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Lou Dobbs Tonight

Bush Warns Iran; Insurgents Fight Big Battle Near Najaf

Aired January 29, 2007 - 18:00   ET


KITTY PILGRIM, HOST: Tonight, the war in Iraq is escalating. President Bush tells Iran to stay out of the fighting.
We'll have complete coverage.

And corporate elites and special interests try to stop the first increase in the federal minimum wage in a decade.

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

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Monday, January 29th.

Live in New York, sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening, everybody.

President Bush today gave Iran a blunt warning. The president declared the United States will respond firmly if Iran escalates its role in the war in Iraq. The president's warning comes one day after some of the heaviest fighting of the entire war. U.S. and Iraqi troops killed as many as 200 insurgents outside of the city of Najaf.

Ed Henry reports from the White House on the president's warnings to Iran.

Arwa Damon reports from Baghdad on new details about the battle outside of Najaf.

And Jamie McIntyre reports from the Pentagon on whether all-out civil war has begun in Iraq.

We turn first to Ed Henry -- Ed.


You know, the president has been blunt about telling Tehran to butt out of Iraq, but Iran does not seem to be listening. Its ambassador to Baghdad today telling "The New York Times" that Iran wants to expand its influence both on the economic front, as well as the military front, in Iraq.

This follows, of course, late last week President Bush trying to crack down further on those Iranians agents who have been fighting in Iraq, responsible in part for some of the most deadly improvised explosive devices, helping militias allegedly in Iraq. All of this, of course, the back-and-forth kicking up charges among Democrats on Capitol Hill that what the president is really doing is edging closer to war with Iran.

The president insisted today, though, in an interview with National Public Radio that he has no plans to invade Iran, even as he once again issued a warning to Tehran.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If Iran escalates its military action in Iraq to the detriment of our troops and/or innocent Iraqi people, we will respond firmly.


HENRY: Now, important to put this in perspective. Just a couple of weeks ago, the president gave an interview to Sinclair broadcasting, in which he was a bit harsher in his language, warning Iran basically that if they continue to meddle in Iraq, the U.S. would "take care of business" in that region. This almost a downshifting of the rhetoric today, just ever so slightly.

And White House aides like Tony Snow say, that while they would recommend Iran helping the situation in Iraq, so far they have seen no signs that Iran actually wants to help.


TONY SNOW, WHITE HOUSE PRESS SECRETARY: To the extent that anybody, including Iranians, are smuggling weapons, bringing in fighters, killing Americans, trying to destabilize the democracy in Iraq, we will take appropriate measures to defend our troops and also to defend the mission. But the Iranians understand that there's a burden of proof for them.


HENRY: Now, in fact, officials say that they're expecting on Wednesday the outgoing U.S. ambassador to Iraq, Zal Khalilzad, will in fact unveil some information or evidence showing that in fact Iran has been meddling in Iraq -- Kitty.

PILGRIM: Thanks very much.

Ed Henry.

Well, as Ed just reported, the United States says Iran is giving insurgents weapons, money and training. U.S. troops have also captured a number of Iranian Revolutionary Guards inside Iraq.

Barbara Starr reports from the Pentagon -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Kitty both the CIA and top U.S. military officials say they already have their dossier against Iran in hand.


ROBERT GATES, DEFENSE SECRETARY: If you are in Iraq and trying to kill our troops, then you should consider yourself a target.

STARR (voice over): That blunt warning from the new defense secretary, singling out Iran's growing involvement in the fighting inside Iraq. The State Department says it wants to unveil classified evidence that proves just that.

SEAN MCCORMACK, STATE DEPT. SPOKESMAN: Where we are in the process is taking a look at the mountain of evidence that we do have.

STARR: But much of that information is already out there if you know where to look. Earlier this month, CIA director General Michael Hayden said Iran is shipping weapons into Iraq that are killing U.S. troops.

GEN. MICHAEL HAYDEN, CIA DIRECTOR: The EFPs are coming from Iran. They are being used against our forces. They are capable of defeating some of our heaviest armor. And incident for incident cause significantly more casualties than any other improvised explosive devices do. And they are provided to Shia militia.

STARR: Hayden is talking about explosively formed projectiles, sophisticated manufactured explosives capable of penetrating even a battle tank. Back in November, Hayden bluntly warned that Tehran was stepping up its supply chain to Shia militias inside Iraq.

HAYDEN: The provisions of them, to them of capabilities that have been used against the coalition...


HAYDEN: ... has been quite striking.

STARR: There is more. U.S. officials say in recent raids in Iraq, they detained suspected Iranian operatives and found IEDs, rifle, mortar launchers, weapons with Iranian markings, maps, and shipping documents. They also say two suspects were senior members of the Iranian Revolutionary Guard.

And there's further evidence still.

GEN. JOHN ABIZAID, COMMANDER, CENTRAL COMMAND: It's clear that money is coming in through their intelligence services. Training is probably being conducted inside Iran through various surrogates and proxies.


