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Lou Dobbs Tonight

Security and Iraq's Historic Election; President Bush Delivers Fourth Speech on Strategy for Victory in Iraq; Patriot Act Battle Rages; A California Statute Offers In-State Tuition to Illegal Immigrants;

Aired December 14, 2005 - 18:00   ET


LOU DOBBS, CNN ANCHOR: Good evening, everybody.
Five hours from now, Iraqis begin voting in an historic general election that could determine whether our troops come home soon from Iraq. As many as 15 million Iraqis will vote at more than 30,000 polling stations to elect a new parliament. The Iraqi president says these elections are a victory over the terrorists.

Aneesh Raman is live in Baghdad and has the very latest for us -- Aneesh.

ANEESH RAMAN, CNN CORRESPONDENT: Lou, good evening. It is now, as you say, election day in Iraq. For U.S. troops here, the goal is to stay out of sight, have no major attack, and to have Iraqis be the face of security.


RAMAN (voice over): Election eve, and Baghdad is a ghost town. Shops are closed, police out in force. The country under near martial law. And as planned for months inside each of the some 6,000-plus polling stations in Iraq, intense security.

At this Baghdad school-turned-election-site, 30 Iraqi troops ready. But even intense security has limits.

"Suicide bombers are the most dangerous thing we face, but we have a joint plan between soldiers and police to protect the centers," says Sergeant Haidr Amin (ph). "Anyone that comes close will be stopped, searched and checked."

And the job won't be finished when the last ballot is cast.

(on camera): The security forces have been here for a few days now setting everything up. They've actually been living inside, and they'll stay here for a few days after the election to make sure that the ballots themselves are secure before they go to the election headquarters.

(voice over): Keeping this election legitimate is already becoming a task in itself. Iraqi police tell CNN they found a truck with thousands of fraudulent ballots. The driver and the vehicle from Iran. Meddling by outsiders not welcome here, and one reason why U.S. forces are suddenly nowhere in sight. They've been told to stay a good distance from polling stations.

COL. EDWARD CARDON, U.S. ARMY: Well, the good news about the Iraqi security forces, they're getting stronger every day. The bad part is they still have troubles with their logistics.

RAMAN: The setup for October's referendum was similar and widely considered a security success, with only a limited number of small attacks. And these Iraqi soldiers and police tell me they're hoping for the same outcome this election day, but they also know with borders closed, travel within the country prohibited, cars kept off the streets, and curfews extended all until Saturday, the security comes at a high cost.


RAMAN: And Lou, all of those security measures go away on Saturday. That is when officials fear we could see the violence return -- Lou.

DOBBS: Aneesh, thank you very much.

Aneesh Raman, reporting live from Baghdad.

President Bush today declared these elections are a watershed moment in the story of freedom. The president said the new Iraqi government will be the only constitutional democracy in the Arab world, and he made those comments in his latest and fourth speech defending the Iraq war and what he calls his strategy for victory.

Dana Bash reports from the White House.


DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice over): On the eve of momentus elections in Iraq, the president was still defending his decision to go to war 1,001 days earlier. In unusually stark terms, he accepted responsibility, but building his case based on weapons that never turned up

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: And it is true that much of the intelligence turned out to be wrong. As president, I'm responsible for the decision to go into Iraq. And I'm also responsible for fixing what went wrong by reforming our intelligence capabilities. And we're doing just that.

BASH: WMD or not, Mr. Bush insisted again Saddam Hussein was a threat and war was justified, lashing out at critics who said he intentionally misled Americans. Addressing lingering doubts about why he went to war and his own credibility is critical to the president's campaign to convince weary Americans it's crucial that U.S. troops stay.

BUSH: We are in Iraq today because our goal has always been more than removal of a brutal dictator. It is to leave a free and democratic Iraq in its place.

BASH: This was the forth and final Bush address in two weeks to try to wrestle back control of the Iraq political debate. Bush aides and allies say these speeches were necessary but admit the President's Iraq legacy now hinges on whether the Iraqi elections begin to change the violent, uncertain landscape and lead to enough stability for American troops to start coming home.

VIN WEBER, REPUBLICAN ADVISER: The stakes couldn't be much higher. This election is critical because it's the last opportunity for some time for the American people to look at Iraq and say, yes, we've succeeded, this is why we came, and it's working.


BASH: Although the president was careful to urge patience, he did call these elections -- he hopes they will be, at least -- a watershed event in the Middle East. But he did warn that the day Iraqis go to polls will be followed by days of uncertainty.

Again, the problem, the president says, is that the Americans need to worry and see that they have to wait for things that go -- excuse me, for it to continue in Iraq perhaps as early as January. They won't get the election results until then -- Lou.

DOBBS: Many days of uncertainty, Dana, as you suggest, for both Iraqis and Americans.

Dana, the president met with a number of House Democrats today at the White House to discuss the war. Tell us what you know about that meeting.

BASH: It was really interesting, Lou. You've been talking on this program this week about the inability of the Democrats to sort of get a message on Iraq.

