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Lou Dobbs Tonight

Sex, Drugs & Politics; Frist Frustrated; Rallying the Troops; Violence Against Border Patrol Agents; CAFTA Is in Trouble

Aired May 27, 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.


LOU DOBBS, CNN ANCHOR: Good evening, everybody. Tonight, Senate Majority Leader Bill Frist, has he lost control of both the Senate and the majority? We'll have a special report for you.
An exclusive look inside a radical Islamist terrorist group. How radical Islamists are training suicide bombers to kill civilians.

And the killer bird flu is coming to the United States. This country's top authority on infectious diseases is our special guest.

And tonight a major new drug scare. Federal officials are investigating reports that some popular impotence drugs may cause blindness. Viagra and Cialis are among the drugs now under investigation.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): An investigation is under way into whether this little blue pill made nearly 40 men blind. It's maker, Pfizer, is in talks with the government over warning consumers of Viagra-related blindness. But there are no plans to pull this drug or its competitors off the market.

Makers of Cialis have also reported four cases of blindness and recently toughened the label. One Levitra user is reported to have gone blind, but there has been no label change there.

Even as the FDA investigates, it says, "Viagra is safe and effective as labeled," but urges paces to talk to their doctor. Pfizer says blindness is very rare. Viagra's label warns that blurred vision is one possible side-effect.

MICHAEL BERELOWITZ, PFIZER: The difficulty here is one of association. You have the same group of patients with the same characteristics who might be at risk for this very, very infrequent condition that affects the eyes, and the condition of erectile dysfunction, which 23 million people around the world have taken Viagra quite safely for.

ROMANS: Pfizer's aggressive advertising has made Viagra the most prescribed erectile dysfunction drug, 177 million prescriptions. Taxpayers paid $38 million last year for Medicaid prescription of these drugs. JOHN ABRAMSON, AUTHOR, "OVERDOSED AMERICA": The market is doing a very good job convincing them that they need them. I've heard stories of adolescence who are just becoming sexually active who carry these pills in their wallets the way kids use to carry condoms.

ROMANS: He says far too many men are buying into marketing hype, forgetting that all prescription drugs carry risks of side-effects.

(END VIDEOTAPE)

ROMANS: Critics say the drug industry's influence over consumers is matched only by its clout on Capitol Hill, where, Lou, there are two drug industry lobbyists for every one member of Congress.

DOBBS: That lobbying power, combined with advertising power of the pharmaceutical interests, overwhelming. Thank you for that excellent report. Christine Romans.

On Capitol Hill tonight, drug safety is being overshadowed by other issues. Senate Majority Leader Bill Frist appears to be losing control of both his party and the Senate. This week, Senator Frist suffered a series of embarrassing setbacks on critical issues. Issues critical to his leadership.

Bill Schneider reports.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Senate Majority Leader Bill Frist hasn't had a particularly good week. He got undercut by a deal that leaves the filibuster intact. He failed to get a confirmation vote to confirm John Bolton as U.N. ambassador. He's facing defeat on federal funding for embryonic stem cell research.

Frist is expected to run for president in 2008. The union leader is the flagship conservative newspaper in -- ahem -- Manchester, New Hampshire.

On Wednesday, the paper wrote about Frist, "If he cannot effectively lead 55 Republican senators, how can he be trusted to lead the party and the country three years from now?" Some Republicans find that a little harsh.

ED ROLLINS, REPUBLICAN STRATEGIST: It's a tough role to try and lead a very diverse group. And he has a diverse group.

SCHNEIDER: Conservatives appreciate the fact that Frist carries their flag. They blame other Republicans for betraying him.

PHYLLIS SCHAFLY, PRESIDENT, EAGLE FORUM: I don't think the compromise about the judicial nominees particularly weakens him, because we all know they all went around him. McCain went around him behind his back to work out this compromise.

SCHNEIDER: McCain won, Frist lost. But... CHUCK TODD, EDITOR, "THE HOTLINE": Frist still is going to have more loyalty in the Republican Senate than John McCain.

SCHNEIDER: But Frist still has to prove he's an effective leader first by getting Bolton confirmed.

TODD: If he doesn't get Bolton through at all, I think that Frist is going to feel like he has worst problems than he does now.

SCHNEIDER: And second, if the Democrats filibuster a Bush Supreme Court nominee, conservatives expect Frist to trigger the nuclear option.

SCHAFLY: Absolutely. Absolutely. We are -- President Bush is entitled to fill a Supreme Court vacancy. And we are entitled to have an up-or-down vote on it.

(END VIDEOTAPE)

SCHNEIDER: Senator Frist has kept the faith with conservatives, but he still has to prove something else: that he can deliver -- Lou.

DOBBS: And how long-lasting do you believe these setbacks that the Senate leadership has endured this week will continue?

SCHNEIDER: Well, if Bolton is confirmed -- presumably it'll come to a vote next month -- then some of this will be set aside. And people will say it was a big victory, it was a temporary setback.

But the real test of his leadership is going to come, and this is going to be a tough test, when President Bush makes first Supreme Court nomination. That's going to be a huge uproar, because he's bound to nominate a pretty hard-core conservative. And Frist will be the man on the spot to shepherd that nomination through the Senate.

DOBBS: Hard-core conservative, Bill. I won't ask you for a definition of what a hard-core conservative is, but we take your point. Bill Schneider, thank you.

A legal drama on television is turning into a real live drama for House Majority Leader Congressman Tom DeLay. Congressman DeLay is outraged tonight over an episode of the NBC hit "Law & Order: Criminal Intent."

The congressman's name was mentioned in this week's episode of a detective investigating the murder of a federal judge suggested this...

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE, "LAW & ORDER: CRIMINAL INTENT": Maybe we should put out an APB for somebody in a Tom DeLay T-shirt.

(END VIDEO CLIP)

DOBBS: Congressman DeLay was not amused and blasted NBC in a letter saying, "This manipulation of my name and trivialization of the sensitive issue of judicial security represents a reckless disregard for the suffering initiated by recent tragedies and a great disservice to public discourse."

The show's executive producer responded. The producer, Dick Wolf, said this: "Up until today, it was my impression that all of our viewers understood that these shows are works of fiction, as is stated in each episode."

It raises the question of why he was using real names and real incidents.

President Bush today focused on an issue his party can unite around, the global war on terror. President Bush told graduates of the U.S. Naval Academy there is only one option in this war and that is, of course, victory.

Dana Bash has our report -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, at that commencement address, President Bush weighed in for the first time on the controversial plan to close 33 major military bases. Now, the base closing has, of course, caused an uproar from home state lawmakers, from local officials in all of those affected areas. Mr. Bush today promised to do everything possible to help communities recover, and said it all part of making sure the military is more efficient to deal with today's dangers.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The military services have each done a review of their requirements, and they've concluded that we have more bases than we need. Supporting these facilities waste billions of taxpayer's dollars, money that can be better spent on giving you the tools to fight terrorists and confront 21st century threats.

(END VIDEO CLIP)

BASH: The president was speaking to the 976 graduates of the Naval Academy in Annapolis. The last time he spoke at the naval commencement was in 2001, four months before September 11.

And Mr. Bush used this address to talk about what some of those graduates have accomplished since in Afghanistan, Iraq and elsewhere. He did that as a way to try to inspire those that you're seeing graduating today.

Now, the event also allowed Mr. Bush to give an update of what he calls the war on terrorism. Fighting terrorism is an area, the area, polls show Americans still have the most faith in President Bush. Much more than the issues he has been talking a lot more about lately, like Social Security and energy. And low confidence in the president on those issues White House aides believe has led to his lagging approval rating -- Lou.

DOBBS: Dana, thank you very much. Just out of curiosity, will the president be taking a break, as is Congress next week?

BASH: The president is not going to be taking a break until next weekend, where he will go to his ranch in Crawford, Texas.

DOBBS: Dana Bash from the White House. Thank you, Dana.

BASH: Thank you.

DOBBS: Coming up next here, an exclusive look inside of a radical Islamist terrorist group's campaign against Israel.

And a bloody terrorist attack in Pakistan. At least 20 people have been killed.

Those stories and more next.

(COMMERCIAL BREAK)

DOBBS: Saudi Arabia's King Fahd today was hospitalized. Reports suggesting he may be suffering from pneumonia. The Saudi government says the king, who has been ill for some time, is now undergoing tests and appears to be doing well.

There were conflicting reports from Saudi Arabia that the government declared a state of alert for its security forces. But those reports now appear to have been both false and exaggerated.

King Fahd is 82 years old. He has been in poor health, as I said, suffering a stroke 10 years ago. He's been hospitalized a number of times over the past six months.

Saudi Arabia has fought a two-year military campaign against al Qaeda terrorists who have launched attacks on Saudi soil.

Radical Islamist terrorists in Lebanon are threatening to launch a barrage of 12,000 rockets against northern Israel. Israeli military officials dismiss that threat as pure propaganda. But the Israelis are concerned that Hezbollah will launch a new wave of terrorist attacks.

John Vause has our exclusive report.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT (voice-over): Senior Israeli intelligence officers say the Lebanese-based militant group backed by Iran and Syria is actively recruiting Palestinians in the West Bank and Gaza, financing and planning attacks on Israel. Those same Israeli intelligence officers point to this training video. It shows a suicide bomber where to stand on a bus. It's just one of hundreds of tapes the Israelis say they've intercepted over last few years, sent from Hezbollah to Palestinian militants.

