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Lou Dobbs Tonight

Kirk Fordham Testifies Before House Ethics Committee In Foley Scandal; Bush Appearing With Hastert At Fundraiser in Chicago; GOP Candidates Distance Themselves From Foley Scandal, House Leadership; Harry Reid Forced To Answer Questions Over Land Deal; Illegal Alien Smugglers Disguising Themselves as Border Patrol Agents; Top General At Pentagon Tells CNN Overall Iraq Strategy Under Review; Barry Levinson Discusses "Man of the Year"

Aired October 12, 2006 - 18:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


KITTY PILGRIM, CNN ANCHOR: Thanks, Wolf. Tonight, who is telling the truth in the congressional page scandal? The House Ethics Committee today heard important close-door testimony from a key witness. We'll have a live report from Capitol Hill.
And watch for the counterfeit Border Patrol. We'll have a special report on the latest attempts by illegal aliens to enter this country.

ANNOUNCER: This is LOU DOBBS TONIGHT, news debate and opinion for Thursday, October 12. Kitty Pilgrim sitting in for Lou Dobbs who is on assignment tonight in Philadelphia.

PILGRIM: Good evening, everybody. Tonight, the House Ethics Committee has begun important hearings into the congressional page scandal. Today Congressman Mark Foley's former chief of staff testified under oath and he says he warned House Speaker Hastert's office more than five years ago about Foley's instant messages to pages. Congressional Democrats are facing ethics questions of their own tonight.

Senate Minority Leader Harry Reid is being probed for possible improper conduct in a million dollar Las Vegas land deal. Andrea Koppel is live on Capitol Hill with more on the closed door testimony in the Foley scandal. Suzanne Malveaux is live in Chicago where President Bush is appearing with embattled House Speaker Hastert. And Bill Tucker reports on the Senate minority leader Harry Reid's Las Vegas jackpot. We begin with Andrea Koppel on Capitol Hill -- Andrea.

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT: Kitty, that's right. After four-and-a-half hours, Kirk Fordham emerged from behind closed doors where he had been answering questions form members of the House Ethics Committee and although Fordham did not respond to any reporters' questions, his attorney did.

(BEGIN VIDEO CLIP)

TIMOTHY HEAPHY, KIRK FORDHAM'S ATTORNEY: He's been truthful and cooperative and will continue to be throughout this and other investigations. We have been asked not to share the substance of the inquiry because of the ongoing investigations. (END VIDEO CLIP)

KOPPEL: Now, as someone who was among the former congressman's closest aides and who had worked with him for about 10 years, Kirk Fordham is somebody who committee members and investigators believe could provide them some hard cold facts as to who knew what, when.

(BEGIN VIDEOTAPE)

KOPPEL (voice-over): Hours before Kirk Fordham and his attorney arrived on Capitol Hill, reporters cornered him at his Washington home and peppered him with questions.

QUESTION: Are you nervous about testifying under oath?

KIRK FORDHAM, FORMER CONGRESSIONAL STAFFER: Not really. I slept very well last night. Had a good night's sleep. Talked to my family. And I'm going to tell the truth.

KOPPEL: But while Fordham may be sleeping well, it's a safe bet some House Republican aides are not. That's because a source familiar with Fordham's account of events tells CNN he planned to testify he had warned a top aide to Speaker Dennis Hastert about Foley's behavior several years ago.

That directly contradicts the speaker's version, that his office first learned about Foley's inappropriate e-mails to House pages last fall.

FORDHAM: I'm going to tell the truth, and that will become apparent once the report is issued. But I'm pretty comfortable with what I'm going to say today.

KOPPEL: But in a written statement, Speaker Hastert's chief of staff has disputed Fordham's allegations saying simply "what Kirk Fordham said did not happen."

The other Republican who testified Thursday was West Virginia Congresswoman Shelley Moore Capito, one of three House members responsible for overseeing the page program.

REP. SHELLEY MOORE CAPITO (R), PAGE BOARD MEMBER: I'm a member of the page board who was not informed of the e-mail messages that were sent. And I want to see this investigation go forth quickly and reach a conclusion.

KOPPEL: But while Capito was in the dark, about Foley until two weeks ago, Illinois Republican John Shimkus, the board's chairman, was not.

(END VIDEOTAPE)

KOPPEL: Now, Congressman Shimkus claims that he was first notified about inappropriate e-mails exchanges between Foley and interns or pages dating back to the year ago last fall. And Kitty, CNN has learned the congressman himself will be in the Ethics Committee hot seat tomorrow -- Kitty.

PILGRIM: Thanks so much. Andrea Koppel.

Now President Bush tonight is appearing with embattled House Speaker Hastert at a fundraiser in Chicago. Suzanne Malveaux is live with the president and the House speaker -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Kitty, literally it is a situation where President Bush is going to be standing by his man, the speaker of the House Denny Hastert. This is very important for White House strategy and for the GOP. It's about getting back on the offense, getting back on message.

And of course this sends a very powerful signal to the Republicans, essentially, get on board, back us up on this one. If there is any perception that Republicans do not stand behind their own speaker, there is no way that they're going to able to maintain the majorities in the House and the Senate. So that clearly is the message tonight.