This morning, on the Senate side, Senate Leader Harry Reid said that the president hasn't leveled with the American people when it comes to his plan on Iraq. Meanwhile, just as that press conference was ending, some House Democrats came out of the White House. They had a briefing here with the president and also some leaders from Iraq, and they were pretty complimentary. They said the opposite of what we heard from Senate Democrats.

Steve Israel, from New York, said that he got a dose of reality, something he had not heard before. But, Lou, they were very eager to say that this is something that they wished they had had many times before, because this was a first for them to actually be invited to the White House.

DOBBS: Dana, thank you very much.

Dana Bash.

And not among those Democrats meeting with the president today another leading House Democrat, a strong critic of the conduct of the war in Iraq. In fact, one who today accused President Bush of confusing the war with the war on terror, Congressman John Murtha. He wants a quick U.S. withdrawal from Iraq, a withdrawal over a period of six months. And today he said there is absolutely no link between terrorism around the world and the insurgency flaming in Iraq.

Congressman Murtha also criticized the Bush administration for using the military for nation-building missions.


REP. JOHN MURTHA (D), PENNSYLVANIA: If you have an open-ended nation- building -- and that's what we got right now, we've got nation- building by the U.S. military, and they're not -- that's not a mission for the U.S. military. I've said this over and over again, they're not good at nation-building.

And you've given them a mission which they cannot carry out. They do the best they can, but they can't do it.


DOBBS: Turning to what the Bush White House says is another critically important national security issue, the House of Representatives today voted to renew parts of the Patriot Act that were due to expire at the end of the year. But hose measures now face a tough battle in the Senate.

A bipartisan group of senators wants to introduce additional safeguards to protect Americans' privacy. The senators are concerned about measures that would allow the FBI access to business, library and other records with a court order, and measures to allow so-called roving wiretaps on every phone a suspect uses.

There are also concerns among some about the FBI's use of national security letters that compel individuals to produce documents during investigations of terrorism.

Ed Henry reports from Capitol Hill -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: This bill faces so much turbulence in the Senate today that, in fact, Majority Leader Bill Frist floated the idea of punting on this issue altogether, pushing through a one-year extension of the current Patriot Act.

The idea would be to try to put this fight off for a long time, try to work out the sticking points over civil liberties. But he's already pulled back from that amid criticism within his own party.

The sticking point, of course, as you suggest, a threatened filibuster by a growing bipartisan coalition of senators led by Democrat Russ Feingold, Republican John Sununu, who say that the civil liberties concerns trump national security concerns. That's why the senators have also been talking about at least a three-month extension to try to get past the holidays, work out those differences.

Frist throwing out the one-year extension, but conservatives in the House and Senate saying no way. They say this is such a critical tool in the war on terror, that there can be no delay, it has to be pushed through this week.

Here's Republican Senator Jon Kyl.


SEN. JON KYL (R), ARIZONA: The House of Representatives is one of the two bodies that have to agree to things, and they've made it clear that they are not going to negotiate further. They've conceded an awful lot so far, and -- so it's really not an option.

Chairman -- I mean, Chairman Specter has also made it crystal clear that somehow deferring this for another day is not an option. We're putting an awful lot into next year, and frankly, we've got more than enough on the plate next year to get done without kicking something as important as the Patriot Act down the road to be considered in that election year. So, no, that's not an option.


HENRY: Senator Frist now pushing ahead for a cloture vote on Friday morning to try to break this filibuster by the bipartisan coalition. But I can tell you, these individual senators think they have a growing number of people opposed to this Patriot Act deal. They think they can prevent Frist from getting those 60 votes and deal a loss both to Frist and to the White House -- Lou.

DOBBS: Ed, the break with Senator Sununu and the administration on this issue is remarkable. I can't recall a time that Senator John Sununu has bucked the White House or the Senate leadership.

HENRY: That's right. And there were other Republicans, like Larry Craig of Idaho, as well. Very rare for him to buck the White House, and I think that is because of these civil liberties concerns. That's what's given this such ammunition, so much fuel for the fire, if you will, because it's not just liberals making the contention, it's also some well-known conservatives, as you say, who are telling this White House they don't like this deal at all -- Lou.

DOBBS: Ed Henry.

Thank you, Ed, from Capitol Hill.

Still ahead here, how one state's low college tuition fees are benefiting illegal aliens, and why middle class Americans are losing out.

And Congress considers tough immigration enforcement measures, but will those measures pass? How much strength does this Congress have at its heart? We'll find out in the very latest.

And Wal-Mart's war, now charging it's trying to use international trade rules to expand in this country?

We'll have that special report here next and a great deal more.

Stay with us. (COMMERCIAL BREAK)

DOBBS: The House of Representatives this week is set to hold its first floor debate on our nation's border emergency, the first such debate in almost a decade. The House will debate legislation that focuses on border security and the punishment of employers who hire illegal aliens.

