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Lou Dobbs Tonight
Bermuda Based Accenture Wins Department of Homeland Security Contract
Aired June 01, 2004 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Tonight, chilling new details about an al Qaeda plot to kill thousands of Americans. The Justice Department says the prime suspect, an American citizen, is too dangerous to be tried in civilian court.
There's a new government in Iraq tonight, four weeks before the United States hands over sovereignty.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We will stand together and ensure that the future of Iraq is a future of freedom.
(END VIDEO CLIP)
DOBBS: A foreign company wins a huge border security contract. It could be worth $10 billion. My guest tonight is the chairman of the House Committee on Homeland Security, Congressman Christopher Cox.
Radical Islamists target westerners in Saudi Arabia. Former CIA officer Robert Baer says Saudi Arabia is on the brink of chaos. He's my guest tonight.
And Americans facing skyrocketing energy costs.
(BEGIN VIDEO CLIP)
JUSTIN MCNAULL, AAA: It's real money coming out of your wallets, and it's coming pretty quickly.
(END VIDEO CLIP)
DOBBS: Tonight, our special report: Outta Gas.
ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, June 1. Here now for an hour of news, debate and opinion is Lou Dobbs.
DOBBS: Good evening.
The government today released disturbing new details about one of its most high-profile terrorism suspects, Jose Padilla. The Justice Department says Padilla planned to kill hundreds if not thousands of Americans by detonating a radiological dirty bomb or blowing up hotels and apartment buildings. The government has held Padilla, an American citizen, in a military jail for two years, without filing any criminal charges against Padilla.
Justice Correspondent Kelli Arena reports -- Kelli.
KELLI ARENA, CNN JUSTICE CORRESPONDENT: Lou, the newly declassified documents shed some new light on Jose Padilla's alleged plans to participate in attacks against the United States right here on U.S. soil. Now, as you said, those plans included detonating a radiological dirty bomb and blowing up apartment buildings. It's a plot that was discussed with September 11 mastermind Khalid Sheikh Mohammed.
(BEGIN VIDEO CLIP)
JAMES COMEY, DEPUTY ATTORNEY GENERAL: KSM suggested that they enter the United States by way of Mexico or by way of Puerto Rico and that, once in the country, they locate high-rise apartment buildings that had natural gas applied to all floors, that they rent two apartments in each building, seal those apartments, turn on the gas, and set timers to detonate and destroy the buildings simultaneously at a later time.
(END VIDEO CLIP)
ARENA: The documents show Padilla was equipped with thousands of dollars in cash from al Qaeda, a cell phone, and contact names and numbers. The government details his al Qaeda training with an emphasis on explosives and his relationship with a series of al Qaeda lead operatives.
Padilla's lawyer says, if the government has the goods on him, he should be charged and have his day in court.
(BEGIN VIDEO CLIP)
ANDREW PATEL, PADILLA'S DEFENSE ATTORNEY: The thing that I find most upsetting is that the government continues their effort to try Mr. Padilla in the media rather than in a court of law. If they have evidence that he did something wrong, indict him and give him a forum where he can defend himself as every American citizen has been able to do for the last 225 years.
(END VIDEO CLIP)
ARENA: Now all of this comes as the Supreme Court is expected to rule on whether the government has the authority to hold U.S. citizens like Padilla as enemy combatants. That ruling is expected by the end of this month -- Lou.
DOBBS: Kelli, thank you very much.
Kelli Arena from Washington.
Turning overseas, there is a new government in Iraq tonight, less than a month before the United States is set to transfer sovereignty to the Iraqis. They took over from the Iraqi Governing Council which today dissolved itself after the appointment of a new president. The new president is a powerful tribal leader who has criticized U.S. policy on Iraq in the past.
Harris Whitbeck reports form Baghdad.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE (through interpreter): I present to you all the president of the Republic of Iraq.
HARRIS WHITBECK, CNN CORRESPONDENT (voice-over): Words many Iraqis have been waiting to hear for decades, a new Iraqi government different from Saddam Hussein and, more recently, planning to be different from the U.S.-led occupation authorities.
U.N. Special Envoy Lakhdar Brahimi spent weeks helping to cobble together the interim government, a presidential council of four, plus 31 Cabinet ministers.
LAKHDAR BRAHIMI, U.N. SPECIAL ENVOY TO IRAQ: I think that the people of Iraq will be praying all over the country for the success of their mission which aims at starting the rebuilding of the new Iraq.
WHITBECK: Interim President Sheikh Ghazi al Yawar was firm in expressing what he will work towards.
GHAZI AL YAWAR, PRESIDENT OF THE REPUBLIC OF IRAQ: We, the Iraqis, also look forward for being granted full sovereignty.
WHITBECK: And that promise of sovereignty seemed to spark hope among many Iraqis we talked to, hope that had not been heard in a long time.
UNIDENTIFIED MALE (through interpreter): Ghazi's a true Iraqi, and, hopefully, he will change this country into a better and safer place for the Iraqis.
WHITBECK: Safety and security, the country's biggest concern. The lack of it was driven home again on the streets of Baghdad hours before the presentation ceremony. A car bomb near the green zone and near the offices of a Kurdish political party left three dead and 20 injured. And earlier Tuesday near Baji, north of Baghdad, a car bomb outside a military base killed 11 Iraqis and wounded 26.
(on camera): Security is just one of many challenges the interim government will face once it takes full political control on June 30. Its immediate challenge: working on a smooth transition with the U.S.- led coalition and assuring the Iraqi people that a transition to full sovereignty will be a reality.
Harris Whitbeck, CNN, Baghdad.
(END VIDEOTAPE)
DOBBS: President Bush today welcomed the formation of the new Iraqi government, but President Bush warned there's likely to be more violence ahead.
White House Correspondent Suzanne Malveaux reports -- Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, after President Bush's Rose Garden ceremony, we are told that he called the new president and the prime minister of the Iraqi interim government to congratulate them, to say that he was looking forward to meeting with them. This after he had said before that he could work with this government, that it was diverse, that these are individuals considered loyal to their own people.
But the big question here, of course, is legitimacy. This is a government that is mostly made up of Iraqi exiles with close ties to Washington. The big question here, whether or not Iraqis will consider the new authority legitimate. The Bush administration denied, however, earlier today hand-picking Iraq's new leadership.
(BEGIN VIDEO CLIPS)
BUSH: I had no role. I mean, occasionally, somebody said this person may be interested or that. But I had no role in picking. Zero.
CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: These are not America's puppets. These are independent-minded Iraqis who are determined to take their country to security and democracy.
(END VIDEO CLIPS)
ARENA: Now, Lou, the thinking here at the White House, the big concerns here are the next couple days, they say perhaps even the next couple of days. More important than that June 30 deadline is really what happens.
They are trying to get a U.N. Security Council resolution that will win the approval of some key allies, and really the question is how long the multinational force is going to be in Iraq, what kind of power they're going to have.
Also, of course, what happens to these two leaders leading up to the June 30 deadline, whether or not they are assassinated. We are told, of course, that they are targets of assassination, and whether or not the Iraqi people themselves consider them legitimate leaders -- Lou.
DOBBS: Lisa, thank you. Lisa -- we appreciate it very much. Suzanne, thank you very much. Suzanne Malveaux from the white house.
Senator John Kerry today accused President Bush of ignoring the threat of nuclear terrorism. In a speech in West Palm Beach, Florida, Senator Kerry said he would take immediate action to cut off the supply of nuclear materials to terrorists if he becomes president.
(BEGIN VIDEO CLIP)
SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: The first step is to safeguard all bomb-making material worldwide. That means making sure that we know where they are and then locking up those materials and securing those materials wherever they are.
(END VIDEO CLIP)
DOBBS: The Bush-Cheney campaign responded by saying the effort to limit the spread of nuclear weapons continues to be an urgent priority for President Bush.
The federal government today awarded a multibillion-dollar border security contract to a foreign company, and, in so doing, the government passed over two U.S. corporations. The Department of Homeland Security awarded the lucrative contract to Accenture, which is based in Bermuda. That contract could be worth as much as $10 billion over 10 years.
Lisa Sylvester reports from Washington.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The U.S. Visit Program (ph) is a jackpot for consulting firms. The multibillion- dollar contract is to monitor visitors who enter the United States by air, sea or land. That's why it came as a surprise to some that the contract was awarded to Accenture LLP, whose parent company is headquartered in Bermuda.
REP. CHRISTOPHER COX (R-CA), HOMELAND SECURITY COMMITTEE CHAIRMAN: I think U.S. visit is a good description of the Accenture business plan. They visit the United States to take a government taxpayer-financed contract. They depart from the United States when it's time to pay their fare share of our national security costs.
SYLVESTER: Civil liberties groups, already concerned about the U.S. government building a database tracking travelers, where U.S. privacy laws will not extend to the overseas company.
MARC ROTENBERG, ELECTRONIC PRIVACY INFORMATION CENTER: It becomes less clear when the personal information is moved outside of the United States to another region of the world where the processing occurs, where the integration occurs, whether those privacy rules will be as vigorously enforced.
SYLVESTER: The Department of Homeland Security insist that Accenture LLP, which is located in Virginia and pays U.S. taxes, met all the legal requirements to bid on the contract and was ultimately chosen because of cost and ability to get the job done.
ASA HUTCHINSON, UNDER SECRETARY FOR BORDER AND TRANSPORTATION SECURITY: We have a set of qualifications that Congress gave to us, and we have to, in a sense of fairness, look at whether they qualify for it. If they do, we consider them.
SYLVESTER: But there's no guarantee U.S. Visit will even work despite the hefty costs.
MICHAEL SCARDAVILLE, HERITAGE FOUNDATION: Terrorists and those who seek to enter the country for illicit purposes know the system. These aren't dumb people who are just trying to wander across the border. They game it, they conduct surveillance, they study it, and they look for the loopholes.
