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Lou Dobbs This Week
Preparing for Talks with Enemies; Border Patrol Agents in Jail
Aired March 03, 2007 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KITTY PILGRIM, CNN ANCHOR, LOU DOBBS THIS WEEK: Tonight, the United States prepares to hold talks with some of this country's most dangerous enemies. Has U.S. foreign policy reversed course? We'll have a special report.
And why did federal prosecutors target two Border Patrol agents who did their jobs, instead of targeting a repeat illegal alien drug smuggler?
We'll have that and a great deal more straight ahead.
ANNOUNCER: This is LOU DOBBS THIS WEEK - news, debate and opinion - for Saturday, March 3rd. Sitting in for Lou Dobbs, Kitty Pilgrim.
PILGRIM: Good evening.
New questions tonight about the direction of U.S. foreign policy. In the next week, the United States is expected to hold talks with three of this country's most outspoken foes.
U.S. and North Korean officials will meet in New York. And U.S. diplomats will join Iranian and Syrian officials at a regional conference in Baghdad.
Our State Department correspondent, Zain Verjee, joins us now.
Zain, what exactly is going on between the United States and Iran and Syria? What can we expect?
ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Well, as you said, the U.S. says it's going to attend a regional conference, basically on stabilizing Iraq. Iraq's neighbors are going to be there, including Iran and Syria.
Now, the Bush administration's policy has basically been to isolate those two countries, Iran because of its controversial nuclear program, and Syria because the U.S. accuses it of backing Hezbollah and playing a destabilizing role in Lebanon.
The U.S. says that the focus, though, of this conference is Iraq only. Nothing else, no other issues will be discussed.
But the question everyone's asking is this, Kitty: Will there be one-on-one talks with Iran and Syria on the sidelines of this conference? Well, a State Department official tells CNN that it's not ruling it out; it's also not ruling it in. Experts we've talked to said, though, there could be some key diplomatic possibilities here.
PILGRIM: And, of course, the Bush administration has refused those bilateral talks up until now.
I guess the other big question is: Has the United States changed its policy towards Iran and Syria?
What's your view, Zain?
VERJEE: That's been the big discussion and debate this week.
The State Department says, look, there is absolutely no change in U.S. policy here. But the U.S.-based policy analysts that we've spoken to say, yes, there is.
But why is that?
Well, first they say that there's a sense that the existing policy toward Iran, toward Syria, just isn't working. Meanwhile, you look over at the situation in Iraq. It's getting worse and worse.
And then add, also, after the midterm elections last year, the supporters of engagement with countries like Iran and Syria within the administration are emerging a lot stronger.
Also, one final point, Kitty. U.S. officials told CNN, too, that by backing the conference, it's a way of satisfying critics at home and abroad who say they really want the U.S. to talk to its foes. So, the Bush administration can then show that it's doing diplomacy and that it is engaging.
PILGRIM: Of course, after the Iraq Study Group suggestions, there was a good bit of pressure ...
VERJEE: Right.
PILGRIM: ... for this sort of engagement.
Zain, let's switch to another country. What about the talks with North Korea, a country President Bush once said was part of the "Axis of Evil?"
VERJEE: Right. North Korea, as you remember, tested a nuclear device last year in October.
Since then, there's been an enormous amount of pressure by the international community to get North Korea back to talks, which they did. And talking to the U.S. on the sidelines of the six party talks, as well as pressure from China essentially led to a new deal.
North Korea agreed to shut down its main nuclear reactor in exchange for aid, as well as normal relations with the U.S.
Now, on Monday and Tuesday of next week, the U.S. and North Korea are going to have a key, one-on-one meeting that's going to be significant. It's going to be held in New York.
And the plan is basically to come up with an agenda to move forward toward diplomatic relations.
The State Department tells us, though, that there's not going to be any breakthrough here, but it is a first meeting, Kitty, and it is a start.
PILGRIM: And it is significant.
Thanks very much, Zain Verjee.
The United States has also been holding talks with a leading, so- called ally in the war against radical Islamist terrorists. Vice President Cheney met with Pakistani president, Pervez Musharraf in Islamabad.
Cheney demanded that Musharraf take firmer action against terrorists in tribal areas near the border with Afghanistan.
Pakistan later announced it has arrested the Taliban's former defense minister, who was arrested in the southwestern Pakistani city of Quetta.
And as the U.S. sends more troops to Iraq, congressional Democrats are deeply divided over their policy on the president's troop buildup. Some House Democrats want to restrict the president's use of war funds, but that proposal ran into strong opposition.
As Dana Bash reports, the Democratic leadership is now trying to develop a new policy on Iraq.
(BEGIN VIDEO)
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT, CAPITOL HILL: California Democrat, Lynn Woolsey, sums up the mood of the Democratic majority on Iraq in one word.
REP. LYNN WOOLSEY, D-CALIFORNIA: Tense.
BASH: Because?
WOOLSEY: Because we aren't unified.
BASH: And why is that?
WOOLSEY: Well, because we have a huge tent.
REP. NANCY PELOSI, D-CALIFORNIA, SPEAKER OF THE HOUSE: The concurrent resolution is accepted.
BASH: But just two weeks ago, House Democrats were unified in opposing the president's plan to send more troops to Iraq. Now, Democrats are openly divided on what to do next.