STARR: Kitty, top officials say it's a trail from Tehran of weapons, training, money, and organization that they want stopped -- Kitty.

PILGRIM: Thanks very much.

Barbara Starr.

The Iraqi government says 200 insurgents were killed in a major battle outside Najaf. One hundred insurgents were captured. Now, the Iraqis defeated the insurgents after U.S. troops joined the fight.

Arwa Damon reports from Baghdad -- Arwa.

ARWA DAMON, CNN CORRESPONDENT: Kitty, the operation to clean up the area lasted well over 24 hours. The identity of the enemy that Iraqi and U.S. forces were facing was shocking.


DAMON (voice-over): As dust from a sandstorm settles over the battlefield, new details emerge of the identity of the gunmen who put up some of the fiercest fighting that Iraq has seen this year.

Members of a Shia messianic cult calling themselves the Soldiers of Heaven, planning to attack the Shia holy city of Najaf. They massed in the hundreds, joined by foreign fighters, Sunni extremists, criminals and gangs. Intending to assassinate pilgrims, clerics, including Grand Ayatollah Ali al-Sistani, the most revered Shia cleric, called by many the Shia pope, and holy shrines, trying to destroy all that is sacred to Shia Islam, during Ashura, the holiest Shia ritual.

The cult's intent: to create more chaos to accelerate the return of the Mehdi, the savior of the Shia. The Mehdi is the 12th Shia imam. His followers believe that he disappeared down a well in Samarra in the 9th century and will return at a time of violent deaths and intense disputes, when people are experiencing great fear. His arrival will directly precede the day of judgment.

Iraqi officials describe the aftermath of the battlefield as being strewn with bodies of the gunmen, saying they killed hundreds of fighters and are investigating reports that the cult's leader was killed. The enemy they faced so fierce, senior Iraqi officials say U.S. forces had to step in, taking the lead on the battlefield.

(on camera): Some officials are calling this group insane. Others lamenting that the level of death and destruction in Iraq has convinced some Shias that the end of days are coming.

Arwa Damon, CNN, Baghdad.


PILGRIM: Two of our troops were killed in that battle outside Najaf. The soldiers were on board a U.S. attack helicopter that insurgents shot down.

Seventy-eight of our troops have been killed in Iraq so far this month. Eight of them over the weekend.

3,078 troops have been killed since this war began. 23,144 troops have been wounded, 10,278 of them so seriously they could not return to duty within three days.

The U.S. military tonight is praising the performance of Iraqi troops and police in the battle outside Najaf. But the fight also demonstrates that Iraq is much closer to all-out civil war than many officials admit.

Jamie McIntyre reports from the Pentagon.


JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice over): While the Iraqi forces had taken the lead in Najaf, in the end it took U.S. fire power and air support to finish the battle. The U.S. military issued a statement quoting former top spokesman and now division commander Brigadier General Vince Brooks as saying, "This is an example of a promise kept. Everything worked just as it should have."

The U.S. argues this is the model for the future: Iraqi troops out front, with the U.S. backing them up only when needed.

MCCORMACK: It is certainly very positive. And when you see the Iraqis on the point, that is what they want. That is certainly what we are looking for as well

MCINTYRE: The U.S. believes the Iraqi offensive thwarted a diabolical plot in which hundreds of gunmen would disguise themselves as pilgrims and murder clerics on the holiest day of the year, including, perhaps, the assassination of Grand Ayatollah Ali Sistani, something experts say could have only made things far worse.

KENNETH POLLACK, SABAN CENTER, MIDDLE EAST POLICY: It was Ayatollah Sistani constantly saying to the Shia, do not fight the Americans, do not fight the reconstruction, this is what we want, this is how we're going to have a better future. That has been critical in whatever success we've had in Iraq so far. Without Ayatollah Sistani, things might have fallen apart even sooner than they already are.

MCINTYRE: The U.S. likes to portray the enemy in Iraq as a combination of disaffected Ba'athists and foreign terrorists. But Iraqi officials say the militants this time included both Shia and Sunni extremists, as well as members from several fringe splinter groups. It makes finding peace that much more difficult.

JUAN COLE, MIDEAST HISTORY PROFESSOR: Iraq has become a cauldron of religious activism of a fundamentalist sort, often resorting to terror and heaven weaponry. And that, I think, for anyone who knew the old Iraq, is a real surprise.


MCINTYRE: One thing this latest battle seems to show is that Iraq has moved from a clear-cut insurgency to what many military experts increasingly agree is an all-out civil war. And that new U.S. offensive with 21,000 reinforcements, Kitty, it hasn't even begun yet.

PILGRIM: Thanks very much.

Jamie McIntyre.

Now, the commander of U.S. troops in Iraq, General David Petraeus, who was recently confirmed, will arrive in Baghdad next week. He replaces General George Casey. General Petraeus is the Army's leading authority on counterinsurgency warfare.

Still to come, the illegal alien lobby blasts federal agents for simply doing their job.

We'll have a special report.

