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Lou Dobbs Tonight
Gun Rights Advocates Celebrate Victory; Guns and Politics; President Bush and North Korea; Vacant Government Jobs; Border Drug Wars; Crackdown on Employers who Hire Illegal Aliens; Congress and the Mortgage Crisis
Aired June 26, 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, gun rights advocates celebrate a stunning victory at the Supreme Court, justices overturning a sweeping ban on handguns in Washington, D.C.
Also, defense contractors wasting billions of dollars on weapons that don't work, companies are being rewarded for failure at your expense.
And seeking Independents, the Republican Party's fight to win the support of Independent voters and we'll talk with the authors of a new plan to help the GOP win the election, all that, the day's news, and much more straight ahead tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Thursday, June 26th. Live from New York, sitting in for Lou Dobbs, Kitty Pilgrim.
PILGRIM: Good evening, everybody. The Supreme Court today declared for the first time that Americans have the right to own guns for self-defense. The justices struck down a 32-year-old ban on handguns in Washington, D.C. This was the first time the Supreme Court has overturned a gun control law, saying it violated the Second Amendment. Now gun rights activists are now planning to challenge gun control laws in other jurisdictions. Jeanne Meserve reports from Washington. Jeanne.
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Kitty, this Supreme Court decision was a blockbuster that is already reverberating around the country.
MESERVE (voice-over): At a gun shop in Georgia, hundreds of miles from the District of Columbia, they cheered the end of the D.C. handgun ban.
BERT COLLINS, GUN STORE CUSTOMER: I thought I may celebrate and buy a gun today.
MESERVE: In an effort to stop a wave of violence, D.C. put the sweeping handgun ban in place 32 years ago, but in a 5-4 ruling, the Supreme Court said the ban violates the constitutional right of individuals to keep and bear arms. It's not the role of this court to pronounce the Second Amendment extinct, Justice Antonin Scalia wrote for the majority. The lead plaintiff, a Washington homeowner, hailed it as a victory for individual liberty.
DICK HELLER, PLAINTIFF, OPPOSES GUN BAN: And I'm very happy that now I'm able to defend myself and my household in my own home.
MESERVE: In a sharp descent, four liberal justices led by John Paul Stevens, criticized the majority for wading into a political thicket, saying elected officials should have the power to regulate guns. D.C.'s mayor said his city would comply with the ruling, reluctantly.
MAYOR ADRIAN FENTY (D), WASHINGTON: More handguns in the District of Columbia will only lead to more handgun violence.
MESERVE: The conservative majority also wrote that there's not a right to keep and carry any weapon whatsoever in any manner whatsoever and for whatever purpose, referring to bans on gun ownership by the mentally ill and convicted felons and the assault rifle ban. Gun control advocates found a silver lining in that.
PAUL HELMKE, BRADY CAMPAIGN TO PREVENT GUN VIOLENCE: This opinion still allows common sense, gun control laws, restrictions to make us all safer.
MESERVE: But the National Rifle Association is already using the ruling to go on the offensive.
WAYNE LAPIERRE, NATIONAL RIFLE ASSOCIATION: I see this as the opening salvo of a step by step process to provide relief to people all over the country to access this freedom.
MESERVE: The NRA announced it's going to court to attempt to overturn gun restrictions in others cities, including Chicago.
MESERVE: There's real debate about whether or not gun restrictions make cities safer. Here in the District of Columbia, where the gun ban has been in effect, the homicide rate last year was about the same as it was in 1976. The question is what happens now? -- Kitty.
PILGRIM: Well, as you say Jeanne, political thicket. Thanks very much. Jeanne Meserve.
Well as Jeanne just reported, Washington's ban on hand guns apparently had little or no effect on the number of murders in the city. Let's take you through the numbers that Jeanne just mentioned.
In 1976, when the ban was enacted, there were 135 gun-related homicides in Washington. Three decades later, 2007, 143 gun-related homicides. Gun ownership is an important issue for voters. A recent CNN Opinion Research Corporation poll said 65 percent of all voters believe the Constitution guarantees an American's right to own a gun. Independent voters support gun ownership by an even bigger margin. Political reaction to the Supreme Court ruling was swift. Senator John McCain said the ruling demonstrates that gun ownership is a fundamental right, and Senator Obama said justices gave much-needed guidance to local jurisdictions.
Jessica Yellin reports.
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT (voice-over): From John McCain, a whole-hearted embrace of the Supreme Court's ruling supporting gun ownership.
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Obviously, I'm very pleased about that decision. I had filed a brief along with 50- some other senators. Senator Obama had declined to do that.
YELLIN: Barack Obama is trying to thread the needle on guns in this interview with Bloomberg TV.
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I believe that the Second Amendment means something, that it is an individual right and that's what the Supreme Court held.
YELLIN: He says he believes in gun rights, but also in gun laws.
OBAMA: There's still room for us I think to have common sense gun laws that are also compatible with the Second Amendment.
YELLIN: It's a position a growing number of Democrats embrace as the party tries to expand its base to include rural and suburban voters who tend to oppose gun restrictions. According to the latest CNN poll, 67 percent of all Americans and 70 percent of Independents believe the Constitution guarantees a right to own a gun.
