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Lou Dobbs Tonight
Schwarzenegger Triumphant; White House Launches P.R. Campaign on Iraq; Wall Street Has First Down Day In Five
Aired October 08, 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.
LOU DOBBS, CNN ANCHOR: Arnold Schwarzenegger, 19 hours after the polls closed in California, now governor-elect, holding his first press conference.
Defying the odds, history, trash politics, charges of sexual misconduct, Arnold Schwarzenegger is now governor-elect of California. And Schwarzenegger won big. He took half the votes of women, a third of the votes of Latinos. Schwarzenegger won by an impressive 16 percent over his nearest challenger, Lieutenant Governor Cruz Bustamante. The bodybuilder, movie star, businessman and now governor-elect has wasted no time in preparing to take office.
He has just announced the head of the transition team who will take over the governor's mansion from Gray Davis. Davis last night became the second governor in American history to be thrown from office in a recall vote.
We begin our coverage tonight with Frank Buckley from Schwarzenegger's headquarters in Los Angeles -- Frank.
FRANK BUCKLEY, CNN NATIONAL CORRESPONDENT: Well, Lou, the news conference still going on behind me, so I am going to try to keep the voice down here, so we don't interrupt the news conference.
But you heard from Arnold Schwarzenegger during the past few minutes that he's been getting calls from literally around the world, from Nelson Mandela, from President Bush and his father, the elder President Bush, from Ted Kennedy, the political spectrum all over the place, also getting a sense of some of the challenges that lie ahead for this governor-elect, the most pressing one, the budget that has to be presented here in California by January 10.
We heard Arnold Schwarzenegger talking about that, saying that he wants to find out exactly what the operating deficit is right now. And what he wants to do there is, as he has said throughout the campaign, he wants to open the books and find the waste. That will be one of the first things that he gets to when he gets into office, his transition team expected to be announced tomorrow.
We know that David Dreier, the congressman, will head up that transition team. Arnold Schwarzenegger still speaking. Here's a portion of what he has said already.
(BEGIN VIDEO CLIP)
SCHWARZENEGGER: I made it very clear in my campaign that I will be the people's governor. That is the most important thing, governor for the people, not for special interests, but for everybody.
I also made it very clear that I believe in inclusion, that I will represent everybody. It doesn't matter if it is young or old or their what racial background is, immigrants, men, women, of different religious backgrounds. Everybody is included. I see a California of 36 million people, and this is the people that I will represent.
(END VIDEO CLIP)
BUCKLEY: Governor Gray Davis has promised a smooth transition, Arnold Schwarzenegger talking about that. It will be a transition that has to take place very quickly. Normally, these kinds of things take a couple of months. It may take place now instead in a period of a couple of weeks. It will have to be a smooth transition, Lou, if there is any business that's going to get done -- Lou.
DOBBS: Frank, thank you very much -- Frank Buckley reporting from Los Angeles.
This election obviously full of many surprises. Not only did Schwarzenegger win the support of women and a large number of Latinos. He also won the votes of many Democrats. One political analyst has consistently viewed Davis' recall and Schwarzenegger's election as all but assured.
And he is "Los Angeles Times" columnist, CNN political analyst Ron Brownstein. And he joins us now.
Good to have you with us, Ron.
RON BROWNSTEIN, CNN POLITICAL ANALYST: Thanks, Lou. Thanks for the plug.
(CROSSTALK)
DOBBS: Well, you have been steadfast. I would have reciprocated, should it have gone the other way.
(CROSSTALK)
DOBBS: This is remarkable.
I want to start with what to me is most impressive in this win. And that is that the Latinos, many of whom had looked at the Latino voters as a block for the Democrats upon whom Davis might rely. They went, 30 percent of them, for Schwarzenegger.
BROWNSTEIN: And nearly half of them went for the recall, an even larger percentage than voted for Schwarzenegger. Of course, Cruz Bustamante, the Latino lieutenant governor, did well in that community, too.
Look, what we saw -- and we talked about this this week -- in the exit polls, both the CNN and the one conducted by "The L.A. Times," was an erosion across the board in working-class constituencies. Latino voters, unionized voters, voters without college education all turned significantly against Davis. Schwarzenegger did not run as well in all of those as he did among Latinos, but he ran pretty well in many of them.
More importantly, they decisively broke against Davis. You saw the car tax, issues like the decision to sign a driver's license bill for illegal immigrants, all of these hurt Davis very much. And, in the end, it was that Democratic defection down the income ladder that really was the nail in the coffin for Gray Davis.
DOBBS: We've just heard governor-elect Schwarzenegger talking about opening the books of the state of California. Obviously, this recall was a revolt, as you're pointing out, by a host of constituencies.
What do you think we're going to see when governor-elect Schwarzenegger finally opens those books? And how difficult will be the chore when he does so?
BROWNSTEIN: Very difficult.
But you saw today, right now, what we are seeing is the best indication of his potential influence as governor. Look, he faces a state legislature with Democratic majorities in both chambers and, as one of the questioners pointed out, a redistricting plan that leaves very few competitive districts. Mostly, these are liberal Democrats and conservative Republicans who don't really have to worry about the middle that much.
But what Schwarzenegger has is the ability to attract the media and mobilize the public. The enormous attention that he can bring to bear -- that he has brought to bear through the campaign, if he can sustain that as governor, he will have an enormous ability to put pressure on them by mobilizing voters on these issues. And that will give him a kind of leverage that Gray Davis, Pete Wilson, Jerry Brown, George Deukmejian, really no Californian governor ever has had.
DOBBS: And we have already heard the calls. They began last week, as you actually reported on our show here, the calls here for the combat to continue, despite the election.
BROWNSTEIN: Yes.
DOBBS: The tone that the governor-elect is taking right now seems designed to be, indeed, as he said, inclusive. He seems to be, at least to me, setting entirely the appropriate tone. Will there be a sufficient number of Democrats, bitter in defeat, who might want to reciprocate with a recall?
BROWNSTEIN: I think that it becomes much less plausible. Any kind of legal challenge or recall, absent some major new revelation or disclosure about Schwarzenegger, is much less plausible because of the size of the victory that he enjoyed here.
Look, the recall didn't pass narrowly. It passed 55-45. Schwarzenegger won more votes for governor than the number of people who voted to keep Gray Davis as governor. There really is much less question about the legitimacy of this election than there would have been if had been a lot closer. He comes in with a very clear mandate, I think, from most voters in the state.
Now, it is a mandate for change. He was not terribly specific on an awful lot of questions as a candidate. Whether it's a mandate for anything more specific than that, we'll have to see. And I know you are dubious of the concept to begin with. But I do think that he is in a more stronger position, vis-a-vis the Democrats. Anybody who would want to go at him again is in a much weaker position because of the size of the vote that he won and the size of the vote against the recall.
DOBBS: As you know, Ron, I am skeptical of the concept of mandate.
BROWNSTEIN: Yes.
DOBBS: But we have yet -- and we should point this out -- not seen the secretary of state yet count those absentee ballots, which numbered over two million.
Ron Brownstein, again, we thank you very much for your insight, your analysis and your correct outlook. Ron Brownstein, thank you.
Well, later in the show, Wolf Blitzer, the anchor of CNN's election coverage, Jim Barnes of "The National Journal," and Karen Breslau of "Newsweek" will be with us to give us their assessments of Schwarzenegger's victory and the huge challenge that he and the state of California now face.
Still ahead here: FBI agents preparing to interview White House staff in the CIA leak investigation. Justice correspondent Kelli Arena will report.
"The Great American Giveaway," our special report, U.S. troops policing the world at a huge cost to taxpayers. Lisa Sylvester will report on the role of those troops and the price of being the world's policemen.
And in our "Face-Off" tonight, more than eight million illegal aliens in this country now, hundreds of thousands entering every year. Are tougher border controls the answer? We will have two very different views for you.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: At the same time, White House attorneys are reviewing memos, phone logs and other documents that may be relevant to the investigation.
Justice correspondent Kelli Arena has the report from Washington -- Kelli.
KELLI ARENA, CNN JUSTICE CORRESPONDENT: Lou, the White House counsel's office is sifting through information that was turned in by White House staffers.
Now, some of those documents could be turned over to the Justice Department as early as this week. And sources close to this investigation say that the list of people who may have been the source of the leak keeps growing. And that has prompted the FBI's Washington field office to assign more agents to the investigation.
(BEGIN VIDEO CLIP)
MCCLELLAN: And there are people inside and outside this administration that can help get to the bottom of this. And if people have information, they ought to talk to the Department of Justice about it, so that we can find out who is responsible for doing this.
(END VIDEO CLIP)
ARENA: One senior official told me, the FBI does not expect to complete this probe by year's end.
And as far as interviews are concerned, as you mentioned, the White House is the next stop, but several have already taken place. Government sources say that former Ambassador Joe Wilson, his wife, and Robert Novak, the reporter who revealed her identity, have all been interviewed by the FBI. So have several CIA officials -- Lou.
DOBBS: Kelli, thank you very much for the update.
