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CNN LOU DOBBS MONEYLINE
Dow Records Losses For Fourth Straight Session
Aired December 4, 2002 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
LOU DOBBS, HOST: Today, Iraq accused the United Nations weapons inspectors of being spies for the CIA and the MOSSAD.
A winter storm has ravaged states stretching from Texas to Virginia, dumping 10 inches of snow in some places, forecasters say the storm isn't over yet.
The White House restored cash bonuses to government executives who are political appointees, they will be eligible for up to $15,000 a year.
And a big bull market that may save Silicon Valley. We'll have a special report what the Department of Homeland Security means to the depressed technology industry.
UNIDENTIFIED MALE: There is no time to wait. There is a sense of urgency.
ANNOUNCER: This is LOU DOBBS MONEY for Wednesday, December 4. Here now Lou Dobbs.
DOBBS: Good evening, late today another huge setback for this country's second largest airline. A federal panel rejected United Airlines request for $1.8 billion in federal loan guaranties. This decision comes as united has scrambled to cut costs trying to avoid bankruptcy. The board denied United's request saying united's business plan is not financially sound. That since the already hammered stock reels in after-hours trading, shares down two-thirds. We'll have more in the story in the broadcast in just a few moments.
First Iraq labeled the U.N. weapons inspectors in Iraq as spies, claiming they are working for the United States and Israeli intelligence services. Iraqi vice president said the inspectors are agents of the CIA and the Mossad. That accusation came as the inspectors visited a former chemical and biological weapons center, and Iraq's main nuclear research facility.
Senior international correspondent Nic Robertson has the report from Baghdad.
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ROBERTSON (voice-over): Numbered and tagged, rows of rusting chemical warfare equipment lie in a rotting warehouse. The site Al Muthanna, the birth place of Iraq's biowarfare program and heart of its chemical research and production in the 1980's. Apparently left in ruin.
What Gulf war bombing didn't destroy in 1991, U.N. weapons inspectors did in the mid 1990's. Filling containers like this with cement and putting U.N. tags on them.
This day, chemical, biological and missile inspectors returned to review the site, spending five hours, searching the sprawling desert complex 120 kilometers northwest of Baghdad.
UNIDENTIFIED FEMALE: Are you happy with the cooperation you've received so far today?
ROBERTSON: Apparently getting good cooperation. An indication of that, getting a mobile crane into the site to move some containers.
According to site officials, however, the chemical and biological warfare programs stopped a long time ago.
UNIDENTIFIED MALE: It stopped working at 1991. Before the war.
ROBERTSON: The sheer scale of this site, 25 square kilometers is an indication to Iraq's previous commitment to weapons of mass destruction. Now containers like these are put across the door to stop it continuing.
In Baghdad, Iraqi officials upset about the presidential palace inspection the previous day blaming the visit on pressure by the United States.
UNIDENTIFIED MALE: We consider the entry of the presidential sites as unjustified and really unnecessary.
ROBERTSON: Inspectors for their part saying they feel caught in the middle.
UNIDENTIFIED MALE: The Iraqi side would have liked us to be very light. And the U.S. side, as from what I heard from you who tends to be extremely, you know, severe.
ROBERTSON: Hard to gauge what the inspectors were thinking when they left Al Muthanna. It is, however, one less site to visit and to the untrained eye at least possibly one they won't be coming back to soon.
Nic Robertson, CNN, Al Muthanna, Iraq.
(END VIDEOTAPE)
DOOBS: President Bush said Saddam Hussein cannot be trusted. President Bush said Iraqi attacks on U.S. and British planes prove it.
Frank Buckley joins me from the White House with the story -- Frank.
FRANK BUCKLEY, WHITE HOUSE CORRESPONDENT: Well, Lou, that was one of the things the president cited as he questioned whether Saddam Hussein truly planned to comply with disarmament. He noted the Iraqis sent a letter to the U.N. protesting the inspections. The president still skeptical about Iraqi intentions, this despite the fact that inspectors gaining access to several sites in and around Baghdad.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We've been doing this for five days, after 11 years of deception and deceit. Process is just beginning, and the world will determine soon whether or not Saddam Hussein doll what we asked, which is in the name peace, fully disarm.
(END VIDEO CLIP)
BUCKLEY: Now, the White House is very closely watching this coming weekend, when Iraq must provide this declaration of all weapons of mass destruction. White House officials saying that that declaration could be hundreds or even thousands of page, they're not issuing any prediction how long it will take to review the declaration -- Lou.
DOBBS: Frank, any reaction from the White House today on the Iraqi vice president's statement claiming that the weapons inspectors in Iraq, the U.N. weapons inspectors are agents of the Mossad and the CIA?
