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Lou Dobbs Tonight
Rising Opposition on Capitol Hill Over Dubai Ports World Deal
Aired March 06, 2006 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Monday, March 6.
Live in New York, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening, everybody.
Tonight, rising opposition on Capitol Hill to the Dubai Ports deal. One leading Republican offering the White House a way out, a deal to end the political uproar and to save some political face.
We'll be live on Capitol Hill with a report, and at the White House.
Then, business groups launching an aggressive lobbying campaign to do what? To stop reforms of the committee that approved the Dubai deal. Are business groups putting commerce ahead of national security?
We'll have the special report and the answer.
The chairman of the Senate Banking Committee, Senator Richard Shelby, will be our guest here. He's one most outspoken critics of this ports deal. He says the United States cannot sell everything. Senator Shelby will be our reassuring guest.
And I'll be talking about the White House's refusal to back down on the Dubai Ports controversy. We'll be talking with three top political and legal analysts: Hank Sheinkopf, Democratic political consultant; Jeffrey Toobin, CNN senior legal analyst; John Fund, "Wall Street Journal" columnists.
All of that and more coming up here next.
We begin tonight with a new and urgent Republican effort to give President Bush a way out of the controversy over the Dubai Ports deal. The chairman of the House Homeland Security Committee, Congressman Pete King, today offered the White House a compromise that he says could satisfy critics of the deal. Congressman King's proposal would allow the Dubai Ports deal to go ahead, but with significant changes.
Ed Henry reports from Capitol Hill -- Ed.
ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Lou, Peter King told me he presented this compromised plan to the White House with a warning: if you don't sign on, this whole contract may blow up because of growing discontent, especially among Republicans here on Capitol Hill. He's basically proposing that the American portion of this contract be stripped out so that basically DP World, the company involved, would have no control over the operations of U.S. ports, the six U.S. ports.
Instead, it would be subcontracted out to various U.S. companies who would handle those subcontracts here in America. This would allow DP World to still rake in some the profits from the U.S. operations, but they would not have access to security information, security blueprints, other key information about those U.S. ports.
And secondly, King says the company would still be able to have the rest of the contract. Most of this contract is dealing with issues outside of the United States. The company would still have control of all of that.
Here's the plan from Peter King.
(BEGIN VIDEO CLIP)
REP. PETER KING (R-NY), CHAIRMAN, HOMELAND SECURITY COMMITTEE: Satisfy the issue of security that Dubai Ports would subcontract out the operation of the American ports to an American company. I don't think a subsidiary will be satisfactory, but a separate American company could do it so long as there was no access to the information or to the operations at all by Dubai Ports. Dubai Ports can still be the contractor, but the actual work and access to everything would be controlled by a totally separate American company.
(END VIDEO CLIP)
HENRY: Now, company officials have said they have no plans to change this contract, and the White House so far has told Congressman King, we'll get back to you. He said it's been a few days, he has not heard back from them since he first presented this proposal. But the pressure is growing a bit, because just a short while ago, Republican senator Susan Collins, chairwoman of the Senate Homeland Security Committee, said that she, too, has presented a similar compromise plan to the White House. She's also still waiting word back.
And the political reality is, in, this election year, Republicans know that they're face real heat from Democrats, who are beating this issue like a political drum. You can take a look at what Democrat Harold Ford Jr., who's running for a Senate seat in Tennessee, did. He filmed a campaign ad at the Port of Baltimore in Maryland, far from Tennessee.
Take a look at how he's playing this issue.
(BEGIN VIDEO CLIP)
HAROLD FORD JR., RUNNING FOR SENATE SEAT IN TENNESSEE: President Bush wants to sell this port and five others to the United Arab Emirates, a country that had diplomatic ties with Taliban, the home of two 9/11 hijackers whose banks wired money to the terrorists.
(END VIDEO CLIP)
HENRY: Now, this whole controversy has also opened up another line of political attack for the Democrats. Senate Democratic Leader Harry Reid today saying that other candidates are going to join Harold Ford Jr. and really jump on this.
Take a listen.
(BEGIN VIDEO CLIP)
SEN. HARRY REID (D-NV), MINORITY LEADER: It's resonating because people have come to the realization that the Bush administration's basically incompetent. And I mentioned some of those things in my presentation to you a few minutes ago. This port security issue is stunning.
(END VIDEO CLIP)
HENRY: And on that score, Senator Reid, as well as Democrat Joe Lieberman, who has been an ally of this White House on several other issues, like Iraq, said today they feel the president's budget on homeland security issues falls short. They're seeking an extra $7 billion, including $1.7 billion for port security and funds to the Coast Guard to make sure that U.S. ports are safe -- Lou.
DOBBS: Ed Henry, thank you very much.
White House officials tonight are maintaining their view that the Dubai Ports deal will go forward. And they insist that sale is not a threat to U.S. national security.
Dana Bash reports from the White House -- Dana.
DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, of course the White House does want this deal to go forward, and that is why a senior administration official tells us that they are talking to Peter King, to other members of Congress, people who are involved, in trying it make sure that happens. And what they say here at the White House, and really behind the scenes, all of those involved, is that what Peter King is proposing is something that has been under discussion behind the scenes in a quiet way for days.
