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Lou Dobbs Tonight
Deep Throat's Identity Confirmed; Who is Mark Felt?; Verdict Overturned; CAFTA: Good Business?
Aired May 31, 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.
KITTY PILGRIM, CNN ANCHOR: Good evening, everyone. Tonight, Deep Throat revealed. "The Washington Post" confirms the identity of a secret source during the Watergate scandal. We'll have a special report on W. Mark Felt and how his secret was revealed.
Then, President Bush calls on Congress to pass a free trade agreement that critics say will threaten American jobs. The head of the U.S. Chamber of Commerce will tell us why he supports CAFTA.
And dozens of Mexican children crossing the Arizona border every day to go to school. The state's superintendent will tell us how he is taking action.
But first tonight, one of the best kept secrets in American politics has been revealed. A top FBI official during the Nixon White House, W. Mark Felt, today claimed that he was in fact Deep Throat. "The Washington Post" confirmed his identity, ending decades of speculation.
Bill Schneider reports from Washington.
Bill, this turned out to be the best kept secret in Washington, didn't it?
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: It certainly is the longest kept secret in the history of American politics, and "Vanity Fair" revealed it. And just a little while ago, "The Washington Post" confirmed it. A mystery for more than 30 years has been solved.
"I'm The Guy Called Deep Throat," that's the title of John O'Connor's sensational story in the new "Vanity Fair." That title is a quote from W. Mark Felt, the number two man at the FBI in the early 1970s. On several occasions, O'Connor writes in the article, "He confided to me, 'I'm the guy they used to call Deep Throat.'"
Now, Felt was in a position to know a great deal about Watergate, having headed the FBI's investigation of the 1972 break-in at the Democratic National Committee's Watergate offices. He was also in a position to feel aggrieved by the Nixon White House, which Felt said tried to stymie his investigation at every point with false leads, noncooperation and threats. The motive behind Deep Throat's decision to go to the press, according to "Vanity Fair," Felt came to see himself as something of the conscience of the FBI.
Now, Felt has been a leading Deep Throat suspect for many years. White House tapes from 1972 recorded White House aide H.R. Halderman telling President Nixon that most of those Watergate leaks were coming from Mark Felt.
A few questions are raised. If Felt now is revealed to be Deep Throat, why did he remain silent for the past 30 years?
Well, the "Vanity Fair" article quotes his son as saying, "His attitude was, 'I don't think being Deep Throat was anything to be proud of. You shouldn't leak information to anyone.'"
His grandson told the author, "He was concerned about bringing dishonor to our family. It was more about honor than about any kind of shame. To this day he feels he did the right thing."
OK. So why did Felt decide to reveal himself now?
O'Connor says Felt reviewed the truth casually, just almost inadvertently to close friends and family members. He confided his identity to a social companion who shared the information with Felt's daughter Joan. And she's reported to have confronted her father, saying, "I know now that you're Deep Throat." His response? "Since that's the case, well, yes, I am" -- Kitty.
PILGRIM: Bill, very dramatic way it unfolded during the day. Now, a real big question that I'm sure everyone will be asking, was money involved, or did the family request any money on this?
SCHNEIDER: Well, that did come up in O'Connor's article. And here's what he said.
He said the family was trying to persuade Mr. Felt to come forward, and they did mention in one conversation -- his son and daughter mentioned -- that the family could get some money out of this. And they needed the money for his grandchildren's education. And Felt is reported to have said, "Well, that's a good reason."
However, in the article, O'Connor points out that "Vanity Fair" gave no compensation to the Felt family for their cooperation with the story.
PILGRIM: Very interesting. Thanks very much. Bill Schneider.
Well, Mark Felt's family talked to reporters in Santa Rosa, California, a short time ago. And his daughter called him an American hero.
(BEGIN VIDEO CLIP)
JOAN FELT, DAUGHTER: I think it's a great moment in human -- in American history. It's a great moment for our family, especially for my dad. And I lived with my dad -- I've been privileged to live with my dad for the past 10 or 12 years.
It's so wonderful to live with an old person in your family, to not have to send them away to a convalescent home, but to have the ones we love close to us. And my dad, I know him, I know him so well, and he's a great man.
He so kind. He's so attentive to other people and loving. And we're all so proud of him, not only for his role in history, but for that, for the character that he is, the person that he is. We love him very much.
(END VIDEO CLIP)
PILGRIM: Now, Mark Felt was a more than 30-year FBI veteran who retired the year before President Nixon resigned. Brian Todd reports from Washington.
(BEGIN VIDEOTAPE)
BRIAN TODD, CNN CORRESPONDENT (voice-over): Even as a 91-year- old retiree in Santa Rosa, California, W. Mark Felt seemingly cannot shake a certain mystique, even as the world is told by those closest to him that he is the man who shook the halls of power and captivated Washington for more than 30 years.
NICK JONES, MARK FELT'S GRANDSON: My grandfather is pleased that he is being honored for his role as Deep Throat with his friend Bob Woodward. He's also pleased by the attention this has drawn to his career and his 32 years of service to his country.
TODD: As definitive as it sounds, a family statement may not answer longstanding questions about this man's actions and motivations.
Born in Idaho in 1913, Felt embarked on the classic story of service to country and devotion to family. Law school, marriage, two children, and in 1942 a job at the Houston field office of the FBI, a place then controlled by J. Edgar Hoover, and according to historians, already controversial.
RON KESSLER, AUTHOR, "THE BUREAU": They were very effective in some ways. On the other hand, they broke a lot of laws: illegal wiretapping, et cetera. And Mark Felt was in counterintelligence. Mainly, he would go after spies.
TODD: A sense of duty and diligence had to have gotten complicated when Felt moved to the bureau's Washington headquarters in the early 1960s. But Felt became a favor of J. Edgar Hoover and quickly moved up the ranks. By the time Hoover died in 1972, Felt had ascended to the number two spot, clearly with an ambition to move up one more.
UNIDENTIFIED MALE: He had his own personal motivation along with the bureau motivation. His motivation being that he, I think, would expect to be named director of the FBI.
TODD: But Felt was passed up. Felt wrote in his memoirs that during this entire period he and his allies has been simmering over Watergate. They believed their investigation had been obstructed, delayed, undermined by Nixon operatives. With access to information, a smoldering resentment and a sense of omission unfulfilled, historians say Felt had motivation to leak to "The Washington Post."
KESSLER: Mark Felt did not want this FBI investigation to be suppressed, and really believed that the country's future was at stake. And that's why I think he helped them.
TODD: Felt retired from the FBI in 1973, during the height of "The Washington Post's" coverage of Watergate. Later, in newspaper articles and even his book, Mark Felt denied that he was Bob Woodward's mysterious source.
Brian Todd, CNN, Washington.
(END VIDEOTAPE)
PILGRIM: Well, in other dramatic news out of Washington tonight, the Supreme Court today overturned a landmark conviction in the fight against corporate crime. The high court unanimously threw out the verdict that all but destroyed Enron's accountant, Arthur Andersen. And the reason, the jury instructions in the case were simply too vague.
Christine Romans reports from the Supreme Court.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): For Jonathan Goldsmith, Arthur Andersen's Supreme Court victory is too little too late.
JONATHAN GOLDSMITH, FMR. ANDERSEN EMPLOYEE: There's really nothing that can be done to go back three years in time and replace jobs that were lost. There's nothing. And you can't do that.
ROMANS: He now runs a Web site for Andersen alumni who never doubted what the Supreme Court ruled today, that Andersen's obstruction of justice conviction was improper.
The Justice Department had charged that Andersen in October, 2001, illegally told workers to shred Enron-related documents to hide wrongdoing. But in its unanimous opinion, the court found that jury instructions were flawed, too broad for jurors to determine correctly whether Andersen obstructed justice.
Wrote Chief Justice William Rehnquist, the instructions "simply failed to convey the requisite consciousness of wrongdoing. Indeed, it is striking how little culpability the instructions required. The instructions diluted the meaning of 'corruptly' so that it included innocent conduct."
RICHARD SAMP, WASHINGTON LEGAL FOUNDATION: Here, not only did nobody know that what was going on was wrong, but based on today's decision it wasn't wrong. It was the prosecutors who were wrong in bringing the case in the first place.
ROMANS: It was the first time in an entire firm was indicted by the Department of Justice. GARY GRINDLER, KING & SPALDING: The collateral consequences, the loss of jobs, impact on shareholders, is something that the Department of Justice, one would hope, would be thinking about more carefully in the future.
ROMANS: Houston trial judge, Melinda Harmon, who issued those flawed jury instructions, would not comment on the Supreme Court decision. A disappointed Justice Department said, "We will carefully examine today's decision and determine whether to retry the case."
(END VIDEOTAPE)
ROMANS: But to what end? The conviction has been overturned, but the legacy has not. Twenty-seven thousand Andersen employees in this country lost their jobs, 84,000 worldwide. For many of those former Andersen employees, this Supreme Court victory rings hollow -- Kitty.
PILGRIM: Thanks very much. Christine Romans.
We will have much more ahead on the Andersen case and what it means for the fight against corporate crime. I'll be joined by an attorney who represented Andersen before the Supreme Court. Also, the head of Columbia University's Center for Corporate Governance will be our guest.
Well, elsewhere in Washington today, President Bush held his monthly news conference. He demanded that Congress take action on a number of stalled measures, and he blasted a report about alleged human rights violations at Guantanamo Bay.
White House Correspondent Suzanne Malveax reports.
(BEGIN VIDEOTAPE)
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): In a wide-ranging 50-minute news conference, President Bush brushed off a human rights report that compared the U.S.'s Guantanamo Bay detention center to a Soviet-era prison camp laden with abuse.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm aware of the Amnesty International report, and it's absurd. It's an absurd allegation.
MALVEAUX: Mr. Bush shrugged off setbacks his administration is facing overseas and at home. The rising insurgency in Iraq that has claimed nearly 800 lives there in the last month, the president insisted the newly-formed Iraqi government can handle it.
BUSH: Our strategy is very clear in that we will work to get them ready to fight. And when they are ready we'll come home.