The video is slickly produced, showing the explosion from five different camera angles. The metal sheets around the mannequin represents seats and passengers. "You will see the seats here," the voiceover explains. "The shrapnel penetrated them and was very effective."

With the guidance of experts, CNN has taken care to leave out critical portions of the video from this report, but the tape does show how to make explosives from chemicals, which are easily available in pharmacies, hardware stores or farms, all set to inspirational music. Once the explosives are ready, there are detailed instructions on how to make a suicide belt.

"This is here for the explosive material," the tape explains. "This is for the shrapnel."

Israeli intelligence believes in the last few years Hezbollah has become increasingly active, not only planning, but coordinating and financing attacks like this one, a double suicide bombing in Tel Aviv two years ago, which left 23 dead, more than 100 wounded, and says last year almost 100 Israelis died as a result of attacks ordered from Lebanon by Hezbollah.

(on camera): Israeli intelligence says it knows of 50 cells operating in the West Bank and Gaza, all made up of disaffected Palestinian militants, and believes last year at least $9 million was sent by a courier, money exchanges and wire transfers from Hezbollah and Lebanon to finance those cells.

(voice-over): John Vause, CNN, the West Bank.

(END VIDEOTAPE)

DOBBS: Tonight, radical Islamists are being blamed for a bloody suicide bomb attack in Pakistan. At least 20 people were killed in the explosion, as many as 150 others wounded.

The bomb exploded in a Muslim shrine in the Pakistani capital of Islamabad. Thousands of people were in shrine, many of them women and children. The attack is the latest in what has become a series of terrorist attacks in Pakistan.

An Islamic Web site tonight is claiming that al Qaeda's leader in Iraq, Abu Musab al-Zarqawi, is alive and well. That Web site admit the terrorist leader was wounded but claims he is now recovering.

The Web site also says al-Zarqawi is still firmly in charge of the Iraq insurgency. U.S. officials say they cannot verify any Internet postings on al-Zarqawi's health and condition.

There was new insurgent violence in Iraq over the past 24 hours. An Iraqi police chief and two police officers were killed in the town of Mosul.

The U.S. military announced that a Marine was killed in western Iraq Thursday during the anti-insurgent offensive Operation New Market, as it has been styled. This is the second time that a Marine has died in this ongoing military operation. And the Pentagon confirms two U.S. soldiers were killed Thursday when their helicopter was shot down by insurgents near Baquba. The insurgents used small arms fire to bring the aircraft down. A second U.S. helicopter escaped the scene unharmed.

When we return, the nation's point man on dangerous diseases says a global flu pandemic may be nearing. I'll be talking with Dr. Anthony Fauci.

Also, understaffed and staring down the barrel of a gun, why a deadly crime wave in Mexico is threatening our Border Patrol agents.

Those stories are next.

(COMMERCIAL BREAK)

DOBBS: Disturbing new details tonight from China on the deadly bird flu, as health officials there warn a global pandemic. A Chinese agriculture official today said a strain of bird flu deadly to human beings has killed five times the number of birds, migratory birds, than originally reported by Chinese authorities. My guest tonight says that if there are infected birds, that chances are greater that the virus will spread to humans.

Joining me now is Dr. Anthony Fauci. He's director of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health.

Doctor, good to have you here.

DR. ANTHONY FAUCI, NATIONAL INSTITUTES OF HEALTH: Good to be here, Lou.

DOBBS: First, the fact that the Chinese authorities are saying that far more migratory birds have both been infected and died of bird flu, then the rush of vaccine to the province where that outbreak is. What does this suggest to you?

FAUCI: Well, there's great concern, because when migratory birds are infected, they almost certainly are going to cross-contaminate the flocks of chickens. And there are literally over 10 billion chickens in China. That's a very important source of nourishment for them, and it is also the source of what we are now seeing in Vietnam of this H5N1 bird flu jumping from chickens to humans.

So they're rushing in trying to vaccinate their chicken flocks, and they're also trying to get some Tamiflu, which is a drug for people who might be handling them. So there's a risk there that if their chicken flocks get infected, with so many people and so many chickens, they're going to be faced with the same thing that Vietnam is going through now, which is really rather ominous with the situation in Vietnam.

DOBBS: As the number of deaths have risen in Vietnam, in China, with the vaccination that has been -- the flu vaccine that has been sent in for those targeted for the chickens, how effective is that against the bird flu?

FAUCI: You know, it really varies, Lou. There are different formulation, different lots.

If made correctly, it should be reasonable good in protecting. But we know that there's great variability from vaccine to vaccine. They obviously did this in a very accelerated, rushed way.

The quality control for vaccines for chickens is certainly not nearly at the level of what we would expect for humans. Certainly not what would be expected in this country regarding both safety and efficacy. But they're faced with an emergency situation there.

DOBBS: Doctor, I'm sure many people are wondering why we're so concerned about what is happening in China with bird flu, or Vietnam, for that matter, as we think about the public health of the United States and the well-being of Americans. But you've testified before Congress this week that, in point of fact, it's really not a question of whether or not the bird flu will arrive in this country and spread around the world, but really when. Is that correct?

FAUCI: It is correct, Lou. And the reason we say that is the factors that accumulate that would lead to what we call a pandemic flu -- and it's important for the viewers to understand the difference between a pandemic flu, that really worries us, and the seasonal flu that we've spoken about on this show, where you have some minor changes from year to year, and fundamentally there's good background immunity. If you get vaccinated it's even better. A pandemic flu is a flu with a virus to which you have no immunity because you've never experienced it before.

What's going on in Asia right now is an accumulative effect. So it may not be this year. It may not be next year. But the factors that are leading to it are not going away. And the intensity or the seriousness of the pandemic varies greatly.

In the 20th century, we had one pandemic in 1980 -- 1918, that is, that killed 20 to 40 million people worldwide, and then we had a much more moderate one in 1968, which killed one million people. A little bit more serious one in '57 that killed two to four.

So there's a wide range. And flu is so unpredictable, Lou, that you have to expect the worst, which is the reason for the concern that you heard in the congressional hearings the other day.

DOBBS: And the worst variant of flu that we could talk about would be bird flu, as you're describing it, that we have not experienced before. The idea of vaccinating Americans against it, where we have not experienced the flu before, is there any way in the world in which to create a vaccine that would be effective against that strain?

FAUCI: Very good point. And we actually have already started a vaccine trial in April of this year. The first stages of it are given in several different doses, as well as in initial prime in a boost to determine, first, is it safe, and what's the right dose, because we don't have any experience with this before. We've also purchased two million doses for our strategic national stockpile.

The problem is that we're faced with the same situation as we were when we discussed on this show about the influenza vaccine shortage of this past season. The total global capacity for making influenza vaccine ranges between 300 million 450 million doses. There are six billion people in the world.

So the capacity of manufacturing is never going to get us to all the vaccine we need. Having said that, we've started a trial with the assumption that we will have to scale up that two million just in case, in fact, we do get bird flu in this country.

DOBBS: Are there -- and we are out of time, doctor -- but, in point of fact, are there U.S. pharmaceutical companies in this country that can produce this vaccine?

FAUCI: Well, the company that's making it is a French company that's actually manufacturing it in Edgewater, Pennsylvania. So the plant is at least in this country.

DOBBS: Dr. Fauci, as always, good to have you here, even when the issues we're discussing are not pleasant by any stretch of the imagination. Thank you very much.

FAUCI: Thank you, Lou. Thank you.

DOBBS: Coming up next, the U.S. Border Patrol is under siege on our southern border. Violence against our Border Patrol agents is rising dramatically.

Then, is CAFTA, the Central American Free Trade Agreement, dead? Some members of Congress say they have the votes to kill it.

And a soldier who hoped for a lifelong career in our military has been forced to choose a new direction for his life.

Those stories and more straight ahead.

(COMMERCIAL BREAK)

ANNOUNCER: News, debate and opinion with Lou Dobbs continues.

DOBBS: Violence against our Border Patrol agents is rising at an alarming rate. The stretch of the Arizona border that is the busiest crossing for illegal aliens has been the scene of violent incidents that are rising nearly 40 percent from last year. And yet groups who defend illegal aliens and advocate open borders accuse the U.S. Border Patrol and peaceful citizen volunteers, such as the Minutemen, of the potential of violence.

Kitty Pilgrim has the report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The nation's Border Patrol under siege. So far this year, physical assaults have already outpaced all of last year.

Vehicle rammings up 188 percent. Shootings up 122 percent. Cases of rock throwing up 23 percent. Rock throwing is such a problem, some Border Patrol vehicles are now custom-outfitted with steel screens to protect the agents against softball-sized boulders thrown at them.

The Arizona Border Patrol today confirmed violence against Border Patrol agents is clearly on the rise.

T.J. BONNER, NATIONAL BORDER PATROL COUNCIL: The smugglers know that if they assault our agents, either by throwing rocks at them or by shooting at them, that our agents will withdraw, making it easier for them to move their cargo across the border.

PILGRIM: In addition to the rising violence against federal agents, this week 300 protesters had to be restrained by police in riot gear as they protested against Minutemen, the citizen volunteer group that patrols the border.

HEATHER MAC DONALD, MANHATTAN INSTITUTE: Any effort to enforce the law peacefully is viewed as somehow an incursion on illegal aliens' rights. And we don't pay as much attention. We don't have people out there protesting against violence against Border Patrolmen and ranchers and property owners.

PILGRIM: Minutemen observe and report any border crossings to authorities, yet have been labeled as vigilantes by many immigrant groups, and even the president of the United States, despite that there have been no incidents of violence by Minutemen against illegal aliens.