And what CNN learned from our reporting over the weekend is that a big problem for those who really want this to go forward is the fact that the company, DP World, is making if very clear they don't necessarily think at this point they need to make and changes. However, a source involved in negotiations with the White House, with the company, and congressional leaders, tell CNN that they're delegating testing out the idea with the company of changes in the legal structure on the American side.
That could be, as Peter King suggested, perhaps completely separating that out. It could be also, in layman's terms, as this source says, a subsidiary, a separate board of directors, even an independent director. All of those are ideas being discussed. But from day one, Lou, as you know, there has been a delicate dance going on when -- when the reality sets in that the opposition is incredibly fierce, a delegate dance as to how to find a middle ground, how to find a compromise. What you're seeing is that exact thing happen right now behind the scenes.
The White House, we are told by two sources involved, is not directly talking to the company or the country at this point. They're working through middlemen. Again, that has been the pattern over the past several weeks as they've been trying to quiet this storm -- Lou.
DOBBS: I'm not certain, Dana, how you quiet the storm since the president said he believes this deal is perfectly fine, no security threat, and that he will veto any legislation intended to scuttle it. The White House doesn't have much room to back -- back down here with or without the offerings of both Senator Susan Collins and Congressman Pete King.
BASH: Right. Well, in terms of the reality, that is true. And they are sticking to that position, that they do believe that it is a safe deal.
You've heard all of the arguments of course many times, Lou. But the pattern here, what you're seeing here, is something that we saw a week ago, when they all agreed that perhaps the company should ask for an additional 45 days.
DOBBS: Right.
BASH: It seems that what they are doing is quietly developing that same kind of strategy, having the company address issues that are very real still with many members of Congress that the White House just simply has to face that reality. That is what you're seeing develop here. It's going to be interesting to see whether or not the company will agree to do these kind of things like they did with the 45-day review.
DOBBS: It is remarkable to see the White House, the president of the United States actually depending on a government-owned corporation for a way through a situation that is of the making of this White House.
Thank you very much.
Dana Bash.
The CEO of Dubai Ports World says Americans shouldn't worry at all about their safety if this port deal were to go through. Mohammed Sharaf says the problem instead lies with the American people, who have not been properly educated about the transaction.
(BEGIN VIDEO CLIP)
MOHAMMED SHARAF, CEO, DUBAI PORTS WORLD: We need to educate the people in America that we are truly a global company.
(END VIDEO CLIP)
DOBBS: Mohammed Sharaf is not alone in dismissing security fears of Americans. About 70 percent of Americans oppose this deal. It seems Mohammed Sharaf has similar views to those of the president, members of administration.
They're also saying that Americans simply don't understand, and blaming Americans and their lack of education on this deal.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The more people learn about the transaction that has been scrutinized and approved by my government, the more they'll be comforted that our ports will be secure.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
JOHN SNOW, TREASURY SECRETARY: We needed to have a better understanding in the Congress of what -- and in the public -- of what this process is. We're going to reach out and try and remedy that deficiency.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: And I think it's clear from the concerns that have been raised by members that they didn't have a clear understanding of what the facts are. That's why we're trying to provide them with the facts.
(END VIDEO CLIP)
DOBBS: Education is also a response on the part of the Bush administration, of course, to a record $700 billion trade deficit, existing, in large measure, according to the administration, because American workers aren't sufficiently educated to move the economy ahead.
An American cargo handling company today failed in a last-minute attempt to block the Dubai Ports deal in a British court. The British court of appeals saying Miami-based Eller & Company does not have a strong enough legal basis to proceed with the action. Eller says the Dubai deal could harm its business. An Eller spokesman saying the company will now pursue legal action in courts in the state of Florida.
deficit existing in large measure, according to the administration, because American workers aren't sufficiently educated to move the economy ahead.
Powerful business groups and interests tonight are aggressively lobbying against any attempt to reform the secretive government committee that approved the Dubai Ports deal in the first place. These lobbyists and opponents of the deal say the Committee on Foreign Investments, or CFIUS, failed to adequately consider the national security implications of the sale, but business lobbyists and groups say commerce is more important often than national security interests.
Lisa Sylvester reports.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice over): When multinational corporations see legislation in Congress they don't like, they throw money at it lobbying. The Dubai Ports deal is no different. It has sparked a flurry of activity by business groups and their lobbying friends on K Street.
The National Association of Manufacturing, the Business Roundtable and the United States Council for International Business and others have written a letter to congressional leaders saying they are "... very concerned by legislative proposals...", including one that would give Capitol Hill veto power over CFIUS reviews.
STEPHEN CANNER, U.S. COUNCIL FOR INTERNATIONAL BUSINESS: A terrible idea, because that is -- that is the ultimate personification of politicizing decisions that need not and should not be politicized.
SYLVESTER: Business groups say hands off. They are pushing back on the ports issue, trying to keep the CFIUS status quo.
Senator Susan Collins is part of a bipartisan group that wants to strip the committee in charge of approving deals out of Treasury Department's control and give it to the Department of Homeland Security.
SEN. SUSAN COLLINS (R-ME), HOMELAND SECURITY CHAIRMAN: We need to take a look at these transactions when a state-owned firm is going to buy critical American assets or run critical American assets.
SYLVESTER: As the lead agency, Treasury has considerable more say than other agencies of how CFIUS runs, deciding how the law will be interpreted and applied. But critics, including the union representing DHS workers, say security is taking a back seat.
