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Lou Dobbs Tonight

Reporter Jailed; Bush in Europe; Missing the Point?

Aired July 06, 2005 - 18:00   ET


KITTY PILGRIM, CNN ANCHOR: Good evening, everyone. Tonight President Bush is in Scotland for the G8 summit meeting, but critically important issues vital to our national security are missing from the agenda.
Detroit's big three launch a new round of price cuts. Is our automobile industry in terminal decline?

And "Red Star Rising": a Chinese microchip company is demanding a subsidized loan from our government to compete with an American rival.

We begin tonight with the jailing of a "New York Times" reporter for refusing to reveal the identify of a source. Judith Miller declared she would not testify to a grand jury investigating the leak of a CIA agent's name. Another reporter, Matthew Cooper, of "TIME" magazine, said he would testify, and he avoided any jail time.

Bob Franken reports.


BOB FRANKEN, CNN NATIONAL CORRESPONDENT (voice-over): She came to the court a free person. But "New York Times" reporter Judith Miller was fully aware she could leave a prisoner. And she did.

Taken from the courthouse by U.S. marshals, on her way to jail, after telling federal Judge Thomas Hogan that she would defy his order and would not reveal her source to a grand jury. "I cannot break my word," she said, "to stay out of jail."

In spite of arguments by her attorney, Robert Bennett, the jail would not coerce Miller to follow the court ruling. Judge Hogan insisted he had to enforce his contempt of court order to attempt to get her to comply.

BILL KELLER, "NEW YORK TIMES" EXECUTIVE EDITOR: I think that anybody who believes that the government and other powerful institutions should be closely and aggressively watched should feel a chill up their spine today.

FRANKEN: "TIME" Magazine reporter Matthew Cooper avoided imprisonment because he ultimately agreed to testify about his source. A last-minute decision, he said, that came only after he had left home and kissed his son good-bye, fully expecting he, too, would go to jail. MATTHEW COOPER, "TIME" MAGAZINE: This morning, in what can only be described as a stunning set of developments, that source agreed to give me a specific personal and unambiguous waiver to speak before the grand jury.

FRANKEN: Judith Miller insists she will not testify. Now comes the test to see if time in jail changes that. Time that could last up to four months.

Special prosecutor Patrick Fitzgerald insisted she can't have special treatment. Fitzgerald was appointed to investigate a leak that identified then-undercover CIA operative Valerie Plame. He said Miller's testimony is necessary, as well as Cooper's, to determine who leaked Plame's name.


FRANKEN: "We have to obey the law," said the judge, "otherwise the nation will descend into anarchy." He says that trumps concerns by journalists that they will have a harder time informing the citizens of that nation -- Kitty.

PILGRIM: Thanks very much. Bob Franken.

Well, joining me now for more on the implication of this in today's court hearing is our senior legal analyst, Jeffrey Toobin.

And Jeffrey, thanks for being here.

This is a big deal for those of us in the profession. This is Washington, D.C., pretty much the center of journalism, those who aspire to real investigative reporting. And what does this mean?

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: Well, you know, here you have a reporter reporting on a critical subject. Remember, this is all about WMD, why we went to war. And in an investigation where no one has yet been charged with any crime, where it's not even clear any crime has been committed, the one person going to jail is Judy Miller, who was only doing her job. That's a, to use the word of the day, chilling thought.

PILGRIM: Let's talk about the shield laws. And certain states have them, but they didn't apparently apply in this case.

TOOBIN: Right. About 31 states have some kind of shield law. And the judge in this case ruled that because this was a federal matter outside the purview of any state shield law, there is no shield law federally. So Judy Miller is simply like any other witness who got a subpoena to the grand jury. She's obliged to testify.

PILGRIM: And let's fill out for our viewers, the shield law would protect journalists from having...

TOOBIN: Right. And after -- particularly, a "New York Times" reporter was jailed in the '70s. Many states passed laws that said you can't subpoena journalists because they are doing work that benefits all of society. That's -- that's what some states felt.

The federal government, the Congress, has never passed a comparable law. So it's -- the journalists have no protection in a federal matter like this one.

PILGRIM: The broader implications for the role of journalists as watchdogs of society?

TOOBIN: Well, journalists are really now at the mercy of prosecutors. They have the right now, it seems clear, at least in Washington, to subpoena journalists if they want information. And journalists have no grounds on which to resist. We'll see how much restraint they exercise, or whether they start going after more reporters.

PILGRIM: Jeffrey Toobin, thanks for helping us sort this through. Thank you.

Well, President Bush is in Scotland tonight for the G8 summit meeting. World leaders will discuss African debt, climate change, some other issues. President Bush is likely to face pretty tough questions about his policies.

