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Lou Dobbs Tonight

Videotape Shows American Contractor Kidnapped; Administration to Request $80 Billion More for Iraq

Aired January 25, 2005 - 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.


(BEGIN VIDEOTAPE)
KITTY PILGRIM, HOST (voice-over): Tonight, terror in Iraq. An American hostage pleads for his life. Six American troops are killed. How long will our troops have to stay in Iraq?

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: We're going to do everything we can to support our troops.

PILGRIM: One of the most powerful members of Congress says Iraqis must take more responsibility for their own security. House Armed Services Committee Chairman Congressman Duncan Hunter is my guest tonight.

In "Broken Borders," an astonishing security breach along our border with Mexico, as hundreds of U.S. citizens take direct action to stop the massive invasion of illegal aliens.

UNIDENTIFIED MALE: We don't need immigration reform. What we need is a secure border and enforcement of the laws that are on the books.

PILGRIM: And the high cost of free trade, two leading senators are planning legislation to slash our exploding trade deficit with China. I'll talking to those senators about the escalating Chinese threat to our global economic supremacy.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, January 25. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening.

Terrorists in Iraq today released a videotape of an American hostage pleading for his life. The hostage, Roy Hallums, was kidnapped in Baghdad last November.

Six more American troops have been killed in Iraq. Five were killed when their Bradley fighting vehicle overturned near Baghdad. The other soldier was killed by a roadside bomb.

Jeff Koinange reports from Baghdad.

(BEGIN VIDEOTAPE) JEFF KOINANGE, CNN CORRESPONDENT (voice-over): Nearly three months after his abduction in Baghdad, American contract worker Roy Hallums appears in a videotape. With an assault rifle pointed to his head, he speaks softly and appeals for help in saving his life.

ROY HALLUMS, HOSTAGE: I am asking for help of Arab rulers, especially President Moammar Gadhafi, because he's known for helping those who are suffering.

KOINANGE: Hallums was a contract worker, employed by a Saudi company. He was seized in November after a gunfight in the Mansour neighborhood of Baghdad.

On the streets of the Iraqi capital, the violence continues five days before Iraqis go to the polls.

Tuesday, a judge was gunned down along with his son just as they were leaving their home. He's the third senior official to be assassinated this year. The governor of Baghdad and city's police chief were both murdered in separate drive-by shootings this month.

To try to disrupt the insurgents, the U.S. and Iraqi military launch raids every day, seizing weapons caches like this one in Baghdad, and going house to house in Falluja, on the hunt for the enemy.

For now, interim Prime Minister Ayad Allawi knows that U.S. forces are indispensable, but he insists Iraq will take care of its own.

AYAD ALLAWI, INTERIM PRIME MINISTER OF IRAQ (through translator): Large number -- large areas of our country is now enjoying a good secure situation, and our security situation, our security forces are shouldering the responsibility of security in these places.

KOINANGE (on camera): The optimists believe this weekend provides an important step towards democracy. The pessimists say it means little in the face of a brutal battle for power.

Jeff Koinange, CNN, Baghdad.

(END VIDEOTAPE)

PILGRIM: A top general says the United States will likely keep 120,000 soldiers in Iraq for at least two more years. The general's statement appears to contradict assertions that Iraqi troops can replace American troops anytime soon.

His remarks also raise new questions about the military's ability to deploy enough troops in the global war on terror.

Senior Pentagon correspondent Jamie McIntyre reports.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN CORRESPONDENT (voice-over): The Pentagon hopes by stiffening Iraqi military units with teams of U.S. military advisers, the Iraqis can take over the fight against the insurgents and allow the U.S. to begin to pull out, but critics say that's more wishful thinking than exit strategy.

REP. ELLEN TAUSCHER (D-CA), ARMED SERVICES COMMITTEE: They frankly can't live without us. They need the coalition forces to be there to protect their opportunity to govern. That is why I think we are there for the long term.

MCINTYRE: In fact, the Army isn't counting on any significant drawdown anytime soon. Its latest planning assumes up to 120,000 fresh soldiers will be needed for Iraq for at least the next two years.

Right now, 44 percent of the Army's combat troops in Iraq are part-time soldiers from the National Guard. And with upcoming troop rotations, the last of the Guard's 15 enhanced brigades, the most deployable units, will have been sent.

With the Pentagon's goal of limiting the service of Guard and Reserve troops to a total of two years, the pool of available part- time replacements or active-duty soldiers is rapidly being tapped out.

SUSAN RICE, BROOKINGS INSTITUTION: We already have gone to a back-door draft and prevented soldiers and enforcers from leaving the Army that are due to leave. We have a real problem of capacity.

MCINTYRE: The Guard will get a bit of a break in the next rotation, as the Pentagon sends back to Iraq units that have already served one tour there.

The percentage of active-duty troops in Iraq will rise from 50 percent to about 70 percent this summer with the return of the 3rd and 4th Infantry and 101st Airborne divisions.

(END VIDEOTAPE)

MCINTYRE: The Army's plan was to rely more on active Guard and Reserve troops last year so that active-duty soldiers could take more of the burden this year and get more recovery time.

Now, the commander of the National Guard set today that he is not in danger of running out any troops, so long as the Pentagon sticks to that plan -- Kitty.

PILGRIM: Thank you very much. Jamie McIntyre.

Later in the show, I'll be talking with the chairman of the House Armed Services Committee, Congressman Duncan Hunter, about U.S. troop levels in Iraq. And I'll also ask him whether our military has enough troops to fight the war in Iraq and the global war on terrorism at the same time.

The White House is asking Congress for nearly $100 billion more to pay for the wars in Iraq and Afghanistan this year. The news comes on the same day that Congressional experts predicted the budget deficit will reach $368 billion this year. Now, that number does not include the extra spending in Iraq and Afghanistan.

White House correspondent Dana Bash reports.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CORRESPONDENT (voice-over): Nearly two years after launching war in Iraq, the Bush administration is asking Congress for more than $80 billion in new spending for operations there and Afghanistan. That, plus $25 billion approved this summer, puts the price at $105 billion over the Pentagon's regular budget this year.

That makes the total cost of war nearly $300 billion, an average of $4.3 billion a month in Iraq alone, a bigger than expected price tag because of an Iraqi insurgency that caught the White House by surprise.

MCCLELLAN: We didn't expect that the Iraqi army under Saddam would flee the battleground like they did and come back to fight another day. They did it in large numbers.

BASH: Just after the Iraq war began, the deputy defense secretary suggested the fighting would soon end and Iraqis would pick up most of the tab.

PAUL WOLFOWITZ, DEPUTY DEFENSE SECRETARY: There's a lot of money to pay for this that doesn't have to be U.S. taxpayer money.

BASH: Democrats called the $80 billion request more proof of administration blunders and abuse of the emergency spending label. Most promised to give the troops what they need, but ask tough questions first.

SEN. BARBARA BOXER (D), CALIFORNIA: What is it going to be used for? Does it incorporate into the $80 billion some type of an exit strategy?

BASH: Because of the additional military spending, the White House announced the government will now run a $427 billion deficit in 2005.

SEN. HARRY REID (D-NE), MINORITY LEADER: We have red ink as far as you can see.

BASH: Senior officials insist they will shrink the deficit. That means what the president calls a tough budget: cuts in domestic programs.

By comparison to other government spending, the $105 billion in supplemental war funding is nearly double the entire 2005 budget for the Department of Education, and 2.5 times that for homeland security.

(END VIDEOTAPE)

BASH: Senior officials would not be specific on exactly how they intend to spend the $80 billion, except to say, Kitty, that they do think much of it will go for refurbishing and replacing worn-out or even destroyed equipment in Iraq -- Kitty.

PILGRIM: Dana, I have to ask you, there was a surprise sighting at the White House, someone who used to work there, in fact, and got into trouble for an infamous prediction he made on the cost of the war in Iraq.

BASH: A twist of irony here, Kitty, today. Larry Lindsey, who of course was President Bush's economic adviser, and as you said, was reprimanded for predicting that the cost could go up to $200 billion -- that was before the war -- was here at the White House today. You saw some pictures.

He was just having some meetings with some of his former colleagues, we are told, but it certainly is a bit ironic that he was here the same day that the White House requested money that, as we reported, put the cost of war in Iraq and Afghanistan at over $300 billion.

PILGRIM: Well, I'm sure he couldn't resist an "I told you so." Thanks very much, Dana Bash.

The United States tonight is stepping up pressure on Syria to stop the flow of money to terrorists and insurgents in Iraq. American officials say a Syrian citizen is a key supporter of the al Qaeda network in Iraq.

National security correspondent David Ensor reports.

(BEGIN VIDEOTAPE)

DAVID ENSOR, CNN CORRESPONDENT (voice-over): The U.S. move aims to reduce attacks by insurgents in Iraq against coalition forces and Iraqi security personnel by cutting off the money that funds the insurgency.

The U.S. Treasury Department says foreign insurgents like Jordanian Abu Musab al-Zarqawi are being helped with money and recruits by a 29-year-old Syrian national, Salayman Karwin Darwish (ph).

JUAN ZARATE, ASSISTANT TREASURY SECRETARY: In Iraq, it's money that allows the activities that we've seen and the activities of Zarqawi to continue.

These individuals need to recruit, they need to train, they need to eat, sleep, buy weapons, and that comes with the resources and money.

So it's part of our strategy to try to break, as Secretary Snow said, the financial backbone of these terrorist networks.

