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CNN LOU DOBBS MONEYLINE

Dow Drops 130.32 to 8,694.09; Nasdaq Loses 33.40 to 1,314.38

Aired August 28, 2002 - 18:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


LOU DOBBS, HOST: Tonight, new information that could lead to the hiding places of leading al Qaeda figures. We begin our coverage tonight with Pentagon Correspondent Jamie McIntyre.
JAMIE MCINTYRE, CNN PENTAGON CORRESPONDENT: Lou, CNN has learned that Iran may be harboring some top al Qaeda fugitives, including one man thought the U.S. thought had been killed last winter.

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: The White House tonight is warning Iran against harboring terrorists, Iran says it's not hiding anyone.

JOHN VAUSE, CNN CORRESPONDENT: Another child is abducted in the dead of night. A 9-year-old boy is snatched from his home here in southern California.

CHRISTINE ROMANS, CNN CORRESPONDENT: The Dow industrials slides 130 points, hurt by a revenue warning in tech and a number of analyst downgrades.

BERTHA COOMBS, CNN CORRESPONDENT: And the Nasdaq dropped 33 points after a warning of continued slow spending in the embattled telecom industry.

DOBBS: Also tonight, WorldCom's former chief financial officer, Scott Sullivan, has been indicted on seven counts of securities fraud. Today's indictment also names other executives connected to the $7 billion fraud at WorldCom.

And in the mid-term elections, both houses of Congress are up for election. We'll take a look at what it means for the business community and you as a taxpayer.

ANNOUNCER: This is LOU DOBBS MONEYLINE for Wednesday, August 28. Here now, Lou Dobbs.

DOBBS: Good evening. The world's most notorious killer and his whereabouts have changed on an almost monthly basis since September 11. Osama bin Laden has been found in Afghanistan, or at least reported to have been found. He was believed killed by U.S. bombs in the Tora Bora region of that country.

Then he was thought to have escaped into Pakistan, where he has been seen riding horses. Recently bin Laden had surgery on his arm. The latest intelligence suggests that he is alive and on the move inside a 250-mile stretch of some of the most rugged terrain against the Afghan-Pakistan border. But we've heard all of this sort of thing before.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I personally think he is not with us any more. But I have no evidence to support that.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Is it possible that bin laden could still be somewhere around those caves?

PAUL WOLFOWITZ, DEPUTY DEFENSE SECRETARY: Look, I think it is possible he could be dead in the bottom of one of them.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: You hear all kinds of reports and all kinds of rumors. You know you've people saying he's in a cave, people saying he is dead, people saying he is in Pakistan. And all I know is that he's running.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

PERVEZ MUSHARRAF, PAKISTAN PREWSIDENT: Osama bin Laden cannot be possibly in Pakistan if he's alive.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

BUSH: He may be alive. If he is, we'll get him. If he's not alive, we've got him.

(END VIDEO CLIP)

DOBBS: Intelligent sources also say high-ranking al Qaeda terrorists may be hiding in Iraq and Iran. A top bin Laden lieutenant thought to have been killed in U.S. bombing strikes last winter is now believed to be hiding in Iran.

Jamie McIntyre joins us now from the Pentagon -- Jamie.

MCINTYRE: Well, Lou, Iran denies that it's harboring, at least knowingly, any al Qaeda suspects sought by the United States. But sources in the United States tell CNN that the latest intelligence suggests that two top al Qaeda leaders are in fact in eastern Iran in two different cities along with several dozen other al Qaeda fighters, apparently meeting together and plotting new attacks.

One of them is a man that the United States thought had been killed in a bombing attack in Afghanistan, back in January. He is a Mafus ul-Walid (ph), who is a top aide to Osama bin Laden, and he is now believed to be exercising some operational control over al Qaeda, along with a second man named Saif al-Adel (ph), who is on the FBI's most wanted list.

He is an Egyptian, was a religious leader of al Qaeda. He is also believed to be, according to intelligence reports, in eastern Iran. Now these reports are not definitive, but they're based on the latest intelligence that the U.S. has access to, including intelligence from foreign governments.

Now Iran has continued to deny that it's providing sanctuary to al Qaeda members. And the fact that Iran turned over 16 suspected al Qaeda members to Saudi Arabia in June is cited as evidence by Saudi officials that Iran is cooperating in the war against terrorism. But the pentagon is pretty dismissive of that. Defense Secretary Donald Rumsfeld said just earlier this month that when it comes to getting assistance in getting to al Qaeda in Iran, that the Iranian government is providing no help at all -- Lou.

DOBBS: Jamie, thank you very much. Jamie McIntyre, from the Pentagon.

As he reported, Iran denies it's harboring any members of the al Qaeda. For the reaction of president Bush to this report, and to now allied criticism of the U.S. policy toward Iraq, we're joined by White House Correspondent Kelly Wallace just outside the president's ranch in Crawford, Texas -- Kelly.

WALLACE: Lou, the Bush team is really not buying Iran's denial. A senior administration official telling us the U.S. has reason to believe that Iran knows some members of al Qaeda are inside the country. And that is why the Bush administration is stepping up the pressure on Iran.