MALVEAUX: And Iran continuing its nuclear ambitions, despite an opportunity to join the World Trade Organization. And a North Korea still unwilling to abandon its nuclear weapons program. BUSH: If diplomacy's the wrong approach, I guess that means military. That's how I view it, it's either diplomacy or military. And I am for the diplomacy approach.
MALVEAUX: On the domestic front, the president addressed setbacks in getting key legislation pushed through Congress regarding Social Security, energy and judicial nominees.
BUSH: Things just don't happen overnight. It takes a while.
MALVEAUX: President Bush was also asked whether he agreed with the Secret Service's decision not to interrupt his bike ride during an emergency evacuation of the White House and the Capitol.
BUSH: I was very comfortable with the decision they made.
MALVEAUX: But the first lady, who was shuttled to a secure bunker during the security scare, has publicly said she disagrees with that decision. The president was asked if that happens often.
BUSH: Herman, here's the way it is... she often disagrees with me.
(END VIDEOTAPE)
MALVEAUX: Now, President Bush is the first Republican president to be reelected with a Republican Congress since Calvin Coolidge, and yet there are some political observers who say this seems to have yet to be paid off -- Kitty.
PILGRIM: Thanks very much. Suzanne Malveaux.
Well, President Bush also called on Congress to pass the Central American Free Trade Agreement. He said CAFTA will be good for American farmers, businesses and workers. Critics say CAFTA is just another NAFTA and will cost millions of Americans their jobs. Well, coming up tonight, the head of the U.S. Chamber of Commerce will join us to explain why he supports CAFTA.
Also ahead, aiding al Qaeda on American soil? Two men are charged with conspiracy. They were in court today.
Also ahead, a family divided. Fidel Castro's communist regime takes extreme steps to make sure that family stays divided.
And your hard-earned tax dollars are being used to bring Mexican children into the United States, educate them, and send them home.
Those stories and more coming up.
(COMMERCIAL BREAK)
PILGRIM: Tonight, two American citizens charged with supporting al Qaeda are being held without bail. Now, the suspects appeared separately in federal courts today. One in New York, one in Florida.
Mary Snow reports.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT (voice-over): Wearing handcuffs and a blue prison jumpsuit, Tarik Shah said little in court and did not have to answer the charge that he pledged support to Osama bin Laden and his terror network. His attorneys say Shah is a world renowned jazz musician. Prosecutors say he told an informant his musical profession was his "greatest cover."
ANTHONY RICCO, DEFENSE ATTORNEY: That's what happens. When you chase people like Tarik Shah, how do you expect to catch Osama bin Laden?
SNOW: Shah's attorney, Anthony Ricco, has represented defendants in high-profile terrorism cases, including the embassy bombing in Kenya. Ricco said he still needs to review two years of surveillance tapes against his client, but called the case a desperate prosecution.
RICCO: If somebody is really a threat to our security, what are they talking about for two years?
SNOW: Shah's wife came to court but would not comment. A group of musicians showing support for Shah said they were stunned by the accusations.
SALIM WASHINGTON, MUSICIAN: He's a wonderful person, and a very accomplished, serious musician. And his time is spent making music.
NELLIE DYER, MUSICIAN: He's a peace-loving, masterful bassist.
SNOW: Shah is also a master of martial arts. Prosecutors say he intended to train terrorists in hand-to-hand combat.
The complaint alleges that Shah showed an undercover FBI agent posing as an al Qaeda operative how prayer beads could be used to strangle someone. Shah was held without bail.
In Florida, Shah's friend and codefendant, Dr. Rafiq Sabir, appeared in court, but will be back later this week when he has secured an attorney. Friends said Sabir is not a violent person.
DAN MCBRIDE, FRIEND OF SABIR: Real low-profile, innocent man, and they are trying to find anything to keep him in jail until they find out his connection to New York.
SNOW: Prosecutors allege Sabir also pledged support for bin Laden and al Qaeda and was prepared to travel to Saudi Arabia this week to aid wounded terrorists.
(END VIDEOTAPE)
SNOW: Defense attorneys here in New York say their client is the victim of a sting operation in a post-911 world targeted because he's Muslim. If convicted, the penalty is up to 15 years in prison and a $250,000 fine -- Kitty. PILGRIM: Thanks very much. Mary Snow.
A U.S. Marine was killed by small arms fire during combat operations near Ramadi, Iraq, yesterday. And that brings the total number of U.S. troops killed in Iraq to 1,663.
Eight U.S. soldiers were wounded in a separate attack in Baghdad tonight as part of Operation Lightning, which is a massive crackdown on insurgents within the capital. A mortar struck the main U.S. military complex near the Baghdad International Airport. Two private contractors and an Iraqi citizen were also wounded in that attack.
French President Jacques Chirac appointed a new prime minister today after voters rejected a proposed constitution for the European Union. Well, after that defeat, President Chirac chose interior minister, Dominique de Villepin, who was an outspoken critic of the Iraq war. And he will be the new prime minister. President Chirac is expecting to replace more government officials as soon as tomorrow.
More than half of French voter turned down the European Union constitution. Nine countries, including Germany, have approved the constitution, and the Netherlands will vote on Wednesday.
Coming up next, a family divided by Castro's communist Cuba. How the Cuban government is punishing one man who helped his brother escape.
And then school for free for dozens of Mexican children who cross the Arizona border every day. We'll have a special report. And the state's superintendent of schools is our guest.
Stay with us.
(COMMERCIAL BREAK)
PILGRIM: A family is divided tonight, perhaps forever, after one man risked his family and his future to help his brother escape from Cuba. Now Fidel Castro's communist government is a making one of the brothers pay an unthinkable price.
Lucia Newman reports from Havana, Cuba.
(BEGIN VIDEOTAPE)
LUCIA NEWMAN, CNN CORRESPONDENT (voice-over): This video is as close as Bernardo Heredia can get to his daughter, all because he made a sacrifice for his brother. A sacrifice that turned out to be bigger than he ever imagined.
BERNARDO HEREDIA: I can't touch her.
NEWMAN: Like thousands of Cubans, Bernardo Heredia left Cuba 11 years ago on a raft, barely making it to Florida alive, when he settled in Las Vegas, fell in love with a Cuban-American, and began raising a family while working as a taxi driver. In March, he returned to Cuba for a two-week vacation. HEREDIA: I come to visit my family. And talking to my brother, he was desperate to leave this country.
NEWMAN: So Bernardo Heredia agreed to help him. His brother, Fidel, who looks almost exactly liked him, used Bernardo's passport to leave the country, flew to Mexico, DHL'd the passport back to Bernardo in Cuba, and then crossed the border to the United States to get asylum.
But when Bernardo came back here to the Havana airport to fly home to Las Vegas, he was arrested. Immigration officials knew someone else had already left Cuba three days before on the same passport. A month later, after confessing to the plan, he was released, but only from jail.
HEREDIA: They didn't charge me with anything. They just say, "You want to stay in this country? There's going to be punishment. You are never going to leave this country by plane again, period."
NEWMAN: Bernardo says authorities confiscated his passport and his green card and told him he would replace his brother. Now he chokes back tears as he watches the home video he brought with him to Cuba to show off his daughter.
Back in Las Vegas, its his brother who is now holding 2-year-old Angela Marie on his lap. Fidel Heredia is now living in Bernardo's house, happy to be in the U.S. but upset about his brother. Would Fidel be willing to return to Cuba so Bernardo can go home?
FIDEL HEREDIA, BERNARDO HEREDIA'S BROTHER (through translator): I'd be willing to go back only if they first promise that nothing will happen to me. But it's been a long time since I believed their promises.
NEWMAN: At first, Bernardo's common law wife of 10 years was angry at both brothers.
UNIDENTIFIED FEMALE: I was mad, you know, because, what about me? What about the baby? You know.
NEWMAN: But after three months, anger has been replaced by despair.
UNIDENTIFIED FEMALE: We've never been separated since we been together like this long, never. And I don't know if I'm going to see him again. And I wonder, you know, how is she going to grow up to be? She need her daddy. She need a father figure.
NEWMAN: Hundreds of miles away, Bernardo is equally desperate to get home.
B. HEREDIA: All my life is over there. This country is saying that they don't want revenge. This is revenge. I mean, what is the purpose of holding me here? I mean, what can they win?
NEWMAN (on camera): Here at the U.S. Diplomatic Mission in Havana, officials told him there was nothing they could do to help, because although he lives in Nevada legally, he's not a U.S. citizen.
(voice-over): Bernardo says a month ago he tried leaving on a raft like did he 11 years ago, but had to swim back after the raft capsized far offshore. He says he's not sorry he helped his brother. But it's hard to live with the price he's paying.
(on camera): What's the hardest part about all this for you?
B. HEREDIA: This.
NEWMAN (voice-over): Lucia Newman, CNN, Havana.
(END VIDEOTAPE)
PILGRIM: Coming up, your tax dollars are paying to transport and educate Mexican children who are crossing the border to go to school in Arizona. I'll be joined by Arizona's state school superintendent.
Also ahead, the Supreme Court overturns the Arthur Andersen conviction. The attorney for Arthur Andersen and the director of Columbia Law School Center for Corporate Governance will join me.
And protesters gather outside a conference on illegal immigration. The cofounder of the Minuteman Project is my guest.
(COMMERCIAL BREAK)
PILGRIM: In "Broken Borders" tonight, a story we broke more than a year ago, free education for dozens of Mexican children paid for by American taxpayers. Each day, nearly 100 children cross our border with Mexico and enter a small Arizona town where many of the children claim they live.
Casey Wian reports from Lukeville, Arizona.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Just before dawn, the remote border crossing at Lukeville, Arizona, comes alive with parents bringing children from Mexico into the United States to attend public school.
RAMON YANEZ, SCHOOL BUS DRIVER: As far as how they are getting across, you can see, they are driving across.
WIAN: They've all provided documents to school district officials claiming they're U.S. residents. Ninety-seven students catch the bus here, but Lukeville's population is only 65.
YANEZ: It's pretty obvious that they're not living here in the United States.
WIAN: What are your thoughts on that as someone that comes up here and picks up 97 of them every day, I guess?
YANEZ: According to the paperwork we've got, they're all American citizens and they all live on this side.
