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Lou Dobbs Tonight

Iran's Secret Nuclear Plant; The Fight over Afghanistan; Liberal Arts; Political Messages; Border Drug Violence

Aired September 25, 2009 - 19:00   ET



Iran's secret nuclear plans not so secret after all -- President Obama saying all options are now on the table. Sanctions, a blockade, military action, what exactly is this administration prepared to do?

Also, this is already the deadliest year ever in Afghanistan for our troops and now five more of our troops have been lost while the White House is debating a possible surge. And half truths, distortion, simple, straightforward, old (ph) lies, some say a video played in schools all across the country is long on left wing propaganda and short, very short on the facts.

ANNOUNCER: This is LOU DOBBS TONIGHT; news, debate and analysis for Friday, September 25th. Live from New York, Mr. Independent Lou Dobbs.

DOBBS: Good evening everybody.

The not so secret, secret -- President Obama and the leaders of France and Great Britain are now demanding that Iran allow inspections of a new covert nuclear facility in Iran. The Islamic Republic came clean about its hidden project in a letter Monday to the International Atomic Energy Agency. But this was no act of openness.

Iran's government realized that western intelligence agencies have known about the facility for some time. It has reportedly been tracked for years. Until now the Iranians have only owned up to one plant, which the International Atomic Energy Agency has been monitoring. Despite knowing all of this, however, President Obama decided not to single out Iran in his speech to the United Nations on nuclear non-proliferation and continues to favor diplomacy. Ed Henry has our report from Pittsburgh.


ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): With a little help from his friends, President Obama took center stage and turned a sleepy G-20 summit about the financial crisis into a showdown over Iran's nuclear ambitions.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Iranian government must now demonstrate through deeds its peaceful intentions or be held accountable to international standards and international law.

HENRY: The president revealed that Thursday in Vienna the U.S., United Kingdom and France provided detailed intelligence to the International Atomic Energy Agency showing Iran has been building a covert uranium enrichment facility for several years. At a news conference at the close of the summit Mr. Obama emphasized the intelligence is solid.

OBAMA: I think Iran is on notice that when we meet with them on October 1st, they are going to have to come clean, and they are going to have to make a choice.

HENRY: French President Nicolas Sarkozy was even blunter demanding that Iran put everything on the table at the meeting next week in Geneva or else.

PRES. NICOLAS SARKOZY, FRANCE (through translator): If by December there is not an in depth change by the Iranian leaders, sanctions will have to be taken.

HENRY: The key to passing tough new sanctions at the United Nations will hinge on whether there is buy in from China and Russia. That's why Mr. Obama quietly started building his case, sharing the sensitive new intelligence with Russian President Dmitry Medvedev in a one-on-one meeting earlier this week according to senior U.S. officials who say their diplomatic effort is starting to bear fruit because Russia's long skepticism over sanctions is beginning to evaporate.

PRES. DMITRY MEDVEDEV, RUSSIA (through translator): But in some cases sanctions are inevitable.

HENRY: Mr. Obama was also spotted engaging in a long chat with Chinese President Hu Jintao on Friday and when asked about China's long resistance to sanctions, a top U.S. official said stay tuned because the Chinese are just starting to absorb the new intelligence.


HENRY: Now, at this news conference today, just a short while ago the president was also issuing a lot of tough talk about how he will not take a military option off the table, a possible U.S. military strike against Iran if it does not come clean about its nuclear ambitions, but the president did stress again and again that he prefers the diplomatic option. He began to make that diplomatic case here in Pittsburgh, only intensify in the days and weeks ahead, Lou.

DOBBS: This all presumes, it seems to me, Ed, as the president speaks with Jintao, speaks with Medvedev that the Russians and the Chinese were not aware of the second plant all this time, and that it was only in the knowledge of three western intelligence agencies. Does that not strain the possibilities here?

HENRY: Well, you know, the world of intelligence can be so tricky and uncertain that nobody knows for sure whether or not the Russians and Chinese have known for a long time. There certainly have been suspicions as you know, well know for years now about a possible second, maybe even multiple underground nuclear sites. So there's certainly that possibility out there that some of these other folks knew about it.

But, I think the U.S. is trying at least to make the case that for the first time they have what they believe and I stress believe to be rock solid intelligence. We also have to remember even if there were suspicions in recent years so much of the intelligence on Iraq for example was faulty that checking and rechecking this is not necessarily a bad thing, Lou.

DOBBS: And the Chinese, we seem to have no sense at all of where they are because they have been extraordinarily supportive of Iran and there is no reason to assume here that because of this knowledge or knowledge that they already possessed about that second facility or, by the way, the fact that they have two facilities does not preclude the possibility that they have more, there is no reason to assume that the Chinese will be supportive of U.S. and U.K. and French desires.