Suzanne Malveaux has our report from Glasgow, Scotland -- Suzanne.


President Bush this evening dines with Queen Elizabeth II, as well as seven other leaders of industrialized nations. Of course the summit under way. Great anticipation not only from politicians, but protesters and rockers.


MALVEAUX (voice-over): President Bush celebrated his 59th birthday in Denmark. At a lunch with the queen, a cake that literally took his breath away.

And earlier, celebration, as well as serious matters, with Denmark's prime minister. At a news conference, President Bush vowed to get a Supreme Court nominee confirmed by October, saying he's already started reading about various candidates.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: There will be no litmus test. I'll pick people who, one, can do the job, people who are honest, people who are bright, and people who will strictly interpret the Constitution and not use the bench to legislate from.

MALVEAUX: One of those possibly on Mr. Bush's short list, Attorney General Alberto Gonzales is already facing criticism from some conservatives who say he's too moderate. Mr. Bush fired back.

BUSH: I don't like it when a friend gets criticized. You know, I'm loyal to my friends. And all of a sudden this fellow, who is a good public servant and a really fine person, is under fire.


MALVEAUX: Now, that was President Bush earlier today in Denmark. Of course, he arrived here in Scotland for the first day of the G8 summit. And an unusual first meeting for the president.

It was not with heads of state, but rather with rockers, Bono, as well as Bob Geldof. Both of them responsible for those Live 8 concerts. They are trying to get the leaders here to double the amount of aid to Africa. They said after their meeting with the president, that they were appreciative of his increasing aid, but, of course, that more could be done -- Kitty.

PILGRIM: All right. Thanks very much. Suzanne Malveaux.

Well, police guarding the summit fought running battles with several hundred anarchists. The protesters left the route of an agreed march near Gleneagles. That's the summit meeting's location.

Now, some of the protesters threw rocks and wooden stakes at police. Riot police eventually pushed the protesters away from the security fence surrounding Gleneagles.

Critically important issues vital to this country's national security appear to have a low priority at the G8 summit meeting. Those issues include the global war on terror, nuclear proliferation. It would seem world leaders have very different priorities at their summit.


PILGRIM (voice-over): The origin of the G7 meeting was to convene the richest countries in the world to discuss financial issues. When Russia was added, the G8 agenda became more political.

NILE GARDINER, HERITAGE FOUNDATION: Unfortunately, this G8 summit will not be addressing some of the major issues of concern to the United States, Great Britain, and other western countries, including the threat posed by global terrorism, the threat posed by rogue regimes with dangerous weapons of mass destruction. This is a summit which simply fails to address many of the key issues to American, British and other western voters at this time.

PILGRIM: Some of the pressing issues that are not high on the agenda, North Korean nuclear proliferation and the emergence of Iran as a nuclear power, tensions over the Chinese military buildup. And the Taiwan Straits will only get brief mention.

The summit's host, Prime Minister Tony Blair, set the agenda. Prime Minister Blair chose African debt relief and global warming. Critics say the summit's agenda misses the point.

PHILIP GORDON, BROOKINGS INSTITUTION: Blair hoped that if he really zeroed in on those two things, he might actually have a chance of getting something done, as opposed to just a long laundry list of all of the issues in the world but not do anything about them.


PILGRIM: Experts point out you cannot have meaningful discussions on issues like global warming without countries like India and China, which are rapidly industrializing.

Still to come, gathering storm. Dennis gains speed in the Caribbean, and it's just reached hurricane strength. We'll have the very latest on that.

And out of gas. How Detroit's latest price cuts could accelerate the decline of our automobile industry.


PILGRIM: This just into CNN: Tropical Storm Dennis has just become the first hurricane of the season. The powerful storm is just days away from striking the United States. Rob Marciano is tracking Dennis from the CNN weather center. He joins us with the very latest on that.


PILGRIM: Well, oil prices spiked to a record high today as Hurricane Dennis approaches. Crude futures rallied by more than $1.50 to settle above $61a barrel. And traders are worried that Dennis will disrupt oil and natural gas production in the Gulf of Mexico.

Some Louisiana refineries were hit by power outages last night. That's as Cindy blew through. That could affect U.S. gas supplies.

Well, rising oil prices is just one reason why there are growing distress in Detroit. The nation's automakers are increasing sales by offering huge discounts. Some fear the automakers are running out of gas. They're giving away their future.

Bill Tucker reports.


BILL TUCKER, CNN CORRESPONDENT (voice-over): Detroit automakers have found their newest magic pill. Everyone in America now gets what every employee of Ford, GM or Chrysler gets, an employee discount. It's a rebate, packaged as a really special insider's deal. And people are talking.