We expect to see President Bush and Hastert sharing that stage at this fundraiser momentarily. The second part, of course, of the White House strategy is about trying to focus again, not on Foley, not on Hastert, not on the controversy, but back on issues that Republicans believe they are really strong on. That would be national security and the economy -- Kitty.

PILGRIM: Suzanne, I guess the real question is what is the real relationship between these two men, is it a sincere personal relationship or a political calculation?

MALVEAUX: It's a little bit of both. Because these two men are honestly and genuinely loyal to each other. They have known each other for quite sometime. President Bush even convincing Hastert to run again for another term back a couple of years ago to push forward his second-term agenda. So clearly they need each other.

There have been divisions over issues with immigration reform, the Dubai port deal. The failed deal there. But President Bush is really dependent on Hastert to push forward much of his domestic agenda. They need each other. And clearly, they are on board now that this is the time to show unity in the Republican Party to maintain those majorities -- Kitty.

PILGRIM: Thanks very much. Suzanne Malveaux.

Well, the political fallout from the Foley scandal remains a wild card in the upcoming midterm elections. And across the country tonight, GOP congressional candidates are trying to distance themselves from the scandal and the House congressional leadership.

Bob Franken reports from Clarksville, Indiana.

(BEGIN VIDEOTAPE)

BOB FRANKEN, CNN NATIONAL CORRESPONDENT (voice-over): It's the third consecutive time the two have run against each other. Baron Hill, the Democratic former congressman ...

BARON HILL, DEM. CONGRESSIONAL CANDIDATE: I hope you can support me.

UNIDENTIFIED FEMALE: We will.

UNIDENTIFIED MALE: How are you doing, Mike?

FRANKEN: ... and Republican Mike Sodrel, the incumbent who now must deal with the lingering presence of Republican ex-congressman Mark Foley.

REP. MIKE SODREL (R), INDIANA: When I saw his face on television, I recognized him. If you had said pick him out of the lineup before that Friday, I'm sorry, I lose.

FRANKEN: But that's not stopping the democrats from hammering away at some of Sodrel's campaign contribution.

ANNOUNCER: And $77,000 from the House leadership, who knew about but did nothing to stop sexual predator Congressman Foley.

FRANKEN: Sodrel says he's not returning the contribution. He spent some of his money on his own ad.

SODREL: Baron Hill's attack ads blaming me for the Mark Foley mess are the biggest lie yet.

FRANKEN: This race is becoming a real test of the Foley factor and how long it will last.

AMY WALTER, COOK POLITICAL REPORT: We still have four weeks to go so we may not be talking about this three weeks from now.

FRANKEN: Fact is, many of the diners at Ryan's Restaurant have already heard enough talk about Foley.

UNIDENTIFIED FEMALE: I'm tired of hearing all the nonsense, this one did this and this one did that. Let's focus on what is important to the American people.

UNIDENTIFIED MALE: What he's done is not going to affect my vote here in our congressional race.

FRANKEN: The Democrat candidate himself acknowledges the Mark Foley scandal will not keep resonating.

HILL: I think it will be a part of the resonation. I don't think it's going to be the key component.

SODREL: It's ridiculous. It's ludicrous.

FRANKEN: And many of the voters are getting weary.

UNIDENTIFIED MALE: I don't think it will affect my vote that much. We're seeing -- the thing that bothers me is we're getting so many of these kind of scandals from the people we're sending to Washington, whether Democrat or Republican.

(END VIDEOTAPE)

FRANKEN: And in fact, the Republicans, Kitty, are hoping that the voters remember that quote from a famous Democrat, Tip O'Neill that "all politics is local."

PILGRIM: Bob, quick question, the Foley factor you discuss, the Bush/Hastert meeting tonight in Chicago, what's the factor in that? Would that factor at all?

FRANKEN: Well, it's interesting. Dennis Hastert was scheduled to come here but this is one of the congressional districts that where quote the Republicans "scheduling problem" caused him to cancel that appearance.

PILGRIM: Thanks very much. Bob Franken. The ethics of congressional Democrats are also under fire tonight. Senator Minority Leader Harry Reid is being forced to answer serious questions about a massive windfall he made in a Las Vegas land deal. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): The facts are fairly simple from Senator Reid's point of view. He and his wife bought land in Nevada in 1998, they sold it in 2004. They made $700,000 profit and he reported all of that. His critics see it differently.

PAUL OREFENDES, JUDICIAL WATCH: He continued to report the property as if it had been his personally, which it wasn't. There was some change in the nature of the ownership that took place. And that's important because the people need to know who congressmen and senators are doing business with.

TUCKER: The identity of the business partner in question is Jay Brown, a Las Vegas attorney who has worked in the casino industry.

Senator Reid admits in his disclosure forms he treated the sale as a personal property sale, not as the sale of property held by a corporation in which he was a holder. He calls that a technical mistake.

SEN. HARRY REID (D-NV), MINORITY LEADER: If there's a technical change needs to be made on reporting, I'll be happy to do that. But this is a very, very simple land deal. I bought a piece of land and I sold it. It's as simple as that.

TUCKER: What Reid is asking for is circumstantial a mulligan, a do-over. Which in this case, as it turns out, is not that unusual. The disclosure forms and instructions can be vague and open to personal interpretation. So ...

