Return to Transcripts main page
Lou Dobbs Tonight
At Least 18 Dead in California Wildfires; Two U.S. Soldiers Killed in Iraq Attack
Aired October 29, 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, October 29. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening.
Tonight: The violence in Iraq escalates. Two Americans were killed today, a 70-ton Abrams tank destroyed, in this latest attack. Senior Pentagon correspondent Jamie McIntyre will report on the hunt or the organizers of the widening attacks against coalition forces and Iraqis.
There are reports tonight that Russian President Vladimir Putin's chief of staff has resigned in protest of the arrest of Russia's richest businessman. Critics say Putin is using strong-arm tactics to stifle political opposition. Bill Schneider has just returned from Russia and will join us with the story.
In our "Face Off" tonight: the Pledge of Allegiance and the phrase "under God." Barry Lynn and Jay Sekulow will be here to argue whether "under God" should survive.
Tonight, Southern Californian authorities say the worst wildfires in that state's history have killed least 18 people. The dead include a firefighter who was killed in San Diego County. He is the first firefighter to be killed since those fires started. The fires have destroyed 2,000 homes, from the Simi Valley near Los Angeles, to the Mexican border, and scorched 60,000 acres, an area the size of Rhode Island.
Five Southern Californian counties have been hit hard, Ventura, Los Angeles, San Bernardino, Riverside, and San Diego. Firefighters have been hoping that cooler winds would help them contain the fires, but now sudden shifts in the wind direction have made the firefighters' task much more difficult.
We begin our coverage tonight with Brian Cabell at Stevenson Ranch in Los Angeles County -- Brian.
BRIAN CABELL, CNN CORRESPONDENT: Lou, we're in Stevenson Ranch, which is about 20 miles north of Los Angeles. It's a community that's been under siege for the last day and a half and remains under siege at this very moment, as a matter of fact.
Winds earlier today were calm. The flames seemed to have decide down. Then, suddenly, everything switched. Suddenly, the flames started attacking this very neighborhood where I'm standing. Let me show you what happened. This was just about two hours ago. These are aerials that were shot at that point. Residents suddenly had to flee with whatever they could pick up.
Fire trucks rushed to this area. There were about a dozen trucks on this particular block, pouring water on the flames as they approached. The flames approached the backyards. But then, finally, finally, after about 45 minutes, they backed off. But for the most part today, throughout Southern California, winds have been fairly favorable.
(BEGIN VIDEO CLIP)
DALLAS JONES, CALIFORNIA GOVERNOR'S OFFICE FOR EMERGENCY SERVICES: The offshore breezes have diminished and now we've had onshore breezes. The good news with that is, it brings a lowering of the humidity and a lowering of the temperatures. And, of course, that helps our firefighters.
CABELL (voice-over): Also in the line of fire, the mountain resort communities of Lake Arrowhead and Big Bear, about 80 miles east of downtown Los Angeles. The area is filled with millions of trees killed by an insect plague, dead wood. That's perfect fuel for a fire.
Some 80,000 people have been evacuated. Those who stayed behind are seeing the devastation firsthand. This man lost his lumber business.
ERIC PERKINS, FIRE VICTIM: This is probably six, seven years of hard work down the drain.
CABELL (on camera): And how tough is it to look out over this stuff?
PERKINS: Well, it's only wood. There's a lot more, hopefully.
CABELL: You look pretty...
PERKINS: I'm beat. I've been up for two days.
(END VIDEOTAPE)
CABELL: All told, firefighters have been fighting more than a dozen fires here in Southern California. We're on the Simi Valley fire.
It's burned more than 100,000 acres here over the last five days. No deaths blamed on this particular fire. And a relative handful of homes have been damaged or destroyed here. But earlier, not far from here, again, another neighborhood came under siege by the fire. It came within about 50 yards of this particular neighborhood, but then once again backed away.
And, apparently, what has helped this neighborhood, Lou, is, there's a green belt that's been deliberately built around this neighborhood, low, green ground cover that is irrigated. Every time the fire approaches that particular green belt around this neighborhood, the fire backs out. It apparently has saved this particular community -- Lou.
DOBBS: And, Brian, to be clear, the winds have shifted again. But Stevenson Ranch, at least that community, in your best judgment, is safe tonight?
CABELL: Well, I can tell you, these are stucco homes, so there's not too much wood that's exposed here. So that's helped , along with this green belt.
But, yes, in the trees there -- take a look at the trees. The breezes have picked up here in the last three hours. And so there is still a threat here, Lou. The fire trucks are out. The firemen at the ready. But right now, no homes destroyed in this particular community.
DOBBS: Brian, thank you -- Brian Cabell reporting.
Firefighters in San Bernardino County are struggling tonight to contain fires that surround 16 mountain communities east of Los Angeles. Strong winds grounded firefighting aircraft and drove the fires toward the resort towns in the mountains. Thousands of people fled the area after one of those fires jumped a highway that firefighters had hoped would act as a fire break. The flames are being fueled by thick underbrush and dry trees.
Two large fires in San Diego County have moved within a few miles of one another. Officials say those fires may converge and form one huge wildfire more than 50 miles in length.
Adrian Baschuk joins us now from Julian in San Diego County and has the very latest -- Adrian.
ADRIAN BASCHUK, CNN CORRESPONDENT: Lou, good evening.
We are just being told that, in the last hour one firefighter has unfortunately died -- that is confirmed -- and two others hurt. That brings the death toll here in San Diego to 13; 12 were civilians; 10 of those -- or 10 -- I'm sorry -- were civilians. And, unfortunately, those 10 people were burned alive in their car.
You can see behind me here in this historic town of Julian, it is a town that fires are encircling it. In all directions, you can see huge plumes of smoke. The ridge you are looking at there was beset by towering flames, 50 feet high, this morning. All that's left is smoldering landscape.
However, we did manage to see this one house that was saved. There were several helicopters by the California Department of Fire and Forestry that were able to swoop in here for about two hours at a time and release 250 gallons of water at a time over these flames. So, as you can see, that house was saved. And over here on the left, we have another house that also the residents never did evacuate from.
Lastly, here in Julian, the winds have certainly picked up, gusting at a strong 30 miles an hour, threatening to ground those much-needed helicopters -- Lou.
DOBBS: Adrian, thank you very much -- Adrian Baschuk reporting from San Diego County.
Turning tonight to Iraq, the number of American troops killed since the end of major combat operations now exceeds the number of Americans killed in the first phase of the war. The death toll since May 1 has risen to 117, two more than killed in the first phase of the war.
In the latest attack, two soldiers were killed when insurgents and terrorists destroyed an M-1 Abrams tank north of Baghdad. It was the first time that terrorists have destroyed an Abrams tank since the end of major combat operations.
As the violence escalates in Iraq, the Pentagon has identified one of the top organizers of the attacks against coalition forces. He is a former Iraqi general, the highest-ranking member of Saddam Hussein's regime still at large.
Senior Pentagon correspondent Jamie McIntyre has the report -- Jamie.
JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Lou, Izzat Ibrahim al-Douri was a member of Saddam Hussein's inner circle, the northern regional military commander.
He was No. 6 on the list of the 55 most wanted Iraqis. The king of clubs in the famous deck of cards, the highest-ranking former official still at large, with the exception of Saddam Hussein himself. Now, Pentagon officials say that the capture of several suspected members of the Ansar al-Islam terrorist group, which is linked to al Qaeda, provided the key intelligence that pointed toward al-Douri as a possible mastermind behind these attacks.
Sources that several suspects, including one said to be very close to al-Douri, fingered him as the brains and financier behind some of the attacks. And Pentagon sources say that Lieutenant General Rick Sanchez, the U.S. commander there, has included that intelligence in his latest report to the Pentagon, Sanchez also telling the Pentagon that there are -- quote -- "clear indications that so-called foreign fighters linked to al Qaeda are working with Saddam Hussein loyalists."
Now, the Pentagon is sending more intelligence assistance to Iraq in order to try to facilitate the flow of intelligence. But today, Pentagon officials denied a report in "The New York Times" that any intelligence resources would be shifted away from the hunt for WMD, simply that those analysts would also be looking for intelligence that could be used in the counterinsurgency operation -- Lou.
DOBBS: With this breakthrough in intelligence, Jamie, is there any indication that the military in Iraq knows where Saddam Hussein's former No. 2 is now operating?
MCINTYRE: Well, they believe that he's operating in the northern area, coincidentally, the same area where they think Saddam Hussein is hiding out, according to the best intelligence. They haven't been able to find him or have him in custody, same with Saddam Hussein.
They do believe that the two are not hiding together. And I can tell you that it's an object of intense focus, both trying to get Saddam Hussein and Ibrahim al-Douri, who is seen as the one who is directly coordinating some of these attacks.
DOBBS: What is the Pentagon's best judgment about how Saddam Hussein, to this point, has been able to avoid the forces that have been arrayed against him?
MCINTYRE: Well, they think he still has a significant number of people who are helping him. They think he's moving his location constantly. They think he's on the run and, therefore, not able to directly coordinate things.
And they've constantly thought they were getting close to him. But they've been thinking that for months. So they have been very careful to say that they're not closing in on him until the day when they actually get him.
DOBBS: Senior Pentagon correspondent Jamie McIntyre, thank you.
The Pentagon has also delayed the planned replacement of a lucrative into no-bid contract awarded to Vice President Dick Cheney's former company, Halliburton, for its work in Iraq. The Pentagon said Halliburton will stay on the job until early next year, because of increasing sabotage to Iraq's oil industry and the need to provide additional security. So far, Halliburton has been paid more than $1.5 billion.
The vice president says he has no current ties to Halliburton and has nothing to do with the contract.
More questions today about the "Mission Accomplished" banner that was strung across the superstructure of the aircraft carrier Abraham Lincoln, where the president landed and announced the end of major combat in Iraq on May 1. Yesterday, President Bush said, in a press conference, that the banner was put there by the Navy.
Critics immediately blasted the president for trying to shift the creation of that embarrassing banner to the Navy because of its premature declaration that the fighting in Iraq was all but over. The White House, for its part, says the banner had a much simpler purpose, to praise the aircraft carrier's crew.
Senior White House correspondent John King has the story tonight -- John.