Christine Romans joins me now with the very latest -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, tonight tough new enforcement legislation moving ahead on Capitol Hill. It's 177 pages of interior enforcement and border security, and the House Rules Committee tonight is deciding which of more than 100 even tougher amendments will make it.

Among them, a measure mandating a fence to be built where illegal aliens have died crossing the border, a fence equipped with cameras and sensors. Also, a measure to deploy military technology on the border.

Also, another measure to deny automatic citizenship to the babies of illegal aliens born in this country. And also a requirement that local authorities and federal immigration officials begin to work together.

Now, House Republicans are hoping for legislation with teeth, while the White House, the business lobbyists, liberal groups and immigration lawyers oppose it.


MARSHALL FITZ, AMERICAN IMMIGRATION LAWYERS ASSN.: What criminalizes the undocumented population here, it doesn't do anything to create legal channels for people to come through a temporary worker program, it does nothing to create a path to legal status for the 11 million who are already here.


ROMANS: Well, that's precisely what House Republicans sought to avoid, a so-called amnesty that would be a draw to even more people to come to the country illegally. But the worry tonight among some backers of this bill is that the administration might just get its way with the Senate, and this enforcement bill could end up as some sort of vehicle for amnesty anyway in the spring.

DOBBS: Putting it in plain language, the concern is that the Republicans here are playing politics and playing with fire. And midterm elections coming up next year.

If the Senate messes with this legislation, denies border security, pulls out the legislation amendment that would require that crossing our borders be made a federal crime, not simply a federal offense, I think there will be hell to pay at the polls next year, at every poll we're looking at. The American people are too smart for the games as usual and politics I think they've probably had a belly full is a fair statement.

ROMANS: I'd say so.

DOBBS: Christine Romans, thank you for bringing us up to date, as always.


DOBBS: In California tonight, the fight is under way to strike down an utterly absurd state education policy that rewards illegal alien students while punishing middle class American citizens from out of state. Opponents say that offering illegal alien in-state tuition benefits denied to out-of-state students is an open invitation for illegal aliens to simply break the law.

Casey Wian has the report.


CASEY WIAN, CNN CORRESPONDENT (voice over): Channing Jang and Mark Hammes are seniors at the University of California, Davis. They're from Hawaii. And like other out-of-state students, pay about $17,000 a year more than students from California. Incredibly, even illegal aliens get the cheaper in-state tuition rate.

CHANING JANG, UC DAVIS STUDENT: I don't really think it's fair that illegal immigrants who can't work here legally, they don't pay any taxes, they get to have a better chance to go to university than I do.

MARK HAMMES, UC DAVIS STUDENT: Where can the state's money be better spent, given breaks to illegal immigrants who can't even continue working in the state after they graduate, or to other U.S. citizens who could stay? I know I intend to stay in California.

WIAN: Activists filed a class-action lawsuit on behalf of 60,000 out- of-state U.S. students forced to pay higher tuition in California. They say the state has been violating a federal law since it began giving illegal aliens reduced tuition in 2002.

KRIS KOBACH, UNIVERSITY OF MISSOURI: It's an incentive to stay illegally in California. And furthermore, we'll give you a very, very valuable benefit worth more than $130,000 in the UC system to stay here legally. And so it's encouraging illegal immigration.

WIAN: California is one of nine states that offer discounted tuition to illegal aliens. A lawsuit has also been filed in Kansas.

A spokesman for the University of California system says it believes in-state tuition for illegal aliens is consistent with federal law. The courts will decide who's right. But many immigration reform advocates say the policy, legal or not, is wrong.

IRA MEHLMAN, FED. FOR AMERICAN IMM. REFORM: We're depriving people who have broken no laws benefits and then extending those very same benefits to the children of people who broke the law.

WIAN: When California lawmakers first tried to approve reduced tuition for illegal aliens, the law was vetoed by then-governor Gray Davis. It eventually passed without his signature.


WIAN: Meanwhile, students like Channing and Mark are taking on massive debts, working several part-time jobs just to make up the difference in benefits offered to illegal aliens and other California resident students -- Lou.

DOBBS: And meanwhile, Congress, Casey, is thinking about cutting back student loans to the tune of $14 billion, one of the primary sources of financing for middle class and working class kids in this country who want a college education.

Thanks for bringing us the story.

WIAN: And one of the points that activists -- one of the points that activists make, Lou, is that by giving this money or these benefits to illegal aliens, you're taking more money away from citizen students.

DOBBS: Absolutely. Casey, thank you.

Casey Wian from Sacramento.

Later here in this broadcast, I'll be joined by Chris Kovak (ph), the law professor who's leading the fight to strike down California's discriminatory tuition policy.

That brings us to tonight's poll. Should states be offering in-state tuition to illegal aliens? Cast your vote at We'll have the results here later in the broadcast.

Still ahead, foreign carriers want control of our once proud U.S. airline giants. And the Bush administration seems more than willing to allow them to own those airlines. We'll have that special report coming up.

And some federal air marshals will soon find themselves grounded. Not the way you might think.

We'll have the story here and a great deal more next.