WIAN: But only a handful of the students actually live here. Most get around residency requirements by setting up guardianship with U.S. relatives or renting space at a local R.V. park and claiming that as their home address.
SCOTT LITTLE, PIMA COUNTY SCHOOL DISTRICT: I think the problem actually probably exists everywhere from Brownsville, Texas, to San Diego. What you have is, you have a more visible example of the concerns in Lukeville.
WIAN: Al Gay owns Lukeville's Gringo Pass R.V. park. He charges Mexicans with border crossing students $100 a month, less than half of what he charges tourists for space.
AL GAY, OWNER, GRINGO PASS: Those kids need the education, and that will create the goodwill between Mexico and the United States, I hope.
WIAN: Students are bussed an hour north to school in the town of Ajo.
ROBERT DOOLEY, AJO SCHOOL SUPERINTENDENT: Once they get on the Pima County bus, we are obligated, legally and morally, in my opinion, to accept them as students here. My job is not to enforce immigration laws.
WIAN: The number of students bussed here from Lukeville has nearly doubled since 1995. They now make up nearly 18 percent of the Ajo school district's student population. County officials say most, if not all of the border crossing students, are natural-born U.S. citizens. They also say they don't have the resources to verify residency claims and are powerless to stop Mexican residents from obtaining a free U.S. education.
Casey Wian, CNN, Lukeville, Arizona.
(END VIDEOTAPE)
PILGRIM: We brought that story to you more than a year ago, but apparently nothing has changed. Well, joining me now for more on the issue is the Arizona state school superintendent, Tom Horne. And thanks very much for being with us, Superintendent Horne. Why has nothing changed in a year?
TOM HORNE, ARIZONA STATE SCHOOL SUPT.: Well, things have been changing, actually. We -- your story appeared in a newspaper. I checked with the attorney general. They researched and did a thorough paper for me on what the various laws were. Actually, citizenship is not relevant. The question is residence. If you're not a resident of Arizona then you can't attend the schools funded by the taxpayers.
And so, we then conducted our own investigation. We got videotape of students crossing the border. We got an investigator to visit the trailer park and was told by an employee there that they issue the utility receipts that the county superintendent was accepting as proof of residency. We've asked the county superintendent to do home checks to check if people reside where they say they reside. At first, she refused. I then asked the school superintendent to do that. She then sent me a letter which implied if the attorney general would say it's proper, she would do the checks.
We're waiting for that letter from the attorney general. I expect that either she or the school superintendent will do that. If neither of them do it, I'll take further action including challenging their request for state funds for the students.
PILGRIM: If these students are claiming residency and it turns out to be a fraud, if these utility bills that they are using as documents turn out to be a fraud, who is charged with this?
HORNE: Well, my job as an elected official is to be sure state funds are used properly, so what I would be doing is making sure we don't fund students who are not residents of Arizona. If there is criminal prosecutions that are appropriate, that would be up to the county attorney or the attorney general.
PILGRIM: What do you think is the solution here? You have to educate these children in the interim and it's been more than a year.
HORNE: Well, the school year has ended now in the Ajo district where the students have been attending. So, I've made it clear that they should check, when students attempt to start next August for the next school year, that they are legitimate residents of Arizona. If they don't, they're taking a risk they will be educating students they won't be reimbursed for by the state, because they have to hire teachers to be ready to hire the students (ph).
So, the school district itself will have a strong incentive not to admit students who are not proper residents, because we're not going to give them state aid for those students.
PILGRIM: How much does it cost to educate these students per year?
HORNE: The state aid is about $5,000 a student and we're talking at -- about 85 students, so we're talking $400,000 or so.
PILGRIM: Has there not been a public outcry over this? Certainly this was very public.
HORNE: Yes, I would say. I issued a press release last week indicating that our investigation had confirmed what had been in the newspaper which in turn was based on your original broadcast. We've gotten a lot of calls and e-mails supporting the stance that we have taken as opposed to the county superintendent in Pima County who has been somewhat resistance. The stand that we've taken is, we've got to make sure that taxpayer funds don't go to students contrary to statute, and so we've gotten a lot of calls and emails supportive of the position that I've taken.
PILGRIM: Isn't this a broader issue? After all, we had the comment that it could exist from Brownsville to San Diego. Do you think this is very prevalent?
HORNE: Well, in the newspaper story that was written based on your original story, it indicated in a number of other districts they did have people who check carefully. For example, Yuma is on the border with Mexico, and the Yuma high school district has somebody employed full time. He goes to the border early in the morning, talks to any kids crossing to see where they're going to school; goes -- does home visits to check to be sure people really are resident where they say they are a resident.
So, other districts are doing a good job. All we're asking of Pima County is that they do as good a job as these school districts are doing.
PILGRIM: Have you made no effort to join forces with other districts?
HORNE: Well, I'm the state superintendent, so I will -- I've made it clear that if there are any colorable allegations of improper funding that we will investigate those. So all the districts are on notice that it's not in their interest to admit student whose are not residents of Arizona because now that the spotlight is shined on this, they are unlikely to get state aid for the students.
PILGRIM: Well, thank you very much for helping us do that. Superintendent Tom Horne, thank you sir.
HORNE: Pleasure to be with you.
PILGRIM: Coming up next, a landmark ruling from the Supreme Court in the Enron case. Does it vindicate Enron's former accountant, Arthur Andersen? Two experts join me next on that and what it means in the fight on corporate crime.
Also, President Bush calls on Congress to pass a trade bill that critics say will cost Americans jobs. Another high profile supporter of CAFTA will tell us why those critics are wrong. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: The Supreme Court today overturned the conviction of accounting firm Arthur Andersen. That's for destroying Enron related documents. In a unanimous decision, the high court said the jury instructions at the 2002 trial were too vague. Well, Maureen Mahoney is one of the attorneys representing Arthur Andersen in its appeal and she argued the case before the Supreme Court, and she joins me now. And thanks very much for being here.
MAUREEN MAHONEY, ATTY FOR ARTHUR ANDERSEN: Thank you for having me.
PILGRIM: How do we interpret this? Does this vindicate the Arthur Andersen case?
MAHONEY: Absolutely. For three years, Andersen has been asserting that it was innocent, that it did not consciously engage in any wrongdoing, and the Supreme Court said that, indeed, that consciousness of wrongdoing is essential to proof of guilt.
PILGRIM: Mm-hm. The jury instructions were too vague. Tell us what that means.
MAHONEY: Well, what they really said is that the jury in this case was told that, even if all of the Andersen employees thought that it was proper to comply with the document retention policy, that they nevertheless could be convicted of crime, that they weren't required to find any consciousness of wrongdoing. And the Supreme Court said, you just can't read this criminal statue that way. You have to -- the jury has to have found that they consciously intended to engage in wrongful conduct. There is no evidence anyone intended to commit a crime or engage in wrongdoing.
PILGRIM: Now, Arthur Andersen subsequently was taken over the coal; 27,000 people lost their jobs here in the United States, more internationally. Many innocent people paid the price for this alleged crime, or, I guess, now -- where do we go from here? There's not getting back their livelihood.
MAHONEY: No, there's not, but we're still very grateful that the Supreme Court has, in effect, said what we've been saying all along, which is that this conduct was not criminal.
PILGRIM: Let's talk about the rules, because they have changed a bit after that, and we have Sarbanes-Oxley that came a few years after. It broadens the definition. It tried to close up some of the loopholes on corporate crime. In your opinion, do you think that Andersen would be guilty under the new definitions of Sarbanes-Oxley?
MAHONEY: I think probably not, because -- but it's an open question. Certainly, that statute is written in a way that is much broader. But there are issues, I think about whether -- under what circumstances that statute would be applied. For instance, you know, I think it may well be that you have to know that a proceeding, a future proceeding, is likely, and intend to withhold the documents from that proceeding. And that was also not part of the jury instructions in this case. And there is very substantial evidence that Andersen people didn't think that there would be a restatement and didn't think that these documents would ever be subpoenaed.
PILGRIM: All right. Well, thank you very much for explaining it to us. It's a very complicated case. Maureen Mahoney, thank you.
MAHONEY: Thank you very much.
PILGRIM: And joining me now is John Coffee, law professor at Columbia University and the director of the Center on Corporate Governance. And thank you very much for joining us, professor Coffee.
Let me ask you the same question that I just asked Maureen, in that under the broader definitions that are now in existence, do you think Andersen would or would not be guilty?
JOHN COFFEE, COLUMBIA UNIVERSITY LAW PROFESSOR: It's an open question. The instruction the jury actually got was that they had to find that Arthur Andersen impeded an investigation. The new statute under Sarbanes-Oxley says that you have to act with an intent to either impede an investigation, or interfere with the appropriate consideration by the government of any matter. That's a very broad -- very broad statute that seems to try to eliminate the requirement of proving criminal intent.
I'm not sure the courts will let this statute be interpreted that broadly, and they might well say, as Ms. Mahoney did say, that there has to be some future proceeding that was foreseeable.
Whether a jury would find that that was present here, we don't know. We'll never know what a jury would have done with the correct instruction in this case.
PILGRIM: You know what, at the time they said that the document destruction was shredding the smoking gun of Arthur Andersen. Do you believe that that was an accurate assessment of what was going on at the time?
COFFEE: I would say this: I don't think we have seen anything like a vindication here, because you can't have a vindication when the court's only talking about what the instructions are that the court gave the jury. What was the real state of the intent of these defendants? We won't know, because the jury never got the correct instruction. They got only an instruction that required a lesser level of intent, not a level of conscious knowledge of wrongdoing.
But unlike the prior speaker, I don't think you can say that Arthur Andersen's demise was caused by this case.
PILGRIM: Let me try to make this relevant to today's world, and we do have some investigations into corporations that are ongoing at the time, AIG being one of them. Is there anything that we can take from this particular example into the current investigations, professor Coffee?
COFFEE: You've got to look at every statute as a different statute. In AIG, or in the basic Enron investigation, or the basic WorldCom investigation, we're looking at securities fraud and various other intent to defraud investors. When we look at the actual trial in Arthur Andersen, it was whether or not you were destroying documents.