Both Al Gore and John Kerry fumbled by appearing too liberal or awkward on the issue. In 2006, Democrats regained the Senate, in part by running a new breed of pro-gun Democrats including Senators Jim Webb, Jon Tester and Bob Casey. One Democratic strategist said other candidates are learning from their example.
JIM KESSLER, THIRD WAY: Let's look at the reality. There are 280 million guns in private hands in America. That's enough guns for every man, woman, and child over the age of 5 to have a gun. I think it makes sense for anybody, whether it's a Democrat or Republican, to speak to those folks that have a gun in their home.
YELLIN: Now Barack Obama does have one big hurdle to clear to appeal to these gun-supporting voters. He'll have to overcome his now infamous gaff about how frustrated bitter people cling to their guns. He is trying to do it by focusing on the substance of the issue, repeating his position that he believes in the right to own guns, but also in the right of the local government to pass gun laws, a tricky hurdle.
PILGRIM: It certainly is. Jessica, today a lot of discussion about this, but how big an issue will this be in the campaign?
YELLIN: Significant issue because such a profound importance to rural and suburban voters, those are key swing voters in this election. Both John McCain and Barack Obama trying to get them and if gun rights matter to them, and they do, these candidates are going to have to be talking about gun rights.
PILGRIM: Thanks very much. Jessica Yellin -- thanks Jessica.
Well, Senator Obama's position on gun control has changed significantly in recent months. Now in November of last year, the Obama campaign said quote, "he believes the D.C. handgun law is constitutional." But that was before Obama won the long battle for his party's presidential nomination.
And today, Obama declared quote, "I've always believed that the Second Amendment protects the rights of the individuals to bear arms." Now as Jessica Yellin reported, a few moments ago Obama can't afford to lose the support of Independent voters who back gun rights.
Joining me now for more on today's Supreme Court ruling one of the best legal analysts in the country, we are joined in Washington, D.C. by Jonathan Turley. He's a professor of law at George Washington University and thanks very much for joining us, Jonathan.
PROF. JONATHAN TURLEY, GEORGE WASHINGTON UNIVERSITY: Thank you.
PILGRIM: Your thoughts on the decision today.
TURLEY: Well you know it's historic and it's historic in a number of ways, but the most important way is that we're unlikely in our lifetime to see a new right, perhaps the recognition of an old right, in the Bill of Rights. You know this is a pretty important thing.
And whether you consider this as a new right or as something that was long-unrecognized, it is a very important milestone for the Bill of Rights. Every aspect of the Bill of Rights, every comma, every clause, is specific to a dozen decisions. But when it is somewhere between the First and Third Amendments, the court attended to avoid the issue until now.
PILGRIM: First time in 70 years, correct, that...
TURLEY: About 170 years, that's right is the last time they dealt with it in the Miller case and they really have tried to avoid this for so many years. And many people feel it was a great blunder of the D.C. mayor and the attorney general D.C. to bring the case because the predictions were that this was inevitable, a 5-4 decision. And it seemed to be motivated more by political than legal judgment because now it's going to be applied across the country.
PILGRIM: Let me read what Justice Antonin Scalia said about the Second Amendment. And I would like our viewers to share this.
"Undoubtedly something that the Second Amendment is outmoded in a society where our standing Army is the pride of our nation and where well-trained police forces provide personal security and where gun violence is a serious problem. That is perhaps debatable, but what is not debatable is that it is not the role of this court to pronounce the Second Amendment extinct."
That's a very strong support of the Second Amendment, correct?
TURLEY: It is, but you know there are many liberals and libertarians that agree with Scalia's analysis. It's hard to read the Second Amendment and not see an individual right of ownership, and it also puts liberals in a tough position. You can't have a broad robust interpretation of the amendment on either side of the Second Amendment, but not that one.
PILGRIM: Well let me read -- Justice Stephen Breyer wrote, dissenting opinion.
"There is simply no untouchable constitutional right guaranteed by the Second Amendment to keep loaded handguns in the house in a crime-ridden urban area."
What do you make of that?
TURLEY: Well you know first of all, I have to say that I have been a critic on many occasions of the Court and the quality of its work, but this is not one of those cases. All three of these opinions were magnificent. They were very well argued. And I think anyone reading them on either side has to admit that there are strong arguments on both sides, good faith disagreement.
But now the Supreme Court has answered the question, it is an individual right of ownership. And what we're going to have to look at in the next few years is how the Court balances that right with legitimate or reasonable limitations, and we're going to find some resting point as in the next few years as to what laws, like Chicago, are likely to be struck down and what laws are likely to survive.
PILGRIM: All right, thank you very much. Jonathan Turley. Thank you, sir.
TURLEY: It's my pleasure.
PILGRIM: Turning to nuclear diplomacy, President Bush today lifted some sanctions against communist North Korea. Now the president's move was a reward for North Korea's latest steps towards nuclear disarmament. Some top Republicans say North Korea is lying. Ed Henry reports from the White House.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): The president lifted trade sanctions against North Korea after the communist regime finally handed over a dossier on its nuclear program, a rare chance for this president to tout success from working with allies.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Today's developments show that tough multilateral diplomacy can yield promising results.
HENRY: The president vowed to make sure North Korea's nuclear program really gets shut down before taking them off America's black list for state sponsors of terror.
