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LOU DOBBS TONIGHT

Wildfire Threatens Homes in Arizona; Drought Conditions in the West Prompt Fears of More Wildfires; Editors' Circle

Aired June 20, 2003 - 18:00   ET

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

ANNOUNCER: This is LOU DOBBS TONIGHT for Friday, June 20. Here now Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening everyone.

Tonight, blazing Arizona, a fast moving wildfire near Tucson is threatening hundreds of homes. It's already destroyed nearly 300 houses and tonight the winds are picking up. Firefighters say it could be weeks before they're able to bring this fire under control. Carey Pena will have the latest for us from Mt. Lemmon, Arizona in just a moment.

But also tonight, severe drought conditions in the West are prompting fears of a brutal wildfire season. Casey Wian will have a special report on what cities are doing to conserve water.

First, Carey Pena reports on the fire that has already burned thousands of acres near Tucson -- Carey.

CAREY PENA, KTVA CORRESPONDENT: Well, Lou, the Aspen fire, the number one priority fire in the nation continues to burn on Mount Lemmon as we speak. Mt. Lemmon is an area outside Tucson, right outside Tucson that has a cluster of small cabin communities on it.

One of those communities, called Summerhaven was ravaged by fire yesterday. Flames jumped the fire line around 11:30 and after that there was little firefighters could do. They estimate one half of the homes in Summerhaven, approximately 200 to 250 homes are lost and they are still putting out fires in that area as we speak.

Also, they are dealing with hazardous material situations up there because of all the propane tanks and vehicles that are exploding. One firefighter we talked to described it as looking like a war zone.

Right now, crews are also concerned about another community called Sykes Knob. That community has about 40 to 50 homes. Just a little while ago, incident commander Larry Humphrey addressed that in a news conference.

(BEGIN VIDEO CLIP)

LARRY HUMPHREY, INCIDENT COMMANDER: We think right now that we can save most if not all of these homes in there but the weather prediction is not good. We're supposed to have a southwesterly wind which as you can tell will blow this fire towards the east to the northeast, and if it gets too hot we'll once again have to pull crews out. We're expecting high winds.

Chances are really good that we'll have to set most if not all of our aircraft down because of high winds and hazardous conditions, so we're going to have another extremely active day.

(END VIDEO CLIP)

PENA: The governor of Arizona issued a state of emergency yesterday and put National Guard troops on standby. Right now 700 firefighters are here at Mt. Lemmon working to try and knock down this fast moving fire. They expect up to 1,000 firefighters will be here by this weekend and they are just not getting a break on the weather. Yesterday they saw winds up to 60 miles an hour, Lou, and today it seems to be more of the same.

DOBBS: Carey, thank you very much, Carey Pena reporting from Mt. Lemmon, Arizona.

And, this tinder box that is being expected throughout the west putting even a further burden on state budgets that are in critical need of more money.

Further complicating in the west, a drought, a severe drought, southern Nevada's main water source, Lake Meade, is now at its lowest level in decades. In our special report tonight, Casey Wian looks at the western drought and how Las Vegas is desperately trying to cope.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Angela Schwendt (ph) is a Las Vegas cop.

UNIDENTIFIED FEMALE: We have a time of day violation in progress with water moving north down here on Almadeas (ph) Lane.

WIAN: A water cop. She patrols the Las Vegas suburbs enforcing southern Nevada's increasingly strict water use regulations and she hands out warnings and fines for violations from water waste to sprinklers operating at the wrong time of day.

Southern Nevada's population has doubled since 1990 but recently the western drought has squeezed its water supply. That's clear when you look at the shrinking shoreline of nearby Lake Meade, part of the Colorado River system that supplies 90 percent of the region's water.

MARY HINSON, NATIONAL PARK SERVICE RANGER: This is Lake Meade Marina and this is the Lake Meade launch ramp and this is what happens when the water gets too low.

WIAN: It's down about 70 feet to a 32-year low leaving what looks like a giant bathtub ring. Each 20 foot drop costs the Park Service $6 million in infrastructure expenses to keep boating facilities open. Marina operators spend millions more to relocate their docks. (on camera): Just about five years ago you could fish off of this pier but Lake Meade's water level has fallen so far that now it would take a cast of well over 200 yards just to reach the edge of the water.

PATRICIA MULROY, SOUTHERN NEVADA WATER AUTHORITY: It's the worst drought cycle the Colorado River has experienced in 1,400 years. We had overnight our water supply for all practical purposes in the short term evaporate on us and we have to now go to extraordinary measures in order to get through this drought cycle.

WIAN (voice-over): The Water Authority is raising rates up to 40 percent banning residential car washing, restricting daytime sprinkler use, and paying property owners a dollar a square foot to replace lawns with desert landscaping.

Las Vegas casinos and golf courses together use only 12 percent of the region's water while generating more than 75 percent of its economic activity. They've already invested heavily in water conservation.

Two-thirds of the region's water use is residential and about a quarter of that is wasted so the burden of the drought in southern Nevada will fall heaviest on its still growing population.

(END VIDEOTAPE)

WIAN: Now, southern Nevada's drought plan has three tiers based on the level of Lake Meade. Already the region has moved from what's called drought watch to drought alert. Drought emergency would be the next step and water officials with the help of a citizen's advisory committee are still deciding what action to take if conditions in fact do get that bad -- Lou.

