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Lou Dobbs Tonight
Big Government; Global New Deal; Border Drug Wars Rage On
Aired March 02, 2009 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Thank you Wolf.
Tonight the stock market plunging to levels not seen in more than a decade, the Dow Jones Industrials losing 300 points amid new concerns about the economy and the bailout and stimulus packages, we'll have complete coverage.
Also tonight, British Prime Minister Gordon Brown is demanding a global new deal to end the economic crisis paid for of course with all of the American money he could possibly get. Europeans who strongly criticize the United States apparently now look upon us more kindly.
And tonight you won't believe what state and local governments are planning to tax now. We'll be telling you about some of their wild and weird ideas, everything from pornography to iPods and beyond. We'll have a special report, all of that, all the day's news and a lot more straight ahead here tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Monday, March 2nd. Live from New York, Lou Dobbs.
DOBBS: Good evening everybody.
The Dow Jones Industrial average today plunged to the lowest level in almost 12 years. The Dow plummeting 300 points closing just above 6700, investors reeling from the impact of recession, its affect on the financial sector and the government's responses. The government's latest effort to prop up the insurance giant AIG utterly failed to improve the mood of investors.
The federal government promising AIG another $30 billion of bailout money, AIG has already received $150 billion and this is their third time to the public drop (ph). Meanwhile, President Obama today took another step toward what many call socialized medicine. The president nominating Kansas Governor Kathleen Sebelius to be the Health and Human Services secretary and to lead his plans for a massive overhaul of our healthcare system. Ed Henry reports now from the White House. Ed?
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, today the White House spokesman Robert Gibbs said the economy is in very bad shape and the president right now is searching for answers, solutions to try to fix it but part of the problem is the White House doesn't quite know where the bottom to all of this is. For example, Gibbs saying that the White House hopes that this is the end of the bailout money for AIG, but he said he's just not quite sure. The Treasury Department, of course, is about to launch the so- called stress test on major financial institutions in the United States. It could mean down the road AIG needs more bailout money. It could mean that other banks need bailout money. Another big issue, of course, for the president is to tackle his health care reform. The spiraling cost there so he decided to roll out his new Health and Human Services secretary today, Kansas Governor Kathleen Sebelius.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If we're going to help families, save businesses and improve the long-term economic health of our nation we must realize that fixing what is wrong with our health care system is no longer just a moral imperative but a fiscal imperative. Health care reform that reduces costs while expanding coverage is no longer just a dream we hope to achieve, it's a necessity we have to achieve.
(END VIDEO CLIP)
HENRY: Now, the health secretary post of course came open because of the fact that Tom Daschle had to step aside several weeks ago because of a tax issue. We've learned today there's yet another tax issue for a top Obama appointee Ron Kirk (ph) to be the U.S. trade representative. It turns out that in recent years he had been giving some speeches and basically taking some honoraria and was telling these groups to give the money directly to his alma mater, Austin College (ph).
The Senate Finance Committee however has determined that he should have taken this money from the group himself and then paid federal taxes on it and then passed it onto Austin College (ph). White House aides said that Ron Kirk (ph) has agreed to pay about $10,000 in back taxes and they believe this will not derail his nomination. They have gotten decent signals from Capitol Hill that this is not seen with as much criticism as the Tom Daschle situation, let's put it that way, and a hearing has been scheduled for Ron Kirk (ph) next week, Lou.
DOBBS: Yes, that almost rises to the level of silly but certainly trivial as a matter of bookkeeping entries when it comes to Ron Kirk's (ph) taxes, does it not?
HENRY: It certainly seems minor compared to some of the other ones we've seen from Tom Daschle to Timothy Geithner, who did get through as Treasury secretary, but about $10,000 is a far cry from some of the other issues and since his own tax preparer thought that he was on the right side of things, I think it appears and I express it appears at this moment from what we're hearing from Democrats and Republicans on the Hill that this should not stop his nomination, Lou.
DOBBS: Any reaction there in the White House? Any suggestion, any concern that President Obama's reach is exceeding his grasp in the midst of what is an absolute pre-fall in the stock markets and more bad news and the contraction of the economy that putting forward a three quarter of a trillion dollar initiative on health care is simply too much at this time?
HENRY: Well Robert Gibbs has consistently said that they're not going to let the daily fluctuations in the stock market determine how their economic plan...
DOBBS: Wait, wait, wait, wait, wait -- excuse me. With all apologies to Mr. Gibbs, there's no fluctuation here. This market has dropped 2,000 points in short order.
HENRY: Of course, but they're not going to let that be the only barometer, Lou. They're saying...
DOBBS: All right, then how about this as well. How about a better than six percent contraction in the economy? How about a $9- trillion expenditure by the federal government, the Treasury and the Federal Reserve?
