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Lou Dobbs Moneyline

Anthrax Anxiety Escalates on Capitol Hill; Anthrax Developments Rattle Investors

Aired October 17, 2001 - 18:00   ET


LOU DOBBS, CNN ANCHOR: Good evening.

America battling terrorists in Afghanistan, while Americans battle anthrax anxiety at home. Good evening.

Part of our nation's capital shutting down because of a growing anthrax scare. More than three dozen people have now been exposed to the bacteria nationwide. So far, no links to terrorists have been discovered.

Tonight, we'll tell you how the United States is responding to the anthrax scare, and the efforts being made to bring more anthrax medicine to the market.

We'll also have the latest for you on the military attacks against the Taliban and Al Qaeda network targets in Afghanistan, and what effect growing tensions between India and Pakistan could have on the world's antiterrorism war.

Former Defense Secretary William Cohen will be here.

As efforts move through Congress to choke off Osama bin Laden's money, we'll hear from one of those individuals whose assets have been frozen. And on Wall Street, new anthrax developments rattle investors, pressuring stock prices.

The anthrax scare causing chaos in the nation's capital. Thirty- one people in Senate Majority Leader Tom Daschle's office were exposed to anthrax. Officials now warn that nasal swab tests can, however, produce false results. Three staffers of Senator Russell Feingold also exposed to anthrax. We'll have a live report for you from Capitol Hill in just a moment.

New York Governor George Pataki, closing his Manhattan offices after tests found anthrax spores in a room used by the governor's security detail. Governor Pataki says he and his staff are taking antibiotics as a precaution.

Nationwide, there have now been a total of four anthrax infections. Two of those were in Florida, one of them resulted in death. Two, in New York City, including an assistant to NBC news anchor Tom Brokaw. Investigators say the anthrax strain sent to Brokaw matches one found in the mailroom of a Florida media company. So far, there are a total of 38 known exposures to anthrax. They include staffers of Senators Daschle and Feingold. Eileen O'Connor is in Washington, D.C. Eileen, what is the latest on the anthrax investigation?

EILEEN O'CONNOR, CNN CORRESPONDENT: Well, basically, Lou, they're trying to determine exactly the kind of strain, and if the strains of all of the New York, Washington and the Florida case are matching. Now, we do know that the strain found in the letter sent to the NBC anchor Tom Brokaw, and the spores found in Florida -- as you know, there was no letters ever found down there.

Apparently, according to CDC, that's the same strain. That's going to be very helpful to investigators. Another helpful piece of information today: the sample found in Senator Daschle's letter that was sent to his office -- that was, being told, is a common strain. A naturally occurring strain, a pure -- they were pure spores in that sample.

Now, what does that mean? That means that it is not genetically altered, it's not resistant to antibiotics. That lessens the possibility that it was actually produced in a state-sponsored lab, a lab that would be used to produce biological weapons, the kinds that are designed to kill a massive amount of people, because it does respond to antibiotics.

Very promising news, Lou, on the investigative side. On the one hand, because it eliminates that kind of state sponsorship. On the other hand, though, Lou, it's going to expand the list of possible suspects. So that's going to make it even harder for investigators.

DOBBS: Eileen, the first reports were that the -- the anthrax strain, if you will, the spores in Senate Majority Leader Tom Daschle's office, were of a very potent and presumably sophisticated nature. Now we're not so certain about that?

O'CONNOR: Well, what I've been told, by people who are experts in this, in the military area, is that virulence means the ability to cause disease, and cause the kind of cutaneous anthrax, or inhaled anthrax. So it was possible the kind that was found was very pure.

But at the same time, sophistication, what does that mean? It wasn't sophisticated enough to be a weapon of mass destruction, but it was the kind that does require a bit of sophistication. It requires the kind of sophistication required in a college-level biochemistry degree.

But, Lou, it can be produced in a laboratory, a regular laboratory setting. Now, what's going to be interesting for investigators now is to determine what the strain was, that was used. Because that's going to be able to lead them down the path of the source.

A lot of commercial labs have been able to sell this to research facilities, where they could produce vaccines -- or perhaps it was stolen from a lab. And it's going to be the strain that's going to be almost like a fingerprint for investigators -- Lou?

DOBBS: Do we have any sense of the number of laboratories? Because irrespective, it would require, would it not, a laboratory in which to process this anthrax, no matter how pure, how virulent, how potent or not -- to create this anthrax and to distribute it?

O'CONNOR: It would. But someone could recreate that kind of laboratory. I've been told by sources who are familiar with the making of this that -- and with the strain and the test results -- it could be made in a home.

If you have enough expertise, you could order the required materials, to process it, to grow it and to put it into this powdery substance. And you know, another interesting thing was this: the one found in Senator Daschle's office, we know, may have been transferred through a ventilation system, originally flurrying one to two microns, we're told, inside.

But again, that's the kind that could still be produce in a laboratory setting. Doesn't mean it's in one of these very sophisticated state labs -- Lou.