DOBBS: Casey, the Colorado River critical to nearly all of the western states involved now in what is a historic drought, it appears it's going to be historic, just how severe would you describe the situation for California, for Arizona, for example?

WIAN: Well, for Arizona, for example, we saw those fires. That's a vivid example of what's happening there. Also, some of the cities in Arizona have water restrictions similar to what's happened in Las Vegas.

In Colorado, there are also cities with water restrictions, though in some places in Colorado those water restrictions have been lifted because there are signs at least there that the drought is beginning to ease. Here in southern California there's no immediate impact.

There is plenty of water for the immediate future but water officials here are very concerned about the long term because the federal government is cutting off access to some of southern California's Colorado River water -- Lou.

DOBBS: OK, Casey, thank you very much, Casey Wian reporting from Los Angeles.

Well, on the opposite side of the country the opposite problem. There is no shortage of water on the eastern seaboard. Rain and thunderstorms have swamped the East Coast throughout the week. More rain is expected over the weekend.

In Gainesville, Florida, the wet weather contributed to a car accident that left a little girl trapped under water. Rescue workers were able to pull her to safety.

In New York, more than half the days of May and June have been rainy. In New Jersey, 21 counties had at least five inches of rain through the first 19 days of June. That is well above normal.

That brings to tonight's thought on the nature of nature and weather itself. "Nature goes her own way, and all that to us seems an exception is really according to order."

That wet weather throughout the country contributing to a number of illnesses and amongst them including Lyme disease. That's our focus tonight as we continue our series of special reports on emerging diseases in this country.

Lyme disease first appeared in the United States in the mid- 1970s. It is one of the first emerging diseases to strike Americans and it seems to be given the least attention.

Lyme disease accounts for more than 95 percent of all insect- borne diseases reported in this country and if left unchecked Lyme can lead to arthritis, neurological problems, and in some cases heart ailments.

The CDC reports more than 145,000 cases have been reported over the past 20 years. On average, 18,000 people are infected with Lyme disease each year. That number jumped dramatically last year to 22,000 and the rate of recurrence on Lyme sufferers is 10 to 15 percent.

Lyme disease can be acquired anywhere in this country but 90 percent of all cases occur in only ten states. They are located primarily in the northeast. And misdiagnosis of Lyme disease continues to be a critical public health problem, Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Polly Murray is not a woman to give up. Living in Lyme, Connecticut in the early 1970s, she started developing rashes, fevers, and joint pain.

POLLY MURRAY: I think doctors, you know, would see me coming and they'd say oh she's just determined to diagnose a disease that probably just doesn't exist excepting in her own mind that I was, you know, kind of a hypochondriac.

PILGRIM: Her husband and every one of her children came down with similar symptoms. She didn't give up, talking to the press, looking through medical manuals on her own.

MURRAY: When you live with it and when you have people sick around you and hobbling around you see it from a different perspective and so I just kept pursuing it with any doctor that would listen.

PILGRIM: The state health department finally did, looking into a report of the disease in 1975. The disease is carried by ticks living in the deep underbrush. The ticks are carried by deer into suburban areas where they can be found easily in the carefully manicured lawns.

Dr. Robert Nadelman is an infectious disease expert.

ROBERT NADELMAN, WESTCHESTER MEDICAL CENTER: It's the most common tick-borne disease in the United States and it's so common that even people who are very familiar with how to prevent Lyme disease and who live in areas where there's Lyme disease can get it.

PILGRIM: Doctors tell people to cover up when walking through the high grass or underbrush and to check for ticks every day in the summer. But the real problem is eradicating the cause. Deer control generates heated debate in many communities. The deer population has climbed from 500,000 in 1900 to 30 million today.

Doctor Durland Fish researches Lyme disease prevention methods at Yale University.

DURLAND FISH, YALE SCHOOL OF MEDICINE: Well, if nothing is done I think that there's going to be more and more cases of human illness due to the tick population. As the ticks spread into more areas I think the situation is only going to get worse.

PILGRIM: Polly Murray agrees. She still gets tick bites about once every summer but she still lives in Lyme.

(END VIDEOTAPE)

PILGRIM: Misdiagnosis is still a very big issue. Now there are several Web sites if you have questions or worries about Lyme disease. The American Lyme Disease Foundation, it's aldf.com, and of course the Centers for Disease Control they have a lyme web page that's very, very good, cdc.org -- Lou.

DOBBS: One of the extraordinary things about this, I don't think most people would realize that Lyme disease is the number one insect- borne disease in this country.

PILGRIM: I was stunned when I started going through the numbers how prevalent it is and how common it is and how fast it's growing.

DOBBS: And the stories about what this disease does to people, the debilitation destroying lives even while not being fatal.

PILGRIM: It's been a very sad exercise to talk to some of the victims of this disease including our subject who had the first case.

DOBBS: And, obviously, information is critically important in this. As Kitty pointed out two Web sites, there are a number of others, but we would urge you to take a look at these two at least as you begin any research in your search for information. The American Lyme Disease Foundation at aldf.com and the Centers for Disease Control of course at cdc.gov.

Kitty, I want to ask you one other question, as we're focusing on emerging diseases, Lyme disease obviously the focus, we know there is Rocky Mountain spotted fever but one of the things we're learning throughout this special series of reports is that we're seeing mutations and new diseases forming, are there other diseases borne by ticks?

