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Kerry on the Attack; Putin Rival Disappears

Aired February 9, 2004 - 18:00   ET


LOU DOBBS, CNN ANCHOR (voice-over): Tonight: Democratic front- runner John Kerry steps up his attacks against President Bush and even resorts to rhyme.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Like father, like son, one term and you're done.


DOBBS: In Russia, the bizarre case of the missing rival to President Putin. A prominent critic of Putin disappears just weeks before the presidential election. A special report from Moscow.

Martha Stewart on trial, the government's star witness under attack again today. We'll have a live report.

And, in "Broken Borders" tonight, a nation of immigrants, a melting pot. Whatever happened to assimilation? And without it, what will happen to democracy? Professor and author Francis Fukuyama is our guest.

And two more highway shootings in Ohio, Nearly two dozen since last May. Police seem no closer to finding the sniper.


ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, February 9. Here now, Lou Dobbs.

DOBBS: Good evening.

Tonight, Senator John Kerry appears all but unstoppable in his bid for the Democratic presidential nomination. Senator Kerry is leading in the two states that hold primaries tomorrow. And after winning all three caucuses this weekend in Michigan, Washington and Maine, Kerry has 426 delegates. That's almost a fifth of the 2,200 needed to win the nomination.


DOBBS (voice-over): Senator Kerry is campaigning hard in Virginia Tennessee, where he is focusing not on his Democratic rivals, but President Bush.

KERRY: If you like what Bill Clinton gave you in those eight years, you're going to love what John Kerry gives you in the first four years when we're president.

DOBBS: Senator Kerry is also questioning whether President Bush fulfilled his National Guard service during the Vietnam War, saying the president's honorable discharge doesn't prove anything.

But it was only 12 years ago, during the 1992 campaign, that Senator Kerry chastised another decorated Vietnam veteran, former Senator Bob Kerrey, for questioning then-Arkansas Governor Bill Clinton's war record. Speaking then on the Senate floor, Kerry said: "I am saddened by the fact that Vietnam has yet again been inserted into the campaign and that it has been inserted in what I feel to be the worst possible way."

Kerry's two Democratic rivals from the South, Senator John Edwards and General Wesley Clark, are still campaigning in Tennessee and Virginia, but struggling to gain traction against Senator Kerry. They, too, are targeting President Bush.

SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE: He still thinks like somebody who stays in Washington all the time. He doesn't understand what's going on in the real world.

DOBBS: President Bush's appearance on NBC's "Meet the Press" could be considered the public kickoff of his national campaign.

DAVID GERGEN, HARVARD UNIVERSITY: The Democratic candidates have had a chance to warm up now with a lot of audiences and to sharpen their messages in ways the president has not. And I think that showed yesterday. He will be a much more effective campaigner than he was yesterday with Tim Russert.

DOBBS: The president also followed Democrats to a primary state for the third time in as many weeks. In Missouri today, President Bush touted the economic recovery. Missouri is a state that the president narrowly won in the 2000 election. And he's been there 15 times since.

President Bush also followed the Democratic candidates into South Carolina and New Hampshire, two days after the Democratic primary.


DOBBS: A footnote to today's campaigning: Former front-runner Howard Dean today changed his mind. He now says he won't drop out of the race even if he loses the Wisconsin primary. That's a week from tomorrow. It was only last week that Dean said, anything less than a win in Wisconsin would end his campaign.

Dean today said he reconsidered, after many of his supporters asked him to stay in the race for the long haul. We'll be talking about all of the day's developments in the campaign with our panel of top political journalists, Karen Tumulty of "TIME," Roger Simon of "U.S. News & World Report," Ron Brownstein of "The Los Angeles Times," later in the broadcast.

The latest CNN/"USA Today"/Gallup poll out tonight says 52 percent of registered Democrats now support Senator John Kerry for his party's nomination. Howard Dean is in second place, but far behind, with 14 percent, followed closely by John Edwards with 13 percent, General Wesley Clark with 10 percent.

That poll also shows all voters evenly split between President Bush and Senator Kerry. The president has 49 percent support, compared with 48 percent for Kerry.