Also, corporate and special interests have managed to stall the first increase in the federal minimum wage in a decade.

We'll have that story.

And some U.S. companies are refusing to fight communist China's new censorship rules for the Internet.

We'll have a special report.


PILGRIM: Pro-illegal alien groups today demanding federal agents stop enforcing our nation's immigration laws. Now, the groups say they want all deportations to stop until Congress passes an amnesty bill for illegal aliens.

Casey Wian reports.


LUIS CARRILLO, ATTORNEY: Let's take a vote. Who says English first?

CASEY WIAN, CNN CORRESPONDENT (voice over): A sign of the times, a news conference starting with a vote on whether to begin in English or Spanish.

CARRILLO: This young woman here was a victim of the recent ICE raids.

WIAN: Last week, ICE arrested more than 750 Los Angeles-area illegal aliens, one of the biggest sweeps of criminal foreign nationals in U.S. history. Now illegal alien advocacy groups claim ICE is using racial profiling to also target otherwise law-abiding illegal aliens, such as this 20-year-old mother of three.

UNIDENTIFIED FEMALE: ICE said that I was illegal. And the agent proceeded to arrest me.

CARRILLO: ICE has given the impression to the public that they're only going after persons with criminal backgrounds, when the truth is that they're picking up workers, mothers, fathers, day laborers. ICE has a historic custom and practice of engaging in racial profiling, stopping only Latinos.

WIAN: The facts prove otherwise. ICE deported illegal aliens from 189 nations last year, including 1,364 Jamaicans, 624 Canadians, 489 Chinese. 431 Filipinos, and 405 Indians.

The majority of deportations, both criminal and otherwise, do involve Latin American citizens. But ICE says that's only because those are the home countries of the overwhelming majority of illegal aliens. ICE says its recent raids only targeted illegal aliens already ordered deported by a judge. However, ICE says there were collateral arrests.

Now a growing number of illegal alien advocates are demanding the federal government stop enforcing immigration law.

JAVIER RODRIGUEZ, MARCH 25 COALITION: We demand, we demand a moratorium against deportations. On deportations and the raids.

WIAN: The same groups behind last year's pro-amnesty street demonstrations are threatening more protests and marches this spring.


WIAN: All this an effort to pressure Congress to grant amnesty to the 12 to 20 million illegal aliens now in the United States -- Kitty.

PILGRIM: Casey, is there any reaction from federal authorities on this protest?

WIAN: These demands, federal authorities say, are absolutely ridiculous. I mean, could you just imagine what would happen at the border if ICE and the Border Patrol decided to stop deporting illegal aliens in anticipation of Congress passing some sort of a guest worker or amnesty bill? The borders would be absolutely flood. They would be overwhelmed, even more so than they are now -- Kitty.

PILGRIM: Thanks very much.

Casey Wian.

Well, some progress today in the war against illegal drugs coming across our border from Mexico. Four alleged Mexican drug lords were arraigned in San Diego this afternoon. The four were extradited from Mexico earlier this month.

The extradition was ordered by Mexico's president, Felipe Calderon. Now, Calderon has vowed to crack down on drug gangs and violence in his country, violence that often spreads to the U.S. side of the border.

A display of foreign flags at a high school in Gainesville, Georgia, will be taken down. School board officials said the American flag did not stand out enough. School officials had to put up the display to represent the diverse community the school serves.

Let's turn to Capitol Hill.

On January 10th, in the first few hours of the new session of Congress, the House of Representatives passed a bill to raise the minimum wage. Tonight, senators are still working on their version of the bill and their work appears far from over.

Christine Romans reports.

Earlier this month, the House passed a simple minimum wage increase in a matter of hours. But the Senate version is stalled. There are now 111 amendments to the Senate bill on everything from health care to school taxes to immigration.

DAVID KING, KENNEDY SCHOOL OF GOVERNMENT: When you see that many amendments, the bill's not intended to pass. Those amendments are put on to delay passage.

ROMANS: Needling the new Democratic majority and delaying a coming confrontation over Iraq.

UNIDENTIFIED MALE: This isn't just about the little person trying to get more money. It's really about global politics in Iraq and delaying the debate in Washington, D.C.

ROMANS: Senator Ted Kennedy today blasted his Republican colleagues for the delay.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: It's always baffling to me about what the Republicans have against hard-working Americans.

ROMANS: He calls it a matter of civil rights for the workers earning the least. Some 80 Republicans voted for a minimum wage increase in the House; only 86 percent of Americans favor it. With no federal action for almost a decade, 29 states and the District of Columbia raised the minimum wage themselves.

Democrats vow to push it through.

SEN. HARRY REID (D-NV), MAJORITY LEADER: We're going to keep working. They're not going to stop us.

ROMANS: But it is, after all, Washington.

BRUCE OPPENHEIMER, VANDERBILT UNIVERSITY: This is part of what the process regularly allows. And it's something the Democrats did after '94 when they had Bill Clinton in the White House but no longer had a majority in the House or the Senate.

