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Lou Dobbs Tonight
Clinton and Obama Face off on National Security; Human Smuggling Ring Broken in California; Are Consumers Spending Less?; Northrop Grumman Wins USAF Tanker Contract
Aired February 29, 2008 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KITTY PILGRIM, CNN CORRESPONDENT: Thanks, Wolf.
Tonight, Senators Clinton and Obama face off on national security. Clinton launching a new attack ad just four days before the Ohio and Texas primaries. We'll have all of that, the latest on the Republican race, and much more, straight ahead tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT; news, debate and opinion for Friday, February 29th. Live from New York, sitting in for Lou Dobbs, Kitty Pilgrim.
PILGRIM: Good evening, everybody. Senator Clinton today launched a blistering attack on Senator Obama's national security credentials. Clinton saying she has the experience to keep voters and their children safe in a crisis. Obama hit back. He reminded voters that Senator Clinton voted in favor of going to war against Iraq.
Meanwhile, Senator McCain blasted both Obama and Clinton. McCain saying their policies on trade could jeopardize important U.S. military alliances. We have extensive coverage tonight.
We begin with Jessica Yellin in Houston, Texas -- Jessica?
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Kitty, Senator Clinton has released a dramatic new ad and Barack Obama is quickly hitting back. The issue: national security.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Tested and ready to lead in a dangerous world.
YELLIN (voice-over): A fierce volley from Senator Clinton.
UNIDENTIFIED MALE: It's 3:00 a.m. and your children are safe and asleep. Who do you want answering the phones?
YELLIN: Now Barack Obama is firing back.
UNIDENTIFIED MALE: When that call gets answered, shouldn't the president be the one, the only one, who had judgment and courage to oppose the Iraq war from the start?
YELLIN: And the war from the stump is at a fever pitch. SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: We've seen these ads before; they're usually the kind that play upon people's fears and try to scare up votes.
SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Senator Obama says that if we talk about national security in this campaign, we're trying to scare people. Well, I don't think people in Texas scare all that easily.
OBAMA: We had a red phone moment. It was the decision to invade Iraq. Senator Clinton gave the wrong answer.
YELLIN: The Clinton ad is a clear illusion to another emotional war-time commercial.
UNIDENTIFIED FEMALE: Three.
(SOUNDS)
YELLIN: And an attempt to break through before must win primaries. Obama is blanketing the air waves in Texas and Ohio.
UNIDENTIFIED MALE: Barack Obama opposed this war in Iraq from the start.
OBAMA: Washington's talked about health care reform, and reformed nothing.
YELLIN: Senator Clinton is being extravagantly outspent. She poured $5 million into ads in Texas and Ohio. He's spent $8 million and it's not just how much but where. On "American Idol," TV's most watched show, it was Obama all over the commercial breaks.
UNIDENTIFIED MALE: The problem for Senator Clinton right now is the "American Idol" problem. This is where it's the most expensive advertising you could buy at the local level and Obama is buying it without hesitation.
(END VIDEOTAPE)
YELLIN: And Kitty, there is some bad news for Senator Clinton on the national security front. Senator Jay Rockefeller, who chairs the Senate Intelligence Committee has just endorsed Barack Obama, saying that Obama is the candidate who is best qualified to handle the terrorist threat -- Kitty?
PILGRIM: Thanks very much, Jessica Yellin.
Well the Obama campaign today predicted that Senator Clinton will fail in Texas and Ohio. Obama's campaign manager saying Clinton has no chance of eroding Obama's lead in pledged delegates. The Clinton campaign responded by saying that anything less than a clean sweep by the Obama on Tuesday, will be regarded as a failure for him.
Now the Clinton campaign tonight is refusing to rule out a legal challenge to the Democratic Party's primary and caucus rules in Texas. Texas has a two-step contest, with a primary election first, followed by caucuses. Clinton officials say they are concerned about the lack of clarity in the rules governing that contest.
A new poll of polls gives Senator Obama a narrow lead in Texas, that poll gives Obama 48 percent, Clinton 44 percent. Statistically that is a dead heat. In Ohio Clinton has the lead with 47 percent against Obama's 40 percent. In the Republican race the latest poll of polls has Senator McCain a commanding lead over Mike Huckabee.
Well joining me for more on the primary battles in Ohio and Texas is Suzanne Malveaux. She's in Waco, Texas.
And Suzanne, which Democrat is winning the battle on national security tonight, in your view, Obama or Clinton?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Kitty, it is so hard to tell just which way the voters are going. Obviously those polls if you look at them, really kind of a back and forth here, really within that margin of error. But what the Clinton camp is essentially trying to do is capitalize off of this national security issue, arguing that she has the qualifications that that she has more experience than Senator Obama.
This is two-fold here when you take a look at those ads, that kind of back and forth, whether or not he would be ready or she would be ready in a time of crisis, getting that call at 3:00 in the morning. That is meant to make a clear sharp distinction with Senator Obama's record but it is also campaign aides say meant to take away some of the strength from Senator John McCain.
