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Lou Dobbs Tonight

Broken Promise: Obama Says no to Public Funding; California Fighting E-Verify

Aired June 19, 2008 - 19:00   ET


LOU DOBBS, HOST: Thank you, Wolf.
Tonight Barack Obama breaks a promise to the American people, and rejects public financing of his campaign. Obama, the first candidate to choose a privately funded campaign over public financing since it went into effect more than three decades ago.

Tonight the FDA showing a total inability to do its job for the American people, not just their latest failure to find the source of contaminated tomatoes, but the agency also now stands accused of being too cozy with the industries it regulates.

Tonight, E-Verify, the federal program that allows employers to check whether the people they hire are illegal, E-Verify also protects your identity, so why does one state want to outlaw it? We'll have that report, all of that, all the day's news and much more from an independent perspective straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Thursday, June 19. Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

Senator Barack Obama breaking a promise to the American public, Obama saying no to public financing for his campaign. Obama becomes the first candidate to ever bypass the public financing system since it was first put in place in the aftermath of Watergate. His decision will allow Senator Obama to spend an unlimited amount of money on his campaign.

Public financing would have limited his spending to just over $80 million. Reaction from the McCain campaign, the move was sharp and swift. A McCain spokesperson blasting Obama, calling him just another typical politician. Senator McCain said Obama's decision should be disturbing to all Americans.

Our coverage tonight begins with Candy Crowley -- Candy.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Lou, aboard the Straight Talk Express this afternoon, John McCain told reporters he will be taking public funds for his campaign. He did not need to add because reporters knew this was about the contrast. McCain's opponent will not be taking that money.



CROWLEY (voice-over): If you raise more than a quarter billion dollars in the primary season, would you limit yourself to 85 million in the fall campaign? Duh.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Hi, this is Barack Obama. I have an important announcement, and I want all of you, the people who built this movement from the bottom up, to hear it first. We have made the decision not to participate in the public financing system for the general election.

CROWLEY: In a Web video announcement, which includes a handy donate link, Barack Obama made history. He will become the first presidential nominee to refuse public financing in a general campaign. Legal and expected, all would be OK except for the video trail of this kind of thing. "Dateline" New Hampshire, April 2007.

OBAMA: I have been a public supporter of public financing since I got into politics.

CROWLEY: And in late November, Obama responded to and then signed a questionnaire stating "I will aggressively pursue an agreement with the Republican nominee to preserve a publicly finance general election. John McCain is the decided underdog in the money chase, but his campaign is hoping he does have a political issue.

Aides helpfully provided a timeline of Obama's evolution on the subject while the Republican National Committee reproduced quotes from Hillary Clinton from February when it was clear Obama would opt out of the campaign finance system. "Now we're seeing, she said, how the words don't even mean what we thought they meant."

McCain, working his way through a day which ends at a fund- raiser, channeled Clinton and said pretty much the same thing.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: And this is a big deal, it's a big deal. He has completely reversed himself and gone back not on his word to me, but the commitment that he made to the American people. That's disturbing.

CROWLEY: Lawyers for both campaigns have different versions of whether any agreement was aggressively pursued, but the bottom line is this, Barack Obama will be able to spend as much money as he can get a hold of. It will help a lot as he tries to define himself to a public still learning about him. The first ad of his campaign goes up Friday.

OBAMA: If I have the honor of taking the oath of office as president, it will be with a deep and abiding faith in a country I love.

CROWLEY (on camera): The Obama campaign rejects the notion that he has walked away from campaign finance reform. In fact, they say his campaign is finance reform because while he has raised a lot of money, much of it has been in small amounts -- Lou.


DOBBS: Candy -- Candy Crowley reporting.

Senator Obama, as Candy just reported, leads the fund-raising race. That lead is carrying over to the general election race. Obama has raised $272 million since January of last year. In April of this year alone, Senator Obama raised $31 million.

Senator McCain for his part has raised about $100 million in the same period. In April of this year, he raised about 18 million. Tomorrow, June 20 is the filing deadline for campaign fundraising and spending through the month of May. The campaigns tend to file at the last moment, so it's likely we won't see the latest details until late Friday evening.

In 2006, Americans contributed $51 million to the public campaign fund for the general election by checking that box at the top of tax returns. The box was conceived in the early '70s as part of a legal framework to end financial abuses in presidential campaigns. Throughout the '70s more than one in four Americans, about 25 percent, checked that box.

Since then, there's been a steady decline. By last year, just one in 10 taxpayers were checking that box, indicating their desire to contribute to the fund. How do the American people feel about Senator Obama's broken promise on campaign funding?

Joining me now from Washington is our senior political analyst Bill Schneider -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, he's taking a lot of hits and being called a hypocrite, not just by Senator McCain, but a lot of people, including some people he ought to be allied with. Russ Feingold said he thought this was a bad decision.

Feingold, of course, co-sponsored campaign finance reform with John McCain. He's taking a big risk by doing this. Why is he taking that risk? Well for one thing he probably thinks people aren't going to care that much about the issue of campaign money.