Stay with us.


DOBBS: More trouble for the struggling U.S. airline industry. The Bush administration is now proposing a rule change that will allow foreign airlines to control U.S. air carriers. Europeans are demanding that rule change is part of world trade negotiations. And apparently these days, Europe gets what Europe wants. At least in Washington.

Bill Tucker has the story.


BILL TUCKER, CNN CORRESPONDENT (voice over): Foreign airlines have never been allowed to control a U.S. airline. But the Department of Transportation wants to change the rules to allow just that, despite the fact that foreign carriers do not allow U.S. airlines to control them.

Opponents of the rule change are angry.

Two years ago, Congress passed an amendment requiring the Department of Transportation to prevent foreign control of domestic airlines.

CPT. DUANE WOERTH, AIRLINE PILOTS ASSOC.: This is a naked attempt to bypass Congress, which has -- prohibits actual control of foreigners by our airlines. And this just kind of wipes out Congress' intent in law and just skips it.

TUCKER: Farm from being an obscure rule change, the American taxpayer has a big stake in it, because they have invested billions of their taxpayer dollars in the industry. Just since 9/11, the industry has been given more than $4.5 billion outright. Since 1975, the Pension Benefit Guarantee Corporation has assumed $11.7 billion in pension liabilities from bankrupt airlines, and that number could double with the pending bankruptcies of Delta and Northwest Airlines.

Congress and others say the industry is simply too important to allow it to be controlled by foreign powers. A bill will be introduced in the House on Thursday to stop the DOT from its proposed rule change.

Congressman Oberstar is a cosponsor of the bill. In a statement to LOU DOBBS TONIGHT, the congressman notes, "The 65-year-old policy should not be overturned by the rulemaking process. Such a change should be done by an act of Congress, after open hearings and thorough debate. That is the purpose of this bill."


TUCKER: The bill's other sponsor, Congressman LoBiondo of New Jersey, says that allowing foreign control of our airlines could significantly undermine our national security interests. The rule change is being pushed by the administration as part of its trade negotiations with Europe, Lou, as you noted.

And in case you're curious, yes, the airline executives do back this bill.

DOBBS: Imagine that? These are the same fine people who have taken federal taxpayer money to support their airlines.

TUCKER: Right.

DOBBS: They have, as you reported, bankrupted their pension systems and put the retirements of their employees at risk. And they have not been able to run a profitable industry in ages. And these people support anything?

Why would anyone care what these people support or oppose?

TUCKER: Lou, that is a question...

DOBBS: Next you'll be telling me they want to own an airline.

TUCKER: In the case of United, you do have executives who want to own the airline.

DOBBS: What percent?

TUCKER: Fifteen percent. It comes up in the trade unions, and the unsecured creditors are opposing this. But Lou, who benefits if foreign owners can buy United?

DOBBS: Right. Well, the way they're running it, one benefit of foreign ownership would be presumably new management.

Thank you very much.

Bill Tucker.

Some federal air marshals may soon find themselves grounded or perhaps even on the water. In a test program, law enforcement officers will be at mass transit facilities all across the country. They will be on buses, trains and ferries. Some of these officers will be undercover, others will be in uniform.

The Transportation Security Administration says it hopes to find new ways to quickly deploy resources in the event of an actual terrorist threat.

Just ahead here, our nation's trade deficits reaching dangerous levels by any measure. What Congress is doing about it, what the White House is doing about it. It's a longer report than the efforts really warrant.

And Wal-Mart going to extreme lengths, trying to build even bigger stores around the world. We'll tell you who Wal-Mart is turning to for help.

And then, more on the rising movement to stop state schools from helping illegal aliens pay for college with in-state tuitions. We'll be talking with one law professor who is leading the national fight.

And President Bush takes the blame for invading Iraq on faulty intelligence. Former presidential adviser David Gergen joins me. He says this marks a major turn in this presidency.

He's our guest here next. Stay with us.


DOBBS: Our nation's record trade deficits with communist China and the rest of the world have again surged, again to new records. The overall trade deficit hit almost $69 billion in the month of October alone. On track to top $700 billion this year. The trade deficit with communist China alone tops an astounding $200 billion this year, nearly a quarter of a trillion dollars.

Kitty Pilgrim reports.


KITTY PILGRIM, CNN CORRESPONDENT (voice over): Congress is blaming the skyrocketing deficit on failed trade policy and communist China. That deficit on track to hit $700 billion this year.

REP. BENJAMIN CARDIN (D), MARYLAND: It shows we do not have an effective policy with China. We're allowing China to do unfair trading practices which are bringing huge deficits here in this country.

PILGRIM: Senators sent out press releases as fast as instant messages. "Behind these deficits are massive numbers of American jobs lost to foreign countries. The Bush administration should stop pretending that this dangerous pattern of increasing trade deficits is not a major problem. A message this broadcast has been hammering for years as the trade deficit has climbed up.

DOBBS: The trade deficit is at record levels. We're borrowing $2.6 billion a day. Totally unsustainable debt levels.