They see that the national security card is a strong card that he is going to play because of his experience, extensive experience on that front, so they believe that she needs to get out there, like she did today, before these generals to talk about her trips to more than 80 different countries and today we heard a different kind of line from Clinton, something that harkens back to the familiar argument, whether it's solutions versus speech, but this is the latest reincarnation. Take a listen.
(BEGIN VIDEO CLIP)
CLINTON: (INAUDIBLE) responsibility for Europe and NATO, and failed policies in Afghanistan. Protecting and defending this country is the most solemn duty of our president.
(END VIDEO CLIP)
MALVEAUX: Kitty, there's also another very simple but aggressive line of argument that she is making, and that is essentially, says I am applying for this job as president and commander in chief, so simply take a look at my resume, compare it to his resume, that I am more qualified and more experienced for the job, that I'm going to work harder.
If you look at it that way she feels that voters will definitely go to her side. It was one of those things that in the audience really got the greatest applause, was when she talked about how hard she was going to work for the American people, that national security is something they feel that they could make some in-roads in the days ahead but we'll just have to see how it all shakes out on Tuesday -- Kitty?
PILGRIM: And the seriousness of this topic makes for very intense campaigning. Thanks very much, Suzanne Malveaux.
Senator McCain tonight blasted his Democratic rivals for policy that he says could jeopardize a key military alliance. McCain's saying Democratic threats to renegotiate the NAFTA agreement could anger Canada, and that could undermine Canadian support for the war in Afghanistan. Dana Bash reports.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Senator John McCain.
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Call this rebooting for the fall campaign.
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Thank you, Don.
BASH: John McCain used an appearance at Dell Computer in Texas to chastise Democratic candidates for wanting to renegotiate NAFTA, saying it could imperil military support from Canada.
MCCAIN: Now how do you think the Canadian people are going to react to that? Who we are having now their enormous and valuable assistance in Afghanistan.
BASH: About 2,500 Canadian troops serve on the front lines in Afghanistan, assist in the U.S. effort against the Taliban. McCain noted the controversy inside Canada about their deployment as he lobbed his latest question about Barack Obama and Hillary Clinton's readiness to be commander in chief.
MCCAIN: I think the Canadians would view that as a betrayal.
BASH: But even as he focused on Democrats, controversy is brewing over McCain's attempt this week to appeal to skeptical conservatives in his own party.
PASTOR JOHN HAGEE, CORNERSTONE CHURCH: And John McCain is the right choice to lead America...
BASH: An endorsement from Texas evangelical Pastor John Hagee. The president of the Catholic League, Bill Donohue, says Hagee regularly impugns the Catholic Church calling it the, "great whore" and a "false cult system." Donohue wants McCain to retract his embrace of Hagee, he refused.
MCCAIN: When he endorses me it does not mean that I embrace everything that he stands for and believes in.
BASH: Meanwhile, as McCain pivots towards the general election, fresh evidence of his huge financial challenge, in February, Hillary Clinton raised $35 million. Barack Obama's campaign says he raised more, but sources tell CNN McCain raised just a third of that, $12 million.
MCCAIN: We got a ways to go to catch up. I think we've been doing better, but I must admit I give great credit to both Senator Obama and Senator Clinton for doing a very fine job at fund raising.
BASH (on camera): To try to make up for that big money disadvantage, McCain went from campaigning here to a private fund- raiser. In fact, he's been doing that nearly every day for the past few weeks. But McCain advisers know his money disadvantage is just one example of a broader challenge that the enthusiasm that is very much there for Democrats right now is just not there for Republicans.
Dana Bash, CNN, Round Rock, Texas.
(END VIDEOTAPE)
PILGRIM: Now one further note on Dana's reporting about John Hagee and his endorsement of McCain. CNN has tried repeatedly to reach Pastor Hagee and to get his response to the criticism from Catholic leaders and his aides said he was traveling and not available.
Russia is also holding presidential elections on Sunday. But the Russian election is far from open or democratic. Vladimir Putin's chosen successor, Dmitry Medvedev, is all but certain to win that election. Now Russian officials ensure that Medvedev faces no serious opposition from independent candidates. Putin is expected to become Russia's prime minister after that election.
Still to come, a massive setback for Boeing in one of the Pentagon's biggest defense contracts, Senator Jeff Sessions will be here, and he'll explain why he supports the Pentagon's decision to give that contract to a U.S. European alliance.
Also troubling new evidence of ruthless tactics of human smuggling gangs, Casey Wian will have that report -- Casey.
CASEY WIAN, CNN CORRESPONDENT: Kitty, a big bust by ICE and a horrifying scene discovered by sheriff's deputies, both disturbing reminders that human trafficking remains alive and well here in Los Angeles and throughout the country. We'll have details coming up -- Kitty.
PILGRIM: Thanks, Casey. We look forward to that report.
Also new questions about the federal government's inability to protect us from dangerous imports.
And the government faces new charges that failing to ensure the safety of American consumers in the air.
Stay with us.
(COMMERCIAL BREAK)
PILGRIM: Shocking video tonight of a human smuggler's safe house in Los Angeles. There's evidence illegal aliens were held for ransom in locked underground tunnels and cells in horrific conditions. Now this house was discovered the same day federal officials cracked another major illegal alien smuggling ring.