People don't particularly care for public financing. You just indicated that they don't, most -- 90 percent of Americans don't check off the box on their campaign -- on their tax return to allow money from their taxes to be used for political heads. They don't like that idea at all.

They rather like the way Obama is raising money, which is large numbers of contributions in small amounts, in his case, about 1.5 million people who have given him money. And of course it does give him a big financial advantage over John McCain. But he did come out in his video to his supporters with an explanation.

He said the public financing of presidential elections as it exists today he said is broken, and we face opponents who have become masters at gaming this broken system. By that he means that even though McCain has raised far less money, the Republican Party has actually been doing pretty well, much better than the Democratic Party.

You can see here Obama has raised almost three times as much money as McCain, but the Republican Party down in the lower right has raised about twice as much money as the Democrats, a lot of it from lobbyists, political action committees. He won't let the Democrats raise the money from those sources anymore. And he claims they're going to run a tax and smear campaign against him through the Republican Party, so that's his argument to his supporters.

DOBBS: Well, Bill, I mean that's fine. The point is he just broke a promise.

SCHNEIDER: Yes, he did. And he's obviously taking a lot of hits for that. But his view is it's worth the risk, especially if he ends up with that huge amount of money and the ability to spend it in unlimited amounts.

DOBBS: So basically it's a cynical decision on the part of Senator Obama who keeps talking about the audacity of hope. He's basically saying that money will, if you will, trump those disappointments on the part of voters who thought he really was change you could believe in.

SCHNEIDER: Well let's call it a calculated decision on his part to take the criticism and -- you know because in the end, he'll have the money. But his argument is that you know the money is coming from ordinary voters, ordinary Americans who want to support his movement. And that kind of money ought to be legal and available. It is legal and it ought to be easily available and easy to raise in politics for someone who believes in the campaign.

DOBBS: Again, it's perfectly legal to bring in money...


DOBBS: ... from tax and lobbyists.


DOBBS: The point is the man made a promise and he broke it. And I for one would consider, if I may offer my own opinion that to be a cynical calculation, as you put it, in deciding to allow money to trump a personal principle.

SCHNEIDER: I think you are not alone in that judgment. A lot of people will share it. He is simply willing to take the criticism and take the risk for the sake of his movement.


DOBBS: His movement? I thought it was a campaign.


SCHNEIDER: No, it's bigger than a campaign.

DOBBS: Oh I see. It's bigger.


DOBBS: According to some in the national media...

SCHNEIDER: Yes, I think it is. I think Ronald Reagan led a movement and so is Barack Obama.

DOBBS: And it's so silly because to most of our mortals, it looks like just another campaign by just another politician. Thank you very much, Bill Schneider.


DOBBS: We'll have much more on Obama's broken promise and his movement here, just ahead.

But first, the Justice Department today announced the arrest of hundreds of people in a mortgage fraud investigation; that investigation targeting real estate agents and mortgage brokers. Four hundred of them have been charged so far. Two Wall Street hedge fund managers at Bear Stearns today indicted in a separate federal investigation.

They became the first executives to face charges related to the collapse of the sub prime mortgage market. There were more than a quarter of a million foreclosure filings across the nation just last month. That's an almost 50-percent increase from May a year ago -- May, the 29th straight month in which there has been a year-over-year increase in foreclosure filings, now more than a million of them over the course of the past year.

Up next, three of the country's best political minds join me. We'll be talking about Senator Obama's broken promise and what it means or may not mean.

And the federal government now says thousands of Americans may have been sickened by those contaminated tomatoes and the FDA, well it says it still doesn't know the source of the outbreak. Now that agency facing new charges it is simply too close to the industries it regulates. We'll have comprehensive coverage here tonight.

And Congressman Ted Poe and Congressman Walter Jones join me. They're now calling for a federal investigation into the prosecution of former border patrol agents Ramos and Compean whose appeal has still not been decided and who remain in federal prison. Stay with us.


DOBBS: Senator Obama today breaking his promise -- Obama reversing himself tonight on public financing of his campaign. He becomes the first presidential candidate since Watergate not to use the public campaign fund in order to maintain his huge fund-raising advantage over Senator McCain. The McCain camp hitting back and hitting back hard. Senator Obama was asked about that today. (BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Senator Obama, Senator McCain said you're breaking your pledge on public financing.


UNIDENTIFIED FEMALE: Why did you change your mind? Why did you change your mind, Senator Obama?


DOBBS: Does that look kind of familiar, another politician walking away without responding to questions? Joining me now for much more on Senator Obama's broken promise, Democratic strategist Julie Roginsky.

Julie, good to have you here.

Keith Richburg New York bureau chief "The Washington Post."

Good to have you here, Keith.

And joining us Scott Rasmussen, founder and CEO of "Rasmussen Reports."

Good to have you with us, Scott.

Let's turn to you, Julie, first, since you're the one with the dog in the hunt, as it were, as a Democratic strategist. Tell us, why did he break his promise and will he have to pay for it?