(END VIDEOTAPE)

PILGRIM: Border Patrol agents say that violence is mainly because the highly-organized efforts of drug traffickers and people traffickers, now they use the tactic to create a diversion, so that vehicles and people can get through the border at another point -- Lou.

DOBBS: An extraordinary story. And by the way, it is a story that's not being reported, at least in any detail or with any extensive coverage by the mainstream media in this country, and one has to wonder why not.

Kitty, thank you very much. Kitty Pilgrim.

That brings us to the subject of our poll tonight. Are you surprised that the mainstream media has basically ignored the anti- Minutemen violence in California and the rising violence against U.S. Border Patrol agents on our southern border? Yes or no? Please cast your vote at loudobbs.com. We'll have the results coming up later here on the program.

The mayor of the city of Fresno, California, has called for a moratorium on illegal immigration. Mayor Alan Autry says the border should be closed for two years, so that officials can take the time to address the issue of illegal immigration. During his state of the city speech, Mayor Autry said he will call on the League of California Cities to support a temporary closing of the border. Autry has not, however, offered a proposal of just how he would close that border with Mexico.

Senator Jon Kyl of Arizona and Senator John Cornyn of Texas are working on a plan to overhaul border security and reform our national immigration policies. The senators' plan would include adding 10,000 new Border Patrol agents and 1,000 new immigration inspectors. The measure would also provide for the training of state and local officials to enforce immigration laws, and it would raise penalties for employers who hire illegal aliens.

Senator Jon Kyl is chairman of the Senate Subcommittee on Terrorism and Homeland Security, joining us tonight from Phoenix. Senator, good to have you with us.

SEN. JON KYL (R), ARIZONA: Thank you, Lou. And by the way, I really appreciate that story you just reported on. Like you said, very few others are reporting on the violence that's occurring at the border.

DOBBS: It is truly remarkable, Senator, that there is a peculiar perspective that has been assumed by many of our politicians, and frankly the national news media, on what is important in this country. And your legislation that you have drafted with Senator Cornyn goes to the issue of border security as a condition precedent at least to immigration reform. Is that a fair statement?

KYL: Yes, indeed. And in fact, what we have determined is that until people are convinced that the government is committed to enforcing the immigration law, in all of its aspects, they're not going to be very open-minded about any kind of temporary worker program. And therefore, our first title in this legislation that we announced this last -- well, yesterday, focuses strictly on enforcement. Enforcement at the border, enforcement in the interior, and enforcement at the workplace.

If we can get all of that right, then I think we can turn to the second title of the bill, which will be for temporary worker programs, but frankly, you have got to demonstrate that commitment to enforcement first.

DOBBS: That is a commitment that is not evident in the legislation proposed by your fellow senator in Arizona, Senator John McCain, and Senator Kennedy's legislation. What is your reaction to their proposals?

KYL: Well, I'd really prefer not to comment on their proposals, as you might expect...

DOBBS: I thought I would give you an opportunity, Senator.

KYL: No, you know, they're good friends, and we each have a little different approach to this problem. One thing that's interesting is that I don't know of anybody now that doesn't believe we need to address the problem, and certainly Senator McCain and I have been down on the border, and we have seen what needs to be done.

But one thing that I think distinguishes the legislation that Senator Cornyn and I will be introducing is this emphasis on enforcement. And again, it's the three key components. At the border itself, we have got to secure the border. In the interior, you can't have people running around who are wanted for crimes, for example, just because there's no detention facility for them. And at the workplace, which there's virtually none of today, and that will be a central component of our legislation.

DOBBS: And you focus as well on the relationship between a data bank that would be maintained by Social Security, the Department of Homeland Security working with that data bank, to assure that identification, particularly Social Security cards, obviously, are indeed valid. How quickly do you think that could be done?

KYL: Not exactly sure how long. This is one of the reasons why we need to get this mechanism in place right away. Because if we're going to have a temporary worker program, we're going to have to have the means of enforcement of identification and employment verification in place and ready to go. And that will take some time, and it will cost some money, but the technology is there. We will use biometric technology. There is no question that you can have a credit card kind of swipe through a little reader that will verify both that the individual is who he or she says they are, and that they are entitled to be employed.

That electronic verification, by the way, will make it much easier to audit, so that the law can be enforced as well, and that's the key component to any temporary worker program, to enforce the identity -- to enforce the law so that you know that only people who are qualified to work in the country are hired.

DOBBS: Senator Jon Kyl, we thank you for being here, and we wish you a very nice Memorial Day holiday.

KYL: Thank you, Lou.

DOBBS: Thank you.

"Heroes," why one soldier thought he'd never make it out of Iraq alive.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: As I go, well, this is where I die, you know. This is like the end of it.

(END VIDEO CLIP)

DOBBS: His story is next. Also, Republican predictions about the fate of NAFTA couldn't be farther from reality, from CAFTA. Is CAFTA a dead deal? Some say no, some say yes. We'll tell you what the correct answer is next in our special report. Stay with us.

(COMMERCIAL BREAK)

DOBBS: In "Heroes" tonight, our weekly salute to our men and women in uniform, the story of former Army Sergeant Charles Horgan, a soldier who dreamed of a long military career in service to the nation. But that dream was cut terribly short in Iraq. Sergeant Horgan was one of the first soldiers to be wounded during the war. Casey Wian has his story.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Charles Horgan plays Irish music for his soul. Once a week, he joins this group at a bar in Helena, Montana to take his mind off of the challenges he's faced since going to war. Hogan taught himself to play the tin flute while his right foot healed. On the second day of the war in Iraq, the truck he was riding in was hit by an RPG.

CHARLES HORGAN, (RET) U.S. ARMY: You could hear it. You know, it doesn't -- it makes like this weird pinwheel noise while it's coming through the air. And I was like, wow, this is where I die, you know? This is like the end of it.

It was loud and it was hot and blowing out of the turret.

WIAN: Bullets began flying and another rocket hit. Horgan jumped off of the truck and tried to crawl to safety, thinking his foot was broken.

HORGAN: I flipped my foot over to look at it and it was like simmering, the boot was just destroyed. And it was just blood dripping out. And it was pretty gross. My heal was gone. My arch was pretty jacked up. And it looked like a mess.

WIAN: Horgan was medevac'd out, and spent a month at Walter Reed watching the war on CNN, hoping to see his buddies and wishing he were there.

Then he went home to Montana. After three months, most of his foot was saved and he could walk again, but the emotional recovery was much harder.

HORGAN: I feel like I got robbed of what high future was going to be, or what my potential could have been in the military. Because I wanted to accomplish so much.

(MUSIC)

WIAN: Horgan plans to go to film school in September to become a cinematographer. For his parents, there is pride and optimism that their son who wanted to be a soldier and go to war will finally find inner peace.

Casey Wian, CNN, reporting.

(END VIDEOTAPE)

DOBBS: We wish Sergeant Horgan the very best. And of course the very best to all of our men and women serving the nation in uniform.

Coming up at the top of the hour here on CNN, none other than Anderson Cooper who joins us now with a preview -- Anderson.

ANDERSON COOPER, CNN ANCHOR: Lou, thanks.

Yeah, about 18 minutes from now on 360, an incredible story from Bali today where a young Australian woman has been sentenced to 20 years in prison for smuggling marijuana. The emotion inside the courtroom was intense after the verdict was read. She and her family crying out insisting on her innocence.

We're also going to give you an update of a story we brought you last night, pets of soldiers called to war. Thousands of them have been abandoned, left homeless, end up getting put to sleep. It's a heart-breaking reality. Happily tonight, got some good news about the dogs we introduced you to last night. How our view verse reached out to save them. Lou, that's at the top of hour.

DOBBS: Looking forward to it, Anderson, thank you.

We reported here last night that San Jose, California, has the second worst roads in the nation. California's governor, Arnold Schwarzenegger, held an event to call attention to the problem and to win support for Proposition 42 in California. That proposition will provide more than a billion dollars in funding for California highway repair.

Governor Schwarzenegger went to San Jose to do street repairs to bring a little publicity. It turns out, and we felt we should update the story, the problem is the street he repaired was in pretty good condition until just a few hours before the governor arrived. Street crews, it turned out, arrived before the governor to make a pothole. The city says the street was slated for repairs before the governor's appearance was scheduled. And anti-road crews must tear up a road in order to repair it. That is intriguing reasoning.

A reminder now to vote in our poll. "Are you surprised the mainstream media has basically ignored the anti Minuteman violence in California and the rising violence against our border patrol agents on our border with Mexico? Yes or no." Please cast your vote at LouDobbs.com. The results will be coming up here in just a few minutes.

As opposition to CAFTA is rising, I'll be talking with only Hispanic Democrat in Congress to support that so-called free trade deal. He's our guest here next. Stay with us.

(COMMERCIAL BREAK) DOBBS: One year ago this very weekend, President Bush signed CAFTA, the Central American Free Trade Agreement. That signing didn't mean much because the Congress has still not approved it. And opponents in the House of Representatives say they now have the votes to defeat it.

Louise Schiavone reports now on the troubled history of what mean call a dangerous pact.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): The promise, a Central American free trade agreement, or CAFTA, would do for trade with Central America, what NAFTA did for trade with Mexico. The answer from Congress so far? No thank you.

REP. VIRGIL GOODE, (R) VIRGINIA: These trade agreements cost manufacturing jobs in this country.

SEN. BYRON DORGAN, (D) NORTH DAKOTA: It is an agreement they think pulls the rug out from our family farmers, pulls the rug out from our workers and pulls the rug out from businesses that produced only in this country.