ENSOR: The Treasury Department is asking a United Nations committee to put Darwish on a list of terrorists tied to Usama bin Laden, Al Qaeda or the Taliban, which U.N. member states are required to freeze the assets of and prevent from traveling. Syrian officials insist the government of Syrian President Bashar al-Assad has been looking for Darwish for years, and they, too, have now asked the U.N. to put him on the list. They deny suggestions by some U.S. officials that Damascus is helping Iraqi insurgents or at least turning a blind eye.

WOLF BLITZER, CNN ANCHOR: Are you cooperating in any way with the insurgents?

FAROUK AL SHARA, SYRIAN FOREIGN MINISTER: Not at all. We are not friendly even with them because this is not the right way to help the Iraqis.

(END VIDEOTAPE)

ENSOR: Treasury officials did not criticize Syria directly, but do say they hope this action will cause Damascus to do more against Syrians who are helping the Iraqi insurgents -- Kitty.

Thanks very much.

David Ensor.

Still to come, "Citizens Take Action" to secure our borders.

(BEGIN VIDEO CLIP)

CHRIS SIMCOX, PUBLISHER, TOMBSTONE TUMBLEWEED: It's a direct challenge. President Bush, do your job.

(END VIDEO CLIP)

PILGRIM: In our special report tonight, how hundreds of citizens hope to succeed where the federal government has failed.

And U.N. Secretary General Kofi Annan faces more questions on his role in the oil-for-food scandal.

(COMMERCIAL BREAK)

PILGRIM: The intelligence bill that President Bush signed into law in December calls for an increase of 10,000 border protection agents over the next five years. The first 2,000 new agents were to be in place by the end of next year.

Now, however, Homeland Security Secretary Tom Ridge says the president's budget proposal will call for fewer new agents.

(BEGIN VIDEOTAPE)

PILGRIM (voice-over): The nation's borders are by clear evidence porous. Three million illegal aliens managed to slip across the border last year.

So, when Congress passed the intelligence bill in December, it authorized the hiring of 2,000 more border guards each year, 10,000 over the next five years, doubling the number of guards who patrol the borders now.

President Bush signed off on the bill authorizing the increase, but the law includes a disclaimer, "subject to funds appropriated by Congress," and now it seems the president will not request enough money for the full 2,000 guards to be hired, leaving it up to Congress to request the additional funds.

T.J. BONNER, NATIONAL BORDER PATROL COUNCIL: I knew that this administration would short-change us. Now it remains to be seen whether Congress is going to go along with this or whether they're going to confront the president and say we know that we need more Border Patrol agents out there, so we're putting it back into the budget.

PILGRIM: The Department of Homeland Security says the new budget, to be unveiled in February, will include additional funding for technology, which also enhances security. Critics say what's missing in this funding debate is a comprehensive strategy for protecting the nation's borders.

JAMES CARAFANO, HERITAGE FOUNDATION: Before we start throwing money at the problem, which is what we're wont to do in Washington, which may or may not solve the problem, we need to -- somebody needs to come to us and lay out a strategy to explain what is the best way to reduce the problem of illegal entry into the United States and the unlawful presence of people here.

(END VIDEOTAPE)

PILGRIM: This is not the first time Congress has proposed new federal hiring without offering up more funding. Administration officials note that Congress didn't even approve the legislation until the White House had already begun to finalize its Homeland Security budget for this fiscal year.

Hundreds of American citizens are hoping to succeed where the federal government has failed. They're taking action to secure or borders themselves. Citizens from all over the country are going to Arizona to patrol the busiest stretch of border in the nation. Millions of illegal aliens cross that border every year.

Casey Wian reports from Tombstone, Arizona.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Two hours before dawn in Arizona, the office of the Tombstone Tumbleweed newspaper opens. Publisher Chris Simcox prepares to lead a group of civilian volunteers patrolling for illegal aliens.

SIMCOX: I've spent time here on the border and heard the stories of the people that live along the border, how they feel abandoned by the president and Congress.

WIAN: So he formed a group, Civil Homeland Defense. SIMCOX: It's a direct challenge. President Bush, do your job. The people want you to spend our tax dollars securing that border. We don't need immigration reform. What we need is a secure border.

WIAN: Using thermal imaging cameras, they search the desert ravines and underbrush, popular resting spots for illegal aliens through the nation's busiest smuggling corridor.

SIMCOX: I've trained just about 400 people in the last two years.

WIAN: Some are former law-enforcement officers, and some are armed, which is legal in Arizona.

SIMCOX: We've been shot at, we've had knives pulled on us, we've had people tell us that if we didn't have that holstered firearm on our side that they'd kill us.

WIAN: When they encounter illegal aliens, they don't try to arrest or apprehend. They call the Border Patrol. Simcox says his volunteers have turned in 6,000 suspects from 26 different countries. Now they're recruiting new members willing to spend a month patrolling the border.

(on camera): The Minuteman Project plans to have more than 1,200 protesters here at the border crossing at Naco, Arizona, on April 1. Then, for the rest of the month, several hundred volunteers will spread out throughout the area and try to stop illegal border crossings.

(voice-over): Volunteers lie Al Garza.

AL GARZA, MINUTEMAN PROJECT VOLUNTEER: I'm Hispanic, but not all Hispanics have the same concepts. We are Americans. We'll defend it 100 percent.

WIAN: The local sheriff says there's huge potential for confrontations between armed citizens, landowners and smugglers. He's warned the Minuteman Project to obey the law.

SHERIFF LARRY DEVER, TOMBSTONE, ARIZONA: Clearly, you know, in my opinion, the cause is just. You know, securing or borders is an absolute necessity.

WIAN: The Minuteman Project says volunteers are being screened and trained to avoid violence.

JIM GILCHRIST, MINUTEMAN PROJECT ORGANIZER: We will not have a conflict with illegal immigrants. We will not confront them. We will not engage in any combative actions whatsoever.

SIMCOX: It's not about who you are and where you come from or what language you speak or what color your skin is. It's about you breaking into our country.

WIAN: Casey Wian, CNN, Tombstone, Arizona. (END VIDEOTAPE)

PILGRIM: We'd like to hear from you on this critical issue, and our poll question tonight is: Do you believe civilian volunteers should patrol our border with Mexico to keep illegal aliens out of this country? Yes or no. Cast your vote at loudobbs.com, and we'll bring you the results later in the show.

Still to come, illegal aliens landing. How immigration officials are fighting the latest trend in illegal border crossings. We'll have that next.

And then, U.N. Secretary General Kofi Annan is questioned in the massive oil-for-food scandal. We'll tell you how much time he's been spending with investigators, next.

(COMMERCIAL BREAK)

PILGRIM: Federal agents tonight are questioning four suspected illegal aliens accused of flying across the U.S. border in a private plane. The plane carrying four Chinese nationals was ordered to land in Texas overnight.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN FINANCIAL CORRESPONDENT (voice-over): An attempt to smuggle in four Chinese aliens ended in arrest in San Antonio, Texas. The pilot expected to be formally charged Tuesday afternoon with human smuggling in connection with the four Chinese, two men and two women.

Federal agents say the four have no connection to the Boston terror threats of last week, but the agents say this latest incident underscores the threat at our borders.

ALONZO PENA, IMMIGRATION AND CUSTOMS ENFORCEMENT: This is just probably an example of the vulnerabilities that are now out there that we have to be aware of as ICE agents and what we do, is that it's becoming more and more difficult for these smugglers to bring their human traffic into the country, and they're going to try every route and every method they can.

TUCKER: The arrests were made by Immigration and Customs Enforcement agents working together with agents from Customers and Border Protection. Acting on a tip, they tracked the plane on radar and tailed it with a plane from its takeoff in Eagle Pass, Texas, just over the border from Mexico, to its landing at Stinson Municipal Airport in San Antonio. The four Chinese aliens remain in custody and will most probably be sent back to China.

(END VIDEOTAPE)

TUCKER (on camera): Now, in a separate incident, three Mexican nationals were arrested in Austin, Texas, after their plane landed carrying 108 pounds of marijuana. All three men in that particular case hold green cards, and they are lawful permanent residents of the United States.

What's interesting is that both flights, the alien smuggling and the drug smuggling planes, began at the same time from the same airport, Kitty, and that's Stinson Airport in San Antonio, Texas.

PILGRIM: Is there a connection?

TUCKER: Authorities don't know, and they are saying that they want to look at this because it is too odd a coincidence in terms of the timing and the way both flights worked. So they are investigating to see if these are somehow related incidents.

PILGRIM: Maybe not a connection, but certainly a problem.

TUCKER: Exactly.

PILGRIM: Thanks very much.

Bill Tucker.

Well, the FBI today said that the terror threat in Boston involving illegal aliens was a false alarm. The FBI says it arrested the man who gave them the tip about four Chinese nationals who crossed our border with Mexico illegally.

Now that man said the four were heading toward Boston with dangerous materials, but the FBI now says there were no terrorist plans under way. The FBI said it arrested the tipster in Mexico, but released no other information.

Still ahead, "Bombs & Ballots." I'll be talking with the powerful chairman of the House Armed Services Committee about the Iraqi election, the number of American troops in Iraq and how long they're likely to be there.

And the "High Cost of Free Trade." Two leading senators who are fighting to save American jobs by forcing China to play fair.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: In a moment, I'll talk with the chairman of the House Armed Services Committee about the challenges to Iraq's first democratic elections.

But, first, these stories.

A Navy helicopter crashed today about 30 miles off the coast of Virginia Beach. All eight crew members on board were rescued. Their condition not immediately known. The helicopter was on a routine training mission when it crashed. More than a million residents in Phoenix, Arizona, have stopped -- have been warned to stop using their tap water because of problems at water treatment plants. City officials are telling residents to boil water or use bottled water for drinking, cooking food, also washing dishes. Officials say the problems were caused by recent flooding.