DOBBS: At this point, Eileen, to very quickly recap, we know that we're dealing with two different strains of anthrax, suggesting two different sources?

O'CONNOR: We don't necessarily know that, because we don't know if they've compared that sample from Senator Daschle's office to the New York and Florida. We know the New York and Florida seem to be of the same strain, according to those tests. We do not know if Fort Detrick has now compared that strain to those two.

If it's all the same strain, that at least will possibly a relief to investigators, at least, if not two different groups that they might be dealing with.

DOBBS: And Fort Detrick being the Army's principle investigative lab for chemical biological weaponry.

One last question: Any advancement on the part of the FBI or the Justice Department? Any leads? are we any closer to knowing who is doing this?

O'CONNOR: They are very tight-lipped, Lou. But I've been told by investigators, they're not ruling out any possibility. But it does not seem right now if they're any closer. They haven't ruled anyone in or out.

DOBBS: Eileen O'Connor, thank you.

DOBBS: Well, for the latest now on the anthrax scare on Capitol Hill, we're going to Capitol Hill correspondent Kate Snow -- Kate.

KATE SNOW, CNN CORRESPONDENT: Well, Lou, precaution is being taken here on Capitol Hill tonight. Within the hour, about 7:00 Eastern time, about 55 minutes from now, all of the office buildings that are on either side of the Capitol, here, the House and Senate Office Buildings, are going to be shut down. They're going to be testing environmentally inside those buildings, testing for any kind of threat from anthrax.

They're doing this, again, just as a precaution. Senate offices will remain closed until Monday, although we're told the Senate itself will technically be in session tomorrow. And the House, in contrast, will be out of session. They will not be due back here until next Tuesday.

We're told a lot of members trying to make arrangements right now, to hold some hearings off campus, of you will, tomorrow. Some of them looking at hotels and other spaces they might be able to use, to continue with their work.

As you mentioned already in the show, 31 people have now been found to be positive for anthrax exposure. That's not the same as infection. And authorities in Capitol Hill here urging a lot of caution about all this. They don't want people to overreact.

In fact, a news conference was just completed, at which Senator Bill Frist, the only doctor in the U.S. Senate, was very clear. He said there is a threat here, certainly, but it's under control.


SEN. BILL FRIST (R), TENNESSEE: The good news, and the good news you heard today, is that this bug, this bacteria, that has a shell or spore around it, is sensitive to every single antibiotic for which it was tested -- that's penicillin, tetracycline, doxycycline, Cipro. And that's good news, and that means this thing is eminently treatable.


SNOW: There's no sign of anthrax being in the ventilation systems. At least, not at this point, Lou, although they are doing some further testing. Right now the only places its been found is in the office of Senator Daschle, and also in a mailroom on the Senate side.

And everyone who has been exposed is being treated with 60 days worth of antibiotics -- Lou?

DOBBS: Kate, one last question. How long do we expect this week to take, both in the Senate and the House -- the House, of course, with far more offices to sweep?

SNOW: Well, we believe it will run through the weekend. House Speaker Dennis Hastert saying that they needed until Tuesday to complete the sweep. And we understand in the Senate that the sweep will take until Monday. So, presumably, they think they can get it all done by early next week.

DOBBS: Kate, thank you very much. Kate Snow from Capitol Hill. As this anthrax scare intensifies, the administration says the federal drug stockpile is adequate, and it is growing, and that two antibiotics, in addition to Cipro, are in fact approved to treat anthrax.

Peter Viles has that part of the story.


PETER VILES, CNN CORRESPONDENT (voice-over): Along the Mexican border, Americans looking to buy cheap Cipro. In New York, even the governor is taking it, and there is a shortage. On Capitol Hill, a push to manufacturer generic Cipro.

Against that backdrop, the Bush administration's point man on the issue went to Capitol Hill with a message: Cipro is not the only way to fight anthrax.

TOMMY THOMPSON, HHS SECRETARY: The FDA is officially approving today the use of two additional generic antibiotics for the treatment of anthrax: doxycycline and penicillin, because these drugs are available in generic forms and produced by several manufacturers. They will be relatively inexpensive, and readily available.

VILES: In fact, the government's anti-ant anthrax stockpile, currently capable of treating 2 million people for 60 days, and with plans to expand that figure to 12 million people, already relies heavily on penicillin and doxycycline. Only 10 percent of the stockpile is ciprofloxacin.

Thompson insisting every strain of anthrax examined in recent days is sensitive to all three drugs. Scientists worry, however, about attacks using other strains of anthrax, developed specifically to resist some antibiotics. Even as the anthrax investigation widened, a developing issue surfaced: the government's preparedness to fight smallpox.

UNIDENTIFIED MALE: Is it accurate to say that smallpox is a -- if it could be obtained by a terrorist, would be a more threatening substance than anthrax?

THOMPSON: There is no question, because it's infectious and contagious.