President Bush is making his record on the economy the center of his public appearances this week. As we've reported, the president was in Missouri today to highlight the economic recovery. At the same time, the White House predicted, the economy will create 2.6 million jobs this year.

Senior White House correspondent John King reports -- John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Lou, that prediction about new jobs and a declining unemployment rate included in the president's annual economic report to Congress. That went up to Capitol Hill today.

Now, President Bush back here at the White House tonight. You see him arriving a bit earlier this evening, after that stop in Missouri earlier today. As you noted, Lou, in your report, a presidential bellwether state, a key target for this president in November, and a sign today of the president's more aggressive campaign posture. On a factory floor there, the president focusing on the economy, knowing full well the Democrats are criticizing his policies, especially his big tax cuts.

The president today directly, without mentioning him, addressing the Democratic front-runner, John Kerry, who would repeal some of the Bush tax cuts. Mr. Kerry says that money should go into health care spending and to reduce the federal deficit. The president said today, don't believe it.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: They're going to raise the taxes and increase the size of the federal government, which would be bad for the United States economy. People have got to understand and listen to the rhetoric carefully. When they say, we're going to repeal Bush's tax cuts, that means they're going to raise your taxes. And that's wrong. And that's bad economics.


KING: The economy the president's urgent focus this week, and there's good reason. Look at the polling.

Asked, the voters, in the CNN/"TIME" poll, "Is the president doing a good job on the economy?" 43 percent say, yes, he is now. That's down six points from just a month ago, when 49 percent gave the president good grades on the economy. The president's posture on the economy slipping a bit, Lou, obviously, his poll standing in those head-to-head matchups slipping a little bit. That's why you're seeing more campaign-style events like, Mr. Bush stopping at an outdoorsman shop in Missouri before heading back to the White House.

Mr. Bush will focus on the economy here again tomorrow, and then, when he travels to another key battleground a bit later in the week, Pennsylvania, and then down to Florida before the week is out -- Lou.

DOBBS: John, a few quick questions. First, is the White House concerned? These numbers that we've seen over the past week show the president's approval rating declining, showing him in a statistical dead heat with Senator Kerry.

KING: They are a bit concerned, Lou. They say the statistical dead heat is no surprise.

With all of the media attention and all the voter attention on the Democratic race, they say that is the traditional dynamic. And they note that, say, Bob Dole was ahead of Bill Clinton at one point back in 1996. President Clinton, of course, went on to win handily. The one they watch more closely is that approval rating. If the incumbent goes below 50 percent, that's a sign of trouble, Mr. Bush right now just above 50 percent.

DOBBS: John, I also understand some new developments tonight in the investigation into the leak of that CIA agent's name. What have you got for us?

KING: Well, Lou, we know there's a grand jury in place now looking into this investigation.

And we now know today that the president's press secretary, Scott McClellan, is among those who have testified before that grand jury. About a handful of White House officials, current and former officials, have been put on notice that they will be called before the grand jury. Press Secretary Scott McClellan only telling reporters today that he is simply doing his part in terms of keeping the president's commitment to cooperate with that investigation.

But we know from other sources that he was called before the grand jury last Friday. McClellan has denied any role at all, Lou, in that leak.

DOBBS: John, thank you very much.

In Iraq today, two American soldiers were killed near the border with Syria when they tried to clear unexploded ordnance. Five others were wounded. And, in Baghdad, the Army said it has found a letter on a computer disk that reveals a clear link between insurgents and al Qaeda.

Pentagon correspondent Barbara Starr reports.


BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): It was a raid like this one Monday in Baquba that led to the discovery a computer disc containing the 17-page document written by a Jordanian terrorist with ties to al Qaeda, calling for a civil war in Iraq. Military officials say the document discovered last month was written by this man, Abu Musab al-Zarqawi, believed to be hiding in Iraq, Iran or Syria. Officials say the letter was on its way to Afghanistan by courier, possibly to be delivered to Osama bin Laden.

BRIG. GEN. MARK KIMMITT, U.S. DEPUTY CHIEF OF OPERATIONS: It is clearly a plan on the part of outsiders to come in this country and spark civil war, create sectarian violence, try to expose fissures in the society. about

STARR: The Zarqawi letter an extraordinary look at al Qaeda's interests in Iraq.