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: And Lou, this debate already, in some ways, reminiscent of the fierce political debate over those 16 words now discredited in the president's State of the Union address, where he claimed Iraq was trying to buy uranium to revive its nuclear weapons program. That controversy became a vehicle for the must larger debate about whether Mr. had hyped the intelligence and hyped the case for going to war -- the "Mission Accomplished" banner now the vehicle for the continuing debate over whether Mr. Bush grossly underestimated the postwar security challenge in Iraq.
Here at the White House today, Press Secretary McClellan conceding, the White House did pay for that banner and the White House authorized that banner and produced that banner. But he says it was produced for a very narrow reason, at the request of the crew of the USS Abraham Lincoln, to thank that crew for a job well done.
(BEGIN VIDEO CLIP)
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: It was the Navy, the people on board the ship, who had the idea of this banner and made the suggestion, because they wanted to have a way to commemorate the fact that these sailors and the crew on board the ship had completed their mission after a very lengthy deployment.
(END VIDEO CLIP)
KING: But Democratic critics on the campaign trail and in the Congress simply don't buy it. They say the president staged that made-for-TV moment on that ship, not only the landing, but standing under that "Mission Accomplished" banner, because he wanted to send a much broader message -- the Senate Democratic leader, Tom Daschle, saying, Mr. Bush backing away from that message now and distancing himself from that banner, because Mr. Bush's message, in the Democrats' view, has backfired.
(BEGIN VIDEO CLIP)
SEN. TOM DASCHLE (D-SD), MINORITY LEADER: We've lost more lives since he's declared victory than we lost prior to the time he declared victory. And this latest fabrication is yet another illustration of their unwillingness to accept reality.
(END VIDEO CLIP)
KING: And, Lou, some fresh evidence tonight that, even a few weeks ago, at least one senior White House official had a sense this banner might come back and be a political problem. At a public forum here in Washington, not very well covered, White House communications director Dan Bartlett said it was he who authorized the banner. He said it was at the request of the ship's crew, and that, in his view, the president's critics were taking it out of context.
Bartlett said he did not consider his decision a mistake. But he did say this -- quote -- "Sometimes pictures have a way of coming back, which is very difficult" -- Lou.
DOBBS: John, just to make sure I understand what the White House is saying here, they're saying that the crew of the carrier asked the White House to create a banner to say thank you to the crew of the carrier? KING: That is right, that, in the conversations about how to stage the event, the White House is saying -- and the Navy confirms this -- that the crew said, we should have a banner thanking the crew of the Lincoln for a job well done. So they had the banner that said "Mission Accomplished." That is all it said. It did not say, "Crew of the Abraham Lincoln, Mission Accomplished."
The White House says that banner was meant to say mission accomplished to the men and women on that ship for their lengthy deployment in Iraq and Afghanistan. The White House is insisting, the president was not trying to say mission accomplished overall in Iraq. And, in fact, the White House says, in his speech, the president said, Iraq is still a dangerous place. But, again, the president's critics, who, of course, thought this was a stunt at the time, they simply don't buy it. They say Mr. Bush is running away from that banner now because of all the trouble on the ground in Iraq.
DOBBS: I think perhaps everyone, Democrats, Republicans, the White House, all could agree now that sometimes, when you're trying to say thank you, a simple thank you will suffice.
John King, thank you very much, our senior White House correspondent.
A victory late today for the White House on the $87 billion spending bill for Iraq and Afghanistan. Congressional negotiators rejected a Senate-passed plan to turn nearly half of the $20 billion in reconstruction money for Iraq into loans. Those funds will now be distributed as grants. President Bush had threatened a veto if the Senate version was approved.
Coming up next here, "The Great American Giveaway," our special report -- tonight, the U.S. government financing college tuition for illegal aliens? It's a proposal working its way through Congress right now. Its terms may surprise you. It may even shock you. Peter Viles has the report.
And then, in our "Face Off" tonight, we focus on the Pledge of Allegiance. A violation of the First Amendment or an integral part of our history and culture? Two drastically different views on the words "under God."
And shades of the evil empire? A Russian business tycoon and political opponent of President Putin arrested at gunpoint and thrown in prison about. Senior political analyst Bill Schneider has just returned from Moscow. He will be here with the story.
Please stay with us.
(COMMERCIAL BREAK)
DOBBS: Tonight, in our special report, "The Great American Giveaway," the United States' enormous trade deficit with China, it could grow to more than $130 billion this year. And some in the business world say the government is not doing enough to reverse it.
Kitty Pilgrim is here tonight and has the story -- Kitty.
KITTY PILGRIM, CNN CORRESPONDENT: Lou, there is a long list of complaints about how China is conducting its trade, from manipulating the currency to outright stealing. And many want action.
(BEGIN VIDEOTAPE)
PILGRIM (voice-over): China is the principal beneficiary of U.S. free trade. The trade deficit with China has exploded in the last decade to an estimated $130 billion this year. American manufacturers are the principal victims of U.S. free trade policies.
SEN. DICK DURBIN (D), ILLINOIS: When it comes to manufacturing jobs, and the fingers all point to China. Because of their undervalued currency, they're able to export much more cheaply and drive our people out of business.
PILGRIM: Congressional leaders want China to float its currency on the open market to help adjust what they consider artificially low prices for Chinese goods. If they don't get action, they threaten a 27 percent tariff on Chinese goods.
But there is another trade problem: China is outright stealing. China sells counterfeit American products like C.D.s and movies illegally. Commerce Secretary Evans, in China, was complaining about bootlegged copies of American movies selling there for about $1.
MYRON BRILLIANT, U.S. CHAMBER OF COMMERCE: It's costing our movie producers money. It's costing our computer companies money. And there's no question it's an overarching concern for American businesses.
PILGRIM: American businesses also want China to live up to its promises to open its markets to U.S. goods. A parade of U.S. trade officials to Beijing has been rebuffed.
DON EVANS, COMMERCE SECRETARY: China must move faster by opening markets, by dropping trade barriers, and letting market forces determine economic decisions.
PILGRIM: One of the few successes for U.S. exports to China is soybeans. China has become our biggest customer, buying $1 billion worth every year. But China has a long way to go to live up to its obligations and American expectations.
(END VIDEOTAPE)
PILGRIM: Now, the pressure will increase tomorrow on China. U.S. Treasury Secretary John Snow is testifying before the Senate Banking Committee about China's unfair currency practices -- Lou.
DOBBS: You can just feel the pressure building as a result of that testimony. Kitty, thank you very much -- Kitty Pilgrim.
Another piece of legislation is moving through Congress that would grant a form of amnesty to thousands of illegal aliens in this country, allowing them to attend state colleges with the same subsidized in-state tuition rate that U.S. citizens pay. For that, it is called the Dream Act.
And Peter Viles is here tonight with the story for us.
It sounds like a dream.
PETER VILES, CNN CORRESPONDENT: A dream for some folks.
With college tuition soaring, Lou, you think this would be a controversial piece of legislation. And yet, in a key Senate committee, it passed on an overwhelming vote.
(BEGIN VIDEOTAPE)
VILES (voice-over): With strong support from Chairman Orrin Hatch, the Judiciary Committee vote was 16-3 for the so-called Dream Act, which would let states offer in-state college tuition rates to illegal aliens who finish high school and would protect them from deportation. Supporters of the bill -- and there are many in the Senate -- believe these students are innocent victims of an immigration system that doesn't work.
MELISSA LAZARIN, NATIONAL COUNCIL OF LA RAZA: They've made the United States their homeland. Their families have built roots in our communities. Their families have contributed in the form of taxes to the state system and federal system. We believe these students should have access to higher education.
VILES: But the bill has become a lightening rod for those who believe immigration laws in this country are a mess and Congress is about to make them worse.
JOHN KEELEY, CENTER FOR IMMIGRATION STUDIES: Immigration law and its enforcement is not age-specific. We don't distinguish by age. Just because you're 15 or 16 or 17 and hard-working, it doesn't mean you get to violate our immigration laws.
VILES: One of the three who opposed the bill in committee, Alabama Republican Jeff Sessions.
SEN. JEFF SESSIONS (R), ALABAMA: If we grant this amnesty to these people, young people who are here illegally, we'll have no principled basis in the future to resist amnesty for any group.
VILES: Sessions is holding out for something very unlikely, a broader approach to the nation's immigration crisis.
SESSIONS: We absolutely need to take a broader look. Our immigration law now is a joke. You talk to police officers throughout America and they tell you that, if they apprehend an illegal alien, they don't even bother to call the Immigration Service, because they won't come and pick them up.
(END VIDEOTAPE) VILES: And the bill was weakened in committee. Senators there voted to keep illegal aliens ineligible for federal Pell grants. Well, why did they do that? Because the federal government would have had to pay for it. It would have cost nearly $200 million a year by one estimate. This bill wouldn't cost the federal government much. It will cost the states.
DOBBS: You have got to be kidding. A U.S. Senate committee has passed legislation, by a margin of 16-3, that would cost the states money, but would refuse to do the same thing under the federal government?
VILES: Right. In the old days, we called these unfunded mandates.
(LAUGHTER)
VILES: But this is taking states rights to an extreme, saying states have the right to set their own immigration policies. We have one that doesn't work. Imagine if we have 50 that don't work.
DOBBS: Well, perhaps that's a solution, turn over immigration policy to the states, since the national government obviously doesn't seem to have the will to deal with what is a problem that is out of control in this country.
Peter Viles, thank you.
Tomorrow on our special report, "The Great American Giveaway," we've reported extensively here on how this nation's borders are simply porous. Tomorrow, we take a look at just how much money the United States is spending to keep, ostensibly, illegal aliens out and why all of that money is being spent futilely. That's tomorrow night. Please join us.
Coming up next: "Face Off": the Pledge of Allegiance, an American tradition or a violation of the separation of church and state? Tonight, two very different points of view, "under God."
And we'll be talking with Governor Gray Davis, who has just toured some of the worst affected areas in California's wildfires. We'll be talking with him here in the next 15 minutes.
Please stay with us.
(COMMERCIAL BREAK)
DOBBS: It's been recited in classrooms across the country for generations, but now the Pledge of Allegiance is at the center of a contentious debate and a Supreme Court decision.
A California man filed suit three years ago, saying his 9-year- old daughter was injured by having to watch and listen as her teacher led her class in reciting the pledge, including the phrase "under God." He won the case, but it was quickly appealed and is now before the Supreme Court. The debate about the Pledge of Allegiance is at the center of our "Face Off tonight."
Joining me now is Barry Lynn. He's the executive director of Americans United For Separation of Church and State; Jay Sekulow, who is the chief counsel at the American Center For Law and Justice. Both join us tonight from Washington.
