that the administration is not on track with its Iraq policy?
KATRINA VANDEN HEUVEL, EDITOR-IN-CHIEF, "THE NATION": The administration gravely underestimated the enormous human, political, and economic costs of this occupation. Unless it changes course for the sake of this country, the world, and the Iraqi people and brings in the United Nations, the international community, more and more American men and women will die. Every day we see a death. The costs to this country, the staggering costs which they misled us about, will deplete the possibility of healing our domestic agenda at home. And finally, I think an independent investigation is desperately needed to find out who knew what, when, and why we didn't know the truth about why we were taken into war.
HOPKINS: With all of these questions, Cliff, why do you think that the administration policy is on track with Iraq?
CLIFF MAY, PRESIDENT, FDN. FOR THE DEFENSE OF DEMOCRACIES: Well, understand, what we're doing is very difficult. What we're doing is something that certainly people on the left like Katrina once supported. It's called nation building. We have freed the Iraqi people. Now the challenge is to keep them free. And we do that by helping them develop Democratic institutions, which they've begun to do. We now have a multiethnic, multireligious council that is beginning to govern Iraq. We're going to have war crimes trials. They're all things that are useful.
Now, there's no question there are Ba'athists and there are terrorists from other place that's are in Iraq because they don't want Iraq to stay free. The terrorists would like to take Iraq back from us. And we can't give it back to them. So this is going to be a challenge. We haven't had a good record in nation building in places like Haiti or even Kosovo or Bosnia. We did it with Germany and Japan. If we turned it over to the U.N. said, okay, but we're going to let the Ba'athists back in. We're going to see that Saddam was toppled, we're going to bring him back in, that wouldn't be okay. If the U.N. comes back in who's going to pay for it, it's still us. We have the responsibility now. We've saved Iraq, and like the old Chinese saying, we're now responsible to get this done, or help the Iraqis get it done.
HOPKINS: But Cliff, I bet in this White House, as President Bush's ratings fall with each passing day, mounting casualties, there is support, as there is among the broad American majority of people, for an internationalization of this occupation. And the United States has had a very poor track record in nation building. The U.N., if given the capacity, and NATO would allow American soldiers to come home instead of having to listen to bring 'em on, we could say bring them home.
MAY: You know what Katrina, I don't necessarily disagree with you. I think we should invite, and we are inviting others in. The problem is that we can't turn over responsibility to Kofi Annan for this. We can't say, okay, you do it, it's no longer our concern.
If they'll work with us, if they'll work with Paul Bremer, the civilian administrator, I think we should welcome them and I think we will welcome them. We haven't gotten a good reaction yet. But we can't turn this problem over to the U.N. The U.N. does not have a great track record...
VANDEN HEUVEL: But Cliff, if given the capacity, there would be more security, legitimacy, and expertise, and it would be viewed in the Arab world and in the international community as an international nation-building problem. It is now a Pentagon occupation. You know that that will lead to more deaths of American men and women.
MAY: Again, we should invite them in to join us, but we have to maintain the responsibility. You don't want the human rights commission of the United Nations headed by Libya, to be in charge of human rights in Iraq, surely, Katrina, you wouldn't be in favor of that.
VANDEN HEUVEL: That's an anomalous situation Cliff, and not directly related ...
HOPKINS: Let me jump in here and start on another topic, which is, what about all of the information about the faulty intelligence that ended up in the president's speech and may have been the justification for going in? Cliff, does that derail the administration's Iraqi policy? MAY: Not in my view. Let me make two very quick points. One is that all the Democrats, as you heard in Bill Schneider's report, who are serious about national security. I'm talking about Joe Biden. I'm talking about Joe Lieberman. I'm talking with about Dick Gephardt. They voted in favor of this military intervention, and they don't regret that vote.
Second, everybody who was serious about this matter, and U.S. intelligence included, knows that Saddam Hussein had chemical weapons, he used them, had biological weapons, he admitted it. And was trying to rebuild his nuclear weapons capacity. If he was trying to do that, he needed uranium. Where was he going to get it from? He was going it get it from Africa or Serbia most likely. That's what all this about. The rest is just footnotes.
VANDEN HEUVEL: Cliff, please don't just say move on and instead of the blame game and stonewalling think about the scores of intelligence officials who believe this country was misled into war. Disparately needed independent investigation to explain to the American people accountability is at the heart of Democracy, we need to know the facts. It is important for the future.
MAY: Congress is investigating. George Tenet, head of the CIA will be testifying tomorrow.
VANDEN HEUVEL: Closed Republican hearings.
MAY: Well, this is what this is about, national security. We don't want to turn this into a political circus. Again, all the Democrats who were serious about national security, they all voted for this and they haven't changed their mind because they understand Saddam Hussein was a butcher. We're finding mass graves every day...
VANDEN HEUVEL: That does not justify...
MAY: And he never accounted for his weapons of mass destruction as he was obligated to do.
VANDEN HEUVEL: Cliff, you can have two ideas in your head at the same time. The world is better off with Saddam Hussein, but we were led into this war with the justification that we faced an imminent and grave threat. Which, they can't find the weapons of mass destruction, Cliff.
MAY: Actually, if you'll recall, people like yourself complained that the administration had too many arguments. You wanted there to be just one. And the fact that we haven't found the weapons or found Saddam Hussein is troubling, but I think we will. The possibility are is that the weapons were either buried or the weapons were dispersed to another country or perhaps...
VANDEN HEUVEL: Meaning, Cliff...
MAY: he destroyed them himself and was going to rebuild them.
VANDEN HEUVEL: Meaning, Cliff, that the world may be more insecure after this war than it was before if those weapons had been dispersed.
MAY: As you just said, the world is a safer place without Saddam Hussein at the -- in a palace -- controlling billions of dollars, an army, oil money, and weapons of mass destruction or the programs to build them as soon as the heat was off. We agree the world's a better place without him in power, and the Iraqi people are certainly better off.
HOPKINS: Just a second. Let me ask another question. And that is, with the morale of the soldiers that are still in Iraq, tumbling every day, Cliff, doesn't that derail the administration's Iraqi policy?
MAY: It doesn't derail it. It does raise a serious question that I think we have to begin to address in the 21st century. Combat soldiers are not necessarily the people who should be policing a country after a war like Iraq, or nation building. We may need different kinds of structures for that. Even to go after the remnants of the Ba'athists and the other terrorists in Iraq. That's not infantry you want to do that. That's special forces. We're going to have to adjust because we've got a lot more of this coming in the 21st century.
VANDEN HEUVEL: Adjusting means working with the United Nations, with NATO, and building alliances instead of dissing allies, and then we would then not have this military overreach, and men and women of America could come home without abandoning Iraq and rebuilding more effectively.
MAY: Sure, but the U.N. Doesn't...
HOPKINS: Thank you very much, both of you.
MAY: Thank you.
HOPKINS: Cliff May and Katrina Vanden Heuvel.
VANDEN HEUVEL: Thank you.
And that brings us to tonight's quote on now the infamous 16 words about Iraq's alleged attempts to purchase uranium from Africa. "It was a mistake to include it in the State of the Union Address, but that was one piece of one part of an overall body of evidence that exists showing why we went to war in Iraq." That from White House spokesman Scott McClellan.