BUCKLEY: No official reaction to that. But U.S. officials are saying clearly this is a U.N. operation. Yes, there are U.S. members of the inspection teams, but this is a U.N. operation. The U.S. is providing intelligence as needed to the inspectors, but so far no reaction to the idea that some of the inspectors are, in fact, spies of the -- Lou.
DOBBS: Frank Buckley reporting from the White House, thank you.
Turkey's offer to support a U.S. led war against Iraq is not as solid as it first appeared. Yesterday Turkey said it would allow the United States to use military bases. It later revised that offer. Jane Arraf reports from Ankara, Turkey.
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JANE ARRAF, CNN INTERNATIONAL CORRESPONDENT (voice-over): Still getting to know each other but the courtship between the U.S. and Turkey's new government seemed off and running. The U.S. deputy defense secretary after talks with officials from Turkey's pro Islamic government praised Turkey's commitment to showing a united front against Iraq.
PAUL WOLFOWITZ, U.S. DEPUTY OF DEFENSE SECRETARY: I must say the attitude we encountered was very encouraging, not surprising, actually, but encouraging that we find this new government is even more committed, if anything, then that last government to the idea of the Turkish/U.S. partnership and alliance. That they have said they'll be with us in clear and strong terms. ARRAF: But in this country where most sympathize with the Iraqi people and where neighboring Iraq is still a major trading partner, there were a couple of glitches. Turkey's new foreign minister said publicly for the first time his country would allow the U.S. to use its bases to attack Iraq. He later said there was only a possibility.
YASAR YAKIS, TURKISH FOREIGN MINISTER (through translator): I talk perfectly and the story is misinterpreted. Turkey has not promised anything to the United States.
ARRAF: The U.S. officials says Turkey has explicitly promised enough support that they start discussing details what bases the U.S. wants to use. This kind of coalition building isn't easy, particularly with anti-American sentiment in the region running dangerously high. But in Turkey, at least, despite its Muslim majority and economic ties with Iraq, the U.S. seems to have found a willing partner.
Turkey's NATO air bases will be key to any attack on Iraq and part of any war would likely involve sending U.S. troops into Kurdish controlled northern Iraq through Turkey. Almost equally important to the coalition Turkey's political weight. Turkey doesn't want war but it if it does participate it wants aid for its devastated economy. U.S. help to get into the European union and assurances that Iraqi Kurds near the border won't get more power. U.S. officials said they would try to provide all the things for the right coalition partner.
Jane Arraf, CNN, Ankara.
(END VIDEOTAPE)
DOBBS: More details about yesterday's incident involving two Kuwaiti patrol boats near Iraq. Pentagon officials said there is no indication an Iraqi vessel fired on those Kuwaiti boats, as Kuwait originally claimed. The United States says the incident occurred southeast of the Kuwaiti of Bubiyan Island when the Kuwaiti boats collided two. People on those boats were injured, a Kuwaiti sailor and a member of the U.S. Special Forces.
Britain has closed it's embassy in Kenya after receiving what officials called a specific threat. The embassy in Nairobi will be closed until further notice. British officials declined to comment on the nature of the threat. The alert comes a week after terrorists attacked Israeli tourists in Mombasa.
Tonight the State Department told MONEYLINE the U.S. Embassy in Nairobi is open for business.
Israeli helicopter gunships killed a leading terrorist suspect in Gaza. Israel said the man was a master bomb maker, he was in the building used by the Palestinian Interior Ministry. Israel said the man built the bombs that blew up three tanks. Seven Israeli soldier were killed in that explosion.
Today Israel said it deported an American citizen. He is suspected of channeling money to terrorists linked to the al Qaeda terrorist network. The U.S. State Department said the man was a naturalized U.S. citizen who was born in Syria. He tried to enter Israel on the 14th of November.
Joining now me to talk about Turkey's offer of now limited help in a U.S. war against Iraq is CNN military analyst General David Grange. General, good to have you here.
GEN. DAVID GRANGE, CNN MILITARY ANALYST: Good evening, Lou.
DOBBS: First, what do you make of what appears to be a mitigation of at least the enthusiasm with which Turkey was offering support to the United States?
GRANGE: I think the enthusiasm is reeled back in a little bit. There's no doubt in my mind that Turkey will support the United States if this war (UNINTELLIGIBLE) Iraq. They just can't be too obvious, too overt about it. They're a great ally and they're going to come through.
DOBBS: And in terms of Saudi Arabia, which has declined the use of its bases by U.S. forces, are you also confident that when should the time come, that the United States need those bases, Saudi Arabia would be accommodating?
GRANGE: I believe that Saudi Arabia, as we go down the road a little bit further, will come around and we'll use Prince Sultan Air Base, they'll let us use their airspace for overflight.
But if not it's one of the things with Saudi Arabia right now, you're either with us, stay out of way and just be prepared for a change of status quo in the Middle East. Things are going change, they're not the way they used to be.
