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Lou Dobbs Tonight
New Details About Terrorist Communications; Wal-Mart Close To Settling Justice Probe; Interview With Robert Kennedy, Jr.; SF Woman Wins Malpractice Suit
Aired August 04, 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.
KITTY PILGRIM, CNN ANCHOR: Tonight, dramatic new information about al Qaeda communications with possible terrorist cells in the United States.
Plus, an extraordinary day in the election campaign. Senator Kerry and President Bush campaigned in the same town at almost the same time.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm looking forward to the race. I'm here to ask for your vote and ask for your help.
(END VIDEO CLIP)
PILGRIM: I will talk with one of the president's most outspoken critics, Robert Kennedy, Jr., author of "Crimes Against Nature."
Also tonight, Wal-Mart, this country's biggest retailer. Is Wal- Mart good or bad for America?
(BEGIN VIDEO CLIP)
KEN JACOBS, U.C. BERKELEY LABOR CENTER: They're really leading a race to the bottom.
(END VIDEO CLIP)
PILGRIM: We'll have two opposing views on Wal-Mart's impact on this country in tonight's Face Off.
ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, August 4. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs who is on vacation, Kitty Pilgrim.
PILGRIM: Good evening.
Tonight, CNN has learned new details about communications between suspected al Qaeda operatives in Pakistan and possible terrorist cells in this country. This new information comes after the federal government ordered increased security in New York, New Jersey and Washington. Government officials insist the al Qaeda threat is very real.
Justice Correspondent Kelli Arena reports.
KELLI ARENA, CNN JUSTICE CORRESPONDENT: Kitty, two senior U.S. government sources tell CNN that intelligence found in Pakistan shows evidence that suspected al Qaeda operatives in Pakistan contacted an individual or individuals in the United States in the past few months.
Now these U.S. officials would not characterize that communication, but two senior Pakistani intelligence officials have told CNN that there's evidence alleged al Qaeda computer expert Muhammad Naeem Noor Khan contacted what they refer to as six al Qaeda operatives in the U.S.
Now the information is important because it lends credibility to the belief that al Qaeda may have operatives in place in the United States. In an interview with CNN's Aaron Brown, Homeland Security Secretary Tom Ridge would not comment specifically, but he did have this to say.
(BEGIN VIDEO CLIP)
TOM RIDGE, SECRETARY, HOMELAND SECURITY: I think we ought to just let it be said that we are exploring every conceivable potential contact that any al Qaeda operative anywhere in the world might have had with anyone in the United States.
(END VIDEO CLIP)
ARENA: The U.S. sources also say that there is other information from Pakistan that has led to several investigations in the United States centered on whether there are any individuals or cells plotting an attack in the U.S.
And this news comes on top of word from the Bush administration that there was a separate stream of intelligence indicating al Qaeda's intent to hit financial targets that corroborated the information gathered in Pakistan. As you know, there was a lot of criticism that the information, though it was very detailed, was old and, therefore, not very useful -- Kitty.
PILGRIM: All right. Thanks very much. Kelli Arena.
Now the global war on terror is a major issue in the presidential campaign. Some Democrats say the president is using the public's fear of terrorism for his own political advantage, and Republicans say that claim is nonsense.
Senior Political Analyst Bill Schneider reports.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): The war in Iraq has always been a political issue. Now terror, too, has become politics. The administration says be afraid, be very afraid.
We are not yet safe. Threats are still out there. RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: We are not yet safe. Threats are still out there.
SCHNEIDER: The Homeland Security secretary's message was specific and sobering.
RIDGE: It is alarming in both the amount and specificity of the information.
SCHNEIDER: Many Democrats were alarmed -- by the timing of the alert -- right after John Kerry's triumphant convention, based on intelligence that was several years old. They saw politics, but Kerry couldn't say that without sounding cynical.
SEN. JOHN F. KERRY (D-MA), PRESIDENTIAL NOMINEE: I haven't suggested that, and I won't suggest that.
SCHNEIDER: So, others said it, with or without Kerry's approval.
HOWARD DEAN (D), FMR. PRESIDENTIAL CANDIDATE: It's just impossible to know how much of this is real and how much of this is politics.
SCHNEIDER: No fear of sounding cynical here.
JON STEWART, COMEDIAN: With the Democratic Party now in the spotlight. many people are wondering...
Yes. Oh, this just in. I'm sorry. Terror warning.
OK. All right. Well, I have to stop -- we'll have to stop talking about the Democrats.
SCHNEIDER: The administration was shocked -- shocked -- to hear that politics might be going on.
RIDGE: We don't do politics in the Department of Homeland Security.
SCHNEIDER: Oh, no?
RIDGE: the kind of information available to us today is the result of the president's leadership in the war against terror.
SCHNEIDER: Democrats, too, can turn terror into politics. They can accuse the White House of fearmongering.
SEN. TED KENNEDY (D), MASSACHUSETTS: A true leader inspires hope and vanquishes fear. This administration does neither. Instead, it brings fear.
SCHNEIDER: They can argue that Democrats would do better.
KERRY: I believe that I can fight a more effective war on terror than George Bush is. I know I can fight a more effective war.
SCHNEIDER: How?
KERRY: I will build and lead strong alliances.
SCHNEIDER: And they can charge that the administration's policies, like the war in Iraq, have made the U.S. more vulnerable.
KERRY: I believe this administration and its policies is actually encouraging the recruitment of terrorists.
(END VIDEOTAPE)
SCHNEIDER: This week, a barrier was broken. The war on terror is now officially a political issue -- Kitty.
PILGRIM: All right. Thanks very much.
Bill Schneider.
Vice President Dick Cheney today launched a new attack on Democrats who have questioned the latest terror alert.
Elaine Quijano reports from the White House -- Elaine?
ELAINE QUIJANO, CNN White House CORRESPONDENT: Good evening, Kitty.
White House officials firmly maintain that this latest terror alert was motivated by what they say was a solid interpretation of the intelligence.
This morning , White House spokesman Scott McClellan reiterating that to reporters, telling them that two different intelligence streams came to light more fully last Friday, and that all the streams of information put together paint an "alarming picture."
Now his comments came ahead of a campaign swing by President Bush. He made a stop in Davenport, Iowa, and, at this hour, he is now in Minnesota -- Mankato, Minnesota -- bringing with him the message that America needs strong leadership in the fight against terrorism and that he is the leader to bring that to the American people.
But it was the vice president, Dick Cheney, on a campaign swing through Missouri who came out with some pointed remarks earlier today. Mr. Cheney attacked Democrat Howard Dean for comments he made over the weekend, suggesting that the president was playing politics with the issue of terrorism.
(BEGIN VIDEO CLIP)
CHENEY: There have been some commentary from some of our critics -- Howard Dean comes immediately to mind -- saying somehow this is being hyped for political reasons, that the data that we collected here, the casing reports that provided the information on these prospective attacks is old data, i.e., 4 or 5 years old. That just tells me Howard Dean doesn't know anything about how these groups operate. (END VIDEO CLIP)
QUIJANO: Now White House officials have said for some time that they will err on the side of caution when it comes to the issue of terrorism. They also say they fully understand that, that will open them up to criticism and questions about the timing and the possible politicizing of the issue of terrorism. But they maintain that they will take whatever action they feel is necessary and take the criticism that goes along with that.
Kitty, back to you.
PILGRIM: All right. Thanks very much.
Elaine Quijano.
A new opinion poll says Senator Kerry is ahead in the battleground states. The Marist College poll says Senator Kerry has 49 percent support in battleground states, compared with 42 percent for President Bush. But they're in a virtual dead heat nationally.
On the campaign trail today, both candidates held rallies in the same critically important town in a key battleground state. The near simultaneous rallies were held just three blocks from each other in Davenport, Iowa.
And Dana Bash reports -- Dana.
DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Kitty, the local paper described what went on here today as the duel in Davenport, and, even for Iowans used to seeing an influx of politicians in their state, people here told us that this was something even for them to behold.
Now this is a town of just under 100,000 people, and, as you mentioned, the two candidates were at the same time discussing their issues practically within shouting distance. Now the president had held a very large rally at the banks of the Mississippi.
His strategy was not even to address the fact that his opponent was here, too. But he launched into him on a number of issues, everything from the war in Iraq to the economy to health care.
(BEGIN VIDEO CLIP)
BUSH: To improve health care, we must end the frivolous lawsuits that raise health-care costs and drive doctors out of medicine. You cannot be pro-patient and pro-doctor and pro-trial lawyer at the same time. You have to choose. My opponent made his choice, and he put him on the ticket.
(END VIDEO CLIP)
BASH: As Senator Kerry took a much more direct approach today, he played on a new Bush slogan, saying that if only the president would turn the corner here, the two could have a great discussion. Now is it a coincidence that the two men were here at the same time? Both campaigns accuse the other of following them here. But regardless, it certainly does illustrate how competitive this state is. This is a state that President Bush lost by just more than 4,000 votes last time around, and it's an area, particularly Davenport, with a number of undecided and independent voters.
So, Senator Kerry's event, which was a lot more intimate than the president's, was aimed at touting his credentials as a fiscally responsible Democrat.
(BEGIN VIDEO CLIP)
KERRY: We are now almost $5 trillion=plus in debt. The debt of our country is growing. We have deficits as far out as we can see. We just announced the largest deficit in history. We've lost in the last four years 1.8 million private sector jobs in America, 25,000 of them right here in Iowa.
(END VIDEO CLIP)
BASH: And to show him as a centrist, his campaign put out a list of about 200 CEOs and business leaders around the country who support him, essentially trying to tout the fact that he is somebody who is perhaps more moderate in terms of his fiscal agenda.
And that list certainly did have a couple of names who voted Republican in the past, but, as some Republicans on the Bush campaign pointed out to us today, a number of the names on there are politically active Democrats -- Kitty.
PILGRIM: All right. Thanks very much.
Dana Bash.
Well, as Dana just mentioned, shortly after Senator Kerry made those remarks on outsourcing, the Bush-Cheney campaign wasted no time pointing out that 39 of the 200 business leaders who endorsed Kerry were put in an awkward position. Those executives currently work for or have worked for companies that do appear on our Exporting America list.