A reminder now to vote in tonight's poll. How important are counterfeit goods in the war on terror? Very, somewhat, not at all, or I buy knockoffs? Cast your vote at CNN.com/lou, and we'll bring you preliminary results in a few minutes.
Coming up, trade outrage. Why rules intended to punish the Chinese weapons trade are putting the squeeze on American companies.
And later, bull's eye. The world's best archers converge on the big apple and find it a target rich environment. Jeanne Moos has that story coming up.
(COMMERCIAL BREAK)
HOPKINS: Now for an update on a story that we've been following this hour. At least eight people are dead tonight, including a 2- year-old child after a speeding car plowed through a crowded farmer's market in Santa Monica, California. As many as 40 people were injured, 15 critically. Car's driver, a man believed to be in his 80s, is in police custody at this hour.
Turning now to national security. Part of the government's effort to increase national security has centered on trade. One set of new trade restrictions is designed to penalize Chinese companies allegedly involved in the weapons trade. However, the sanctions are also hurting some American businesses, as Louise Schiavone reports.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Jerry Sorkin has been nurturing his rugs and antiques business just outside Philadelphia for 18 years. He finds goods in exotic locations, unusual designs and weaves, rare furniture, and then ships it all back to his retail store.
But at this moment, Uncle Sam is offering to destroy $30,000 worth of Sorkin's rugs and antiques, or have them returned to China, all at Sorkin's expense, because the federal government says they arrived on the wrong ship.
JERRY SORKIN, SORKIN RUGS & MORE: It's very costly to export the items, and to where I would export them I have no idea. And once they arrive somewhere, what would I do? And certainly the idea of paying to have my shipment destroyed is an option that I can't even consider.
SCHIAVONE: The ship is owned by China North Industries, also known as Norinco. It's one of five Chinese companies accused of transporting materials to aid Iran's weapons program.
Through a bureaucratic triple whammy, the Departments of State, Treasury, and Homeland Security announced on May 23 that anything arriving on a ship owned by Norinco would be seized. Trouble is, by then Sorkin's goods had been at sea for almost two weeks.
A government official tells CNN that it's the State Department that gave no grace period for shipments already in transit. That has left Sorkin bouncing from agency to agency in a fruitless search for relief.
It's cost him $3,000 to get the goods to Philadelphia. If they're sent back to China and reshipped to the U.S., it will probably cost Sorkin another $10,000.
Sorkin employs 10 people, and in this rough economy sometimes lurches from payroll to payroll. He feels the Bush administration isn't living up to its promises to reduce the obstacles faced by small businesses. SORKIN: So the question I would ask is who's being punished? Is it the Asian firms being punished because perhaps those same firms carry armaments to Iran, or is it the American businessperson who is being punished?
SCHIAVONE (on camera): For now, Mr. Sorkin's furniture and carpets are somewhere here in Philadelphia in a customs warehouse. And unless the federal bureaucracy gives him a break, Mr. Sorkin's $30,000 investment could go up in smoke, or just sail away.
Louise Schiavone, for CNN Financial News, Philadelphia.
(END VIDEOTAPE)
HOPKINS: Turning to money and politics, the race to raise money for the next presidential election is well under way. President Bush is way out in front. The president raised more than -- in more than six weeks more than the nine Democratic hopefuls could manage in three months. In the second quarter, the president raised $34 million, and he has more than $32 million of cash on hand.
Among the Democrats, Howard Dean raised the most, more than $7 million. He has over $6 million of cash. And John Kerry raised less, just under $6 million. But he has a much bigger cash pile of almost $11 million. The former House Democratic leader, Congressman Dick Gephardt, raised a disappointing $3.8 million, though he has just under $6 million in cash. And former vice presidential candidate Senator Joe Lieberman brought in $5 million, but he has only $4 million in the bank.
When we return, the preliminary results of tonight's poll, and then Jeanne Moos meets some old-fashioned sharpshooters right here in New York City.
(COMMERCIAL BREAK)
HOPKINS: Now the preliminary results of tonight's poll. How important are counterfeit goods in the war on terror? Twenty-four percent of you said very; 16 percent said somewhat; 47 percent said not at all. And 14 percent said, I buy knockoffs.
Finally tonight, the Big Apple was a target-rich environment for the world's best archers. From one New York landmark to the next, these sharpshooters see bull's eyes everywhere they look, as Jeanne Moos reports.
(BEGIN VIDEOTAPE)
JEANNE MOOS, CNN CORRESPONDENT (voice-over): They look like Cupids on steroids, and they can spear a strawberry perched on New York cheesecake.
UNIDENTIFIED MALE: Yes! Another dead strawberry!
MOOS: They can thread an arrow through the windows of three cabs. But did they have to impale Lady Liberty in the process? UNIDENTIFIED MALE: Yes!
MOOS: The trick shots were just a sideshow as close to 600 archers gathered in New York for the World Outdoor Target Championships.
UNIDENTIFIED MALE: We have been informed which archer it was that shot the cable earlier today. For a small bribe, I'll be willing not to mention the name.
MOOS: Someone accidentally hit an electrical cable and caused a 15-minute power outage.
Competitors came from 80 countries. Including Iraq.
(on camera): How did you do?
UNIDENTIFIED MALE: (UNINTELLIGIBLE) is in second place.
UNIDENTIFIED FEMALE: (UNINTELLIGIBLE).
MOOS (voice-over): The Iraqi women spent more time retrieving their arrows in the grass rather than in the intended targets, but the team was happy to compete, even if ranked close to last.
One thing most competitors have in common -- calluses.
UNIDENTIFIED MALE: I have 27, 28.
MOOS: Modern bows look more like souped-up machine guns, like a mass of praying mantises.
(on camera): It's not pure. You know? I'm thinking a string, a bow.
UNIDENTIFIED MALE: Oh, you're thinking of Robin Hood and the green tights.
MOOS (voice-over): Imagine what Robin could have done with a bow equipped with pulley, sight and stabilizers.
UNIDENTIFIED MALE: Had the American Indians had these, we'd still be in Europe.
MOOS: The arrows alone cost 30 to 40 bucks apiece.
UNIDENTIFIED MALE: Bull's eye.
MOOS: No bull. We found these arrows in the lost and found. Archers need to use their dominant eye, the eye which sends images to the brain first. To find yours, make a triangle with your hands.
GUY KRUEGER, U.S. COMPETITOR: You pick something and put it in between them, and looking with both eyes. You close one eye, and if it stays in there, the eye that's open is your dominant eye.
MOOS: When it comes to archery scenes in movies...
UNIDENTIFIED FEMALE: We're always saying can you believe they're trying that?
MOOS: They say Kevin Costner could never have done this.
Trick shooter Frank Addington (ph) fires two from behind his back. He punctures balloons.
But his signature is shooting aspirin.
UNIDENTIFIED MALE: Got it.
MOOS (on camera): Oh, that was a big aspirin. A baby aspirin now?
UNIDENTIFIED MALE: Let's do the baby.
MOOS (voice-over): And though it took him nine tries...