JULIE ROGINSKY, DEMOCRATIC STRATEGIST: Well, he would claim he never explicitly made the promise, but I would say he knows this is a one or two-day story. He's raising tons of money from small donors, something that's also never quite been done this way before. He's not taking PAC money or corporate money. He's not allowing the DNC to do it. And so he's going to say that he's actually being a lot more populist in his fundraising than John McCain is being right now.

DOBBS: Keith, are you persuaded by that?

KEITH RICHBURG, "THE WASHINGTON POST": You know an old politician once said when the facts change, I change my mind and the facts for him is he can raise a heck of a lot money, and he can raise a lot more than he can get through the public financing system. And you know let's face it, the point is to win, you know it's not to stick to some promise you made. It's to win the election.


DOBBS: What happened to change we can believe in? That sounds like just another pragmatic politician making a decision of money over principle.

RICHBURG: Absolutely, but you know to make that change... (CROSSTALK)


RICHBURG: To make that change, you got to win first.


RICHBURG: His point is to win the election.


DOBBS: Scott, we're going to (INAUDIBLE). Julie has found a point she wants to deal with.

ROGINSKY: I do have a point that I would love to make here and he actually would say that this is change you can believe in because his money is coming from small donors from all across the country and (INAUDIBLE) straight face, but it's true.

DOBBS: I can't. I can't look at (INAUDIBLE).

ROGINSKY: And he is going to say that unlike you know John McCain, he's not taking corporate money. That is change you can believe in is what he would say.

DOBBS: OK. Scott, your turn, let's see if you've got any change I can believe in here.

SCOTT RASMUSSEN, CEO, "RASMUSSEN REPORTS": Look, the reality is the American people don't like public funding of presidential campaigns. Polling earlier in the year showed they didn't have any idea whether if any of the candidates had pledged to support it or not. It is a day or two issue, but even for this day or two, Barack Obama is coming out ahead because we've been talking about energy and offshore drilling in the last couple of days. Those were issues he was hurting on. Changing the subject today has been good for Obama.

DOBBS: Oh, we're not changing the subject -- you've got to watch this broadcast a lot more because we do deal with the issues primarily...


DOBBS: ... and quite regularly here. Let's turn to that issue. By the way, I don't think it's about campaign financing. I don't think it's about funding of these elections. I think it's about breaking a promise. And I think that this is another installment under "read my lips." We'll see how that works and whether it plays out as a one or two day story. Scott, we'll see whether you and Julie and Keith have it right on that.

Let's turn to the issue of energy policy. It looks like Senator McCain has stolen the march on Senator Obama. And Julie, I mean, he has put a stake in the public policy ground here that's going to be very hard to resist. One, calling for drilling, offshore drilling and two, the construction of 45 nuclear power plants.

ROGINSKY: Well this is like the gas tax holiday that both he and Hillary Clinton advocated in the spring and nobody bought it then and I don't think anybody is going to buy this now for two reasons. One is this is not going to make any difference in people's gas prices in the next -- in the immediate future.

Two, the states where he was competing including the state of New Jersey, where I know you have some interests and where Scott lives is completely off the table for John McCain as a result of this. I would argue, too, that the Pacific Northwest is off line for him now as a result of this. People hate offshore drilling, and you cannot make the argument to them that something that is going to happen...


ROGINSKY: ... years is going to set their gas prices today.

DOBBS: I've got to say one thing. I have seen a very important recent poll in which 67 percent of Americans now support offshore drilling. Scott, is that the number you recall?

RASMUSSEN: It's the number I recall very well and look, we even tell people now, John McCain is for it. Barack Obama is against it. Barack Obama says it won't lower prices. And 62 percent say well we still want offshore drilling. And in the state of Florida when we make that position, John McCain's lead actually grows in the state, so this is an issue its somewhere between $2 a gallon and $4 a gallon, the politics flipped on it.

ROGINSKY: Except that he doesn't have the lead in Florida, Scott. You know this. He's actually losing Florida, according to recent polls that I've seen and even Jeb Bush when he was governor, even Jeb Bush opposed it, but the reality is this is another example...

RASMUSSEN: Julie, Julie, Julie...



ROGINSKY: This is...



ROGINSKY: Let me finish my point. This is the reality of John McCain endorsing yet another Bush position. It completely puts him in the same category as George Bush on yet one more issue.

RASMUSSEN: That's right. Well look, but in Florida, the polls you're referring to were taken care of -- were taken a week or so ago before this issue came out. Polling that we released today shows that John McCain is leading in Florida and his lead grows the more people know about this issue. Offshore drilling is a good issue for John McCain because it splits the Democrats and unifies...

DOBBS: What about nuclear power real quickly?


RASMUSSEN: Nuclear power is less popular than offshore drilling, but it is 51 percent supported nationwide.

ROGINSKY: Nuclear power is something Obama said he would take a look at. I think you do have to look at alternative sources of energy, nuclear being one of them...