I think Saudi Arabia realizes that and with our relationships of other Gulf states they can see how we're leaning right now.
DOBBS: From your perspective, is it your judgment that the United States is continuing to build up its forces in the region to a level at least near readiness for an attack, should the president decide to carry out one?
GRANGE: The forces are -- some of them are peaking in readiness, in fact, when you get to a certain point it will require rotation of other forces back and forth to maintain that readiness level.
But U.S. forces are very much ready. And they have to be. Let's just say that we don't get to use more than a southern approach. We have to use only Turkey. There'll be a requirement to do a forced entry operation somewhere into Northern Iraq, Western Iraq to establish a forward base to operate out of if other bases are not available.
DOBBS: Is it your judgment that the United States, with Britain and other members of the coalition, have sufficient men on the ground carry out a successful operation, should the president order one? GRANGE: Lou, not yet. But getting close. There's 30,000-plus armed forces just on the U.S. side in the region. Great Britain of course would have a armed division and air assault brigade. There'll probably be an Australian brigade and some others.
But it's getting close. And now, really the United States and the coalition partners we have right now can start overtly building up forces because we can use it as an excuse just in case the coalition or the resolution, I should say, fails.
DOBBS: Is there any indication that the Iraqi military is taking steps now, the defensive nature preparing for a potential conflict?
GRANGE: They are. In fact, they had some fellow Arab nations come into help evaluate for them the defenses of Baghdad. They, I believe, are taking measures.
But mainly the ones that we have to be concerned about are the Republican Guard units about 80,000. The Special Republican Guard called the Golden Division, that covers the weapons of mass destruction sites and protects Saddam Hussein.
But I think the rest of the army is really a ragtag group that has low morale that is waiting to see our commitment to capitulate or not. And I think when they see the coalition resolve which I'm sure will be displayed, they'll do just that.
DOBBS: General David Grange, thanks for being here.
More now on the breaking news on United Airlines. As we reported just a few minutes ago, the federal government has rejected United's request for a loan guarantee of $1.8 billion. Peter Viles is here with the very latest on the story for us.
This makes moot the mechanics vote scheduled for tomorrow. It assures bankruptcy does, it not?
PETER VILES, CNN FINANCIAL CORRESPONDENT: Yes, well, we would think so, we haven't heard yet from the airline. One of the three members of this board wanted to wait. Two of them said they had seen enough from United. This is a tough, no-nonsense decision essentially saying there's no sense throwing good government money after bad.
The plan, they said, not financially sound, unreasonably optimistic on the revenue side, leaving aside the cost cuts, too much risk to taxpayers -- $1.8 billion in government money would have been at risk.
So they say no, this is essentially the same case that the rival airlines made, American and Continental said, these guys are going down whether you give them the money or not. Why give them money? That's the best position the government is taking here.
DOBBS: Peter, we're talking about a lot of jobs here being lost potentially. The competitors obviously would not be the best source of judgment on this issue. VILES: No, they wouldn't. But it's interesting they make that case. That means it's unlikely they can come back if they are to hit hard times and say the government give us a loan now. What they are saying is the industry needs to be restructured very dramatically, and privately they're saying maybe bankruptcy court isn't a bad place for one of us to go to get our costs in alignment with the new industry as we know it.
DOBBS: What is remarkable about United, these cost cuts that they've instituted today announcing a cut of 18 percent reduction in executives. These cuts are coming more than a year after they knew full well they had to be made.
VILES: A footnote here, the biggest loser in all these, the shareholders. The stock had dropped dramatically after hours. About half its value down to the dollar, $1.40 range. The employees own more than half of this airline.
DOBBS: Right, the airline's employees are just absolutely the victims here.
VILES: About 80,000 at United. We don't know if there are big layoffs in a bankruptcy, but it's a fair guess.
DOBBS: A sad story that has been going on at United for some time. And not a happy chapter. Peter Viles, thank you.
Coming up next, ice and snowstorms sweeping all across the Southern United States, winter storm warnings have been issued for other regions as well. We'll have a full report for you.
Thousands of travelers have decided to ignore instructions to leave their weapons at home. We'll tell you about the weapons that travelers tried to carry onto airliners over the Thanksgiving holidays.
And on Wall Street today, the Dow ended five points lower, it's fourth straight decline. The Nasdaq dropped almost 19 points, the S&P 500 fell 3.22.
Bonuses for 2,000 political appointees in the federal government. CNN's senior political analyst Bill Schneider will be here to talk about why and whether it's really necessary.
And a new survey reveals what people in other countries think about the United States, and we guarantee, the results will probably surprise you.
All of that and more still ahead here. Stay with us.
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DOBBS: Time for our "MONEYLINE Poll." Here are the final results of yesterday's poll question. In light of recent events we asked, what is the worst idea right now? Nineteen percent of you said flying to Kenya, 15 percent of you said taking a Caribbean cruise, 66 percent of you said relaying on Saudi Arabia to fight terrorism. And we received a lot of e-mail that I looked at today that suggested there should have been one other category called "all of the above."