BUSH: I'm pleased with the progress, under no illusions that this is the first step. This isn't the end of the process. This is the beginning of the process.
HENRY: But the most senior Republican on the House Intelligence Committee assailed the deal, saying North Korea has lied before.
REP. PETE HOEKSTRA (R), MICHIGAN: I think the president and this administration they are limping out of office when it comes to dealing with proliferation.
HENRY: Hoekstra charged that in an effort to improve his legacy, the president is making concessions now while North Korea's only making future promises and just partially detailing its alleged program to develop nuclear bombs. White House officials counter North Korea on Friday will bring down the cooling tower at the Pyongyang nuclear plant.
ED GILLESPIE, WHITE HOUSE COUNSELOR: That's a pretty tangible sign of progress. They're allowing American and IAEA inspectors to come into the -- into Pyongyang (ph) and look at the core.
HENRY: Back in 2002, the president famously called North Korea, Iraq, and Iran the access of evil.
BUSH: By seeking weapons of mass destruction, these regimes pose a grave and growing danger.
HENRY: An adviser to Democrat Barack Obama said the White House should see any success from the North Korea talks as a model for dealing with Iran.
AMB. WENDY SHERMAN, THE ALBRIGHT GROUP: I think this is a very good example of why Senator Obama's call for direct negotiations makes sense. When one negotiates in a tough, verifiable way, you can make progress.
HENRY: Now the White House fires back that the president has actually been trying to rally European allies to get around to the negotiating table, but that strategy is drawing fire from fellow conservatives such as Richard Perle, writing a stinging op-ed in today's "Washington Post", saying that a quote, "hapless president and his coalition could only look on while the Iranians rush to the finish line in their effort to get nuclear weapons", so the president getting fire not just from the left, but also on the right on the issue of Iran as well as North Korea -- Kitty.
PILGRIM: And on the North Korea issue, I guess the big issue is how big is the opposition of the Republican Party, Ed?
HENRY: Certainly. I think Peter Hoekstra being a senior Republican on the House Intelligence Committee, he is not acting alone. There are other conservatives, as you know, who have already spoken out, people like John Bolton, a former senior official in this administration who have suggested that the administration has been operating from weakness and that they did not cut a good deal here, so there's going to be obviously a lot of scrutiny of this deal, Kitty.
PILGRIM: As there should be. Thanks very much. Ed Henry.
Well new developments in the U.N. Oil for Food scandal in pre-war Iraq. CNN has learned that the Iraqi government tomorrow will file a suit in federal court in New York to recover billions of dollars. Now much of that money was paid in bribes to officials in Saddam Hussein's regime. The Iraqi government names 47 companies and individuals in the suit and it says the scandal caused serious hardship to the Iraqi people.
Still to come, many federal government agencies are broken and they're dysfunctional and we'll tell you one major reason why our government is failing the American people.
Also are retired generals and admirals helping defense contractors make weapons that don't work? We'll have a special report. Stay with us.
PILGRIM: We report regularly here on the failure of federal agencies to do their jobs. A lack of senior staff could be one reason those agencies are underperforming. Many federal agencies could be understaffed at this critical time because of political reasons. Louise Schiavone reports.
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): After seven and a half years in power, it's almost time for members of the Bush administration to close the doors and turn out the lights. But lots of officials have left early.
MELANIE SLOAN, CITIZENS FOR RESPONSIBILITY & ETHICS: Towards the end of an administration, lots of people start jumping ship, looking for those high-paying private sector jobs. This is a real problem in Washington because so many jobs are then left vacant. It's hard for agencies to get done all the things they really need to.
SCHIAVONE: Political turmoil and scandal have played a part in the resignations and the thinning of top level personnel. Less than five months away from the first Tuesday in November, the Federal Election Commission finally has a quorum with Senate approval of five new members, but that's just the tip of the iceberg.
The White House reports that nearly 400 nominations are still pending in the Senate, among them 11 vacant seats on financial boards including three seats at the Federal Reserve, three at the Securities and Exchange Commission, two at the Department of Housing and Urban Development, seven slots at the Justice Department, and three Homeland Security nominations. Senate Democratic leaders say they are closer to 500 nominations pending with top positions at many levels of government filled by acting officials with little or no authority to guide policy.
JOAN CLAYBROOK, PUBLIC CITIZEN: People don't know what to do. They don't react quickly. They don't have supplies on hand. They don't know procedures and how to get things done. It's a very dangerous situation. And it's very unfortunate that this has been allowed to occur.
SCHIAVONE: Kitty, Joan Claybrook, who served in the Carter administration, says the president at that time asked his appointees to pledge to serve a full term, affirming that the notion of serving in office is a high privilege.
PILGRIM: Well it takes a long time to fill these political appointees, doesn't it?
SCHIAVONE: That's right. At the beginning of every new administration, there's something called the Plum Book that comes out. And there are 3,000 jobs advertised in that Plum Book. And it usually takes a president two years to even get up to speed with those jobs. But what's happening now is people are leaving the administration because they want to get ahead of all the other people, all the other middle managers who also need work, and they don't want to be without a job.
PILGRIM: Thanks very much. Louise Schiavone. Thanks, Louise.