UNIDENTIFIED MALE: Got it.
MOOS: ... he's the William Tell of popping pills.
Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
HOPKINS: That's our show for tonight. Thanks for joining us. Tomorrow we'll continue our series of special reports on genetically modified foods, and whether they could help in the fight against world hunger.
For all of us here, good night from New York. "LIVE FROM THE HEADLINES" with Anderson Cooper is next.
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Aired July 16, 2003 - 18:00 ET
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ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, July 16. Sitting in for Lou Dobbs, Jan Hopkins.
JAN HOPKINS, GUEST HOST: Good evening, everyone.
We will bring you continuing coverage of a developing story in Santa Monica, California, where a driver slammed into a farmers market, injuring dozens, but first, guerrilla war in Iraq.
The new head of the Central Command, General John Abizaid, said today that U.S. forces are facing a classic guerrilla campaign. Another U.S. soldier was killed in combat today, the 148th to die from hostile fire since the conflict began in March. That is the same number of battle deaths in the first -- as in the first war against Iraq in 1991.
Senior Pentagon correspondent Jamie McIntyre joins me live -- Jamie.
JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Jan, another convoy attack and another grim scene in Baghdad, as U.S. soldiers cover the body of a comrade along the side of the road after that attack, the latest victim in what the Pentagon is no longer denying is a deadly guerrilla war.
It's a war, as you said, that's claimed at least 148 American live. And new threats abound. Plans to reopen the Baghdad International Airport have been delayed, after a C-130 crew reported a shoulder-fired missile fired at its plane as it was landing, again, the Pentagon no longer mincing words about what kind of a conflict it's involved in.
(BEGIN VIDEO CLIP)
GEN. JOHN ABIZAID, COMMANDER, U.S. CENTRAL COMMAND: I would describe as a classical guerrilla-type campaign against us. It's low- intensity conflict in our doctrinal terms, but it's war, however you describe it.
(END VIDEO CLIP)
MCINTYRE: So the U.S. is digging in for the long haul, working out a rotation plan to maintain a force of about 160,000 U.S. and coalition troops. And it's considering one-year tours of duty for American forces. As for the war-weary 3rd Infantry Division, it now has a new promise. It will be on the way home by September, a year after it was deployed, even though the top commander today expressed his displeasure with some of the griping, especially a TV report in which a soldier said, if Donald Rumsfeld was there, he would ask for his resignation.
(BEGIN VIDEO CLIP)
ABIZAID: None of us that wear this uniform are free to say anything disparaging about the secretary of defense or the president of the United States. We're not free to do that. It's our professional code.
(END VIDEO CLIP)
MCINTYRE: Now, the complaining soldiers could be reprimanded by their commanders, but it's unlikely anything much will happen to them. The Pentagon recognizes, they're doing dirty and dangerous work. The frustration is somewhat understandable.
And the Pentagon also today admitted it has to do a better job of telling troops when they'll be home. General Abizaid said he'll be meeting with commanders in Iraq, working out a plan, so that each and every sailor, soldier, Marine, airman has a good idea of when their end date is -- Jan.
HOPKINS: Jamie, one-year tour of duty, that's the longest since Vietnam, isn't it?
MCINTYRE: Well, actually, in Bosnia, the 1st Armored Division did deploy for a year in Bosnia. But generally speaking, the tours of duty have been more like -- for ground troops, three, six, even nine months has been pretty long. So it's a long tour of duty. But the point is, the Pentagon is going to be in Iraq for some time and that, at least if you know it's a year, you know exactly how long you're going to be there. You can figure out -- you can deal mentally with how long you're going to be there, just like many of the soldiers did in Vietnam.
HOPKINS: Thanks very much, Jamie McIntyre, at the Pentagon.
CIA Director George Tenet went to Capitol Hill today for a showdown with senators on the intelligence used to justify the war against Saddam Hussein. Democrats are trying to use the issue to question the credibility of President Bush. Republicans want to know why Tenet did not stop the president from using faulty intelligence in his State of the Union speech.
Jonathan Karl joins us live from Capitol Hill -- Jonathan.
JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Jan, the CIA director arrived here on Capitol Hill 3 1/2 hours ago. He is still in these closed-door hearings, taking some tough questions, we are told, from both Democrats and Republicans about that faulty intelligence that got into the president's speech. One Republican, though, just a few minutes ago came out, Mike DeWine of Ohio, to say that he has complete confidence in George Tenet, that he is answering questions in a very satisfactory way and has been a leading figure in the fight against terrorism for many years, a very strong and unequivocal statement of support for George Tenet from one of the top Republicans on that committee.
But even before this hearing got under way, John Edwards, who is both on the committee and a Democrat running for president, came out and said this is about much more than George Tenet. He pointed the finger not at the CIA, but down at 1600 Pennsylvania Avenue and the president.
(BEGIN VIDEO CLIP)
SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE: I have some very serious questions about what I think are one of the most important issues there can be, which is the credibility of the president of the United States. When the president speaks, he speaks on behalf of the American people. George Tenet has accepted his responsibility, and that's good. But, at the end of the day, the president, when he speaks, has to take responsibility for what he says.
(END VIDEO CLIP)
KARL: And that has really been the unifying theme for Democrats here, both those running for president and those simply serving in Congress, saying that this is really about the president, about his failure to present an honest interpretation of what was going on before the war with Iraq, an honest case, suggesting that he distorted the facts, distorted the intelligence.
There's been some strong pushback from Republicans on this, however. One Republican who is also on the Intelligence Committee came out and said there are some very tough questions, important questions, that need to be asked of the CIA director and perhaps others in the administration. But he came right out and said the Democrats here are simply playing politics with a very important issue.
(BEGIN VIDEO CLIP)
SEN. SAXBY CHAMBLISS (R), GEORGIA: The presidential candidates, the Democratic Senatorial Committee, continues to politicize this issue. And the issue simply is not about the credibility of George Bush. It's about the credibility of the intelligence community. And that's what we're about establishing.
(END VIDEO CLIP)
KARL: The hearing is still going on. It's expected to go on for at least another hour. And the -- several members of the committee have told me that they expect George Tenet will be back again before this committee. You can bet he'll also be back before the House Intelligence Committee and that there will be open hearings, as well as the closed hearings that we're now seeing -- Jan.
HOPKINS: Jonathan Karl on Capitol Hill, thank you.
And while the CIA director was on Capitol Hill, the White House launched a counterattack against Democrats who have criticized the president. Administration officials say that the last thing Democrats should do is politicize the issue of Saddam Hussein's weapons of mass destruction.
White House correspondent Suzanne Malveaux has the story -- Suzanne.
SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Jan, the White House is certainly fighting back, taking on those Democrats who've been pulling into question President Bush's credibility, those who have been making charges that he exaggerated intelligence about Iraq's weapons programs to make his case for the war, White House spokesman Scott McClellan saying that he was using a different strategy, a different tactic, rather, using the Democrats' own words against them.
(BEGIN VIDEO CLIP)
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: The last thing anyone should do is politicize this issue by rewriting history. There are some where the present rhetoric does not match their past record. So look back at past comments. Look back at past voting records.