Well the White House today said it's reinstated a policy making 2,00 political appointees eligible for cash bonuses. That policy was discontinued for eight years under President Clinton. It's back. And it leads to out poll question tonight: "Should political appointees be entitled to annual cash bonuses?" Cast your vote at cnn.com/moneyline. We'll have much more on the story. And our senior political analyst Bill Schneider will join us as well.
Apparently many of us haven't heard about airline security quite yet. During the Thanksgiving holiday, airport screeners managed to confiscate an incredible 16,000 pocketknives from people trying to board planes, 98 box cutters, and six guns from would-be traveler.
Despite all of that activity, passengers face few delays over the weekend as a result of security, at least. The average waiting time less than 10 minutes and that was the first holiday test for the new federalized airport screeners.
Among the more bizarre items those screeners discovered were a toy cannon with live ammunition, a welding gun, and my favorite, a brick.
Wetter weather storming across the South tonight. Snow, sleet, freezing rain, even thunderstorms falling from the Texas panhandle all the way to North Carolina, and storm watches and warnings have been posted across the entire region.
Orelon Sidney is in the cnn weather center tracking the storm system. Orelon, where do we stand tonight?
ORELON SIDNEY, CNN WEATHER ANCHOR: Well, I tell you what. It's going to be quite a mess tonight. I've already gotten reports out of South Carolina, and notice that the precipitation really has just got going there. They had a half inch of ice -- half inch of freezing rain in Fairfield County. We've had up to a quarter to half inch stretching from Chesterfield County all the way through Richmond County. Georgia reporting some ice on the roads too in the northeast -- or ice on the ground. And we've had up to five inches of snowfall as this storm system has moved through. And this is just really the leading edge of it, because the main area of low pressure is still back to the West.
So, this area in pink, the freezing rain, is what we are most concerned with, from Raleigh-Durham, down through Charlotte, into Columbia, South Carolina even northeastern Georgia and then right along the Tennessee-Kentucky border. That's where we're getting some freezing rain as going. That's going to be the problem, because it's going to freeze on the bridges and overpasses.
Look at the temperatures. A lot of these temperatures are right at or above freezing, so I'm not concerned about it right now. But what I'm concerned about is later tonight, as it continues to rain in some areas, it's going to cool off and then you could get to about freezing. The overpasses will be a problem. The power lines will be a problem. The trees will be a problem and so will the airports. Ground delay now at Atlanta-Hartsfield three and a half hours. Deicing in St. Louis. You're also deicing in Charlotte, Nashville, Raleigh-Durham and Syracuse. Delays here have been as much as three and a half hours. Down to the south, mainly about half hour to 45 minutes.
This is the way it looks tomorrow. More storms in the Northeast -- Lou.
DOBBS: All right. At least the rest of the county seems to be downright balmy by comparison.
Jeff Flock tonight is in Charlotte, North Carolina, right in the middle of all this storm activity.
Jeff, what do you have for us?
JEFF FLOCK, CNN CORRESPONDENT: Well, I have a report from an overpass which -- where we're experiencing some severe freezing rain right now. You know, we talk about this ice and Orelon was saying maybe a half inch. You can judge it for yourself, maybe if we're able to get in somewhat tight on this. I can chip this and maybe -- I don't know if you can see it. It's even hard to break through it right there. But that is, I would say, at least a quarter inch already on this -- on this rail over an overpass which stretches over I-77 here near downtown Charlotte.
You know, the salt trucks are out. We've got some pictures of the efforts that they've been making all day. A mixture of sand and salt have been spread on city street. But in Charlotte alone, they tell us between the hours noon and 2:30 today, they had reports of 119 separate traffic accidents. So really, not very pretty at all.
And right now, I-77 and other interstates are moving, some of them not too well although right here in this area, at the moment, I- 77 moving pretty well, Lou. And of course, this is a storm started back in Arkansas and through into Kentucky. A lot of snow that way as well as ice.
At this point, as Orelon pointed out we're not look so much at the snow, although it snowed off and on throughout day today. Really what they think will be the problem will be this ice and these sheets of ice, that, you know, as I said, on an overpass, Lou, -- and maybe you can you see already the middle of the road is OK, but look at that ice. That's got to be maybe a half inch there already. So, it is not going to be pretty, and they tell us it's going to get uglier before it gets better.
We'll keep watching it. Back to you, Lou.
DOBBS: All right, Jeff. We want and you everybody else in the Carolinas and throughout the region to be careful. And I have to say, I really like your high-tech ice measuring device you've got out, there Jeff. Keep us posted. Try to stay warm. Thank you. Jeff Flock. Coming up next: shoulder fired missiles almost shot down an Israeli airliner in Kenya. Senator Richard Shelby says those missiles could be used right here in this country. Senator Shelby is our guest next.