HENRY: Certainly bad news all around. As where I started with Robert Gibbs saying the economy is in very bad shape. I mean how many times have we heard the president himself say that a crisis could become a catastrophe. He's used that kind of rhetoric to try and push his economic plans. He got a stimulus plan through already at $787 billion.
I think their response would be that they are hoping that once that money starts kicking in it will start turning around some of those -- some of that bad economic data. But obviously that's only a hope at this point because they don't know how quickly this is going to work and how well it's going to work. And that's why when you see AIG needing another $30 billion...
DOBBS: Yes.
HENRY: ... you're still waiting to see where the bottom here is, Lou.
DOBBS: Yes, yes, I think that it would be one way to express it waiting for a bottom. But at the same time, having really no clue whatsoever about the consequences of the public policy choices that are being made. Thank you very much -- Ed Henry from the White House.
President Obama tomorrow meets with British Prime Minister Gordon Brown at the White House. Brown, leader of Britain's Socialist Labour Party (ph), is pushing now for what he calls a global new deal. The so-called new deal would be funded by who else, the United States of America. Kitty Pilgrim has our report.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): British Prime Minister Gordon Brown wants the U.S. to spearhead a new deal style rescue package for the global economy. In his recent op-ed he recalls U.S./British ties and the era of Winston Churchill using all the Obama buzz words calling for high growth, low carbon recovery and applauding the American spirit of enterprise.
GORDON BROWN, BRITISH PRIME MINISTER: A global grand bargain is not now just necessary but it is vitally urgent.
PILGRIM: The irony is not lost on many who study U.S./European relations. With a couple of trillion dollars of world market losses the U.S. has gone from international pariah to potential savior. Nile Gardiner has studied European/U.S. relations for the conservative Heritage Foundation.
NILE GARDINER, HERITAGE FOUNDATION: In this case this is not going to benefit the United States at all. This is the European Union trying to dictate to America and the rest of the world how to solve the financial crisis.
PILGRIM: Financially Europe is in very tough shape. It's deeply divided with charges of protectionism among member states. With an unemployment rate in double digits in some countries, several banks across European have had to be nationalized. This weekend the EU rejected a bailout for Eastern Europe. This global financial consultant says there's no question.
NARIMAN BEHRAVESH, IHS GLOBAL INSIGHT: Europe could do a lot more. Europe could cut interest rates more. The European Central Bank could cut interest rates all the way down to zero essential like what the Fed has done. They could provide a lot more fiscal stimulus. They've only done it in a very, very small kind of timid way.
PILGRIM: In the U.S. the financial stimulus plan over the next two years is 5.5 percent of GDP, but it's only 1.5 percent in the U.K. and the euro zone (ph).
(END VIDEOTAPE)
PILGRIM: Now the White House today seemed to relish the prospect of being back in European good graces saying they will see Prime Minister Brown tomorrow and will continue the conversation to have everybody in the world on the world stage acting together to improve our economy -- Lou.
DOBBS: Well that sounds very -- I don't know, sort of warm and fuzzy. But as Ed Henry just reported and as is becoming increasingly obvious, there's no one in this administration or the previous that has a clue as to what is going to work in regenerating some energy in this economy.
PILGRIM: Well neither do the Europeans. I mean they haven't been able to cooperate or coordinate at all during this crisis and they have not done a very good job figuring out their own mess.
DOBBS: It could be an interesting march with the prime minister and the president shoulder to shoulder marching into the unknown. Thank you very much -- Kitty Pilgrim.
Well much more on the prime minister's push for a global new deal and whether it makes any sense at all later in the broadcast. We'll be joined by the two of country's leading economic thinkers.
Also ahead here, state and local governments proposing bizarre even crazy new taxes to tackle huge budget deficits, this instead of say cutting expenses.
And a search for two missing NFL players and another boater intensifying after the Coast Guard rescues one of their group off the Florida coast. We'll have the very latest for you. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: The Coast Guard will continue searching through the night for two NFL players and another boater who are missing off the coast of Clearwater, Florida. One man has been found clinging to the overturned boat. He was rescued this afternoon. The three other men who were with him include NFL players Marquis Cooper and Corey Smith. They are still missing two days after they went out on a fishing trip. The rescued boater says the boat flipped over during a storm Saturday evening.
There are new details tonight in the beheading of a woman in upstate New York. The woman was allegedly killed as her young children and stepson waited in a nearby car. (INAUDIBLE) Hassan (ph), a Muslim television executive beheaded his wife, Zia (ph), last month. Hassan (ph) then called police and led them to her body. He is charged with second-degree murder -- second-degree because apparently he did not premeditate her murder. Hassan (ph) and his wife founded a television network to counter negative stereotypes of Muslims.