Congress overwhelmingly, in a bipartisan way, passed a resolution supporting the steps that we are taking and approving the use of force, if it was necessary, after 12 years of Saddam Hussein's deception and denial, to confront that threat.
(END VIDEO CLIP)
MALVEAUX: Now, McClellan singles out two of the most vocal critics of the president, one of them, Senator Carl Levin. He said in a letter to President Clinton back in 1998 -- he quotes him here as saying that he urged Clinton to take necessary actions to respond effectively to the threat posed by Iraq's refusal to end its weapons of mass destruction.
He also pointed to statements made by Senator John Kerry, who voted for President Bush's war resolution, again, going back to 1998, saying that he said Saddam Hussein had already used these weapons and had made it clear that he has the intent to continue to try. He called it a threat to the stability of the Middle East.
Now, Democrats are countering that this is five years ago, that it is out of context. And they say it still does not explain why the president created this sense of urgency, this imminent threat against the United States, that the administration still has many questions to answer -- Jan.
HOPKINS: Suzanne Malveaux at the White House, thanks.
The president's closest ally, British Prime Minister Tony Blair, is under even greater pressure over intelligence about Iraq's weapons of mass destruction. Blair arrives in Washington for a summit with President Bush tomorrow. Today, Blair faced tough questions in the British Parliament from lawmakers critical of his policies.
Another visitor to Washington this month will be the Palestinian prime minister, Mahmoud Abbas. Today, he said that he will hold talks with President Bush on July 25, a date the White House has not yet confirmed. It would be the first meeting between the president and the Palestinian prime minister since their talks in Aqaba, Jordan, on June 4. Israeli Prime Minister Ariel Sharon will also be in Washington at the end of this month. So far, there is no indication if the two leaders will meet.
The United States is also stepping up efforts to try to end the crisis over North Korea's nuclear weapons program. Secretary of State Colin Powell today said he expects some developments soon. His comments follow reports that North Korea has completed reprocessing spent fuel into materials for nuclear weapons.
(BEGIN VIDEO CLIP)
COLIN POWELL, SECRETARY OF STATE: We have taken note of the recent visit of the Chinese vice foreign minister to Pyongyang, which was reported on in the press this morning. And I had a long conversation with the Chinese foreign minister last evening, where he gave me an update on those conversations.
So the diplomatic track is alive and well and I expect to see some developments along that track in the very near future.
(END VIDEO CLIP)
HOPKINS: And tonight, the State Department said that a senior Chinese official will visit Washington this week for talks on North Korea.
We take you now to the scene of an incredible tragedy in Santa Monica, California. At least eight people are dead tonight after a speeding car plowed through a crowded farmers market. The car traveled several blocks through the crowd, knocking people to the ground. As many as 40 more have been injured, at least 14 of them critically. Witnesses say the driver of the car appeared to be an elderly man who may have been suffering some kind of medical problem at the time. We'll have an update on this story in just a few minutes.
Still ahead tonight: The "Food Fight" stretches overseas in our series of special reports on genetically modified food -- tonight, Europe and the United States on the brink of a trade war.
And later: funding terrorism. Seemingly harmless everyday purchases financing international terror?
That story and much more all ahead.
(COMMERCIAL BREAK) HOPKINS: Now, the driver of this car apparently was having some kind of a medical problem? Is that what you've ascertained?
JAMES BUTTS, SANTA MONICA POLICE CHIEF: We have various statements. We have hundreds -- over 100 witnesses. We're attempting now to ascertain exactly what happened, whether this was an accident or whether it was a criminal act, either through negligence or deliberation.
HOPKINS: But, at this point, you can't say? The driver is in custody. Is that right?
BUTTS: The driver is being detained by investigators at the station. He's been treated at a local hospital. And we do know that there's no alcohol or psych meds in his bloodstream.
HOPKINS: And he was an elderly person? Is that correct?
BUTTS: Male in his 80s.
HOPKINS: James Butts, the police chief in Santa Monica, California, thanks very much for joining us.
BUTTS: You're welcome.
HOPKINS: Let's turn now to Wall Street.
The head of the world's largest financial services company is stepping down. Citigroup Chairman Sanford Weill will leave his position as CEO by the end of the year. He plans to remain chairman for the next three years. Weill will be replaced by longtime lieutenant Charles Prince. In a memo to Citigroup employees, Weill said the time is right for transition. He said -- quote -- "We've dealt with painful issues and have demonstrated our commitment to being the best practice leader in every business. Our team is ready."
Three months ago, Citigroup agreed to pay $400 million, more than any other bank, in the global settlement over faulty stock research.
Citigroup's stock fell more than $1 after that announcement. Overall, it was a losing day on Wall Street. The Dow fell 34 points. The Nasdaq lost 5, and the S&P 500 down six.
Christine Romans is here with the market -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Well, Jan, the second- quarter numbers weren't too bad, but it's the third quarter, the outlook, that really spooked investors today, got all the attention on Wall Street.
Intel shares soared 5 percent, after its net income doubled in the second quarter. But cautious third-quarter views from Lucent and Motorola sent those shares and their competitors tumbling. And after several days of stellar bank earnings, J.P. Morgan reported a 78 percent gain in profit for its second quarter, driven by mortgage and bond trading businesses. But it was more cautious for the second half, and the stock tumbled 3 percent. Keep in mind, it's still up 55 percent this year.
Now, volume picked up to the best in more than two weeks at the Big Board; 68 percent of that came at lower prices and more than two stocks fell for each that rose. And dividend-paying stocks also grabbed the headlines today: Clorox and Qualcomm the latest to raise their dividends. About a quarter of the S&P companies have raised them this year. And some analysts expect Microsoft to raise its dividend any day now. It's one of seven Dow stocks to report earnings tomorrow, along with General Motors, Coca-Cola, Caterpillar, Altria, Honeywell, and United Technologies.
And tonight, after the bell, IBM reported earnings of 98 cents a share. Now, some of the analysts are noting, that was helped by cost- cutting and acquisitions, sales up about 10 percent. So watch IBM tomorrow, Jan.
HOPKINS: Thanks, Christine Romans.
And still to come: You may be unwittingly funding terror with some unlikely purchases. Deborah Feyerick will have that story.
And then: The combat phase of the war in Iraq is over, but Americans are still dying. Two leading experts face off on the war, the aftermath, and the role of U.S. troops on the ground.
And wildfires on the move in Arizona, sending thousands fleeing from the flames -- we'll have a live report coming up.
(COMMERCIAL BREAK)
HOPKINS: An unusual part of the war against terror: Fake goods support terrorism, that according to Ronald Noble, the secretary- general of Interpol.
Noble testified today at a congressional hearing on intellectual property crimes. He said the link between organized crime groups and counterfeit goods is well established and the sale of such goods is now becoming the preferred method of funding for some organizations.
Deborah Feyerick has our report.
(BEGIN VIDEOTAPE)
DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): You see them on lots of New York City street corners: counterfeit T-shirts, bootleg DVDs, fake designer handbags.
UNIDENTIFIED FEMALE: Eighteen dollars?
UNIDENTIFIED FEMALE: Yes, $18.
