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Lou Dobbs Tonight

Ties to Obama?; Impeachment?; Bailout for Detroit; Illegal Alien Enforcement; Big Ponzi Scheme

Aired December 15, 2008 - 19:00   ET


LOU DOBBS, CNN ANCHOR: Thank you, Wolf. Tonight, the Obama transition team says the president-elect had no contact with Illinois Governor Blagojevich over the successor to Senator Obama's seat. The Illinois House takes the first step toward impeaching the governor and removing him from office. We'll have complete coverage of those developments.
And tonight, still no deal for the auto industry. The White House has, again, delayed a bailout for the car industry.

And tonight, it could be the largest Ponzi scheme in history, a $50 million fraud. Some of the nation's best known names losing millions and millions of dollars. We'll have that special report for you and 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 Monday, December 15th. Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody. The Obama transition team tonight says the president-elect and his staff had no contact with Illinois Governor Rod Blagojevich that was inappropriate. The team says there were no inappropriate discussions between the president- elect's staff and the governor over filling Obama's Senate seat.

And the Illinois House of Representatives now says business as usual is over for the governor. It's taken the first step toward impeachment. We have two reports tonight and we begin with Jessica Yellin in Chicago. Jessica?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Hi, Lou. Barack Obama today said that the results of his internal fact-finding on the Blagojevich matter are complete. But he's not going to release that information to the public for another week. He says that's at the request of the prosecutor.

In a statement that was released to the media before his press conference today he also revealed that his office, through their lawyer, have been in ongoing contact with the U.S. attorney in this matter, Patrick Fitzgerald. All Obama would say at his press conference on this matter is that he personally didn't have contact with Rod Blagojevich on the Senate seat. And his staff did nothing wrong. Let's listen.

(BEGIN VIDEO CLIP) SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT OF THE UNITED STATES: Nothing in the review that was presented to me that in any way contradicted my earlier statements that this appalling set of circumstances that we've seen arise had nothing to do with my office. And that, you know, those facts will be forthcoming to all of you in due course. We just want to make sure that we're not interfering with an ongoing and active investigation.


YELLIN: Now, Lou, there have been reports that Barack Obama's chief of staff, Rahm Emanuel, did have contact with one of the governor's aides about the Senate seat. That's not to suggest there was anything improper there. That kind of contact is to be expected.

And we have reported that Emanuel has been informed he's not the target of the investigation. Patrick Fitzgerald, the prosecutor in this case, also released a statement today confirming what Obama said. The Fitzgerald statement says in part, "The U.S. Attorney's Office requested a brief delay of the release of the report of that investigation to conduct certain interviews."

Now this suggests that Fitzgerald does not want any of the Obama team's findings to influence statements that Fitzgerald might get from witnesses in his investigation. So finally Barack Obama will be on vacation next week when this report is supposed to come out. On one hand this drags the matter out for another week. On the other hand that means the news will be released when Americans might be distracted paying more attention to Christmas than any of this news -- Lou.

DOBBS: Well convenient that the U.S. attorney should see it that way and ask for such an extension. The idea that the president-elect said that he would have this report out in a few days, how could it be a delay to release -- how could it in any way interfere with an investigation to say what, effectively, the president-elect said today, which is that there were no inappropriate contacts. Why not just simply laid them out?

YELLIN: Right and Obama did promise transparency and candor in his administration in the way he leads. All is he is saying is that he doesn't want to interfere with the investigation and apparently, Fitzgerald has concerns that any information they would release could inform what witnesses might tell him. We just have to take both men's word for it at this point.

DOBBS: All right. Thank you very much -- Jessica Yellin.

Well the Illinois State House today taking action that could lead to the impeachment of Governor Blagojevich, a decision the House was considering even before last week's arrest of the governor and his chief of staff. Drew Griffin has our report.


DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice-over): With Blagojevich again going to work and acting like a governor, the powerful House speaker of Illinois announced "enough is enough."

MIKE MADIGAN (D), ILLINOIS HOUSE SPEAKER: Today we've announced a formation of a committee of inquiry concerning the possible impeachment of Governor Blagojevich.

GRIFFIN: The Illinois Democratic leader says he had been reviewing grounds for impeaching the Democratic governor, quote, "for about a year", based on allegations of abuse of power and because of recent federal court convictions of other people, including former top fundraiser and adviser to the governor, Antoine Tony Rezko (ph).

Federal prosecutors charged Blagojevich last week with solicitation of bribery and conspiracy to commit mail and wire fraud. He's made no public comment on the accusations. What high ranking state Democrats want most is for the governor to voluntarily leave office. But the man who would take over in the job, Lieutenant Governor Pat Quinn says the governor appears to be in a state of denial.

UNIDENTIFIED MALE: Have you had any communications with him or his office at all suggesting what he's about to do?

