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Lou Dobbs Tonight

Top U.S. General Admitting Major U.S. Offensive Against Insurgents And Terrorists in Baghdad Has Failed; Rising Number of Republicans Publicly Expressing Concern About President's Conduct Of War; Princeton Pointing Out Serious Flaws In Electronic Voting Machines; Boehner Repeats Assertion He Told Hastert About Mark Foley's Behavior Last Fall

Aired October 19, 2006 - 18:00   ET


LOU DOBBS, CNN ANCHOR: Tonight, the U.S. military has admitted its strategy to defeat insurgents and terrorists in Baghdad has failed. A top U.S. general says the escalating violence there is "disheartening".
We'll have a special report from the Pentagon and Baghdad.

And it's been called a shocking miscarriage of justice. Two U.S. Border Patrol agents facing 20 years in prison for shooting a Mexican drug smuggler. A drug smuggler who was given immunity by our federal government and allowed to walk free.

We'll have that live report.

All of that and a great deal more straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Thursday, October 19th.

Live in New York, Lou Dobbs.

DOBBS: Good evening, everybody.

A top U.S. general in Iraq today admitted for the first time that a major U.S. offensive against insurgents and terrorists in Baghdad has failed. Major General William Caldwell said the operation has not met "overall expectations" and the rise in violence is "disheartening".

The general's bleak assessment comes two months after the U.S. ambassador to Iraq said the battle of Baghdad would determine the country's fate. Since then, the number of our troops killed in Iraq has risen to one of the highest levels of the war.

Jamie McIntyre tonight reports from the Pentagon on the military's blunt assessment of the progress of this war.

Michael Ware reports from Baghdad on the Iraqi government's failure to take effective action against insurgents and terrorists.

And Brian Todd reports tonight on rising opposition in President Bush's own party to his conduct of the war in Iraq. We turn to Jamie McIntyre at the Pentagon first -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Lou, in Iraq violence is spiking, U.S. casualties are on a record pace, and now the strategy of securing Baghdad first is under review.


MCINTYRE (voice-over): The latest U.S. strategy, simply stated, is, as goes Baghdad, so goes the country. And from the top military spokesman, a simple admission: At the moment, Baghdad is not going so well.


MCINTYRE: What's disheartening, Major General William Caldwell noted, is that attacks are up 22 percent in the past three weeks, that Operation Together Forward, the joint U.S.-Iraqi effort to secure Baghdad, has, in his words, "not met overall expectations," and that now the U.S. and Iraqi government must figure out "how to refocus the effort."

CALDWELL: We're taking a lot of time to go back and look at the whole Baghdad security plan. We're asking ourselves if the conditions under which it was first devised and planned still exist today, or have the conditions changed and, therefore, modification to that plan needs to be made?

TONY SNOW, WHITE HOUSE PRESS SECRETARY: The White House listens to the generals, but I would caution you against saying it's not working, because that's not their view.

MCINTYRE: The White House was quick to downplay the sober assessment from the military, insisting it amounted to routine adjustments.

SNOW: Tactics change all the time, and generals talk about changing tactics all the time. It happens regularly. It is nothing new in a time of war.

MCINTYRE: While the U.S. military expected casualties to go up with the Baghdad offensive in the holy month of Ramadan, at this pace October will surpass the high of 137 deaths the U.S. suffered back in November of 2004. Still, the White House dismissed as a lot of hooey the idea that the recommendations from an independent Iraq study group would result in a major course correction, such as dividing up Iraq.

SNOW: Yes, partition, nonstarter.

MCINTYRE: What about a phased withdrawal?

SNOW: You know, you withdraw when you win. Phased withdrawal is a way of saying, regardless of what the conditions are on the ground, we're going to get out of Dodge.


MCINTYRE: The one thing that White House spokesman Tony Snow did not rule out is a large infusion of U.S. troops in the future, saying, once again, that U.S. commanders would get what they need and ask for -- Lou.

DOBBS: That expression we have heard since almost the -- the end of what was then called major combat operations, as you know, Jamie. But this straightforward, sober and candid language from General Caldwell, this is really the first time we've heard a military leader -- a U.S. military leader be this -- this candid. And the White House quick to react.

What is the sense there in the Pentagon? Is there a political consequence for the general's candor?

MCINTYRE: Well, I think that General Caldwell would dispute the characterization that he said the strategy is failing. I think he was trying to highlight some areas where he felt it was working, but he did say that, you know, overall it wasn't producing the results and that they were going to basically refine the strategy. But, again, his comments kicked up a lot of reaction here in Washington. And as you heard, the White House was quick to try to dispel the notion that -- that he was saying anything that in any way could be interpreted as defeatist.

DOBBS: Well, certainly defeatist is not a tone that anyone would want to hear. Honest is certainly one that we would all like to hear.

Jamie McIntyre, thank you.

The Iraqi government has more than 300,000 police and troops now trained in its security forces. But the government appears incapable of stopping this violence. The number of Iraqi casualties is rising sharply. Insurgents and terrorists today killed at least 40 people.