It's much broader, whether or not you are trying to deceive investors. And that case at present will be tried in New York state court by Mr. Spitzer. By the way, the real irony here is that Mr. Spitzer has avoided indicting AIG. And I think that's because of the lesson of Arthur Andersen. He doesn't want the danger that by indicting a financial services company, you might cause significant job loss. Instead, he's just going after the officers.
PILGRIM: That's interesting. Thank you very much, professor John Coffee, for that comment.
Let's go to the subject of tonight's poll. And we'd like to ask you, do you think the Justice Department was wrong to indict Arthur Andersen as a firm, instead of targeting individuals? Yes or no? Cast your vote at loudobbs.com. We'll bring you the results a little bit later in the broadcast.
And coming up at the top of the hour here on CNN, "ANDERSON COOPER 360," and Anderson joins us with a preview -- Anderson.
ANDERSON COOPER, HOST, "ANDERSON COOPER 360": Hey, Kitty. Thanks very much. Yeah, coming up tonight on "360," Deep Throat's identity finally revealed. It was one of the last and best-kept secrets in modern times. Now, it is out. Mark Felt, former FBI man during Nixon's administration, has come forward. "The Washington Post's" Bob Woodward has just confirmed that Felt was indeed his source. We are going to go "Beyond the Headlines" tonight with the story, and talk to G. Gordon Liddy, who masterminded the Watergate break-in, about what he thinks about the news. We'll also talk to "Washington Post" media reporter Howie Kurtz about how Deep Throat changed journalism and the press' relationship with the White House. That's ahead in about 15 minutes from now -- Kitty.
PILGRIM: We'll look forward to it, Anderson. Thanks.
Coming up, CAFTA controversy. Why the head of a major business group supports a trade deal that could devastate American workers.
Also, protecting our borders. The co-founder of the Minuteman Project is already working on new projects. That's despite growing opposition. And he will tell us what he's up to next, when we continue.
(COMMERCIAL BREAK)
PILGRIM: My next guest heads the world's largest not-for-profit business federation, which is a group that is supposed to be protecting business in America. He says his goal is to ensure that opponents of CAFTA don't sabotage it, but will it hurt American workers? Well, joining me now is Tom Donohue, president and CEO of the U.S. Chamber of Commerce. And thank you for being here.
TOM DONOHUE, PRES. & CEO, U.S. CHAMBER OF COMMERCE: Good to be with you, Kitty.
PILGRIM: You know, we have many critics of CAFTA who say it won't do a thing for the American worker. In fact, it will just cause a hemorrhage of jobs across the border. Why do you support it?
DONOHUE: American markets are open to all of the CAFTA Central American countries. They send products to us without any tariffs. All of the products that we sell into those countries pay between 7 and 11 percent tariff. What we propose to do is take away the tariff. It will create billions of dollars worth of trade, and it will create tens of thousands of U.S. jobs. It's very simple.
The second and most important part beyond that is that we worked for the last 30 years to assure the creation of democratic institutions in Latin America, right south of our border. And if we turn our back at this juncture on Central America, we'll never get a free trade agreement in the Americas, and we will cause great harm, in my opinion, to those democratic institutions. And on top of that, the minute we leave, the Chinese and the European Union will be in there creating free trade agreements in our backyard to the detriment of American workers.
PILGRIM: Well, let me press you a little bit on this democracy building exercise. Should it be done on the backs of the American workers?
DONOHUE: It won't be done on the backs of the American workers. This will create jobs for American workers. If you make textiles in Central America, 60 percent of the components that go into those textiles are produced by American workers in American cities. If we don't make them there, they will move immediately to Asia, where 1 percent of the product will be produced by American workers. And lots of American workers will lose their job in that circumstance, instead of gaining their job by eliminating tariffs that sell American products into the Central American countries.
PILGRIM: Correct me if I'm wrong, but you are arguing a lesser evil argument, is that right?
DONOHUE: Absolutely not. I'm arguing a wonderful opportunity for the American people.
PILGRIM: All right. Let me talk about NAFTA, and many people point out that real wages have fallen as a result from NAFTA. How is CAFTA different?
DONOHUE: Well, there are a lot of sing-song things about CAFTA, NAFTA. The basic issue is that NAFTA has created millions of American jobs. It has put certain amount of stability into Mexico, although a lot more has to be done. And it is beginning to create an American trading system that helps us compete around the world.
I've listened to Lou Dobbs and everybody else complain about NAFTA. Their facts are just fundamentally wrong. NAFTA has been a big boost for the American economy.
PILGRIM: All right. I think we're going to have to agree to disagree on that, especially Mr. Dobbs, I think.
But let's go into another issue that is very important to you. I know you testified recently about it, and that's immigration. What can we do to stop the flow of illegal immigration into this country?
DONOHUE: Well, let's start with the facts. There are about 11 million undocumented workers in the United States. At the same time, we have about 5.2 percent unemployment, which says there's a million and a half, two million people available to go to work. They may not live in the right town. And there are some people in seasonal jobs.
We need those 11 million workers. If you ever sent them home, there'd be a loud sucking noise in this economy.
But the worst part is that by 2010, we're going to need another 6 to 10 million serious workers, because we have lots of people retiring and not enough people coming into the workforce. The bottom line is, we're all immigrants, unless we're American Indians, and we need to find a better way to do this.
We need to have adequate numbers of people that are allowed to come into this country for different levels of jobs, and hopefully to go home from time to time.
We have an immigration system that's broken, and that's making it more and more difficult for people that want to come here and work and for people that want to hire them.
PILGRIM: So legal immigration you are for, it's just not illegal immigration.
DONOHUE: I'm very much for legal immigration, and I don't want to have illegal immigration, but the fundamental reality is, when the demand is here, and when everybody wants to come here, like our forefathers did, it's very hard to stop them. This is the place of hope and opportunity. And we shouldn't turn it away from people that deserve it or can help us when we have had the benefit of it.
PILGRIM: Well, I think we can agree on America is the place of hope and opportunity. Mr. Donohue, thank you very much for being with us, Tom Donohue.
DONOHUE: Thank you very much.
PILGRIM: A reminder now to vote in tonight's poll. Do you think the Justice Department was wrong to indict Arthur Andersen as a firm instead of targeting individuals? Yes or no? Cast your vote at loudobbs.com. We'll bring you the results in just a few minutes.
Next, a preview of what's ahead tomorrow. And opposition to the Minuteman Project turns violent. Will that change the group's mission? Well, I'll be joined by one of the Minutemen co-founders when we return. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: In Las Vegas this weekend, the Wake Up America Foundation held a conference addressing the fight against illegal immigration. Open border advocates protested outside the meeting and called the attendees racists. This is the second time in a week meetings dealing with illegal immigration have sparked protests. Five demonstrators were arrested last week in Orange County, California after violence erupted at a conference where the Minuteman Project founder Jim Gilchrist was speaking, and protest organizers say the violence was started when a demonstrator blocking the entrance to the event was hit by a car driven by a meeting attendee.
Jim Gilchrist is the co-founder of the Minuteman Project. He joins me now from Irvine, California, and thanks for being with us.
JIM GILCHRIST, CO-FOUNDER, MINUTEMAN PROJECT: Thank you, Kitty. PILGRIM: You know, this does take away from the message, and yet it seems to be unavoidable at this point. What do you have to say about the violence that's directed against these meetings?
GILCHRIST: Kitty, we've been expecting this. This -- there's a concerted effort to suppress the First Amendment rights of myself, people like Chris Simcox, anyone who's involved in the promotion of enforcement of immigration laws. There's a concerted effort to stifle our First Amendment rights.
I'm not happy about it. We're trying to resolve this.
What happened in Garden Grove was five demonstrators against my 20-minute speech, which had nothing to do with racism. It had to do with recanting what happened in Arizona. We are not a racist group, by the way. And five of those people were charged with felony assault with a deadly weapon. A brick thrown at an 80-year-old woman in her car, right through her windshield. Another 70-year-old man, by the name of Hal, attacked by 12 rowdy people between the ages of 20 and 35, who were trying to smash into his car.
What would you do if you were 70 years old? You would hit the accelerator and get out of dodge. Fortunately, he was not charged with any crime.
PILGRIM: Mr. Gilchrist, we covered the event, and it was remarkably violent. And yet the Minuteman Project was initially accused of being potentially violent, and yet no violence ever occurred as citizens patrolled the border.
How do you deal with this, these accusations versus the reality?
GILCHRIST: Very patiently, very legally, very peacefully. Although I do get hot under the collar at these situations, we do not promote any violence. We do not promote any racism. If you go to the Web site, read it over and over again, if you have to. Not you, Kitty, but your audience, to get the message that we're trying to send.
Our message is: We want to bring national awareness to this critical issue that's affecting this country, and we want to bring this nation back under the rule of law.
PILGRIM: You have been approached by several different groups hoping to form their own groups for border patrol. Do you think they should be united? Should individuals start other groups? What's your position on this?
GILCHRIST: Yes, and that's what we expanded on. We developed a vast network in Las Vegas. We had representatives from New Hampshire, Florida, Washington state and California, all four corners of the country. We also resolved to start a new operation, which is to cut, literally cut off donations of campaign funds to candidates or organizations who are not supporting the simple enforcement of U.S. immigration laws. There's about $1.5 billion a year that end up in political coffers annually, I've been told. We are going to tap into that treasure chest. We are going to expect about $500 million in otherwise -- money that would otherwise go to campaign contributions, and we're going to develop a powerhouse, a financial powerhouse in order to compete with our own government.
PILGRIM: OK, Jim Gilchrist, thank you very much for joining us tonight.
GILCHRIST: Thank you.
PILGRIM: Let's get to the results of tonight's poll. Do you think the Justice Department was wrong to indict Arthur Andersen as a firm instead of targeting individuals? Seventy-three percent of you said yes; 27 percent said no.
Thanks for being with us tonight. Please join us tomorrow, and I'll talk with one city councilman who's fighting to have signs in one American city actually be in English.
Also, why an FDA drug approval system is failing to keep you and your family safe. One congressman is working to change that. He's my guest.
For all of us here, good night from New York. "ANDERSON COOPER 360" starts right now -- Anderson.