And Americans of course love America. The rest of the world, we're told, often doesn't share those feelings. A new survey tells us what they think of us. You will perhaps be surprised by the results.
And homeland security can bring life back to Silicon Valley and boost a battered technology industry. Stay with us.
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ANNOUNCER: LOU DOBBS MONEYLINE continues. Here again, Lou Dobbs.
DOBBS: In just a minute, we'll be talking with Senator Richard Shelby, the vice chairman of the intelligence committee. But first, this "News Alert."
(NEWS ALERT)
DOBBS: North Korea today rejected the United Nations' request to open its nuclear weapons program to inspection. The U.N.'s international atomic agency passed a resolution last week calling upon North Korea to abandon its weapons program and to allow in inspectors. In response, North Korea said it could not accept the resolution and called it extremely unilateral.
Some tough views about the United States from around the world. That according to the Pew global attitudes project that surveyed 34,000 people from 44 countries outside the United States. The countries with the least favorable view of the United States are Middle Eastern allies Pakistan and Turkey, populous South American nations Argentina and Brazil and Asian allies South Korea. Countries with the most favorable of this country include the former Soviet republic of Uzbekistan as well as Latin American nations Venezuela, Guatemala, Honduras and the African nation Kenya. Two countries where the most favorable rating rose most dramatically since the last survey two years ago: Nigeria and Russia.
Well another member of what President Bush calls the "Axis of Evil" is warning that the United States is a danger to the world. Iranian President Mohammad Khatami, today said the United States is seeking a pretext to attack Iraq. Khatami said -- quote -- "We sense danger from America's unilateral policies not only ourselves but the whole of mankind."
Earlier this year President Bush named Iran is part of an axis of evil along with Iraq and North Korea.
The near miss involving a shoulder fired missile and Israeli airliner in Kenya, last week, is raising concerns about similar attacks in this country. Our guest is one of the most vocal members of Congress trying to address the threat. Senator Richard Shelby of Alabama has served on the Senate Intelligence Committee for the past eight years. He'll take over the Banking Committee next year, and joins us tonight from Capitol Hill.
Senator Shelby, good to have you here.
SEN. RICHARD SHELBY (R), ALABAMA: Good to be with you, Lou.
DOBBS: The shoulder fired weapons set off a flurry of discussion how best to protect against it. How serious the threat is for Americans on jetliners? Is it your judgment that enough is being done?
SHELBY: Well, we can never do too much as far as bringing security to our people, the people who fly, the people who drive, the people who walk down the streets. But this surface-to-air missiles are prevalent throughout world. There are a lot of them out there. We are afraid that a lot of surface-to-air missile are in the wrong hands. Witness what could have been a disaster in Kenya last week, it could happen here.
I hope it would never happen, but we have to be aware of the situations that people could be trained with shoulder fired missiles that could take down airliners in this country or anywhere else in the world. I believe last week was a wake-up call to that possibility in Kenya. There were near misses on the Israeli airliner, it could have been a disaster of great magnitude.
DOBBS: Senator, characterizing them if I may as knowledgeable sources, they told me that there could be as many as half million of these shoulder fired surface-air-missiles in the world today potentially in the wrong hands.
Would you agree with that assessment?
SHELBY: There are thousands of them. If it's a half a million that's a lot of missiles out there, just too many in the wrong hand. I guess one in the wrong hands would be too bad, but we know that a lot of our so-called stinger missiles which are shoulder fired missiles are still unaccounted for that we used against the Soviets by the Afghanistan people in the Afghan war against the Soviet Union. I don't know exactly how many but several hundred that are still missing there. And there are thousands of missiles, if it's 500,000 or half a million that is scary as the dickens.
DOBBS: Senator, what do you think we should do? It seems like one of the most difficult security problems for our airlines and for our airports.
SHELBY: Well, it's a real challenge because it would be easy to do damage to airplanes if the people were trained right and had a little luck. We don't need to foster that, but we need to be aware of it. And some people have advocated we should do something for our airlines. That would be a huge cost and I'm not sure that it would work without a lot of retrofitting. That is to make the airlines defensive in nature against these kinds of attacks. But we're aware of it. I believe Governor Ridge who is directing our Homeland Security will be in the forefront of that. I know the Intelligence Committee will be pushing measures to counter that. I think that we have to be, first, alert and try to stop it before it happens.
DOBBS: Senator, lets -- turning to the issue of intelligence, you have watched the progress in the war against terror and radical Islamists over the past, now better than a year. Give us your assessment how far we've come in terms of the intelligence we have both -- about the radical Islamists who make up a global terrorist network, and our own preparation to deal with them?