MASSIE RITSCH, CENTER FOR RESPONSIVE POLITICS: A good rule of thumb for any politician is disclose as much as possible as quickly as possible. And you can generally avoid getting hard questions later that might hurt your political standings.

TUCKER: The Center for Responsive Politics is trying to make hiding less possible.

(END VIDEOTAPE)

TUCKER: Now, on their Web site, opensecrets.org, they will begin posting the various disclosure forms the members of House and Senate must fill out annually. And create a searchable database for those interested in the finances of our political leaders. And yes, Minority Leader Reid will be up there with everybody else.

PILGRIM: I guess the real question is did he break the law or not?

TUCKER: The facts as we know them right now is simple, no he didn't. He did do the property, he moved it into a partnership, he reported his profits. Anything else, we don't know and right now he has not broken the law. In terms of disclosure, the Senate Ethics Committee has not spoken out. He went to them and said, do I need to file an amended form and he hasn't gotten an answer back so we'll wait and see.

PILGRIM: All right. Thanks very much. Bill Tucker.

Well, still ahead, are your local lawmakers really working in your best interest? A new study says former state officials can't wait to become Washington lobbyists and write laws for big business.

Plus outrageous charges that the Pentagon botched the Iraqi reconstruction effort by putting cronies in charge.

And illegal alien smugglers appear to have found a brand new way to avoid the Border Patrol. They're trying to pass themselves off as the Border Patrol.

(COMMERCIAL BREAK)

PILGRIM: A new report tonight says the revolving door from public service to special interest turns just as easily at the state house as it does on Capitol Hill. Now this report says state lawmakers are now rushing to become lobbyists. And critics say, they're in danger of putting business interests ahead of your interests. Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Across the country a revolving door from state house to lobbying. A new report found some 1,300 former state legislators registered in 2005 as lobbyists.

LEAH RUSH, CENTER FOR PUBLIC INTEGRITY: Politics is politics no matter where you are.

ROMANS: The Center for Public Integrity uncovered a state gambling committee leader who left to represent casinos. Another lawmaker spear-headed a move to cap medical liability and then left to represent the medical industry.

The center asked hundreds of former lawmakers why.

RUSH: The allure of, I've done my public time, now I need to put my kid through college, is a response that we heard often from lawmakers.

ROMANS: The payoff is incredible. In Texas, for example, the report found a lawmaker earning $7,200 can earn almost half a million dollars a year as a lobbyist. Texas leads the nation in this revolving door, 70 former state lawmakers on the lobby rolls last year. Sixty in Florida. These states round out the top 10.

It is now a billion dollar business, special interests working hard for a say in the 40,000 state laws passed last year.

PAUL MILLER, AMERICAN LEAGUE OF LOBBYISTS: If you're a corporation or a private company or an association what you are going to do is probably look to hire the best lobbyist out there and that may be a former lawmaker whether it be on the federal or state level.

ROMANS: Some call it government for sale. Another blow in the war on the middle class. But the lobbyist for lobbyists says it makes government better.

MILLER: Without lobbyists I'd be scared to see the rules and regulations that would be placed on citizens all across this country.

ROMANS: Still, he supports a cooling off period between elected office and lobbying.

(END VIDEOTAPE)

ROMANS: About half the states now have some sort of waiting period to slow the revolving door, but term limits may be accelerating this trend. Ineligible to run again, lawmakers who would have been career politicians, Kitty, they can stay in politics but by becoming lobbyists.

PILGRIM: Very interesting stuff. Thanks very much, Christine Romans.

Well, join us next Wednesday, October 18th for a LOU DOBBS TONIGHT special report, war on the middle class. And Lou will be reporting live from Kansas City, Missouri. That's next Wednesday, 7:00 p.m. Eastern here on CNN. And Lou's book "War on the Middle Class" is now available in bookstores and also online.

There are new questions tonight whether the government is sending the best possible people to lead the reconstruction effort in Iraq. Some critics of the administration say patronage rather than ability may be the deciding factor for who lands the job. Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): At least nine people were killed at an Iraqi TV station as the sectarian violence swells to an all-time high. More than 400 bullet riddled bodies found throughout the Iraqi capital in month alone. Critics say the chaos can be traced back to cronyism in the days immediately after Baghdad fell.

RAJIV CHANDRASEKARAN, "WASHINGTON POST": Instead of sending the best and the brightest, in many instances we sent the loyal and the willing.

SYLVESTER: Rajiv Chandrasekaran spent two years in Iraq with the "Washington Post." He's the author of "Imperial Life in the Emerald City."

He says the U.S. Coalition Provisional Authority brought in political appointees with little know-how to run Iraq, rejecting Middle Eastern experts experienced in postwar reconstruction.

A 24-year-old with no finance experience was put in charge of the Baghdad stock exchange. A social worker with Republican ties brought in to run the health care system replacing a senior USAID official.

Democratic senators are now calling for an independent investigation into the Pentagon's hiring practices.

SEN. DICK DURBIN (D), ILLINOIS: Need to ask how they voted in the previous election. What their position was on important issues like abortion before they would hire them to try to rebuild Iraq. They ended up giving jobs as political favors to people totally incompetent.