A spectacular scene in Massachusetts where homes on the South shore look like igloos. Heavy winds carrying sprays of ocean water froze the homes into blocks of ice. Forecasters warn of another storm, saying six more inches of snow could fall on parts of eastern Massachusetts tomorrow.

A new development tonight in the massive multibillion-dollar oil- for-food scandal at the United Nations. The U.N. today said Secretary General Kofi Annan has been questioned in the U.N.'s independent investigation.

Senior U.N. Correspondent Richard Roth has the report -- Richard.

RICHARD ROTH, CNN SENIOR U.N. CORRESPONDENT: Kitty, this is the day we got official confirmation for the first time that Kofi Annan, the U.N. secretary general, has been questioned as part of this oil- for-food investigation, at least the investigation authorized by the Security Council and run by Paul Volcker.

This was the scene when the two men met several months ago when the investigation was first voted for by the Security Council after Annan wanted an internal probe. However, today, U.N. spokesman Fred Eckhard, when I asked, said, yes, it's true. Three times now, Annan has met with Volcker and his people.

(BEGIN VIDEO CLIP)

FRED ECKHARD, U.N. SPOKESMAN: He has met more than once for an extended period of time with Mr. Volcker and his investigators. So, yes, the secretary-general is part of the investigation, is a subject like anyone else involved in Oil-for-Food in the secretariat, and he has been questioned and most likely will continue to be questioned as Mr. Volcker's investigation continues.

(END VIDEO CLIP)

ROTH: The secretary being the administrative arm of the U.N., with Kofi Annan as the chief executive officer. Secretary-General Annan being questioned is not really a shock, but it's interesting third time now, shortly after the spokesman made his comments, it was revealed that he had met with Annan today and nearly three and a half to four hours of conversations between the two men. Annan seen here just a couple weeks ago on his trip, last chance to really get away from Oil-for-Food, but his son remains at the heart of this. At least one of the angles of the probe, did he accept money and possible impropriety involved with getting the contract for the Cotecna company.

Paul Volcker after his interview with Annan today to the press. (BEGIN VIDEO CLIP)

PAUL VOLCKER, HEAD, OIL-FOR-FOOD INQUIRY: I couldn't tell you what I accomplished today. We've met with him from time to time. We'll have a report shortly, and it will be a little later than we anticipated, probably into early February.

(END VIDEO CLIP)

ROTH: It was originally planned for January 31. Now it is either going to be February 7, February 8 for the first interim report, which will involve procurement and perhaps Cotecna and these other companies that handled the inspections. But any type of surprise is always possible in this first report.

PILGRIM: And hopefully lots of detail, Richard.

ROTH: Hopefully enough that we can get it on the air and read it at the same time.

PILGRIM: Thanks very much, Richard Roth.

U.S. policy in Iraq faces a huge challenge Sunday when Iraqis vote in their first free election. Whatever the outcome, it's clear that large numbers of our troops will stay in Iraq for years to come. Now, yesterday, a top American general said 120,000 U.S. soldiers are likely to stay in Iraq for at least two more years. That number does not include U.S. marines or troops from other military branches. Joining me now from Washington is Congressman Duncan Hunter, chairman of the House armed services committee. Thanks very much for being with us, sir.

REP. DUNCAN HUNTER (R), CHMN, HOUSE ARMED SERVICES: Good to be with you, Kitty.

PILGRIM: This 120,000 number, I'm sure it was a surprise, and the duration of time that this number will be required. What's your reaction to this?

HUNTER: Well, obviously we can't project precisely when we're going to be able to draw down, because that depends on a number of variables, but the key is the stand-up of the Iraqi forces. We need to stand up an Iraqi military that can in the least can protect its government. I don't think it has to be strong enough to handle a major external threat, an invasion from an outside source, but it has to be able to keep that new government from going up in a cloud of smoke and from having its offices overrun and having its membership assassinated on a widespread basis. It has to able to secure the government.

I think they'll be able to do that. That's not going to require a massive army or massive national guard, and we are training those people right now with our best and brightest military leadership headed by David Petraeus, former head of the 101st Airborne. He's doing a good job so standing up the Iraqi military is the exit strategy for the United States. It's a little tough, I think, for anybody to say we're going to be here for two years, two and a half years, three years at full strength. We stand that military up, they take some hits, they're able to keep on ticking, they respond to this new civilian government that has been built on the backs of and on the shoulders of American fighting forces. If they do that, if they respond to and are bound to and loyal to this new civilian government that we're standing up, they'll be able to handle the situation much earlier than lots of people have expected.

PILGRIM: One of the big questions is how fast the training is going, and the estimates of how many are sufficiently trained. That is a big question or trained up to the level where they can defend their own country. That's a big question. In fact, that came out in the confirmation hearings with Condoleezza Rice just recently. Do you have an assessment of where we stand on the numbers of Iraqis that are being trained?

HUNTER: The real evaluation -- and we have several hundred thousands that are being trained right now, whether it's in the national guard forces or the full-time military, you have the border guards, which is a fairly large force, so you have a number of different types of military forces, but the real test is, when you have a battle, will they get on the helicopter, will they get in the truck, will they go to the battle lines and will they stand firm?

So the real evaluation of the quality of their training -- and I would say their toughness and their discipline has yet to be proven and it can't be proven until it's put to the test. It will be put to the test because there will be people trying to overthrow this government, and you're going to have some very tense times in the future. What we have given Iraq and the people of Iraq is a running start at a free government, and a free country. They're going to have to be tough, resolute, and their military is going to have to be loyal to that civilian government. That's the most important thing. If you have military leadership that respects these elections, and does what the secretary of defense, the deputy of defense tells them to do, and what the president tells them to do, then we'll have the core for a continuing and enduring representative government.

PILGRIM: We're almost out of time, but I must ask you, we're days from the election. How do you think it will go?

HUNTER: 14 million people registered to vote? You're going to have an election. I think it will surprise the international world. I think there will be some enthusiasm for this election, just as we had it in Central America where you had people who had actually been shot by the guerrillas who were standing in line to vote, I think there's a lot of Iraqis who want to vote. There's a lot of enthusiasm, I think over this idea of picking your own candidates. Lots of people have signed up to run. You've got like 100 parties involved now. I think we'll have a fairly robust election.

PILGRIM: A lot of hope and effort riding on this. Thanks very much for being with us. Congressman Duncan Hunter, thank you.

Coming up at the top of the hour here on CNN, a look at this Sunday's elections in Iraq, with a special edition of ANDERSON COOPER 360 live from Baghdad. And Anderson is here now with a preview -- Anderson.

ANDERSON COOPER, CNN ANCHOR: Kitty, we're going to be looking at the latest efforts by Iraqi terrorists and Islamic extremists and insurgents to try to stop these elections. Islamic terrorists over the weekend declared an all-out war against democracy saying they'll do whatever they can to try to stop these elections. We're going to take a look at what exactly they are doing.

Today a top Iraqi judge was shot in the street along with his son. Ten Iraqi police officers were shot, three of them killed, and Iraqi extremists are handing out fliers in the streets in Baghdad and other cities throughout Iraq saying that the streets will run red with the blood of anyone who votes this weekend. We'll be looking at the latest efforts to stop these insurgents and these terrorists, coming up at 7:00 Eastern Time.

PILGRIM: We look forward to your reporting, Anderson. Thanks very much.

Tonight, still to come, the high cost of free trade, how a bipartisan group of senators says it plans to fight China's unfair trade practices.

And then Enron, the movie. A new film captures the many human stories behind one of the greatest corporate failures of all time.

(COMMERCIAL BREAK)

PILGRIM: Our next guests tonight say our so-called free trade with China is neither free nor fair. Senators Lindsey Graham and Charles Schumer are part of a bipartisan effort to hold China accountable for its undervalued currency. Now, they will soon introduce a bill that would impose a 27.5 percent tariff on Chinese goods until China reevaluates their currency. Just today, a Chinese official told Reuters, that won't happen anytime soon.

Senators Graham and Schumer join us from Capitol Hill, and thank you for being with us.

Let's talk about the revaluation of the currency. Senator Schumer, maybe you can give us a quick explanation of why that's so important.

SEN. CHARLES SCHUMER (D), NEW YORK: Yeah, the Chinese are the only large trading country that artificially pegs their currency low, and what that means, in effect, is that every Chinese export, in addition to everything else, gets a 27.5 percent advantage, because the currency is so much lower. It is against every tenet of free trade, which says you let the currency float and that corrects imbalances.

This has helped probably more than anything else to unfairly exaggerate the trade deficit or make the trade deficit larger. It is throwing the whole international monetary system into disarray, because now the Europeans face the brunt of the falling dollar, and there is no excuse for it. The administration has said -- they've told us, give us time, we'll fix it. Well, we gave them a whole year since we introduced our bill, and frankly the manufacturers, whether they be in South Carolina, New York, or anywhere else, are fed up. Manufacturers in New York come to me and say, I can compete against that lower Chinese wage base and lower Chinese cost because of our productivity, but if you throw a 27.5 percent extra advantage, I'm out of business.

PILGRIM: So your proposal is to put tariffs on of a comparable amount. Senator Graham, some people say the tariffs will really just be punitive for the American consumer, that they'll have to pay a little bit more for Chinese-made goods. What do you say to that?

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Well, the American consumer is also the American worker, and if we don't do something to protect our manufacturing base here at home, it is going to be hard to buy any retail goods.

