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Lou Dobbs Tonight
Americans Fight back; Chinese Hackers Attack; Nuclear Outrage; Amnesty Agenda; Rights under Attack
Aired April 08, 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: Good evening everybody.
American sailors showing the rest of the world how to fight back against pirates -- the crew of a U.S. flag cargo ship retaking their ship after it was seized by Somali pirates, but those pirates are still holding the ship's captain hostage tonight. We'll have the very latest for you.
Also communist China is sharply escalating its cyber warfare again the United States, planting malicious software in our electrical grid. Some say communist China now has the ability to sabotage or even destroy key elements of our national electrical power infrastructure.
And we have bad news for those in the Obama tonight who want to strip American citizens of Second Amendment rights. A Gallup poll shows support for bans on handguns and restrictions on firearms has fallen to an all-time low.
The economy, bailouts and bonuses, I'll be joined by former AIG CEO Hank Greenberg (ph) and influential Congressman Thaddeus McCotter, chairman of the House Republican Party Committee will also be here to tell us how we can save the automobile industry.
We begin with a pirate attack on a U.S. flagship off the coast of East Africa. American sailors doing what no other merchant ship crew has done in living memory. They managed to retake their ship from the pirates; crewmembers overpowering the pirates who tried to hijack the ship more than 300 miles off the coast of Somalia. But those pirates now adrift in a lifeboat still hold the ship's captain hostage. Tonight a U.S. guided missile destroyer, the "USS Bainbridge" (ph) is heading to the scene at full steam. Pentagon correspondent Chris Lawrence reports now on the rapidly developing story.
(BEGIN VIDEOTAPE)
CHRIS LAWRENCE, CNN CORRESPONDENT (voice-over): The "Maersk Alabama" was cruising nearly 300 miles off the eastern coast of Somalia, it's bound for Mombasa, carrying 5,000 tons of food for humanitarian aid when pirates moved in on the "Alabama's" 20-man crew which includes second in command Shane Murphy (ph) they sent a global distress message.
JOE MURPHY, FATHER OF CREW MEMBER: Which was received by the United States Navy and the U.S. Navy responded immediately. The problem is that the Navy was almost 200 miles away. They used evasive maneuvers to keep the pirates off.
LAWRENCE: For hours it works but Wednesday morning the ship called again. They've been boarded by four pirates.
MURPHY: They held the crew in a secure area. They shut down all communication. No further communications.
LAWRENCE: But hours later, crewman Murphy calls his wife to say, "Honey, I'm alive. I can't speak for very long, I just want you to know that we've taken down one of the pirates." By phone from the Alabama, a crewman describes how it happened.
KEN QUINN, CREW MEMBER ON MAERSK ALABAMA (via phone): When they border a ship they sink their boat so the captain talked them in to getting off the ship with our life boat. But we took one of their pirates hostage and we did an exchange.
(END VIDEOTAPE)
LAWRENCE: Yes, so what happened was the three pirates took the captain with them on the life boat. The crew tells us it was supposed to be an even swap. The crew gives over the one pirate they had in custody. The pirates hand over the Alabama's captain but the crew says it didn't work out that way because the pirates didn't keep up their end of the bargain. They handed over the pirate but the pirates kept the captain.
They have been negotiating with them trying to offer them food, anything to get him back but it wasn't working. And pretty much they have just been holding out until that Navy destroyer got there. The latest word we've got right now is that the ship is very close and we can expect some news very soon. Lou.
DOBBS: The Bainbridge (ph) close, do we have any idea -- obviously great concern for the captain in that boat with those four pirates. Do we know, first, that he is OK? And are they in radio contact with those pirates -- that is the crew of the Maersk ship? Are they in contact with them visually, verbally or is it by radio?
LAWRENCE: Yes, a lot of different ways, Lou. First, the military has been monitoring the situation with a P-3 surveillance plane. So that has been flying over keeping an eye down on the ship. Also they've been in verbal contact by phone with the crewmen who do have control of the actual Alabama. Also, one of the crewmen said that the captain when he went on this lifeboat took one of their two- way radios with him so it appears that he is also in contact with the rest of his crew that's still on the ship.
DOBBS: And -- let's just hope the Bainbridge (ph) gets there's and this is resolved satisfactory and safely for the captain of the "Maersk Alabama". Chris Lawrence, thank you very much.
LAWRENCE: You're welcome.
DOBBS: As always appreciate it. The number of pirate attacks off the coast of Somalia has risen sharply over just the past two years. Last year there were more than 130 attacks on merchant shipping, mostly in the Gulf of Aiden (ph). More than double the number in 2007 and already this year there have been dozens of attacks on ships near the Somalia Coast, 15 of them successful attacks despite the presence of warships from the United States and other nations operating in the Gulf of Aiden (ph).