FEYERICK: Louis Vuitton for just 18 bucks? Don't think so. The legal lingo for these kinds of knockoffs is intellectual property theft. The International Trade Commission estimates, sales of fake goods worldwide total $350 billion a year, but now claims of a new, more dangerous cost. TIMOTHY TRAINER, INTERNATIONAL ANTICOUNTERFEITING COALITION: There is a very, very strong indication that there would be links to terrorist organizations.
FEYERICK: An industry anti-counterfeiting group claims terrorists are funding operations by selling counterfeit goods. At a hearing on Capitol Hill, the head of Interpol testified, containers of phony products have been confiscated from al Qaeda supporters.
RONALD NOBLE, INTERPOL SECRETARY-GENERAL: If you find one al Qaeda operative with it, it's like finding one roach in your house or one rat in your house. It should be enough to draw your attention to it.
FEYERICK: A report compiled by the trade group cites what they call evidence: a raid on a Manhattan souvenir shop that allegedly turned up counterfeit watches and manuals for Boeing 767s; and the discovery in Denmark of shipping containers filled with counterfeit shampoo and perfume allegedly sent by a member of al Qaeda.
But the claims may be just claims. To date, the Justice Department has brought no charges linking any counterfeit scheme with terrorism. Treasury officials do not discount the claims, but say they've brought no official action to indicate such a link. However, homeland security officials do acknowledge, in the post-9/11 world, they're looking at old-style crimes like counterfeiting and money laundering in a new light.
(END VIDEOTAPE)
FEYERICK: There's still very little hard evidence establishing a direct link between counterfeiting and terrorism.
And there is another possibility. With the government focused on fighting al Qaeda and its allies, some Washington insiders say, to get any attention these days, you've got to show your cause is somehow tied to terrorism -- Jan.
HOPKINS: That's interesting.
Deborah Feyerick, thanks.
The story is the topic of tonight's poll: How important are counterfeit goods in the war on terror, very, somewhat, not at all, or, I buy knockoffs? Cast your vote at CNN.com/Lou. We'll bring you preliminary results later in the show.
And now the final results of yesterday's poll. We asked, what worries you the most? Twenty-six percent of you said North Korea; 56 percent said the U.S. deficit; 16 percent said media concentration. And 2 percent said Internet predators.
And now for a look at some of your thoughts. Many of you wrote in responding to last night's poll on what concerns you most.
Jeri from Florida wrote in to say: "Although the deficit worries me the most, I place media concentration on at least an equal footing, because, without an independent media, we don't get the truth about the deficit or anything else."
And Mary from Florida wrote in to say: "Media concentration worries me more than any of the other contenders. If we continue on the path of media consolidation, we'll be fed only what media conglomerates want us to know. And then we all might be worrying about the wrong things."
In our series "Food Fight" about genetically modified foods, Scott of Pennsylvania writes: "As an American, I have a right to know what is in my food. It is downright un-American to force products on the public without giving them the choice to avoid such products."
And Samir of Texas wrote in to say: "My son is allergic to wheat, shellfish, cheese, and milk. However, when he's overseas, he eats all of the above. The doctors can't explain it. I wonder if it has to do with genetically modified food and how food is processed in the U.S."
And Thomas Carty wrote: "This isn't anything new. Food has been genetically manipulated since Gregor Mendel played with his peas."
And we love hearing from you. You can send us an e-mail at LouDobbs@CNN.com.
More now on the breaking news from California. Eight people were killed when a driver crashed into a farmers market in Santa Monica.
Dan Lothian joins us on the phone now.
Dan, what's the latest?
DAN LOTHIAN, CNN CORRESPONDENT: Well, Jan, it continues to be a chaotic scene here in this farmers market. This is also a very popular tourist attraction.
It is, according to the police chief, the worst disaster that he has ever seen in this city -- as you mentioned, eight people confirmed dead, 15 people in critical condition taken to area hospitals, an additional 20 to 40 people also hospitalized with moderate to minor injuries, we are told. One of the hospitals locally here, St. John's Hospital, doctors who normally would not be working, other emergency personnel, have arrived, so that they could help out in this tragedy that has happened here.
Officials are telling us that, at this point, it's too early to tell whether this was an accident or whether the driver plowed into the people in this farmers market intentionally. All that they tell us is that the driver is a man who appears to be in his 80s. He did sustain some injuries. And police hope to be interviewing him to find out exactly what is behind this accident.
But, certainly, it is a chaotic scene here, as the rain now has been coming down. About 100 or so emergency personnel are involved in carrying the folks to the hospital, the injured to the hospital, and also securing the scene. We're told that there have been about 100 witnesses who police plan to interview in order to get to the bottom of this case, to find out why this man drove into these people on this road.
This farmers market always occurs on Wednesdays, usually between 9:00 in the morning until 2:00 in the afternoon. And according to police authorities, it was just about wrapping up, about 1:47 Pacific time, when this accident, what appears to be an accident, at least at this point, occurred.
So, once again, the latest numbers that we have: eight people killed -- one of those is a 2-year-old girl -- 15 people in critical condition, 20 to 40 with moderate to minor injuries.
That's the very latest from the scene -- now back to you.
HOPKINS: Thanks, Dan Lothian, on the phone from Santa Monica.
And still to come: The fight over genetically modified food extends overseas -- in our series of special reports, a brewing trade war between Europe and the United States.
We'll have the story.
(COMMERCIAL BREAK)
HOPKINS: In news "Across America": A Maryland nurse has been suspended while officials investigate whether she helped at least one critically ill patient die. Hospital officials say that they were tipped off by fellow nurses in the intensive care unit.
The trial of sniper suspect John Allen Muhammad is moving to Virginia Beach. A judge thought it would help him receive a fair trial. Muhammad is charged with murder in last year's sniper spree.
Jimmy Hoffa has been missing for 28 years. Today, investigators were digging outside a home not far from Detroit, where Hoffa disappeared. They were looking for evidence into his disappearance. Authorities were acting on a tip from an informant.
In Arizona tonight, the wildfire at Fort Apache Indian reservation has doubled in size overnight. More than 12,000 acres have now burned. And there is concern tonight that the fire is far from over.
Steve Bodinet of CNN affiliate KTVK joins us from White River, Arizona.
Steve, what are the conditions tonight?
STEVE BODINET, KTVK REPORTER: Jan, it has not been a good night up here to fight the fire. They said they did OK -- firefighters, that is -- but not as well as they hoped for.
You mentioned 12,000 acres. They just told us, this fire is now at 16,000 acres up here. A lot of dry air helped that fire to grow. Right now, it's just smoky here. But a while ago, a giant plume going 25,000 feet into the atmosphere. Plume fires are tough fires. That means it's burning up a lot of acreage up there.
Again, they said they worked throughout the night, firefighters did -- 600 of them still on this fire, trying to get some lines, especially to the northeast. They want to block that from the towns of Pinetop-Lakeside, Honda up there, and a little town called McNary. That would be a real problem going up into that area. They did pull off 15 crews on this fire today and sent 11 of those to other fires in the area. We've got a lot of dry area here. There are still 5,000 people evacuated from their homes. Jane, they're hoping that those folks will be able to go home two, three days at the minimum. They are making some progress here, but they do have a long way to go on this fire.