Chuck is absolutely right. This ought to say something. Chuck and I come from different political perspectives on most issues, but we see the same problem here. China cheats. They steal intellectual property. They peg their currency below its true value to get a discount. It's not about being outworked, or people being smarter than the American worker. It's about the American workers having to fight forces that it's hard to fight. It's hard to fight governments when governments get into business. And the Chinese manipulate their currency, and really our companies are fighting the Chinese government.

To the American consumer, I think most American consumers want to make sure that American businesses are protected.

SCHUMER: And the bottom line is the prices are artificially low, and if you do that, every rule of economics and free trade says eventually that is going to hurt everybody, including U.S. consumers.

PILGRIM: You introduced this bill a little over a year ago. Do you believe that the climate has shifted somewhat in Washington, that you can get this done at this point? Or is this a pressure tactic, that you're hoping will work to get the results you really want, which is Chinese acquiescence on the currency issue?

GRAHAM: Well, I'll take a stab at that. I'm obviously -- my party is in charge of the Congress, and Secretary Evans has gone to China to make a forceful case. But I'll tell you, if hard words would have changed this, it would have changed, because the administration has spoken out in a harsh way. There have been some Democrats that have pushed back against this idea of tariffs. But the time has come, a year has passed, the problem has gotten worse. They're cheating on many fronts. The currency manipulation is just one form of cheating. I think if we got the bill on the floor of Congress or the Senate, it will pass.

SCHUMER: Let me say, our goal is really not to impose this tariff, but to get the Chinese to play fair. But the bottom line is, all the words in the world haven't gotten them to do it. And if this bill, for instance, were to pass through the Senate -- and I think it has the majority of votes in the Senate -- my guess is the Chinese might change their tune, because they would rather let their currency float than just have an automatic tariff slapped on their goods.

PILGRIM: There are -- oh, go ahead.

SCHUMER: So our goal is to get results one way or the other. We prefer it the first way, but the second way, the tariff, is better than nothing.

PILGRIM: You gentlemen bring up other issues, though. There's the wage disparity issue, there is the stealing of intellectual property and copyrights. There are other issues that maybe the tariff doesn't address. What do you say to that?

GRAHAM: Well, you've got to start somewhere, and this is a common ground between a Republican and a Democrat from New York and South Carolina, supported by the American manufacturing community. I think we need to have a policy of engagement with China that is serious across the board. Intellectual property theft, manipulating currency, transshipping goods -- there is a variety of activities they engage in that cost us jobs by cheating, and I want to hit them on all fronts. But this is common ground. This is a good place to start. And words alone will not change China's behavior. We've talked this issue to death. It is now time to act.

SCHUMER: Let me say, the Chinese have a pattern. You know, if they were a small little country on their way up, that's one thing. They have the biggest trade surplus in the United States in the history of recorded time, and they're still not playing the rules. No one is going to take away the intrinsic advantages that China has in making certain goods, and that's fine, that fits the principles of free trade. But when they add on these other things, it's so unfair and it throws the whole economic world trade and monetary system out of balance.

My belief is, if we play tough with currency, they would be less apt to cheat on intellectual property, because they knew we finally meant business. Right now the Chinese regard us as as strong as a wet noodle, and they have to be shown some real strength. That's what our bill does.

GRAHAM: Totally agree.

PILGRIM: Gentlemen, thank you very much for taking the time to explain it to us -- a very interesting program. Senator Charles Schumer and Senator Lindsey Graham, thank you very much, gentlemen.

SCHUMER: Thank you.

GRAHAM: Thank you.

PILGRIM: A reminder now to vote in tonight's poll. Do you believe civilian volunteers should patrol our border with Mexico to keep illegal aliens out of this country? Yes or no? Cast your vote at loudobbs.com. We'll bring you the results here shortly.

And up next, "Enron: The Movie," how some straightforward reporting led to the biggest corporate scandal in history.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: She asked a simple question in the article that no one could seem to answer -- how exactly does Enron make its money?

(END VIDEO CLIP)

PILGRIM: The two journalists who wrote the book on the Enron scandal will join us.

(COMMERCIAL BREAK)

PILGRIM: As you just saw on our scoreboard, it's been more than three years since Enron's spectacular collapse in December of 2001. And now a new documentary film looks at the enormous human toll of what was at the time the largest bankruptcy in American history. The documentary, "The Smartest Guys in the Room," is based on a book by the same name. Well, the film debuted this weekend at the Sundance Film Festival, and joining me tonight from Park City, Utah are the book's co-authors, Bethany McLean and Peter Elkind. And thanks very much for joining us.

We're all very familiar with this story, 20,000 people out of jobs, the loss of their retirement savings, very sad, sad story. You did digging beyond this story. What did you turn up that surprised you?

BETHANY MCLEAN, AUTHOR, "THE SMARTEST GUYS IN THE ROOM": I think one of the most surprising things was that people think that this is a story about numbers. People think this is a story about incomprehensible numbers, and in reality it's a story about people and it's a story about very understandable human failings like greed, hubris, arrogance, self delusion.

PETER ELKIND, AUTHOR, "THE SMARTEST GUYS IN THE ROOM": That's exactly right and that's also what makes the story compelling and also universal.

PILGRIM: Who came up the worst in your digging? Who really was behaving the worst?

MCLEAN: I think a lot of the characters -- one of fascinating things about Enron is that it is many shades of gray. A lot of people began with a lot of idealism. And I'd say that's true of people at the top of the company like Jeffrey Skilling, the CEO. What's so fascinating about the story is how that became corrupted over time and how it ended the way we all know that Enron ended, when it really didn't start that way.

ELKIND: That's right. This is a story where really no one looks good. There are very, very few heroes.

PILGRIM: Having covered the story myself, it's a sad story, because the little guy was affected. In fact, the little guy still isn't getting any kind of comfort out of this, except for the fact that now the public is more aware of their plight. How do you feel about the movie? Do you think that the movie will help bring it to light more?

ELKIND: I think it will. It's a different medium, it has a different kind of impact than a book. You have to make calls in terms of what you can focus on in limited amount of space and time. But it's very powerful. For example, in the film there's audio tapes of Enron traders talking about how they're going to rape and pillage California. That has an incredible impact.

PILGRIM: Bethany, the buzz is it could be this year's "Fahrenheit 9/11." Do you think that's Sundance hype or do you think that's maybe true?

MCLEAN: It's really hard to tell. The reception here of the film seems to be really good. We just came from the second screening, and it was packed and people stayed for the Q&A afterwards and had to be practically driven out of the theater. So it seems like the buzz is really good, but how do you know where it goes after that?

PILGRIM: This is a story also based in politics in that Ken Lay had some connection to the Bush family. Tell us a little bit about that.

ELKIND: The Bushes have had a close political relationship with Enron for a long time, but Enron also did support politicians of all stripes. So the film does explore the issue of the Bushes' ties to Enron. For example, when an Enron executive left the company, both this President Bush and previous President Bush participated in a private videotape, giving a farewell valentine to that executive.

PILGRIM: You know, books don't always have to end well, and have happy endings. Movies in America tend to do that. Does this movie have a brighter side at the end, or is it all bleak? And do you think there is a brighter side to this whole story?

MCLEAN: I'm not sure there really is a brighter side. I think documentaries tend to be able to get away with somewhat bleaker endings than maybe conventional dramas do where people are really hankering after a happy ending. I think this movie does give you a sense of resolution in that you feel like you understand what happened, but it doesn't leave you with an entirely warm and fuzzy feeling about corporate America, nor frankly should it. I think it ends on the note of asking why, which was Enron's corporate slogan, and how few people do ask the questions that they should.

PILGRIM: Thanks very much for bringing this story to light for us, and do enjoy your success in the Sundance Festival. Thanks for being with us today.

MCLEAN: Thank you.

PILGRIM: Well, here's a story that will give you a warm and fuzzy feeling about corporate America. It's about a multimillion dollar donation from the Bill and Melinda Gates Foundation. The Microsoft co-founder and his wife are giving three quarters of a billion dollars to buy and distribute immunization supplies for developing countries. The ten-year grant will fund vaccines for several diseases which include measles, tuberculosis and hepatitis B. An estimated 2 million people die each year from infectious diseases that are preventable with vaccinations.

Let's take a look at some of your thoughts and many of you wrote about President Bush's proposed guest worker program.

Kathy Swann of Las Vegas, Nevada, writes, "if I hear this administration say one more time that illegal aliens are willing to take jobs that Americans won't I will explode. It's not that Americans aren't willing to take these jobs it's that they won't do it for the criminal pay below minimum wage.

And John Newman of Cleveland, Ohio writes, "I don't think it is a matter of what kind of work U.S. workers are willing to do I think it is more of a matter of what kind of wages U.S. employers are willing to pay. Not only is the government not protecting our borders, it isn't protecting minimum wage standards."

And Lisa of Salem, New Hampshire writes, "rewarding illegal aliens for breaking the law with a guest worker program is insane. Get ready for the floodgates to open from Mexico and a way of life to close in America."

We absolutely love hearing from you, so send us your thoughts at loudobbs@CNN.com.

Still ahead, the results of the poll and what's ahead for tomorrow.

(COMMERCIAL BREAK)

PILGRIM: Now the results of tonight's poll. 75 percent of you believe civilian volunteers should patrol our border with Mexico to keep illegal aliens out of this country. 25 percent do not.

Thanks for being with us tonight. Please do join us tomorrow. In our series on "Broken Borders" one state's idea to crack down on illegal aliens is catching on. We'll have our special report.

And two leading members of Congress face off on the president's plan to overhaul Social Security. We'll tell you all about that and the controversial plan involved. We do hope you'll join us for all of that.