REP. JIM CLYBURN, D-SOUTH CAROLINA, MAJORITY WHIP: We are what America is. We are searching for consensus. We are searching for an honorable way to address a dishonorable situation that we find ourselves in.
BASH: Senior Democrats say an early problem was this.
REP. JOHN MURTHA, D-PENNSYLVANIA: We're trying to force a redeployment, not by taking money away, by redirecting money.
BASH: Congressman John Murtha pitching a plan on an anti-war Web site to bring U.S. troops home from Iraq by setting conditions on funding the president can't meet.
Conservative Democrats said, "No way."
REP. JIM COOPER, D-TENNESSEE: I think the main message the Democratic Party needs to have is support for our troops. We need to give them the equipment, everything they need to do the job.
BASH: So, now Democratic leaders are pushing a proposal with less political risk. Instead of cutting or withholding war funding, it would set military readiness standards. If those aren't met, the president would have to sign a waiver and explain why. But caution is a tough sell to anti-war liberals.
WOOLSEY: A lot of Democrats still believe that a label of not protecting the troops would be devastating to them in their next elections. And I think they are so wrong.
BASH: Democrats point out over and over that public opinion is stronger than ever against the Iraq war. But turning that into a consensus on how to confront the president and force an end to the war is proving extraordinarily difficult for Democrats.
Dana Bash, CNN, Capitol Hill.
(END VIDEO)
PILGRIM: A new push in the Senate to give illegal aliens in this country outright amnesty. The Senate Judiciary Committee held hearings on so-called comprehensive immigration reform, and Democrats, the White House and corporate elites are all demanding amnesty for illegal aliens.
Lisa Sylvester reports.
(BEGIN VIDEO)
LISA SYLVESTER, CNN CORRESPONDENT, WASHINGTON: The one thing the Bush administration, congressional Democrats and Republicans agree on is the current immigration system is broken.
Fake Social Security cards are so abundant, it's a joke.
SEN. LINDSEY GRAHAM, R-SOUTH CAROLINA: Can I get a Social Security card illegally by midnight tonight?
MICHAEL CHERTOFF, SECRETARY OF HOMELAND SECURITY: I don't know if you could, but I think probably ...
(LAUGHTER)
... I think probably an illegal immigrant ...
GRAHAM: Don't sell me short.
SYLVESTER: Lawmakers wanted to pin down Homeland Security secretary, Michael Chertoff, and Commerce secretary, Carlos Gutierrez, on their position on immigration.
Democrats pushing so-called comprehensive immigration reform expect the White House to do more heavy lifting after last year's failed efforts. That means convincing Republicans, many of whom don't buy the sanitized phrase "earned legalization," but see it as blanket amnesty.
CHERTOFF: I think the president's been crystal clear he does not want to have an amnesty program. So ...
SEN. CHUCK GRASSLEY, R-IOWA: My answer to that is, if it walks like a duck and quacks like a duck, it's a duck.
SYLVESTER: Secretary Gutierrez said the White House is on record favoring a guest worker program and legalizing the 12 million plus illegal aliens.
Chertoff added that, whatever program Congress approves, it has to be workable, noting the U.S. government's failure to follow through on enforcement measures after the 1986 amnesty.
CHERTOFF: I think that, frankly, there was a lot of public skepticism built up over 20 or 30 years of what many people in the public view as lip service.
SYLVESTER: Some, like Senator Tom Coburn are not convinced a guest worker and amnesty program is even necessary.
SEN. TOM COBURN, R-OKLAHOMA: Why does it make sense to have an influx of an additional workforce, when we have 10 million Americans that aren't employed today, and real wages for those people at those entry level jobs aren't rising?
SYLVESTER: The new Congress is taking up immigration where the old Congress left off, with the same battle lines drawn.
(END VIDEO)
SYLVESTER (on camera): Even though there is a Democratically controlled Congress, what happens on immigration in the House and Senate could ultimately be decided by swing Republicans.
On one hand, they're receiving pressure from the White House to support the comprehensive approach. On the other, they're spending time in their districts, hearing from constituents who oppose anything resembling amnesty for illegal aliens - Kitty. PILGRIM: It will be quite a battle. Thanks very much, Lisa Sylvester.
Still to come, the battle to reclaim our streets from drug cartels and drug addicts. We'll have an exclusive report from the front line.
Also, the Bush administration persists with so-called free trade policies, even though free trade has cost millions of Americans their jobs.
And, startling new charges of lies and cover-ups in the case of two Border Patrol agents sent to prison for doing their jobs.
(COMMERCIAL BREAK)
PILGRIM: Now, "The War Within," our special report on this country's battle against drug and alcohol abuse.
Tonight, we have an exclusive look at a raid by drug enforcement agents in Los Angeles. As Kelli Arena tells us, the targets are members of a vicious Mexican drug cartel.
(BEGIN VIDEO)
KELLI ARENA, CNN CORRESPONDENT, LOS ANGELES: As the city of angels sleeps, the DEA is gearing up - final preparations for an early morning raid on a suspected U.S. branch of a lethal Mexican drug cartel.
CNN was granted exclusive access.
UNIDENTIFIED MALE: Walk around to the front and make entries at the front door, right here.
ARENA: Silently, the team moves in, surrounds a house in East L.A.