HOPKINS: Turning now to our series of special reports on the rise of genetically modified food. Tonight we examine the trade debate. While Americans have for the most part quietly accepted genetically modified foods, many Europeans are passionately against them. It's an issue that's causing broader strains in the trade relation between Europe and the United States.
Peter Viles has our report.
(BEGIN VIDEOTAPE)
PETER VILES, CNNfn CORRESPONDENT (voice-over): Here's something you won't see back home: protests over food. European consumers campaigning against genetically modified foods from America and starting a long-distance food fight. Europe has put a moratorium on genetically altered crops. The Bush administration believes that's an illegal trade tactic and has filed suit with the World Trade Organization.
Now, Europe says it will lift the ban but replace it with a strict labeling system that would identify genetically modified foods.
DAVID BYRNE, EU COMMISSIONER, HEALTH AND CONSUMER PROTECTION: The purpose of this legislation is to inform consumers about the exact nature and characteristics of the food to enable them to make informed choices. The purpose of labeling is not to inform the consumer about the safety or lack of safety of a food. If a food is unsafe, it cannot be placed on the market at all.
VILES: But American farmers say labeling is unfair and unworkable and the issue has degenerated into name calling.
SEN. KIT BOND (R), MISSOURI: Unfortunately, the ludites in Europe who are against this new science and technology have spread their eurosclerosis to countries like Africa. The total hypocrisy of the Europeans is shown by the fact that they excluded from labeling the fact that their cheese is made from genetically engineered enzymes.
VILES: The money at stake is not huge, at least not yet. The ban affects mainly corn, costs American corn farmers roughly $300 million a year. That's just 5 percent of America's corn exports and less than 1 percent of American food and agriculture exports. European consumers appear to be so adamant in their views, however, that former Agriculture Secretary Dan Glickman believes Americans will probably have to compromise and accept some system of labeling.
DAN GLICKMAN, FORMER SECRETARY OF AGRICULTURE: What you've got here is a situation in Europe where the European people culturally are averse to genetically engineered foods. And it's almost as if the facts don't matter. And their governments over there reflect that popular opposition to genetically modified foods. And that's what makes it so difficult for us here in our country to deal with the issue.
VILES: The farm lobby is holding fast and bracing for an escalating trade war.
RON GASKILL, AMERICAN FARM BUREAU: I don't expect the E.U. To really comply with the WTO decision. I'm not trying to be pessimistic, but I just -- hopefully I'm just being realistic. I think ultimately the U.S. is going to be in a position to request retaliatory tariffs.
(END VIDEOTAPE)
VILES: This is an unusual trade dispute because it's being driven in part by public opinion rather than economic policy, and public opinion is something that politicians and diplomats cannot negotiate -- Jan.
HOPKINS: But Pete, how much of this is political? how much of it is the Europeans trying to protect their own market for their own goods?
VILES: It's almost entirely political in the sense that they are responding to pressure. But most of the pressure, as we understand it, is coming from consumers. Consumers in Europe are distrustful of the government on food safety issues in a way that we don't really relate to in this country.
HOPKINS: Peter Viles, thank you.
Tomorrow in our series of special reports, "Food Fight," ending world hunger. We'll explore the debate over whether to use genetically modified food to fight the -- or rather to feed the hungry and get rid of hunger. Kitty Pilgrim will have that report.
That brings us to tonight's thought on the value of trade in a global economy. "It used to be said that when the U.S. sneezed, the world caught a cold. The opposite is equally true today. Our prosperity is linked to the maintenance of a strong world economy, an open international trading system and stable global financial market." That's from former Treasury Secretary Lawrence Summers.
Still to come, face-off: the U.S. role in Iraq. Is the Bush administration policy on track or off the rails? Two leading experts will join us with opposing views. And later, trade outrage. Rules intended to keep the Chinese weapons trade in check are instead putting the pinch on American companies. Louise Schiavone will have that report.
(COMMERCIAL BREAK)
HOPKINS: Democratic presidential candidate Senator John Kerry today accused President Bush of having a credibility gap on national security. Kerry said that the president has failed to follow through on his promises to make the country safer.
However, Kerry and other Democrats are facing their own credibility issues following the war on Saddam Hussein. Bill Schneider has the report.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): It wasn't supposed to be like this. Last October, when many Democrats in Congress supported the war resolution, they figured they'd take national security off the political agenda and change the subject to the economy.
That didn't happen. President Bush surprised Democrats by making national security the focus of the midterm campaign and winning big.
Four Democrats running for president voted for the war resolution. They figured the U.S. would bring down Saddam Hussein. They'd have political cover and antiwar candidates like Howard Dean would fade away. That didn't happen.
What did happen is that Iraq has become more controversial. Polls show more and more Americans turning against the war and strong opposition from Democrats.
Now, President Bush is facing a credibility problem over the war and so are pro-war Democrats running for president.
HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: I think those who voted for the war in Iraq are on very thin ice. They did not exercise their senatorial requirement to advise and consent knowing all the facts.
SCHNEIDER: Dean hasn't served in Congress and didn't have to vote on the war, which he has always opposed. But those Democrats in Congress who voted for the war now find themselves on the defensive.
SEN. JOE LIEBERMAN (D-CT), PRESIDENTIAL CANDIDATE: I respect your position. Let's disagree respectfully. Let me finish my remarks.
SCHNEIDER: They have to face hostile Democratic audiences.
UNIDENTIFIED MALE: (UNINTELLIGIBLE) does not bring people back from the dead.
REP. DICK GEPHARDT (D-MO), PRESIDENTIAL CANDIDATE: All I'm saying is that I did the best I knew how to do in my judgment, in my heart, in my mind for what it would take to keep our people safe.
SCHNEIDER: They have to backtrack.
SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: They assured us they had a plan. It is now evident they didn't have a plan.
SCHNEIDER: While Howard Dean has become Mr. I told you so.
DEAN: I believe that the evidence was not there. I refuse to change my view and as it turned out I was right.
(END VIDEOTAPE)
SCHNEIDER: The script said the U.S. would win the war, then the war issue would fade away and anti-war Democrats like Dean would disappear. But the war is still controversial, Dean is thriving, and a lot of Democrats are frantically trying to rewrite the campaign script -- Jan.
HOPKINS: Very interesting. Bill Schneider, thanks.
SCHNEIDER: Sure.
HOPKINS: That brings us to tonight's face-off topic, which is, is the Bush administration on track with its Iraq policy? Katrina Vanden Heuvel says no and adds that America's legitimacy is being questioned. She's editor of the "Nation." Cliff May says yes, the administration is on track. He is president of the Foundation for the Defense of Democracies, a policy institute focusing on terrorism.
Katrina, let's start with you. Why do you think that the administration is not on track with its Iraq policy?
KATRINA VANDEN HEUVEL, EDITOR-IN-CHIEF, "THE NATION": The administration gravely underestimated the enormous human, political, and economic costs of this occupation. Unless it changes course for the sake of this country, the world, and the Iraqi people and brings in the United Nations, the international community, more and more American men and women will die. Every day we see a death. The costs to this country, the staggering costs which they misled us about, will deplete the possibility of healing our domestic agenda at home. And finally, I think an independent investigation is desperately needed to find out who knew what, when, and why we didn't know the truth about why we were taken into war.