And for all of us here good night from New York. "ANDERSON COOPER 360" is live next from Baghdad. Stay tuned.

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 January 25, 2005 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, HOST (voice-over): Tonight, terror in Iraq. An American hostage pleads for his life. Six American troops are killed. How long will our troops have to stay in Iraq?

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: We're going to do everything we can to support our troops.

PILGRIM: One of the most powerful members of Congress says Iraqis must take more responsibility for their own security. House Armed Services Committee Chairman Congressman Duncan Hunter is my guest tonight.

In "Broken Borders," an astonishing security breach along our border with Mexico, as hundreds of U.S. citizens take direct action to stop the massive invasion of illegal aliens.

UNIDENTIFIED MALE: We don't need immigration reform. What we need is a secure border and enforcement of the laws that are on the books.

PILGRIM: And the high cost of free trade, two leading senators are planning legislation to slash our exploding trade deficit with China. I'll talking to those senators about the escalating Chinese threat to our global economic supremacy.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, January 25. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening.

Terrorists in Iraq today released a videotape of an American hostage pleading for his life. The hostage, Roy Hallums, was kidnapped in Baghdad last November.

Six more American troops have been killed in Iraq. Five were killed when their Bradley fighting vehicle overturned near Baghdad. The other soldier was killed by a roadside bomb.

Jeff Koinange reports from Baghdad.

(BEGIN VIDEOTAPE) JEFF KOINANGE, CNN CORRESPONDENT (voice-over): Nearly three months after his abduction in Baghdad, American contract worker Roy Hallums appears in a videotape. With an assault rifle pointed to his head, he speaks softly and appeals for help in saving his life.

ROY HALLUMS, HOSTAGE: I am asking for help of Arab rulers, especially President Moammar Gadhafi, because he's known for helping those who are suffering.

KOINANGE: Hallums was a contract worker, employed by a Saudi company. He was seized in November after a gunfight in the Mansour neighborhood of Baghdad.

On the streets of the Iraqi capital, the violence continues five days before Iraqis go to the polls.

Tuesday, a judge was gunned down along with his son just as they were leaving their home. He's the third senior official to be assassinated this year. The governor of Baghdad and city's police chief were both murdered in separate drive-by shootings this month.

To try to disrupt the insurgents, the U.S. and Iraqi military launch raids every day, seizing weapons caches like this one in Baghdad, and going house to house in Falluja, on the hunt for the enemy.

For now, interim Prime Minister Ayad Allawi knows that U.S. forces are indispensable, but he insists Iraq will take care of its own.

AYAD ALLAWI, INTERIM PRIME MINISTER OF IRAQ (through translator): Large number -- large areas of our country is now enjoying a good secure situation, and our security situation, our security forces are shouldering the responsibility of security in these places.

KOINANGE (on camera): The optimists believe this weekend provides an important step towards democracy. The pessimists say it means little in the face of a brutal battle for power.

Jeff Koinange, CNN, Baghdad.

(END VIDEOTAPE)

PILGRIM: A top general says the United States will likely keep 120,000 soldiers in Iraq for at least two more years. The general's statement appears to contradict assertions that Iraqi troops can replace American troops anytime soon.

His remarks also raise new questions about the military's ability to deploy enough troops in the global war on terror.

Senior Pentagon correspondent Jamie McIntyre reports.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN CORRESPONDENT (voice-over): The Pentagon hopes by stiffening Iraqi military units with teams of U.S. military advisers, the Iraqis can take over the fight against the insurgents and allow the U.S. to begin to pull out, but critics say that's more wishful thinking than exit strategy.

REP. ELLEN TAUSCHER (D-CA), ARMED SERVICES COMMITTEE: They frankly can't live without us. They need the coalition forces to be there to protect their opportunity to govern. That is why I think we are there for the long term.

MCINTYRE: In fact, the Army isn't counting on any significant drawdown anytime soon. Its latest planning assumes up to 120,000 fresh soldiers will be needed for Iraq for at least the next two years.

Right now, 44 percent of the Army's combat troops in Iraq are part-time soldiers from the National Guard. And with upcoming troop rotations, the last of the Guard's 15 enhanced brigades, the most deployable units, will have been sent.

With the Pentagon's goal of limiting the service of Guard and Reserve troops to a total of two years, the pool of available part- time replacements or active-duty soldiers is rapidly being tapped out.

SUSAN RICE, BROOKINGS INSTITUTION: We already have gone to a back-door draft and prevented soldiers and enforcers from leaving the Army that are due to leave. We have a real problem of capacity.

MCINTYRE: The Guard will get a bit of a break in the next rotation, as the Pentagon sends back to Iraq units that have already served one tour there.

The percentage of active-duty troops in Iraq will rise from 50 percent to about 70 percent this summer with the return of the 3rd and 4th Infantry and 101st Airborne divisions.

(END VIDEOTAPE)

MCINTYRE: The Army's plan was to rely more on active Guard and Reserve troops last year so that active-duty soldiers could take more of the burden this year and get more recovery time.

Now, the commander of the National Guard set today that he is not in danger of running out any troops, so long as the Pentagon sticks to that plan -- Kitty.

PILGRIM: Thank you very much. Jamie McIntyre.

Later in the show, I'll be talking with the chairman of the House Armed Services Committee, Congressman Duncan Hunter, about U.S. troop levels in Iraq. And I'll also ask him whether our military has enough troops to fight the war in Iraq and the global war on terrorism at the same time.

The White House is asking Congress for nearly $100 billion more to pay for the wars in Iraq and Afghanistan this year. The news comes on the same day that Congressional experts predicted the budget deficit will reach $368 billion this year. Now, that number does not include the extra spending in Iraq and Afghanistan.

White House correspondent Dana Bash reports.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CORRESPONDENT (voice-over): Nearly two years after launching war in Iraq, the Bush administration is asking Congress for more than $80 billion in new spending for operations there and Afghanistan. That, plus $25 billion approved this summer, puts the price at $105 billion over the Pentagon's regular budget this year.

That makes the total cost of war nearly $300 billion, an average of $4.3 billion a month in Iraq alone, a bigger than expected price tag because of an Iraqi insurgency that caught the White House by surprise.

MCCLELLAN: We didn't expect that the Iraqi army under Saddam would flee the battleground like they did and come back to fight another day. They did it in large numbers.

BASH: Just after the Iraq war began, the deputy defense secretary suggested the fighting would soon end and Iraqis would pick up most of the tab.

PAUL WOLFOWITZ, DEPUTY DEFENSE SECRETARY: There's a lot of money to pay for this that doesn't have to be U.S. taxpayer money.

BASH: Democrats called the $80 billion request more proof of administration blunders and abuse of the emergency spending label. Most promised to give the troops what they need, but ask tough questions first.

SEN. BARBARA BOXER (D), CALIFORNIA: What is it going to be used for? Does it incorporate into the $80 billion some type of an exit strategy?

BASH: Because of the additional military spending, the White House announced the government will now run a $427 billion deficit in 2005.

SEN. HARRY REID (D-NE), MINORITY LEADER: We have red ink as far as you can see.

BASH: Senior officials insist they will shrink the deficit. That means what the president calls a tough budget: cuts in domestic programs.

By comparison to other government spending, the $105 billion in supplemental war funding is nearly double the entire 2005 budget for the Department of Education, and 2.5 times that for homeland security.

(END VIDEOTAPE)

BASH: Senior officials would not be specific on exactly how they intend to spend the $80 billion, except to say, Kitty, that they do think much of it will go for refurbishing and replacing worn-out or even destroyed equipment in Iraq -- Kitty.

PILGRIM: Dana, I have to ask you, there was a surprise sighting at the White House, someone who used to work there, in fact, and got into trouble for an infamous prediction he made on the cost of the war in Iraq.

BASH: A twist of irony here, Kitty, today. Larry Lindsey, who of course was President Bush's economic adviser, and as you said, was reprimanded for predicting that the cost could go up to $200 billion -- that was before the war -- was here at the White House today. You saw some pictures.

He was just having some meetings with some of his former colleagues, we are told, but it certainly is a bit ironic that he was here the same day that the White House requested money that, as we reported, put the cost of war in Iraq and Afghanistan at over $300 billion.

PILGRIM: Well, I'm sure he couldn't resist an "I told you so." Thanks very much, Dana Bash.

The United States tonight is stepping up pressure on Syria to stop the flow of money to terrorists and insurgents in Iraq. American officials say a Syrian citizen is a key supporter of the al Qaeda network in Iraq.

National security correspondent David Ensor reports.

(BEGIN VIDEOTAPE)

DAVID ENSOR, CNN CORRESPONDENT (voice-over): The U.S. move aims to reduce attacks by insurgents in Iraq against coalition forces and Iraqi security personnel by cutting off the money that funds the insurgency.

The U.S. Treasury Department says foreign insurgents like Jordanian Abu Musab al-Zarqawi are being helped with money and recruits by a 29-year-old Syrian national, Salayman Karwin Darwish (ph).

JUAN ZARATE, ASSISTANT TREASURY SECRETARY: In Iraq, it's money that allows the activities that we've seen and the activities of Zarqawi to continue.

These individuals need to recruit, they need to train, they need to eat, sleep, buy weapons, and that comes with the resources and money.

So it's part of our strategy to try to break, as Secretary Snow said, the financial backbone of these terrorist networks.