Well, a new government report found cost overruns on more than 70 new weapons systems for the Pentagon. This is costing taxpayers billions of dollars. Critics say one reason could be the large number of former military officials that end up working for defense contractors. Lisa Sylvester reports.
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): A Government Accountability Office report found that in 2006 alone more than 2,400 senior DOD officials including generals and admirals left the government to work for private defense contractors and of those more than 400 DOD officials had new jobs that could have involved work on defense contracts awarded by their former offices. The Project on Government Oversight says it creates an appearance of a conflict of interest.
SCOTT AMEY, PROJECT ON GOVT. OVERSIGHT: When you have issues of the revolving door, or contracts that have been handed out or steered to a specific contractor because who they know in the government rather than what they know, that makes the public question the integrity of our government.
SYLVESTER: Senator Bernie Sanders blames the revolving door as one reason taxpayers paid nearly $300 billion in cost overruns for military weapons systems.
SEN. BERNIE SANDERS (I), VERMONT: We want to make sure the taxpayers get the value for what they are spending. And I think the time is long overdue for the Congress to take a very, very hard look at the waste and fraud that's taking place within the Department of Defense.
SYLVESTER: A DOD official told CNN that Pentagon officials are not prohibited from working for defense contractors and that just working for a contractor doesn't mean there's an automatic conflict of interest, but in one high-profile case, Air Force official Darlene Druyun went to jail for accepting jobs at Boeing for herself and family members while she was working on a $20 billion deal with the company.
SYLVESTER: Now by law, top Pentagon officials who work for the private defense sector can not lobby their old offices for one to two years depending on their government position. Senator Bernie Sanders has offered legislation to make the revolving door more transparent. Right now former DOD officials are supposed to self report their employment. The GAO found several problems with compliance -- Kitty.
PILGRIM: That's a surprise. Lisa Sylvester thanks very much.
Well we have some numbers for you. An astounding number of lobbyists are trying to influence the decisions made by federal agencies, officials and lawmakers. There are more than 41,000 registered lobbyists in Washington. That works out to 77 lobbyists for each member of Congress.
Business special interests in this country spent almost $3 billion last year trying to influence this country's decision makers. The health care industry spent the most on lobbying, almost half a billion dollars.
Coming up, Mexico's capital city becomes the latest front in that country's war against drug cartels. We will have a live report on that.
Also, did some U.S. senators receive too good a deal on their mortgages? We'll have the story. Stay with us.
PILGRIM: Coming up, another brazen assassination in Mexico City, another sign that Mexico is losing its war against drug cartels. We'll have a live report. Stay with us. (COMMERCIAL BREAK)
PILGRIM: Mexico's deadly drug war today flared up on the streets of its capital. A top federal police officer was shot and killed while eating lunch at a Mexican City restaurant. And the officer's bodyguard was also killed. Harris Whitbeck is in Mexico City tonight, Harris?
HARRIS WHITBECK, CNN CORRESPONDENT: Kitty, this is the second killing of a high level federal police officer in just about six weeks. Today, it was Igor Labastida Calderon. He was the second highest ranking federal police officer in Mexico. He and his bodyguard were having an early lunch at a small Mexico City restaurant that is frequented by police, federal police -- police officers when according to eyewitnesses a car drove by and then opened fire on the restaurant, killing Labastida and his bodyguard immediately.
A third police officer died in the hospital, and two more are still in the hospital, being -- their wounds being tended to. Now the fact that Labastida was only accompanied by one bodyguard has raised eyebrows. Some sources in the Mexican Ministry of Interior said that they do not understand that. Given the fact that just six weeks ago, Labastida's boss, Edgar Mian (ph), was also gunned down, and the authorities believed that that killing was directly attributed to drug traffickers. It is believed that this killing might also be linked to drug traffickers.
Labastida was in charge of a federal police unit that looks into trafficking and smuggling in general, and that of course includes drug trafficking. And this of course happens at a time when drug related violence is on the rise in Mexico. The latest government estimates indicate that close to 5,000 people have died in Mexico since the beginning of the year. This after President Felipe Calderon ordered 20,000 federal troops onto the streets in several cities in the country to fight drug traffickers. Kitty.
PILGRIM: Harris, you point out it's a daytime, noontime attack, a very brazen attack. How atypical is this in this drug war?
WHITBECK: Well recently, it's become rather typical. The killing today is similar to the one that occurred six weeks ago when Mian was killed. He was killed in broad daylight right outside of his home on his front doorstep, so certainly a brazen attack that are meant not only to obviously do away with an enemy, but also to send a very, very clear message to the authorities and to society in general that the drug war is escalating. And that is going to result in violence that will affect anybody at any time.
PILGRIM: Thanks very much. Harris Whitbeck. Thank you, Harris.
Immigration and Customs Enforcement agents are continuing their crackdown on businesses that knowingly hire illegal aliens. That crackdown is drawing new protests. Pro amnesty advocates including unions, immigration lawyers, and the Catholic Church are lashing out at the federal government's enforcement efforts. Casey Wian has the report. (BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Immigration and Customs Enforcement agents arrested 160 employees of ACTION RAGS USA Wednesday. The Houston company exports used clothes to Africa, South America, and India. And according to law enforcement, employs illegal workers from Mexico and Central America.
ROBERT RUTT, ICE: We received information over a year ago of allegations of illegal hiring of illegal aliens.