PILGRIM: Yes. In fact, that was the great surprise of doing our research. There are four diseases that are borne by ticks that are emerging now. One of them is very fatal. It's a malaria-like disease and it's fatal and it's just shocking how new diseases are turning up every minute borne by ticks.

DOBBS: And, of course, the concerning, the frightening aspect of this is that doctors today are not Lyme disease literate and still have not come up with effective treatments and yet we see new diseases emerging here.

PILGRIM: That's right.

DOBBS: Kitty, thank you very much, Kitty Pilgrim.

Later here tonight, we'll be talking about one of the deadliest emerging diseases of all, Ebola. Louise Schiavone will report on the frightening virus that to this point has been contained.

And, we'll be talking with Director of the National Institutes of Health Dr. Anthony Fauci. We'll be talking about what public health officials are doing to prevent these emerging diseases from spreading infection in this country.

Still ahead, Secretary of State Powell is in the Middle East tonight. They're demanding speedy progress on the road to peace and a truce the secretary says is not enough.

Later, the editors of this country's top business magazines on the stories the world is watching. They include, of course, Potter pandemonium and Martha mania. Stay with us.

(COMMERCIAL BREAK)

DOBBS: On Wall Street today the index has finished mixed but the markets scored another winning week, the Dow today up more than 21 points, the NASDAQ fell almost four, the S&P up a point.

Susan Lisovicz has the market for us tonight -- Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Lou, it was a rather meager finish on the day and it belied the volatility of the session. Today was quadruple witching, options expirations which accounted for some of the volatility and a lot of the volume. The Dow relinquished most of its gains but closed to the upside largely due to the march of the generals. General Motors rose 1.4 percent after announcing a $10 billion debt offering to improve its balance sheet, and General Electric gained ground after reaffirming second quarter and full year earnings one day after disclosing weakness in its plastics division.

But losers narrowly beat out winners on the big board. Among them, Halliburton, which plunged more than five percent on word that cash for asbestos claims will exceed expectations. And NASDAQ stock JetBlue tumbled nearly two percent on a downgrade.

Bonds sold off sharply with the yields on the ten-year note at 3.9 percent. The three major stock indices all recorded a win of about one percent and more evidence of renewed interest in stocks. An industry guide said nearly $2 billion more flowed into stock funds last week from the previous week, next week's focus, Lou two words, Federal Reserve.

DOBBS: All right, our four federal open market committee I suppose.

LISOVICZ: And we'll all be waiting.

DOBBS: The expectation is that interest rates will decline.

LISOVICZ: But debate, though, whether it's a quarter or a half a point.

DOBBS: All right, well perhaps they'll surprise us all. Susan, thank you very much, Susan Lisovicz.

Well now our nightly look at the corporate America criminal scoreboard, 73 executives charged with criminal wrongdoing, 16 of them from Enron, only one executive has been sentenced to jail in the 564 days since Enron filed for bankruptcy.

Still ahead here tonight, Secretary of State Colin Powell calls for speed and urgency in the push for peace as he travels through the Middle East.

Then, Ebola, what's behind this fast-acting deadly virus? We'll be talking with Dr. Anthony Fauci of the National Institutes of Health about the threats to the public health in this country as our series of special reports on emerging diseases continues.

Later, flying high, our CEO of the week helped his company take off even in tough times. Stay with us.

(COMMERCIAL BREAK)

DOBBS: A terrorist warning tonight for Americans in Kenya. The Pentagon raised the threat level there to high following information about a possible plot to attack the new U.S. Embassy in Nairobi.

The previous embassy was destroyed in the 1998 terrorist attack. The embassy was closed today and probably will not reopen until at least next Wednesday. Kenya and the Horn of Africa region have long been a center of al Qaeda terrorist activity.

Terrorism from a different source the focus for government leaders meeting in the Middle East tonight, Secretary of State Colin Powell today met with Israeli Prime Minister Ariel Sharon. Powell called Hamas the enemy of peace.

Wolf Blitzer is in Jerusalem and has the very latest for us -- Wolf.

WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou. It was a day of high diplomatic drama here in the Middle East but it wound up with low diplomatic results.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Unfortunately for Secretary of State Colin Powell he found himself in yet another familiar predicament his latest effort to promote peace a disappointment, not much headway at least not in public.

He and his aides have been hoping to get word from Palestinian Prime Minister Mahmoud Abbas that Hamas and other militant Palestinian groups would accept a cease-fire in their terror attacks against Israel. The best Abbas could offer Powell publicly following their talks in the West Bank town of Jericho was a promise to keep trying.

MAHMOUD ABBAS, PALESTINIAN PRIME MINISTER (through translator): I am confident, highly confident that we will reach an agreement with all these organizations.

BLITZER: Earlier, following a separate round of talks with Israeli Prime Minister Ariel Sharon in Jerusalem, the secretary of state lashed out at Hamas.

COLIN POWELL, SECRETARY OF STATE: The enemy of peace has been Hamas especially over the last two weeks.

BLITZER: To that, Abdel Aziz Rantisi, the Hamas leader who was nearly assassinated by the Israelis in Gaza earlier this month, lashed right back at Powell.

ABDEL AZIZ RANTISI, HAMAS LEADER: He is totally with the Israeli terror against Palestinian rights. He is an enemy to Palestinians.

BLITZER: While the war of words was playing out, yet another deadly incident, an Israeli motorist driving through the West Bank was shot and killed, three other passengers wounded two seriously. Israeli military sources blame Palestinian gunmen.