ENSOR: The Treasury Department is asking a United Nations committee to put Darwish on a list of terrorists tied to Usama bin Laden, Al Qaeda or the Taliban, which U.N. member states are required to freeze the assets of and prevent from traveling. Syrian officials insist the government of Syrian President Bashar al-Assad has been looking for Darwish for years, and they, too, have now asked the U.N. to put him on the list. They deny suggestions by some U.S. officials that Damascus is helping Iraqi insurgents or at least turning a blind eye.

WOLF BLITZER, CNN ANCHOR: Are you cooperating in any way with the insurgents?

FAROUK AL SHARA, SYRIAN FOREIGN MINISTER: Not at all. We are not friendly even with them because this is not the right way to help the Iraqis.

(END VIDEOTAPE)

ENSOR: Treasury officials did not criticize Syria directly, but do say they hope this action will cause Damascus to do more against Syrians who are helping the Iraqi insurgents -- Kitty.

Thanks very much.

David Ensor.

Still to come, "Citizens Take Action" to secure our borders.

(BEGIN VIDEO CLIP)

CHRIS SIMCOX, PUBLISHER, TOMBSTONE TUMBLEWEED: It's a direct challenge. President Bush, do your job.

(END VIDEO CLIP)

PILGRIM: In our special report tonight, how hundreds of citizens hope to succeed where the federal government has failed.

And U.N. Secretary General Kofi Annan faces more questions on his role in the oil-for-food scandal.

(COMMERCIAL BREAK)

PILGRIM: The intelligence bill that President Bush signed into law in December calls for an increase of 10,000 border protection agents over the next five years. The first 2,000 new agents were to be in place by the end of next year.

Now, however, Homeland Security Secretary Tom Ridge says the president's budget proposal will call for fewer new agents.

(BEGIN VIDEOTAPE)

PILGRIM (voice-over): The nation's borders are by clear evidence porous. Three million illegal aliens managed to slip across the border last year.

So, when Congress passed the intelligence bill in December, it authorized the hiring of 2,000 more border guards each year, 10,000 over the next five years, doubling the number of guards who patrol the borders now.

President Bush signed off on the bill authorizing the increase, but the law includes a disclaimer, "subject to funds appropriated by Congress," and now it seems the president will not request enough money for the full 2,000 guards to be hired, leaving it up to Congress to request the additional funds.

T.J. BONNER, NATIONAL BORDER PATROL COUNCIL: I knew that this administration would short-change us. Now it remains to be seen whether Congress is going to go along with this or whether they're going to confront the president and say we know that we need more Border Patrol agents out there, so we're putting it back into the budget.

PILGRIM: The Department of Homeland Security says the new budget, to be unveiled in February, will include additional funding for technology, which also enhances security. Critics say what's missing in this funding debate is a comprehensive strategy for protecting the nation's borders.

JAMES CARAFANO, HERITAGE FOUNDATION: Before we start throwing money at the problem, which is what we're wont to do in Washington, which may or may not solve the problem, we need to -- somebody needs to come to us and lay out a strategy to explain what is the best way to reduce the problem of illegal entry into the United States and the unlawful presence of people here.

(END VIDEOTAPE)

PILGRIM: This is not the first time Congress has proposed new federal hiring without offering up more funding. Administration officials note that Congress didn't even approve the legislation until the White House had already begun to finalize its Homeland Security budget for this fiscal year.

Hundreds of American citizens are hoping to succeed where the federal government has failed. They're taking action to secure or borders themselves. Citizens from all over the country are going to Arizona to patrol the busiest stretch of border in the nation. Millions of illegal aliens cross that border every year.

Casey Wian reports from Tombstone, Arizona.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Two hours before dawn in Arizona, the office of the Tombstone Tumbleweed newspaper opens. Publisher Chris Simcox prepares to lead a group of civilian volunteers patrolling for illegal aliens.

SIMCOX: I've spent time here on the border and heard the stories of the people that live along the border, how they feel abandoned by the president and Congress.

WIAN: So he formed a group, Civil Homeland Defense. SIMCOX: It's a direct challenge. President Bush, do your job. The people want you to spend our tax dollars securing that border. We don't need immigration reform. What we need is a secure border.

WIAN: Using thermal imaging cameras, they search the desert ravines and underbrush, popular resting spots for illegal aliens through the nation's busiest smuggling corridor.

SIMCOX: I've trained just about 400 people in the last two years.

WIAN: Some are former law-enforcement officers, and some are armed, which is legal in Arizona.

SIMCOX: We've been shot at, we've had knives pulled on us, we've had people tell us that if we didn't have that holstered firearm on our side that they'd kill us.

WIAN: When they encounter illegal aliens, they don't try to arrest or apprehend. They call the Border Patrol. Simcox says his volunteers have turned in 6,000 suspects from 26 different countries. Now they're recruiting new members willing to spend a month patrolling the border.

(on camera): The Minuteman Project plans to have more than 1,200 protesters here at the border crossing at Naco, Arizona, on April 1. Then, for the rest of the month, several hundred volunteers will spread out throughout the area and try to stop illegal border crossings.

(voice-over): Volunteers lie Al Garza.

AL GARZA, MINUTEMAN PROJECT VOLUNTEER: I'm Hispanic, but not all Hispanics have the same concepts. We are Americans. We'll defend it 100 percent.

WIAN: The local sheriff says there's huge potential for confrontations between armed citizens, landowners and smugglers. He's warned the Minuteman Project to obey the law.

SHERIFF LARRY DEVER, TOMBSTONE, ARIZONA: Clearly, you know, in my opinion, the cause is just. You know, securing or borders is an absolute necessity.

WIAN: The Minuteman Project says volunteers are being screened and trained to avoid violence.

JIM GILCHRIST, MINUTEMAN PROJECT ORGANIZER: We will not have a conflict with illegal immigrants. We will not confront them. We will not engage in any combative actions whatsoever.

SIMCOX: It's not about who you are and where you come from or what language you speak or what color your skin is. It's about you breaking into our country.

WIAN: Casey Wian, CNN, Tombstone, Arizona. (END VIDEOTAPE)

PILGRIM: We'd like to hear from you on this critical issue, and our poll question tonight is: Do you believe civilian volunteers should patrol our border with Mexico to keep illegal aliens out of this country? Yes or no. Cast your vote at loudobbs.com, and we'll bring you the results later in the show.

Still to come, illegal aliens landing. How immigration officials are fighting the latest trend in illegal border crossings. We'll have that next.

And then, U.N. Secretary General Kofi Annan is questioned in the massive oil-for-food scandal. We'll tell you how much time he's been spending with investigators, next.

(COMMERCIAL BREAK)

PILGRIM: Federal agents tonight are questioning four suspected illegal aliens accused of flying across the U.S. border in a private plane. The plane carrying four Chinese nationals was ordered to land in Texas overnight.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN FINANCIAL CORRESPONDENT (voice-over): An attempt to smuggle in four Chinese aliens ended in arrest in San Antonio, Texas. The pilot expected to be formally charged Tuesday afternoon with human smuggling in connection with the four Chinese, two men and two women.

Federal agents say the four have no connection to the Boston terror threats of last week, but the agents say this latest incident underscores the threat at our borders.

ALONZO PENA, IMMIGRATION AND CUSTOMS ENFORCEMENT: This is just probably an example of the vulnerabilities that are now out there that we have to be aware of as ICE agents and what we do, is that it's becoming more and more difficult for these smugglers to bring their human traffic into the country, and they're going to try every route and every method they can.

TUCKER: The arrests were made by Immigration and Customs Enforcement agents working together with agents from Customers and Border Protection. Acting on a tip, they tracked the plane on radar and tailed it with a plane from its takeoff in Eagle Pass, Texas, just over the border from Mexico, to its landing at Stinson Municipal Airport in San Antonio. The four Chinese aliens remain in custody and will most probably be sent back to China.

(END VIDEOTAPE)

TUCKER (on camera): Now, in a separate incident, three Mexican nationals were arrested in Austin, Texas, after their plane landed carrying 108 pounds of marijuana. All three men in that particular case hold green cards, and they are lawful permanent residents of the United States.

What's interesting is that both flights, the alien smuggling and the drug smuggling planes, began at the same time from the same airport, Kitty, and that's Stinson Airport in San Antonio, Texas.

PILGRIM: Is there a connection?

TUCKER: Authorities don't know, and they are saying that they want to look at this because it is too odd a coincidence in terms of the timing and the way both flights worked. So they are investigating to see if these are somehow related incidents.

PILGRIM: Maybe not a connection, but certainly a problem.

TUCKER: Exactly.

PILGRIM: Thanks very much.

Bill Tucker.

Well, the FBI today said that the terror threat in Boston involving illegal aliens was a false alarm. The FBI says it arrested the man who gave them the tip about four Chinese nationals who crossed our border with Mexico illegally.

Now that man said the four were heading toward Boston with dangerous materials, but the FBI now says there were no terrorist plans under way. The FBI said it arrested the tipster in Mexico, but released no other information.

Still ahead, "Bombs & Ballots." I'll be talking with the powerful chairman of the House Armed Services Committee about the Iraqi election, the number of American troops in Iraq and how long they're likely to be there.

And the "High Cost of Free Trade." Two leading senators who are fighting to save American jobs by forcing China to play fair.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: In a moment, I'll talk with the chairman of the House Armed Services Committee about the challenges to Iraq's first democratic elections.

But, first, these stories.

A Navy helicopter crashed today about 30 miles off the coast of Virginia Beach. All eight crew members on board were rescued. Their condition not immediately known. The helicopter was on a routine training mission when it crashed. More than a million residents in Phoenix, Arizona, have stopped -- have been warned to stop using their tap water because of problems at water treatment plants. City officials are telling residents to boil water or use bottled water for drinking, cooking food, also washing dishes. Officials say the problems were caused by recent flooding.