DOBBS: But he also said that he wouldn't be foregoing public financing in his campaign.



DOBBS: You get the last word...


RICHBURG: Well the Sierra Club just came out tonight endorsing Obama specifically saying because of McCain's positions on nuclear power and offshore drilling, but you know this is what we want.


RICHBURG: We want a good debate over policies...

DOBBS: We've got it.


DOBBS: And it's great to watch the Sierra Club just simply put itself -- put in a ringer once again both ideologically, philosophically and environmentally. Did I mention politically? All right. Thank you very much Scott Rasmussen -- good to have you with us -- Keith Richburg...


DOBBS: ... thank you very much -- Julie Roginsky, thank you very much.

And by the way, Senator Obama is on the phone.

Up next, cities and towns along the Mississippi River tonight bracing for the worst as flooding there is moving south down the Mississippi. We'll have the latest for you on some of the worst flooding in this country's history.

California trying to advance its amnesty agenda tonight, you won't believe how they're going about it, trying to block federal efforts to enforce immigration law. How about that? We'll be right back.


DOBBS: Up next, the deadly salmonella outbreak is spreading. So why is the FDA charged with protecting all of us, seemingly powerless to stop it? We'll be right back with that story.


DOBBS: The White House and the Department of Homeland Security this month ordering all federal contractors to use E-Verify to assure the legal status of their employees, if they contract with the government. But the state of California tonight is trying to ban California's state government employers from using E-Verify in that state.

Casey Wian has our report.


CASEY WIAN, CNN CORRESPONDENT (voice-over): The Homeland Security Department says 1,000 employers a week nationwide are signing up for E-Verify, a computer program that determines if a perspective employee is a legally authorized worker.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: I would estimate that almost maybe actually more than 10 percent of the new hires being hired in the United States are currently being run through this E- Verify system. We have almost 70,000 employers currently enrolled. The system works.

WIAN: Chertoff says E-Verify has a 99.5 percent accuracy rate, and that discrepancies are usually resolved within two days. But advocates of "Expanded Rights For Illegal Aliens" claim it's unreliable and can lead to discrimination against legal workers. California Assembly has passed a bill that would prevent state agencies from using E-Verify and prohibit counties and cities from requiring businesses to use the program.

Sponsor Felipe Fuentes says in a statement, "widespread use of this system will have a devastating impact on California businesses and workers, creating workforce confusing, instability, and economic harm to the state." Californians For Population Stabilization, which favors reductions in all immigration, calls the bill a welcome mat for illegal aliens.

RICK OLTMAN, CALIFORNIANS FOR POPULATION STABILIZATION: If this legislation was passed and signed by the governor, it would be a message worldwide, that if you can get to California, you can get a job. And the state of California and law enforcement will do nothing about your illegal presence in our country.

WIAN: The bill is now before the California Senate. Republican Tom McClintock wrote Governor Schwarzenegger this week asking him to follow the federal government and require all state contractors to use E-Verify. (END VIDEOTAPE)

WIAN: A spokesman for the governor says Schwarzenegger will not take a position on E-Verify until the bill reaches his desk. The Department of Homeland Security says in a statement quote, "E-Verify was developed to keep illegal workers out of the work force, and it is hard to believe that California taxpayers want their tax money to pay the salaries of people in state funded jobs who are not in the country legally" -- Lou.

DOBBS: Well I think that's well put, but the next question is how in the world can Fuentes and the leadership in the House -- I mean, this is straightforwardly -- I mean this goes beyond sanctuary. This is absolute encouragement, aiding and abetting, and really saying come on down. You're illegal, but you're home.

WIAN: And you know this bill only targets the state and state contractors, but they're hoping, they say this, that they're hoping it sends a message to all employers in the state of California not to use this program. It's an encouragement for illegal aliens to continue working here, Lou.

DOBBS: As the saying goes, there ought to be a law, but there ought to be a law against those kinds of lawmakers if you can call that law. It gets a little confusing, doesn't it?

Casey thanks a lot -- Casey Wian.

California, you got to love that state.

Private companies have been using E-Verify, of course, for more than a decade now on a purely voluntary basis. Thousands upon thousands of those companies are located in California. California is second only to Arizona when it comes to the number of business now using the E-Verify system on that voluntary basis. Homeland Security Secretary Michael Chertoff says the new federal order could apply to millions of workers doing business with the federal government.

Time now for our poll. The question is: Are you outraged that the state of California would argue against verifying the authenticity and legality of its employees?

Yes or no? Cast your vote at We'll have the results here later.

Up next, the government agency charged with protecting us seemingly powerless to either stop the deadly salmonella outbreak or to discover its origins or at least so they say.

And President Bush touring the Midwest flooding disaster with officials of FEMA, the agency claims it learned from its mistakes following Hurricane Katrina, we'll have a report, all of that and a great deal more coming up here next. Stay with us.


ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion. Here again, "Mr. Independent," Lou Dobbs.