PILGRIM: And up...

DOBBS: I don't think this administration, frankly, nor the other one that preceded it has a clue about trade deficit.

PILGRIM: And up.

DOBBS: How can you say that all of this is so good for the United States when we've run 29 consecutive years of trade deficits.

PILGRIM: Why is American not getting the point? To the average American, the situation looks innocent. Chinese imports just in time for the Christmas season: toys, games, sporting goods, computers, adding to the festivity, the cheap prices. But there is going to be a holiday hangover, if not this season, sometime in the future, economists are saying there is no escape from the consequences.

PAUL FREEDENBERG, FRM. UNDER SECRETARY OF COMMERCE: Historically, countries that have such large trade deficits, those trade deficits are secured either by a recession or by a dramatic drop in the value of the country's currency or both, it's not something that goes on forever because the world generally doesn't accept IOUs ad infinitum.


PILGRIM: Senators giving their prescription for a fix start paying -- stop having soft peddling language with China over currency manipulation, enforce the trade rules and take action to bring cases before the World Trade Organization on theft of personal property. These are all things that they say should have been done a long time ago before the United States hit such a trade crisis that we are in now, Lou.

DOBBS: It's a trade crisis at a time when this Treasury Department of this administration -- the U.S. Treasury -- doesn't have the guts to refer to a pegged currency, the yuan, the Chinese currency pegged to the dollar about a 40 percent devaluation -- undervaluation of the yuan. If the U.S. Treasury doesn't have that kind of guts, that kind of intellectual honesty, what in the world are we going to do in trade negotiations?

PILGRIM: I think that was the single biggest issue that people brought up today, that we have to be so much tougher on the currency issue, it's absolutely critical right at this moment and it's just not happening.

DOBBS: Tough is great, I'd just like to see some honesty. Thank you very much, Kitty Pilgrim.

Today's shocking trade numbers come amid new pessimism at the World Trade Organization meeting in Hong Kong. Now pessimism is a relative term, U.S. and European negotiators urging delegates to break a deadlock that threatens this latest rounds of talk, but virtually no progress is being reported. That may not be altogether a bad result. Our trade representative, Rob Portman, today called this new round of talks a once in a generation opportunity to boost growth and cut world poverty.

Outside the summit in Hong Kong, fears anti-WTO protests continue for a second day. South Korean farmers again clashing with police. They say a WTO agreement cutting import barriers would destroy their livelihoods and put them out of business.

Tonight, there are new fears the World Trade organization is growing so strong that it is threatening this nation's Democratic process, our very sovereignty. As we have reported here on this broadcast, the WTO could soon try to eliminate congressional power over immigration and visa policy. It is now poised to award stunning new concessions to Wal-Mart. Concessions intensely opposed by local U.S. governments.

Lisa Sylvester reports.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Wal-Mart is lobbying the World Trade Organization to lift government limits on the size, height and number of stores that can be established in the country, a move that could make it easier for the giant retailer to expand into smaller communities over the objections of its residents.

SARA JOHNSON, PUBLIC CITIZEN: State and local officials really need to be aware that their sovereignty and their authority over land use and many issues is being eroded by federal trade negotiators at the WTO. SYLVESTER: Public citizens say U.S. towns, cities and states could find zoning laws challenged in international trade court. If the 1994 WTO general agreement on trade and services is changed, it could be harder to limit hours of operations and restrict growth of big box stores. Retailers deny they're trying to use the WTO as a back door to change local laws.

PAUL KELLY, RETAIL INDUSTRY LEADERS ASSOCIATION: We'll fight those restrictions, but we'll do it in the full light of day through the American public legislative process.

SYLVESTER: Wal-Mart did not provide anyone for an on-camera interview but in a statement says, "what we're interested in is the ability to open stores on the same basis as a domestic retailer overseas so that foreign and domestic retailers are treated the same."

A 2002 letter from Wal-Mart to the U.S. trade representatives office on the WTO Doha talks now under way shows the retailer pushing for even more. It's seeking to have limitations on store expansion removed by the WTO. California state senator Liz Figueroa asks if that's the case...

LIZ FIGUEROA, CALIFORNIA STATE SENATOR: Why even have a city council, Why even have state governments if WTO agreements are superseding our judgment?


SYLVESTER: And another group, the National Retail Federation says that markets should decide issues such as the size of a store or location, not city, state and local governments. But lawmakers say taxpayers in a local community would then have no say over zoning issues. And that would allow a big box retailer to plant itself in the middle of any main street -- Lou?

DOBBS: It must be exceedingly difficult for companies and those economists and those political partisans, when democracy participatory democracy in this country and the concerns of middle class Americans and of a broad community, obstruct their mission in life, this is outrageous by any definition.

SYLVESTER: You know, Lou, this is a perfect example how trade agreements are so much more than just about trade. We've seen it again with some of the other issue us that mentioned, and this is another example where things that are decided by trade negotiators can have a real impact on local communities.

