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Lou Dobbs Tonight
New York Subway System on Alert; White House Mess; Pentagon To Reimburse Soldiers For Body Armor Purchases
Aired October 06, 2005 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: And good evening, everybody.
This country's largest police force tonight is mobilizing to counter what New York City Mayor Michael Bloomberg calls the most specific terrorist threat yet against the city. It is a threat against the subway system, to be specific, used by 4.5 million commuters each day. There is no specific information as yet, no corroboration. Mayor Bloomberg and Police Commissioner Ray Kelly have been holding a news conference.
We will begin with two reports from Deborah Feyerick here in New York City and Jeanne Meserve in Washington.
Deborah Feyerick in New York. Deborah?
DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Lou, police have always known that the New York City subway system could be a target of a terrorist attack. However, this is the first time that there is actually a specific threat.
What is unique about the information, according to the mayor, is that the timing and also the kind of information that was in the threat made everybody sit up and pay attention that this could very well be real.
The police commissioner and the mayor spoke just a short while ago.
(BEGIN VIDEO CLIP)
RAY KELLY, NYC POLICE COMMISSIONER: The New York City Police Department and the Federal Bureau of Investigation have received information which indicates that the city's subway system may be the target of a terrorist attack in the coming days. While the information has not been fully corroborated, it has been deemed of sufficient concern for the police department to enhance its counterterrorism coverage of the subway system and to advise the public of the threat, and to ask its assistance in reporting immediately any suspicious individuals or activities to police or transit personnel.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
MAYOR MICHAEL BLOOMBERG (R), NEW YORK CITY: It was more specific as to timing. And some of the sources had more information that would lead one to believe that it was not the kind of thing that appears in the intelligence community every day.
(END VIDEO CLIP)
FEYERICK: And Lou, one of the newest things that we heard today coming out of this press conference, it is the first time that there has ever been a mention of the possible use of baby carriages to carry some sort of a bomb or some sort of an explosive.
Now, there are more police in the subway stations this evening, according to the police commissioner. There are going to be bag searches as well. As matter of fact, the police commissioner asking that if you don't have to carry a briefcase or a backpack, that perhaps you should not do it. But again, the most interesting thing being the use of baby carriages in some kind of possible attack.
Now, the information was available for the last couple of days. But again, according to the FBI, there were enforcement operations under way. And so nobody wanted to jeopardize those attempts.
The mayor trying to assure the public here in New York that everything is fine. He himself, as is his habit, plans to take the subway home this evening.
Lou?
DOBBS: Deborah Feyerick. Thank you very much.
Homeland Security officials in Washington saying very little about this threat to New York.
Homeland Security Correspondent Jeanne Meserve joins me now with the latest. Jeanne?
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Lou, I haven't been able to speak to any officials since that press conference was completed, but just prior to it I did speak to several who described the information involved here as being of doubtful credibility. They said the source was not credible, the information was not viable.
Now obviously, officials in New York City took a different tact. They have gone ahead and ramped up security and made this very public announcement not only about that, but revealed some tantalizing details about exactly what they might be investigating. They said that it originated overseas. And the FBI official there said it could be resolved in the next couple of days.
Tantalizing little facts. We haven't yet been able to put them in the full context of what's going on here.
Now, what you may be seeing here is a difference in philosophy of how much information should be pushed out to the public. There are some officials who feel until you have it nailed, until you are absolutely sure that you are dealing with specific and credible threats, something that's corroborated, you don't go out and alarm the public. But what we heard officials in New York say was, we will push out the information. It is up to the public to make their own decision as but what they do. And you heard Mayor Bloomberg say his decision is to go ahead and ride the New York subways despite this information.
Lou.
DOBBS: And Jeanne, the fact is that Mayor Bloomberg, the city government of New York, Police Commissioner Ray Kelly, no one in the country has a better reputation than this city in terms of its counterterrorism efforts and its law enforcement agencies. The mayor often refers to New York's finest in talking about both the police department and the fire department.
This is an interesting difference of view, and one in which proximity looks as though it is the superior perspective. Homeland Security -- these are intriguing developments as you suggest -- they're really trying to knock this down.
MESERVE: I don't know if they're going so far as to knock it down. I think they're trying to minimize this. I think they're saying, go slow, be careful. And one gets the sense that they think perhaps New York officials have ramped it up a little higher than they would have liked.
I might mention, Lou, that although you talk -- and rightly so -- about New York City and its police and its intelligence capabilities, which are much more developed than they are in any other city in the country, there also was a history of some disagreement and even, I would say, and some officials have told me some conflict between New York City officials and Homeland Security officials.
They are not always on the same page. There is not always this sort of information sharing that some would look to see between those two very significant agencies.
DOBBS: Sharing reports tonight that the CIA and FBI, in a joint operation, generated the source of intelligence that has led to this mobilization of the New York Police Department tonight.
MESERVE: Yes, and the mobilization is going to be interesting to watch. We have seen these -- these sorts of things happen before, where they throw more police on to the commuter trains. You'll see an increased presence at Grand Central Station and at Penn Station.