Michael Ware reports from Baghdad.

Michael, what in the world is the Iraqi government doing there to show some effectiveness, some capability to at least bring the violence down to what some might call an acceptable level or even better, end it?

MICHAEL WARE, CNN CORRESPONDENT: Lou, it can be said that the Iraqi government is doing everything within its power to stem this bloodletting. But given that the Iraqi security forces, despite American assurances, are still largely ineffective or deeply penetrated by the militias, the death squads and the insurgents that they're supposed to be tracking, that effort really amounts to very, very little.

We saw across the country today 41 Iraqis were killed in violence, 11 by a fuel tanker suicide bomber targeting police headquarters in the northern city of Mosul. Eleven more were killed in another suicide car bomb attack targeting an army patrol in Kirkuk as they collected their paychecks. In Diyala Province, just north of the capital, we saw seven people killed in a crowded marketplace bombing. Two others were beheaded. Four others in the same province were shot.

In Baghdad, five people died from a roadside bomb explosion and a police officer was assassinated.

It does not bode well for the abilities of this government. And perhaps this is one of the things that saw Iraqi Prime Minister Nouri al-Maliki make a trip to the southern religious city of Najaf to see the Grand Ayatollah Ali Sistani, the leader of the religious clerics, and Muqtada al-Sadr, the militiaman who has helped put this prime minister in power.

In the meantime, we've seen al Qaeda announce that Iraq is now the Islamic state of Iraq, fulfilling their promise and their strategy to develop a key toehold here in this country to develop al Qaeda's international caliphate -- Lou.

DOBBS: Michael Ware from Baghdad.

Insurgents in Iraq have killed three more of our troops, two soldiers and a Marine. Seventy-three of our troops have now been killed in Iraq so far this month. Nearly four of our troops have been killed each and every day in Iraq -- 2,785 of or troops have now been killed since the war began.

A rising number of Republicans publicly expressing concern about the president's conduct of the war. Those concerns are increasing less than three weeks before the midterm elections. The war in Iraq, of course, is the biggest issue in those elections.

Brian Todd reports.


BRIAN TODD, CNN CORRESPONDENT (voice-over): The president famously quoted as saying he won't leave Iraq even if the only ones still with him are his wife and dog. Is he getting closer to that tiny constituency?

Listen to key members of his own party.

SEN. CHUCK HAGEL (R), NEBRASKA: We are going to have to find a new strategy. The American people are not going to continue to support, sustain a policy that puts American troops in the middle of a civil war.

SEN. JOHN WARNER (R), ARMED SERVICES CHAIRMAN: In two or three months, if this thing hasn't come to fruition, and if this level of violence is not under control and this government able to function, I think it's the responsibility of our government internally to determine, is there a change of course that we should take?

TODD: Even Senator Kay Bailey Hutchison, a loyal Republican from the president's own state, says it's time to think about partitioning Iraq. And in the latest CNN poll, a third of Republicans say they oppose the war, the highest percentage since the conflict began.

Analysts say many Republicans who had taken a wait-and-see approach are at the end of that rope now with the violence spiking. They say the Iraq war is by far the number one issue in this midterm election and GOP candidates are feeling the backlash on the campaign trail.

Even the insurgents could be playing into this equation.

CALDWELL: We also realize that there is a midterm election that's taking place in the United States and that the extremist elements understand the power of the media.

TODD: Does it all mean a full-scale party revolt against the president's course in Iraq?

STUART ROTHENBERG, ROTHENBERG POLITICAL REPORT: I would not say not yet amassed defection. Growing doubt, growing concerns. After the election, if the Republicans take the hit that many of us think they will, then I think we'll start to see those massive defections.


TODD: The aftermath of midterm elections is also when the Iraq Study Group, a bipartisan panel led by former secretary of state James Baker, is due to present its report on what needs to be done in Iraq. If Baker's team recommends a completely new course, analysts say, GOP defections could accelerate -- Lou.

DOBBS: Brian Todd reporting from Washington.

Many Republicans, of course, remain firmly loyal to President Bush and his conduct of this war. Today, President Bush campaigned for two leading Republicans who face difficult re-election battles.

First, President Bush stumped for Congressman Don Sherwood in Pennsylvania. He has acknowledged having a five-year extramarital affair. Congressman Sherwood is in danger of losing what had been one of the safest congressional seats in the country.

And tonight President Bush is campaigning for another beleaguered member of Congress, Senator George Allen in Virginia. Senator Allen faces strong criticism for his remarks that many people consider to be racially insensitive.

Turning to another major challenge for the Bush administration tonight, the nuclear confrontation with communist North Korea and the possibility that Pyongyang will test a second, perhaps a third nuclear weapon.

Secretary of State Condoleezza Rice today offered North Korea an opportunity to end this crisis through negotiation. Secretary Rice made her offer after meeting with South Korean president Roh in the South Korean capital of Seoul.