Much of the East Coast tonight still digging out after a late winter storm over the region, the storm dumped overnight about a foot of snow along the northeast, as much as seven inches of snow falling in Boston forcing flight delays and school closings there. Four deaths in three states have been blamed on the storm. That same storm hammering the southeast before making its way northward, as much as 10 inches of snow falling in South Carolina. The storm knocked out power to tens of thousands of people, many of them still tonight without power.
States all around the country are proposing given the economic crisis and the shortfall of revenue bizarre what some might call even crazy new tax schemes. They include imposing a series of taxes on almost anything and everything ranging from pornography to plastic bags -- Ines Ferre with our report.
(BEGIN VIDEOTAPE)
INES FERRE, CNN CORRESPONDENT (voice-over): It is after all the world's oldest profession, so one lawmaker in Nevada says he's ready to consider taxing the state's legal brothels, so-called sin taxes are a tempting way to close state budget deficits. Florida legislators are looking at the taxing example of a $5 pole tax on strip clubs. In Washington, a proposed 18.5 percent tax against porn magazines and sex toys caused so much outrage that the bill died in committee.
CLAIRE CAVENAUGH, CO-OWNER, BABELAND: When the state comes in and levies a huge tax on what you're doing just because it happens to be about sexuality that is un-American. FERRE: The taxing frenzy extends beyond porn. In New York State, 15 billion in the red, Governor Paterson proposed a so-called iPod tax levying digital content downloads and a four percent tax on ski lift tickets, golfing and movies, the industry that's actually seen increased ticket sales this year in the midst of a recession.
BRIAN SIGRITZ, NATL. ASSOC. OF STATE BUDGET OFFICERS: They are trying to avoid the major increases and the personal income taxes and the sales taxes that would affect everyone.
FERRE: In New York City, Mayor Bloomberg hopes to raise 18 million by making shoppers pay a nickel for plastic shopping bags; a proposal in D.C. would charge five cents for plastic or paper bags. But some lawmaker groups say narrowly targeted taxes are bad policy.
JOSEPH HENCHMAN, TAX FOUNDATION: If taxes do have to go up, they should go up on everyone; the pain should be shared equally rather than trying to focus on unpopular groups. That's poor tax policy.
FERRE: If it looks like a tax and sounds like a tax, it probably is a tax even though that's not what they call a plan in Connecticut to double license fees for fishing and hunting.
(END VIDEOTAPE)
FERRE: And the finances are so bad that experts say you can bet that state and cities are going to tax anything and everything that they can. Everything is on the table, Lou.
DOBBS: Well with these sort of ironic initiatives under way, you can expect it I guess, but have these folks -- do they understand there's a recession that adding taxes really is recessionary in its impact?
FERRE: There's definitely I mean outrage from people who are saying how can you tax all of this stuff? I mean even in Oregon you have got initiatives to tax -- to increase taxes on beer, in Wisconsin the same. It's just -- people are definitely outraged but they're saying well look, we need this money. We need to use it for certain programs, et cetera.
DOBBS: And you have taxpayers all over this country and there are fewer and fewer of us, I guess, in point of fact, but at some point does it occur to someone that it's time to quit taxing and start stimulating the economy by, say, leaving taxes alone and perhaps curtailing some of those payrolls, four million jobs lost in the private sector, 150,000 added in the public sector. I wonder if there are any possibilities there.
FERRE: And one interesting thing is that one of the people that actually spoke in this, a co-owner of Babeland, she said, you know, you think that for example the adult entertainment industry is so huge, but there's small businesses that are involved and we're a small business and our customers make less than 50,000 a year.
DOBBS: Amazing. All right thank you very much, Ines. Appreciate it -- Ines Ferre.
Hundreds of people marching through Phoenix today, well actually Saturday. Protesting the Maricopa Sheriff Joe Arpaio's enforcement policies on U.S. immigration law and the federal program known as 287- G. That program gives local officers the authority to enforce immigration law. The protesters were calling for an end to what they call the sheriff's racial profiling tactics.
Sheriff Arpaio says he will not stop enforcing immigration law. He denies any charges of racial profiling and by the way, just to be really clear about it, the U.S. Justice Department has looked at this issue on more than one occasion, has found no, no racial profiling, period. There is, by the way, for some reason the national liberal media hasn't been reporting that, but there it is.
There is new evidence tonight that Mexico is producing more drugs than ever including heroin and opium. Mexico remains the principle source of marijuana, cocaine, heroin and methamphetamines into the United States. But incredibly Mexico's seizures of drugs are declining while drug cartel violence is soaring. I guess they missed that one over on "60 Minutes", but we've got it here as usual. Casey Wian has the report.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Of the 20 countries identified by the State Department as major producers of or transit points for illicit drugs, only one shares a border with the United States. In Mexico tens of thousands of troops are waging daily battles to reclaim portions of their country from drug cartels.