The mayor mentioned you are going to see more in the way of bag searches. Baby strollers are going to be looked at. Clearly, what they're interested in here is a bomb.
The first thing that sprang to my mind was, gee, are they going to be talking about putting up more monitors to be monitoring air quality in the subway. No mention of that at all. But a very specific mention that if somebody was -- had a bomb, they had to hide it somewhere, in a bag, a briefcase, a knapsack, a baby stroller might be a place to put it.
DOBBS: Jeanne Meserve. Thank you very much.
The terror alert issued as millions of New York commuters began their journey home from work.
Jason Carroll is at Penn Station tonight. Jason, what is the scene there, the mood among commuters this evening?
JASON CARROLL, CNN CORRESPONDENT: Well, I can tell you, it's a very busy scene. Penn Station, for those who are not familiar, is right where we also have Madison Square Garden, where they're having a Rangers hockey game and a concert. You've got Macy's just a few blocks from here, as well as the Empire State Building.
So to say that it's busy here would actually be an understatement, especially at this rush hour period right now. But just to give a sense, 4.5 million people take the subway on a daily basis. So that gives you the sense of how many people come in and out of this system at all times.
And in terms of the increased security measures since the London bombing, that we've been told about, you've got the division of the NYPD called the Emergency Services Unit. What they're doing is they're patrolling 70 subway stops a day. You've heard about the stepped-up random bag checks of people. They'll be checking for briefcases, strollers, and, in fact -- baby strollers. And, in fact, you also heard them say during that press...
DOBBS: Jason...
CARROLL: ... they're going to be asking people not to bring in a bag or a backpack if you don't have to.
(CROSSTALK)
DOBBS: Jason, let me ask you this. Is there a greater presence of New York Police, law enforcement there at Penn Station, which is certainly among the two most -- two busiest subways in the country -- in the city?
CARROLL: We have seen some police. But I have to be honest...
DOBBS: Yes, you do.
CARROLL: I think because New York City has always been under a heightened state off alert recently, I don't think people are really going to recognize the increased police that we have seen, simply because here in New York we're so accustomed to seeing them anyway.
DOBBS: Jason Carroll. Thank you very much, from Penn Station.
Our Justice correspondent Kelli Arena, now from Washington. Kelli, what is -- what are your sources at the FBI telling you tonight about this threat that the New York authorities obviously deemed both specific and credible and actionable?
KELLI ARENA, CNN JUSTICE DEPT. CORRESPONDENT: Well, specific, yes, Lou. But I'm not hearing the word "credible."
I was told that, as you heard, the information came in several days ago, that it was run down, that it was analyzed. What I have been told by several law enforcement sources is that there was-- there was no way to corroborate the information. I was also told that it was determined that it was not viable, that the plot was not a viable plot.
We did hear the mayor suggest that there was a news organization that had this information and was asked to hold it. When I asked what that was about, I was told that it was the information regarding baby strollers, that there was information that came in suggesting that baby strollers would be used as a way to transport explosives. And that was the information that law enforcement did not want out, because that would have jeopardized sources of that information.
DOBBS: And to be clear, that information coming tonight from the mayor, Commissioner Ray Kelly, and from the FBI. The news organization holding that information.
ARENA: That's right.
DOBBS: Kelli, thank you very much. Kelli Arena from Washington.
Our senior Pentagon correspondent, Jamie McIntyre, reports tonight that some of the information that led to this mobilization and announcement of the threat, the public announcement of this threat, resulted from a raid conducted in Iraq. Jamie?
JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, just to be precise, Lou, what we're reporting, according to a well-placed senior military official, is that a raid conducted in Iraq last night was the result of the same intelligence about the threat to the New York City subway system. You heard New York City officials say just a short time ago, the mayor and police chief, that they were aware of this threat for some time, but they didn't announce it so that operations could continue.
Sources tell CNN that one of those operations was a raid in a town south of Baghdad called Musayab (ph), where several al Qaeda operatives were rounded up who may have been connected to this threat. Again, the raid by CIA and FBI officials, with the support of the U.S. military, was conducted in an attempt to thwart the possible threat against the New York City subway station. Hence the hint you heard from New York City officials that the matter may be resolved in a couple of days.
But it was a highly classified operation. And it's not clear we're going to get any details of exactly who was captured and what kind of intelligence they recovered. Although I am told by a well- placed official that they did get some very valuable intelligence, along with these al Qaeda operatives rounded up in a raid south of Baghdad last night.
And that's why the officials now felt comfortable to go ahead and make the -- make the statement public, take the precautions. They didn't feel the attack was imminent. They wanted time to try to round up some of the people who may have been behind it.
Lou.
DOBBS: Jamie McIntyre from the Pentagon. Thank you.
Still ahead here, we'll have the very latest for you on the terror alert in New York City.
Also, major developments in the White House CIA leak investigation today. And a White House that is simply under a storm.
As well, how companies hard hit by Hurricanes Katrina and Rita are missing major construction contracts. We'll be live from New Orleans with that story.
And a new scandal over the failure of the federal government to enforce our immigration laws --a widening scandal, a profound scandal. That special report.