LT. GOV. PAT QUINN (D), ILLINOIS: I've had no communications with the governor. I don't have the faintest idea of what's going through his mind. I think watching on television his comments indicate that he doesn't realize how serious this situation is for the people of Illinois.

GRIFFIN: It is, at least, serious enough for the governor to consult one of Chicago's most high-profile defense attorneys. The governor spent eight hours Sunday inside the law office of Ed Genson who today said prosecutors will have a fight on their hands.

ED GENSON, CRIMINAL DEFENSE ATTORNEY: If I'm trying the case, it's going to be a fight.

GRIFFIN: It has been nearly one week since his arrest and since Illinois politicians began demanding the governor resign. But today in the only indication anyone is going anywhere, the governor's wife and children left home carrying a large suitcase. An hour later the governor did what he had done every business day since his arrest, defiantly, perhaps, he went to work.


GRIFFIN: And, Lou, his press secretary again today said there is no talk of resignation from the governor. Based on the attorney he's fired -- hired I should say -- Governor Blagojevich looks like he's settling in for a fight -- Lou.

DOBBS: Thank you very much, Drew -- Drew Griffin from Chicago.

In Illinois, politics, of course is sometimes not only a dirty business but it's not uncommon for it to be a family business. Governor Blagojevich's father-in-law, in fact is a powerful Chicago alderman. Dick Mell, Mell's backing in fact helped the governor win election to the Illinois House, ultimately the governorship.

The governor's wife, Patricia, until recently, was a real estate broker. "The Chicago Tribune" reports many of her clients have political ties to the governor and that her business is under investigation. The governor's sister-in-law is also in the family business.

She's been elected to the Illinois State House. And the family ties don't stop at the governor's office. House Speaker Michael Madigan has been criticized for waiting until today to launch the impeachment process against the governor. Critics say the speaker didn't want to steal the thunder from his daughter. His daughter is Attorney General Lisa Madigan, who Friday called for Blagojevich to be removed from office. Lisa Madigan is reportedly considering a run for governor herself in 2010.

There could be another Kennedy in the Senate, speaking of family ties. CNN has learned that Caroline Kennedy told New York Democrats she wants to be the state's next senator, replacing Hillary Clinton. Caroline is of course the daughter of President John Kennedy who was assassinated in 1963.

Her Uncle Ted is the senior senator of Massachusetts. Her other uncle, Robert Kennedy, served in the Senate from New York from 1965 until his assassination in 1968. That's the very same seat held by, of course, Senator Hillary Clinton.

President Bush today reassured automakers that the administration will help out the industry. But there was no sign of when that help would arrive. Lawmakers from both parties want to know just how much the administration will spend and where they'll get the money.


KATE BOLDUAN, CNN CORRESPONDENT (voice-over): From Congress...



BOLDUAN: Back to the president, a senior Democratic leadership aide tells CNN to anticipate an announcement Tuesday of the Bush administration's plans to help the auto industry. But big questions remain concerning how much the administration will lend, where the money will come from and with what strings attached.

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: I think all the signals coming from the White House are that they know that bankruptcy is not an option and that TARP funds are the only recourse that they have.

BOLDUAN: House Speaker Nancy Pelosi, along with other Democratic leaders are calling on the president to attach the restrictions of the House passed rescue plan to any automaker loan. This could include appointing a car czar, deadlines for restructuring and proving a return to profitability.

SEN. CARL LEVIN (D), MICHIGAN: Once the president makes a deal, he is not likely to walk away from it.

BOLDUAN: But Republicans want the administration to adopt provisions introduced by Tennessee Senator Bob Corker (ph).

UNIDENTIFIED MALE: What we've offered is incredibly reasonable.

BOLDUAN: Including the congressional deal breaker reducing auto worker wages to be more level with pay at the U.S. plants of foreign auto companies. A top Senate Republican aide warns if the administration doesn't adopt the Corker (ph) amendment Republicans won't be motivated to devote any more money to the auto industry.


BOLDUAN: The truth is, outside of pushing for what they want to happen now, there's little Congress can do. They have no congressional review over how the White House proceeds or what restriction the White House decides to put on the money they offer, if they do, to the auto industry -- Lou?

DOBBS: Kate, thank you very much -- Kate Bolduan.

Up next here a $50 billion scandal, some of the country's most famous names may have lost millions and millions in what is, without question, the largest Ponzi scheme ever. We'll have that story for you.

And a local port has jeopardized the prosecution of tax fraud cases involving 1,300 illegal aliens. We'll have the story.

And a link between Governor Blagojevich and the biggest donor to the Obama presidential campaign, that special report as well, and a great deal more coming up next, stay with us.


DOBBS: New developments tonight in an identity theft and tax fraud scheme in Colorado that we first reported to you on last month. This scheme involves about 1,300 illegal aliens. A judge has decided to block that investigation. The judge claims local prosecutors don't have jurisdiction over federal tax records. Casey Wian has the very latest.