HENRY: Absolutely. I mean you're right. Because look the Chinese and Russians have made what the U.S. believes to be relatively positive statements in the last 24 hours about the possibility of sanctions. But as you point out, time and time again in recent years the Chinese and Russians have not been on board for tough sanctions against Iran largely because of business reasons -- business going on in Iran. And so the proof will still be in the pudding whether or not they follow through on the talk right now about more sanctions, Lou.

DOBBS: Ed, thank you very much -- Ed Henry reporting from Pittsburgh where the president is attending the G-20 summit. Pittsburgh is dealing with thousands of protesters at the G-20 summit, more today. The scene more peaceful as the so-called people's march made its way through Pittsburgh. Riot police were standing by just in case things were to get out of hand as they did yesterday when police had to fire tear gas into the crowd of demonstrators.

This is already the deadliest year for our forces in Afghanistan. Over the last 24 hours five more Americans have been killed in action -- the news comes as the Obama administration is debating whether or not to escalate the war. Chris Lawrence has our report.


CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT (voice-over): A secret meeting at a secured military base in Europe that could help decide the fate of up to 40,000 American troops. CNN has learned General David Petraeus and the chairman of the Joint Chiefs flew to Ramstein, Germany for a face-to-face meeting with their Afghanistan war commander.

The goal -- to better understand the troops and equipment General Stan McChrystal needs in Afghanistan. But those added troops are based on fighting President Obama's (INAUDIBLE) counter insurgency against al Qaeda and the Taliban. Officials tell us the administration was taken aback by General McChrystal's assessment of Afghanistan's problems and the sheer number of troops needed to fix them.

GEOFF MORRELL, PENTAGON SPOKESMAN: There's a discussion taking place about whether to continue the strategy or whether adjustments should be made.

LAWRENCE: President Obama said he'd only support expanding the counter insurgency if it's proven to ultimately defeat al Qaeda. Another consideration is a more limited goal of ensuring al Qaeda doesn't operate in Afghanistan. A just released audiotape allegedly from Osama bin Laden himself suggests he's listening to that debate. Al Qaeda warns European nations to leave the U.S.-led coalition and get out of Afghanistan.

UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE) "It won't be long before the Americans flee Afghanistan and there will be no one left but us and those you oppressed ready to retaliate against you."

LAWRENCE: Analyst Michael O'Hanlon monitored the recent elections in Afghanistan. He says there's a third option on the table besides immediately sending more troops or scaling back the mission.

MICHAEL O'HANLON, BROOKINGS INSTITUTE: I think the leading alternative contender is a blend of trying to negotiate more with the so-called moderate Taliban, trying to await, improve the Afghan government performance before we add more resources, trying to do some of what Senator Levin is saying and trying to think of how we can use the Afghan security forces a little more assertively and American forces...


LAWRENCE: O'Hanlon says holding off on those troops could give the U.S. more time to pressure the Afghan government to say, look, we're not going to go all in here until you clean up your own corruption. As for negotiating with the moderate Taliban, problem is one senior defense official told me flat out the Taliban believe they are winning and a lot of Afghan people believe they are winning. It's going to be very hard to co-op them right now. Who wants to jump ship if you believe you're already on the winning side? Lou?

DOBBS: Chris, there seems to be a lot of discussion on the part of the general staff about diplomatic initiatives and appropriate diplomatic strategies. It seems that eight years into this war almost that the general staff of the United States military doesn't have an answer as to how to win in Afghanistan.

LAWRENCE: Well there was a pretty stunning admission from a senior defense official this week who said, who told us, this strategy that President Obama proposed in March, he felt was the first real strategy in Afghanistan in 20 years. That they had basically been just in a holding pattern during the Bush administration because of the war fighting in Iraq, and that they had this counter insurgency that was developed and come up with earlier this year was the very first time they had a coherent strategy.

Now that is based on having a viable local partner. They might not have a viable local partner because the Afghan people as a whole just don't trust and have faith in the Afghan government. So, you combine that with the fact that General McChrystal found the situation there to be much worse than they originally thought, you've got some problems and some questions about going forward with that counter insurgency strategy.

DOBBS: And some answers that are desperately needed for both the interests of the United States and the safety of our troops serving this nation there right now. Chris, thanks very much -- Chris Lawrence reporting from the Pentagon.

Political scandal claiming another Obama administration official, this time at the National Endowment for the Arts -- an ACORN shell game -- one senator wants to know where all the money is going and where all the money has gone, also a leftist video popular viewing in some schools all across the country, just more evidence of political agendas being placed squarely in our classrooms.


DOBBS: The Obama administration's use of federal tax dollars and the administration's efforts to fund artists chosen to promote the president's policies through the National Endowment for the Arts has forced the resignation of a top NEA official. The NEA's communication chief, Yosi Sergant, quit after his role in the controversy was revealed. Lisa Sylvester has our report.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The National Endowment for the Arts is an agency of the federal government, the largest source of funding for the arts in America. It is supposed to be non-political and neutral. But on August 6th the agency's then communications director, Yosi Sergant, sent an e-mail to dozens of artist, many of them considered friendly to the White House, inviting them to take part in a conference call. During the call he said...