DAVID JOHNSON, BUREAU OF INTL. NARCOTICS: The United States is committed to support these efforts including further steps to confront and dismantle the drug cartels that are responsible for smuggling most of the cocaine, heroin and methamphetamine consumed within the United States.
WIAN: The State Department's international narcotics control strategy reports that production of marijuana, opium and heroin are all rising in Mexico. Seizures of most (INAUDIBLE) drugs are down reported tributes of that to law enforcement pressure forcing cartels to seek alternate distribution routes. Still the Mexican government arrested nearly 27,000 people linked to drug trafficking last year, three times as many as in 2003.
EDUARDO MEDINA MORA, MEXICAN FOREIGN MINISTER: We are not defining the objective (INAUDIBLE) disappearing the cartels or the drug trafficking. This is beyond our possibilities.
WIAN: Instead Mexico says its goal is to weaken cartels and strengthen local police to reverse the balance of power that now favors drug traffickers. U.S. border states are increasingly feeling the effects as cartel violence spreads north, prompting new Attorney General Eric Holder to say that a renewal of the Clinton era assault weapons ban would help stem the flow of guns to Mexico. REP. LAMAR SMITH (R), TEXAS: You don't solve the problem with gun control. You solve the problem with more personnel, better secured borders, more fences, that's the way you stop the drug trafficking.
WIAN: More than 6,000 people were killed in Mexico's drug cartel wars last year. This year already more than a thousand have perished.
(END VIDEOTAPE)
WIAN: The Mexican government...
(AUDIO GAP)
WIAN: ... it won't make significant (INAUDIBLE) against drug cartels unless drug consumption in the United States is reduced. The State Department says the U.S. federal government alone will spend $14 billion this year on programs to reduce demand and treat drug addicts -- Lou.
DOBBS: You know hearing those kinds of arrogant and insipid remarks from -- for a large measure of a government that is as corrupt as that of Mexico. It's really irritating and then to hear a U.S. attorney general match up with his counterpart in Mexico, lamenting the Second Amendment, I mean these are two despicable statements by two men who should be acting responsibly in their positions and there seems to be no -- no real protest. But the idea that Eric Holder would talk about the Second Amendment being jeopardized to the convenience of the Mexican government, which is at best incompetent and at worse corrupt.
WIAN: Yes, they seem to be ignoring the opinions of the U.S. State Department, which pointed out at this press conference announcing this new intelligence report that one of the reasons that those arms are getting through to Mexico is because Mexico has failed to secure its side of the border. There is virtually no inspection of vehicles going across the border into Mexico.
DOBBS: Let's help -- let's help the Obama administration just a little here if we may Casey. Here's the deal -- $25 billion in remittances back into Mexico as a result of exporting poverty and low skill labor into the United States, 25 to $45 billion a year taken into Mexico as a result of the illicit drug trade into the United States. Would you like to add anything to -- to the lesson plan Casey?
WIAN: Well the interesting thing is that as we pointed out, Mexico is growing more drugs, shipping more drugs than ever. The U.S. reported last year that most drug seizures are down. They say that's a sign of progress. You wonder where all of those additional drugs are going if the U.S. is seizing less of them at the border, Lou. It's clearly a problem that's escalating not getting better.
DOBBS: And a definition of assault weapons for the Obama administration, those are semi automatic weapons and -- and partner, the Mexican drug cartels are using far more sophisticated weaponry than that. We thank you very much Casey as always, Casey Wian reporting.
Up next here, one of our closest allies demanding a global new deal for the world's economic crisis. Did I mention you'll be paying for it? We'll talk about that with two of the country's leading economic thinkers and giant leaps for communist China's space program and the United States space program is -- well we'll have the report next. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Communist China advancing its space ambitions over the weekend landing a probe on the moon. That landing part of a three stage moon mission, but as China celebrates its success NASA is reeling from its recent failures and lack of imagination and leadership -- Louis Schiavone with our report.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Communist China this week moved a step closer to its goal of a manned moon mission, a planned crash landing of its orbiter into the surface of the moon -- time to worry?
RICHARD FISHER, INTL. ASSESSMENT AND STRAT. CTR.: We simply do not know enough about China's space program and especially the military priorities of its space program to rule out expanded opportunities for conflict in space.
SCHIAVONE: So how is NASA rising to the challenge? Even as the U.S. space agency was celebrating its 50th anniversary last year, it was contemplating the loss of a critical tool bag in a space walk, the retirement of the space shuttle program, dependent upon the Russians to get to the international space station and concerns in general about the soaring cost of space exploration.
Former NASA administrator Michael Griffin (ph) warned late last year that without more robust funding quote "the U.S. space program will again be mired in Earth orbit as it has been for the 35 years since Apollo with no American option to define and extend the human frontier in space", end quote. Lawmakers say they are counting on President Obama to foreclose such a fate.