SYLVESTER: But the Department of Homeland Security says U.S. Visit is one part of its layered approach to keep terrorists out of the country.
(END VIDEOTAPE)
SYLVESTER: Accenture does not disclose how much they pay in U.S. taxes, and the U.S. Visit was technically awarded to Accenture LLP. Accenture LLP falls under Accenture Incorporated, and Accenture Incorporated is a branch of the Accenture Company in Bermuda -- Lou.
DOBBS: Kind of convoluted for a company that means to streamline an operation on border security, Lisa.
SYLVESTER: You certainly have to follow the trail with Accenture. That's one of the things that we learned today.
DOBBS: Lisa, thank you very much. Lisa Sylvester from Washington.
Another Accenture contract has caused some controversy in Illinois. The Illinois comptroller is withholding a $2 million payment from the company. Comptroller Dan Hynes questions whether Illinois should be doing business with Accenture since it pays no state taxes. A state advisory panel says Accenture should be paid since that work was completed. Accenture also claims it does pay taxes in Illinois.
Later in the broadcast, I'll be talking about the Accenture contract, the future of the Visit Program and outsourcing our border security with Congressman Christopher Cox. He's the chairman of the House Committee on Homeland Security.
That brings us to the topic of tonight's poll: Do you believe the federal government should be outsourcing its border security? Yes or no. Cast your vote at cnn.com/lou. We'll have the results for you later in the broadcast.
Also ahead here tonight, a new government now in Iraq, but American troops are still fighting insurgents. We'll have a live report from the Pentagon.
And our special report, Outta Gas. Energy costs are skyrocketing. Middle-class Americans are facing tough choices. We'll have that special report coming up.
And a key test of voter sentiment in South Dakota tonight. Both Republicans and Democrats are hoping to build momentum for the November elections.
(COMMERCIAL BREAK)
(18:15) DOBBS: One of the new Iraqi government's first tasks is to negotiate an agreement that will allow U.S. troops to remain in Iraq. That could lead to a change in tactics away from offensive operations.
Senior Pentagon Correspondent Jamie McIntyre has the report.
(BEGIN VIDEOTAPE)
JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT (voice-over): In a day when the new interim Iraqi government was announced, a deadly car bomb ripped through the Baghdad offices of a pro-American Kurdish group not far from coalition headquarters. It underscored that while Iraq's new leaders bristle at the U.S. occupation, for now, they still need U.S. troops.
IYAD ALLAWI, IRAQI PRIME MINISTER-DESIGNATE (through interpreter): We will need the partnership of the NNF (ph) to defeat the enemies of Iraq who do not wish for us stability, prosperity and peace.
MCINTYRE: The old U.S.-appointed Iraqi Governing Council unexpectedly stepped aside as soon as the new government was announced, and that, Pentagon officials say, may put the transition on a faster track, allowing the U.S. military to shift the mission from the anti-insurgent offensives to protecting Iraq's leaders and economic infrastructure. The plan, officials say, is to make Iraq's military another coalition partner with its input based like any other coalition member on the capabilities it provides.
BUSH: There may be times when the Iraqis say we can handle this ourselves, get out of the way, we're plenty capable of moving in to secure a town or to secure a situation.
MCINTYRE: For the U.S. military, protecting the new government will be a top priority, especially considering the head of the old Governing Council was assassinated just two weeks ago.
ROBERT MAGINNIS (RET.), U.S. ARMY: We're going to be a quick reaction force, as necessary. We're going to try to kind of turn offensive operations away and turn and try to protect the infrastructure, the oil, the electricity and, of course, these 33 bodies that are now the so-called interim, you know, government.
MCINTYRE: Pentagon sources say the U.S. efforts to strike a cease-fire deal with the radical cleric Muqtada al-Sadr's militia reflects a shift in strategy, too. Allowing Iraqis to bring him to justice later is another way, U.S. officials say, to build support for the new Iraqi government.
But even as it seeks to move away from offensive operations, the U.S. military insists it will continue to respond forcefully to attacks, and no one is suggesting the 138,000 U.S. troops will be able to come home until after the Iraqi elections next year.
(END VIDEOTAPE) MCINTYRE: Well, the Pentagon insists that the official turnover and the transfer of sovereignty will occur as scheduled June 30. There is a feeling here that the actual transfer is going on now and that the sooner the Iraqi people believe that, the sooner U.S. troops will begin to move out of the crossfire -- Lou.
DOBBS: Jamie, thank you very much.
Jamie McIntyre, our senior Pentagon correspondent.
New violence today in Kufa, just south of Baghdad. Four U.S. tanks exchanged fire with insurgents near a holy mosque in the city. The tanks were on patrol for militia members loyal to Muqtada al-Sadr. Coalition forces have fought al-Sadr's militia in Kufa and nearby Najaf now for weeks.
The intense fighting in Najaf is simply the latest challenge to some U.S. soldiers who have been in Iraq for more than a year.
Guy Raz has the report.
(BEGIN VIDEOTAPE)
GUY RAZ, CNN CORRESPONDENT (voice-over): Downtime for the soldiers of the 2nd Battalion 37th Armored Regiment. Anything to relieve the stress of combat. Three hot meals of comfort food to keep up morale, anyway to escape from the horrors they've seen.
JOSHUA VRIEZELAAR, U.S. ARMY: I've gotten used to it, hearing all the sounds of war. Sometimes when it's nice, when it's quiet, like it's been for the past week or so, it makes it a little harder to sleep. I'm just not used to hearing the quiet, all the -- hearing explosions all around from RPGs and everything else going off.
UNIDENTIFIED MALE: When you're sad and feel all alone...
RAZ: Downtime for some is a time for prayer. For the other soldiers here, a chance to catch up on sleep.
SPC. TODD POISSON, U.S. ARMY: It's been one long workday for the past 14 months. There's no weekend, no time to unwind. You know, really unwind. Just kind of put the weapon down, sign it back into the arms room, and just go, get out of here.
RAZ: The last 14 months have provided a crash course in Middle East theology and politics for these soldiers. All volunteered, some wondering whether it was all worth it.
STAFF SGT. DAVID NEUZIL, U.S. ARMY: I want to say it was worth it. I don't want to say that I wasted my time here. I don't want to believe that I wasted my time here. Maybe that's more of what it is. I think we're still accomplishing things, even if it's taking a long time.
And it probably won't show now. Like it's not going to happen tomorrow. But I do think down the line somewhere, you know, some of these Iraqis and I think some of these kids are going to look back and say probably we weren't that bad.
RAZ: Some who arrived as boys, forced to become men. Fourteen months on, many have seen a fellow soldier die. And all of them will never forget the hardest 14 months of their lives.
Guy Raz, CNN, near Najaf in southern Iraq.
(END VIDEOTAPE)
DOBBS: And our thought tonight is about this country's youth. "We cannot always build the future for our youth, but we can build our youth for the future." Franklin Delano Roosevelt.
Well, hundreds of our country's youth are competing in the nation's largest and longest-running education event, the 77th Annual National Spelling Bee. Two hundred sixty-five champion spellers, ages 9 to 15, are competing in Washington for a $12,000 grand prize.
The national contest began this morning with a 25-word written test. That test included words to spell such as "revelry" and "triskaidekaphobia." That, of course, the fear of Friday the 13th. The oral competition begins tomorrow, and it ends with a single winner declared Thursday.
And we'll keep you posted on the progress of this competition among some of our nation's brightest students.
Turning now to politics and a special state election that could have national implications. Voters in South Dakota tonight are choosing a successor to former Congressman Bill Janklow. Janklow resigned earlier this year after he was convicted of manslaughter when he ran a stop sign and killed a motorcyclist. Political experts tell us the election to replace Janklow could indicate which way voters around the country will be voting come November.
Ed Henry reports.
(BEGIN VIDEOTAPE)
ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): South Dakota is considered Bush country, but Democrats have high hopes of seizing a Republican House seat there in today's special election. This follows a recent Democratic pick-up in Kentucky, fueling claims that the president's sliding poll numbers are loosening the GOP's grip on Congress.
REP. STENY HOYER (D), MARYLAND: And I think you're going to see a very good victory by a very good candidate, Stephanie Herseth, and that's going to say one more time that, in Kentucky and South Dakota, two different areas of the country, two different kinds of states, that people are looking for change.
HENRY: Herseth is a 33-year-old attorney and the granddaughter of a former governor. Independent polls give her a 10-point lead over Republican State Senator Larry Diedrich, former head of the South Dakota Soybean Association. Republicans concede Herseth has the edge but say private polling shows a tighter race.
The seat was vacated by Republican Bill Janklow who beat Herseth in a tight race in 2002, but resigned after being convicted of vehicular manslaughter. Republicans say that scandal, plus the fact that Herseth has been essentially running for two years, make it an isolated case.
Independent analysts say Democrats have some momentum, but they shouldn't get carried away.
AMY WALTER, THE COOK REPORT: They really do have reasons to be optimistic. At the same time, we are still looking at a pretty small playing field in terms of seats that are up for grabs here, and Democrats would need to win a disproportionate number, an incredibly large number of those competitive seats, to be able to take the number they need to win control of Congress.
(END VIDEOTAPE)
RAZ: Lou, the polls will begin to close in the eastern part of South Dakota tonight at 8:00 Eastern Standard Time. The western part of the state, the polls will close at 9:00 Eastern Standard Time. But officials in both parties say that they do not expect results really to come in and really to get a handle on this until about midnight Eastern Standard Time because the race has tightened in recent days, and they expect it to be close.
The bottom line here is that there's not much math at stake. It's only one seat, as you know, but the bottom line is it's a psychological boost if Democrats could win tonight in Bush country -- Lou.
