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Lou Dobbs Tonight

Clinton Aide Berger Under Investigation; Los Alamos Work Halts After Security Lapse

Aired July 20, 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, HOST: Tonight, former National Security Adviser Sandy Berger has resigned as a campaign adviser to Senator John Kerry. It's been learned that Berger is under investigation by the Justice Department for taking secret documents from the National Archive. Berger says he made a mistake. The Justice Department says its investigation is serious.
(BEGIN VIDEO CLIP)

JAMES COMEY, DEPUTY ATTORNEY GENERAL: We have prosecuted or sought administrative sanctions against any number of people throughout the years for mishandling of classified information.

(END VIDEO CLIP)

DOBBS: An astonishing security lapse at one of this country's most secret nuclear facilities. The government has suspended all work at the Los Alamos National Laboratory. We'll have a report.

Also tonight, I'll be joined by two leading members of the Senate Intelligence Committee, Senator Saxby Chambliss and Senator Ron Wyden. I'll also talk with former CIA Director James Woolsey about this week's report by the September 11 commission.

Palestinian leader Yasser Arafat under siege from his own people, as well as Israel. Arafat struggling to keep control of Gaza. I'll be joined by PLO Adviser Diana Buttu.

Millions of Americans will vote in the November elections with e- voting machines. Critics say those machines are now a threat to our democracy. Congressman William Lacy Clay wants a paper trail for each vote. Congressman Clay is our guest.

And 35 years after Neil Armstrong set foot on the moon, will Americans ever travel out of earth's orbit again?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Spacecraft, unmanned, are not going to be able to always obtain all of the information that we need.

(END VIDEO CLIP)

DOBBS: Tonight, Mission Critical, our special report on the future of American space exploration.

ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, July 20. Here now for an hour of news, debate and opinion is Lou Dobbs.

DOBBS: Good evening.

Tonight, former National Security Adviser Sandy Berger is at the center of a political firestorm after he admitted taking highly classified documents from the National Archive. Law-enforcement sources say Berger hid some of those documents in his clothing, even in his socks. Berger's supporters call that charge absurd. Berger himself says he took the documents by mistake.

But some Republicans say Berger may have taken those documents in order to help Senator Kerry's election campaign. Tonight, Berger resigned as an adviser to the Kerry campaign.

We begin our coverage with Justice Correspondent Kelli Arena -- Kelli?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Lou, Sandy Berger admits this much, that he inadvertently removed highly classified documents from the National Archives and that he accidentally discarded some of them. He's under criminal investigation, according to our sources, and has been since last fall.

Now his lawyer just appeared on CNN exclusively in the last hour, and he had this to say.

(BEGIN VIDEO CLIP)

LANNY BREUER, BERGER'S ATTORNEY: This matter is now over a year old. Sandy Berger reviewed documents in the Archives in July and September and October of 2003, and, from October 2003, the first time that Sandy was notified that this one document was missing, we've been 100 percent open, returned the two documents that were in Sandy's possession immediately, and have tried to have a very open and informed discussion with the Department of Justice.

(END VIDEO CLIP)

ARENA: Now Berger had been asked by former President Clinton to go through thousands of pages of documents which are kept at the National Archives for submission to the September 11 commission. Berger made at least three visits to the Archives during which staff there noticed that some documents were not being returned.

Berger was eventually confronted. He did bring back some of the documents, but not all. The documents that are still missing are described by sources as a critical review of the Clinton administration's handling of the millennium terror plot.

Now Justice officials are not commenting on the investigation, but, generally speaking, they had this to say.

(BEGIN VIDEO CLIP)

COMEY: We take issues of classified information very, very seriously, and, as you know, we have prosecuted or sought administrative sanctions against any number of people throughout the years for mishandling of classified information.

(END VIDEO CLIP)

ARENA: Now it is a crime to mishandle documents, but, because investigators are not dealing with something like handing classified information over to a foreign government, many experts expect a punishment, if there is one, to be light.

(BEGIN VIDEO CLIP)

ROSCOE HOWARD, FORMER U.S. ATTORNEY: You might get your clearance removed for a certain period of time as punishment or certain access will simply be denied to you.

(END VIDEO CLIP)

ARENA: Officials tell CNN the investigation is ongoing, but that there has been no decision made yet on whether to bring criminal charges -- Lou.

DOBBS: Kelli, thank you very much.

Kelli Arena from Washington.

Republicans and Democrats quick to offer their opinions on Sandy Berger's removal of documents from the National Archive. House Speaker Dennis Hastert said he wonders if Berger was trying to rewrite history. Senate Minority Leader Tom Daschle said Berger deserves the benefit of the doubt.

Congressional Correspondent Joe Johns with the report -- Joe?

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Lou, congressional Republicans are slamming Berger for these allegations, and they're highly skeptical of his explanation.

The speaker of the House said he was profoundly troubled. We also have part of his written statement in a graphic. I'll read it to you. It says, "What could these documents have said that drove Mr. Berger to remove them without authorization from a secure reading room for classified documents? What information could be so embarrassing that a man with decades of experience in handling classified documents would risk being caught pilfering our nation's most sensitive secrets?"

And House Majority Leader Tom DeLay weighed in. He went a little further. He said, "That's not sloppy, and that's not inadvertent. I think it's gravely, gravely serious what he did, if he did it. It could be a national security crisis."

Over on the Senate side, Senator Saxby Chambliss, a member of the Intelligence Committee, also talked about it.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: He deserves certainly the benefit of the doubt here.

(END VIDEO CLIP)

JOHNS: That, of course, is Senator Tom Daschle. He, meanwhile, was a person who was actually defending Mr. Berger. He said that as far as he's concerned, the timing is highly suspicious.

This is something, also, a number of Democrats here on Capitol Hill have said. They question the motivations of the leak, the timing, the fact that it comes so far along after the investigation was initiated. They say it's being done for political purposes.

Lou, back to you.

DOBBS: Joe, the motivation, the timing of the leak, certainly curious. But also, certainly, Senator Daschle, other Democrats, are also concerned because it is very curious why a man of Sandy Berger's experience and obvious understanding of classified information and its handling should have been taking material of this nature. What is their reaction to that issue?

JOHNS: Well, on the one hand, the Democrats are trying to point out that these are copies, they say, not originals, that were taken from that location.

On the other hand, Republicans are pointing out that he does have a great deal of experience in national security affairs and the way you're supposed to handle documents of this type.

And many people here on Capitol Hill, who also have to handle such documents, are well aware of the parameters. So it creates quite a stir. And you also do have to factor in on both sides the fact that this is an election year -- Lou.

DOBBS: Absolutely, Joe.

Joe Johns reporting from Capitol Hill.

Thank you.

In another case of not handling documents appropriately, missing secrets in New Mexico. Sensitive information has disappeared from the Los Alamos National Laboratory in New Mexico. That lab is one of this country's most important centers for nuclear weapons research. Investigators are trying to find out what happened to two computer disks that contain highly classified information. They were reported missing two weeks ago.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN BUSINESS CORRESPONDENT (voice-over): Los Alamos National Laboratory is where the nation's nuclear secrets are kept and now, it appears, lost. REP. DIANA DEGETTE (D), ENERGY COMMITTEE: We had four disks disappear earlier this spring. Two of them are still missing. Those disks contain classified information about our nation's nuclear weapons program. So, obviously, we're quite concerned.

PILGRIM: The main work at Los Alamos, one of the country's main nuclear labs, was shut down last Friday until the security breach can be cleared up. No schedule on when it will open again.

Project Government Oversight, a watchdog group, is outraged about lost disks and e-mails sent out that contain classified information. They chalk it up to an organizational culture among the rank-and-file employees who disregard what they see as pedestrian security rules.

The lab director, Pete Nanos said, "Cowboys simply refuse to follow procedure."

DANIELLE BRIAN, PROJECT ON GOVERNMENT OVERSIGHT: The scientists think their work is so important that it must go on at all costs. In reality, what's happening is that they're creating a Homeland Security vulnerability by making these secrets potentially available to people who are hostile to our country.

PILGRIM: Los Alamos, a historic facility where the atomic bomb was created in 1945, has thousands of employees. One of the most high-profile security lapses was when scientist Wen Ho Lee was charged with taking files home. But members of Congress say Los Alamos has a chronic problem.

REP. JOE BARTON (R), ENERGY COMMITTEE CHAIRMAN: I think it's very serious. This is the third or fourth time they've had a loss of classified material at Los Alamos, and, in my opinion, that's three or four times too many. So I'd say it's a serious issue.

(END VIDEOTAPE)

PILGRIM: Now the ultimate solution being considered is to go to a diskless system so employees are not tempted to walk out with their research or take it home.

The Energy and Commerce Committee is holding hearings in September to make sure that, in the meantime, all security measures are followed -- Lou?

DOBBS: Do we know right now, Kitty, the specific nature of the material -- the classified material that was on these disks?

PILGRIM: There's a top-to-bottom search going on. They don't know exactly what's missing, and they don't have an accurate description of what's missing.

DOBBS: I think at this point it's safe to say, for crying out loud, what in the world are they doing?

PILGRIM: Yes, it's quite disturbing.

DOBBS: Kitty Pilgrim, thank you very much.

Well, Iran today insisted it did not play any role in the September 11 terrorist attacks against this country. The Iranian foreign ministry, in fact, said such suggestions are fabrication and fantasy. Yesterday, President Bush said the United States is, as he put it, digging into the facts to determine whether Iran was directly involved in those attacks. The president's comments followed reports that as many as 10 of the September 11 hijackers passed through Iran before September 11.

Former CIA Director James Woolsey says he is not surprised that Iran may have helped al Qaeda terrorists. James Woolsey has just finished giving testimony to the Senate Intelligence Committee, in fact, within just the past hour. He talked there about the need for a massive overhaul on our intelligence agencies. He joins us now from Washington, D.C.

Jim, good to have you here.

JAMES WOOLSEY, FORMER CIA DIRECTOR: Good to be with you, Lou.