WIAN: The company is now under investigation for criminal employment violations. That threat is one reason 70,000 American employers have now enrolled in the federal E-Verify program to determine the legal status of employees. No charges have been filed, but an attorney claims ACTION RAGS was unaware employees were illegal.
WILLIAM ESTES, ATTORNEY, ACTION RAGS USA: I'm understanding that a system is being set up or in the process of being set up. We have no way to determine that. When you show us your I.D. that's all we have.
WIAN: ICE says its raids only target egregious violators of immigration law. Still, advocates of Amnesty for Illegal Aliens are holding a series of one-sided hearings denouncing ICE, including one this week in Los Angeles.
JOE HANSEN, UNITED FOOD & COMMERCIAL WORKERS: Every day, tens of millions of Americans go to their jobs unaware that without any warning, they could be swept up, detained, and held at gunpoint in a massive raid conducted by armed government agents that shuts down their workplaces, that denies them access to their families.
WIAN: They're even calling those arrested victims.
HANSEN: The victims of the ICE raid at the Micro Solutions Enterprise.
CARDINAL ROGER MAHONY, L.A. ARCHDIOCESE: This is just really almost a sin on our national character. So just count on my help in any way that I can, and count on the Catholic Church in this country walking with you every step of the way.
WIAN: ICE officials reject that criticism, promising even more work site enforcement raids. So far this year, the agency says it has prosecuted twice as many people as in 2007 for felony immigration charges.
WIAN: But only 92 employers by ICE last year. Homeland Security Secretary Michael Chertoff says that number will increase as well. He says ICE is following the model set by drug and organized crime prosecutors, busting people at the bottom and working their way up -- Kitty.
PILGRIM: Casey, it seems a bit preposterous, to an illegal alien, the thought that they could be swept up in a raid must be a thought that they have to live with when they risk the law every day.
WIAN: Absolutely. These advocates of amnesty for illegal aliens seem to ignore the facts that these folks knowingly committed a crime, either crossing the border illegally, overstaying a visa, they know they're working illegally in the United States. In many cases, they have stolen people's identities, stolen people's Social Security numbers. That's a felony.
So this argument they don't know what they're doing and they are not aware of the consequences of their actions is a little bit ridiculous -- Kitty.
PILGRIM: Thanks very much, Casey Wian.
Well, time now for tonight's poll. Do you believe the escalation in violence in Mexico and on the border is a serious threat to this nation's security? Yes or no? Cast your vote at loudobbs.com. And we'll bring you the results a little bit later in the broadcast.
And time now for some of "Your Thoughts." Susan in Florida wrote to us: "Hi, Lou. Thank you for keeping me and the rest of the nation informed about the selling out of American jobs by corporations who obviously only care about their bottom line and their own jobs and agenda. Thanks again for all you do to keep us struggling Americans aware."
And Tom in Georgia wrote to us: "Lou, no Americans should participate in a Nielsen poll until they reverse their decision to move jobs to India. Too many of our companies are choosing greed over patriotism, and I'm sick of it. The wimps in Washington are letting our country slip away."
Stephen in Massachusetts wrote: "If it was not for you, Lou, and the information you provide on our own corporations, the American people would be out in the dark. Keep on keeping us informed.
We'll have more of your e-mail a little bit later in the broadcast.
Also coming up, sweetheart mortgage deals on Capitol Hill. Are members of Congress trying to hide the details?
Also, the battle to win the support of independent voters. Can Senator McCain win this vital constituency?
Also, the deadliest month of the entire war in Afghanistan. General David Grange will be here, we'll discuss it.
PILGRIM: The Senate Ethics Committee is investigating whether two senators improperly received loans from a mortgage company at the center of the housing crisis. Now those senators, Chris Dodd, Kent Conrad, received special VIP mortgage deals from Countrywide Financial. Politico has been trying to find out whether other senators have received sweetheart deals. Politico financial correspondent Eamon Javers joins me now.
Thanks very much for being with us, Eamon.
EAMON JAVERS, POLITICO CORRESPONDENT: Hey, thanks for having me.
PILGRIM: You know, I think the thing that is the most disturbing about this whole thing is we have foreclosures at record levels, and then we hear about sweetheart deals for the senators. What have senators Dodd and Conrad told you about their deals?
JAVERS: Well, both Dodd and Conrad say that they didn't know that they were getting these kind of sweetheart deals. In Dodd's case, he says he knew he was in a VIP program, but he didn't know that that was because of his status as a United States senator. And Conrad has said that even though he called the CEO of Countrywide to set up the mortgage, he didn't really realize that he had been given these special rates in his mortgage.
So both of them are saying they were unaware of special deals, but my colleague Marty Kady and I, we were looking at this after the news broke. We said, well, let's go look at the disclosures for other senators and find out how many of them have Countrywide mortgages as well and what the terms were.
It turns out though that there's a huge loophole in Senate ethics rules and Senate disclosure rules which says that they don't have to reveal anything about their personal residential mortgages.
PILGRIM: Well, that's exactly right. You know, it was very intriguing, the three questions you asked, you asked, who is the home mortgage lender, who did they contact to arrange the loan, which is critical, and did the senator receive any special treatment? You asked -- a week ago you started this whole process. You asked 100 senators. And they took about a week to give you this information.
