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LOU DOBBS TONIGHT

Interview With Wesley Clark; California Wildfires Continue to Rage

Aired October 27, 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 Monday, October 27. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening.

A series of suicide bombing attacks in Baghdad today. Those attacks were against police stations and the International Red Cross. Hundreds were wounded, more than 30 people killed. We'll have a report from Baghdad.

Tonight, we'll also be joined by Bernard Kerik and Richard Perle to discuss the administration's Iraq policy. Also tonight, General Wesley Clark will discuss his run for the Democratic presidential nomination.

And Senator Olympia Snowe will join us to discuss her lone Republican vote against a new Medicare prescription bill.

Tonight, in Southern California, wildfires continue to rage. At least 13 people are dead. Tens of thousands of people have fled their homes and hundreds of thousands of acres have been burned. The fires are the deadliest in California in a decade. Tonight, President Bush declared a major disaster in four California counties. Those fires have burned more than 400,000 acres from the Simi Valley north of Los Angeles to San Diego County in the south, sending huge plumes of smoke into the air. Authorities say powerful Santa Ana winds are fueling the fires. Those winds have gusts of up to 45 miles an hour.

Fire officials say there are about 10 different fires now. That includes two in the San Bernardino Valley that have merged into one colossal blaze. The fires have burned more than 1,000 homes. Authorities say another 30,000 homes are in danger of catching fire tonight.

We have two reports. Frank Buckley is in Devore, San Bernardino County. David Mattingly is in San Diego.

We go to David Mattingly first -- David.

DAVID MATTINGLY, CNN CORRESPONDENT: Lou, San Diego is reeling from the worst fires seen here since 1970; 11 people were killed in two separate fires last night, those fires also destroying hundreds of homes, 180 houses, in fact, destroyed in a single neighborhood.

The flames were whipped along by those hot and dry Santa Ana winds. They were too much for firefighters to try and stop. The city is blanketed today by large, thick clouds of smoke, the sun not able to pierce through at all today. Schools have been closed. Qualcomm Stadium, the site of tonight's NFL "Monday Night Football" game, has been turned into an evacuation center. That game between the Chargers and the Dolphins has been moved to Arizona.

So instead of fans wondering what the score is tonight, you will have evacuees wondering what they might have to go home to.

(BEGIN VIDEO CLIP)

GEORGE LEWIS, FIRE EVACUEE: I could see the fire outside my living room. It was pretty scary. It is -- we got the documents. We got the important papers and pictures and left. We were pretty well off, because we had the motor homes. There was other people in the neighborhood that wanted to stick around.

(END VIDEO CLIP)

MATTINGLY: Firefighters today did catch a break from the weather. The wind was not nearly as strong as it was yesterday. So, here in the city of San Diego, the fire chief says they had a couple of hot spots, but no major flare-ups, like they had yesterday.

Outside, in the county, however, it is another story. The fires are still burning out in the county. They're hoping that the weather holds up like it is. They will slowly be able to turn the corner on those fires as well.

As for tonight, you have plenty of people still out of their homes, evacuation centers set up all over San Diego. In fact, what you see behind me is dinner being prepared here at one of those evacuation centers, San Diego residents helping their fellow residents who are no longer able to go to their homes -- Lou.

DOBBS: David, thank you very much -- David Mattingly reporting from San Diego.

The fires in San Bernardino County have now burned more than 75,000 acres. Hundreds of homes have been lost.

Frank Buckley reports from Devore, where firefighters and residents are still trying to protect their homes tonight -- Frank.

FRANK BUCKLEY, CNN NATIONAL CORRESPONDENT: Yes, Lou, that firefight still under way in this community. Every few moments, we'll see a fire truck go by. You see firefighters attacking the hot spots as they can.

Still, in this community, eight homes were lost in Devore and Devore Heights. And this is one of them. This is the house where Linda Kineston (ph) lived for 25 years. She said we could show you this house. She didn't want to be here any longer to talk about it. She's OK. That's the good news. But you can see her three bedroom, two-bath house. What was 1,500 square feet is lost. She was too broken up to talk about it.

But here is what her daughter had to say.

(BEGIN VIDEO CLIP)

AMY REESE, DAUGHTER OF WILDFIRE VICTIM: Mixed feelings. Maybe it hasn't set in. I mean, I don't know. What do you say? It is devastating. I don't live there now, but my mom does, and she's going to have to start all over, rebuild. It is an inconvenience.

(END VIDEO CLIP)

BUCKLEY: Meanwhile, the firefight does goes on, as we said, especially here in the Devore area, helicopters hitting what they can with water, hoses also on the ground with firefighters in this region, in and around San Bernardino.

It is an almost unbelievable number, Lou: 520 homes destroyed, 300 of those just within the city of San Bernardino. The video of homes burning this weekend commonplace on local television here in Southern California. Two fires blamed. They're called the Grand Prix Fire and the Old Fire. And, sadly, Lou, three deaths are attributed to these fires -- Lou.

DOBBS: Frank, thank you very much -- Frank Buckley reporting from Devore, San Bernardino County, California.