The "Maersk Alabama" owned by the U.S. subsidiary of the Danish shipping line sails under the U.S. flag. Only 422 merchant ships fly the American flag. The United States in fact ranks only 24th in the world in the number of registered merchant ships. All but unregulated, Panama is ranking now first. More than 6,300 vessels registered with Panama; Liberia second, 2,200; Communist China third, more than 1,800 ships. The United States has fewer than a fourth of that number.
Well troubling new evidence tonight of communist China's aggressive cyber warfare against the United States. Hackers from China and other countries have penetrated critically important computer networks in our electrical grid. There are concerns that those hackers left behind malicious software that could be activated in the event of a crisis or war with China. Jeanne Meserve has our report.
(BEGIN VIDEOTAPE)
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice-over): Could a foreign entity turn off our power from afar with a computer mouse? Two former federal officials tell CNN hackers have embedded software in the electric grid that could potentially disrupt the system or even destroy equipment.
JANET NAPOLITANO, HOMELAND SECURITY SECRETARY: You know, I don't think it's appropriate for me to confirm that one way or the other. But what I can say is that the vulnerability has been something that the Department of Homeland Security and the energy sector have known about for years.
MESERVE: It is hard to trace the origin of covert cyber activities but there is heavy suspicion that China and Russia are involved.
ROBERT BAER, FORMER CIA OFFICER: This is deterrence, in the event of war they're going to have another weapon at their disposal which would be to turn off our power.
MESERVE: But the power grid is not the only vulnerable sector. According to the former officials, malicious code has also apparently been found in the computer systems of the oil and gas telecommunications and financial services industries. What is discovered can be destroyed, but experts doubt everything has been found.
SCOTT BORG, U.S. CYBER CONSEQUENCES UNIT: If you have somebody who knows what they're doing, writing that code and embedding it in a clever way, you can look right at it and not recognize it.
MESERVE: The implications are extraordinarily serious.
FRANCES FRAGOS TOWNSEND, CNN NAT'L SECURITY CONTRIBUTOR: When I think of terrorism I think of high end WMD terrorism, nuclear biological weapons and I put cyber right in the same category. Not because of the likely loss of life. I put it up there because of the likely economic impact.
MESERVE (on camera): In 2007, a government experiment demonstrated that a cyber attack could destroy electrical equipment. But critics say the electric industry has not done enough to ferret out cyber vulnerabilities or close them. The industry says it is making progress.
Jeanne Meserve, CNN, Washington.
(END VIDEOTAPE)
DOBBS: But by most judgments that progress is very slow and the government has been very slow to react to communist China's cyber warfare campaign. The Department of Defense says hackers launch as many as three million cyber attacks each and every day against the Pentagon. The Pentagon yesterday said it spent more than $100 million over the past six months alone trying to respond to those cyber attacks and repairing damage done to those computers.
Defense Secretary Robert Gates this week said the Pentagon plans to train hundreds more cyber warfare experts. Defense Secretary Gates might have taken action much sooner had he listened to this broadcast years ago. We've been reporting here on the cyber warfare threat from communist China for literally years. The first report that we're going to provide you is from almost three years ago. Please take a listen.
(BEGIN VIDEO CLIP)
DOBBS: The security breach exposes our most sensitive government information. North Korea and communist China could be declaring cyber war on this country. The FBI considers communist China's efforts to obtain American military technology to be the number one espionage threat against the United States.
Apparently, the State Department isn't listening to the FBI. Critics, including this broadcast, slammed the State Department for buying 16,000 computers from Lenovo (ph), a company owned by the Chinese communist government.
The Pentagon is investigating reports that communist China hacked into the Defense Department's computer system. It is another example of China's rising threat to this nation and U.S. interest.
(END VIDEO CLIP)
DOBBS: Yes, a rising threat to the United States that our federal government is apparently only now acknowledging and acting on. Rising opposition in Congress tonight to a nuclear deal that had been done with the United Arab Emirates -- critics of that deal, the deal put together in the waning days of the Bush administration -- those critics say that it could help Iran obtain our nuclear technology. And opponents say Iran has already used the United Arab Emirates as a transient point for other sensitive technologies transferred from the United States. Kitty Pilgrim has our report.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): In its last days in office, the Bush administration signed a nuclear cooperation agreement allowing the sale of U.S. nuclear technology to the United States Arab Emirates. Now, several members of Congress are begging President Obama to reconsider the deal asking the president, quote, "to secure increased cooperation from the UAE regarding United States' highest priority, national security concerns, namely the Iranian nuclear program and the proliferation of nuclear weapons in general." The UAE is Iran's top trading partner and the Congress members worry that nuclear material will find its way to Iran from Dubai.