Senator Kerry has called executives at companies who shift jobs overseas "Benedict Arnold CEOs." Senator Kerry later amended his remarks, saying he does not blame the companies that outsource, but blames the tax laws that allow them to do it.
Outsourcing is a major issue of the campaign season. Earlier this year, the Bush administration faced criticism when its economic adviser, Greg Mankiw, said outsourcing was good for the economy.
Well, the high security at both events in Davenport, Iowa, today left an opening that some bank robbers found too good to miss. Three of Davenport's banks were robbed, while President Bush and Senator Kerry were in town. The city only has between 15 and 20 banks. Now the police department says there were no fewer patrols on the streets because of the political events. Police have one suspect in custody.
Still to come, new testimony today in the Lynndie England prisoner abuse hearing. We'll have a live report.
In Face Off tonight, is Wal-Mart good for America or a threat to our economy? We'll have two opposing views.
And Robert F. Kennedy, Jr., accuses the Bush White House of corporate cronyism in his new book, "Crimes Against Nature." Robert Kennedy is my guest.
(COMMERCIAL BREAK)
PILGRIM: In Iraq tonight, clashes between police and insurgents in Mosul left 12 Iraqis dead and more than 25 wounded. A curfew was imposed in the northern city a day after street battles. Witnesses say they heard explosions and rocket-propelled grenade fire.
Meanwhile, in Jordan, four workers returned home after being held hostage for four days in Iraq. The hostages were released last night after successful negotiations between two tribal chiefs in Fallujah.
And two Turkish truck drivers held hostage in Iraq since Saturday have also been released. The hostages were apparently freed after their employer vowed not to supply American troops in Iraq.
A preliminary court hearing continued today for Private Lynndie England, accused in the Abu Ghraib prisoner abuse scandal. The hearing will determine whether Private England will be court- martialed. She faces 19 charges that could lead to as many as 38 years in prison.
Bob Franken joins me now from Fort Bragg, North Carolina, with the detail -- Bob.
BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Kitty, it was the second day of these proceedings, where the witnesses were all from her former unit, the 372nd Military Police unit just recently returned to the United States, and the testimony was all by telephone.
England and the others listened in the court as she was described as somebody who was a disciplinary problem, sometimes not showing up for work at Abu Ghraib prison because of what was alleged to be sexually activity.
But the most graphic testimony of the day came from Specialist Matthew Wisdom also of that unit. He talked about the actual abuse, the beatings, particularly centering on the night of November 7, seven detainees were brought in who had been charged with rioting in another prison.
He gave graphic descriptions of both physical abuse and sexual abuse, at one time talking about two detainees who were slammed against the wall and forced to simulate oral sex. Then he went on to describe the voice of Lynndie England saying words to the effect that one of the detainees appeared to be aroused.
The defense is trying to that say all of this kind of thing that happened was the result of orders that Lynndie England was only doing when she was told, but the testimony today seemed to undermine that. This is a hearing that's going to go on all week before the presiding judge, Kitty, decides whether this is going to go forward to a full- scale court-martial -- Kitty.
PILGRIM: All right. Thanks very much.
Bob Franken.
PILGRIM: Still ahead here tonight, the debate over whether the world's largest retailer, Wal-Mart, is good or bad for America. That is our Face Off next.
And we'll report on developments in the Justice Department's case against Wal-Mart and its use of illegal aliens.
And then Robert F. Kennedy, Jr., says the White House is guilty of crimes against nature. He will join us to talk about his new book blasting the White House.
That and much more is still ahead here tonight.
(COMMERCIAL BREAK)
ANNOUNCER: LOU DOBBS TONIGHT continues. Sitting in for Lou Dobbs, Kitty Pilgrim.
PILGRIM: Wal-Mart today is reportedly close to settling a Justice Department probe into its hiring of the illegal aliens, and Wal-Mart maintains it did not know a third-party cleaning contractor was using illegal aliens. But tonight, CNN has learned there may be evidence to the contrary.
Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): New evidence filed in federal district court in Newark, New Jersey, late Tuesday appears to hurt Wal-Mart's defense that it had no idea illegal immigrants were working in any of their stores.
The evidence is in the form of a letter written in June of 2002, more than a year before federal agents raided Wal-Mart stores in 21 states and arrested 250 workers illegally in the country. It was written by the man who heads up the Gulf Coast region for Jani-King, the country's largest commercial cleaning franchiser.
Raymond Druid (ph) was concerned that his company was losing contracts with Wal-Mart and concerned about the reasons why. JAMES LINSEY, ATTORNEY: "Please conduct an investigation because I can't compete with these people because these people don't pay minimum wage, they don't pay federal taxes, and there's no way a legitimate contractor can compete.
TUCKER: Druid's (ph) letter was handed over to the U.S. attorney in charge of the prosecution about a week ago. Calls to the U.S. attorney in the middle Pennsylvania district where the case is being tried were not returned.
In Washington, D.C., the Justice Department declined comment on reports of a settlement. Mr. Druid (ph) never received a response to his letter. Today, Wal-Mart responded, calling into question Druid's (ph) credibility and saying, "We cannot find any record of his letter being received."
(END VIDEOTAPE)
TUCKER: Now Raymond Druid's (ph) concerns go way beyond Wal- Mart. All he said he ever wanted was for the company to investigate a problem at some of their stores, a problem he goes on to add that plagues his entire industry -- Kitty.
PILGRIM: Thanks.
Bill Tucker.
Wal-Mart is the world's number one retailer. The company has built its brand around low-cost products that save consumers money, but, according to a new study, Wal-Mart may be costing California taxpayers millions of dollars every year.
Casey Wian reports from Los Angeles.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN BUSINESS CORRESPONDENT (voice-over): Wal-Mart shoppers know where to find low prices, Wal-Mart workers know they're not very well paid, and Wal-Mart suppliers know to cut costs or else. With 3,500 stores, a million employees and annual sales topping one- quarter of a trillion dollars, Wal-Mart is a dominant economic force.
ARTHUR LAFFER, LAFFER ASSOCIATES: Wal-Mart is just terrific for the economy. I mean, it sells high-quality products at low cost. How could something like that be wrong or bad for the economy?
WIAN: Here's how according to a study by the U.C. Berkeley Labor Center released this week. It concluded Wal-Mart's wages are so far below those paid by other retail chains, more of its workers rely on public assistance programs. The study estimates that costs California taxpayers $86 million a year in health care and welfare for Wal-Mart workers.
JACOBS: What we found is rather than raising the bar, they're leading the race to the bottom. That has real implications for our country and our country's economy. When jobs don't pay enough for people to get by, taxpayers make up the difference.
WIAN: Wal-Mart says the study's methods and conclusions are one- sided and flawed. While it shows only half of Wal-Mart employees have company-provided health insurance, many of its workers are students, senior citizens and second wage earners with coverage from other sources.
Wal-Mart says the total with health coverage is 90 percent. The study also relied on data from an expert who testified against Wal- Mart in a lawsuit Wal-Mart says underestimated its wages.
CYNTHIA LIN, WAL-MART SPOKESPERSON: It's outrageous that U.C. Berkeley's Labor Center would release such a biased study. Berkeley's Labor Center is known to support union causes, is known to receive funding from unions whose opposition to Wal-Mart is well documented.
WIAN: Wal-Mart also says the study failed to account for the costs of unemployment and health benefits for the workers who would be without jobs without Wal-Mart.
(on camera): At the heart of the dispute is Wal-Mart's plans to open 40 Supercenters in California over the next four years. Labor unions and community activists are fighting those plans, saying saving money at Wal-Mart isn't worth the cost.
Casey Wian, CNN, Los Angeles.
(END VIDEOTAPE)
PILGRIM: Wal-Mart's impact on the American economy is the subject of tonight's Face Off, and joining me tonight from Washington is Brink Lindsey, vice president for research at the CATO Institute -- he says Wal-Mart benefits American workers and consumers -- and Robert Scott is a senior economist at the Economic Policy Institute. He says Wal-Mart is a big part of this country's trade problems.
Well, thank you both for joining us. And it's not an easy topic, but let's start right away with the subject of wages and the fact the average wage of Wal-Mart is -- the average worker's wage is $9.64. Is that something that is a problem?
Let's start with you, Robert.
ROBERT SCOTT, ECONOMIC POLICY INSTITUTE: Well, we've looked at the relationship between wages at Wal-Mart and between wages in other industries, and we found that a 10 percent increase in the Wal-Mart market share will drive wages down by 1 to 2 percentage points.
The real benefits of workers from trade occur when they enjoy rising living standards, and yet, as our trade deficits have grown over the last two decades, we've seen real wages for most production workers fall by about 7 percent on average.
Where are the benefits from these supposedly cheap imports?
PILGRIM: OK. And Brink, let me just bring in, as long as we're talking about this, the 2002 report by McKinsey Global Institute. Twenty-five percent of growth in the U.S. productivity from 1995 to 2000 was in retailing. Have the retailing workers benefited from this?
BRINK LINDSEY, THE CATO INSTITUTE: Well, let's remember why we're talking about Wal-Mart in the first place. This is a company that has been fantastically successful at giving American consumers what they want, a wide choice of goods at low prices. So, there's 100 million people who shop at Wal-Mart every day. Ultimately, Wal-Mart's future is up to them.
Also, Wal-Mart employs something like 1.4 million people, people who weren't forced to work at Wal-Mart, and presumably work there because it was the best job they could find. So, as far as the consumers are concerned and Wal-Mart's workers are concerned, Wal-Mart is doing good by both of them.
Now it is true that Wal-Mart wages are low compared to, you know, other companies in other sectors. But Wal-Mart is big. It's not big enough to set wages in retailing. Retailing wages are low because of the general relationship between the supply of and demand for low- skilled labor, and that's what retailing labor is.
Retailing labor doesn't command high wages. Wal-Mart pays as much as it has to to fill its positions and no more. And again, it provides employment opportunities to 1.4 million people, including many young people, senior citizens, and second income earners.
PILGRIM: Let's talk about the sort of debate over what Wal-Mart is doing to America, and many people think that despite the enormous consumer demand for Wal-Mart products, it's in some way eroding American life the way we knew it before.