Let me begin first with you, Barry. Why in the world is the phrase "under God" construed as establishment of religion?
BARRY LYNN, EXEC. DIRECTOR, AMERICANS UNITED FOR SEPARATION OF CHURCH AND STATE: Well, before 1954, the Pledge of Allegiance, which had been written by a Baptist minister in the 1890s as a completely secular document, all of a sudden had added to it, at the behest of people who wanted to make this a religious statement, the words "under God."
They thus transformed an affirmation of love of country into what amounts to a religious test, a kind of affirmation that, in order to be an American, you also have to believe in one God, "under God." If we were going to be absolutely frank about what Americans believe, you'd have to have that phrase, I guess, read "under God, gods, or no god" in order to be inclusive. We're not going to do that. I think the next best thing is to have that phrase removed, so that public school students never feel like a second-class citizen in their own classroom simply because they don't agree with the phrase "under God."
They may agree with the rest of the affirmation of love of country, but just not that addition of religion.
DOBBS: Jay, it sounds pragmatic and reasonable. What's wrong with that view?
JAY SEKULOW, CHIEF COUNSEL, AMERICAN CENTER FOR LAW & JUSTICE: I'll tell you, Lou, why it's not reasonable.
It's not reasonable because the phrase "under God" is simply an acknowledgement of the religious heritage that exists in the United States. The phrase "under God" actually originated in the Gettysburg Address, where President Lincoln said, "This nation, under God, shall have a new birth of freedom." And what the acknowledgement is that our rights and liberties and freedoms don't come from government. They're not ordained only by government.
But it's from God to man. It's what our founders talked about in the Declaration of Independence, that we are endowed by our creator with these inalienable rights, life, liberty, and the pursuit of happiness. This is simply an acknowledgement of the religious heritage that serves as a foundation of our country. No student is required to say the Pledge of Allegiance. Nobody has to participate. The Supreme Court has been very clear about that since the 1940s.
So, to remove the phrase "under God" would lead to, in my view, a challenge to "In God We Trust" as our national motto. And even the Supreme Court of the United States starts with the phrase, "God save the United States and this honorable court."
LYNN: You know, Jay -- Jay is right about one thing, Lou. Nobody is forced at gunpoint, of course, to utter the words under God. But if you're a third or fourth grader and the teacher, the authority in your classroom says, "This the time for the pledge of allegiance," it is absolutely inconceivable that a student who has a differing viewpoint on religion and wants to not participate is going to get up and leave every day and face the ridicule or, worse, if his or her peers...
(CROSSTALK)
LYNN: ....that you find in the school prayer cases, where the court has said even if you don't require participation, if you're present as a part of a religious ritual, that's bad enough.
SEKULOW: Yes, this isn't a school prayer. And there's been 50 years of history where students have opted out, decided not to say the pledge of allegiance.
You know, the First Amendment works both way. It certainly protects the religious dissenter, those that don't believe. But it also protects the freedom of speech and the free exercise of religion and freedom of speech, includes religious speech. And the fact that someone's' going to utters the phrase under God, and, in this particular case, Michael Newdow says his daughter is offended, which the daughter denies -- that's -- the price of freedom --
DOBBS: May I ask you both a question?
(CROSSTALK)
DOBBS: Let's say a teacher said to her class, We're going to vote on whether you have a pledge of allegiance. We're going to give you two forms of it, one with under God, one without. And the majority of the students said, we want it with, "with under God." What would be the problem with that?
LYNN: Well, I don't think, Lou, that we take a vote on the Bill of Rights.
DOBBS: No, no, no. No, no, no. I'm just asking -- I'm posing a hypothetical question. I'm talking about a student option.
LYNN: Yes, I don't think that that's the way we run schools. We don't have options about whether we're going to have religious affirmations or not have them...
SEKULOW: Yes, but this is Barry Lynn who's -- my friend Barry Lynn saying this, and meanwhile, what about the freedom of speech or the freedom of choice? There you're saying it can't even be an option.
DOBBS: Well, let me ask this question.
(CROSSTALK) LYNN: They do have the freedom of speech because you can say this at any time other than the time when the teacher announces, This is the time for you to participate in a religious ritual. So this free speech argument is really bogus.
DOBBS: Well, let me ask you this -- is it any more offensive to a young man or a young woman in class to be reading along, as Jay pointed out, the Constitution, the -- those rights -- those inalienable rights, by which our creator endowed us? Is it any more offensive to look down at a dollar bill or a coin and say, in God we trust? At what point...
LYNN: I think it's more -- well, I do think, Lou, it's more violative of personal conscience to be asked to essentially participate, even, again at -- not at gun point -- but to participate in a religious oath every single day. I think that's much more of a serious constitutional issue than the fact that "In God we trust" has -- is on the dollar bills. At least you don't have to say the phrase when you pay for your cup of coffee in the morning.
SEKULOW: But if a student is required to recite the Declaration of Independence, under Barry -- under your theory the student would have an opt-out right to remove phrases and kind of take a scissors to those phrases you disagree with. And that's just not the point. That's not the way it works.
LYNN: Why would we, in fact, do the Declaration of Independence except as the study of an important -- essentially important historical document.
(CROSSTALK)
SEKULOW: I think the pledge of allegiance is recognized as religious heritage (UNINTELLIGIBLE)
LYNN: Absolutely not. What this is -- was designed -- read what President Eisenhower said when he signed the bill changing this to a religious oath instead of a political one. He said it was so that we would have schoolchildren affirming their belief in God every day. That was his intent. But under our constitutional system, people in government don't -- do not get to make those changes that affect every schoolchild in America.
DOBBS: Jay, at what point do you get concerned if -- if we had some sort of cultural shift in this country and the next generation said under a Judeo Christian God we trust, in a pledge of allegiance? At what point is there every reason in the world to say, the American government is about the freedom of religion, it's about the freedom of expression, and it should not be incorporated in any way into our government?
SEKULOW: Well, I think the fact is, Lou, you can't have a government that's neutral of the recognition that we are a nation that is -- was founded on a basic Judeo Christian ethic, whether you take the view that constitutes prayer under God in the pledge of allegiance or whether you just acknowledge as historical fact. I think as long as you're talking about the historical reality of what the phrase meant, where it came from, what its origin was, that's not the -- that's not an affirmation of a particular religious belief or denomination. And again, no one's required to say it. So, you know, when you look at the new history to these cases, you've got to be careful.
You've got to realize that what is at stake, I think, goes beyond the pledge. It's beyond under God. It does look at things like "In God we trust" or the recognition of the Supreme Court, "God save the United States and this honorable court."
LYNN: You know, if it was all that simple, I could imagine if one teacher ever said anywhere in the United States, we're going to say, "One nation under Vishnu or under Oden, the Norse god"....
SEKULOW: I would argue that's historically inaccurate.
LYNN: Yes, but we'd have a tremendous amount of battle. And courts, of course, Lou, draw lines all the time. They can say that saying something like "God bless this honorable court" is not the same constitutionally as having young children have to proclaim loyalty to both God and country every morning in their homeroom exercises in California or anywhere else in the country.
DOBBS: Jay Sekulow, Barry Lynn, gentlemen, thank you.
(CROSSTALK)
DOBBS: I hope you'll come back and discuss this as we wind it toward a court decision, which I -- I won't even make religious reference of it.
Thank you very much, gentlemen.
(CROSSTALK)
DOBBS: We want to hear from you on this topic. The question tonight of our poll -- "Do you believe every U.S. classroom should begin its day with the pledge of allegiance, with or without the phrase 'under God'? Yes or no?" Cast your vote at cnn.com/lou. We'll have the results for you coming right up.
Next -- "Leading Questions," our series of special reports in conjunction with "The Economist" magazine. Tonight, a leader who relies on basic humanity and a strong sense of service to lead -- to put his company on top.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Tonight in our series of special reports in conjunction with "The Economist" magazine, management styles that, believe it or not, work. We focus on CEOs this week who are overpaid, who underperform. There are also CEOs who actually perform and earn their money. One of those is our feature tonight.
(BEGIN VIDEOTAPE)
DOBBS (voice-over): In a sea of bad news about corporate scandals and poor performance, A. G. Lafley, the CEO of Procter & Gamble is definitely swimming against the tide.
UNIDENTIFIED MALE: Are you still living here in town?
UNIDENTIFIED FEMALE: Nice to see you again. How are you?
UNIDENTIFIED MALE: Beautiful.
UNIDENTIFIED FEMALE: We tried our best.
A.G. LAFLEY, CHAIRMAN & CEO, PROCTER & GAMBLE: P&G delivered results ahead of growth objectives, volume and sales up 8 percent, profit margins, the highest in 50 years.
DOBBS: Lafley was elected president and CEO in 2000, after 25 years with the company. Since July of 2001, with Lafley the insider at the helm, P&G's stock price is up more than 40 percent, and growth has accelerated.
LAFLEY: I came into the job three-and-a-half years ago, the company was in a bit of a crisis. We had to come together quickly. We had to make a few hard choices and we had to regain our confidence.
FRANCES CAIRNCROSS, "THE ECONOMIST"; To turn a company around, as Lafley has done, it takes first of all focus. You need to decide very quickly which of the bits of the business are worth saving and which you should jettison. And you need the ability to bring everyone along with you.
LAFLEY: And that was probably the most important thing I did, was just remind all 100,000 P&Gers that we're here to serve the woman and her family for whom we create and build these brands and products and services.
DICK ANTOINE, GLOBAL HUMAN RESOURCES OFFICER, PROCTER & GAMBLE: Working with P&G is stimulating, fun, and exhausting.
LAFLEY: This is a fairly typical day. Early in the morning is when I communicate with Asia, almost always via phone.
Hopefully the Chinese consumers are making you work very hard.
Every month I call all the presidents that aren't in the U.S. I try to guide the conversation into two or three areas. First, strategy, choices that they're making. Second thing is people development. We are a company that recruits, develops, trains and promotes almost exclusively from within. The third thing I do is I listen.
UNIDENTIFIED FEMALE: This Cover Girl thing is up most of the time. I like to get out into the stores so does A.G. just to see what's new, what's going on at retail.
LAFLEY: You know what I like about this? We have, you know, we have this center section which features the new item, right?
I think we're in a very competitive marketplace, because unless we're delighting you, you won't choose us.