(BEGIN VIDEO CLIP) CONDOLEEZZA RICE, SECRETARY OF STATE: We want to leave open the path of negotiation. We don't want the crisis to escalate. And the sooner that North Korea would choose to unconditionally come back to the table and take up the very good -- very good statement or very good agreement that is their framework agreement that is there as of September, it would be to the betterment of everyone.


DOBBS: Secretary Rice faces a difficult struggle trying to convince South Korea to support tough sanctions against North Korea. South Korea has investigated hundreds of millions of dollars in North Korea, and so far it's refusing to close down its factories in the north.

Still ahead here tonight, shocking new evidence that e-voting machines are highly vulnerable to fraud, corruption and manipulation. We'll show you just how easy it is to hack into e-voting machines.

And a judge sentencing two Border Patrol agents in a case that's been called an outrageous miscarriage of justice.

We'll have a live report for you.

And police remove protesters from a city hall after one community takes decisive action to combat our escalating illegal alien crisis.

We'll have that special report and a great deal more straight ahead.


DOBBS: Tonight, another community fed up with the federal government's refusal to enforce U.S. immigration law and to establish border security is fighting back. It's now against the law for landlords to rent to illegal aliens in the city of Escondido, just outside San Diego.

This is the latest crackdown by cities all across the country from California to Connecticut on illegal immigration. Open border advocates and illegal alien supporters are blasting the new law tonight. Many, of course, calling it what has become a very familiar term, "racist".

Bill Tucker reports.


BILL TUCKER, CNN CORRESPONDENT (voice-over): Pro-illegal alien protesters stood outside Escondido's city hall holding signs declaring, "No human being is illegal." Opposing them, supporters of an ordinance to ban landlords from renting to illegal aliens. The two sides separated by police.

Inside, the measure's passing by a 3-2 vote was greeted with cheers from supporters. The bill requires landlords to collect some form of documentation when they lease to a tenant, Social Security number, a green card, or a visa. If a complaint is filed against a landlord, that documentation will be requested and federal authorities asked to verify it. If the documents provided by the landlord are not verified, the landlords have 10 days to respond or face fines of $1,000 per illegal and the loss of their business license.

Critics were quick to undermine the bill as unworkable.

OLGA DIAZ, CITY COUNCIL CANDIDATE: We don't even know how we're going to collect the complaints, and then we're going to forward those complaints to the federal government, which everybody agrees hasn't really been doing its job in the first place.

TUCKER: There is no disagreement on that point in Escondido, but the city council member who proposed the new ordinance says that it is that failure that has forced the city to act.

MARIE WALDRON, CITY COUNCIL MEMBER: The effects of the government, the feds not enforcing the law, is 100 percent local. We have to deal with the overcrowding in our neighborhoods, we have to deal with the overcrowding of our schools and the diseases that our children are exposed to. Our police department has to fight the gangs.

TUCKER: The ACLU is promising the ordinance will be challenged.


TUCKER: Now, Councilwoman Waldron expects that a suit will be filed some time within the next 30 days, Lou. That would be before the ordinance takes effect.

DOBBS: You know, listening to the city council woman, Bill, it just occurs to me I don't remember the last time that the ACLU has ever brought action for the failure of government officials to enforce law. Perhaps we could check that and make sure that we're historically correct on that.

TUCKER: Be happy to.

DOBBS: It's remarkable, local communities having to take action because this federal government, at the behest of illegal alien employers, without question, refusing to enforce immigration law and to establish border security, even five years after September 11th.

Thank you.

Drug violence in Mexico becoming more and more violent and gruesome. Police in western Mexico Wednesday found two human heads in a backpack. The area has been hit with a brutal wave of beheadings and other murders as drug gangs are fighting for control of smuggling operations and routes up to the United States.

And more violence in the troubled Mexican city of Oaxaca. A protester shot and killed in a drive-by shooting. Eight people have been murdered there since teachers occupied the city's center almost five months ago. Those protesters calling the ouster of the region's corrupt governor.

Coming up next here, a judge sentencing two U.S. Border Patrol agents in a case that's been called an outrageous miscarriage of justice. Our Casey Wian is in the courthouse in El Paso, Texas, right now. He will have the latest details as soon as this hearing comes to a close. And we'll have it for you.

The Dow Jones industrials closed over 12,000 for the first time today. Corporate profits skyrocketing. Why is the war on the middle class intensifying?

We'll have that story.

And new developments tonight in the Mark Foley scandal. Why the speaker of the House may be in even more trouble.

That story, and "Democracy at Risk," our special report on how security flaws in electronic voting machines could well lead to what is nothing less than a disaster on Election Day.

Stay with us.


DOBBS: In our continuing series of special reports, "Democracy at Risk," Princeton University has been at the forefront in pointing out serious flaws in certain electronic voting machines. Those machines tested have an internal tape that records the votes, but that tape can be altered or manipulated to benefit one party or candidate.

Kitty Pilgrim reports.