CHARLES SHOWALTER, NATIONAL HOMELAND SEC. COUNCIL: I think the national security is being sacrificed for profitability. I believe that we need to look at, at least with an equal eye and make sure that we are securing our country, and then facilitating trade and commerce. Not the opposite.
SYLVESTER: Congress also wants to make the CFIUS process more transparent. Business groups believe it's fine the way it is.
(END VIDEOTAPE)
SYLVESTER: And this may be one fight that the business community loses. Overwhelming public support is in favor of denying Dubai Ports World control over the port facilities and in favor of tighter congressional oversight of the foreign investment approval process -- Lou.
DOBBS: It's interesting that the Homeland Security Council representative spokesman would say that there should be an equal eye to national security as to commerce. It would seem to me that you would put some great and considerably far greater emphasis on national security. Wouldn't you, Lisa?
SYLVESTER: Oh, indeed. In fact, he goes on to say that he believes that the Treasury Department has been looking at this clearly with an eye toward investment flows, but that national security needs to be up front and center, which it's not even equal at this point -- Lou.
DOBBS: If we say "eye" one more time, I will have to say something about optics, and the optics here in terms of CFIUS are that in it's entire existence, the Committee on Foreign Investment in the United States has only canceled one of 1,500 deals that it's reviewed.
Lisa, thank you very much.
Lisa Sylvester.
Well, Israel may sell its ports to private investors, but there's absolutely no suggestion that any Arab company will be taking over Israeli port terminals. The Israeli government has established a state-owned ports company that owns the equipment and land at Israel's three major ports. Three separate operating companies manage those ports. The government says those three operating companies must be privatized, oh, about 2010.
The Department of Homeland Security frequently proclaims it's doing everything possible to protect us and this country from a terrorist attack. It turns out, however, the truth is somewhat different.
The Department of Homeland Security itself is anything but secure. It turns out private guards at the department's headquarters in Washington now say they don't have enough training, nor equipment to provide security to headquarters.
At one point, guards emptied an envelope containing suspicious white powder into the air outside the building. The company that provides those guards, Wackenhut Services, is, by the way, owned by a firm based in Great Britain.
Feeling reassured now?
The Department of Homeland Security said the Navy hired Wackenhut when the Pentagon used the building. A spokesman told us a new security contract will be signed in the very new future.
Still ahead here, charges of bribes, green card giveaways and fraud inside the U.S. immigration bureaucracy. Ready for a guest worker program? We'll have a preview of an explosive new report here next. And why state and local officials are now in Washington begging the federal government for help against illegal immigration and the establishment of border security.
And how the agency responsible for investigating foreign transactions has consistently violated U.S. law.
We'll have that special report and a great deal more straight ahead.
(COMMERCIAL BREAK)
DOBBS: A shocking new government report is expected to charge the Bush administration with gross mismanagement of this country's immigration system. The report says the Bush administration's so- called temporary guest worker program has no chance of succeeding because of widespread fraud within our nation's immigration bureaucracy.
Casey Wian reports.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: San Antonio welcomes Secretary Michael Chertoff.
CASEY WIAN, CNN CORRESPONDENT (voice over): The Bush administration's top homeland security official is again promoting the temporary worker program opponents say is a thinly-disguised illegal alien amnesty.
MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: If we don't do some kind of a temporary worker program, I think it's going to be impossible to address the challenge of what could be eight to 11 million illegal migrants who are currently in this country.
WIAN: That estimate is probably low, and even so, the agency that would be in charge of a guest worker program is already overwhelmed and plagued by fraud. What's more, the United States Citizenship and Immigration Service is not expected to be up to the task for at least five years. Those are just some the findings of a Government Accountability Office draft report now in the hands of two congressional committees and the Department of Homeland Security.
Iowa Senator Chuck Grassley recently gave colleagues a preview, saying, "You'd all be shocked if you learned about the internal fraud and abuse at CIS. Officials are being bribed. Visas are being given away. Green cards are being sold."
The year-long study found CIS denied 19,000 applications for citizenship or immigration benefits due to fraud last year. Many of the other 800,000 rejected applications were also likely frauds but denied for other easier to prove reasons. Fraudulent applications are rarely prosecuted.
ROSEMARY JENKS, NUMBERSUSA: If your application is denied based on fraud and you're not prosecuted, then there is nothing that bars you from continuing to apply again and again and again until you get what you're looking for. In the 1986 amnesty, we gave a green card to at least one of the terrorists who blew up the World Trade Center in 1993. And here we are, we're set to do it again.
WIAN: More than 5,000 applicants for immigration benefits are identified as potential national security threats each year. The Bush administration last month asked Congress for nearly a quarter of a billion dollars for the citizenship and immigration service this year to begin implementing its temporary worker program.
(END VIDEOTAPE)
WIAN: The GAO is currently incorporating comments from the U.S. Citizenship and Immigration Service into its report which is expected to be released Friday. CIS did not return our calls, but it told "The Washington Times" that the report does not fully portray the Department of Homeland Security's anti-fraud efforts -- Lou.
DOBBS: The anti-fraud effort, of course, the fraud on the part of those applying for visas and even citizenship in this country. But at the same time, Casey, you're reporting that the institution, the bureaucracy itself, has corruption within it, at least according to Senator Grassley.