REP. WALTER JONES, (R) NORTH CAROLINA: This CAFTA bill is bad and wrongful for America and manufacturing.

SCHIAVONE: Despite the high hoes of Republican leaders, CAFTA has turn out to be a hard sell. It was designed to eliminate tariff and trade barriers between the U.S. and six Central American nations. But critics challenge, at what cost?

REP. XAVIER BECERRA, (D) CALIFORNIA: The biggest losers will be American companies. They're going to be forced to start undercutting their own standards on labor and environment in order to compete in that race to the bottom.

SCHIAVONE: A recent survey of House members found that 165 oppose it, 73 support it, and 197 either did not respond or are undecided. 218 votes are needed to defeat the treaty.

ERNEST BAYNARD, AMERICANSFORFAIRTRADE.ORG: Many I think have accurately referred to CAFTA as an outsourcing agreement, whereby cheap labor can be found. At it really does facilitate a race to the bottom. It doesn't serve our workers, it does not serve our strategic economic interests.

SCHIAVONE: The biggest obstacle to CAFTA may be the opposition of the Congressional Hispanic Caucus. They are joined by dozens of churches and religious groups who say that CAFTA will only exploit Central American workers.

(END VIDEOTAPE)

SCHIAVONE: Lou, it would be wrong to say the CAFTA train has crashed, however, it is overdue when its whereabouts are unknown for now -- Lou.

DOBBS: And we should remind everyone, Louise, that the president decided to defer a congressional vote on this bill before the presidential elections last fall. And as you point out, it is well overdue now before Congress. Louise Schiavone, thank you.

The Congressional Hispanic Caucus voted overwhelmingly this week to oppose CAFTA. That vote 14-1. The lone vote of support came from Democratic Congressman Henry Cuellar of Texas who says CAFTA could ease America's illegal immigration crisis. He's our guest tonight from Washington, D.C.

Congressman, good to have you with us.

REP. HENRY CUELLAR, (D) TEXAS: Thank you, Lou.

DOBBS: Let's -- you have to feel like the lone ranger, if being from Texas, you should appreciate the expression. Only one of 14 in the Hispanic Caucus. Why do you feel necessary to go against your colleagues on this issue? Democratic colleagues.

CUELLAR: Yes, well, first of all, I do support CAFTA. There were four members that abstained from voting because they haven't decided yet, Hispanic Caucus members.

But we have to keep one thing in mind, Lou. That is, the Hispanic community is a growing, diverse group. And I respect the opinions of my colleagues.

But at the same time, there's a lot of Hispanic groups that have been pushing very hard for CAFTA, for example the Hispanic Alliance for Free Trade, which is composed of 125 business organizations which includes the U.S. Chamber of Commerce, do support CAFTA. And they understand the benefits of CAFTA.

DOBBS: Well, you're a Democrat; the U.S. Chamber of Commerce is pro-business. You're a Democrat with a proud tradition of look out for working men and women in this country. We know that CAFTA is NAFTA in miniature certainly. We know that NAFTA's result in the loss of three quarters -- at least three quarters of a million jobs in this country. How can you support an agreement that is so blatantly anti- worker there are no safeguards for Central American workers, neither five Central American countries, nor in the Dominican Republic in the Caribbean.

How do you square that out?

CUELLAR: Several points. Let me make the first point. First of all, we've got to keep one I thing in mind. Since 1980s we have been trading with have been trading with the Central American countries under an agreement called the Caribbean base and initiative, where they send all of their goods over to the United States duty-free. That is, they don't pay any duties. But with we send our agriculture products, and our goods over there, we pay up to 40 percent, 40 percent tariff on those goods. Now, do you call that fair? I don't think that's fair, and I don't think it's fair for the American consumer and for our agriculture community. I want to see a level playing field. And if we do that, this will be fair for our workers, and it would create more jobs in the United States.

DOBBS: Well, that's certainly as you know, hasn't been the experience with NAFTA. It's also a region, those five countries, plus the Dominican Republican -- Republic, Congressman, amount to an economy the size of New Haven, Connecticut, some $85 billion. They can't buy much. In point in fact, the International Monetary Fund is supporting a number -- three of those countries, either directly or indirectly with loans. They're not in austerity program certainly all them.

But -- I mean, this is a difficult sell for me, because I just don't see the market. And in point in fact, we have a deficit of about $2 billion with those five Central American countries. I'm not -- I'm sort of struggling to understand why we would be concerned about that when we have $162 billion deficit last year with China. Help me out here.

CUELLAR: Well, sure. First of all, when you look at the markets, they're small countries. But when you look at exportation that we send over, we send up to 15 billion of exports. In fact, those small countries are bigger than Russia, China -- I mean, Russia, India and some other countries put together. They're small, but we could export goods over there. But you hit it right on the nail, you're exactly right. It's not fair. We send our goods over to them, and we pay up to 40 percent of tariffs. But when they send their goods over, and I'm talking about those specific Central American countries, it's duty-free. I want to level the playing field. It is very important that we play fair and this is what this agreement allows us to export new jobs, exportation over there so we can create jobs here in the United States.

DOBBS: Well, Congressman, it is nice, even though we disagree on this piece of legislation, I must say it is nice to talk with a Congressman -- one of the representatives the people in this country who is actually concerned about exports. We've got a lot of people who think that free trade is just about buying more. Henry Cuellar, good to have you with us. Thank you, sir.

CUELLAR: Thank you. And it's good talking to another Texan.

DOBBS: You got a deal. Thank you.

Still ahead, the results of our poll tonight, and a preview of what's ahead Monday. And I'll be joined by Ken and Daria Dolan. Unscripted as always but fascinating as always. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results now of our poll. The question, are you surprised the mainstream media has basicly surprised the anti- Minutemen violence in California, and the rising violence against our border patrol agents on our southern border. Forty seven percent of you said, you have been surprised, 53 percent said, no surprise. Tonight's "Quote of the Day" comes from Michael Berelowitz, vice president at Pfizer. When asked if Pfizer found any cases of blindness during clinical trials on Viagra, he simply replied, quote, "We did not see any. We did not see any."

Joining me now from "DOLANS UNSCRIPTED," it airs at 10:00 a.m. tomorrow morning here on CNN, Ken and Daria Dolan. Good to have you both with us.

DARIA DOLAN, HOST, DOLANS UNSCRIPTED: Thank you so much.

DOBBS: Let's start with the housing bubble.

KEN DOLAN, HOST, DOLANS UNSCRIPTED: Yes.

DOBBS: I know that you have been focusing on that and you will tomorrow.

K. DOLAN: We'll talk tomorrow, yes.

DOBBS: What is the situation? Is it a bubble and is it something we should be concerned about?

D. DOLAN: It depends on where you live. If you're in the state of California, in the state of Florida, or in the northeast corridor between Boston and Washington, there are definitely signs of a megabubble.

K. DOLAN: Yes, but Lou, before anybody gets crazy, let's call it the way it is. If you own a home and it's appreciated in value, great, just shut up. Don't do what a lot people are doing. And that is, simply saying, my house has gone from $150,000 to $250,000, I'm going to take the extra equity, I'm going to buy house number two and house number three. That's the bubble. Not owning a house, and saying, if it goes up, that's great. I've got a wonderful place to live. I've done my comparables. I can enjoy my house, that's the bubble.

DOBBS: And how much of this bubble do you think is speculation, Daria?

D. DOLAN: Lately, it's mostly that. A lot in the second house market and certainly -- I mean, you look in the state of Florida, they are flipping before they are even finished?

K. DOLAN: What did you say earlier today? Thirty percent of the houses bought last year, have some sort speculation related to them.

D. DOLAN: Yes, and see it in the types of mortgages being taken. One-year adjustable rates when we've got the lowest down.

K. DOLAN: Zero down.

D. DOLAN: And interest-only loans. That's the time bubble.

K. DOLAN: You don't need any, money, Lou. D. DOLAN: If I were Alan Greenspan, that's what would be keeping me up at night.

DOBBS: For the first time, he's mentioning his concerns.

K. DOLAN: A large company I thinking -- I won't give the name. I know the name, gave a seminar. Yes, am I out of time?

DOBBS: No, just hurry up.

K. DOLAN: I know. Gave a get rich quick in real estate. There were thousands and thousands of peep in Los Angeles. Real estates now are the tech stocks of the year 2000, be careful!

DOBBS: And what about Viagra, Daria?

K. DOLAN: Yes, what about Viagra, Daria?

D. DOLAN: Well, you know, this whole thing, now you're going to watch all the politicians falling all over themselves now that word has gotten out that the states under their Medicaid programs were providing Viagra to certain sex offenders. And that in certain states, they're even finding incidents of a couple of cases of child abuse.

K. DOLAN: Yes, it's a mess. It's irresponsible for doctors to say, we just take care of people. We don't care about the sex offender list. It's irresponsible on the lobbyist. It's irresponsible on the drug companies. And it's irresponsible on the healthcare system's that out of control.

DOBBS: I agree with everything.

D. DOLAN: And they'll legislate in haste and will all repent at leisure.

DOBBS: And now we find out that for some it means blindness when they do use it.

K. DOLAN: I guess.

DOBBS: Don't have any thoughts?

K. DOLAN: I don't.

DOBBS: By tomorrow morning, Ken and Daria will have a thought about that at 10:00 a.m. here on CNN.

K. DOLAN: Lou. Lou.

DOBBS: "DOLANS UNSCRIPTED," please join them.