CASEY WIAN, CNN CORRESPONDENT (voice-over): The sheriff and district attorney of Weld County (ph) say they have evidence more than 1,300 illegal aliens there have been using either stolen or phony Social Security numbers to receive millions of dollars in improper tax refunds.

TOM FITTON, JUDICIAL WATCH: Fraudulent Social Security numbers are the golden ticket for illegal aliens who are trying to get jobs, get credit cards, get mortgages and otherwise engage in unlawful and fraudulent practices and it impacts on Americans directly. WIAN: Allegedly, the illegal aliens applied for refunds of taxes withheld from their paychecks and claimed credits for children who either live outside the United States or don't exist. Colorado authorities busted the ring last month without much help, they say, from federal tax authorities.

UNIDENTIFIED MALE: What we hope the policymakers in Washington, D.C. do is start to deal with this issues of turning over hundreds of millions (INAUDIBLE) billions of dollars to illegal immigrants through our taxes.

WIAN: The tax returns were all linked to one tax preparer. She says she did nothing wrong and the Colorado Department of Revenue agrees. So far authorities have arrested 37 people after obtaining search warrants for their tax records. But now prosecutors have been stalled by District Judge James Hartman (ph) who wrote that a "review of applicable federal law has raised a question in this court's mind as to whether a state court has jurisdiction for the production or seizure of federal tax returns." Weld County (ph) Sheriff John Cooke (ph) had this reaction to the judge's order.

"I was kind of shocked and surprised. I don't know what his agenda is." Sheriff Cooke (ph) says there are still 50 arrest warrants linked to the case and those people will be apprehended if deputies find them.


WIAN: However, no new arrest warrants will be issued and the prosecution of existing cases is on hold until the judge rules later this month. The district attorney likened the judge's order to a time-out to make sure such a potentially large number of cases are not overturned on appeal. The D.A., however, says he's confident prosecutors obtained the arrest warrants legally -- Lou.

DOBBS: All right, Casey, thank you very much -- Casey Wian.

An American anti-kidnapping expert has been kidnapped in Mexico. Government officials there say Felix Batista (ph), a Houston based security expert was in Mexico advising government authorities there on how to combat kidnapping. Batista (ph) was kidnapped on December 10th. Both the FBI and Mexican police are investigating the case and there has been no statement as to whether a reward was sought or a ransom nor whether one is being paid.

Well time now for tonight's poll. The question is -- do you believe the Obama administration will improve or weaken our border security? We'd like to hear from you. Cast your vote at We'll have the results here later in the broadcast.

There are new questions tonight about possible ties between President-elect Obama's campaign and Governor Blagojevich's office. A union watchdog group says Blagojevich's largest contributor, the Service Employees International Union, also donated millions of dollars to the Obama campaign. Bill Tucker has our report.


BILL TUCKER, CNN CORRESPONDENT (voice-over): This full-page ad in "The New York Times" doesn't hesitate to connect Illinois' scandal- ridden Governor Rod Blagojevich, ACORN and corrupt Chicago politics. The ad was paid for by the self-described union watchdog group the Center for Union Facts.

The ad draws attention near the Service Employee International Union. The SEIU was Governor Blagojevich's largest contributor in his last campaign in 2006, donating almost a million dollars. The next year, 2007, the governor signed the first-ever contract with the SEIU local 880, made up of state childcare workers, increasing union membership by 49,000 members. The Center for Union Facts says the connection is more Chicago-style politics on open display.

JUSTIN WILSON, CENTER FOR UNION FACTS: These people really and truly are pushing around politicians with money and power and influence. And in a lot of ways they try to control the public debate about issues and use a lot of misinformation to steer constituents, to contact their voters or contact their congressmen.

TUCKER: ACORN though denies any connection with SEIU as a union. The Center for Union Facts points out that the SEIU was the first union to publicly endorse Obama's candidacy and it spent more than $13 million on ads supporting him.

The SEIU calls the ad a quote, "distraction". And without responding directly to the charges made in the ad, the union released the following statement. Quote, "the SEIU will continue working with President-elect Obama, the new Congress, and activists all around this country to help bring change that works to America." Part of that change would be the Employee Free Choice Act, which would eliminate secret ballots and union organizing efforts.


TUCKER: Now Employee Free Choice Act is strongly opposed by a number of groups including the Union Facts Organization. Obama and the Democratic leadership, Lou, have made it very clear that they publicly support the Employee Free Choice Act.

DOBBS: A number of people have said you know they will support the Free Choice Act if the United States Congress starts doing all of its caucusing in public. It's -- this is a very difficult issue here.

TUCKER: It is.

DOBBS: Appreciate it. Thank you very much -- Bill Tucker.

Well still ahead, mortgage help is slow to come for homeowners facing foreclosure and more Americans are facing foreclosure. Why are the nation's banks using bailout money to take care of themselves but not their customers? We'll have that report and a $50 billion Ponzi scheme involving some of the best known people in this country. We'll have that special report here next. We're coming right back.