Scott McClellan, the White House Deputy Press Secretary, telling reporters earlier this afternoon, "We expect every government not to harbor terrorists who are in their country and not to provide them a safe haven. And that's what we call on the Iranian government to do as well. Our views are very clear and we want to be very clear to the Iranian government on that message."

Meantime, opposition around the world is growing to talk of a possible military action against Iraq to remove Saddam Hussein from power. The Iraqi leader was seen Wednesday meeting with military commanders. U.S. allies are saying the goals should be getting weapons inspectors back inside the country, but Bush officials say that simply will not set the threat.

Just take a look at all the countries that have expressed some reservations or even opposition to any military attack. Fourteen countries in all, ranging from Australia and Jordan to Egypt, Germany, Saudi Arabia, Turkey and Yemen. So far, only one country, Britain, has loosely supported the U.S. goal of regime change. To all of this, U.S. officials say, look, this president has not yet decided how to bring about regime change. When he does, he will make the case and then let's see what kind of support he will have.

And then, Lou, in terms of making the case, look for Vice President Cheney to speak out again tomorrow. He has a speech planned in Texas. We are told it will be very similar to the speech he delivered Monday, laying out the administration's most forceful case yet for preemptive action against Iraq -- Lous.

DOBBS: Kelly, has the White House indicated to you whether that speech will include some specificity as to evidence of the possession by Iraq of weapons of mass destruction?

WALLACE: The sense is, probably not. It will include pretty much what we saw the vice president say on Monday, that the administration has intelligence, that it believes Saddam Hussein could have nuclear weapons very soon. U.S. officials have not been revealing that intelligence, though, to the public, Lou. But they are trying to make the case that the world community cannot sit and wait for Saddam Hussein to get his hands on nuclear weapons. So look for that message from the vice president tomorrow -- Lou.

DOBBS: Kelly Wallace with the president just outside Crawford, Texas. Thank you, Kelly.

U.S. forces now seem to be operating under the assumption that Osama bin Laden is indeed alive. They are combing a large mountainous region along the Afghan-Pakistan border. Kitty Pilgrim has the report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): In Tora Bora last spring, U.S. planes pounded the mountainside with wave after wave of B-52 bombers in what many hoped was the OK Corral for Osama bin Laden. When the dust settled, there was no sign of bin Laden, dead or alive.

Military experts say at first it was thought he was alive because there wasn't any chatter amongst the al Qaeda over the airwaves about a successor. But then, because of the prolonged silence, it was presumed he was dead.

MICHAEL O'HANLON, THE BROOKINGS INSTITUTE: And now we're assuming again, based on perhaps very sketchy information from the region that there are these larger groups of al Qaeda, and what could possibly motivate a larger group to stay together, apart from the existence of some high leadership within their ranks?

PILGRIM: Military experts say bin laden or other high-level al Qaeda operatives would be traveling with an entourage to give them more security. It would be difficult for them to hide in cities, so they are more likely in the mountains.

About 7500 U.S. forces are engaged in Afghanistan. An undisclosed number of special forces are leading the hunt along the 200-mile border area between Afghanistan and Pakistan.

TOM NICHOLS, U.S. NAVAL WAR COLLEGE: It is not that hard to move a lot of people around and be undiscovered in the short term. To keep doing it for months at a time is a lot harder. Eventually people need supplies, they need to rest, they need to recuperate. Bin Laden, as we know, needs medical care, so to evade allied forces for a while isn't hard. To evade them for a long time is going to be somewhat more difficult.

(END VIDEOTAPE)

PILGRIM: Now one military expert put it this way: "It's like looking for a needle in several hay stacks." But he says U.S. forces have been relentlessly searching for months and they've learned a lot from the lessons of Tora Bora -- Lou.

DOBBS: Kitty, thank you very much.

Tonight, a Seattle man has been indicted for helping al Qaeda organize in this country. James Ujama (ph) was charged with recruiting jihad fighters, setting up a training camp for them in Oregon, and providing safe houses for members of the al Qaeda around the country.

Ujama (ph) was already being held as a material witness as part of an investigation into terrorist activity in Seattle. He and his family maintained his innocence.

Four men with ties to the al Qaeda were indicted today on terrorism charges. Those charges are not directly related to September 11. The men were arrested in late September after a raid on a Detroit apartment, which uncovered documents written in Arabic that appeared to describe plans for attacks on an airport in Jordan and a U.S. airbase in Turkey.

Iraq continued its public relations blitz today, trying to avoid a possible U.S. military strike. One day after hosting Qatar's foreign minister, the Iraqi government took reporters on a tour of an insecticide plant that it claims was labeled a weapons factory. Iraqi officials took reporters on similar tours earlier this month. The Bush administration has dismissed these moves. UN weapons inspectors left Iraq in December of 1998 and have not been back since.

A navy Seal was killed in a military exercise today in El Salvador. Commander Peter Oswald (ph) died from injuries he received while repelling from a black hawk helicopter. The training exercise is routinely practiced by special operations forces. The accident is under investigation.