SEN. BILL NELSON (D), FLORIDA: The Chinese obviously are very aggressive about space, but if you're talking about them being able to get back to the moon, they've got a long way to go. It's not at all certain that they can get there by 2020, but the question is, what is America going to do?
SCHIAVONE: A spokesman for the Chinese government tells CNN quote "the Chinese lunar program is conducted in a peaceful and cooperative spirit. The project is also very transparent", end quote.
(END VIDEOTAPE)
SCHIAVONE: Said one defender of NASA, what is the space race? We went to the moon in 1969. We won. But he also noted the competition is ongoing with India and Japan also orbiting the moon, along with private contractors who are sizing up the challenge at the same time. Lou?
DOBBS: Louise, thank you very much -- Louise Schiavone.
Debt collectors preying on victims of this economic crisis and we'll have that story. And British Prime Minister Gordon Brown, well he wants a global new deal, such a deal. We'll be talking about it with two of the best economic thinkers here next. Stay with us.
(COMMERCIAL BREAK)
DOBBS: British Prime Minister Brown tomorrow will meet with the president to support what he's calling a global new deal, of course, funded by the United States -- joining me now two of the worlds leading economic thinkers. Pat Choate, author of the important book, "Dangerous Business", David Smick who wrote the provocative book, "The World Is Curved: Hidden Dangers to the Global Economy". Good to have you both with us.
Let me start out, let's go straight to Warren Buffett, gentlemen, if I may. If we can put this quote up because it's a beauty from Warren Buffett in a letter to his shareholders saying in part, "The economy will be in shambles," if we could put that up, please, how we feel, we don't have it. So I'd better not wait for you.
"The economy will be in shambles throughout 2009 and for that matter probably well beyond." I thought George Bush was talking the economy down, I thought Barack Obama was talking it down, Warren Buffett just got into league with them, didn't he?
PAT CHOATE, AUTHOR, "DANGEROUS BUSINESS": Sure did.
DOBBS: What is the point of that statement? Because frankly Warren Buffett was telling us 2,000 points ago that we should be investing in the stock market in this country.
DAVID SMICK, AUTHOR, "THE WORLD IS CURVED": Exactly. At one point he was saying get into the market at the precise time that he was not in the market. I think there are a lot of people troubled. I think that if you're the average American, you have to be really confused. About 10 days ago we were told we were in a depression, that was coming out of the White House and then we just saw a budget in which they predicting between three and three and a half percent growth for next year and then four and five percent growth after that. I think people know in fact and I think one reason the stock market is reacting the way it is saying Washington is basically fudging the numbers. They're spending $4 trillion and they are only going to have about at best $3 trillion in new tax revenue.
DOBBS: Is it really worse than that? They're not just fudging the numbers. They haven't got a clue what the numbers are.
SMICK: They're picking it out of the air.
CHOATE: Well, they're estimates on what the economy is going to be doing. They are estimating 10 percent unemployment next year. I think we'll see on Friday that that is a low ball estimate on this. Basically what the Obama administration is doing is trying to ignore the recession and impose on top of it the plan that they had a year, year and a half ago going in. They're not going to be able to afford it.
DOBBS: This looks like a social program, gentlemen. It doesn't look like an economic response at all. We've seen about $9 trillion put forward by the Bush administration and the Federal Reserve combined. And in six week's time a trillion dollar spending bill, biggest in American history. Passed by this administration. The continued intervention by Federal Reserve. We've seen as best can be discerned at least by my eyes, zero consequence, zero positive result from any of the actions taken to this point.
SMICK: I can tell you what's frustrating is that Washington is talking about all of this stimulus, about education, about all of these positive things and they're not talking about the one issue that could take us all down and that's the banking issue. If you listen very carefully, they're not talking about the banking issue because there's no easy solution to this issue.
DOBBS: I have got an easy solution. I can't understand -- I want you gentlemen to tell me. AIG doesn't get a dime. You put it into receivership. You announce that all of the parties, counterparties to derivatives are done. There will be no transaction. Everything is suspended and we'll deal with the real economy and we'll come back to you folks when we want to play with you but until then you're done. What's the problem with that, Pat Choate?
CHOATE: Well, you do two things. You would say we'll unwind those derivatives that have real assets and those that don't have real assets or are speculative, sorry, you lose. Basically what the Obama administration doesn't want to do and has got to do is wipe out stockholders in many of the national banks and in doing that they have to --
DOBBS: How about wiping out management, too?
CHOATE: Absolutely. Basically I think that what's got to be done is take these 19 banks, make a quick decision, this lingering is killing us. Remember FDR closed the banks and one week later he said those that can stay in business and those that cannot. One week he did this. We need to impose that same sort of standard. Then say for those that are going to be nationalized, we're going to put in solid management. We'll get rid of the managers. The policy directors. Etc. I would do something else. I would move it out of Treasury which has been far too political and put it into the FDIC, create a special unit and put someone like Bill Isaac in charge to really bring those banks into shape.