DOBBS: Well, both the president of the United States and the man who wants to be president were touring separately the Midwest disaster area today. On a top in Columbus Junction, Iowa, Senator McCain praised volunteers who helped prevent even worse damage.

President Bush brought along FEMA chief David Paulison on his tour. They told local officials there that FEMA is helping to preparing the region for what's to come as the cresting Mississippi flows south. Paulison called it yet another lesson learned from Hurricane Katrina, and millions of acres in three states now, Iowa, Illinois and Missouri already under water, millions more at risk, a levee breach in Winfield, Missouri. That's 50 miles north of St. Louis, is among the most recent levee failures. Another 20 levees already have been breached. The flooding has killed 24 people, injured another 148.

The cresting Mississippi still threatens dozens of communities as it flows south. Those white dots you're looking at there indicate levees that have been breached or topped, and the red dots that could fail over the days ahead. Hundreds of National Guard troops and residents are working together, and they're working and trying to prepare for the worst tonight. They're piling up sandbags to raise the tops of the levees and create a more sturdy barrier against that rising river.

The Food and Drug Administration said it's likely that thousands of Americans, not hundreds have been sickened by the salmonella- contaminated tomatoes. But the FDA still has not, it says, found the source of the contamination. And there is now growing confusion and concern about the safety of the entire U.S. tomato crop.

Louise Schiavone has our report.


LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): There are no answers yet about how or where it started. But the Centers for Disease Control believe the salmonella outbreak linked to tomatoes has affected thousands.

DR. DAVID ACHESON, ASSOCIATE COMMISSIONER, FDA: For every case we see in our surveillance system, it's estimated there are 30 more cases that actually occur. So this outbreak likely represents many thousands of people, several thousands of people.

SCHIAVONE: For the record, the Food and Drug Administration still suspects Florida and Mexico principally, but officials are retreating from a decision that Mexico had spotted its own salmonella cases.

ACHESON: Mexico getting back to us with that specific information. I believe that they are -- they have -- think they have found some cases of salmonella saintpaul's.

SCHIAVONE: One day later, this retraction. ACHESON: What I said yesterday is I believed that there were some cases in Mexico. It appears that I was incorrect.

SCHIAVONE: One source at the agency told LOU DOBBS TONIGHT that there were concerns that the FDA had been quote, "too hard on the Mexicans." So as the probe continues, investigators are immersed only in paperwork.

ACHESON: Because we haven't identified a specific farm, then no FDA investigators are not yet out in Florida or anywhere else looking for where something may have gone wrong because we don't know yet where to send them.

SCHIAVONE: Doctors and scientists agree in an era of global markets, food quality worries are ever where.

DR. JONATHAN JACOBS, NY PRESBYTERIAN, CORNELL MEDICAL CENTER: We live in a time where food products from around the world can come into this country and quickly, as we have seen from this outbreak, spread quite widely. We have to be very vigilant.


SCHIAVONE: So Lou, as far as the FDA is concerned, Mexicans not investigator their own cases of salmonella poisoning, and one food safety expert in academia said it's still fair to wonder what is going on. Whether Mexico has the science. And this academic said to me one man's science is another man's non-tariff trade barrier. So the Mexicans are very, very concerned about how all of the talk about the salmonella outbreak is going to affect their ability to sell their product to the United States.

DOBBS: You mean to tell us the FDA is more concerned about the feelings of some in the Mexican government than the safety of American consumers? Why isn't there a criminal investigation of the FDA going on at this very moment?

SCHIAVONE: The FDA wouldn't put it that way. They would say, yes, of course, they're concerned, which is why they're going through all these efforts to try to find the source of the outbreak. But what they're saying is they're trying to treat everyone fairly. They don't have any ...

DOBBS: Their job is to protect the American consumer. They're not in the justice and jurisprudence and diplomatic business. They're in the business of protecting the American consumer, even though they have operated for some time as if they have no responsibility at all.

SCHIAVONE: They don't have the science to prove where it's coming from. They don't have the ability to prove where it's coming from. That's why we're at this juncture with an out break that the CDC says they're not sure how many people have been affected yet. And it could be thousands upon thousands of people who have gotten this.

DOBBS: And when did we first learn that the ratio of reported cases to who may actually have these cases, when did we first hear that number from the FDA?

SCHIAVONE: It's the CDC who does the case estimates. They did have on their Web site there could be thousands of actual cases as opposed to the 228 they were able to document. Those cases they document because they take samples, they run the ...

DOBBS: Which is - now it's over 300.

SCHIAVONE: It's almost. The first case they diagnosed, the first case reported was April 10, Lou -- April 10.

DOBBS: You know, I have heard a lot of reasons over the years as to why George W. Bush should be impeached. For them to leave the Food and Drug Administration in this state, it's leadership in sorry condition, and to have no capacity apparently, or will, to protect the American consumer, that is alone to me sufficient reason to impeach a president who has made this agency possible and has ripped its guts out in its ability to protect the American consumer. It's insane what's going on here.

Is there any sense of embarrassment on the part of the leadership of that agency?