VILES: The hearing, however, ended abruptly, an unfortunate sign of the times on Capitol Hill.

SEN. JOE LIEBERMAN (D), CONNECTICUT: I've just received a message and request from Senator Daschle that we recess this hearing for now, and that the two of you come with us to the joint caucus of senators.


VILES: Prior to this hearing today, the government had said it wanted a stockpile of 40 million vaccines for smallpox. Today Thompson informed the Congress that's not nearly enough. He wants 300 million vaccines of smallpox on hand -- Lou.

DOBBS: How soon?

VILES: He didn't say how soon. They think they can get the 40 by the end of next year, and perhaps even the 300. He met with drug manufacturers today to form a partnership to get what they need in a hurry, and he said he did get good cooperation from them.

DOBBS: You don't think it would be over (UNINTELLIGIBLE) of me to say than "not soon."

VILES: Not soon enough.

DOBBS: Thank you very much, Peter Viles.

Here now are the latest developments in the attacks against the Al Qaeda and Taliban targets in Afghanistan. U.S. aircraft continuing to pound Taliban and Al Qaeda targets. The heavy bombing has been focused on front line troops, those located north of Kabul, the capital. And the Pentagon tonight says those airstrikes are hurting Taliban resistance.

The assaults around the capital city mark the first time that the special forces AC-130 Spectre gunships, such as the one shown here, have been used in the area.

The Pentagon says more than 2,000 missiles and bombs have been launched against Afghanistan since the war on terrorism began October 7th. And today, President Bush promised those bombs will continue to fall until the terrorists are rooted out.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: They're learning that anyone who strikes America will hear from our military. And they're not going to like what they hear.



DOBBS: International aid organizations, however, want the bombing to stop, at least for awhile. Those groups want to make sure the Afghan people have food before winter arrives. And British Prime Minister Tony Blair saying that the bombing will continue.

Meanwhile, the Taliban has seized more than half the United Nations' food aid in Afghanistan, that hindering efforts to send that aid into Afghanistan.

Tensions between India and Pakistan are intensifying, despite a trip to both countries by Secretary of State Colin Powell, who is trying very hard to ease those tensions. That friction could undermine antiterrorism efforts in the region.

John Vause is in Islamabad, Pakistan with more for us now on that -- John?

JOHN VAUSE, CNN CORRESPONDENT: Yes, Lou. Well, U.S. Secretary of State Colin Powell was barely out the door before this latest development took place. We were at a briefing at the foreign ministry here, in Islamabad, when General Quereshi, a spokesman for President Musharraf, interrupted.

He informed us that he believed that Indian troops were making threatening movements on that line of control. You might recall that the last couple of days, there has been sporadic fire on the border. India fired first. Pakistan retaliated.

For its part, India says the troop movement, merely routine. Pakistan is not buying that. It's placed the army here on high alert. Really quite extraordinary, given the meeting earlier between first, Pakistan President Musharraf, and then Indian Prime Minister Vajpayee.

Now, the other news from this part of the world: There have been more nighttime airstrikes. A couple of hours ago on the city of Kandahar, we've been told by our people on the ground in Kandahar, something like six to eight explosions. Very, very loud explosions, they're saying, in the vicinity of the Taliban headquarters. Kandahar, of course, is the stronghold for the Taliban and has been the focus of many attacks over the last 11, 12 days.

Also being struck tonight, the city of Jalalabad, as well as Kabul. Earlier today there were some daytime raids on Kandahar, hit very hard. These pictures you're seeing now are the hospital. This is also some video that we shot, a CNN crew took, taken to that scene by the Taliban. They say this, in fact, was a bus, which was hit by a stray U.S. missile, or a stray bomb.

The Taliban claim 18 people were killed in that attack. There's obviously no way to get that confirmed. Foreign journalists, very light on the ground, inside Afghanistan. But obviously, these nighttime raids continuing. And as we said, more nighttime raids in Kandahar -- Lou?

DOBBS: John, very quickly, a couple of things. One is, Kandahar has been under attack from almost the very beginning of this assault against the Taliban. The headquarters you say, apparently being struck at today, with six to eight explosions in the area. Has not the headquarters of the Taliban in Kandahar been attacked previously, and do we have an assessment of damage?

VAUSE: It's very difficult to get assessment of destruction, from our point of view. Yes, they have hit the Taliban, and they have hit them hard, and they have hit them before. And they're going back and they're hitting them again. In fact, what we're being told tonight is that these explosions are very targeted, very specific explosions in the region of the Taliban headquarters. As far as the extent of the destruction, we cannot be too sure.

I guess it's very difficult to gauge how much destruction is taking place in Afghanistan. As one British newspaper put it, "rubble upon rubble." DOBBS: Specifically, I was referring to the headquarters, John, of the Taliban in Kandahar. Does one infer then, that it had not been destroyed in previous attacks?

VAUSE: Well, I guess from what we're gathering at this point, is that the Taliban headquarters is a fairly extensive network of buildings. And while one part of it may have been hit, there are probably other parts which are still standing, which would warrant for these airstrikes to go back over to Kandahar, to hit these targets again.