It's a scenario simultaneously playing out in 15 cities from Southern California to Chicago, a culmination of nearly two years of investigative work.
Here in L.A., they get their woman, Leticia Cervantes Lopez (ph). The DEA believes she's the head of a distribution cell for the Cazares-Salazar drug cartel. Officials say she's in the United States illegally.
UNIDENTIFIED MALE: She was responsible for breaking down the drug shipments that were transported across the southwest border into the U.S. into smaller shipments, and distributing to other couriers.
ARENA: There are other adults in the house during the raid, and children - one baby only months old.
JON GOLDBERG, U.S. DRUG ENFORCEMENT ADMINISTRATION: These people push these drugs and do it around their own children. And that's something that has to be stopped.
ARENA: As agents searched the house, a drug-sniffing dog is sent in to assist.
RICK CURIEL, HUNTINGTON PARK POLICE: When we made our initial search, he did show interest and alert in a couple of areas.
ARENA: In the end, a small amount of marijuana is seized.
Including today's raids, the DEA says this investigation has netted more than 700 pounds of meth, 4,000 kilograms of cocaine, 27,000 pounds of marijuana, and more than $45 million in cold, hard cash.
The man allegedly responsible for getting those drugs into the United States, Victor Emilio Cazares-Salazar. Indicted by a grand jury, he is believed to be in Mexico.
Agents say his runners stash the drugs inside wheel walls and hidden compartments in trucks to make their way across the porous southwest border to Los Angeles. Agents say the drugs are then repackaged and sent all across the country.
GOLDBERG: We targeted this organization at all levels, from the command and control structure to the people at the top who call the shots, down to the street dealers who pedal the poison on the streets.
ARENA: More than 400 people have been arrested so far in Operation Imperial Emperor, dealing a serious blow to Cazares- Salazar's operations. But the satisfaction only lasts so long.
UNIDENTIFIED FEMALE: There's a lot of them out there, and obviously there'll be people who want to take the place of the people that we arrested today.
ARENA: Kelli Arena, CNN, Los Angeles.
(END VIDEO)
PILGRIM: The numbers are staggering. By age 17, seven out of 10 teenagers have been offered illegal drugs. And now hundreds of schools are fighting the drug war with random drug testing.
Christine Romans walks us through one of those schools taking action on "The War Within."
CHRISTINE ROMANS, CNN CORRESPONDENT: These kids have all been drug tested at school.
GABRIEL HAMILTON, HIGH SCHOOL STUDENT: They just made it really confidential. I mean, I was really comfortable doing it.
MEREDITH DUDLEY, HIGH SCHOOL STUDENT: It's a deterrent. So, if someone has ever offered me something, I could go, "No, I can't. I'm going to get tested,"
ROMANS: At Hunterdon Central High School in New Jersey, it's a trip to the nurse's office if your name comes up randomly.
SUZANNE COOLEY, VICE PRINCIPAL, HUNTERDON CENTRAL HIGH SCHOOL: And once they get to the health office, they get - they pick a little ball out of a box. One says urine, one says oral. And whatever one is picked is the test that we administer for them.
ROMANS: Testing for THC, found in marijuana, cocaine, PCP, prescription drugs and alcohol.
It's not legal to randomly test everyone. So Hunterdon Central tests kids in extracurricular activities, or with other privileges, like a school parking spot.
LISA BRADY, SUPERINTENDENT, SOUTH HUNTERDON HIGH SCHOOL: The message of a student random drug testing program is pretty simple. We do not allow drug use and alcohol use in our school.
ROMANS: But critics say it doesn't work. It's a poor use of money in cash-starved schools. It undermines trust between teens and adults. And it's an invasion of privacy.
Jennifer Kern lobbies against school drug testing.
JENNIFER KERN, DRUG POLICY ALLIANCE: You're pushing students away from the very things that have been proven most effective to keep them engaged in the after-school hours where their parents aren't home, during the peak drug-use hours.
ROMANS: Randomly testing, she says, the wrong students.
BRADY: No, we're not. We're testing the right kids, because these programs are deterrent programs. They are designed to try to keep kids who are not already using drugs from starting, or getting those kids that are maybe dabbling around in drug use to stop.
ROMANS: So often, that very experimentation is happening under parents' noses.
TONY SPADORA, HUNTERDON CENTRAL PARENT: If it's only a matter of, you know, a test to find out if my son is using drugs, then, you know, I'd be interesting in having it done, because I want to know, as a parent.
ROMANS: The White House pushing hard to get more schools to test for drugs, providing $20 million since 2003 for school districts.
BERTHA MADRAS, OFFICE OF NATIONAL DRUG CONTROL POLICY: This is a way to help both the child and their parents get over this very treacherous period of adolescence.
ROMANS: By the age of 17, seven out of 10 kids have been offered illegal drugs. Thirty percent of 16- and 17-year-olds drink.
(END VIDEO)
ROMANS (on camera): Now, a positive test means the parents are called, a doctor is consulted and drug counseling is provided.
But the critics include the American Academy of Pediatrics and the National Association of Social Workers - groups whose members work with at-risk teens. And they say random testing can undermine the trust that kids have with adults, and actually complicate treatment.
But school administrators of these programs, they say their own experience with this proves otherwise, Kitty.
PILGRIM: Now, public schools face some limits on the children they test, correct?