SCHIAVONE: I sense that they actually are embarrassed, Lou. I think that they're frustrated, waiting for new money so they can put in new investigators. But here is the thing, they do have investigators. They don't know how many -- they can't say how many.

DOBBS: They can't say how many?

SCHIAVONE: They can't even estimate how many investigators are on the case, but the investigators are in offices checking paperwork. They're not on any farms anywhere.

DOBBS: Because they're afraid to offend the Mexican government, because they're afraid, what? There is no reason in this. This is utter madness.

Louise, thank you very much. Stay on it. I know you're as frustrated as many of us, or some ways, more so, I'm sure.

Louise Schiavone, thank you very much.

Well, over the past seven and a half years of this administration's mismanagement in so many corners, the FDA has literally as I said been gutted. It's no longer able to protect Americans from contaminated food and pharmaceuticals. But now, finally, some at the agency apparently realize they have gone too far, and they're left struggling to repair the agency they broke.

The Bush administration recently managed to request an additional $275 million for the FDA's budget for next year. Under the new budget, the FDA will conduct at least 1,000 more foreign inspections and an equal number at home of producers of both food and medical products. Where is Congress in all this? The Center for Science in the Public Interest say there are 12 food safety bills now pending in Congress, but none of those have cleared the committee stage.

Up next here, new evident there's no need for those H1B visas that our government keeps pushing on behalf of the technology industry in this country. We'll tell you why.

And lawmakers in this country are demanding a federal investigation of U.S. attorney Johnny Sutton's actions in the case of two Border Patrol agents Ignacio Ramos and Jose Compean. Two of those congressmen, Walter Jones and Ted Poe join us.

Stay with us. We'll be right back.


DOBBS: Several members of Congress are now demanding a federal investigation into U.S. attorney Johnny Sutton's prosecution of former border patrol agents Ramos and Compean. Compean and Ramos are serving lengthy prison sentences for shooting and wounding an illegal alien drug smuggler from Mexico back in 2005. The lawmakers say Sutton is guilty of prosecutorial misconduct because he prosecuted the agents for a crime that doesn't exist. Joining me now two of the lawmakers who are now pushing that effort. Congressman Walter Jones of North Carolina.

Congressman, good to have you with us.

REP. WALTER JONES, (R) N.C.: Thank you, Lou.

DOBBS: Congressman Ted Poe of Texas joining us from Capitol Hill. Congressman, good to have you with is.

REP. TED POE, (R) T.X.: Good to see you, Lou.

DOBBS: Prosecutorial misconduct. Specifically, what?

JONES: Well, Lou, let me speak first. I would like to say, I want to thank Ted Poe, former judge in the State of Texas, who for over a year has said this whole prosecution by Johnny Sutton and his staff should be investigated, and I finally just said the time has come where we need to initiate this, and we wrote a letter to the Justice Department's Office of Professional Responsibility, and we just presented facts to them and asked them to look into these facts to see if there was misconduct.

DOBBS: All right, here is what your letter states in part: "The United States attorney Sutton charged Mr. Ramos and Mr. Compean with a nonexistence crime of discharging a firearm in relation to a crime of violence."

The charge carried a 10-year sentence. Hasn't the Supreme Court ruled that this charge should only be considered for sentencing after a conviction?

POE: No question about it. The discharging requirement is something the judge considers on punishment only. And that allows the judge to impose a 10-year additional sentence to the original crime. And so, the Supreme Court and the lower courts have already ruled that discharging a firearm in the commission of the crime is not a crime. They reworded the indictment improperly. And doing so, charged them with a crime that does not exist under our statutes. Therefore, they have committed in my opinion prosecutorial misconduct.

DOBBS: Also, within that letter, "Mr. Sutton," you say, "has manipulated the federal criminal code to obtain a conviction over to U.S. Border Patrol agents, preferring to win at all costs over his duty as a United States attorney." How did he manipulate the authorities?

POE: One way was to not allow the judge to make the decision, but demanding the jury make the decision, Lou. And also the prosecutors offered the defendants a plea bargain, and because the defendants maintained their innocence and wanted to go to trial, they were punished for exercising their right as citizens to be tried and they added the charge of discharging a firearm so they would get an additional 10 years.

JONES: Lou, let me also say, we fought -- the last two years, talking to the attorneys for Compean and Ramos and many legal experts like my friend Ted Poe. And when you look at how this case was prosecuted, there is obviously legitimate question as to how this proceeded, quite frankly.

DOBBS: We're talking about now over six months since that appeal was filed. No movement at all from the appellate court on this case. Are you troubled by that, congressman?

POE: It's unusual for the fifth circuit to take this long to make a decision, but I think the length of time is to the advantage of the defendants. Back in December, December 3, one of the justices really raked the prosecution over the coals, thought they had overreached in the prosecution of the case. But it has taken a long time and I think the results will be come.

JONES: Lou, if I can very quickly, Chairman John Conyers is seriously looking at holding hearings about this case itself as we come back from the July 4 break.