The White House today launched a new public relations campaign -- that's right, a public relations campaign -- to convince Americans and Congress that the president is pursuing the correct policies in Iraq. National Security Adviser Condoleezza Rice today said the enemies of freedom are making a desperate stand in Iraq, but that they will be defeated.
Senior White House correspondent John King has the report -- John.
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Lou, the administration saying this new P.R. or strategy offensive is to reeducate or further educate the American people about what the administration insists is a policy success in Iraq.
Critics say it is proof to them that this president and this administration now very much on the offensive. Condoleezza Rice, as you noted, the national security adviser, taking the lead today. In a speech in Chicago to the Chicago Council on Foreign Relations, she not only said that the day-to-day lives of the Iraqi people are getting better now and that the killing fields, as she put it, of Saddam Hussein and his torture chambers are no more.
She also took a moment to very vehemently to defend the president's decision to go to war in the first place.
(BEGIN VIDEO CLIP)
CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: The war on terror is greatly served by the removal of this source of instability in the world's most unstable region. And the people of Iraq are free and working toward self-government.
Step by step, normal life in Iraq is being reborn as basic services are restored, in some cases for the first time in decades. Throughout the country, schools and hospitals are being rebuilt. Banks are opening and a new currency without Saddam's picture is being prepared.
(END VIDEO CLIP)
KING: Striking, perhaps, to see the administration mounting this offensive, even to defend the decision to go to war itself, five months and one week after Mr. Bush made that made-for-TV landing on an aircraft carrier to deliver a speech in which he, at one point, stood under a banner saying "mission accomplished" and declared major combat operations over.
But since that day and since that speech, of course, 91 Americans killed in action in Iraq, criticism in Congress for the president's plan for Iraq's reconstruction and the hefty price tag, the failure of the administration to win the support in the U.N. Security Council for a new resolution blessing its postwar policy. So Condoleezza Rice out today, Lou. Vice President Cheney and the president will add their voices in major speeches this week.
And, on Monday, the president will sit down with some regional media outlets for television interviews, all part of an administration P.R. offensive, the critics saying it is proof that the policy is wrong and that selling it won't help, but this administration making an aggressive push -- Lou.
DOBBS: John, is there any concern amongst the White House staff, the administration, that calling the problem with Iraq one of P.R., is probably one of the worst P.R. strategies that could be employed?
KING: Well, they say that it is being under-covered, the progress in Iraq, things like schools reopening, things like hospitals reopening.
But this administration insists that it is simply trying to put a spotlight on the successes to try to get some perspective. We did sit down with Joe Lockhart, the former Clinton White House press secretary, today. And he's been through many of these. And he said, look, when you bring everyone into your office and need a new P.R. offensive, he says, in reality, that is actually a reflection, an admission that you have a problem with the policy.
But they insist here at this White House, they don't have a problem. They think they just need to push the message through.
DOBBS: And Secretary of Defense Rumsfeld not aware that there was a shakeup in the administration over Iraq policy. What is the White House now saying?
KING: Well, the White House is now saying that perhaps Secretary Rumsfeld did not see in advance the plans to have this reorganization, as the White House has said on Monday. Secretary Rumsfeld is characterizing this as so what, business as usual. That's what the National Security Council does.
White House officials are saying there's still a great deal power and respect for the defense secretary in all this. But behind the scenes, Lou, they insist this reorganization was done for a reason. They say the president wants Condi Rice to have a firmer, more aggressive day-to-day role. And they say one of the reasons to have this reorganization was not to exclude Secretary Rumsfeld, but to include more voices in the debate over postwar Iraq.
DOBBS: I take the point, John. Who's in charge, Condoleezza Rice or Donald Rumsfeld?
KING: Well, they are both in charge, Lou. But this new reorganization does give Condoleezza Rice some authority to make decisions that, until this reorganization was put in place, were in the hands of the defense secretary.
DOBBS: John King, as always, thank you -- John King, senior White House correspondent.
Central Command today said 321 Americans have now been killed in the war against Saddam Hussein, 202 killed in combat, 119 in accidents. Another 1,767 troops have been wounded or injured, more than 1,400 of them under hostile fire.
Coming up next: "The Great American Giveaway," our special report tonight, policing the world. The United States spends hundreds and billions of dollars a year to keep peace around the globe. Lisa Sylvester reports on what, if anything, we receive in return, whether we should indeed be the world's policemen -- that story and a great deal more still ahead.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Tonight, in our series of special reports on "The Great American Giveaway," policing the world.
The United States maintains a military presence in more than two- thirds of the countries on this planet. Our defense budget is more than that of all of the other NATO members combined, $370 billion a year. There is a rising debate over whether this country should be policemen to the world and whether other nations should do more to help.
Lisa Sylvester reports.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): After hundreds of Liberians were killed this summer, a handful of U.S. Marines went in and the bloodshed stopped. In 1999, the United States led the charge to stop ethnic cleansing in Kosovo. And the United States led the effort to stop the civil war in Bosnia in 1995. In most cases where there has been a problem, the United States has taken the lead.
MICHAEL O'HANLON, BROOKINGS INSTITUTION: There's no doubt that many European countries and Japan feel that, on balance, they don't need to do as much in the international order to protect their interests, because the United States will do it for them.
SYLVESTER: U.S. troops are in 137 countries, with American military forces taking part in peacekeeping operations in Kosovo and Bosnia, patrolling in Afghanistan, and still fighting in Iraq.
Being the world's only superpower has its benefits. The United States can act unilaterally to confront a threat. And a stable world translates to a free flow of trade, stable markets and general economic growth.
MAX BOOT, COUNCIL ON FOREIGN RELATIONS: If we don't deal with it, nobody will. And if we don't, the world will be a much less safe place for us and for our allies and trading partners.
SYLVESTER: But removing a potential threat benefits the entire world. Yet it has been left to the United States to hold up the security umbrella, at a cost both in U.S. dollars and American lives. What's more, working alone can backfire.
TONY CLARK AREND, PROFESSOR, GEORGETOWN UNIVERSITY: If the United States attempts to do these things by itself, we will become less secure, because many states and peoples and groups in the international system will see us as an imperialist, will see us as a unilateral power. And that will actually engender more threats to our security, more terrorism.
(END VIDEOTAPE)
SYLVESTER: There are conflicts where other countries have taken the lead, the British in Sierra Leone, the French in the Congo, and the Australians in East Timor.
But these are places with relatively small populations and where the conflict is not likely to spill over to other regions -- Lou.
DOBBS: Lisa, thank you -- Lisa Sylvester, reporting from Washington.
The United States, as Lisa has just reported, maintains a military presence in more than 100 countries.
Our poll question tonight is: Should the United States adjust its military presence around the world, that is, reduce military presence, raise military presence, or maintain the status quo? Please vote on our Web site, CNN.com/Lou. We will have the results for you later in the show.
According to a new Gallup poll, 45 percent of Americans surveyed say the news media is too liberal. Only 14 percent say the media is too conservative. Those numbers remain pretty much unchanged over the past three years. And almost half of those surveyed said they have little to no trust in the overall news media.
California's new governor-elect has just held his first meeting with the press.
Joining me now for more on his performance, both at the polls and in that press conference, the surprises of the recall election on the minds of three leading journalists covering the story, Jim Barnes, the chief political correspondent of "The National Journal," who joins us from Washington, Wolf Blitzer who led CNN's election coverage into the early morning hours, joining us from Los Angeles
Karen Breslau, the San Francisco bureau chief for "Newsweek" magazine. Karen joins us from the Century Plaza Hotel where the news conference just took place. Thank you, all, for being here.
Karen let me, if I may, start with you. First on the press conference, the tone? Your take on his first press conference?
KAREN BRESLAU, "NEWSWEEK": You know, this was a feel-good press conference. He came out, was very friendly. Bantered a little bit, which we haven't seen a whole lot in the final days of the campaign. I think it was a bit a test drive to see what move of the press was and it was overwhelmingly friendly.
There was not really one sticky question for him on any personal matter. These were all about matters of state and about the transition and then just some real softballs about, you know, how it was with the kids, and whether or not he's going to move to Sacramento. So I think this was a nice, easy walk for him.
DOBBS: Does he move to San Francisco Karen?
BRESLAU: I think -- if he the option to move to San Francisco, he might. Unfortunately the choice is Sacramento. He very artfully dodged it and said he didn't know yet and he had tried to tell his children it would be a bit like having their father away on a movie set. Sometimes he'd be home and sometimes he wouldn't. He talked about traveling around the state. But he very carefully dodged whether or not he has intends to establish a residence in Sacramento.
And from what I heard, the family will not make the decision sometime next year until the children were out of school.
DOBBS: I will try to keep the state's Capitol and San Francisco separated in mind.
BRESLAU: I think a lot of people would like that, yes.
DOBBS: Throughout the rest of this evening at least. I'm not wanting to offend either city.
Jim Barnes, your take on the surprises of this election, if there were any for you? JIM BARNES, "NATIONAL JOURNAL": Well, I think one of the interesting aspects of this election was Arnold Schwarzenegger managed not only to galvanize the support of Republicans as well as conservatives, even though there was a strong anti-tax Republican McClintock also in the race. But he was able to really reach out and capture a plurality of independent voters. And I think almost a moderate -- a majority of self-identified moderates. And that's what a Republican needs to do to win in California.