Wait. Hold it. We were walking at a fast pace, we just glanced down the aisle and the Pringles stood out. I introduced this notion to there are two consumer moments of truth: when she shops in the store and when she uses the product in the home and we have to win both of those moments. We stand for election every day in the store.
This is interesting, because it's taking off outside the U.S. and it needs to be refreshed.
CLAUDIA KOTCHKA, V.P. PROCTER & GAMBLE: A.G.'s so friendly that he can just go up and start a conversation with a shopper, get all kinds of information that's just great.
LAFLEY: Again, too close.
UNIDENTIFIED FEMALE: Way too close.
LAFLEY: Shapes way too close.
You know, we're not curing cancer, but we are trying to make everyday life just a little bit better.
UNIDENTIFIED FEMALE: It should be a lively little warm-up for when you come up there at 9:00.
LAFLEY: All right. I don't have to dance this time.
UNIDENTIFIED FEMALE: Not unless you want to.
LAFLEY: No, that's okay.
UNIDENTIFIED FEMALE: It's essential to have bosses who like being surrounded by really good people. Too many bosses are scared of being surrounded by the best.
LAFLEY: Our most precious resources, the assets of this company, are our brands and our people. I spend a fair amount of personal time, not just welcoming new hires, but beginning to teach them about the P&G way.
We're going to Folgers, straight ahead. I manage by walking around.
UNIDENTIFIED MALE: Hey, A.G..
LAFLEY: How's it going?
UNIDENTIFIED MALE: Good.
LAFLEY: I learn by listening.
UNIDENTIFIED MALE: What's for you, the single biggest step change?
LAFLEY: I try to lead through teachable moments. I try to find an opportunity to help someone learn something. They're learning and then transfer it into action.
You can start anywhere in this couldn't company and learn, learn, the practice of delighting, you know, the consumer if you understand who the target is. Now, to your specific question on beauty care?
JIM COLLINS, AUTHOR, "GOOD TO GREAT": Proctor & gamble has been a successful company since 1837. They've had a set of core values they stuck through thick and thin, through civil wars, World War I, they stuck to those core values, absolutely we will not change these!
What a great company builder does is take their personal value system, then instill it into the company so that it becomes a cultural value system. That's the mark of real corporate genius.
(END VIDEOTAPE)
DOBBS; Coming up next, we'll be going to California to talk with Governor Gray Davis who has just completed a helicopter tour of some of the worst affected areas in California's wildfires. He joins us next.
Also ahead, a political threat to the future of Russia. Senior political analyst Bill Schneider has just returned from Russia. And we'll have that story coming right up. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: Russia's markets are taking a dramatic decline after the country's richest man, a top oil Tycoon, arrested for fraud and tax evasion. There have been political aftershocks as well. Russian newspapers tonight reporting President Putin's chief of staff has resigned in protest.
The scandal has erupted on the even of Russian parliamentary elections. Joining me now with his thoughts on the issue is our senior political analyst Bill Schneider just returned from Moscow.
Bill, at this point, it is -- is this, in your judgment, a system back wars for Russia a return to in the views of some in Russia, the good old days?
BILL SCHNEIDER, CNN SENIOR POLITICAL ANALYST: It certainly looks that way. This looks leak a war between the business community and the economic reformers on the one hand, who thrived under the former president, Boris Yeltsin. And the bureaucracy, including the state security apparatus, which has taken on the businessmen and thrown their leader, Khodorkovsky, into jail.
So, this is a real war between two elites, for control of the Russian government.
DOBBS: Khodorkosky has obviously control of the largest oil company and immensely wealthy person. Isn't he smarter than to get himself into this position?
SCHNEIDER: Well, he actually invited this arrest. He expected it. He was under investigation. Three associates had been arrested. Others in the business elite so-called oligarchs, 17 billionaires who grew rich in 1990s.
Others when threatened by the Kremlin they fled, one to London, one to Israel. But Khodorkosky decided to call the Kremlin's bluff, arrest me if you want. He virtually invited it and he's now become the most serious political threat to Putin who, when he came to power, said to the so-called oligarchs, you don't get involved in politics and we won't bother you. But Khodorkosvy and some of his colleagues decided to take him on.
DOBBS: Separating business and politics under any form of government is always difficult. Khordokovsky is in jail, likely to be there for some time. With the Parlimentary elections approaching, how will this affect the Duma? How will effect Putin's power?
SCHNEIDER: Well, in the short run, it looks leak a smart political move by Putin. Because these business oligarchs are very unpopular. They're widely resented. Many are of them are young, many of them are Jewish and there's a strain of anti-semitism in that resentment.
On the other hand, it could throw the economic recovery of Russia into reverse. Russia has done very nicely since the devaluation of 1998. The stock market had reached an all-time high. So, if business begins to unravel, if the economic reforms of the Yeltsin era look threaten. If foreign investment begins to flee. If there is capital flight, which a lot of business leaders are predicting, it could be very bad news for Putin in the longer run.
DOBBS: Bill Schneider, thank you very much, reporting from Washington.
Coming up next, Governor Gray Davis will join us. He's just completed a helicopter tour of areas devastated by the worst wildfires in California's history. Governor Gray Davis coming up next. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: Now the results of "Tonight's Poll." The question, do you believe every U.S. classroom should begin its day with the pledge of allegiance, with or without the phrase, under God?
Fifty-three percent say, yes, 47 percent, no.
And turning now to Christine Romans with the market.
CHRISTINE ROMANS, CNNfn CORRESPONDENT: Very interesting day in the market. OK, it was only up 26 points for the Dow.
DOBBS: Come on.
ROMANS: Three days in a row and it held on to yesterday. Lou...
DOBBS: Interesting day on the market.
ROMANS: It is an interesting day. When it's three in a row -- a couple of reasons the markets are higher. Blockbuster growth report is expected tomorrow and earnings for the quarter topped 20 percent. Three-quarters of the S&P 500 have reported numbers for the quarter. The best profit growth in three years revenue looking like it's up at least 5 percent. And then there's tomorrow's GDP report expected to show growth topping 6 percent for the fastest pace in this economy since late 1999. Now, that's a couple of reasons why investors have been low to sell stocks but it comes as mutual fund charges against Putnam Investments. A day after that Massachusetts treasurer blasted Putnam recommending the state's pension fund give its investments to a more worthy mutual fund company. Massachusetts says, the latest ethical breaches come after Putnam was already on a watch list for poor performance and mutual fund personal changes.
DOBBS: They weren't doing right and weren't doing it well.
ROMANS: Exactly. And now, they said, forget it, we're pulling our money. Connecticut, also considering pulling it's money out of Putnam. And Lou, this also comes today, Janus, reported a profit after a year-ago lose, but it's going to take a $9 million charge for costs related to the mutual fund scandal. It's an interesting time for the mutual fund companies because they have had three year of real tough time growing revenue. Now the markets go their way but they have this big fund scandal to deal with.
DOBBS: Fund outflows for those being focused on as it should be.
Christine Romans, thank you.
Taking a look now at some of "Your Thoughts."
From New York City, New York, "President Bush did not show leadership when he tried to pass the buck to those brave men and women in uniform and he owes those sailors a big apology." That from Meryl Vladimer.
From Fort Riley, Kansas, "Lou, I am so sick of hearing the debates over whether or not we should have gone to war. No matter how much it is debated, we did in fact go to war in Iraq, and that can not be changed. Let's focus on positive solutions to the current problems, such as how to keep our troops alive and giving control back to the Iraqis so that our troops, my husband included, can come home soon and safe!" Priscilla Parker, we share your sentiment.
From Las Cruces, New Mexico, "Lou, have you considered that corporations are creating a self-fulfilling prophecy? Take Wal-Mart as an example. Their practice is to pay their employees a very low wage. They hire mostly part-time workers so there are no benefits. They sell low and force locally owned competition out of business and, thereby lower the local standard of living. So where are the people in the community going to shop?" Jim Warren.
From Claremore, Oklahoma. "Anyone that says the U.S. government usually votes in their best economic interest, must be visiting the U.S. from India or China on a business trip to arrange moving more American jobs or manufacturing offshore." That from Gary Melrose.
From South Carolina, Lou Dobbs, you are an OK guy, but when you are interviewing someone stop butting in. I've noticed that when your talk to a guest on your show, you ask a question and then when you have a different point of view you butt in while they are talking and act so rude. I think you should air this so people will know, but you won't because you're too scared. Sometimes, you can suck." Cory Haynes.
Well, I don't agree with the sentiment and I hope you'll forgive me and I'm hurt, but we're getting better quickly.
From Beecher, Illinois, "Lou, an amazing thing happens when I start watching the evening news lately. No matter what station I begin with, I suddenly end up on watching your show on CNN. Since I get more real news from you, I don't think I'll bother with the others anymore. Sorry, I am a slow learner, but glad to be aboard!" Walt, no matter what we're glad to have you. We love hearing you.
E-mail us loudobbs@cnn.com. We'll be right back. Stay with us.
(COMMERCIAL BREAK)
DOBBS: The third largest solar flare in history, 5 million mile an hour particle interests yesterday's powerful solar flare hit earth early this morning, earlier than had been expected. The National Oceanic and Atmosphere Administration says reports show the power grids in the northern United States and Canada have been feeling the effects. Japan's Space Agency reports one of its communications satellites malfunctioned because of the storm and Japan will not attempt to restart that satellite until after the storm passes. The positive side of these geomagnetic storms, beautiful, colorful, auroras in the sky. And we are told by astrophysicists and astronomers they will be visible as far south as Texas and Florida. So, good luck, and as we look to the skies for this spectacular side effect.
"Tonight's Quote" is from one California Congressman who learned firsthand the devastation of those fires when he and his family lost their home. He said, "It swept up the canyon and got just about everything in it's track and my wife called up and said you won't believe it, but the only thing it missed was the old station wagon we've been trying to get rid of." That from Congressman Duncan Hunter.
Were hoping to be talking with Governor Gray Davis about those wildfires in Southern California as soon as he completed his helicopter survey. Unfortunately, we're not going to be able to bring him to you this evening. We'll try again. That's our show for tonight. We thank you for being with us.
Tomorrow, Senator Chuck Hagel, Republican of Nebraska will be here to talk about U.S. policy in the Middle East, in Iraq and American foreign policy in general. In our special report tomorrow night, "The Great American Giveaway," we focus on the cost of illegal aliens and the effort to keep them out of the country. Why the billion of dollars we spend each year simply aren't enough. For all of us good night from New York. "ANDERSON COOPER 360" is next.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Soldiers Killed in Iraq Attack>
Aired October 29, 2003 - 18:00 ET
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, October 29. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening.