Tonight's thought is on the unpredictability of nature: "Nature goes her own way. And all that to us seems an exception is really according to order" -- that from German poet, philosopher and writer Johann Wolfgang von Goethe.

Turning to tonight's other big story, Iraq: Terrorists today killed more than 30 people and wounded 200 more in an unprecedented wave of suicide bomb attacks in Baghdad. One of the targets was the headquarters of the International Red Cross. The other targets were police stations. The attacks came one day after a rocket attack on a hotel where Deputy Defense Secretary Paul Wolfowitz was staying.

Ben Wedeman reports from Baghdad.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN CORRESPONDENT (voice-over): Fire and flames outside the Red Cross headquarters in Baghdad, the first of a series of car bombings to shake the city. Just after 8: 30 a. m. Baghdad time, the city shuddered when a van with Red Crescent markings and packed with explosives crashed into a barrier outside the Red Cross. The blast killed at least 10 people and wounded more than two dozen, all of them Iraqis.

The Red Cross had reduced its international staff in Iraq following the bombing in August of the U.N. headquarters. But it tried to avoid security measures that would create barriers between it and ordinary Iraqis.

NADA DOUMANI, RED CROSS SPOKESWOMAN: The Red Cross is here to assist people, to help them. So we cannot just build a concrete wall and stop and make a fence between us and the people. So we always, as I said, thought that the work we're doing was humanitarian and on the basis of this, we can assume that people know us and this would protect us.

WEDEMAN: Monday is the first day of the holy month of Ramadan. There had been warnings of a possible upsurge in attacks on coalition and other international targets.

BRIG. GEN. MARK HERTLING, U.S. ARMY: It's an indication that these criminals, these terrorists are indiscriminate in terms of who they're attacking, and especially at the start of the holy month of Ramadan. This is a bane on the Iraqi people and I think the majority of the Iraqis here are tired of this and they want a safe and secure environment. And these people are interfering with that.

WEDEMAN: Elsewhere in Baghdad, four police stations were targeted by car bombers, killing more than 20 people, including five policemen and two American soldiers.

One attack was narrowly averted when Iraqi police opened fire on a white Toyota Land Cruiser racing towards them. Iraqi police identified the driver, wounded in the incident, as a Syrian national. The death toll for Monday's bombings may well exceed 30, making it the bloodiest single day in the Iraqi capital since war that brought down the regime of Saddam Hussein.

For Iraqis, Monday marks the first day of the holy month of Ramadan, a time of fasting and festivity, of peace and harmony among believers. The holy month, however, seems to be getting off to an unholy start.

Ben Wedeman, CNN, Baghdad.

(END VIDEOTAPE)

DOBBS: Intelligence officials had warned the military that insurgents and terrorists were planning to attack a hotel used by Westerners in Baghdad before that attack on Paul Wolfowitz's hotel. Many analysts are now asking tough questions about the coalition's security and intelligence in Iraq.

Kitty Pilgrim is here now and has the story for us -- Kitty.

KITTY PILGRIM, CNN CORRESPONDENT: Lou, at the end of last week, administration officials were insisting that things were getting better. But the warnings were there.

(BEGIN VIDEOTAPE)

PILGRIM (voice-over): A day after Secretary of State Powell said they had not expected Baghdad security problems to be so intense for so long, four suicide bombings.

COLIN POWELL, SECRETARY OF STATE: We don't know if it is a spike as a result of the beginning of Ramadan or whether it is something that we'll see continue. PILGRIM: Last week, U.S. government agencies warned that Islamists were planning a suicide bombing at a Baghdad hotel. Last August, before the bombing of U.N. headquarters in Baghdad, there were also warnings about an imminent bomb attack. Weeks later, 22 people were killed, 150 people injured.

After each attack, the questions of why intelligence didn't connect the dots.

FRANK GAFFNEY, CENTER FOR SECURITY POLICY: You're in a sort of running battle with many of these operatives. It is very difficult to process and to act on all of the intelligence that can be made available to you in time.

PILGRIM: Some say foreign fighters, Islamic extremists, are flooding into Iraq over the borders, something the U.S. military has downplayed, but Iraqi officials today confirmed.

AHMAD CHALABI, LEADER, IRAQI NATIONAL CONGRESS: They're entering Iraq in large numbers now from Saudi Arabia, from Jordan, and from Syria.

PILGRIM: Terrorism experts say the situation is critical.

JONATHAN SCHANZER, WASHINGTON INSTITUTE FOR NEAR EAST POLICY: It is increasingly becoming a showdown between the U.S. and foreign Islamist fighters. I think that there are a couple of other culprits that we should looking at, though, not just al Qaeda.

(END VIDEOTAPE)

PILGRIM: Now, last week, there was the argument that security had improved enough to lift the curfew in Iraq for Ramadan. That curfew was lifted just hours before the first attack -- Lou.

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

Well, coming up next, former New York City Police Commissioner Bernard Kerik trained the Iraqi police force. He warns, it would be a mistake to send more American troops to Iraq. Bernard Kerik is our guest.

And Democratic presidential candidate Wesley Clark, he says more troops are needed in Iraq. He joins us to discuss the war, the economy and the race for the White House.