DOBBS: And Sheila Bair has been saying many of the right things I believe as well. And let me turn real quickly -- David, you will get the last word because we're running out of time. David Smick?
SMICK: I think that they're exactly right. I think the one reason the administration is avoiding this is that they're in paralysis. And what's happening is the market is now de facto nationalizing the banks. When the market -- when the stock market takes Citigroup stock down to slightly more than a dollar, which is what happened today, that means the administration is behind the curve and they've got to get moving. The market is going to do the job for them. And yet they're not going to be able to have control over this situation.
The metaphor for Citigroup and banks in general is Citigroup stock is now - it costs less than an ATM fee. Gentlemen, thank you very much. Pat Choate, David Smick, we appreciate it.
We would like to know what you think. Our poll question tonight is do you think the United States might consider solving its own economic problems before taking on those of the world? We would like to hear from you. Cast your vote at loudobbs.com. We'll have the results here later.
Coming up here, your rights and your freedoms guaranteed by the constitution. The Obama administration has some other ideas. We'll have a full report on that.
And debt collectors pushing the limits of the law rather dishonestly in point of fact. We'll have that exclusive report here next.
(COMMERCIAL BREAK)
DOBBS: All across this country tonight there are people facing overdrafts or they bounce a check and they could be charged hundreds of dollars in legal fees and they may think they're being chased down by prosecutors but it turns out they're not. All of those telephone calls and all of those letters with fancy letterheads from attorney generals and other prosecutors are actually originating with private debt collectors disguising themselves as law enforcement and incredibly it's all legal. Our special investigation unit correspondent in corroboration with the online investigation organization propublica.org has our exclusive report.
(BEGIN VIDEOTAPE)
DREW GRIFFIN, CNN CORRESPONDENT (voice-over): It happened to Michelle O'Neil and her husband Mike. Both said they wrote checks with insufficient funds as they wrote from Florida to Michigan. It was a mistake but letters and phone calls soon followed.
MICHELLE O'NEIL, WROTE BAD CHECKS: They told me that they were part of the attorney general's office.
GRIFFIN: In California, 21-year-old Jennifer Osborn wrote a check to the bookstore and her math, she says, was wrong.
JENNIFER OSBORN, COLLEGE STUDENT: Well, I called them and said, what's going on and they basically told me I had to pay the money and go to the class or I'd be arrested. GRIFFIN: She got this letter with the district attorney's offense seal on the letterhead. Mike O'Neil thought this phone call was from the state attorney's office in Florida.
UNIDENTIFIED MALE: This is the State's Attorney Bad Check Restitution Office. Our office has an official matter requiring your immediate attention.
GRIFFIN: But none of the letters or calls were from local prosecutors. They came from a private debt collection agency named ACCS, a Southern California firm hired by about 150 district attorney's offices across the nation to collect bad checks.
DEEPAK GUPTA, PUBLIC CITIZEN: They are renting the prosecutor's seal and using they're that name and authority to collect bad check debt.
GRIFFIN: The fees are large. Mike O'Neil says he wrote a $14 bad check to a CVS drugstore in Florida, that cost him $285.
MICHAEL O'NEIL, DETROIT CONSTRUCTION WORKER: They make you feel like a criminal. They try to scare you. They use, again, scare tactics, harassment, everything. And you really take a look at it. Seriously the attorney general of Florida after me for a $14 returned check.
GRIFFIN: The company splits the collection fees with prosecutors and then as part of its contract with local D.A.s requires even more. Mike O'Neil and Jennifer Osbourn had to take the company's money management class, the fee $160. All of it going to ACCS.
What was that like?
OSBORN: It was boring. It was pointless.
GRIFFIN: The watchdog group Public Citizen filed class action lawsuits against ACCS for deceptive debt collection practices claiming that you really only need to pay the fee to those classes. You don't even have to show up.
GUPTA: ACCS doesn't really doesn't really care about these classes about teaching people how to balance their check books. It's really about collecting the fees.
GRIFFIN: And those classes are required under some state laws in court filings, ACCS says the classes are successful in preventing repeat offenders and the company denied deceptive practices. But the firm would not talk to CNN on camera suggesting we talk to local prosecutors instead. So we did.
SHARON MATSUMOTO, ASSISTANT D.A., L.A. COUNTY: This particular function is something that we can legally outsource to another company who is experienced in doing this.
GRIFFIN: Sharon Matsumoto runs the program for the Los Angeles District Attorney's office. Last year she says ACCS collected $2 million on 80,000 bad checks. She says without the private contract, the D.A.'s office never could have got that money back to merchants. She hasn't heard complaints and neither has Massachusetts Congressman Barney Frank.
REP. BARNEY FRANK, (D) MASSACHUSETTS: This is the first anybody has called it to my attention.