Tonight: The violence in Iraq escalates. Two Americans were killed today, a 70-ton Abrams tank destroyed, in this latest attack. Senior Pentagon correspondent Jamie McIntyre will report on the hunt or the organizers of the widening attacks against coalition forces and Iraqis.
There are reports tonight that Russian President Vladimir Putin's chief of staff has resigned in protest of the arrest of Russia's richest businessman. Critics say Putin is using strong-arm tactics to stifle political opposition. Bill Schneider has just returned from Russia and will join us with the story.
In our "Face Off" tonight: the Pledge of Allegiance and the phrase "under God." Barry Lynn and Jay Sekulow will be here to argue whether "under God" should survive.
Tonight, Southern Californian authorities say the worst wildfires in that state's history have killed least 18 people. The dead include a firefighter who was killed in San Diego County. He is the first firefighter to be killed since those fires started. The fires have destroyed 2,000 homes, from the Simi Valley near Los Angeles, to the Mexican border, and scorched 60,000 acres, an area the size of Rhode Island.
Five Southern Californian counties have been hit hard, Ventura, Los Angeles, San Bernardino, Riverside, and San Diego. Firefighters have been hoping that cooler winds would help them contain the fires, but now sudden shifts in the wind direction have made the firefighters' task much more difficult.
We begin our coverage tonight with Brian Cabell at Stevenson Ranch in Los Angeles County -- Brian.
BRIAN CABELL, CNN CORRESPONDENT: Lou, we're in Stevenson Ranch, which is about 20 miles north of Los Angeles. It's a community that's been under siege for the last day and a half and remains under siege at this very moment, as a matter of fact.
Winds earlier today were calm. The flames seemed to have decide down. Then, suddenly, everything switched. Suddenly, the flames started attacking this very neighborhood where I'm standing. Let me show you what happened. This was just about two hours ago. These are aerials that were shot at that point. Residents suddenly had to flee with whatever they could pick up.
Fire trucks rushed to this area. There were about a dozen trucks on this particular block, pouring water on the flames as they approached. The flames approached the backyards. But then, finally, finally, after about 45 minutes, they backed off. But for the most part today, throughout Southern California, winds have been fairly favorable.
(BEGIN VIDEO CLIP)
DALLAS JONES, CALIFORNIA GOVERNOR'S OFFICE FOR EMERGENCY SERVICES: The offshore breezes have diminished and now we've had onshore breezes. The good news with that is, it brings a lowering of the humidity and a lowering of the temperatures. And, of course, that helps our firefighters.
CABELL (voice-over): Also in the line of fire, the mountain resort communities of Lake Arrowhead and Big Bear, about 80 miles east of downtown Los Angeles. The area is filled with millions of trees killed by an insect plague, dead wood. That's perfect fuel for a fire.
Some 80,000 people have been evacuated. Those who stayed behind are seeing the devastation firsthand. This man lost his lumber business.
ERIC PERKINS, FIRE VICTIM: This is probably six, seven years of hard work down the drain.
CABELL (on camera): And how tough is it to look out over this stuff?
PERKINS: Well, it's only wood. There's a lot more, hopefully.
CABELL: You look pretty...
PERKINS: I'm beat. I've been up for two days.
(END VIDEOTAPE)
CABELL: All told, firefighters have been fighting more than a dozen fires here in Southern California. We're on the Simi Valley fire.
It's burned more than 100,000 acres here over the last five days. No deaths blamed on this particular fire. And a relative handful of homes have been damaged or destroyed here. But earlier, not far from here, again, another neighborhood came under siege by the fire. It came within about 50 yards of this particular neighborhood, but then once again backed away.
And, apparently, what has helped this neighborhood, Lou, is, there's a green belt that's been deliberately built around this neighborhood, low, green ground cover that is irrigated. Every time the fire approaches that particular green belt around this neighborhood, the fire backs out. It apparently has saved this particular community -- Lou.
DOBBS: And, Brian, to be clear, the winds have shifted again. But Stevenson Ranch, at least that community, in your best judgment, is safe tonight?
CABELL: Well, I can tell you, these are stucco homes, so there's not too much wood that's exposed here. So that's helped , along with this green belt.
But, yes, in the trees there -- take a look at the trees. The breezes have picked up here in the last three hours. And so there is still a threat here, Lou. The fire trucks are out. The firemen at the ready. But right now, no homes destroyed in this particular community.
DOBBS: Brian, thank you -- Brian Cabell reporting.
Firefighters in San Bernardino County are struggling tonight to contain fires that surround 16 mountain communities east of Los Angeles. Strong winds grounded firefighting aircraft and drove the fires toward the resort towns in the mountains. Thousands of people fled the area after one of those fires jumped a highway that firefighters had hoped would act as a fire break. The flames are being fueled by thick underbrush and dry trees.
Two large fires in San Diego County have moved within a few miles of one another. Officials say those fires may converge and form one huge wildfire more than 50 miles in length.
Adrian Baschuk joins us now from Julian in San Diego County and has the very latest -- Adrian.
ADRIAN BASCHUK, CNN CORRESPONDENT: Lou, good evening.
We are just being told that, in the last hour one firefighter has unfortunately died -- that is confirmed -- and two others hurt. That brings the death toll here in San Diego to 13; 12 were civilians; 10 of those -- or 10 -- I'm sorry -- were civilians. And, unfortunately, those 10 people were burned alive in their car.
You can see behind me here in this historic town of Julian, it is a town that fires are encircling it. In all directions, you can see huge plumes of smoke. The ridge you are looking at there was beset by towering flames, 50 feet high, this morning. All that's left is smoldering landscape.
However, we did manage to see this one house that was saved. There were several helicopters by the California Department of Fire and Forestry that were able to swoop in here for about two hours at a time and release 250 gallons of water at a time over these flames. So, as you can see, that house was saved. And over here on the left, we have another house that also the residents never did evacuate from.
Lastly, here in Julian, the winds have certainly picked up, gusting at a strong 30 miles an hour, threatening to ground those much-needed helicopters -- Lou.
DOBBS: Adrian, thank you very much -- Adrian Baschuk reporting from San Diego County.
Turning tonight to Iraq, the number of American troops killed since the end of major combat operations now exceeds the number of Americans killed in the first phase of the war. The death toll since May 1 has risen to 117, two more than killed in the first phase of the war.
In the latest attack, two soldiers were killed when insurgents and terrorists destroyed an M-1 Abrams tank north of Baghdad. It was the first time that terrorists have destroyed an Abrams tank since the end of major combat operations.
As the violence escalates in Iraq, the Pentagon has identified one of the top organizers of the attacks against coalition forces. He is a former Iraqi general, the highest-ranking member of Saddam Hussein's regime still at large.
Senior Pentagon correspondent Jamie McIntyre has the report -- Jamie.
JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Lou, Izzat Ibrahim al-Douri was a member of Saddam Hussein's inner circle, the northern regional military commander.
He was No. 6 on the list of the 55 most wanted Iraqis. The king of clubs in the famous deck of cards, the highest-ranking former official still at large, with the exception of Saddam Hussein himself. Now, Pentagon officials say that the capture of several suspected members of the Ansar al-Islam terrorist group, which is linked to al Qaeda, provided the key intelligence that pointed toward al-Douri as a possible mastermind behind these attacks.
Sources that several suspects, including one said to be very close to al-Douri, fingered him as the brains and financier behind some of the attacks. And Pentagon sources say that Lieutenant General Rick Sanchez, the U.S. commander there, has included that intelligence in his latest report to the Pentagon, Sanchez also telling the Pentagon that there are -- quote -- "clear indications that so-called foreign fighters linked to al Qaeda are working with Saddam Hussein loyalists."
Now, the Pentagon is sending more intelligence assistance to Iraq in order to try to facilitate the flow of intelligence. But today, Pentagon officials denied a report in "The New York Times" that any intelligence resources would be shifted away from the hunt for WMD, simply that those analysts would also be looking for intelligence that could be used in the counterinsurgency operation -- Lou.
DOBBS: With this breakthrough in intelligence, Jamie, is there any indication that the military in Iraq knows where Saddam Hussein's former No. 2 is now operating?
MCINTYRE: Well, they believe that he's operating in the northern area, coincidentally, the same area where they think Saddam Hussein is hiding out, according to the best intelligence. They haven't been able to find him or have him in custody, same with Saddam Hussein.
They do believe that the two are not hiding together. And I can tell you that it's an object of intense focus, both trying to get Saddam Hussein and Ibrahim al-Douri, who is seen as the one who is directly coordinating some of these attacks.
DOBBS: What is the Pentagon's best judgment about how Saddam Hussein, to this point, has been able to avoid the forces that have been arrayed against him?
MCINTYRE: Well, they think he still has a significant number of people who are helping him. They think he's moving his location constantly. They think he's on the run and, therefore, not able to directly coordinate things.
And they've constantly thought they were getting close to him. But they've been thinking that for months. So they have been very careful to say that they're not closing in on him until the day when they actually get him.
DOBBS: Senior Pentagon correspondent Jamie McIntyre, thank you.
The Pentagon has also delayed the planned replacement of a lucrative into no-bid contract awarded to Vice President Dick Cheney's former company, Halliburton, for its work in Iraq. The Pentagon said Halliburton will stay on the job until early next year, because of increasing sabotage to Iraq's oil industry and the need to provide additional security. So far, Halliburton has been paid more than $1.5 billion.
The vice president says he has no current ties to Halliburton and has nothing to do with the contract.
More questions today about the "Mission Accomplished" banner that was strung across the superstructure of the aircraft carrier Abraham Lincoln, where the president landed and announced the end of major combat in Iraq on May 1. Yesterday, President Bush said, in a press conference, that the banner was put there by the Navy.
Critics immediately blasted the president for trying to shift the creation of that embarrassing banner to the Navy because of its premature declaration that the fighting in Iraq was all but over. The White House, for its part, says the banner had a much simpler purpose, to praise the aircraft carrier's crew.
Senior White House correspondent John King has the story tonight -- John.
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: And Lou, this debate already, in some ways, reminiscent of the fierce political debate over those 16 words now discredited in the president's State of the Union address, where he claimed Iraq was trying to buy uranium to revive its nuclear weapons program. That controversy became a vehicle for the must larger debate about whether Mr. had hyped the intelligence and hyped the case for going to war -- the "Mission Accomplished" banner now the vehicle for the continuing debate over whether Mr. Bush grossly underestimated the postwar security challenge in Iraq.