ROMANS: The Supreme Court says it has to be kids in after-school activities, in athletics. At Hunterdon Central, they even include kids who have, say, privileges like a parking spot. So, their pool is about 1,800 kids and about 20 a week are tested. So about 60 percent of the population is tested there.
PILGRIM: All right. Thanks very much, Christine Romans.
Coming up, China's policies are costing millions of Americans their jobs. Why is the administration still touting free trade with the communist regime? We'll have a report on that.
A Democratic congressman under investigation by the FBI takes a ride on Air Force One after he's appointed to a key committee seat. We'll have the details.
And new developments in the Ramos-Compean case have outraged the agents, supporters and members of Congress. We'll have a report. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: Millions of U.S. jobs have been lost due to trade agreements with Communist China. And even though the Bush administration admits it has a problem with China's policies, the U.S. continues to tout free trade as the key to a strong economic future, but the results are devastating to America's besieged middle class.
And Bill Tucker is here with the details - Bill.
BILL TUCKER, CNN CORRESPONDENT: Kitty, Treasury Secretary Henry Paulson is scheduled to head off to Asia next week, where he will sit down with Chinese trade officials.
But before he left the States, the secretary stopped by the Economic Club in D.C., to give a speech, where he warned of a rising tide of protectionism in America.
(BEGIN VIDEO CLIP)
HENRY PAULSON, TREASURY SECRETARY: We must redouble our effort to demonstrate the benefits of trade to our standard of living.
(END VIDEO CLIP) TUCKER: The secretary's attitude was hard to take for critics of the administration's trade policies.
(BEGIN VIDEO CLIP)
REP. STEVE KAGEN, D-WISCONSIN: This nation is hemorrhaging our jobs. They're bleeding overseas. You can't fix that with a band aid.
(END VIDEO CLIP)
TUCKER: Now, since 2001, American has lost three million manufacturing jobs, and it has seen its trade deficit rise from $83 billion in 2001, to more than $232 billion last year, Kitty.
PILGRIM: You brought up the remarks by Treasury Secretary Paulson at the Economic Club.
TUCKER: Right.
PILGRIM: He also did say that there was - that more should be done about piracy and about the currency issue with China. How do you assess that?
TUCKER: Well, that's a problem. This administration has talked that talk for a long time. Critics say, enough talk. Let's get some action. Let's do something.
Talking only serves the Chinese interests. And as you can see over the last five years, our trade deficit has not improved; it has worsened.
PILGRIM: Thanks very much, Bill Tucker.
And now it's time for some of your thoughts. We'll read e-mails.
Curt in Michigan: "Our President and leaders, both Republican and Democratic, will go down in history as the leaders that destroyed this Democracy while trying to promote it in the Middle East. Our government is doing everything to hurt the working man while helping illegal aliens and giving jobs to Communist China. And they're breaking our laws to do it. God help us!"
And we heard from Russ in Kentucky: "The prosecution and ultimate incarceration of agents Compean and Ramos is, in my opinion, the most blatant miscarriage of justice I have ever seen. Who's running this country anyway? Is it our elected representatives or is it Mexico?"
E-mail us at LouDobbs.com. Each of you whose e-mail is read here will receive a copy of Lou's book, "War on the Middle Class."
Coming up, new developments and accusations against the prosecutor in the Ramos-Compean case. We'll have a report on that.
Aftershocks of a dip in China's stock market sends tremors through markets around the world. And we'll hear from an expert on the threat of China's influence, and what (ph) threat that it poses to the United States.
And why was a Democratic congressman under investigation by the FBI flying with President Bush on Air Force One? We'll have the report. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: New developments this week in the case of imprisoned former Border Patrol agents, Ramos and Compean.
The two are serving lengthy prison sentences for shooting and wounding an illegal alien drug smuggler.
Casey Wian reports that shocking new documents now show how the prosecutor deliberately targeted the Border Patrol agents, instead of targeting a repeat drug smuggler.
(BEGIN VIDEO)
CASEY WIAN, CNN CORRESPONDENT: Congressman Dana Rohrabacher holds the latest evidence suggesting former Border Patrol agents Ignacio Ramos and Jose Compean were unjustly prosecuted by the Bush administration.
The men are serving 11 and 12 years in prison for shooting and wounding an illegal alien drug smuggler, who was given immunity to testify against the agents by Texas U.S. attorney, Johnny Sutton.
The once secret documents show Sutton's office was told by the DEA that Oscar Aldrete-Davila was implicated in a second drug- smuggling incident, while he was under immunity, but before the agents' trial.
The evidence that Aldrete-Davila was a serial drug smuggler was kept from the jury that convicted Ramos and Compean.
REP. DANA ROHRABACHER, R-CALIFORNIA: Evidence now emerging suggests that Sutton's office was notified by the DEA of Davila's direct involvement of a second offense. Sutton chose to disregard the information, despite the evidence provided by the DEA.
WIAN: Rohrabacher even accused Sutton of lying, by misleading jurors and the public about Aldrete-Davila's drug-smuggling history.
Sutton released a statement saying, "The U.S. Attorney's office cannot comment about matters that are under seal or ongoing investigations. This office will pursue criminal charges where there is prosecutable activity and competent evidence to prove it."