Some people say the prices are great, but the drive distances are too long. It's not helping American towns and cities. Let's get into that a little bit.
And Robert, why don't you start?
SCOTT: Well, I think that Wal-Mart is helping some consumers who can get there by car, but Wal-Mart is causing the closure of thousands and thousands of stores across the country, many of them in the center part of towns where poorer people are located, and, often, those people have to rely on public transit.
So, the cost savings may not be as great as one might think. So, I think we have to look carefully at all aspects of Wal-Mart's impact on a community.
Also, a study done in California showed that a $1 billion drop in wage payments to Wal-Mart workers would translate into a $1.8 billion additional drop in regional income because those workers would have less money left over to spend.
PILGRIM: Brink, what do you think about this drive time debate? LINDSEY: Again it's up to consumers. If the tradeoff between drive time and prices gets them into Wal-Mart, then that's good for Wal-Mart. If it doesn't, then it's good for its competitors.
Is Wal-Mart good for America? Well, it's good for some Americans and bad for others. It's good for the people who choose to shop there. It's good for the people who choose to work there, as compared to whatever other options they might have for employment.
It's not good for their competitors. Wal-Mart is incredibly successful. It has revolutionized retailing with state-of-the-art computerized logistics, distribution and inventory management, and it's very tough to compete against them.
PILGRIM: One of the other great debates with Wal-Mart is the suppliers, and some suppliers complain that they're being squeezed, that they're forced to import some of their goods to supply Wal-Mart now, where they were able to get them domestically previously.
Robert, what do you think of that debate, or do you think that they're basically just fighting the tide of what's going on in the economy?
SCOTT: Well, I think Wal-Mart is the leading edge of our tremendous surge of imports, which I think are eroding our manufacturing base in this country.
One-eighth of all imports from China, for example, were coming in to Wal-Mart. Fourteen percent of the imports of clothing from Bangladesh were sold in Wal-Mart stores.
So, Wal-Mart is having a huge impact on our trade problems, and these threaten to destabilize our economy.
PILGRIM: Is that a problem?
SCOTT: Yes. I think that in the next few years we're going to be forced to adjust that trade deficit and that could push us into another deep recession, which I think could be bad for millions of workers throughout the economy.
PILGRIM: And yet American consumers benefit from the lower prices of imported goods. Brink?
LINDSEY: Yes, well, Wal-Mart is not eroding the American manufacturing base. If you look at the Wal-Mart era since 1980, U.S. manufacturing output has basically doubled.
As far as Wal-Mart suppliers are concerned, it can be tough doing business for an extremely demanding and extremely powerful customer. It's said thought that the only thing worse doing business with Wal- Mart, is trying to do business without Wal-Mart as one of your customers.
PILGRIM: Let's just get into this last point. And we heard a report from Casey Wian. A U.C. Berkeley study points out that Wal- Mart workers cost $86 million in public assistance; presumably, that's because they're paid so little. What do you say to that, Robert?
SCOTT: Well, I think it's true that Wal-Mart workers have to rely on public assistance. An average Wal-Mart worker making $9 and change an hour is actually earning less than the poverty-level wage.
On the other hand, cost of benefits is very high at Wal-Mart. They pay about 25 to 30 percent of their wages if they want to buy health insurance there. And Wal-Mart, in fact, tells its workers to apply to public assistance for help with health insurance and other needs.
So, Wal-Mart knows that it's driving its workers into poverty and it persists in these kinds of employment practices.
LINDSEY: I think the Berkeley study is fundamentally silly. If Wal-Mart vanished from the face of the earth tomorrow, would these public assistance costs go away? Of course not, you just have 1.4 million people out of work. These people work at Wal-Mart because it's the best job they can find. So, the idea that somehow or other Wal-Mart is driving them into poverty and penury is, again, just silly.
PILGRIM: All right. Thanks very much. We won't solve it tonight but it was very worth discussing. Robert Scott and Brink Lindsey, thanks very much.
LINDSEY: Thank you.
SCOTT: Thank you.
PILGRIM: That brings us the subject of tonight's poll: do you think Wal-Mart is good for America? Cast your vote at cnn.com/lou and we'll bring you the results later in the show. Let's take a look at some of your e-mails and some of your thoughts.
And many of you were outraged about our report last night that the Pentagon has awarded a massive defense contract to a consortium that includes a foreign aerospace company.
Vincent Wilson of Texas writes: "No government contracts should be sent overseas. The cost argument is a fallacy. How much U.S. income tax will workers in Brazil or Spain pay? How much additional expense will there be in another bankrupt American family?"
Carolyn of West Alexandria, Ohio, writes: "The government sets a bad example for the rest of corporate America when they buy products outside the U.S. that can be produced here."
And Ken McBride of Amherst, Virginia, writes: "Awarding a multibillion dollar contract for a new aircraft to be essentially built in Brazil, Spain and Chile is just another example of the downward spiral of the American economy. What is next, building the next Army tank in China?"
We love hearing from you. E-mail us at loudobbs@cnn.com. Still to come tonight, "Crimes Against Nature." Robert F. Kennedy, Jr. says the White House is putting our nation's health and security at risk, for profit. And he is our guest, next.
Plus the teacher who had an affair and two children with a former student spends her first day out of prison. We'll have a report on what's next for Mary Kay Letourneau.
And then how crime pays for some corporate executives even after they've been sent to prison. Those stories and much more still ahead here tonight.
(COMMERCIAL BREAK)
PILGRIM: Robert F. Kennedy, Jr. has written a new book lambasting the Bush White House. It accuses the administration of jeopardizing our health, national security and democracy all for greed.
The new book is called "Crimes Against Nature: How George Bush and His Corporate Pals are Plundering the Country and Hijacking our Democracy." Robert Kennedy is one of the nation's most prominent environmental advocates and he joins me now. Thanks very much for joining us.
ROBERT F. KENNEDY, JR., AUTHOR OF "CRIMES AGAINST NATURE": Thanks for having me.
PILGRIM: These are very harsh words and yet you maintain that this is not a political book.
KENNEDY: I've been disciplined over 20 years as an environmental advocate about being nonpartisan and bipartisan. I don't believe that there's such thing as Republican or Democratic children. I've supported both Republican and Democratic candidates with strong environmental records.
But in this case, we have never seen anything like this in our history, where we have a concerted, disciplined assault on 30 years of environmental legislation that threatens now to dismantle, to eviscerate all of our federal environmental laws.
It's a stealth attack that's not being covered by the media. It's deliberately a stealth attack because the President has seen the poll numbers. His own pollster warned him that this radical agenda would be unpopular, not only in the Democratic Party but equally so within the rank and file of the Republican Party.
The White House has put the polluters in charge of virtually all the government agencies that are supposed to enforce our environmental loss.
PILGRIM: By polluters you mean people who have previously worked for corporations?
KENNEDY: Well, look, the second-in-command of the EPA is a Monsanto lobbyist. The head of the Forest Service is a timber industry lobbyist. The head of Public Lands is a mining industry lobbyist. The head of the Air Division at EPA is a utility lobbyist who has done nothing but represent polluters for his entire career.
These are people who did not enter government service for the public interest. They are at work dismantling and subverting the very laws that they are charged now with enforcing.
PILGRIM: So, do you think people who worked in these industries should be precluded from working in government in these areas?
KENNEDY: No, of course not. I don't think that there's anything wrong with having people who work for corporations be in power. But if the corporations are actually dictating our federal policy -- which is happening with this administration -- I'll give you an example with mercury.
In the state of Connecticut it's now unsafe to eat any fresh water fish in the state. The same is true in 17 other states. That mercury is coming from 1100 power plants primarily that are discharging it illegally.
The Clinton administration proposed a regulation that would force them to clean up within 3.5 years. It would have cost them -- we can do it easily -- it costs less than 1 percent of the revenues to the plants. But this is an industry that gave $100 million to the Bush administration, and six weeks ago the Bush administration announced that it was abandoning those regulations and adopting, instead, regulations that would require them never to clean up.
The new regulations were written by Latham & Watkins, a law firm for the utilities that were being prosecuted for breaking the law. The head of the chief lobbyists of that law firm is now the head of the Air Division at EPA.
PILGRIM: It's a compelling argument and you make it well. But isn't it incumbent on Congress to pass a legislation when it's proposed? It seems to have lagged in Congress.
KENNEDY: No. We have strong laws on the books. We have very good regulations and very good laws in this country to protect the environment. But those laws are being subverted. The enforcement has virtually stopped throughout the administration because the enforcement divisions have been de-funded. So, there's no money to enforce these laws. Then the people who are supposed to be enforcing the laws are the polluters from the companies that are being prosecuted.
And so, you've basically got a situation where we have very strong laws but the whole government is ignoring them and allowing criminals to flourish in our marketplace when we should be prosecuting them.
PILGRIM: You made this a lifetime...
KENNEDY: It's like if you put a bank robber the head of the SEC and who said, "I'm going to turn my back on all bank robbers." That's what's happening. And it's laughable but it actually is happening throughout all these agencies, and, you know, I give hundreds and hundreds of examples of this in the book.
PILGRIM: And it's a great book, and it's very compelling. And it is disturbing that some of our environmental issues are languishing and particularly in a campaign year, where distraction is being made over other issues. Great debate over homeland security; great debate over jobs.
Are environmental issues going by the wayside in this campaign year? Are you disturbed with the lack of focus?
KENNEDY: Yes. But this is always a challenge for the environmental movement. Americans care deeply about the environment, both Republicans and Democrats. There's almost no difference in the poll...
PILGRIM: It should be above politics.
KENNEDY: That's right. It should be above politics. And it's very bad for the environment to become the province of a single political party.
The problem is that you have an administration that is deliberately mounting a stealth attack and, you know its own pollster advised them: Frank Luntz advised the President in 2002, "We have to hide this from the American public because it's a radical agenda that is going to be offensive to people within our own party."
Plus you have a media that has been negligent about covering these issues. And actually Paul Krugman did a wonderful article this weekend for "The Sunday Times" in which he showed that the media is covering the fist fight but they're not -- the political fist fight, but there's almost no coverage of the actual positions of the candidates or the outcomes of many of these policies that have been promoted by the Bush administration.