Now to the latest developments in the West Nile virus outbreak. Health officials in Michigan say a second man has died of the virus. That has not been confirmed by the Centers for Disease Control. The CDC lists the death toll from West Nile virus at this point as 24. The number of human infections nationwide has risen to 480.

To put this in some perspective, there were just 145 cases of West Nile virus three weeks ago today. In addition, a 72-year-old Mexican man has died of West Nile virus in Mexico City. Officials say the man apparently contracted the virus while in Houston, Texas. The Centers for Disease Control will give $6 million to 14 states hardest hit by the virus. The CDC has already provided more than $31 million this year to help states, cities and towns fight the outbreak of the virus. And federal regulators have charged Lintek International (ph) with false advertising.

Lintek (ph) claimed its battery-powered mosquito repellant products protect people against West Nile virus. The Federal Trade Commission says that is not true. Lintek (ph) could face a federal hearing.

Well, on Wall Street today, that grim outlook from Nortel Networks pulled stocks lower. Also hurting the market today some downbeat comments from Goldman Sachs on Sun Microsystems. The Dow Jones industrials fell 130 points, losing about 1.5 percent on the day, while the Nasdaq fell almost 2.5 percent, falling 33 points. The S&P 500 down nearly 17 points.

Jan Hopkins will be here with a complete market coverage later.

Still ahead, sources say the abduction of a 9-year-old California boy early today may involve a custody dispute or unpaid debts. We'll have a live report for you.

Mid-term elections this year could be especially significant for the business community, for investors, as seats are being contested in both the House and the Senate. We'll have a report for you from Washington.

And the most corrupt nation in the world may surprise you. And we'll tell you what a watchdog group has to say about the state of official corruption around the world.

That, and a great deal more, still ahead. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

STEPHEN HESS, BROOKINGS INSTITUTION: ... the majority of seats that are up are Republicans. That looks bad, but most of the Republican seats that are up are also safe seats. So it's not as bad as it looks.

TIM O'BRIEN, CNN CORRESPONDENT (voice-over): In the House, all 435 seats are up for grabs, but only about 40 of those contests are expected to be competitive. Democrats need a net gain of at least seven of those seats to take control.

GREG VALLIERE, SCWAB WASHINGTON RESEARCH: The safe bet, the very boring bet, is that this is going to be a status quo election, with the Democrats maintaining a tiny majority in the Senate, with the Republicans maintaining a tiny majority in the House.

O'BRIEN: Democrats have complained that President Bush is trying to steer attention away from the stagnant economy to Saddam Hussein and the war on terrorism, where he enjoys greater support. Yet some economists believe local issues will dominate the election, rather than terrorism or the economy.

L. DOUGLAS LEE, ECONOMICS FROM WASHINGTON: And by the time November rolls around, I think people are going to feel better about the economic outlook. And I don't expect that's going to be a very big issue. So I think the Democrats have gotten hopeful about that issue, and it probably won't work out quite as well as they expect.

(END VIDEOTAPE)

O'BRIEN: George Bush's soaring possibility could help reverse the so-called mid-term curse, which might not apply in this case anyway. Mr. Bush's election victory was narrow, his coattail short. So few Republicans were swept in with him on the ticket. Some party strategists predict it is unlikely they will now be swept out with him off the ticket -- Lou.

DOBBS: Tim, thanks -- Tim O'Brien.

For more now on the mid-term elections, we're joined by two people who know more about than most: pollster John Zogby and Ron Faucheux, who is the editor-in-chief of "Campaigns & Elections" magazine. Gentlemen, good to have you here.

Let me -- as we're surely going to see some considerable turnover this year, let me quote Alan Simpson (ph), former senator from Wyoming in lamenting the departure of some of those eccentric lawmakers, he says, "When you have spirited people, whether you agree with them or not, it adds a little yeast to the dough. In your country club, your church and business, about 15 percent of the people are screwballs, lightweights and boobs (ph). And you would not want those people unrepresented in Congress.

Are we safe?

JOHN ZOGBY, ZOGBY INTERNATIONAL COMPANIES: Ron, you take that one.

RON FAUCHEUX, "CAMPAIGNS & ELECTIONS" : Well I'll tell you, as a former member of the state legislature I don't know if I should comment on that because I held a representative position. But I do think that in any given legislative given body, whether it's Congress, whether it's the state legislature, there is always a variety of people. Some of them are representative, some of them aren't. But I don't think the parties are focused on whether the elected representatives are boring at this point. They're just focused on whether or not they have a "D" or an "R" behind their names.

DOBB: Well that leads us, if I may turn to you, John, at this point, are you seeing anything in your polling that would suggest anything of an anomaly this year and what we can expect as an outcome?

ZOGBY: Lou, anger is back. We haven't seen it since 1994, and it is a real anger and it's about the economy and the economy is a different kind of issue. Normally, the economy is about jobs, unemployment, inflation. This year, with 66 percent of likely voters telling us they have 401Ks or IRAs, it's about stocks and investments in their future security.

And the very fact that they're angry now, they're blaming bad people for it, not some Asian crisis or whatever. And the fact that they also get another quarterly stock report, earnings report, the second or third week of October, I suspect there's going to be a pretty foul mood on November 5.