Here at the White House today, Press Secretary McClellan conceding, the White House did pay for that banner and the White House authorized that banner and produced that banner. But he says it was produced for a very narrow reason, at the request of the crew of the USS Abraham Lincoln, to thank that crew for a job well done.
(BEGIN VIDEO CLIP)
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: It was the Navy, the people on board the ship, who had the idea of this banner and made the suggestion, because they wanted to have a way to commemorate the fact that these sailors and the crew on board the ship had completed their mission after a very lengthy deployment.
(END VIDEO CLIP)
KING: But Democratic critics on the campaign trail and in the Congress simply don't buy it. They say the president staged that made-for-TV moment on that ship, not only the landing, but standing under that "Mission Accomplished" banner, because he wanted to send a much broader message -- the Senate Democratic leader, Tom Daschle, saying, Mr. Bush backing away from that message now and distancing himself from that banner, because Mr. Bush's message, in the Democrats' view, has backfired.
(BEGIN VIDEO CLIP)
SEN. TOM DASCHLE (D-SD), MINORITY LEADER: We've lost more lives since he's declared victory than we lost prior to the time he declared victory. And this latest fabrication is yet another illustration of their unwillingness to accept reality.
(END VIDEO CLIP)
KING: And, Lou, some fresh evidence tonight that, even a few weeks ago, at least one senior White House official had a sense this banner might come back and be a political problem. At a public forum here in Washington, not very well covered, White House communications director Dan Bartlett said it was he who authorized the banner. He said it was at the request of the ship's crew, and that, in his view, the president's critics were taking it out of context.
Bartlett said he did not consider his decision a mistake. But he did say this -- quote -- "Sometimes pictures have a way of coming back, which is very difficult" -- Lou.
DOBBS: John, just to make sure I understand what the White House is saying here, they're saying that the crew of the carrier asked the White House to create a banner to say thank you to the crew of the carrier? KING: That is right, that, in the conversations about how to stage the event, the White House is saying -- and the Navy confirms this -- that the crew said, we should have a banner thanking the crew of the Lincoln for a job well done. So they had the banner that said "Mission Accomplished." That is all it said. It did not say, "Crew of the Abraham Lincoln, Mission Accomplished."
The White House says that banner was meant to say mission accomplished to the men and women on that ship for their lengthy deployment in Iraq and Afghanistan. The White House is insisting, the president was not trying to say mission accomplished overall in Iraq. And, in fact, the White House says, in his speech, the president said, Iraq is still a dangerous place. But, again, the president's critics, who, of course, thought this was a stunt at the time, they simply don't buy it. They say Mr. Bush is running away from that banner now because of all the trouble on the ground in Iraq.
DOBBS: I think perhaps everyone, Democrats, Republicans, the White House, all could agree now that sometimes, when you're trying to say thank you, a simple thank you will suffice.
John King, thank you very much, our senior White House correspondent.
A victory late today for the White House on the $87 billion spending bill for Iraq and Afghanistan. Congressional negotiators rejected a Senate-passed plan to turn nearly half of the $20 billion in reconstruction money for Iraq into loans. Those funds will now be distributed as grants. President Bush had threatened a veto if the Senate version was approved.
Coming up next here, "The Great American Giveaway," our special report -- tonight, the U.S. government financing college tuition for illegal aliens? It's a proposal working its way through Congress right now. Its terms may surprise you. It may even shock you. Peter Viles has the report.
And then, in our "Face Off" tonight, we focus on the Pledge of Allegiance. A violation of the First Amendment or an integral part of our history and culture? Two drastically different views on the words "under God."
And shades of the evil empire? A Russian business tycoon and political opponent of President Putin arrested at gunpoint and thrown in prison about. Senior political analyst Bill Schneider has just returned from Moscow. He will be here with the story.
Please stay with us.
(COMMERCIAL BREAK)
DOBBS: Tonight, in our special report, "The Great American Giveaway," the United States' enormous trade deficit with China, it could grow to more than $130 billion this year. And some in the business world say the government is not doing enough to reverse it.
Kitty Pilgrim is here tonight and has the story -- Kitty.
KITTY PILGRIM, CNN CORRESPONDENT: Lou, there is a long list of complaints about how China is conducting its trade, from manipulating the currency to outright stealing. And many want action.
(BEGIN VIDEOTAPE)
PILGRIM (voice-over): China is the principal beneficiary of U.S. free trade. The trade deficit with China has exploded in the last decade to an estimated $130 billion this year. American manufacturers are the principal victims of U.S. free trade policies.
SEN. DICK DURBIN (D), ILLINOIS: When it comes to manufacturing jobs, and the fingers all point to China. Because of their undervalued currency, they're able to export much more cheaply and drive our people out of business.
PILGRIM: Congressional leaders want China to float its currency on the open market to help adjust what they consider artificially low prices for Chinese goods. If they don't get action, they threaten a 27 percent tariff on Chinese goods.
But there is another trade problem: China is outright stealing. China sells counterfeit American products like C.D.s and movies illegally. Commerce Secretary Evans, in China, was complaining about bootlegged copies of American movies selling there for about $1.
MYRON BRILLIANT, U.S. CHAMBER OF COMMERCE: It's costing our movie producers money. It's costing our computer companies money. And there's no question it's an overarching concern for American businesses.
PILGRIM: American businesses also want China to live up to its promises to open its markets to U.S. goods. A parade of U.S. trade officials to Beijing has been rebuffed.
DON EVANS, COMMERCE SECRETARY: China must move faster by opening markets, by dropping trade barriers, and letting market forces determine economic decisions.
PILGRIM: One of the few successes for U.S. exports to China is soybeans. China has become our biggest customer, buying $1 billion worth every year. But China has a long way to go to live up to its obligations and American expectations.
(END VIDEOTAPE)
PILGRIM: Now, the pressure will increase tomorrow on China. U.S. Treasury Secretary John Snow is testifying before the Senate Banking Committee about China's unfair currency practices -- Lou.
DOBBS: You can just feel the pressure building as a result of that testimony. Kitty, thank you very much -- Kitty Pilgrim.
Another piece of legislation is moving through Congress that would grant a form of amnesty to thousands of illegal aliens in this country, allowing them to attend state colleges with the same subsidized in-state tuition rate that U.S. citizens pay. For that, it is called the Dream Act.
And Peter Viles is here tonight with the story for us.
It sounds like a dream.
PETER VILES, CNN CORRESPONDENT: A dream for some folks.
With college tuition soaring, Lou, you think this would be a controversial piece of legislation. And yet, in a key Senate committee, it passed on an overwhelming vote.
(BEGIN VIDEOTAPE)
VILES (voice-over): With strong support from Chairman Orrin Hatch, the Judiciary Committee vote was 16-3 for the so-called Dream Act, which would let states offer in-state college tuition rates to illegal aliens who finish high school and would protect them from deportation. Supporters of the bill -- and there are many in the Senate -- believe these students are innocent victims of an immigration system that doesn't work.
MELISSA LAZARIN, NATIONAL COUNCIL OF LA RAZA: They've made the United States their homeland. Their families have built roots in our communities. Their families have contributed in the form of taxes to the state system and federal system. We believe these students should have access to higher education.
VILES: But the bill has become a lightening rod for those who believe immigration laws in this country are a mess and Congress is about to make them worse.
JOHN KEELEY, CENTER FOR IMMIGRATION STUDIES: Immigration law and its enforcement is not age-specific. We don't distinguish by age. Just because you're 15 or 16 or 17 and hard-working, it doesn't mean you get to violate our immigration laws.
VILES: One of the three who opposed the bill in committee, Alabama Republican Jeff Sessions.
SEN. JEFF SESSIONS (R), ALABAMA: If we grant this amnesty to these people, young people who are here illegally, we'll have no principled basis in the future to resist amnesty for any group.
VILES: Sessions is holding out for something very unlikely, a broader approach to the nation's immigration crisis.
SESSIONS: We absolutely need to take a broader look. Our immigration law now is a joke. You talk to police officers throughout America and they tell you that, if they apprehend an illegal alien, they don't even bother to call the Immigration Service, because they won't come and pick them up.
(END VIDEOTAPE) VILES: And the bill was weakened in committee. Senators there voted to keep illegal aliens ineligible for federal Pell grants. Well, why did they do that? Because the federal government would have had to pay for it. It would have cost nearly $200 million a year by one estimate. This bill wouldn't cost the federal government much. It will cost the states.
DOBBS: You have got to be kidding. A U.S. Senate committee has passed legislation, by a margin of 16-3, that would cost the states money, but would refuse to do the same thing under the federal government?
VILES: Right. In the old days, we called these unfunded mandates.
(LAUGHTER)
VILES: But this is taking states rights to an extreme, saying states have the right to set their own immigration policies. We have one that doesn't work. Imagine if we have 50 that don't work.
DOBBS: Well, perhaps that's a solution, turn over immigration policy to the states, since the national government obviously doesn't seem to have the will to deal with what is a problem that is out of control in this country.
Peter Viles, thank you.
Tomorrow on our special report, "The Great American Giveaway," we've reported extensively here on how this nation's borders are simply porous. Tomorrow, we take a look at just how much money the United States is spending to keep, ostensibly, illegal aliens out and why all of that money is being spent futilely. That's tomorrow night. Please join us.
Coming up next: "Face Off": the Pledge of Allegiance, an American tradition or a violation of the separation of church and state? Tonight, two very different points of view, "under God."
And we'll be talking with Governor Gray Davis, who has just toured some of the worst affected areas in California's wildfires. We'll be talking with him here in the next 15 minutes.
Please stay with us.
(COMMERCIAL BREAK)
DOBBS: It's been recited in classrooms across the country for generations, but now the Pledge of Allegiance is at the center of a contentious debate and a Supreme Court decision.
A California man filed suit three years ago, saying his 9-year- old daughter was injured by having to watch and listen as her teacher led her class in reciting the pledge, including the phrase "under God." He won the case, but it was quickly appealed and is now before the Supreme Court. The debate about the Pledge of Allegiance is at the center of our "Face Off tonight."
Joining me now is Barry Lynn. He's the executive director of Americans United For Separation of Church and State; Jay Sekulow, who is the chief counsel at the American Center For Law and Justice. Both join us tonight from Washington.