And that's actually -- those moderate and those independent voters are going to be even more important to Schwarzenegger in the coming months, because he doesn't have any natural allies among the Republican or Democratic lawmakers in Sacramento. I think he's going to have to govern from the bully pull pit and he's going to need to maintain and indeed build his support among those swing voters those independents and moderates if he is going to go through Sacramento.
DOBBS: If he doesn't have any natural allies right now, Jim, the common controlling party of course, the Democrats, they do have a common opposition. This governor-elect making all of the right noises at least in his first press conference, talking about inclusion. Throwing open the books. That should be really received quite well, shouldn't it, amongst the leaders of the legislature in Sacramento?
BARNES: Oh, I think so. And I think that the leaders on both sides are going to be open to Schwarzenegger. I don't think anybody wants to come right out of the box to throttle this guy's program.
But it is not going to be easy. He has -- he has set a nice tone. But, you know, when the rubber meets the road, he's got to deal with Democrats who don't like cuts in programs, and Republicans who abhor tax increases.
DOBBS: Wolf, your take on first the surprises and where you think Arnold Schwarzenegger and the state of California will be headed now?
WOLF BLITZER, CNN ANCHOR: Well, I thought that Cruz Bustamante would do a lot better with his fellow Latinos. It they were pretty much split. He got a majority, but Arnold Schwarzenegger did very well with Latino voters here in California. That was somewhat of a surprise with me.
Also he did very well with women. He did a lot better with men, but with women, he got a major of the women despite the revelations, the accusations surfaced in the past few days.
It was a clear win for him. He got more votes than Gray Davis did in the recall election. So it was a strong, decisive mandate for Arnold Schwarzenegger to go forward. And I believe that's yet people of California have spoken decisively.
So many of the Democratic leaders of this state, including Gray Davis, who is going to have a smooth transition, we are told and Senator Dianne Feinstein and others are reaching out and insisting they want to cooperate with the governor-elect. DOBBS: Karen, let me ask you a final question. Do you think that -- and I just talked to Ron Brownstein about this -- do you think that the election has ended all of the pain and suffering is now over? The bitterness that we will not see the much threatened recall effort by some Democrats in the state?
BRESLAU: I think that the size of his majority, and as Wolf said, this incredible mandate is certainly going to quiet the dissent for now. I wouldn't rule out anything in the future, though, because Democrats are feeling very burned and very cheated. And...
DOBBS: By -- are they...
BRESLAU: If things don't go well. I don't think by Schwarzenegger personally but by the process.
DOBBS: Are they feeling burned by Governor Davis?
BRESLAU: And they are feeling -- I think they are feeling let down. They knew they were trying to ride a very weak and handicapped candidate to victory, and he went down to a much worse defeat than they had anticipated and so I think right now a lot of Democrats are stunned.
And nobody wants to, in view of this tremendous mandate, nobody wants to be the spoiler. Nobody wants to be the first one popping up and threatening recall or any sort of obstruction or sabotage to Schwarzenegger's attention. If things don't go well, I am sure happy to pile on at the first convenient moment.
DOBBS: Well, it appears to be perhaps an appropriate response if things don't go well. California is setting its own standard in demands of its elected officials.
Karen Breslau, we thank you very much. The San Francisco bureau chief of "Newsweek." Jim Barnes with the "National Journal," we thank you very much. And always Wolf Blitzer, pleasure to have you with us and great work last night. Thank you.
Tonight's quote is from Washington where one California Congresswoman wished Governor-elect Schwarzenegger luck. And we quote, "in 90 days he's going to have to have a budget and I wish him a great deal of luck in putting it together and honoring all his campaign pledges. I think he will find it this isn't like the movies, where you just write a scenario and get a happy ending." Democratic Minority Leader, Congresswoman Nancy Pelosi.
As we reported the Associated Press tonight is saying that listening devices discovered in the office of Philadelphia Mayor John Street were planted by the FBI. Philadelphia police discovered those bugs in a routine sweep in the mayor's office. Joining me now for the latest from Philadelphia is Walt Hunter from our affiliate KYW -- Walt.
WALT HUNTER, KYW CORRESPONDENT: Rising tide of voices here in Philadelphia tonight, calling on the FBI of their Philadelphia office behind me to break their silence. Among the voices calling for the FBI to come forward and explain the bugs, none other than Arlen Specter, our state Senator, our U.S. Senator and a member of the House Judiciary Committee, and the governor of Pennsylvania, Ed Rendell.
(BEGIN VIDEOTAPE)
SYLVESTER JOHNSON, PHILADELPHIA POLICE COMMISSIONER: Before we start, I'm telling you right now, I am not discussing the mayor's office. Under no circumstances, any questions that pertains to the mayor's office will have to be answered by the Federal Bureau of Investigation.
HUNTER: Police Commissioner Sylvester Johnson made it clear, any questions about the bug found in Mayor Street's office should go straight to the FBI's Philadelphia's office.
JOHNSON: I couldn't go to the FBI. I have no further comment about that investigation.
HUNTER: But neither the FBI nor the U.S. Attorney would comment on whether the highly sophisticated listening device was, in fact, part of a federal probe inside City Hall.
PAT MEEHAN, U.S. ATTORNEY: Well, I'm aware there's been a great deal of media speculation. And I've certainly been watching it as well. But I know that yesterday as well that the FBI came down and actually made a comment, spoke on behalf of the Department of Justice. And at this point in time, I think I'm going to let that comment stand.
HUNTER: The mayor, who maintains he has done absolutely nothing wrong, says he knows of no reason why any federal agency should be planting bugs in his office. And there's now growing pressure on the FBI to explain why it happened.
GOV. ED RENDELL, (D) PENNSYLVANIA: The mayor says that he's been told through sources, that he is not the target of an investigation. If that is true, than the FBI owes that explanation, not only to the mayor, but to the people of Philadelphia.
(END VIDEOTAPE)
HUNTER: Now, sources tell us, when that bug was found in the mayor's office, instead of taking it to the Philadelphia police crime lab where it would normally be examined, the bug was immediately given to the FBI and they returned to their office with it where it is still being kept at this hour. That, according to sources, is a strong indication that it was the FBI's bug and they were the ones that put it there in the first place.
As of now, the FBI maintaining total silence on the bug and refusing to confirm or deny that there's even an investigation underway. Live for CNN from Philadelphia, I'm Walt Hunter. Back to you.
DOBBS: Walt Hunter, KYW, thank you. Still ahead here tonight, our borders are wide open to potential terrorists and illegal aliens. Bill Tucker will have a special report tonight. State Congressman Randy Graf of Arizona, Angela Kelley of the National Immigration Forum, join us to face off over the issue over illegal immigration and what to do about it.
(COMMERCIAL BREAK)
DOBBS: Before turning to our "Face-Off" segment, we want to report to you that CNN has now confirmed that the FBI did plant a listening device in the office of Philadelphia Mayor John F. Street. We will have more for you on that developing story in just a matter of moments here.
More than two years after the terrorist attacks of September 11, immigration policy in this country remains seriously flawed. Many have argued for reform, but so far there is no evidence of political will to fix the problem.
Bill Tucker is here now with the story -- Bill.
BILL TUCKER, CNN CORRESPONDENT: Lou, immigration policy in the United States of America is confused, and that is putting it nicely.
(BEGIN VIDEOTAPE)
TUCKER (voice-over): A dozen states allow illegal aliens to obtain driver's licenses. Hundreds of financial institutions allow illegal aliens to open bank accounts opinion there is proposed legislation, the Dream Act, that would allow illegal aliens to attend colleges at in-state tuition levels. And this is attention directed to illegal aliens who the media and increasingly government workers refer to undocumented workers. It would appear we have no immigration policy.
MARK KRIKORIAN, CENTER FOR IMMIGRATION STUDIES: We have an immigration policy just because we do something with regard to immigration, but it can't be described as coherent or sensible in any way. Nobody really sat down and thought out what it is we want out of immigration.
TUCKER: Ironically, the right and the left agree.
DANIEL GRISWOLD, CATO INSTITUTE: I think our immigration system is dysfunctional the way it is. We do have a divided personality over immigration. It technically, it's illegal for 8 million people to be here in the country, who are here without documents. And 2 or 300,000 more coming in more net each year.
TUCKER: And failing to declare an immigration policy, those illegal aliens effectively become second-class citizens. Vulnerable to social and economic abuse, but they are not the only ones who suffer the consequences.
DAN STEIN, FED. FOR AMER. IMMIGRATION REFORM: We're creating an hourglass society and we're going to start looking more like one of those Latin American countries, where the rich people live in rural communities hiding out and everybody else doesn't know what to do.
(END VIDEO CLIP)
TUCKER: Failure to engage in a national debate to shake that policy is what has led us to this point. The world's superpower with a de facto immigration policy -- Lou.
Bill, thank you. Bill Tucker.
Well, the lack of a coherent immigration policy is the focus of our "Face-Off" tonight.