REP. BRAD SHERMAN (D), FOREIGN AFFAIRS CMTE.: Here we have a country seeking something very sensitive, a nuclear cooperation agreement with the United States. It's not unreasonable for us to expect them to have a good system for controlling a re-export (ph) to Iran.
PILGRIM: Supporters of the deal argued the agreement would strengthen ties with a key ally. But just last week the Department of Justice announced an Iranian national and legal U.S. resident and 10 others were indicted for exporting banned military aircraft parts to Iran. They are accused of using companies based in Dubai. Nonproliferation analysts fear that if military aircraft parts can reach Iran illegally so might nuclear technology. They want a thorough review.
HENRY SOKOLSKI, NONPROLIF. POLICY ED. CTR.: They haven't done that review and they ought to do it. They need to slow down. It seems like they are doing a bum's rush just as bad as George Bush on this and it's hard to understand why.
PILGRIM: The UAE says they have taken strong action to enhance and enforce their export laws and prevent transshipment of sensitive materials.
(on camera): The letter from members of Congress points out that the UAE signed an expert control law in August of 2007, but has not yet fully implemented the restrictions in that law.
Kitty Pilgrim, CNN, New York.
(END VIDEOTAPE)
DOBBS: And indications tonight that President Obama is determined to hold talks with Iran before Iran makes any concessions. In a major shift in U.S. policy, the Obama administration saying it will join international talks trying to stop Iran's nuclear weapons program. Iran, however, refuses to end that program that the United States and its allies say is designed to build a nuclear weapon.
Iran tonight also escalating a diplomat battle with the United States over an American journalist in jail there now for two months -- Iranian prosecutors say they have charged the journalist, Roxana Soberry (ph), with espionage. Iran, however, has produced absolutely no evidence of any kind to support the spying charges. Iran announced the charges days after the president called Iran a great civilization.
Up next, we'll have the very latest for you on the pirate stand- off and an American warship is steaming toward that ship, and the head of the left wing activist group ACORN last night challenged me here saying that our reporting was inaccurate, that ACORN isn't being investigated in any state for election fraud. I told her we'd set the record absolutely straight and we're going to do so here tonight.
Also tonight, new charges that the massive bailout of the insurance giant AIG is a waste of taxpayer money; I'll be joined by AIG's former CEO, Hank Greenberg (ph). He'll be joining us here next. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Breaking news on the pirate attack on a U.S. flag cargo ship off the coast of Somalia over just the past few minutes. A senior Navy official has told CNN that the crew of a Navy P-3 aircraft has a visual on the lifeboat that contains the pirates and the captain, whom they are holding hostage. A U.S. destroyer, the "USS Bainbridge" (ph), tonight is nearing the scene as well.
Again, a Navy aircraft flying over the area has a visual contact with the lifeboat that contains four pirates and their hostage, the captain of the "Maersk Alabama". We'll have more on this developing story throughout the broadcast here. We'll have the very latest developments for you.
Turning now to Washington, the Obama administration has demonstrated a willingness to weaken U.S. immigration law and its enforcement in this country. Now the administration is being asked to suspend all immigration raids while Census workers count population next year. As Casey Wian reports, that request could politicize the 2010 Census.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Preparations for the 2010 Census are under way with workers walking neighborhoods trying to identify every U.S. dwelling, a constitutional mandate to count each person legally or illegally living in the United States. During the Los Angeles rally, city leaders assured residents their information would be safe from immigration authorities and police. The Census Bureau promises confidentiality.
LINDA RIVERA, U.S. CENSUS BUREAU: Not even the president of the U.S. can obtain any information that's collected for the U.S. Census Bureau.
WIAN: Still, Missouri Democrat William Lacy Play (ph), who heads the House subcommittee overseeing the Census, said last week he favors halting immigration raids during next year's count to quote, "tamp down any fears the immigrant population might have on certain raids whether they're here illegally or not."
California's Darrell Issa (ph), the subcommittee's ranking Republican counters quote, "we're not talking about one day of not doing raids. We're talking about a period of time. Is that a week, a month or a whole year? We cannot suspend law enforcement."
The Census Bureau itself has asked for exactly that in the past. Former President Clinton halted raids in 2000. Former President Bush was asked two years ago to do the same for the 2010 Census. He refused. Now the Census Bureau has released this video featuring groups advocating amnesty for illegal aliens to encourage participation.
ROSA ROSALES, LEAGUE OF UNITED LATIN AMERICAN CITIZENS: It's so important that we get our fair share of the money (INAUDIBLE) coming from the federal government.
WIAN: The Census Bureau estimated that three million people were not counted in 2000. At stake billions of dollars in federal funds and distribution of congressional seats.