ROMANS: The measure is expected to pass eventually.


ROMANS: Majority Leader Harry Reid's office says a vote may come by the end of this week. But supporters say every day of a delay is an insult to America's lowest-paid workers after nine years of waiting for an increase. A time when Congress took home, Kitty, pay raises totaling some $31,600.

PILGRIM: I think everyone will agree, it's about time.

Thanks very much.

Christine Romans.

The White House is urging Congress to renew its Fast Track Trade Authority, saying it allows negotiators to operate efficiently. Well, that efficiency is the result of Congress not being involved in the details of trade agreements.

Under the White House' Fast Track Authority, Congress is only allowed to improve or reject trade deals when they take place. President Bush's Fast Track Authority expires on July 1.

Coming up, Warde Nichols, the chairman of the Arizona Homeland Security Committee, will talk about what the National Guard is and is not allowed to do to secure the border with Mexico.

Google admits its decision to help censor the Internet in China has been bad for the company's image. But will the company change its policy?

We'll have a report.

The president's low poll numbers may impair his ability to push through his agenda.

We'll have a report on that.

And testimony from a former Bush aide at the CIA leak trial contradicts statements by defendant Lewis "Scooter" Libby.

We'll have the latest.

Stay with us.


PILGRIM: Communist China is tightening its control of the Internet. Now, some U.S. companies in China are refusing to protest this new censorship. Those companies say it's better to operate in China with limits than to not do business at all in China.


PILGRIM (voice over): At the world economic forum in Davos, Switzerland, corporate elites gathered to discuss democracy and human rights. This year, Google co-founder Sergey Brin said Google regrets the bad publicity the company generated by helping the communist Chinese government censor the Internet in China. But, he added, it won't change how Google operates in that country.

Human rights activists are outraged. SOPHIE RICHARDSON, HUMAN RIGHTS WATCH: If Google is really serious about feeling bad about its censorship, the first thing it could do is stop voluntarily censoring its own search engines.

PILGRIM: Internet censorship in China is getting worse. And last week, Chinese president Hu Jintao announced even tighter controls on Internet access. He ordered Chinese government regulators to promote "a healthy online culture" in order to better guide public opinion.

Google has long argued that the benefits of providing Internet access to Chinese citizens outweighs restrictions imposed by the Chinese government. Today they repeated that statement, saying, "Some people in the U.S. feel we're doing the right thing by engaging. Some feel we should not engage. We think what we've done overall is the right strategy."

Congressman Chris Smith introduced legislation that would ban U.S. companies from helping governments censor information about human rights and democracy and providing information leading to the arrest of activists. He proposed fines of up to $2 million for violators.

REP. CHRIS SMITH (R), NEW JERSEY: Dictatorships need two things to survive: a strong secret police and propaganda. The Internet gives them both of that in spades if it is not done in a way that is in keeping with human rights principles.

PILGRIM: Smith draws parallels to the Foreign Corrupt Practices Act that makes corruption and bribery illegal and punishable crimes for U.S. businesses operating overseas.


PILGRIM: Google and other technology companies are meeting with human rights groups to develop voluntary guidelines for companies confronting censorship.

Well, that does bring us to the subject of tonight's poll.

Should U.S. companies be allowed to sell equipment used for censorship to communist countries? Yes or no?

Cast your vote at We'll bring you the results later in the broadcast.

And time now for some of your thoughts.

Gary in Florida wrote to us, "Why does George W. Bush consider himself a decision maker when everything he does is very divisive? We should call him a division maker, not a decision maker."

And Judy in California writes, "Aren't illegal immigrations basically crying that they're receiving cruel and inhuman treatment in this country? Isn't that supposedly the very reason they have left their countries?" And Vicki in Michigan, "I would like to start a new political party called the common sense party. I, like many other people in the country, just can't take this anymore. It's time to realize that neither the Republicans nor the Democrats understand the real American public."

"I'd like to see them live on minimum wage for three months and try to pay all their bills, and provide for their families. Then, and only then, will they know the true struggle we go through every day."

E-mail us at We'll have a little more of your thoughts in the broadcast later.

And each of you whose e-mail is read here will receive a copy of Lou's book, "War on the Middle Class."

Coming up, President Bush's popularity keeps dropping and dropping. Now, does the president stand any chance of being able to push his agenda through Congress?

We'll have a special report.

New testimony, new questions about Scooter Libby's defense at the CIA leak trial.

We'll have the latest on that.

And are the United States and Saudi Arabia planning to use oil prices as a weapon against Iran?

We'll have a report.

Stay with us.


PILGRIM: Now our top stories.

President Bush today warned Iran not to increase its role in the war in Iraq. The president said the United States will take "firm action" if Iran escalates its military action.

Iraq says as many as 200 insurgents were killed in a battle, a major battle with Iraqi troops and police outside of Najaf. It was one of the biggest battles of the entire war.

And the illegal alien lobby is blasting ICE agents for trying to arrest and deport illegal aliens. The illegal alien movement is demanding an amnesty for every illegal alien in this country.