DOBBS: A real impact on all of us. And particularly those who are losing their jobs in this country. Thank you very much, Lisa Sylvester, from Washington.

Later in this broadcast -- earlier in this broadcast, rather, we brought you the story of a massive class-action lawsuit filed against the California State University system. The lawsuit demanding California stop its absurd policy of giving in-state tuition benefits to illegal aliens while denying those benefits from out of state citizen.

University of Missouri law professor Kobach is leading the national fighting to strike down these discriminatory policies that punish middle class American citizens. The professor says it actually encourages in fact illegal aliens to further break the law. Joining us tonight from Sacramento, California, California officials had reservations about the legality of this policy before it was passed. Just how in the world did this policy get through, and how is it affecting your case?

KRIS KOBACH, LAW PROFESSOR: Well, that's an interesting question, Lou. When it was passed in 2000 by the California legislature, Governor Gray Davis vetoed this California law and said it would violate federal law, and it would expose our state to tremendous financial liability. And so he vetoed it.

Two years later, the legislature came back and passed the same bill again, but in 2002, Gray Davis let the bill become law without his signature, and so now that brings us to where we are today where, California is giving in-state tuition to illegal aliens and has exposed itself to great financial liability under federal law.

DOBBS: And the current governor, Arnold Schwarzenegger, how does he feel?

KOBACH: I'm not sure if he has taken a position on this issue. And frankly, at this point, he would be well-served if he did so and try to persuade his legislator to repeal this statute, because every year that California offers illegal aliens in-state tuition, they are incurring more and more liability.

DOBBS: It is easy to dismiss such laws as this, as sort of a California thing, a left coast thing, but, in fact, Chris, there are nine states, California, Kansas, Utah, New Mexico, Oklahoma, Texas, New York, Illinois, Washington State who have nearly the precisely the same provisions. Are you going to be able to roll back all of these?

KOBACH: Well, we will try to roll back the states that we can. And what happens in California and in Kansas will be critical. But you're right to point out that this is part of a nationwide effort by some interest groups to provide in-state tuition to illegals across the country.

And we have got to say look, it's time for the rule of law to prevail here. Congress was unmistakable in 1996. They passed a law that says very clearly, you can't do this, you can't give illegal aliens in-state tuition unless all U.S. citizens get it, too.

And here's an interesting factor about this case, one of our named plaintiffs is a former U.S. Congressman who voted for that 1996 act. Now he's paying out of state tuition on behalf of his two kids who are from California, but they don't qualify for in-state tuition while illegal aliens in California do.

DOBBS: It is so often -- the open borders advocates, the pro illegal immigration advocates, always want to say we're a nation of immigrants, and we certainly are. But that really isn't the issue. We are also first and foremost a nation of laws, for the most part. They want to ignore that fundamental reality. Kris Kobach, thanks for being here.

KOBACH: And it's the rule of law that -- my pleasure.

DOBBS: Appreciate it.

A reminder now to vote in our poll tonight. Should states be offering in-state tuition to illegal aliens? Please cast your vote at We'll have the results coming up here in a matter of moments.

Coming up next, President Bush takes responsibility for going to war in Iraq on faulty intelligence. How his admission could effect U.S. strategy in Iraq and in fact his presidency. I'll be talking with former presidential adviser David Gergen here next.

And then Able Danger members may soon be able to speak about what they knew about Mohammed Atta and other 9/11 hijackers a year before the attack. I'll be talking with Emmy winning journalist who is investigating our nation's intelligence failures here next. Stay with us.


DOBBS: President Bush today delivered his fourth speech on what he calls a strategy for victory in Iraq. And in his speech today, the president assumed responsibility for going to war on the basis of bad intelligence.

Joining me now, the former adviser to four presidents, David Gergen.

David, good to have you here.

Your reaction to the president's comments today?

DAVID GERGEN, FORMER PRESIDENTIAL ADVISER: Well, Lou, you know you have railed on this program for a long time about all the double talk coming out of Washington. It's good to have a little straight talk. He has finally acknowledged there were mistakes in intelligence, and that's, you know, that's coming out of the bubble, as they say.

DOBBS: Coming out of bubble, and at the same time, David, I don't -- I'm going to ask you in a minute about what kind of weight we should give this, but it coincides at the same time with the president breaking away from those canned, filtered, screened appearances before audiences that for all the world look like sort of Stepford presences to hear his words. He's breaking from long standing patterns.

GERGEN: I agree with that as well, and that's why I think that the president does deserve credit for, you know, now acknowledging some mistakes, acknowledging that intelligence was wrong. I think there has been a change in tone that's welcome. I would underscore, Lou, that he has not changed his policies. He's sticking very much to the same hard-line policies. But certainly his tone is welcome. And I think it makes all of us feel at least he's listening. He's in the world in which the rest of us, you know, would like to think we inhabit.

DOBBS: Absolutely, and over which we would like to think as Americans, that 300 million of us have some influence over our destiny.