(on camera): Perhaps it's no surprise then that both Republicans and Democrats appear to be politicizing the process that's seemingly as straightforward as counting people.
Casey Wian, CNN, Los Angeles.
(END VIDEOTAPE)
DOBBS: Well, counting illegal aliens in the 2010 Census would have an impact on how the 435 seats in the House of Representatives are allocated among the states. A study by the University of Connecticut finds that states with higher illegal alien populations such as Arizona, Florida and Texas would gain a total of seven seats.
Illinois, Michigan, Missouri, New York and Ohio will lose seven seats. And California, which picked up six congressional seats when illegal aliens were included in the 2000 Census count, according to the University of Connecticut study may stand to actually gain even more. We would like to know what you think about all of this.
Our poll question is very simple. Do you believe it's more important for the federal government to count illegal aliens or enforce immigration laws? We'd like to hear from you. Cast your vote at loudadobbs.com. We'll have the result here later in the broadcast.
Well now I'd like to shed some light on an issue that we discussed here last night. Left wing activist group ACORN is calling for the removal of Maricopa County, Arizona Sheriff Joe Arpaio for enforcing immigration laws. During an interview last night with both Bertha Lewis, the head of ACORN, and Reverend Al Sharpton, the head of the National Action Network, I asked Bertha Lewis about investigations into ACORN for voter fraud and what impact that might have on her credibility. Lewis adamantly denied being investigated for voter fraud. This is what she had to say.
(BEGIN VIDEO CLIP)
DOBBS: What do you suppose would be said about ACORN? You're being investigated in 13 states for crying out loud.
UNIDENTIFIED MALE: Oh, I'm glad you brought that up.
(CROSSTALK)
UNIDENTIFIED FEMALE: That's not true.
(CROSSTALK)
UNIDENTIFIED FEMALE: Check the facts. It's not true. You can get on the phone right now and call the Department of Justice.
(CROSSTALK)
DOBBS: ... about the Justice Department.
UNIDENTIFIED FEMALE: ACORN is not being investigated anywhere in any state. You don't have your facts correct.
(END VIDEO CLIP)
DOBBS: Anywhere in any state. Well Bertha, here we go. I promised you that we would check those facts and when you denied being investigated, we called all of those states and confirmed that investigations into ACORN indeed are under way.
We begin with Ohio where the Cuyahoga (ph) County Prosecutor's Office in Ohio tells us it has been investigating ACORN, for as it put it, some time. The investigator at the State Board of Elections for North Carolina says they hope to reach a decision on their investigation by the 30th of June and Nevada also investigating your organization.
ACORN also being investigated, Bertha, in New Mexico, I'm sorry to tell you and oh yes, Connecticut too. They're investigating ACORN. So is the state of Wisconsin. The Secretary of State's Office in Indiana tells us that the Lake County prosecutor as well as here goes the federal investigation, Bertha, I'm sorry to tell you again, but these are just the facts -- the U.S. attorney in Indiana are actively engaged in the investigation of ACORN.
That as you know, Bertha, makes it a federal investigation, which you said wasn't under way. Turning to Florida -- the Department of Law Enforcement in Florida says it is investigating several cases associated with ACORN at the state level. And in Michigan a worker from ACORN is now serving a six-month jail sentence. And Bertha, those are the facts. ACORN is under investigation all across the country. What I think you might consider is asking around in your organization why no one is telling you this or maybe you just forgot. That's probably it.
Up next here, new information coming in to CNN tonight on the location of those pirates and the captain of the "Maersk Alabama" ship that they are holding. We'll have that story for you and all of the latest details.
Also ahead Americans still outraged over the millions of dollars in AIG bonuses. AIG's former CEO Hank Greenberg (ph) joins me. He'll tell us who he believes is responsible for the mess.
And are you concerned the Obama administration will try to curtail your Second Amendment rights to keep and bear arms? We'll have the results of a number of new polls. Stay with us. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: Well, Americans believe that our Second Amendment right to keep and bear arms is under assault by the Obama administration and a Gallup poll shows the number of Americans who want to restrict Second Amendment rights is at an all-time low. And a new CNN poll shows Americans simply don't want stricter gun laws. Bill Schneider has our report.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): Binghamton, Pittsburgh, Oakland, Samson, Alabama, Carthage (ph), North Carolina, sensational incidents of gun violence all over the country. Are we seeing an impact on public opinion? Since 2001, a majority of Americans has favored stricter gun laws though support has been trending slightly down and now a sharp, sudden drop.
Only 39 percent of Americans now favor stricter gun laws according to a CNN/Opinion Research Corporation poll. It may have to do with President Obama and the new administration.