COOPER: Kitty, thanks very much.
END
Aired May 31, 2005 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KITTY PILGRIM, CNN ANCHOR: Good evening, everyone. Tonight, Deep Throat revealed. "The Washington Post" confirms the identity of a secret source during the Watergate scandal. We'll have a special report on W. Mark Felt and how his secret was revealed.
Then, President Bush calls on Congress to pass a free trade agreement that critics say will threaten American jobs. The head of the U.S. Chamber of Commerce will tell us why he supports CAFTA.
And dozens of Mexican children crossing the Arizona border every day to go to school. The state's superintendent will tell us how he is taking action.
But first tonight, one of the best kept secrets in American politics has been revealed. A top FBI official during the Nixon White House, W. Mark Felt, today claimed that he was in fact Deep Throat. "The Washington Post" confirmed his identity, ending decades of speculation.
Bill Schneider reports from Washington.
Bill, this turned out to be the best kept secret in Washington, didn't it?
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: It certainly is the longest kept secret in the history of American politics, and "Vanity Fair" revealed it. And just a little while ago, "The Washington Post" confirmed it. A mystery for more than 30 years has been solved.
"I'm The Guy Called Deep Throat," that's the title of John O'Connor's sensational story in the new "Vanity Fair." That title is a quote from W. Mark Felt, the number two man at the FBI in the early 1970s. On several occasions, O'Connor writes in the article, "He confided to me, 'I'm the guy they used to call Deep Throat.'"
Now, Felt was in a position to know a great deal about Watergate, having headed the FBI's investigation of the 1972 break-in at the Democratic National Committee's Watergate offices. He was also in a position to feel aggrieved by the Nixon White House, which Felt said tried to stymie his investigation at every point with false leads, noncooperation and threats. The motive behind Deep Throat's decision to go to the press, according to "Vanity Fair," Felt came to see himself as something of the conscience of the FBI.
Now, Felt has been a leading Deep Throat suspect for many years. White House tapes from 1972 recorded White House aide H.R. Halderman telling President Nixon that most of those Watergate leaks were coming from Mark Felt.
A few questions are raised. If Felt now is revealed to be Deep Throat, why did he remain silent for the past 30 years?
Well, the "Vanity Fair" article quotes his son as saying, "His attitude was, 'I don't think being Deep Throat was anything to be proud of. You shouldn't leak information to anyone.'"
His grandson told the author, "He was concerned about bringing dishonor to our family. It was more about honor than about any kind of shame. To this day he feels he did the right thing."
OK. So why did Felt decide to reveal himself now?
O'Connor says Felt reviewed the truth casually, just almost inadvertently to close friends and family members. He confided his identity to a social companion who shared the information with Felt's daughter Joan. And she's reported to have confronted her father, saying, "I know now that you're Deep Throat." His response? "Since that's the case, well, yes, I am" -- Kitty.
PILGRIM: Bill, very dramatic way it unfolded during the day. Now, a real big question that I'm sure everyone will be asking, was money involved, or did the family request any money on this?
SCHNEIDER: Well, that did come up in O'Connor's article. And here's what he said.
He said the family was trying to persuade Mr. Felt to come forward, and they did mention in one conversation -- his son and daughter mentioned -- that the family could get some money out of this. And they needed the money for his grandchildren's education. And Felt is reported to have said, "Well, that's a good reason."
However, in the article, O'Connor points out that "Vanity Fair" gave no compensation to the Felt family for their cooperation with the story.
PILGRIM: Very interesting. Thanks very much. Bill Schneider.
Well, Mark Felt's family talked to reporters in Santa Rosa, California, a short time ago. And his daughter called him an American hero.
(BEGIN VIDEO CLIP)
JOAN FELT, DAUGHTER: I think it's a great moment in human -- in American history. It's a great moment for our family, especially for my dad. And I lived with my dad -- I've been privileged to live with my dad for the past 10 or 12 years.
It's so wonderful to live with an old person in your family, to not have to send them away to a convalescent home, but to have the ones we love close to us. And my dad, I know him, I know him so well, and he's a great man.
He so kind. He's so attentive to other people and loving. And we're all so proud of him, not only for his role in history, but for that, for the character that he is, the person that he is. We love him very much.
(END VIDEO CLIP)
PILGRIM: Now, Mark Felt was a more than 30-year FBI veteran who retired the year before President Nixon resigned. Brian Todd reports from Washington.
(BEGIN VIDEOTAPE)
BRIAN TODD, CNN CORRESPONDENT (voice-over): Even as a 91-year- old retiree in Santa Rosa, California, W. Mark Felt seemingly cannot shake a certain mystique, even as the world is told by those closest to him that he is the man who shook the halls of power and captivated Washington for more than 30 years.
NICK JONES, MARK FELT'S GRANDSON: My grandfather is pleased that he is being honored for his role as Deep Throat with his friend Bob Woodward. He's also pleased by the attention this has drawn to his career and his 32 years of service to his country.
TODD: As definitive as it sounds, a family statement may not answer longstanding questions about this man's actions and motivations.
Born in Idaho in 1913, Felt embarked on the classic story of service to country and devotion to family. Law school, marriage, two children, and in 1942 a job at the Houston field office of the FBI, a place then controlled by J. Edgar Hoover, and according to historians, already controversial.
RON KESSLER, AUTHOR, "THE BUREAU": They were very effective in some ways. On the other hand, they broke a lot of laws: illegal wiretapping, et cetera. And Mark Felt was in counterintelligence. Mainly, he would go after spies.
TODD: A sense of duty and diligence had to have gotten complicated when Felt moved to the bureau's Washington headquarters in the early 1960s. But Felt became a favor of J. Edgar Hoover and quickly moved up the ranks. By the time Hoover died in 1972, Felt had ascended to the number two spot, clearly with an ambition to move up one more.
UNIDENTIFIED MALE: He had his own personal motivation along with the bureau motivation. His motivation being that he, I think, would expect to be named director of the FBI.
TODD: But Felt was passed up. Felt wrote in his memoirs that during this entire period he and his allies has been simmering over Watergate. They believed their investigation had been obstructed, delayed, undermined by Nixon operatives. With access to information, a smoldering resentment and a sense of omission unfulfilled, historians say Felt had motivation to leak to "The Washington Post."
KESSLER: Mark Felt did not want this FBI investigation to be suppressed, and really believed that the country's future was at stake. And that's why I think he helped them.
TODD: Felt retired from the FBI in 1973, during the height of "The Washington Post's" coverage of Watergate. Later, in newspaper articles and even his book, Mark Felt denied that he was Bob Woodward's mysterious source.
Brian Todd, CNN, Washington.
(END VIDEOTAPE)
PILGRIM: Well, in other dramatic news out of Washington tonight, the Supreme Court today overturned a landmark conviction in the fight against corporate crime. The high court unanimously threw out the verdict that all but destroyed Enron's accountant, Arthur Andersen. And the reason, the jury instructions in the case were simply too vague.
Christine Romans reports from the Supreme Court.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): For Jonathan Goldsmith, Arthur Andersen's Supreme Court victory is too little too late.
JONATHAN GOLDSMITH, FMR. ANDERSEN EMPLOYEE: There's really nothing that can be done to go back three years in time and replace jobs that were lost. There's nothing. And you can't do that.
ROMANS: He now runs a Web site for Andersen alumni who never doubted what the Supreme Court ruled today, that Andersen's obstruction of justice conviction was improper.
The Justice Department had charged that Andersen in October, 2001, illegally told workers to shred Enron-related documents to hide wrongdoing. But in its unanimous opinion, the court found that jury instructions were flawed, too broad for jurors to determine correctly whether Andersen obstructed justice.
Wrote Chief Justice William Rehnquist, the instructions "simply failed to convey the requisite consciousness of wrongdoing. Indeed, it is striking how little culpability the instructions required. The instructions diluted the meaning of 'corruptly' so that it included innocent conduct."
RICHARD SAMP, WASHINGTON LEGAL FOUNDATION: Here, not only did nobody know that what was going on was wrong, but based on today's decision it wasn't wrong. It was the prosecutors who were wrong in bringing the case in the first place.
ROMANS: It was the first time in an entire firm was indicted by the Department of Justice. GARY GRINDLER, KING & SPALDING: The collateral consequences, the loss of jobs, impact on shareholders, is something that the Department of Justice, one would hope, would be thinking about more carefully in the future.
ROMANS: Houston trial judge, Melinda Harmon, who issued those flawed jury instructions, would not comment on the Supreme Court decision. A disappointed Justice Department said, "We will carefully examine today's decision and determine whether to retry the case."
(END VIDEOTAPE)
ROMANS: But to what end? The conviction has been overturned, but the legacy has not. Twenty-seven thousand Andersen employees in this country lost their jobs, 84,000 worldwide. For many of those former Andersen employees, this Supreme Court victory rings hollow -- Kitty.
PILGRIM: Thanks very much. Christine Romans.
We will have much more ahead on the Andersen case and what it means for the fight against corporate crime. I'll be joined by an attorney who represented Andersen before the Supreme Court. Also, the head of Columbia University's Center for Corporate Governance will be our guest.
Well, elsewhere in Washington today, President Bush held his monthly news conference. He demanded that Congress take action on a number of stalled measures, and he blasted a report about alleged human rights violations at Guantanamo Bay.
White House Correspondent Suzanne Malveax reports.
(BEGIN VIDEOTAPE)
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): In a wide-ranging 50-minute news conference, President Bush brushed off a human rights report that compared the U.S.'s Guantanamo Bay detention center to a Soviet-era prison camp laden with abuse.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm aware of the Amnesty International report, and it's absurd. It's an absurd allegation.
MALVEAUX: Mr. Bush shrugged off setbacks his administration is facing overseas and at home. The rising insurgency in Iraq that has claimed nearly 800 lives there in the last month, the president insisted the newly-formed Iraqi government can handle it.
BUSH: Our strategy is very clear in that we will work to get them ready to fight. And when they are ready we'll come home.