SHELBY: We have a real problem in the world, dealing with Islamic fundamentalists, and the terrorist groups that spring from these countries and mainly the people in Islamic nations. We're fighting that since September 11 and even before that we were fighting it, big time. But we've got a long way to go. We have not mastered the situation. This war as the President Bush warned us it's going to last a generation, maybe beyond that. This is round one of many, many rounds or many many years.
I believe that we're doing better. I believe the FBI is doing better than they were doing a year ago. They're going through a huge cultural change from police work to stopping terrorist attacks before they happen, that is intelligence work. It's probably -- I would say that we're probably on a three, three and half on a one to 10 scale on September 11 or right before it. We might be up to a five now, but we're a long way from a 10.
DOBBS: Senator Shelby, thank you very much.
SHELBY: Thank you, Lou.
DOBBS: Senator Shelby.
Well the Department of Homeland Security is boosting business for technology firms in this country. The government needs sophisticated software to protect this country's borders and track terrorist not only domestically but worldwide. Companies like BEA Systems are, among others, cashing in.
Casey Wian has the report.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNNfn CORRESPONDENT: Business software designer BEA Systems just broke a fourth quarter streak of declining revenue. Sales rose nearly 7 percent in the third quarter thanks to a dramatic increase in BEA's government business. The company won 103 federal contracts in 90 day, ranging from web portal launches to military and intelligence software programs.
ALFRED CHUANG, CHMN. & CEO, BEA SYSTEMS: There's no time to wait anymore. There is a sense of urgency that we have never seen. They believe these systems allowing them to have realtime ability are more critical than ever.
WIAN: The efforts to fight terrorism improve homeland security and upgrade technology are all providing a boost to technology companies reeling from a slowdown in commercial business.
HARRIS MILLER, PRES. INFO TECH ASSOC. Of AMERICA: Many companies which previously had little interest in government as customer. Now have an intense interest, because even though the government may be somewhat difficult to deal with relative to dealing with commercial clients at least they're spending money.
UNIDENTIFIED MALE: This application was offered to offer a realtime fly through the city.
WIAN: Silicon Graphics builds super computers with advanced imaging capabilities. For urban planners they can simulate flying through a big city like Los Angeles and go inside city hall. The same computers take an air force pilot into downtown Baghdad to prepare for the real thing.
UNIDENTIFIED MALE: You recognize another one of Saddam's palaces.
WIAN: Federal contracts are now 35 percent of Silicon Graphics revenue up from 20 percent last year, SGI was founded with a Pentagon grant and has a 20-year history of government business.
GERG ESTES, V.P. MARKETING, SILICON GRAPHICS: We're seeing a higher number of people in different sectors of the government pay a lot more attention to specific new technologies that we have. But the government is still the government and still moves very slowly.
WIAN: But the technology industry is moving quickly to capture billions in new government business. President bush has asked Congress for a 15 percent increase in federal information technology spending next year. Tech companies believe that's just a start.
Casey Wian, CNN, San Jose, California.
(END VIDEOTAPE)
DOBBS: Coming up next here: just in time for the holidays, the White House has reversed a Clinton administration policy denying bonuses to certain government employees. We'll tell you who the lucky ones are.
We'll also tell you why the "New York Times" spiked two stories that disagreed with its position on the Augusta National Golf Club issue.
Those stories and much more still ahead. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Two thousand, more government employees are eligible for a bonus this year, because today, the White House acknowledged that it was appropriate for political appointed employees and reversed a policy put in place during the Clinton administration.
Joining us now political analyst Bill Schneider. Bill, good to have you here.
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Sure.
DOBBS: What's the reason for the change? What's the driving motivation here?
SCHNEIDER: One word: fairness.
The administration says political appointees work side by side with career civil servants who routinely get bonuses. In fact, they say these guys and women often work harder. Look at the Justice Department, which had to put in long hours to -- in the counterterrorism effort after September 11. They think they should be rewarded.
But you know, somebody's kind of bothered by the appearance of this, because the White House chief of staff, Andrew Card, put this policy in effect earlier this year, but somehow it did not get disclosed until this week, after the election.
DOBBS: Just slipped in there after the election.
SCHNEIDER: Right.
DOBBS: I'm sure that was entirely inadvertent, aren't you?
SCHNEIDER: Of course. Well, I'm not so sure. Let's go on.
DOBBS: How much money are we talking about here in total?
SCHNEIDER: Well, Cabinet secretaries and agency heads are authorized to give bonuses of up to $10,000 but it could go up to $25, 000 or even more if the White House approves. Now you said there are 200 senior executive service people who are eligible. They make between 115 and $140,000 a year. It does not, however, apply to presidential political appointees who have to be confirmed by the Senate, like Cabinet secretaries. It's people just below that.
DOBBS: And bill, is this a matter of productivity incentive? Are these people actually measured in the productivity? Can they be?