SEAN HEALY, ATTORNEY: If he and the people in control of Congress right now could have what they want, they would heavily restrict or eliminate guns from this country.
SCHNEIDER: They may have heard what the new attorney general said.
ERIC HOLDER, U.S. ATTORNEY GENERAL: There are just a few gun related changes that we would like to make, and among them would be to reinstitute the ban on the sale of assault weapons.
SCHNEIDER: And what the new secretary of state said about the ban.
HILLARY CLINTON, U.S. SECRETARY OF STATE: I, as a senator, supported measures to try to reinstate it. Politically, that is a very big hurdle in our Congress. But there may be some approaches that could be acceptable, and we are exploring those.
SCHNEIDER: The country is seeing a surge in gun sales.
STEVE PRATER, LOCK 'N' LOAD MANAGER: Everybody kind of got scared. The market got depleted.
SCHNEIDER: Support for tougher gun laws has held fairly steady among Democrats. The sharp drop has been among Independents and Republicans where there are fewer Obama supporters.
(on camera): The Gallup poll reveals a gradual long-term decline in support for gun control from the early 1990's to 2008. In fact support for handgun ban was down to 29 percent, the lowest figure in 50 years. That coincides with the decline in the nation's murder rate. But this year's sudden drop seems to have been influenced by politics.
Bill Schneider, CNN, Washington.
(END VIDEOTAPE)
DOBBS: Up next, new details on that pirate attack on a U.S. flagship off the coast of Somalia, and former AIG CEO Hank Greenberg (ph) joins me. We'll be talking about our economy, bonuses at AIG and all across Wall Street and what's going on with this government bailout. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: Well, over just the past few minutes, CNN has learned that the crew of a Navy P-3 aircraft, in the Gulf of Aden, has made visual contact with a lifeboat that contains the pirates and the ship's captain, that, whom they're holding hostage, all of that off the coast of east Africa. Our Pentagon correspondent, Chris Lawrence, has the very latest for us. Chris, this looks like good news to this point.
LAWRENCE: That's right, Lou. Having the visual contact allows the P-3 to relay that information not only to the USS Bainbridge, that navy destroyer that we are told is very close to the situation now at this point, but also back to higher command to give them an accurate visual reading of what is going on right now at the situation.
Again just to recap, if you haven't heard by now, this was a crew of about 20. The crew, the American crew, took one of the pirates into custody. The other three took the captain of that vessel on to one of the life boats off the ship. Now one of the crew members told us, there was supposed to be an exchange, even exchange. That they would hand over the pirate that they had in custody and pirates would then hand over the Alabama's captain.
The crew says they kept their end of the bargain. They gave back the pirate. Pirates did not keep their end of the bargain, they kept the captain. And that's where it's been the last few hours, this negotiation ongoing between the pirates on the life boat and the crew right there still on the Alabama. DOBBS: Chris, thank you very much. Chris Lawrence, who has been reporting, I should say and doing a terrific job of reporting from the outset of this incident, in the Gulf of Aden. Chris, thanks a lot.
LAWRENCE: You're welcome.
DOBBS: And Chris will be updating us further as we have development warrant here in this hour.
Let's turn now to the economy. The millions of dollars paid in bonuses to AIG executives galvanized public outrage against customers using taxpayer money. AIG's former CEO blamed current management and the government for the company's failure when he appeared before Congress. Joining me now to assess this is the former chairman and CEO of AIG, Hank Greenberg. Hank, good to have you with us.
MAURICE GREENBERG, FORMER CHAIRMAN, CEO, AIG: Good to be with you, Lou.
DOBBS: Let's start with first the situation that we're looking at. Do you believe that AIG should have more federal bailout money, if it is in the judgment of the Treasury Department, or the Federal Reserve required?
GREENBERG: Look, I think the way to do that, should have done from the beginning is use guarantees, not cash. All that was necessary, in my judgment, would be to wall off AIG financial products, give it a guarantee. The insurance subsidiaries were all doing fine, had adequate capital. And that would have been -- and then they'd run off the portfolio, hedge where they can and run it off. That was in -- that could have been done.
DOBBS: Here's AIG's statement. Hank, when they heard that you're going to be joining me here tonight. And if we may, let's share this with our viewers. "Mr. Greenberg's continued refusal to take any responsibility for the company's current problems is undermined by the fact that he created AIG's financial products business." And I should point out that is the business, the derivative, and so forth. "That he created AIG's financial products business and presided over the writing of many billions of dollars in multi-sector credit default swaps, none of which were hedged."
GREENBERG: You know, that's almost a silly statement. It's very misleading. To begin with, of course I created AIG financial products.
DOBBS: You created just about everything else there, too.