MALVEAUX: And Iran continuing its nuclear ambitions, despite an opportunity to join the World Trade Organization. And a North Korea still unwilling to abandon its nuclear weapons program. BUSH: If diplomacy's the wrong approach, I guess that means military. That's how I view it, it's either diplomacy or military. And I am for the diplomacy approach.
MALVEAUX: On the domestic front, the president addressed setbacks in getting key legislation pushed through Congress regarding Social Security, energy and judicial nominees.
BUSH: Things just don't happen overnight. It takes a while.
MALVEAUX: President Bush was also asked whether he agreed with the Secret Service's decision not to interrupt his bike ride during an emergency evacuation of the White House and the Capitol.
BUSH: I was very comfortable with the decision they made.
MALVEAUX: But the first lady, who was shuttled to a secure bunker during the security scare, has publicly said she disagrees with that decision. The president was asked if that happens often.
BUSH: Herman, here's the way it is... she often disagrees with me.
(END VIDEOTAPE)
MALVEAUX: Now, President Bush is the first Republican president to be reelected with a Republican Congress since Calvin Coolidge, and yet there are some political observers who say this seems to have yet to be paid off -- Kitty.
PILGRIM: Thanks very much. Suzanne Malveaux.
Well, President Bush also called on Congress to pass the Central American Free Trade Agreement. He said CAFTA will be good for American farmers, businesses and workers. Critics say CAFTA is just another NAFTA and will cost millions of Americans their jobs. Well, coming up tonight, the head of the U.S. Chamber of Commerce will join us to explain why he supports CAFTA.
Also ahead, aiding al Qaeda on American soil? Two men are charged with conspiracy. They were in court today.
Also ahead, a family divided. Fidel Castro's communist regime takes extreme steps to make sure that family stays divided.
And your hard-earned tax dollars are being used to bring Mexican children into the United States, educate them, and send them home.
Those stories and more coming up.
(COMMERCIAL BREAK)
PILGRIM: Tonight, two American citizens charged with supporting al Qaeda are being held without bail. Now, the suspects appeared separately in federal courts today. One in New York, one in Florida.
Mary Snow reports.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT (voice-over): Wearing handcuffs and a blue prison jumpsuit, Tarik Shah said little in court and did not have to answer the charge that he pledged support to Osama bin Laden and his terror network. His attorneys say Shah is a world renowned jazz musician. Prosecutors say he told an informant his musical profession was his "greatest cover."
ANTHONY RICCO, DEFENSE ATTORNEY: That's what happens. When you chase people like Tarik Shah, how do you expect to catch Osama bin Laden?
SNOW: Shah's attorney, Anthony Ricco, has represented defendants in high-profile terrorism cases, including the embassy bombing in Kenya. Ricco said he still needs to review two years of surveillance tapes against his client, but called the case a desperate prosecution.
RICCO: If somebody is really a threat to our security, what are they talking about for two years?
SNOW: Shah's wife came to court but would not comment. A group of musicians showing support for Shah said they were stunned by the accusations.
SALIM WASHINGTON, MUSICIAN: He's a wonderful person, and a very accomplished, serious musician. And his time is spent making music.
NELLIE DYER, MUSICIAN: He's a peace-loving, masterful bassist.
SNOW: Shah is also a master of martial arts. Prosecutors say he intended to train terrorists in hand-to-hand combat.
The complaint alleges that Shah showed an undercover FBI agent posing as an al Qaeda operative how prayer beads could be used to strangle someone. Shah was held without bail.
In Florida, Shah's friend and codefendant, Dr. Rafiq Sabir, appeared in court, but will be back later this week when he has secured an attorney. Friends said Sabir is not a violent person.
DAN MCBRIDE, FRIEND OF SABIR: Real low-profile, innocent man, and they are trying to find anything to keep him in jail until they find out his connection to New York.
SNOW: Prosecutors allege Sabir also pledged support for bin Laden and al Qaeda and was prepared to travel to Saudi Arabia this week to aid wounded terrorists.
(END VIDEOTAPE)
SNOW: Defense attorneys here in New York say their client is the victim of a sting operation in a post-911 world targeted because he's Muslim. If convicted, the penalty is up to 15 years in prison and a $250,000 fine -- Kitty. PILGRIM: Thanks very much. Mary Snow.
A U.S. Marine was killed by small arms fire during combat operations near Ramadi, Iraq, yesterday. And that brings the total number of U.S. troops killed in Iraq to 1,663.
Eight U.S. soldiers were wounded in a separate attack in Baghdad tonight as part of Operation Lightning, which is a massive crackdown on insurgents within the capital. A mortar struck the main U.S. military complex near the Baghdad International Airport. Two private contractors and an Iraqi citizen were also wounded in that attack.
French President Jacques Chirac appointed a new prime minister today after voters rejected a proposed constitution for the European Union. Well, after that defeat, President Chirac chose interior minister, Dominique de Villepin, who was an outspoken critic of the Iraq war. And he will be the new prime minister. President Chirac is expecting to replace more government officials as soon as tomorrow.
More than half of French voter turned down the European Union constitution. Nine countries, including Germany, have approved the constitution, and the Netherlands will vote on Wednesday.
Coming up next, a family divided by Castro's communist Cuba. How the Cuban government is punishing one man who helped his brother escape.
And then school for free for dozens of Mexican children who cross the Arizona border every day. We'll have a special report. And the state's superintendent of schools is our guest.
Stay with us.
(COMMERCIAL BREAK)
PILGRIM: A family is divided tonight, perhaps forever, after one man risked his family and his future to help his brother escape from Cuba. Now Fidel Castro's communist government is a making one of the brothers pay an unthinkable price.
Lucia Newman reports from Havana, Cuba.
(BEGIN VIDEOTAPE)
LUCIA NEWMAN, CNN CORRESPONDENT (voice-over): This video is as close as Bernardo Heredia can get to his daughter, all because he made a sacrifice for his brother. A sacrifice that turned out to be bigger than he ever imagined.
BERNARDO HEREDIA: I can't touch her.
NEWMAN: Like thousands of Cubans, Bernardo Heredia left Cuba 11 years ago on a raft, barely making it to Florida alive, when he settled in Las Vegas, fell in love with a Cuban-American, and began raising a family while working as a taxi driver. In March, he returned to Cuba for a two-week vacation. HEREDIA: I come to visit my family. And talking to my brother, he was desperate to leave this country.
NEWMAN: So Bernardo Heredia agreed to help him. His brother, Fidel, who looks almost exactly liked him, used Bernardo's passport to leave the country, flew to Mexico, DHL'd the passport back to Bernardo in Cuba, and then crossed the border to the United States to get asylum.
But when Bernardo came back here to the Havana airport to fly home to Las Vegas, he was arrested. Immigration officials knew someone else had already left Cuba three days before on the same passport. A month later, after confessing to the plan, he was released, but only from jail.
HEREDIA: They didn't charge me with anything. They just say, "You want to stay in this country? There's going to be punishment. You are never going to leave this country by plane again, period."
NEWMAN: Bernardo says authorities confiscated his passport and his green card and told him he would replace his brother. Now he chokes back tears as he watches the home video he brought with him to Cuba to show off his daughter.
Back in Las Vegas, its his brother who is now holding 2-year-old Angela Marie on his lap. Fidel Heredia is now living in Bernardo's house, happy to be in the U.S. but upset about his brother. Would Fidel be willing to return to Cuba so Bernardo can go home?
FIDEL HEREDIA, BERNARDO HEREDIA'S BROTHER (through translator): I'd be willing to go back only if they first promise that nothing will happen to me. But it's been a long time since I believed their promises.
NEWMAN: At first, Bernardo's common law wife of 10 years was angry at both brothers.
UNIDENTIFIED FEMALE: I was mad, you know, because, what about me? What about the baby? You know.
NEWMAN: But after three months, anger has been replaced by despair.
UNIDENTIFIED FEMALE: We've never been separated since we been together like this long, never. And I don't know if I'm going to see him again. And I wonder, you know, how is she going to grow up to be? She need her daddy. She need a father figure.
NEWMAN: Hundreds of miles away, Bernardo is equally desperate to get home.
B. HEREDIA: All my life is over there. This country is saying that they don't want revenge. This is revenge. I mean, what is the purpose of holding me here? I mean, what can they win?
NEWMAN (on camera): Here at the U.S. Diplomatic Mission in Havana, officials told him there was nothing they could do to help, because although he lives in Nevada legally, he's not a U.S. citizen.
(voice-over): Bernardo says a month ago he tried leaving on a raft like did he 11 years ago, but had to swim back after the raft capsized far offshore. He says he's not sorry he helped his brother. But it's hard to live with the price he's paying.
(on camera): What's the hardest part about all this for you?
B. HEREDIA: This.
NEWMAN (voice-over): Lucia Newman, CNN, Havana.
(END VIDEOTAPE)
PILGRIM: Coming up, your tax dollars are paying to transport and educate Mexican children who are crossing the border to go to school in Arizona. I'll be joined by Arizona's state school superintendent.
Also ahead, the Supreme Court overturns the Arthur Andersen conviction. The attorney for Arthur Andersen and the director of Columbia Law School Center for Corporate Governance will join me.
And protesters gather outside a conference on illegal immigration. The cofounder of the Minuteman Project is my guest.
(COMMERCIAL BREAK)
PILGRIM: In "Broken Borders" tonight, a story we broke more than a year ago, free education for dozens of Mexican children paid for by American taxpayers. Each day, nearly 100 children cross our border with Mexico and enter a small Arizona town where many of the children claim they live.
Casey Wian reports from Lukeville, Arizona.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Just before dawn, the remote border crossing at Lukeville, Arizona, comes alive with parents bringing children from Mexico into the United States to attend public school.
RAMON YANEZ, SCHOOL BUS DRIVER: As far as how they are getting across, you can see, they are driving across.
WIAN: They've all provided documents to school district officials claiming they're U.S. residents. Ninety-seven students catch the bus here, but Lukeville's population is only 65.
YANEZ: It's pretty obvious that they're not living here in the United States.
WIAN: What are your thoughts on that as someone that comes up here and picks up 97 of them every day, I guess?
YANEZ: According to the paperwork we've got, they're all American citizens and they all live on this side.