DOBBS: Well, that's encouraging. We talked with U.S. attorney Johnny Sutton's office for reaction to your letter and what is going on with the appellate court. Here's what his office said. "The assertions made in the congressmen's letter about the sufficiency of the indictment charging Compean and Ramos with a firearm violation have been briefed and argued in the Fifth Circuit of Appeals. I welcome the courts resolution of this and the other issues raised on appeal."

What are we dealing with here? This is pretty raw stuff by any standard, to have two law enforcement agents treated this way, a federal prosecutor just simply run rampant over the facts here to give immunity and to hide from the court and from the jury, most importantly, the fact that that immunized illegal alien drug smuggler was a career criminal who had just committed another crime while under that immunity. I mean, this is nasty, nasty stuff. POE: There are a lot of issues in the case where it seems that the prosecution was relentless in making sure they had a conviction. The duty for a prosecutor is to seek justice. And justice in this case was not sought by the prosecution, but a conviction. So we want this aired out in the legal community to see whether or not the prosecutor's office was engaged in misconduct under our laws.

DOBBS: What do you think the odds are, Congressman Jones, that the U.S. attorney will even honor your letter with a response?

JONES: Lou, I'm encouraged because I tell you the truth, thanks to you and many people like yourself, this is a national issue, a national concern. I believe the Justice Department will take this request by those of us in Congress seriously, I really do.

DOBBS: Let's hope so.

We thank you very much, Congressman Jones, Congressman Poe. We thank you both for being here.

JONES: Thank you, Lou.

POE: Thank you, Lou.

DOBBS: Up next, new evidence tonight the number of H1B visas so prized by people like Bill Gates, it turns out they're not related to job growth. Are companies hiring more cheap foreign labor instead of more expensive labor? You guessed it.

And Bush administration negotiators, well, they are offering concessions to the Chinese. What are they gaining, if anything? We'll have a full report for you straight ahead. We'll be right back.


DOBBS: Well, coming up at the top of the hour, the "ELECTION CENTER" with Wolf Blitzer. That's right. I said Wolf Blitzer, again, still right here on CNN.

Wolf, what are you working on?

WOLF BLITZER, CNN ANCHOR: Just filling in for Campbell, Lou, thanks very much.

In just a few minutes we're going to take you to a city that's directly in the path of the devastating Midwest floods. Its only protection, some very fragile levees. Tonight, there's a lot of concern about whether they'll actually hold up.

Also, the political stage prep behind the visits President Bush, John McCain and Barack Obama have paid to the disaster area.

Plus, a CNN exclusive with Cindy McCain. She's now in Vietnam. We'll tell you why. All that coming up right at the top of the hour.

Thank you, Lou. DOBBS: Wolf, you're the man. You're unstoppable.

BLITZER: Thank you.

DOBBS: Wolf Blitzer at the top of the hour, folks.

The United States and communist China are negotiating a new treaty between the two countries. That means from China to the United States. By the way, given the fact we're impoverished, U.S. and Chinese officials meeting this week for a fourth round of so-called strategic economic dialogue. There are critics who say the United States should not be offering these concessions until China begins playing by the rules.

Kitty Pilgrim has our report.


KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Treasury Secretary Paulson meeting with China's Vice Premier Wang Qishan launched a new series of talks to open the United States to Chinese investment.

HENRY PAULSON, TREASURY SECRETARY: We're getting to the point where they have more companies of the size and stature and financial resources, they're going to want to invest outside of their country.

PILGRIM: He came under criticism by the Chinese press over the treasury's CIFIUS review process that bans foreign investment in strategic U.S. industries.

UNIDENTIFIED FEMALE: Chinese is a little bit concerned about the protectionists in the United States as the United States is asking openness of the Chinese financial market. What's your comment on that?

PILGRIM: But instead of the defending the review process, Paulson seemed more interested in appeasing the Chinese.

PAULSON: We had a good conversation about investment and we talked about sovereign wealth funds and again explained we're open to investment, very open.

PILGRIM: Some members of Congress said China has done little to address past trade concerns and the U.S. should not be granting new concessions on investment. Congresswoman Debbie Stabenow met with the Chinese vice premier today and didn't hold back.

REP. DEBBIE STABENOW, (D) M.I.: Well, I'm very concerned, first of all, we're talking about entering into other agreements when we're not even enforcing the ones we have. My message to them was certainly in the global economy, we want to do business with them, but we need them to stop manipulating their currency. We need them to stop sending in counterfeit products into our country and stop subsidizing illegally what they do. PILGRIM: She's one of 11 senators who have written to Secretary Paulson pointing out even though the Chinese government claims to have allowed its currency to appreciate 19 percent ,the Chinese currency is still undervalued by 40 percent.


PILGRIM: Secretary Paulson seemed grateful for any progress on the currency issue with China. He said our side understanding and expressing appreciation for the understanding for the accelerating pace of the appreciation of the Chinese currency -- Lou.

DOBBS: You're kidding?

PILGRIM: I don't make it up.