DOBBS: Ed, thank you very much.
Ed Henry reporting from Washington.
Still ahead here, Outta Gas. The highest gasoline prices ever are causing some Americans to rethink their dependence on driving and all that foreign oil. We'll have a SPECIAL REPORT next.
And then, terror in Saudi Arabia. A former CIA case officer says it's just the beginning. I'll be joined by Robert Baer, the author of "Sleeping With the Devil."
That and a great deal more still ahead.
(COMMERCIAL BREAK)
(18:17)
ANNOUNCER: LOU DOBBS TONIGHT continues. Here now for more news, debate and opinion, Lou Dobbs.
DOBBS: Tonight, we begin a work-long series of special reports on what looks to be a possible energy crisis in this country. Crude oil prices closed at an all-time high today, $42.33 a barrel, up $2.45.
And looking now at how the country feels about this spike in gasoline prices, a new CNN/"USA Today"/Gallup poll shows nearly three out of four of us think the current cost of gasoline represents either a crisis or at least a major problem for the country.
Kitty Pilgrim reports.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN BUSINESS CORRESPONDENT (voice-over): When it comes to gas, people are re-thinking their consumption. Day tripping is trimmed.
UNIDENTIFIED FEMALE: We went to the zoo two weekends ago. We took public transportation because we didn't want to drive. We have a big truck, an SUV, and it costs like 60 bucks to fill it up.
PILGRIM: Chores are rationed.
UNIDENTIFIED FEMALE: You figure do I really need to go out now, or can I get something, and, you know, can I make another trip and do everything together.
PILGRIM: Suddenly, premium seems well named.
UNIDENTIFIED MALE: Before, I was using premium, and I can't even use premium gas anymore. I'm using regular gas now. I mean, the prices are sky-high.
MCNAULL: Gas prices now are at the highest point adjusted for inflation since the mid '80s. It's really money coming out of our wallets, and it's coming out quickly.
PILGRIM: Gasoline is the single largest energy product consumed in the United States, and consumption has been rising since the 1950s. Up until then, the United States was energy self-sufficient. That's no longer the case. Now the United States imports 60 percent of its oil, a little less than half of that from OPEC nations.
We are a driving nation by choice, and, as suburban life dominates the country, by necessity, energy efficiency in vehicles has improved. But we are simply driving more and more cars longer and longer distances. Consumer spending on all kinds of energy has soared in recent years.
PETER NEUTEL, OIL ANALYST: That's in-pocket-after-tax dollars. That's money that can't go somewhere else.
PILGRIM: The average household spends 5 percent of its budget on energy, 3 percent on gasoline alone. The problem is it's a fixed expense. Cutting back on heat in the winter or the daily commute to work is not an option.
(END VIDEOTAPE) PILGRIM: Now the anxiety over energy is showing up in the latest Gallup poll released today. More than half the people polled said gas prices are causing financial hardship, and nearly 60 percent say the increase in gas prices will cause them to drive less this summer -- Lou.
DOBBS: Kitty, thank you. It's a serious problem, without a question.
One reason for this rise in energy prices is the concern about terrorism in Saudi Arabia, the world's largest oil exporter. Tonight, Saudi Arabian police and troops are hunting radical Islamists after a terrorist attack on western oil workers over the weekend. That attack killed 22 people, including one American. Three of those four terrorists escaped after threatening to kill nearly 250 hostages in a housing complex in Khobar. Joining me now is Robert Baer, a former CIA officer, the author of "Sleeping With The Devil, How Washington Sold Our Soul For Saudi Crude." Robert Baer says Saudi Arabia is moving closer to chaos and terrorists are likely to launch more attacks. Joining us tonight from Washington, good to have you with us.
Were you surprised, shocked that the Saudis released three radical Islamist terrorists.
ROBERT BAER, FMR. CIA OFFICER: They either released them or escaped. Either way it makes me wonder about Saudi security services. In an incident like this the first thing you want to do is surround the area of operations, make sure no one gets out. It was essential to catch these people to find out if a second attack is coming, interrogate them. They failed to do this, failed to capture. They say they know who they are. but still as of tonight they haven't found them.
DOBBS: What are your inferences right now, first on the strength of al Qaeda that it can carry out this attack against oil facilities in Saudi Arabia itself. Secondly, manage to escape or manage to be released.
BAER: Well, there's this accusation out there that Qaeda has a certain amount of sympathy in Saudi Arabia, at least, in a symbolic sense. People support the defiance Osama bin Laden represents. They may not join in terrorism but they are fed up with the west, fed up with the situation in Palestine between the Israelis and Palestinians in Iraq. They're upset about the corruption inside the royal family. They consider that the price of oil is too low. They think it is a national resource which should be preserved. We think it's too high. They think it's being stolen from them.
DOBBS: You spent a lot of years in the Middle East. What is your sense tonight as to how vulnerable Saudi Arabia is to real chaos?
BAER: I think we're on the edge of chaos. I hear that from people inside Saudi Arabia, who were supportive of the regime and depend upon the regime but they're worried about the future. They're worried about the fact that al Qaeda has focused in on westerners, focused in on the petroleum industry. They've gone out of their way not to kill Muslims at this point. And this call for a popular uprising which was made last week. There was another shootout today. There are large parts of Saudi Arabia where the police feel insecure.
DOBBS: They may feel insecure but the fact is the security of those oil facilities is not only critically important to the Saudi royal family, but to, indeed, much of the world, the western world. Is it your judgment that the Saudis can maintain the supply of crude to the world?
BAER: Today, yes. Tomorrow, I can't say because those oil facilities are above ground. They're extensive. They're difficult to protect. The core facilities are but the pipelines and facilities are not. They could hit them if they wanted to. There is no amount of forces, no amount of money that can protect them at the end of the day if there is a determined effort or if there's inside help. If we're looking at the risk premium today, it is just based on -- no petroleum production was touched in this last attack this weekend. What would happen if one of those pipelines were hit? We would be well over $50 or $60 for a barrel of oil.
DOBBS: Iraq tonight has a new government. Are you reassured about the prospects of the handover of sovereignty and stability in Iraq?
BAER: One of the problems we're facing now that Iyad Allawi who is a very pragmatic man, well regarded in Washington, has been identified as a CIA agent. He's going to have to do a lot to overcome this in the next six months.
DOBBS: When you say he has been identified. It's been claimed?
BAER: It's been claimed. He's not a CIA agent. Iraqis identify him as one, which is a detriment for him.
DOBBS: And with that baggage, what do you think the prospects are?
BAER: Not good. Keep in mind, again going back to Saudi Arabia, 814 kilometer border. It is easy to bring weapons across. We have to count on making Iraq work. Failure is not an option.
DOBBS: Robert Baer, thanks for being here.
BAER: Thank you, Lou.
DOBBS: Still ahead, outsourcing border security, outsourcing national security. The homeland security department has awarded a multibillion dollar border security contract to a company based outside the United States. We'll be talking with the chairman of the House select committee on homeland security, Congressman Christopher Cox, next.
Tonight, a disastrous beginning to the summer travel season at one of this nation's busiest airports. An airporst spokesman says federal security officials are to blame for amazing delays in moving passengers to aircraft.
Then, a new option for Americans hoping to save money on their prescription drugs. We'll tell you why many are finding it's not such a great deal after all. That, and much more, ahead.
(COMMERCIAL BREAK)
DOBBS: As we reported, the department of homeland security today awarded a border security contract worth as much as $10 billion over a ten-year period to Bermuda-based Accenture. Announcing that decision, Homeland Security Undersecretary for Border Security, Asa Hutchinson said, quote, "I really don't think you could overstate the importance of this responsibilty in terms of the security of this nation." And yet, the department of homeland security chose to award this critically important contract to a foreign company. Congressman Christopher Cox is the chairman of the select committee on homeland security and joining us tonight from Capitol Hill. Mr. Chairman, good to have you here.
Accenture, as you know, is a partnership incorporated in Bermuda through its level of organization. Operates in 40 countries. Are you concerned about the U.S. government awarding something so critical to national security to a foreign-based company?
REP. CHRISTOPHER COX (R-CA), SELECT CMTE. ON HOMELAND SECURITY: Well, it's a fair question. As you might imagine with a contract so significant and a competition for this contract so fierce, that question has been turned over and analyzed very, very carefully. The award of the contract makes it very clear that all this work is going to be done in the United States. It is true that Accenture's parent company is incorporated in Bermuda but Accenture in the United States with its 25,000 employees here in the U.S. is going to do this work along with a broader alliance, the smart border alliance, which, in total, has 330,000 employees in the United States. There is an assurance that all this work will be done here and, of course, all the taxes will be paid here as well. In its second quarter filing, Accenture, I should note, paid 35 percent of its earnings in taxes to the United States from its United States operations.
DOBBS: Mr. Chairman, 35 percent. Our research reveals that they don't say what percentage of that 35 percent tax level went to the U.S. in the form of taxes.
COX: No, no. What I said is that 35 percent of their earnings went to the United States in taxes.
DOBBS: Of Accenture in Bermuda?
COX: From Accenture, right. No, no. Accenture is incorporated in Bermuda. This is Accenture in the United States paying taxes here in the United States of America with 25,000 employees. But I think it is a fair question. We want to make sure on something that is of vital importance to our country who comes in and out of the borders, that we have technology that works, that we have system that works. And we want to make sure the U.S. contractor is in charge of that. DOBBS: A U.S. contractor in charge of it. I guess by some stretch of imagination one could consider a subsidiary a U.S. contractor, but they're also a subsidiary of a foreign-based company set up precisely to avoid taxes to the U.S. government and to the states in which they operate.
Is that really the message that you want to send to corporate America and to the rest of the country?