Casey Wian has our report.
(BEGIN VIDEOTAPE)
WIAN (voice-over): In a Los Angeles county neighborhood near a school, sheriffs condemned this home Wednesday. Inside they found not only squalor but underground tunnels, cells and steel doors that could only be locked from the outside, all telltale signs of an illegal alien drop house.
DEP. JOE OCHOA, L.A. COUNTY SHERIFF'S DEPT.: We've got a theory but we have no proof of it.
LT. DUANE HARRIS, L.A. COUNTY SHERIFF'S DEPT.: Obviously maybe some human smuggling or something to that effect.
WIAN: In fact, the "San Gabrielle Valley Tribune" reports a relative of the home's owner who did not want to be identified told them the cinder block building was used as a smuggler safe house.
UNIDENTIFIED FEMALE: It was like a dungeon.
WIAN: She told the paper, "Let's just say if you bring a person across the border and they're not paying up you just don't let them go."
The same day in a different case, Immigration and Customs Enforcement announced the results of a three-year investigation of what it called a major Los Angeles-based human trafficking ring. Authorities say more than 100 Guatemalan illegal aliens per week were brought across the Mexican border in Arizona then moved to safe houses in Los Angeles. In a 160-page affidavit, ICE alleges this 99-cent store downtown served as a transportation staging area for illegal aliens being taken all over the country by van or SUV.
JENNIFER SILLIMAN, ICE DEP. SPC. AGENT IN CHARGE: These are ruthless criminal organizations who are putting these people in danger. As I said there are horrible conditions inside the load houses. They're put in danger when they're put into these vehicles that are overloaded and unsafe.
WIAN: ICE says the investigation resulted in the arrest of more than 800 illegal aliens. Six suspects are in custody, and ICE is searching for seven others, including one of the alleged ring leaders.
(END VIDEOTAPE)
WIAN: ICE says the suspects charged from 1,200 to $3,700 per illegal alien for just the U.S. portion of their journey. That means the ring grossed between six and $19 million a year -- Kitty.
PILGRIM: That is just shocking. Thanks very much, Casey Wian.
Arizona's new employer sanction law may already be having an impact even though no enforcement action has been taken. There are clear signs that many illegal aliens in Arizona are simply packing up and leaving. And many are returning to Mexico, but some are moving to neighboring states like Oklahoma and Texas. An increase in illegal aliens in Houston and Dallas has also been reported and many are believed to have come from Arizona.
Arizona senator and presidential candidate John McCain is busy trying to emphasize his border security credentials. McCain is facing a tough fight to win the support of conservative Republicans. Senator McCain is trying to put his previous open border stance behind him. Now he's supporting efforts to build a fence along the southern border with Mexico.
(BEGIN VIDEO CLIP)
MCCAIN: It seems to me that borders are borders and that there should be agreements between the land owners and the federal government so that they don't impinge on their property rights, but at the same time there has to be these barriers to illegal immigrants coming across our border because of the national security aspects of it.
(END VIDEO CLIP)
PILGRIM: Now many conservatives remain deeply suspicious of McCain. Those conservatives believe McCain still wants to give illegal aliens amnesty.
An illegal alien fugitive accused of murdering his wife in New Zealand has been arrested in Georgia. Ny Yon Hsu (ph) entered this country illegally and was living in the primarily Asian section of Atlanta. Local residents who recognized Hsu from Chinese press reports tied him up with his own clothes until the police arrived and took him into custody.
Coming up, the economic crisis is forcing America's middle class to take drastic steps just to stay afloat. We will have that story.
Also a new report questions the safety of our nation's airplanes. We'll have a special report on that. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: Oil prices rose sharply today touching about $103 a barrel. Americans are paying more at the gas pump. That's according to AAA. The average price a gallon is now at more than $3.16 a gallon.
Stocks tumbled today, the DOW losing more than 300 points. It's more evidence that the economy is in trouble. The economy is barely growing. The Bush administration predicts this spring's tax rebate checks will give Americans some relief and stimulate the economy. But millions of Americans say they have other plans.
Christine Romans reports.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Everything's going up. Milk is going up, mortgages, and taxes and everything.
UNIDENTIFIED FEMALE: I had to put back a few things as I was shopping and deciding what to purchase because I was trying to be a little more realistic in what I was buying.
CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Millions of Americans now more realistic out of necessity. For homeowners the value of their biggest asset is falling and foreclosures are spiking. Job growth is slowing and it costs more to eat and drive.
UNIDENTIFIED MALE: What are they going to do about these gas prices going up? People with the wages that we make now we just can't keep up with that.
ROMANS: The latest numbers bare it out. The Commerce Department says consumer spending essentially stalled for the second month in a row when adjusted for inflation. New data from the University of Michigan show more families report financial distress than any time since the 1991-92 recession.
GREG MCBRIDE, BANKRATE.COM: Consumer spending has clearly softened; inflation is essentially chewing up whatever spending gains people are making. That's troubling for the economy.
ROMANS: It couldn't come at a worse time for millions of homeowners with adjustable rate loans.