WIAN: But only a handful of the students actually live here. Most get around residency requirements by setting up guardianship with U.S. relatives or renting space at a local R.V. park and claiming that as their home address.
SCOTT LITTLE, PIMA COUNTY SCHOOL DISTRICT: I think the problem actually probably exists everywhere from Brownsville, Texas, to San Diego. What you have is, you have a more visible example of the concerns in Lukeville.
WIAN: Al Gay owns Lukeville's Gringo Pass R.V. park. He charges Mexicans with border crossing students $100 a month, less than half of what he charges tourists for space.
AL GAY, OWNER, GRINGO PASS: Those kids need the education, and that will create the goodwill between Mexico and the United States, I hope.
WIAN: Students are bussed an hour north to school in the town of Ajo.
ROBERT DOOLEY, AJO SCHOOL SUPERINTENDENT: Once they get on the Pima County bus, we are obligated, legally and morally, in my opinion, to accept them as students here. My job is not to enforce immigration laws.
WIAN: The number of students bussed here from Lukeville has nearly doubled since 1995. They now make up nearly 18 percent of the Ajo school district's student population. County officials say most, if not all of the border crossing students, are natural-born U.S. citizens. They also say they don't have the resources to verify residency claims and are powerless to stop Mexican residents from obtaining a free U.S. education.
Casey Wian, CNN, Lukeville, Arizona.
(END VIDEOTAPE)
PILGRIM: We brought that story to you more than a year ago, but apparently nothing has changed. Well, joining me now for more on the issue is the Arizona state school superintendent, Tom Horne. And thanks very much for being with us, Superintendent Horne. Why has nothing changed in a year?
TOM HORNE, ARIZONA STATE SCHOOL SUPT.: Well, things have been changing, actually. We -- your story appeared in a newspaper. I checked with the attorney general. They researched and did a thorough paper for me on what the various laws were. Actually, citizenship is not relevant. The question is residence. If you're not a resident of Arizona then you can't attend the schools funded by the taxpayers.
And so, we then conducted our own investigation. We got videotape of students crossing the border. We got an investigator to visit the trailer park and was told by an employee there that they issue the utility receipts that the county superintendent was accepting as proof of residency. We've asked the county superintendent to do home checks to check if people reside where they say they reside. At first, she refused. I then asked the school superintendent to do that. She then sent me a letter which implied if the attorney general would say it's proper, she would do the checks.
We're waiting for that letter from the attorney general. I expect that either she or the school superintendent will do that. If neither of them do it, I'll take further action including challenging their request for state funds for the students.
PILGRIM: If these students are claiming residency and it turns out to be a fraud, if these utility bills that they are using as documents turn out to be a fraud, who is charged with this?
HORNE: Well, my job as an elected official is to be sure state funds are used properly, so what I would be doing is making sure we don't fund students who are not residents of Arizona. If there is criminal prosecutions that are appropriate, that would be up to the county attorney or the attorney general.
PILGRIM: What do you think is the solution here? You have to educate these children in the interim and it's been more than a year.
HORNE: Well, the school year has ended now in the Ajo district where the students have been attending. So, I've made it clear that they should check, when students attempt to start next August for the next school year, that they are legitimate residents of Arizona. If they don't, they're taking a risk they will be educating students they won't be reimbursed for by the state, because they have to hire teachers to be ready to hire the students (ph).
So, the school district itself will have a strong incentive not to admit students who are not proper residents, because we're not going to give them state aid for those students.
PILGRIM: How much does it cost to educate these students per year?
HORNE: The state aid is about $5,000 a student and we're talking at -- about 85 students, so we're talking $400,000 or so.
PILGRIM: Has there not been a public outcry over this? Certainly this was very public.
HORNE: Yes, I would say. I issued a press release last week indicating that our investigation had confirmed what had been in the newspaper which in turn was based on your original broadcast. We've gotten a lot of calls and e-mails supporting the stance that we have taken as opposed to the county superintendent in Pima County who has been somewhat resistance. The stand that we've taken is, we've got to make sure that taxpayer funds don't go to students contrary to statute, and so we've gotten a lot of calls and emails supportive of the position that I've taken.
PILGRIM: Isn't this a broader issue? After all, we had the comment that it could exist from Brownsville to San Diego. Do you think this is very prevalent?
HORNE: Well, in the newspaper story that was written based on your original story, it indicated in a number of other districts they did have people who check carefully. For example, Yuma is on the border with Mexico, and the Yuma high school district has somebody employed full time. He goes to the border early in the morning, talks to any kids crossing to see where they're going to school; goes -- does home visits to check to be sure people really are resident where they say they are a resident.
So, other districts are doing a good job. All we're asking of Pima County is that they do as good a job as these school districts are doing.
PILGRIM: Have you made no effort to join forces with other districts?
HORNE: Well, I'm the state superintendent, so I will -- I've made it clear that if there are any colorable allegations of improper funding that we will investigate those. So all the districts are on notice that it's not in their interest to admit student whose are not residents of Arizona because now that the spotlight is shined on this, they are unlikely to get state aid for the students.
PILGRIM: Well, thank you very much for helping us do that. Superintendent Tom Horne, thank you sir.
HORNE: Pleasure to be with you.
PILGRIM: Coming up next, a landmark ruling from the Supreme Court in the Enron case. Does it vindicate Enron's former accountant, Arthur Andersen? Two experts join me next on that and what it means in the fight on corporate crime.
Also, President Bush calls on Congress to pass a trade bill that critics say will cost Americans jobs. Another high profile supporter of CAFTA will tell us why those critics are wrong. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: The Supreme Court today overturned the conviction of accounting firm Arthur Andersen. That's for destroying Enron related documents. In a unanimous decision, the high court said the jury instructions at the 2002 trial were too vague. Well, Maureen Mahoney is one of the attorneys representing Arthur Andersen in its appeal and she argued the case before the Supreme Court, and she joins me now. And thanks very much for being here.
MAUREEN MAHONEY, ATTY FOR ARTHUR ANDERSEN: Thank you for having me.
PILGRIM: How do we interpret this? Does this vindicate the Arthur Andersen case?
MAHONEY: Absolutely. For three years, Andersen has been asserting that it was innocent, that it did not consciously engage in any wrongdoing, and the Supreme Court said that, indeed, that consciousness of wrongdoing is essential to proof of guilt.
PILGRIM: Mm-hm. The jury instructions were too vague. Tell us what that means.
MAHONEY: Well, what they really said is that the jury in this case was told that, even if all of the Andersen employees thought that it was proper to comply with the document retention policy, that they nevertheless could be convicted of crime, that they weren't required to find any consciousness of wrongdoing. And the Supreme Court said, you just can't read this criminal statue that way. You have to -- the jury has to have found that they consciously intended to engage in wrongful conduct. There is no evidence anyone intended to commit a crime or engage in wrongdoing.
PILGRIM: Now, Arthur Andersen subsequently was taken over the coal; 27,000 people lost their jobs here in the United States, more internationally. Many innocent people paid the price for this alleged crime, or, I guess, now -- where do we go from here? There's not getting back their livelihood.
MAHONEY: No, there's not, but we're still very grateful that the Supreme Court has, in effect, said what we've been saying all along, which is that this conduct was not criminal.
PILGRIM: Let's talk about the rules, because they have changed a bit after that, and we have Sarbanes-Oxley that came a few years after. It broadens the definition. It tried to close up some of the loopholes on corporate crime. In your opinion, do you think that Andersen would be guilty under the new definitions of Sarbanes-Oxley?
MAHONEY: I think probably not, because -- but it's an open question. Certainly, that statute is written in a way that is much broader. But there are issues, I think about whether -- under what circumstances that statute would be applied. For instance, you know, I think it may well be that you have to know that a proceeding, a future proceeding, is likely, and intend to withhold the documents from that proceeding. And that was also not part of the jury instructions in this case. And there is very substantial evidence that Andersen people didn't think that there would be a restatement and didn't think that these documents would ever be subpoenaed.
PILGRIM: All right. Well, thank you very much for explaining it to us. It's a very complicated case. Maureen Mahoney, thank you.
MAHONEY: Thank you very much.
PILGRIM: And joining me now is John Coffee, law professor at Columbia University and the director of the Center on Corporate Governance. And thank you very much for joining us, professor Coffee.
Let me ask you the same question that I just asked Maureen, in that under the broader definitions that are now in existence, do you think Andersen would or would not be guilty?
JOHN COFFEE, COLUMBIA UNIVERSITY LAW PROFESSOR: It's an open question. The instruction the jury actually got was that they had to find that Arthur Andersen impeded an investigation. The new statute under Sarbanes-Oxley says that you have to act with an intent to either impede an investigation, or interfere with the appropriate consideration by the government of any matter. That's a very broad -- very broad statute that seems to try to eliminate the requirement of proving criminal intent.
I'm not sure the courts will let this statute be interpreted that broadly, and they might well say, as Ms. Mahoney did say, that there has to be some future proceeding that was foreseeable.
Whether a jury would find that that was present here, we don't know. We'll never know what a jury would have done with the correct instruction in this case.
PILGRIM: You know what, at the time they said that the document destruction was shredding the smoking gun of Arthur Andersen. Do you believe that that was an accurate assessment of what was going on at the time?
COFFEE: I would say this: I don't think we have seen anything like a vindication here, because you can't have a vindication when the court's only talking about what the instructions are that the court gave the jury. What was the real state of the intent of these defendants? We won't know, because the jury never got the correct instruction. They got only an instruction that required a lesser level of intent, not a level of conscious knowledge of wrongdoing.
But unlike the prior speaker, I don't think you can say that Arthur Andersen's demise was caused by this case.
PILGRIM: Let me try to make this relevant to today's world, and we do have some investigations into corporations that are ongoing at the time, AIG being one of them. Is there anything that we can take from this particular example into the current investigations, professor Coffee?
COFFEE: You've got to look at every statute as a different statute. In AIG, or in the basic Enron investigation, or the basic WorldCom investigation, we're looking at securities fraud and various other intent to defraud investors. When we look at the actual trial in Arthur Andersen, it was whether or not you were destroying documents.