WIAN: And Senator Grassley was very clear about that in a hearing on Thursday that received very little attention. The overwhelming fact from this report is that the Citizenship and Immigration Service has absolutely no idea how widespread the fraud is because so many of these applications are denied for other reasons -- Lou.
DOBBS: And, of course, none of this even goes to the issue of compatibility of computer systems and databases that are absolutely critical to following the flow of those entering this country.
WIAN: Actually, there is a mention of the computer systems, and that's -- they're five years away of getting computer systems up and running that would detect fraud across the different homeland security agencies -- Lou.
DOBBS: Excellent. Casey, thank you very much.
Casey Wian reporting from Los Angeles.
Senator Chuck Grassley will be talking about his efforts to uncover fraud inside our immigration bureaucracy. He'll be me guest here Wednesday.
Tomorrow, Senator Jeff Sessions will be my guest. We'll be discussing the latest developments in the Senate Judiciary Committee as it begins moving legislation forward on illegal immigration and border security.
State and local officials say the Bush administration is ignoring their battle against illegal immigration. Some of those officials traveled to Washington today, demanding, demanding federal help. But they say this time they're not going to be ignored.
Bill Tucker reports.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: OK.
BILL TUCKER, CNN CORRESPONDENT (voice over): They came from 26 states, declaring illegal immigration a United States problem not just a border states problem.
MAYOR PETER CORROON, SALT LAKE COUNTY, UTAH: Peter Corroon, Salt Lake County mayor.
UNIDENTIFIED FEMALE: Carol Ann Hunter (ph), county commissioner, Concord, North Carolina.
TUCKER: This was their first meeting.
MAYOR CATHRYN DEYOUNG, LAGUNA NIGEL, CALIFORNIA: I think this is probably the most exciting thing that has happened in terms of immigration reform. Now you have local elected stepping out and saying something has got to be done.
TUCKER: And they were not shy about speaking up.
MAYOR PERRY BARSE, VINELAND, NEW JERSEY: This a local issue. Speaking of grassroots (ph) is a local issue. It's not a federal issue or a national issue. It is a local issue because it all starts from the bottom up.
TUCKER: The view from the bottom up looks like this.
SHERIFF DANIEL BECK, ALLEN COUNTY, OHIO: Illegal aliens that come in to take a job in our county take a job away from one of my neighbors and one of my friends in my community. It's not fair and it's not right.
TUCKER: The administration did send a representative to the meeting, but he may have gotten more than he bargained for.
COMM. ROBERT VASQUEZ, CANYON COUNTY, IDAHO: But I can tell from the expression on the administration's representative that he was a tad perplexed as to how to handle this.
TOBY BURKE, WHITE HOUSE INTERGOVT. AFFAIRS: I don't want to get out of my expertise, so to speak, because I...
TUCKER: What they're asking for is something very simple.
MAYOR MARK BOUGHTON, DANBURY, CONNECTICUT: We have a Democrat and a Republican working together to push Congress and to push our federal government to do the job.
COUNTY EXEC. STEVE LEVY, SUFFOLK, NEW YORK: We're trying to create an organization around which people can rally so that we can finally get the federal government to speak out on behalf of the people they represent.
(END VIDEOTAPE)
TUCKER: And the people would appear to be on their side, Lou. The latest poll by Quinnipiac University found that 88 percent of those asked think illegal immigration is a serious problem. Put another way, 94 percent of Republicans and 86 percent of Democrats see illegal immigration as a serious issue -- Lou.
DOBBS: You would think both parties would see it as a serious issue then for the upcoming midterm elections.
TUCKER: You'd think so.
DOBBS: Thank you very much.
Bill Tucker from Washington.
Still ahead here, serious new concerns about President Bush's nuclear deal with India. Critics say it is another example of this administration's decision to put commerce ahead of the national interest.
And the Committee on Foreign Investment, does it really have your security in mind when rubberstamping foreign investment deals? We'll have that special report.
And I'll be joined by Senator Richard Shelby here next.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: As you know, the Committee on Foreign Investment approved the ports deal in a review that lasted just under 30 days. CFIUS has approved the foreign takeover of critical American assets and more than 1,500 cases, but it claims it doesn't have the time to conduct follow-up investigations about the impact of those decisions.
By the way, that's not an arbitrary decision for CFIUS and its committee members. Those investigations are required by law. A law the committee has ignored.
Christine Romans reports.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): Thirty days, the time it takes for foreign governments to get approval to buy a key U.S. asset. Twelve years and counting, and still no required analysis of the implications of what has become a foreign buying spree.
The president and his administration are required by law to give Congress a detailed report every four years, evaluating whether there is credible evidence of a coordinated strategy by one or more countries or companies to acquire United States companies. The Committee on Foreign Investment has not filed that legally required report since 1994.
ROBERT KIMMITT, DEPUTY TREASURY SECRETARY: It's a thicket. It asks a lot of very detailed data-oriented questions. We need help to make sure that our intelligence or information basis is right, because how can you reach an analytical conclusion against the legal standards until you get the base right? And it's a very fact-intensive process.
ROMANS: Another fact-intensive process should be approving a foreign government's purchase of U.S. assets. But the administration routinely does that in less than 30 days.