First of all, what took them so long?
JAVERS: Well, you know, there was a lot of resistance here. Some of the offices did get right back to us immediately and said, here is the information. A lot of them, though, really resisted this and told us that they felt that the home mortgage information for a United States senator shouldn't be public. It should continue to be private information and that we had no business really asking that kind of question.
Over time, though, as the course of the week went on, we got more and more responses. And as of tonight, we have now gotten information from all 100 senators. Not complete information in every case, but at least something from every member of the Senate telling us who their lenders were or details about their mortgages.
PILGRIM: We've got last-minute information from Senator Maria Cantwell, who initially -- you explain what you had to do to get that information.
JAVERS: Yes, Maria Cantwell was the only senator holding out at one point yesterday. We were looking at the last remaining hold-outs here who hadn't disclosed anything to us. And we went to her office and actually presented her office with some documents that we had found which showed that Cantwell at one point had held a mortgage from Countrywide, the lender that's at the heart of this whole thing.
They confirmed that fact for us after we presented them with the documents. But it wasn't until we showed them documents that they gave us the kind of complete information that we're looking for. They now have done that, and that information will be up on our Web site at politico.com pretty soon.
PILGRIM: OK. Let me read their statement from their office. And they dispute your report. They sent us a statement. "I responded to the Politico's questions verbally yesterday," they're saying they didn't delay, "and informed the paper that Senator Cantwell's mortgage did not originate with Countrywide but rather was sold to them as a package of loans without any knowledge or action on her part. The mortgage for her home in Washington State is currently held by Wells Fargo. She did not receive any special treatment or terms."
When was the Wells Fargo switch, is that clear?
JAVERS: It's not clear. And we have gone back to the Cantwell office to ask them exactly when the Wells Fargo switch happened. What we asked them yesterday was, did she have a mortgage from Countrywide? Their office said, in fact, she did. And then we asked were there any special terms? Her office told us yesterday that they were not aware of any special terms. They would look into it and get back to us.
That was how we quoted them in our story. Now today, they're say they checked into it and they've determined that there were no special terms there. So I think what we're looking at here is just a process of the Cantwell office going through and doing the due diligence and checking their records to make sure that what they say is accurate.
Now, they have given us a complete statement and it's up on the politico.com site.
PILGRIM: OK. Quickly, senators Boxer and Cornyn are ranking members of the Senate Ethics Committee. They want to make mortgages part of the financial disclosures. I'm sure you support that. And what did you learn from this whole process? Interesting exercise.
JAVERS: Yes, you know, it's fascinating what has happened here, because this was just a little-known loophole in the Senate Ethics disclosure. And Marty Kady and I decided, you know what, let's go and look and see whether we can get all of these senators to actually disclose this. They don't have to, but they voluntarily complied once we started asking.
And now there's this proposal out there that would in fact require all senators to release a lot more detail than what we even asked for. They would require the senators to release the interest rate on the mortgage and the terms -- the financial terms of the underlying assets.
Those are things we didn't even bother asking for here because that would be too complicated for us in our process. But what we did learn was that a lot of senators are a little bit skittish about allowing any of their personal financial information out there into the public domain.
A lot of them feel this is information they would rather keep private. Some disclose immediately, a lot resisted.
PILGRIM: Yes. Eamon Javers, good work. Hard work for one week. Thanks very much for joining us.
JAVERS: Thanks a lot.
PILGRIM: Coming up, which political party will represent this country's hard-working middle class in November? The authors of an important new book say it might not be the party you think. They'll join me next.
Also, this is the deadliest month in Afghanistan for American and international troops since the war began. One of the country's top former commanders will join me with his assessment. Stay with us.
PILGRIM: Can the Republican Party re-event itself as the party of America's embattled middle class? Well, my next guest believes that may be the only way for the party to survive. Ross Douthat and Reihan Salam authored "The Grand New Party: How Republicans Can Win the Working Class and Save the American Dream." And they join me now.
That's quite a tall order, gentlemen, especially when you have record gas prices, housing foreclosures, job losses, manufacturing jobs and the very abysmal ratings of the Bush administration and approval ratings with the voters. What's the prescription?
REIHAN SALAM, CO-AUTHOR, "GRAND NEW PARTY": Well, the prescription is getting Republican politicians to get their heads out of the sand. They keep telling folks that the economy is doing great, everything is wonderful, everything hunky-dory, except that middle class families have been feeling a real squeeze for many, many years now.
You know, even when the GDP was growing, and now it's not, they felt that gas prices, home prices, and most of all, rising health care premiums were taking a huge bite out of their paychecks.
PILGRIM: Well, you know, we have been reporting on this -- we have been reporting on the middle class, and it's more than a squeeze at this point with the energy prices going up.
Ross, how can they reconnect, and will they be able to? You wrote this entire book, and will anyone -- what advice would you give to John McCain? Will anyone read this and take it to heart? ROSS DOUTHAT, CO-AUTHOR, "GRAND NEW PARTY": Well, the big challenge for John McCain this election cycle is that he has got the right big-picture brand. He is branded as a reformer, he's a guy who has broken with conservative orthodoxy on a lot of issues over the years, and that's really the only kind of Republican who could possibly appeal to the working class and win in what is going to be a bad year for Republicans.