It is precisely these kinds of attacks that strengthen Prime Minister Sharon's refusal to abandon his policy of targeting suspected terrorists for assassination despite urgings from Washington.

ARIEL SHARON, ISRAELI PRIME MINISTER (through translator): We have to make sure there are no independent terror organizations on the group. The terror organizations must be fought.

BLITZER: Despite the disappointment, top Bush administration officials promised to keep on pushing to underline President Bush's commitment to advance his road map hailed by all sides only two weeks ago at the Aqaba Summit. He's dispatching his National Security Adviser Condoleezza Rice to the region next week in an effort to pick up where Powell left off.

(END VIDEOTAPE)

BLITZER: And interestingly enough in the past several days I've heard from both Israeli and Palestinian Authority sources that they might be more prepared to make deeper concessions to Dr. Rice than they would have made to Secretary Powell convinced that Condoleezza Rice is closer to President Bush -- Lou.

DOBBS: Wolf, thank you very much, Wolf Blitzer live from Jerusalem tonight.

And tonight's quote, a progress report on the road map to peace from an Israeli official saying: "I would call this week birth pangs. The state of Israel will make every effort and will take advantage of every opportunity and will pursue every path in order to try and lead to a political process that will finish up with a political settlement," Ariel Sharon.

Now, the question of whether Saddam Hussein is dead or alive. There is now a growing belief among U.S. intelligence officials that Saddam Hussein did survive those attacks against him and is now in Iraq. Two U.S. intelligence agencies tell CNN that they reached that assessment based on intercepts of communications between Saddam Hussein supporters.

Senior Pentagon Correspondent Jamie McIntyre has the story -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Lou, part of the reason for this opinion is that the U.S. military has excavated two sites where they tried to kill Saddam Hussein with decapitation air strikes and found no evidence at either place that he was there.

Pentagon sources say, and U.S. officials say, that scraps of information that have come from local citizens and interrogations of some of the captured regime members have pushed many intelligence analysts into the camp of those who think it's likely Saddam is alive and hiding in Iraq, but the U.S. government says officially that they don't know.

U.S. officials also tell CNN that the General Abid Hamid Mahmud, Saddam Hussein's closest confidante has been talking since his capture by U.S. Special Operations forces on Monday but U.S. officials won't say what he's saying and Pentagon sources say that so far most of those captured regime leaders have not been providing much useful information.

The hunt is on for Saddam Hussein. It's being led by something called Task Force 20. It is a Special Operations unit backed by intelligence from the CIA that is pursuing the latest information trying to find Saddam Hussein and Pentagon officials say if Saddam is alive he has had to go deep underground.

(BEGIN VIDEO CLIP)

VICTORIA CLARKE, PENTAGON SPOKESPERSON: Saddam Hussein is not running that country anymore. He is not making as a matter of policy torture and oppression. Torture and oppression, tyranny, were how he ran that country. That's not going on anymore so that's a very good, very positive thing.

(END VIDEO CLIP)

MCINTYRE: Now, Pentagon officials stress that all of the latest intelligence about Saddam Hussein is not conclusive. In fact, most of it is not firsthand. There have been some sightings of Saddam that have been deemed to be plausible but U.S. officials also caution that some of the evidence that he's alive could be faked by his supporters because it's in their interest to maintain the perception that Saddam Hussein is still alive -- Lou.

DOBBS: Of course now, Jamie, intelligence has an advantage. They have the capability on the ground in Iraq. This is raising some concern I would think there at the Pentagon about the quality of U.S. intelligence, Chemical Ali reportedly still alive after initial reports that he was dead. Saddam Hussein twice presumed to be dead based on intelligence and, of course, the search for weapons of mass destruction.

How big a concern is there about the intelligence agencies on the part of the Pentagon now?

MCINTYRE: Well, they say there's always a difference between what intelligence suggests and what the reality is they find on the ground. In the case of not killing Saddam Hussein, both of those strikes, those air strikes, were based on somebody who the U.S. government, an informant that the U.S. government has very high confidence in. Now they're wondering if perhaps that person was a double agent.

DOBBS: Jamie, thank you very much, Jamie McIntyre our Senior Pentagon Correspondent.

In our series of special reports this week on emerging diseases, tonight Ebola. Louise Schiavone will report. Dr. Anthony Fauci of the National Institutes of Health joins us to assess the threat from emerging diseases against the public health of this country.

And, it's a united effort for our CEO of the week balancing financial success and a high standard of corporate responsibility, much more to come here please stay with us.

(COMMERCIAL BREAK)

DOBBS: The deadly Ebola virus is not yet 30 years old since its discovery in Africa. There have been almost 1,700 cases worldwide and while that is not a certainty for those infected it is likely.

Louise Schiavone has the report on our special series on emerging diseases.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): It's quick, gruesome, and deadly. No one knew it existed until about 30 years ago but now through international travel and communications even its name, Ebola Hemorrhagic Fever conjures fear.

Dr. Malonga Miatudila treated victims in the first outbreak of Ebola in 1976 in what is now the Democratic Republic of Congo.

DR. MALONGA MIATUDILA: You start bleeding, eyes, mouth, nose, from every point you can imagine, even through the skin. And then three, four days later you are dead. You are dead.

SCHIAVONE: The virus attacks the blood's ability to coagulate. Headache, cramping and vomiting unrelenting. Transmission is through bodily fluids easily passed to family care givers.