COX: Lou, as I just said, all the work is going to be done here in the United States with 330,000 employees, not just from Accenture, but several companies. All of the Accenture companies will be U.S. employees. It is going to be a U.S.-based operation, paying taxes here in the United States. So the U.S. Economy benefits directly this, the U.S. national security benefits directly from this. I think it is a fair point to raise it, that's why it was important we got the assurances.
DOBBS: Let's turn to the issue of the assurances and the visit program itself. Critics are saying, point blank, that they think this is going to be a very difficult contract to execute under any circumstance.
How confident are you that it can be the -- that deadlines can be met and this consortium executed?
COX: Count me in the camp that will cast a weary eye on all of this. This is enormously difficult what we're trying to do, with or without technology. The sheer numbers of people we have to look at, number one. And number two, the importance of accuracy, both in capturing the biometric information and matching it against other data bases. I want to make sure it works. This contract, I should note, which lasts for a decade, potentially, is worth up to $10 billion. It's also worth as little as $10 million. There are milestones along the way to make sure it works on issues of which technology to use, facial recognition, finger prints, retina scan, photography, even voice. All of these things are open questions that are subject to proof and experimentation as we go down the road. And we know that technology will change and move on us during this period. We want to use the very best technology available to us.
DOBBS: Congressman Cox, how satisfied are you with the progress being made by Homeland Security and the other agencies responsible for port security, for border security, along with the visit program and a host of other screening operations that were to have been in place that are not?
COX: As you know, first starting with U.S. Visit, it's operating on time. This contract, incidentally, was awarded on time. The program began in January of this year. We've just taken this container security initiative to further countries now as a result of our agreement with Europe, but we are seeing a great deal of progress there. The container security initiative for those who aren't fully aware of what that's about is screening cargo before it gets on the ship in foreign ports, before they come here. We're screening 100 percent of the high-risk cargo that enters the United States of America. There is no question that we have a lot more to do, but when you take a look at how much we've done in barely over a year it's absolutely extraordinary to move from a standing start to what is now being accomplished. Both my Democratic colleagues and Republican colleagues on the Homeland Security Committee, dedicated as we are to the oversight of the Homeland Security Department, a, want to see it succeed and, b, want to make sure we have constructive oversight to achieve these fundamentally difficult but important tasks.
DOBBS: Oversight is one of the roles of Congress which we're hearing increasingly from both Republicans and Democrats, some lament that Congress has not more rigorous in other areas, in terms of your committee's charter.
How concerned are you about not having sufficient oversight and engagement on these issues, particularly in the case of border security watching as many as a million illegal aliens cross our border every year?
COX: U.S. Visit, of course, is designed to deal with this problem. It is an entry/exit program. For the first time to begin keeping track of who's coming across the border, what their stay is, and when they leave. That's not been done before. And it's fund mentally necessary if you're going to claim to have control of your borders. I think the merger of this function into the Department of Homeland Security gives us an opportunity to get serious about border control in a way we never have before. I think the oversight and attention we can give to this is enhanced in the house of representatives because we, just like the executive branch which reorganized itself, have created the Homeland Security Committee expressly for this purpose.
DOBBS: Congressman Christopher Cox, chairman of the Select Committee on Homeland Security, we thank you for being with us.
COX: Happy to join you.
DOBBS: A reminder to vote in our poll tonight.
Do you believe the federal government should be outsourcing its border security?
Cast your vote at cnn.com/lou. We'll have the results coming up for you later in the broadcast.
The busy summer travel season kicking off over the weekend of course. Already the higher number bad of travelers putting a strain on airport security. Thousands of people waited in line for hours today at Atlanta's Hartsfield Jackson International Airport. While official blamed a back up at one security checkpoint.
Doug Richards of CNN affiliate, WAGA report from Atlanta.
(BEGIN VIDEO CLIP)
LANH THOMAS, AIRPORT SPOKESWOMAN: Historically we think it might be the busiest day we've had in terms of passenger travel. It is overwhelming is the word we describe. We were anticipating this to be a busy day for us. We weren't anticipating having a wait time of over two hours.
DOUG RICHARDS, WAGA (voice-over): The lines formed at security check points and grew quickly. Four lines backed up deep into the airport atrium. More lines snaked through hallways behind the baggage claim area.
PAT LYNCH, TRAVELER: A little congested. I'm antsy trying to make my plane. I have like 45 minutes to get to the gate.
RICHARDS (on camera): How many lines have you stood in?
LYNCH: This is my fourth.
RICHARDS: Why is today so busy?
THOMAS: A combination of post-holiday travel, the beginning of the summer holiday travel season. Again, it is our normal Monday for business travelers. So we had a combination of business and leisure travelers but more leisure, I would say, than business travelers today.
(END VIDEOTAPE)
DOBBS: That's Doug Richards of WAGA reporting from Atlanta. Hartsfield is one of the countries busiest airports, built to accommodate 55 million travelers. This year it is expected to handle 81 million. Other major airports tell us they've had no significant delays at security check points.
Well, many of you wrote in to about the federal governments decision to award a massive border security contract to a foreign company.
Pat Wright from Oakland, California wrote in, "Tell me I'm having a bad dream. I just heard that Accenture, one of the prime exporters of American jobs, has won the contract offered by our own Department of Homeland Security. I'm dreaming, aren't I?" Not exactly.
Jim of Alexandria, Virginia, "How can a department that is responsible for a defending the homeland select a company that is Bermuda base to implement one of the most important government programs that DHS will implement?"
Jan Herron in Evergreen, Colorado, "Will someone please tell me how we are supposed to be vigilant and watch for seven terrorist in our country as suggested by John Ashcroft when we have over 2,000 illegal aliens jumping our borders daily?"
Send us your thoughts at loudobbs@cnn.com.
Still ahead, a new Medicare prescription drug card fails to attract millions of Americans who could be saving money with it. We'll have that special report next.
(COMMERCIAL BREAK)
DOBBS: Americans are not rushing to sign up for the Medicare prescription benefits. Louise Schiavone has the report.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): The Medicare prescription drug discount card (UNINTELLIGIBLE) for the largest titlement expansion in U.S. history. The program is a 19-month bridge to the 2006 full implementation of the Bush administration's Medicare prescription drug improvement and modernization act, costing different amounts to different income groups and not available at all if a senior doesn't sign up. Confusion abounds.
UNIDENTIFIED FEMALE: I've heard rumors that the new law is not good for seniors, and I haven't had a chance to go over that yet.
UNIDENTIFIED MALE: I do know there are a lot of companies that are issuing it. It is difficult to decide on which card is the best to use.
SCHIAVONE: At least 70 companies have been approved to market the discount cards. The cost is $30 per card and could reduce the prices of certain drugs from certain pharmacies by 10 to 25 percent. Critics say that with rising drug prices, the discount card doesn't so much reduce prices as it keeps them constant.
JOHN ROTHER, POLICY DIRECTOR, AARP: Really, what they're going to be doing even with a discount is paying the same prices they would have paid without a discount about three years ago. So while the drug card is helpful today, we have a fundamental problem in the cost of medications.
SCHIAVONE: The biggest winners are low income seniors. They are eligible for a free card and a $600 credit for their prescriptions. Roughly 7 million people fall into this category. One of the most worrisome aspects is the potential for fraud.
CHARLEA LEATHERWOOD, PRESIDENT, NATL. COMM. PHARMACISTS ASSOC.: There have been a lot of scams so far where even individuals have gone door to door telling seniors that they are selling a Medicare card to them and getting an enrollment fee from them.
SCHIAVONE: A legitimate card will have a Medicare approved seal. The Bush administration argues that with the cards brandname drugs could be reduced by as much as 18 percent. Critics fear that a $530 billion behemoth carries with it no mechanism to restrain rising drug prices which, after all, was the original reason for the Medicare expansion. Louise Schiavone, CNN, Washington.
(END VIDEOTAPE)
DOBBS: Still ahead, rising gasoline prices squeezing this country's middle class. CEOs, however, they are doing just fine, earning more than ever. That story is next.
(COMMERCIAL BREAK)
DOBBS: Wall Street opened the week with only modest gains, but they were gains. The Dow up 14 points, the Nasdaq up four. The S&P 500 up a half a point. The slight gains coming despite a record day for oil prices. Christine Romans is here with that story.
CHRISTINE ROMANS, CNN CORRESPONDENT: The biggest spike in oil prices since the first Gulf War, up $2.50 a barrel today, the highest price in the 21 years crude oil's been trading on the New York Mercantile Exchange. And since crude is about half the price of gasoline, it is especially tough on motorists. The government says average gas prices dropped last week for the first week in five, but still up 58 cents from a year ago and will track higher still this summer.
American workers are struggling with those high energy bills and stagnant wages. Their bosses are not. Chief executive officers are getting paid better than ever. That excessive CEO compensation that you talk about frequently here isn't any less excessive. In fact, median CEO pay rose 27 percent last year to $4.6 million. Lou, the Corporate Library says it sees no signs whatsoever that CEO pay will slow.
DOBBS: Amazing. I'm just stunned.
ROMANS: It is a broken record.
DOBBS: Well, it's a sad one, whatever it is. Thank you very much, Christine Romans.
Still ahead, we'll have the results of tonight's poll. But first, a reminder to check out our website for the complete list of companies we've confirmed to be exporting America. CNN.com/lou. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Well, the results of tonight's poll. There weren't many undecided votes. 3 percent of you say the federal government should outsource border security. 97 percent say you don't think that's such a good idea. Thanks for being with us tonight. Please join us tomorrow. We'll have a special report live from the border with Mexico in Arizona. New technology and increased manpower may not be enough to keep illegal aliens from crossing our borders and what about terrorists? And in "Face Off" is it time for the United States to tap the Strategic Petroleum Reserve? We'll have the debate on the issue. Please be with us. For all of us here, good night from New York. "ANDERSON COOPER 360" coming up next.