SCHNEIDER: Well, that's what their bosses assume because -- look, they say that they measure civil servants by productivity, they should be able to measure political appointees.
But, you know, the civil servants are very angry about this because they saw their raise, which was approved by Congress, cut a quarter this year -- their bonuses -- because the president asked civil servants to make a sacrifice for the war effort.
And, they argue, there's a limited amount of money for these bonuses. Can they really be made to compete with people who are very well connected politically? Civil servants resent this. DOBBS: And it's going to, I suspect, be a subject of some discussion for a few days at least to come.
SCHNEIDER: Yes.
DOBBS: Bill Schneider, thank you very much.
SCHNEIDER: Sure.
DOBBS: We want to hear your opinion as well. Please cast your vote in our poll tonight. The question: "Should political appointees be entitled to those cash bonuses. Please log on to cnn.com/moneyline. And we'll have the preliminary results coming up for you in just a minute.
But next, we'll tell you which cars are the most environmentally friendly and which are not.
And the "New York Times" defends itself after killing two columns, that happen to disagree with the paper's editorial stance on Augusta and women membership. That story and a great deal more still ahead. Stay with us.
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DOBBS: Coming up next, cars in the United States are greener than ever before. We'll tell you which carmaker is miles ahead in the race for cleaner cars.
And a bit later, your thoughts about Saudi Arabia and the war on terrorism. Stay with us.
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DOBBS: A modest decline in the markets today. Stocks fell for a fourth straight session on wall street. The Dow traded in a 150-point range through the day but closed off just five points. Semiconductor stocks again dragging the Nasdaq down, today more than 1 percent.
Christine Romans is here to tell us what's going on with this chip sector.
CHRISTINE ROMANS, CNNfn CORRESPONDENT: You know, there has been a different call every day this week on the chip sector. And I guess we're calling it chip lash now because every day the chips move pretty sharply. Today, the semiconductor index down 6 percent.
Take a look though, Lou, at how much this sector has rallied since October 9. The Philly Semiconductor Index up 57 percent in about 40 days. Intel up 46 percent in the same period of time. S&P 500 up about 18 percent. Morgan Stanley today downgraded the sector, saying that the best is factored in here, and, in fact, listen to this: the average semi-stock has seen valuation right from 10 year lows in October to the best of the 1993 to 1999 range.
DOBBS: Now, I knew it was volatile. ROMANS: Volatile.
DOBBS: But you're talking about 10 days compressed into what? Forty days?
ROMANS: Yes. Yes. Essentially.
DOBBS: That's unbelievable.
ROMANS: Yes, it's been pretty amazing. And some days the stocks are moving 3 percent, 4 percent, 5 percent really on no news.
DOBBS: And as crazily volatile as that sector is, it could happen all over again in a very compressed period of time again.
ROMANS: Absolutely. So, I guess, the advice is be careful, as a lot of people are saying.
And there's an Intel mid-quarter update on Thursday. So you can bet there will be a lot of opinions about what to do on tech stocks.
DOBBS: And probably 5 percents moves on the index.
IBM today -- trading halted at the end.
ROMANS: To halt it at the end -- IBM saying it's going to fully fund its pension by the end of the year. That's earlier than expected and the shortfall is $3 billion, not the $4.5 billion that Wall Street had feared. So, equity market doing a little bit better.
Now, IBM stock is from 50 in that same 40-day period to about 84. In the 50s to the 80s in about a month and a half. So, that helps.
DOBBS: It's been a pretty good month and a half.
ROMANS: It has been. The question is, now what?
DOBBS: What do we have? We have about three weeks. We're going to be able to go positive on the year, do you think?
ROMANS: I think that we can safely to say it's very rare to go negative on the year. December's usually a good month. But if we're heading for this triple crown, three years in a row the Dow lower.
I want to run through, Lou, one that's happened before. Hasn't happened in about half a century. First happened in 1901 to 1903 and was followed up by a 42 percent rally. When it happened again, it it was four years in a row the Dow was down. But then it rallied 63 percent in 1933. And then the last time we saw three years down in a row, '39 to '41, followed by an 8 percent rally in '42. That triple crown is the most like what we're seeing is right now in the market.
DOBBS: I was looking for the 40 percent return rather than the 8.
ROMANS: Sixty-three isn't bad either, 63 percent is not bad. DOBBS: Christine, thanks.
In our "Corporate Crime Watch" tonight, a federal grand jury today indicted a former El Paso vice president and natural gas trader, Todd Geiger is charged with reporting 48 bogus trades to an industry newsletter last year. FERC discovered the trades early in the year in a review of the firm's natural gas trades. That part of a widening investigation of phony trades by energy trading companies. If convicted Geiger faces five years in prison, a quarter million-dollar fine.
Geiger's indictment today raises the score on our "Enron Corporate America Criminal Scoreboard" bringing the number charges in all of corporate America to 32, 28 of them at large, if you will four of them at Enron and 387 days since Enron went belly up.