Supporters of Ramos and Compean want the men freed while an appeals court considers their case. And they want President Bush to personally intervene and pardon the former agents.
A House pardon bill now has 85 Republican co-sponsors. And this week, for the first time, two Democrats joined the effort, Tim Holden of Pennsylvania, and Bart Gordon of Tennessee. REP. BERT GORDON, (D) TN: Looks to me like the government has gotten the cops and robber confused here. We have a terrible problem on the border, and I'm very concerned about it.
WIAN: A full 20 percent of the U.S. House of Representatives is now on record supporting a pardon of the agents.
UNIDENTIFIED MALE: We're going to get to the bottom of it. These men will be freed.
WIAN (on camera): Even in San Bernardino County, California, where a local newspaper reporter and a Border Patrol supporter first brought national attention to the case, the Board of Supervisors passed a unanimous resolution this week asking President Bush to consider a pardon for them at the earliest opportunity.
Casey Wian, CNN, Los Angeles.
(END VIDEOTAPE)
PILGRIM: And late this week, a fourth Democratic congressman, Tennessee's Lincoln Davis, signed on to Congressman Hunter's bill in support of a pardon for the two agents. Eighty six Republicans have signed on as cosponsors.
Congressman Ted Poe is a strong supporter of Ramos and Compean and a former Texas prosecutor and judge. I sat down with the congressman this week and asked him why the smuggler who had testified against the two agents wasn't arrested when he drove a load of drugs into the United States after he was given immunity for his testimony.
(BEGIN VIDEOTAPE)
REP. TED POE, (R) TX: The Justice Department, the federal prosecutors always denied there was a second case, and they were wrong about that. There was a second case. And the drug smuggler was not prosecuted on the second case, it's a case that could be made. They chose not to even investigate it even though there's obvious evidence he's guilty of that.
The jury should have heard about the second case. And that he was not prosecuted for it so they could judge the credibility of the drug smuggler who was the government's only and main witness in this case.
So that's very disturbing that the Justice Department really misled the public about the second case. And what we have done is asked that the speaker of the House and the appropriate committee chairs now investigate, have congressional hearings on exactly this case and why the federal government acted the way it did.
PILGRIM: Now the DEA says there was clearly a second case and they were not told not to prosecute. As a former judge, is it unusual for prosecutors to protect a witness to this degree?
POE: Well, certainly it is. Normally the prosecutors prosecute criminals. But in this case, they give the criminal a pass and while he's waiting to testify, he slips in some more drugs. They don't prosecute him for that. They were so determined and relentless to have both these agents convicted that at any price, any cost, they would give immunity to the drug smuggler, make deals for him so he would testify and cooperate.
And the thing is, normally in this kind of situation, when you make a deal with a witness, you usually get the testimony you want.
PILGRIM: It's shocking. We do have a statement from the U.S. attorney Johnny Sutton. This is what he said. We have the statement.
"The U.S. attorney's office cannot comment about matters that are under seal or ongoing investigation. This office will pursue criminal charges where there is prosecutable criminal activity and competent evidence to prove it."
Seems a lot of backpedaling going on there. What's your view?
POE: Well, they are hedging on this case. They've got a case. The DEA has made the case for the prosecutors. All they had to do was prosecute it.
See, they were caught in a fix. They were getting ready to use this smuggler to testify against the agents. He picks up another case. What are they to do? What they should have dismissed the case against the border agents and prosecute the smuggler. But they didn't choose to do that so they're giving double talk to the American public about this second case. They should have prosecuted him. He's a drug smuggler bringing in twice now $1 million worth of drugs into the United States.
PILGRIM: Yeah, the details of this are shocking. Do you believe there's enough evidence for an appeal here?
POE: Certainly, no question about it. My opinion as a former judge, the jury should have known about the second case and let them judge the credibility of the witness to see what kind of deal he was getting to testify like the government wanted him to testify.
And they did give him certain privileges. You know, he came to the United States, got treated for medical wounds at taxpayer expense and on probably one of these visits is when he brought in the drugs on the second case.
PILGRIM: Unbelievable. What is your next step in Congress, sir?
POE: Well, we have asked and 30 of us have sent a letter to the speaker and chairs of the different appropriate committees asking for congressional investigation on this whole case. And to see why the federal government chose the action it did, chose why it especially chose to deceive members of Congress and the public about the truth of the whole border situation.
PILGRIM: Well, we applaud your efforts. Thank you very much for explaining to us the situation tonight. Congressman Ted Poe. Thank you.
POE: Thank you, Kitty.
(END VIDEOTAPE)
PILGRIM: Coming up, a sharp decline in China's markets sends a shock wave through the world economies. China expert Gordon Chang joins us to discuss what it means for Americans.
Plus, Congressman William Jefferson remains under investigation for accepting thousands of dollars in bribes. So why is the Louisiana lawmaker up for a new high ranking position on Capitol Hill? Three political experts will be here to discuss that and more.
(COMMERCIAL BREAK)
PILGRIM: This week, the Chinese stock market dropped nine percent. It rippled through markets around the world, including here in the United States. It's a reminder that communist China's economic, political and military influence around the world continues to grow.
To find out how much of a threat China poses to the United States we sat down with Gordon Chang, the author of "The Coming Collapse of China. I asked him how worried we should be about the stability of China's economy.