SYLVESTER: But Republicans insist, there were knowledgeable advisers and dismissed the criticism as election year posturing by Democrats.

CHERI JACOBUS, REPUBLICAN STRATEGIST: They really have nothing to offer the American people in terms of alternative. It's just a way to throw stones at the Bush administration and score rather cheap political points in an election year.

SYLVESTER: But even Republicans acknowledge mistakes were made by junior and senior aides and it's been left to U.S. troops to mop up the mess.

(END VIDEOTAPE)

SYLVESTER: Now the Pentagon has so far refused to release a list of the Coalition Provisional Authority personnel ignoring Freedom of Information Act requests. And Senator Durbin has asked the Government Accountability Office and the Inspector General of the Defense Department to investigate -- Kitty.

PILGRIM: Thanks very much, Lisa Sylvester. Well, still ahead, American troops will be in Iraq for sometime to come. We'll have a report from the Pentagon. Also talk to General David Grange. And Middle East expert Fawaz Gerges about the implications of a prolonged occupation.

A group of illegal aliens try yet another new way to cross the border from Mexico. We'll have a report.

And Lou Dobbs sits down with Oscar winner Barry Levinson, director and writer of the new political comedy, "Man of the Year."

(BEGIN VIDEO CLIP)

ROBIN WILLIAMS, ACTOR: When I was 21 I went to a prostitute. And I was so bad she actually gave me a refund. I once had a ...

(END VIDEO CLIP)

(COMMERCIAL BREAK)

PILGRIM: Incredible pictures tonight show the lengths to which smugglers will go to violate our nation's immigration laws. Some illegal alien smugglers are now actually disguises themselves as Border Patrol agents. Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): It sure looks like the kind of van Border Patrol agents use every day to transport captured illegal aliens. But it's a fake, painted with the border patrol's distinctive green stripes and logo and it was being used by a coyote to transport illegal aliens across the border from Mexico. According to agents in Casa Grande, Arizona, they encountered the 2001 Dodge Van on the Tahona Odem (ph) Indian reservation.

After the van's driver spotted the agents, he turned around and tried to drive back into Mexico. He then got out of the van, ran across the border, leaving 30 illegal aliens trapped inside by a metal cage.

SHANNON STEVENS, U.S. BORDER PATROL: There was a cage in the back so there was no way for them to get out.

WIAN: In San Antonio another bust.

FRED HOLLENBACK, IMMIGRATION AND CUSTOMS ENFORCEMENT: It appears it's a stash house and that people were being staged there to move elsewhere.

WIAN: Police acting on a tip about stolen cars found more than 50 illegal aliens trapped in a three-bedroom house without food or water.

HOLLENBACK: We have a diverse group, some from other than Mexico and the majority are from Mexico. WIAN: Recent efforts to beef up border security have made smugglers more desperate, ruthless and creative. Even President Bush has take notice. His solution, a temporary worker program.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It will certainly help stamp out these illegal characters that are exploiting human beings -- these coyotes that stuff people in the back of 18 wheelers for money is just -- that's not in character with how this nation works.

WIAN: But it is the reality at the border. In just the past week, agents discovered 17 people sealed in a U-Haul truck in Falfurrias, Texas. Almost a ton of marijuana in a dump truck in Los Barreras, Texas. And in Lordsburg, New Mexico, 1,500 pounds of pot in the floorboard of a livestock trailer.

And in San Ysidro, California, an 83 year old woman with 10 pounds of methamphetamine strapped to her body.

(END VIDEOTAPE)

WIAN: Needless to say, it's been a busy week at the southern border, another reminder that despite some highly publicized efforts by the federal government, that border remains far from secure -- Kitty.

PILGRIM: It's unbelievable, Casey. Thanks very much for that report.

Well, there are new protests today and strikes that have crippled the Mexican city of Oaxaca in the past four months. Today protesters hijacked buses and forced government workers from their offices. This breaks an agreement earlier in the week for demonstrators to end the occupation of the city.

Now the protestors say the local government is corrupt and they are demanding that the governor of Oaxaca step down.

President Bush tonight making his support of embattled House Speaker Dennis Hastert very clear. The president is appearing with the speaker at a GOP fundraiser in Chicago.

(BEGIN VIDEO CLIP)

BUSH: Speaker Denny Hastert has a long record of accomplishment. He's not one of these Washington politicians who spews a lot of hot air. He just gets the job done.

(END VIDEO CLIP)

PILGRIM: That was President Bush appearing with Dennis Hastert. Time now for some of your thoughts.

Frank in Florida writes, "As a Democrat I must admit that we deserve the Republican Party - all that it has thrown at us. We have lost a sense of the issues that made Democrats defenders of the middle class and making available education and economic opportunities. We simply have no leadership."

And Jack in Florida writes to us on the dangerous food. "Why do we need to create another government agency to check our food? We need to make the one we have, the FDA, do what it's supposed to do."

Earl in Florida writes, "Shame on you, of course we need another agency to check our food. There must be at least seven or eight Republican cronies that President Bush still hasn't found a job for."

So e-mail us at LouDobbs.com. We have more of your thoughts a little bit later in the broadcast. And each of you whose e-mail is read here will receive a copy of Lou's new book, "War on the Middle Class."