In fact, yesterday we were told that many of the missions which are being flown over Afghanistan now are mopping-up missions, to complete their original targets, sent out to hit. So that's possibly one explanation as to why they continue to hit the Taliban headquarters in Kandahar, as well as those strongholds in Kabul, and Jalalabad as well.

DOBBS: John, as you are reporting, the Pakistani military on high alert tonight because of the troop movements by India to the border. But over the two previous days we've had actual engagements at the border between India and Pakistani -- the Pakistanis at their outpost. Is there any report tonight of a third day of those attacks?

VAUSE: Essentially, you're quiet on that front at this stage. But as we have been reporting, the Pakistan military placed on high alert. What was interesting at that press conference, which I spoke of earlier, General Quereshi was very light on details as to what exactly was happening in the part of the world. He said he would not divulge details of exactly where this was taking place, because of security concerns.

He would not actually give any indication of what Pakistan was doing, as far as any kind of military response. All he said was that Pakistan reserves the right to retaliate with force. That it's appropriate for any misadventure or mischief making on India's part. So as far as exactly what's happening in the area, Pakistan is very tight-lipped. India, playing it completely down, saying these troop movements are just routine.

DOBBS: John, thank you very much. John Vause tonight, from Islamabad.

Efforts to choke off Osama bin Laden's money supply continue, as well as the attacks against the Taliban and Al Qaeda, targets in Afghanistan. Assets belonging to several Muslim charities have now been frozen, because it is believed, money from some of those charities are funneled to terrorists.

Allan Dodds Frank talks with a wealthy Saudi businessman who ran one of those charities, whose assets have been frozen. This is his report.


ALLAN DODDS FRANK, CNN CORRESPONDENT (voice-over): Afghan refugees in Pakistan. According to the United States government, perfect cover for Muslim charities that actually served as fronts for Osama bin Laden. In its most resent asset freeze, the U.S. Treasury took aim at several charities and the people behind them.

Perhaps the most notable, Yassin Kadi, a prominent Saudi businessman, whose Muwafaq Foundation, the government says is a front for Al Qaeda, Osama bin Laden's organization.

YASSIN KADI, SAUDI BUSINESSMAN: I have nothing to do whatsoever with bin Laden and his group. And I never financed them by any cent -- not even millions of dollars, but not even with one cent.

FRANK: The Treasury stands by its naming of Kadi, saying -- quote -- "The U.S. government has clear, convincing and credible evidence to put each individual and organization on that list."

Kadi says his foundation spent between 10 million an $20 million on charitable organizations and schools, in Afghanistan, Pakistan, Sudan, Bosnia and Malaysia.

KADI: We send a lot of students from different countries of the world to continue their education, like countries like Malaysia.

FRANK: But Kadi's money has come up before. Three years ago, U.S. law enforcement froze $820,000 a Kadi company sent through Switzerland to affiliates of this suburban Chicago foundation, called the Koranic Literacy Institute. The U.S. government believes the money was intended to benefit Mohammed Salah, who the government claims is an operative of Hamas, a Middle Eastern terrorist organization.

KADI: This is a Koranic institute. We gave them a loan -- yes, I confirm that.

FRANK: Yes, he may have met Mohammed Salah, Kadi admits, but he says the money was to buy Islamic books like this one, and he has never filed suit to get his money back from the Chicago case.

Kadi says he's talking with American authorities and has a message for the United States.

KADI: These days, you need friends. You don't need more enemies. You have to make sure not to point finger on people, on innocent people. We like -- we have nothing to hate about America.


FRANK: Kadi told me his books and audits will be in order shortly, and available for examination. And he insists his books will prove the foundation never gave any money to bin Laden, even unwittingly -- Lou?

DOBBS: That's quite a statement. Is he saying, in point of fact, that he will open up all of his books and operations to U.S. agencies?

FRANK: Well, he told me he would let me look at them, on the phone yesterday. We'll see if he lives up to that.

DOBBS: We'll certainly take him up on that. Allan, thanks very much. Allan Dodds Frank.

Well, now, for more on the money, the Taliban and the situation between India and Pakistan, we are joined by Mansoor Ijaz. He lived in Dubai. He knows how easy it is to hide money. He is the chairman of Crescent Investment Management, handling nearly $1 billion in investments. He has experience negotiating as well with the Taliban. Last year he brokered a cease-fire between India and Pakistan in Kashmir.

Sir, it's good to have you with us.


DOBBS: Let's start first with Kashmir, which is one of the most intractable political situations, and occasionally military situations, in the world. The movement of Indian troops, the heightened state of alert there, both between India and Pakistan, what do you think is going on?

IJAZ: Well, I think this was all started by a terrorist attack in Srinigar, which is the capital of the Indian side of Kashmir, a few days after the September 11 tragedy here in New York City. And the Indian government argued that if the United States was going to help stamp out terrorism in Afghanistan, they might as well go ahead and stamp it out in the Pakistan side outside of Kashmir, and with Pakistanis themselves.