A spectacular scene in Massachusetts where homes on the South shore look like igloos. Heavy winds carrying sprays of ocean water froze the homes into blocks of ice. Forecasters warn of another storm, saying six more inches of snow could fall on parts of eastern Massachusetts tomorrow.

A new development tonight in the massive multibillion-dollar oil- for-food scandal at the United Nations. The U.N. today said Secretary General Kofi Annan has been questioned in the U.N.'s independent investigation.

Senior U.N. Correspondent Richard Roth has the report -- Richard.

RICHARD ROTH, CNN SENIOR U.N. CORRESPONDENT: Kitty, this is the day we got official confirmation for the first time that Kofi Annan, the U.N. secretary general, has been questioned as part of this oil- for-food investigation, at least the investigation authorized by the Security Council and run by Paul Volcker.

This was the scene when the two men met several months ago when the investigation was first voted for by the Security Council after Annan wanted an internal probe. However, today, U.N. spokesman Fred Eckhard, when I asked, said, yes, it's true. Three times now, Annan has met with Volcker and his people.

(BEGIN VIDEO CLIP)

FRED ECKHARD, U.N. SPOKESMAN: He has met more than once for an extended period of time with Mr. Volcker and his investigators. So, yes, the secretary-general is part of the investigation, is a subject like anyone else involved in Oil-for-Food in the secretariat, and he has been questioned and most likely will continue to be questioned as Mr. Volcker's investigation continues.

(END VIDEO CLIP)

ROTH: The secretary being the administrative arm of the U.N., with Kofi Annan as the chief executive officer. Secretary-General Annan being questioned is not really a shock, but it's interesting third time now, shortly after the spokesman made his comments, it was revealed that he had met with Annan today and nearly three and a half to four hours of conversations between the two men. Annan seen here just a couple weeks ago on his trip, last chance to really get away from Oil-for-Food, but his son remains at the heart of this. At least one of the angles of the probe, did he accept money and possible impropriety involved with getting the contract for the Cotecna company.

Paul Volcker after his interview with Annan today to the press. (BEGIN VIDEO CLIP)

PAUL VOLCKER, HEAD, OIL-FOR-FOOD INQUIRY: I couldn't tell you what I accomplished today. We've met with him from time to time. We'll have a report shortly, and it will be a little later than we anticipated, probably into early February.

(END VIDEO CLIP)

ROTH: It was originally planned for January 31. Now it is either going to be February 7, February 8 for the first interim report, which will involve procurement and perhaps Cotecna and these other companies that handled the inspections. But any type of surprise is always possible in this first report.

PILGRIM: And hopefully lots of detail, Richard.

ROTH: Hopefully enough that we can get it on the air and read it at the same time.

PILGRIM: Thanks very much, Richard Roth.

U.S. policy in Iraq faces a huge challenge Sunday when Iraqis vote in their first free election. Whatever the outcome, it's clear that large numbers of our troops will stay in Iraq for years to come. Now, yesterday, a top American general said 120,000 U.S. soldiers are likely to stay in Iraq for at least two more years. That number does not include U.S. marines or troops from other military branches. Joining me now from Washington is Congressman Duncan Hunter, chairman of the House armed services committee. Thanks very much for being with us, sir.

REP. DUNCAN HUNTER (R), CHMN, HOUSE ARMED SERVICES: Good to be with you, Kitty.

PILGRIM: This 120,000 number, I'm sure it was a surprise, and the duration of time that this number will be required. What's your reaction to this?

HUNTER: Well, obviously we can't project precisely when we're going to be able to draw down, because that depends on a number of variables, but the key is the stand-up of the Iraqi forces. We need to stand up an Iraqi military that can in the least can protect its government. I don't think it has to be strong enough to handle a major external threat, an invasion from an outside source, but it has to be able to keep that new government from going up in a cloud of smoke and from having its offices overrun and having its membership assassinated on a widespread basis. It has to able to secure the government.

I think they'll be able to do that. That's not going to require a massive army or massive national guard, and we are training those people right now with our best and brightest military leadership headed by David Petraeus, former head of the 101st Airborne. He's doing a good job so standing up the Iraqi military is the exit strategy for the United States. It's a little tough, I think, for anybody to say we're going to be here for two years, two and a half years, three years at full strength. We stand that military up, they take some hits, they're able to keep on ticking, they respond to this new civilian government that has been built on the backs of and on the shoulders of American fighting forces. If they do that, if they respond to and are bound to and loyal to this new civilian government that we're standing up, they'll be able to handle the situation much earlier than lots of people have expected.

PILGRIM: One of the big questions is how fast the training is going, and the estimates of how many are sufficiently trained. That is a big question or trained up to the level where they can defend their own country. That's a big question. In fact, that came out in the confirmation hearings with Condoleezza Rice just recently. Do you have an assessment of where we stand on the numbers of Iraqis that are being trained?

HUNTER: The real evaluation -- and we have several hundred thousands that are being trained right now, whether it's in the national guard forces or the full-time military, you have the border guards, which is a fairly large force, so you have a number of different types of military forces, but the real test is, when you have a battle, will they get on the helicopter, will they get in the truck, will they go to the battle lines and will they stand firm?

So the real evaluation of the quality of their training -- and I would say their toughness and their discipline has yet to be proven and it can't be proven until it's put to the test. It will be put to the test because there will be people trying to overthrow this government, and you're going to have some very tense times in the future. What we have given Iraq and the people of Iraq is a running start at a free government, and a free country. They're going to have to be tough, resolute, and their military is going to have to be loyal to that civilian government. That's the most important thing. If you have military leadership that respects these elections, and does what the secretary of defense, the deputy of defense tells them to do, and what the president tells them to do, then we'll have the core for a continuing and enduring representative government.

PILGRIM: We're almost out of time, but I must ask you, we're days from the election. How do you think it will go?

HUNTER: 14 million people registered to vote? You're going to have an election. I think it will surprise the international world. I think there will be some enthusiasm for this election, just as we had it in Central America where you had people who had actually been shot by the guerrillas who were standing in line to vote, I think there's a lot of Iraqis who want to vote. There's a lot of enthusiasm, I think over this idea of picking your own candidates. Lots of people have signed up to run. You've got like 100 parties involved now. I think we'll have a fairly robust election.

PILGRIM: A lot of hope and effort riding on this. Thanks very much for being with us. Congressman Duncan Hunter, thank you.

Coming up at the top of the hour here on CNN, a look at this Sunday's elections in Iraq, with a special edition of ANDERSON COOPER 360 live from Baghdad. And Anderson is here now with a preview -- Anderson.

ANDERSON COOPER, CNN ANCHOR: Kitty, we're going to be looking at the latest efforts by Iraqi terrorists and Islamic extremists and insurgents to try to stop these elections. Islamic terrorists over the weekend declared an all-out war against democracy saying they'll do whatever they can to try to stop these elections. We're going to take a look at what exactly they are doing.

Today a top Iraqi judge was shot in the street along with his son. Ten Iraqi police officers were shot, three of them killed, and Iraqi extremists are handing out fliers in the streets in Baghdad and other cities throughout Iraq saying that the streets will run red with the blood of anyone who votes this weekend. We'll be looking at the latest efforts to stop these insurgents and these terrorists, coming up at 7:00 Eastern Time.

PILGRIM: We look forward to your reporting, Anderson. Thanks very much.

Tonight, still to come, the high cost of free trade, how a bipartisan group of senators says it plans to fight China's unfair trade practices.

And then Enron, the movie. A new film captures the many human stories behind one of the greatest corporate failures of all time.

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PILGRIM: Our next guests tonight say our so-called free trade with China is neither free nor fair. Senators Lindsey Graham and Charles Schumer are part of a bipartisan effort to hold China accountable for its undervalued currency. Now, they will soon introduce a bill that would impose a 27.5 percent tariff on Chinese goods until China reevaluates their currency. Just today, a Chinese official told Reuters, that won't happen anytime soon.

Senators Graham and Schumer join us from Capitol Hill, and thank you for being with us.

Let's talk about the revaluation of the currency. Senator Schumer, maybe you can give us a quick explanation of why that's so important.

SEN. CHARLES SCHUMER (D), NEW YORK: Yeah, the Chinese are the only large trading country that artificially pegs their currency low, and what that means, in effect, is that every Chinese export, in addition to everything else, gets a 27.5 percent advantage, because the currency is so much lower. It is against every tenet of free trade, which says you let the currency float and that corrects imbalances.

This has helped probably more than anything else to unfairly exaggerate the trade deficit or make the trade deficit larger. It is throwing the whole international monetary system into disarray, because now the Europeans face the brunt of the falling dollar, and there is no excuse for it. The administration has said -- they've told us, give us time, we'll fix it. Well, we gave them a whole year since we introduced our bill, and frankly the manufacturers, whether they be in South Carolina, New York, or anywhere else, are fed up. Manufacturers in New York come to me and say, I can compete against that lower Chinese wage base and lower Chinese cost because of our productivity, but if you throw a 27.5 percent extra advantage, I'm out of business.

PILGRIM: So your proposal is to put tariffs on of a comparable amount. Senator Graham, some people say the tariffs will really just be punitive for the American consumer, that they'll have to pay a little bit more for Chinese-made goods. What do you say to that?

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Well, the American consumer is also the American worker, and if we don't do something to protect our manufacturing base here at home, it is going to be hard to buy any retail goods.