The president mentioned Charles Dulfer, who discovered that Saddam was using the United Nations' Oil-for-Food Program to influence countries in the run-up to the war and to restart his weapons programs. What's your reaction to those words from the president today?

GERGEN: Well, I'm glad that he brought up the Oil-for-Food. It needs to be ventilated, and it is an argument that it wasn't working well and the sanctions were breaking down. Whether Saddam would have truly become a menace had sanctions broken down I think is debatable.

The Clinton administration thought that Saddam probably--they read the same intelligence. They thought it was likely that Saddam had weapons of mass destruction, but they also thought he was containable. They thought that they could contain with limited strikes without an invasion.

DOBBS: We're now just about coming up on four hours before the opening of polls in Iraq for their parliamentary elections. How important is this? And does this process over which the president has been adamant in his timetable and has forced everyone to go along with it when they said it was impossible, in point of fact, how important is this? And what will be the likely result in your opinion?

GERGEN: I think we should be a little cautious. It's a milestone, and a very important one. The government that emerges from this is going to be the first Democratically elected sanctioned by a true constitution government and the Arab Middle East. And that is a major step forward.

But, Lou, as you know, the real question is whether they can create a country out of this, and we don't know the answer to that. This government is not only going to have to come together, but it is going to have to rewrite a constitution that currently the constitution that is selecting this government basically does not create a country. It creates a federation of very loose and potentially conflicting states.

The real question is can they now create a country? And this administration, I think the Democrats are going to put a lot of pressure on these Iraqis to do that.

DOBBS: David Gergen, as always, we appreciate your insight.

GERGEN: Thank you sir. Thank you.

DOBBS: Coming up at the top of the hour here on CNN, "The Situation Room" and Wolf Blitzer.

Wolf, tell us all about it.

WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou.

Is there a new candidate for the White House in 2008? Speculation fueled by a surprise announcement. We're checking the political pulse.

Also, on the eve of a historic election in Iraq, President Bush takes responsibility for that bad intelligence. How will the nation move forward from here? We're looking at all sides.

Also, using liquor to sell cigarettes. R.J. Reynolds comes under fire for mixing its vices. Find out why they're now pulling a controversial campaign.

And rock stars sell from Bob Dylan to Paul McCartney. Are they trading in idealism for lucrative ad deals? The baby boomers grow up. All that, Lou, coming up right here in "The Situation Room."

DOBBS: Thank you very much. Wolf Blitzer, we'll be looking forward to it.

There is rising anger around the world tonight after the Iranian presidents latest shocking remarks about the state of Israel. Iran's president declared that the Holocaust in which six million Jews were murdered is a myth.

In October, the Iranian president called for Israel to be wiped off the map, in his words. The United States described the president's comments as outrageous. Israel called the Iranian Government a rogue regime. Many strategic analysts think the United States and, indeed, the western world is now on a collision course with Iran.

Just ahead, untangling the mystery of Able Danger.

Award winning journalist Peter Lance joins me. We'll be discussing what the U.S. Government may have known before the 9/11 terrorist attacks.

Stay with us.


DOBBS: It appears now that the American public may soon be hearing explosive testimony about U.S. intelligence failures leading up to the 9/11 terrorist attacks. Congressman Curt Weldon announced on this broadcast Monday evening that the Pentagon is now set to approve open Able Danger hearings on Capitol Hill.

REP. CURT WELDON, (R) PENNSYLVANIA: This will be a full hearing, and finally the American people will get to hear what the 9/11 commission didn't pursue, and that is information about what happened before the attacks on September 11. DOBBS: All this comes following an admission by former Joint Chiefs of Staff Chairman General Hugh Shelton that he approved the Able Danger project four years before 9/11.

Joining me now, Emmy-award-winning investigative journalist Peter Lance, who is now writing a book on U.S. intelligence failures. Peter, first, good to have you here. What is the significance, in your judgment, of General Shelton's comments acknowledging the creation of Able Danger?

PETER LANCE, INVESTIGATIVE JOURNALIST: It's very significant, Lou. How many projects does the chairman of the Joint Chiefs get together with the head of SOCOM, Special Operations Command, and actually ask for a project to be created, an operation to be created. It's very significant.

And now we know that the Defense Intelligence Agency, as early as August of '99 -- several months before Able Danger was initiated -- had in their files intelligence linking blind Sheikh Rahman to other al Qaeda groups. So, this is a year after the African embassy, the original cell that did the World Trade Center bombing in New York, the DIA finds out they're linked to other al Qaeda cells. No wonder the chairman of the Joint Chiefs and the head of SOCOM wanted this.

DOBBS: Peter, we're looking at a chart on the air, if we could put that back. Give us the significance of this chart, because so much about charts and Able Danger has come up in the discussion, particularly with the former members of the 9/11 Commission and Able Danger.

LANCE: Lou, this chart was built by a gentleman named Jacob L. Bossen (ph). He was a contract employee, working for the Defense Intelligence Analysis Center at Bolling Air Force Base. This is kind of the analytical heart of the DIA; they call it the Death Star. This is a year after the African embassy bombing, and the fact that the DIA had evidence linking Ramzi Yousef, the original World Trade Center bomber and the blind Sheikh directly to al Qaeda and bin Laden is hugely significant.