Let me begin first with you, Barry. Why in the world is the phrase "under God" construed as establishment of religion?
BARRY LYNN, EXEC. DIRECTOR, AMERICANS UNITED FOR SEPARATION OF CHURCH AND STATE: Well, before 1954, the Pledge of Allegiance, which had been written by a Baptist minister in the 1890s as a completely secular document, all of a sudden had added to it, at the behest of people who wanted to make this a religious statement, the words "under God."
They thus transformed an affirmation of love of country into what amounts to a religious test, a kind of affirmation that, in order to be an American, you also have to believe in one God, "under God." If we were going to be absolutely frank about what Americans believe, you'd have to have that phrase, I guess, read "under God, gods, or no god" in order to be inclusive. We're not going to do that. I think the next best thing is to have that phrase removed, so that public school students never feel like a second-class citizen in their own classroom simply because they don't agree with the phrase "under God."
They may agree with the rest of the affirmation of love of country, but just not that addition of religion.
DOBBS: Jay, it sounds pragmatic and reasonable. What's wrong with that view?
JAY SEKULOW, CHIEF COUNSEL, AMERICAN CENTER FOR LAW & JUSTICE: I'll tell you, Lou, why it's not reasonable.
It's not reasonable because the phrase "under God" is simply an acknowledgement of the religious heritage that exists in the United States. The phrase "under God" actually originated in the Gettysburg Address, where President Lincoln said, "This nation, under God, shall have a new birth of freedom." And what the acknowledgement is that our rights and liberties and freedoms don't come from government. They're not ordained only by government.
But it's from God to man. It's what our founders talked about in the Declaration of Independence, that we are endowed by our creator with these inalienable rights, life, liberty, and the pursuit of happiness. This is simply an acknowledgement of the religious heritage that serves as a foundation of our country. No student is required to say the Pledge of Allegiance. Nobody has to participate. The Supreme Court has been very clear about that since the 1940s.
So, to remove the phrase "under God" would lead to, in my view, a challenge to "In God We Trust" as our national motto. And even the Supreme Court of the United States starts with the phrase, "God save the United States and this honorable court."
LYNN: You know, Jay -- Jay is right about one thing, Lou. Nobody is forced at gunpoint, of course, to utter the words under God. But if you're a third or fourth grader and the teacher, the authority in your classroom says, "This the time for the pledge of allegiance," it is absolutely inconceivable that a student who has a differing viewpoint on religion and wants to not participate is going to get up and leave every day and face the ridicule or, worse, if his or her peers...
(CROSSTALK)
LYNN: ....that you find in the school prayer cases, where the court has said even if you don't require participation, if you're present as a part of a religious ritual, that's bad enough.
SEKULOW: Yes, this isn't a school prayer. And there's been 50 years of history where students have opted out, decided not to say the pledge of allegiance.
You know, the First Amendment works both way. It certainly protects the religious dissenter, those that don't believe. But it also protects the freedom of speech and the free exercise of religion and freedom of speech, includes religious speech. And the fact that someone's' going to utters the phrase under God, and, in this particular case, Michael Newdow says his daughter is offended, which the daughter denies -- that's -- the price of freedom --
DOBBS: May I ask you both a question?
(CROSSTALK)
DOBBS: Let's say a teacher said to her class, We're going to vote on whether you have a pledge of allegiance. We're going to give you two forms of it, one with under God, one without. And the majority of the students said, we want it with, "with under God." What would be the problem with that?
LYNN: Well, I don't think, Lou, that we take a vote on the Bill of Rights.
DOBBS: No, no, no. No, no, no. I'm just asking -- I'm posing a hypothetical question. I'm talking about a student option.
LYNN: Yes, I don't think that that's the way we run schools. We don't have options about whether we're going to have religious affirmations or not have them...
SEKULOW: Yes, but this is Barry Lynn who's -- my friend Barry Lynn saying this, and meanwhile, what about the freedom of speech or the freedom of choice? There you're saying it can't even be an option.
DOBBS: Well, let me ask this question.
(CROSSTALK) LYNN: They do have the freedom of speech because you can say this at any time other than the time when the teacher announces, This is the time for you to participate in a religious ritual. So this free speech argument is really bogus.
DOBBS: Well, let me ask you this -- is it any more offensive to a young man or a young woman in class to be reading along, as Jay pointed out, the Constitution, the -- those rights -- those inalienable rights, by which our creator endowed us? Is it any more offensive to look down at a dollar bill or a coin and say, in God we trust? At what point...
LYNN: I think it's more -- well, I do think, Lou, it's more violative of personal conscience to be asked to essentially participate, even, again at -- not at gun point -- but to participate in a religious oath every single day. I think that's much more of a serious constitutional issue than the fact that "In God we trust" has -- is on the dollar bills. At least you don't have to say the phrase when you pay for your cup of coffee in the morning.
SEKULOW: But if a student is required to recite the Declaration of Independence, under Barry -- under your theory the student would have an opt-out right to remove phrases and kind of take a scissors to those phrases you disagree with. And that's just not the point. That's not the way it works.
LYNN: Why would we, in fact, do the Declaration of Independence except as the study of an important -- essentially important historical document.
(CROSSTALK)
SEKULOW: I think the pledge of allegiance is recognized as religious heritage (UNINTELLIGIBLE)
LYNN: Absolutely not. What this is -- was designed -- read what President Eisenhower said when he signed the bill changing this to a religious oath instead of a political one. He said it was so that we would have schoolchildren affirming their belief in God every day. That was his intent. But under our constitutional system, people in government don't -- do not get to make those changes that affect every schoolchild in America.
DOBBS: Jay, at what point do you get concerned if -- if we had some sort of cultural shift in this country and the next generation said under a Judeo Christian God we trust, in a pledge of allegiance? At what point is there every reason in the world to say, the American government is about the freedom of religion, it's about the freedom of expression, and it should not be incorporated in any way into our government?
SEKULOW: Well, I think the fact is, Lou, you can't have a government that's neutral of the recognition that we are a nation that is -- was founded on a basic Judeo Christian ethic, whether you take the view that constitutes prayer under God in the pledge of allegiance or whether you just acknowledge as historical fact. I think as long as you're talking about the historical reality of what the phrase meant, where it came from, what its origin was, that's not the -- that's not an affirmation of a particular religious belief or denomination. And again, no one's required to say it. So, you know, when you look at the new history to these cases, you've got to be careful.
You've got to realize that what is at stake, I think, goes beyond the pledge. It's beyond under God. It does look at things like "In God we trust" or the recognition of the Supreme Court, "God save the United States and this honorable court."
LYNN: You know, if it was all that simple, I could imagine if one teacher ever said anywhere in the United States, we're going to say, "One nation under Vishnu or under Oden, the Norse god"....
SEKULOW: I would argue that's historically inaccurate.
LYNN: Yes, but we'd have a tremendous amount of battle. And courts, of course, Lou, draw lines all the time. They can say that saying something like "God bless this honorable court" is not the same constitutionally as having young children have to proclaim loyalty to both God and country every morning in their homeroom exercises in California or anywhere else in the country.
DOBBS: Jay Sekulow, Barry Lynn, gentlemen, thank you.
(CROSSTALK)
DOBBS: I hope you'll come back and discuss this as we wind it toward a court decision, which I -- I won't even make religious reference of it.
Thank you very much, gentlemen.
(CROSSTALK)
DOBBS: We want to hear from you on this topic. The question tonight of our poll -- "Do you believe every U.S. classroom should begin its day with the pledge of allegiance, with or without the phrase 'under God'? Yes or no?" Cast your vote at cnn.com/lou. We'll have the results for you coming right up.
Next -- "Leading Questions," our series of special reports in conjunction with "The Economist" magazine. Tonight, a leader who relies on basic humanity and a strong sense of service to lead -- to put his company on top.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Tonight in our series of special reports in conjunction with "The Economist" magazine, management styles that, believe it or not, work. We focus on CEOs this week who are overpaid, who underperform. There are also CEOs who actually perform and earn their money. One of those is our feature tonight.
(BEGIN VIDEOTAPE)
DOBBS (voice-over): In a sea of bad news about corporate scandals and poor performance, A. G. Lafley, the CEO of Procter & Gamble is definitely swimming against the tide.
UNIDENTIFIED MALE: Are you still living here in town?
UNIDENTIFIED FEMALE: Nice to see you again. How are you?
UNIDENTIFIED MALE: Beautiful.
UNIDENTIFIED FEMALE: We tried our best.
A.G. LAFLEY, CHAIRMAN & CEO, PROCTER & GAMBLE: P&G delivered results ahead of growth objectives, volume and sales up 8 percent, profit margins, the highest in 50 years.
DOBBS: Lafley was elected president and CEO in 2000, after 25 years with the company. Since July of 2001, with Lafley the insider at the helm, P&G's stock price is up more than 40 percent, and growth has accelerated.
LAFLEY: I came into the job three-and-a-half years ago, the company was in a bit of a crisis. We had to come together quickly. We had to make a few hard choices and we had to regain our confidence.
FRANCES CAIRNCROSS, "THE ECONOMIST"; To turn a company around, as Lafley has done, it takes first of all focus. You need to decide very quickly which of the bits of the business are worth saving and which you should jettison. And you need the ability to bring everyone along with you.
LAFLEY: And that was probably the most important thing I did, was just remind all 100,000 P&Gers that we're here to serve the woman and her family for whom we create and build these brands and products and services.
DICK ANTOINE, GLOBAL HUMAN RESOURCES OFFICER, PROCTER & GAMBLE: Working with P&G is stimulating, fun, and exhausting.
LAFLEY: This is a fairly typical day. Early in the morning is when I communicate with Asia, almost always via phone.
Hopefully the Chinese consumers are making you work very hard.
Every month I call all the presidents that aren't in the U.S. I try to guide the conversation into two or three areas. First, strategy, choices that they're making. Second thing is people development. We are a company that recruits, develops, trains and promotes almost exclusively from within. The third thing I do is I listen.
UNIDENTIFIED FEMALE: This Cover Girl thing is up most of the time. I like to get out into the stores so does A.G. just to see what's new, what's going on at retail.
LAFLEY: You know what I like about this? We have, you know, we have this center section which features the new item, right?
I think we're in a very competitive marketplace, because unless we're delighting you, you won't choose us.
Wait. Hold it. We were walking at a fast pace, we just glanced down the aisle and the Pringles stood out. I introduced this notion to there are two consumer moments of truth: when she shops in the store and when she uses the product in the home and we have to win both of those moments. We stand for election every day in the store.