PILGRIM: Well, hopefully through this segment and through your efforts we can draw more detail to this debate. Thank you very much for joining us.
KENNEDY: Thanks for having me.
PILGRIM: Tonight's thought is on politics. Politics ought to be a part-time profession of every citizen who would protect the rights and privileges of free people, and who would preserve what is good and fruitful in our national heritage. Those are the words of President Dwight Eisenhower.
A reminder now to vote in tonight's poll. Do you think Wal-Mart is good for America? Cast your vote at cnn.com/lou. We'll bring you the results a little bit later in the show.
Coming up: an elementary school teacher convicted of having sex with a sixth-grader is free tonight. Her former student is going back to court but not for the reasons you might expect.
And a shocking mistake lands two American families in court fighting for a child they each believe is theirs.
(COMMERCIAL BREAK)
PILGRIM: A former grade school teacher convicted of having sex with her six-grade student was released from prison.
Mary Kay Letourneau was convicted in 1997 of having an affair with a then-12-year-old boy. She served seven and a half years in prison. Kimberly Osias has the report from Seattle, Washington -- Kimberly.
KIMBERLY OSIAS, CNN CORRESPONDENT: Good evening, Kitty. Well they called it love; prosecutors called it rape. Tonight, Mary Kay Letourneau is an ex-convict, after spending seven years in a Washington state correctional facility for women.
She walked out about 1:00 a.m., surprising media and nobody even saw her. There were signs saying, "Take me home, baby," and "I'm 18." She did what many would consider taboo, crossing moral, ethical and legal lines as his teacher.
With a rocky marriage and four children already, Mary Kay Letourneau became pregnant by Fualaau and pled guilty to two counts of child rape in 1997. After just five short months in jail, a judge had mercy and gave her a second chance.
But right after her release, she defied a court order and had sex with the student again. The pair was caught in a car with $6,000 in cash and clothes. She landed back in jail, where she gave birth to the pair's second child.
Now for his part, Vili Fualaau, he's working on a GED. As far as Mary Kay, he says he is open about their romantic possibilities.
(BEGIN VIDEO CLIP)
VILI FUALAAU, LETOURNEAU'S FMR. STUDENT: I'm kind of nervous. I don't know what my feelings are right now, but I know I do love her.
(END VIDEO CLIP)
OSIAS: Mary Kay Letourneau will have 24 hours to register here in King County as a sex offender. As such, she will be under very close scrutiny for the next three years. She will have to meet with authorities every 90 days; in fact, be sure to tell them about her neighborhood, her work, any kind of relationship or romantic relationship at all, she will have to report to them.
As far as Vili Fualaau, well today, through his attorney, they filed a motion asking that the two could see one another. The district attorney's office, well, they are having a hearing, they're deciding whether or not they will ask Judge Linda Lau for a hearing in the matter. For her part, Judge Linda Lau can do a number of things. Either she can ask for psychological testing to be done on Vili Fualaau, she can rescind the ban or not allow the two to see one another -- Kitty.
PILGRIM: All right. Thanks very much, Kimberly Osias.
A San Francisco woman today was awarded $1 million in damages in a malpractice suit against her fertility specialist. Susan Buchweitz's doctor implanted her with wrong embryos and then covered up his mistake. Rob Flatabeau (ph) of CNN affiliate KRON reports from San Francisco.
ROB FLATABEAU (ph), CNN AFFILIATE KRON CORRESPONDENT: Susan Buchweitz gave birth to a healthy baby boy three years ago by way of in vitro fertilization. But somehow she got the wrong embryo here at the fertilization clinic of the Bay Area.
And now the couple who provided the embryo is suing for custody of the child, arguing that since both women were implanted with embryos fertilized by the husband's sperm, the children are biologically brother and sister.
(BEGIN VIDEO CLIP)
NANCY HERSH, SUSAN BUCHWEITZ'S LAWYER: It has actually wrecked her life. It's been a horrible, terrible thing. She had a baby that she thought was hers alone. She found out that the baby was from the embryo of someone else.
(END VIDEO CLIP)
FLATABEAU (ph): Susan Buchweitz successfully sued her doctor, Steven L. Katz, for malpractice, and has reportedly mortgaged her Campbell home to defend against the couple's custody suit.
In the meantime, the case has raised questions about why months went by before the mistake was finally revealed by a whistle-blower and how could the embryos have been mixed up to begin with?
(BEGIN VIDEO CLIP)
DR. DAVID ADAMSON, FERTILITY PHYSICIANS OF NORTHERN CALIFORNIA: Somehow the identification protocol clearly broke down.
(END VIDEO CLIP)
FLATABEAU (ph): Dr. David Adamson of Fertility Physicians of Northern California, not connected to the San Francisco clinic, says there is no national standard; that protocol varies from one clinic to the next, but offered this advice:
(BEGIN VIDEO CLIP)
ADAMSON: I think that people should check to make sure the clinic is a member of the SART, the Society for Assisted Reproductive Technology. They should meet with the physician and make sure that they are comfortable with them and that they have all of their questions answered. And they should ask their doctor about protocols in place to deal with this kind of situation.
(END VIDEO CLIP)
FLATABEAU (ph): The technology itself, says Adamson, is reliable with more than 100,000 successful in vitro babies born since the first so-called test tube baby was born 26 years ago. Nancy Hearst says her client is telling her story now in the hope that it won't happen again to someone else.
(BEGIN VIDEO CLIP)
HERSH: Her main interest is in educating the public and other women who undergo in vitro procedures to be careful, to become their own patient advocates; not to assume that there are protocols in place that will protect them.
(END VIDEO CLIP)
PILGRIM: That was Rob Flatabeau (ph) of KRON reporting from San Francisco.
Still ahead: no more free rides for NASA. Russia tells the United States to pay up.
And big bucks in the big house: corporate big wigs prove exactly how crime pays. We'll have the report.
(COMMERCIAL BREAK)
PILGRIM: Russia has told NASA it will not give American astronauts any more free rides to the International Space Station. Russia says it will begin charging the United States for shipping astronauts and cargo to the station next year.
Now, the two countries had agreed to split the cost of going to the space station, but Russia has launched the only mission since the shuttle Columbia disaster last year. NASA has said the next shuttle mission could be as early as next spring.
On Wall Street, stocks showed very little change. The Dow rose six points, the NASDAQ lost four and the S&P dropped a point. Oil prices eased from record highs, down below $43 a barrel.
And turning now to the big fight against corporate crime, some CEOs who end up in prison, still earning big bucks behind bars. Christine Romans is here with that report -- Christine?
CHRISTINE ROMANS, CNN CORRESPONDENT: Kitty, it's more than two year after this wave of corporate scandals and CEOs are getting paid more than ever. And some convicted executives are still collecting their paychecks while in prison.
(BEGIN VIDEOTAPE) ROMANS (voice-over): Andrew Wiederhorn is a convicted felon, serving an 18-month prison sentence. He's also the CEO of Fog Cutter Capital Group. It's listed on the NASDAQ and owner of the Fatburger hamburger chain.
This incarcerated CEO is collecting a $2.5 million paycheck, and has the full support of his board of directors. They say he was wrongfully prosecuted, so they're keeping him on the payroll, paying his $2 million fine and they might even give him a bonus.
LANNY DAVIS, ATTORNEY, FOG CUTTER CAPITAL GROUP: We, on the Fog Cutter Board, thought it was the best interest of our shareholders to help Mr. Wiederhorn out so he would return and do the kind of outstanding job he had done for the company, which had shown profitability over these years. And we need him to come back to continue the profitability.
ROMANS: It's a complicated case, but bottom line: he pleaded guilty to felony tax and improper payment charges related to activities before he took over Fog Cutter. Still, the NASDAQ has threatened to de-list the stock and shareholders are suing.
The case of shoe designer Steve Madden is more cut and dry. He's serving 41 months for stock fraud and money laundering. He's getting $700,000 a year behind bars.
Martha Stewart still reaps $1.2 million a year as founding editorial director. Her company has made no move yet to take her off the payroll.
One consultant to company boards says he's surprised a company would pay a CEO who's in prison.
DANIEL RYTERBAND, FREDERIC W. COOK: I can't find, personally, any rationale that would support continuing to pay them while they're distant from the company and distant in the sense that they've been prohibited from serving the company due to a jail sentence.
ROMANS: The Bureau of Prisons makes it clear, that these CEOs will not be allowed to conduct any company business behind bars. No conference call, no business meetings, no strategy sessions.
(END VIDEOTAPE)
(on camera): So, these companies are spending precious shareholder dollars for nothing more than corporate talent sitting by doing time -- Kitty?
PILGRIM: Unbelievable, Christine.
ROMANS: It really is and each of these cases has its own sort of et cetera; sort of asterisk, if you will.
You know on the first case, Andrew Wiederhorn, they say, "Well, he didn't do anything wrong." Well he may not have done anything wrong but in a court of law he pleaded guilty. Martha Stewart, she could appeal; that process is not over yet.
And it's a licensing agreement for the Steve Madden there. They're paying him for the use of his name.
So, it's very interesting, but to think of this whole wave of corporate corruption and have CEOs in jail, convicted felons, earning paychecks; shareholder money. It's just astonishing.
PILGRIM: Sign of the times.
ROMANS: I guess.
PILGRIM: Thanks, Christine Romans.
Well, let's look at some of your thoughts.
And Gail Rubio of Brea, California, wrote about the "Middle Class Squeeze": "An alarming number of Americans are working two or more jobs to keep their families going. The basic benefits of retirement planning or health care have disappeared for all but the top echelons of any large corporation."
And on the polarization in this country:
Lia, of Sarasota, Florida, writes: "It looks to me like this nation is not the United States of America. The two-party system is not working. The parties are at war with each other. Do I dare dream that the Republicans and the Democrats will work together to keep the United States united?"
We love hearing from you. E-mail us loudobbs@cnn.com.
Still ahead, the results of tonight's poll.
(COMMERCIAL BREAK)
PILGRIM: Now the results of tonight's poll: 19 percent of you think Wal-Mart is good for American and 81 percent do not.
Thanks for joining us tonight. Please join us tomorrow when former Senator and presidential candidate, Gary Hart, joins us to discuss his new book, "The Fourth Power," and his vision for the American farm policy in the 21st century.