(BEGIN VIDEOTAPE)
GORDON CHANG, AUTHOR, "THE COMING COLLAPSE OF CHINA": The Chinese stock markets really don't reflect fundamentals, either the fundamentals of the economy as a whole or the fundamentals of the companies that are traded. The Chinese government manipulates this market, and they're the biggest factor. It goes up when they want and it goes down when they want it to. And for about a week or so, they've been signaling they wanted stock market prices to cool. It's like the currency. They manipulate the currency. They also manipulate the stock markets.
PILGRIM: But our economy is tied closely because the Chinese hold a lot of our debt. How worried should we be about that?
CHANG: I'm not particularly worried because you know, if the Chinese were to try to drop our debt into the market, which is the worst case scenario, well, they would have to buy something, which they'd have to buy euros and yen. Which means those currencies would soar through the ceilings. The Japanese and Europeans would then have to buy dollars to bring their currencies back into line. And that means after all of this was over, our debt would be held by our friends rather than by China.
So I don't think that's a bad result.
PILGRIM: So the global markets are basically deep enough to absorb things like this? CHANG: Well, in 2005, there was something like 140 trillion dollars worth of financial assets and the global markets are very deep and very flexible and they can handle almost anything. And if we talk about China's problems, then we'll discount them when they actually occur, which of course they will at some point.
PILGRIM: That would be a very positive thing. But are we in denial about the systemic flaws which you point out in your book, "The Coming Collapse of China"?
CHANG: Yeah, the Chinese economy has been defying gravity for some time. And at some point, the factors of gravity have to pull the economy back down again. And that could very well be after the 2008 Summer Olympics, which a lot of people in Beijing are talking about as a factor. Many countries have post Olympic slowdowns. And by then, China will have had a decade of solid growth and just a natural economic cycle will pull the Chinese economy down. So I see that as a critical period for us.
PILGRIM: That's good to be aware of it. Talk strategic issues. And it was very interesting last week when touring Asia, Vice President Dick Cheney raised concern about China's military buildup. And sent a very strong statement. He said, "Last month's anti- satellite tests, China's continued fast paced military buildup, less constructive, not consistent with China's stated goal of a peaceful rise."
Now, this was Vice President Dick Cheney basically calling China on their military buildup. It was a remarkably strong statement. Do you agree?
CHANG: I agree because over the last year or so, China's become much more assertive than cooperative on a whole range of issues. We talk about the satellite destruction in January. But they lasered one of our satellites in August with the parent intention of blinding it. That's a very hostile act.
And we said nothing, and that I think is a really bad because we set a very bad precedent for the Chinese. So they think they can naturally get away with bad conduct in the future, and that's what's been happening.
PILGRIM: Well, let me call to your attention something that we also heard. The vice president criticism of China was replied to. A spokesperson for the Chinese Foreign Ministry accuse the U.S. of being too demanding. Now, this is a weird probably a weird translation. But you can sort of understand the sense of what he's saying.
"If someone always tears through your clothes and even wants to lift open your underwear, saying, let me see what's inside, how would you feel? Would you want to call the police?"
So he's basically saying, a rough translation, this is very invasive that we're calling for transparency in their military. And they feel it's very invasive.
That's my sense of what he's trying to say. I don't speak Mandarin. But how do you read this.
CHANG: Well, you know, it's the same language that the North Koreans have been using about our wanting them to take down their pants so we can verify their nuclear weapons program. The Chinese want to play in a globalized world. They want to be a part of it, and yet, they don't want to show us anything. And I think that that demonstrates about their commitment to actually integrating themselves into the world as it is. And so, it's a very bad signal from Beijing.
PILGRIM: Uh-huh. You bring up North Korea. Assistant secretary of state Christopher Hill has announced he's going to meet with the North Korean foreign minister to discuss what he calls normalizing relations. This is quite a step, isn't it?
CHANG: It's a very big step. Just a couple weeks ago, there was this agreement to shut down their nuclear facilities. It was a two- stage deal. We haven't even started the first stage of shutting down and sealing their reactor at Yongbin. Now we're talking about normalizing relations.
It's really a big giant step. And I think that we probably should end up shutting their program down first before we start to actually talk about the broader issues of normalizing relations with Pyongyang.
PILGRIM: Gordon Chang, always wonderful to get your perspective on this. Thank you very much.
CHANG: Thank you.
(END VIDEOTAPE)
PILGRIM: Coming up, Congressman William Jefferson ignites a fire storm on Capitol Hill over allegations he accepted thousands of dollars in bribes. So why is the embattled lawmaker enjoying rides on Air Force One? And up for a new job on Capitol Hill? Our political panel will be here to discuss that. And much more. Next.
(COMMERCIAL BREAK)
PILGRIM: Republicans and taxpayers are still expressing outrage at Congressman William Jefferson being named to the Homeland Security Committee. In 2005, federal agents found $90,000 in the congressman's freezer. Andrea Koppel tells us why Jefferson still under investigation by the FBI was flying on Air Force One with the president this week.