As we reported, House Speaker Dennis Hastert tonight is campaigning in Chicago for two Republicans who are facing tough races. Now, our poll question tonight is, would House Speaker Hastert's endorsement of a particular candidate make you more or less inclined to vote for that person? Answer one is more inclined. Less inclined and also the third choice, his support would not affect your vote. Cast your vote at LouDobbs.com. We'll bring you the results a little bit later in the broadcast.

And coming up, American casualties in Iraq are rising sharply. What is our strategy in Iraq? Fawaz Gerges, a leading expert on the Middle East will join me.

Also, new details about the plane crash that took the life of Cory Lidle and his flight instructor.

And just in time for the midterm elections, Lou speaks with Barry Levinson, the director of the new film, "Man of the Year."

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Have you given any thought to what the makeup of your Cabinet might be.

WILLIAMS: Well, I've always been a big fan of hardwoods like teak or mahogany.

(END VIDEO CLIP)

PILGRIM: Now the movie is all about a very unlikely presidential candidate and his platform. It's very familiar to viewers of this program. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: The investigation into New York's high-rise plane crash continues. New York Yankees pitcher Cory Lidle was killed yesterday when his plane smashed into the 50-story building on New York's Upper East Side. Also killed in the crash, Lidle's flight instructor, Tyler Stanger. Now, investigators from the National Transportation Safety Board have been collecting evidence from the scene.

(BEGIN VIDEO CLIP)

DEBBIE HERSMAN, NTSB: Our team is completing the on-scene phases of our investigation. As I mentioned, numerous parts have been sent back to our lab in Washington. The engines and the propellers are being sent back to the manufacturer's site for further review and teardown. We hope to release the scene.

(END VIDEO CLIP)

PILGRIM: Some of the residents of the luxury apartment building were allowed back in today. Investigators from the National Transportation Safety Board continue to collect evidence in their search for a cause of the crash.

An early winter -- parts of the West and Midwest were just socked. Lake Tahoe, California, hit with snowstorms, making driving treacherous, parts of Colorado, areas as far east as Northern Michigan also hit by ice and snow that caused damage to homes and cars. The weather across the northern part of the country is expected to remain cold and blustery over the next few days.

Bad weather in Florida is expected to drive up the price of orange juice. The government says this year's orange crop will be the smallest in 17 years, and that's because of a cold snap last February and two damaging hurricane seasons. Florida does produce 90 percent of all orange juice consumed in the United States.

The Federal Reserve has detected a cooling trend in the once hot housing market. A new survey found that most of the country is seeing lower asking prices and a rising number of unsold homes.

The nation's trade deficit has hit another record high. Imports topped exports by nearly 70 billion in August, and that broke the previous record set in July. Analysts say the skyrocketing trade deficit is due to high oil prices and the growing trade gap with China.

The chairman of the Joint Chiefs of Staff confirmed to CNN today that he has begun a top to bottom review of the U.S. war strategy in Iraq. And this acknowledgement from General Peter Pace comes one day after President Bush expressed a willingness to change strategy in Iraq.

Jamie McIntyre reports.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice-over): With U.S. casualties in Iraq on pace to make October the deadliest month in two years, the top general at the Pentagon tells CNN the overall strategy is under review, including the lynchpin of the U.S. exit strategy, relying on Iraqi forces to take up the fight.

GEN. PETER PACE, JOINT CHIEFS CHAIRMAN: Are those assumptions still valid? If they are, OK. Then how are we doing in getting to where we're supposed to be going? If we're getting there, how do we reinforce that? If we're not, what should we change?

MCINTYRE: Pace's candid comments come a day after Iraq commander General George Casey met with President Bush, whose Iraq policy is being questioned by key members of his own party. Armed Services Committee Chairman, Republican Senator John Warner, for instance, returned from Iraq saying a change of course may be needed if the current level of violence continues.

BUSH: If the plan is now not working, the plan that's in place isn't working, America needs to adjust. I completely agree.

MCINTYRE: Pace says he and the other joint chiefs are debriefing commanders just back from the frontlines, including one colonel recognized as a rising star and creative thinker. Colonel H.R. McMaster is the author the 1997 book "Dereliction of Duty," considered the seminal work on the military's responsibility during Vietnam to confront their civilian bosses when the strategy wasn't working.

But so far, neither Casey nor his civilian boss, Donald Rumsfeld, admit any flaws in the current approach. And Rumsfeld gave this terse response when asked if he was responsible for what's gone wrong in Iraq.

DONALD RUMSFELD, DEFENSE SECRETARY: Why do we have to keep going through this? Of course I bear responsibility. My Lord, I'm secretary of defense. Write it down. Quote it. You can bank it.

(END VIDEOTAPE)

MCINTYRE: A separate strategy review is underway by the Independent Iraq Study Group, headed by former Secretary of State Jim Baker. Sources tell CNN there is little consensus among the experts, except for the general agreement that the current strategy is not working -- Kitty.

PILGRIM: Thanks very much, Jamie McIntyre.

Well, insurgents in Iraq have killed one more U.S. soldier and wounded two others. Now, the troops came under enemy fire in Tameem Province; 2,753 of our troops have been killed in Iraq. Twenty thousand eight hundred and ninety-seven of our troops have been wounded.