KITTY PILGRIM, CNN CORRESPONDENT (voice-over): At Princeton University, Professor Edward Felten shows us how to hack a Diebold voting machine and steal the election.

EDWARD FELTEN, PRINCETON UNIVERSITY: It takes only about a minute with an unsupervised machine to insert the virus.

PILGRIM: We run a mock election: George Washington versus Benedict Arnold.

FELTEN: This is the screen that a voter sees on Election Day when they show up to vote. The voting machine virus is on this memory card.

PILGRIM: The machines all use the same key to unlock them. A very low-tech number commonly used for luggage or desk furniture. Felten bought this one on the Internet.

FELTEN: Anyone who can get the door open and stick in a memory card can insert a virus or do whatever they like.

PILGRIM: The virus is sophisticated enough that it doesn't become active during the test.

FELTEN: The virus is not kicking in yet. It's just working in the background.

PILGRIM (on camera): Now we're hackers. We just did the test. The test checked out. Now we're hackers.

FELTEN: You've checked in at the front desk. Here's your voter card.

PILGRIM: I'm going to vote for George Washington.

(voice-over): We vote three times. Only for George Washington.

FELTEN: This virus has been instructed to steal the election for Benedict Arnold. The records have been modified so that the records inside the voting machine show two votes for Benedict Arnold and one vote for George Washington.

This machine has been highly compromised. It counts the votes wrong.

PILGRIM (on camera): This particular voting machine in election has a virus.


PILGRIM: That's only one machine. How does that -- if someone really has malicious intent, how does that go from machine to machine?

FELTEN: At the end of Election Day, if this card is taken back to headquarters and it's put into a machine back there, the central election headquarters can be a sort of vector for the virus to spread.

PILGRIM (voice-over): And Benedict Arnold would be president.


PILGRIM: The Diebold machines we tested do not leave a paper trail. The record tape on the inside of the machine can be altered by this computer virus, and there's no other record of what votes were actually cast.

Once the voters walk away, their vote can be lost or stolen -- Lou.

DOBBS: It's -- we have been reporting -- I think you alone have done something like 40 reports on this, "Democracy at Risk," since -- since June. We're facing a crisis in this country, and it seems that a lot of election officials and a lot of governors are not taking notice and taking action certainly.

PILGRIM: That's clearly so, and they should listen to the computer experts who know the flaws in these systems.

DOBBS: Thank you very much, Kitty Pilgrim. New polls released by CNN show considerable voter concern about e-voting. Those polls conducted by Opinion Research Corporation show a full two thirds, 66 percent of voters, believe the vote will be deliberately manipulated by computer hackers or people working for political candidates.

When asked if their votes will be counted accurately, only 31 percent of those polled now say they're very confident, 47 percent somewhat confident, 23 percent not confident at all.

And that bring us to the subject of our poll tonight.

How confident are you that your individual vote will be counted correctly and count in the upcoming elections? Very, somewhat or not at all?

Cast your vote at The results coming up here later in the broadcast.

Let's take a look at some of your thoughts tonight.

Rob in Wisconsin said, "Both poor and middle class America have been abandoned by Republicans and Democrats alike. The only thing Washington's elite care about is serving those special interests that keep them in power. This is by far the worst example of governance I've witnessed in my lifetime."

Mary Ann in New Jersey, "To satisfy Wall Street and secure big bonuses for the upper management, corporations are increasingly sending white-collar middle-class jobs overseas. I'm surprised that the corporate heads don't realize that sooner or later if you kill the middle class there will be no one to buy your product."

Send us your thoughts at More of your thoughts coming up here later. And each of you whose e-mail is read here receives a copy of my new book, "War on the Middle Class".

Next here, sentencing is complete in the case of two U.S. Border Patrol agents who shot a Mexican drug smuggler who was granted immunity to testify against those Border Patrol agents. We'll have that live report for you next from El Paso, Texas.

And glowing reports about our economy. Those reports aren't impressing middle class Americans struggling to keep their jobs.

We'll have that special report.

And a key witness in the House scandal surrounding congressman Mark Foley testifies today on Capitol Hill.

And the author of a provocative new book tells us that it's the Republicans or the Democrats who will prevail in the midterms and beyond.

Stay with us for that and more next.


DOBBS: Harsh sentences have just been handed down in the case of two U.S. Border Patrol agents. Agents Jose Compean and Ignacio Ramos convicted of shooting an illegal alien drug smuggler.

Casey Wian joins us now. He has the live report from El Paso -- Casey.

CASEY WIAN, CNN CORRESPONDENT: Lou, Border Patrol agents Ignacio Ramos and Jose Compean were sentenced tonight to 11 and 12 years in federal prison, respectively. That was after federal Judge Kathleen Cardone denied a last-minute request for a new trial based on allegations of jury misconduct.

Family members wept in the courtroom at the realization that these two brave Border Patrol agents, who were only trying to do their job, are going to prison.