DOBBS: Now what, gentlemen -- and I would like you both to deal with this -- what is the likely outcome? One can understand a resentment against a given party for a specific cause. To go back to President Reagan's famous question in the debates of 1980, "Are you better off than four years ago," here we have identifiable people in corporate America who have wronged investors. But then it is something that crosses both parties, from the Clinton administration through the Bush administration. How is this going to play out in those elections, gentlemen?

FAUCHEUX: Well we don't really know yet, and the big question is whether or not the Democrats can figure out a way to develop some type of a coherent message about economic security that can relate to that. And the big question is whether the individual Democratic candidates have the credibility to carry that message.

As it stands now, there's a large anti-incumbent wave moving across governors' elections. Both the Democrats and the Republicans probably have three to five Senate seats that are in big trouble right now; although the House is more stable than the (UNINTELLIGIBLE). So going into the pre-post Labor Day period, I think voters are going to refocus, and we'll see whether that anger that John was talking about will come together against incumbents across the board or whether it will come together to help one of the parties.

DOBBS: John?

ZOGBY: Lou, I was inclined to think of this as a slight advantage for Democrats until I did some polling in Missouri; a pretty good (UNINTELLIGIBLE) state. Jean Carnahan, Democrat, was ahead by seven points in April; she is now down by a point or two. what I'm detecting there is the real potential for, as the Mexican revolutionaries used to say pre World War I, "Down with whoever is up." This could be a big anti-incumbent here.

DOBBS: Well let's take a look at some of these tight Senate races. And I think we have a map here that I would like to put up, if we could, and there it is. These races, give us your best judgment, gentlemen, as to where we stand and where you think these -- what you think the outcome will be. Can we start, let's start at the top in Minnesota.

FAUCHEUX: Well, as far as Minnesota goes, you have an incumbent Democrat who was in big trouble. He has never won any of his two elections with better than 50 percent of the vote. So he's definitely within the zone of danger there.

DOBBS: And, John, you agree?

ZOGBY: I do, except that Paul Wellstone (ph) has the tendency to come on real strong the last couple of weeks. That's when he's at his best. This one could be too close to call all the way.

DOBBS: And South Dakota?

FAUCHEUX: South Dakota I think the same thing. You have a democratic incumbent with Senator Tim Johnson who is in big trouble. You have a strong Republican challenger against him in a state that leans Republican. So that's another prime Republican pickup opportunity.

ZOGBY: I just wanted to say Johnson's numbers are not good for an incumbent. But this is one of two races that are on that map. Texas is another that are proxy races. So this is very much Tom Daschle versus George W. Bush in South Dakota.

DOBBS: And how is it going to come out?

ZOGBY: I'm not that good, Lou.

DOBBS: Well you're a great pollster. I thought I would move you into the forecasting business if I could get away with it.

Give us your best judgment, gentlemen, here. We have a number of critical issues before this Congress and this administration; taxes, obviously. We have the federal budget deficits now and a great deal of uneasiness. You talk about the anger based on the economy, there's not much that either party or the White House or Congress can do to offset that between now and election year.

How do you think these senate races are going to come out? Give us your best judgment. You said it is anti-incumbent. Does that mean we're going to see a Republican Senate and a Democratic House?

FAUCHEUX: Well I think we could see a number of incumbents lose just like we saw two years ago in the Senate. But as it stands now, they're fairly evenly matched between three or four or five on the Republican side, three or four or five seats on the Democratic side. But, as you know, it will only take one small event, one small issue in any of these states to flip it one way or another in the last week of the election.

DOBBS: John, you get the last word.

ZOGBY: It can only be a matter of a few thousand votes that could change the course of either House. I agree with that. Democrats have to be careful to not overplay their hand and turn this into a populous campaign. It is a different kind of anger. These are investors who don't hate the stinking rich, they want to be stinking rich.

DOBBS: OK. John Zogby and Ron Faucheux, thank you very much for being with us. Gentlemen, I hope you come back on a weekly basis to take the temperature of the electorate. Thank you. ZOGBY: I would like that.

DOBBS: Thank you.

Still ahead here, our Enron corporate America criminal charges scoreboard. The list is getting longer.

Also, U.S. troops focus their operations now on the whereabouts of Osama bin Laden. We'll talk about the latest developments with CNN Military Analyst General David Grange.

Also, a corruption watchdog group. That international group has released its list of the most and least corrupt nations in the world. We will have the surprising results for you.

And WorldCom's former CFO, Scott Sullivan, indicted. That story, and a great deal more, still ahead. Stay with us.

(COMMERCIAL BREAK)

DOBBS: U.S. officials now say Osama bin Laden was likely surrounded in the Tora Bora region of Afghanistan last December and that he still managed to escape into Pakistan. U.S. officials now say Afghan fighters may have facilitated bin Laden's escape.

Afterwards, the Pentagon started placing much larger numbers of U.S. forces on the ground. And today, U.S. forces are still actively searching for bin Laden in a remote area along the border between Pakistan and Afghanistan.

CNN Military Analyst, General David Grange, joins me now. General, good to have you here.