The U.S. Army says its planning to keep current U.S. troop levels in Iraq for at least the next four years. Now, with this statement, it is unlikely that there will be significant withdrawal of troops in the near future.

For more on the impact of this announcement and for more perspective on other developments in Iraq, we turn to General David Grange. General Grange joins us from Chicago.

Thanks for being with us.

BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Good evening. PILGRIM: Let's start. Yesterday President Bush responded to pressures that the United States should set a definitive time period for troop withdrawal, and let's talk about what he said.

He said, "they may not use cut and run but they say that a date certain is the way to get out before the job is done. That is cut and run. And maybe their words are more sophisticated than mine but when you pull out when the job and done, it is cut and run as far as I'm concerned."

President Bush very clearly saying that we are not going to cut and run. What is your position on this new announcement and the president's statement?

GRANGE: Well, on the president's statement, I mean, you know, first of all, it's good to let the enemy know that you have the resolve, that you're going to finish this thing through and it's not the American way to lose a war. I mean, we have lost in the past and I don't think we want to do that again.

I mean, it's one of these things that if we leave, I think the whole region will explode, if not right away, immediately after that. And so, I mean, there's no other choice whether you agree with the fact that we went into Iraq or not that we have to win this thing.

Now, to make the statement that we're going to keep the same troop levels for four more years, if that's in fact the case, I'm glad that's an upfront statement. It's better to say you're going to have more than what you have right now and then downsize is good news than keep going back and forth and saying, well, we may have to pull guys, may have to extend them. Put what you need in there to win, even if it takes a long time, and get on with it.

PILGRIM: There was some discussion a phased withdrawal and that was pretty much the way it was discussed up until this point, General Grange. Is it really the failure of the Iraqi forces, both police and army, to fill the gaps?

GRANGE: Well, you know, it takes awhile to train up forces. I mean, I know how long it takes to train the best armies in the world, ours and armies like ours. And so when you're starting from scratch, with a culture like this, especially on the leadership training, you can't do it overnight. And it takes time.

At the same -- while you're doing this training, at the same time you have a lot of militant leaders that don't want this thing to work and they're trying to break it apart. General Casey, we were able to talk to him last week on a teleconference, and he said that, you know, to have prosperity in Iraq, you've got to have security and to have security, you've got to have unity.

And what the enemy is doing is attacking both the security and the unity, the unity of the people, unity of the government and security of the people, attacking those two critical aspects, those two conditions because they know that's what it takes for them to win. And so they have to get on with getting that resolved with the unity and the security, if we have any chance for victory.

PILGRIM: You know, we've been looking at the figures of Ramadan. There have been an average of 36 attacks a day in Iraq now. It's something -- a spike we usually see during this period, but is it worse than ever?

GRANGE: I think it's been pretty bad, as we know, and it's getting worse. And that's because the strategy of the militant Sunni and Shia leaders, as well as the country of Iran, the leaders of Iran, that is their strategy to break this thing apart. And so you have these other influences that the coalition and the Iraqi government did not have to such a degree before.

You were fighting terrorists, you were fighting insurgents, you were fighting criminals. Now you're dealing with these militant militias and advisers and influence from the country of Iran, which is now increasing the violence.

PILGRIM: Thank you very much, General David Grange.

Still to come, is the war in Iraq giving more fuel to our enemies? Well, my next guest says yes. Fawaz Gerges is the preeminent expert on the Middle East, and he'll join us.

Also, Lou speaks with Barry Levinson. He's the director of "Man of the Year," and it's a film that has more than a few similarities to this program. We'll explain all that. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: American casualties in Iraq are rising sharply. But President Bush says the U.S. needs to stay the course, and my next guest says that rather than stay the course, the U.S. needs to dramatically shift gears.

Fawaz Gerges is a leading expert on the Middle East. He's currently living in Cairo as a Carnegie scholar researching the Muslim world, but he's in New York tonight, and thank you very much for taking time to talk to us.

I know you're in the Middle East for 16 months, taking a bit of a break to talk to us and see some people, and then you're going back. So we'll take advantage of your expertise.

Let's look at the statement. President Bush has continued to insist that the U.S. has to stay the course. And yesterday, he did remark on the consequences of removing the troops. Listen to that first.

(BEGIN VIDEO CLIP)

BUSH: If we were to abandon that country before the Iraqis can defend their young democracy, the terrorists would take control of Iraq and establish a new safe haven from which to launch new attacks on America.

(END VIDEO CLIP)

PILGRIM: Now, and we also hear the policy statement that the troop levels will remain the same. What is your reaction to this?

FAWAZ GERGES, PROFESSOR, SARAH LAWRENCE COLLEGE: Well, it seems to me that the president has boxed himself in. We are winning. They are losing. Iraq is standing on its feet. And this is why I think we should not expect any dramatic changes in the next two years or so.

I expect more of the same. My fear, Kitty, is that security conditions could deteriorate further in the next year or so, and American forces would then be forced to retreat in humiliation as a result of the policy of staying the course.

PILGRIM: Fawaz, I really have to push you on this. You say Iraq is standing on its feet. Sometimes the perception through the news media is that Iraq is in a very big mess. Is Iraq improving?