WIAN (voice-over): Last year, Border Patrol agents Jose Compean and Ignacio Ramos were trying to apprehend a Mexican drug smuggler driving a van loaded with 743 pounds of marijuana. The smuggler fled, a struggle followed, and the agents shot at the man, thinking he had a gun.

The smuggler fled across the border to Mexico. The agents thought he was uninjured.

IGNACIO RAMOS, BORDER PATROL AGENT: I was going the job the public entrusted me to do. They entrusted me to stop a drug smuggler, and I did.

WIAN: The Border Patrol's usual penalty for not reporting a shooting is a suspension. Instead, federal prosecutors charged the agents with attempted murder, assault, civil rights violations, and using a firearm to commit a crime.

Both agents say they had clean disciplinary records. In fact, Ramos has been nominated for agent of the year.

The drug smuggler was given immunity from prosecution to testify against the agents. Ramos and Compean were convicted in March of all charges, except attempted murder.

Defense attorneys this week filed a motion for a new trial because three jurors signed affidavits alleging jury misconduct. The case sparked nationwide outrage from the public, from fellow Border Patrol agents, who held a rally Wednesday in support of the agents, and from members of Congress, who promised to investigate the Justice Department's decision to prosecute by the end of the year.


WIAN: Now, the sentences, Lou, handed down by the judge are actually lighter than they could have been. Each agent could have received up to 20 years in prison for the crimes that they were convicted of. Ten years of those sentences were mandatory minimums. The judge had no discretion, and she reduced the sentences to one year and two year for the other charges that the agents were convicted of.

A couple of interesting things that happened in the courtroom. The attorney for Agent Compean was arguing that the agent feared for his life at the time of this confrontation with the drug smuggler. Debra Kanof, the assistant U.S. attorney who led the prosecution of this case, said the drug smuggler was only trying to go home.

Family members of the two Border Patrol agents gasped.

One other interesting fact: The drug smuggler himself was expected to show up in court today. There had been a motion filed for him to do that. Instead, it was just his attorney, the attorney who's representing him in his $5 million lawsuit against the U.S. government, and the drug smuggler's attorney complained that the agents never apologized for shooting the drug smuggler.

The agents will stay out of prison until January 17th. That was the date the judge gave them to report to allow them to spend the holidays with their families. A motion to have them remain free on bail pending their appeal will be considered by the judge at a later date -- Lou.

DOBBS: This judge handing down what by any measure are very severe penalties. This U.S. attorney, the assistant U.S. attorney, Debra Kanof, I mean, try to organize for us if you will the kind of priorities that would lead the U.S. attorney's office there in Texas to give a -- absolutely a guilty drug smuggler immunity to testify against two U.S. Border Patrol agents for what is effectively an administrative penalty for those unreported shots fired?

WIAN: No one can figure it out, Lou. Everyone who's been involved with this case on the side of the two agents can't believe that this case got this far.

I must point out that the agents were offered a plea deal of a year in prison several months ago. They turned that down, because to this day, the agents believed they didn't do anything wrong that warrants any kind of a federal prison term.

What they do admit is they didn't file a report that there were shots fired, and as we've mentioned, that's usually handled by an administrative penalty inside the Border Patrol, Lou.

DOBBS: And Casey, the allegations, made by some U.S. congressmen, in point of fact, that this effort by the U.S. attorney's office there in Texas and by prosecutor Debra Kanof was simply to -- to some sort of -- make some sort of appeasement to the Mexican government that -- what is -- what are the investigations? What is the state of those investigations now into that element?

WIAN: The investigations are still pending. Congressman James Sensenbrenner has promised to hold hearings by the end of the year. He indicated they wouldn't happen before the election. You know, you mentioned Congress. And there was something that happened today. In the local paper, "The El Paso Times," Congressman Sylvestre Reyes, who's a former Border Patrol chief in Texas and is the congressman for this area that represents these two agents, actually came out in favor of the government's prosecution of these two agents today.

That absolutely outraged family members, who have been trying to get help from their own congressman, and every time they've complained to the government about the prosecution in this case, they've been referred to Congressman Reyes. And for him to say something like that on the eve of the trial was just very disheartening to these families, Lou.

DOBBS: Well, we will, of course, continue our investigation into what is going on there, whether it is appeasement of the government of Mexico, whether it's just the madness of this border crisis that we have in this country, or whether it's the influence of drug smugglers along that corridor of our border with Mexico. We're going to do what we can to find out, and meanwhile, continue the investigation into this case, and what many are calling an outright miscarriage of justice.

Thank you very much. Casey Wian reporting tonight from El Paso.

On Capitol Hill tonight, new developments in the Mark Foley scandal. In testimony to the House Ethics Committee, Majority Leader John Boehner repeated his assertion that he told Speaker Dennis Hastert about Mark Foley's behavior last fall. Dana Bash has the story.


DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): The No. 2 Republican in the House gave sworn testimony to the Ethics Committee that appears to contradict House Speaker Dennis Hastert.