YOSI SERGANT, FORMER NEA COMMUNICATIONS DIR.: I would encourage you to pick something, whether it's health care, education, the environment -- you know there's four key areas that the corporation has identified as the areas of service.

SYLVESTER: The call also included a member of the White House Office of Public Engagement Buffy Wicks. Independent film producer Patrick Courrielche who believes many artists have become tools of the state recorded the call. He says the mandate was clear.

PATRICK COURRIELCHE, INDEPENDENT FILM PRODUCER: They encouraged us to create art on health care, on energy and the environment, and they wanted us to bring whatever art network that we had or whatever art talent that we had to those issues.

SYLVESTER: Ten Republican senators sent a letter to the chairman of the NEA, concerned taxpayer dollars were being used to promote the president's legislative priorities. Rory Cooper with the conservative Heritage Foundation says rules that apply in campaign mode don't apply once a candidate is in office.

RORY COOPER, HERITAGE FOUNDATION: The hatjacks (ph) strictly prevents political appointees in the administration from engaging in lobbying activities or campaign or political activities that are designed to either promote the president's program.

SYLVESTER: Sergant resigned this week. Calls to him were not returned. The NEA in a statement said "some of the language used by the former NEA director of communications was unfortunately not appropriate, adding this call was completely unrelated to NEA's grant making which is highly regarded for its independence and integrity."

The White House also released a statement saying the conference call was to encourage voluntary participation in a national service initiative, adding quote "We regret any comments on the call that may have been misunderstood or troubled other participants."


SYLVESTER: But the White House is clearly concerned about this. White House counsel Gregory Craig sent a memo to agency heads saying avoid even the appearance of impropriety. Make sure funding decisions are free of political interference and make sure that engagement with citizens and organizations is even handed. Lou?

DOBBS: And it looks as though this is over or is there further investigation underway?

SYLVESTER: Well I think that there were other participants on the call and I think that there will be more attention drawn to some of those individuals, even at least one member of the White House who participated in that call.

DOBBS: All right. We'll watch closely. Thanks very much -- Lisa Sylvester from Washington.

Political messages are also making their way into our nation's public classrooms. A video titled "The Story of Stuff" has been seen by students all across the country. Critics say the so-called environmental video perpetuates leftist myths about our government, our politics and our society and many critics are asking, what is it doing in our public schools -- Kitty Pilgrim with our report.



KITTY PILGRIM, CNN CORRESPONDENT (voice-over): "The Story of Stuff" by Annie Leonard is an illustrated video that claims that too much consumption is bad for the planet.

UNIDENTIFIED FEMALE: I spent 10 years traveling the world, tracking where our stuff comes from and where it goes.

PILGRIM: But critics like Matt Spalding at the conservative Heritage Foundation say it has no place in the nation's classrooms.

MATT SPALDING, HERITAGE FOUNDATION: It's essentially a Marxist understanding of capitalism. We're teaching our children this is a consumer society that essentially rapes and pillages the rest of the world. And that the model we have in this country of capitalism and model of our governance actually should -- needs to be changed in some radical way. That strikes me as pretty political.

PILGRIM: Ms. Leonard, a former Greenpeace worker, says the video was originally made for environmental conferences and never intended for children. She limited her response to a written statement. She claims her goal was "to shine a light on these often hidden impacts and to encourage conversation about current patterns of production and consumption."

She acknowledges urging schools to download the video or buy DVDs for classroom use. The movie has been viewed more than 7.3 million times on the filmmaker's Web site, more than 400,000 times on YouTube and has been seen in 7,000 schools, according to the filmmakers.

Lee Doren, a lawyer with the Competitive Enterprise Institute a non-partisan free market advocacy group was so outraged by the video in May he posted a rebuttal video on his Web site called "How the World Works".

LEE DOREN, DIR., BUREAUCRASH: It's a specious argument that's being taught to young kids and they don't have a counter argument. And the worst thing about it is the teachers think that they are doing something good for society by showing it to kids. I'm sorry -- it's just factually inaccurate.

PILGRIM: Doren personally researched the rebuttal, running the words "Warning: Indoctrination" over the original footage.

UNIDENTIFIED FEMALE: Where I live in the United States we have less than four percent of our original forest left.

UNIDENTIFIED MALE: OK, that quote that she just gave is a blatant falsehood and should disqualify this video from being shown in classrooms (INAUDIBLE) America because it's patently not true.

PILGRIM: Doren says 95 percent of forests have been logged but many have grown back. The National Forest Service told us today our forestland is actually increasing from 735 million acres in 1920 to 751 million today -- another claim from "The Story of Stuff."

UNIDENTIFIED FEMALE: Now my friends tell me I should use a tank to symbolize the government and that's true in many countries and increasingly in our own. After all, more than 50 percent of our federal tax money is now going to the military.