TODD MARK, CCCS OF GREATER DALLAS: Now another year later, payments go up again, their cards are maxed out. Their other resources are maxed out and they still have this higher payment to keep themselves in the home.
ROMANS: Many of those people now own a home worth less than they owe. The bright side?
UNIDENTIFIED MALE: There's a lot of stimulus in the pipeline in the form of Fed interest rate cuts and the tax rebates that are on the way.
ROMANS: Relief, he says, could come in the second half of the year.
(END VIDEOTAPE)
ROMANS: But just how strapped are consumers? And how will they use that rebate check? The University of Michigan Survey of consumer sentiment found 82 percent said they will save it or pay off bills with their government stimulus. They won't be making new purchases, Kitty.
PILGRIM: It stands to reason if people are in the hole, they're going to use it to pay off debt. I mean this is not a leap, this is obvious. Thanks very much, Christine Romans.
Federal Reserve officials are warning tonight the country's slumping housing market could slow consumer spending even more. Now the officials say further declines in housing prices could result in even more foreclosures and greater financial instability.
They say a number of fiscal measures are needed to fix this housing crisis and the Fed says it hopes putting more money into the economy will help fight the severe credit crisis. The Central Bank will auction off another $60 billion in short term funds next month to cash-strapped banks. The Fed says it hopes the increased supply of cash will prompt banks to continue lending.
Well it is time now for tonight's poll. And if you could, would you vote for none of the above instead of the current presidential candidates? Cast your vote at loudobbs.com. We'll bring you the results later in the broadcast.
Time now for some of your thoughts. Thousands of you are e- mailing us about President Bush being surprised to learn that gasoline is predicted to cost as much as $4 a gallon.
So Marjorie in Florida wrote: "It doesn't surprise me that President Bush's comments reveal that he is out of touch with the struggles faced by the middle class. He has never been a president in touch with the middle class. What surprises me is that it still surprises the general public."
And John in Florida wrote to us: "Lou, we have a president that has no clue about gas prices and the present economy. We have lost the focus as a nation. For the first time in my life I am an Independent. Please keep your objective views and information flowing. The middle class needs you."
Jude in New Jersey wrote to us: "Lou, the president not knowing that gasoline is going to $4 a gallon explains the Bush presidency the best. No further explanation needed."
We'll have more of your thoughts a little bit later in the broadcast and each of you whose e-mail is read here receives a copy of Lou's book "Independents Day: Awakening the American Spirit".
And a reminder now that Lou kicks off his new three-hour radio program "The Lou Dobbs Show" this Monday and among Lou's guests, Independent presidential candidate Ralph Nader and Republican presidential candidate Mike Huckabee. Join Lou for his first show. So go to loudobbs.com to find local listings for "The Lou Dobbs Show" that's three hours of Lou on the radio beginning Monday.
And coming up, much more on the presidential campaign, the make or break battles in Ohio and Texas, compelling new evidence of the risks to Americans from medicines made in communist China. We'll have a special report on that and also new charges that the system to ensure the safety of our airlines is utterly broken.
And the Pentagon gives a European a share of a massive new tanker contract. Senator Jeff Sessions (ph) will be here to explain why he supports the Pentagon's decision. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: The Air Force today awarded a tanker contract that could be worth up to $100 billion to Northrop Grumman. Now Northrop is a partner of the European consortium that builds the Airbus airliner. Boeing was the other contender for the contract. The new planes will replace the Air Force's aging tanker aircraft, some of them 50 years old.
Jamie McIntyre reports from the Pentagon -- Jamie.
JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well Kitty, this decision is a big blow to Boeing and a big surprise to a lot of industry watchers. The decision is to award that contract worth initially $35 billion, but could eventually lead to future contracts totally more than 100 million to a partnership between Northrop Grumman and the European maker of Airbus EADS.
Now the plane will be assembled in the United States and some 2,000 jobs will be created in Mobile, Alabama, but critics are already complaining that this is going to send thousands of jobs overseas to European countries at a time when many of them are not big supporters of the United States' military operations overseas -- Kitty?
PILGRIM: Why not go with the American company, with the long record of building aircraft for our military?
MCINTYRE: Well, that's I think why a lot of people are surprised. They really thought that Boeing with its 50-year reputation would get the contract, but the Air Force says when they looked at the contract, the proposal from EADS, the plane was bigger, it provided more fuel, the ability to refuel more planes at a time in the air.
It was cheaper, and the reputation of the companies, the delivery record in the past was very good. Altogether, they claim it adds up to a better deal for the taxpayers. You can bet that Boeing will probably contest this contract. Also you can bet that Boeing's stock price will probably take a hit when the market opens Monday.
PILGRIM: That is probably accurate. Thank you very much, Jamie McIntyre.
Well, the contract to replace the Air Force tanker fleet has been tainted by corruption over the past few years. In 2004 Senator John McCain led a congressional effort to ban the Air Force from making a deal with Boeing for tanker replacements.
Now the ban followed an investigation which found a Boeing executive had conducted illegal job negotiations with an Air Force acquisition official who went to work for Boeing. Both ultimately went to jail.