So I think the Indians are right now reacting to something that, in my judgment, causes a lot more tension than it needs to. And, far from troop movements being normal or anything of the sort, there's no routine troop movements between India and Pakistan under any circumstances. And the problem now is that the military movements with the aircraft that happened today, those are very similar to what we saw during the cargo crisis two years ago, that brought General Musharraf to power.

DOBBS: And do you believe, first, that this is simply a transitory act by the Indians, to establish with Secretary of State Powell being in the region, that the Indian interest will be preserved here to remind Secretary Powell, President Bush, that Pakistan is not the sole player here?

IJAZ: Well, it's unfortunate that that's probably what's going on. And certainly, they didn't treat Secretary Powell very well by inviting him in, having discussions and then the minute he left Indian airspace, moving their military aircraft to the front lines.

But the larger problem here is that, as a coalition partner, if India, as a democracy, has a capacity to run a country of a billion people, they ought to understand the value of having to stamp out terrorism in Afghanistan first, before we go after other types. Because the terrorism in Afghanistan is a very different breed. That is against civilization. The terrorism in Kashmir is an extension of a freedom movement that's going on there for the last 50 years. It's a different type of movement altogether.

DOBBS: You talk about democracy. As my friends in India remind me, it is the longest-running free democracy in the world. Moving from the situation between Pakistan and India -- and after all, it is what's going on in Afghanistan who's creating all of tension there -- how does the progress of the war look to you against the Taliban and the Al Qaeda, to this point now -- and it's well into its second week?

IJAZ: Well, it's pretty clear that we have probably taken most of the military installations that we needed to. But unfortunately, that's not really what we have to achieve in this ground campaign that's going to be coming up in the not-too-distant future. And we're not going to have very much time to execute that before the Muslim holy month of Ramadan starts, on November 17th.

The difficulty that the Defense Department and the war planning department, if you will, faces right now is, one, to get the American commando troops in there efficiently. And once you get them in there, then you have to get them out, get whatever we want, out of those caves as quickly as possible.

DOBBS: And amongst the things that, obviously, are wanted, would be the Al Qaeda and specifically, Osama bin Laden, should he be there.

IJAZ: Yes.

DOBBS: Relying, as it appears the United States and Great Britain are now, on the Northern Alliance, and these troops supporting the Northern Alliance, as they try to unseat the Taliban from power, do you think that's going to be a sufficient solution, going forward, for Afghanistan?

IJAZ: the Northern Alliance by itself cannot be, because the majority of the population Afghanistan are Pashtuns.

DOBBS: Right.

IJAZ: But what people are not paying attention to is that the Taliban don't necessarily represent all Pashtun, either. They are, essentially, a student militia that has grown into something different. And so the opportunity that's before us is to reach out, once we have removed these radical minds from the scene -- to reach out and have a dialogue with those people in the Pashtun tribes that are still reasonable people to talk to.

DOBBS: Of the many things that are not clear tonight, it is clear we're a long ways away from that point at which that's going to be relevant, unfortunately.

It's very good to have you with us.

IJAZ: Thank you for having me.

DOBBS: Thank you.

Coming up here next, we'll take a look at the future of the skyscraper after the terrorist attacks of September 11. And Former Defense Secretary William Cohen will be here to give us his insight on the battle against terrorism in Afghanistan, and against terrorism in this country.


DOBBS: The rules of engagement have changed for U.S. pilots over Afghanistan. There a directive now, fire at will in certain zones. And there are fresh flare-ups of violence on the Indian-Pakistan border, after Secretary of State Powell's visit, as we just reported to you. And there are more reports of anthrax appearing here at home.

Here now to talk about these latest developments, Former Defense Secretary William Cohen, and a regular MONEYLINE contributor. Bill, good to have you with us.


DOBBS: It is -- first, let's start with the change in directives from the Defense Department, apparently giving pilots in certain parts of Afghanistan the opportunity to fire at will at Taliban and Al Qaeda targets. What does that suggest?

COHEN: What it suggests is that the United States now has almost complete dominance over the skies. There are still some threats of possibly some stinger missiles, possibly some artillery that can be fired at these aircraft, but not posing a great threat.

Now they're going to go after any kind of concentration of Taliban forces on the ground, with the gunships, the C-130 gunships. So they're taking it to the Taliban in a very aggressive way right now.

DOBBS: Some calls coming from humanitarian agencies today, that the bombing subside so that they can carry out their work. How -- what's your reaction?

COHEN: Well, the military mission is the one that's critical right now. And I'm sure they'll be some kind of a combination, to try to look at those free fire zones, so to speak, and get them away from where there may be humanitarian relief drop, so they can try to accomplish both.

Right now, with the weather coming and the future and the holiday -- the holy day. It should be with Ramadan, I think they're going to intensify this campaign while they can from the air.