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Aired June 1, 2004 - 18:00 ET
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LOU DOBBS, CNN ANCHOR: Tonight, chilling new details about an al Qaeda plot to kill thousands of Americans. The Justice Department says the prime suspect, an American citizen, is too dangerous to be tried in civilian court.
There's a new government in Iraq tonight, four weeks before the United States hands over sovereignty.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We will stand together and ensure that the future of Iraq is a future of freedom.
(END VIDEO CLIP)
DOBBS: A foreign company wins a huge border security contract. It could be worth $10 billion. My guest tonight is the chairman of the House Committee on Homeland Security, Congressman Christopher Cox.
Radical Islamists target westerners in Saudi Arabia. Former CIA officer Robert Baer says Saudi Arabia is on the brink of chaos. He's my guest tonight.
And Americans facing skyrocketing energy costs.
(BEGIN VIDEO CLIP)
JUSTIN MCNAULL, AAA: It's real money coming out of your wallets, and it's coming pretty quickly.
(END VIDEO CLIP)
DOBBS: Tonight, our special report: Outta Gas.
ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, June 1. Here now for an hour of news, debate and opinion is Lou Dobbs.
DOBBS: Good evening.
The government today released disturbing new details about one of its most high-profile terrorism suspects, Jose Padilla. The Justice Department says Padilla planned to kill hundreds if not thousands of Americans by detonating a radiological dirty bomb or blowing up hotels and apartment buildings. The government has held Padilla, an American citizen, in a military jail for two years, without filing any criminal charges against Padilla.
Justice Correspondent Kelli Arena reports -- Kelli.
KELLI ARENA, CNN JUSTICE CORRESPONDENT: Lou, the newly declassified documents shed some new light on Jose Padilla's alleged plans to participate in attacks against the United States right here on U.S. soil. Now, as you said, those plans included detonating a radiological dirty bomb and blowing up apartment buildings. It's a plot that was discussed with September 11 mastermind Khalid Sheikh Mohammed.
(BEGIN VIDEO CLIP)
JAMES COMEY, DEPUTY ATTORNEY GENERAL: KSM suggested that they enter the United States by way of Mexico or by way of Puerto Rico and that, once in the country, they locate high-rise apartment buildings that had natural gas applied to all floors, that they rent two apartments in each building, seal those apartments, turn on the gas, and set timers to detonate and destroy the buildings simultaneously at a later time.
(END VIDEO CLIP)
ARENA: The documents show Padilla was equipped with thousands of dollars in cash from al Qaeda, a cell phone, and contact names and numbers. The government details his al Qaeda training with an emphasis on explosives and his relationship with a series of al Qaeda lead operatives.
Padilla's lawyer says, if the government has the goods on him, he should be charged and have his day in court.
(BEGIN VIDEO CLIP)
ANDREW PATEL, PADILLA'S DEFENSE ATTORNEY: The thing that I find most upsetting is that the government continues their effort to try Mr. Padilla in the media rather than in a court of law. If they have evidence that he did something wrong, indict him and give him a forum where he can defend himself as every American citizen has been able to do for the last 225 years.
(END VIDEO CLIP)
ARENA: Now all of this comes as the Supreme Court is expected to rule on whether the government has the authority to hold U.S. citizens like Padilla as enemy combatants. That ruling is expected by the end of this month -- Lou.
DOBBS: Kelli, thank you very much.
Kelli Arena from Washington.
Turning overseas, there is a new government in Iraq tonight, less than a month before the United States is set to transfer sovereignty to the Iraqis. They took over from the Iraqi Governing Council which today dissolved itself after the appointment of a new president. The new president is a powerful tribal leader who has criticized U.S. policy on Iraq in the past.
Harris Whitbeck reports form Baghdad.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE (through interpreter): I present to you all the president of the Republic of Iraq.
HARRIS WHITBECK, CNN CORRESPONDENT (voice-over): Words many Iraqis have been waiting to hear for decades, a new Iraqi government different from Saddam Hussein and, more recently, planning to be different from the U.S.-led occupation authorities.
U.N. Special Envoy Lakhdar Brahimi spent weeks helping to cobble together the interim government, a presidential council of four, plus 31 Cabinet ministers.
LAKHDAR BRAHIMI, U.N. SPECIAL ENVOY TO IRAQ: I think that the people of Iraq will be praying all over the country for the success of their mission which aims at starting the rebuilding of the new Iraq.
WHITBECK: Interim President Sheikh Ghazi al Yawar was firm in expressing what he will work towards.
GHAZI AL YAWAR, PRESIDENT OF THE REPUBLIC OF IRAQ: We, the Iraqis, also look forward for being granted full sovereignty.
WHITBECK: And that promise of sovereignty seemed to spark hope among many Iraqis we talked to, hope that had not been heard in a long time.
UNIDENTIFIED MALE (through interpreter): Ghazi's a true Iraqi, and, hopefully, he will change this country into a better and safer place for the Iraqis.
WHITBECK: Safety and security, the country's biggest concern. The lack of it was driven home again on the streets of Baghdad hours before the presentation ceremony. A car bomb near the green zone and near the offices of a Kurdish political party left three dead and 20 injured. And earlier Tuesday near Baji, north of Baghdad, a car bomb outside a military base killed 11 Iraqis and wounded 26.
(on camera): Security is just one of many challenges the interim government will face once it takes full political control on June 30. Its immediate challenge: working on a smooth transition with the U.S.- led coalition and assuring the Iraqi people that a transition to full sovereignty will be a reality.
Harris Whitbeck, CNN, Baghdad.
(END VIDEOTAPE)
DOBBS: President Bush today welcomed the formation of the new Iraqi government, but President Bush warned there's likely to be more violence ahead.
White House Correspondent Suzanne Malveaux reports -- Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, after President Bush's Rose Garden ceremony, we are told that he called the new president and the prime minister of the Iraqi interim government to congratulate them, to say that he was looking forward to meeting with them. This after he had said before that he could work with this government, that it was diverse, that these are individuals considered loyal to their own people.
But the big question here, of course, is legitimacy. This is a government that is mostly made up of Iraqi exiles with close ties to Washington. The big question here, whether or not Iraqis will consider the new authority legitimate. The Bush administration denied, however, earlier today hand-picking Iraq's new leadership.
(BEGIN VIDEO CLIPS)
BUSH: I had no role. I mean, occasionally, somebody said this person may be interested or that. But I had no role in picking. Zero.
CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: These are not America's puppets. These are independent-minded Iraqis who are determined to take their country to security and democracy.
(END VIDEO CLIPS)
ARENA: Now, Lou, the thinking here at the White House, the big concerns here are the next couple days, they say perhaps even the next couple of days. More important than that June 30 deadline is really what happens.
They are trying to get a U.N. Security Council resolution that will win the approval of some key allies, and really the question is how long the multinational force is going to be in Iraq, what kind of power they're going to have.
Also, of course, what happens to these two leaders leading up to the June 30 deadline, whether or not they are assassinated. We are told, of course, that they are targets of assassination, and whether or not the Iraqi people themselves consider them legitimate leaders -- Lou.
DOBBS: Lisa, thank you. Lisa -- we appreciate it very much. Suzanne, thank you very much. Suzanne Malveaux from the white house.
Senator John Kerry today accused President Bush of ignoring the threat of nuclear terrorism. In a speech in West Palm Beach, Florida, Senator Kerry said he would take immediate action to cut off the supply of nuclear materials to terrorists if he becomes president.
(BEGIN VIDEO CLIP)
SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: The first step is to safeguard all bomb-making material worldwide. That means making sure that we know where they are and then locking up those materials and securing those materials wherever they are.
(END VIDEO CLIP)
DOBBS: The Bush-Cheney campaign responded by saying the effort to limit the spread of nuclear weapons continues to be an urgent priority for President Bush.
The federal government today awarded a multibillion-dollar border security contract to a foreign company, and, in so doing, the government passed over two U.S. corporations. The Department of Homeland Security awarded the lucrative contract to Accenture, which is based in Bermuda. That contract could be worth as much as $10 billion over 10 years.
Lisa Sylvester reports from Washington.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The U.S. Visit Program (ph) is a jackpot for consulting firms. The multibillion- dollar contract is to monitor visitors who enter the United States by air, sea or land. That's why it came as a surprise to some that the contract was awarded to Accenture LLP, whose parent company is headquartered in Bermuda.
REP. CHRISTOPHER COX (R-CA), HOMELAND SECURITY COMMITTEE CHAIRMAN: I think U.S. visit is a good description of the Accenture business plan. They visit the United States to take a government taxpayer-financed contract. They depart from the United States when it's time to pay their fare share of our national security costs.
SYLVESTER: Civil liberties groups, already concerned about the U.S. government building a database tracking travelers, where U.S. privacy laws will not extend to the overseas company.
MARC ROTENBERG, ELECTRONIC PRIVACY INFORMATION CENTER: It becomes less clear when the personal information is moved outside of the United States to another region of the world where the processing occurs, where the integration occurs, whether those privacy rules will be as vigorously enforced.
SYLVESTER: The Department of Homeland Security insist that Accenture LLP, which is located in Virginia and pays U.S. taxes, met all the legal requirements to bid on the contract and was ultimately chosen because of cost and ability to get the job done.
ASA HUTCHINSON, UNDER SECRETARY FOR BORDER AND TRANSPORTATION SECURITY: We have a set of qualifications that Congress gave to us, and we have to, in a sense of fairness, look at whether they qualify for it. If they do, we consider them.
SYLVESTER: But there's no guarantee U.S. Visit will even work despite the hefty costs.
MICHAEL SCARDAVILLE, HERITAGE FOUNDATION: Terrorists and those who seek to enter the country for illicit purposes know the system. These aren't dumb people who are just trying to wander across the border. They game it, they conduct surveillance, they study it, and they look for the loopholes.