The challenge for McCain, though, is that the specific issues that he has been a reformer on have been -- they've been kind of boutique issues, they are issues that appeal to the media elite, to issues like campaign finance reform, tobacco legislation, and now global warming, climate change, and so on.
And he's much less comfortable talking about those kitchen table issues that Reihan was mentioning: jobs, education, health care. And if you look at -- I mean, take what he has done on global warming. Global warming, it's an important issue, but he has essentially just borrowed the Democrats' plan, cap and trade.
And so he's stuck saying simultaneously, well, we need to drill for oil so that we can lower gas prices, but I'm going to impose this massive new regulatory scheme that's actually going to raise your gas prices.
PILGRIM: All right. Let's play campaign managers for the Republicans for a second. Tax reform, now what is your prescription for the Republicans? How can they make that their issue that really connects with middle class, Reihan?
SALAM: Well, if you're going to have tax cuts that are focuses on investment, why not focus on the most important investment most families make? And that is an investment in children. Instead of having a $1,000 tax credit for kids, have a $5,000 tax credit that recognizes having kids isn't a consumption good. It's not like buying a fancy car. It's like making an investment in the country's future.
These are going to be the taxpayers of the future. So if you want to look at it in that crude way, you know, that's going to pay off over time.
PILGRIM: OK. So let's -- anything to say on tax?
DOUTHAT: Well, I mean, part of what has happens to the Republicans is they're victims of their own success. There was a slew of issues on which the GOP appealed to working class voters for many years, from Ronald Reagan on, issues like welfare reform, issues like crime rates and issues like taxes.
The problem is, taxes are much lower. Marginal income tax rates are much lower than they were when Ronald Reagan was running for president. Crime is much lower. Welfare has been reformed. So the GOP needs to step into the 21st Century really and look at the new challenge it's facing, working class voters, like the cost of raising families. PILGRIM: I think that's what I took away from your book the most, is that you cannot just keep repeating the Reagan mantra. You must reinvent the entire structure of the party. Health care, 46 million Americans uninsured. This is the toughest thing for any political party to take on. What could the Republicans do to make a difference, to make it their issue, Ross?
DOUTHAT: Well, John McCain started with the right idea. Look, the Republicans are the party of the free market. A lot of the problem with health care issues is cost. If you could bring more of a free market element to the health care market system, it would ultimately drive down costs.
The problem for conservatives is if you move to a more free market system, people are going to slip through the cracks, people with pre-existing conditions are going to have a tough time getting insurance and so forth.
And so far, John McCain hasn't talked enough about how you're going to cover those people in a more free market system. And this is something, if you look back at welfare reform in the 1990s, the Republicans were the party of limited government, always will be, always should be.
But sometimes if you're going to reform a broken system, you need to spend a little more money to make money. Initial welfare reform, you spend a little more money and eventually lower the cost of welfare by moving people from welfare to work.
The same thing is true in health care. You have to spend a little more maybe to cover the uninsured to get the more free market system to work.
SALAM: ... express though is that Democratic solutions don't work. Democratic solutions plan on pouring more money into an already broken system.
PILGRIM: The great criticism. OK. We are really almost out of time. But we cannot go without this big, big campaign issue, immigration. Quick, how can the Republicans fix it? This is so important.
SALAM: Well, look, every Republican needs to be committed to fixing our broken borders. At the same time, one thing that we suggest is that the United States look to Mexico and demand that they take accountability for their role on our broken borders. Because look, we've done a lot to help Mexico, they need to do something to help us or else we're going to stop playing ball. We have a lot of tools.
PILGRIM: All right. Ross, thoughts on immigration?
(CROSSTALK) DOUTHAT: I mean, well, the challenge for Republicans is, in an odd way, John McCain has -- officially has the right position on the issue. He says we're going to have border security first, and then down the road, maybe, we'll look at what to do with the people who are already here.
The problem is McCain probably doesn't really believe that. It's just something he has come to through primary season pandering. But the challenge for the GOP is how to be a party that's in favor of fixing our broken borders, as Reihan says, without giving the impression that they're hostile to immigrants in general.
And it's a balancing act. But it's one the party should be able to pull off.
PILGRIM: One would hope they're listening. They should be. Anyway, thank you very much. Ross Douthat and Reihan Salam, thank you for being here tonight.
DOUTHAT: Thanks for having us.
PILGRIM: Coming up at the top of the hour, the "ELECTION CENTER" with Campbell Brown. Campbell, what are you working on?
CAMPBELL BROWN, CNN ANCHOR: Well, Kitty, coming up on the "ELECTION CENTER," we're live at tonight's much anticipated Barack Obama/Hillary Clinton get together. We're going to look at who may need the most from this fairly awkward relationship.
Also, the politics of gun control and whether today's Supreme Court ruling today will immobilize Democrats and energize the Republicans.
Plus, a little girl today asked John McCain today if a president is like a king? Well, we've got his answer and a lot more coming up as well. Kitty, back to you.
PILGRIM: Can't wait for that. Thank you very much, Campbell Brown.
Coming up next, we have been reporting extensively about the hundreds of Nielsen employees in Florida. They're losing their jobs to outsourcing, but where is the outrage from the representatives? We'll have a special report on that.