Thank you for being with us tonight. For all us here, we hope you have a wonderful, safe, holiday weekend. Good night from New York, "ANDERSON COOPER 360" starts right now -- Anderson.

END

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Aired May 27, 2005 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Good evening, everybody. Tonight, Senate Majority Leader Bill Frist, has he lost control of both the Senate and the majority? We'll have a special report for you.
An exclusive look inside a radical Islamist terrorist group. How radical Islamists are training suicide bombers to kill civilians.

And the killer bird flu is coming to the United States. This country's top authority on infectious diseases is our special guest.

And tonight a major new drug scare. Federal officials are investigating reports that some popular impotence drugs may cause blindness. Viagra and Cialis are among the drugs now under investigation.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): An investigation is under way into whether this little blue pill made nearly 40 men blind. It's maker, Pfizer, is in talks with the government over warning consumers of Viagra-related blindness. But there are no plans to pull this drug or its competitors off the market.

Makers of Cialis have also reported four cases of blindness and recently toughened the label. One Levitra user is reported to have gone blind, but there has been no label change there.

Even as the FDA investigates, it says, "Viagra is safe and effective as labeled," but urges paces to talk to their doctor. Pfizer says blindness is very rare. Viagra's label warns that blurred vision is one possible side-effect.

MICHAEL BERELOWITZ, PFIZER: The difficulty here is one of association. You have the same group of patients with the same characteristics who might be at risk for this very, very infrequent condition that affects the eyes, and the condition of erectile dysfunction, which 23 million people around the world have taken Viagra quite safely for.

ROMANS: Pfizer's aggressive advertising has made Viagra the most prescribed erectile dysfunction drug, 177 million prescriptions. Taxpayers paid $38 million last year for Medicaid prescription of these drugs. JOHN ABRAMSON, AUTHOR, "OVERDOSED AMERICA": The market is doing a very good job convincing them that they need them. I've heard stories of adolescence who are just becoming sexually active who carry these pills in their wallets the way kids use to carry condoms.

ROMANS: He says far too many men are buying into marketing hype, forgetting that all prescription drugs carry risks of side-effects.

(END VIDEOTAPE)

ROMANS: Critics say the drug industry's influence over consumers is matched only by its clout on Capitol Hill, where, Lou, there are two drug industry lobbyists for every one member of Congress.

DOBBS: That lobbying power, combined with advertising power of the pharmaceutical interests, overwhelming. Thank you for that excellent report. Christine Romans.

On Capitol Hill tonight, drug safety is being overshadowed by other issues. Senate Majority Leader Bill Frist appears to be losing control of both his party and the Senate. This week, Senator Frist suffered a series of embarrassing setbacks on critical issues. Issues critical to his leadership.

Bill Schneider reports.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Senate Majority Leader Bill Frist hasn't had a particularly good week. He got undercut by a deal that leaves the filibuster intact. He failed to get a confirmation vote to confirm John Bolton as U.N. ambassador. He's facing defeat on federal funding for embryonic stem cell research.

Frist is expected to run for president in 2008. The union leader is the flagship conservative newspaper in -- ahem -- Manchester, New Hampshire.

On Wednesday, the paper wrote about Frist, "If he cannot effectively lead 55 Republican senators, how can he be trusted to lead the party and the country three years from now?" Some Republicans find that a little harsh.

ED ROLLINS, REPUBLICAN STRATEGIST: It's a tough role to try and lead a very diverse group. And he has a diverse group.

SCHNEIDER: Conservatives appreciate the fact that Frist carries their flag. They blame other Republicans for betraying him.

PHYLLIS SCHAFLY, PRESIDENT, EAGLE FORUM: I don't think the compromise about the judicial nominees particularly weakens him, because we all know they all went around him. McCain went around him behind his back to work out this compromise.

SCHNEIDER: McCain won, Frist lost. But... CHUCK TODD, EDITOR, "THE HOTLINE": Frist still is going to have more loyalty in the Republican Senate than John McCain.

SCHNEIDER: But Frist still has to prove he's an effective leader first by getting Bolton confirmed.

TODD: If he doesn't get Bolton through at all, I think that Frist is going to feel like he has worst problems than he does now.

SCHNEIDER: And second, if the Democrats filibuster a Bush Supreme Court nominee, conservatives expect Frist to trigger the nuclear option.

SCHAFLY: Absolutely. Absolutely. We are -- President Bush is entitled to fill a Supreme Court vacancy. And we are entitled to have an up-or-down vote on it.

(END VIDEOTAPE)

SCHNEIDER: Senator Frist has kept the faith with conservatives, but he still has to prove something else: that he can deliver -- Lou.

DOBBS: And how long-lasting do you believe these setbacks that the Senate leadership has endured this week will continue?

SCHNEIDER: Well, if Bolton is confirmed -- presumably it'll come to a vote next month -- then some of this will be set aside. And people will say it was a big victory, it was a temporary setback.

But the real test of his leadership is going to come, and this is going to be a tough test, when President Bush makes first Supreme Court nomination. That's going to be a huge uproar, because he's bound to nominate a pretty hard-core conservative. And Frist will be the man on the spot to shepherd that nomination through the Senate.

DOBBS: Hard-core conservative, Bill. I won't ask you for a definition of what a hard-core conservative is, but we take your point. Bill Schneider, thank you.

A legal drama on television is turning into a real live drama for House Majority Leader Congressman Tom DeLay. Congressman DeLay is outraged tonight over an episode of the NBC hit "Law & Order: Criminal Intent."

The congressman's name was mentioned in this week's episode of a detective investigating the murder of a federal judge suggested this...

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE, "LAW & ORDER: CRIMINAL INTENT": Maybe we should put out an APB for somebody in a Tom DeLay T-shirt.

(END VIDEO CLIP)

DOBBS: Congressman DeLay was not amused and blasted NBC in a letter saying, "This manipulation of my name and trivialization of the sensitive issue of judicial security represents a reckless disregard for the suffering initiated by recent tragedies and a great disservice to public discourse."

The show's executive producer responded. The producer, Dick Wolf, said this: "Up until today, it was my impression that all of our viewers understood that these shows are works of fiction, as is stated in each episode."

It raises the question of why he was using real names and real incidents.

President Bush today focused on an issue his party can unite around, the global war on terror. President Bush told graduates of the U.S. Naval Academy there is only one option in this war and that is, of course, victory.

Dana Bash has our report -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, at that commencement address, President Bush weighed in for the first time on the controversial plan to close 33 major military bases. Now, the base closing has, of course, caused an uproar from home state lawmakers, from local officials in all of those affected areas. Mr. Bush today promised to do everything possible to help communities recover, and said it all part of making sure the military is more efficient to deal with today's dangers.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The military services have each done a review of their requirements, and they've concluded that we have more bases than we need. Supporting these facilities waste billions of taxpayer's dollars, money that can be better spent on giving you the tools to fight terrorists and confront 21st century threats.

(END VIDEO CLIP)

BASH: The president was speaking to the 976 graduates of the Naval Academy in Annapolis. The last time he spoke at the naval commencement was in 2001, four months before September 11.

And Mr. Bush used this address to talk about what some of those graduates have accomplished since in Afghanistan, Iraq and elsewhere. He did that as a way to try to inspire those that you're seeing graduating today.

Now, the event also allowed Mr. Bush to give an update of what he calls the war on terrorism. Fighting terrorism is an area, the area, polls show Americans still have the most faith in President Bush. Much more than the issues he has been talking a lot more about lately, like Social Security and energy. And low confidence in the president on those issues White House aides believe has led to his lagging approval rating -- Lou.

DOBBS: Dana, thank you very much. Just out of curiosity, will the president be taking a break, as is Congress next week?

BASH: The president is not going to be taking a break until next weekend, where he will go to his ranch in Crawford, Texas.

DOBBS: Dana Bash from the White House. Thank you, Dana.

BASH: Thank you.

DOBBS: Coming up next here, an exclusive look inside of a radical Islamist terrorist group's campaign against Israel.

And a bloody terrorist attack in Pakistan. At least 20 people have been killed.

Those stories and more next.

(COMMERCIAL BREAK)

DOBBS: Saudi Arabia's King Fahd today was hospitalized. Reports suggesting he may be suffering from pneumonia. The Saudi government says the king, who has been ill for some time, is now undergoing tests and appears to be doing well.

There were conflicting reports from Saudi Arabia that the government declared a state of alert for its security forces. But those reports now appear to have been both false and exaggerated.

King Fahd is 82 years old. He has been in poor health, as I said, suffering a stroke 10 years ago. He's been hospitalized a number of times over the past six months.

Saudi Arabia has fought a two-year military campaign against al Qaeda terrorists who have launched attacks on Saudi soil.

Radical Islamist terrorists in Lebanon are threatening to launch a barrage of 12,000 rockets against northern Israel. Israeli military officials dismiss that threat as pure propaganda. But the Israelis are concerned that Hezbollah will launch a new wave of terrorist attacks.

John Vause has our exclusive report.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT (voice-over): Senior Israeli intelligence officers say the Lebanese-based militant group backed by Iran and Syria is actively recruiting Palestinians in the West Bank and Gaza, financing and planning attacks on Israel. Those same Israeli intelligence officers point to this training video. It shows a suicide bomber where to stand on a bus. It's just one of hundreds of tapes the Israelis say they've intercepted over last few years, sent from Hezbollah to Palestinian militants.

The video is slickly produced, showing the explosion from five different camera angles. The metal sheets around the mannequin represents seats and passengers. "You will see the seats here," the voiceover explains. "The shrapnel penetrated them and was very effective."