MARK HUGHES, BUZZ MARKETING: Yes, people are talking about the deal. And they're not talking about GM. You know, they're going to GM for the deal, but they're talking about the employee discount. You know, you can talk about the deal until the cows come home, but you really want people talking about the car and the product.

TUCKER: Oh, sure, people are talking about the new Ford Mustang, the Chrysler 300, the Dodge Magnum and the Chevy Corvette. But those cars aren't included on the discount programs. The Ford Focus and the Chevy Monte Carlo are, two cars with double-digit sales declines that not even employees want to buy. And that is the problem in the eyes of many critics who say instead of making products that people want, the automakers are structuring deals.

JOHN CASESA, MERRILL LYNCH: This price-cutting campaign is a tactic that's become a strategy. It was originally used in tough times to tide these companies over until better times: 1982 recession, 1991 recession.

It was used during -- after September 11 to get through that very difficult period. But it's like a consumer who uses credit cards to get -- make this month's bills, and then ultimately becomes completely dependent on credit cards. And that's what's happened here, and it's going to require restructuring of these companies.

TUCKER: And like credit cards, the rebates and incentives carry a high cost. GM, Chrysler, Ford each spend more than three times as much money selling their cars as Toyota USA. Last year, the big three spent $9 billion in advertising to lure buyers into the showrooms.


TUCKER: And what it means is that Detroit has chosen to compete on a cost basis rather than a product basis. And there are cheaper products coming -- Korea and China, among other places, leaving Detroit to fight essentially a fight on quick sand.

Kitty, the analysts are saying what Detroit really needs to do here is offer a better product, one that people want to buy.

PILGRIM: And get in line with the oil issue, right?

TUCKER: Exactly. They've been slow to come to market with diesels, they've been slow to come to market with hybrids. They've seen Toyota and Honda move way out in the front on those cars, which are a small segment of the market now. But Detroit is standing there flat-footed once again, trying to play catch-up.

PILGRIM: Someday they'll learn. Thanks very much.

TUCKER: I don't know if they will.

PILGRIM: All right, Bill. I'm being optimistic. Bill Tucker. Thank you.

Well, we've just received some video of "New York Times" reporter Judith Miller. She's on her way to a detention center. And this video shows a van taking Miller to a detention center in Alexandria, Virginia.

Now, as we've been reporting, Miller has been jailed for refusing to identify the identity of a source. This is for a story she never wrote. Judith Miller declared she would not testify to a grand jury investigating the leak of a CIA agent's name. And later in the show, we will talk with Linda Foley, president of The Newspaper Guild, about today's dramatic developments.

When we return, red star rising. Should your tax dollars build Chinese chip plants? Well, the high-tech debate that could spark a security scare.

Plus, pressuring the G8 on poverty. World leaders are set to forgive billions in African debt. Should they go even farther for African aid?


PILGRIM: Congress is already deeply troubled by China's bid to take over Unocal, the U.S. oil giant. Well, tonight, some members of Congress are worried that a major Chinese semiconductor company is trying to get a multimillion-dollar loan from the U.S. government, a loan that could harm an American semiconductor company and compromise our national security.

Lisa Sylvester has our report.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): China's Semiconductor Manufacturing International Corporation, or SMIC, has applied for a $770 million loan guarantee from the US Export-Import Bank. The Chinese firm wants the bank to help it expand into one of the world's high-tech leaders. But SMIC is a chief rival of U.S.- based Micron Technology, and lawmakers are critical of using American tax dollars to subsidize a Chinese company.

REP. MIKE SIMPSON (R), IDAHO: Those facilities will then compete against Micron Technology and other chip producers in this country, putting employees out of business in an over -- in an already overstocked market. And why would we go through the bank and have them subsidize that loan for that?

SYLVESTER: SIMC says it needs the loan guarantee in order to buy machinery from an American company, Applied Materials. Applied Materials argues that without the loan guarantee, China will buy the machines from Japan, or Korea, instead of the U.S.

DAVE MCCURDY, PRESIDENT & CEO, ELECTRONICS INDUSTRIES ALLIANCE: They're marketing aggressively. Their governments are doing everything they can to open the doors for their industry. And our Department of Commerce and our government should be there as well opening up market opportunities.

SYLVESTER: But there's a bigger picture here: national security.

PATRICK MULLOY, U.S.-CHINA ECON. & SECURITY REVIEW COMMISSION: We need to have a semiconductor manufacturing industry in this country. These are very important components of key items that our military needs, like fighter jets and other matters. And this is gravitating out of this country to China. SYLVESTER: So far, the Export-Import Bank has shelved SMIC's application, not on the grounds of national security, but economic security. In a statement, the Export-Import Bank says it is adhering to congressional requirements that it "perform economic impact studies of the potential harm to the U.S. economy."