This is a remarkable development after so many conflicting and ambiguous reports now, the Pentagon suggesting Osama bin Laden is, indeed, alive and they're focusing their efforts on that 250-mile area. What is your thought?

BRIG. GEN. DAVID GRANGE (RET.), U.S. ARMY: Well, I think many of us always thought he was still alive, that he was laying low, evading pursuit by coalition forces. In that area between Afghanistan and Pakistan is a great hideout for guerilla-type element. I And so I believe he is there, as many of my colleagues do.

DOBBS: Well, we've got a map up there, as you can see there general. It is very difficult to do justice to that rugged terrain in that area. We have 7,500 troops, a lot of special operations and special forces people there. But that seems like an extraordinarily daunting task to assign them, even if they were focused simply on the efforts along that 250-mile stretch of Afghan-Pakistan border.

GRANGE: That is one of the challenges, Lou. I mean it is just under 8,000 troops, I believe, and they're not just in that area. They are in many places throughout Afghanistan, and so you only have a small contingent, relatively speaking, to the size of the force that's in country in that search and destroy mission along the border area. So it is a daunting task, and it puts a lot of pressure on those leaders in that area that are looking for bin Laden and the al Qaeda.

DOBBS: General, a decorated combat veteran, a leader of men, what, in your judgment, went wrong in Tora Bora? How did this happen?

GRANGE: As military analysts and others look back at that particular fight and more information has come out on the operation, you know, it wasn't the (UNINTELLIGIBLE) to surround that area was not sealed 100 percent. And because you had so many tribal ties of al Qaeda, Taliban, with other tribal leaders in that area, they helped get them out of there. But the area wasn't sealed off completely.

A couple of reasons. One, there wasn't enough Americans, coalition forces available in the country at that time to do that. And two is that, when you deal with proxies, you always take the risk that they're not going to come through for you as they say they will. That has happened historically throughout many conflicts.

DOBBS: Well now we're looking for Osama bin Laden, and along that 250-mile stretch border we still have roughly the same number of troops. That lesson learned in Tora Bora under combat conditions. Now, shouldn't there be more troops? It seems logical there should be more U.S. forces brought to bear in the search for Osama bin Laden.

GRANGE: Well, I've always been an advocate of having more forces in Afghanistan for these operations. You can do that, I believe, not appearing to look like the Soviet occupation. And, again, I remember just even in peace support operations in the Balkans many coalition forces would just refuse and not do what you asked them to do. And it's not much you can do about it.

And so you have to rely on your own guys. And so I would put more people in there to do just that, because in that area, you can't really rely even on a Pakistani army to a great extent in that particular region.

DOBBS: What are your -- very quickly, what do you judge the chances of the U.S. military there finding Osama bin Laden?

GRANGE: The chances are slim. It's not because we don't have good troops. We have great soldiers, and they're busting their backs to do this thing right.

The challenge you have is that you have -- everybody has the information. In other words, the enemy has the information that we're coming in. The information is passed through tribal connections, family ties from marriages, between different tribal areas. There are codes of hospitality to those in danger. And so because they have the information on the ground that we're coming, it is very difficult to achieve surprise.

DOBBS: General David Grange, thank you.

GRANGE: Thank you, Lou. DOBBS: The watchdog group Transparency International has now reported its list of the world's most and least corrupt nations. 102 countries are ranked in the annual survey. Finland has captured the honor of the world's most honest country. Behind it are New Zealand, Iceland and Sweden. Luxembourg and the Netherlands tied for fifth place.

The dubious title of the most dishonest nation goes to Bangladesh. Nigeria, Paraguay, Madagascar and Kenya follow closely behind. And even with our corporate scandals, the United States is still one of the least corrupt countries in the world, number 16.

Turning now to a story that we have been following and reporting on throughout the day, police in southern California are searching for a 9-year-old boy who was kidnapped from his home early this morning. Two men forced their way into the boy's home before speeding off in what police say was a white SUV. Police are following a definite line of inquiry tonight, believing this was not a random act.

John Vause joins us now from Palm Desert, California, and has the latest for us -- John.

JOHN VAUSE, CNN CORRESPONDENT: Lou, "We will find you," that's the message that authorities here in Palm Desert are giving out to the kidnappers of 9-year-old Nicholas Farber. They say that this boy who was kidnapped in his home around two o'clock this morning local time was taken at gunpoint.

Now they're saying to the kidnappers, to the abductors, take this boy to a safe location. Take him to a hospital, police or the fire station and let him go. Police say that he was taken at gunpoint. There was a struggle between the boy's father and these two men. The boy's father was beaten. He was treated in the hospital for bruises to the head, chest and shoulders. He was later released.

Now police and authorities here are not releasing a motive. The say they are still treating this as a stranger abduction, which is, in fact, no relationship between the kidnapper and the boy who has been abducted. But there could be another line of inquiry, which you have mentioned, and that is one to do with the boy's mother.

They wish to speak with the boy's mother. Her names is Debra Rose. She lives in Colorado Springs. FBI agents have been to her house there, and they are yet to find her.