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 August 4, 2004 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KITTY PILGRIM, CNN ANCHOR: Tonight, dramatic new information about al Qaeda communications with possible terrorist cells in the United States.
Plus, an extraordinary day in the election campaign. Senator Kerry and President Bush campaigned in the same town at almost the same time.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm looking forward to the race. I'm here to ask for your vote and ask for your help.
(END VIDEO CLIP)
PILGRIM: I will talk with one of the president's most outspoken critics, Robert Kennedy, Jr., author of "Crimes Against Nature."
Also tonight, Wal-Mart, this country's biggest retailer. Is Wal- Mart good or bad for America?
(BEGIN VIDEO CLIP)
KEN JACOBS, U.C. BERKELEY LABOR CENTER: They're really leading a race to the bottom.
(END VIDEO CLIP)
PILGRIM: We'll have two opposing views on Wal-Mart's impact on this country in tonight's Face Off.
ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, August 4. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs who is on vacation, Kitty Pilgrim.
PILGRIM: Good evening.
Tonight, CNN has learned new details about communications between suspected al Qaeda operatives in Pakistan and possible terrorist cells in this country. This new information comes after the federal government ordered increased security in New York, New Jersey and Washington. Government officials insist the al Qaeda threat is very real.
Justice Correspondent Kelli Arena reports.
KELLI ARENA, CNN JUSTICE CORRESPONDENT: Kitty, two senior U.S. government sources tell CNN that intelligence found in Pakistan shows evidence that suspected al Qaeda operatives in Pakistan contacted an individual or individuals in the United States in the past few months.
Now these U.S. officials would not characterize that communication, but two senior Pakistani intelligence officials have told CNN that there's evidence alleged al Qaeda computer expert Muhammad Naeem Noor Khan contacted what they refer to as six al Qaeda operatives in the U.S.
Now the information is important because it lends credibility to the belief that al Qaeda may have operatives in place in the United States. In an interview with CNN's Aaron Brown, Homeland Security Secretary Tom Ridge would not comment specifically, but he did have this to say.
(BEGIN VIDEO CLIP)
TOM RIDGE, SECRETARY, HOMELAND SECURITY: I think we ought to just let it be said that we are exploring every conceivable potential contact that any al Qaeda operative anywhere in the world might have had with anyone in the United States.
(END VIDEO CLIP)
ARENA: The U.S. sources also say that there is other information from Pakistan that has led to several investigations in the United States centered on whether there are any individuals or cells plotting an attack in the U.S.
And this news comes on top of word from the Bush administration that there was a separate stream of intelligence indicating al Qaeda's intent to hit financial targets that corroborated the information gathered in Pakistan. As you know, there was a lot of criticism that the information, though it was very detailed, was old and, therefore, not very useful -- Kitty.
PILGRIM: All right. Thanks very much. Kelli Arena.
Now the global war on terror is a major issue in the presidential campaign. Some Democrats say the president is using the public's fear of terrorism for his own political advantage, and Republicans say that claim is nonsense.
Senior Political Analyst Bill Schneider reports.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): The war in Iraq has always been a political issue. Now terror, too, has become politics. The administration says be afraid, be very afraid.
We are not yet safe. Threats are still out there. RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: We are not yet safe. Threats are still out there.
SCHNEIDER: The Homeland Security secretary's message was specific and sobering.
RIDGE: It is alarming in both the amount and specificity of the information.
SCHNEIDER: Many Democrats were alarmed -- by the timing of the alert -- right after John Kerry's triumphant convention, based on intelligence that was several years old. They saw politics, but Kerry couldn't say that without sounding cynical.
SEN. JOHN F. KERRY (D-MA), PRESIDENTIAL NOMINEE: I haven't suggested that, and I won't suggest that.
SCHNEIDER: So, others said it, with or without Kerry's approval.
HOWARD DEAN (D), FMR. PRESIDENTIAL CANDIDATE: It's just impossible to know how much of this is real and how much of this is politics.
SCHNEIDER: No fear of sounding cynical here.
JON STEWART, COMEDIAN: With the Democratic Party now in the spotlight. many people are wondering...
Yes. Oh, this just in. I'm sorry. Terror warning.
OK. All right. Well, I have to stop -- we'll have to stop talking about the Democrats.
SCHNEIDER: The administration was shocked -- shocked -- to hear that politics might be going on.
RIDGE: We don't do politics in the Department of Homeland Security.
SCHNEIDER: Oh, no?
RIDGE: the kind of information available to us today is the result of the president's leadership in the war against terror.
SCHNEIDER: Democrats, too, can turn terror into politics. They can accuse the White House of fearmongering.
SEN. TED KENNEDY (D), MASSACHUSETTS: A true leader inspires hope and vanquishes fear. This administration does neither. Instead, it brings fear.
SCHNEIDER: They can argue that Democrats would do better.
KERRY: I believe that I can fight a more effective war on terror than George Bush is. I know I can fight a more effective war.
SCHNEIDER: How?
KERRY: I will build and lead strong alliances.
SCHNEIDER: And they can charge that the administration's policies, like the war in Iraq, have made the U.S. more vulnerable.
KERRY: I believe this administration and its policies is actually encouraging the recruitment of terrorists.
(END VIDEOTAPE)
SCHNEIDER: This week, a barrier was broken. The war on terror is now officially a political issue -- Kitty.
PILGRIM: All right. Thanks very much.
Bill Schneider.
Vice President Dick Cheney today launched a new attack on Democrats who have questioned the latest terror alert.
Elaine Quijano reports from the White House -- Elaine?
ELAINE QUIJANO, CNN White House CORRESPONDENT: Good evening, Kitty.
White House officials firmly maintain that this latest terror alert was motivated by what they say was a solid interpretation of the intelligence.
This morning , White House spokesman Scott McClellan reiterating that to reporters, telling them that two different intelligence streams came to light more fully last Friday, and that all the streams of information put together paint an "alarming picture."
Now his comments came ahead of a campaign swing by President Bush. He made a stop in Davenport, Iowa, and, at this hour, he is now in Minnesota -- Mankato, Minnesota -- bringing with him the message that America needs strong leadership in the fight against terrorism and that he is the leader to bring that to the American people.
But it was the vice president, Dick Cheney, on a campaign swing through Missouri who came out with some pointed remarks earlier today. Mr. Cheney attacked Democrat Howard Dean for comments he made over the weekend, suggesting that the president was playing politics with the issue of terrorism.
(BEGIN VIDEO CLIP)
CHENEY: There have been some commentary from some of our critics -- Howard Dean comes immediately to mind -- saying somehow this is being hyped for political reasons, that the data that we collected here, the casing reports that provided the information on these prospective attacks is old data, i.e., 4 or 5 years old. That just tells me Howard Dean doesn't know anything about how these groups operate. (END VIDEO CLIP)
QUIJANO: Now White House officials have said for some time that they will err on the side of caution when it comes to the issue of terrorism. They also say they fully understand that, that will open them up to criticism and questions about the timing and the possible politicizing of the issue of terrorism. But they maintain that they will take whatever action they feel is necessary and take the criticism that goes along with that.
Kitty, back to you.
PILGRIM: All right. Thanks very much.
Elaine Quijano.
A new opinion poll says Senator Kerry is ahead in the battleground states. The Marist College poll says Senator Kerry has 49 percent support in battleground states, compared with 42 percent for President Bush. But they're in a virtual dead heat nationally.
On the campaign trail today, both candidates held rallies in the same critically important town in a key battleground state. The near simultaneous rallies were held just three blocks from each other in Davenport, Iowa.
And Dana Bash reports -- Dana.
DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Kitty, the local paper described what went on here today as the duel in Davenport, and, even for Iowans used to seeing an influx of politicians in their state, people here told us that this was something even for them to behold.
Now this is a town of just under 100,000 people, and, as you mentioned, the two candidates were at the same time discussing their issues practically within shouting distance. Now the president had held a very large rally at the banks of the Mississippi.
His strategy was not even to address the fact that his opponent was here, too. But he launched into him on a number of issues, everything from the war in Iraq to the economy to health care.
(BEGIN VIDEO CLIP)
BUSH: To improve health care, we must end the frivolous lawsuits that raise health-care costs and drive doctors out of medicine. You cannot be pro-patient and pro-doctor and pro-trial lawyer at the same time. You have to choose. My opponent made his choice, and he put him on the ticket.
(END VIDEO CLIP)
BASH: As Senator Kerry took a much more direct approach today, he played on a new Bush slogan, saying that if only the president would turn the corner here, the two could have a great discussion. Now is it a coincidence that the two men were here at the same time? Both campaigns accuse the other of following them here. But regardless, it certainly does illustrate how competitive this state is. This is a state that President Bush lost by just more than 4,000 votes last time around, and it's an area, particularly Davenport, with a number of undecided and independent voters.
So, Senator Kerry's event, which was a lot more intimate than the president's, was aimed at touting his credentials as a fiscally responsible Democrat.
(BEGIN VIDEO CLIP)
KERRY: We are now almost $5 trillion=plus in debt. The debt of our country is growing. We have deficits as far out as we can see. We just announced the largest deficit in history. We've lost in the last four years 1.8 million private sector jobs in America, 25,000 of them right here in Iowa.
(END VIDEO CLIP)
BASH: And to show him as a centrist, his campaign put out a list of about 200 CEOs and business leaders around the country who support him, essentially trying to tout the fact that he is somebody who is perhaps more moderate in terms of his fiscal agenda.
And that list certainly did have a couple of names who voted Republican in the past, but, as some Republicans on the Bush campaign pointed out to us today, a number of the names on there are politically active Democrats -- Kitty.
PILGRIM: All right. Thanks very much.
Dana Bash.
Well, as Dana just mentioned, shortly after Senator Kerry made those remarks on outsourcing, the Bush-Cheney campaign wasted no time pointing out that 39 of the 200 business leaders who endorsed Kerry were put in an awkward position. Those executives currently work for or have worked for companies that do appear on our Exporting America list.
Senator Kerry has called executives at companies who shift jobs overseas "Benedict Arnold CEOs." Senator Kerry later amended his remarks, saying he does not blame the companies that outsource, but blames the tax laws that allow them to do it.