And a race against time in California. Firefighters battling to contain a huge blaze near Los Angeles.
(COMMERCIAL BREAK)
DOBBS: President Bush tonight faces rising pressure on two major political fronts, over the White House CIA leak investigation, and plummeting support for the war in Iraq.
In the White House CIA leak investigation, one of the president's most trusted advisers, if not most trusted, Karl Rove, will give new testimony to a federal grand jury investigating the CIA leak case.
At the same time, President Bush today used some of his strongest language yet to warn Americans about the global threat from radical Islamist terrorists.
Bob Franken, in Washington, reports on the intensifying investigation in the White House CIA leak case, now in its 645th day. And Dana Bash, at the White House, reports on the president's blunt warning today about the threat from radical Islamic terrorists.
We begin with Bob Franken. Bob?
BOB FRANKEN, CNN NATIONAL CORRESPONDENT: And over that period of time, Karl Rove will have testified four times when he makes his next appearance before the grand jury.
As we thought that this was coming to a head, we now learn that the prosecutor, Patrick Fitzgerald, has asked that Karl Rove appear again. Karl Rove's lawyer says, however, there is no target letter -- a target letter is what is sent to somebody who can expect to be indicted.
As a matter of fact, we're told that no charges have been guaranteed by the prosecutor. However, this is an investigation that has meandered. Patrick Fitzgerald was appointed after the hubbub that came up in the July 2003 disclosures that identified Valerie Plame as an undercover CIA operative. She, the wife of a man who had been very critical, very critical of the Bush administration's claims over Iraq and weapons of mass destruction.
It has gone on a very long time. Reporters have been forced to testify. One of them was forced, Judith Miller, as we all know, after 85 days in jail.
We had thought we had finally come to the point where it was time for some answers from the prosecutor. But Lou, it looks like he still has questions.
DOBBS: And the grand jury wrapping up at the end of this month. And presumably, in the 11th hour we're going to see some of those questions answered. And one of them, whether or not this investigation will lead to indictments.
We thank you very much. Bob Franken.
The White House is refusing tonight to comment at all on Karl Rove's decision to once again testify.
Dana Bash reports from the White House. Dana?
DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Hi, Lou. Well, no comment has been the only comment here at the White House for several months when it comes to this investigation. They call it an ongoing investigation. And that's that.
One thing I should note to what Bob was talking about, Karl Rove, there is another senior official here, Scooter Libby, the vice president's chief of staff, whose lawyer last week told CNN had not had any contract with the special prosecutor and had no understanding that he was at all under investigation or a target of the investigation, or that he would be called back before the grand jury.
Lou, we have not heard back from his lawyer despite repeated attempts to find out if that has changed. But I can tell you that that is being very much watched behind the scenes here at the White House.
In public, as you mentioned, what the White House tried to do today is to get Mr. Bush to talk about Iraq, the other issue that the White House thinks is really pulling down the president's poll numbers.
(BEGIN VIDEOTAPE)
BASH (voice over): With support for Iraq at an all-time low, the president cast his unmistakably familiar stay-the-course refrain in new stark terms.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We're facing a radical ideology with inalterable objectives to enslave whole nations and intimidate the world. BASH: Mr. Bush tried to put near-daily terrorism in Iraq in a global context connected to bombings in Bali, London and Egypt.
BUSH: Focused ideology, a set of beliefs and goals that are evil, but not insane.
BASH: And as he urged patience in Iraq, the president compared U.S. fights against communism and fascism to terrorism, saying its leaders seek a totalitarian empire.
BUSH: Enabling them to overthrow all moderate governments in their region and establish a radical Islamic empire that spans from Spain to Indonesia
BASH: He spoke in a strikingly personal way about Osama bin Laden, chiding him as a hypocritical son of privilege.
BUSH: He assures them that his -- that this is the road to paradise, though he never offers to go along for the ride.
BASH: To critics who say war in Iraq created more radical terrorism, this rebuttal...
BUSH: I would remind them that we were not in Iraq on September the 11, 2001. And al Qaeda attacked us anyway.
BASH: But Democrats, emboldened by Mr. Bush's political struggles, hit back.
SEN. JOHN D. ROCKEFELLER (D), WEST VIRGINIA: I think the president is wrong about that. I think what is going on in Iraq has enormously fueled the war on terrorism, it's given hope to lots of new iterations, new forms of terrorist groups all around the world.
BASH: The White House promised this speech would contain unprecedented detail. Aside from the rhetoric, the sole new nugget of hard information about the fight against terrorism, it was boasting of 10 thwarted attacks, three inside the U.S.
BUSH: Of course the enemy is wounded, but the enemy is still capable of global operations.
BASH: But he did not elaborate. And it was not on this fact sheet released with the speech. Aides pointed to a 2003 plot to blow up a New York bridge and one involving Jose Padilla, accused of planning a dirty bomb attack. They were not prepared to back up the rest.
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Those are two off the top of my head. I'll be glad to see what additional information we can get you.
(END VIDEOTAPE)
BASH: Now, McClellan earlier today said that a lot of that might be classified. But we understand late tonight that they actually will be releasing some more information to back up the cases that the president vaguely referenced in the speech today.