Now a short time ago, the FBI here in Palm Desert released a photo of Debra Rose. This is the latest photo which has been issued. This photo, a booking photo taken two weeks ago.

Now, two weeks ago, that is when the boy came to live with his father here in Palm Desert. The authorities are not drawing any relationship between those two dates, but obviously, there must be something there.

Now, as far as the boy is concerned, they say there have been no sightings of him. Nothing at this stage, but they are now still appealing to those kidnappers to take the boy to a safe location -- Lou.

DOBBS: John Vause, thank you very much.

Police in southern Alabama tonight are looking for two people. Those people may have witnessed the brutal murders of six people, including three teenage boys. The bodies were discovered inside and outside a house in Crenshaw (ph) County last night after someone called the sheriff's department. A teenage girl and her infant daughter are missing. Police have not yet provided any information on a motive nor do they have any suspects.

Police say that the handyman who might have been involved in the disappearance of 14-year-old Elizabeth Smart in Salt Lake City, Utah, has undergone emergency surgery. Richard Ricci collapsed in his Utah's jail cell yesterday apparently from a stroke. He was rushed to a hospital in Salt Lake City, where doctors operated for several hours.

Ricci is behind bars on charges of theft. So far, police have not charged Ricci in the disappearance of Elizabeth Smart.

Coming up next here, our Enron, corporate America criminal charges scorecard. Also, there's been another indictment in the biggest bankruptcy in U.S. history. Today, former WorldCom CFO Scott Sullivan charged.

Also tonight, there's a tug of war between Enron creditors and the SEC over former executive Michael Kopper's money and assets. We'll have the story for you on that.

And the Dow Jones industrials close with another big loss. We'll have all of the coverage for you of the market. Jan Hopkins coming up.

And China is celebrating the birth of a pair of rare baby pandas. We never resist pandas on this broadcast. That story and more still ahead.

(COMMERCIAL BREAK)

DOBBS: A federal grand jury today indicted WorldCom's former chief financial officer Scott Sullivan on seven counts of securities fraud. Sullivan, who was arrested a month ago for his part in the $7 billion fraud at WorldCom, was trying to reach a deal with prosecutors, but that deal apparently collapsed.

Sullivan, it seems, has decided to take his chances with the jury. Fred Katayama reports.

(BEGIN VIDEOTAPE)

FRED KATAYAMA, CNN CORRESPONDENT (voice-over): A federal grand jury indicted the alleged architect of WorldCom's bogus accounting scheme that led to the biggest bankruptcy in U.S. History.

The indictment of former chief financial officer Scott Sullivan comes nearly four weeks after he was handcuffed and arrested on similar fraud charges. Some media experts believe Sullivan could try to implicate his former boss, ex chief executive Bernard Ebbers.

BOYD PAGE, SECURITIES LAWYER: It's quite likely that he will be constantly reevaluating his position as we have more developments in this matter. And I do think we're going to have some significant additional developments.

KATAYAMA: Also named in the 24-page indictment, former WorldCom accounting director, Buford Yates (ph). Prosecutors say the pair schemed to misreport expenses, artificially inflating the long distance company's earnings by $5 billion over a 20-month period. They say Sullivan instructed Yates (ph) and others to fudge the books.

The two each face one count of conspiracy to commit securities fraud, one count of securities fraud and five counts of making false statements to the Securities and Exchange Commission.

Two former lower level accounting executives and former controller David Myers (ph) were named as co-conspirators, but not indicted. Experts say they are likely to cooperate with prosecutors because the government laid out charges but the grand jury did not indict them. Experts say keep an eye on Myers (ph) because he was high enough to know what was going on.

STEPHEN RYAN, FORMER FEDERAL PROSECUTOR: In every case there is going to be an insider that the government is going to use as their witness. Based on what we now know, it's likely that this is the individual they're going to use for that purpose.

(END VIDEOTAPE)

KATAYMA: One footnote: Andersen, the auditor convicted in the Enron case was also WorldCom's auditor at the time. In this case, the indictment says Andersen specifically asked Sullivan whether WorldCom had changed its accounting practice. Sullivan and others did not disclose the changes -- Lou.

DOBBS: Andersen actually did something right in this case.

KATAYAMA: In this case they did, the other guys lied.

DOBBS: Fred, thank you very much.

Well Scott Sullivan is already on our Enron scorecard. He notched one up for corporate America when he was arrested and led away in handcuffs a month ago. A new name is that of Buford Yates (ph), WorldCom's director of general accounting. His indictment brings the total number of criminal charges in corporate America now to 19, still only one charge against an executive of Enron, that against Michael Kopper, former managing director of the company. It's now almost nine months since Enron went bankrupt.

Michael Kopper's attorney was in court today attending a hearing on the freezing of his client's assets. A New York bankruptcy today judge extended that order. As part of his plea bargain with the government, Kopper agreed to hand over $12 million he made in illegal deals while at Enron. The SEC sec intends to give that money back to investors. But Enron's unsecured creditors who were owed billions of dollars say that money belongs to them.