Outsourcing is a major issue of the campaign season. Earlier this year, the Bush administration faced criticism when its economic adviser, Greg Mankiw, said outsourcing was good for the economy.
Well, the high security at both events in Davenport, Iowa, today left an opening that some bank robbers found too good to miss. Three of Davenport's banks were robbed, while President Bush and Senator Kerry were in town. The city only has between 15 and 20 banks. Now the police department says there were no fewer patrols on the streets because of the political events. Police have one suspect in custody.
Still to come, new testimony today in the Lynndie England prisoner abuse hearing. We'll have a live report.
In Face Off tonight, is Wal-Mart good for America or a threat to our economy? We'll have two opposing views.
And Robert F. Kennedy, Jr., accuses the Bush White House of corporate cronyism in his new book, "Crimes Against Nature." Robert Kennedy is my guest.
(COMMERCIAL BREAK)
PILGRIM: In Iraq tonight, clashes between police and insurgents in Mosul left 12 Iraqis dead and more than 25 wounded. A curfew was imposed in the northern city a day after street battles. Witnesses say they heard explosions and rocket-propelled grenade fire.
Meanwhile, in Jordan, four workers returned home after being held hostage for four days in Iraq. The hostages were released last night after successful negotiations between two tribal chiefs in Fallujah.
And two Turkish truck drivers held hostage in Iraq since Saturday have also been released. The hostages were apparently freed after their employer vowed not to supply American troops in Iraq.
A preliminary court hearing continued today for Private Lynndie England, accused in the Abu Ghraib prisoner abuse scandal. The hearing will determine whether Private England will be court- martialed. She faces 19 charges that could lead to as many as 38 years in prison.
Bob Franken joins me now from Fort Bragg, North Carolina, with the detail -- Bob.
BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Kitty, it was the second day of these proceedings, where the witnesses were all from her former unit, the 372nd Military Police unit just recently returned to the United States, and the testimony was all by telephone.
England and the others listened in the court as she was described as somebody who was a disciplinary problem, sometimes not showing up for work at Abu Ghraib prison because of what was alleged to be sexually activity.
But the most graphic testimony of the day came from Specialist Matthew Wisdom also of that unit. He talked about the actual abuse, the beatings, particularly centering on the night of November 7, seven detainees were brought in who had been charged with rioting in another prison.
He gave graphic descriptions of both physical abuse and sexual abuse, at one time talking about two detainees who were slammed against the wall and forced to simulate oral sex. Then he went on to describe the voice of Lynndie England saying words to the effect that one of the detainees appeared to be aroused.
The defense is trying to that say all of this kind of thing that happened was the result of orders that Lynndie England was only doing when she was told, but the testimony today seemed to undermine that. This is a hearing that's going to go on all week before the presiding judge, Kitty, decides whether this is going to go forward to a full- scale court-martial -- Kitty.
PILGRIM: All right. Thanks very much.
Bob Franken.
PILGRIM: Still ahead here tonight, the debate over whether the world's largest retailer, Wal-Mart, is good or bad for America. That is our Face Off next.
And we'll report on developments in the Justice Department's case against Wal-Mart and its use of illegal aliens.
And then Robert F. Kennedy, Jr., says the White House is guilty of crimes against nature. He will join us to talk about his new book blasting the White House.
That and much more is still ahead here tonight.
(COMMERCIAL BREAK)
ANNOUNCER: LOU DOBBS TONIGHT continues. Sitting in for Lou Dobbs, Kitty Pilgrim.
PILGRIM: Wal-Mart today is reportedly close to settling a Justice Department probe into its hiring of the illegal aliens, and Wal-Mart maintains it did not know a third-party cleaning contractor was using illegal aliens. But tonight, CNN has learned there may be evidence to the contrary.
Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): New evidence filed in federal district court in Newark, New Jersey, late Tuesday appears to hurt Wal-Mart's defense that it had no idea illegal immigrants were working in any of their stores.
The evidence is in the form of a letter written in June of 2002, more than a year before federal agents raided Wal-Mart stores in 21 states and arrested 250 workers illegally in the country. It was written by the man who heads up the Gulf Coast region for Jani-King, the country's largest commercial cleaning franchiser.
Raymond Druid (ph) was concerned that his company was losing contracts with Wal-Mart and concerned about the reasons why. JAMES LINSEY, ATTORNEY: "Please conduct an investigation because I can't compete with these people because these people don't pay minimum wage, they don't pay federal taxes, and there's no way a legitimate contractor can compete.
TUCKER: Druid's (ph) letter was handed over to the U.S. attorney in charge of the prosecution about a week ago. Calls to the U.S. attorney in the middle Pennsylvania district where the case is being tried were not returned.
In Washington, D.C., the Justice Department declined comment on reports of a settlement. Mr. Druid (ph) never received a response to his letter. Today, Wal-Mart responded, calling into question Druid's (ph) credibility and saying, "We cannot find any record of his letter being received."
(END VIDEOTAPE)
TUCKER: Now Raymond Druid's (ph) concerns go way beyond Wal- Mart. All he said he ever wanted was for the company to investigate a problem at some of their stores, a problem he goes on to add that plagues his entire industry -- Kitty.
PILGRIM: Thanks.
Bill Tucker.
Wal-Mart is the world's number one retailer. The company has built its brand around low-cost products that save consumers money, but, according to a new study, Wal-Mart may be costing California taxpayers millions of dollars every year.
Casey Wian reports from Los Angeles.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN BUSINESS CORRESPONDENT (voice-over): Wal-Mart shoppers know where to find low prices, Wal-Mart workers know they're not very well paid, and Wal-Mart suppliers know to cut costs or else. With 3,500 stores, a million employees and annual sales topping one- quarter of a trillion dollars, Wal-Mart is a dominant economic force.
ARTHUR LAFFER, LAFFER ASSOCIATES: Wal-Mart is just terrific for the economy. I mean, it sells high-quality products at low cost. How could something like that be wrong or bad for the economy?
WIAN: Here's how according to a study by the U.C. Berkeley Labor Center released this week. It concluded Wal-Mart's wages are so far below those paid by other retail chains, more of its workers rely on public assistance programs. The study estimates that costs California taxpayers $86 million a year in health care and welfare for Wal-Mart workers.
JACOBS: What we found is rather than raising the bar, they're leading the race to the bottom. That has real implications for our country and our country's economy. When jobs don't pay enough for people to get by, taxpayers make up the difference.
WIAN: Wal-Mart says the study's methods and conclusions are one- sided and flawed. While it shows only half of Wal-Mart employees have company-provided health insurance, many of its workers are students, senior citizens and second wage earners with coverage from other sources.
Wal-Mart says the total with health coverage is 90 percent. The study also relied on data from an expert who testified against Wal- Mart in a lawsuit Wal-Mart says underestimated its wages.
CYNTHIA LIN, WAL-MART SPOKESPERSON: It's outrageous that U.C. Berkeley's Labor Center would release such a biased study. Berkeley's Labor Center is known to support union causes, is known to receive funding from unions whose opposition to Wal-Mart is well documented.
WIAN: Wal-Mart also says the study failed to account for the costs of unemployment and health benefits for the workers who would be without jobs without Wal-Mart.
(on camera): At the heart of the dispute is Wal-Mart's plans to open 40 Supercenters in California over the next four years. Labor unions and community activists are fighting those plans, saying saving money at Wal-Mart isn't worth the cost.
Casey Wian, CNN, Los Angeles.
(END VIDEOTAPE)
PILGRIM: Wal-Mart's impact on the American economy is the subject of tonight's Face Off, and joining me tonight from Washington is Brink Lindsey, vice president for research at the CATO Institute -- he says Wal-Mart benefits American workers and consumers -- and Robert Scott is a senior economist at the Economic Policy Institute. He says Wal-Mart is a big part of this country's trade problems.
Well, thank you both for joining us. And it's not an easy topic, but let's start right away with the subject of wages and the fact the average wage of Wal-Mart is -- the average worker's wage is $9.64. Is that something that is a problem?
Let's start with you, Robert.
ROBERT SCOTT, ECONOMIC POLICY INSTITUTE: Well, we've looked at the relationship between wages at Wal-Mart and between wages in other industries, and we found that a 10 percent increase in the Wal-Mart market share will drive wages down by 1 to 2 percentage points.
The real benefits of workers from trade occur when they enjoy rising living standards, and yet, as our trade deficits have grown over the last two decades, we've seen real wages for most production workers fall by about 7 percent on average.
Where are the benefits from these supposedly cheap imports?
PILGRIM: OK. And Brink, let me just bring in, as long as we're talking about this, the 2002 report by McKinsey Global Institute. Twenty-five percent of growth in the U.S. productivity from 1995 to 2000 was in retailing. Have the retailing workers benefited from this?
BRINK LINDSEY, THE CATO INSTITUTE: Well, let's remember why we're talking about Wal-Mart in the first place. This is a company that has been fantastically successful at giving American consumers what they want, a wide choice of goods at low prices. So, there's 100 million people who shop at Wal-Mart every day. Ultimately, Wal-Mart's future is up to them.
Also, Wal-Mart employs something like 1.4 million people, people who weren't forced to work at Wal-Mart, and presumably work there because it was the best job they could find. So, as far as the consumers are concerned and Wal-Mart's workers are concerned, Wal-Mart is doing good by both of them.
Now it is true that Wal-Mart wages are low compared to, you know, other companies in other sectors. But Wal-Mart is big. It's not big enough to set wages in retailing. Retailing wages are low because of the general relationship between the supply of and demand for low- skilled labor, and that's what retailing labor is.
Retailing labor doesn't command high wages. Wal-Mart pays as much as it has to to fill its positions and no more. And again, it provides employment opportunities to 1.4 million people, including many young people, senior citizens, and second income earners.
PILGRIM: Let's talk about the sort of debate over what Wal-Mart is doing to America, and many people think that despite the enormous consumer demand for Wal-Mart products, it's in some way eroding American life the way we knew it before.
Some people say the prices are great, but the drive distances are too long. It's not helping American towns and cities. Let's get into that a little bit.
And Robert, why don't you start?