Also, the deadliest month for American troops in what some call the forgotten war, General David Grange will join me with his assessment of the situation in Afghanistan.
PILGRIM: A deadly day for our troops in Iraq. Insurgents killed three of our marines in Al Anbar province, that's west of Baghdad, 29 of our troops have been killed in Iraq so far this month, 4,113 of our troops killed since the war began, 30,275 troops wounded, 13,458 seriously. More than 3,000 Marines are also fighting in Afghanistan. Now the war there is worsening. More U.S. and international troops have been killed in Afghanistan this month, more than any other month of the entire war. And joining me now, LOU DOBBS TONIGHT military analyst General David Grange.
Thanks for joining us, General Grange.
GEN. DAVID GRANGE, CNN MILITARY ANALYST: Thank you.
PILGRIM: You know, I want to bring to our viewers' attention attacks against U.S. troops jumped 40 percent in the first five months of the year. We had this month, 39 U.S. and allied troops have been killed. And that's in Afghanistan. We had the highest monthly total since the war began. Why the spike in violence in Afghanistan, General Grange?
GRANGE: Well, I believe the reason is the Taliban now has certain areas within Afghanistan where their dealings, their interactions with the population supports their ability to conduct offensive operations. In other words, they have this support base.
It's also in areas that might be a lot of poppy control, where they're tied into the marketing of the poppy crop, and it's also -- they have to show that they -- to the people that they have the capability to attack, that they're a dominant force and they're taking advantage of some of these areas where there is thinning out of NATO coalition forces where they can take advantage of that. And that's what they're doing.
PILGRIM: You know, Defense Secretary Robert Gates today said one of the reasons for the increase in violence is our failure to secure the Pakistan border. Now what, in your view, is the role that Pakistan should play in that situation?
GRANGE: Well, they shouldn't allow the sanctuary because the sanctuary is obviously a support base. And any time you have a sanctuary, you cannot defeat insurgents. The problem is that Pakistan cannot control its own country from these same type of insurgents, let alone keep insurgents going into Afghanistan.
And so the only thing to do is again precision air strikes and covert action, but maybe draw them out and kill them in a place where you want to do so. And that can be done as well.
PILGRIM: Do you think that U.S. and Afghan troops should cross the border into Pakistan?
GRANGE: Not ground forces unless you have got the Pakistani army on the other side doing this together with you. You can't do a half- hearted effort. I mean, to do something like that in this area, you're talking about very robust forces and sustained for a long period of time.
PILGRIM: Is the Afghan government capable of really controlling this violence at any point? GRANGE: Not without the coalition forces. I mean, eventually, they'll get better as the years go on. But right now, what is needed is a surge not only in military but the other elements of government power, you know, the economic, the informational, et cetera, and the profit and nonprofit sectors providing capability, capacity in a coordinated manner throughout Afghanistan.
PILGRIM: General David Grange, thank you very much.
GRANGE: My pleasure.
PILGRIM: Still ahead, hundreds of employees at Nielsen losing their jobs to outsourcing. Where are the lawmakers and what are they doing about it? That's our report, next. Stay with us.
PILGRIM: Anheuser-Busch today rejected a takeover bid from Belgian-based InBev. Now the maker of Budweiser and other brands controls about 50 percent of the markets -- this country's beer market. Company officials said $46 billion bid from InBev was financially inadequate and not in the best interest of stockholders. The Financial Times reports tonight that InBev will now launch a hostile bid for Anheuser-Busch.
And we have been reporting this week on a rising scandal over the Nielsen Company, the TV ratings firm. Now this company is firing American workers in Florida, replacing them with foreign workers.
Bill Tucker is here -- Bill.
BILL TUCKER, CNN CORRESPONDENT: Yes, Kitty, roughly about 300 workers at Nielsen lost their jobs down at Oldsmar, or are about to lose their job, city council is angry about the way (INAUDIBLE) powerless to do anything. The council, after all, doesn't run Nielsen, it's a large company in their community.
The company's ratings are part of a conversation about TV shows' popularity, Nielsen pretty much endemic to everything that we do. Its research literally is what sets the rates that advertisers charge. It's a monopoly for all intent and purposes. And it's hard for a company like that size, that importance for people to not be aware of who they are and what they're doing.
And for that reason you might be expected to think that maybe the people up in Congress are aware of what Nielsen is doing. But that's not the case, because the elected officials for the people of Oldsmar, Florida, apparently don't know what's going on.
Congressman Bilirakis represents the 9th District in the House. Senators Bill Nelson and Mel Martinez are their men in the Senate. We called their offices several times today asking for their thoughts on what Nielsen is doing to the voters in their state.
Not a single one admitted to being aware of the replacement of American workers with foreign workers. None expressed concern about outsourcing of jobs. The best that we could get from them, Kitty, was, we'll look at it and get back to you later. And none of them got back to us later, at least not today.
PILGRIM: Well, let's hope they're listening now. And we'll stay on this story. Thanks very much, Bill Tucker.
Tonight's poll results, 98 percent of you believe the escalation in violence in Mexico on the border is a serious threat to this nation's security. Thanks for being with us tonight. Please join us tomorrow. Good night from New York. The ELECTION CENTER with Campbell Brown starts right now -- Campbell.
BROWN: Thanks, Kitty.