PILGRIM: The rebuttal video claims military spending is 20 percent of our budget, confirmed by the White House Office of Management and Budget.


PILGRIM: Now these are the kinds of films that generate discussion in college classrooms, not with kids in middle school because the video only represents one side or one point of view of the world and young children are often not equipped to formulate any alternative point of view. Lou? DOBBS: And that's why you need adults, particularly in the national media to help people understand that there is such a thing as an independent objective reality that has nothing to do with ideology or partisanship. The percentage of the budget is the percentage of the budget.


DOBBS: And to overstate it by 150 percent is somewhat hard to understand when it comes to an intelligent person, such as the producer of that video. And why she would misrepresent the state of our forests in this country.


PILGRIM: There were many factual points that are being debated now...

DOBBS: Debated -- I mean...


DOBBS: ... facts are facts. I mean let's be honest here. These are straightforward misstatements and they need to be corrected and shouldn't be in our schools.

PILGRIM: Yes -- no -- everyone we talked to said no place in the school system.

DOBBS: All right. Thank you very much -- Kitty Pilgrim.

Coming up, one powerful senator saying ACORN is funneling money through a shell game. Also Iran admits it has a second nuclear plant after it finds out that western powers including the United States have known about it for years. But are more sanctions the answer or is military action the answer? That's the subject of our "Face Off" debate tonight. Another gang bust in Los Angeles, this time agents find dozens of high powered weapons and a hit man for a Mexican drug cartel. We'll be right back.


DOBBS: Federal agents raiding a Los Angeles gang running a drug and weapons trafficking ring -- the agents found dozens of high powered weapons and one man who claims to be a hit man for a Mexican drug cartel. This raid is the second in Los Angeles in just days, and marks to the end of what has been a violent week along our border with Mexico. And we should caution you, some of the images you're about to see are graphic. Casey Wian has our report.


CASEY WIAN, CNN CORRESPONDENT (voice-over): Immigration and Customs Enforcement agents arrested nine alleged members of Los Angeles's Barrio Evil 13 Street Gang Thursday and seized 48 weapons. The suspects face charges of drug and weapons trafficking. Authorities say one told an undercover agent, he was a hit man for a Mexican drug cartel.

KEVIN KOZAK, DEPUTY SPC. AGENT IN CHARGE, ICE: We've had numerous investigations not just in Los Angeles but throughout the southwest United States where we have identified representatives to cartels who have been specifically sent to the United States to commit homicides.

WIAN: Agents say the suspect claimed he committed a hit early this month and has six contracts outstanding. They have not been able to confirm his story but evidence includes four seized weapons with silencers used specifically for contract killings. Gangs with high powered weapons are a growing problem for local law enforcement.

(on camera): Is it a fair statement to say that in some cases your officers may be outgunned by some of these gangs now?

CHIEF RANDY ADAMS, BELL POLICE DEPT.: I think that's a very safe statement. Yes and that's why we have to exercise the utmost caution.

WIAN (voice-over): A day earlier police in (INAUDIBLE) Mexico found 13 people dead, one victim decapitated and five separate drug cartel related killings within 24 hours. More than 1,600 people have been killed in Juarez this year alone, already surpassing last year's total. On Tuesday in San Diego, border agents fired shots to stop an attempt to smuggle 78 illegal immigrants crammed into three vans across the world's busiest land border crossing.

UNIDENTIFIED MALE: I started hearing all the gunfire and I looked to see and I saw them -- I saw the van going east -- west and I just saw people running.

WIAN: Four were injured. All three of the suspected smugglers apprehended. Before dawn that same day more than 1,300 local and federal law enforcement officers swept through a neighborhood just north of downtown Los Angeles. They arrested 50 suspected members of the Avenue Street Gang, an affiliate of the prison-based Mexican mafia.



WIAN: Suspects are charged with murder, weapons trafficking and drug dealing in a 222-page indictment that says they bragged about their alleged crimes on the Internet.



GEORGE CARDONA, ACTING U.S. ATTORNEY: It was part of the Avenues' effort to reinforce its authority over the neighborhood by directing violent attacks against law enforcement officers and bragging about those attacks in Internet communications.

WIAN: The raid grew out of last year's investigation into the murder of Los Angeles County Sheriff's Deputy Juan Escalante. Three alleged Avenue members are awaiting trial in that case. A fourth remains at large.


WIAN: The common denominator in all of these cases -- the drug, weapons and human trafficking that continues to flourish across the United States border with Mexico. Lou?

DOBBS: Casey, thank you very much. Casey Wian.

Well following ACORN's money, calls for the left wing activist group to explain where all of that money has gone and where it's going. Also, get this. It is possible you could be fined thousands and thousands of dollars and even sent to prison for not buying health care. It's a little more complicated than we've been led to believe by the architects of the Baucus/Obama legislation.