GRIFFIN: It was Frank who helped change the law allowing private debt collectors to work for local prosecutors. Something the prosecutors wanted.
FRANK: The way it had been represented to us, this was as an alternative to criminal prosecution. So I would be surprised if someone is going to be criminally prosecuted for one check of just a few dollars.
GRIFFIN: That's why Jennifer was surprised and scared when she was threatened with jail if she didn't pay up the $360 ACCS was asking for that $92 check she bounced at the campus bookstore. An honest mistake that she says that she tried to immediately fix.
OSBORN: I'm disappointed in the system. It shouldn't happen.
GRIFFIN: The government should not be in business with a private collection agency?
OSBORN: No way. Not at all. It should not happen that way.
GRIFFIN: Drew Griffin, CNN, Santa Barbara, California.
(END VIDEOTAPE)
DOBBS: Perhaps part of the moral is that the Congress should quit working for the banking industry itself. By the way, ACCS itself recently filed for chapter 11 bankruptcy only a day before a judge was to hand down a ruling on the class action lawsuit against that company. That of course puts the case on hold. Congressman Frank told me on my radio show earlier today the law he helped pass needs to be looked into.
Up next, another assault on your right to own and bear arms. We'll tell you what the Obama administration wants to do now. Hang on. It's all here now. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: Your rights are under assault with the First Amendment colliding with the Second in some case. In Tennessee a newspaper there published a searchable database of people with handgun permits. Is this the public's right to know or is it a dangerous violation of privacy. Bill Tucker is with me now. Bill, what's going on in Tennessee.
BILL TUCKER, CNN CORRESPONDENT: Well, it's interesting, Lou. If you want to know if a person has a right to carry a gun in Tennessee, there is a Web site that will tell you. It is posted and maintained by the "Commercial Appeal" newspaper of Memphis. It is highly controversial. It sparked sharp debate over public availability of the information and the editor of the newspaper says they are providing this database because they found examples of people getting gun permits even though they weren't eligible to get them.
(BEGIN VIDEO CLIP)
CHRIS PECK, "THE COMMERCIAL APPEAL": We're not against Second Amendment, we're not against permit to carry in any way. We are for making sure the government is transparent and accountable in what it does and what we would like to do is make sure the list stays open so that at an appropriate time someone can go and check on the government.
(END VIDEO CLIP)
TUCKER: Now there are several bills now under consideration in the Tennessee State House which would limit the public access to the information. Those who support restricting the information like State Senator Majority Leader Mark Norris, say they are concerned about what they call gun control at the point of a pen.
(BEGIN VIDEO CLIP)
MARK NORRIS, TENNESSEE STATE SENATE: Look, under Tennessee law as it is presently written, the Department of Safety gathers the information for handgun carry permits just as they do for driver's license permits. The latter is not open to public record. And I don't think that handgun carry permit application information should be treated any differently than driver's license information.
(END VIDEO CLIP)
TUCKER: States that don't allow access are in the majority. Twenty seven don't allow data base access to the public. Two states, Mississippi and Georgia do have open records, the remaining states don't have any laws related to right to carry permits. Lou, it's very likely that it will pass the legislature in Tennessee because the Republicans control it, these are their initiatives but they have a Democratic governor and it's not clear whether he would sign it.
DOBBS: But clear it up for me. Are we going to see the records open or are we not?
TUCKER: They're open now. We don't know whether we'll see them closed or not. The legislature will pass the bill, but the governor hasn't indicated whether he'll sign it or not.
DOBBS: All right, these controversies go, this one seems a relatively mild, I suppose. Bill, thank you very much. Bill Tucker.
Well, the Obama administration is renewing its call for a ban on assault weapons they call. Attorney General Eric Holder suggesting this is somehow helping crimes committed by the warring drug cartels in Mexico. The Second Amendment apparently getting in the way of the Mexican government. On Friday, the executive vice president of the National Rifle Association responded saying restricting Americans' rights is no way to fight crimes across the border.
(BEGIN VIDEO CLIP)
WAYNE LAPIERRE, NATIONAL RIFLE ASSOCIATION: The lie is if we would just surrender more of our Second Amendment, Mexican drug cartels couldn't get the guns they get to terrorize their people and ours. I mean, give me a break.
(END VIDEO CLIP)
DOBBS: Wayne LaPierre joins me now. He is the executive vice president of the NRA joining us now from Las Vegas. Wayne, this is getting -- well, first, let me follow with Bill Tucker's story. That is having open records on a carry license. I'm not sure one way or the other how I feel about that. How does the NRA feel about it?
LAPIERRE: We feel as people do in Tennessee that it violates law-abiding people. That's the best way I know to describe it. People feel violated by what the newspaper has done. There are women on that that have gone out and got right to carry permits because they're being stalked. They don't want people to know where they live, they don't want people to know they have a permit because some of the people are bad people who intend to do harm to them.