We're joined by State Representative Randy Graf, Republican of Arizona, who says more money needs to be spent to secure our borders.
We are also joined by Angela Kelly, who says more money will not fix this problem. It never has. She is the deputy director of the National Immigration Forum.
To both of you, welcome. We appreciate you're being here. We have anywhere between 8 and 10 million illegal aliens in this country.
What is the solution?
And if I may begin with you, representative?
STATE REP. RANDY GRAF (R), ARIZONA: Well, it's very frustrating at the state level. Arizona shares about 360 miles of border with Mexico. And the federal government is very lax in controlling the border. The numbers coming across on an annual basis are far more than the number just given of 2 or 300,000. We have more than that coming across in the Tucson sector alone. And yet, even though the federal government fails to live up to its responsible of patrolling the border and securing the border, it puts mandates on the states, such as Arizona, to give K-12 education, to take care of healthcare issues. We've got tremendous criminal justice costs in the state of Arizona, not to mention the environmental impacts along the borders.
DOBBS: Do you want the borders sealed, Graf.
GRAF: I think the border has to be sealed. I am certainly not opposed to immigration. We have immigration laws on the books right now. We're at the tremendous -- we are at the highest levels of immigration in the history of our nation.
DOBBS: Angela Kelley, would you support the idea of closing the borders as a first step toward controlling both our borders and the population of illegal aliens in the country?
ANGELA KELLEY, DEPUTY DIRECTOR, THE NATIONAL IMMIGRATION FORUM: Well, quite frankly, that's been the policy of the last many years to try to seal a border by pouring Border Patrol agent, by pouring money at the border, and what have we seen?
We've seen a ballooning undocumented population of 8 to 10 million people as you've indicated. And what is desperately needed is immigration reform that deals with the realities of what this country needs. We need a secure legal system for people to come through this country through legal channels. We need to put people who have been working hard and paying taxes in this country on a path to legal status so we know who they are.
DOBBS: Are you talking about amnesty?
KELLEY: And we need better target our enforcement resources so we can go after the bad actors, stop the smuggling, so we can stop the fraudulent documents.
DOBBS: Representative Graf, you are shaking your head.
KELLEY: The resources today have been put at the point of entry. We have three major points of entry in Arizona with Mexico. Unfortunately, there is another 350 miles of border that is protected by nothing but a three strand barbed wire fence. And many of those areas are very remote, very dangerous areas. We have record numbers of deaths of immigrants trying to cross into Arizona. Not to mention the fact that Border Patrol will admit, they have apprehended folks heading to Arizona from at least 63 countries other than just Mexico. So from 9/11 standpoint and security aspect, we are not securing our borders.
DOBBS: Governor Rick Perry of Texas was here Monday evening. Discussed illegal aliens as the two edged sword. The benefiting and burdens that result.
Who is benefiting from not having a policy here?
Why is there is an institutional inertia on the part of our politicians, to deal with this at the national level?
And why is there not a sufficient will at any level to deal with this rising crisis in a sensible humane way for those people who are dislocated and within our borders?
Why can we not come to a conscience policy decision?
I'll start with you, Angela.
KELLEY: I think the debate is long overdue as you have indicated. I share concerns of the deaths at the border. I share the concerns about the pressures on state budgets. What we see happening finally is that both Republicans and Democrats are beginning to introduce legislation on comprehensive immigration reform. The debate is slowly but surely moving in that direction. And meanwhile you see what is happening locally is that police departments are endorsing the idea of people carrying identification cards. You're seeing the effort to try to give kids who are here, who have been graduating from a high schools and want to go into college the chance to go to college even if they are undocumented. So you see the solutions begin to bubble up from local governments and beginning to see the efforts in Washington, but much more needs to be done, and to be done quickly.
DOBBS: You are far more discerning I am, Angela, to see those efforts in Washington. We have not been able to detect anything of any real significance to this point but I am delighted to hear that.
KELLEY: Your other guests home state, Senator McCain, Representative Colby and Representative Flake, they have introduced legislation that gets that the very issue and it's a good start.
DOBBS: Representative Graf.
GRAF: It's a good start for a debate perhaps, but unless we secure the border, nothing is going to be done. The frustration at the local level and here in Arizona is to -- the Protect Arizona Committee for example is trying to bring an initiative to ballot next year that would make sure we have enforcement mechanisms on the front end to make sure people that are registering to vote -- I mean, our citizens. People who are registering for welfare benefits are actually citizens or legal residents.
So there are things that can be done at the local level. Arizona is trying to do that right now. And when the federal government fails to once again enforce the borders and begins to allow the acceptance of foreign I.D. cards like the metricula consulate (ph) cards. You are right, the policy level at Washington, D.C. is so scattered right now that it's hard to see how anything could be done that the level.
KELLEY: I would say that if we want to get a handle on folks coming this country, then we have to give them legal channels to come. And that benefits us.
DOBBS: I am sorry, Angela.
KELLEY: That benefits us, because we know who's coming. That benefits our economy, because these are needed workers and it benefits American families because they can be reunited.
DOBBS: Representative Graf, the last word, please.
GRAF: There are plenty of legal channels for them to come in right now I believe. There's over 60 or 70 different types visa programs that allow people.
(CROSSTALK)
DOBBS: We thank you both. We will ask you both to continue this discussion of a critical issue. We didn't even move to the issue of the potential terrorist threat with having porous borders that we can't even control in the case of illegal immigration.
We thank you very much, Angela Kelley, representative Graf of Arizona. Thank you both so much.
Just ahead here, stocks after a five-day winning streak. Is it broken. Christine Romans will have the market for us next. Also we'll have your thoughts on the exporting of America. Please stay with us.
(COMMERCIAL BREAK) DOBBS: On Wall Street, a streak broken. The Dow Jones Industrials today losing almost 24 points, breaking a five-day winning streak. A monthly winning streak quite a fact. The S&P 500 off 5.5 points. Christine Romans now with the market -- Christine.
CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: That's not too bad, 5 days up, 1 day down for October.
DOBBS: I think most people will take that.
ROMANS: Exactly. First down day six and telecom services stocks, Lou, really took it on the chin. We watch that group, because new rules for cell phone providers begin next month allowing consumers to keep their phone numbers when they switch carriers. Analysts say it means consumers can be more choosy, looking for the best deals and that's going to cost the cell phone carriers.
Now outside of telecom, earnings were center stage. Yahoo after the close, reported a 10 cent profit -- that's profit doubling, Lou, in the quarter. One penny ahead of expectations.
DOBBS: Expectations?
ROMANS: Yes, this whole game was sort of coming back in some of these areas. Last quarter, when the company reported triple-digit profit growth, but it just matched the street, the stock fell 6 percent. This time beat by a penny and the stock is up after hours. Yahoo is up 133 percent this year. It boasts a price earnings ratio of about 80 for next year.
DOBBS: Is that as reported?
ROMANS: Yes. As reported is even in the hundreds. Okay, this brings me to margin debt. Margin loans through brokerage firms listed NASE rose to $26 billion in July. That's four times the amount in January and it tops the money at the high of the bull market back in March of 2000. The NASE even sent out an alert to investors last month warning about the lists of borrowing money, so watch that.
And active stocks today, you'll like this one Lou: Biovail. Bank Of America put out a sell rating on the drug maker and Biovail came back swinging. Here is what Bank of America said, "Corporate governance and aggressive accounting issues." It said, "there are several trends including the high level of CEO options, company loans to management and the purchase of a company jet from the CEO."
It's CEO made $42 million last year. Too much B of A says, for a company that's 5 years old and is yet to crack a billion in sales. Biovail said nothing new to the report. It's outrageous and irresponsible. The stock fell 13 percent.
DOBBS: But they're making huge profits I'm sure justifying all of that?
ROMANS: No, barely making a profit.
DOBBS: Ah, but they did have time for the big jet. $42 million. Very impressive. And it's good for B of A.
ROMANS: Analysts doing its job.
DOBBS: Absolutely.
Christine Romans doing yours.
ROMANS: Thank you.
DOBBS: Now the results of our poll question tonight, "should the United States adjust its military presence around the world?" 83 percent of you said reduce military presence, 18 percent said raise it and 9 percent said maintain the status quo.
Let's take a look at some of your thoughts. From Austin, Texas tonight on our series of special reports "Exporting America", "Maybe if we outsource a few multimillion dollar CEO's the politicians will take notice."
And from Yalaha, Florida, "why doesn't someone step up to the plate and suggest imposing a tariff on those imports to level the playing field? Maybe that will stop the unpatriotic corporations from shipping all our jobs overseas. I think they are as harmful to the well being of this great country as all of the other international terrorists." That from Bob Minsch.
From Rome, Georgia, "Mr. Dobbs, thanks for you coverage on the continuing losses of manufacturing jobs. It would seem that many in their race to discuss the economy as a whole have forgotten that all well built houses must first have a good foundation. And in our country, for many years, manufacturing has been that foundation. Keep up the good work." From Sean Walker.
We love to hear from you. And please e-mail us at loudobbs@CNN.com.