Northrop Grumman said it would build an aircraft manufacturing plant in Mobile, Alabama, that could create about 2,000 jobs in the region. Now, Senator Jeff Sessions from Alabama joins me now for more on tonight's deal.
Thank you for joining us, Senator Sessions.
SEN. JEFF SESSIONS, (D) AL: Thank you and it's 25,000 jobs in the region.
PILGRIM: OK. We truly understand why that is a victory for your state, sir, but there is considerable discussion over the military's use of foreign contractors. What have to you say about that criticism?
SESSIONS: You know, this is not a situation in which the aircraft would be built in Europe or Germany for France or someplace like that. It will be built with an American lead contractor and EADS as part of the consortium but it will be built in America, by Americans and also it's not a high-tech, sophisticated attack aircraft like the FA-22 (sic), for example. This is a normal commercial airliner, reconfigured for refueling capabilities, so it's not as if we're giving up a lot of our technology either.
PILGRIM: Well, sir, I just would like to quote your fellow Republican, Senator Sam Brownback of Kansas, when he heard of this announcement, and he said, "It's stunning to me that we would outsource the production of these airplanes to Europe, instead of building them in America."
You maintain that the majority of this craft will be built in the United States. But apparently final assembly will be in Alabama, and underlying parts of the plane will be constructed in Europe.
SESSIONS: Well, I'd like to bring my good friend, Sam, down to Mobile and I can show him exactly where the aircraft will be built, and the majority of the components will be American made, and in fact, we think, as time goes by, we'll see larger and larger numbers of components made in the United States, and I would also note that this is going to be totally new jobs in the aircraft industry, not just expanding work on existing assembly line, so we're getting an in- sourcing of quite a number of jobs into America.
PILGRIM: That isn't built into the initial contract, though, sir, is it?
SESSIONS: What is that, the --
PILGRIM: The larger number of component eventually that you hope for to be built in the united states, there's still a good portion of the plane being built in Europe, correct?
SESSIONS: Well, fundamentally, they are pretty close in the number of components. Not all of the Boeing aircraft is made from American components either, a considerable number are imported. So I think you'll see as the years go by, them virtually the same but we will have enhanced our American infrastructure for business, by creating one of the three world's great aircraft assembly plants in Alabama.
Right now there are just two, one in Europe and one in the United States, this will be the second one in the United States. So I think it strengthens us. I also remember, this aircraft was one in a shutout. The air force said all five criteria, including cost, was won by the Northrop team, Northrop of course is a Los Angeles corporation.
PILGRIM: There's a good bit of discussion over the fact that the EADS Company, based in Paris, said that if it won the contract, it would put a plane assembly plant in Mobile, Alabama, but critics say that this is a very small carrot to get a big contract, that at present is $30 billion to $40 billion and could go to $100 billion over the years, but one small plant in one state is not a big enough inducement. What do you say to that, sir?
SESSIONS: Well, first of all, the plant will be built in the United States to construct these aircraft. That's where it will be built. It will be built in Mobile, Alabama. What they said in addition was many of their commercial aircraft that they're selling now all around the world, they will, in fact, construct some of them in the United States.
So we will be obtaining additional jobs and additional supplier work in the United States for aircraft now being made in Europe. I think that's an in-sourcing that we can be proud of. I just want to again say, this is not like we're having an aircraft that we are purchasing, being built abroad.
It's not a high-tech, sophisticated fighter aircraft. It's a commercial aircraft, in America, that creates American jobs, and I think it's a great day, frankly, and the most important thing, of course, is that the Air Force has concluded, after great scrutiny, that this is the best aircraft for our men and women in uniform.
PILGRIM: Thank you very much for being with us, Senator Jeff Sessions, thank you, sir.
SESSIONS: Thank you.
PILGRIM: Still ahead, disturbing new evidence the federal government may be compromising your safety in the air. We'll have a special report.
And the FDA once again failing to protect Americans from dangerous imports. We'll have that story.
Stay with us.
(COMMERCIAL BREAK)
PILGRIM: The FDA has found problems at the Chinese factory supplying the main ingredient of a blood thinner heparin. After hundreds of four fatal problems, Baxter International is recalling all heparin it produces. All this comes under mounting congressional pressure for the FDA to explain how this was allowed to happen in the first place. Louise Schiavone has our report.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Off the market in the United States, Baxter International's blood thinner heparin, now suspected in connection with 400 adverse patient reactions, including 21 deaths and whose active ingredient has been made in China.
JIAN LUI, UNIVERSITY OF NORTH CAROLINA: The heparin is the most important anti-coagulant drug and there's not many substitutes. It's in crisis right now. It is a problem.
SCHIAVONE: Doctors use heparin for cardiovascular surgery and kidney dialysis. Baxter supplies 50 percent of market. The drug's active ingredient is derived from scraping the mucus membranes in pig intestines. Despite rampant pig disease across China, the Food and Drug Administration failed to inspect the plant that processed Baxter's heparin until this month, when problems emerged.