MIATUDILA: You died because you love somebody.

SCHIAVONE: Doctors in biohazard suits strictly enforcing sterile health care practices and quarantine have responded to that and several similar outbreaks in central Africa. To date, it's claimed over a thousand victims. But Ebola is not restricted to Africa. In the movie "Outbreak" a killer disease enters the U.S. through an infected monkey. And that's exactly what happened in real life.

DR. TOM KSIASEK, CENTERS FOR DISEASE CONTROL: When it popped up, first of all, we were quite surprised that it was Ebola virus because it was isolated from the tissues of a monkey in Reston, Virginia.

SCHIAVONE: In 1989 and 1990, laboratory primates imported from the Philippines were diagnosed with a strain of the virus dubbed Ebola-Reston after a research facility in Reston, Virginia. Several monkeys died. Blood testes revealed that four scientists were infected, although none ever suffered symptoms. A similar outbreak followed in Alice, Texas.

Army scientists and the CDC both responded. To this day, no one knows the ultimate source of the virus.

KSIASEK: A couple of the more recent outbreaks have had primates as the source for human infection, but we also don't believe that primates probably the reservoir.

SCHIAVONE (on camera): So far, treatment of Ebola has been reactive, isolating and treating patients, and results have been spotty. But here at the National Institutes of Health, scientists are working to prevent outbreaks from occurring to begin with.

(voice-over): Researchers have had great success with an Ebola vaccine for primates. Next step is human trials, all the while racing the threat of an outbreak or even bio terrorism.

DR. GARY NABEL, NATIONAL INSTITUTES OF HEALTH: None of us knows what -- what lurks in the minds of some of the very evil people who do these kinds of things. But if we have it within our power to safeguard ourselves against those sorts of attacks, then by all means, we should do it.

(BEGIN VIDEOTAPE)

SCHIAVONE: Lou, an affected vaccine against Ebola could not only save lives on the front lines in central Africa, but also give us peace of mind at home -- Lou.

DOBBS: Louise, thank you very much. Louise Schiavone from Washington.

Dr. Anthony Fauci is director of the National Institutes for Health. He says emerging diseases are noting new. They're spread not surprising given the nature of a shrinking world in which we all now live. Dr. Anthony Fauci joins us now from Washington. Good to have you with us.

DR. ANTHONY FAUCI, DIRECTOR, NIH: Good to be here.

DOBBS: This week, Doctor, we have been focusing on this show on emerging diseases and it is concerning. With international travel, with the number of diseases that are emerging, how would you rank the level of concern on the part of your organization and other public health agencies?

FAUCI: Well, it's a level of concern that spurs you to be very vigilant to increase your preparedness. It's not the kind of concern where you wring your hands and feel panicky that you have an impending disaster that it's just around the corner, but it is a state of mind of taking it very seriously.

Emerging and reemerging diseases have been with us from the beginning of civilization and will continue to be with us because of that special relationship between microbes and humans, and they emerge. They emerge as new diseases or they reemerge as older diseases, only under different forms.

DOBBS: The capacity, though, by which they can be transmitted, to populations centers literally all over the planet is entirely new. And amongst those diseases, Dr. Fauci, which is the most concerning to you? Which do you think deserves the highest priority on the part of U.S. public health officials?

FAUCI: Well, Lou , right now, the unknown is certainly something that you can't quantitate because we could have the emergence of a disease like SARS of which we are still having a problem with right now. Although it's plateaued that's a totally new disease. So there's a vast unknown.

But of the things that we know of that most concerning to many public health officials like myself is a pandemic influenza because we know in that 1918, influenza killed 40 or some odd more million people worldwide, and about 750,000 people in the United States in one year, in 1918. And there certainly is a possibility that we may have the emergence of, again, another pandemic, deadly flu.

So that's of considerable concern to me.

DOBBS: Debilitating, as well, but of a lesser threat in terms of its fatality rate, its mortality rate, is lyme disease. It is striking that in a period of 30 years, treatment is so -- if you will, primitive. Cures not at hand. Diagnosis is often not available. Too many doctors simply not literate. How can this be?

FAUCI: Well, that's exactly not quite the case, Lou. In lyme disease, if you get acute lyme disease, the antibiotic treatment of that is really quite effective in curing people of it. What happens that sometimes it goes undiagnosed or it goes into into a chronic form. And once it goes into a chronic form, then you have a significant problem.

We've had an effective vaccine, but it's the kind of vaccine that you have to essentially vaccinate people each year. And from the standpoint of it's use, it has not been used as efficiently as it could have been used. So scientifically, we had a vaccine and still do have a vaccine, but it's not really well used.

The problem is when you get either an undiagnosed case that goes on smoldering without appropriate treatment or you get into the chronic phase which can be quite debilitating.

DOBBS: And turning to West Nile virus, we are coming into -- May and June, record wet weeks in the east. Mosquitoes will be certainly in abundance. And West Nile, the danger from it even greater. How concerned are you about West Nile disease?

FAUCI: Certainly West Nile is of concern. Remember, it came for the first time in the United States in 1999 just a handfuls of cases. Last year, we had over 4,100 cases with 285 deaths.

When you have the seasons like we have now with the wetness and then you have a following a dry season, we'll wind up with some significant problems. I don't think there's any doubt. We have already identified in about 24 states animals that have already been this season identified to be infected with West Nile. That's a bad sign.