And "The Great American Giveaway," our series of special reports -- tonight, American tax dollars paying for European government projects. It is true. And it is legal. Louise Schiavone will have the report.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: My guest returned last month from Iraq, where he spent four months building the national Iraqi police force. Bernard Kerik is the former commissioner of the New York Police Department and joins me now.

Good to have you here.

BERNARD KERIK, FORMER NYPD COMMISSIONER: Lou, thank you.

DOBBS: Within hours of lifting this curfew, the attacks came. Was it a mistake to lift the curfew?

KERIK: I don't know. I'm not there now. I can't say. Based on what I hear from the Iraqi people, they wanted the curfew lifted. The economy is growing. They want to be out at night. They want to be in markets. They want to be in restaurants.

Is there going to be a spike in violence? Probably. It's going to give the resistance some ability to move about. I think we'll have to see.

DOBBS: You opened 35 police stations.

KERIK: Thirty-five in four months.

DOBBS: Four of them were attacked within the last 24 hours.

KERIK: Right.

DOBBS: The Iraqi police under attack. American soldiers remain under attack, as many as 25, 26 attacks a day. What needs to be done to bring order to Baghdad in particular?

KERIK: You need more forces, but you don't need more U.S. coalition and more international coalition, per se. You need Iraqis.

The Iraqis have the ability to identify, locate and find the Fedayeen, Saddam's killers and his assassins, the Baathist party, the loyalists to Saddam. They have the ability to do that. We do not. We have got to get the money out of Congress. That $20 billion reconstruction money, a lot of that money is supposed to go toward the Iraqi police training. We need 30,000 more Iraqi police officers.

In the last 12 weeks, since that program was developed, we could have had 3,000 of those cops in the streets already. They're not there because that money is held up in Washington.

DOBBS: Those cops, the police department, obviously, under Saddam Hussein, were Baathists. They were brutal. They terrorized the population. Where did you find these police officers?

KERIK: We brought back 40,000. There were probably about 70,000 under Saddam's regime, plus an enormous amount of military oversight. They were steeped in military doctrine and oversight. We eliminated those. We eliminated the senior Baathists.

And we brought back the cops we could trust. We brought back the leaders we could trust. A lot were of those were imprisoned by Saddam. Those are the people we knew we could trust.

DOBBS: Bernard Kerik says we don't need more U.S. troops, more international troops, more foreign troops, coalition forces, more Iraqis. The administration has threatened to veto the $87 billion if that $20 billion is not entirely in the form of a grant. Should it be a grant? Should it be a loan? Does it matter?

KERIK: You know what, Lou? I'm not a politician. Here is what I say.

DOBBS: That's why I'm asking you.

KERIK: I lived on the ground. I'm not speaking from a golf course in Washington, D.C. or from the halls of Congress.

I know what they need. They need that reconstruction money to get this off the ground. They need Iraqi intelligence. They need Iraqi cops. They need the civil defense forces and they need the Iraqi military. We need mentors. We need coalition mentors, but we need Iraqis to stand up to security services, or we're never going to get out of there.

The idea behind transitioning and disengaging our military is Iraqi forces. We can't do that without the money to do it.

DOBBS: And that $20 billion is critical to executing that.

KERIK: Absolutely, absolutely.

DOBBS: The intelligence, we -- you just heard Kitty Pilgrim report on the number of foreign radical Islamist terrorists who are coming into the country and attacking U.S. forces, attacking Iraqi people and police stations. What kind of intelligence is needed? What more needs to be done to create an intelligence system that will work for that Iraqi police force?

KERIK: Well, there's two things.

There is actionable intelligence that we get now from the CIA and from the U.S. military and from the coalition militaries. But there's also Iraqi intelligence. We disbanded Saddam's intelligence service, the Mukhabarat. All they did was execute, torture, maim, murder people. We got rid of them. We have to bring Iraqis back, stand up an internal intelligence service that lets the Iraqis give us information on where the Fedayeen is, where the Baathists is, and then go after them.

DOBBS: Is it your judgment that there is a will in the population of the city of Baghdad to provide that kind of intelligence to an Iraqi in military or police intelligence operation and the will within that police agency to carry out necessary actions to assure security for the Iraqi people in Baghdad?

KERIK: Lou, I was on the phone four hours today with Iraq, with the senior people in the Ministry of Interior, the people that I appointed, the people that worked for me. They want to catch these people more than we do. This is their country. This is their freedom.

If we walked out tomorrow -- I was listening to one of the presidential candidates. He said we should walk out tomorrow. If we did that, Iraq falls down the tubes and Saddam is back in power or somebody like him is back in power tomorrow. They don't want that to happen. They need our support. They want our support. And the people are empowered to do that. We have to get them more training. We have to get them the equipment they need. That's what is going to secure the country.

DOBBS: Do we need $20 billion to get done what you think should be done?

KERIK: I think so. I think so.

I can't talk for the whole $20 billion. I didn't put that whole package together. But I did put the Ministry of Interior together. I do know the equipment they need in the Ministry of Interior, the Iraqi cops, customs, borders, immigration, emergency management and fire. That money, I know they need. I put that package together. It's essential for them to stand up those services.