GREENBERG: The insurance companies. It made $5 billion from the time I created until I left. What happened when I left? They lost their AAA rating. And what they should have done then is stopped writing credit default swaps. They wrote twice as much as we had written in nine months. In nine months after I left, wrote twice as much as I had written.
You know, you manage a portfolio. You don't put it in a safe and have it just hang out there. Nobody managed anything in that area when I left. They just added more and more to it. So the statement that AIG makes is just completely erroneous, like everything else they've been saying.
DOBBS: Forty million dollars worth of credit --
GREENBERG: Notional value.
DOBBS: A notional value, $40 billion worth. Were they in fact hedged when they were there?
GREENBERG: I don't know if it was $40 billion because they won't release the date of --
DOBBS: To the best of your sense of it?
GREENBERG: To the best of my knowledge...
DOBBS: I know you too well, Hank, to know you don't have a pretty good sense of it.
GREENBERG: Lou, our belief was it was significantly less than $40 billion. We started writing credit default swaps for European banks on a regulatory basis and we never had a loss on those. Matter of fact, if you read the testimony, at the Senate Banking Committee hearing, there were no losses reported. These were all -- these were all cash -- this is all cash requirements that they have to put up for counter parties.
DOBBS: You say that, in your judgment, the way this should have been handled is that the financial products part of the business, handling the derivatives, should have been walled off from the insurance business.
GREENBERG: That's correct.
DOBBS: Rather than cash being applied, $170 billion worth of cash now from the federal government, that there should have been guarantees, put forward.
As we look what is happening from there, I had said from the outset of this crisis, that one of the mistakes, I believe the Treasury and the chairman of the Fed made was not suspending payments among counter parties period, whether at AIG, whether on Wall Street, across the board.
Simply suspend what we think of as something around $70 trillion in the derivatives market and hold in place. And then resolve the real issues. Why, why, with all you know about finance, and all that you understand of the international financial system, why would we not have considered doing that?
GREENBERG: The main things they could have done, that's one of the things they could have done. Why they gave AIG a loan of $85 billion, at 14.5 percent interest, and 79.9 percent of the company. Now, you know, you have to go to a three-ball operation to get that kind of a deal. And then of that, most of the money went through AIG, funneled out the back door into fallen banks.
DOBBS: To Societe Generale, to Goldman Sachs.
GREENBERG: Was that the right way of handling it?
DOBBS: In my judgment, absolutely not.
GREENBERG: Absolutely, mine too.
DOBBS: But this Congress, this Treasury secretary, the previous Treasury secretary, the previous administration as well as this, quite content to distribute money back to the buddies of Hank Paulson and Timothy Geithner. I've been extraordinarily critical of them, remain so. Yet this persists. Hank Greenberg has as good an insight and perspective as any man on the planet as to what we should do moving forward. What should we do?
GREENBERG: Look, AIG could be saved. OK and the taxpayer could be paid back. Not on the plans they've got. The taxpayer will never be paid back on the plan. Their plan was to sell off parts of AIG.
DOBBS: Sure.
GREENBERG: They couldn't do that. In this market, you can't sell anything at value. So extend the loan to 20 years, put as much guarantees, instead of cash up as you possibly can, claw back some of the money from the so-called counter parties and have them invest that in AIG equity.
OK. Reduce the government.
DOBBS: Reduce the government loans.
GREENBERG: Reduce the government loans and reduce the government's ownership to 15 percent, so you can raise private capital. And you can build the company back. It becomes a taxpayer again, and employer. The way they're doing it, there will be no company.
DOBBS: And very quickly, your judgment on the toxic asset recovery plan that now it appears the treasury secretary is intent upon executing.
GREENBERG: Well, you know, there's only been a couple of deals done so far, as I know. There's no overwhelming embracing of it yet. Look, I hope it works. I really hope it works. For the good of the country, I hope it works. We've got to get credit going again. If we don't get credit going again, we're not going to get the economy going again. We must do that.
DOBBS: Hank Greenberg, thanks for being here.
GREENBERG: Thanks for having me, Lou.
DOBBS: Appreciate it. Up next, rules allowing medical professionals to refuse service on moral grounds may be rescinded by the Obama administration. We'll tell you what that could mean to patients and to medical professionals. And General Motors, is it nearing bankruptcy? It's working on a survival plan. We'll be talking about that with Congressman Thaddeus McCotter. He represents the Detroit area. He joins ms next. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: New reports tonight that General Motors is stepping up its preparation force a possible bankruptcy. General Motors, however, still hoping to win concessions from both creditors and unions to stay in business. The Obama administration has set a June 1st deadline for General Motors to put in place a plan for restructuring or be forced into bankruptcy.