That's our show for tonight. Thanks for being with us. For all of us here, good night from New York. "ANDERSON COOPER 360" coming up.
END
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Campaign on Iraq; Wall Street Has First Down Day In Five>
Aired October 8, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Arnold Schwarzenegger, 19 hours after the polls closed in California, now governor-elect, holding his first press conference.
Defying the odds, history, trash politics, charges of sexual misconduct, Arnold Schwarzenegger is now governor-elect of California. And Schwarzenegger won big. He took half the votes of women, a third of the votes of Latinos. Schwarzenegger won by an impressive 16 percent over his nearest challenger, Lieutenant Governor Cruz Bustamante. The bodybuilder, movie star, businessman and now governor-elect has wasted no time in preparing to take office.
He has just announced the head of the transition team who will take over the governor's mansion from Gray Davis. Davis last night became the second governor in American history to be thrown from office in a recall vote.
We begin our coverage tonight with Frank Buckley from Schwarzenegger's headquarters in Los Angeles -- Frank.
FRANK BUCKLEY, CNN NATIONAL CORRESPONDENT: Well, Lou, the news conference still going on behind me, so I am going to try to keep the voice down here, so we don't interrupt the news conference.
But you heard from Arnold Schwarzenegger during the past few minutes that he's been getting calls from literally around the world, from Nelson Mandela, from President Bush and his father, the elder President Bush, from Ted Kennedy, the political spectrum all over the place, also getting a sense of some of the challenges that lie ahead for this governor-elect, the most pressing one, the budget that has to be presented here in California by January 10.
We heard Arnold Schwarzenegger talking about that, saying that he wants to find out exactly what the operating deficit is right now. And what he wants to do there is, as he has said throughout the campaign, he wants to open the books and find the waste. That will be one of the first things that he gets to when he gets into office, his transition team expected to be announced tomorrow.
We know that David Dreier, the congressman, will head up that transition team. Arnold Schwarzenegger still speaking. Here's a portion of what he has said already.
(BEGIN VIDEO CLIP)
SCHWARZENEGGER: I made it very clear in my campaign that I will be the people's governor. That is the most important thing, governor for the people, not for special interests, but for everybody.
I also made it very clear that I believe in inclusion, that I will represent everybody. It doesn't matter if it is young or old or their what racial background is, immigrants, men, women, of different religious backgrounds. Everybody is included. I see a California of 36 million people, and this is the people that I will represent.
(END VIDEO CLIP)
BUCKLEY: Governor Gray Davis has promised a smooth transition, Arnold Schwarzenegger talking about that. It will be a transition that has to take place very quickly. Normally, these kinds of things take a couple of months. It may take place now instead in a period of a couple of weeks. It will have to be a smooth transition, Lou, if there is any business that's going to get done -- Lou.
DOBBS: Frank, thank you very much -- Frank Buckley reporting from Los Angeles.
This election obviously full of many surprises. Not only did Schwarzenegger win the support of women and a large number of Latinos. He also won the votes of many Democrats. One political analyst has consistently viewed Davis' recall and Schwarzenegger's election as all but assured.
And he is "Los Angeles Times" columnist, CNN political analyst Ron Brownstein. And he joins us now.
Good to have you with us, Ron.
RON BROWNSTEIN, CNN POLITICAL ANALYST: Thanks, Lou. Thanks for the plug.
(CROSSTALK)
DOBBS: Well, you have been steadfast. I would have reciprocated, should it have gone the other way.
(CROSSTALK)
DOBBS: This is remarkable.
I want to start with what to me is most impressive in this win. And that is that the Latinos, many of whom had looked at the Latino voters as a block for the Democrats upon whom Davis might rely. They went, 30 percent of them, for Schwarzenegger.
BROWNSTEIN: And nearly half of them went for the recall, an even larger percentage than voted for Schwarzenegger. Of course, Cruz Bustamante, the Latino lieutenant governor, did well in that community, too.
Look, what we saw -- and we talked about this this week -- in the exit polls, both the CNN and the one conducted by "The L.A. Times," was an erosion across the board in working-class constituencies. Latino voters, unionized voters, voters without college education all turned significantly against Davis. Schwarzenegger did not run as well in all of those as he did among Latinos, but he ran pretty well in many of them.
More importantly, they decisively broke against Davis. You saw the car tax, issues like the decision to sign a driver's license bill for illegal immigrants, all of these hurt Davis very much. And, in the end, it was that Democratic defection down the income ladder that really was the nail in the coffin for Gray Davis.
DOBBS: We've just heard governor-elect Schwarzenegger talking about opening the books of the state of California. Obviously, this recall was a revolt, as you're pointing out, by a host of constituencies.
What do you think we're going to see when governor-elect Schwarzenegger finally opens those books? And how difficult will be the chore when he does so?
BROWNSTEIN: Very difficult.
But you saw today, right now, what we are seeing is the best indication of his potential influence as governor. Look, he faces a state legislature with Democratic majorities in both chambers and, as one of the questioners pointed out, a redistricting plan that leaves very few competitive districts. Mostly, these are liberal Democrats and conservative Republicans who don't really have to worry about the middle that much.
But what Schwarzenegger has is the ability to attract the media and mobilize the public. The enormous attention that he can bring to bear -- that he has brought to bear through the campaign, if he can sustain that as governor, he will have an enormous ability to put pressure on them by mobilizing voters on these issues. And that will give him a kind of leverage that Gray Davis, Pete Wilson, Jerry Brown, George Deukmejian, really no Californian governor ever has had.
DOBBS: And we have already heard the calls. They began last week, as you actually reported on our show here, the calls here for the combat to continue, despite the election.
BROWNSTEIN: Yes.
DOBBS: The tone that the governor-elect is taking right now seems designed to be, indeed, as he said, inclusive. He seems to be, at least to me, setting entirely the appropriate tone. Will there be a sufficient number of Democrats, bitter in defeat, who might want to reciprocate with a recall?
BROWNSTEIN: I think that it becomes much less plausible. Any kind of legal challenge or recall, absent some major new revelation or disclosure about Schwarzenegger, is much less plausible because of the size of the victory that he enjoyed here.
Look, the recall didn't pass narrowly. It passed 55-45. Schwarzenegger won more votes for governor than the number of people who voted to keep Gray Davis as governor. There really is much less question about the legitimacy of this election than there would have been if had been a lot closer. He comes in with a very clear mandate, I think, from most voters in the state.
Now, it is a mandate for change. He was not terribly specific on an awful lot of questions as a candidate. Whether it's a mandate for anything more specific than that, we'll have to see. And I know you are dubious of the concept to begin with. But I do think that he is in a more stronger position, vis-a-vis the Democrats. Anybody who would want to go at him again is in a much weaker position because of the size of the vote that he won and the size of the vote against the recall.
DOBBS: As you know, Ron, I am skeptical of the concept of mandate.
BROWNSTEIN: Yes.
DOBBS: But we have yet -- and we should point this out -- not seen the secretary of state yet count those absentee ballots, which numbered over two million.
Ron Brownstein, again, we thank you very much for your insight, your analysis and your correct outlook. Ron Brownstein, thank you.
Well, later in the show, Wolf Blitzer, the anchor of CNN's election coverage, Jim Barnes of "The National Journal," and Karen Breslau of "Newsweek" will be with us to give us their assessments of Schwarzenegger's victory and the huge challenge that he and the state of California now face.
Still ahead here: FBI agents preparing to interview White House staff in the CIA leak investigation. Justice correspondent Kelli Arena will report.
"The Great American Giveaway," our special report, U.S. troops policing the world at a huge cost to taxpayers. Lisa Sylvester will report on the role of those troops and the price of being the world's policemen.
And in our "Face-Off" tonight, more than eight million illegal aliens in this country now, hundreds of thousands entering every year. Are tougher border controls the answer? We will have two very different views for you.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: At the same time, White House attorneys are reviewing memos, phone logs and other documents that may be relevant to the investigation.
Justice correspondent Kelli Arena has the report from Washington -- Kelli.
KELLI ARENA, CNN JUSTICE CORRESPONDENT: Lou, the White House counsel's office is sifting through information that was turned in by White House staffers.
Now, some of those documents could be turned over to the Justice Department as early as this week. And sources close to this investigation say that the list of people who may have been the source of the leak keeps growing. And that has prompted the FBI's Washington field office to assign more agents to the investigation.
(BEGIN VIDEO CLIP)
MCCLELLAN: And there are people inside and outside this administration that can help get to the bottom of this. And if people have information, they ought to talk to the Department of Justice about it, so that we can find out who is responsible for doing this.
(END VIDEO CLIP)
ARENA: One senior official told me, the FBI does not expect to complete this probe by year's end.
And as far as interviews are concerned, as you mentioned, the White House is the next stop, but several have already taken place. Government sources say that former Ambassador Joe Wilson, his wife, and Robert Novak, the reporter who revealed her identity, have all been interviewed by the FBI. So have several CIA officials -- Lou.
DOBBS: Kelli, thank you very much for the update.
The White House today launched a new public relations campaign -- that's right, a public relations campaign -- to convince Americans and Congress that the president is pursuing the correct policies in Iraq. National Security Adviser Condoleezza Rice today said the enemies of freedom are making a desperate stand in Iraq, but that they will be defeated.