DOBBS: The -- let's go first to the issue of the role of Saddam Hussein, Iraq, Iran and the September 11 terrorists. Is there, in the September 11 commission, anything revelatory, determinant that we should focus upon?

WOOLSEY: Well, we don't know yet, but I think what's interesting is that they are finding connections between Iran and al Qaeda, in terms of these passages permitted without stamping passports and perhaps others.

The Senate committee, which I was just testifying before, found some interesting connections not really reported by the staff report of the 9/11 commission. The Senate committee found some interesting connections between Iraq and al Qaeda. The most disturbing, they said, was a dozen or so reports of training on chemical and bacteriological weapons.

But they said the relationship was not one in which Iraq wanted to actually help al Qaeda tactically, but rather one of mutual exploitation between the two. One wanted training. The other would like to see the attacks on the United States. So they may not have been operationally involved working together on individual operations, but they found a lot of connections, and I think we're going to find more and more with Iran and al Qaeda as well.

These two dictatorships of the Middle East both saw the world, I think, as a situation in which the enemy of my enemy is my temporary friend, and, although they may not have had sponsorship or operational relationships with al Qaeda, I imagine each of them was helping it out in some rather substantial ways, and I think we'll learn more and more as time goes on.

DOBBS: So, while you're not suggesting there was a direct causal relationship between Saddam Hussein and the terrorists who carried out September 11 attacks against this country, there certainly was a mutuality of interests that is not in any way dismissed by any of the findings of either the Senate Intelligence Committee, or, to our knowledge, the September 11 commission?

WOOLSEY: I think that's right, the two big question marks still on Iraq and al Qaeda and operations.

One is Ahmed Hikmat Shakir, who was an Iraqi who was in the meeting in Malaysia in January of 2000 with some of the terrorists who brought off 9/11. Generally, it's regarded as probably a planning meeting for 9/11. Recent information from Iraq has suggested that he may have been a member of Saddam's Fedayeen under the command of Uday, Saddam's son. That still remains to be completely spelled out.

And then, of course, you've got from Mr. Yasin, one of the two main terrorists of '93 in attacking the World Trade Center who went back to Iraq, lived there, was paid by the Iraqi government after the fact. So we don't have either Yasin or Shakir in custody. Stay tuned on those, I think.

DOBBS: Yes. And we don't have Osama bin Laden in custody either and a number of other people within al Qaeda that we would like to have.

Let's turn to the issue of Iran. Two years ago -- more than two- and-a-half years ago now -- just about two-and-a-half ago, President Bush in the State of the Union message referred to North Korea, to Iran and Iraq as the axis of evil.

This administration has backed off considerably from that kind of hyperbolic language, if you will, bellicose language, and yet we continue to hear mounting evidence of an important nature with Iran, whether it is the building of nuclear weapons programs, whether it is their support of insurgents and complicity with insurgents in Iraq, or whether it be their support of al Qaeda broadly and specifically in support of al Qaeda on September 11.

Why is there this reserve in dealing with this issue publicly, directly and forthrightly by the administration?

WOOLSEY: Well, the president may have stretched on axis a little bit because there probably wasn't any sort of axis-like agreement between these three, but evil, it seems to me, was right on then and it's right on now.

The Iranian people, the women, the young people -- and half the country's 19 or younger -- and even a number of the clerics are really very hostile to these crazy theocratic mullahs like Khomeini who control things in Tehran, and the Iranian government is working on nuclear weapons. I think there's no reasonable dispute about that. And, certainly, they support Hezbollah strongly, a major terrorist organization.

So, you know, I don't think it would be wise for us to use military force against Iran. We'd drive all these wonderful women and students into the arms of these crazy mullahs. Buy I think we want to be not only distant from them, but use whatever levers we and other countries can to weaken these rulers, these theocratic rulers in Tehran, and let the Iranian people run their own government.

DOBBS: And speaking of running our own government, I would like your comment, your thoughts on Sandy Berger, whom you know, as the former national security adviser, walking away with documents from the National Archive, classified documents, now under investigation, an investigation the Justice Department says it's taking seriously. Your thoughts on both that and the timing of the revelation that such an investigation is underway?

WOOLSEY: Well, it has to be looked into thoroughly and carefully. But I've known Sandy Berger for 20 years, and I find it hard to believe that he would maliciously or intentionally do something like this.

My -- you know, I had a security violation once when I was ambassador 15 years ago in Moscow. I had a classified document, and I was working on it in one part of the embassy, and I put it with some other papers and left it in the wrong part of the embassy, and I got a security violation.

Almost anybody who's worked on things like this has done something like this from time to time. I think we ought to withhold judgment until Sandy's story is out.

DOBBS: Jim Woolsey, thanks for being here to share your judgment about that issue and a host of others. Thanks.

WOOLSEY: Good to be with you.

DOBBS: Still ahead, I'll talk with two leading members of the Senate Intelligence Community, Senator Ron Wyden and Senator Saxby Chambliss about the need for a massive overhaul of our intelligence agencies.

Also, millions of Americans will be voting in the presidential election with unproved and often unreliable electronic voting machines. Congressman William Lacy Clay says those machines must leave a paper trail. Congressman Clay is our guest.

And Yasser Arafat faces a challenge to his authority in Gaza, not from the Israelis, but his own people. I'll be joined by adviser to the PLO Diana Buttu next.

(COMMERCIAL BREAK)

DOBBS: The Senate Intelligence Committee today heard testimony on the need for a massive overhaul of this country's intelligence agencies. The committee's hearing comes two days before the release of the September 11 commission report. The commission is expected to call for the creation of a new intelligence czar to oversee both the CIA and the community of 14 other intelligence agencies.

Joining me now, two leading members of the Intelligence Committee, Senator Ron Wyden of Oregon, Senator Saxby Chambliss of Georgia.

Good to have you here.

Let me start, if I may with you, Senator Wyden. The call for a czar to cover all of the intelligence community. Are you -- at this point, how do you feel about that at this juncture?

SEN. RON WYDEN (D-OR), INTELLIGENCE COMMITTEE: I'm for the idea, Lou. It seems to me that better accountability and better management can help us deal with some of the problems that we saw in our report.

For example, it's clear there was inadequate information sharing between intelligence and defense and law-enforcement agencies. I think making sure that there's some real accountability, rather than having these decisions strewn all over Washington, makes sense.

DOBBS: And, Senator Chambliss, your thoughts on the same issue?

SEN. SAXBY CHAMBLISS (R-GA), INTELLIGENCE COMMITTEE: Well, I'm not sold on it yet, Lou. I think there's still some real questions that have to be answered relative to the power and authority that's to be granted to any director of national security, whether or not we're going to give them not just budgetary authority, but really authority to hire and fire and to really put pressure on the intelligence community.

That has not been resolved yet. We've started some hearings. We had one in the Intel Committee today, and Ron and I were both there, and we're going to continue down this road. I'm very open to the idea because, obviously, we've got real problems in the intelligence community, both within our country and outside our country that have got to be resolved. If that's the answer to it, I'm going to be all for it.

WYDEN: Lou, I think the point really is -- and Saxby makes it -- we do have to have real authority to get these changes, and the fact is after 9/11, after this significant intelligence and security failure, nobody was fired. One of the reasons I support this idea is to have some accountability so that when mistakes like that are made, we see changes.

DOBBS: Let me ask you both about -- I was just talking with former CIA Director Jim Woolsey about what we're learning incrementally, at least, day by day, on the relationship between Iran, Iraq, the al Qaeda, their disparate roles in what was the September 11 terrorist attacks against this country, the support by Iran of insurgency in Iraq.

Is it your sense that we have reliable intelligence on all of these issues, not a causal relationship between Saddam Hussein's Iraq and the September 11 hijackers, but the affiliation and the broad support of interests amongst Iraq, the al Qaeda and Iran?

CHAMBLISS: Well...

DOBBS: And if I may...

CHAMBLISS: ... Lou, I think what the problem is, that we're looking back and finding out this kind of information now. We should have had that information looking forward, and that's where the real breakdown is in the intelligence community.

Should we be surprised that there was some sort of connection between Iran and al Qaeda? No, we shouldn't have because we know that they've been a terror-sponsoring nation, and they continue to be that way.

But what we've got to do is we've got to figure out better methods of getting that information up front, rather than looking behind us and picking up on it after the fact.

WYDEN: Lou, I think the Iranian leaders are bad people with multiple priors. The fact of the matter is they've been involved in supporting terrorists around the world. They're in the nuclear proliferation business. They do not wish our country well.

But, at this point, there is no evidence of a cooperative relationship between the Iranians and 9/11 and al Qaeda, and, of course, we heard some of that before with respect to Iraq, and I think we've got to stick to the facts and insist that it be proved.

DOBBS: Well, let's, if I may, ask the final question on Sandy Berger who resigned, as you know, as an adviser to the campaign of Senator Kerry today, once it was disclosed that there was an investigation of his taking documents -- classified documents -- from the National Archive.

Senator Wyden, what is your reaction to both that charge and the timing of the leak?

WYDEN: Sandy Berger has already admitted that this was a significant mistake. There's an ongoing investigation. Nobody is oblivious, Lou, to the fact that we're moving into the fall of even numbered years, and there are going to be charges thrown every which way.

But, to me, the bottom line is there is no history -- no prior history -- of Sandy Berger playing politics this way, and I think we ought to let the investigation go forward and the facts come out.

DOBBS: Senator Chambliss, you have the final word here.

CHAMBLISS: Well, it's a very strange situation. Sandy Berger is a professional, very competent, intelligence-oriented individual, who's provided a good public service. Why in the world somebody like Sandy Berger would take classified documents that he knew were sensitive and stick them in his pants and smuggle them out of a building is just -- I mean, it's amazing.

And, you know, it's -- it is a political year, but that has nothing to do with politics. This is a serious breach within the intelligence community. And Ron's right. We've got to let it play out. And I just hope that those documents weren't used in an improper way, politically or otherwise. DOBBS: Senator Chambliss, Senator Wyden, we thank you both for taking time, as you're pursuing an important part of the nation's business as members of the Intelligence Committee, to be with us tonight. Thank you both.