(BEGIN VIDEOTAPE)
ANDREA KOPPEL, CNN CORRESPONDENT (voice-over): President Bush arrived in New Orleans, the hometown of Congressman William Jefferson just one day after House Republicans kicked up a political dust storm, pledging to try to block the Louisiana lawmaker's appointment to the Homeland Security Committee. But the Republican leader didn't raise as much as an eyebrow when he learned Mr. Bush had just given Jefferson a ride to New Orleans on Air Force One. REP. JOHN BOEHNER, (R) MINORITY LEADER: The president's going to Mr. Jefferson's hometown. And it is customary under Democratic and Republican Presidents, they typically invite the hometown member to join them on those flights.
KOPPEL: Republicans are accusing speaker Nancy Pelosi of failing to practice what she's preached. Last summer, after the FBI raided Jefferson's congressional office, over allegations he had accepted bribes, and about six months before midterm elections, Pelosi forced Jefferson resign his seat on a powerful tax writing committee.
REP. NANCY PELOSI, (D), HOUSE SPEAKER: Our House Democratic Caucus is determined to uphold a high ethical standard.
KOPPEL: But this week, Pelosi backed Jefferson's appointment to the homeland security panel because she said he would be in a better place to help out his hurricane-ravaged district and defended her decision.
PELOSI: Mr. Jefferson has already paid a price, not being appointed to the Ways and Means Committee. In fact, being put off the ways and means committee because there was some thought that the allegations, although they're still allegations had some relationship to the work of that committee.
KOPPEL: New York Congressman Peter King is the committee's top Republican.
REP. PETER KING, (R) NY: So she's saying that a person who has too many ethical issues to be on the Ways and Means Committee is going to be dumped onto the Homeland Security Committee. A committee which is one of four committees that has constant access to classified information, is aware of on going threats and investigations and plots.
KOPPEL (on camera): But Democratic leadership aides point out that all members have access to the same intelligence as the Homeland Security Committee and Congressman Jefferson for his part continues to maintain he is innocent of all allegations. Andrea Koppel, CNN, Capitol Hill.
(END VIDEOTAPE)
PILGRIM: Now, we are joined now by three of the best political analysts in the country. In New York, I'm joined by Democratic strategist Robert Zimmerman and Miguel Perez, nationally syndicated columnist, from Washington, Diana West of the "Washington Times" and thank you all for joining us.
OK. So this flap over Jefferson and Pelosi's defense of this, what do you make of it?
MIGUEL PEREZ, SYNDICATED COLUMNIST: I think it's amazing that they're even considering this man for any kind of appointment right now. I think that until he's cleared, they should not be considering him for anything. But the fact Mrs. Pelosi has decided to put this off now, this is the latest thing we're hearing, that she's putting it off because the Republicans are calling for a roll call on this vote, it's very significant. Who wants to get up and say I'm for the guy who has the $90,000 in his refrigerator?
PILGRIM: Yeah.
ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: I think what's really amazing is the fact that his constituents reelected him to the Congress. That's really the travesty. Ultimately, it doesn't take Colombo to figure out this is a guy with a problem. But the bigger problem confronting Congress bipartisanly is what do you do with an individual who has not faced any charges, has not faced any indictments, has been reelected to serve by his constituents and this is the case affecting Jefferson, plus there are two Republican members of the House under federal investigation serving on the Appropriations Committee, which is in charge of spending money.
And yet, you don't hear anything from the Republicans about how to handle that. There has to be a bipartisan solution how to address the issue of members of Congress who are under investigation but haven't been charged.
PILGRIM: Diana.
DIANA WEST, "WASHINGTON TIMES": Yeah. Sure. I think the way you handle it though is you exercise a little caution. And keep such members off very sensitive committees or any committees at all. I think it's one thing to give the man a ride home on Air Force One, a little strange but I can understand the protocol. It's quite another to give him homeland security seat in what's supposed to be the most ethical Congress in history. It just doesn't compute.
PILGRIM: There are plenty of people calling them out on it. Let's move on to a couple of other topics. Because we really could spend some time on this one.
But let's look at the latest poll numbers. Because that's even more fascinating. And Republicans in Washington, the poll is ABC News poll and we have the line-up choice for nominee in 2008, Rudy Giuliani, 44 percent, John McCain 21 percent, Newt Gingrich 15 percent, Mitt Romney, four percent. What do you make of the numbers, Miguel.
PEREZ: Very interesting. Very interesting, especially the shifting that's going on in all of these races. Guiliani keeps moving up, McCain keeps moving down. Hillary has started to move down a little bit because Senator Obama has moved up. Very significantly after the shift in the African American vote.
PILGRIM: Yeah.
Let's bring up the Democrats while we're at it. This one we have Hillary Clinton at 36 percent. Barack Obama at 24 percent, Al Gore 14 percent, John Edwards at 12 percent. Miguel, I go back to you because you talked about the very important African American vote and support for Obama about two weeks ago on broadcast. And I have to say, you were right about this.
PEREZ: Well, you know, I was surprised at that time that African Americans were not coming out just yet for Mr. Obama, but now the shift has been dramatic. I mean, it was December and January, it was 60 to 20 for Hillary and now all of a sudden, Obama leads her 44-33 percent among African Americans. That's a shift and a half.
PILGRIM: That's right. Robert?
ZIMMERMAN: I think it's important to remember the polls are going to continue to shift dramatically. And that's just the reality of a process this early on. I've argued on the show many times that the concept of a frontrunner is an obsolete in today's political climate.