HOPKINS: With all of these questions, Cliff, why do you think that the administration policy is on track with Iraq?
CLIFF MAY, PRESIDENT, FDN. FOR THE DEFENSE OF DEMOCRACIES: Well, understand, what we're doing is very difficult. What we're doing is something that certainly people on the left like Katrina once supported. It's called nation building. We have freed the Iraqi people. Now the challenge is to keep them free. And we do that by helping them develop Democratic institutions, which they've begun to do. We now have a multiethnic, multireligious council that is beginning to govern Iraq. We're going to have war crimes trials. They're all things that are useful.
Now, there's no question there are Ba'athists and there are terrorists from other place that's are in Iraq because they don't want Iraq to stay free. The terrorists would like to take Iraq back from us. And we can't give it back to them. So this is going to be a challenge. We haven't had a good record in nation building in places like Haiti or even Kosovo or Bosnia. We did it with Germany and Japan. If we turned it over to the U.N. said, okay, but we're going to let the Ba'athists back in. We're going to see that Saddam was toppled, we're going to bring him back in, that wouldn't be okay. If the U.N. comes back in who's going to pay for it, it's still us. We have the responsibility now. We've saved Iraq, and like the old Chinese saying, we're now responsible to get this done, or help the Iraqis get it done.
HOPKINS: But Cliff, I bet in this White House, as President Bush's ratings fall with each passing day, mounting casualties, there is support, as there is among the broad American majority of people, for an internationalization of this occupation. And the United States has had a very poor track record in nation building. The U.N., if given the capacity, and NATO would allow American soldiers to come home instead of having to listen to bring 'em on, we could say bring them home.
MAY: You know what Katrina, I don't necessarily disagree with you. I think we should invite, and we are inviting others in. The problem is that we can't turn over responsibility to Kofi Annan for this. We can't say, okay, you do it, it's no longer our concern.
If they'll work with us, if they'll work with Paul Bremer, the civilian administrator, I think we should welcome them and I think we will welcome them. We haven't gotten a good reaction yet. But we can't turn this problem over to the U.N. The U.N. does not have a great track record...
VANDEN HEUVEL: But Cliff, if given the capacity, there would be more security, legitimacy, and expertise, and it would be viewed in the Arab world and in the international community as an international nation-building problem. It is now a Pentagon occupation. You know that that will lead to more deaths of American men and women.
MAY: Again, we should invite them in to join us, but we have to maintain the responsibility. You don't want the human rights commission of the United Nations headed by Libya, to be in charge of human rights in Iraq, surely, Katrina, you wouldn't be in favor of that.
VANDEN HEUVEL: That's an anomalous situation Cliff, and not directly related ...
HOPKINS: Let me jump in here and start on another topic, which is, what about all of the information about the faulty intelligence that ended up in the president's speech and may have been the justification for going in? Cliff, does that derail the administration's Iraqi policy? MAY: Not in my view. Let me make two very quick points. One is that all the Democrats, as you heard in Bill Schneider's report, who are serious about national security. I'm talking about Joe Biden. I'm talking about Joe Lieberman. I'm talking with about Dick Gephardt. They voted in favor of this military intervention, and they don't regret that vote.
Second, everybody who was serious about this matter, and U.S. intelligence included, knows that Saddam Hussein had chemical weapons, he used them, had biological weapons, he admitted it. And was trying to rebuild his nuclear weapons capacity. If he was trying to do that, he needed uranium. Where was he going to get it from? He was going it get it from Africa or Serbia most likely. That's what all this about. The rest is just footnotes.
VANDEN HEUVEL: Cliff, please don't just say move on and instead of the blame game and stonewalling think about the scores of intelligence officials who believe this country was misled into war. Disparately needed independent investigation to explain to the American people accountability is at the heart of Democracy, we need to know the facts. It is important for the future.
MAY: Congress is investigating. George Tenet, head of the CIA will be testifying tomorrow.
VANDEN HEUVEL: Closed Republican hearings.
MAY: Well, this is what this is about, national security. We don't want to turn this into a political circus. Again, all the Democrats who were serious about national security, they all voted for this and they haven't changed their mind because they understand Saddam Hussein was a butcher. We're finding mass graves every day...
VANDEN HEUVEL: That does not justify...
MAY: And he never accounted for his weapons of mass destruction as he was obligated to do.
VANDEN HEUVEL: Cliff, you can have two ideas in your head at the same time. The world is better off with Saddam Hussein, but we were led into this war with the justification that we faced an imminent and grave threat. Which, they can't find the weapons of mass destruction, Cliff.
MAY: Actually, if you'll recall, people like yourself complained that the administration had too many arguments. You wanted there to be just one. And the fact that we haven't found the weapons or found Saddam Hussein is troubling, but I think we will. The possibility are is that the weapons were either buried or the weapons were dispersed to another country or perhaps...
VANDEN HEUVEL: Meaning, Cliff...
MAY: he destroyed them himself and was going to rebuild them.
VANDEN HEUVEL: Meaning, Cliff, that the world may be more insecure after this war than it was before if those weapons had been dispersed.
MAY: As you just said, the world is a safer place without Saddam Hussein at the -- in a palace -- controlling billions of dollars, an army, oil money, and weapons of mass destruction or the programs to build them as soon as the heat was off. We agree the world's a better place without him in power, and the Iraqi people are certainly better off.
HOPKINS: Just a second. Let me ask another question. And that is, with the morale of the soldiers that are still in Iraq, tumbling every day, Cliff, doesn't that derail the administration's Iraqi policy?
MAY: It doesn't derail it. It does raise a serious question that I think we have to begin to address in the 21st century. Combat soldiers are not necessarily the people who should be policing a country after a war like Iraq, or nation building. We may need different kinds of structures for that. Even to go after the remnants of the Ba'athists and the other terrorists in Iraq. That's not infantry you want to do that. That's special forces. We're going to have to adjust because we've got a lot more of this coming in the 21st century.
VANDEN HEUVEL: Adjusting means working with the United Nations, with NATO, and building alliances instead of dissing allies, and then we would then not have this military overreach, and men and women of America could come home without abandoning Iraq and rebuilding more effectively.
MAY: Sure, but the U.N. Doesn't...
HOPKINS: Thank you very much, both of you.
MAY: Thank you.
HOPKINS: Cliff May and Katrina Vanden Heuvel.
VANDEN HEUVEL: Thank you.
And that brings us to tonight's quote on now the infamous 16 words about Iraq's alleged attempts to purchase uranium from Africa. "It was a mistake to include it in the State of the Union Address, but that was one piece of one part of an overall body of evidence that exists showing why we went to war in Iraq." That from White House spokesman Scott McClellan.
A reminder now to vote in tonight's poll. How important are counterfeit goods in the war on terror? Very, somewhat, not at all, or I buy knockoffs? Cast your vote at CNN.com/lou, and we'll bring you preliminary results in a few minutes.