In other news tonight, a new plan to defend the nation's nuclear reactors from terrorist attack. Now, this plan says nuclear plant operators should not be expected to stop terrorists from crashing airliners into reactors. Instead, defending reactors should be the responsibility of the government. And that was precisely the position taken by the nuclear industry. The plan says plant operators should focus on containing the release of radiation from any type of attack.

Critics of the plan wanted nuclear plants to have barriers to keep airplanes from hitting reactor domes.

States around the Great Lakes now being slammed by a blast of winter weather. And Michigan officials say whiteout conditions caused a freeway pileup north of Detroit on Sunday. There were some 20 cars and four trucks in that crash on Interstate 69. No one was killed, but there were numerous injuries. And there's more snow in the forecast.

Now we have some new poll numbers that shows President Bush's approval rating at the lowest levels of his presidency. That has some asking how low can he go? Bill Schneider has the report.


BILL SCHNEIDER, CNN POLITICAL ANALYST (voice-over): The latest batch of polls is in, and the news is not good for President Bush. Five polls taken in mid-January show the president's job approval rating at very low levels.

The CBS News figure, 28 percent, is the lowest figure ever for this president. Our poll of polls gives us an average of 32 percent approval, 63 percent disapproval. Nearly 2 to 1 negative.

So what, you might ask. Bush can't run again. A job rating is a measure of the president's clout. This president has a lot of things he wants to get done in his last two years besides Iraq. Health care, for instance.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We proposed a bold initiative.

SCHNEIDER: Congress is not likely to follow a deeply unpopular president. The public sees this president as a lame duck. Seventy- one percent do not think he will have the support he needs to get things done.

Members of the president's own party are distancing themselves, particularly on his troop build-up in Iraq.

SEN. JOHN WARNER (R), VIRGINIA: I'm very concerned about the American G.I. being thrust in the middle in the violence that really has root causes that go back a thousand years.

SCHNEIDER: Only four presidents since World War II have seen their job ratings drop below 30 percent. Harry Truman chose not to run for reelection in 1952. Richard Nixon was forced to resign. Jimmy Carter was fired after one term. So was Bush's father in 1992.

When you're this low, the voters consider your presidency over. Is that the way they feel about President Bush? Apparently. Fifty- eight percent in the "Newsweek" poll said they personally wished George W. Bush's presidency were over.


SCHNEIDER: Sixty-four percent told the "Newsweek" poll that since the Iraq war began, they do not think Congress has been assertive enough in challenging this administration's conduct of the war. Voters elected a Democratic Congress last year to do just that -- Kitty.

PILGRIM: Bill, the president has always been seen, though, as a person of resolve. Has that changed?

SCHNEIDER: Well, he's still seen as a person of resolve. Remember he ran against his opponent as a flip-flopper. But the image of resolve has backfired now. The "Newsweek" poll asked people, do you think President Bush is influenced more by the facts or more about his personal beliefs, regardless of the facts?

Two-thirds said he's more influenced by his personal beliefs, regardless of the facts. That's the flip side of resolve.

PILGRIM: Thank you very much, Bill Schneider.

A former presidential spokesman is telling what he knows about the outing of a CIA operative. Ari Fleischer was the latest witness to assert that Lewis "Scooter" Libby misled investigators.

Now Brian Todd is in Washington with the very latest -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Kitty, a pivotal moment today for the prosecution. Their witnesses offer a window into the Bush administration's spin machine, especially in the summer of 2003, when prosecutors contend that spin machine was in overdrive, trying to counter claims by former ambassador Joe Wilson that the Bush administration essentially twisted intelligence to justify going to war in Iraq.

As you mentioned the star witness today, the man who was the public face of that White House at the time, former press secretary Ari Fleischer. Fleischer's key testimony today was about a meeting that he had with the defendant Lewis "Scooter" Libby, Vice President's Cheney's former chief of staff on July 7 of 2003.

On that date, Fleischer testified that Libby told him that Joe Wilson's wife worked for the CIA, that she worked in the counter- proliferation division and that her name, Fleischer says, he believes, Libby told him that her name was Valerie Plame Wilson. Very key there, because that date was three days that Libby claimed he even heard of Valerie Plame Wilson, Libby saying that he got the name first from Tim Russert of NBC News on July 10, three days after Fleischer that they had this meeting in which Libby told him Valerie Plame Wilson's name.

But the defense is trying to punch holes in the memory of several prosecution witnesses that came right back at Ari Fleischer today. And said, can you say with absolute certainty that Scooter Libby told you Valerie Plame Wilson's name? Ari Fleischer's response, "With absolute certainty, no." So the defense is really trying to counter some memory claims by the prosecution witnesses, trying to punch holes in their memory. Also questioning their access to key information and key meetings.

David Addington finished testimony today. He is the former -- excuse me. He is the current chief of staff of Vice President Dick Cheney. He is testifying for the prosecution about scheduling, about the authorization of trips, about records of trips. He is testifying this afternoon. He'll finish tomorrow morning, Kitty.