SYLVESTER: But the Department of Homeland Security says U.S. Visit is one part of its layered approach to keep terrorists out of the country.
(END VIDEOTAPE)
SYLVESTER: Accenture does not disclose how much they pay in U.S. taxes, and the U.S. Visit was technically awarded to Accenture LLP. Accenture LLP falls under Accenture Incorporated, and Accenture Incorporated is a branch of the Accenture Company in Bermuda -- Lou.
DOBBS: Kind of convoluted for a company that means to streamline an operation on border security, Lisa.
SYLVESTER: You certainly have to follow the trail with Accenture. That's one of the things that we learned today.
DOBBS: Lisa, thank you very much. Lisa Sylvester from Washington.
Another Accenture contract has caused some controversy in Illinois. The Illinois comptroller is withholding a $2 million payment from the company. Comptroller Dan Hynes questions whether Illinois should be doing business with Accenture since it pays no state taxes. A state advisory panel says Accenture should be paid since that work was completed. Accenture also claims it does pay taxes in Illinois.
Later in the broadcast, I'll be talking about the Accenture contract, the future of the Visit Program and outsourcing our border security with Congressman Christopher Cox. He's the chairman of the House Committee on Homeland Security.
That brings us to the topic of tonight's poll: Do you believe the federal government should be outsourcing its border security? Yes or no. Cast your vote at cnn.com/lou. We'll have the results for you later in the broadcast.
Also ahead here tonight, a new government now in Iraq, but American troops are still fighting insurgents. We'll have a live report from the Pentagon.
And our special report, Outta Gas. Energy costs are skyrocketing. Middle-class Americans are facing tough choices. We'll have that special report coming up.
And a key test of voter sentiment in South Dakota tonight. Both Republicans and Democrats are hoping to build momentum for the November elections.
(COMMERCIAL BREAK)
(18:15) DOBBS: One of the new Iraqi government's first tasks is to negotiate an agreement that will allow U.S. troops to remain in Iraq. That could lead to a change in tactics away from offensive operations.
Senior Pentagon Correspondent Jamie McIntyre has the report.
(BEGIN VIDEOTAPE)
JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT (voice-over): In a day when the new interim Iraqi government was announced, a deadly car bomb ripped through the Baghdad offices of a pro-American Kurdish group not far from coalition headquarters. It underscored that while Iraq's new leaders bristle at the U.S. occupation, for now, they still need U.S. troops.
IYAD ALLAWI, IRAQI PRIME MINISTER-DESIGNATE (through interpreter): We will need the partnership of the NNF (ph) to defeat the enemies of Iraq who do not wish for us stability, prosperity and peace.
MCINTYRE: The old U.S.-appointed Iraqi Governing Council unexpectedly stepped aside as soon as the new government was announced, and that, Pentagon officials say, may put the transition on a faster track, allowing the U.S. military to shift the mission from the anti-insurgent offensives to protecting Iraq's leaders and economic infrastructure. The plan, officials say, is to make Iraq's military another coalition partner with its input based like any other coalition member on the capabilities it provides.
BUSH: There may be times when the Iraqis say we can handle this ourselves, get out of the way, we're plenty capable of moving in to secure a town or to secure a situation.
MCINTYRE: For the U.S. military, protecting the new government will be a top priority, especially considering the head of the old Governing Council was assassinated just two weeks ago.
ROBERT MAGINNIS (RET.), U.S. ARMY: We're going to be a quick reaction force, as necessary. We're going to try to kind of turn offensive operations away and turn and try to protect the infrastructure, the oil, the electricity and, of course, these 33 bodies that are now the so-called interim, you know, government.
MCINTYRE: Pentagon sources say the U.S. efforts to strike a cease-fire deal with the radical cleric Muqtada al-Sadr's militia reflects a shift in strategy, too. Allowing Iraqis to bring him to justice later is another way, U.S. officials say, to build support for the new Iraqi government.
But even as it seeks to move away from offensive operations, the U.S. military insists it will continue to respond forcefully to attacks, and no one is suggesting the 138,000 U.S. troops will be able to come home until after the Iraqi elections next year.
(END VIDEOTAPE) MCINTYRE: Well, the Pentagon insists that the official turnover and the transfer of sovereignty will occur as scheduled June 30. There is a feeling here that the actual transfer is going on now and that the sooner the Iraqi people believe that, the sooner U.S. troops will begin to move out of the crossfire -- Lou.
DOBBS: Jamie, thank you very much.
Jamie McIntyre, our senior Pentagon correspondent.
New violence today in Kufa, just south of Baghdad. Four U.S. tanks exchanged fire with insurgents near a holy mosque in the city. The tanks were on patrol for militia members loyal to Muqtada al-Sadr. Coalition forces have fought al-Sadr's militia in Kufa and nearby Najaf now for weeks.
The intense fighting in Najaf is simply the latest challenge to some U.S. soldiers who have been in Iraq for more than a year.
Guy Raz has the report.
(BEGIN VIDEOTAPE)
GUY RAZ, CNN CORRESPONDENT (voice-over): Downtime for the soldiers of the 2nd Battalion 37th Armored Regiment. Anything to relieve the stress of combat. Three hot meals of comfort food to keep up morale, anyway to escape from the horrors they've seen.
JOSHUA VRIEZELAAR, U.S. ARMY: I've gotten used to it, hearing all the sounds of war. Sometimes when it's nice, when it's quiet, like it's been for the past week or so, it makes it a little harder to sleep. I'm just not used to hearing the quiet, all the -- hearing explosions all around from RPGs and everything else going off.
UNIDENTIFIED MALE: When you're sad and feel all alone...
RAZ: Downtime for some is a time for prayer. For the other soldiers here, a chance to catch up on sleep.
SPC. TODD POISSON, U.S. ARMY: It's been one long workday for the past 14 months. There's no weekend, no time to unwind. You know, really unwind. Just kind of put the weapon down, sign it back into the arms room, and just go, get out of here.
RAZ: The last 14 months have provided a crash course in Middle East theology and politics for these soldiers. All volunteered, some wondering whether it was all worth it.
STAFF SGT. DAVID NEUZIL, U.S. ARMY: I want to say it was worth it. I don't want to say that I wasted my time here. I don't want to believe that I wasted my time here. Maybe that's more of what it is. I think we're still accomplishing things, even if it's taking a long time.
And it probably won't show now. Like it's not going to happen tomorrow. But I do think down the line somewhere, you know, some of these Iraqis and I think some of these kids are going to look back and say probably we weren't that bad.
RAZ: Some who arrived as boys, forced to become men. Fourteen months on, many have seen a fellow soldier die. And all of them will never forget the hardest 14 months of their lives.
Guy Raz, CNN, near Najaf in southern Iraq.
(END VIDEOTAPE)
DOBBS: And our thought tonight is about this country's youth. "We cannot always build the future for our youth, but we can build our youth for the future." Franklin Delano Roosevelt.
Well, hundreds of our country's youth are competing in the nation's largest and longest-running education event, the 77th Annual National Spelling Bee. Two hundred sixty-five champion spellers, ages 9 to 15, are competing in Washington for a $12,000 grand prize.
The national contest began this morning with a 25-word written test. That test included words to spell such as "revelry" and "triskaidekaphobia." That, of course, the fear of Friday the 13th. The oral competition begins tomorrow, and it ends with a single winner declared Thursday.
And we'll keep you posted on the progress of this competition among some of our nation's brightest students.
Turning now to politics and a special state election that could have national implications. Voters in South Dakota tonight are choosing a successor to former Congressman Bill Janklow. Janklow resigned earlier this year after he was convicted of manslaughter when he ran a stop sign and killed a motorcyclist. Political experts tell us the election to replace Janklow could indicate which way voters around the country will be voting come November.
Ed Henry reports.
(BEGIN VIDEOTAPE)
ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): South Dakota is considered Bush country, but Democrats have high hopes of seizing a Republican House seat there in today's special election. This follows a recent Democratic pick-up in Kentucky, fueling claims that the president's sliding poll numbers are loosening the GOP's grip on Congress.
REP. STENY HOYER (D), MARYLAND: And I think you're going to see a very good victory by a very good candidate, Stephanie Herseth, and that's going to say one more time that, in Kentucky and South Dakota, two different areas of the country, two different kinds of states, that people are looking for change.
HENRY: Herseth is a 33-year-old attorney and the granddaughter of a former governor. Independent polls give her a 10-point lead over Republican State Senator Larry Diedrich, former head of the South Dakota Soybean Association. Republicans concede Herseth has the edge but say private polling shows a tighter race.
The seat was vacated by Republican Bill Janklow who beat Herseth in a tight race in 2002, but resigned after being convicted of vehicular manslaughter. Republicans say that scandal, plus the fact that Herseth has been essentially running for two years, make it an isolated case.
Independent analysts say Democrats have some momentum, but they shouldn't get carried away.
AMY WALTER, THE COOK REPORT: They really do have reasons to be optimistic. At the same time, we are still looking at a pretty small playing field in terms of seats that are up for grabs here, and Democrats would need to win a disproportionate number, an incredibly large number of those competitive seats, to be able to take the number they need to win control of Congress.
(END VIDEOTAPE)
RAZ: Lou, the polls will begin to close in the eastern part of South Dakota tonight at 8:00 Eastern Standard Time. The western part of the state, the polls will close at 9:00 Eastern Standard Time. But officials in both parties say that they do not expect results really to come in and really to get a handle on this until about midnight Eastern Standard Time because the race has tightened in recent days, and they expect it to be close.
The bottom line here is that there's not much math at stake. It's only one seat, as you know, but the bottom line is it's a psychological boost if Democrats could win tonight in Bush country -- Lou.