Senior White House correspondent John King has the report -- John.
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Lou, the administration saying this new P.R. or strategy offensive is to reeducate or further educate the American people about what the administration insists is a policy success in Iraq.
Critics say it is proof to them that this president and this administration now very much on the offensive. Condoleezza Rice, as you noted, the national security adviser, taking the lead today. In a speech in Chicago to the Chicago Council on Foreign Relations, she not only said that the day-to-day lives of the Iraqi people are getting better now and that the killing fields, as she put it, of Saddam Hussein and his torture chambers are no more.
She also took a moment to very vehemently to defend the president's decision to go to war in the first place.
(BEGIN VIDEO CLIP)
CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: The war on terror is greatly served by the removal of this source of instability in the world's most unstable region. And the people of Iraq are free and working toward self-government.
Step by step, normal life in Iraq is being reborn as basic services are restored, in some cases for the first time in decades. Throughout the country, schools and hospitals are being rebuilt. Banks are opening and a new currency without Saddam's picture is being prepared.
(END VIDEO CLIP)
KING: Striking, perhaps, to see the administration mounting this offensive, even to defend the decision to go to war itself, five months and one week after Mr. Bush made that made-for-TV landing on an aircraft carrier to deliver a speech in which he, at one point, stood under a banner saying "mission accomplished" and declared major combat operations over.
But since that day and since that speech, of course, 91 Americans killed in action in Iraq, criticism in Congress for the president's plan for Iraq's reconstruction and the hefty price tag, the failure of the administration to win the support in the U.N. Security Council for a new resolution blessing its postwar policy. So Condoleezza Rice out today, Lou. Vice President Cheney and the president will add their voices in major speeches this week.
And, on Monday, the president will sit down with some regional media outlets for television interviews, all part of an administration P.R. offensive, the critics saying it is proof that the policy is wrong and that selling it won't help, but this administration making an aggressive push -- Lou.
DOBBS: John, is there any concern amongst the White House staff, the administration, that calling the problem with Iraq one of P.R., is probably one of the worst P.R. strategies that could be employed?
KING: Well, they say that it is being under-covered, the progress in Iraq, things like schools reopening, things like hospitals reopening.
But this administration insists that it is simply trying to put a spotlight on the successes to try to get some perspective. We did sit down with Joe Lockhart, the former Clinton White House press secretary, today. And he's been through many of these. And he said, look, when you bring everyone into your office and need a new P.R. offensive, he says, in reality, that is actually a reflection, an admission that you have a problem with the policy.
But they insist here at this White House, they don't have a problem. They think they just need to push the message through.
DOBBS: And Secretary of Defense Rumsfeld not aware that there was a shakeup in the administration over Iraq policy. What is the White House now saying?
KING: Well, the White House is now saying that perhaps Secretary Rumsfeld did not see in advance the plans to have this reorganization, as the White House has said on Monday. Secretary Rumsfeld is characterizing this as so what, business as usual. That's what the National Security Council does.
White House officials are saying there's still a great deal power and respect for the defense secretary in all this. But behind the scenes, Lou, they insist this reorganization was done for a reason. They say the president wants Condi Rice to have a firmer, more aggressive day-to-day role. And they say one of the reasons to have this reorganization was not to exclude Secretary Rumsfeld, but to include more voices in the debate over postwar Iraq.
DOBBS: I take the point, John. Who's in charge, Condoleezza Rice or Donald Rumsfeld?
KING: Well, they are both in charge, Lou. But this new reorganization does give Condoleezza Rice some authority to make decisions that, until this reorganization was put in place, were in the hands of the defense secretary.
DOBBS: John King, as always, thank you -- John King, senior White House correspondent.
Central Command today said 321 Americans have now been killed in the war against Saddam Hussein, 202 killed in combat, 119 in accidents. Another 1,767 troops have been wounded or injured, more than 1,400 of them under hostile fire.
Coming up next: "The Great American Giveaway," our special report tonight, policing the world. The United States spends hundreds and billions of dollars a year to keep peace around the globe. Lisa Sylvester reports on what, if anything, we receive in return, whether we should indeed be the world's policemen -- that story and a great deal more still ahead.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Tonight, in our series of special reports on "The Great American Giveaway," policing the world.
The United States maintains a military presence in more than two- thirds of the countries on this planet. Our defense budget is more than that of all of the other NATO members combined, $370 billion a year. There is a rising debate over whether this country should be policemen to the world and whether other nations should do more to help.
Lisa Sylvester reports.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): After hundreds of Liberians were killed this summer, a handful of U.S. Marines went in and the bloodshed stopped. In 1999, the United States led the charge to stop ethnic cleansing in Kosovo. And the United States led the effort to stop the civil war in Bosnia in 1995. In most cases where there has been a problem, the United States has taken the lead.
MICHAEL O'HANLON, BROOKINGS INSTITUTION: There's no doubt that many European countries and Japan feel that, on balance, they don't need to do as much in the international order to protect their interests, because the United States will do it for them.
SYLVESTER: U.S. troops are in 137 countries, with American military forces taking part in peacekeeping operations in Kosovo and Bosnia, patrolling in Afghanistan, and still fighting in Iraq.
Being the world's only superpower has its benefits. The United States can act unilaterally to confront a threat. And a stable world translates to a free flow of trade, stable markets and general economic growth.
MAX BOOT, COUNCIL ON FOREIGN RELATIONS: If we don't deal with it, nobody will. And if we don't, the world will be a much less safe place for us and for our allies and trading partners.
SYLVESTER: But removing a potential threat benefits the entire world. Yet it has been left to the United States to hold up the security umbrella, at a cost both in U.S. dollars and American lives. What's more, working alone can backfire.
TONY CLARK AREND, PROFESSOR, GEORGETOWN UNIVERSITY: If the United States attempts to do these things by itself, we will become less secure, because many states and peoples and groups in the international system will see us as an imperialist, will see us as a unilateral power. And that will actually engender more threats to our security, more terrorism.
(END VIDEOTAPE)
SYLVESTER: There are conflicts where other countries have taken the lead, the British in Sierra Leone, the French in the Congo, and the Australians in East Timor.
But these are places with relatively small populations and where the conflict is not likely to spill over to other regions -- Lou.
DOBBS: Lisa, thank you -- Lisa Sylvester, reporting from Washington.
The United States, as Lisa has just reported, maintains a military presence in more than 100 countries.
Our poll question tonight is: Should the United States adjust its military presence around the world, that is, reduce military presence, raise military presence, or maintain the status quo? Please vote on our Web site, CNN.com/Lou. We will have the results for you later in the show.
According to a new Gallup poll, 45 percent of Americans surveyed say the news media is too liberal. Only 14 percent say the media is too conservative. Those numbers remain pretty much unchanged over the past three years. And almost half of those surveyed said they have little to no trust in the overall news media.
California's new governor-elect has just held his first meeting with the press.
Joining me now for more on his performance, both at the polls and in that press conference, the surprises of the recall election on the minds of three leading journalists covering the story, Jim Barnes, the chief political correspondent of "The National Journal," who joins us from Washington, Wolf Blitzer who led CNN's election coverage into the early morning hours, joining us from Los Angeles
Karen Breslau, the San Francisco bureau chief for "Newsweek" magazine. Karen joins us from the Century Plaza Hotel where the news conference just took place. Thank you, all, for being here.
Karen let me, if I may, start with you. First on the press conference, the tone? Your take on his first press conference?
KAREN BRESLAU, "NEWSWEEK": You know, this was a feel-good press conference. He came out, was very friendly. Bantered a little bit, which we haven't seen a whole lot in the final days of the campaign. I think it was a bit a test drive to see what move of the press was and it was overwhelmingly friendly.
There was not really one sticky question for him on any personal matter. These were all about matters of state and about the transition and then just some real softballs about, you know, how it was with the kids, and whether or not he's going to move to Sacramento. So I think this was a nice, easy walk for him.
DOBBS: Does he move to San Francisco Karen?
BRESLAU: I think -- if he the option to move to San Francisco, he might. Unfortunately the choice is Sacramento. He very artfully dodged it and said he didn't know yet and he had tried to tell his children it would be a bit like having their father away on a movie set. Sometimes he'd be home and sometimes he wouldn't. He talked about traveling around the state. But he very carefully dodged whether or not he has intends to establish a residence in Sacramento.
And from what I heard, the family will not make the decision sometime next year until the children were out of school.
DOBBS: I will try to keep the state's Capitol and San Francisco separated in mind.
BRESLAU: I think a lot of people would like that, yes.
DOBBS: Throughout the rest of this evening at least. I'm not wanting to offend either city.
Jim Barnes, your take on the surprises of this election, if there were any for you? JIM BARNES, "NATIONAL JOURNAL": Well, I think one of the interesting aspects of this election was Arnold Schwarzenegger managed not only to galvanize the support of Republicans as well as conservatives, even though there was a strong anti-tax Republican McClintock also in the race. But he was able to really reach out and capture a plurality of independent voters. And I think almost a moderate -- a majority of self-identified moderates. And that's what a Republican needs to do to win in California.