And then the first high-profile member of the media we believe will take the stand tomorrow. That is Judith Miller, the former reporter for "The New York Times".

PILGRIM: Thanks very much, Brian Todd.

Well, coming up, are the United States and Saudi Arabia planning to use oil prices as a weapon against Iran?

Also ahead, Arizona holds hearings to find out what the National Guard is supposed to do when it patrols our border with Mexico. We'll talk with the chairman of Arizona's homeland security committee.

A new medical research center dedicated to treating our most severely opened servicemen and women opens its stores today in San Antonio. We'll have a special report. Stay with us.


PILGRIM: Saudi Arabia today is sending signals that it wants to keep the price of oil at around $50 a barrel, a move that would be good for the United States and at the same time put pressure on Iran.

Zain Verjee reports.


ZAIN VERJEE, CNN CORRESPONDENT (voice-over): When oil prices shoot up, so does Iran's confidence and its ability to make trouble in the Middle East.

SEAN MCCORMACK, STATE DEPARTMENT SPOKESMAN: Everybody knows that they derive the great bulk of their international outcome from oil.

VERJEE: In recent months, senior U.S. officials have talked to Saudis about how to stop Iran's growing threat in the region. Have they turned to oil as a weapon?

Publicly U.S. and Saudi officials say oil's not being used as a weapon to hurt Iran's economy and squeeze the regime. Privately they acknowledge, it's all about Iran.

ANN KORIN, INSTITUTE FOR ANALYSIS OF GLOBAL SECURITY: So Iran is a lot more vulnerable to oil price falling and Saudi Arabia is using that, using the oil weapon, basically, to try and reign in Iran. VERJEE: After sky-high prices, a barrel of oil is now at a two- year low point, and Saudi Arabia's oil minister wants to keep it that way. Last week, he blocked a move by OPEC to increase oil prices, because he says, Saudi Arabia wants to keep prices moderate.

A senior U.S. official tells CNN the kingdom has told Washington it wants to curb Iran's nuclear ambitions, prevent further Iranian meddling in Iraq and limit Iran's influence in Lebanon and the Palestinian territories.

A former Saudi adviser was fired for writing an op-ed in the "Washington Post", warning Shia Iran against making trouble for Sunnis in Iraq. If Saudi Arabia boosted production and cut the price in oil in half, he said, it would be devastating to Iran, which is facing economic difficulties.

KORIN: The oil market is extremely volatile today. So if there are problems in Nigeria, problems in Venezuela, there is really a limit to what Saudis could do.

VERJEE: Analysts say it's a gamble.


VERJEE: U.S. officials are hesitant, Kitty, to publicly talk about the price of oil, fearing that their comments are going to influence the market. Now privately, U.S. officials have also told us that, essentially, they support the Saudis' strategy, although they're not driving it.

PILGRIM: Zain, are the Saudis concerned about how much of their oil may use in the future?

VERJEE: Yes, the Saudis are really worried about this, Kitty, about the U.S. move to reduce dependence on foreign oil. President Bush said in his State of the Union address a little while ago that he wants to pursue developing alternative fuel. So the Saudis are concerned about that.

So what they're hoping is, you know, drive the price of oil down and make it cheaper for Americans at the pump and keep them in good shape.

PILGRIM: Thanks very much, Zain Verjee.

Well, let's turn to our border security crisis. There are currently more than 6,000 National Guardsmen patrolling our border with Mexico. But just what are the guard's rules of engagement?

An Arizona National Guards spokesman said, "We don't apprehend. We don't detain. We don't transport." Arizona legislators also want to know just what the Guard's role is. And today they held a hearing on the National Guard's border role.

And joining me now is Warde Nichols, Arizona's homeland security chairman. And thanks for being with us.


PILGRIM: Part of the hearing today was to sort out exactly happened. What did we establish at today's hearing on what happened?

NICHOLS: Well, unfortunately, what we established today is that the National Guard are there on the border as basically window dressing. They can't do anything. They -- all they do is radio in positions of illegals when they're coming across the border. They can't engage. They can't, you know, apprehend, detain. I mean they're there basically to just radio in -- radio in positions.

PILGRIM: Now, you have said that the gunmen who cross over from the Mexico side of the border appear to be testing the resolve of the National Guard. Explain a little bit what you -- what you mean by that.

NICHOLS: Yes, based off the stories that we got from General Ratochek (ph) today an exact account of the story. I believe that these were paramilitary personnel in Kevlar, vests carrying automatic weapons coming in to test the resolve of what the National Guard are going to do in these situations. Test -- test to see what their response is when they come across the border in these type of situations.

And we found out today that with rules of engagement in the type of things they have to adhere to, that our National Guard men and women on the border are, in my opinion, terrible risk. Their rules of engagement are terrible. Their hands are tied.

PILGRIM: The rules of engagement are what? They must retreat, correct, and cannot engage?