Chuck is absolutely right. This ought to say something. Chuck and I come from different political perspectives on most issues, but we see the same problem here. China cheats. They steal intellectual property. They peg their currency below its true value to get a discount. It's not about being outworked, or people being smarter than the American worker. It's about the American workers having to fight forces that it's hard to fight. It's hard to fight governments when governments get into business. And the Chinese manipulate their currency, and really our companies are fighting the Chinese government.

To the American consumer, I think most American consumers want to make sure that American businesses are protected.

SCHUMER: And the bottom line is the prices are artificially low, and if you do that, every rule of economics and free trade says eventually that is going to hurt everybody, including U.S. consumers.

PILGRIM: You introduced this bill a little over a year ago. Do you believe that the climate has shifted somewhat in Washington, that you can get this done at this point? Or is this a pressure tactic, that you're hoping will work to get the results you really want, which is Chinese acquiescence on the currency issue?

GRAHAM: Well, I'll take a stab at that. I'm obviously -- my party is in charge of the Congress, and Secretary Evans has gone to China to make a forceful case. But I'll tell you, if hard words would have changed this, it would have changed, because the administration has spoken out in a harsh way. There have been some Democrats that have pushed back against this idea of tariffs. But the time has come, a year has passed, the problem has gotten worse. They're cheating on many fronts. The currency manipulation is just one form of cheating. I think if we got the bill on the floor of Congress or the Senate, it will pass.

SCHUMER: Let me say, our goal is really not to impose this tariff, but to get the Chinese to play fair. But the bottom line is, all the words in the world haven't gotten them to do it. And if this bill, for instance, were to pass through the Senate -- and I think it has the majority of votes in the Senate -- my guess is the Chinese might change their tune, because they would rather let their currency float than just have an automatic tariff slapped on their goods.

PILGRIM: There are -- oh, go ahead.

SCHUMER: So our goal is to get results one way or the other. We prefer it the first way, but the second way, the tariff, is better than nothing.

PILGRIM: You gentlemen bring up other issues, though. There's the wage disparity issue, there is the stealing of intellectual property and copyrights. There are other issues that maybe the tariff doesn't address. What do you say to that?

GRAHAM: Well, you've got to start somewhere, and this is a common ground between a Republican and a Democrat from New York and South Carolina, supported by the American manufacturing community. I think we need to have a policy of engagement with China that is serious across the board. Intellectual property theft, manipulating currency, transshipping goods -- there is a variety of activities they engage in that cost us jobs by cheating, and I want to hit them on all fronts. But this is common ground. This is a good place to start. And words alone will not change China's behavior. We've talked this issue to death. It is now time to act.

SCHUMER: Let me say, the Chinese have a pattern. You know, if they were a small little country on their way up, that's one thing. They have the biggest trade surplus in the United States in the history of recorded time, and they're still not playing the rules. No one is going to take away the intrinsic advantages that China has in making certain goods, and that's fine, that fits the principles of free trade. But when they add on these other things, it's so unfair and it throws the whole economic world trade and monetary system out of balance.

My belief is, if we play tough with currency, they would be less apt to cheat on intellectual property, because they knew we finally meant business. Right now the Chinese regard us as as strong as a wet noodle, and they have to be shown some real strength. That's what our bill does.

GRAHAM: Totally agree.

PILGRIM: Gentlemen, thank you very much for taking the time to explain it to us -- a very interesting program. Senator Charles Schumer and Senator Lindsey Graham, thank you very much, gentlemen.

SCHUMER: Thank you.

GRAHAM: Thank you.

PILGRIM: A reminder now to vote in tonight's poll. Do you believe civilian volunteers should patrol our border with Mexico to keep illegal aliens out of this country? Yes or no? Cast your vote at loudobbs.com. We'll bring you the results here shortly.

And up next, "Enron: The Movie," how some straightforward reporting led to the biggest corporate scandal in history.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: She asked a simple question in the article that no one could seem to answer -- how exactly does Enron make its money?

(END VIDEO CLIP)

PILGRIM: The two journalists who wrote the book on the Enron scandal will join us.

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PILGRIM: As you just saw on our scoreboard, it's been more than three years since Enron's spectacular collapse in December of 2001. And now a new documentary film looks at the enormous human toll of what was at the time the largest bankruptcy in American history. The documentary, "The Smartest Guys in the Room," is based on a book by the same name. Well, the film debuted this weekend at the Sundance Film Festival, and joining me tonight from Park City, Utah are the book's co-authors, Bethany McLean and Peter Elkind. And thanks very much for joining us.

We're all very familiar with this story, 20,000 people out of jobs, the loss of their retirement savings, very sad, sad story. You did digging beyond this story. What did you turn up that surprised you?

BETHANY MCLEAN, AUTHOR, "THE SMARTEST GUYS IN THE ROOM": I think one of the most surprising things was that people think that this is a story about numbers. People think this is a story about incomprehensible numbers, and in reality it's a story about people and it's a story about very understandable human failings like greed, hubris, arrogance, self delusion.

PETER ELKIND, AUTHOR, "THE SMARTEST GUYS IN THE ROOM": That's exactly right and that's also what makes the story compelling and also universal.

PILGRIM: Who came up the worst in your digging? Who really was behaving the worst?

MCLEAN: I think a lot of the characters -- one of fascinating things about Enron is that it is many shades of gray. A lot of people began with a lot of idealism. And I'd say that's true of people at the top of the company like Jeffrey Skilling, the CEO. What's so fascinating about the story is how that became corrupted over time and how it ended the way we all know that Enron ended, when it really didn't start that way.

ELKIND: That's right. This is a story where really no one looks good. There are very, very few heroes.

PILGRIM: Having covered the story myself, it's a sad story, because the little guy was affected. In fact, the little guy still isn't getting any kind of comfort out of this, except for the fact that now the public is more aware of their plight. How do you feel about the movie? Do you think that the movie will help bring it to light more?

ELKIND: I think it will. It's a different medium, it has a different kind of impact than a book. You have to make calls in terms of what you can focus on in limited amount of space and time. But it's very powerful. For example, in the film there's audio tapes of Enron traders talking about how they're going to rape and pillage California. That has an incredible impact.

PILGRIM: Bethany, the buzz is it could be this year's "Fahrenheit 9/11." Do you think that's Sundance hype or do you think that's maybe true?

MCLEAN: It's really hard to tell. The reception here of the film seems to be really good. We just came from the second screening, and it was packed and people stayed for the Q&A afterwards and had to be practically driven out of the theater. So it seems like the buzz is really good, but how do you know where it goes after that?

PILGRIM: This is a story also based in politics in that Ken Lay had some connection to the Bush family. Tell us a little bit about that.

ELKIND: The Bushes have had a close political relationship with Enron for a long time, but Enron also did support politicians of all stripes. So the film does explore the issue of the Bushes' ties to Enron. For example, when an Enron executive left the company, both this President Bush and previous President Bush participated in a private videotape, giving a farewell valentine to that executive.

PILGRIM: You know, books don't always have to end well, and have happy endings. Movies in America tend to do that. Does this movie have a brighter side at the end, or is it all bleak? And do you think there is a brighter side to this whole story?

MCLEAN: I'm not sure there really is a brighter side. I think documentaries tend to be able to get away with somewhat bleaker endings than maybe conventional dramas do where people are really hankering after a happy ending. I think this movie does give you a sense of resolution in that you feel like you understand what happened, but it doesn't leave you with an entirely warm and fuzzy feeling about corporate America, nor frankly should it. I think it ends on the note of asking why, which was Enron's corporate slogan, and how few people do ask the questions that they should.

PILGRIM: Thanks very much for bringing this story to light for us, and do enjoy your success in the Sundance Festival. Thanks for being with us today.

MCLEAN: Thank you.

PILGRIM: Well, here's a story that will give you a warm and fuzzy feeling about corporate America. It's about a multimillion dollar donation from the Bill and Melinda Gates Foundation. The Microsoft co-founder and his wife are giving three quarters of a billion dollars to buy and distribute immunization supplies for developing countries. The ten-year grant will fund vaccines for several diseases which include measles, tuberculosis and hepatitis B. An estimated 2 million people die each year from infectious diseases that are preventable with vaccinations.

Let's take a look at some of your thoughts and many of you wrote about President Bush's proposed guest worker program.

Kathy Swann of Las Vegas, Nevada, writes, "if I hear this administration say one more time that illegal aliens are willing to take jobs that Americans won't I will explode. It's not that Americans aren't willing to take these jobs it's that they won't do it for the criminal pay below minimum wage.

And John Newman of Cleveland, Ohio writes, "I don't think it is a matter of what kind of work U.S. workers are willing to do I think it is more of a matter of what kind of wages U.S. employers are willing to pay. Not only is the government not protecting our borders, it isn't protecting minimum wage standards."

And Lisa of Salem, New Hampshire writes, "rewarding illegal aliens for breaking the law with a guest worker program is insane. Get ready for the floodgates to open from Mexico and a way of life to close in America."

We absolutely love hearing from you, so send us your thoughts at loudobbs@CNN.com.

Still ahead, the results of the poll and what's ahead for tomorrow.

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PILGRIM: Now the results of tonight's poll. 75 percent of you believe civilian volunteers should patrol our border with Mexico to keep illegal aliens out of this country. 25 percent do not.

Thanks for being with us tonight. Please do join us tomorrow. In our series on "Broken Borders" one state's idea to crack down on illegal aliens is catching on. We'll have our special report.

And two leading members of Congress face off on the president's plan to overhaul Social Security. We'll tell you all about that and the controversial plan involved. We do hope you'll join us for all of that.

And for all of us here good night from New York. "ANDERSON COOPER 360" is live next from Baghdad. Stay tuned.

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