And that's actually -- those moderate and those independent voters are going to be even more important to Schwarzenegger in the coming months, because he doesn't have any natural allies among the Republican or Democratic lawmakers in Sacramento. I think he's going to have to govern from the bully pull pit and he's going to need to maintain and indeed build his support among those swing voters those independents and moderates if he is going to go through Sacramento.
DOBBS: If he doesn't have any natural allies right now, Jim, the common controlling party of course, the Democrats, they do have a common opposition. This governor-elect making all of the right noises at least in his first press conference, talking about inclusion. Throwing open the books. That should be really received quite well, shouldn't it, amongst the leaders of the legislature in Sacramento?
BARNES: Oh, I think so. And I think that the leaders on both sides are going to be open to Schwarzenegger. I don't think anybody wants to come right out of the box to throttle this guy's program.
But it is not going to be easy. He has -- he has set a nice tone. But, you know, when the rubber meets the road, he's got to deal with Democrats who don't like cuts in programs, and Republicans who abhor tax increases.
DOBBS: Wolf, your take on first the surprises and where you think Arnold Schwarzenegger and the state of California will be headed now?
WOLF BLITZER, CNN ANCHOR: Well, I thought that Cruz Bustamante would do a lot better with his fellow Latinos. It they were pretty much split. He got a majority, but Arnold Schwarzenegger did very well with Latino voters here in California. That was somewhat of a surprise with me.
Also he did very well with women. He did a lot better with men, but with women, he got a major of the women despite the revelations, the accusations surfaced in the past few days.
It was a clear win for him. He got more votes than Gray Davis did in the recall election. So it was a strong, decisive mandate for Arnold Schwarzenegger to go forward. And I believe that's yet people of California have spoken decisively.
So many of the Democratic leaders of this state, including Gray Davis, who is going to have a smooth transition, we are told and Senator Dianne Feinstein and others are reaching out and insisting they want to cooperate with the governor-elect. DOBBS: Karen, let me ask you a final question. Do you think that -- and I just talked to Ron Brownstein about this -- do you think that the election has ended all of the pain and suffering is now over? The bitterness that we will not see the much threatened recall effort by some Democrats in the state?
BRESLAU: I think that the size of his majority, and as Wolf said, this incredible mandate is certainly going to quiet the dissent for now. I wouldn't rule out anything in the future, though, because Democrats are feeling very burned and very cheated. And...
DOBBS: By -- are they...
BRESLAU: If things don't go well. I don't think by Schwarzenegger personally but by the process.
DOBBS: Are they feeling burned by Governor Davis?
BRESLAU: And they are feeling -- I think they are feeling let down. They knew they were trying to ride a very weak and handicapped candidate to victory, and he went down to a much worse defeat than they had anticipated and so I think right now a lot of Democrats are stunned.
And nobody wants to, in view of this tremendous mandate, nobody wants to be the spoiler. Nobody wants to be the first one popping up and threatening recall or any sort of obstruction or sabotage to Schwarzenegger's attention. If things don't go well, I am sure happy to pile on at the first convenient moment.
DOBBS: Well, it appears to be perhaps an appropriate response if things don't go well. California is setting its own standard in demands of its elected officials.
Karen Breslau, we thank you very much. The San Francisco bureau chief of "Newsweek." Jim Barnes with the "National Journal," we thank you very much. And always Wolf Blitzer, pleasure to have you with us and great work last night. Thank you.
Tonight's quote is from Washington where one California Congresswoman wished Governor-elect Schwarzenegger luck. And we quote, "in 90 days he's going to have to have a budget and I wish him a great deal of luck in putting it together and honoring all his campaign pledges. I think he will find it this isn't like the movies, where you just write a scenario and get a happy ending." Democratic Minority Leader, Congresswoman Nancy Pelosi.
As we reported the Associated Press tonight is saying that listening devices discovered in the office of Philadelphia Mayor John Street were planted by the FBI. Philadelphia police discovered those bugs in a routine sweep in the mayor's office. Joining me now for the latest from Philadelphia is Walt Hunter from our affiliate KYW -- Walt.
WALT HUNTER, KYW CORRESPONDENT: Rising tide of voices here in Philadelphia tonight, calling on the FBI of their Philadelphia office behind me to break their silence. Among the voices calling for the FBI to come forward and explain the bugs, none other than Arlen Specter, our state Senator, our U.S. Senator and a member of the House Judiciary Committee, and the governor of Pennsylvania, Ed Rendell.
(BEGIN VIDEOTAPE)
SYLVESTER JOHNSON, PHILADELPHIA POLICE COMMISSIONER: Before we start, I'm telling you right now, I am not discussing the mayor's office. Under no circumstances, any questions that pertains to the mayor's office will have to be answered by the Federal Bureau of Investigation.
HUNTER: Police Commissioner Sylvester Johnson made it clear, any questions about the bug found in Mayor Street's office should go straight to the FBI's Philadelphia's office.
JOHNSON: I couldn't go to the FBI. I have no further comment about that investigation.
HUNTER: But neither the FBI nor the U.S. Attorney would comment on whether the highly sophisticated listening device was, in fact, part of a federal probe inside City Hall.
PAT MEEHAN, U.S. ATTORNEY: Well, I'm aware there's been a great deal of media speculation. And I've certainly been watching it as well. But I know that yesterday as well that the FBI came down and actually made a comment, spoke on behalf of the Department of Justice. And at this point in time, I think I'm going to let that comment stand.
HUNTER: The mayor, who maintains he has done absolutely nothing wrong, says he knows of no reason why any federal agency should be planting bugs in his office. And there's now growing pressure on the FBI to explain why it happened.
GOV. ED RENDELL, (D) PENNSYLVANIA: The mayor says that he's been told through sources, that he is not the target of an investigation. If that is true, than the FBI owes that explanation, not only to the mayor, but to the people of Philadelphia.
(END VIDEOTAPE)
HUNTER: Now, sources tell us, when that bug was found in the mayor's office, instead of taking it to the Philadelphia police crime lab where it would normally be examined, the bug was immediately given to the FBI and they returned to their office with it where it is still being kept at this hour. That, according to sources, is a strong indication that it was the FBI's bug and they were the ones that put it there in the first place.
As of now, the FBI maintaining total silence on the bug and refusing to confirm or deny that there's even an investigation underway. Live for CNN from Philadelphia, I'm Walt Hunter. Back to you.
DOBBS: Walt Hunter, KYW, thank you. Still ahead here tonight, our borders are wide open to potential terrorists and illegal aliens. Bill Tucker will have a special report tonight. State Congressman Randy Graf of Arizona, Angela Kelley of the National Immigration Forum, join us to face off over the issue over illegal immigration and what to do about it.
(COMMERCIAL BREAK)
DOBBS: Before turning to our "Face-Off" segment, we want to report to you that CNN has now confirmed that the FBI did plant a listening device in the office of Philadelphia Mayor John F. Street. We will have more for you on that developing story in just a matter of moments here.
More than two years after the terrorist attacks of September 11, immigration policy in this country remains seriously flawed. Many have argued for reform, but so far there is no evidence of political will to fix the problem.
Bill Tucker is here now with the story -- Bill.
BILL TUCKER, CNN CORRESPONDENT: Lou, immigration policy in the United States of America is confused, and that is putting it nicely.
(BEGIN VIDEOTAPE)
TUCKER (voice-over): A dozen states allow illegal aliens to obtain driver's licenses. Hundreds of financial institutions allow illegal aliens to open bank accounts opinion there is proposed legislation, the Dream Act, that would allow illegal aliens to attend colleges at in-state tuition levels. And this is attention directed to illegal aliens who the media and increasingly government workers refer to undocumented workers. It would appear we have no immigration policy.
MARK KRIKORIAN, CENTER FOR IMMIGRATION STUDIES: We have an immigration policy just because we do something with regard to immigration, but it can't be described as coherent or sensible in any way. Nobody really sat down and thought out what it is we want out of immigration.
TUCKER: Ironically, the right and the left agree.
DANIEL GRISWOLD, CATO INSTITUTE: I think our immigration system is dysfunctional the way it is. We do have a divided personality over immigration. It technically, it's illegal for 8 million people to be here in the country, who are here without documents. And 2 or 300,000 more coming in more net each year.
TUCKER: And failing to declare an immigration policy, those illegal aliens effectively become second-class citizens. Vulnerable to social and economic abuse, but they are not the only ones who suffer the consequences.
DAN STEIN, FED. FOR AMER. IMMIGRATION REFORM: We're creating an hourglass society and we're going to start looking more like one of those Latin American countries, where the rich people live in rural communities hiding out and everybody else doesn't know what to do.
(END VIDEO CLIP)
TUCKER: Failure to engage in a national debate to shake that policy is what has led us to this point. The world's superpower with a de facto immigration policy -- Lou.
Bill, thank you. Bill Tucker.
Well, the lack of a coherent immigration policy is the focus of our "Face-Off" tonight.
We're joined by State Representative Randy Graf, Republican of Arizona, who says more money needs to be spent to secure our borders.