DOBBS: If that money is provided, if the U.S. military performs its role according to the dictates that you see as appropriate -- and I'm not talking about in terms of political issues or government goals, but the way you see the situation -- is it possible to win the hearts and minds, if you can -- if you'll allow me to use that expression, of the people of Baghdad in particular within the Sunni Triangle and establish order that is sustainable?

KERIK: I think so. I think over time.

You're not winning the hearts and minds overnight, No. 1. And, No. 2, we have done a lot of the hearts and minds already; 70 to 80 percent of the Iraqi people, they are glad we came in. They would love to see us leave. They would love to take over the country on their own. They need help doing that. That $20 billion is going to help us do that.

DOBBS: How quickly, in Bernard Kerik's judgment, can the administration, the rule of Iraq be turned over to Iraqis?

KERIK: I would say, in the police, we would have 30,000 cops stood up, trained and instituted in stations probably within 18 months.

DOBBS: OK, Bernard Kerik, good to have you here.

KERIK: Thanks, Lou.

DOBBS: Thank you.

KERIK: Thank you.

DOBBS: That brings us to the subject of tonight's poll. The question: Do you think security in Iraq is improving, yes or no? Cast your vote at CNN.com/Lou. We'll have the results later in the show.

Tonight's quote is from an American military commander in Iraq, speaking on the deadly attacks carried out by the radical Islamist terrorists over the past two days -- and we quote -- "These attacks they are conducting right now, they are not against military forces. It's not about war. This is about attacking civilian people. This is about attacking their own people. And I think it's desperate" -- Major General Raymond T. Odierno, commander of the Army's 4th Infantry.

Coming up next: big tax breaks for corporate America, easy money for American and European governments, all courtesy of you, the American taxpayer. Louise Schiavone will report in our series of special reports, "The Great American Giveaway."

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, in our series of special reports, "The Great American Giveaway": American taxpayers are paying twice to rebuild public infrastructure all across this country and, unbelievably, across Europe as well. What is perhaps the most shocking is that it is all quite legal.

Louise Schiavone reports from Washington.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): The Washington metro system, clean, efficient and paid for by American taxpayers not once, but twice, through a sophisticated tax shelter. Corporations pay cash up front to lease items like subway cars and take huge tax write-offs. Cash-starved local governments offer no apologies.

JIM GRAHAM, CHAIRMAN, WASHINGTON METRO AREA TRANSIT AUTHORITY: It is a great advantage to us. And we'll continue to use it until such time as it is not available to us. Why wouldn't we?

SCHIAVONE: In Washington, the leasing scheme has involved a variety of parties over several years, so far delivering $100 million in revenue. The metro system won't identify the parties. The practice came to light in congressional testimony from a witness whose identity was concealed.

"MR. JANET," CONGRESSIONAL WITNESS: The subway systems of Boston, Chicago, Washington, D.C. have been leased and leased back to U.S. corporations. I have reason to believe that the New York and Chicago water authorities are about to engage in a scheme to lease the water lines on their streets.

SCHIAVONE: Some of the most fertile grounds for these deals are in Europe, with big corporations taking U.S. tax breaks on everything from the Paris subway to the Berlin subway to railroad tracks, power plants and town halls. SEN. CHARLES GRASSLEY (R), IOWA: You're finding American taxpayers paying for the restructuring and refurbishing of very important infrastructure for cities in Europe. It just doesn't seem right that the American taxpayers would be picking up that bill.

SCHIAVONE: Grassley estimates that, over the past 10 years, the U.S. treasury has lost $84 billion through the leasing schemes and other tax shelters.

(END VIDEOTAPE)

SCHIAVONE: Lou, the IRS cracked down on these kinds of leasing deals back in the late '90s. But congressional investigators say it will take more IRS staff and resources to stay ahead of the sophisticated corporate tax engineers, who are always looking for an edge -- Lou.

DOBBS: Louise, thank you.

And we should give credit to Senator Chuck Grassley, who is holding hearings on this very issue and who is going to be relentless in dealing with a change in the tax code.

Thanks a lot, Louise Schiavone from Washington.

Well, now from giving away American tax dollars to giving away American jobs. As we have reported here, hundreds of illegal aliens were arrested in a government raid of Wal-Mart stores late last week. Those raids, however, are simply the beginning. There are 10 million illegal aliens living and working in this country.

Peter Viles is here now with the story -- Peter.

PETER VILES, CNN CORRESPONDENT: Well, Lou, there had been sporadic crackdowns on the hiring of illegal aliens in this country. But critics say, the law against hiring illegals is weak and government efforts to enforce it even weaker.

(BEGIN VIDEOTAPE)

VILES (voice-over): The House Democratic leader, Nancy Pelosi, said the Wal-Mart raids amounts to -- quote -- "terrorizing illegal workers." She suggested the government focus more on the employers, who are also breaking the law, but that would be a major switch in federal policy.

MARK KRIKORIAN, CENTER FOR IMMIGRATION STUDIES: Starting in the late 1990s, the immigration service essentially announced in public that it wasn't enforcing the ban on hiring illegals anymore. And the new administration, the Bush administration, that took over didn't change that policy. So we have had, for all intents and purposes, zero enforcement of the ban on hiring illegals for a good four years, probably.