CAROLYN BARTHOLOMEW, U.S.-CHINA COMMISSION: Frankly, it's outrageous that the administration hasn't filed the reports that it should be filing to talk about the CFIUS process.
ROMANS: Especially outrageous since Congress, until recently, has been uninterested.
PETER LEITNER, CENTER FOR ADV. DEFENSE STUDIES: They just ignore Congress. They ignore the law. They basically flagrantly violate the law by doing that. And unfortunately, Congress, for one reason or another, doesn't exercise proper oversight and should never let them get away with it.
ROMANS: What they get away with is rubberstamping important purchases of U.S. assets without oversight.
Under President Clinton, 46 foreign government deals triggered only one 45-day investigation. During the first five years of this administration, 46 government-backed purchases of U.S. assets sparked only four 45-day investigations.
(END VIDEOTAPE)
ROMANS: That means foreign governments have snapped up 92 different assets in this country. And today we have virtually no idea about patterns, motives, or the cumulative effect on economic and national security. The Treasury Department says, Lou, it has an awful lot of data to analyze and it's in "the middle of it" for 12 years.
DOBBS: The middle of it for 12 years. As you report, this has been going on under a Republican Congress, a Democratic Congress, a Democratic presidency, a Republican presidency, but this is a Republican presidency that we're all focused on now.
The idea that this committee dames to suggest that it's just -- what are they sagging, as the president says it's hard work and that's a reason not to do what the law requires?
ROMANS: Why in the world does it take 30 days to approve a deal that, as you pointed out, no CEO would ever do diligence if 30 days? Thirty days for the government to approve a deal but 12 years to follow-up on the very important national security implications longer term.
DOBBS: What we're all learning here is that this is not just about Dubai Ports World or another government-owned company. This is about key U.S. infrastructure assets, a government that is not being responsive to the laws that it created.
The question I have is why in the world isn't Congress demanding that there be a fulfillment of the obligation they put in the Treasury Department and this committee? And secondly, why in the world are we tolerating a government that permits an operation in governance like this? This is absolutely, absolutely infuriating.
ROMANS: The Senate Banking Committee has oversight of CFIUS and after the CNOOC, the China deal last year that actually fell through, they started asking these questions and holding hearings about just who is in charge here, and, you know, we have got to get on this.
DOBBS: Well, it is good that you're on it.
We thank you, Christine Romans, as always.
That brings us to the subject of our poll tonight. Are you outraged to learn that Congress hasn't demanded the CFIUS reports that are required by law? Cast your vote at loudobbs.com. We'll have the results coming up later in the broadcast.
Joining me now to discuss the Dubai Ports deal, one of the most outspoken critics of the CFIUS review process, indeed the man who led the hearings last October into CFIUS and its operation, Senator Richard Shelby, Chairman of the Senate Banking Committee.
Senator, it is good to have you with us.
SEN. RICHARD SHELBY (R), BANKING COMMITTEE CHMN.: Thank you, Lou.
DOBBS: This is -- first of all, your personal position on this deal with Dubai Ports World, a government-owned company, taking over operation of key U.S. infrastructure?
SHELBY: One of deep concern. Just like I was last fall when the Chinese state-owned oil company was trying to buy UNOCAL. It was a wake-up call for a lot of us up here. That America -- everything in America can't be for sale.
And I'll tell you, Lou, if we don't reform the process, which is something -- it's the highest thing on my agenda -- dealing with CFIUS, then what's going to be for sale next?
DOBBS: Well, let me ask you a question before we get to what's for sale next. And I hope when it comes to a key infrastructure asset in this country, it's never for sale. To me this isn't an issue about Dubai Ports World.
It's the idea that the United States would sell-off any key infrastructure to anyone and not take responsibility for its security in our ports or on our borders.
But let me ask you this. Why in the world, senator, as chairman of the Senate Banking Committee -- why not just blow this tainted, disgusting, flawed process in which there's only been one deal, one deal stopped out of 1,500? If that's not a rubber stamp process, I never heard of one.
SHELBY: Well, I'll tell you what, it's not only a rubber stamp process, it's a secretive process. And they would like to remain this way because they say, well, this interferes with our policy of buying and selling. Buying in those countries. They buy here.
But I said last week that everything is not for sale in this country, that security tops everything in this country. If we don't have security, we don't have anything.
DOBBS: You couldn't say it any better. No matter who tried. And senator, let me ask you this. We've got $4.5 trillion in external trade debt. The world is awash in American dollars. Is this administration, this treasury secretary and CFIUS basically trying to find a home for that money?
SHELBY: Well I hope not, but the money will find a home somewhere. And you're absolutely right. You know, we're selling our bonds all over the world now because we have a small savings rate, probably not even a net savings rate.
We're not financing our government. We're not financing a lot of things. We want to do business with people but this process, CFIUS process, the committee on foreign investment, is broken, and we're going to reform it. And we're going to do it soon. You'll see some legislation coming through in the next several weeks.
DOBBS: And you're going to be introducing that.
SHELBY: I'll be introducing it and I'll be talking with you about it.
DOBBS: All right, we look forward to that. Senator Richard Shelby, as always, good to have you here.
SHELBY: Thank you, Lou.