It's much broader, whether or not you are trying to deceive investors. And that case at present will be tried in New York state court by Mr. Spitzer. By the way, the real irony here is that Mr. Spitzer has avoided indicting AIG. And I think that's because of the lesson of Arthur Andersen. He doesn't want the danger that by indicting a financial services company, you might cause significant job loss. Instead, he's just going after the officers.
PILGRIM: That's interesting. Thank you very much, professor John Coffee, for that comment.
Let's go to the subject of tonight's poll. And we'd like to ask you, do you think the Justice Department was wrong to indict Arthur Andersen as a firm, instead of targeting individuals? Yes or no? Cast your vote at loudobbs.com. We'll bring you the results a little bit later in the broadcast.
And coming up at the top of the hour here on CNN, "ANDERSON COOPER 360," and Anderson joins us with a preview -- Anderson.
ANDERSON COOPER, HOST, "ANDERSON COOPER 360": Hey, Kitty. Thanks very much. Yeah, coming up tonight on "360," Deep Throat's identity finally revealed. It was one of the last and best-kept secrets in modern times. Now, it is out. Mark Felt, former FBI man during Nixon's administration, has come forward. "The Washington Post's" Bob Woodward has just confirmed that Felt was indeed his source. We are going to go "Beyond the Headlines" tonight with the story, and talk to G. Gordon Liddy, who masterminded the Watergate break-in, about what he thinks about the news. We'll also talk to "Washington Post" media reporter Howie Kurtz about how Deep Throat changed journalism and the press' relationship with the White House. That's ahead in about 15 minutes from now -- Kitty.
PILGRIM: We'll look forward to it, Anderson. Thanks.
Coming up, CAFTA controversy. Why the head of a major business group supports a trade deal that could devastate American workers.
Also, protecting our borders. The co-founder of the Minuteman Project is already working on new projects. That's despite growing opposition. And he will tell us what he's up to next, when we continue.
(COMMERCIAL BREAK)
PILGRIM: My next guest heads the world's largest not-for-profit business federation, which is a group that is supposed to be protecting business in America. He says his goal is to ensure that opponents of CAFTA don't sabotage it, but will it hurt American workers? Well, joining me now is Tom Donohue, president and CEO of the U.S. Chamber of Commerce. And thank you for being here.
TOM DONOHUE, PRES. & CEO, U.S. CHAMBER OF COMMERCE: Good to be with you, Kitty.
PILGRIM: You know, we have many critics of CAFTA who say it won't do a thing for the American worker. In fact, it will just cause a hemorrhage of jobs across the border. Why do you support it?
DONOHUE: American markets are open to all of the CAFTA Central American countries. They send products to us without any tariffs. All of the products that we sell into those countries pay between 7 and 11 percent tariff. What we propose to do is take away the tariff. It will create billions of dollars worth of trade, and it will create tens of thousands of U.S. jobs. It's very simple.
The second and most important part beyond that is that we worked for the last 30 years to assure the creation of democratic institutions in Latin America, right south of our border. And if we turn our back at this juncture on Central America, we'll never get a free trade agreement in the Americas, and we will cause great harm, in my opinion, to those democratic institutions. And on top of that, the minute we leave, the Chinese and the European Union will be in there creating free trade agreements in our backyard to the detriment of American workers.
PILGRIM: Well, let me press you a little bit on this democracy building exercise. Should it be done on the backs of the American workers?
DONOHUE: It won't be done on the backs of the American workers. This will create jobs for American workers. If you make textiles in Central America, 60 percent of the components that go into those textiles are produced by American workers in American cities. If we don't make them there, they will move immediately to Asia, where 1 percent of the product will be produced by American workers. And lots of American workers will lose their job in that circumstance, instead of gaining their job by eliminating tariffs that sell American products into the Central American countries.
PILGRIM: Correct me if I'm wrong, but you are arguing a lesser evil argument, is that right?
DONOHUE: Absolutely not. I'm arguing a wonderful opportunity for the American people.
PILGRIM: All right. Let me talk about NAFTA, and many people point out that real wages have fallen as a result from NAFTA. How is CAFTA different?
DONOHUE: Well, there are a lot of sing-song things about CAFTA, NAFTA. The basic issue is that NAFTA has created millions of American jobs. It has put certain amount of stability into Mexico, although a lot more has to be done. And it is beginning to create an American trading system that helps us compete around the world.
I've listened to Lou Dobbs and everybody else complain about NAFTA. Their facts are just fundamentally wrong. NAFTA has been a big boost for the American economy.
PILGRIM: All right. I think we're going to have to agree to disagree on that, especially Mr. Dobbs, I think.
But let's go into another issue that is very important to you. I know you testified recently about it, and that's immigration. What can we do to stop the flow of illegal immigration into this country?
DONOHUE: Well, let's start with the facts. There are about 11 million undocumented workers in the United States. At the same time, we have about 5.2 percent unemployment, which says there's a million and a half, two million people available to go to work. They may not live in the right town. And there are some people in seasonal jobs.
We need those 11 million workers. If you ever sent them home, there'd be a loud sucking noise in this economy.
But the worst part is that by 2010, we're going to need another 6 to 10 million serious workers, because we have lots of people retiring and not enough people coming into the workforce. The bottom line is, we're all immigrants, unless we're American Indians, and we need to find a better way to do this.
We need to have adequate numbers of people that are allowed to come into this country for different levels of jobs, and hopefully to go home from time to time.
We have an immigration system that's broken, and that's making it more and more difficult for people that want to come here and work and for people that want to hire them.
PILGRIM: So legal immigration you are for, it's just not illegal immigration.
DONOHUE: I'm very much for legal immigration, and I don't want to have illegal immigration, but the fundamental reality is, when the demand is here, and when everybody wants to come here, like our forefathers did, it's very hard to stop them. This is the place of hope and opportunity. And we shouldn't turn it away from people that deserve it or can help us when we have had the benefit of it.
PILGRIM: Well, I think we can agree on America is the place of hope and opportunity. Mr. Donohue, thank you very much for being with us, Tom Donohue.
DONOHUE: Thank you very much.
PILGRIM: A reminder now to vote in tonight's poll. Do you think the Justice Department was wrong to indict Arthur Andersen as a firm instead of targeting individuals? Yes or no? Cast your vote at loudobbs.com. We'll bring you the results in just a few minutes.
Next, a preview of what's ahead tomorrow. And opposition to the Minuteman Project turns violent. Will that change the group's mission? Well, I'll be joined by one of the Minutemen co-founders when we return. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: In Las Vegas this weekend, the Wake Up America Foundation held a conference addressing the fight against illegal immigration. Open border advocates protested outside the meeting and called the attendees racists. This is the second time in a week meetings dealing with illegal immigration have sparked protests. Five demonstrators were arrested last week in Orange County, California after violence erupted at a conference where the Minuteman Project founder Jim Gilchrist was speaking, and protest organizers say the violence was started when a demonstrator blocking the entrance to the event was hit by a car driven by a meeting attendee.
Jim Gilchrist is the co-founder of the Minuteman Project. He joins me now from Irvine, California, and thanks for being with us.
JIM GILCHRIST, CO-FOUNDER, MINUTEMAN PROJECT: Thank you, Kitty. PILGRIM: You know, this does take away from the message, and yet it seems to be unavoidable at this point. What do you have to say about the violence that's directed against these meetings?
GILCHRIST: Kitty, we've been expecting this. This -- there's a concerted effort to suppress the First Amendment rights of myself, people like Chris Simcox, anyone who's involved in the promotion of enforcement of immigration laws. There's a concerted effort to stifle our First Amendment rights.
I'm not happy about it. We're trying to resolve this.
What happened in Garden Grove was five demonstrators against my 20-minute speech, which had nothing to do with racism. It had to do with recanting what happened in Arizona. We are not a racist group, by the way. And five of those people were charged with felony assault with a deadly weapon. A brick thrown at an 80-year-old woman in her car, right through her windshield. Another 70-year-old man, by the name of Hal, attacked by 12 rowdy people between the ages of 20 and 35, who were trying to smash into his car.
What would you do if you were 70 years old? You would hit the accelerator and get out of dodge. Fortunately, he was not charged with any crime.
PILGRIM: Mr. Gilchrist, we covered the event, and it was remarkably violent. And yet the Minuteman Project was initially accused of being potentially violent, and yet no violence ever occurred as citizens patrolled the border.
How do you deal with this, these accusations versus the reality?
GILCHRIST: Very patiently, very legally, very peacefully. Although I do get hot under the collar at these situations, we do not promote any violence. We do not promote any racism. If you go to the Web site, read it over and over again, if you have to. Not you, Kitty, but your audience, to get the message that we're trying to send.
Our message is: We want to bring national awareness to this critical issue that's affecting this country, and we want to bring this nation back under the rule of law.
PILGRIM: You have been approached by several different groups hoping to form their own groups for border patrol. Do you think they should be united? Should individuals start other groups? What's your position on this?
GILCHRIST: Yes, and that's what we expanded on. We developed a vast network in Las Vegas. We had representatives from New Hampshire, Florida, Washington state and California, all four corners of the country. We also resolved to start a new operation, which is to cut, literally cut off donations of campaign funds to candidates or organizations who are not supporting the simple enforcement of U.S. immigration laws. There's about $1.5 billion a year that end up in political coffers annually, I've been told. We are going to tap into that treasure chest. We are going to expect about $500 million in otherwise -- money that would otherwise go to campaign contributions, and we're going to develop a powerhouse, a financial powerhouse in order to compete with our own government.
PILGRIM: OK, Jim Gilchrist, thank you very much for joining us tonight.
GILCHRIST: Thank you.
PILGRIM: Let's get to the results of tonight's poll. Do you think the Justice Department was wrong to indict Arthur Andersen as a firm instead of targeting individuals? Seventy-three percent of you said yes; 27 percent said no.
Thanks for being with us tonight. Please join us tomorrow, and I'll talk with one city councilman who's fighting to have signs in one American city actually be in English.
Also, why an FDA drug approval system is failing to keep you and your family safe. One congressman is working to change that. He's my guest.
For all of us here, good night from New York. "ANDERSON COOPER 360" starts right now -- Anderson.
COOPER: Kitty, thanks very much.
END