Coming up, trade outrage. Why rules intended to punish the Chinese weapons trade are putting the squeeze on American companies.
And later, bull's eye. The world's best archers converge on the big apple and find it a target rich environment. Jeanne Moos has that story coming up.
(COMMERCIAL BREAK)
HOPKINS: Now for an update on a story that we've been following this hour. At least eight people are dead tonight, including a 2- year-old child after a speeding car plowed through a crowded farmer's market in Santa Monica, California. As many as 40 people were injured, 15 critically. Car's driver, a man believed to be in his 80s, is in police custody at this hour.
Turning now to national security. Part of the government's effort to increase national security has centered on trade. One set of new trade restrictions is designed to penalize Chinese companies allegedly involved in the weapons trade. However, the sanctions are also hurting some American businesses, as Louise Schiavone reports.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Jerry Sorkin has been nurturing his rugs and antiques business just outside Philadelphia for 18 years. He finds goods in exotic locations, unusual designs and weaves, rare furniture, and then ships it all back to his retail store.
But at this moment, Uncle Sam is offering to destroy $30,000 worth of Sorkin's rugs and antiques, or have them returned to China, all at Sorkin's expense, because the federal government says they arrived on the wrong ship.
JERRY SORKIN, SORKIN RUGS & MORE: It's very costly to export the items, and to where I would export them I have no idea. And once they arrive somewhere, what would I do? And certainly the idea of paying to have my shipment destroyed is an option that I can't even consider.
SCHIAVONE: The ship is owned by China North Industries, also known as Norinco. It's one of five Chinese companies accused of transporting materials to aid Iran's weapons program.
Through a bureaucratic triple whammy, the Departments of State, Treasury, and Homeland Security announced on May 23 that anything arriving on a ship owned by Norinco would be seized. Trouble is, by then Sorkin's goods had been at sea for almost two weeks.
A government official tells CNN that it's the State Department that gave no grace period for shipments already in transit. That has left Sorkin bouncing from agency to agency in a fruitless search for relief.
It's cost him $3,000 to get the goods to Philadelphia. If they're sent back to China and reshipped to the U.S., it will probably cost Sorkin another $10,000.
Sorkin employs 10 people, and in this rough economy sometimes lurches from payroll to payroll. He feels the Bush administration isn't living up to its promises to reduce the obstacles faced by small businesses. SORKIN: So the question I would ask is who's being punished? Is it the Asian firms being punished because perhaps those same firms carry armaments to Iran, or is it the American businessperson who is being punished?
SCHIAVONE (on camera): For now, Mr. Sorkin's furniture and carpets are somewhere here in Philadelphia in a customs warehouse. And unless the federal bureaucracy gives him a break, Mr. Sorkin's $30,000 investment could go up in smoke, or just sail away.
Louise Schiavone, for CNN Financial News, Philadelphia.
(END VIDEOTAPE)
HOPKINS: Turning to money and politics, the race to raise money for the next presidential election is well under way. President Bush is way out in front. The president raised more than -- in more than six weeks more than the nine Democratic hopefuls could manage in three months. In the second quarter, the president raised $34 million, and he has more than $32 million of cash on hand.
Among the Democrats, Howard Dean raised the most, more than $7 million. He has over $6 million of cash. And John Kerry raised less, just under $6 million. But he has a much bigger cash pile of almost $11 million. The former House Democratic leader, Congressman Dick Gephardt, raised a disappointing $3.8 million, though he has just under $6 million in cash. And former vice presidential candidate Senator Joe Lieberman brought in $5 million, but he has only $4 million in the bank.
When we return, the preliminary results of tonight's poll, and then Jeanne Moos meets some old-fashioned sharpshooters right here in New York City.
(COMMERCIAL BREAK)
HOPKINS: Now the preliminary results of tonight's poll. How important are counterfeit goods in the war on terror? Twenty-four percent of you said very; 16 percent said somewhat; 47 percent said not at all. And 14 percent said, I buy knockoffs.
Finally tonight, the Big Apple was a target-rich environment for the world's best archers. From one New York landmark to the next, these sharpshooters see bull's eyes everywhere they look, as Jeanne Moos reports.
(BEGIN VIDEOTAPE)
JEANNE MOOS, CNN CORRESPONDENT (voice-over): They look like Cupids on steroids, and they can spear a strawberry perched on New York cheesecake.
UNIDENTIFIED MALE: Yes! Another dead strawberry!
MOOS: They can thread an arrow through the windows of three cabs. But did they have to impale Lady Liberty in the process? UNIDENTIFIED MALE: Yes!
MOOS: The trick shots were just a sideshow as close to 600 archers gathered in New York for the World Outdoor Target Championships.
UNIDENTIFIED MALE: We have been informed which archer it was that shot the cable earlier today. For a small bribe, I'll be willing not to mention the name.
MOOS: Someone accidentally hit an electrical cable and caused a 15-minute power outage.
Competitors came from 80 countries. Including Iraq.
(on camera): How did you do?
UNIDENTIFIED MALE: (UNINTELLIGIBLE) is in second place.
UNIDENTIFIED FEMALE: (UNINTELLIGIBLE).
MOOS (voice-over): The Iraqi women spent more time retrieving their arrows in the grass rather than in the intended targets, but the team was happy to compete, even if ranked close to last.
One thing most competitors have in common -- calluses.
UNIDENTIFIED MALE: I have 27, 28.
MOOS: Modern bows look more like souped-up machine guns, like a mass of praying mantises.
(on camera): It's not pure. You know? I'm thinking a string, a bow.
UNIDENTIFIED MALE: Oh, you're thinking of Robin Hood and the green tights.
MOOS (voice-over): Imagine what Robin could have done with a bow equipped with pulley, sight and stabilizers.
UNIDENTIFIED MALE: Had the American Indians had these, we'd still be in Europe.
MOOS: The arrows alone cost 30 to 40 bucks apiece.
UNIDENTIFIED MALE: Bull's eye.
MOOS: No bull. We found these arrows in the lost and found. Archers need to use their dominant eye, the eye which sends images to the brain first. To find yours, make a triangle with your hands.
GUY KRUEGER, U.S. COMPETITOR: You pick something and put it in between them, and looking with both eyes. You close one eye, and if it stays in there, the eye that's open is your dominant eye.
MOOS: When it comes to archery scenes in movies...
UNIDENTIFIED FEMALE: We're always saying can you believe they're trying that?
MOOS: They say Kevin Costner could never have done this.
Trick shooter Frank Addington (ph) fires two from behind his back. He punctures balloons.
But his signature is shooting aspirin.
UNIDENTIFIED MALE: Got it.
MOOS (on camera): Oh, that was a big aspirin. A baby aspirin now?
UNIDENTIFIED MALE: Let's do the baby.
MOOS (voice-over): And though it took him nine tries...
UNIDENTIFIED MALE: Got it.
MOOS: ... he's the William Tell of popping pills.
Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
HOPKINS: That's our show for tonight. Thanks for joining us. Tomorrow we'll continue our series of special reports on genetically modified foods, and whether they could help in the fight against world hunger.
For all of us here, good night from New York. "LIVE FROM THE HEADLINES" with Anderson Cooper is next.
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