DOBBS: And while they can from the air and through all the ground troops here?

COHEN: We're going to see special forces go in and start to work with other special forces, perhaps the British, and to go in on the ground. Not a large campaign, not a permanent presence of any sort, but a quick strikes in, quick strikes off.

DOBBS: Let's turn to the anthrax scare that is, if not intensifying, certainly spreading here the last several days. You've written a great deal about bioterrorism. What is, in your judgment, going on here?

COHEN: Well, one thing that's going is we're seeing fear being spread. If we go back to World War II with FDR, he said the only thing we have to fear is fear itself. And that's a real danger here. I think there has to be more a responsible reporting.

Yes, the public should be educated and made aware, and should not be alarmed or made to panic. So preparation and not panic. We have the kind of preparation necessary. This is not something that's contagious. It can be treated. People will not die from it if they take care to look at substances that may be released in their presence.

So we are on the case. I think we have to take a step back and not allow the fear-mongers, and those who are releasing these spores, to totally affect our economy, and to affect the psyche of the American people.

DOBBS: You're highly competent in the capability of the federal and state governments to deal with this threat specifically, the anthrax threat.

COHEN: I'm satisfied we can deal with the threat, as it currently exists. To the extent that we find it's much more extensive, to the extent that we find it's much more "sophisticated" in terms of being immune from any kind of treatment, then we have a different measure of -- to contend with.

DOBBS: How can the media, the news media, recalibrate and pull back, as you suggest somewhat here?

COHEN: Well, there's intense competition among the networks. And there's 24-hour coverage now. And so, we see that competitive edge start to really have an impact upon our society. What we have to do is get the facts straight, not put misinformation or misleading information out and then try to correct the day after.

Get the facts, put them out, and don't intensify the hype on this, to the point where we really do start to panic.

DOBBS: I've seldom seen a story where the facts as elusive, as in this one.

COHEN: All the more reason why we have to get the facts straight.

DOBBS: Absolutely, Bill Cohen, thanks.

Coming up next, we'll have the latest developments for you. The United States broadening its bombing today, hitting Taliban front lines, as this country recovers and talks about rebuilding, is there a future for skyscrapers? We'll have that report for you next.


DOBBS: Well, just what is the future of the skyscraper, after the events of September 11? Steve Young has the story.


STEVE YOUNG, CNN CORRESPONDENT (voice-over): Located just a few blocks from ground zero in lower Manhattan, the world's only skyscraper museum is now a disaster relief center.

ROBERT IVY, EDITOR, ARCHITECTURAL RECORD: No one is going to want to be above a certain height. Now I don't know what that magic number is.

YOUNG: The magic number certainly won't be higher than 80. Higher than that, and you risk scaring prospective tenants. And you're certain to eat into your return on investment, because of the added cost of steel, concrete reinforcement and complicated elevator systems.

CAROL WILLIS, DIRECTOR, SKYSCRAPER MUSEUM: When you build a higher than about 80 stories, you're doing it for a reason for show or for some other value that you want to draw from the building.

YOUNG: For branding and bragging rights, Shanghai plans to build a new world financial center, determined to make it the tallest building in the world, at least 1500 feet. But its New Architect doesn't expect to build anything that tall in America anytime soon.

EUGENE KOHN, KOHN PEDERSEN: I doubt that they'll be a large building proposed in American, super tall of the 100 story variety for many years to come. It could be 10 years or more. And now part of this is because the economy.

YOUNG: The rest is the unshakable horror of the September terrorist attack. One of the World Trade Center's architects who believes its 1970s design delayed collapse and saved lives says to attract tenants to future skyscrapers, New York will to have to toughen its building codes.

GRAHAM DICKENS, DECISION WORKPLACE INTEGRATORS: The codes in Los Angeles, for example, are stronger than they are in New York relative to the exiting of buildings, especially in fire conditions.

YOUNG: But they're by far than codes in Europe, Japan and China. The Shanghai building will have two feet of concrete surrounding its structural steel. The World Trade Center had two inches.

(on camera): Experts say look for an unofficial moratorium on the construction of very tall skyscrapers in this country until the public gets over its fear of heights and until builders are willing to pay for world class safety designs. Steve Young, CNNfn.


DOBBS: Coming up next here on MONEYLINE, Alan Greenspan today says economic prospects are bright. We'll take a closer look, a much closer look at what the Fed chairman had to say. And stocks post big losses on Wall Street today. We'll take a look at that next on MONEYLINE.


DOBBS: Now the latest developments. U.S.-led forces unleashing a new round of bombing against Taliban targets, including the city of Jalalabad. Defense officials tell CNN that the USS Kitty Hawk is now fully loaded with helicopters and special operations forces for use in Afghanistan if required.

The Taliban claims a bus carrying civilians outside Kandahar was hit during air strikes. They say 18 people were killed. CNN sources on the ground unable to confirm that. The former king of Afghanistan is working to create a provisional government that would serve, if the Taliban is ousted from power.