So we're girding ourselves with a good deal of surveillance and we may have to implement some significant mosquito control measures depending on how things shake out over the next couple of months. So it's something we need to keep a very serious eye on.

DOBBS: Dr. Anthony Fauci of the National Institutes of Health, we thank you very much for being with us.

Since we began our series of reports on emerging diseases this week, another person in Florida has likely contracted the SARS virus. In Canada, a 45-year-old man died from the disease, bringing the death toll in that country to 36. And in China, some good news. It is now been almost two weeks since a new case of the SARS virus was reported.

As for monkeypox, 87 people in six states have shown symptoms of the disease. Twenty of those cases have been confirmed by laboratory tests. Federal health officials say for some reason monkeypox cases in the U.S. milder than those that occur in central Africa.

When we continue, "Our CEO of the Week" keeps his business firmly grounded even when some of the products are soaring.

And in "Our Weekly Editors' Circle", the stories moving your money. We'll have a lively talk with the editors of the nation's top business magazines, coming up. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight's "CEO of the Week" runs a company so diversified it manufactures products as small as air conditioners, as large as helicopters. United Technologies has $28 billion in sales, 155,000 employees and it also has our "CEO of the Week," George David.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): This Blackhawk Helicopter is built at United Technologies's Sikorsky helicopter unit in Connecticut. It is here that military pilots perform their test flights before these helicopters are sent into active duty.

The Blackhawk safety record is unblemished.

GEORGE DAVID, CEO & CHAIRMAN, UNITED TECHNOLOGIES: We have millions and millions of flight hours with the Blackhawk's family of helicopters. No accident due to material failure, design failure, manufacturing defect. And that's the way it has to be. it has to be a standard of zero, zero defects.

DOBBS: Since George David took over as CEO in 1994, operating income margins have jumped from 4 to 14 percent. United Technologies started a number of industries, from Otis elevators, where David got his start in the '70s, to Sikorsky helicopters.

DAVID: We also have flown every president since presidential flights began with Eisenhower in 1957 -- has gone in the Sikorsky helicopter.

DOBBS: The company continues to spend heavily on research and development.

DAVID: We spend $2.4 billion a year. That's actually about 8 percent of sales.

DOBBS: Shares of United Technologies are up more than 60 percent over the past five years.

DAVID: We typically raised the dividend about 10 percent every five quarters. We have done that now for a dozen years. And strong cash flow. We have active share repurchase. We buy back typically three quarters of a billion dollars a year.

DOBBS: And the company has a long history of commitment to good corporate governance.

DAVID: Back in the early 1990s, we actually adopted our statement of principles of corporate governance. We provided for all the tests that you see talked about in the newspapers today.

DOBBS: The United Technologies Employees Scholar Program is unique. It prepays all tuition bills for college and advanced degrees. Employees scholars are granted three hours a week of paid time off for their studies, and the company even provides a graduation gift.

DAVID: Last thing we do is when the employee goes to the podium to get the degree, we give them $10,000 of stock -- $10,000 worth of UTC stock.

DOBBS: Quite a gift, considering that over the past seven years, there have been 11,000 UTC graduates of the Employee Scholar Program.

(END VIDEOTAPE)

DOBBS: George David of United Technologies, our "CEO of the Week" and our congratulations.

From an example of corporate integrity, to an example of compassionate, sensible government. Six-year-old Avigayil Wardein opened a stand in her neighborhood. Business was good and she made a little money until Naples, Florida, police showed up one day and shut her down.

(BEGIN VIDEO CLIP)

AVIGAYIL WARDEIN, YOUNG ENTREPRENEUR: We didn't have a permit, so she called the cops. We had to take down my lemonade stand.

(END VIDEO CLIP)

DOBBS: Eventually, Naples City officials agreed to waive permit fees and they gave Avigayil a license to sell lemonade after the neighbor had complained and, in fact, she has a permit that permits her to open as many lemonade stands as she wants in Naples. A very nice example of government working and common sense triumphing and we applaud those officials in Naples, Florida.

And we have we begun an intensive investigation and search for that sour neighbor who turned in 6-year-old Avigayil. We'll keep you posted on the results.

That brings us to tonight's poll. "Would your local government act as compassionately and sensibly as that of Naples, Florida? Yes or no?" Cast your vote at cnn.com/lou. We'll have the results for you later in the broadcast.

Another CEO set a date with the justice system this week. Martha Stewart's trial set for January, just one of the topics to be discussed in this week "Editor's Circle."

But first, a look at the latest issues of the country's leading business magazines.

"Fortune" looks at Uncle Sam's sneaky way of taking back that tax cut that George Bush just gave us.

"Forbes" magazine profiles the world's 100 hottest celebrities.

And this week's "BusinessWeek" offers a guide to summer investment.

Here now, Rik Kirkland, the managing editor of "Fortune"; Robert Lenzner, the national editor of "Forbes"; Stephen Shepard, who is the editor-in-chief of "BusinessWeek."

Good to have you with us.

(CROSSTALK)

DOBBS: Let's turn to the biggest news of the week, unquestionably unrivalled, Martha Stewart -- Rik.

RIK KIRKLAND, "FORTUNE": The wheels of justice grind exceedingly slow. I mean, it's two years since this case was brought and we're going to go to trial in January and that's pretty much -- that's probably fast for these CEOs scandal trials, and Martha's is pretty simple. So what hope for Enron?