DOBBS: Well Wall Street is reeling from a $50 billion pyramid investment scheme. Bernard Madoff, a highly respected security's trader for decades is accused of victimizing some of America's best known names. Kitty Pilgrim has our report.


KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Duped and deceived, bigger and bigger names appear in the headlines including Mortimer Zuckerman, Steven Spielberg's (ph) charity foundation, LEWEZEL Foundation (ph), Norman Braman, former owner of the Philadelphia Eagles football team. Many investors are not returning calls about investing with Bernard Madoff, but CNN has confirmed the victims include Fred Wilpon, principal owner of the New York Mets, U.S. Senator Frank Lautenberg's (ph) charity.

HSBC, one of the world's largest banks could loose a billion dollars, Royal Bank of Scotland, 600 million, France's BNP Paribas (ph) nearly 500 million. And Spain's Banco Santander said clients had exposure of three billion. Today, the SEC chief of enforcement said they are trying to investigate as quickly as possible.

LINDA THOMSEN, SECURITIES & EXCHANGE COMM.: We are acutely focused with our colleagues in the southern district of New York and the FBI to figure out exactly what's going on to pursue the case that we've got to preserve assets to the extent we're able and to bring everyone who is responsible for the conduct at the Madoff firm to justice.

PILGRIM: Some question the role of the regulatory authorities in all of this, including the SEC.

BRAD SIMON, FORMER FED. PROSECUTOR: They clearly were asleep at the switch. They exist to uncover securities fraud and here is a $50 billion massive Ponzi scheme and somehow they missed it. And now that $50 million has disappeared they are scrambling.

PILGRIM: A former prosecutor who worked with victims of another Ponzi scheme says recovering assets is almost impossible at this point in time.

CARL H. LOEWENSON, ATTORNEY: Based on experience of Ponzi schemes it will likely take years for this to get unraveled. And in the meantime there is an asset freeze so people are looking at years, not months.

PILGRIM: It's money well heeled investors and charitable institutions will have to do without.


PILGRIM: A federal judge today in Manhattan appointed a trustee to begin the process of looking after the interests of investors. A former prosecuting attorney we spoke today pointed out both investors and federal regulatory agencies were complacent in looking at this company and mistaking a long career with an honest career -- Lou.

DOBBS: This is -- it's really a mystery as to why and how this guy got away with this, apparently, for quite some time.

PILGRIM: Those we spoke to today who were former prosecutors said that it's really amazing that something this large went this undetected for this amount of time.

DOBBS: You know and the names of the people that you just reported, the speculation, of course is that there are many more names, but people who are embarrassed or reluctant to come out in public to discuss the money that they've lost. Madoff is -- you know this issue brings up something very important and that is, of course, we're in the middle of an economic crisis, Wall Street crisis, credit crisis, banking crisis.

Almost in every step regulators have been abject failures in dealing with the mess that we find ourselves in right now. The SEC and Christopher Cox (ph) has been nothing but -- some of the greatest, you know terrific, most terrific people in government. But the enforcement division they have just been allowed to not do much.

PILGRIM: We spoke to some former prosecutors today and they said it will take absolute years to get through this. But we spoke to one who had started an investigation in 2000 and it's still ongoing. It will take years to get...

DOBBS: In 2000?


DOBBS: Do you know what we put up with in this country is -- some days it's utterly beyond me. Why would we expect something to take eight years? I mean this used to be America where things had to happen. Things had to be accomplished and you wouldn't ask a family -- and I know these are very wealthy people -- but there's some people who are presumably not that wealthy. Why would you not want to have this thing resolved and that money moved as quickly as possible to those folks?

PILGRIM: It's pretty clear today in reporting this story, Lou that they don't have any idea how big this is.

DOBBS: No idea how big and apparently not much of an idea how to intelligently resolve it. Thank you very much, Kitty -- Kitty Pilgrim.

Well, 70-year-old Bernard Madoff has been a trusted force on Wall Street for decades. A former chairman of the technology heavy Nasdaq market, he helped to bring Wall Street into the computer age in fact. The hedge fund that he founded consistently paid respectable returns, sometimes more than 10 percent over the past decade, until, of course, it collapsed. Some Wall Street insiders say Madoff's reported earnings were just too good and they knew it at the time and that made many people skeptical, but too many people obviously ignored what are now considered to be red flags. At $50 billion and Madoff is the one who put forward that estimate, this would be the largest Ponzi scheme in history. There have been many others, such swindles in recent memory. In the 1990's, the broker Kenneth Kasarjian pleaded guilty to losing more than $1 billion of investor money. Lou Pearlman, the music producer behind the band NYSYNC was convicted in connection with a $300 million scam. And Democratic fundraiser, Norman Hsu was put in prison last year for running a $60 million Ponzi operation. And that's just to name a few.