Wolf. Excuse me -- Lou. Sorry.
DOBBS: That's fine, Dana. Thank you very much.
An American soldier today was killed in Iraq in a roadside bomb attack in northern Baghdad. One thousand nine hundred forty-seven of our troops have now been killed in Iraq.
Insurgents also attacked Iraqis today. A suicide bomber killed 10 Iraqis near the Iraqi Oil Ministry. And eight Iraqi civilians were wounded in a separate bomb attack in Baghdad against a convoy of U.S. security contractors. None of the contractors was injured.
A former U.S. Marine who worked in the White House is tonight under investigation for allegedly stealing classified information. At the same time, a former Philippines national police official linked to the Marine has been indicted for passing information to the government of the Philippines.
Kelli Arena has the story. Kelli?
ARENA: That's right, Lou. Michael Ray Aquino stands accused of conspiring to share classified information that he received with both current and former high-ranking officials in the Philippines.
(BEGIN VIDEOTAPE)
ARENA: Michael Ray Aquino, a Filipino national who was in the United States on an expired visa was arrested last month.
ALBERTO GONZALES, U.S. ATTORNEY GENERAL: We take all investigations, of course, very, very seriously, and particularly investigations that might involve jeopardizing very sensitive information relating to the actions of our government.
ARENA: His lawyer says he didn't know the information he was receiving was classified. He faces up to 15 years in prison.
The FBI analyst who allegedly passed the information to Aquino is also in custody. His name is Leandro Aragoncillo. In a criminal complaint, the government charged he allegedly stole classified information from FBI computers, but the accusations against Aragoncillo go even further. Government officials say he also allegedly stole documents from the White House when assigned there as a Marine.
Aragoncillo, who lives in New Jersey, remains in custody without bail. Government officials say he's cooperating with the investigation. But his lawyer won't comment. Neither will the White House.
MCCLELLAN: Well, it's an ongoing investigation. And when there is an ongoing investigation like this, we refer comments to the proper authorities. And the proper authorities would be the Department of Justice. We will continue to cooperate fully. ARENA: Sources say while the accusations are serious, the information they believe was stolen does not pose a major threat to national security.
(END VIDEOTAPE)
ARENA: Instead, those sources say that it's more politically damaging, putting the United States smack in the middle of a battle between Philippine President Gloria Arroyo and those who would look to topple her government. Some of the stolen documents, according to our sources, were negative dossiers on Arroyo and other current leaders.
Lou.
DOBBS: And Kelli, while talking about the limited damage that may result, the fact is that for the first time a spy has been allegedly found in the White House. And the fact is that, in the midst of a war on terror, and after 9/11, it has taken considerable time and effort to discover this spy.
ARENA: You are absolutely right, Lou.
DOBBS: Kelli, thank you very much. Kelli Arena, from Washington.
One day after the guilty plea of a former Pentagon analyst who admits to spying for Israel, Israeli officials are denying they have ever spied against the United States.
Former Pentagon analyst Larry Franklin pleaded guilty yesterday to conspiracy charges for passing classified information to Israeli government officials in exchange for other unspecified information. He admits to discussing that information with an Israeli embassy official and members of an Israeli lobbying group. But top Israeli government officials deny any knowledge of Franklin's actions.
Joining me now for more on the escalating CIA-White House leak investigation now in its 645th day, our senior legal analyst, Jeffrey Toobin. Jeffrey, Karl Rove has not been offered apparently immunity. He's going back for a fourth time. This doesn't -- this does not look good for him.
JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: No. But we have to remember that grand jury investigations are sort of like icebergs. Most of what goes on is below the surface, and we don't know. But there is no scenario in which testifying for the fourth time at the end of an investigation is good for Karl Rove.
This is obviously a distracting, nerve-wracking, uncomfortable experience for him. And he is not certain that he will avoid indictment.
DOBBS: And apparently he has not been assured that he is not a target of this investigation.
TOOBIN: That's right. He is certainly in the category of what's known as subjects. There are witnesses who are simply people providing information. There are targets who are likely to be indicted, and subjects who are people who are being examined.
In a funny way, he is in worse shape than most subjects, because any defense lawyer in a normal circumstance would tell a subject, don't testify, don't give them ammunition, take the Fifth. But because President Bush has promised all of his people will cooperate, he keeps going back and back, thereby exposing himself to all sorts of problems that way.
DOBBS: Are you suggesting, then, that if he were to take the Fifth Amendment, that the Bush administration would have -- the Bush White House would have no choice but to relieve him of his duties?
TOOBIN: Exactly. I think President Bush has said that in so many words, that anyone who takes the Fifth will be gone. Taking the Fifth means you can't have the words used against you, but it doesn't mean you can't lose your job.
DOBBS: Absolutely. And is -- you have been watching this case, obviously, very carefully. Is it your sense that Fitzpatrick is getting near a conclusion, and in a likelihood that someone will be indicted after so much effort and time?
TOOBIN: Yes to the first. Don't know to the second.