DOBBS: Ed, thank you very much.
Ed Henry reporting from Washington.
Still ahead here, Outta Gas. The highest gasoline prices ever are causing some Americans to rethink their dependence on driving and all that foreign oil. We'll have a SPECIAL REPORT next.
And then, terror in Saudi Arabia. A former CIA case officer says it's just the beginning. I'll be joined by Robert Baer, the author of "Sleeping With the Devil."
That and a great deal more still ahead.
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(18:17)
ANNOUNCER: LOU DOBBS TONIGHT continues. Here now for more news, debate and opinion, Lou Dobbs.
DOBBS: Tonight, we begin a work-long series of special reports on what looks to be a possible energy crisis in this country. Crude oil prices closed at an all-time high today, $42.33 a barrel, up $2.45.
And looking now at how the country feels about this spike in gasoline prices, a new CNN/"USA Today"/Gallup poll shows nearly three out of four of us think the current cost of gasoline represents either a crisis or at least a major problem for the country.
Kitty Pilgrim reports.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN BUSINESS CORRESPONDENT (voice-over): When it comes to gas, people are re-thinking their consumption. Day tripping is trimmed.
UNIDENTIFIED FEMALE: We went to the zoo two weekends ago. We took public transportation because we didn't want to drive. We have a big truck, an SUV, and it costs like 60 bucks to fill it up.
PILGRIM: Chores are rationed.
UNIDENTIFIED FEMALE: You figure do I really need to go out now, or can I get something, and, you know, can I make another trip and do everything together.
PILGRIM: Suddenly, premium seems well named.
UNIDENTIFIED MALE: Before, I was using premium, and I can't even use premium gas anymore. I'm using regular gas now. I mean, the prices are sky-high.
MCNAULL: Gas prices now are at the highest point adjusted for inflation since the mid '80s. It's really money coming out of our wallets, and it's coming out quickly.
PILGRIM: Gasoline is the single largest energy product consumed in the United States, and consumption has been rising since the 1950s. Up until then, the United States was energy self-sufficient. That's no longer the case. Now the United States imports 60 percent of its oil, a little less than half of that from OPEC nations.
We are a driving nation by choice, and, as suburban life dominates the country, by necessity, energy efficiency in vehicles has improved. But we are simply driving more and more cars longer and longer distances. Consumer spending on all kinds of energy has soared in recent years.
PETER NEUTEL, OIL ANALYST: That's in-pocket-after-tax dollars. That's money that can't go somewhere else.
PILGRIM: The average household spends 5 percent of its budget on energy, 3 percent on gasoline alone. The problem is it's a fixed expense. Cutting back on heat in the winter or the daily commute to work is not an option.
(END VIDEOTAPE) PILGRIM: Now the anxiety over energy is showing up in the latest Gallup poll released today. More than half the people polled said gas prices are causing financial hardship, and nearly 60 percent say the increase in gas prices will cause them to drive less this summer -- Lou.
DOBBS: Kitty, thank you. It's a serious problem, without a question.
One reason for this rise in energy prices is the concern about terrorism in Saudi Arabia, the world's largest oil exporter. Tonight, Saudi Arabian police and troops are hunting radical Islamists after a terrorist attack on western oil workers over the weekend. That attack killed 22 people, including one American. Three of those four terrorists escaped after threatening to kill nearly 250 hostages in a housing complex in Khobar. Joining me now is Robert Baer, a former CIA officer, the author of "Sleeping With The Devil, How Washington Sold Our Soul For Saudi Crude." Robert Baer says Saudi Arabia is moving closer to chaos and terrorists are likely to launch more attacks. Joining us tonight from Washington, good to have you with us.
Were you surprised, shocked that the Saudis released three radical Islamist terrorists.
ROBERT BAER, FMR. CIA OFFICER: They either released them or escaped. Either way it makes me wonder about Saudi security services. In an incident like this the first thing you want to do is surround the area of operations, make sure no one gets out. It was essential to catch these people to find out if a second attack is coming, interrogate them. They failed to do this, failed to capture. They say they know who they are. but still as of tonight they haven't found them.
DOBBS: What are your inferences right now, first on the strength of al Qaeda that it can carry out this attack against oil facilities in Saudi Arabia itself. Secondly, manage to escape or manage to be released.
BAER: Well, there's this accusation out there that Qaeda has a certain amount of sympathy in Saudi Arabia, at least, in a symbolic sense. People support the defiance Osama bin Laden represents. They may not join in terrorism but they are fed up with the west, fed up with the situation in Palestine between the Israelis and Palestinians in Iraq. They're upset about the corruption inside the royal family. They consider that the price of oil is too low. They think it is a national resource which should be preserved. We think it's too high. They think it's being stolen from them.
DOBBS: You spent a lot of years in the Middle East. What is your sense tonight as to how vulnerable Saudi Arabia is to real chaos?
BAER: I think we're on the edge of chaos. I hear that from people inside Saudi Arabia, who were supportive of the regime and depend upon the regime but they're worried about the future. They're worried about the fact that al Qaeda has focused in on westerners, focused in on the petroleum industry. They've gone out of their way not to kill Muslims at this point. And this call for a popular uprising which was made last week. There was another shootout today. There are large parts of Saudi Arabia where the police feel insecure.
DOBBS: They may feel insecure but the fact is the security of those oil facilities is not only critically important to the Saudi royal family, but to, indeed, much of the world, the western world. Is it your judgment that the Saudis can maintain the supply of crude to the world?
BAER: Today, yes. Tomorrow, I can't say because those oil facilities are above ground. They're extensive. They're difficult to protect. The core facilities are but the pipelines and facilities are not. They could hit them if they wanted to. There is no amount of forces, no amount of money that can protect them at the end of the day if there is a determined effort or if there's inside help. If we're looking at the risk premium today, it is just based on -- no petroleum production was touched in this last attack this weekend. What would happen if one of those pipelines were hit? We would be well over $50 or $60 for a barrel of oil.
DOBBS: Iraq tonight has a new government. Are you reassured about the prospects of the handover of sovereignty and stability in Iraq?
BAER: One of the problems we're facing now that Iyad Allawi who is a very pragmatic man, well regarded in Washington, has been identified as a CIA agent. He's going to have to do a lot to overcome this in the next six months.
DOBBS: When you say he has been identified. It's been claimed?
BAER: It's been claimed. He's not a CIA agent. Iraqis identify him as one, which is a detriment for him.
DOBBS: And with that baggage, what do you think the prospects are?
BAER: Not good. Keep in mind, again going back to Saudi Arabia, 814 kilometer border. It is easy to bring weapons across. We have to count on making Iraq work. Failure is not an option.
DOBBS: Robert Baer, thanks for being here.
BAER: Thank you, Lou.
DOBBS: Still ahead, outsourcing border security, outsourcing national security. The homeland security department has awarded a multibillion dollar border security contract to a company based outside the United States. We'll be talking with the chairman of the House select committee on homeland security, Congressman Christopher Cox, next.
Tonight, a disastrous beginning to the summer travel season at one of this nation's busiest airports. An airporst spokesman says federal security officials are to blame for amazing delays in moving passengers to aircraft.
Then, a new option for Americans hoping to save money on their prescription drugs. We'll tell you why many are finding it's not such a great deal after all. That, and much more, ahead.
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DOBBS: As we reported, the department of homeland security today awarded a border security contract worth as much as $10 billion over a ten-year period to Bermuda-based Accenture. Announcing that decision, Homeland Security Undersecretary for Border Security, Asa Hutchinson said, quote, "I really don't think you could overstate the importance of this responsibilty in terms of the security of this nation." And yet, the department of homeland security chose to award this critically important contract to a foreign company. Congressman Christopher Cox is the chairman of the select committee on homeland security and joining us tonight from Capitol Hill. Mr. Chairman, good to have you here.
Accenture, as you know, is a partnership incorporated in Bermuda through its level of organization. Operates in 40 countries. Are you concerned about the U.S. government awarding something so critical to national security to a foreign-based company?
REP. CHRISTOPHER COX (R-CA), SELECT CMTE. ON HOMELAND SECURITY: Well, it's a fair question. As you might imagine with a contract so significant and a competition for this contract so fierce, that question has been turned over and analyzed very, very carefully. The award of the contract makes it very clear that all this work is going to be done in the United States. It is true that Accenture's parent company is incorporated in Bermuda but Accenture in the United States with its 25,000 employees here in the U.S. is going to do this work along with a broader alliance, the smart border alliance, which, in total, has 330,000 employees in the United States. There is an assurance that all this work will be done here and, of course, all the taxes will be paid here as well. In its second quarter filing, Accenture, I should note, paid 35 percent of its earnings in taxes to the United States from its United States operations.
DOBBS: Mr. Chairman, 35 percent. Our research reveals that they don't say what percentage of that 35 percent tax level went to the U.S. in the form of taxes.
COX: No, no. What I said is that 35 percent of their earnings went to the United States in taxes.
DOBBS: Of Accenture in Bermuda?
COX: From Accenture, right. No, no. Accenture is incorporated in Bermuda. This is Accenture in the United States paying taxes here in the United States of America with 25,000 employees. But I think it is a fair question. We want to make sure on something that is of vital importance to our country who comes in and out of the borders, that we have technology that works, that we have system that works. And we want to make sure the U.S. contractor is in charge of that. DOBBS: A U.S. contractor in charge of it. I guess by some stretch of imagination one could consider a subsidiary a U.S. contractor, but they're also a subsidiary of a foreign-based company set up precisely to avoid taxes to the U.S. government and to the states in which they operate.
Is that really the message that you want to send to corporate America and to the rest of the country?