The SEC has reportedly denied a proposed settlement with bankrupt telecom Global Crossing. According to the "Wall Street Journal's" report, Global Crossing would have agreed to cease and desist fraudulent practices without admitting or denying guilt. The Journal reports the SEC rejected that proposal because it did not single out individual executives. Tonight, the SEC refuses to comment on the report.

Stocks fell for the third time in the past four sessions today. The losses today on Wall Street, again, light trading. But $187 billion of market cap erased. Jan Hopkins is here with the market for us -- Jan.

JAN HOPKINS, CNN CORRESPONDENT: Well, Lou, the indictments against WorldCom did not help the market today. Instead, investors were focusing on companies that are still struggling.

Nortel was the catalyst for the sell-off, and though it is hard to believe that stocks that are trading in the low single digits can fall further, they did today. And, as a result, at the end of the day, the Dow was off 1.5 percent The Nasdaq lost 2.5 percent; the S&P dropped two percent.

Christine Romans is at the New York Stock Exchange and Bertha Coombs at the Nasdaq -- Christine.

ROMANS: Jan, embattled Nortel will cut another 7,000 jobs and it sliced its revenue targets again. The stock down 16 percent today. It is down over 88 percent over the past year. That dim (ph) tech mood spread. IBM fell two percent, and (UNINTELLIGIBLE) analysts' comments, hit Alcoa (ph) and Lehman Brothers. Meanwhile, Exxon Mobil switched to two-week low as oil prices retreated.

Now the bright spots, Philip Morris up three percent. It will boost its quarterly dividends to 64 cents from 58 cents. Boeing inches closer to a strike by its machinists union, but the stock edged higher. And Qwest was the third most active stock here up nine percent on talk its banks may amend terms of some of some of its credit agreements. Traveler's Insurance (ph) and Hewlett-Packard also very active today and firm.

Now to Bertha at the Nasdaq.

COOMBS: Christine, technology fairs were hard hit again today as investors looked beyond Labor Day to the fall. And the forecast is for weak technology spending continuing.

Telecom (UNINTELLIGIBLE) makers, like Cisco, were especially hard hit with that warning from Nortel Networks. It appears all those telecom companies that are in financial and legal trouble just aren't spending. Computer chip maker Intel shares came under pressure again today, after an analyst said there are signs pointing to slow sales of computers in the back-to-school market. And another influential analyst is predicting that business computer hardware maker, Sun, sales are going to come in at the low end of expectations. Sun is offering an update on its quarter tomorrow.

Microsoft cut the price of its x-box (ph) computer hardware in Europe after its rival, Sony, did the same. 1-800-flowers (ph) was a bright spot, even if people aren't buying technology. 1-800-flowers (ph) signed an online marketing deal with American Greetings, hoping that they might be using that technology to buy cards and flowers. Sentimentality shouldn't be something that goes out of style -- Jan.

HOPKINS: Thanks, Bertha.

Stocks have lost ground for three of the last four sessions. The S&P, though, is still up 15 percent from that five-year low they hit at the end of July. For the year, the S&P is off 20 percent, and that's the third year of declines in a row.

And, Lou, as you mentioned, volume was very low and that could exaggerate the moves in the market. But, of course, this is the last week before Labor Day. A lot of people are on vacation, so low volume is pretty much to be expected. I think that after Labor Day and next week we should start seeing more direction for the market.

DOBBS: Well the direction was pretty decisive.

HOPKINS: Yeah, that's true, but we'll find out if...

(CROSSTALK)

DOBBS: When you say -- I always think about -- you know as we've been covering these markets for some considerable period of time, we say that the market is exaggerated by light volume, but which direction?

HOPKINS: It's true. Well that's what we might see in September.

DOBBS: You've got it. All right. Jan, thanks a lot.

Coming up next, heavy downpours continue to hit Europe and Asia. We'll show you where the damage is worse. And the birth of a pair of rare baby pandas in China. We will deliver that for you and more, next here on MONEYLINE. Stay with us.

(COMMERCIAL BREAK)

DOBBS: That New Mexico forest fire continues to burn tonight. The firefighters say they do expect to contain it by Sunday. The (UNINTELLIGIBLE) fire in the Jemez Mountains has now burned 4,000 acres. Three communities have, however, been ordered to evacuate. Some of the residents, we are told, are refusing to leave. Cooler temperatures have helped those firefighters fight the blaze. Meanwhile, rains continue to fall in parts of Europe and Asia. Central Belgium flooded today after a freak storm there dumped several inches of rain overnight. And the fire teams have been (UNINTELLIGIBLE) river banks and pumping water from flooded houses.

Flood waters are surging down the Yangtze River in China. Thousands of volunteers are patrolling dykes looking for leaks in the rain-soaked region. Cambodia suffering one of the worst floods on record. More than a million people have been effected by those rising waters. Half a million of them have been evacuated.

In Spain, you might say it was raining tomatoes. The world's most colorful food fight took place today in the Spanish town of Benul (ph). Thirty-five thousand people pelted one another with 132 tons of tomatoes. It's part of a decade's-old festival. The tomato tossing lasted, however, only an hour.

There were no injuries, which is pretty impressive when you think about 32 tons being passed around as it were within an hour. Once it was over, the tomato debris was washed away and the town, we are told, returned to normal -- or at least their version of normal.