Yes, it does seem like he is wrapping things up. This has gone on absurdly long. He is obviously very zealous. As we know, he is the guy who put Judy Miller in prison for all those months.
But he is also known as very much a straight shooter. He's not a political person. And my sense -- and I know him a little bit -- is he is not going to be swayed one way or another by the obvious political currents. And he is going to indict somebody only if he thinks he can prove it beyond a reasonable doubt. And based on what's public, there is really no way of knowing whether he can make a case at this point.
DOBBS: My enthusiasm for the special counsel is perhaps not -- is certainly mitigated by what I see as a trouncing of First Amendment values that should never be tainted. But we defer to your judgment. Thank you, Jeffrey Toobin.
TOOBIN: OK.
DOBBS: Still ahead tonight, the latest on New York City's subway alert after specific threats of a terrorist attack.
Also, a possible cancer breakthrough, the vaccine that could save thousand of lives next. And remarkable, remarkable trial results.
The government is failing to prosecute companies that hire illegal aliens. They're failing to do almost anything right in supporting the laws of this country. Our special report is next.
Stay with us.
(COMMERCIAL BREAK) DOBBS: Updating you now on the top story of the evening, New York City Mayor Michael Bloomberg says officials have received a specific threat against New York City's subway system. New York Police Commissioner Ray Kelly says that threat indicates the subway system could be the target of a terrorist attack within the coming days.
Military sources tell CNN the same intelligence that led to this threat also led to a raid against suspected al Qaeda operatives in Iraq. That raid overnight.
Hundreds of police officers here in New York City have been mobilized to move into subway stations around the five boroughs in the wake of this threat. At least 4.5 million New Yorkers take the subway each day. And, of course, we will be bringing you details on the story as the -- as developments warrant.
Turning now to Southern California, firefighters there tonight are making progress in their battle to contain fierce wildfires in the hills of Riverside County. But hot winds could move back into the area tonight. They are in fact expected, and they could cause those fires to spread.
Fires have scorched some 6,000 acres. Earlier today, helicopters, air tankers were flying into the region to put out wildfire hot spots, at least to try to do so with water and fire retardant.
In Pasadena, in Southern California, firefighters rushing to put out a mansion fire before it spread to surrounding brush. The mansion, which has been used as a set for movies, was under renovation. It was completely destroyed.
In southern Georgia and the Carolinas tonight, cleanup continues after Tropical Storm Tammy. That storm went ashore last night, dumping as much as 10 inches of rain in some areas. More than 16,000 residents lost power.
And in the northern plains, one of the earliest major snowstorms on record. Parts of North Dakota, Montana and Wyoming hit by as much as two feet of snow overnight. That storm knocked out power to more than 10,000 homes.
In Washington today, the head of the U.S. Army Corps of Engineers declared that New Orleans is, in his words, essentially dry. General Carl Strock says un-watering of the Crescent City is complete as of today. However he said there may still be pockets of standing water and some places in the Ninth Ward.
Meanwhile, nearly all the federal money for rebuilding the Gulf Coast is going to companies outside the region. Less than 4 percent of federal aid has gone to companies in Alabama, less than 3 percent to those in Louisiana, and less than 2 percent in Mississippi.
As a result, local companies hard hit by this storm and -- they're missing out on the chance to rebuild and the opportunity to rebuild their businesses as well as their lives.
Lisa Sylvester reports.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): As New Orleans rebuilds, local union workers say they're being shoved aside. Contractors are shipping in out of state workers willing to work for half of the going rate and no benefits.
The White House suspended the Davis-Bacon Act that allows rebuilding companies to pay less than the prevailing wage.
Tiger Hammond says 60 electricians from areas hardest hit by Katrina were hired to make repairs at the Naval Air Station at Belle Chasse, a 20-month project. But after only four weeks on the job, they were told their services were no longer needed.
TIGER HAMMOND, IBEW LOCAL 130: My God, something -- this is not only a shame, it's a sin, it's a crime. Something needs to be done. And I hope somebody can do something to get our city workers back. They have city jobs, get our local people to get local jobs.
SYLVESTER: The contractor BE&K says they let electricians go because the backlog for the work declined, not because of lower wages.
Louisiana contractors say rebuilding after Hurricane Katrina should be an engine for economic development in the battered Gulf region.
Department of Homeland Security records obtained by CNN show as of last week, 91 percent of Federal Emergency Management Agency Katrina contracts have gone to firms outside of Alabama, Louisiana and Mississippi. The Department of Homeland Security says the federal government is trying to funnel work to local companies and has set up a special registry for small businesses.
Local contractor, Luis Musa, says large, national companies like the Shaw Group are getting lucrative contracts. Small subcontractors without connections are being shut out.
LUIS MUSA, GENERAL CONTRACTOR: You know, this city doesn't have enough contractors but it still breaks my heart that these big companies are coming in and the smaller guys who been here for a long time building the city and renovating a whole life here, you can't get the work right now.
(END VIDEOTAPE)
SYLVESTER: And today the head of FEMA on Capitol Hill, he announced that millions of dollars in contracts will be reconsidered, will be re-bid. So far FEMA has handed out $1.5 billion in contracts, and 80 percent of those were no bid.