ANDREW VON ESCHENBACK, COMMISSIONER, FDA: There appears to be a problem in the execution in the sense that given names of various plants, there was a similarity in those names that was such that there was a confusion with regard to signing, the fact that there had been inspections.
SCHIAVONE: Translation? The FDA couldn't keep track of the plants it inspected. The FDA calls it a paperwork mix-up. The inspection they say should have been conducted in 2004 but was not. The agency says it believes the issues occurred well after 2004.
DR. SIDNEY WOLFE, PUBLIC CITIZEN: The law is very clear. Every time a company starts making new drug, before they can ship the drug out, FDA has to inspect it.
SCHIAVONE: In its belated inspection of the facility two hours from Shanghai, the FDA noted, among other things, poor records on impurities, incomplete manufacturing instructions, and processing tanks that did not appear clean. Both Baxter International and the FDA note that no definitive link has been established between the fatalities and Baxter's heparin, but all Baxter heparin, except that contained in intravenous bags is now off the market.
(END VIDEOTAPE)
SCHIAVONE: Kitty, the FDA says it's satisfied that the other U.S. heparin suppliers not included in this product alert can pick up the slack. Researchers meanwhile mindful of the unreliability of natural ingredients like pig intestines are trying to develop synthetic versions of the blood thinner -- Kitty.
PILGRIM: In the meantime it does nothing to help those who have been affected by this. Thank you very much, Louise Schiavone. Another disturbing example of the federal government's failure to protect Americans, a new report raises questions about the safety of our aircraft. The Department of Transportation found less than one percent of the suppliers used by airplane manufacturers have been inspected by the Federal Aviation Administration.
Bill Tucker reports on the potential dangers in the air.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): The Federal Aviation Administration is failing to protect aircraft safety. That is the simple finding of a just-released report from the inspector- general of the Department of Transportation.
To quote the report: "Neither manufacturers nor FAA inspectors have provided effective oversight of suppliers. This has allowed substandard parts to enter the aviation supply chain. The quality of parts used in landing gear, jet engines and other critical components has been compromised."
A government watchdog group says the report shows a broken system.
NICK SCHWELLENBACH, PROJECT ON GOV'T OVERSIGHT: They're pretty clear in the report. But when you fully understand, wow, there's just all these massive breakdowns throughout the system. The FAA is relying on manufacturers to a large extent and I'm sure that's the way the manufacturers want the system to be run, but the manufacturers are failing and governing themselves, which really strikes me as frankly stupid.
TUCKER: Only one percent of the suppliers to the manufacturers reviewed the inspector general's report have been inspected by the Federal Aviation Administration and at its current inspection rate it would take almost 100 years to inspect every supplier.
In a conference call with CNN officials from the FAA made it clear final responsibility rests with the companies. Quote, "Safety in aviation first and foremost rests with the manufacturers, not the Federal Aviation Administration. Courts have made that clear."
Those same officials also said they're satisfied with the way the companies assure the quality of parts, noting that an inspector general's report is never positive and always harsh in tone.
When asked about the comment, the spokesperson for the inspector general's office had no comment, saying the report "speaks for itself.
(END VIDEOTAPE)
TUCKER: And it speaks loads knowing that FAA inspectors made decisions to conduct an audit of a local supplier, rather than a foreign supplier because well, the travel would, for the inspection would be too expensive. The report also notes that the current system was designed when aircraft carriers maintained primary control over the production of their planes, rather than today's model where the manufacturing is outsourced to a greater and greater and greater extent.
In other words, we have a system that's broken, we've got a model that's broken and I got to tell you, it's uncomfortable reading that report feeling comfortable about the planes in the air.
PILGRIM: I could say so and the responsibility rests with the manufacturer. What's the FAA's role in this?
TUCKER: I don't know, a good question, Kitty.
PILGRIM: Thank you very much, Bill Tucker.
Well coming up at the top of the hour, THE ELECTION CENTER with Soledad O'Brien -- Soledad?
SOLEDAD O'BRIEN, CNN ANCHOR: Hey, Kitty, good evening.
CNN ELECTION CENTER right at the top of the hour. Just three days before the crucial march 4th primary, we're taking a look at those dueling attack ads from Clinton and Obama in Texas.
Plus, John McCain sings the praises of free trade, NAFTA and Canada. Is that the best way to win votes in Texas? We'll take a look. Stay tuned for the latest from the best political team on TV, coming up, Kitty.
PILGRIM: Thanks very much, Soledad.
A reminder now to vote in tonight's poll: If you could, would you vote for "none of the above" instead of the current presidential candidates? Cast your vote at loudobbs.com. We'll bring up the results in just a few moments.
And up next, John McCain, Barack Obama escalate their war of words over the war in Iraq.
And is Hillary Clinton using scare tactics to win over voters? Three of the best political analysts in the country join me for those stories and more.
Stay with us.
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PILGRIM: Joining me now are three of the best political analysts in the country. Here in New York we have Pulitzer prize winning columnist for the "New York Daily News" Michael Goodwin, James Taranto, editor of OpinionJournal.com and in Austin, Texas, Jonathan Martin, senior political reporter for Politico.com.
Gentlemen, thanks for being with me.