Well turning now to business. It was on Wall Street, a losing session. The anthrax scares pressuring stock prices. Losses escalating, as we look at these earnings reports. And as we take a look at the big board, 47 stocks at new 52-week highs. And on the Nasdaq, 56 stocks reached new highs.

The Dow dropping 151 points, decliners beating advancers by a 2 to 1 margin. And the Nasdaq composite dropping more than four percent, losing 75 points. And decliners beating advancers by a 3 to 2 margin.

Federal Reserve Chairman Alan Greenspan today testified before Congress. His main point, it's still too soon to know the full impact of the September 11 attacks.

Tim O'Brien has the story from Washington.


TIM O'BRIEN, CNN CORRESPONDENT (voice-over): Neither last month's hijackings, nor this week's anthrax scare has dimmed Chairman Greenspan's optimism about the resiliency of the U.S. economy. People are just, said Greenspan, and the economy, he assured, is more flexible than ever.

ALAN GREENSPAN, CHAIRMAN, FEDERAL RESERVE: That flexibility, in turn, has enabled us to be absorb shocks which I don't think we could have very readily absorbed in decades past.

O'BRIEN: Lawmakers try to draw the chairman into the debate over an economic stimulus package and fail.

REP MEL WATT (D), NORTH CAROLINA: I'm not asking to you comment on any particular package. I'm asking what you think will work.

GREENSPAN: I feel uncomfortable doing that.

WATT: I think I'll yield back, Mr. Chairman. I'm not getting very far here.

O'BRIEN: Greenspan took issue with a view that even a perfect fiscal policy could prevent a recession or even reverse an economic downturn.

GREENSPAN: Under no conditions would I ever argue that perfect monetary and fiscal policy will eliminate the business cycle. It will not.

O'BRIEN: Greenspan acknowledged the economy was weak before September 11 and that the immediate of the terrorism hurt badly.


(on camera): And that point was underscored later in the day by Lawrence Lindsey, President Bush's chief economic aide. Lindsey today became the highest ranking administration official to predict that terrorism would tip the U.S. economy into a recession, saying negative growth is likely in both the third and fourth quarters.


DOBBS: Tim, thank you very much. Tim O'Brien.

Still ahead here, the United States spends billions on aid to countries around the world. We'll have a report for you on just what that support does for the United States.


DOBBS: The United States spends billions of dollars on aid to countries all around the world, but the reason for that aid has shifted over the past decade.

Kitty Pilgrim takes a look at the current U.S. aid effort.


KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Aid is often used as a tool of foreign policy, these days, perhaps more than ever. But the mix is shifting from economic assistance to military. The United States spends $15 billion in bilateral aid of which one-third goes to Middle Eastern countries.

CAROL GRAHAM, BROOKINGS INSTITUTION: Traditionally, we have given the big bulk of our -- what is called official development assistance to Israel and Egypt. That has obviously been done for political reasons.

PILGRIM: Aid to Israel is becoming increasingly focused on military assistance. Israel is still the largest recipient of U.S. aid, $2.8 billion, of which $1.9 billion goes to military assistance.

Egypt is the second largest recipient of U.S. aid, of which $1.2 billion goes to military aid. It is not clear future U.S. aid will be based on a very simple geopolitical strategy.

CAROLINE ATKINSON, COUNCIL ON FOREIGN RELATIONS: The question looking forward is how much is U.S. aid and not just the bilateral aid, but importantly, how the U.S. uses its weight and power in the international agencies, the IMF and the World Bank, how much of that going to depend on more of a litmus test? Is the country helping us in the battle against terrorism or not?


PILGRIM: The U.S. is also likely to use its dominant role in such international organizations as the World Bank and the IMF to push for it policy goals. And here, a broad set of criteria is already being used, from anti-corruption practices to more transparency for money flows.


DOBBS: It's nice to see that criteria boil down to one rather simple directive.

PILGRIM: With us or against us, I guess.

DOBBS: Yes, Kitty, thanks. Kitty Pilgrim. Coming next here, we'll take a look at why fighting the war again terrorism may be more expensive than we've been told and perhaps think.

ANNOUNCER: Coming up, Lou speaks with "Fortune" managing editor and regular MONEYLINE contributor Rik Kirkland.


DOBBS: New evidence of how terrorism and the war against it are pressuring the business world. Ford today announcing a third quarter loss of $692 million, its consecutive -- its first loss in a decade. The carmaker also warning its fourth quarter will be weak. More weakness in the technology sector reversing gains.

And we turn now to Rik Kirkland, the managing editor of "Fortune" magazine. Good to have you here, Rik.


DOBBS: Let's start with this cost of this war. Do we have a sense of what we're spending here and what it's going to cost?

KIRKLAND: No, nobody's able to quantify it yet. But I think today out in the marketplace, you know, one of the things Secretary Greenspan said in his testimony, which he -- I think he was trying to be upbeat. He was talking about in the long run, things are going to be okay. But he said in the short-term, there is a lot of cost to adding new security and back up redundancy. And that doesn't help productivity.