NICHOLS: Basically, yes. They have to -- there's three or four different things that they have to do in process. And basically, in a nutshell, they cannot do anything until fired upon.

PILGRIM: Now this area, tell us a little bit about this area, and what kind of people might be coming across.

NICHOLS: Well, in this type of area, it's out near Sasabe and in this area there's a lot of coyote, human smuggling going on. There's drugs that are coming across the border and now in this particular situation, we believe it was some type of paramilitary personnel.

PILGRIM: And -- and there was no engagement whatsoever?

NICHOLS: Well, again from General Ratochek's report, one the armed gunman got within about 30 feet of one of our guardsman. And they were standing there, looking at each other, rifles in hand, and at that point that's what our National Guardsman went a different position in a defensive position.

PILGRIM: They withdrew and called in...

NICHOLS: Yes, they called in the border guard. And that's another thing that we learned in the hearing today, that our border guard, our Border Patrol, are there basically taking care of our National Guard. I think it's a little reversed. Our National Guard men and women are trained military personnel. Yet they have to call the border guard, the Border Patrol in order to be able to do anything.

PILGRIM: Now this National Guard operation is called "Operation Jump Start". It's $760 million so far. Do you think that that's a waste of money or do you think that's effectively spent?

NICHOLS: You know, I can't say it's a complete waste of money, because we have gotten reports that they have been able to help Border Patrol apprehend and detain these people.

But again I would venture to say that if we use that money more wisely and we are able to put them there in a primary role, able to do the duties of the Border Patrol, we would have much more success in securing our borders.

PILGRIM: Now this particular group of National Guard troops were commended for their action. Do you think that that's something that should have been done? They were commended not only by the National Guard but Arizona's governor's office for their actions.

NICHOLS: Yes, I wouldn't want to belittle what the soldiers did in any shape, way or form. They were following out their directives and their orders. But that's what we were looking at today. What are their directives and what are their orders and what are their rules of engagement? And I would venture to say that they -- that their rules of engagement and their directives must be changed.

PILGRIM: Now, this is a state hearing. But what would you like to see happen?

NICHOLS: I would like to see more awareness about this issue brought forward. That people understand that our men and women on the border are at risk every day because of the directives of the federal government and the directives of the governors that they have signed on to in order to have the National Guard at the border. And they're putting their lives on line, and we've got to untie their hands.

PILGRIM: This is not just a state issue, because this border stretches across many states. Is there any thinking that perhaps a few states could get together and start to reexamine the rules of engagement?

NICHOLS: I would love the four border states to get together and, you know, look at the rules of engagement and look at what Border Patrol's doing on the border.

We know the governor of Texas, just in last week, signed a decree basically putting another 600 plus Texas National Guard on the border to act more in a primary role there and to be able to ride along with Border Patrol and assist. And that may be partially the way to go, but I don't think it goes far enough yet.

PILGRIM: In this hearing today, any input from Washington? And you are happy with the support you're getting from Washington?

NICHOLS: No, we didn't get any input from Washington. And quite frankly, unfortunately, Washington in their federal policies, immigration policies, border security policies, have failed us miserably here in Arizona, and we've got to do something about it.

PILGRIM: Any next steps decided on today?

NICHOLS: You know, I did tell the general in the hearing today that we would like to have him back at some point. As we let some of the thoughts simmer and understand what was said. And we hope to get more answers as we continue to mow through this process and be able to, again, make good policy decisions that we can bring awareness of the issue to the forefront.

PILGRIM: In the interim, would more National Guard troops help the situation?

NICHOLS: You know, we asked the general that. And he didn't really quite have an answer for us that issue. He said that he's apolitical. He's not going to get into the policies and the politics of it and that he's just there carrying out orders.

PILGRIM: Well, sometimes politics has to be practical.

NICHOLS: Yes, yes.

PILGRIM: Thanks very much for joining us this evening and explaining it.

NICHOLS: Thank you, Kitty.

PILGRIM: Representative Warde Nichols.

NICHOLS: Thank you.

PILGRIM: A reminder now to vote in tonight's poll. Should U.S. companies be allowed to sell equipment used for censorship to communist countries? Yes or no? Cast your vote at We'll bring you the results in just a few minutes.

Almost every year, someone in Congress suggests that members forego their annual pay raise. Now some vote for it and the measure usually fails and everyone receives their raise.

But Republican Senator James Inhofe tried to raise the price of such posturing, and he proposed a measure that would deny pay raises to members who vote against them. And it was tacked onto a recently- passed Senate ethics package.

Of course, it's not likely senators are serious about this. A spokesman for the Senate rules committee suggests the provision could be revisited in a House Senate conference before it becomes law. Still ahead, new high-tech help for severely wounded American troops. We'll have a special report from Texas next.

Stay with us.


PILGRIM: The Center for the Intrepid today opened its doors to our wounded warriors in San Antonio, Texas. Now, the center will help troops wounded in Iraq and Afghanistan recover from their injuries.

Bill Tucker reports from San Antonio on today's opening ceremonies.