This is interesting, because it's taking off outside the U.S. and it needs to be refreshed.
CLAUDIA KOTCHKA, V.P. PROCTER & GAMBLE: A.G.'s so friendly that he can just go up and start a conversation with a shopper, get all kinds of information that's just great.
LAFLEY: Again, too close.
UNIDENTIFIED FEMALE: Way too close.
LAFLEY: Shapes way too close.
You know, we're not curing cancer, but we are trying to make everyday life just a little bit better.
UNIDENTIFIED FEMALE: It should be a lively little warm-up for when you come up there at 9:00.
LAFLEY: All right. I don't have to dance this time.
UNIDENTIFIED FEMALE: Not unless you want to.
LAFLEY: No, that's okay.
UNIDENTIFIED FEMALE: It's essential to have bosses who like being surrounded by really good people. Too many bosses are scared of being surrounded by the best.
LAFLEY: Our most precious resources, the assets of this company, are our brands and our people. I spend a fair amount of personal time, not just welcoming new hires, but beginning to teach them about the P&G way.
We're going to Folgers, straight ahead. I manage by walking around.
UNIDENTIFIED MALE: Hey, A.G..
LAFLEY: How's it going?
UNIDENTIFIED MALE: Good.
LAFLEY: I learn by listening.
UNIDENTIFIED MALE: What's for you, the single biggest step change?
LAFLEY: I try to lead through teachable moments. I try to find an opportunity to help someone learn something. They're learning and then transfer it into action.
You can start anywhere in this couldn't company and learn, learn, the practice of delighting, you know, the consumer if you understand who the target is. Now, to your specific question on beauty care?
JIM COLLINS, AUTHOR, "GOOD TO GREAT": Proctor & gamble has been a successful company since 1837. They've had a set of core values they stuck through thick and thin, through civil wars, World War I, they stuck to those core values, absolutely we will not change these!
What a great company builder does is take their personal value system, then instill it into the company so that it becomes a cultural value system. That's the mark of real corporate genius.
(END VIDEOTAPE)
DOBBS; Coming up next, we'll be going to California to talk with Governor Gray Davis who has just completed a helicopter tour of some of the worst affected areas in California's wildfires. He joins us next.
Also ahead, a political threat to the future of Russia. Senior political analyst Bill Schneider has just returned from Russia. And we'll have that story coming right up. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: Russia's markets are taking a dramatic decline after the country's richest man, a top oil Tycoon, arrested for fraud and tax evasion. There have been political aftershocks as well. Russian newspapers tonight reporting President Putin's chief of staff has resigned in protest.
The scandal has erupted on the even of Russian parliamentary elections. Joining me now with his thoughts on the issue is our senior political analyst Bill Schneider just returned from Moscow.
Bill, at this point, it is -- is this, in your judgment, a system back wars for Russia a return to in the views of some in Russia, the good old days?
BILL SCHNEIDER, CNN SENIOR POLITICAL ANALYST: It certainly looks that way. This looks leak a war between the business community and the economic reformers on the one hand, who thrived under the former president, Boris Yeltsin. And the bureaucracy, including the state security apparatus, which has taken on the businessmen and thrown their leader, Khodorkovsky, into jail.
So, this is a real war between two elites, for control of the Russian government.
DOBBS: Khodorkosky has obviously control of the largest oil company and immensely wealthy person. Isn't he smarter than to get himself into this position?
SCHNEIDER: Well, he actually invited this arrest. He expected it. He was under investigation. Three associates had been arrested. Others in the business elite so-called oligarchs, 17 billionaires who grew rich in 1990s.
Others when threatened by the Kremlin they fled, one to London, one to Israel. But Khodorkosky decided to call the Kremlin's bluff, arrest me if you want. He virtually invited it and he's now become the most serious political threat to Putin who, when he came to power, said to the so-called oligarchs, you don't get involved in politics and we won't bother you. But Khodorkosvy and some of his colleagues decided to take him on.
DOBBS: Separating business and politics under any form of government is always difficult. Khordokovsky is in jail, likely to be there for some time. With the Parlimentary elections approaching, how will this affect the Duma? How will effect Putin's power?
SCHNEIDER: Well, in the short run, it looks leak a smart political move by Putin. Because these business oligarchs are very unpopular. They're widely resented. Many are of them are young, many of them are Jewish and there's a strain of anti-semitism in that resentment.
On the other hand, it could throw the economic recovery of Russia into reverse. Russia has done very nicely since the devaluation of 1998. The stock market had reached an all-time high. So, if business begins to unravel, if the economic reforms of the Yeltsin era look threaten. If foreign investment begins to flee. If there is capital flight, which a lot of business leaders are predicting, it could be very bad news for Putin in the longer run.
DOBBS: Bill Schneider, thank you very much, reporting from Washington.
Coming up next, Governor Gray Davis will join us. He's just completed a helicopter tour of areas devastated by the worst wildfires in California's history. Governor Gray Davis coming up next. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: Now the results of "Tonight's Poll." The question, do you believe every U.S. classroom should begin its day with the pledge of allegiance, with or without the phrase, under God?
Fifty-three percent say, yes, 47 percent, no.
And turning now to Christine Romans with the market.
CHRISTINE ROMANS, CNNfn CORRESPONDENT: Very interesting day in the market. OK, it was only up 26 points for the Dow.
DOBBS: Come on.
ROMANS: Three days in a row and it held on to yesterday. Lou...
DOBBS: Interesting day on the market.
ROMANS: It is an interesting day. When it's three in a row -- a couple of reasons the markets are higher. Blockbuster growth report is expected tomorrow and earnings for the quarter topped 20 percent. Three-quarters of the S&P 500 have reported numbers for the quarter. The best profit growth in three years revenue looking like it's up at least 5 percent. And then there's tomorrow's GDP report expected to show growth topping 6 percent for the fastest pace in this economy since late 1999. Now, that's a couple of reasons why investors have been low to sell stocks but it comes as mutual fund charges against Putnam Investments. A day after that Massachusetts treasurer blasted Putnam recommending the state's pension fund give its investments to a more worthy mutual fund company. Massachusetts says, the latest ethical breaches come after Putnam was already on a watch list for poor performance and mutual fund personal changes.
DOBBS: They weren't doing right and weren't doing it well.
ROMANS: Exactly. And now, they said, forget it, we're pulling our money. Connecticut, also considering pulling it's money out of Putnam. And Lou, this also comes today, Janus, reported a profit after a year-ago lose, but it's going to take a $9 million charge for costs related to the mutual fund scandal. It's an interesting time for the mutual fund companies because they have had three year of real tough time growing revenue. Now the markets go their way but they have this big fund scandal to deal with.
DOBBS: Fund outflows for those being focused on as it should be.
Christine Romans, thank you.
Taking a look now at some of "Your Thoughts."
From New York City, New York, "President Bush did not show leadership when he tried to pass the buck to those brave men and women in uniform and he owes those sailors a big apology." That from Meryl Vladimer.
From Fort Riley, Kansas, "Lou, I am so sick of hearing the debates over whether or not we should have gone to war. No matter how much it is debated, we did in fact go to war in Iraq, and that can not be changed. Let's focus on positive solutions to the current problems, such as how to keep our troops alive and giving control back to the Iraqis so that our troops, my husband included, can come home soon and safe!" Priscilla Parker, we share your sentiment.
From Las Cruces, New Mexico, "Lou, have you considered that corporations are creating a self-fulfilling prophecy? Take Wal-Mart as an example. Their practice is to pay their employees a very low wage. They hire mostly part-time workers so there are no benefits. They sell low and force locally owned competition out of business and, thereby lower the local standard of living. So where are the people in the community going to shop?" Jim Warren.
From Claremore, Oklahoma. "Anyone that says the U.S. government usually votes in their best economic interest, must be visiting the U.S. from India or China on a business trip to arrange moving more American jobs or manufacturing offshore." That from Gary Melrose.
From South Carolina, Lou Dobbs, you are an OK guy, but when you are interviewing someone stop butting in. I've noticed that when your talk to a guest on your show, you ask a question and then when you have a different point of view you butt in while they are talking and act so rude. I think you should air this so people will know, but you won't because you're too scared. Sometimes, you can suck." Cory Haynes.
Well, I don't agree with the sentiment and I hope you'll forgive me and I'm hurt, but we're getting better quickly.
From Beecher, Illinois, "Lou, an amazing thing happens when I start watching the evening news lately. No matter what station I begin with, I suddenly end up on watching your show on CNN. Since I get more real news from you, I don't think I'll bother with the others anymore. Sorry, I am a slow learner, but glad to be aboard!" Walt, no matter what we're glad to have you. We love hearing you.
E-mail us loudobbs@cnn.com. We'll be right back. Stay with us.
(COMMERCIAL BREAK)
DOBBS: The third largest solar flare in history, 5 million mile an hour particle interests yesterday's powerful solar flare hit earth early this morning, earlier than had been expected. The National Oceanic and Atmosphere Administration says reports show the power grids in the northern United States and Canada have been feeling the effects. Japan's Space Agency reports one of its communications satellites malfunctioned because of the storm and Japan will not attempt to restart that satellite until after the storm passes. The positive side of these geomagnetic storms, beautiful, colorful, auroras in the sky. And we are told by astrophysicists and astronomers they will be visible as far south as Texas and Florida. So, good luck, and as we look to the skies for this spectacular side effect.
"Tonight's Quote" is from one California Congressman who learned firsthand the devastation of those fires when he and his family lost their home. He said, "It swept up the canyon and got just about everything in it's track and my wife called up and said you won't believe it, but the only thing it missed was the old station wagon we've been trying to get rid of." That from Congressman Duncan Hunter.
Were hoping to be talking with Governor Gray Davis about those wildfires in Southern California as soon as he completed his helicopter survey. Unfortunately, we're not going to be able to bring him to you this evening. We'll try again. That's our show for tonight. We thank you for being with us.
Tomorrow, Senator Chuck Hagel, Republican of Nebraska will be here to talk about U.S. policy in the Middle East, in Iraq and American foreign policy in general. In our special report tomorrow night, "The Great American Giveaway," we focus on the cost of illegal aliens and the effort to keep them out of the country. Why the billion of dollars we spend each year simply aren't enough. For all of us good night from New York. "ANDERSON COOPER 360" is next.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Soldiers Killed in Iraq Attack>