SCOTT: Well, I think that Wal-Mart is helping some consumers who can get there by car, but Wal-Mart is causing the closure of thousands and thousands of stores across the country, many of them in the center part of towns where poorer people are located, and, often, those people have to rely on public transit.
So, the cost savings may not be as great as one might think. So, I think we have to look carefully at all aspects of Wal-Mart's impact on a community.
Also, a study done in California showed that a $1 billion drop in wage payments to Wal-Mart workers would translate into a $1.8 billion additional drop in regional income because those workers would have less money left over to spend.
PILGRIM: Brink, what do you think about this drive time debate? LINDSEY: Again it's up to consumers. If the tradeoff between drive time and prices gets them into Wal-Mart, then that's good for Wal-Mart. If it doesn't, then it's good for its competitors.
Is Wal-Mart good for America? Well, it's good for some Americans and bad for others. It's good for the people who choose to shop there. It's good for the people who choose to work there, as compared to whatever other options they might have for employment.
It's not good for their competitors. Wal-Mart is incredibly successful. It has revolutionized retailing with state-of-the-art computerized logistics, distribution and inventory management, and it's very tough to compete against them.
PILGRIM: One of the other great debates with Wal-Mart is the suppliers, and some suppliers complain that they're being squeezed, that they're forced to import some of their goods to supply Wal-Mart now, where they were able to get them domestically previously.
Robert, what do you think of that debate, or do you think that they're basically just fighting the tide of what's going on in the economy?
SCOTT: Well, I think Wal-Mart is the leading edge of our tremendous surge of imports, which I think are eroding our manufacturing base in this country.
One-eighth of all imports from China, for example, were coming in to Wal-Mart. Fourteen percent of the imports of clothing from Bangladesh were sold in Wal-Mart stores.
So, Wal-Mart is having a huge impact on our trade problems, and these threaten to destabilize our economy.
PILGRIM: Is that a problem?
SCOTT: Yes. I think that in the next few years we're going to be forced to adjust that trade deficit and that could push us into another deep recession, which I think could be bad for millions of workers throughout the economy.
PILGRIM: And yet American consumers benefit from the lower prices of imported goods. Brink?
LINDSEY: Yes, well, Wal-Mart is not eroding the American manufacturing base. If you look at the Wal-Mart era since 1980, U.S. manufacturing output has basically doubled.
As far as Wal-Mart suppliers are concerned, it can be tough doing business for an extremely demanding and extremely powerful customer. It's said thought that the only thing worse doing business with Wal- Mart, is trying to do business without Wal-Mart as one of your customers.
PILGRIM: Let's just get into this last point. And we heard a report from Casey Wian. A U.C. Berkeley study points out that Wal- Mart workers cost $86 million in public assistance; presumably, that's because they're paid so little. What do you say to that, Robert?
SCOTT: Well, I think it's true that Wal-Mart workers have to rely on public assistance. An average Wal-Mart worker making $9 and change an hour is actually earning less than the poverty-level wage.
On the other hand, cost of benefits is very high at Wal-Mart. They pay about 25 to 30 percent of their wages if they want to buy health insurance there. And Wal-Mart, in fact, tells its workers to apply to public assistance for help with health insurance and other needs.
So, Wal-Mart knows that it's driving its workers into poverty and it persists in these kinds of employment practices.
LINDSEY: I think the Berkeley study is fundamentally silly. If Wal-Mart vanished from the face of the earth tomorrow, would these public assistance costs go away? Of course not, you just have 1.4 million people out of work. These people work at Wal-Mart because it's the best job they can find. So, the idea that somehow or other Wal-Mart is driving them into poverty and penury is, again, just silly.
PILGRIM: All right. Thanks very much. We won't solve it tonight but it was very worth discussing. Robert Scott and Brink Lindsey, thanks very much.
LINDSEY: Thank you.
SCOTT: Thank you.
PILGRIM: That brings us the subject of tonight's poll: do you think Wal-Mart is good for America? Cast your vote at cnn.com/lou and we'll bring you the results later in the show. Let's take a look at some of your e-mails and some of your thoughts.
And many of you were outraged about our report last night that the Pentagon has awarded a massive defense contract to a consortium that includes a foreign aerospace company.
Vincent Wilson of Texas writes: "No government contracts should be sent overseas. The cost argument is a fallacy. How much U.S. income tax will workers in Brazil or Spain pay? How much additional expense will there be in another bankrupt American family?"
Carolyn of West Alexandria, Ohio, writes: "The government sets a bad example for the rest of corporate America when they buy products outside the U.S. that can be produced here."
And Ken McBride of Amherst, Virginia, writes: "Awarding a multibillion dollar contract for a new aircraft to be essentially built in Brazil, Spain and Chile is just another example of the downward spiral of the American economy. What is next, building the next Army tank in China?"
We love hearing from you. E-mail us at loudobbs@cnn.com. Still to come tonight, "Crimes Against Nature." Robert F. Kennedy, Jr. says the White House is putting our nation's health and security at risk, for profit. And he is our guest, next.
Plus the teacher who had an affair and two children with a former student spends her first day out of prison. We'll have a report on what's next for Mary Kay Letourneau.
And then how crime pays for some corporate executives even after they've been sent to prison. Those stories and much more still ahead here tonight.
(COMMERCIAL BREAK)
PILGRIM: Robert F. Kennedy, Jr. has written a new book lambasting the Bush White House. It accuses the administration of jeopardizing our health, national security and democracy all for greed.
The new book is called "Crimes Against Nature: How George Bush and His Corporate Pals are Plundering the Country and Hijacking our Democracy." Robert Kennedy is one of the nation's most prominent environmental advocates and he joins me now. Thanks very much for joining us.
ROBERT F. KENNEDY, JR., AUTHOR OF "CRIMES AGAINST NATURE": Thanks for having me.
PILGRIM: These are very harsh words and yet you maintain that this is not a political book.
KENNEDY: I've been disciplined over 20 years as an environmental advocate about being nonpartisan and bipartisan. I don't believe that there's such thing as Republican or Democratic children. I've supported both Republican and Democratic candidates with strong environmental records.
But in this case, we have never seen anything like this in our history, where we have a concerted, disciplined assault on 30 years of environmental legislation that threatens now to dismantle, to eviscerate all of our federal environmental laws.
It's a stealth attack that's not being covered by the media. It's deliberately a stealth attack because the President has seen the poll numbers. His own pollster warned him that this radical agenda would be unpopular, not only in the Democratic Party but equally so within the rank and file of the Republican Party.
The White House has put the polluters in charge of virtually all the government agencies that are supposed to enforce our environmental loss.
PILGRIM: By polluters you mean people who have previously worked for corporations?
KENNEDY: Well, look, the second-in-command of the EPA is a Monsanto lobbyist. The head of the Forest Service is a timber industry lobbyist. The head of Public Lands is a mining industry lobbyist. The head of the Air Division at EPA is a utility lobbyist who has done nothing but represent polluters for his entire career.
These are people who did not enter government service for the public interest. They are at work dismantling and subverting the very laws that they are charged now with enforcing.
PILGRIM: So, do you think people who worked in these industries should be precluded from working in government in these areas?
KENNEDY: No, of course not. I don't think that there's anything wrong with having people who work for corporations be in power. But if the corporations are actually dictating our federal policy -- which is happening with this administration -- I'll give you an example with mercury.
In the state of Connecticut it's now unsafe to eat any fresh water fish in the state. The same is true in 17 other states. That mercury is coming from 1100 power plants primarily that are discharging it illegally.
The Clinton administration proposed a regulation that would force them to clean up within 3.5 years. It would have cost them -- we can do it easily -- it costs less than 1 percent of the revenues to the plants. But this is an industry that gave $100 million to the Bush administration, and six weeks ago the Bush administration announced that it was abandoning those regulations and adopting, instead, regulations that would require them never to clean up.
The new regulations were written by Latham & Watkins, a law firm for the utilities that were being prosecuted for breaking the law. The head of the chief lobbyists of that law firm is now the head of the Air Division at EPA.
PILGRIM: It's a compelling argument and you make it well. But isn't it incumbent on Congress to pass a legislation when it's proposed? It seems to have lagged in Congress.
KENNEDY: No. We have strong laws on the books. We have very good regulations and very good laws in this country to protect the environment. But those laws are being subverted. The enforcement has virtually stopped throughout the administration because the enforcement divisions have been de-funded. So, there's no money to enforce these laws. Then the people who are supposed to be enforcing the laws are the polluters from the companies that are being prosecuted.
And so, you've basically got a situation where we have very strong laws but the whole government is ignoring them and allowing criminals to flourish in our marketplace when we should be prosecuting them.
PILGRIM: You made this a lifetime...
KENNEDY: It's like if you put a bank robber the head of the SEC and who said, "I'm going to turn my back on all bank robbers." That's what's happening. And it's laughable but it actually is happening throughout all these agencies, and, you know, I give hundreds and hundreds of examples of this in the book.
PILGRIM: And it's a great book, and it's very compelling. And it is disturbing that some of our environmental issues are languishing and particularly in a campaign year, where distraction is being made over other issues. Great debate over homeland security; great debate over jobs.
Are environmental issues going by the wayside in this campaign year? Are you disturbed with the lack of focus?
KENNEDY: Yes. But this is always a challenge for the environmental movement. Americans care deeply about the environment, both Republicans and Democrats. There's almost no difference in the poll...
PILGRIM: It should be above politics.
KENNEDY: That's right. It should be above politics. And it's very bad for the environment to become the province of a single political party.
The problem is that you have an administration that is deliberately mounting a stealth attack and, you know its own pollster advised them: Frank Luntz advised the President in 2002, "We have to hide this from the American public because it's a radical agenda that is going to be offensive to people within our own party."
Plus you have a media that has been negligent about covering these issues. And actually Paul Krugman did a wonderful article this weekend for "The Sunday Times" in which he showed that the media is covering the fist fight but they're not -- the political fist fight, but there's almost no coverage of the actual positions of the candidates or the outcomes of many of these policies that have been promoted by the Bush administration.
PILGRIM: Well, hopefully through this segment and through your efforts we can draw more detail to this debate. Thank you very much for joining us.
KENNEDY: Thanks for having me.