Also confronting Iran -- so far it's just talk about sanctions. Could we soon be talking about a military strike? That is the subject of our "Face Off" debate here tonight.


ANNOUNCER: Here again, Mr. Independent, Lou Dobbs.

DOBBS: New revelations that Iran is continuing its nuclear ambitions with not one, but at least two, nuclear facilities. The covert site was reportedly tracked for years by Western intelligence agencies, but shockingly President Obama did not single out Iran in his speech yesterday to the United Nations on the issue of nuclear non-proliferation.

President Obama, along with the leaders of Great Britain and France, today, threatened sanctions against Iran, but are sanctions sufficient? That's the subject of our "Face-Off" debate, tonight. And joining me now, Michael Levi with the Council on Foreign Relations, and Gordon Chang author of "Nuclear Showdown: North Korea takes on the World."

Gentlemen, thanks for being here. Let me ask you both first, given the high probability that Western intelligence agencies were aware of the second site, and as I said earlier, we should not suggest that precludes a third or fourth site, as well, but aware of that site, why is it that the president of the United States would go to the United Nations and remove references to Iran and North Korea from his speech and remove the word "deplore" from the language addressing the issue of non-proliferation -- Michael.

MICHAEL LEVI, COUNCIL ON FOREIGN RELATIONS: The president was trying to build consensus for a broad resolution at the United Nations, yesterday. He decided, apparently, that by having references to specific countries it would get in the way of trying to move the ball forward on what he was trying to do on Thursday and I suspect he knew that come Friday morning he would be going out there with a very clear, very determined front against Iran and several other countries. GORDON CHANG, AUTHOR, "NUCLEAR SHOWDOWN": I think the real problem, though, is that when we look back at American diplomacy with regard to Iran, we always agree to lowest common denominator solutions with regard to the U.N. because we're trying to please Russia and China. We've done this three times, it hasn't worked, the Iranians are continuing to enrich uranium at secret sites. We need something a bit more effective and that's working with our friends in Western Europe, the Israelis. I'm not so sure that the Russians and the Chinese are going to run and help us with regard to Iran.

DOBBS: What do you think? Russia and China are going to stand up this time?

LEVI: I wouldn't hold my breath for it. Russia is moving a bit in the right direction, there have been some promising noises. But when it comes down it, when they have to actually decide on what sort of sanctions they might back they often pull back considerably. The Chinese are even further away from moving forward. Now let's be clear, we don't know there's any secret enrichment going on at covert sites, but what we heard today about the building of a covert site is plenty to worry us.

DOBBS: And is there any other possibility for that site should it be operational?


LEVI: No, there's no plausible reason to have that site. It's too big to be a simple research facility and it's too small to be commercial facility. It's just right for a military facility.

DOBBS: Ahmadinejad has already pushed back saying that President Obama made a mistake. Does he have sufficient credibility for that to be any kind of reason for others who are unconvinced of the roles of both the West and Iran to give pause here to suggest that perhaps they should listen to Ahmadinejad?

CHANG: I mean, there's no reason to listen to him, he has absolutely no credibility on any of this. You know, what he is doing is he feels he has Russia and China on his side. You got to remember that with regard to China and North Korea, we played it by China's rules and for years we negotiated with the North Koreans and that gave them the opportunity to build nuclear weapons. Now the Russians and Chinese want us to do the same thing with regard to Iran and Ahmadinejad knows that, so he can say all these outrageous things.

DOBBS: It's interesting because, Mike, what you suggest as the president's motivation here, trying to build a consensus. The president had no hesitation in singling Israel out for strong criticism and even insult from some perspectives, yet you suggest it's rational that he would hold back on Iran while seeking consensus. What does this leave Israel in the way of options vis-a-vis Iran and what is, at least at this point, apparently a rush to creation of weaponized uranium processing facilities

LEVI: Well, the president appears to be choosing different approaches for different forums. He's decided the general assembly is not a place he'll fundamentally transform so he takes that one way -- or the Security Council and when he's at the G-20 with his partner from France and Britain he takes a much more aggressive stance. Now Israel, looking at this, has to see two different things.

On the one hand they are seeing that Iran has been willing to build a covert facility that has to have them worried. At the same time they are seeing that Western intelligence has discovered at least one facility that has to encourage them a bit. I don't think that Israel is ready just now to take military action, but day think they will be contemplating it in a year or so ahead.

DOBBS: Non-proliferation, the president making his speech, a lot of clucks of approval at the United Nations, and then today, the vice president of Brazil saying that it makes every bit of sense for Brazil to have nuclear weapons, as well. Is it possible to constrain nuclear proliferation?

CHANG: Well, I think that it is, but we have to have better policies with regard to North Korea and Iran. You know, once we're weak on these countries, the Brazilians, the Argentineans, you know, the Venezuelan, the people in the Gulf, they all want nukes and that's sort of understandable if they think the American leadership is going to fail.