We are also joined by Angela Kelly, who says more money will not fix this problem. It never has. She is the deputy director of the National Immigration Forum.
To both of you, welcome. We appreciate you're being here. We have anywhere between 8 and 10 million illegal aliens in this country.
What is the solution?
And if I may begin with you, representative?
STATE REP. RANDY GRAF (R), ARIZONA: Well, it's very frustrating at the state level. Arizona shares about 360 miles of border with Mexico. And the federal government is very lax in controlling the border. The numbers coming across on an annual basis are far more than the number just given of 2 or 300,000. We have more than that coming across in the Tucson sector alone. And yet, even though the federal government fails to live up to its responsible of patrolling the border and securing the border, it puts mandates on the states, such as Arizona, to give K-12 education, to take care of healthcare issues. We've got tremendous criminal justice costs in the state of Arizona, not to mention the environmental impacts along the borders.
DOBBS: Do you want the borders sealed, Graf.
GRAF: I think the border has to be sealed. I am certainly not opposed to immigration. We have immigration laws on the books right now. We're at the tremendous -- we are at the highest levels of immigration in the history of our nation.
DOBBS: Angela Kelley, would you support the idea of closing the borders as a first step toward controlling both our borders and the population of illegal aliens in the country?
ANGELA KELLEY, DEPUTY DIRECTOR, THE NATIONAL IMMIGRATION FORUM: Well, quite frankly, that's been the policy of the last many years to try to seal a border by pouring Border Patrol agent, by pouring money at the border, and what have we seen?
We've seen a ballooning undocumented population of 8 to 10 million people as you've indicated. And what is desperately needed is immigration reform that deals with the realities of what this country needs. We need a secure legal system for people to come through this country through legal channels. We need to put people who have been working hard and paying taxes in this country on a path to legal status so we know who they are.
DOBBS: Are you talking about amnesty?
KELLEY: And we need better target our enforcement resources so we can go after the bad actors, stop the smuggling, so we can stop the fraudulent documents.
DOBBS: Representative Graf, you are shaking your head.
KELLEY: The resources today have been put at the point of entry. We have three major points of entry in Arizona with Mexico. Unfortunately, there is another 350 miles of border that is protected by nothing but a three strand barbed wire fence. And many of those areas are very remote, very dangerous areas. We have record numbers of deaths of immigrants trying to cross into Arizona. Not to mention the fact that Border Patrol will admit, they have apprehended folks heading to Arizona from at least 63 countries other than just Mexico. So from 9/11 standpoint and security aspect, we are not securing our borders.
DOBBS: Governor Rick Perry of Texas was here Monday evening. Discussed illegal aliens as the two edged sword. The benefiting and burdens that result.
Who is benefiting from not having a policy here?
Why is there is an institutional inertia on the part of our politicians, to deal with this at the national level?
And why is there not a sufficient will at any level to deal with this rising crisis in a sensible humane way for those people who are dislocated and within our borders?
Why can we not come to a conscience policy decision?
I'll start with you, Angela.
KELLEY: I think the debate is long overdue as you have indicated. I share concerns of the deaths at the border. I share the concerns about the pressures on state budgets. What we see happening finally is that both Republicans and Democrats are beginning to introduce legislation on comprehensive immigration reform. The debate is slowly but surely moving in that direction. And meanwhile you see what is happening locally is that police departments are endorsing the idea of people carrying identification cards. You're seeing the effort to try to give kids who are here, who have been graduating from a high schools and want to go into college the chance to go to college even if they are undocumented. So you see the solutions begin to bubble up from local governments and beginning to see the efforts in Washington, but much more needs to be done, and to be done quickly.
DOBBS: You are far more discerning I am, Angela, to see those efforts in Washington. We have not been able to detect anything of any real significance to this point but I am delighted to hear that.
KELLEY: Your other guests home state, Senator McCain, Representative Colby and Representative Flake, they have introduced legislation that gets that the very issue and it's a good start.
DOBBS: Representative Graf.
GRAF: It's a good start for a debate perhaps, but unless we secure the border, nothing is going to be done. The frustration at the local level and here in Arizona is to -- the Protect Arizona Committee for example is trying to bring an initiative to ballot next year that would make sure we have enforcement mechanisms on the front end to make sure people that are registering to vote -- I mean, our citizens. People who are registering for welfare benefits are actually citizens or legal residents.
So there are things that can be done at the local level. Arizona is trying to do that right now. And when the federal government fails to once again enforce the borders and begins to allow the acceptance of foreign I.D. cards like the metricula consulate (ph) cards. You are right, the policy level at Washington, D.C. is so scattered right now that it's hard to see how anything could be done that the level.
KELLEY: I would say that if we want to get a handle on folks coming this country, then we have to give them legal channels to come. And that benefits us.
DOBBS: I am sorry, Angela.
KELLEY: That benefits us, because we know who's coming. That benefits our economy, because these are needed workers and it benefits American families because they can be reunited.
DOBBS: Representative Graf, the last word, please.
GRAF: There are plenty of legal channels for them to come in right now I believe. There's over 60 or 70 different types visa programs that allow people.
(CROSSTALK)
DOBBS: We thank you both. We will ask you both to continue this discussion of a critical issue. We didn't even move to the issue of the potential terrorist threat with having porous borders that we can't even control in the case of illegal immigration.
We thank you very much, Angela Kelley, representative Graf of Arizona. Thank you both so much.
Just ahead here, stocks after a five-day winning streak. Is it broken. Christine Romans will have the market for us next. Also we'll have your thoughts on the exporting of America. Please stay with us.
(COMMERCIAL BREAK) DOBBS: On Wall Street, a streak broken. The Dow Jones Industrials today losing almost 24 points, breaking a five-day winning streak. A monthly winning streak quite a fact. The S&P 500 off 5.5 points. Christine Romans now with the market -- Christine.
CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: That's not too bad, 5 days up, 1 day down for October.
DOBBS: I think most people will take that.
ROMANS: Exactly. First down day six and telecom services stocks, Lou, really took it on the chin. We watch that group, because new rules for cell phone providers begin next month allowing consumers to keep their phone numbers when they switch carriers. Analysts say it means consumers can be more choosy, looking for the best deals and that's going to cost the cell phone carriers.
Now outside of telecom, earnings were center stage. Yahoo after the close, reported a 10 cent profit -- that's profit doubling, Lou, in the quarter. One penny ahead of expectations.
DOBBS: Expectations?
ROMANS: Yes, this whole game was sort of coming back in some of these areas. Last quarter, when the company reported triple-digit profit growth, but it just matched the street, the stock fell 6 percent. This time beat by a penny and the stock is up after hours. Yahoo is up 133 percent this year. It boasts a price earnings ratio of about 80 for next year.
DOBBS: Is that as reported?
ROMANS: Yes. As reported is even in the hundreds. Okay, this brings me to margin debt. Margin loans through brokerage firms listed NASE rose to $26 billion in July. That's four times the amount in January and it tops the money at the high of the bull market back in March of 2000. The NASE even sent out an alert to investors last month warning about the lists of borrowing money, so watch that.
And active stocks today, you'll like this one Lou: Biovail. Bank Of America put out a sell rating on the drug maker and Biovail came back swinging. Here is what Bank of America said, "Corporate governance and aggressive accounting issues." It said, "there are several trends including the high level of CEO options, company loans to management and the purchase of a company jet from the CEO."
It's CEO made $42 million last year. Too much B of A says, for a company that's 5 years old and is yet to crack a billion in sales. Biovail said nothing new to the report. It's outrageous and irresponsible. The stock fell 13 percent.
DOBBS: But they're making huge profits I'm sure justifying all of that?
ROMANS: No, barely making a profit.
DOBBS: Ah, but they did have time for the big jet. $42 million. Very impressive. And it's good for B of A.
ROMANS: Analysts doing its job.
DOBBS: Absolutely.
Christine Romans doing yours.
ROMANS: Thank you.
DOBBS: Now the results of our poll question tonight, "should the United States adjust its military presence around the world?" 83 percent of you said reduce military presence, 18 percent said raise it and 9 percent said maintain the status quo.
Let's take a look at some of your thoughts. From Austin, Texas tonight on our series of special reports "Exporting America", "Maybe if we outsource a few multimillion dollar CEO's the politicians will take notice."
And from Yalaha, Florida, "why doesn't someone step up to the plate and suggest imposing a tariff on those imports to level the playing field? Maybe that will stop the unpatriotic corporations from shipping all our jobs overseas. I think they are as harmful to the well being of this great country as all of the other international terrorists." That from Bob Minsch.
From Rome, Georgia, "Mr. Dobbs, thanks for you coverage on the continuing losses of manufacturing jobs. It would seem that many in their race to discuss the economy as a whole have forgotten that all well built houses must first have a good foundation. And in our country, for many years, manufacturing has been that foundation. Keep up the good work." From Sean Walker.
We love to hear from you. And please e-mail us at loudobbs@CNN.com.
That's our show for tonight. Thanks for being with us. For all of us here, good night from New York. "ANDERSON COOPER 360" coming up.
END
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