Well let's take a look at some of your thoughts. Arlene in Nevada said: "My Merry Christman is dashed. The thought that Bernie 'made-off' with the money of the filthy rich is more than the middle class should have to bear."

And Robert in Nevada: "Lou, have you heard about the new video game out just in time for the holidays? It's called 'Grand Theft Financial'."

And John in Illinois: "Lou, Secretary Hank Paulson has done such a pathetic and inept job with the bailout and the economic recovery. I'm thinking of recommending him for a $200 million bonus." I think that's a terrific idea.

And Gayle in California: "Dear Lou, thank you for being the voice of the working people. I feel the only time anyone in Washington knows we exist is when they take our taxes. Keep up the good work!" Thank you and we'll sure try.

We'll have more of your thoughts here later. Each of you whose e-mail is read here receives a copy of my book "Independents Day: Awakening the American Spirit", now available in paperback.

Up next new charges that this country's banks are using bailout money to help themselves instead of helping their homeowner customers who face foreclosure, we'll have that report.

And dangerous weather taking a deadly toll as ice, snow and rain storms sweep across much of the country, we'll have the latest.

And the president-elect says no contact with Illinois Governor Blagojevich over his Senate seat. We'll be talking about that with four of the country's leading political analysts here next. Stay with us. We'll be right back.


DOBBS: Welcome back. The treasury department bailout was supposed to encourage banks to help out Americans specifically, families paying mortgages that far exceed the value of their homes and facing foreclosure. But as Louise Schiavone now reports, the banks are helping themselves instead of helping homeowners.


LOUISE SCHIAVONE (voice-over): Las Vegas, Nevada, once one of the hottest real estate markets in the nation is witnessing a roughly, 30 percent drop in home values. Prices depressed by a back log of distressed properties.

LAWRENCE YUN, NATIONAL ASSOCIATION OF REALTORS: There is a very long frustrating process related to short sales. Those homes that require bank approval to get the loan forgiveness.

SCHIAVONE: Case in point, this property purchased three years ago for $900,000. With the owner in financial trouble, the house hit the market nine months ago for sale at less than its value, drawing a cash purchase offer of $650,000, rejected by the owner's bank.

ANTHONY DEVRIES, REAL ESTATE BROKER: We were calling on a daily basis and when we finally did get hold of this loss mitigator, he actually told me, that "Anthony I have 100 files sitting on my desk and I'm lucky to get to 50 of them before they go to sale."

SCHIAVONE: After nine months in which the swimming pool turned glean and the grass turned brown, the house ultimately sold for $467,000, almost $200,000 less than the original offer. It's a scene replayed on distressed assets across the nation, costing banks into the billions of dollars.

DAVID SMICK, AUTHOR: The banks are losing a lot of money with that. And their personnel is shrinking. They don't have enough to run their operations. But right now they're scared to death and all they are thinking is, stock pile capital.

SCHIAVONE: Economists say lost in the execution of the bailout so far, the original plan to tackle distressed properties head-on.

YUN: They need to focus back to the original intent of the T.A.R.P. funds were which was to address the very toxic mortgage- backed securities.

SCHIAVONE: To do that, banks need to hire more people to handle the workload. Many banks though, are, instead, announcing steep job cuts.


SCHIAVONE (on camera): Lou, the National Association of Realtors says right now, about 40 to 50 percent of all home sales are distress sales and due to a glut of these low-cost properties across the nation there's currently a 10-month inventory of available homes -- Lou?

DOBBS: Wow! All right, Louise, thank you very much. Louise Schiavone from Washington.

Well, ice storms, snow and heavy rains all across the country tonight. Hundreds of people evacuated a higher ground in Southern California. One to two inches of rain fell in the area. At least one death being blamed on the rain storms. Another person was killed in an avalanche as a Utah ski resort. The Salt Lake county sheriff says Heather Gross was buried for nearly an hour before her body was found.

North Dakota is in a deep freeze after a weekend blizzard across the northern plains. Temperatures dropped to minus 25 degrees in Dickenson, North Dakota. More than a foot of snow fell over the weekend.

And power is slowly being restored in New England after an ice storm there. More than a million customers were left without power at the height of the storm.

And up next here, Illinois lawmakers moving to push Governor Blagojevich out of office. We'll have more on that and I'll be talking with four of the best political minds in the country.

And why former Secretary of State, Colin Powell is blaming radio talk show host, Rush Limbaugh for the Republican Party's problems. We'll be examining that as well.


DOBBS: Well, with the inauguration now fast approaching there's no end of armchair quarterbacking about what the Republican Party should have done, could have done. The most recent criticism comes from General Colin Powell.


COLIN POWELL, FORMER SECRETARY OF STATE: I was impressed by an article that Mort Kondracke wrote recently that said, can we continue to listen to Rush Limbaugh? Is this really the kind of party we want to be? When these kinds of spokespersons seem to appeal to our lesser instincts rather than our better instincts.