BILL TUCKER, CNN CORRESPONDENT (voice-over): They came to celebrate, to honor.

GEN. PETER PACE, JOINT CHIEFS CHAIRMAN: To the wounded warriors here today and to all your fellow wounded warriors around this nation, thank you for what you've given your country.

TUCKER: To open a state-of-the-art facility for the treatment and rehabilitation of America's wounded warriors. The Center for the Intrepid, a research facility that is technologically unparalleled for our severely injured, our amputee and burn victims, to help them recover and resume their lives.

STAFF SGT. DANIEL BARNES, U.S. ARMY: My vehicle was struck by an RPG, a rocket propelled grenade. It struck on my side. I was the TCC of the vehicle. Came through my vehicle and took my legs off.

STAFF SGT. JON ARNOLD-GARCIA, U.S. ARMY: It's phenomenal that the American people care this much to donate all the funds that they did and the effort and the work that's been put into here. This place is amazing.

COL. MARK BAGG, DIRECTOR, CENTER FOR INTREPID: To me it means the world because it tells me that the Americans are behind these soldiers. Whether they're for the war, against the war, we really don't get into those politics. But what we do want is we want to see the support for these injured soldiers. And I don't think there's a better statement than just this.

TUCKER: It's a $50 million gift, built with private donations from 600,000 people. Attached to the Center for the Intrepid are two Fisher Houses, temporary residences for the families of wounded warriors, also provided for by private funding, allowing families to be together as the healing takes place.

ARNOLD FISHER, FISHER HOUSE FOUNDATION: And I love this country and I love these kids defending it for us. And I want to do everything in my power to help them. That's my mission.

BILL WHITE, FALLEN HEROES FUND: We want these service members, these wounded warriors to know that we care, that we love them, that we respect them. And that we thank them for their sacrifices.


TUCKER: Kitty, the importance of this center was perhaps best summed up by General Dick Cody, vice chair staff for the U.S. Army. He called it a testament to the warrior's creed, never leave a fallen comrade behind -- Kitty.

PILGRIM: Bill, tell us a little bit about the opening ceremonies. They must have been quite spectacular.

PILGRIM: The ceremonies today were actually moving. You know, a lot of times they can be very ceremonious. But today you saw some of those pictures. It was a very moving tribute, very genuine sincere heartfelt thank-yous from people in the crowd and in the audience.

Yesterday was a beautiful day. They had an unofficial opening, and Master Sergeant Daniel Robelus was awarded the Purple Heart and the Bronze Star, as well.

So this has been a very emotional couple of days here. And it's been a very genuine heartfelt thank you extended to these wounded warriors and their families who stand by them and stay with them and help them through what is a tremendously unimaginably difficult time in their life.

PILGRIM: Bill, I understand John Mellencamp was there today, adding to the ceremonial...

TUCKER: Yes, he was. He was here. And some people were wondering why, in fact, he was here today. He had a very simple answer to that. He said it doesn't matter where you come down on your feelings about the government or where you come down on your feelings about this war.

It's important that we support the young men and women who've decided to give their service to this country and some of these young men and women, as you've seen in the piece, have given legs, and arms, and have given their sight, and they've given parts of their body in service for us to our country.

PILGRIM: And we do salute them. Thanks very much. Bill Tucker.

You're welcome.

For more on the grand opening of the Center for the Intrepid, be sure to tune in to "ANDERSON COOPER 360" tonight. That's at 10 p.m. Eastern. And Anderson will be broadcasting live in San Antonio.

Still ahead the results of tonight's poll, more of your thoughts of Washington's response or lack thereof to our illegal immigration and border security crisis. All that is next. Stay with us.


PILGRIM: Now the results of tonight's poll. Ninety-three percent of you say companies should not be allowed to sell equipment used for censorship to communist countries.

Time now for a few more of your e-mails. And Jim in Washington writes, "I can't help but wonder exactly how some of our elected officials expect me to believe they are worth reelecting. Quite a few of them have spent the last week campaigning pretty hard instead of earning the six figure salaries they get. It seems to me they have time for only three things: campaigning, selling off our country, and taking away the rights our forefathers held so dear."

And Bob in Ohio writes, "After 9/11, one would think that securing our borders would be of primary importance in protecting Americans from their enemies. They failure to do so seems to me to be a betrayal of trust and a disloyalty by our nation to our representatives. There is a word in the dictionary that describes such an action. It is treason."

Sue in Florida writes, "In view of the current political/business attitude of our government, I think we should reconsider amending the Pledge of Allegiance to the following: 'I pledge Allegiance to the flag of the Associated American States, and to the corporations for which it now stands, one government controlled by profit with the ability to fleece and defraud us all."

Thanks for being with us tonight. Please join us tomorrow. And among our guests, Senator Jeff Sessions. He wants to punish government contractors that hire illegal aliens.

For all of us here, good night from New York. "THE SITUATION ROOM" starts right now with Wolf Blitzer -- Wolf.