REP. JOHN BOEHNER (R-OH), MAJORITY LEADER: I made myself clear on the record for the last three weeks, and I have told the Ethics Committee today the same thing that I have told many of you.

BASH: What Boehner has said is that he told the speaker last spring about a troubling Mark Foley e-mail. That's at odds with what Hastert has said. He has repeatedly insisted he did not know about Foley's behavior until it became public three weeks ago.

That kind of inconsistency inside the GOP leadership is at the core of what the House Ethics Committee is trying to sort out. And if anyone can answer the who knew what when of the Mark Foley scandal, it's this man: Former House Clerk Jeff Trandahl, who had day-to-day responsibility over House pages. He went behind closed doors with the House Ethics Committee, under oath, for more than four hours. His attorney saying afterwards, quote, "he answered every question asked of him."

Just before he left his job last year, Trandahl confronted Mark Foley about an e-mail with a former male page. Trandahl isn't talking publicly, but sources familiar with his version of events say he repeatedly raised red flags about Foley years earlier, long before GOP leaders say they knew about Foley's inappropriate conduct with pages.

Two sources close to Trandahl tell CNN that he had observed and was told about Mark Foley's troubling behavior in the House cloak room and elsewhere, and was actively monitoring Foley's interaction with pages.

Among the many questions for Trandahl, what did he do about the early warnings? Several former colleagues describe Trandahl as a by- the-book guy who took his job overseeing 16-year-old pages very seriously. One source saying he watched the teenagers closely and had, quote, "zero tolerance for problems," expelling pages for drinking and smoking pot no matter how senior a lawmaker the page's sponsor was.

Craig Shniderman is a long-time friend of Jeff Trandahl.

CRAIG SHNIDERMAN, FRIEND OF TRANDAHL: Jeff is a guy that always does the right thing. If he was aware of something that was improper, I'm confident he would report it.


BASH: Jeff Trandahl is saying nothing publicly, but CNN is told by sources close to Trandahl that it is hard, even impossible to imagine that he did not take concerns about Mark Foley to the speaker's office, and we know that he had those concerns years ago, Lou.

DOBBS: Thank you very much, Dana Bash, from Capitol Hill.

The Democrats tonight in Washington dealing with an ethics scandal of their own. Congressman William Jefferson's reelection bid in Louisiana is being dogged by that ongoing federal bribery investigation. Federal investigators found $90,000 in marked money in a freezer in Congress Jefferson's home.

The party leadership wants Jefferson out. Some people just want to know why the money was in the freezer. The leadership has endorsed someone else, but Jefferson won't budge. He says he's been investigated for a long time and hasn't been charged with a thing.

Record corporate profits and record levels today for the Dow Jones Industrials. Corporate America is riding high, but for many working Americans the war on the middle class is intensifying. Lisa Sylvester reports.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Health costs have been rising for middle class families. Nearly one in five Americans cannot afford health insurance. Contrast that with health insurance companies that are in great financial shape. UnitedHealth Group's profits up 38 percent this quarter. The company's CEO, William McGuire, is leaving with a reported $1.1 billion golden parachute, even amid reports of a stock option scandal.

The gap between the wealthy and the working is expanding.

RICHARD TRUMKA, AFL-CIO: It's been the greatest transfer of wealth from the middle class to the elite class we've ever seen in our history.

SYLVESTER: Corporations are handing out profits to their shareholders and pink slips to their American employees. IBM reported a 47 percent jump in quarterly profits, meanwhile the company announced layoffs of 400 U.S. engineers. IBM has hired more than 4,000 workers in India this year alone.

JOHN CHALLENGER, CHALLENGER, GRAY, CHRISTMAS: You wonder how long companies can go, shifting jobs overseas, reaping the gains, the cost gains, and yet causing people to lose their jobs. We have consumers that are not as strong. At some point that's got to come back around to bite us.

SYLVESTER: The Dow Jones Index jumped above the 12,000 threshold for the first time. But for middle class workers, job growth is sluggish, the housing market cooling and paychecks shrinking.

ISABEL SAWHILL, THE BROOKINGS INSTITUTE: We've always viewed ourselves as a country that provides upward mobility to everyone who works hard, and that in America, you can achieve the middle class dream if you do so. And right now, the middle class is not doing very well.

SYLVESTER: Higher earnings for the corporate class, less security for the middle class.


SYLVESTER: According to the AFL-CIO, the average CEO, now these are just -- not the CEOs at the top, but the average chief executive officer, makes 431 times the salary of a median worker in the United States -- Lou.

DOBBS: That would work out to mean that a CEO would make in one day what it would take that so-called average worker two years to earn. That seems just a little disproportionate.

SYLVESTER: A little unfair indeed, Lou.

DOBBS: Lisa, thank you very much.

Lisa Sylvester.

Coming up next here, as vote prepare to head for the polls, journalist and author Thomas Edsall joins us to talk about why recent Republican dominance in Washington may be ending. He has some startling ideas about whether that leadership and firm hold on control will last.