DOBBS: You've got to be kidding? The Chinese just said that the United States is protectionist. And the secretary of the treasury said, we're sorry you feel that way, and we are really letting your sovereign wealth funds in and want to assure you we're really open. Is this administration, is there anyone in this administration in any corner of the economic team who has any clue as to what they're talking about? Any one of them feel in anyway aligned with say, the American national interest? Is there any evidence of this anywhere?

That's a rhetorical question, I don't mean to put you on the spot, but I have to say, this is where I get to say. This is my personal comment and my personal view. Treasury Secretary Henry Paulson is an absolute embarrassment to this country and doesn't seem to have much of a sense of history or proportion when it comes to the job he now holds.

Perhaps soon he will leave that job behind and leave someone more able, competent and principled to take it. In that we can hope.

Thank you very much, Kitty Pilgrim.

Up next, some in Congress want to make it even easier to hire cheap foreign workers instead of Americans. That's Bush administration regular policy, but we'll have a special report on what's going on now. We'll be right back.


DOBBS: Well, business and political elites in this country repeatedly claim that the H1B foreign worker visa program must be expanded to meet the growing demand for more technology workers, but there's evidence tonight that the number of H1B visas issued by the government is outpacing by a considerable margin job growth.

As Bill Tucker now reports, that means companies are cheap foreign labor because that foreign labor is cheaper than American.


BILL TUCKER, CNN CORRESPONDENT (voice-over): In the two years from 2003 to 2005, about 125,000 new computer jobs were created in this country. During that same job, more than 98,000 H1B visas were issued for computer workers. That was enough to fill 78 percent of the jobs created. Leaving only about 27,000 jobs for American workers. That's a conclusion by a report from the "Center of Immigration Studies" after an analysis of government data. The center which lobbies for tighter immigration policy concludes there's no relationship between the program and economic need. And it says the picture is worse for engineers.

JOHN MIANO, CENTER FOR IMMIGRATION STUDIES: In 2005, the United States lost 3,200 engineering jobs. In the same year, we imported over 12,000 engineers H1B engineers. How do you argue with numbers like that?

TUCKER: The high-tech industry continues to argue it's short skilled workers and that the program needs to be doubled add the very least from the official cap of 65,000 visas a year.

ROBERT HOFFMAN, COMPETE AMERICA: These are job opening just within 5,000 companies in the U.S. economy. There 120,000 skilled job openings. It is not in any company's interest to leave jobs unfilled.

TUCKER: According to the National Science Foundation, in 2005, we graduated 271,000 students with bachelors and masters degrees in science and engineering who were citizens or legal residents.


TUCKER: And for the more than 18,000 foreign students who graduated from American universities, the Department of Homeland Security gave them a nice graduation present earlier this year. DHS doubled the length of time that foreign students can stay and work in the country after graduation to two and a half years. A lawsuit challenging that action is scheduled for preliminary hearing on July 7, Lou, so we'll see what happens with that.

DOBBS: Yes, I still see Bill Gates standing before the committee chaired by Senator Ted Kennedy over a year ago. The only witness, the only member in the committee with Bill Gates saying, I need an infinite number of worker advisories, H1B visas. The absurdity and to watch the way Congress just sort of fawns over him and (INAUDIBLE) and says, it doesn't really matter what happens to the voters, to our constituents, to working men and women in this country, just so you satisfy the corporate and political elites in this country.

Such balderdash. It's ridiculous.

Thank you very much. Bill Tucker.

Eight of the top 20 companies requesting H1B worker visas last year were based in India. Did I say that? Yes, I did.

Those firms want to bring cheap labor from India to the United States so they can outsource middle class jobs to those workers here -- so they don't have to go to all that trouble of sending them all the way to India. The H1B visa program is one of 10 guest worker programs that this country already has in place. I know you're thinking, George W. Bush, the president of the United States, was saying, we need a guest worker program. But we actually have 10 of them already.

Ten, Mr. President -- 10 of them, as we've been reminding you for the past year.

Tonight's poll results -- 96 percent of you say you're outraged that the state of California would argue against verifying the legality of employees who would be doing work for the state of California.

Well, you -- it's hard to even have anything to say about that. I mean, it's just -- it's insane what the state of California has chosen to do there, or at least at its state assembly.

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

Betsi in Massachusetts said: "Lou, thanks for filling us in on the tomato/salmonella situation. My husband and I have just finished a week on antibiotics. We have decided to eat only cooked food when we eat out, and we will buy tomatoes only at our local farm stands. Thanks for all you do."

And John in Florida: "Lou, if the country of origin of labels were on the tomatoes, nearly 400 people could tell the CDC and the FDA exactly where to look for the source."

Please join me the radio Monday through Friday for "The Lou Dobbs Show." Tomorrow we'll be talking politics with Bob Barr, a Libertarian candidate for president and Mike Allen, of

Thanks for being with us tonight. Good night from New York.

The "ELECTION CENTER" with Wolf Blitzer begins now -- Wolf.