Detroit obviously a part of Thaddeus McCotter's district and he joins us here tonight. I know this has got to be a difficult time for all of the folks, not just General Motors and Chrysler and Detroit and the automobile industry, but for everyone in your district, everyone in the state of Michigan, in fact the whole country.
REP. THADDEUS MCCOTTER (R), MICHICAN: Yes Lou, that's absolutely right. One from the things that's most pressing upon the people in Michigan and the manufacturing community in general is the uncertainty about the process that is currently taking place regarding the structure. The administration said that 50,000 jobs between Chrysler and GM were not enough to show viability.
DOBBS: The elimination of 50,000?
MCCOTTER: The elimination. And so in their place, they've not given us what number they think will be viable in the future. Instead, they've given us policy goals, not a pass to probability that the companies can follow. And the people in Michigan and throughout America can know with certainty what is going to happen to them.
DOBBS: Fritz Henderson, the new CEO of General Motors indicating that he is in prepared for the possibility of that bankruptcy and has accelerated those preparations. Do you have any signals that that is a greater likelihood tonight than it was, say, a week ago?
MCCOTTER: Clearly Fritz Henderson is very smart. He would be not be doing his job if he were not preparing for the administration has said there's a substantial likelihood of occurring. But GM and Chrysler in its own situation want to avoid bankruptcy. That's why they're going to do everything they can with the unions, trying to get the bond holders to the table and do the best they can to beat that deadline to avoid the bankruptcy. But he has to as a part of his due diligence understand that that's a distinct likelihood if the restructuring doesn't take place.
DOBBS: When I talked with him here last week, I got the distinct impression he was still hopeful that he could negotiate with both his unions and the bond holders, the creditors of the company. Do you share that -- I won't put it that way. I won't call it optimism. Are you as confident tonight as you would be, say, a week ago?
MCCOTTER: What I'd really like to know, Lou, to have any confidence in the bond holders, is are there bond holders with GM bonds that have credit default swaps with AIG? Because as you know, what happens is, they get par value if you go under bankruptcy. This means in an attempt to get the bond holders to the table, would be futile because they would make out better in bankruptcy and the very workers' tax dollars used to reward them for the effort. I've sent a letter to Geithner. I've sent a letter to Bernanke asking are there bond holders of GM that have credit default swap/insurance with AIG and if so in what amounts? So that as we restructure, we know what everyone has at the table or under it. I've yet to get my response.
DOBBS: Well, one hopes you get that straightaway. And I'm sure that the treasury secretary has considered that possibility.
Turning to General Motors, it's clear that there's going to be a tremendous negative impact again either way this goes on the people of Detroit, people of Michigan. Where does Detroit go from here? Whether it is a structured or prepackaged bankruptcy, whether it is a regular bankruptcy, whether you avoid bankruptcy. There still will be a tremendous cut in employment in Detroit. Where do we go from here?
MCCOTTER: As we already have the highest unemployment rate in the country, and we are expecting an economic Katrina for the auto industry even with both options, one or the other, that will happen.
But we face it with a grim determination that we'll get through this. This is the arsenal of democracy. This is the engine of prosperity. These are the people who put the world on wheels. It's going to be very painful, we know that. But we expect to prove the critics wrong in the end and have a viable auto industry. And to tie it back to what you've been talking about with some of the overseas competitors we have. There are many such as Communist China that would love to have an auto industry. It's time for Americans to understand why it's important for us to keep our own as well.
DOBBS: All right, we'll leave it there. And I'll say absolutely. Congressman, good to have you with us, Thaddeus McCotter.
A reminder now to vote on our poll. The question tonight is do you believe it's more important for the federal government to count illegal aliens or enforce immigration laws? We'd like to hear from you. Cast your vote at LouDobbs.com. We'll have the results here in just a few moments.
Up next, the Obama administration trying to take away right of doctors and pharmacists, medical professionals of all kinds to refuse treatments when they object on moral or ethical grounds. We'll have that story. And rising concern that the Obama administration trying to strip the Department of Homeland Security of vital powers to enforce U.S. immigration law. We'll be right back.
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DOBBS: New concerns tonight that the Obama administration is trying to weaken the Department of Homeland Security when it comes to immigration enforcement. DHS may roll back Real I.D., the plan to raise state I.D. standards. And there are serious questions about the department's commitment to enforce immigration laws. Louise Schiavone reports from Washington.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): It's the nature of presidents to attach their philosophy to government agencies. So to the extent that critics accuse the Bush administration of weakening the Food and Drug Administration.
SUSAN WOOD, GEORGE WASHINGTON UNIVERSITY: The FDA lost the ability to carry out its job. It was politicized in a number of different cases.
SCHIAVONE: Some predict the Obama administration may weaken the Department of Homeland Security, starting with a retreat on the real I.D. law, designed to make state I.D. standards more stringent.