SYLVESTER: But that's not the end of the story. Applied Materials has been lobbying Congress on behalf of the Chinese semiconductor company to force the Export-Import Bank to vote on the application. But so far, the chairman of the Export-Import Bank is refusing to bring it forward -- Kitty.

PILGRIM: All right. Thanks very much. Lisa Sylvester.

Well, that does bring us to the subject of tonight's poll. Do you think that foreign companies that would be direct competitors with American companies, should they be able to win loans from the U.S. government, yes or no? Cast your vote at We'll bring you the results a little bit later in the broadcast.

When we come back, helping Africa help itself. The G8 is ready to increase African aid at its summit. But is more money really the answer?

Plus, two journalists, two different fates. Our coverage of today's First Amendment showdown in federal court continues.

And a desperate search in the mountains of Afghanistan. A Navy SEAL missing after a mission that went horribly wrong.


PILGRIM: New details tonight about what happened to a small team of Navy SEALs in a desperate battle in the mountains of Afghanistan. One SEAL survived the battle, two were killed. One SEAL Is still missing.

Jamie McIntyre is at the Pentagon with the story -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: And Kitty, the widow of one of the U.S. Navy SEALs who was killed in that operation is breaking the traditional silence that surrounds America's secret warriors. Twenty-five-year-old Danny Dietz was one of the Navy SEALs who died last week in Afghanistan. His widow has released a very emotional personal statement, along with some personal photographs of her husband.

Maria Dietz says in the statement, "I want the world to know that Danny Dietz was not just my husband, but he was my other half, my friend, my role model and my hero. The same day he left for Afghanistan, as tears rolled down my cheeks, he told me with sparkles in his eyes, 'All the training I underwent for years is going to pay off with this trip, and I'm going to do something special for this country and for my team.'" Dietz was on a secret reconnaissance mission in the rugged mountains of eastern Afghanistan when he was killed. His helicopter sent to rescue him, extract the four-man team that he was on the ground with was shot down by a rocket-propelled grenade.

One of the SEALs in that incident was apparently knocked to the ground and into a ravine by the force of an explosion. And that may have saved his life, separating him from the other members of his SEAL team. He was eventually rescued.

Dietz was not. And his wife, again, pours out her emotions in this statement saying that she was -- she says, "I sit here in the house once shared with my husband. I'm consumed of thoughts of pain and confusion." But she said, "I want the world to know that they lost an incredible man, an outstanding Navy SEAL, and a hero" -- Kitty.

PILGRIM: All right. Thanks very much. Jamie McIntyre.

Well, the war on terror is not a headline issue at the G8 summit in Scotland this week. It's sure to be discussed in some form.

G8 leaders arrived at Gleneagles, Scotland, today to discuss two flagship issues, aid to Africa and global warming. Protesters were not far behind.

Now, they gathered near Gleneagles by the thousands. The U.K. is calling it -- its three-day security operation at the summit -- the largest ever.

Protesters are out to pressure the G8 on aid to Africa, but is more money for failed and corrupt African states really the answer?

Well, joining me tonight from Washington is Charles Kupchan, a senior fellow, director of European studies at the Council on Foreign Relations. Also a professor of international affairs at Georgetown University.

And thanks for joining us.


PILGRIM: Let's first go through the numbers. And Prime Minister Tony Blair says $25 billion annually to $50 billion by 2010. Is that realistic?

KUPCHAN: It's probably a little bit of a stretch at this point, because he's really talking about a doubling by 2010, and then another $25 billion by 2015. The Europeans have committed to increase their assistance to .7 percent of GDP, but the United States is still below .2 percent. Unless the U.S. substantially increases its aid, which is pretty unlikely, I think we're not going to see the levels that Blair is talking about.

PILGRIM: Let's go through the U.S. numbers, because the United States gets somewhat of a bad rap on this and yet, the numbers are considerable. The U.S. provided $3.2 billion in official development assistance to sub-Sahara Africa in 2004. That's more than triple the amount provided in 2000. So, the United States is upping their contribution. Why still the criticism?

KUPCHAN: Well, in part, the numbers are a little bit difficult to get at. It is true that the U.S. has gone from $2 billion to roughly $3 billion, but some of that money was already allocated, some of it took the form of humanitarian assistance, food aid, for example, which is not quite the same thing as aid that goes to stimulating growth over the long term.

But there's no question, Bush has been good to Africa. The reason that the U.S. gets the bad rap, is really the question of per capita spending. With, as I mentioned, the U.S. down around .2 GDP, around $30 per person, per year. Many other industrialized countries are spending about $70 per person, per year. That's where the bad rap comes from.