By the way, this is what runs counter to the conclusion of the 9/11 Commission -- people like Dietrich Snell -- and it's why I believe Snell and company decided to flush the Able Danger intelligence when they were briefed on it.

DOBBS: And you have -- in reviewing some of the documentation -- in particular an executive memorandum in 1982, signed by, obviously, President Reagan, that in your judgment, at least, and frankly in my reading of it, suggests that it is -- if you will, an opportunity for our intelligence agencies to share information, rather than destroy it.

LANCE: Exactly. That executive order, EO12333, was the order cited by a Doogan (ph) from the Pentagon at the hearings that Senator Specter had in September as the reason for destroying the data. And also the reason that LtC. Tony Shaffer (ph) was prevented three times from meeting with the FBI to talk about Able Danger. Now, Jeff Toobin maybe the man that should come in on this, but as a graduate of Fordham Law School, I read that as you do. There are massive exceptions, Lou. In other words, it prohibits the maintenance of information on U.S. persons for civil liberties reasons, but there is an exception for terrorism, Lou, there is an exception if it's public open source material. And it says can you meet with the FBI to share the information.

DOBBS: Peter Lance, we thank you for being here and you and Jeffrey Toobin certainly have the background to make that analysis. Occasionally, I lose myself and think that I can simply take legal documents and assume they mean what they say. So I will defer to both and you Mr. Toobin. As always, Peter, good to have you here, look forward to talking to you soon, as we follow this unfolding controversy.

LANCE: Thanks, Lou.

DOBBS: Thanks.

Still ahead, we'll have your thoughts, plus the results of our poll question tonight, and of course our nightly tribute to our troops serving this nation around the world. Stay with us.


DOBBS: Taking a look now at your thoughts, your e-mails. John Hahn, from Fort Worth, Texas: "Lou, great show. I used to be happy and proud when I heard our lawmakers talk bipartisan. Lately (border and other security issues) when I hear the word bipartisan I get the feeling they're ganging up on me." John, unfortunately, it may be just more than a feeling.

And from Ocala, Florida: "I think we should add a new line to ballots, `None of the above.' Of course, if we did this, there would be no one elected, considering the type of people who are running for office these days. Just how low can we go?"

And Scott in Rockton, Pennsylvania: "Regarding the sellout of the middle class and the American worker on so many fronts these days, I'm thankful that you're bringing the information to light. Now if we could just get those who are most affected to pay attention and participate in this democracy. If only..."

Sandra in Irving, Texas: "Give the WTO even one bit of power over our immigration policy? Not only no, but hell no."

And Jay Tift in Chapel Hill, Tennessee: "Now I am ready for war. If the WTO can decide our immigration policy then it's time for Americans to go to war. All of us against Washington, DC."

And Bobby in New Lennox, Illinois: "If the WTO controls immigration in the United States, the Chinese control our economy and the Mexicans control our language, will we still be the United States of America?" Interesting question. We love hearing from you. Send us your thoughts at The results of our poll tonight, overwhelming -- 96 percent of you say states should not be offering in-state tuition to illegal aliens while not offering it to out-of- state American citizens.

Finally tonight, our tribute to this nation's troops -- every night on this broadcast we share thoughts from some of the men and women who serve us all far from home this holiday season.

WANDA NUNEZ, U.S. NAVY: Hi, I'm Bosun's Mate Second Class Wanda Nunez, and I just wanted to send a seasons greetings to my family, my mom and dad, my daughter, Lisette (ph) and my son Christian (ph) in Queens, New York. Happy Holidays.

WILLIAMS, USMC: This is Lance Corporal Williams currently in Al Issad (ph), Iraq, United States Marine Corps. I want to wish happy holidays and happy new year to my friends and family in Salisbury, Princess Anne and Baltimore, Maryland. Love you, see you soon.

LIZ MARTIN, U.S. ARMY: Hi. My name is Captain Liz Martin from Rochester, New York. I'm stationed with Charlie Company, FANAMS (ph), 5/101 Aviation Regiment from the 101st Airborne Division Air Assault. I'd like to say happy holidays and merry Christmas to my mom and dad, Eugene and Susan Bonsignor (ph), and my family in Rochester, New York.

CHRISTIAN JENNY, Hi. I'm Christian Jenny, from Ocean City, New Jersey, stationed here in Belat (ph), Iraq. I just want to say hello to my mother and father -- Mom and Pop, I love you both, I miss you, I'll see you soon. Merry Christmas.

DOBBS: And Merry Christmas to all our troops, happy holidays. And thanks for being with us tonight. Please join us here tomorrow when we will be honored by the presence of Jerry Jasinowski of the National Association of Manufacturers. He's finally accepted our long-standing invitation. Will it be war, or will it be rapprochement? Who knows? Please join us. For all of us here, good night from New York.