This is the weekend before the real big test. This may be the moment. Ohio and Texas, what do you think, James? JAMES TARANTO, OPINIONJOURNAL.COM: Well, if Mrs. Clinton doesn't win them both, I think there's going to be a lot of pressure for her to drop out. Obama has won 10 or 11 in a row and she's looking weak. She could hang on and try to win the superdelegates and it could get really ugly. It's already gotten pretty ugly but I think this is make or break for Mrs. Clinton.
PILGRIM: Jonathan?
JONATHAN MARTIN, POLITICO.COM: I think there's a reason why she aired that ad she did this morning, the so-called 3:00 a.m. ad with the phone ringing in the middle of the night. She wants to make this case, once and for all, that Obama is not right now qualified to be commander in chief and that she is. That is effectively her closing argument. She recognizes that Tuesday is do or die. That's why she's now running that spot.
PILGRIM: She's been roundly criticized for scare tactics and this is one of the most essential issues of the entire country right now. Michael?
MICHAEL GOODWIN, "NEW YORK DAILY NEWS": I agree with Jonathan. That is quite an extraordinary ad for one Democrat to be running against another in a primary season. It feels like a general election ad that more likely a Republican would run against a Democrat, and I think in many ways this is, you know, look this is her last chance.
She's got to do very well. It's also worth noting that her campaign put out a statement today that with all the expectations on Obama, he has to win all four next week or that reflects doubts about him. I mean talk about changing the game, changing the goal post.
PILGRIM: Is that kind of a statement of strength -- a strong statement or a weak statement?
GOODWIN: It struck me as weakness because it means that she doesn't think she's going to win the two big ones, at least. She's preparing to lose some of the primaries and try to turn that into a virtue.
PILGRIM: We have the February fund raising in, $35 million in February for the Clinton campaign and Obama saying it will raise more than $50 million for the February, that's the number he's coming up with, in the money trails, the Obama camp is really taking a sweep, aren't they?
TARANTO: Well, Obama has been outraising her for quite some time now so this is not surprising. I want to say also with regard to the ad if it doesn't work for Mrs. Clinton, McCain should take the ad and use it in the national election and just replace the last few seconds where she shows up.
Because I think it actually would be an effective ad in the general election when you are appealing to a more ideological diverse group. I don't know if it works with Democrats.
MARTIN: He could to toughen it up some, too.
PILGRIM: Let's talk about superdelegates. We've seen a steady erosion, Obama, we have 236 for Clinton, Obama 185, but the erosion has been towards Obama. What do you think in the whole sort of superdelegate debate, James?
TARANTO: There was a piece on the politico today that said a number of black supporters of Mrs. Clinton are resist these kind of racially-charged pressures to switch over to Obama. So I'm not sure the erosion is that clear. I think it's more that Obama is picking up people previously undecided.
The whole superdelegate phenomenon is a little interesting. What it means is if there's a close race, it gets decided by party leaders. Which kind of runs counter to the small "d" democratic party.
But on the other hand, as some have urged the superdelegates just follow the popular opinion and go with Obama, then what's the point of having superdelegates?
PILGRIM: Right, but it is quite a point of contention and discussions around the dinner tables of this country, because the sort of we won't be robbed is sort of hanging over this whole thing. Michael?
GOODWIN: Well we've talked before about sort of this period between primaries, that this was the real danger for Clinton, that Obama could be picking up delegates, superdelegates, even though there were no votes going on because he's been, won so many of the recent states, he's won 11 in a row, 11 contests in a row so that during this time, he could be picking up superdelegates and that's exactly what's happening. So there's no votes being cast but he's building his delegate lead anyway.
PILGRIM: Jonathan, anything to say about the superdelegate issue?
MARTIN: Well, certainly Obama is obviously picking up more than Clinton is and that reflects the state of the race but I think what you mentioned earlier, Kitty, is a point that should not be overlooked, that is what Clinton and Obama raised this past month -- $35 million for Clinton, probably over 50 for Obama.
Those are staggering numbers for one month's time during the course of the primary season when the candidates are not out there raising money at events. This is largely organic, guys, this is money coming in online. For Republicans I've talked to these are intimidating numbers and don't auger well for the fall.
PILGRIM: This is enormous amounts of money.
I'd like to get to an issue that's interesting, New York Mayor Michael Bloomberg announced he's not running for president but he also made a statement about we could put it up: "I believe an independent approach to these issues is essential to governing our nation, and that an independent can win the presidency." He was talking about the economy, the education and environment. Do any of these people have a chance of selling themselves as an independent, when they're so entrenched by money and by association in these parties? Michael?
GOODWIN: Well, look, if any independent could have made a shot, it would have been Bloomberg, because he's got unlimited money, and even then, his polling was in the single digits in key states. He would have had a hard time winning a single state, and you can't win the presidency if you don't win the Electoral College.
So I don't buy the notion that America is yet ready for a third party to win the White House. I think that in the end you get typecast as either a liberal or conservative. You take votes from one party or the other but you don't have a base to run from and Bloomberg is the perfect example of that.
PILGRIM: Jonathan, you seem to agree?