And rising violence in Iraq. Has the United States lost the battle for Baghdad?

Stay with


DOBBS: Our guest tonight is Thomas Edsall, former senior political reporter, "Washington Post", author of the new book "Building Red America: The New Conservative Coalition and the Drive for Permanent Power".

Tom, good to have you here. It's a powerful book. It's, in my opinion, a terrific analysis of our current political situation. Good history, good basis for the future.

You call the Republican -- I love the way you analyze the Republican party, the party that's socially and the economically dominant -- and I suppose the Democrats, you can convince me that they're just those poor weak fellows and ladies that don't have any real consequence.

THOMAS EDSALL, AUTHOR, "BUILDING RED AMERICA": Well, not that -- they have plenty of consequence. But the Republican party has people who are used to winning. Corporate executives, military guys, preachers, they all win souls, battles or money. The Democratic party has tended to have groups that are trying to come out from being subdominant. Gays, women, minorities, all of them are trying to get a leg up. But they have...

MATTHEWS: Well, you also point out that a third of the Democratic party are those same folks who are socially and economically dominant, as I read what you were saying.

EDSALL: That's true.

DOBBS: And it seems to me that that's -- you've got two parties starting to look a lot alike.

EDSALL: There is no fundamental difference in the economic sense between the policies of the two parties, and it's one of the real the Democrats have in distinguishing themselves and, in the long run, competing effectively.

DOBBS: Let's take a look at one of the other things you wrote, if we could share that with everybody.

"For Democrats, although an aggressive attempt to exploit Republican vulnerabilities on corruption is necessary, by itself a focus on corruption can produce only short-term gains. Nor is the quagmire of Iraq enough to guarantee Democrats a reliable progressive coalition."

Are you convinced that's going to hold up here as the way the world is shifting so quickly around us now? EDSALL: I think right now in this election, the Republicans are headed into big trouble, virtually certain to lose the House. Really, the only question is by how big a margin.

DOBBS: Right.

EDSALL: And they're at a 50/50 point on the Senate, so they could lose the Senate. But the ability of the Democrats to put back together a coalition that has real staying power, I think, is very doubtful. They have not shown the capacity to deal with the real tough issues, to present an alternative on globalization, on jobs, any of those things.

DOBBS: Why is that? The Democrats, as you also write, used to be a populace party, the idea that working men and women, those who were disenfranchised, those who were struggling from a minority position, whether it be socially or racially, ethnically -- the Democratic party just isn't populace anymore in your view. Why not?

EDSALL: Well, partly because the elite of the Democratic party, the people who really set the policy, the agenda, the ones who go to the Democratic convention and pick the president, these are people who are very well educated, often professional, with advanced degrees in law, doctors. And their concerns are not bread and butter. Their concerns are really social: abortion, gay marriage...

DOBBS: You paint a picture in "Building Red America" -- can we put it up, by the way, Tom, just so that people could see it on a very small relief -- you paint a picture, really, of two parties that are completely out of touch with working men and women, the so-called average American family. You really talk about these parties as nothing more than brand names.

EDSALL: Well in fact, at the end of the book I make the argument that what we have in the Republican party is maybe two thirds of a party and in the Democratic party, half a party. And if this was corporate America, if these were two corporations, there would be raiders in here in a minute, looking to turn these companies into a profitable proposition. Unfortunately politics does not work that way.

DOBBS: Well, it can be very profitable for people, as we've seen...

EDSALL: It can be very profitable, no question there. But in terms of a takeover, you've got to have a candidate and a real -- it takes legs to do it.

DOBBS: Right.

You expect the Republicans to hold on to the Senate and lose the House?

EDSALL: 50/50.

DOBBS: OK. EDSALL: Although I think it's been trending towards the Republicans the last couple of weeks, yes.

DOBBS: All right.

Thomas Edsall, we thank you for being here. It's a terrific book, a terrific piece of analysis on a very complicated and important subject. We thank you for being here. "Building Red America." We're going to see if a good part of the country gets painted blue come November 7th.

EDSALL: We'll see.

DOBBS: We'll pay careful attention to that.

Thank you very much, Tom.

EDSALL: Thank you.

DOBBS: Coming up at the top of the hour, a very important program, out special report, "Broken Government", anchored -- hosted by Jack Cafferty, a man who knows exactly what he's talking about.

Jack, what's on the agenda tonight?


Coming up at the top of the hour, our government is broken to the point of being dysfunctional, the 109th Congress now being called one of the most corrupt ever. The president lied us into a war in Iraq that is now the bloodiest that it's ever been for our troops since it began.

It's been confirmed that Hezbollah members are entering the United States from Mexico, while our government refuses to do anything about border security. And we're headed into an election where 80 percent of the voters will use electronic machines that Princeton University -- no slout school, at that -- says can be rigged in a heartbeat.

The country's in trouble and this midterm election, Lou, might be our last best chance to try to fix it. And I have a favor to ask. You consistently have the biggest audience on CNN. I wish you'd just ask them to stay tuned and watch this thing.