WYDEN: Thank you.

CHAMBLISS: Thank you, Lou.

DOBBS: Just ahead, it was supposed to be the antidote for hanging chads, but electronic voting is now facing a barrage of criticism and raising concerns about a democracy putting itself in jeopardy. We'll have a special report next.

And Gaza in chaos. The unrest continues despite a Cabinet reshuffling within the Palestinian government. I'll be talking with one of the PLO's adviser, Diana Buttu, next.

Stay with us.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Here now for more news, debate and opinion, Lou Dobbs.

DOBBS: We've reported extensively here on rising concerns about electronic voting in our upcoming presidential election. Millions of us are expected to vote on touch-screen machines which leave no paper record, but critics say e-voting machines are a threat now to our very democracy.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Florida voters dropped off boxes of petitions requesting the secretary of state reconsider the use of electronic voting machines in 15 of the state's 67 counties this election. The e-voting machines have already come under fire. An investigation by the Florida "Sun-Sentinel" found in the March primary, the ATM-style machines failed at least eight times more than paper ballots read by an optical scanner.

SEN. BILL NELSON (D), FLORIDA: This is about people having the right to vote and having the knowledge and the confidence that their vote is being counted and counted in the way that they intended it.

SYLVESTER: Senator Bill Nelson is asking the Justice Department and the Florida secretary of state's office to conduct an independent audit of the machines.

But the problem with electronic machines is not isolated to Florida. Secretaries of state in California and Ohio have barred the use of the machines in this election.

A congressional subcommittee held a hearing to address the issue, but lawmakers acknowledge time is running out.

REP. ADAM PUTNAM (R), FLORIDA: Anyone could have been Florida in 2000. And in my opinion, we haven't passed any legislation that will prevent another Florida in 2004.

SYLVESTER: Congress did pass the Help America Vote Act of 2002. That was supposed to prevent another Florida debacle. But Congress never fully funded the federal agency charged with election oversight. As a result, there are no uniform standards or certification processes for voting machines.

MICHAEL SHAMOS, CARNEGIE MELLON UNIVERSITY: When a flaw is detected in a voting machine, there's no compulsory procedure for reporting it, studying it, repairing it, or even learning from the experience. The voting machine industry is unregulated and has not chosen to regulate itself.

SYLVESTER: Unlike the 2000 election, when there were actual paper ballots to recount, most of the electronic voting machines do not keep a paper audit.

(END VIDEOTAPE)

SYLVESTER: The Florida secretary of state's office remains confident in the security of the electronic machines and has so far declined to conduct an audit. The Justice Department has yet to comment on the audit request -- Lou.

DOBBS: Lisa, thank you very much. Lisa Sylvester.

I'm joined now by the ranking Democrat on the House Technology Subcommittee, Congressman William Lacy Clay of Missouri, supports electronic voting, but only if it has a paper record of the vote.

He joins us tonight from Capitol Hill. Good to have you with us, Congressman.

REP. WILLIAM LACY CLAY (D), MISSOURI: Thank you, Mr. Dobbs, for having me on this evening.

DOBBS: The idea that these concerns are now rising, and it seems with greater frequency and greater passion as almost each month passes as we approach November, what is going to be done? What can be done for those like yourself who are concerned about the absence of a paper record of a vote?

CLAY: Well, Lou, we certainly do not want a repeat of the 2000 elections with all of the chaos, chaos, and all of the hanging chad, and what have you. I think that the rest of the country should follow the lead of the secretary of states of Ohio and California, and in my case, Missouri. The Missouri secretary of state, Matt Blunt, had said that he will suspend the use of all electronic voting machines until they can be verified and certified that they actually count the votes accurately. These machines are susceptible to be -- to hacking, susceptible to being pre-programmed, re-programmed, and there is a real security issue here. DOBBS: You heard from the vendors and manufacturers of these machines today. To what degree were you reassured about what they testified before your committee?

CLAY: Well, it was not too reassuring as far as the testimony received. We have to come up with a foolproof system of making sure that every American who wants to vote and who votes, that their vote is counted accurately. We -- and that is why I have signed on with 130 other of my colleagues on a bill sponsored by Congressman Rush Holt of New Jersey that would require the production of paper ballots from electronic voting machines.

DOBBS: As you know, I've talked with Congressman Holt about that legislation. The likelihood that anything can be done with that legislation, Congressman Clay, is minimal at best before the election itself. What do you think will be the effect come November?

CLAY: Well, I agree with you. The likelihood of us passing the bill is not good at this time. I would think that more and more states will follow the lead of California and Ohio and suspend the use of the electronic voting machines, even though they have already bought these machines, the different locales and jurisdictions. But if it's not verifiable, if the voter's vote cannot be verified, then we cannot trust the technology at this point.

DOBBS: And with that added ingredient in this election, according to some, which is though this presidential election could be just as close as the last. We thank you very much, Congressman, for being with us here. Congressman William Clay of Missouri, thank you.

That brings us to the subject of our poll tonight. The question, do you believe states should be required to provide paper receipts of electronic votes? Yes or no? Please cast your vote at cnn.com/lou. We'll have the results upcoming in the show.

Tonight's thought is on democracy. "Let us never forget that government is ourselves and not an alien power over us. The ultimate rulers of our democracy are not a president and senators and congressmen and government officials, but the voters of this country."

President Franklin D. Roosevelt.

In tonight's "Campaign Journal," President Bush today traveled to two swing states, Iowa and Missouri. President Bush campaigning with his twin daughters. The first time they've made a joint appearance on the campaign trail. President Bush today focused much of his attention on the war on terror, saying America should be proud that it liberated Iraq.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Nobody wants to be the war president. I want to be the peace president. I want to be the president that after four years, four more in this office, I want people to look back and say, the world is a more peaceful place.

(END VIDEO CLIP)

DOBBS: Senator John Kerry, meanwhile on vacation in Nantucket. Senator Kerry is expected to meet up with Senator Edwards Friday to kick off their tour of America. A tour that will lead them to Boston for next week's Democratic National Convention.

Just ahead here, I'll be talking with the PLO's legal adviser, Diana Buttu, about the threat to Yasser Arafat's leadership and massive protests in Gaza and the diminishing prospects for a resolution between Israelis and Palestinians.

Also tonight, "Mission Critical," our special report. A look at man versus machine in space, and the future of American manned space flight.

And don't tell these hard-working Americans that free trade is not a threat to our economy. Hundreds of jobs have been slashed in Alabama. Textile mills there trying to compete with cheap Chinese imports. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Palestinian President Yasser Arafat today formally rejected Prime Minister Ahmed Qorei's resignation. Prime Minister Qorei insisted his resignation stands, however.

This turmoil in the upper ranks during an unprecedented challenge to President Arafat's power disturbing. Separately, Arab and European -- European Union diplomats at the United Nations wrangling over a resolution to pressure Israel to tear down its West Bank barrier.

Joining me now to talk about the issues the Middle East is now facing, Diana Buttu. She is legal adviser to the Palestine Labor (sic) Organization. She joins us from Ramallah. Good to have you with us.

First question has to be, is Prime Minister Qorei still prime minister? Does his resignation stand, or is it, in fact, accepted?

DIANA BUTTU, LEGAL ADVISER, PLO: Well, he has indicated that he is willing to stay on in the form of a temporary government until an alternative prime minister is found, or until alternative arrangements are made. So currently as it stands, he still remains the Palestinian prime minister until such time as his premiership is revoked, not only by President Arafat, but also by the Palestinian Legislative Council.

DOBBS: And Prime Minister Qorei basically saying to Mr. Arafat, give the cabinet more power, step back, and is there, in your mind, at least, in your understanding, any sense that Arafat is open to such a request?

BUTTU: Well, I don't think that that's exactly the request that's been made. The prime minister has made it very clear that it's not just a question of power sharing, but that there's also a lot of underlying problems, namely Israel's military occupation. Israel hasn't allowed for Palestinian movement, it hasn't lifted any of the conditions of the occupation. In fact, has intensified the occupation since the prime minister has taken office.

So it's not simply a question of Arafat himself, but it's also a question of what it is that Israel is doing, particularly as it continues to build the wall inside the West Bank.

But when it comes to President Arafat, there has, in fact, been such a request made. But the question, you know, it's important to remember that Prime Minister Qorei was not, in fact, an elected person. He was simply an appointed person. So at the end of the day, it's not up to the Palestinian prime minister. But it is, in fact, up to the Palestinian president, who is Yasser Arafat, the only democratically elected leader, to be able to determine what power should be granted and what power shouldn't be granted.

DOBBS: Now, I understand, but -- and I quite take your point that there are a host of issues facing the leadership of the PLO. But in this specific case, sharing power, an important part of the issue here, is it your understanding that President Arafat is so disposed to share such power with the cabinet?

BUTTU: He has, in fact, stated that he is definitely willing to hand over a great number of powers to the Palestinian prime minister. But I think that this issue of powers is simply a ruse. The Palestinian prime minister, nor the president have any powers whatsoever. It's important to keep the occupation in context. This is a government that is operating under Israel's military rule. This isn't a government that's operating freely.

So at the end of the day, yes, powers may be transferred or may not be transferred, but really the real question to be asked is, what are these powers really all about? And in the end, they're worth nothing, because Israel continues to maintain its military occupation over the Palestinian territories.

DOBBS: I quite take your point. The fact is, on this broadcast last night, Israel general counsel in New York, Alon Pinkas, said, referring to Qorei, he is a good man, a sincere and effective person. And I'm paraphrasing the ambassador's words. But to hear that kind of comment, when we have not heard a similarly supportive statements from the other members of the PLO leadership in Ramallah is quite striking. Why would that be?

BUTTU: Oh, no, that's in fact not correct, Lou. In fact, it's important to remember that the Palestinian prime minister was appointed by not only President Arafat but also by the PLO. This is a person in whom a great deal of faith has been put in and a great deal of faith continues to remain, so that's absolutely not correct at all. This is a person that the Palestinians, the Palestinian leadership itself has put forward as the candidate, and by all means we're certainly hoping that the Palestinian prime minister can -- we're hoping that he will succeed.