COX: Lou, as I just said, all the work is going to be done here in the United States with 330,000 employees, not just from Accenture, but several companies. All of the Accenture companies will be U.S. employees. It is going to be a U.S.-based operation, paying taxes here in the United States. So the U.S. Economy benefits directly this, the U.S. national security benefits directly from this. I think it is a fair point to raise it, that's why it was important we got the assurances.
DOBBS: Let's turn to the issue of the assurances and the visit program itself. Critics are saying, point blank, that they think this is going to be a very difficult contract to execute under any circumstance.
How confident are you that it can be the -- that deadlines can be met and this consortium executed?
COX: Count me in the camp that will cast a weary eye on all of this. This is enormously difficult what we're trying to do, with or without technology. The sheer numbers of people we have to look at, number one. And number two, the importance of accuracy, both in capturing the biometric information and matching it against other data bases. I want to make sure it works. This contract, I should note, which lasts for a decade, potentially, is worth up to $10 billion. It's also worth as little as $10 million. There are milestones along the way to make sure it works on issues of which technology to use, facial recognition, finger prints, retina scan, photography, even voice. All of these things are open questions that are subject to proof and experimentation as we go down the road. And we know that technology will change and move on us during this period. We want to use the very best technology available to us.
DOBBS: Congressman Cox, how satisfied are you with the progress being made by Homeland Security and the other agencies responsible for port security, for border security, along with the visit program and a host of other screening operations that were to have been in place that are not?
COX: As you know, first starting with U.S. Visit, it's operating on time. This contract, incidentally, was awarded on time. The program began in January of this year. We've just taken this container security initiative to further countries now as a result of our agreement with Europe, but we are seeing a great deal of progress there. The container security initiative for those who aren't fully aware of what that's about is screening cargo before it gets on the ship in foreign ports, before they come here. We're screening 100 percent of the high-risk cargo that enters the United States of America. There is no question that we have a lot more to do, but when you take a look at how much we've done in barely over a year it's absolutely extraordinary to move from a standing start to what is now being accomplished. Both my Democratic colleagues and Republican colleagues on the Homeland Security Committee, dedicated as we are to the oversight of the Homeland Security Department, a, want to see it succeed and, b, want to make sure we have constructive oversight to achieve these fundamentally difficult but important tasks.
DOBBS: Oversight is one of the roles of Congress which we're hearing increasingly from both Republicans and Democrats, some lament that Congress has not more rigorous in other areas, in terms of your committee's charter.
How concerned are you about not having sufficient oversight and engagement on these issues, particularly in the case of border security watching as many as a million illegal aliens cross our border every year?
COX: U.S. Visit, of course, is designed to deal with this problem. It is an entry/exit program. For the first time to begin keeping track of who's coming across the border, what their stay is, and when they leave. That's not been done before. And it's fund mentally necessary if you're going to claim to have control of your borders. I think the merger of this function into the Department of Homeland Security gives us an opportunity to get serious about border control in a way we never have before. I think the oversight and attention we can give to this is enhanced in the house of representatives because we, just like the executive branch which reorganized itself, have created the Homeland Security Committee expressly for this purpose.
DOBBS: Congressman Christopher Cox, chairman of the Select Committee on Homeland Security, we thank you for being with us.
COX: Happy to join you.
DOBBS: A reminder to vote in our poll tonight.
Do you believe the federal government should be outsourcing its border security?
Cast your vote at cnn.com/lou. We'll have the results coming up for you later in the broadcast.
The busy summer travel season kicking off over the weekend of course. Already the higher number bad of travelers putting a strain on airport security. Thousands of people waited in line for hours today at Atlanta's Hartsfield Jackson International Airport. While official blamed a back up at one security checkpoint.
Doug Richards of CNN affiliate, WAGA report from Atlanta.
(BEGIN VIDEO CLIP)
LANH THOMAS, AIRPORT SPOKESWOMAN: Historically we think it might be the busiest day we've had in terms of passenger travel. It is overwhelming is the word we describe. We were anticipating this to be a busy day for us. We weren't anticipating having a wait time of over two hours.
DOUG RICHARDS, WAGA (voice-over): The lines formed at security check points and grew quickly. Four lines backed up deep into the airport atrium. More lines snaked through hallways behind the baggage claim area.
PAT LYNCH, TRAVELER: A little congested. I'm antsy trying to make my plane. I have like 45 minutes to get to the gate.
RICHARDS (on camera): How many lines have you stood in?
LYNCH: This is my fourth.
RICHARDS: Why is today so busy?
THOMAS: A combination of post-holiday travel, the beginning of the summer holiday travel season. Again, it is our normal Monday for business travelers. So we had a combination of business and leisure travelers but more leisure, I would say, than business travelers today.
(END VIDEOTAPE)
DOBBS: That's Doug Richards of WAGA reporting from Atlanta. Hartsfield is one of the countries busiest airports, built to accommodate 55 million travelers. This year it is expected to handle 81 million. Other major airports tell us they've had no significant delays at security check points.
Well, many of you wrote in to about the federal governments decision to award a massive border security contract to a foreign company.
Pat Wright from Oakland, California wrote in, "Tell me I'm having a bad dream. I just heard that Accenture, one of the prime exporters of American jobs, has won the contract offered by our own Department of Homeland Security. I'm dreaming, aren't I?" Not exactly.
Jim of Alexandria, Virginia, "How can a department that is responsible for a defending the homeland select a company that is Bermuda base to implement one of the most important government programs that DHS will implement?"
Jan Herron in Evergreen, Colorado, "Will someone please tell me how we are supposed to be vigilant and watch for seven terrorist in our country as suggested by John Ashcroft when we have over 2,000 illegal aliens jumping our borders daily?"
Send us your thoughts at loudobbs@cnn.com.
Still ahead, a new Medicare prescription drug card fails to attract millions of Americans who could be saving money with it. We'll have that special report next.
(COMMERCIAL BREAK)
DOBBS: Americans are not rushing to sign up for the Medicare prescription benefits. Louise Schiavone has the report.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): The Medicare prescription drug discount card (UNINTELLIGIBLE) for the largest titlement expansion in U.S. history. The program is a 19-month bridge to the 2006 full implementation of the Bush administration's Medicare prescription drug improvement and modernization act, costing different amounts to different income groups and not available at all if a senior doesn't sign up. Confusion abounds.
UNIDENTIFIED FEMALE: I've heard rumors that the new law is not good for seniors, and I haven't had a chance to go over that yet.
UNIDENTIFIED MALE: I do know there are a lot of companies that are issuing it. It is difficult to decide on which card is the best to use.
SCHIAVONE: At least 70 companies have been approved to market the discount cards. The cost is $30 per card and could reduce the prices of certain drugs from certain pharmacies by 10 to 25 percent. Critics say that with rising drug prices, the discount card doesn't so much reduce prices as it keeps them constant.
JOHN ROTHER, POLICY DIRECTOR, AARP: Really, what they're going to be doing even with a discount is paying the same prices they would have paid without a discount about three years ago. So while the drug card is helpful today, we have a fundamental problem in the cost of medications.
SCHIAVONE: The biggest winners are low income seniors. They are eligible for a free card and a $600 credit for their prescriptions. Roughly 7 million people fall into this category. One of the most worrisome aspects is the potential for fraud.
CHARLEA LEATHERWOOD, PRESIDENT, NATL. COMM. PHARMACISTS ASSOC.: There have been a lot of scams so far where even individuals have gone door to door telling seniors that they are selling a Medicare card to them and getting an enrollment fee from them.
SCHIAVONE: A legitimate card will have a Medicare approved seal. The Bush administration argues that with the cards brandname drugs could be reduced by as much as 18 percent. Critics fear that a $530 billion behemoth carries with it no mechanism to restrain rising drug prices which, after all, was the original reason for the Medicare expansion. Louise Schiavone, CNN, Washington.
(END VIDEOTAPE)
DOBBS: Still ahead, rising gasoline prices squeezing this country's middle class. CEOs, however, they are doing just fine, earning more than ever. That story is next.
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DOBBS: Wall Street opened the week with only modest gains, but they were gains. The Dow up 14 points, the Nasdaq up four. The S&P 500 up a half a point. The slight gains coming despite a record day for oil prices. Christine Romans is here with that story.
CHRISTINE ROMANS, CNN CORRESPONDENT: The biggest spike in oil prices since the first Gulf War, up $2.50 a barrel today, the highest price in the 21 years crude oil's been trading on the New York Mercantile Exchange. And since crude is about half the price of gasoline, it is especially tough on motorists. The government says average gas prices dropped last week for the first week in five, but still up 58 cents from a year ago and will track higher still this summer.
American workers are struggling with those high energy bills and stagnant wages. Their bosses are not. Chief executive officers are getting paid better than ever. That excessive CEO compensation that you talk about frequently here isn't any less excessive. In fact, median CEO pay rose 27 percent last year to $4.6 million. Lou, the Corporate Library says it sees no signs whatsoever that CEO pay will slow.
DOBBS: Amazing. I'm just stunned.
ROMANS: It is a broken record.
DOBBS: Well, it's a sad one, whatever it is. Thank you very much, Christine Romans.
Still ahead, we'll have the results of tonight's poll. But first, a reminder to check out our website for the complete list of companies we've confirmed to be exporting America. CNN.com/lou. Stay with us.
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DOBBS: Well, the results of tonight's poll. There weren't many undecided votes. 3 percent of you say the federal government should outsource border security. 97 percent say you don't think that's such a good idea. Thanks for being with us tonight. Please join us tomorrow. We'll have a special report live from the border with Mexico in Arizona. New technology and increased manpower may not be enough to keep illegal aliens from crossing our borders and what about terrorists? And in "Face Off" is it time for the United States to tap the Strategic Petroleum Reserve? We'll have the debate on the issue. Please be with us. For all of us here, good night from New York. "ANDERSON COOPER 360" coming up next.
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