DOBBS: Well, I'm certainly doing that, and I don't think I'll even have to ask, because the viewers of this broadcast, as you know, Jack, are very bright and the most sophisticated and caring audience. And by that I mean they care about what's happening to this country.

The idea that we could be sitting here now less than three weeks away from that election and have e-voting machines that are vulnerable to fraud, to manipulation. And with the exception of just a few governors, Jack, not much is being done about it.

CAFFERTY: Well, and the suspicions go all the way back to the 2004 presidential election and maybe even predate those. Here we are 230 years into what is arguably the greatest Democratic experiment in the history of the world, and we don't trust our own elections. We've lost the ability to govern ourselves if we don't trust the outcome of the vote count. It's disgraceful.

DOBBS: As is the lowest of voter turnout in history in our primary elections. Jack Cafferty, thank you.

CAFFERTY: Thanks, Lou.

DOBBS: We'll look forward to your special report coming up at the top of the hour here, "BROKEN GOVERNMENT," hosted by Jack Cafferty.

Still ahead, the U.S. military admits its strategy to stop escalating violence in Baghdad so far has failed. We'll examine what, if anything, our troops can do to defeat the insurgency and allow the generals to claim they've won in Iraq. Stay with us.


DOBBS: American casualties in Iraq have risen to one of the highest monthly rates of the entire war. Seventy-three of our troops killed in Iraq just so far this month, more than in the entire month of September. Joining me now is General David Grange.

General, good to have you here. Let's get straight to it. General Caldwell today -- General William Caldwell said this ...


MAJ. GEN. WILLIAM CALDWELL, SPOKESMAN, MULTINATIONAL FORCE IRAQ: The violence is, indeed, disheartening. In Baghdad alone, we've seen a 22 percent increase in attacks during the first three weeks of Ramadan as compared to the three weeks preceding Ramadan. In Baghdad, Operation Together Forward has made a difference in the focus areas, but has not met our overall expectations of sustaining a reduction in the levels of violence.


DOBBS: That is as candid an assessment as I believe you could ask for. "Disheartening" -- your reaction to that language on the part of General Caldwell.

BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Well, very upfront. You know, he's talking about tactics changing every day and how this thing is going. You know, foot soldier against foot soldier produces an inherent, continuous casualty rate that does not show any benefit to the cause, and it reduces the resolve, the national will to continue the fight.

So what has to happen is a shift in strategy, which is overarching, that will change the means, all the resources to make this thing winnable. DOBBS: At what point, General Grange -- and I know you've never been faced with this in your career, but at what point with -- and you and I have talked about just what outstanding troops this country has. Those young men and women are the best we've ever put in the field.

Are our generals matching them in capability and character and imagination? And at what point do we have to say, General Grange, these generals aren't getting the job done and somebody has to be fired and moved out and somebody better found?

GRANGE: I've got to refocus this question.

DOBBS: No, don't refocus the question. Answer the question.

GRANGE: No, it's not about the generals. No, Lou, it's not just about the generals. This is about unity. It's about a failure of the entire country, all the elements of the country -- the government, the media, everybody else that's involved -- to get together to win this thing. This is not about losing. I mean, it's like we want to lose. I mean, why don't we just beat ourselves? We want to win.

DOBBS: General grange, you and I know one thing. We're both going to come across this thing on exactly the way we feel about it. And I know that you've got many friends in the Pentagon, in Iraq serving this country with great distinction.

But I can't think of a war that's ever been fought in which not a single general has been fired because they haven't been able to deliver a victory. We're fighting a nation -- in a nation of 25 million people -- we're the world's only superpower. We've got the finest armed services in the world, and our general staff is asking for patience, talking about adjustment.

Meanwhile, as you know all too well, we're losing young Americans every day. At what point do we say, win it, tell us you can't win it, tell us what you're going to do to win it, but no more stay the course, maintain the faith, because as Americans, we expect victory.

GRANGE: Well, absolutely, and I think the plan has to come together, the briefing plan tonight and it can be briefed tomorrow morning, how this thing is going to be won, because, yes, this type of warfare takes patience. We don't have the patience, so we have to change the strategy if we're going to win. Otherwise, just leave now.

DOBBS: Absolutely. Can we get that done?

GRANGE: I believe so. I mean, we have the means to do it. This is a winning country. I mean, I can't imagine. We're the Marshalls, we're the Eisenhowers, we're the Churchills, and they're there. We can win.

DOBBS: General David Grange. I know where one General Grange is. We'd like to have him with -- on point, if you will. Dave Grange, thank you very much.

Still ahead here, we'll have the results of our poll. (COMMERCIAL BREAK)

DOBBS: The results of our poll: 49 percent of you say you are not at all confident your individual vote will be counted in these upcoming elections.

Thanks for being with us tonight. Please join us here tomorrow. For all of us, thanks for watching. Good night from New York. Next, "BROKEN GOVERNMENT" with Jack Cafferty. It starts right now.