VILES: The Office of Immigration and Customs Enforcement did not respond to repeated requests for comment on its efforts to stop the hiring of illegals.

Prior to Wal-Mart, the highest profile case was Tyson Foods, indicted, along with six executives, for an alleged conspiracy to smuggle illegal aliens into country. The government alleged that hiring illegals -- quote -- "was condoned by Tyson management to meet its production goals and to cut its costs." A jury, however, didn't buy it, and Tyson was acquitted.

Other recent high-profile cases, earlier this summer, the lumber company Trussway, fined $300,000 for hiring illegals in Kentucky. In 1998, ConAgra was fined $223,000 for hiring illegals at a poultry plant, also in Kentucky.

(END VIDEOTAPE)

VILES: Another problem here, the law against hiring illegals has a big loophole in it. To violate that law, the company must knowingly hire an illegal worker. So ignorance on the company's case can protect companies from violating this law. Lou, if they don't know for a fact the person is illegal, they're not violating the law.

DOBBS: If Tyson was charged with condoning the smuggling and hiring of illegal aliens, what in the world is the U.S. government, if not condoning this practice at this time?

VILES: Certainly, in agriculture, where we have half-a-million known illegal aliens, and there's no government effort to crack down. The last time the government went looking for illegals on farms, congress said, hey, back off. We need these crops.

DOBBS: Peter Viles, thank you very much.

Coming up next: more on the wave of deadly violence in Iraq and what lies ahead for the coalition. Richard Perle, the former chairman of the Defense Policy Board, is our guest.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: For more on the new wave of bombings aimed at collaborators in Iraq, I'm joined now by the former chairman of the Defense Policy Board Richard Perle. He also served as assistant secretary of defense under President Ronald Reagan, joining us tonight from Washington.

Good to have you here.

We heard today -- tonight -- from Bernard Kerik, saying that, really, more U.S. troops aren't necessary. They're not even perhaps helpful in any way, nor are foreign troops, more police to be required in Baghdad and Iraq. Do you agree with that assessment?

RICHARD PERLE, FORMER CHAIRMAN, DEFENSE POLICY BOARD: I certainly do agree with that. The sooner we can recruit and train the necessary Iraqi security and police forces, the better. They will do a better job of coping with the violence than we can do. They know the neighborhoods. They know the people. So, we need to accelerate the process of turning those responsibilities over to Iraqis.

DOBBS: Yet, today, Chalabi for the first time acknowledged that there were foreign terrorists coming into Iraq and Baghdad, a clear role for the U.S. military, the coalition military, to interdict and to stop the terrorists.

You have before said there are other terrorist nations that should be dealt with. Do you believe they should be dealt with now?

PERLE: Well, I certainly think we should make it clear to the Iranians, who are facilitating the flow of terrorists and sponsoring them, and the Syrians, who are doing the same, that this is intolerable. That unless they stop this, they're going to have to deal with us directly.

We're giving them an open gate. And terrorists, under their sponsorship, and with their support are pouring in. It's not acceptable.

DOBBS: What is the answer?

PERLE: Well, I think in part the answer is to say to the leadership in Iran and in Syria, if this doesn't stop, you're going to have to deal with us directly. And they that see we are there. They see we're there in force. They see what we did in Iraq, what we did before that in Afghanistan, and I think they'll take us seriously if we deliver a firm and clear message.

DOBBS: Richard, obviously you, Paul Wolfowitz, other so-called neo-conservatives, among the architects of what was to become the war against Saddam Hussein, a highly successful military operation, but a terribly, I think the kindest word I could probably use is a confused post Saddam plan for reconstruction and establishing order.

What is your best assessment of the post-Iraq policy and where we, that is the United States, and the Iraqi people, go from here?

PERLE: I think we're making real progress. I know it doesn't look that way on a day when bombs are exploding at the Red Cross.

DOBBS: It certainly does not.

PERLE: And elsewhere. But it is not difficult to pack a car with explosives and pay someone to organize to have someone drive it into an area where it can do great damage.

What is going on in most of the country is that schools are open hospitals are open, local communities are electing local councils. Progress is being made toward the drafting of a constitution. Real estate prices are going up. That's an indication of what people think about the future. It's going to take a little while. It's only six months. And we had 35 years of the most brutal regime so a little patience is called for.

DOBBS: Bernard Kerik suggests 18 months.

PERLE: I think 18 months is about right. In fact, I believed the day that -- that Baghdad fell that within 18 months there would be no debate about whether this had been a success on behalf of the people of Iraq and our own security.

DOBBS: When you and I talked at one point during the war, in mid-March of this year, you said you believed that the French and the Germans and other critics of the Bush administration's Iraq policy would fall in line as soon as the war were ended, as soon as it became clear that Saddam was a nonentity. That has not been the case.

What is your assessment of the French and the German policy post- Saddam Hussein?

PERLE: Well, I think it's appalling, having professed concern about the people of Iraq, when the time came to make a contribution to their reconstruction, they couldn't find the euro to put in the till. And that tells you more than all their words about how much they care about the people of Iraq. It's an appalling failure of responsibility on their part.