PILGRIM: Let's talk about a couple of the countries that get aid and Nigeria comes to mind. It's been flooded, $300 billion in the past 20 to 30 years and yet, this country still remains destitute. What's going wrong here? Is it corruption?

KUPCHAN: Corruption is a big piece of the puzzle here. There are some countries such as Madagascar, Ghana is another example, where you have good governance and that means that the aid, when it arrives, is spent wisely. There are other countries, Nigeria chief among them, others that have experienced political programs, like Sierra Leon. And there, the aid tends to be like water in sand, it disappears.

And the Bush administration, I think, has been right by saying, we will give more aid, but it has to be attached to good governance. The history of the last several decades says that only when the two come together, good management practices and governance with aid, do you see significant increases in growth.

PILGRIM: Well, that seems like very good sense. Let's talk a bit about the Millennium Challenge that President bush set out. Is it working so far?

KUPCHAN: It's working, but primarily in theory. The Bush administration laid out a clear set of guidelines that said, you need to have transparent accounting procedures; you need to have responsible governance and a minimum of corruption and then, we will give you aid. And the increase from $10 billion to $15 billion in the aid budget was very much about this new program.

The problem is that the money has not been flowing. It's buried in the bureaucracy. The forms that need to be filled out by the target countries are long and onerous. That's one of the reasons the Senate has not given Bush the money he's asked for. The program is in good shape theoretically, but it needs to be speeded up and streamlined.

PILGRIM: We've seen a weekend of rock concerts. We've seen a high-level summit. We've seen a lot of attention paid to Africa. Will this make a difference?

KUPCHAN: I think it will make a difference and I think that if you say, what's happened in the United States, why has aid gone up so substantially, there are two reasons: One is the court of world opinion and I think Americans are more sensitive to these issues than they were before.

And the other is 9-1-1, September 11th. And the clear sense, in the Bush administration's mind, I think a correct sense, that we need to go after not just the bad guys, but also the breeding ground for extremists. And that is, those are the countries that are -- have serious problems with poverty and disease, so the War on Terror also means getting rid of the sources of these troubles and going after poverty and disease in the Middle East and Africa.

PILGRIM: Thanks very much for your comments tonight, Charles Kupchan.

KUPCHAN: My pleasure.

PILGRIM: Coming up next: A "New York Times" reporter goes to jail for a story she never wrote about. Why one reporters group is demanding that Congress takes action.

And then: A federal judge throws out a lawsuit filed by a group of American citizens. They're fighting to win the same benefits as illegal aliens and their lawyer is our guest, ahead.

So, stay with us.


PILGRIM: More now, on our top story: "New York Times" reporter Judith Miller is headed to jail tonight, after refusing to name a confidential source. Miller's refusal came before a grand jury investigating who in the Bush administration leaked the name of a covert CIA agent.

"Time" magazine reporter Matt Cooper avoided prison at the last minute, by agreeing to name his source in the case.

Well, my next guest says, simply, this is a sad day for journalism. Linda Foley is the president of the Newspaper Guild. The group held vigils all around the country today in support of Miller and Cooper. And Linda Foley joins me from Washington. And thanks for being here, Linda.


PILGRIM: Your organization has global reach. What are you hearing?

FOLEY: What we're hearing is, is that everyone in the journalism community is very, very concerned about this issue. I mean, basically a reporter's right to not divulge his or her sources is critical to a reporter being able to do their job. PILGRIM: In your opinion, will this make confidential sources hesitate before coming forward?

FOLEY: Well, it could. And that's what has us very concerned. One of the things that we did today in the vigils and protests that we held around the country, was we stressed the need for passage of a national shield law.

Part of the reason that we have encountered this situation today, is because this is a federal grand jury and there is no protection for reporters who can't divulge confidential sources in federal courts. We think it's past time that there be a national shield law to protect reporters in these situations.

PILGRIM: Yes. And we have state shield laws. In fact, almost every state, 49 states, correct?

FOLEY: Well, there are protections for reporters in 49 states. Thirty-one states and the District of Columbia have actually enacted shield laws, per se. In other states, the courts have interpreted state constitutions and other laws to protect journalists in those situations.

So, in 49 states, that protection is available. At the federal government level, it's not. We think it's past time, we think it's time that congress enacts shield law -- national shield law.

PILGRIM: There have been attempts in Congress to get this passed, and yet, speaking with our legal analyst earlier in the evening, he pointed out to me, congress is not terribly sympathetic about this as a rule.