DOBBS: Well, Senator Shelby fears that just about everything in America is for sale in the minds of some. And he might be right about those few. But not only are foreign firms taking over our port operations, they now have a foothold at our nation's airports as well.
Since 1995 a British firm BAA has managed the Indianapolis International Airport under its U.S. arm called BAA Indianapolis. The British company, it owns seven airports in the United Kingdom, also provides security at the Indiana Airport.
It also runs some operations at Boston's Logan International Airport, the Pittsburgh International Airport and the Baltimore- Washington International Thurgood-Marshall Airport, if you're keeping count.
Taking a look now at some of your thoughts. Dolores from Pennsylvania wrote in to say, "I have never known of a president to so stubborn as Bush. I think he would let this country go to ruin rather than admit he has been wrong.
Ted in Massachusetts, "Lou, trading our nuclear technology to India for mangoes? Brilliant. Now how about trading our Florida oranges to the UAE for our ports back."
And Len in California, "Did I really hear the president say that we are exchanging nuclear technology for mangoes? I just can't get my brain around this."
And Dave in Oregon, "Dear Lou, this country cannot afford another three years of this president. There will be nothing left for him sell off."
And Linda in Michigan, "Now that my job in customer service is unavailable, can I get a job peeling mangoes?"
Walt in Idaho, "It seems to me that Congress is specializing in overlook these days rather than oversight."
Sheldon in California, "At last a ray of hope. At my local Ace hardware store I actually found a product made in America. It was a toilet plunger. Perhaps we have finally hit bottom."
Richard in Pennsylvania said, "Lou, Ross Perot told us to listen for the big sucking sound of jobs leaving our country with the NAFTA free trade agreement. Now we are hearing another sound, that of churning water as our country is being flushed down the toilet."
Send us your thoughts at loudobbs.com. We'll have more of your thoughts later here in the program.
Still ahead, what colleges and universities will lose if they don't allow military recruiters on their campuses.
And putting commerce ahead of national security, why critics of this nuclear deal with India say President Bush is doing just exactly that. Our special report is next. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Growing concern in Congress tonight about the president's nuclear deal with India, that deal signed in New Delhi last week, gives India access to U.S. commercial nuclear technology. Critics say the agreement will help India increase its stockpile of nuclear weapons as well. Kitty Pilgrim reports.
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KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The ink barely dry, and the critics are forming. Republican Duncan Hunter, chairman of the House Armed Services Committee, worries India's civilian nuclear program will feed military build-up. REP. DUNCAN HUNTER (R-CA), CHAIRMAN, ARMED SVCS. CMTE: Those people can quickly move their talents from domestic energy production to weapons production, so this thing has to be looked at very, very carefully. I'm skeptical.
PILGRIM: Democratic Ed Markey, who co-chairs the bipartisan task force on nonproliferation called the deal, "a historic failure." Experts say the deal could triple the number of nuclear weapons India can produce and about a third of India's 22 nuclear facilities will be off limits to inspection.
Senator Susan Collins, chair of the Homeland Security Committee says she is leery of putting any kind of facility off limits to international inspectors. Positions today were being taken. Many disgruntled by the way the president did the deal without consulting Congress. The Democratic co-chair of the India Caucus was for the deal, but blunt about the way it was done.
REP. GARY ACKERMAN (D-NY), CO-CHAIR, INDIA CAUCUS: I think the president has done a horrendous job in lining up votes or making the point or trying to present it to the Congress. It's like he still thinks he's the only one in the government and everything is going to go just because he says it.
PILGRIM: Proliferation experts are livid.
JOSEPH CIRINCIONE, CARNEGIE ENDOWMENT FOR INT'L PEACE: This deal feed into the developing storyline on this administration. A secret deal cooked up without proper procedural review, no consultation with Congress. It seems to be a sweetheart giveaway it a foreign government that sacrifices U.S. national security interests.
PILGRIM: Republican Ed Royce, who chairs the International Relations Subcommittee on non-proliferation warned, "better relations with India should not come at any cost."
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PILGRIM: Now sources on Capitol Hill say they think it will be months before the administration sends a bill up and they doubt that the legislation would be passed this year. Now we were able to contact about half of the 184 members of the India Caucus. A large majority who responded still undecided whether they would support the deal. However the eight who were strongly against it Lou, were all Democrats.
DOBBS: All Democrats and as the president is talking with Manmohan Singh, the prime minister of India, talking about the trade relationship, it's important to note that that trade relationship, just as it has with almost every country -- and India's without question a critically important trading partner and ally -- nonetheless, it's grown to $11 billion. Thank you very much, Kitty Pilgrim.
The Supreme Court today ruled universities must allow military recruiters on their campus or they will lose federal funding. A group of elite law schools wanted to ban recruiters to protest Pentagon policies against gays in the military. In a unanimous decision, the high court ruled colleges are free to speak out against Don't Ask, Don't Tell military policies, but the justices said those schools that accept federal funds cannot ban recruiters, and if they do, they will lose an estimated $35 billion.
The proposed $67 billion merger of AT&T and BellSouth, a major step toward reuniting what was the old Bell telephone monopoly. AT&T would become the largest phone company in the world, serving 70 million local phone customers in 22 states. It would also be the nation's largest wireless cell phone carrier.