Lou.
DOBBS: No bid, and to the credit of the new director of FEMA saying that isn't the way he wants to do business and that at least injecting some prudence and responsibility desperately needed in all parts of our federal government, but particularly in this instance at FEMA. Thank you very much, Lisa Sylvester.
That brings us the subject of our poll tonight. Do you believe companies in the Gulf region should be given first priority when it comes to rebuilding contracts? Yes or no? Please cast your vote at LOUDOBBS.com. We'll have the results, coming up.
The latest report on FEMA fraud involves two inmates at a Louisiana prison, almost 200 miles away from New Orleans. Those inmates called FEMA's toll-free hotline to apply for hurricane relief. They even gave the prison address as their address. And sure enough, those inmates later received checks for $2,000 each. The sheriff's office however intercepted the checks. The FBI and FEMA are investigating.
U.S. Immigration and Customs officials tonight announced they have arrested seven Mexican illegal aliens working at a U.S. Customs facility in California. At least one of those illegal aliens had already been deported from the United States. Our immigration enforcement at work.
But even as immigration agents occasionally clear out some illegal aliens from sensitive national security targets, critics fear there is no reason that their employers won't simply replace them with more illegal aliens.
Christine Romans reports.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN CORRESPONDENT: Illegal aliens are working in airports, nuclear power plants, chemical facilities and military installations. Hundreds have been caught painting ships, even refitting the U.S. Navy's P-3 Orion aircraft. And incredibly, three illegals have been giving language training to U.S. special operations soldiers at Fort Bragg.
Immigration and Customs Enforcement says it is investigating several of the contractors who hired the illegal workers, but acknowledged it's very difficult to prosecute employers. Critics say until the employers take responsibility, illegals will keep coming, putting our national security at risk.
REP. SUE MYRICK (R), NORTH CAROLINA: ... we need to seal our borders. And I agree with that. But then we also need to deal with the demand side, which is the job side. And as long as people keep hiring illegals they're going to continue to come into the country.
ROMANS: She wants companies who knowingly hire illegal workers to be fined $10,000 per worker. And she wants a mandatory database for employers to check with homeland security before hiring anyone. Meantime there is no reason to think illegal aliens won't be hired at high security locations again.
DEBORAH MEYERS, MIGRATION POLICY INSTITUTE: It would be very difficult for any of these employers to say that won't happen again, particularly when it is often the subcontractor who is doing the hiring rather than the employer himself. This actually provides a little bit of distance; it's a secondary layer. The employer is a little bit removed from the direct hiring process. And that's extremely common.
ROMANS: For example, leading defense contractor Parsons Evergreen blames its subcontractors who hired 48 illegal aliens for Parsons contract work at Seymour Johnson Air Force Base.
(END VIDEOTAPE)
ROMANS: Another seven were removed this week from Idaho's Mountain Air Force Base. The illegal aliens know that the weakest fraudulent documents are all employers need. And many employers know the government won't or can't prosecute them when they hire illegal aliens who have fraudulent documents.
DOBBS: Those fake documents being used even in instances where we have sensitive national security issues, whether it be Air Force bases, whatever -- the U.S. Customs facilities, knowing that that is simply a fig leaf and gives them permission to proceed with this.
ROMANS: Clear them out. But a lot of people think they're going to be replaced with more workers who are equally illegal.
DOBBS: Congressman Sue Myrick, North Carolina -- she looks like she is focusing on the issue.
ROMANS: She is.
DOBBS: Good for her. Christine Romans, thank you.
Still ahead here, New York City subway alert tonight. New York City Police have been mobilized to respond to the latest specific new terrorist threats against the nation's biggest subway system.
And hope in the fight against cancer, a new vaccine that could well save thousands of lives each year.
And a medical mystery in Toronto, Canada. Nursing home residents are dying. We'll be talking with the doctor directly involved in the investigation, one of the world's leading microbiologists.
Stay with us.
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DOBBS: Tonight there appears to be a major breakthrough in the fight against cervical cancer. A new vaccine is showing remarkable results in preventing early forms of the disease, preventing that disease which kills an estimated 3,000 American women each year.
Now that is so easy to raise hopes and, in point of fact, hype results, but this experimental vaccine has proved to be, so far, 100 percent effective in some instances. It could be on the market as soon as next year. Cervical cancer is a disease caused almost exclusively by a highly common sexually transmitted virus.
Also tonight, a global response to a global health threat. Health experts around the world met at the State Department to discuss the possibility of a bird flu pandemic. They discussed ways to coordinate their response to a bird flu outbreak in humans that could kill millions.
(BEGIN VIDEO CLIP)
PAULA DOBRAINSKY, U.S. UNDERSECRETARY OF STATE: We are witnessing a trend, a trend where the numbers have gone up. And also the number of deaths have gone up of humans. And in this sense, we are concerned. We want to make sure we are prepared. And that we take those kinds of measures and actions at an international level, not only on the national level.