FOLEY: Well, they haven't been. However, these -- there have been two bills introduced, one in each house. Actually, three bills introduced and there are two in the Senate and one in the House. And there is bipartisan support for these bills. And we hope that the situation, the sad situation today of Judith Miller going to jail, will prompt Congress to act.

PILGRIM: Two different journalists, same situation, two different courses: What can you take from the positive from either of this and I guess specifically, will Judith Miller going to jail, will that accomplish anything?

FOLEY: Well, I don't know whether it accomplishes anything. You know, and I think you would have to ask the prosecutor that question. You know: Why is this happening? But I think what it does do, is it says that journalists are standing up for principle. This is an important principle. It's a principle that's critical to investigative journalism and it's a principle that we all have to stand up for. And the fact that she is going to jail shows that she and her employer, the "New York Times," are standing up for this principle.

PILGRIM: This was an article that Judith Miller didn't even write. How do you see that? FOLEY: Well, I think that's particularly dangerous. I mean, here we have a situation where a reporter got information, evaluated the information and decided, for whatever reason, that she was not going to write a story.

When sources divulge information, particularly confidential information, they ask for confidentiality first, before they divulge the information to the reporter. And as a result, any reporter would be at risk to be subpoenaed and be threatened with jail in this kind of situation. So, I think this is particularly dangerous.

PILGRIM: In this context, a mere conversation could be damaging?

FOLEY: Absolutely. And that's very, very chilling. It has a very, very chilling effect on free press and on journalism, and particularly on investigative journalism.

PILGRIM: Now, Matt Cooper said that he had received permission from his confidential source that freed him from any obligation. Do you think that the pressure of the situation caused that to happen?

FOLEY: Well, in the first place, his employer, Time Warner, did release his notes, and confidential e-mails to the prosecutor. So that put him in kind of a different position. And I certainly can't speak for Matt Cooper, or Judith Miller, or anybody else who finds themselves in this situation.

I just think it's terrible that the prosecutor has -- had put them in the situation that they had to make this terrible choice about whether to divulge their sources or whether go to jail. That's a terrible situation to put a journalist in.

PILGRIM: What are you advising your journalists who talk to you?

FOLEY: We are advising them to stand up for this principle. We think it's critically important that journalists be able to keep their sources confidential. And that it's time for them to step up and let their congressional representatives know that we do need a national shield law. They do need this kind of protection or they won't be able to cover the news in an effective way.

And what really suffers here is the public's right to know. The public doesn't get the information it needs if this protection isn't afforded to journalists.

PILGRIM: Thank you very much for being with us tonight, Linda Foley. Thanks Linda.

FOLEY: Thank you.

PILGRIM: A reminder now to vote in tonight's poll. And here's the question, "do you think foreign companies that would be direct competitors with American companies should be allowed to win loans from the U.S. government?" That's a yes or no vote. Cast your vote We'll be there in a few minutes with the results. A real-life "Law and Order" assignment for actor and former Tennessee senator Fred Thompson. President Bush tapped Thompson to be his point man today in the upcoming battle over the Supreme Court. Thompson will help shepherd Bush's Supreme Court nominee through the Senate, once that nominee is named. And he says he's hoping for a smooth process.


FRED THOMPSON, FRM. U.S. SENATOR: There's been a lot of harsh statements already made. But, you know, the judiciary is one of the institutions -- especially the federal judiciary -- who has had great respect over the years. And if we take good people and castigate them just for the purpose of defeating them before a Judiciary Committee and confirmation hearings, that's not going to serve the purpose of the judiciary or the -- what the American people expect, I don't think.


PILGRIM: Thompson retired from the Senate in 2002. He's been devoting his time to acting, since then. He's currently one of the stars of NBC's "Law and Order."

Well up next, this July the 4th week, the United States will roll out the welcome mat to 15,000 new legal citizens. How this country welcomes immigrants who obey our rules.

Plus, remembering a true American hero. Vice Admiral James Stockdale won the honor. He also ran as Ross Perot's running mate.


PILGRIM: On this program, we report extensively on the failure of the White House and Congress to stop illegal aliens from entering this country. But in one area, U.S. policy is functioning reasonably well. Well, for legal immigrants. During the July 4th week alone, the United States will welcome more than 15,000 new citizens. Casey Wian has the story.


CASEY WIAN, CNN CORRESPONDENT: Thirteen hundred immigrants from Mexico, India, the Philippines and 91 other countries became American citizens in Sacramento, California today. This year, about half a million people will become naturalized Americans.

UNIDENTIFIED FEMALE: It means I can vote. I can exercise my right as a citizen.

UNIDENTIFIED MALE: This is a great country to be part of. Who doesn't want to come to America.