GERGES: Truly, by the way, I mean, for a person like me who spends long periods of time in the Middle East, the situation in Iraq is very grave. The social fabric of the country itself is disintegrating under the weight of internal civil strife and foreign occupation.

And I think the president underestimates the gravity of the internal turmoil that's breaking the country apart.

Today, Kitty, Iraq stands on the brink of all-out conflict. Even though now Iraq is undergoing low-intensity civil war, my fear and the consensus in the region, that Iraq is breaking apart.

And this is why staying the course, as the president says, the president does not appreciate the gravity of the internal turmoil in the country.

PILGRIM: You know, I have to push you on another fact, and that is that with all the sectarian violence -- we've just spoken with General Grange about this spike in violence -- why is there no strong -- or perhaps there is a strong Muslim voice, a leader speaking out against this sectarian violence?

GERGES: Well, unfortunately, I mean, people I talk to in the Middle East, Iraqis, they don't believe that Iraqis are doing this to Iraqis. I mean, the consensus, the conventional wisdom is that it's either the Americans or the Israeli military or security apparatus. But the truth is, Iraqis are killing each other in the thousands. I mean, the average killing last month, 2,600 Iraqi civilians have been killed.

And the question here, Kitty, the president keeps talking about terrorism. Terrorism, al Qaeda, of course are critical, a critical factor in the equation. What the president does not take into account now, the gravity of the internal strife in the country itself, that Iraq is breaking apart.

And further, for a person like me, who comes, who lives in the region, resides in the region, in fact our military presence in Iraq is alienating mainstream Muslim public opinion. So not only we're basically, as our intelligence services, our actions are sowing the seeds of a new generation of jihadists, our military venture in Iraq is alienating and antagonizing mainstream public opinion.

PILGRIM: Let me suggest to you, though, that the airwaves are filled with anti-American rhetoric in the Middle East, and Al-Jazeera playing all over -- this is also causing a good bit of anti-American sentiment. Is it really the military presence, or is this propaganda that's being broadcast?

GERGES: Truly, Kitty, I mean, there's a great deal of propaganda. There is a pervasive anti-American foreign policy in the region, but the Iraq war is pouring fuel on a raging fire.

The Iraq war, the reason why I'm worried a great deal, the Iraqi war is alienating mainstream Arab and Muslim public opinion as opposed to radical public opinion. Of course, we don't care about radical public opinion, but we should care about the floating middle of Muslim public opinion.

And the Iraq war is pivotal, is pivotal because most Muslims I talk to think that somehow that we are a colonial power, we are there to divide and humiliate the Muslim world.

PILGRIM: Fawaz Gerges, thank you very much for your insights. Good luck in your travels and your studies. Thank you.

GERGES: Pleasure.

PILGRIM: Just ahead, actor and comedian Robin Williams runs for president in the new movie "Man of the Year," and we're going to ask director Barry Levinson what he was trying to prove.

(BEGIN VIDEO CLIP)

WILLIAMS: Seventeen years old, I beat up a guy. When I was 21, I went to a prostitute. I was so bad she actually gave me a refund.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

PILGRIM: Coming up shortly here on CNN is "THE SITUATION ROOM" with Wolf Blitzer -- Wolf.

WOLF BLITZER, CNN ANCHOR: Kitty, thanks very much. U.S. strategy in Iraq under review, and a plan to divide the country into three. Should the U.S. simply pull out right now? We're joined by Max Cleland and Terry Jeffrey.

Plus, happening right now, President Bush on the Foley scandal. He's backing the Speaker of the House, who's been under fire for his handling of the affair. We'll go live to Chicago, where the President's raising money for Republicans.

Also, crack in the alliance. China slaps the U.S. by refusing to go along with a very tough sanction resolution against North Korea.

And a political cheap shot goes viral. The man behind the movies "Airplane" and "Scary Movie 4" does a serious spoof that hits below the belt. Video Columnist Jeanne Moos on the story.

All that coming up, right here in the SITUATION ROOM -- Kitty.

PILGRIM: Thanks, Wolf.

With the campaign season in full swing, a new movie takes a swipe at politics, as usual. It's called "Man of the Year" and stars Robin Williams as a comedian, named Tom Dobbs, who is elected president.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Can we get back to questions of the cabinet?

WILLIAMS: Certainly. My cabinet will be diverse. It will include both Republicans and Democrats and people of no people of no party affiliation. I want diversity. I believe that democracy is about a collision of ideas. I'm not of the school that if you're not for us, you're against us.

(END VIDEO CLIP)

PILGRIM: Now this is not the first time the film's director, Barry Levinson, has tackled political satire. You may recall "Wag the Dog", about an administration that goes to extremes to distract the public from a presidential sex scandal.

Well, earlier, Lou sat down with Levinson and asked him about the new picture.

(BEGIN VIDEOTAPE)

LOU DOBBS, CNN ANCHOR: Barry, at the outset, what brought this movie to your mind? What were you trying to create?

BARRY LEVINSON, FILMMAKER: It started with the idea after the 2004 election, about computer malfunctions in Ohio, et cetera. And I was thinking of that, and a third party candidate benefiting by that kind of -- something happening with the system, and my frustration in general about where we are and where we're going as a country, not in terms of Democrats or Republicans, because you're always hearing about that, and the red states versus the blue states.