DOBBS: What hope for Enron, indeed. Sixteen executives have been charged, but they're lower level. Will we ever see prosecution of the top executives of Enron, Bob?

ROBERT LENZNER, "FORBES": Well, we'll see prosecution of Mr. Fastow. He was the chief financial officer -- I'm hoping, that he's going to give up Mr. Skilling and I'd love it if Mr. Skilling gives up Mr. Lay, but I don't think that's going to happen.

Yes, these things take too much time. That's why we paying so much attention to Martha Stewart. Those other cases are far more important. So far, we've just put Mr. Waksal in jail. I think more people are going to go. It would be better if it were speeded it up and we could see justice take place. That's what i think.

STEPHEN SHEPARD, "BUSINESSWEEK": Well, the coverage of Enron won't be nearly as much fun as the coverage of Martha Stewart. We read -- we read she was wearing glenn-plaid blazer, lemon-print shoes and a polka dot umbrella. So, this is, you know...

DOBBS: It's hard to get that going with special purpose...

(LAUGHTER)

SHEPARD: We will get to obstruction of justice, I hope.

DOBBS: Yes. It's remarkable. And I don't know what the reaction is with your readers, but our viewers on this program are incensed. The e-mail that we receive about the slowness, the pace of this white collar investigation -- people are really very tired of hearing this is a complicated case. These are bright attorneys working for the SEC, for the Justice Department, the U.S. Attorney's Office.

SHEPARD: In the fairness in the case, a lot of that time went to negotiating to see if they could get her to agree to some sort of a plea. And that's what took a lot of the time and she didn't do it. So she's going to go to trial.

LENZNER: Louie, you know what one of the problems is? Every day, there's another...

KIRKLAND: That's what I was doing to say.

LENZNER: ...scandal or two or three. So these -- the cops are really busy as the criminals are coming in and they have to get their facts together to indict them. We're going to have a -- this is going to be a long time putting these guys in jail.

KIRKLAND: It's like busting all the kids at Spring Break for drinking beer. We're overloading the system here. I mean, that's really what happened.

DOBBS: That's the first -- that was the first simile that came to my mind. Beer drinking.

(LAUGHTER)

DOBBS: I think you're probably right. It's not going to end quickly, but -- because Freddie Mac has demonstrated that even though they were attempting the inverse of what most of the corporate scandals were all about, that is...

KIRKLAND: We even had something -- minor item in the news this week. The SEC issued a wells notice to a woman at Lucent. Lucent. Remember Lucent? That's where we started all this. We had $700 million of restatements back in 2000, which seemed like a lot in the time. It's piddly. And that one's just grinding now.

SHEPARD: Well, what this tells us is the people that said it's just a bunch -- a few rotten apples were just plain wrong. I mean, it's a systemic problem and it's continuing and we're not going to see the end of it any time soon.

KIRKLAND: Amen.

DOBBS: It is really remarkable in that regard, and one of the things -- I don't know -- are you as surprised as I will candidly admit I am? And please -- Bill Donaldson is bringing great fervor, in my judgment, at least, what I've been able to determine to the SEC this man is serious.

KIRKLAND: I feel like I should jump in, because "Fortune" had some doubts about whether Bill was the right man for the job. And, you know, he's got a long way to go, but I'm impressed with what he's done.

(CROSSTALK)

LENZNER: I'm on record saying not such nice things about him before he took the job and I think he's made a lot of right moves.

SHEPARD: Everybody had doubts.

I think what this is saying is that the Bush administration realizes this is a very serious problem and they better get a handle on it.

DOBBS: And next year is an election year.

SHEPARD: And Donaldson is doing a very, very good job and he deserves full credit for that.

KIRKLAND: Every prosecution has November '04 circled on their calendar. Get something done before that.

LENZNER: In the face of all this, the market is doing really well.

DOBBS: The market is doing -- even this week, with stocks under pressure, a remarkable performance.

LENZNER: The way I feel about it -- I was discussing with him before we came on -- the market's sort of telling us something. That's what I think. Like it has...

DOBBS: You know what?

LENZNER: Yes.

DOBBS: Wait a minute. Wait a minute.

LENZNER: It's saying...

DOBBS: Don't tell us what it's saying yet.

LENZNER: OK.

DOBBS: We have to take a quick break. We're going to stay in suspense. Bob Lenzner will tell us what this market is telling us in just a moment.

We'll continue with our "Editors' Circle." We'll talk about what the Market is telling us, but Bob and Steve and Rik will also tell us what Martha, Harry Potter and big media really represent in this country.

And we'll share some of your many e-mails on the military medical benefits, promises broken, by the federal government.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Once again, our "Editors' Circle," and Bob Lenzner of "Forbes" was about to say, the market is telling us?

LENZNER: That the economy is going to bounce back. How great a bounce it's going to be, but I think that's what it's telling us. I think it's telling us that the combination of the lower interest rates and the dollar going down and the tax cut, combined, are going to help move the economy ahead. Maybe not dramatically and quickly, but already, the earnings that I have seen show that on the average up about 10 percent, which I think is pretty good. And maybe we can expect more of that.

SHEPARD: I think the second quarter earnings won't be as good as the first quarter earnings, because it includes the war. We're likely to see a lull over the summer, but I think it will pick up again in the fall. We have come a long way, you know, we're 20 percent off the lows of March.