In 1984, the government broke up Ma Bell into seven so-called Baby Bells. This merger reduces the number of remaining Baby Bells to three, that just about rolls back the divestiture. By the way, AT&T says it will cut 10,000 jobs if the deal goes through. We've heard no one suggesting that there will be an antitrust problem like there was a little more than two decades ago. What goes around, et cetera.
Still ahead, some Republicans are turning away from this White House deal on the Dubai Ports World as the president's approval rating sinks to a record low.
Also, the administration's nuclear deal with India facing tough criticism. We'll be taking a look at a number of the president's problems with our distinguished panel of political analysts, here next. Stay with us.
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DOBBS: Coming up at the top of the hour, "THE SITUATION ROOM" with Wolf Blitzer, tonight reporting from Dubai. Wolf?
WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou. At the top of the hour, we'll have an exclusive interview with the CEO of Dubai Ports World, the company hoping to take over six of America's largest port operations. It's an interview you'll see only here on CNN.
Plus, one-on-one with a top U.S. naval officer who oversees logistics for the U.S. Navy in the Persian Gulf. They'll show us the kind of security precautions the U.S. Navy is taking in Dubai.
And, want to see what city of Dubai really looks like? I'll take you on a tour. I went up on a helicopter over the city earlier today. "THE SITUATION ROOM" in Dubai. All of that, Lou, coming up right at the top of the hour.
DOBBS: Looking forward to it, thank you very much -- Wolf Blitzer tonight from Dubai.
President Bush is facing sinking poll number, a mutiny in his own party, and the nuclear agreement that he signed with India will also be extremely difficult and controversial when he joins with his colleagues on Capitol Hill. Joining me now to discuss the political turmoil engulfing this White House, the Republican Party and indeed some of the most serious concerns for this nation. "Wall Street Journal" columnist John Fund, Democratic political strategist Hank Sheinkopf, CNN senior legal analyst Jeffrey Toobin.
John Fund, let me turn to you. The Dubai ports deal, now Congressman Pete King, chairman of the House Homeland Security, trying to offer the president a graceful exit, political cover. What do you think?
JOHN FUND, COLUMNIST, WALL STREET JOURNAL: We're having a negotiation. The final shape of it will finally be somewhere between Pete King's position and the president's position, probably be a U.S. subsidiary with some provisos that security will be absolutely positively nothing to do.
DOBBS: Should we do business that way when we're talking about key U.S. strategic infrastructure assets?
FUND: Well, I actually support the deal, Lou, believe it or not.
DOBBS: No, I know you do, that's why I'm asking.
FUND: One the things that we should understand is there's a reason why 80 percent of our ports are currently operated by foreign companies.
DOBBS: You know, I would probably have a disagreement about that.
FUND: Well, there's a reason.
DOBBS: But do you think it should be?
FUND: Well, no, I don't. What I would prefer would be that the corrupt unions that have ties to organized crimes...
DOBBS: Oh cry.
FUND: ... that have raised our costs so dramatically.
DOBBS: Oh please, please, John.
FUND: Excuse me, I can send you the -- fine, the federal indictments in Brooklyn.
DOBBS: What I'm talking about right now is the institution that's supposed to save us in terms of our national security...
FUND: On the waterfront is here and now.
DOBBS: ... and to investigate corruption is the United States government and it's not working worth a damn.
FUND: We can investigate the U.S. government, too. DOBBS: All right, start there.
FUND: But there is a serious problem with the on the waterfront unions that have raised our costs so that no American companies will participate.
DOBBS: Hank Sheinkopf?
HANK SHEINKOPF, DEMOCRATIC POLITICAL CONSULTANT: This is political nonsense. The facts are that average Americans will look at this deal and say, "What, are you kidding me?" This is more fuel on the fire for people to wonder what this country is doing and how it's being operated. That's the bottom line.
DOBBS: Jeffrey?
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: The Bush administration seems to be trying to change the subject all the time. Today, the president came out with the supporting for a doomed and probably unconstitutional line item veto idea. He can't.
DOBBS: You mean one that's already been ruled unconstitutional?
TOOBIN: In 1998, yes, in 1998. You know, this is basically a democracy, and when you've got 75 percent of the people...
DOBBS: I want you to think of it as more than basically.
TOOBIN: No, I mean, when you have got 75 percent of the people against something as you do with the ports deal, it's not going to go through. You can decide that now or decide it later.
DOBBS: Let's examine this thing about democracy because we all, I think, nearly all of us believe what were talk in the fifth, sixth grade, that this is a democracy. That our votes count. That the will of the people is what drives this government. But when you look at illegal immigration, when you look at border security, when you look the at the Dubai ports deal, when you look at national security interests, this government is effectively telling the American people to go to hell. Right, John?
FUND: Well, remember, we're a democracy and also a republic. There are certain things the majority is not allowed to do because we have a constitution, we have the rule of law.
DOBBS: Wait a minute. Rule of law. Here's the law. The law is --
FUND: I agree with you. I agree with the illegal immigration problem but we still have to do it constitutionally.
SCHEINKOPF: We have had an imperial presidency for quite some time where troops and use of force have been used at will by not only by this president but others, and what you see in the heartland of this nation is revolting as that imperial presidency. People are angry and when they get angry, they change partners in dance. DOBBS: Do you think that's a profound anger? Do you think that timely this country has said looking at our -- the disparity and income from the top one percent to the rest of this population that makes up this democratic republic. When we look at the corruption in this government, when they look at what is happening with the spin machine that used to be called a government, do you think they've had a belly full.