MARTIN: Exactly. Especially in a year, as Michael well knows where you've got two major party candidates to have significant appeal to independent voters. If there was more of a sharp contrast this year between Hillary Clinton and say Mitt Romney for example, maybe a Bloomberg or any third party candidate would have a shot. If John McCain and Barack Obama who have demonstrated appeal to independents it's tougher to find a place for Bloomberg.
Plus, I want to just ad that Bloomberg is more of a conventional liberal, too, with the exception of a few issues like trade, he's pretty down the line left. I'm not sure why a Democrat would have supported him over whoever their nominee was going to be.
PILGRIM: Or Bloomberg said theoretically anyone who represents independent values we would throw his support behind. James?
TARANTO: It's never happened. There's never been an independent or third party candidate elected president of the United States. Even Abe Lincoln in 1860, the Republicans were already an established party by then. So I think this is a pipe dream that's very popular around the media, the idea of it is exciting. But it's never going to happen. I predicted on this show that Bloomberg would not run.
PILGRIM: Look, it's fun to talk about. Michael Goodwin, James Taranto, Jonathan Martin, thank you for being here.
A reminder now that Lou kicks off his new three-hour radio program "The Lou Dobbs Show" this Monday and among Lou's guest, independent presidential candidate Ralph Nader and Republican candidate Mike Huckabee. They will join Lou for his first show. Go to loudobbs.com to find the local listings for the "Lou Dobbs Show" and that's three hours of Lou on the radio, beginning on Monday.
Still ahead, "Heroes" our tribute to the men and women who bravely serve the country in uniform and tonight we introduce you to Army Specialist Jeremy Stone.
We'll be right back.
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PILGRIM: And now "Heroes", it's our tribute to the men and women in uniform who bravely serve our country. Tonight we introduce to you Army Specialist Jeremy Stone. Specialist Stone received the Bronze Star with Valor for saving the lives of four U.S. soldiers and three Iraqi soldiers and this after the compound he and his men were securing was hit by two truck bombs.
Phillipa Holland has his story.
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PHILLIPA HOLLAND, CNN CORRESPONDENT (voice-over): Jeremy Stone joined the army a month after his 19th birthday. Now just 21-year-old this Army specialist received the Bronze Star with Valor for his heroism on this August day in Hor al Bash (ph), Iraq.
SPC JERMEY STONE, U.S. ARMY: Towards the end of the summer we started moving out further and further west, we were going to the areas that hadn't been patrolled before and that's around the time this attack happened.
HOLLAND: It was Stone's second day as team leader for Bravo Company Second Battalion Eight Cavalry Regiment.
STONE: I experienced mortars, RPGs, IEDs but the explosion that happened was unlike anything I had ever experienced. All of the sudden out of nowhere when I least expected it, everything around me just exploded.
HOLLAND: Two trucks packed with explosives detonated within minutes of each other.
STONE: I lost all of my senses for a minute or two. I couldn't hear anything, my smell was completely defeated because I breathed all that debris in instantly. Couldn't taste anything. My vision was - I couldn't see more than about five feet in front of me.
HOLLAND: The insurgent attack continued. Stone and his men held their position for 15 minutes under the hail of enemy fire. Helicopters arrived helping to secure the area. Stone cleared a location for medics to rescue his wounded men.
Thirty American soldiers were there that day. Not a single one lost his life. Stone is now back at Fort Hood, Texas after the 15 month deployment.
STONE: I'm a completely different man now. I don't really know how to put into words myself because obviously I'm on the inside looking out but all my friends and family, they say that my strength it just kind of radiates now. I've gone through hell and come back and at this point there's really nothing any more that seems insurmountable.
Phillipa Holland, CNN
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PILGRIM: A real hero.
And now the results of tonight's poll -- 81 percent of you would vote for "none of the above" instead of the current presidential candidates.
We do have time for a couple of your thoughts.
Alvin in Florida: "Lou, I became eligible to vote in 1961 and registered then as an Independent. I have never changed my registration. Lou, even then as a 21-year-old I didn't trust either one of those parties and I trust them infinitely less now."
Judy in Pennsylvania: "Lou, my husband and I are tired of the usual political blather. We have been registered Democrats for 40 years and recently changed to Independent. We thank you for keeping is informed. Keep up the good work!"
Marge in Arizona: "I am going to be an Independent. I do not like how the Democratic party is conducting itself with the superdelegates regardless of how the people voted. So much for democracy! Go for it Lou, you are speaking for all us who want a voice!"
And Jason in New Jersey: "Dear Lou, after being an ardent fan of your program for some time now, I am changing my party affiliation to Independent as I am just as disgusted as you are in what this government has become, or what it hasn't become."
We love hearing from you. Send us your thoughts at loudobbs.com. Each of you whose e-mail is read here receives a copy of Lou's book, "Independents Day: Awakening the American Spirit."
Thanks for being with us tonight. Please join us tomorrow. Please join Lou Monday, as well. And among his guests, Republican presidential candidate, Mike Huckabee.
For all of us here, thanks for watching. Good night from New York.
The ELECTION CENTER with Soledad O'Brien starts right now.
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