But the real question that remains to be asked is how can such a prime minister succeed when in the end he remains subject to Israel's military rule? DOBBS: As does everyone at this point involved in that region, specifically within Gaza, in which Israel now says unilateral disengagement is in course. Will that either help or be supportive of what Prime Minister Qorei had wanted to accomplish?

BUTTU: Well, the Gaza plan is what Sharon is trying to do, is for the past 3 1/2 years he systematically destroyed the Palestinian Authority. And now that he's destroyed the Palestinian Authority, he's saying that now he's going to withdraw from the Gaza Strip, where the Palestinian Authority has been completely destroyed.

This is why the Palestinians have been repeatedly calling for a rebuilding, not only of security forces, but of the authority itself, with guarantees by both Israel and the United States that Israel will no longer attack the Palestinian Authority as it has done over the course of the past 3 1/2 years.

Such guarantees of course have not been given by Israel, nor by the United States, and so accordingly I think that if such a pullout actually happens, which I don't think it will happen, then what we will continue to see is simply a continuation of this same chaos.

DOBBS: Diana Buttu...

BUTTU: I think, you know, just to end on that point, I think that it's very...

DOBBS: I'm sorry, go ahead.

BUTTU: I was going to say that I think that at this point, it's very important to highlight that the Palestinians have been calling for elections, and that elections have now been halted three times by Israel. I think it's time that we look very closely and very hard at the issue of elections, and allow Palestinians to express freely who it is that they want to be leading them, and not have the United States, or Israel, or any other country around the world expressing who it is that should be leading the Palestinians.

DOBBS: Diana Buttu, we thank you very much for being with us. Legal adviser to the PLO.

BUTTU: Thank you.

DOBBS: Tonight from Ramallah.

A reminder to vote in our poll tonight. The question -- do you believe states should be required to provide paper receipts of electronic votes? Yes or no? Please cast your vote at cnn.com/lou. We'll have the results later in the broadcast.

Still ahead here, exploring space. Man or machine? A fascinating debate within the scientific community. Thirty-five years after man first set foot on the moon. We'll have our special report, "Mission Critical," coming up next.

And a flood of cheap imports from China threatening to destroy a small town in Alabama, the center of one of this country's last surviving textile industries. That story and a great deal more are still ahead here tonight.

(COMMERCIAL BREAK)

DOBBS: "Mission Critical," our special report on the future of American space exploration.

It was 35 years ago today that Neil Armstrong set foot on the moon. But the most recent successes in space exploration have not involved humans in space, but rather machines. And that is at the center of a debate over whether manned or unmanned missions will be the focus of NASA in the future. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): The beauty, the mystery, the danger, and the drama will always be a part of space exploration. But what will man's role be?

Since the Apollo missions, man's role has been limited to the space shuttle and the International Space Station. And yet NASA makes no clear distinction between manned and unmanned missions, considering them both pieces of the whole picture.

PAUL HARDERSEN, SPACE STUDIES, UNIVERSITY OF NORTH DAKOTA: Spacecraft, unmanned, are not going to be able to always obtain all of the information that we need. I mean, that's simply not going to happen. They're only so limited, they only have so many detectors of certain types, and it depends on what they're going to do.

TUCKER: Proponents of unmanned missions argue that such projects are cheaper and far less risky in terms of human life, the only practical way to continue to explore space. The argument for machines is bolstered by the success of the Mars rovers.

But as one person within NASA pointed out, it takes a rover hours to move the inches that it would take an astronaut seconds to explore.

And then there is man's quest to explore.

UNIDENTIFIED MALE: Houston, Tranquility base here. The eagle has landed.

TUCKER: Would this moment have been the same, or the tension as dramatic had it belonged to a machine? And a robot could have never given us this for the history books.

NEIL ARMSTRONG, ASTRONAUT: That's one small step for man, one giant leap for mankind.

DAVID HEYMAN, CSIS: When you place a person up there floating in space, and showing us our small planet down below, it gives everybody here on Earth the opportunity to dream. And in so dreaming, inspires us to new pathways and new exploration, and new opportunities. TUCKER: Perhaps the argument over manned or unmanned flights was resolved 35 years ago by President Richard Nixon as he addressed astronauts Armstrong and Buzz Aldrin on the surface of the moon.

(on camera): President Nixon told the astronauts that their accomplishments had made the heavens a part of our world. And in a recent Gallup poll, two-thirds of those surveyed agree, the future of space should include manned flights, as well as unmanned missions.

Bill Tucker, CNN, New York.

(END VIDEOTAPE)

DOBBS: When we continue, another American industry devastated by a flood of cheap imports. Hundreds of textile jobs lost in one town.

And the Bush administration continues to defend the outsourcing of American jobs to cheap overseas labor markets. One cabinet member today speaks out against critics of outsourcing. That story and a great deal more still ahead.

(COMMERCIAL BREAK)

DOBBS: It is, in fact, a small part of what is a diminishing U.S. apparel industry. But right now, the United States is fighting a major trade battle over socks. The Commerce Department is expected to announce tomorrow whether it will consider establishing temporary quotas on Chinese imports. Advocates of quotas say socks are the last textile sector in which American companies still dominate the American market. The cheap competition from overseas has rapidly changed that picture as Susan Lisovicz now reports.

(BEGIN VIDEOTAPE)

SUSAN LISOVICZ, CNN CORRESPONDENT, (voice-over): There is a lot of pain in Fort Payne, Alabama. The mills in the self-proclaimed "Sock Capital" of the world have laid off 800 people or nearly 11 percent of its workforce in less than two years.

UNIDENTIFIED MALE: It's been really scary for awhile with our job security, with all this going on, the market is so competitive.

LISOVICZ: Even though the mills have cut costs and improved efficiency, they simply can't compete with an even bigger producer, China, whose entry into the World Trade Organization in 2001 proceeded to unleash millions of imports onto American store shelves.

CHARLES COLE, OWNER, ALABAMA FOOTWEAR: In 2001 they shipped less than one million dozen pairs of socks into the United States. In 2003, they shipped over 22 million dozen pairs into the United States. So, they're increasing at a real rapid rate.

LISOVICZ: And as China's exports have swelled, U.S. market share has shrunk. Just five years ago American mills accounted for 76 percent of the market. Now it's down to about 40 percent. But retailers and consumers haven't been complaining because prices have also come down sharply. The average price of a Chinese pair of socks costs 75 cents in 2001. Two years later, the price was less than half that. Manufacturers say their privately owned mills can't compete against a giant subsidized industry, nor against Chinese workers who earn a fraction of what Americans earn.

JIM SCHOLLAERT, AM. MFG. TRADE ACTION COALITION: China is a huge country. It has tremendous cost of production advantages. They're all subsidized. It's all predatory trade. But the cost of labor, of course is something like 70, 80 cents an hour. Energy is cheaper. Raw materials are cheaper.

LISOVICZ: The Bush administration has imposed emergency quotas to restrict Chinese-made bras, knits and dressing gowns, but most clothing is not protected.

(END VIDEOTAPE)

LISOVICZ: And as a result, American mill workers say it's not a level playing field. They say the loss of more than 3,700 jobs in sock manufacturing over the last three years is proof -- Lou.

DOBBS: From socks throughout the apparel industry, as you know, Susan, 95 percent of all apparel in this country is now imported. Thank you very much, Susan Lisovicz.

On Wall Street today, stock prices rose. The Dow up 55 points, the Nasdaq up 33, the S&P up almost 8.

Former New York Stock Exchange Chairman Richard Grasso tonight fighting back in the controversy and scandal over his multimillion dollar pay package and termination.

Christine Romans is here with the story for us -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, he has been sued over that huge pay package. And now he is counter-suing, claiming he's owed $50 million more in pay. And Grasso sued John Reid, the Stock Exchange new chairman, for defamation of character. This from a man who already collected $139.5 million. Grasso's lawyers claim all that money was legal, and appropriate. And Dick Grasso promises to give the proceeds, if he gets any in this suit, to charity, Lou.

DANIELS: And outsourcing on the minds of the Bush administration today?

ROMANS: Absolutely.

DOBBS: And other top officials.

ROMANS: That's right, Lou. Treasury Secretary John Snow in particular says outsourcing critics need perspective. Economic isolation, he says, is not the answer. We've heard that before. Outsourcing keeps American companies competitive, he says, and helps them find new markets overseas for their products. And from Alan Greenspan today, in a question and answer session with senators he said outsourcing to cheap overseas labor markets is not bad, it will grow and it will raise American living standards.

In his turn at the mike, Senator Bob Bennett of Utah agreed with Greenspan on outsourcing, telling the panel it's a good thing Greenspan is chairman of the Fed and not the chairman of the Council of Economic Advisers like Greg Mankiw. Mankiw, of course, came under fire for his support of outsourcing.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think the response to Greg Mankiw remark was unfortunate.

UNIDENTIFIED MALE: Yes, and you're not going to be invited onto LOU DOBBS any time soon.

(END VIDEO CLIP)

ROMANS: I don't know is that that true, Lou, not invited on LOU DOBBS?

DOBBS: He is absolutely welcome to come here and learn a lot more about outsourcing any time he so chooses. Senator Bennett, Chairman Greenspan.

ROMANS: Hot topic today on the Hill, at least.

DOBBS: A hot topic and one worthy of their attention and further, obviously, further exploration. Two great minds should be able to do that forthwith.

Thank you very much, Christine Romans.

Still ahead here, we'll have the results of tonight's poll. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Well, the results now of tonight's poll, 99 percent of you say states should be required to provide paper recites of electronic votes, only 1 percent of you do not. Ninety-nine percent. Now I'm not sure, but I think that is certainly that is the most lopsided poll that we've ever conducted on this broadcast. We thank you for participating. And we thank you for being with us tonight.