But the bigger issue is that there's something fundamentally wrong with the system, and the fact that money has become too important in politics, in order to get elected. And so once that happens, you're eliminating 99 percent of all the qualified people.

DOBBS: Absolutely.

LEVINSON: So that was the motivation for it. DOBBS: Robin Williams, as the comedian who decides he wants to run for president. What gave you the idea of a comedian running for president?

LEVINSON: The comedian is very spontaneous, and someone who is also intelligent in that way, they can run circles around politicians because they're not inhibited. And that character can just say what he wants because, at the end of the day, if he doesn't win, that's okay. And so that today, we have such the need to win, that we're afraid to say anything. And that's what I think people are feeling, that they're saying, I don't know what these politicians are talking about anymore.

DOBBS: I think that is a wonderful thought, because there is the sense that if Robin Williams doesn't win or he does, it would be -- it'll change the country, but it won't change him. The capacity to say that you can be a citizen and be an elected official and not lose your citizenship or your normality, if one can call Robin Williams normal, is a wonderful statement.

Let's take a look at a scene, if we may, Barry, very quickly, in which your candidate explodes during a debate and says what more than a few people in this country are thinking.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Mr. Dobbs.

WILLIAMS: It's over there.

UNIDENTIFIED FEMALE: Mr. Dobbs, please.

WILLIAMS: It's a distraction. They point over here, they point over there. They want you now to know. You don't want than amendment to the Constitution for burning the flag. Make it out of asbestos, no one will want to touch the thing.

UNIDENTIFIED FEMALE: Mr. Dobbs, please do not make a mockery of this process. Return to your podium.

WILLIAMS: Ma'am, this was a mockery a long time before I came here.

UNIDENTIFIED FEMALE: Mr. Dobbs!

(END VIDEOTAPE)

DOBBS: A mockery of the system, Barry? I think a lot of people would wonder, could it be made more of a mockery?

LEVINSON: Well, I mean, I think that in that particular scene is that you have the president and the other candidate who's running, and it's all basically sound bites. They're going to say what they say, and there's nothing that is loose enough. So when we watch these debates, we begin to kind of tune out, because it all sounds so rehearsed. And so, he's spontaneous, he's saying whatever he wants. And that freedom, I think, is what we want. We say, jeez, can somebody just say something, and I may not have to agree with everything, but at least it's coming from a place of honesty and a place of real integrity.

DOBBS: And without an attempt at manipulation.

LEVINSON: Yes.

DOBBS: Perhaps we will live that long, one hopes.

LEVINSON: The trick is to find a way to entertain the audience and not, you know, pontificate to them about the issues. The issues are in there, but we can laugh, as they do quite frequently in the movie, and these other things slip in.

UNIDENTIFIED MALE: I support hydrogen cars.

WILLIAMS: It's weird, because you're backed by oil companies.

And if you're representing special interest groups, maybe we should be like NASCAR, the little patches on the back. Enron, we take your money and run.

DOBBS: Your prescience on political and societal issues established from "Wag the Dog" till now, with "Man of the Year". Let me ask you a serious question. What do you think about these upcoming elections, what do you think the outcome means? What are you expectations?

LEVINSON: Well, I mean, I think that the country wants some kind of change because there's such frustration. The question is when are we going to actually change the system, that it opens the door and allows a lot of really qualified people to get into the mix? And that requires taking the money out of it all, that you can't spend $200 million plus to run for president, or whatever it costs for a governor, or whatever.

I mean, I don't know, was Thomas Jefferson very good at raising money? Because that's where we are now. And you say, no, no, no, that is not what it's about. We need people that can come up with ideas to move us ahead. And that, I don't think, we feel is happening. I think in general, no matter where you stand in politics, in terms of the people, we want somebody to be accountable.

DOBBS: Well, you have put forward a candidate that everyone can rally behind in Robin Williams. The movie's "Man of the Year". We thank you for being here. And we wish you all of the very best.

LEVINSON: Well, thank you very much.

DOBBS: Thank you, Barry Levinson.

(END VIDEOTAPE) PILGRIM: That was Lou speaking with director Barry Levinson. His new film, "Man of the Year", starring Robin Williams, opens nationwide tomorrow.

Well, still ahead, more of your thoughts and the results of tonight's poll.

(COMMERCIAL BREAK)

PILGRIM: Now the results of tonight's poll. Seventy-four percent of you say you are less inclined to vote for a candidate that was endorsed by House Leader Dennis Hastert.

Well, time now for a few more of your thoughts.

Henry in New Jersey: "As a blue collar worker, I see the company I work, Norfolk Southern Railroad, reap record profits each quarter, while taking a greater portion of my salary for healthcare. They also say they have no money for raises. I am a casualty in the war on the middle class."

And finally, Robert in Pennsylvania writes: "We are losing more and more of our civil liberties every day. Everybody in this country should send a postcard to the White House and say 'Enough!'"

We love hearing from you. Send us your thoughts at LouDobbs.com. And each of you whose e-mail is read here will receive a copy of Lou's new book, "War on the Middle Class".

Thanks for being with us tonight. Please join us tomorrow. For all of us, here, good night from New York.

"THE SITUATION ROOM" starts right now with Wolf Blitzer -- Wolf.

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