SCHEINKOPF: Once is an accident. Twice is a panel of experts. Three is a five-year study. This is one, two, three, four, five, six. At some point average Americans will get the information and get crazy.
TOOBIN: What if Republicans succeed in putting anti gay marriage amendments on the ballot in a lot of states? The Republican party is far from powerless here at harnessing this anger. Even though they're the incumbents. There are lots of issues out there that still favor the Republicans.
FUND: Jeff, only 24 states that have the initiative process. Almost all of them has already passed all those amendments. That strategy is not on this year. Sorry it's over.
SCHEINKOPF: The beauty of Republicanism, Post-Nixon, was the ability to take anger from people and put it to use. What is happening is that anger is now turning the other direction because people are tired of knowing they have no economic security. They have a class of politicians which has become a ruling cluster of elites. In both parties. I'm not saying --
DOBBS: Both parties supported by U.S. multinationals in corporate America.
SCHEINKOPF: But the difference is they get angry at -- they get angry against the post-Watergate Congress, at Clinton in '94 and on and on.
FUND: This climate is the most ripe for a third party or independent candidate than it has been since 1992. It is there, both parties have been discredited. The Democrats are brain dead. The Republicans have obvious corruption and other problems, perceptionably. A third party may well be in the cards for next election.
TOOBIN: But you can't beat somebody with nobody and third parties have nobody at this point. They don't even have Ross Perot.
DOBBS: I would argue to you, though, Jeffrey, that neither the Democrats or the Republicans, I think about as nobody as you get right now. It is remarkable.
SCHEINKOPF: The history of American politics is such that economic populism wore off as the fire keg that lights the spark that creates the disruption in the system. We've had it time and time again. DOBBS: Let's talk about the president today, you were talking about changing the subject. About the economy. I just -- say where we are with federal spending. Federal spending has been going up just about 40 percent over the course of the past five years. This is the compassionate conservative, constrained government president.
And here we are with the budget. He inherited $128 billion, this compassionate conservative. This Republican party is in charge of both houses. There is the projected deficit, $423 billion on the record.
FUND: I want to agree with Jeff. The line-item veto is a dodge. The president already has within his power, he has rescission power and he also has the power to get rid of all of the earmarks that congress passes. But he hasn't taken that so it's a dodge.
TOOBIN: He started a war. But he started a war that's very expensive and now very unpopular.
FUND: If he wants to pare back spending, he has tools at his disposal. He's not chosen to exercise them.
DOBBS: how about getting government under control, responsible to the will of the people and putting the national interests first.
TOOBIN: Amen, brother Lou.
DOBBS: Brothers, all of you. We thank you very much. We'll talk soon. Appreciate your time.
Still ahead here, we'll have the results of our poll. More of your thoughts. Stay with us.
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DOBBS: Well, now the results of our poll.
Only 99 percent of you say your outraged to learn that congress hasn't demanded that CFIUS, as required by law, report on congress on its decisions and the impact of those decisions.
And now, let's turn to more your thoughts. We've received thousand of e-mails from viewers concerned that the United Arab Emirates wants CNN to shut me up for reporting the Dubai Ports World takeover. CNN by the way has been standing fast with me. I couldn't ask for more support. For reporting that representatives of Dubai Ports World refuse to come on this broadcast. Which they do and they're entitled and for reporting that another UAE company Astithmar (ph) bought a 2.4 percent stake in Time Warner, the parent of CNN recently.
R.B. in Utah says, they might not be the only ones who would like to see me silenced. He writes to say, "I'll bet you the Bush administration would like to shut you up like the UAE government owned port managing company." And James in Ohio. "It only took five and a half years, but George Bush has united the people like he said he would. Too bad it took Dubai Ports World to do it." You're right, it is too bad.
And Diane in Maryland. "Lou, I finally figured out why President Bush supports the Dubai sale. He looked into the emir's eyes and has seen his soul," a reference I believe to Vladimir Putin of Russia.
Thomas in Pennsylvania. "Lou, it appears obvious to me that W and some members of congress are preparing for their futures in our global economy by assuring themselves a position on the board of directors with the companies they are busy exporting America to."
And Phillys in Colorado. "Mr. Dobbs, Friday's show has moved me to do something I have never done, write my congressman. With all the sellout and mismanagement that's going on in Washington, I wonder if anyone is listening to the American people."
Bob in Florida. "The selling of our ports and other domestic interests equates with the fall of Rome. sold out, let others run their empire, lost control and disappeared. They lasted 1000 years. We'll be lucky to make it to 300."
And Terry in California. "Lou, what is more dangerous than a wounded bear? A lame duck."
Thanks for your thoughts. Send us those thoughts at loudobbs.com. We appreciate it and love to share them with everyone. Thank you for being here tonight. Please join us tomorrow when among my guests will be Congressman Harold Ford whose new Senate campaign focusing on the Dubai ports deal. Senator Barbara Boxer will be here as well, a key opponent of the deal. Please join us.
For all of us here. Thanks for watching. Good night from New York. "THE SITUATION ROOM" begins now with Wolf Blitzer.
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