Please join us tomorrow. For all of us here, good night from New York. "ANDERSON COOPER 360" is next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired July 20, 2004 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, HOST: Tonight, former National Security Adviser Sandy Berger has resigned as a campaign adviser to Senator John Kerry. It's been learned that Berger is under investigation by the Justice Department for taking secret documents from the National Archive. Berger says he made a mistake. The Justice Department says its investigation is serious.
(BEGIN VIDEO CLIP)

JAMES COMEY, DEPUTY ATTORNEY GENERAL: We have prosecuted or sought administrative sanctions against any number of people throughout the years for mishandling of classified information.

(END VIDEO CLIP)

DOBBS: An astonishing security lapse at one of this country's most secret nuclear facilities. The government has suspended all work at the Los Alamos National Laboratory. We'll have a report.

Also tonight, I'll be joined by two leading members of the Senate Intelligence Committee, Senator Saxby Chambliss and Senator Ron Wyden. I'll also talk with former CIA Director James Woolsey about this week's report by the September 11 commission.

Palestinian leader Yasser Arafat under siege from his own people, as well as Israel. Arafat struggling to keep control of Gaza. I'll be joined by PLO Adviser Diana Buttu.

Millions of Americans will vote in the November elections with e- voting machines. Critics say those machines are now a threat to our democracy. Congressman William Lacy Clay wants a paper trail for each vote. Congressman Clay is our guest.

And 35 years after Neil Armstrong set foot on the moon, will Americans ever travel out of earth's orbit again?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Spacecraft, unmanned, are not going to be able to always obtain all of the information that we need.

(END VIDEO CLIP)

DOBBS: Tonight, Mission Critical, our special report on the future of American space exploration.

ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, July 20. Here now for an hour of news, debate and opinion is Lou Dobbs.

DOBBS: Good evening.

Tonight, former National Security Adviser Sandy Berger is at the center of a political firestorm after he admitted taking highly classified documents from the National Archive. Law-enforcement sources say Berger hid some of those documents in his clothing, even in his socks. Berger's supporters call that charge absurd. Berger himself says he took the documents by mistake.

But some Republicans say Berger may have taken those documents in order to help Senator Kerry's election campaign. Tonight, Berger resigned as an adviser to the Kerry campaign.

We begin our coverage with Justice Correspondent Kelli Arena -- Kelli?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Lou, Sandy Berger admits this much, that he inadvertently removed highly classified documents from the National Archives and that he accidentally discarded some of them. He's under criminal investigation, according to our sources, and has been since last fall.

Now his lawyer just appeared on CNN exclusively in the last hour, and he had this to say.

(BEGIN VIDEO CLIP)

LANNY BREUER, BERGER'S ATTORNEY: This matter is now over a year old. Sandy Berger reviewed documents in the Archives in July and September and October of 2003, and, from October 2003, the first time that Sandy was notified that this one document was missing, we've been 100 percent open, returned the two documents that were in Sandy's possession immediately, and have tried to have a very open and informed discussion with the Department of Justice.

(END VIDEO CLIP)

ARENA: Now Berger had been asked by former President Clinton to go through thousands of pages of documents which are kept at the National Archives for submission to the September 11 commission. Berger made at least three visits to the Archives during which staff there noticed that some documents were not being returned.

Berger was eventually confronted. He did bring back some of the documents, but not all. The documents that are still missing are described by sources as a critical review of the Clinton administration's handling of the millennium terror plot.

Now Justice officials are not commenting on the investigation, but, generally speaking, they had this to say.

(BEGIN VIDEO CLIP)

COMEY: We take issues of classified information very, very seriously, and, as you know, we have prosecuted or sought administrative sanctions against any number of people throughout the years for mishandling of classified information.

(END VIDEO CLIP)

ARENA: Now it is a crime to mishandle documents, but, because investigators are not dealing with something like handing classified information over to a foreign government, many experts expect a punishment, if there is one, to be light.

(BEGIN VIDEO CLIP)

ROSCOE HOWARD, FORMER U.S. ATTORNEY: You might get your clearance removed for a certain period of time as punishment or certain access will simply be denied to you.

(END VIDEO CLIP)

ARENA: Officials tell CNN the investigation is ongoing, but that there has been no decision made yet on whether to bring criminal charges -- Lou.

DOBBS: Kelli, thank you very much.

Kelli Arena from Washington.

Republicans and Democrats quick to offer their opinions on Sandy Berger's removal of documents from the National Archive. House Speaker Dennis Hastert said he wonders if Berger was trying to rewrite history. Senate Minority Leader Tom Daschle said Berger deserves the benefit of the doubt.

Congressional Correspondent Joe Johns with the report -- Joe?

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Lou, congressional Republicans are slamming Berger for these allegations, and they're highly skeptical of his explanation.

The speaker of the House said he was profoundly troubled. We also have part of his written statement in a graphic. I'll read it to you. It says, "What could these documents have said that drove Mr. Berger to remove them without authorization from a secure reading room for classified documents? What information could be so embarrassing that a man with decades of experience in handling classified documents would risk being caught pilfering our nation's most sensitive secrets?"

And House Majority Leader Tom DeLay weighed in. He went a little further. He said, "That's not sloppy, and that's not inadvertent. I think it's gravely, gravely serious what he did, if he did it. It could be a national security crisis."

Over on the Senate side, Senator Saxby Chambliss, a member of the Intelligence Committee, also talked about it.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: He deserves certainly the benefit of the doubt here.

(END VIDEO CLIP)

JOHNS: That, of course, is Senator Tom Daschle. He, meanwhile, was a person who was actually defending Mr. Berger. He said that as far as he's concerned, the timing is highly suspicious.

This is something, also, a number of Democrats here on Capitol Hill have said. They question the motivations of the leak, the timing, the fact that it comes so far along after the investigation was initiated. They say it's being done for political purposes.

Lou, back to you.

DOBBS: Joe, the motivation, the timing of the leak, certainly curious. But also, certainly, Senator Daschle, other Democrats, are also concerned because it is very curious why a man of Sandy Berger's experience and obvious understanding of classified information and its handling should have been taking material of this nature. What is their reaction to that issue?

JOHNS: Well, on the one hand, the Democrats are trying to point out that these are copies, they say, not originals, that were taken from that location.

On the other hand, Republicans are pointing out that he does have a great deal of experience in national security affairs and the way you're supposed to handle documents of this type.

And many people here on Capitol Hill, who also have to handle such documents, are well aware of the parameters. So it creates quite a stir. And you also do have to factor in on both sides the fact that this is an election year -- Lou.

DOBBS: Absolutely, Joe.

Joe Johns reporting from Capitol Hill.

Thank you.

In another case of not handling documents appropriately, missing secrets in New Mexico. Sensitive information has disappeared from the Los Alamos National Laboratory in New Mexico. That lab is one of this country's most important centers for nuclear weapons research. Investigators are trying to find out what happened to two computer disks that contain highly classified information. They were reported missing two weeks ago.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN BUSINESS CORRESPONDENT (voice-over): Los Alamos National Laboratory is where the nation's nuclear secrets are kept and now, it appears, lost. REP. DIANA DEGETTE (D), ENERGY COMMITTEE: We had four disks disappear earlier this spring. Two of them are still missing. Those disks contain classified information about our nation's nuclear weapons program. So, obviously, we're quite concerned.

PILGRIM: The main work at Los Alamos, one of the country's main nuclear labs, was shut down last Friday until the security breach can be cleared up. No schedule on when it will open again.

Project Government Oversight, a watchdog group, is outraged about lost disks and e-mails sent out that contain classified information. They chalk it up to an organizational culture among the rank-and-file employees who disregard what they see as pedestrian security rules.

The lab director, Pete Nanos said, "Cowboys simply refuse to follow procedure."

DANIELLE BRIAN, PROJECT ON GOVERNMENT OVERSIGHT: The scientists think their work is so important that it must go on at all costs. In reality, what's happening is that they're creating a Homeland Security vulnerability by making these secrets potentially available to people who are hostile to our country.

PILGRIM: Los Alamos, a historic facility where the atomic bomb was created in 1945, has thousands of employees. One of the most high-profile security lapses was when scientist Wen Ho Lee was charged with taking files home. But members of Congress say Los Alamos has a chronic problem.

REP. JOE BARTON (R), ENERGY COMMITTEE CHAIRMAN: I think it's very serious. This is the third or fourth time they've had a loss of classified material at Los Alamos, and, in my opinion, that's three or four times too many. So I'd say it's a serious issue.

(END VIDEOTAPE)

PILGRIM: Now the ultimate solution being considered is to go to a diskless system so employees are not tempted to walk out with their research or take it home.

The Energy and Commerce Committee is holding hearings in September to make sure that, in the meantime, all security measures are followed -- Lou?

DOBBS: Do we know right now, Kitty, the specific nature of the material -- the classified material that was on these disks?

PILGRIM: There's a top-to-bottom search going on. They don't know exactly what's missing, and they don't have an accurate description of what's missing.

DOBBS: I think at this point it's safe to say, for crying out loud, what in the world are they doing?

PILGRIM: Yes, it's quite disturbing.

DOBBS: Kitty Pilgrim, thank you very much.

Well, Iran today insisted it did not play any role in the September 11 terrorist attacks against this country. The Iranian foreign ministry, in fact, said such suggestions are fabrication and fantasy. Yesterday, President Bush said the United States is, as he put it, digging into the facts to determine whether Iran was directly involved in those attacks. The president's comments followed reports that as many as 10 of the September 11 hijackers passed through Iran before September 11.

Former CIA Director James Woolsey says he is not surprised that Iran may have helped al Qaeda terrorists. James Woolsey has just finished giving testimony to the Senate Intelligence Committee, in fact, within just the past hour. He talked there about the need for a massive overhaul on our intelligence agencies. He joins us now from Washington, D.C.

Jim, good to have you here.

JAMES WOOLSEY, FORMER CIA DIRECTOR: Good to be with you, Lou.