DOBBS: That newspaper, as best you know, are they being cute or are they really talking about the public right to know? Are they publishing, say, lists of sex offenders and other folks, or are they just worried about folks that -- the editor said he wasn't opposed to the Second Amendment. I love that. Somebody stands up and says they're not opposed to the Constitution. Makes you want to give them a big warm hug, doesn't it?
LAPIERRE: I tell you. I could care less what they do with sex offenders. Those people have committed a crime. But it's a constitutional right for law-abiding people in this country to own a firearm. It's the height of journalistic irresponsibility to violate all of the good honest people in their town and put their name in the paper that they are exercising this constitutional right and I hope the legislature stops it. I know the people want it stopped.
DOBBS: Well, if the people want it stopped, I suspect it will get stopped. One of the things, I'm tired -- I don't know about you. I'm tired of people whining about stuff and not getting something done. We've got people in this country who have just about had a bellyful. But it's time to stand up and say you're going to go to the polls and get involved in your local community and you're going to kick somebody's rear end at the ballot box. That's the way it's got to be done.
LAPIERRE: I totally agree with you.
DOBBS: Let me turn to this assault weapons band and Eric Holder. First of all, Eric Holder certainly one of my favorite people in very short order. Listen to what he said about the crisis across our border.
(BEGIN VIDEO CLIP)
ERIC HOLDER, U.S. ATTORNEY GENERAL: The Mexican government has been courageous in the last two years to directly confront the drug trafficking cartels and I stand before you today to say that we are ready and willing to continue the fight with our Mexican counterparts against these violent enterprises.
(END VIDEO CLIP)
DOBBS: Can you -- what possible impact would a ban on assault weapons in this country have on -- on Mexico? As best you understand it.
LAPIERRE: It would have absolutely no impact at all. These Mexican drug cartels down there, I mean, they're terrorist operations. They're the equivalent of terrorist operations hiding out in Pakistan over the Afghan border. They get whatever they want. They break any law they want. They rape, they rob, kill, murder, kidnap. They could care less about law.
DOBBS: Let me ask you this -- in the 10 years that the assault weapon ban is in place, so-called assault weapons ban, what's was its impact on crime?
LAPIERRE: It had no impact on crime. That whole bill was bogus and phony. The Clinton administration sold it by putting a bunch of guns on that list that were no different than any other gun. They perform the same, they function the same. They didn't make bigger holes, the didn't shoot faster. They weren't machine guns. All of that was not true. They were not the choice of criminals.
DOBBS: Wayne, we thank you very much for being with us as always. Wayne LaPierre of the NRA.
LAPIERRE: Thanks for having me, Lou.
DOBBS: In a very serious fight now. Thank you very much.
Coming up at the top of the hour, CAMPBELL BROWN, NO BIAS, NO BULL, sitting in for Campbell is Roland Martin. Roland, it's still called NO BIAS, NO BULL?
ROLAND MARTIN, CNN CONTRIBUTOR: Absolutely. I can handle the "NO BULL" part, now I'll mess (ph) with the "NO BIAS" part as well, Lou.
Tonight, it's the battle for the soul of the GOP, Rush Limbaugh's pointed attacks on President Barack Obama have put him in odds with the man who has been elected to run the Republican Party. Who's really in charge? And how does the White House figure in all of this. We'll have the latest on that.
Plus insurance giant AIG is getting a new $30 billion lifeline from the feds. I know, Lou, you support that. On top of the $130 billion it already received. Why do they need more dough? And when will it end? Ali Velshi will be here to explain. Plus, I have a few things about the nonsense I've been hearing about Michelle Obama's arms. Not the right to bear arms, Lou, but her actual arms. All that at the top of the hour -- Lou?
DOBBS: Keep the bias out of it and all of that bull out of that. You said that $30 billion I support? I don't support any of it. I'd like to have the $180 billion back. I'd like to see those fellows run the business without the taxpayers' help just to keep it fair. Roland, we'll look forward to it.
MARTIN: I figured you would like that.
DOBBS: See you at the top of the hour. Roland Martin.
Up next, we'll have the results of our poll. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Our poll results, 88 percent of you say the United States just might consider solving economic problems before taking on those of the world.
And time for one quick e-mail. Johnny in Georgia says: "Hi, Lou, please know that down here the definition of gun control is being able to hit your target."
I love that. Send us your thoughts at loudobbs.com. And a reminder to join me on the radio Monday through Friday for "The Lou Dobbs Show". Loudobbsradio.com to get the local listings in your area. And WOR 2:00 to 4:00 p.m. Monday through Friday.
Thanks for being with us tonight. CAMPBELL BROWN, NO BIAS, NO BULL starts right now with Roland Martin -- Roland?