DOBBS: Michael Levi, thank you very much. Gordon Chang, thank you very much.

Up next, President Obama's media blitz not doing much for his approval rating. It's back down again and we'll tell you what a lot of people say are the reasons why.

And Vice president Biden his approval rating seems to be fine, but calling out his fellow Democrats calling some of them "turkeys." Oh yes, the vice president just getting started.

And new charges leveled against ACORN. Is the left-wing activist group one giant shell game? We'll have the answers, next.


DOBBS: New investigations, new charges against the left-wing activist group ACORN Senate Republicans charging ACORN has been running a big shell game taking in millions of dollars in both charitable donations and federal tax dollars using them for its own political agenda. Ines Ferre has our report.


INES FERRE, CNN CORRESPONDENT (voice-over): The flow of money between ACORN affiliates is a "big shell game" according to the Republican staffers. Senator Chuck Grassley's tax team found in 2006 ACORN had 94 organizations under its umbrella, some nonprofit some for profit. Many of them were located at one address in New Orleans.

It also found that ACORN's four largest charities received more than $20 million in revenue in 2006, most of it through charitable contributions and government grants. More than 50 percent of that money went to other ACORN affiliates including taxable entities. The National Legal and Policy Center says the study is exactly what the IRS needs to fully investigate ACORN.

PETER FLAHERTY, NATIONAL LEGAL AND POLICY CTR: It looks like ACORN and its affiliates could be one big laundromat. Government money goes in, foundation money goes in, and it comes out as political action and into the pockets of those people running ACORN.

FERRE: ACORN's response to the study was, "Senator Grassley clearly told the staff to dig out old files on ACORN, wrap them up to a bow tie and release them to the public as if there was any substance to his accusations. If you actually read the report, it is based on outdated information and draws no relevant conclusions."

The study comes amidst the controversy over a video showing ACORN workers giving questionable, if not fraudulent, advice to undercover activists posing as a pimp and a prostitute. Grassley is just one senator asking the IRS to investigate ACORN, others have asked the FBI, the Justice Department, the Treasury and Labor Department to do their own investigation.

The IRS recently dropped ACORN from its volunteer tax assistance program and Congress voted to cut its funding.


FERRE: And ACORN is being investigated in at least 10 states for voter registration fraud. ACORN has launched an internal investigation into how it delivers its service, but not the allegations of voter registration fraud. Congressman Lamar Smith says ACORN's announcement is too little too late saying, "an internal audit will only tell us what we already know, ACORN is poorly managed and has little regard for the law" -- Lou.

DOBBS: Yeah, the investigations are only beginning. The inspector general of Internal Revenue Service, an investigation by the Justice Department on grants that have been received, calls by Lamar Smith, Congressman Smith for a full blown FBI investigation. And as you reported, these calls that you just mentioned in your report, I mean ACORN is now under full assault by investigators and it looks like it will only intensify.

Thank you very much, appreciate it, Ines Ferre.

Joining me now, three of the best political analysts in the country, all CNN contributors, Republican strategist, former political director for the White House, Ed Rollins.

Ed, good to have you here.

Columnist, "New York Daily News", Errol Louis. Democratic strategist, Robert Zimmerman. Gentlemen, good to have you here.

Let's start with it, well, let's see, let's start, Mr. Zimmerman as Democratic strategist, this would be appropriate. Any problem for the Democratic Party there with ACORN?

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: Absolutely not. As long as Democrats stands up...

DOBBS: OK, we can move to the next question.

ZIMMERMAN: Very honestly, as long as Democrats stand up and call for full scrutiny and demand transparency and if they were watching Lou Dobbs a year ago they would have known this was going on and could have been more proactive.

DOBBS: Appreciate that, Robert, thank you very much. As a matter of fact, former -- a kind gesture -- former board member of ACORN, crediting this broadcast as well from a year ago, so thank you and we appreciate it.

This is remarkable that this has gone on in various places. ACORN is sitting in the same building with the Service Employees Union, their relationship with the Obama campaign, left-wing, Democratic candidates all over the country, well established, yet federal dollars, taxpayer dollars flowing into an organization. Forget the criminality, the whatever else is going on, why in the world should federal tax dollars be going to a partisan organization?

ERROL LOUIS, NEW YORK DAILY NEWS: Well, it's something we've talked about here before. You get a lot of, especially, Democratic organizations; they get very lazy, you know, who wants to run a voter drive? Ah, we'll just write a check, let them take care of it.

And in response to your earlier question, is this going to hurt the Democratic Party? Somewhere down the road it will, because I think people gotten out of the habit of doing the basics of what a political party is suppose to do as far as recruiting new members, registering new voters, being a presence in some of these low-income communities that tend to vote Democratic when people are actually engaged. So, they're going to have to start from scratch, they're going to have to figure out a new model.