DOBBS: The -- let's go first to the issue of the role of Saddam Hussein, Iraq, Iran and the September 11 terrorists. Is there, in the September 11 commission, anything revelatory, determinant that we should focus upon?

WOOLSEY: Well, we don't know yet, but I think what's interesting is that they are finding connections between Iran and al Qaeda, in terms of these passages permitted without stamping passports and perhaps others.

The Senate committee, which I was just testifying before, found some interesting connections not really reported by the staff report of the 9/11 commission. The Senate committee found some interesting connections between Iraq and al Qaeda. The most disturbing, they said, was a dozen or so reports of training on chemical and bacteriological weapons.

But they said the relationship was not one in which Iraq wanted to actually help al Qaeda tactically, but rather one of mutual exploitation between the two. One wanted training. The other would like to see the attacks on the United States. So they may not have been operationally involved working together on individual operations, but they found a lot of connections, and I think we're going to find more and more with Iran and al Qaeda as well.

These two dictatorships of the Middle East both saw the world, I think, as a situation in which the enemy of my enemy is my temporary friend, and, although they may not have had sponsorship or operational relationships with al Qaeda, I imagine each of them was helping it out in some rather substantial ways, and I think we'll learn more and more as time goes on.

DOBBS: So, while you're not suggesting there was a direct causal relationship between Saddam Hussein and the terrorists who carried out September 11 attacks against this country, there certainly was a mutuality of interests that is not in any way dismissed by any of the findings of either the Senate Intelligence Committee, or, to our knowledge, the September 11 commission?

WOOLSEY: I think that's right, the two big question marks still on Iraq and al Qaeda and operations.

One is Ahmed Hikmat Shakir, who was an Iraqi who was in the meeting in Malaysia in January of 2000 with some of the terrorists who brought off 9/11. Generally, it's regarded as probably a planning meeting for 9/11. Recent information from Iraq has suggested that he may have been a member of Saddam's Fedayeen under the command of Uday, Saddam's son. That still remains to be completely spelled out.

And then, of course, you've got from Mr. Yasin, one of the two main terrorists of '93 in attacking the World Trade Center who went back to Iraq, lived there, was paid by the Iraqi government after the fact. So we don't have either Yasin or Shakir in custody. Stay tuned on those, I think.

DOBBS: Yes. And we don't have Osama bin Laden in custody either and a number of other people within al Qaeda that we would like to have.

Let's turn to the issue of Iran. Two years ago -- more than two- and-a-half years ago now -- just about two-and-a-half ago, President Bush in the State of the Union message referred to North Korea, to Iran and Iraq as the axis of evil.

This administration has backed off considerably from that kind of hyperbolic language, if you will, bellicose language, and yet we continue to hear mounting evidence of an important nature with Iran, whether it is the building of nuclear weapons programs, whether it is their support of insurgents and complicity with insurgents in Iraq, or whether it be their support of al Qaeda broadly and specifically in support of al Qaeda on September 11.

Why is there this reserve in dealing with this issue publicly, directly and forthrightly by the administration?

WOOLSEY: Well, the president may have stretched on axis a little bit because there probably wasn't any sort of axis-like agreement between these three, but evil, it seems to me, was right on then and it's right on now.

The Iranian people, the women, the young people -- and half the country's 19 or younger -- and even a number of the clerics are really very hostile to these crazy theocratic mullahs like Khomeini who control things in Tehran, and the Iranian government is working on nuclear weapons. I think there's no reasonable dispute about that. And, certainly, they support Hezbollah strongly, a major terrorist organization.

So, you know, I don't think it would be wise for us to use military force against Iran. We'd drive all these wonderful women and students into the arms of these crazy mullahs. Buy I think we want to be not only distant from them, but use whatever levers we and other countries can to weaken these rulers, these theocratic rulers in Tehran, and let the Iranian people run their own government.

DOBBS: And speaking of running our own government, I would like your comment, your thoughts on Sandy Berger, whom you know, as the former national security adviser, walking away with documents from the National Archive, classified documents, now under investigation, an investigation the Justice Department says it's taking seriously. Your thoughts on both that and the timing of the revelation that such an investigation is underway?

WOOLSEY: Well, it has to be looked into thoroughly and carefully. But I've known Sandy Berger for 20 years, and I find it hard to believe that he would maliciously or intentionally do something like this.

My -- you know, I had a security violation once when I was ambassador 15 years ago in Moscow. I had a classified document, and I was working on it in one part of the embassy, and I put it with some other papers and left it in the wrong part of the embassy, and I got a security violation.

Almost anybody who's worked on things like this has done something like this from time to time. I think we ought to withhold judgment until Sandy's story is out.

DOBBS: Jim Woolsey, thanks for being here to share your judgment about that issue and a host of others. Thanks.

WOOLSEY: Good to be with you.

DOBBS: Still ahead, I'll talk with two leading members of the Senate Intelligence Community, Senator Ron Wyden and Senator Saxby Chambliss about the need for a massive overhaul of our intelligence agencies.

Also, millions of Americans will be voting in the presidential election with unproved and often unreliable electronic voting machines. Congressman William Lacy Clay says those machines must leave a paper trail. Congressman Clay is our guest.

And Yasser Arafat faces a challenge to his authority in Gaza, not from the Israelis, but his own people. I'll be joined by adviser to the PLO Diana Buttu next.

(COMMERCIAL BREAK)

DOBBS: The Senate Intelligence Committee today heard testimony on the need for a massive overhaul of this country's intelligence agencies. The committee's hearing comes two days before the release of the September 11 commission report. The commission is expected to call for the creation of a new intelligence czar to oversee both the CIA and the community of 14 other intelligence agencies.

Joining me now, two leading members of the Intelligence Committee, Senator Ron Wyden of Oregon, Senator Saxby Chambliss of Georgia.

Good to have you here.

Let me start, if I may with you, Senator Wyden. The call for a czar to cover all of the intelligence community. Are you -- at this point, how do you feel about that at this juncture?

SEN. RON WYDEN (D-OR), INTELLIGENCE COMMITTEE: I'm for the idea, Lou. It seems to me that better accountability and better management can help us deal with some of the problems that we saw in our report.

For example, it's clear there was inadequate information sharing between intelligence and defense and law-enforcement agencies. I think making sure that there's some real accountability, rather than having these decisions strewn all over Washington, makes sense.

DOBBS: And, Senator Chambliss, your thoughts on the same issue?

SEN. SAXBY CHAMBLISS (R-GA), INTELLIGENCE COMMITTEE: Well, I'm not sold on it yet, Lou. I think there's still some real questions that have to be answered relative to the power and authority that's to be granted to any director of national security, whether or not we're going to give them not just budgetary authority, but really authority to hire and fire and to really put pressure on the intelligence community.

That has not been resolved yet. We've started some hearings. We had one in the Intel Committee today, and Ron and I were both there, and we're going to continue down this road. I'm very open to the idea because, obviously, we've got real problems in the intelligence community, both within our country and outside our country that have got to be resolved. If that's the answer to it, I'm going to be all for it.

WYDEN: Lou, I think the point really is -- and Saxby makes it -- we do have to have real authority to get these changes, and the fact is after 9/11, after this significant intelligence and security failure, nobody was fired. One of the reasons I support this idea is to have some accountability so that when mistakes like that are made, we see changes.

DOBBS: Let me ask you both about -- I was just talking with former CIA Director Jim Woolsey about what we're learning incrementally, at least, day by day, on the relationship between Iran, Iraq, the al Qaeda, their disparate roles in what was the September 11 terrorist attacks against this country, the support by Iran of insurgency in Iraq.

Is it your sense that we have reliable intelligence on all of these issues, not a causal relationship between Saddam Hussein's Iraq and the September 11 hijackers, but the affiliation and the broad support of interests amongst Iraq, the al Qaeda and Iran?

CHAMBLISS: Well...

DOBBS: And if I may...

CHAMBLISS: ... Lou, I think what the problem is, that we're looking back and finding out this kind of information now. We should have had that information looking forward, and that's where the real breakdown is in the intelligence community.

Should we be surprised that there was some sort of connection between Iran and al Qaeda? No, we shouldn't have because we know that they've been a terror-sponsoring nation, and they continue to be that way.

But what we've got to do is we've got to figure out better methods of getting that information up front, rather than looking behind us and picking up on it after the fact.

WYDEN: Lou, I think the Iranian leaders are bad people with multiple priors. The fact of the matter is they've been involved in supporting terrorists around the world. They're in the nuclear proliferation business. They do not wish our country well.

But, at this point, there is no evidence of a cooperative relationship between the Iranians and 9/11 and al Qaeda, and, of course, we heard some of that before with respect to Iraq, and I think we've got to stick to the facts and insist that it be proved.

DOBBS: Well, let's, if I may, ask the final question on Sandy Berger who resigned, as you know, as an adviser to the campaign of Senator Kerry today, once it was disclosed that there was an investigation of his taking documents -- classified documents -- from the National Archive.

Senator Wyden, what is your reaction to both that charge and the timing of the leak?

WYDEN: Sandy Berger has already admitted that this was a significant mistake. There's an ongoing investigation. Nobody is oblivious, Lou, to the fact that we're moving into the fall of even numbered years, and there are going to be charges thrown every which way.

But, to me, the bottom line is there is no history -- no prior history -- of Sandy Berger playing politics this way, and I think we ought to let the investigation go forward and the facts come out.

DOBBS: Senator Chambliss, you have the final word here.

CHAMBLISS: Well, it's a very strange situation. Sandy Berger is a professional, very competent, intelligence-oriented individual, who's provided a good public service. Why in the world somebody like Sandy Berger would take classified documents that he knew were sensitive and stick them in his pants and smuggle them out of a building is just -- I mean, it's amazing.

And, you know, it's -- it is a political year, but that has nothing to do with politics. This is a serious breach within the intelligence community. And Ron's right. We've got to let it play out. And I just hope that those documents weren't used in an improper way, politically or otherwise. DOBBS: Senator Chambliss, Senator Wyden, we thank you both for taking time, as you're pursuing an important part of the nation's business as members of the Intelligence Committee, to be with us tonight. Thank you both.