DOBBS: Absolutely.

SHEPARD: So it's quite a rally.

KIRKLAND: But the market always tells us more than one thing. I think it is predicting a recovery. I think the economy is coming back, but the market is also telling me that there's still a huge amount of speculative fever out there. I mean, a lot of the stocks are running up really high which are tech stocks, which have incredibly high P/Es and I don't think tech spending coming back strong enough to justify it. So we have got some excess in this market still.

DOBBS: It's really interesting, such uneven reporting in the trades and on IT as to whether or not spending is going up or stay static. But one thing is clear, these rates are so low that we can almost begin to justify some of these higher P/E ratios, not quite, perhaps. So we see what happens.

SHEPARD: That's exactly right. I mean, you can't compare interest rates now to some historical interest rate, I mean, P/E ratios, because interest rates are (UNINTELLIGIBLE).

KIRKLAND: You have to hope the economy is ready to if we get it really rolling again, the economy is ready to live with higher interest rates, though, because that's what is going to happen if it happens.

DOBBS: Does the Fed cut -- I'm sorry, Bob.

LENZNER: You know what bothers me about tech? I was telling Rik this before. Mr. Ballmer...

DOBBS: Did you spend all your time talking to Kirkland before?

LENZNER: Well, I'm eating the pineapple. But Mr. Ballmer of Microsoft, president of Microsoft, and every other executive and director who have been selling their stock in Microsoft and then Mr. Ballmer put a memo out saying that there's no uptick in IT spending, that people want free software, not expensive software, and there are a lot of problems...

DOBBS: That's a Microsoft problem.

LENZNER: Right.

DOBBS: So let's talk about quickly if we could, one really important event, and that is the move in the Senate to overthrow that FCC decision deregulating big media companies. That doesn't look like it's going to work. It looks like Michael Powell just had a slap in the face.

SHEPARD: I wish I could say it was going to happen, but it isn't. It may get through the Senate, but the House -- it is not going to get to first base in the House. So Michael Powell lives.

DOBBS: Billy Tauzin will ...

KIRKLAND: Billy Tauzin has drawn a line in the sand and he's not going to back off.

DOBBS: Gentlemen, we have got to look at the other event, the really big event right up there with Martha and Billy Tauzin in the House. We're looking at the Toys "R" Us in Times Square. These are live pictures right now. Can you see those, gentlemen? I know our viewers at home can. People getting ready for the midnight release of the "Harry Potter" book there at the Toys "R" Us, buying the appropriate -- well, regalia and accoutrements to celebrate such an important happening, and it's an incredible happening.

SHEPARD: Eight-hundred-ninety-six-page book for $30 a pop, and all the kids in America are going to read it. I think it's great.

DOBBS: And what I love is that some families, two books have to be bought because they don't want the kids fighting over that one book, and at the length of that book it's probably a good idea.

KIRKLAND: What I love is they're saying that despite all this saturation and media and all this marketing, apparently they're being restrained, they're trying not to overcommercialize this too much.

DOBBS: One, one wouldn't want to overcommercialize a commercial enterprise.

KIRKLAND: I'd hate to see that if they did that.

DOBBS: Interest rates? Federal open market committee. Rates down?

SHEPARD: Quarter point down. I wish he weren't doing it, but he's going to.

DOBBS: I agree with you, Steve.

LENZNER: It's going to go down and it's going to help the bond market and the stock market.

KIRKLAND: Go down a quarter and the market goes nowhere because they're expecting it. Go down more than that, I think it will scare them a little bit. Do nothing, and it will also go down. So I think a quarter.

DOBBS: Well, Steve, I agree with you about they shouldn't. We'll see what happens. Alan's in charge of it anyway (UNINTELLIGIBLE).

(CROSSTALK)

DOBBS: Gentlemen, as always, good to have you here. Rik, Bob, Steve, thank you.

Checking on the national debt quickly, six trillion, 600 billion, the debt has grown almost $20 billion this week. And when we continue, some of your thoughts on our series on emerging diseases.

Also, the preliminary results of tonight's very important poll. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of tonight's poll: The question, would your local government act as compassionately and sensibly as that of Naples, Florida, when it restored the 6-year-old young lady to her entrepreneurial lemonade stand? Twenty-nine percent of you said yes; 71 percent said, no. Better start working on that city council.

Taking a look at some of your thoughts. Bonnie Friedman of Trumbull, Connecticut wrote in about lyme disease, saying: "This illness has had a very serious impact upon my family. I have come to see that the consequences can be debilitating, chronic and life- altering. It's time to face the need for better testing and treatment."

Lori Hoorl of Fernando Beach, Florida: "I think it is important for viewers to know about the real problems with chronic lyme disease."

Norman Cambpell of Albuquerque wrote in about our segment last night with General David Grange, "Broken Promises": "We are passing away these veterans by the thousands each day with a bitter taste in our souls, knowing that the government we fought and suffered so much for lied to us."

Jerry McIntosh, retired Air Force master sergeant, from Alamogordo, New Mexico: "This 22-year veteran and many, many others cannot thank you enough for taking the time to present this issue to the general public on our behalf." General David Grange will be here every week to carry out that commitment.

We love hearing from you. Send us your thoughts at loudobbs@cnn.com. Thanks for being with us. We wish you a very pleasant weekend. For all of us here, good night from New York. 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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