DOBBS: Now the article that the general was so impressed with had this to say among other things, "how can the Republican party rebound? The first step would be to letting Rush Limbaugh, Sean Hannity and Laura Ingraham set its agenda." Now that took up quite a chunk of the conversation yesterday and it's bizarre because Rush Limbaugh was opposed to Senator John McCain as the standard bearer for the Republican Party.

Now for myself I don't quite understand why any Republicans, and I'm independent party, so I don't care what the Republicans or the Democrats do -- but I don't understand why the Republicans care what General Powell had to say. Because Powell was actually for McCain before he was against him if you will. He donated, $2300, the maximum, to the McCain campaign in the primaries. Then deserted the Republican Party and endorsed Barack Obama. So help me out. Why should he be an oracle for the Republicans? It defies reason, but so much does these days, right?

Joining me now for the best political thinkers around, Republican Strategist CNN Contributor Ed Rollins. Former White House political director under President Reagan and chairman of the Mike Huckabee campaign. Ed, good to have you here. And Pulitzer Prize winning columnist of "New York Daily News", CNN Contributor, Michael Goodwin. Michael, great to have you here. Democratic Strategist, CNN Contributor, Robert Zimmerman. Democratic National Committeeman as well, I shall always point out. Good to see you, Robert. And then our Washington DC bureau Beth Frerking she is senior editor of Beth great to have you with us.

Let me start with the Sunday crowd of the sage, the oracle. What happened? I thought Colin Powell was anathema to the liberal left because of what he had done in February of 2003, before the United Nations, and embracing and really saying "go get them" for war in Iraq. What's the deal?

ED ROLLINS, REPUBLICAN STRATEGIST: To quote Mort Kondracke who's a left wing liberal reporter and has been for many, many years, there are plenty of conservative columnists out there who have problems with the Republican Party and will give us proper guidance. And we need proper guidance; we need to get back in this game. And I have great respect for Colin Powell but Colin Powell has always been a Rockefeller Republican. There are not more Rockefeller Republicans. There aren't; they're gone. It's a different party today than what he may grew up with and what he was. So I think at the end of the day, you know, Rush Limbaugh certainly doesn't run our party but he's a powerful voice in America and some people listen to him, some people don't listen to him.

DOBBS: What do you think Beth?

BETH FRERKING, POLITICO.COM EDITOR: Well, you know I'd say -- I don't know that I would describe Mort as a real liberal columnist. I think he's a little more centered than that. But you know I think what you've got are some people that feel that -- and this comes from critics of both parties , that folks who are on sort of what they see as more of the extreme right or left, depending on which party you're talking about, as controlling the agenda, when, in fact, they feel like -- and I think these are folk that is look to folks like Colin Powell and the Republican party -- that there is sort of more of a center and we certainly are seeing...

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: ...well the (inaudible) that Colin Powell has been lost to the Republican Party and that he feels alienated from the Republican party, I think that really tells a story of where the Republican party stands today. The Democratic Party faced a similar problem when they were defined by a very narrow constituency. And it was only their ability to regain the center much as that motivated by...

DOBBS: ... who regained the center?

ZIMMERMAN: Well, if you look at this last election the Democratic Party certainly did. Much of it motivated by an anti-Bush agenda. But obviously Bill Clinton began the center for the Democratic Party too. That's really the battle for the middle ground.

MICHAEL GOODWIN, "NEW YORK DAILY NEWS": Well, Colin Powell, however I think, we have to look at him almost by himself because I think that he is respected across the country, both parties. But I think in fact if you trace his own history what you see is that the left turned on Colin Powell after the Iraq war went bad; blamed him for it. SO when he's out of the Bush Administration, begins to criticize the Bush Administration, sides with Obama. I think we also have to take, sort of, Colin Powell and look at him as a political figure. He's clearly fixing his relationship with the winning party now. And I don't think we can see him as a bipartisan figure anymore.

DOBBS: All right, well let's talk about somebody we can and that is Governor Rod Blagojevich apparently he's not going to resign. He's in - it's fun to watch Illinois politics. I have to say that, and I'm going to say it. I apologize. It's fun to watch it. Because you're watching Blagojevich, you're watching all of the antics with Rahm Emanuel. All of them part of the Chicago counting machine. Then along comes house speaker today; House Speaker Madigan. And then you think, well wait a minute; I've heard the name before. Oh yes, that's his daughter, the attorney general last week who's going after Blagojevich. I mean you guys have got something going on Illinois don't you?

ZIMMERMAN: Don't look at me and say you guys. I mean- and don't say Rahm Emanuel was involved in any shenanigans because I think...

DOBBS: ... I didn't say he was involved in any shenanigans, I said he was involved in this mess. By the way I was waiting on that report from the Obama team. They said it would be out in a few days.