With the guidance of experts, CNN has taken care to leave out critical portions of the video from this report, but the tape does show how to make explosives from chemicals, which are easily available in pharmacies, hardware stores or farms, all set to inspirational music. Once the explosives are ready, there are detailed instructions on how to make a suicide belt.

"This is here for the explosive material," the tape explains. "This is for the shrapnel."

Israeli intelligence believes in the last few years Hezbollah has become increasingly active, not only planning, but coordinating and financing attacks like this one, a double suicide bombing in Tel Aviv two years ago, which left 23 dead, more than 100 wounded, and says last year almost 100 Israelis died as a result of attacks ordered from Lebanon by Hezbollah.

(on camera): Israeli intelligence says it knows of 50 cells operating in the West Bank and Gaza, all made up of disaffected Palestinian militants, and believes last year at least $9 million was sent by a courier, money exchanges and wire transfers from Hezbollah and Lebanon to finance those cells.

(voice-over): John Vause, CNN, the West Bank.

(END VIDEOTAPE)

DOBBS: Tonight, radical Islamists are being blamed for a bloody suicide bomb attack in Pakistan. At least 20 people were killed in the explosion, as many as 150 others wounded.

The bomb exploded in a Muslim shrine in the Pakistani capital of Islamabad. Thousands of people were in shrine, many of them women and children. The attack is the latest in what has become a series of terrorist attacks in Pakistan.

An Islamic Web site tonight is claiming that al Qaeda's leader in Iraq, Abu Musab al-Zarqawi, is alive and well. That Web site admit the terrorist leader was wounded but claims he is now recovering.

The Web site also says al-Zarqawi is still firmly in charge of the Iraq insurgency. U.S. officials say they cannot verify any Internet postings on al-Zarqawi's health and condition.

There was new insurgent violence in Iraq over the past 24 hours. An Iraqi police chief and two police officers were killed in the town of Mosul.

The U.S. military announced that a Marine was killed in western Iraq Thursday during the anti-insurgent offensive Operation New Market, as it has been styled. This is the second time that a Marine has died in this ongoing military operation. And the Pentagon confirms two U.S. soldiers were killed Thursday when their helicopter was shot down by insurgents near Baquba. The insurgents used small arms fire to bring the aircraft down. A second U.S. helicopter escaped the scene unharmed.

When we return, the nation's point man on dangerous diseases says a global flu pandemic may be nearing. I'll be talking with Dr. Anthony Fauci.

Also, understaffed and staring down the barrel of a gun, why a deadly crime wave in Mexico is threatening our Border Patrol agents.

Those stories are next.

(COMMERCIAL BREAK)

DOBBS: Disturbing new details tonight from China on the deadly bird flu, as health officials there warn a global pandemic. A Chinese agriculture official today said a strain of bird flu deadly to human beings has killed five times the number of birds, migratory birds, than originally reported by Chinese authorities. My guest tonight says that if there are infected birds, that chances are greater that the virus will spread to humans.

Joining me now is Dr. Anthony Fauci. He's director of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health.

Doctor, good to have you here.

DR. ANTHONY FAUCI, NATIONAL INSTITUTES OF HEALTH: Good to be here, Lou.

DOBBS: First, the fact that the Chinese authorities are saying that far more migratory birds have both been infected and died of bird flu, then the rush of vaccine to the province where that outbreak is. What does this suggest to you?

FAUCI: Well, there's great concern, because when migratory birds are infected, they almost certainly are going to cross-contaminate the flocks of chickens. And there are literally over 10 billion chickens in China. That's a very important source of nourishment for them, and it is also the source of what we are now seeing in Vietnam of this H5N1 bird flu jumping from chickens to humans.

So they're rushing in trying to vaccinate their chicken flocks, and they're also trying to get some Tamiflu, which is a drug for people who might be handling them. So there's a risk there that if their chicken flocks get infected, with so many people and so many chickens, they're going to be faced with the same thing that Vietnam is going through now, which is really rather ominous with the situation in Vietnam.

DOBBS: As the number of deaths have risen in Vietnam, in China, with the vaccination that has been -- the flu vaccine that has been sent in for those targeted for the chickens, how effective is that against the bird flu?

FAUCI: You know, it really varies, Lou. There are different formulation, different lots.

If made correctly, it should be reasonable good in protecting. But we know that there's great variability from vaccine to vaccine. They obviously did this in a very accelerated, rushed way.

The quality control for vaccines for chickens is certainly not nearly at the level of what we would expect for humans. Certainly not what would be expected in this country regarding both safety and efficacy. But they're faced with an emergency situation there.

DOBBS: Doctor, I'm sure many people are wondering why we're so concerned about what is happening in China with bird flu, or Vietnam, for that matter, as we think about the public health of the United States and the well-being of Americans. But you've testified before Congress this week that, in point of fact, it's really not a question of whether or not the bird flu will arrive in this country and spread around the world, but really when. Is that correct?

FAUCI: It is correct, Lou. And the reason we say that is the factors that accumulate that would lead to what we call a pandemic flu -- and it's important for the viewers to understand the difference between a pandemic flu, that really worries us, and the seasonal flu that we've spoken about on this show, where you have some minor changes from year to year, and fundamentally there's good background immunity. If you get vaccinated it's even better. A pandemic flu is a flu with a virus to which you have no immunity because you've never experienced it before.

What's going on in Asia right now is an accumulative effect. So it may not be this year. It may not be next year. But the factors that are leading to it are not going away. And the intensity or the seriousness of the pandemic varies greatly.

In the 20th century, we had one pandemic in 1980 -- 1918, that is, that killed 20 to 40 million people worldwide, and then we had a much more moderate one in 1968, which killed one million people. A little bit more serious one in '57 that killed two to four.

So there's a wide range. And flu is so unpredictable, Lou, that you have to expect the worst, which is the reason for the concern that you heard in the congressional hearings the other day.

DOBBS: And the worst variant of flu that we could talk about would be bird flu, as you're describing it, that we have not experienced before. The idea of vaccinating Americans against it, where we have not experienced the flu before, is there any way in the world in which to create a vaccine that would be effective against that strain?

FAUCI: Very good point. And we actually have already started a vaccine trial in April of this year. The first stages of it are given in several different doses, as well as in initial prime in a boost to determine, first, is it safe, and what's the right dose, because we don't have any experience with this before. We've also purchased two million doses for our strategic national stockpile.

The problem is that we're faced with the same situation as we were when we discussed on this show about the influenza vaccine shortage of this past season. The total global capacity for making influenza vaccine ranges between 300 million 450 million doses. There are six billion people in the world.

So the capacity of manufacturing is never going to get us to all the vaccine we need. Having said that, we've started a trial with the assumption that we will have to scale up that two million just in case, in fact, we do get bird flu in this country.

DOBBS: Are there -- and we are out of time, doctor -- but, in point of fact, are there U.S. pharmaceutical companies in this country that can produce this vaccine?

FAUCI: Well, the company that's making it is a French company that's actually manufacturing it in Edgewater, Pennsylvania. So the plant is at least in this country.

DOBBS: Dr. Fauci, as always, good to have you here, even when the issues we're discussing are not pleasant by any stretch of the imagination. Thank you very much.

FAUCI: Thank you, Lou. Thank you.

DOBBS: Coming up next, the U.S. Border Patrol is under siege on our southern border. Violence against our Border Patrol agents is rising dramatically.

Then, is CAFTA, the Central American Free Trade Agreement, dead? Some members of Congress say they have the votes to kill it.

And a soldier who hoped for a lifelong career in our military has been forced to choose a new direction for his life.

Those stories and more straight ahead.

(COMMERCIAL BREAK)

ANNOUNCER: News, debate and opinion with Lou Dobbs continues.

DOBBS: Violence against our Border Patrol agents is rising at an alarming rate. The stretch of the Arizona border that is the busiest crossing for illegal aliens has been the scene of violent incidents that are rising nearly 40 percent from last year. And yet groups who defend illegal aliens and advocate open borders accuse the U.S. Border Patrol and peaceful citizen volunteers, such as the Minutemen, of the potential of violence.

Kitty Pilgrim has the report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The nation's Border Patrol under siege. So far this year, physical assaults have already outpaced all of last year.

Vehicle rammings up 188 percent. Shootings up 122 percent. Cases of rock throwing up 23 percent. Rock throwing is such a problem, some Border Patrol vehicles are now custom-outfitted with steel screens to protect the agents against softball-sized boulders thrown at them.

The Arizona Border Patrol today confirmed violence against Border Patrol agents is clearly on the rise.

T.J. BONNER, NATIONAL BORDER PATROL COUNCIL: The smugglers know that if they assault our agents, either by throwing rocks at them or by shooting at them, that our agents will withdraw, making it easier for them to move their cargo across the border.

PILGRIM: In addition to the rising violence against federal agents, this week 300 protesters had to be restrained by police in riot gear as they protested against Minutemen, the citizen volunteer group that patrols the border.

HEATHER MAC DONALD, MANHATTAN INSTITUTE: Any effort to enforce the law peacefully is viewed as somehow an incursion on illegal aliens' rights. And we don't pay as much attention. We don't have people out there protesting against violence against Border Patrolmen and ranchers and property owners.

PILGRIM: Minutemen observe and report any border crossings to authorities, yet have been labeled as vigilantes by many immigrant groups, and even the president of the United States, despite that there have been no incidents of violence by Minutemen against illegal aliens.

(END VIDEOTAPE)

PILGRIM: Border Patrol agents say that violence is mainly because the highly-organized efforts of drug traffickers and people traffickers, now they use the tactic to create a diversion, so that vehicles and people can get through the border at another point -- Lou.