We told you last night that Honda held up extremely well in those fender bender accidents. Those tests results released yesterday. Today Honda has another reason to crow. Its fleet of cars are environmentally friendly. The Union of Concerned Scientists rated emissions from the six largest carmakers in the U.S. market. Honda did best followed by Toyota, Nissan and Ford. General Motors and DaimlerChrysler rounding out the list. The UCS survey said Ford deserved the most credit for going beyond federal requirement for smog emissions for trucks.
"CROSSFIRE" begins in a few minutes. Let's go to Paul Begala and Tucker Carlson in Washington -- Paul.
PAUL BEGALA, CO-HOST, "CROSSFIRE": Well, Lou, although it's Christmastime, President Bush is playing Scrooge with federal workers telling front line workers even in the war on terrorism they can't get the pay raise they were promised but he has found money to give political hacks up to $25,000 in bonuses. We will debate whether that is fair or compassionate from the conservative president.
TUCKER CARLSON, CO-HOST, "CROSSFIRE": And then an entry interview with one of the least fresh freshman, former senator, now senator again, Frank Lautenberg. He described his years in the Senate before as, quote, "A large personal inconvenience." We'll ask him if he still feels that way.
And then, former President Bill Clinton says Democratic Party must take a stand on foreign policy. Does anybody have an any idea what that stand should be? We'll ask two leading Democrats what they think their party thinks about foreign policy.
DOBBS: Looking forward to it. Tucker, thank you very much. Paul, thank you.
Now the preliminary results of our MONEYLINE question of the evening in which we framed it as should political appointees be entitled to year-end cash bonuses. This being the focus of "CROSSFIRE" in just a few minutes. Only 5 percent of you said yes, 95 percent said no. You have 23 hours in which to vote and we can watch some balance be achieved in this result, perhaps. Perhaps not. The "New York Times" confirmed to MONEYLINE tonight that it killed two stories, different from the editorial position on the Augusta National Golf club on the issue of admitting women members. However the "Times" stressed that difference was not why the columns were killed. In a memorandum to the paper's staff, Managing Editor Gerald Boyd said, quote, "We are not concerned with which side the writers are on. A well-reported, well-reasoned column can come down on any side, with our welcome."
The "Times" has been critical of August's refusal to allow women as members, but columns by Dave Anderson and Harvey Arritan (ph) did not conform with the paper's editorial position. Boyd insisted the columns didn't meet the paper's reporting standards.
Coming up next here, we'll hear what you had to say about Saudi Arabia's new found enthusiasm in the fight against terrorism and we'll have "In Their Words" as well. Stay with us.
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DOBBS: Time now for a look at your thoughts and Saudi Arabia's defense of its participation in the war against terrorism. Roger Homefield from Florida wrote to say: "The Saudis are talking about tracking their charities better, but what about the telethon for homicide bombers we all saw on live television"
Zach from New York said: "Saudi Arabia admits funding Hamas, a group that has been the official U.S. terror list. The Saudis consider Hamas to be a charity."
But Tom Peiser from Nova Scotia says we need to pause a moment and writes to say: "I think judging the Saudis right now is one of the worst things we could do. How many of us thought all the money we gave to the Red Cross was going directly to help the 9/11 efforts."
And regarding our MONEYLINE poll question yesterday about the worst idea of the moment, Gretchen Ritter from Germany had this to say: "The worst idea is a Caribbean cruise. Nobody will attack Kenya again next week, but to be sick with 200 plus other passengers on a bumpy ship? NO thank you."
Send us your thoughts. Moneyline cnn.com. Please include your name and address.
Those are your words. Now, "In Their Words."
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DEMETRIUS PERRICOS, UNMOVIC TEAM LEADER: The Iraqi side would have liked us to be very light. The U.S. side, as from what I hear from you, would like us to be extremely, you know, severe. I think what we are doing is the proper way. We are simply -- still doing a good job.
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SEN. JOHN KERRY (D), MASSACHUSETTS: Not only do the new Bush tax make no economic sense, but this administration has chosen at the same time to turn fiscal responsibility on its ear, turning a budget surplus to a budget with endless deficits, and making it difficult for us to make common sense choices to invest in those things America needs.
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MADELEINE ALBRIGHT, FMR. SECRETARY OF STATE: We believe that we take others country national interest into mind in making our decisions. They do not think so. And as someone whose job it was to protect the national interests, I think that the only way to protect our national interest is to understand the national interests of the other countries.
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DOBBS: And that is MONEYLINE for this Wednesday evening. Thanks for being with us. Join us tomorrow. We'll be focusing on global warming. Is it or isn't it? Our guests will include Michael Oppenheimer of Princeton.
Thanks for being with us tonight. For all of us here, good night from New York.
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