(END VIDEO CLIP)
DOBBS: The president met with representatives from the world's leading flu vaccine makers tomorrow to discuss their preparations for a bird flu pandemic.
In Toronto tonight, the death toll is rising after the outbreak of a mystery respiratory illness. 17 elderly residents at a Toronto nursing home have now died from the disease which has sickened more than 80 people. Officials say the death toll could climb higher. Toronto officials say the illness is not related to SARS, the respiratory illness that killed 40 people in city some two years ago.
Joining me now from Toronto with his insight into both this new disease, threat of a bird flu pandemic, is Doctor Donald Low, medical director of the Ontario Public Health Labs. And one of the world's leading microbiologists. And a good friend of the broadcast. Doctor, good to have you here.
Is it -- is there any, any clue right now as to what the nature of this mystery illness is that is claiming lives in Toronto?
DR. DONALD LOW, ONTARIO PUBLIC HEALTH LABS: Yes, we have got it -- the later -- late this morning, around noon, two cultures that were taken from autopsies that were done on late Monday night have been growing Legionnaires' disease.
DOBBS: It is Legionnaires' disease.
LOW: Looks like it is Legionnaires' disease. Another autopsy that we did on Wednesday using a special stain came up positive as well.
What is -- one of the things that has set us back is one of the tests that we rely on for diagnosing Legionnaires' disease, that is the urinary test, has been negative in all of the patients we have tested to date. But we got here real tissue that was infected, and sure enough, we have grown Legionnaires'.
DOBBS: Well, you are, as you know, making news tonight because to my knowledge that is the first time that we have heard the actual cause, and as matter of fact reports as recently as today saying Legionnaires' disease along with SARS had been ruled out as a cause of these deaths and illness.
LOW: That's correct. It's fortunate that -- we were able to get those critical autopsy specimens on Monday night. And we hope that subsequent autopsy specimens taken yesterday and today will, will even just reconfirm what our findings are.
DOBBS: Now, does this suggest a different approach in any treatment differences, any in point of fact quarantine that might be necessary because it is Legionnaires?
LOW: No. In fact, Lou, this is so important to know what the diagnosis is, because it not only helps direct therapy, but it allows us to manage this outbreak better. This is a disease from the environment. It's not a disease that is transferred from person to person. So, there is no risk outside of what happened in that nursing home.
DOBBS: Well it is -- it is -- it is good news you have been able to identify the disease. And it also has the to, even against the tragedy of so many lives already having been lost, it has to at least ease some fears amongst your fellow citizens in Toronto.
LOW: That's for certain.
DOBBS: Dr. Donald Low, we thank you for being here. We appreciate it.
LOW: Pleasure as always.
DOBBS: Still ahead, the latest on a new terrorist threat against New York City at the height of the subway system's evening rush hour. We'll have the latest for you.
And President Bush returns growing calls for a pullout from Iraq. General David Grange's response coming up.
And alternative nation: are you ready for the new push toward alternative energy? We'll have a special report next.
(COMMERCIAL BREAK)
DOBBS: More now on the developing story out of New York City. Police have raised security levels on the city subway system after the FBI received a specific terrorist threat against the city. New York police commissioner Ray Kelly tonight saying the threat indicates the subway system could be the target of a terrorist attack in the coming days.
Mayor Michael Bloomberg saying New York will remain on heightened orange alert where it has been since September 11. Mayor Bloomberg urging New Yorkers to remain vigilant and to report anything suspicious. Officials say this is the most specific threat ever to the city's subway system. CNN, of course, will continue to bring you all details as the story unfolds. President Bush today declared Syria and Iran deserve no patience from the victims of terror. The president said countries that support and harbor terrorists are equally as guilty of murder.
Joining me now, General David Grange and General Richard Sherlock, assistant commander of the 98th Division who has just returned from Iraq.
General, let me ask you first, General Sherlock, what do you think the United States should be doing to stop these terrorists from crossing over from Syria and Iran?
GEN. RICHARD SHERLOCK, ASST. COMMANDER 98TH DIVISION: Well, the Iraqi army will be very successful at that. And one of the things they're able to do very well is tell the difference between what looks right and what doesn't look right in their country. And as they become more and more proficient and are able to take areas of operation on their own, they will be able to be very effective at stopping those kinds of things.
DOBBS: I guess the question, when it will be effective, when will we see, if ever, the control of the borders and to stop insurgents. And General Casey in testifying before Congress, provoked the wrath of some U.S. senators, because he was not giving them the information they wanted, which is, when do we get out? When do we have the Iraqis ready?
You have been an important part of the training for the Iraqi military. Let me ask you -- give you the same opportunity. When do you think that the Iraqis will be ready to move in to combat with their own people and allow the American forces at least to be in the rear echelon?
SHERLOCK: Well, that is a continuous process. That's something that will continue to evolve. Last year was a year of dramatic change for the Iraqi army and the Iraqi police force. When I arrived in Iraq in July of 2004, there was only one operational unit of the Iraqi army. When I left, there were over 110 battalions of Iraqi army and police that were operating with conjunction with coalition forces.