DOBBS: Ed Rollins, before I ask you a question, I'd just like everybody to see Senator Max Baucus today explaining to everybody why they're adjourning for the day at about Noon and they wouldn't have a test vote, they're not going to be -- still not have 72 hours to read legislation and no they still not going tell anybody on that committee what it's going to cost, but this is the senator, if you will, just watch this exhausted, frustrated and embarrassed committee chairman trying to communicate what's going on in his committee.


SEN MAX BAUCUS (D-MT), FINANCE CHAIRMAN: We're going to bring up public option amendments when we get back, after -- over -- next week, because Monday is a holiday when we adjourn today, we will not go back in session until Tuesday morning. And so Tuesday -- sometime Tuesday I expect, and hopefully earlier rather than later on Tuesday, we'll bring up the public option amendment. I want to take that up soon. It's an extremely important amendment... (END VIDEO CLIP)

DOBBS: Yes, it is. Is all of this taking a toll, do you think?

ED ROLLINS, REPUBLICAN STRATEGIST: Oh, absolutely. Sure it is. He had a long period of time where he got to do this by himself and now he's under very close scrutiny. And the problem is every time you put a solution out there there's a problem. And I think to a certain extent the money does not add up and every time you try and move this pot to that side it basically antagonizes some another constituency group.

DOBBS: And the scoring of this legislation, why in the world would the Democrats not, the Democratic leadership at both White House and the Senate and also the House, why would they not just give time to score the legislation, do intelligent, have an intelligent national dialogue on this issue -- Errol.

LOUIS: Well, they're handling, I think, the pace is around 25 amendments per day, so it's a pace and it's a kind...

DOBBS: Well, they've got 560 in Baucus's...


LOUIS: Well, sometime in late October they should be finished, shortly before Halloween.

ZIMMERMAN: Well, let's also remember there have been 2-1/2 years of public hearings, there have been, I think, over 150 bipartisan meetings. I give Max Baucus a real shout out for trying to come up with an innovative idea, trying to bring the two parties together...

DOBBS: Oh, right, by the way, when I -- look, my heart goes out to Max Baucus. You saw a man fatigued, tired, as I said, frustrated and embarrassed by this process. He stood up, he's been trying to get it done. He's obviously a man who believes he's doing the right thing. This is no way a criticism of Max Baucus. This is a criticism of two parties, a president and two houses of Congress that, my god, why should it not be reflective, why shouldn't it be a matter of coercion to say let's act in the national interest, let's be intelligent, let's talk about the facts, let's look at the possibilities, the alternatives, their costs, their impact on the consequences of the public policy decisions we make and eliminate these artificial deadlines and act like adults with responsibilities to the American people in both parties.

ZIMMERMAN: Because we if don't have deadlines and if we don't at least prompt action, we'll have no action. It's not an accident...

DOBBS: Reject that. I've got to say, I reject that. If you're saying that the only way we can do this is to deny responsible action on the part of our legislators, then we're doomed.

ZIMMERMAN: Lou, there's a reason, out of the five committees dealing with health care legislation, four have already voted them out of their committee. That's more progress then they've made since Harry Truman brought this up. And I think it's significant...

DOBBS: Now, everybody can go home

ZIMMERMAN: No, no, there's more work yet to be done. But the point is here, we are making progress, and I think we'll have a bill by the end of the year and I think if we don't have it by the end the year we won't have a bill and I think that would be a travesty.

ROLLINS: See, that's the absurdity of this thing. I mean, you made that pitch; the president's made that pitch. If this thing is something that this country desperately needs and cost us trillion dollars, no matter what your numbers are, it's going to cost us a trillion dollars, it's going to alter everybody who has health insurance today dramatically, one way or the other. And why can't we take the time to debate it? I mean the reality if you can't make your case for it then it shouldn't happen in a Democracy.

ZIMMERMAN: I'm going to make my case when we come back, I hope.

DOBBS: That's right, and as Robert said, we will be right back with his case. Stay with us.


DOBBS: We're back with our panel, as you may hear. Senator John Ensign got a note back from the Joint Committee on Taxation's chief of staff. He sent Senator Ensign a note, wanted to know what that 1,900, had been 3,800, remember, the family that had to pay that didn't have health care. It turns out that Ensign's was pretty revealing. It turns out that the violators who did not pay that 1,900, that was 3,800, would be charged with a misdemeanor, they would face $25,000 in fines or, and I love the way they describe it, not more than just one year in jail. I mean, what in the world is going on -- Errol.

LOUIS: Well, it's not quite a felony, but I mean, yeah, this is why some people don't like taxes. This is why Ed and his party are fighting tooth and nail. I mean, the reality is if you're going to tax people, there have to be penalties if they don't pay...

ROLLINS: You know what the reality is, first of all, this isn't a tax, it's going to end up being a tax. This is supposed to be about health care. This is supposed to be about -- a mandate is a little different. We have never mandated any program besides the federal government mandating the states...