DOBBS: Richard Perle, thank you for being here.

PERLE: My pleasure.

DOBBS: Coming up next, General Wesley Clark on his campaign for the Democratic presidential nomination, his assessment of the economy and a prescription for an even stronger recovery. The race for the White House, next.

(COMMERCIAL BREAK)

DOBBS: The latest CNN/"USA Today"/Gallup poll shows General Wes Clark and former Vermont Governor Howard Dean in a statistical dead heat for the Democratic presidential nominations.

I talked earlier with General Clark about a number of issues, including Iraq and the economy, particularly about the U.S. goals for Iraq.

(BEGIN VIDEOTAPE)

DOBBS: The Bush administration's stated goals at the outset of hostilities against Saddam Hussein were to democratize Iraq, to democratize the Middle East. Do you agree with those goals?

GEN. WESLEY CLARK (D), PRESIDENTIAL CANDIDATE: I think they're noble long-term goals. I think the Bush administration made a decision on or shortly after 9/11 that it was going to invade Iraq. It made that decision for reasons that are still unclear to me. Maybe it was left over from campaign rhetoric. Maybe it had to do with some neo-conservative agenda. It's never has been presented to the American people.

They took -- they did the best they could at constructing a case based on weapons of mass destruction. As Paul Wolfowitz apparently said in one of the magazine interviews, that seemed to be the best basis on which everyone could agree. But the evidence wasn't very good, and it turned out the evidence was vastly inflated.

So we went to Iraq, we went to war, really under false pretenses.

And later, as we were marching toward war in February, the president unveiled this democratization goal. It had nothing to do with why the administration wanted to go into Iraq. It sounded noble and lofty. And there wasn't a plan in place to really make it happen. So we ended the war without a real plan for what do next.

DOBBS: Yet you, General, it's been alleged that you suggested that a congressional -- a Democratic congressional candidate support the resolution that would ultimately lead the nation to use its military against Saddam Hussein last October.

CLARK: Lou, I always believed we should take this problem to the United Nations. I always supported efforts to get leverage to the United States and use United States leverage to bring resolution to Saddam Hussein's weapons of mass destruction programs. I would never have voted for war.

DOBBS: General, let's turn to domestic issues. You called for $1.1 trillion over a ten-year period in tax increases on those making over $200,000. That would be the aggregate number in your plan. How popular do you think that's going to be with the voting public?

CLARK: Well, considering that that's the upper 2 percent of the population, I think it's going to be very popular.

In fact, I talked to a lot of those people. We're talking about individuals making -- families making $200,000 and above. That's the top 2 percent of the American population. We're not talking about raising taxes, except that we're going to go back to where President Bush cut those taxes. We're going to take that revenue back.

I think that's essential. The president took -- he gave -- he gave back, mostly to wealthy people, and by borrowing three times the amount of money that we need to make Social Security solvent for the next 75 years.

DOBBS: One of the ways that nearly every American would like to see money used in this country is to create jobs, if it's to be used in that form.

You mentioned exporting jobs in this country. Hundreds of thousands of high value jobs are now being exported from this country, hitting the hard working middle class Americans at the worst possible time.

What would you do to stop the outsourcing of those high value jobs?

CLARK: Well, first of all, I think you to go and look at the tax code and make sure that you're not giving incentives to companies to move and -- move off shore or outsource offshore through the tax code.

Secondly, I proposed a job creation plan that would put $40 billion back in to homeland security jobs, $40 billion back to the state to deal with their needs -- and the states are suffering right now -- and $20 billion in employment tax credits.

The third thing I'd do is I'd look at our trade agreements...

DOBBS: General, you're spending that money almost as fast as you're raising it.

CLARK: Well, what we're going to do is we said we're going to take about two and a third trillion dollars back, not only from the taxes from wealthy people, but also from better government.

And then we're going to use about half of that to meet America's urgent needs in education, health care and job creation. I think that's the right balance for this economy and for this country.

DOBBS: As you know, General, turning to another important national issue that has garnered extraordinarily little attention on the part of any candidate, Democratic candidate, running for president, and certainly it has not garnered the impression or the attention of this administration.

Ten million illegal aliens in this country. We have a border that, despite all the concerns about national security, homeland security, that is absolutely porous. What would you do about a national immigration policy? What would you do about the 10 million illegal aliens now in this country?

CLARK: Well, first of all, I think we need to really put leadership into homeland security. We're just now getting started on homeland security. It's been over two years. Jim Moore (ph), I think, has done a great job of working airline security. But we've got a long way to go on the borders. And there's no excuse that we're seeing dozens of Mexicans and Hispanics dying in the Arizona desert each summer.

I think we need to set up a system for guest workers in this country. I think we need to encourage legal immigration. I think we need to discourage illegal immigration. For those undocumented aliens that are here, for those that have been good citizens that hold responsible jobs, I think we ought to have a procedure where they can work their way into citizenship.