WIAN: The requirements are simple. Be an adult, legal permanent resident of the United States for five years, speak, read and write English, take a civics test and be of good, moral character. Immigration experts say the United States is one of a handful of nations that welcomes immigrants as citizens through a fair and efficient naturalization process.

DEMETRIOS PAPADEMETRIOU, MIGRATION POLICY INSTITUTE: Probably more often than any other country with the possible exception of Canada, and I suspect Australia, the process is pretty much down pat. We make exceptions for people who cannot met some of the requirements because of disabilities and other kinds of things. And the outcome's fairly predictable.

WIAN: Still, problems exist. After 9/11, citizenship became the responsibility of the Homeland Security Department which tightened background checks. Meanwhile, citizenship officials were already overwhelmed. The backlog of citizenship applications grew to nearly 2 million cases in 1998. Now, it's been reduced to 650,000.

Another concern, a growing number of new Americans are remaining dual citizens. One reason for the increase, Mexico, birthplace of the largest number of new Americans, is now encouraging the practice.

JOHN FONTE, HUDSON INSTITUTE: The United States Congress has the power to pass sanctions on people that would be exercising dual citizenship, voting in a foreign country, swearing an oath of allegiance to a foreign state. So there could be sanctions, fines, time in jail. In other words, criminalizing the act, which would discourage this.

WIAN: Although the United States requires an oath of allegiance to this country, it does nothing to enforce it.


WIAN: Now, opponents of dual citizenship want Congress to include sanctions in any immigration reform legislation it passes. They say it's a matter of both loyalty and fairness, because dual citizens enjoy rights other Americans don't -- Kitty.

PILGRIM: All right. Thanks very much, Casey Wian. Thanks, Casey.

Well, tonight, in a controversial immigration case, a federal judge dismissed a lawsuit challenging a Kansas law, granting in-state tuition to illegal immigrants. The current law allows illegal aliens to pay roughly $4,000 less than out-of-state students who are U.S. citizens.

Well, the judge dismissed the case on procedural grounds, not on the merits of the case, we add. But tonight, my guest is Chris Kobach. And the attorney who represented the plaintiffs, a group of six parents and 18 students who paid those higher out-of-state tuition fees. He's a professor at the University of Missouri Law School in Kansas City.

And Professor Kobach, welcome to the program.


PILGRIM: Why do you think this was dismissed?

KOBACH: Well, the judge basically took the easy way out here. This was a very complex case. And the judge dismissed it on standing grounds without reaching any of the statutory or constitutional issues here, standing as essentially as a decision that the wrong plaintiffs are before the court. That they haven't suffered sufficient injury.

The problem with that decision is, clearly, our out-of-state students have suffered injury. They've suffered discrimination, because they are nonresident U.S. citizens, and yet they don't get the same benefit that the non-resident illegal aliens get. And they've also suffered financial injury. Their tuition goes up to subsidize the extra subsidy that goes to more in-state tuition payers who happen to be out-of-state -- happen to be illegal aliens.

PILGRIM: They basically paid more money. That's not enough?

KOBACH: Yeah. Apparently not enough for this court. I think we'll be on strong grounds when we appeal this standing decision to the tenth circuit. But nonetheless, it's frustrating. I would have preferred a situation where the judge got to the merits of the issue.

PILGRIM: Let's talk about the other states that have similar laws, and there are quite a few. There are eight. But this is the first time your case is the first time it's been ruled on. Where do you see this going from here legally?

KOBACH: Well, I think the other eight states are definitely watching this case. We will have a decision on standing in the tenth circuit. And regardless of which way the tenth circuit goes, this case is not over. If the court were to agree with the district judge here and say there's no standing, that just means a different set of plaintiffs could bring this challenge.

So, these state laws are on very thin ice. Congress expressly prohibited states from doing this. And we're going to continue to fight to make sure that federal law is enforced.

PILGRIM: What would be the solution to this inequity?

KOBACH: Well, a number of solutions: One is to just wipe out these state laws that give in-state tuition to illegal aliens; another part of the solution is to compensate U.S. citizens whose equal protection rights have been violated during the period of time that the states have been unequally favoring illegal aliens.

PILGRIM: So, to pay them back? Would that not be huge sums of money?

KOBACH: Well, it could be. Basically, pay -- give them a reimbursement for the extra tuition; the difference between in-state and out-of-state tuition during the year that the statute has in effect.

PILGRIM: Bring us up to speed on what efforts have been made so far, to bar illegal aliens from getting these in-state tuition fees?

KOBACH: Well, some states have actually passed laws expressly saying, no illegal alien gets in-state tuition in our state. Unfortunately, at the same time, you have some states like Kansas, which are encouraging illegal immigration by offering this huge reward.