ZIMMERMAN: Well, the U.S. Attorney also suggested it would be late for a few days as a part of their investigation.

DOBBS: See, they should have gotten it out Friday before there had been a problem.

ZIMMERMAN: But since 1971 over one statistic, over 1000 Illinois politicians have gone to jail since 1971. And that's quite a stunning...


ROLLINS: And 10,000 didn't go to jail. Look at the bright side.

DOBBS: Beth what do you think? How has the Obama team handled this? I love it; we're calling it the Obama team for God sakes.

FRERKING: That's right. They've been very calm and certainly the president-elect has been, you know, it would have been interesting to hear Patrick Fitzgerald to be the one to come out and say we want to hold that report for a week. Now I think it would help them to go ahead and come up and put some pressure on Fitzgerald and say, we need to go ahead and release that report now that shows that we weren't involved.

ZIMMERMAN: Beth, it is a criminal investigation and in fact


FRERKING: I still think it would have helped.

ZIMMERMAN: It would help for the media but I think for the public at large we are focusing on solutions to truly critical issues that would affect every Republic in the world so I think we can wait a few days and cooperate with the U.S. attorney. I think (inaudible). ROLLINS: No offense to my good friend, Robert, this has been a terrible distraction. And In think the quicker they can get it behind them, the better it is. They named a cabinet today in which, you know, it's some very significant people. It's a cabinet and very few people pay attention to that. The key thing here is they still want to get to the bottom of this. They want to know who did what and I think to a certain extent - I'm not in any way, shape or form accusing anybody in this camp in doing anything - but I think the reality is the quicker they get it out the better.

GOODWIN: And here's there is something they could do in the meantime short of putting the whole report out. And Rahm Emanuel himself could speak. I mean...


GOODWIN: So I don't think we have to wait for a report. I think the Obama people are being a little too calm about this. I don't think they recognize...

DOBBS: Michael, it's interesting you say that, but I didn't see anything too calm about the president-elect today. That man was being as careful, and he can be tediously careful as we all know, but I mean my God I thought he was being over the top careful with even his "uh's" today.

GOODWIN: Well, calm I think in a sense of just waiting, being prepared to wait. I think there is a kind of drip by drip here. Look this is not fatal. But I think it doesn't help them in this time when they're trying to focus on other things.

DOBBS: But Beth, just saying not fatal gives it so much weight. I mean, it's not only not fatal it also maybe outright trivial.

FRERKING: Well and it may be. It may be. And I think as we watch...

DOBBS: ...just go for trivial right now.

FRERKING: You know the behavior of the governor in Illinois is really sort of baffling. I mean, you know, you see him going on and going to work as if nothing is happening. I think people are sort of riveted. They are fascinated in sort of a bazaar way. And again, I agree with Ed. No one is saying that there is a connection there. I think the president-elect has been very clear in it. But, deal with it and move on. I think that's the thing of politics; you don't want to keep having this hang around you and it just makes more sense to say, here are the people who we know we looked at, we saw these conversations happened or didn't and here's the way it went. You know, get it out of the way and move on.

ROLLINS: Get him out of the way. I think that's the more important thing is get the governor out of the way.

ZIMMERMAN: Or at least takes shoe laces and belt away.

ROLLINS: Why? Is he going to throw the shoes?

DOBBS: We are going to be back with our panel as we avoid any further distractions as we analyze the clear course to follow here when Caroline Kennedy decides she wants to be a Senator. I'm sure that, well, you're going to want to know where everybody stands on - well not only Caroline Kennedy but anybody with a name. Jeb Bush wants to run in the Senate. Joe Biden's kid apparently needs a caretaker while he's on military duty. All sorts of things but we'll be back with that to tell you how important your family name to you prospects in politics.

A reminder now to vote in tonight's poll. The question is: Do you believe the Obama Administration will approve or weaken border security? Cast your vote at We'd love to hear from you. We'll have the results upcoming shortly.

And a reminder you can turn me on the radio Monday through Fridays for the Lou Dobbs Show. Among my guests tomorrow columnist Robert Simonson on why - "Newsweek" columnist Robert Simonson. We'll be talking about Obama's pledge to fight lobbyists. A pledge that he says will fail. And Donald Ritchie of the U.S. Senate historical office will talk about why gubernatorial appointments to open Senate seats well, are a little bit of a problem for corruption occasionally. Go to to get the local listings in your area. And we'll have much more in just a moment. Stay with us.


DOBBS: We're going to find out what everybody thinks about -- well, one of "Time" magazine's top journalists going to work for a top politician. What everybody thinks about Caroline Kennedy saying she wants to be a senator now.

First, coming up at the top of the hour, Campbell Brown, "NO BIAS, NO BULL." Campbell, what are you working on?