DOBBS: And those illegal aliens that are in this country, those 10 million, you're basically saying amnesty? CLARK: Well, I'm saying that you need a program where people who are here and lack the documentation can one way or another work their way into citizenship. It's not a general amnesty. It's dependent on their performance and what kind of citizens they'll be.

DOBBS: You use the word "undocumented" and "those who don't have papers." The immigration service itself uses the expression "illegal alien." Is there some reason that you would not use that expression?

CLARK: Well, I think it is a question of whether you're talking about the act of crossing the border or people inside the country. There's a wide variety of offenses against the immigration laws. And what I'm interested in are the people.

DOBBS: General Wesley Clark. We thank you for being with us.

CLARK: Thank you, Lou. It's always good to be with you.

(END VIDEOTAPE)

DOBBS: A reminder to vote in tonight's poll. Do you think security in Iraq is improving? Yes or no. Cast your vote at CNN.com/Lou. We'll have the results coming up for you in just a few moments.

And I should point out we'll be talking with each of the Democratic candidates for their party's nomination throughout the weeks ahead here.

Coming up next, senator Olympia Snowe crossed party lines and is willing to cross borders if it will bring affordable prescription drugs to this country's senior citizens. Senator Snowe joins us next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The future of Medicare, a critical issue facing Americans, the major focus of the presidential election. Both the Senate and the House approved separate versions of Medicare legislation in June that included prescription drug benefits for senior citizens.

The bill is still before a conference committee. But that process is being threatened by a bipartisan effort to reach a different solution. My next guest crossed party lines in order to join with that effort, Republican Senator Olympia Snowe joins us now.

Thanks for being with us.

SEN. OLYMPIA SNOWE (R), MAINE: Thank you, Lou.

DOBBS: This is, is it not, because you're the sole Republican to sign on with this, a highly risky proposition that could, in fact, endanger the overall legislation, could it not?

SNOWE: Well, Lou, I think what we're trying to do is try to affect and influence the final decision that that will be made by the conferees. And most especially about the existence of the Medicare program in the future.

And we don't believe that we should be endorsing any provisions or ultimately a package that includes prescription drugs at the expense of the entire Medicare program and its existence in future years for senior citizens. And in fact, two other Republicans, Senator Wyden (ph) and Senator Specter, also signed another letter to the conferees with me, essentially expressing the same concerns and views.

DOBBS: The fact is that the prescription drug benefit that hangs in balance here, for first time being made available through this legislation to seniors, you feel so strongly about the issue of privatization that you would be willing to stop it here?

SNOWE: If it's necessary and I hope it doesn't come to that point.

The point of our letter wasn't, obviously, to threaten or filibuster it. What we're trying to do is affect change within the conference committee and to express the view that it is important to achieve bipartisan support for the bill, to build upon the kind of plan that engendered 76 votes in the United States Senate.

I think it's possible to accomplish that with the right conference report in the Senate as well as in the House of Representatives. But I don't think that we want to go down the path of privatizing Medicare. It's untested, unproven. It would be an experimental approach at the expense of senior citizens.

DOBBS: The Senate majority leader last week, Tom Frist (sic), last week told me here that he was confident that this could all be worked out within a couple of weeks. Do you share that view?

SNOWE: Well, obviously it's taking longer than he or I or many of us would have anticipated, but this was a very complex piece of legislation. More importantly, it is significant in that -- given that we need to get it right.

And the right policy is an imperative here so that we're not experimenting with new proposals that basically are ideological ventures, that will affect the quality of health care that is given to seniors in future years. So we have to get it right on the prescription drug side, but also in the Medicare side.

So privatizing it ultimately, certainly would ill serve senior citizens in this country and jeopardize the kind of care they currently get under Medicare.

DOBBS: Are you comfortable with the House Republican spending cap of $400 billion?

SNOWE: Well, we all agreed that it should be $400 billion. The question is how we accomplish that. And I think Congress that has to play a role in that in monitoring it and making sure that any changes that are necessary that has to go through the legislative process.

And I think that's what's important. We all agree that it should be $400 billion, obviously.

DOBBS: Senator, I heard you say that you did not sign that letter with the intent of filibustering. I did not hear you say that you would not filibuster. Would you filibuster on this issue?

SNOWE: Well, you know, obviously if it came to that, but that's not what we're threatening at this point. That wasn't the intent of the letter. That's a last resort.

We have a lot of -- you know, we still have other interim approaches that can be taken before we reach the final agreement -- the conference report. We want to affect those changes now, because the conferees have not concluded their deliberations. They haven't made any decisions on privatizing Medicare or reaching premium support plan that would ultimately lead to that. And we want to affect those changes now. That's the key here.

So we're not interested in threatening filibusters or anything of that kind. What we are trying to do is make sure we get the right and best policy for senior citizens so that we don't confer on the Medicare program, the kind of problems that are faced with the uninsured in America today.

DOBBS: I'm sure the conferees appreciate the absence of even an implicit threat in that letter.

Senator Olympia Snowe, we thank you very much for being with us here.

SNOWE: Thank you, Lou.

Coming up next, we'll share some of your e-mails, including my use of the term radical Islamist. And merger mania of all things, on Wall Street among some bright news about the economy an the market. Christine Romans, next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of tonight's poll, the question, "Do you think security in Iraq is improving?" Only 10 percent of you say yes. Ninety percent say no.