And the amazing thing about the Kansas law, is that it says if you actually play by the rules, if you actually get a visa to come here and study in the United States, too bad, you have to pay out-of- state tuition. We only reward you in Kansas, if you come here illegally.

PILGRIM: That is incomprehensible. What's your next step?

KOBACH: Well, the next step is to appeal this standing decision to the U.S. Court of Appeals for the Tenth Circuit.

PILGRIM: And how do you think you'll do?

KOBACH: I think we'll have a very good chance there. The judge in this district case, District Court case, he glossed over some really important precedents that make clear that our plaintiffs do have standing, they have suffered a sufficient injury.

I think anyone can understand the injury here, when a U.S. citizen is denied the opportunity to get something that an illegal alien can get. There's a fundamental equal protection problem, as well as a federal statutory problem.

PILGRIM: Thanks very much for sorting that out for us. It's very complicated and very, very important. Thank you for being here.

KOBACH: My pleasure.

PILGRIM: Well, disturbing news tonight out of North Carolina, where authorities found illegal aliens working at a U.S. Air Force base. Authorities arrested nearly 50 illegal aliens at Seymour Johnson Air Base, in Goldsboro today.

Immigration and Customs Enforcement in Atlanta, tell us that subcontractors hired the illegal aliens and the aliens were using fraudulent documents. They did not, however, have access to military files. The illegal aliens came from Mexico, Honduras, El Salvador and the Ukraine.

Well, during several investigations Immigration and Customs Enforcement has arrested illegal aliens at numerous sensitive sites across the country. In Operation Tarmac, this targets the nation's airport, ICE has arrested more than 1100 illegal alien workers.

In Operation Glow Worm, which targets the nation's 104 power plants, ICE has arrested more than 50 illegal aliens workers since last November. And during that same period, ICE arrested nearly 90 illegal alien workers at chemical plants across the country.

And yes, we do keep track.

Still ahead, the nation remembers a hero: A former vice presidential candidate, highly decorated Naval officer and prisoner of war. A look back at his life, when we return.

Plus, the results of tonight's poll and a preview of what's ahead tomorrow.

Stay with us.


PILGRIM: Retired Admiral James Stockdale has died at age 81. He fought for our country in Vietnam without ever asking for recognition or fame. But fame of a sort, did come to Admiral Stockdale late in life in an only-America twist.

Barbara Starr, looks back on a heroic life.


BARBARA STARR, CNN CORRESPONDENT (voice-over): Navy Captain James Stockdale limped to freedom in 1973, ending seven-and-a-half brutal years as a prisoner of war in North Vietnam. For four of those years, Stockdale was in solitary confinement. He was in leg irons for two years and tortured repeatedly. He organized a secret way to communicate with other POWs and set up rules of prison behavior. Stockdale used this metal cup to get messages from other prisoners.

JAMES STOCKDALE, FORMER PRISONER OF WAR: This may look like, to you, a receptacle in which I would get a drink. It was that for seven years, but it was much more. For, it was my link with sanity. My link with my community. My link with the world.

STARR: Senator John McCain, a fellow POW, says, "His leadership inspired us to do better than we ever thought we could."

Stockdale was awarded the Medal of Honor. The citation noted: He slashed his own scalp with a razor and beat himself in the face with a stool to keep the North Vietnamese from parading him as a propaganda tool.

Stockdale's 1992 run for vice president with Ross Perot, was ill- fated from the moment he made an opening statement.

STOCKDALE: Who am I? Why am I here?

STARR: But it is the moments of POW life many of Stockdale's military colleagues remember. Stockdale himself recalled a bad day shortly after being shot down, using his crutches to push a coffee can, his toilet, down a hallway. He was being taken for his first shower and an unexpected memory of home.

STOCKDALE: I can't imagine when I was any more depressed until I looked under that shower head and there was kind of a hole in the concrete and there was etched in very small print: Smile, you're an "Candid Camera."

STARR: James Stockdale died at the age of 81, after battling Alzheimer's disease.

Barbara Starr, CNN, the Pentagon.


PILGRIM: Admiral Stockdale is survived by his wife and four sons.

Well, the results of tonight's poll: We have 96 percent of you said foreign companies should not be able to win loans from the U.S. government.

Thanks for being with us tonight.

Please join us tomorrow.

Homeland insecurity: A new report finds thousands of Americans are living dangerously close to potential targets in a bio-terror attack. We'll have a special report on that.

And then: "Red Storm Rising." Communist China looks to take control of a critical American oil company and now a new force is joining the fight to stop the Unocal deal.

We'll have all of that. Please join us.

For all of us here, good night from New York.

"Anderson Cooper 360" starts right now with Rudi Bahktiar filling in -- Rudi?