DOBBS: An extraordinary story. And by the way, it is a story that's not being reported, at least in any detail or with any extensive coverage by the mainstream media in this country, and one has to wonder why not.

Kitty, thank you very much. Kitty Pilgrim.

That brings us to the subject of our poll tonight. Are you surprised that the mainstream media has basically ignored the anti- Minutemen violence in California and the rising violence against U.S. Border Patrol agents on our southern border? Yes or no? Please cast your vote at loudobbs.com. We'll have the results coming up later here on the program.

The mayor of the city of Fresno, California, has called for a moratorium on illegal immigration. Mayor Alan Autry says the border should be closed for two years, so that officials can take the time to address the issue of illegal immigration. During his state of the city speech, Mayor Autry said he will call on the League of California Cities to support a temporary closing of the border. Autry has not, however, offered a proposal of just how he would close that border with Mexico.

Senator Jon Kyl of Arizona and Senator John Cornyn of Texas are working on a plan to overhaul border security and reform our national immigration policies. The senators' plan would include adding 10,000 new Border Patrol agents and 1,000 new immigration inspectors. The measure would also provide for the training of state and local officials to enforce immigration laws, and it would raise penalties for employers who hire illegal aliens.

Senator Jon Kyl is chairman of the Senate Subcommittee on Terrorism and Homeland Security, joining us tonight from Phoenix. Senator, good to have you with us.

SEN. JON KYL (R), ARIZONA: Thank you, Lou. And by the way, I really appreciate that story you just reported on. Like you said, very few others are reporting on the violence that's occurring at the border.

DOBBS: It is truly remarkable, Senator, that there is a peculiar perspective that has been assumed by many of our politicians, and frankly the national news media, on what is important in this country. And your legislation that you have drafted with Senator Cornyn goes to the issue of border security as a condition precedent at least to immigration reform. Is that a fair statement?

KYL: Yes, indeed. And in fact, what we have determined is that until people are convinced that the government is committed to enforcing the immigration law, in all of its aspects, they're not going to be very open-minded about any kind of temporary worker program. And therefore, our first title in this legislation that we announced this last -- well, yesterday, focuses strictly on enforcement. Enforcement at the border, enforcement in the interior, and enforcement at the workplace.

If we can get all of that right, then I think we can turn to the second title of the bill, which will be for temporary worker programs, but frankly, you have got to demonstrate that commitment to enforcement first.

DOBBS: That is a commitment that is not evident in the legislation proposed by your fellow senator in Arizona, Senator John McCain, and Senator Kennedy's legislation. What is your reaction to their proposals?

KYL: Well, I'd really prefer not to comment on their proposals, as you might expect...

DOBBS: I thought I would give you an opportunity, Senator.

KYL: No, you know, they're good friends, and we each have a little different approach to this problem. One thing that's interesting is that I don't know of anybody now that doesn't believe we need to address the problem, and certainly Senator McCain and I have been down on the border, and we have seen what needs to be done.

But one thing that I think distinguishes the legislation that Senator Cornyn and I will be introducing is this emphasis on enforcement. And again, it's the three key components. At the border itself, we have got to secure the border. In the interior, you can't have people running around who are wanted for crimes, for example, just because there's no detention facility for them. And at the workplace, which there's virtually none of today, and that will be a central component of our legislation.

DOBBS: And you focus as well on the relationship between a data bank that would be maintained by Social Security, the Department of Homeland Security working with that data bank, to assure that identification, particularly Social Security cards, obviously, are indeed valid. How quickly do you think that could be done?

KYL: Not exactly sure how long. This is one of the reasons why we need to get this mechanism in place right away. Because if we're going to have a temporary worker program, we're going to have to have the means of enforcement of identification and employment verification in place and ready to go. And that will take some time, and it will cost some money, but the technology is there. We will use biometric technology. There is no question that you can have a credit card kind of swipe through a little reader that will verify both that the individual is who he or she says they are, and that they are entitled to be employed.

That electronic verification, by the way, will make it much easier to audit, so that the law can be enforced as well, and that's the key component to any temporary worker program, to enforce the identity -- to enforce the law so that you know that only people who are qualified to work in the country are hired.

DOBBS: Senator Jon Kyl, we thank you for being here, and we wish you a very nice Memorial Day holiday.

KYL: Thank you, Lou.

DOBBS: Thank you.

"Heroes," why one soldier thought he'd never make it out of Iraq alive.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: As I go, well, this is where I die, you know. This is like the end of it.

(END VIDEO CLIP)

DOBBS: His story is next. Also, Republican predictions about the fate of NAFTA couldn't be farther from reality, from CAFTA. Is CAFTA a dead deal? Some say no, some say yes. We'll tell you what the correct answer is next in our special report. Stay with us.

(COMMERCIAL BREAK)

DOBBS: In "Heroes" tonight, our weekly salute to our men and women in uniform, the story of former Army Sergeant Charles Horgan, a soldier who dreamed of a long military career in service to the nation. But that dream was cut terribly short in Iraq. Sergeant Horgan was one of the first soldiers to be wounded during the war. Casey Wian has his story.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Charles Horgan plays Irish music for his soul. Once a week, he joins this group at a bar in Helena, Montana to take his mind off of the challenges he's faced since going to war. Hogan taught himself to play the tin flute while his right foot healed. On the second day of the war in Iraq, the truck he was riding in was hit by an RPG.

CHARLES HORGAN, (RET) U.S. ARMY: You could hear it. You know, it doesn't -- it makes like this weird pinwheel noise while it's coming through the air. And I was like, wow, this is where I die, you know? This is like the end of it.

It was loud and it was hot and blowing out of the turret.

WIAN: Bullets began flying and another rocket hit. Horgan jumped off of the truck and tried to crawl to safety, thinking his foot was broken.

HORGAN: I flipped my foot over to look at it and it was like simmering, the boot was just destroyed. And it was just blood dripping out. And it was pretty gross. My heal was gone. My arch was pretty jacked up. And it looked like a mess.

WIAN: Horgan was medevac'd out, and spent a month at Walter Reed watching the war on CNN, hoping to see his buddies and wishing he were there.

Then he went home to Montana. After three months, most of his foot was saved and he could walk again, but the emotional recovery was much harder.

HORGAN: I feel like I got robbed of what high future was going to be, or what my potential could have been in the military. Because I wanted to accomplish so much.

(MUSIC)

WIAN: Horgan plans to go to film school in September to become a cinematographer. For his parents, there is pride and optimism that their son who wanted to be a soldier and go to war will finally find inner peace.

Casey Wian, CNN, reporting.

(END VIDEOTAPE)

DOBBS: We wish Sergeant Horgan the very best. And of course the very best to all of our men and women serving the nation in uniform.

Coming up at the top of the hour here on CNN, none other than Anderson Cooper who joins us now with a preview -- Anderson.

ANDERSON COOPER, CNN ANCHOR: Lou, thanks.

Yeah, about 18 minutes from now on 360, an incredible story from Bali today where a young Australian woman has been sentenced to 20 years in prison for smuggling marijuana. The emotion inside the courtroom was intense after the verdict was read. She and her family crying out insisting on her innocence.

We're also going to give you an update of a story we brought you last night, pets of soldiers called to war. Thousands of them have been abandoned, left homeless, end up getting put to sleep. It's a heart-breaking reality. Happily tonight, got some good news about the dogs we introduced you to last night. How our view verse reached out to save them. Lou, that's at the top of hour.

DOBBS: Looking forward to it, Anderson, thank you.

We reported here last night that San Jose, California, has the second worst roads in the nation. California's governor, Arnold Schwarzenegger, held an event to call attention to the problem and to win support for Proposition 42 in California. That proposition will provide more than a billion dollars in funding for California highway repair.

Governor Schwarzenegger went to San Jose to do street repairs to bring a little publicity. It turns out, and we felt we should update the story, the problem is the street he repaired was in pretty good condition until just a few hours before the governor arrived. Street crews, it turned out, arrived before the governor to make a pothole. The city says the street was slated for repairs before the governor's appearance was scheduled. And anti-road crews must tear up a road in order to repair it. That is intriguing reasoning.

A reminder now to vote in our poll. "Are you surprised the mainstream media has basically ignored the anti Minuteman violence in California and the rising violence against our border patrol agents on our border with Mexico? Yes or no." Please cast your vote at LouDobbs.com. The results will be coming up here in just a few minutes.

As opposition to CAFTA is rising, I'll be talking with only Hispanic Democrat in Congress to support that so-called free trade deal. He's our guest here next. Stay with us.

(COMMERCIAL BREAK) DOBBS: One year ago this very weekend, President Bush signed CAFTA, the Central American Free Trade Agreement. That signing didn't mean much because the Congress has still not approved it. And opponents in the House of Representatives say they now have the votes to defeat it.

Louise Schiavone reports now on the troubled history of what mean call a dangerous pact.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): The promise, a Central American free trade agreement, or CAFTA, would do for trade with Central America, what NAFTA did for trade with Mexico. The answer from Congress so far? No thank you.

REP. VIRGIL GOODE, (R) VIRGINIA: These trade agreements cost manufacturing jobs in this country.

SEN. BYRON DORGAN, (D) NORTH DAKOTA: It is an agreement they think pulls the rug out from our family farmers, pulls the rug out from our workers and pulls the rug out from businesses that produced only in this country.

REP. WALTER JONES, (R) NORTH CAROLINA: This CAFTA bill is bad and wrongful for America and manufacturing.