And so, I think that, coupled with all these anthrax scares, kind of got people in the Street thinking, "Well, what is the cost of this? It's significant.

DOBBS: Instead of the usual question is just exactly what does the chairman mean?

KIRKLAND: Exactly.

DOBBS: The costs here are going to be significant, but I think while the chairman may focus on productivity, it seems to me that one way to look at this is also, it's a considerable stimulus as well for the economy.

KIRKLAND: Well, eventually it might be. But you know, it's a little bit like back in the early 70s, when we attacked pollution. I mean, we had a huge amount, billions of dollars of spending that didn't add to productive output of the economy. Now eventually, once you took that hit, you have new businesses arising that add, you know, selling scrubbers for coal companies or new kinds of clean air technologies. And they can be a plus.

But I think for the next 12 to 18 months, we've got a terrorism tax we've imposed on the economy.

DOBBS: And as we look at the terrorism tax, obviously, one of the major expenses for corporate America is security. Most major corporations obviously have very sophisticated security organizations. Are we going to see a lot more spending here by those companies?

KIRKLAND: I think you are. I mean, again, it's hard to quantify. About every company I talk to is talking about how they're going to beef it up, they're adding more layers of security, they're adding back up. And there's just time loss right now. I mean, you know, we've had just -- I don't know how we're going to quantify it. But dozens of companies, businesses, retail outlets shut down to check out the powder and so on. And that has a knock on effect.

DOBBS: Some serious hits on productivity. And Lawrence Lindsey, the President's chief economic adviser, irrespective of anyone's else's title, today saying we're going to have in classic definition, a recession, two consecutive negative quarters of growth. Do you think he's right?

KIRKLAND: Absolutely. I've actually thought that for some time. I'm glad to see that we're over that. We -- with any luck, if we get this recession behind us and it's not a deep one. But we clearly are having one. And I think there's no point in trying to be Polyannish about where we are right now.

DOBBS: I've noticed a dearth of Pollyannas. Good to have you with us.

KIRKLAND: Thanks, Lou. DOBBS: Rik Kirkland.

"WOLF BLITZER REPORTS" begins in just a few minutes. Let's go to Wolf now in Washington for a preview. Wolf?

WOLF BLITZER, HOST, "WOLF BLITZER REPORTS": Thank you very much, Lou. We'll have complete coverage of the anthrax investigations. And I'll talk live with the former CIA director James Woolsey, who has his own suspicions about who's behind these acts of bioterrorism. I'll also check in with our reporters, on Capitol Hill, the Pentagon, and in Islamabad. What's the next phase in the U.S.-led airstrikes. That and much more at the top of the hour.


DOBBS: Wolf, thank you very much.

Coming up next here, we're going to check your thoughts. We'll take a look at why lies ahead tomorrow. Stay with us.


DOBBS: Tomorrow, Dow companies reporting their earnings including Coca-Cola, General Motors, Boeing, McDonald's, Merck, and Microsoft. A big day for the Dow components. And Sun Microsystems, eBay, Gateway, Eli Lily, Merrill Lynch and Tyco International also reporting.

And President Bush will arrive in Shanghai tomorrow. He is there to attend the Asia-Pacific Economic Cooperation summit, otherwise known as APEC.

Let's look a look at some of the bigger movers in the market very quickly. Rambus today dropping more than $2.50 a share, losing 20 percent on the day. The memory chipmaker reporting better than expected results, but Morgan Stanley downgraded the stock.

Eli Lily losing $4 a share. An FDA panel, split no whether on approve Lily's drug for sepsis, a condition following a severe bacterial infection.

And General Dynamics dropping more than $7 a share today. The defense contractor reported a 22 percent drop in profits, but General Dynamics affirms it will meet its year-end targets. Despite today's losses, General Dynamic stock climbing more than 10 percent since September 11.

Well, we, as always, want to take a look at your thoughts. Several of you commenting on our guest Bert Ely last night and his criticism of an anti-terrorism bill.


BERT ELY, ELY & COMPANY: Bankers should not be spies operating on behalf of the government. And essentially, that's what this legislation is trying to create. (END VIDEO CLIP)

DOBBS: Well, some of you seem more than willing to let the government look over your shoulder in the interest of greater personal safety and security.

Florence and David Becker, writing to say times have changed. "If we find one terrorist bank account, it's worth it."

Hector Botero of Miami arguing honest citizens have nothing to fear from scrutiny, writing, "If a government wants to look at my banking transactions, they're welcome to it."

And Chris Moore writing in to propose, "Let's get someone to propose better solutions instead of suggesting we just stick our heads in the sand."

As always, we want to hear from you, For this Wednesday evening, that is MONEYLINE. Thanks for being with us. I'm Lou Dobbs. Good night from New York. "WOLF BLITZER" begins right now.