And today on Wall Street, the week kicked off with big merger news and that helped the markets with a modest gain. The Dow up 26 points almost. The NASDAQ up 17. The S&P 500 up 2.22.

Christine Romans with the market.

We're back in merger mania.

CHRISTINE ROMANS, CNN CORRESPONDENT: We haven't had a day like this in four years. By the time you tallied it all up, Lou, it was almost $70 billion in deals. Good old-fashioned merger Monday. Bank of America was a big one. It will buy Fleet Boston for $47 billion in stock. That's the biggest merger since Pfizer and Pharmacia in more than a year ago and the 40 plus percent premium sent the regional banking stocks soaring today.

Add in a couple of health care deals and it started to look like there are CEOs out there that think this is a good environment to get some business done. Anthem and Wellpoint together would make the nation's biggest health insurer. That's a $15 billion deal.

And United Healthcare announced its own acquisition, worth about $3 billion.

And then R.J. Reynolds agreed to buy British American's U.S. tobacco business for more than $3 billion in cash and stock. T

Now, those mergers come amid a bullish background of earnings and economic news. Third quarter profit up almost 20 percent and, Lou, existing home sales today hit a third record high in a row, new home sales near a record.

And homeowners can rejoice about this. The price of the American home in the third quarter rose almost 10 percent at the fastest clip in 23 years.

Now, switching gears, some comments today from the stock exchange CEO, John Reed. An interview published in the exchange's newsletter outlined his plans for restoring respect to the New York Stock Exchange and building consensus among the board members for some reform.

No mention of the specialist scandal, look. And he takes some pains to talk about the regulatory -- self-regulatory role of the exchange. He says taking the regulatory function away from the stock exchange is akin to Toyota taking away its quality control operations. And that's the way...

DOBBS: Toyota?

ROMANS: Toyota. And that's the way he's looking at the issue.

DOBBS: Not Ford, not General Motors.

ROMANS: Toyota. And, you know, by my count, Toyota is regulated by at least four other government organizations, not to mention any Japanese regulatory organizations, as well.

DOBBS: Well, maybe we're misinterpreting him. Maybe he really means he'd like to see at least more regulators on top of the New York exchange. Probably not.

ROMANS: I don't think so.

DOBBS: Christine, thanks. Christine Romans.

Let's look at some of your thoughts. From Longview, Texas, tonight: "Damn, Lou. You've turned this show into daily required viewing in our home. Seldom has a news program created 'standup and cheer' outbursts from our living room." That from Philip Flanagan.

And on the subject of my use of the term "radical Islamists," to describe terrorists at war against this country, from New York, New York, "Your repeated quotes about radical Islamist terrorists is really a veiled attack on Islam and Muslims. Have some decency. You are only helping those terrorists bolster their argument. CNN should be ashamed of having someone like you on their staff." That from Hashim Hamandi.

The Bush administration has chosen to call this war, Hashim, against those radical Islamists a war on terror. As you know, Hashim, every act of terror against this country has been carried out by radical Islamists.

I chose long to go to call the terrorists what they are, radical Islamists. I notice you didn't deny that fact. Calling terrorists what they are, radical Islamists, is not a veiled attack or any other kind of attack on Islam, nor on Muslims.

My audience is very smart and clearly understands the difference between as Muslim and a radical Islamist. I'm only disappointed you are more concerned about my language than you are about the very real attacks on your very religion by those who murder and terrorize in the name of your religion.

Moving now to the issue of the shortage of bulletproof vests for American troops in Iraq, an e-mail from Dubois, Pennsylvania. "Dear Lou, the lack of adequate body armor for our troops is a disgrace. My son was sent to Iraq with the 4th I.D. without body armor. I bought police grade armor plates myself and shipped them to him. We have money for a tax cut for the rich but no money to give our soldiers the best equipment?" John Crawford.

From Arlington, Virginia, "Lou, thank you for your continued series on the decimation of the manufacturing sector of the United States by our so-called trading partners. I would buy and send you a medal, but it would probably say 'Made in China' on the back." That from Patrick Magrath.

And from Lake Oswego, Oregon, "I just saw your piece on children titled America's Bright Future, and I wanted to say thanks for a heartwarming and refreshingly positive news story. I'd love to see more news coverage of stories of hope and promise, something we could all use." We agree, Mark Bonney, and we love hearing from you.

E-mail us at LouDobbs@CNN.com.

Filing: American astronaut Ed Lou tonight is headed back to Earth aboard a Russian Soyuz space capsule. The capsule undocked moments ago from the international space station, where Lou has spent the last six months. Also aboard the Soyuz, Russian cosmonaut and a Spanish astronaut. The capsule is scheduled to land in Kazakhstan in about three hours. Godspeed.

That's our show tonight. Thanks for being with us. Tomorrow, just back from Iraq, Congressman Jim Saxton. And government money designed to save family farms now going to big corporations instead. We'll be telling you all about it in the Great American Giveaway. Please join us.

Thanks for being with us tonight. From 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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