WYDEN: Thank you.

CHAMBLISS: Thank you, Lou.

DOBBS: Just ahead, it was supposed to be the antidote for hanging chads, but electronic voting is now facing a barrage of criticism and raising concerns about a democracy putting itself in jeopardy. We'll have a special report next.

And Gaza in chaos. The unrest continues despite a Cabinet reshuffling within the Palestinian government. I'll be talking with one of the PLO's adviser, Diana Buttu, next.

Stay with us.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Here now for more news, debate and opinion, Lou Dobbs.

DOBBS: We've reported extensively here on rising concerns about electronic voting in our upcoming presidential election. Millions of us are expected to vote on touch-screen machines which leave no paper record, but critics say e-voting machines are a threat now to our very democracy.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Florida voters dropped off boxes of petitions requesting the secretary of state reconsider the use of electronic voting machines in 15 of the state's 67 counties this election. The e-voting machines have already come under fire. An investigation by the Florida "Sun-Sentinel" found in the March primary, the ATM-style machines failed at least eight times more than paper ballots read by an optical scanner.

SEN. BILL NELSON (D), FLORIDA: This is about people having the right to vote and having the knowledge and the confidence that their vote is being counted and counted in the way that they intended it.

SYLVESTER: Senator Bill Nelson is asking the Justice Department and the Florida secretary of state's office to conduct an independent audit of the machines.

But the problem with electronic machines is not isolated to Florida. Secretaries of state in California and Ohio have barred the use of the machines in this election.

A congressional subcommittee held a hearing to address the issue, but lawmakers acknowledge time is running out.

REP. ADAM PUTNAM (R), FLORIDA: Anyone could have been Florida in 2000. And in my opinion, we haven't passed any legislation that will prevent another Florida in 2004.

SYLVESTER: Congress did pass the Help America Vote Act of 2002. That was supposed to prevent another Florida debacle. But Congress never fully funded the federal agency charged with election oversight. As a result, there are no uniform standards or certification processes for voting machines.

MICHAEL SHAMOS, CARNEGIE MELLON UNIVERSITY: When a flaw is detected in a voting machine, there's no compulsory procedure for reporting it, studying it, repairing it, or even learning from the experience. The voting machine industry is unregulated and has not chosen to regulate itself.

SYLVESTER: Unlike the 2000 election, when there were actual paper ballots to recount, most of the electronic voting machines do not keep a paper audit.

(END VIDEOTAPE)

SYLVESTER: The Florida secretary of state's office remains confident in the security of the electronic machines and has so far declined to conduct an audit. The Justice Department has yet to comment on the audit request -- Lou.

DOBBS: Lisa, thank you very much. Lisa Sylvester.

I'm joined now by the ranking Democrat on the House Technology Subcommittee, Congressman William Lacy Clay of Missouri, supports electronic voting, but only if it has a paper record of the vote.

He joins us tonight from Capitol Hill. Good to have you with us, Congressman.

REP. WILLIAM LACY CLAY (D), MISSOURI: Thank you, Mr. Dobbs, for having me on this evening.

DOBBS: The idea that these concerns are now rising, and it seems with greater frequency and greater passion as almost each month passes as we approach November, what is going to be done? What can be done for those like yourself who are concerned about the absence of a paper record of a vote?

CLAY: Well, Lou, we certainly do not want a repeat of the 2000 elections with all of the chaos, chaos, and all of the hanging chad, and what have you. I think that the rest of the country should follow the lead of the secretary of states of Ohio and California, and in my case, Missouri. The Missouri secretary of state, Matt Blunt, had said that he will suspend the use of all electronic voting machines until they can be verified and certified that they actually count the votes accurately. These machines are susceptible to be -- to hacking, susceptible to being pre-programmed, re-programmed, and there is a real security issue here. DOBBS: You heard from the vendors and manufacturers of these machines today. To what degree were you reassured about what they testified before your committee?

CLAY: Well, it was not too reassuring as far as the testimony received. We have to come up with a foolproof system of making sure that every American who wants to vote and who votes, that their vote is counted accurately. We -- and that is why I have signed on with 130 other of my colleagues on a bill sponsored by Congressman Rush Holt of New Jersey that would require the production of paper ballots from electronic voting machines.

DOBBS: As you know, I've talked with Congressman Holt about that legislation. The likelihood that anything can be done with that legislation, Congressman Clay, is minimal at best before the election itself. What do you think will be the effect come November?

CLAY: Well, I agree with you. The likelihood of us passing the bill is not good at this time. I would think that more and more states will follow the lead of California and Ohio and suspend the use of the electronic voting machines, even though they have already bought these machines, the different locales and jurisdictions. But if it's not verifiable, if the voter's vote cannot be verified, then we cannot trust the technology at this point.

DOBBS: And with that added ingredient in this election, according to some, which is though this presidential election could be just as close as the last. We thank you very much, Congressman, for being with us here. Congressman William Clay of Missouri, thank you.

That brings us to the subject of our poll tonight. The question, do you believe states should be required to provide paper receipts of electronic votes? Yes or no? Please cast your vote at cnn.com/lou. We'll have the results upcoming in the show.

Tonight's thought is on democracy. "Let us never forget that government is ourselves and not an alien power over us. The ultimate rulers of our democracy are not a president and senators and congressmen and government officials, but the voters of this country."

President Franklin D. Roosevelt.

In tonight's "Campaign Journal," President Bush today traveled to two swing states, Iowa and Missouri. President Bush campaigning with his twin daughters. The first time they've made a joint appearance on the campaign trail. President Bush today focused much of his attention on the war on terror, saying America should be proud that it liberated Iraq.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Nobody wants to be the war president. I want to be the peace president. I want to be the president that after four years, four more in this office, I want people to look back and say, the world is a more peaceful place.

(END VIDEO CLIP)

DOBBS: Senator John Kerry, meanwhile on vacation in Nantucket. Senator Kerry is expected to meet up with Senator Edwards Friday to kick off their tour of America. A tour that will lead them to Boston for next week's Democratic National Convention.

Just ahead here, I'll be talking with the PLO's legal adviser, Diana Buttu, about the threat to Yasser Arafat's leadership and massive protests in Gaza and the diminishing prospects for a resolution between Israelis and Palestinians.

Also tonight, "Mission Critical," our special report. A look at man versus machine in space, and the future of American manned space flight.

And don't tell these hard-working Americans that free trade is not a threat to our economy. Hundreds of jobs have been slashed in Alabama. Textile mills there trying to compete with cheap Chinese imports. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Palestinian President Yasser Arafat today formally rejected Prime Minister Ahmed Qorei's resignation. Prime Minister Qorei insisted his resignation stands, however.

This turmoil in the upper ranks during an unprecedented challenge to President Arafat's power disturbing. Separately, Arab and European -- European Union diplomats at the United Nations wrangling over a resolution to pressure Israel to tear down its West Bank barrier.

Joining me now to talk about the issues the Middle East is now facing, Diana Buttu. She is legal adviser to the Palestine Labor (sic) Organization. She joins us from Ramallah. Good to have you with us.

First question has to be, is Prime Minister Qorei still prime minister? Does his resignation stand, or is it, in fact, accepted?

DIANA BUTTU, LEGAL ADVISER, PLO: Well, he has indicated that he is willing to stay on in the form of a temporary government until an alternative prime minister is found, or until alternative arrangements are made. So currently as it stands, he still remains the Palestinian prime minister until such time as his premiership is revoked, not only by President Arafat, but also by the Palestinian Legislative Council.

DOBBS: And Prime Minister Qorei basically saying to Mr. Arafat, give the cabinet more power, step back, and is there, in your mind, at least, in your understanding, any sense that Arafat is open to such a request?

BUTTU: Well, I don't think that that's exactly the request that's been made. The prime minister has made it very clear that it's not just a question of power sharing, but that there's also a lot of underlying problems, namely Israel's military occupation. Israel hasn't allowed for Palestinian movement, it hasn't lifted any of the conditions of the occupation. In fact, has intensified the occupation since the prime minister has taken office.

So it's not simply a question of Arafat himself, but it's also a question of what it is that Israel is doing, particularly as it continues to build the wall inside the West Bank.

But when it comes to President Arafat, there has, in fact, been such a request made. But the question, you know, it's important to remember that Prime Minister Qorei was not, in fact, an elected person. He was simply an appointed person. So at the end of the day, it's not up to the Palestinian prime minister. But it is, in fact, up to the Palestinian president, who is Yasser Arafat, the only democratically elected leader, to be able to determine what power should be granted and what power shouldn't be granted.

DOBBS: Now, I understand, but -- and I quite take your point that there are a host of issues facing the leadership of the PLO. But in this specific case, sharing power, an important part of the issue here, is it your understanding that President Arafat is so disposed to share such power with the cabinet?

BUTTU: He has, in fact, stated that he is definitely willing to hand over a great number of powers to the Palestinian prime minister. But I think that this issue of powers is simply a ruse. The Palestinian prime minister, nor the president have any powers whatsoever. It's important to keep the occupation in context. This is a government that is operating under Israel's military rule. This isn't a government that's operating freely.

So at the end of the day, yes, powers may be transferred or may not be transferred, but really the real question to be asked is, what are these powers really all about? And in the end, they're worth nothing, because Israel continues to maintain its military occupation over the Palestinian territories.

DOBBS: I quite take your point. The fact is, on this broadcast last night, Israel general counsel in New York, Alon Pinkas, said, referring to Qorei, he is a good man, a sincere and effective person. And I'm paraphrasing the ambassador's words. But to hear that kind of comment, when we have not heard a similarly supportive statements from the other members of the PLO leadership in Ramallah is quite striking. Why would that be?

BUTTU: Oh, no, that's in fact not correct, Lou. In fact, it's important to remember that the Palestinian prime minister was appointed by not only President Arafat but also by the PLO. This is a person in whom a great deal of faith has been put in and a great deal of faith continues to remain, so that's absolutely not correct at all. This is a person that the Palestinians, the Palestinian leadership itself has put forward as the candidate, and by all means we're certainly hoping that the Palestinian prime minister can -- we're hoping that he will succeed.