In China, a different sort of celebration, two rare pandas born last week at a special breeding center. Both males weighed in at about a half pound each. But the two panda mothers began to ignore their babies soon after they were born. So the staff at the center stepped in and transferred them to incubators.

(COMMERCIAL BREAK)

DOBBS: I don't know about you, but the fact that the United States today was ranked 16th among nations in honesty rankles me. My first thought when I read the transparency international rankings today was, sure, these are the same one-worlders who were blasting the United States at the earth summit in Johannesburg, South Africa.

But then I had to square up my reaction with the fact that we've been reporting here for nearly a year about ramped corruption in corporate America. That the SEC and the Justice Department are investigating dozens and dozens of companies, including the parent company of this network.

And there is a lot of squaring up to do these days. Vice President Cheney says the United States must attack Iraq before it is too late, but the administration has offered no specific evidence that the claim that the Iraqis have weapons of mass destruction they will use against the United States or its allies.

Those same allies say they won't support a U.S. military strike against Iraq, with even our good friend Britain pulling back. There's a lot of hand ringing in Europe about stable oil supplies and energy prices. The United States is not the only nation with an honesty problem, however. In fact, surely our friends in Europe must recall that oil prices actually fell in 1991 when the United States finally attacked Iraq by air and then fell further as the ground war began and quickly concluded. The Arab states, for their part, say there will be an uprising in the streets of the Middle East if the United States does attack Iraq. None of those Arab states is high on the honesty list either, by the way. Many Arab leaders said the same thing would happen when the United States attacked the al Qaeda and the Taliban in Afghanistan. And, frankly, if Saddam Hussein were demonstrated to have weapons of mass destruction, of what possible interest could it be to any American that a U.S. attack would provoke an uprising in the streets of any nation?

There comes a time to square things up. For this administration to show us the evidence against Saddam Hussein or to move on with other priorities in its Middle East policy. It is pastime in our dealings with the world to match our actions with our values, to speak as we believe and to act as we believe. It is time, in other words, for this world's only super power to assure that by this time next year we are regarded as number one on that list in honesty.

Now let's turn to your thoughts, beginning with criticism of my commentary last night on the earth summit in Johannesburg, South Africa. The purpose of that summit, of course, to combat poverty and promote sustainable development to help the environment. But so far, one of the main themes appears to have been the bashing of America, and it's being pursued enthusiastically.

Andrew Simpson (ph) in Johannesburg writes in to say, "I really enjoy the show, Lou, but your comments on the earth summit were unjustified. People should be slamming America because they are the biggest culprits worldwide for pollution."

But Patrick (ph) in Capetown says, "Got to agree with your comments on the world summit. It makes me furious the way our South African politicians have wardrobes and hairstyles that would keep our poor family (UNINTELLIGIBLE) for a week. Gee whiz."

And Joshua Phillips (ph) writes to say, "Lou, I'm an American living in Germany. I agree wholeheartedly with your opinions on sustainable growth, A.K.A., let's knock America for everything bad in the world conference. I have to say I love to watch your show. It is informative, but beyond that, it makes sense."

Thank you.

Steve Goodman (ph) in New York writes in to say, "It's about time this country stops worrying about what other countries think. We are the world's only superpower and cannot be on both sides of any issue at the same time."

On to other matters, Chuck (ph) in New York wrote in to say, "Now that the feds are on to Enron, how about an AOL Time Warner scorecard?" We don't like that idea here.

And Cory (ph) in California wrote in to say, "I'd like to see a Global Crossing clock like your Enron clock." It shall be done.

And, finally, Preston Ivans (ph) in Sugarland (ph), Texas wrote in to say, "I enjoyed last night's guest host on Jan Hopkin's MONEYLINE. Nothing against Jan, but I feared that Mr. Dobbs might have malaria. Guess it was just Koppel (ph) disease."

I enjoyed my vacation very much, thank you.

As always, we love hearing from you. E-mail us at MONEYLINE@cnn.com. Please include your name and address.

Those were your words, let's turn to their words.

(BEGIN VIDEO CLIP)

HAMID KARZAI, AFGHAN PRESIDENT: Whether they are or whether they're not (UNINTELLIGIBLE) on the other side of the border with Pakistan or somewhere else, wherever they are in Afghanistan or Pakistan or (UNINTELLIGIBLE) somewhere, if we come to know their whereabouts, we will definitely go up to them and arrest them. They're fugitives, they're criminals, and we are hunting for them.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We have a situation where energy prices are nowhere near the level that they were before. And we ought not to get ourselves over-exercised about the fact that we do have now higher oil per barrel prices. It's an important factor; it could cause problems. But we don't see that as continuing at the level that it's at and working through the entire energy process.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's good fun, man. I tell you, it's like you can get out your aggressions, but you can do it in such a way that it's not going to really hurt anybody. You know I have a few bruises here and there, but oh man, what a way to just meet people and chill and the Spanish culture.

(END VIDEO CLIP)

DOBBS: That's MONEYLINE for this Wednesday evening.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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