PILGRIM: Tonight's thought is on politics. Politics ought to be a part-time profession of every citizen who would protect the rights and privileges of free people, and who would preserve what is good and fruitful in our national heritage. Those are the words of President Dwight Eisenhower.
A reminder now to vote in tonight's poll. Do you think Wal-Mart is good for America? Cast your vote at cnn.com/lou. We'll bring you the results a little bit later in the show.
Coming up: an elementary school teacher convicted of having sex with a sixth-grader is free tonight. Her former student is going back to court but not for the reasons you might expect.
And a shocking mistake lands two American families in court fighting for a child they each believe is theirs.
(COMMERCIAL BREAK)
PILGRIM: A former grade school teacher convicted of having sex with her six-grade student was released from prison.
Mary Kay Letourneau was convicted in 1997 of having an affair with a then-12-year-old boy. She served seven and a half years in prison. Kimberly Osias has the report from Seattle, Washington -- Kimberly.
KIMBERLY OSIAS, CNN CORRESPONDENT: Good evening, Kitty. Well they called it love; prosecutors called it rape. Tonight, Mary Kay Letourneau is an ex-convict, after spending seven years in a Washington state correctional facility for women.
She walked out about 1:00 a.m., surprising media and nobody even saw her. There were signs saying, "Take me home, baby," and "I'm 18." She did what many would consider taboo, crossing moral, ethical and legal lines as his teacher.
With a rocky marriage and four children already, Mary Kay Letourneau became pregnant by Fualaau and pled guilty to two counts of child rape in 1997. After just five short months in jail, a judge had mercy and gave her a second chance.
But right after her release, she defied a court order and had sex with the student again. The pair was caught in a car with $6,000 in cash and clothes. She landed back in jail, where she gave birth to the pair's second child.
Now for his part, Vili Fualaau, he's working on a GED. As far as Mary Kay, he says he is open about their romantic possibilities.
(BEGIN VIDEO CLIP)
VILI FUALAAU, LETOURNEAU'S FMR. STUDENT: I'm kind of nervous. I don't know what my feelings are right now, but I know I do love her.
(END VIDEO CLIP)
OSIAS: Mary Kay Letourneau will have 24 hours to register here in King County as a sex offender. As such, she will be under very close scrutiny for the next three years. She will have to meet with authorities every 90 days; in fact, be sure to tell them about her neighborhood, her work, any kind of relationship or romantic relationship at all, she will have to report to them.
As far as Vili Fualaau, well today, through his attorney, they filed a motion asking that the two could see one another. The district attorney's office, well, they are having a hearing, they're deciding whether or not they will ask Judge Linda Lau for a hearing in the matter. For her part, Judge Linda Lau can do a number of things. Either she can ask for psychological testing to be done on Vili Fualaau, she can rescind the ban or not allow the two to see one another -- Kitty.
PILGRIM: All right. Thanks very much, Kimberly Osias.
A San Francisco woman today was awarded $1 million in damages in a malpractice suit against her fertility specialist. Susan Buchweitz's doctor implanted her with wrong embryos and then covered up his mistake. Rob Flatabeau (ph) of CNN affiliate KRON reports from San Francisco.
ROB FLATABEAU (ph), CNN AFFILIATE KRON CORRESPONDENT: Susan Buchweitz gave birth to a healthy baby boy three years ago by way of in vitro fertilization. But somehow she got the wrong embryo here at the fertilization clinic of the Bay Area.
And now the couple who provided the embryo is suing for custody of the child, arguing that since both women were implanted with embryos fertilized by the husband's sperm, the children are biologically brother and sister.
(BEGIN VIDEO CLIP)
NANCY HERSH, SUSAN BUCHWEITZ'S LAWYER: It has actually wrecked her life. It's been a horrible, terrible thing. She had a baby that she thought was hers alone. She found out that the baby was from the embryo of someone else.
(END VIDEO CLIP)
FLATABEAU (ph): Susan Buchweitz successfully sued her doctor, Steven L. Katz, for malpractice, and has reportedly mortgaged her Campbell home to defend against the couple's custody suit.
In the meantime, the case has raised questions about why months went by before the mistake was finally revealed by a whistle-blower and how could the embryos have been mixed up to begin with?
(BEGIN VIDEO CLIP)
DR. DAVID ADAMSON, FERTILITY PHYSICIANS OF NORTHERN CALIFORNIA: Somehow the identification protocol clearly broke down.
(END VIDEO CLIP)
FLATABEAU (ph): Dr. David Adamson of Fertility Physicians of Northern California, not connected to the San Francisco clinic, says there is no national standard; that protocol varies from one clinic to the next, but offered this advice:
(BEGIN VIDEO CLIP)
ADAMSON: I think that people should check to make sure the clinic is a member of the SART, the Society for Assisted Reproductive Technology. They should meet with the physician and make sure that they are comfortable with them and that they have all of their questions answered. And they should ask their doctor about protocols in place to deal with this kind of situation.
(END VIDEO CLIP)
FLATABEAU (ph): The technology itself, says Adamson, is reliable with more than 100,000 successful in vitro babies born since the first so-called test tube baby was born 26 years ago. Nancy Hearst says her client is telling her story now in the hope that it won't happen again to someone else.
(BEGIN VIDEO CLIP)
HERSH: Her main interest is in educating the public and other women who undergo in vitro procedures to be careful, to become their own patient advocates; not to assume that there are protocols in place that will protect them.
(END VIDEO CLIP)
PILGRIM: That was Rob Flatabeau (ph) of KRON reporting from San Francisco.
Still ahead: no more free rides for NASA. Russia tells the United States to pay up.
And big bucks in the big house: corporate big wigs prove exactly how crime pays. We'll have the report.
(COMMERCIAL BREAK)
PILGRIM: Russia has told NASA it will not give American astronauts any more free rides to the International Space Station. Russia says it will begin charging the United States for shipping astronauts and cargo to the station next year.
Now, the two countries had agreed to split the cost of going to the space station, but Russia has launched the only mission since the shuttle Columbia disaster last year. NASA has said the next shuttle mission could be as early as next spring.
On Wall Street, stocks showed very little change. The Dow rose six points, the NASDAQ lost four and the S&P dropped a point. Oil prices eased from record highs, down below $43 a barrel.
And turning now to the big fight against corporate crime, some CEOs who end up in prison, still earning big bucks behind bars. Christine Romans is here with that report -- Christine?
CHRISTINE ROMANS, CNN CORRESPONDENT: Kitty, it's more than two year after this wave of corporate scandals and CEOs are getting paid more than ever. And some convicted executives are still collecting their paychecks while in prison.
(BEGIN VIDEOTAPE) ROMANS (voice-over): Andrew Wiederhorn is a convicted felon, serving an 18-month prison sentence. He's also the CEO of Fog Cutter Capital Group. It's listed on the NASDAQ and owner of the Fatburger hamburger chain.
This incarcerated CEO is collecting a $2.5 million paycheck, and has the full support of his board of directors. They say he was wrongfully prosecuted, so they're keeping him on the payroll, paying his $2 million fine and they might even give him a bonus.
LANNY DAVIS, ATTORNEY, FOG CUTTER CAPITAL GROUP: We, on the Fog Cutter Board, thought it was the best interest of our shareholders to help Mr. Wiederhorn out so he would return and do the kind of outstanding job he had done for the company, which had shown profitability over these years. And we need him to come back to continue the profitability.
ROMANS: It's a complicated case, but bottom line: he pleaded guilty to felony tax and improper payment charges related to activities before he took over Fog Cutter. Still, the NASDAQ has threatened to de-list the stock and shareholders are suing.
The case of shoe designer Steve Madden is more cut and dry. He's serving 41 months for stock fraud and money laundering. He's getting $700,000 a year behind bars.
Martha Stewart still reaps $1.2 million a year as founding editorial director. Her company has made no move yet to take her off the payroll.
One consultant to company boards says he's surprised a company would pay a CEO who's in prison.
DANIEL RYTERBAND, FREDERIC W. COOK: I can't find, personally, any rationale that would support continuing to pay them while they're distant from the company and distant in the sense that they've been prohibited from serving the company due to a jail sentence.
ROMANS: The Bureau of Prisons makes it clear, that these CEOs will not be allowed to conduct any company business behind bars. No conference call, no business meetings, no strategy sessions.
(END VIDEOTAPE)
(on camera): So, these companies are spending precious shareholder dollars for nothing more than corporate talent sitting by doing time -- Kitty?
PILGRIM: Unbelievable, Christine.
ROMANS: It really is and each of these cases has its own sort of et cetera; sort of asterisk, if you will.
You know on the first case, Andrew Wiederhorn, they say, "Well, he didn't do anything wrong." Well he may not have done anything wrong but in a court of law he pleaded guilty. Martha Stewart, she could appeal; that process is not over yet.
And it's a licensing agreement for the Steve Madden there. They're paying him for the use of his name.
So, it's very interesting, but to think of this whole wave of corporate corruption and have CEOs in jail, convicted felons, earning paychecks; shareholder money. It's just astonishing.
PILGRIM: Sign of the times.
ROMANS: I guess.
PILGRIM: Thanks, Christine Romans.
Well, let's look at some of your thoughts.
And Gail Rubio of Brea, California, wrote about the "Middle Class Squeeze": "An alarming number of Americans are working two or more jobs to keep their families going. The basic benefits of retirement planning or health care have disappeared for all but the top echelons of any large corporation."
And on the polarization in this country:
Lia, of Sarasota, Florida, writes: "It looks to me like this nation is not the United States of America. The two-party system is not working. The parties are at war with each other. Do I dare dream that the Republicans and the Democrats will work together to keep the United States united?"
We love hearing from you. E-mail us loudobbs@cnn.com.
Still ahead, the results of tonight's poll.
(COMMERCIAL BREAK)
PILGRIM: Now the results of tonight's poll: 19 percent of you think Wal-Mart is good for American and 81 percent do not.
Thanks for joining us tonight. Please join us tomorrow when former Senator and presidential candidate, Gary Hart, joins us to discuss his new book, "The Fourth Power," and his vision for the American farm policy in the 21st century.
For all of us here, good night from New York. "ANDERSON COOPER 360" is next.
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