DOBBS: General Grange, I want to turn to another issue, and that is the fact that now we have received word that the Pentagon is going to start reimbursing our soldiers and Marines there, our men and women in uniform for things like their armored vests that they bought, their bulletproof vests. What in the world are we doing? Why should our young men and women in uniform have to buy their own bulletproof vests?
GEN. DAVID GRANGE, U.S. ARMY (RET): Well, when it comes to protective vests, Lou, they shouldn't have to. And they should be reimbursed if that's the case. For 30 years, a vest was an issue with myself. The only reason I had them early on in certain units because I was in Special Operations where in the Rangers we developed our own vests. Of course, the government paid for those.
But there's some equipment that is just nice to have equipment. And some of those things probably shouldn't be reimbursed. But protective vests, yes.
DOBBS: Nice to have certainly a protective vest, as you put it, up-armored Humvees, that sort of thing?
GRANGE: Absolutely. But then again, there is some gee-whiz stuff that just -- people get from civilian vendors, and I don't think that this has anything to do with that type of reimbursement.
DOBBS: Let me ask you the same thing I asked General Sherlock. When do you sense that we are going to really have the Iraqis ready to take our place, and specifically then -- when would that permit us to get our young men and women out of Iraq?
GRANGE: Well, it will take some time. And the reason being is it's not just training people to shoot, move and communicate. They have to develop an entire NCO corps, a sergeants' corps in the Iraqi army, which they had not.
Second, what's not briefed in these hearings is that the units are going to change their capability from totally ready, to somewhat ready, to not ready depending on leadership, training, equipment, et cetera. Same thing happens in the United States Army, and that system is in place right now to rate those units. That's not explained very well.
DOBBS: General Sherlock, we're out of time. Have you got them ready -- the NCOs for the Iraqi army, their combat leaders?
SHERLOCK: They're getting better all the time. That's one of the things we are helping set up now is the NCO corps and academies to grow that capability in the junior leaders.
DOBBS: General Sherlock, General Grange, thank you, gentlemen.
GRANGE: Thank you.
SHERLOCK: Thank you.
DOBBS: Coming up next -- energy solutions. Believe it or not, we are starting to see some innovation, and we may in fact curb our dependence on foreign oil, if, if people like Governor Ed Rendell are listened to. He'll be talking next.
Stay with us.
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DOBBS: President Bush has responded to record high gasoline prices by calling upon Americans to conserve. One state is taking action to try to cure at least in part its dependence on foreign oil. Pennsylvania hoping to build the nation's first commercial plant to convert coal scrap into diesel fuel.
Governor Ed Rendell says the project will also create hundreds of jobs for his state. Joining us tonight from the capital, Harrisburg. Good to have you with us, Governor. This plant, the first of its kind, to take coal scraps and effectively create a fuel that is an alternative to foreign fuel, do you think it is going to work soon enough to be helpful?
GOV. ED RENDELL (D), PENNSYLVANIA: I do, Lou, especially if we get the federal government actively involved. To make this plant work, the state of Pennsylvania, the state itself and some businesses, metals manufacturer, transportation people -- we agreed to off-take all of the fuel, the 40 million gallons of non-sulfur -- non-sulfur diesel fuel that this plant is going to produce for 10 years. That enabled them to get Wall Street financing.
We have been dealing with the Defense Department as an off-taker for plants like this all across the country. Montana, West Virginia, Pennsylvania. It could be incredible.
Consider this fact, Lou. Pennsylvania has got 72 billion tons of coal reserves. That's enough to take care of the country's needs, the same imported oil, for 40 years.
DOBBS: Well, to start a contest, the governor of Montana also reminds us that, through his coal deposits, he can generate more energy than Saudi Arabia has oil. So Pennsylvania and Montana can drive us to the future.
RENDELL: And there are eight other major coal-producing states. This technology works. You know it works in South Africa. It's going to work in Pennsylvania. I have written the president twice and asked him to get behind this and let the Defense Department become an off- taker. If we get behind this, we can unlock energy independence, good economic development for the states, good jobs, as you said, and a better environment.
DOBBS: Well, you are to be congratulated for your leadership. As you know, we are very supportive of anything that removes our dependency on the rest of the world for critical commodities and resources, of course energy foremost among them. How soon will you be able to have an impact? When will this plant be up and running?
RENDELL: This plant will break ground in April and be up and running two years thereafter.
This plant takes six -- produces 60 million gallons of fuel. We have a plant ready to go in western Pennsylvania that can quintuple that, and we can get, by the time President Bush leaves office, if we make this a major effort, we can have 20 or 25 of these plants up and running in the country.
DOBBS: Well, good for you. And, Governor Ed Rendell, it's always good to talk with you here. Thank you.
RENDELL: Thank you, Lou.
DOBBS: Still ahead, the results of our poll tonight. Stay with us.
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DOBBS: Now the results of our poll tonight. Overwhelming result, in point of fact. Ninety-four percent of you saying you believe companies in the Gulf region should be given first priority when it comes to rebuilding contracts.
Thanks for being with us tonight. Please join us here tomorrow. For all of us, good night from New York.
ANDERSON COOPER 360 starts right now. Anderson?
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