STEWART BAKER, CTR. FOR STATEGIC & INTL STUDIES: Al Qaeda is still out there. They still would love to strike at us. They are eager to find a way to do it. If it's easy to get a fake I.D., then many of our security measures fail.
SCHIAVONE: An agency spokeswoman tells CNN that DHS Secretary Janet Napolitano, a former governor who protested the cost, is working with the nation's governors to change Real I.D.
Also of concern, in Bellingham, Washington, after the first and only workplace immigration rate of the new administration, only one of the apprehended laborers were deported. The others were released and provided with work documents.
JAMES CARAFANO, HERITAGE FOUNDATION: People who are here unlawfully are breaking the law and you can never enforce a law by not actually punishing the law breakers.
SCHIAVONE: Napolitano has ordered a departmental review.
(on camera): With respect to border security, DHS is heralding its recent success intercepting arms and money being smuggled from the U.S. into Mexico. But is there equal concern about who and what is entering the U.S.?
(voice-over): A DHS spokesperson tells LOU DOBBS TONIGHT quote "There will be difference between the Bush and Obama administration approaches. But one of those will not be the amount of time spent protecting the country from terrorist attacks." Louise Schiavone for CNN, Washington.
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DOBBS: The administration is set to rescind another rule from the Bush administration. The so-called conscience clause allowed doctors and pharmacies to refuse to fill prescriptions or perform procedures to which they objected on moral or ethical grounds. Now doctors and pharmacists with a moral issue may find they have to quit their jobs or risk breaking the law. Lisa Sylvester has our report.
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LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Leonard Edloe has been a pharmacist for 39 years in Richmond, Virginia. He is also a pastor at his church. His religious views make him hesitant to fill prescriptions for the morning-after pill that can prevent unwanted pregnancies.
LEONARD EDLOE, PHARMACIST: As I tell my members all the time, what I say on Sunday, I have to live six days a week. I can't say one thing on Sunday morning and then come in here and practice pharmacy a different way the other days of the week.
SYLVESTER: President Bush in his final days in office signed off on a rule known as the conscious clause. It reaffirmed and expanded existing laws to say that individuals like Edloe could refuse to provide services based on moral grounds. It also said that not only doctors and nurses could refuse to provide services, but so could others like receptionists or janitors who object for personal reasons.
Now the Obama administration has announced it's reversing that rule. Donna Crane with NARAL Pro Choice America has lobbied to roll back the conscience clause. She says the Bush rule allowed not just individuals to opt out, but whole organizations. She believes these institutions have an obligation to their patients.
DONNA CRANE, NARAL PRO CHOICE AMERICA: I think if you're serving a broad population, if your employees are not all of the same faith, your employees will be from across the spectrum as well. And you're also, you're essentially a participant in the public health care system. I think the standards a little different for an institution. We should expect institutions to adhere to the standard of care.
SYLVESTER: But Leonard Edloe says he has to listen to his conscious. He says in rare cases like rape, he would consider dispensing the morning after pill. But providing services is an individual decision, not one to be made by the government.
(on camera): There is a 30-day comment period that ends tonight. The Obama administration will then take a few months to review those comments before making a final announcement. Lisa Sylvester, CNN, Washington.
(END VIDEOTAPE)
DOBBS: Up next, we'll have our poll results and some of your thoughts. We'll be right back.
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DOBBS: Tonight's poll results, 97 percent of you say it is more important for the federal government to enforce our immigration laws than to count illegal aliens in the census next year. Time now for some of your thoughts. Mike in Colorado said: "If we have the best government money can buy, then money doesn't buy much anymore, does it?"
And Brenda in Arizona said: "Lou, last night you had two guests badmouthing Sheriff Joe Arpaio. Do they live in Arizona? Arizona now has the highest kidnapping rate in the country due to the drug war being fought on our border. Sheriff Joe has done a great job here trying to keep us safe."
But we had tons of e-mails on the subject of Sheriff Arpaio and nearly every one of them supportive.
Bill in California said: "We have a sheriff who enforces the laws in Arizona and now we have people who want him to resign? We need more officials like this, not fewer."
And Max in Colorado said: "I think Sheriff Joe Arpaio should be removed and made head of Homeland Security."
We love hearing from you. Send us your thoughts to LouDobbs.com. Each of you whose e-mail is read here receives a copy of my book, "Independents Day."
Join me on the radio Monday through Fridays for "The Lou Dobbs Show." In New York, 2 to 4 p.m. each afternoon on WOR 710 Radio. And go to LouDobbsRadio.com to get the local listings in your area for the show.
We thank you for joining us. Up next, "NO BIAS, NO BULL." In for Campbell Brown, Roland Martin.