CAMPBELL BROWN, CNN ANCHOR: Hey there, Lou. Well, how many outrages do you think Wall Street can serve up in a year? In a few minutes we're going to dig into the latest mess. The scandal that' is costing investors at least $50 billion. We take a "NO BULL" look at why government regulators seem to have been a little bit clueless while it was going on.

Also, Barack Obama's late afternoon announcement about the scandal over his Senate seat. What's happening also to the Iraqi journalist who threw his shoes at President Bush. We'll look at whether there will be another Senator Kennedy soon as well. Lou, we'll see new a few.

DOBBS: You've got a deal. Thanks very much, Campbell.

We're back with Ed Rollins, Michael Goodwin, Robert Zimmerman, Beth Frerking. Let's go Beth to you first. broke the story that Jay Carney of "Time" magazine will go over to the president-elect's staff as communications director. Tell us about it. FRERKING: Well, Michael Calderon, our media critic had that story today. It had been announced earlier that Jay Carney was going to be leaving "Time." We just didn't know where he was going. Obviously, this raises questions and people are talking about it generally is this the kind of revolving door at that media criticizes; you know, government officials and lobbyists, for example. Or are former Congress member going to a lobbying teams? I don't know what the personal situation of Jay is. As you know, the industry is in a little bit of trouble. So I'm not going to comment on him personally. But I think it does raise the question and it does make the public question, well, was he already for him? You know, would that affect his coverage early on?

DOBBS: I think most people would say that there's no doubt that the national media would seem would be -- have been for Obama/Biden ticket. What do you think, Robert?

ZIMMERMAN: Well, let me tell you something, I'm not going to judge Jay Carney either.

DOBBS: Well, I'm not judging him. I'm actually having a little fun.

ZIMMERMAN: I think it's fair to have some fun with the way the media covered this presidential campaign. I think for a lot of folks there's millions of dollars of free advertising for Obama in many respects on the ticket. But you know it's interesting, I wonder if journalists might have a better perspective about government by being on the inside?

DOBBS: Well, definitely. We've got -- Beth, don't you agree -- we've got the best...


GOODWIN: One thing for Jay Carney, we can bet that with Biden's penchant for sort of going off the reservation; what Carney will be doing virtually every time he says something it will be "what the vice president meant to say."

ROLLINS: Jay is first rate journalist. We'll never hear from him again, I don't think. I mean I really think he ceased ending a first rate journalist career. It's just - once you go in that side, it's hard to go back.

DOBBS: Let me just - quickly, let's wrap up with Caroline Kennedy. You said that you dint' think it was such a hot idea last week and I commended you for that and I do again. I mean this is really extraordinary. The last name thing is the basis to go to the government and say you know, I want to be senator. What do you think of that?

ZIMMERMAN: Look, I think the reality here is there's one vote in this process that's the governor's. And Caroline Kennedy is going to have to make the case about how her experiences and her background suits her for the position. She's up against another other prospects who have served the state and the country very effectively.

DOBBS: Beth? Your thought?

FRERKING: Yes, I think that there's going to be some interesting discussions among those Congressional -- New York Congress people who feel like they've put in a lot of time. And I don't think they're going to go easily into the night.

ROLLINS: Not to cut her off, if she really wants to make a statement, she basically says I don't care who the governor appoints. I hope he appoints me. Two years from now, I'm going to run for the seat. That's a statement.

DOBBS: And Congressman Gary Ackerman said, "It seems the only qualification she's got is name recognition but of course J-Lo has that as well."

GOODWIN: And today Caroline Kennedy is really starting now to push openly so it will be interesting to see how much backlash there is against her. Because I think there's going to be a lot. I think the political establishment in New York does not want her to have this job.

DOBBS: All right folks, thank you very much. We appreciate you all being here.

FRERKING: Thanks, Lou.

DOBBS: Up next the results of our poll. More of your thoughts, next.


DOBBS: Tonight's poll results: Seventy-five percent of you say the Obama administration will weaken border and port security. Let's take a look now at some of your thoughts.

Edward in Florida said: "I think it's time for another Boston Tea Party, but instead of dumping tea in the Boston harbor we should dump politicians into the Potomac. Do you think the river can handle that much pollution?"

And Tom in Alabama: "I offer the following novel idea for the holidays to my fellow Americans. Buy American on everything you purchase this holiday. Find out where it was made and buy only American-made items support your fellow Americans by purchasing their goods. If only there were enough."

And Sal in Ohio said: I think it's about time that all the politicians took a pay cut and benefit cut like the rest of us."

Ian in New Hampshire said: "Lou, as a fellow independent, I want to thank you for keeping the fact that the bank bailout hasn't really helped one homeowner yet. The banks haves fattened their wallets and vaults with taxpayer money. It's time for our supposed representatives in Congress to wake up get out of office. It's up to us to make that happen."

Send us your thoughts at Thanks for being with us tonight.

Campbell Brown "NO BIAS, NO BULL" starts right now.