So yes, I think it's very significant that the African American vote is up for grabs, I think it's great that all the candidates are competing for it. But it's very important to remember that what really counts, not the national polls, but how these candidates will poll in the early caucus and primaries because that's where the momentum comes to determine the nominee.
PILGRIM: And there is plenty of time for slip-ups and mistakes and successes from then. Diana?
WEST: Yes, I think the funniest comment on all of this comes from Newt Gingrich who said about a week ago that we're going to get so bored with these candidates for the next two years almost, that at a certain point, the voters are going to "Survivor" style vote everybody off the island because this is just going to be -- this is going to be very familiar territory to us very soon.
PILGRIM: All right. Let's hope not or our democracy may be at risk. But anyway, let's take a quick break and come back to some other topics in a minute and we're back with our panel right after this. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: Joining me once again, Robert Zimmerman, Miguel Perez, and Diana West. And thanks for staying with us through the commercial. And let's talk about John McCain. On Letterman announced, I think it's got some style, I have to say. But then there were some devil in the details. His statement was picked to pieces.
Let's look at what he said. "Americans are very frustrated and they have every right to be. We wasted," and that was the word that caused the problem, "a lot of our most precious treasure, which is American lives, over there."
Talking about Iraq. "Wasted" was the sticking point. And then he corrected himself. He said, "I should have used the word 'sacrifice' as I have in the past. No one appreciates and honors more than I do the selfless patriotism of American servicemen and women in Iraq."
So there was much made over this. Do you think too much was made over this?
PEREZ: Much to do about nothing. So he chose - it's semantics. He chose "wasted" instead of "sacrificed." Senator Obama has also use the word "wasted" and the Republicans criticized him when he did it. Now the Democrats are criticizing McCain.
They have to find something better to fight about.
ZIMMERMAN: This is the game of gotcha politics that really demeans the entire process. Obviously John McCain is a patriot, he is a decorated hero from Vietnam. I have every confidence that he respects the sacrifices made by our brave men and women."
But there's a much bigger issue than the choice of words. John McCain, the maverick of 2000 is not going to rekindle that by appearing on David Letterman, he is going to rekindle it by the type of rhetoric and leadership that he showed which clearly is not happening.
For him to talk about lives being lost and then support the escalation of the war really reflects the fact that he's become nothing more than a Bush acolyte on the Iraq War policy and nothing more than an establishment Bush Republican.
PILGRIM: Diana, weigh in here on this.
WEST: Well, I would only add that presidential candidates when they become candidates take on a symbolic role and that rhetoric using words such as "wasted" don't go over well. And I wouldn't expect any other candidate to use such language.
PILGRIM: Uh-huh. Let's turn to, as long as we're on the topic about Iraq, secretary of state Condoleezza Rice announce this had week Iraq will sponsor and the United States will sponsor a neighborhood meeting and it will be sort of group discussion with Iran and Syria. How do you assess this? Some charging this is a major flip-flop for the Bush administration.
PEREZ: It is.
It is a major flip-flop. They've been saying they would not meet with rogue regimes. The Axis of Evil. Obviously these two countries, Syria and Iran are part of that. So yeah, it is a major shift. I don't know if it's a good idea. I don't know if we should be talking to our enemies.
WEST: It's not a good idea.
PILGRIM: OK. Diana, go ahead.
WEST: For one thing, when they announce a neighbors meeting, I begin to wonder if Mr. Rogers is going to come back for it. But it's such cloying language.
But there's a very important point here in dealing with Iran. It's not only that it's a terrorist state sponsor. There's also the dissimilarity in goals. You have a leader in Iran who when he was mayor of Tehran, one of his pet proposal was to widen the streets of Tehran so that the hidden imam on his return to earth could tread on broad avenues.
You have someone who is focused on the afterlife. When we sit down with world leaders, we are thinking of this world. And there is just no playing field level enough for such a meeting. It's fruitless.
PILGRIM: Diana really doesn't like this. Go ahead, Robert.
ZIMMERMAN: Fortunately, Ronald Reagan didn't have that kind of narrow perspective when he sat down with Mikhail Gorbachev.
WEST: It's a completely different ...
ZIMMERMAN: And let me finish my point, Diana, if I might.
WEST: OK.
ZIMMERMAN: Furthermore, President Kennedy also showed the diplomatic maturity to reach out to negotiate with Russia during the Cuban missile crisis. No one is defending the Iran regime and what it represents. But we have now heard from so many different leaders in foreign policy, our military leaders pointing out that now is a critical time to begin a dialogue. Iran is economically dysfunctional. They are now rationing gasoline and the leadership of Iran is facing severe rebellion in his own ranks.
WEST: Well, I'm so glad. But it's different from negotiating with other communist nations as you mentioned before because they are motivated by the same kind of great power problems that any nation shares.
ZIMMERMAN: We don't know what they share until we have a dialogue with them and that's the issue, Diana.
PILGRIM: What we'll do is we'll revisit this after the meeting and we'll continue to debate it.
WEST: Sounds good.
PILGRIM: But for now we're out of time. Thank you very much for being with us today. Robert Zimmerman, Miguel Perez and Diana West.
WEST: Thank you.
PILGRIM: And thank you for joining us. Please join us tomorrow. For all of us here, thanks for watching. Enjoy your weekend. Good night from New York. THIS WEEK AT WAR starts now with John Roberts.
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