But the real question that remains to be asked is how can such a prime minister succeed when in the end he remains subject to Israel's military rule? DOBBS: As does everyone at this point involved in that region, specifically within Gaza, in which Israel now says unilateral disengagement is in course. Will that either help or be supportive of what Prime Minister Qorei had wanted to accomplish?

BUTTU: Well, the Gaza plan is what Sharon is trying to do, is for the past 3 1/2 years he systematically destroyed the Palestinian Authority. And now that he's destroyed the Palestinian Authority, he's saying that now he's going to withdraw from the Gaza Strip, where the Palestinian Authority has been completely destroyed.

This is why the Palestinians have been repeatedly calling for a rebuilding, not only of security forces, but of the authority itself, with guarantees by both Israel and the United States that Israel will no longer attack the Palestinian Authority as it has done over the course of the past 3 1/2 years.

Such guarantees of course have not been given by Israel, nor by the United States, and so accordingly I think that if such a pullout actually happens, which I don't think it will happen, then what we will continue to see is simply a continuation of this same chaos.

DOBBS: Diana Buttu...

BUTTU: I think, you know, just to end on that point, I think that it's very...

DOBBS: I'm sorry, go ahead.

BUTTU: I was going to say that I think that at this point, it's very important to highlight that the Palestinians have been calling for elections, and that elections have now been halted three times by Israel. I think it's time that we look very closely and very hard at the issue of elections, and allow Palestinians to express freely who it is that they want to be leading them, and not have the United States, or Israel, or any other country around the world expressing who it is that should be leading the Palestinians.

DOBBS: Diana Buttu, we thank you very much for being with us. Legal adviser to the PLO.

BUTTU: Thank you.

DOBBS: Tonight from Ramallah.

A reminder to vote in our poll tonight. The question -- do you believe states should be required to provide paper receipts of electronic votes? Yes or no? Please cast your vote at cnn.com/lou. We'll have the results later in the broadcast.

Still ahead here, exploring space. Man or machine? A fascinating debate within the scientific community. Thirty-five years after man first set foot on the moon. We'll have our special report, "Mission Critical," coming up next.

And a flood of cheap imports from China threatening to destroy a small town in Alabama, the center of one of this country's last surviving textile industries. That story and a great deal more are still ahead here tonight.

(COMMERCIAL BREAK)

DOBBS: "Mission Critical," our special report on the future of American space exploration.

It was 35 years ago today that Neil Armstrong set foot on the moon. But the most recent successes in space exploration have not involved humans in space, but rather machines. And that is at the center of a debate over whether manned or unmanned missions will be the focus of NASA in the future. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): The beauty, the mystery, the danger, and the drama will always be a part of space exploration. But what will man's role be?

Since the Apollo missions, man's role has been limited to the space shuttle and the International Space Station. And yet NASA makes no clear distinction between manned and unmanned missions, considering them both pieces of the whole picture.

PAUL HARDERSEN, SPACE STUDIES, UNIVERSITY OF NORTH DAKOTA: Spacecraft, unmanned, are not going to be able to always obtain all of the information that we need. I mean, that's simply not going to happen. They're only so limited, they only have so many detectors of certain types, and it depends on what they're going to do.

TUCKER: Proponents of unmanned missions argue that such projects are cheaper and far less risky in terms of human life, the only practical way to continue to explore space. The argument for machines is bolstered by the success of the Mars rovers.

But as one person within NASA pointed out, it takes a rover hours to move the inches that it would take an astronaut seconds to explore.

And then there is man's quest to explore.

UNIDENTIFIED MALE: Houston, Tranquility base here. The eagle has landed.

TUCKER: Would this moment have been the same, or the tension as dramatic had it belonged to a machine? And a robot could have never given us this for the history books.

NEIL ARMSTRONG, ASTRONAUT: That's one small step for man, one giant leap for mankind.

DAVID HEYMAN, CSIS: When you place a person up there floating in space, and showing us our small planet down below, it gives everybody here on Earth the opportunity to dream. And in so dreaming, inspires us to new pathways and new exploration, and new opportunities. TUCKER: Perhaps the argument over manned or unmanned flights was resolved 35 years ago by President Richard Nixon as he addressed astronauts Armstrong and Buzz Aldrin on the surface of the moon.

(on camera): President Nixon told the astronauts that their accomplishments had made the heavens a part of our world. And in a recent Gallup poll, two-thirds of those surveyed agree, the future of space should include manned flights, as well as unmanned missions.

Bill Tucker, CNN, New York.

(END VIDEOTAPE)

DOBBS: When we continue, another American industry devastated by a flood of cheap imports. Hundreds of textile jobs lost in one town.

And the Bush administration continues to defend the outsourcing of American jobs to cheap overseas labor markets. One cabinet member today speaks out against critics of outsourcing. That story and a great deal more still ahead.

(COMMERCIAL BREAK)

DOBBS: It is, in fact, a small part of what is a diminishing U.S. apparel industry. But right now, the United States is fighting a major trade battle over socks. The Commerce Department is expected to announce tomorrow whether it will consider establishing temporary quotas on Chinese imports. Advocates of quotas say socks are the last textile sector in which American companies still dominate the American market. The cheap competition from overseas has rapidly changed that picture as Susan Lisovicz now reports.

(BEGIN VIDEOTAPE)

SUSAN LISOVICZ, CNN CORRESPONDENT, (voice-over): There is a lot of pain in Fort Payne, Alabama. The mills in the self-proclaimed "Sock Capital" of the world have laid off 800 people or nearly 11 percent of its workforce in less than two years.

UNIDENTIFIED MALE: It's been really scary for awhile with our job security, with all this going on, the market is so competitive.

LISOVICZ: Even though the mills have cut costs and improved efficiency, they simply can't compete with an even bigger producer, China, whose entry into the World Trade Organization in 2001 proceeded to unleash millions of imports onto American store shelves.

CHARLES COLE, OWNER, ALABAMA FOOTWEAR: In 2001 they shipped less than one million dozen pairs of socks into the United States. In 2003, they shipped over 22 million dozen pairs into the United States. So, they're increasing at a real rapid rate.

LISOVICZ: And as China's exports have swelled, U.S. market share has shrunk. Just five years ago American mills accounted for 76 percent of the market. Now it's down to about 40 percent. But retailers and consumers haven't been complaining because prices have also come down sharply. The average price of a Chinese pair of socks costs 75 cents in 2001. Two years later, the price was less than half that. Manufacturers say their privately owned mills can't compete against a giant subsidized industry, nor against Chinese workers who earn a fraction of what Americans earn.

JIM SCHOLLAERT, AM. MFG. TRADE ACTION COALITION: China is a huge country. It has tremendous cost of production advantages. They're all subsidized. It's all predatory trade. But the cost of labor, of course is something like 70, 80 cents an hour. Energy is cheaper. Raw materials are cheaper.

LISOVICZ: The Bush administration has imposed emergency quotas to restrict Chinese-made bras, knits and dressing gowns, but most clothing is not protected.

(END VIDEOTAPE)

LISOVICZ: And as a result, American mill workers say it's not a level playing field. They say the loss of more than 3,700 jobs in sock manufacturing over the last three years is proof -- Lou.

DOBBS: From socks throughout the apparel industry, as you know, Susan, 95 percent of all apparel in this country is now imported. Thank you very much, Susan Lisovicz.

On Wall Street today, stock prices rose. The Dow up 55 points, the Nasdaq up 33, the S&P up almost 8.

Former New York Stock Exchange Chairman Richard Grasso tonight fighting back in the controversy and scandal over his multimillion dollar pay package and termination.

Christine Romans is here with the story for us -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, he has been sued over that huge pay package. And now he is counter-suing, claiming he's owed $50 million more in pay. And Grasso sued John Reid, the Stock Exchange new chairman, for defamation of character. This from a man who already collected $139.5 million. Grasso's lawyers claim all that money was legal, and appropriate. And Dick Grasso promises to give the proceeds, if he gets any in this suit, to charity, Lou.

DANIELS: And outsourcing on the minds of the Bush administration today?

ROMANS: Absolutely.

DOBBS: And other top officials.

ROMANS: That's right, Lou. Treasury Secretary John Snow in particular says outsourcing critics need perspective. Economic isolation, he says, is not the answer. We've heard that before. Outsourcing keeps American companies competitive, he says, and helps them find new markets overseas for their products. And from Alan Greenspan today, in a question and answer session with senators he said outsourcing to cheap overseas labor markets is not bad, it will grow and it will raise American living standards.

In his turn at the mike, Senator Bob Bennett of Utah agreed with Greenspan on outsourcing, telling the panel it's a good thing Greenspan is chairman of the Fed and not the chairman of the Council of Economic Advisers like Greg Mankiw. Mankiw, of course, came under fire for his support of outsourcing.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think the response to Greg Mankiw remark was unfortunate.

UNIDENTIFIED MALE: Yes, and you're not going to be invited onto LOU DOBBS any time soon.

(END VIDEO CLIP)

ROMANS: I don't know is that that true, Lou, not invited on LOU DOBBS?

DOBBS: He is absolutely welcome to come here and learn a lot more about outsourcing any time he so chooses. Senator Bennett, Chairman Greenspan.

ROMANS: Hot topic today on the Hill, at least.

DOBBS: A hot topic and one worthy of their attention and further, obviously, further exploration. Two great minds should be able to do that forthwith.

Thank you very much, Christine Romans.

Still ahead here, we'll have the results of tonight's poll. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Well, the results now of tonight's poll, 99 percent of you say states should be required to provide paper recites of electronic votes, only 1 percent of you do not. Ninety-nine percent. Now I'm not sure, but I think that is certainly that is the most lopsided poll that we've ever conducted on this broadcast. We thank you for participating. And we thank you for being with us tonight.

Please join us tomorrow. For all of us here, good night from New York. "ANDERSON COOPER 360" is next.

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