SCHIAVONE: Despite the high hoes of Republican leaders, CAFTA has turn out to be a hard sell. It was designed to eliminate tariff and trade barriers between the U.S. and six Central American nations. But critics challenge, at what cost?

REP. XAVIER BECERRA, (D) CALIFORNIA: The biggest losers will be American companies. They're going to be forced to start undercutting their own standards on labor and environment in order to compete in that race to the bottom.

SCHIAVONE: A recent survey of House members found that 165 oppose it, 73 support it, and 197 either did not respond or are undecided. 218 votes are needed to defeat the treaty.

ERNEST BAYNARD, AMERICANSFORFAIRTRADE.ORG: Many I think have accurately referred to CAFTA as an outsourcing agreement, whereby cheap labor can be found. At it really does facilitate a race to the bottom. It doesn't serve our workers, it does not serve our strategic economic interests.

SCHIAVONE: The biggest obstacle to CAFTA may be the opposition of the Congressional Hispanic Caucus. They are joined by dozens of churches and religious groups who say that CAFTA will only exploit Central American workers.

(END VIDEOTAPE)

SCHIAVONE: Lou, it would be wrong to say the CAFTA train has crashed, however, it is overdue when its whereabouts are unknown for now -- Lou.

DOBBS: And we should remind everyone, Louise, that the president decided to defer a congressional vote on this bill before the presidential elections last fall. And as you point out, it is well overdue now before Congress. Louise Schiavone, thank you.

The Congressional Hispanic Caucus voted overwhelmingly this week to oppose CAFTA. That vote 14-1. The lone vote of support came from Democratic Congressman Henry Cuellar of Texas who says CAFTA could ease America's illegal immigration crisis. He's our guest tonight from Washington, D.C.

Congressman, good to have you with us.

REP. HENRY CUELLAR, (D) TEXAS: Thank you, Lou.

DOBBS: Let's -- you have to feel like the lone ranger, if being from Texas, you should appreciate the expression. Only one of 14 in the Hispanic Caucus. Why do you feel necessary to go against your colleagues on this issue? Democratic colleagues.

CUELLAR: Yes, well, first of all, I do support CAFTA. There were four members that abstained from voting because they haven't decided yet, Hispanic Caucus members.

But we have to keep one thing in mind, Lou. That is, the Hispanic community is a growing, diverse group. And I respect the opinions of my colleagues.

But at the same time, there's a lot of Hispanic groups that have been pushing very hard for CAFTA, for example the Hispanic Alliance for Free Trade, which is composed of 125 business organizations which includes the U.S. Chamber of Commerce, do support CAFTA. And they understand the benefits of CAFTA.

DOBBS: Well, you're a Democrat; the U.S. Chamber of Commerce is pro-business. You're a Democrat with a proud tradition of look out for working men and women in this country. We know that CAFTA is NAFTA in miniature certainly. We know that NAFTA's result in the loss of three quarters -- at least three quarters of a million jobs in this country. How can you support an agreement that is so blatantly anti- worker there are no safeguards for Central American workers, neither five Central American countries, nor in the Dominican Republic in the Caribbean.

How do you square that out?

CUELLAR: Several points. Let me make the first point. First of all, we've got to keep one I thing in mind. Since 1980s we have been trading with have been trading with the Central American countries under an agreement called the Caribbean base and initiative, where they send all of their goods over to the United States duty-free. That is, they don't pay any duties. But with we send our agriculture products, and our goods over there, we pay up to 40 percent, 40 percent tariff on those goods. Now, do you call that fair? I don't think that's fair, and I don't think it's fair for the American consumer and for our agriculture community. I want to see a level playing field. And if we do that, this will be fair for our workers, and it would create more jobs in the United States.

DOBBS: Well, that's certainly as you know, hasn't been the experience with NAFTA. It's also a region, those five countries, plus the Dominican Republican -- Republic, Congressman, amount to an economy the size of New Haven, Connecticut, some $85 billion. They can't buy much. In point in fact, the International Monetary Fund is supporting a number -- three of those countries, either directly or indirectly with loans. They're not in austerity program certainly all them.

But -- I mean, this is a difficult sell for me, because I just don't see the market. And in point in fact, we have a deficit of about $2 billion with those five Central American countries. I'm not -- I'm sort of struggling to understand why we would be concerned about that when we have $162 billion deficit last year with China. Help me out here.

CUELLAR: Well, sure. First of all, when you look at the markets, they're small countries. But when you look at exportation that we send over, we send up to 15 billion of exports. In fact, those small countries are bigger than Russia, China -- I mean, Russia, India and some other countries put together. They're small, but we could export goods over there. But you hit it right on the nail, you're exactly right. It's not fair. We send our goods over to them, and we pay up to 40 percent of tariffs. But when they send their goods over, and I'm talking about those specific Central American countries, it's duty-free. I want to level the playing field. It is very important that we play fair and this is what this agreement allows us to export new jobs, exportation over there so we can create jobs here in the United States.

DOBBS: Well, Congressman, it is nice, even though we disagree on this piece of legislation, I must say it is nice to talk with a Congressman -- one of the representatives the people in this country who is actually concerned about exports. We've got a lot of people who think that free trade is just about buying more. Henry Cuellar, good to have you with us. Thank you, sir.

CUELLAR: Thank you. And it's good talking to another Texan.

DOBBS: You got a deal. Thank you.

Still ahead, the results of our poll tonight, and a preview of what's ahead Monday. And I'll be joined by Ken and Daria Dolan. Unscripted as always but fascinating as always. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results now of our poll. The question, are you surprised the mainstream media has basicly surprised the anti- Minutemen violence in California, and the rising violence against our border patrol agents on our southern border. Forty seven percent of you said, you have been surprised, 53 percent said, no surprise. Tonight's "Quote of the Day" comes from Michael Berelowitz, vice president at Pfizer. When asked if Pfizer found any cases of blindness during clinical trials on Viagra, he simply replied, quote, "We did not see any. We did not see any."

Joining me now from "DOLANS UNSCRIPTED," it airs at 10:00 a.m. tomorrow morning here on CNN, Ken and Daria Dolan. Good to have you both with us.

DARIA DOLAN, HOST, DOLANS UNSCRIPTED: Thank you so much.

DOBBS: Let's start with the housing bubble.

KEN DOLAN, HOST, DOLANS UNSCRIPTED: Yes.

DOBBS: I know that you have been focusing on that and you will tomorrow.

K. DOLAN: We'll talk tomorrow, yes.

DOBBS: What is the situation? Is it a bubble and is it something we should be concerned about?

D. DOLAN: It depends on where you live. If you're in the state of California, in the state of Florida, or in the northeast corridor between Boston and Washington, there are definitely signs of a megabubble.

K. DOLAN: Yes, but Lou, before anybody gets crazy, let's call it the way it is. If you own a home and it's appreciated in value, great, just shut up. Don't do what a lot people are doing. And that is, simply saying, my house has gone from $150,000 to $250,000, I'm going to take the extra equity, I'm going to buy house number two and house number three. That's the bubble. Not owning a house, and saying, if it goes up, that's great. I've got a wonderful place to live. I've done my comparables. I can enjoy my house, that's the bubble.

DOBBS: And how much of this bubble do you think is speculation, Daria?

D. DOLAN: Lately, it's mostly that. A lot in the second house market and certainly -- I mean, you look in the state of Florida, they are flipping before they are even finished?

K. DOLAN: What did you say earlier today? Thirty percent of the houses bought last year, have some sort speculation related to them.

D. DOLAN: Yes, and see it in the types of mortgages being taken. One-year adjustable rates when we've got the lowest down.

K. DOLAN: Zero down.

D. DOLAN: And interest-only loans. That's the time bubble.

K. DOLAN: You don't need any, money, Lou. D. DOLAN: If I were Alan Greenspan, that's what would be keeping me up at night.

DOBBS: For the first time, he's mentioning his concerns.

K. DOLAN: A large company I thinking -- I won't give the name. I know the name, gave a seminar. Yes, am I out of time?

DOBBS: No, just hurry up.

K. DOLAN: I know. Gave a get rich quick in real estate. There were thousands and thousands of peep in Los Angeles. Real estates now are the tech stocks of the year 2000, be careful!

DOBBS: And what about Viagra, Daria?

K. DOLAN: Yes, what about Viagra, Daria?

D. DOLAN: Well, you know, this whole thing, now you're going to watch all the politicians falling all over themselves now that word has gotten out that the states under their Medicaid programs were providing Viagra to certain sex offenders. And that in certain states, they're even finding incidents of a couple of cases of child abuse.

K. DOLAN: Yes, it's a mess. It's irresponsible for doctors to say, we just take care of people. We don't care about the sex offender list. It's irresponsible on the lobbyist. It's irresponsible on the drug companies. And it's irresponsible on the healthcare system's that out of control.

DOBBS: I agree with everything.

D. DOLAN: And they'll legislate in haste and will all repent at leisure.

DOBBS: And now we find out that for some it means blindness when they do use it.

K. DOLAN: I guess.

DOBBS: Don't have any thoughts?

K. DOLAN: I don't.

DOBBS: By tomorrow morning, Ken and Daria will have a thought about that at 10:00 a.m. here on CNN.

K. DOLAN: Lou. Lou.

DOBBS: "DOLANS UNSCRIPTED," please join them.

Thank you for being with us tonight. For all us here, we hope you have a wonderful, safe, holiday weekend. Good night from New York, "ANDERSON COOPER 360" starts right now -- Anderson.

END

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