ZIMMERMAN: Ed Rollins, you're turning into a fiscal conservative. And I'll tell you why.

ROLLINS: And you'll be very dangerous to your party.

ZIMMERMAN: I'll tell you why.


ZIMMERMAN: Because I want to end the health care welfare system that we presently have, where we have... ROLLINS: You're creating another one.

ZIMMERMAN: We have people who can afford health care go into the emergency room and passing on the cost to taxpayers like me. Now it seems that your party.


ROLLINS: You have nothing to say. The bottom line is health care, Medicare, Medicaid is the one that basically is putting the big burden on -- it's 50 percent of all health care in America, today. You're now going add more entitlement...

ZIMMERMAN: I want people to pay for their health insurance. That's what I want, rather than stick us taxpayers with the bill, you liberal, you. Taxpayers are going to get stuck with the bill anyways.

DOBBS: I am absolutely dumbfounded.


Robert Zimmerman says no welfare.

ZIMMERMAN: That's right.

DOBBS: All right.

ROLLINS: He called me a liberal. My god, I've been insulted.

DOBBS: We got some folks getting mighty confused, here. Coming up at the top of the hour -- only me, really -- coming up at the top of the hour, sitting in for Campbell Brown, Rick Sanchez.

Rick, what you got?

RICK SANCHEZ, CNN NEWS ANCHOR: I'm wondering if you or any of your guests can speak Gadhafi, because I think we need a translator.

DOBBS: I don't even listen Gadhafi.


SANCHEZ: Gadhafi goes off with Fareed Zakaria. He's talking, apparently about whether he has regrets over Lockerbie. His answer, Lou, his answer will astound you. Talk about, you know, this is language Lou Dobbs would use. Talk about not owning up, that's exactly what happens here. So tonight, here's what I'm going to do, Lou. I'm going to talk to a woman who lost a loved one, on brother on PanAm Flight 103. And she was there, she met with Gadhafi, she was expecting an apology. Well maybe the clue here is she didn't get one.

So you're going to be hearing from her. She's going to be sitting down and talking to me, tonight.

Also, Michael Moore is going to be on tonight. He's going to take us through this new movie. I know you're going to run to watch, Lou. It's called "Capitalism, A Love Story." How do you like that, Lou?

DOBBS: I think it sounds like a fascinating hour. Rick, thanks a lot. Look forward to it.

SANCHEZ: See you, man. Take care.

DOBBS: Still ahead, "Heroes," our tribute to our men and women who serve this nation in uniform. It's not Michael Moore, but it's great. We'll be right back.


DOBBS: Now "Heroes," our weekly tribute to our men and women in uniform. Tonight we honor Staff Sergeant Glennie Burks who followed in his father's footsteps, joining the Army right out of high school and he continued following his father's footsteps. Bill tucker has their story.


BILL TUCKER, CNN NEWS CORRESPONDENT (voice-over): Staff Sergeant Glennie Burks joined the Army for the discipline, the education and to be just like his dad who has served in the Army for over 25 years. Burks enlisted in 2002, months after 9/11, but the thought of going to war never crossed his mind.

STAFF SGT GLENNIE BURKS, U.S. ARMY: Just the thought of trying to fathom it, especially at the age I was 18, it just wasn't happening until I was actually there.

TUCKER: He was sent to fight the war in Iraq in 2003. His father, Glen Burks, Sr. had never been in a combat zone. He was supportive of his son, but on the inside...

GLEN BURKS, SR, FATHER: I was scared to death. I was literally scared to death.

TUCKER: Burks was part of an infantry unit that conducted patrols and door-to-door raids throughout Baghdad. In 11 months, Burks and his unit were involved in six major enemy engagements, the last one turned deadly. It started out as a typical patrol.

BURKS: After driving, there was a -- we hear an explosion.

TUCKER: The truck in front of Burk's crew had just run over a pack of explosives, sending the truck 30 feet into the air.

BURKS: When we went out, we see this huge flame of fire, we can see the tracers from the bullets flying each and every way. And all I can hear them saying is you got to help him, you got to help him.

TUCKER: Burks and his crew heroically saved the lives of two soldiers, five others were trapped in the truck had perished in the fire.

BURKS: We couldn't help them. They were, you know, already gone.

TUCKER: Sergeant Burks was awarded the Bronze Star of Valor and the war hero found himself giving long distance advice to his father who had been called to deploy for combat for the first time in his career. The highlight of his dad's time in the combat zone arrived just before Father's Day.

BURKS, SR: I looked up and it was my son. And I jumped up, I was like oh, my god, my son. We just embraced.

TUCKER: It was Glennie's second deployment to Iraq and a surprise for his dad.

BURKS, SR: My son is my hero and I say that all the time, he's my hero. And I'm so proud of him.

TUCKER: Bill Tucker, CNN, New York.


DOBBS: And us, too. Our thanks to the Burks' and all our brave men and women in uniform.

Next, Rick Sanchez.