He calls for attacks on the majority Shiite population, with the hope, that will spark counterattacks against the once powerful Sunni minorities. He says it must be done before the June 30 date for handing power back to the Iraqis. He complains that the insurgency is not scaring off U.S. troops and Iraqi security forces are growing in numbers.

And, finally, he claims responsibility for 25 attacks inside Iraq. Zarqawi is suspected of involvement in the attack on Italian troops in Nasiriyah in November and the bombing of the U.N. headquarters in Baghdad in August.

COLIN POWELL, SECRETARY OF STATE: With respect to the letter itself, it's very revealing. They describe the weaknesses that they have in their efforts to undercut the coalition's efforts. But, at the same time, it shows they haven't given up.


STARR: So, Lou, this al Qaeda document apparently expressing some frustration that the al Qaeda is not able to do more with the insurgency in Iraq, but coalition officials saying they're going to step up their efforts, find Zarqawi, and put him out of business -- Lou.

DOBBS: Thank you, Barbara.

Still ahead here, a counterattack against the government's star witness in the Martha Stewart trial.

Also, two more highway shootings in Ohio, nearly two dozen shootings since last May. We'll have a live report from Columbus.

Also ahead, a bird flu scare in this country, 12,000 chickens slaughtered and U.S. exports denied. We'll have the latest for you on that.

And, in Russia, a missing person case with a twist. A leading critic of President Putin has disappeared just weeks before the presidential election. We'll have a report from Moscow.

Stay with us. (COMMERCIAL BREAK)

DOBBS: Martha Stewart's attorney on the defensive -- rather, on the offensive -- against the prosecution's key witness, Douglas Faneuil, specifically questioning Faneuil's ability to recall details that took place more than two years ago.

Mary Snow has the latest for us from the federal courthouse in Manhattan -- Mary.

MARY SNOW, CNN CORRESPONDENT: Lou, Martha Stewart's lead defense attorney tried to poke holes in Doug Faneuil's credibility by pointing out, there were inconsistencies in Faneuil's recollection of dates and details in the Martha Stewart case.

Robert Morvillo, the lead attorney, pointed out, though, that Faneuil seemed to have no problem remembering word for word the conversation he had with Martha Stewart on the day of December 27, 2001, the day she sold her ImClone shares. Faneuil last week testified he thought there was a cover-up involving Peter Bacanovic, Stewart's stockbroker.

But under cross-examination today, he admitted that, in early 2002, he thought it was strange that Merrill Lynch was offering him gifts and an extra week of vacation after being questioned about the Stewart sale. He also said at that time, he believed that Merrill Lynch had, in his words, a don't ask/don't tell policy. Faneuil was on the stand for more than three hours.

Also called to the stand today, Ann Armstrong. She is Martha Stewart's personal assistant. She testified that, on December 27, 2001, she received a phone message from Peter Bacanovic, Stewart's stockbroker, who said that he thought ImClone was going to sell downward. A few minutes later, she broke down on the stand when asked about Martha Stewart and her conversation about Christmas. The judge recessed. The trial will be back in session tomorrow, with Ann Armstrong on the stand -- Lou.

DOBBS: Mary, thank you.

And joining us now to discuss this case against Martha Stewart, our CNN senior legal analyst, Jeffrey Toobin.

Jeff, this is -- the breakdown on the part of Martha Stewart's assistant, what's happening?

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: It was just really poignant in the courtroom.

What happened was, what she was doing is, she was talking about the events of December 27, which is obviously the key day, the day of the stock sale.

DOBBS: Right.

TOOBIN: And she said, you know, when I first spoke to Martha, I thanked her for sending me plum pudding. And just the memory of that made her break down in tears.

And we had spent a lot of time talking about what a horrible boss Martha Stewart is. The reason she was crying is that she felt clearly a great deal of affection for Martha Stewart. And it was actually quite moving.

DOBBS: And what is the expectation of her testimony?

TOOBIN: Well, she's got a very bad piece of evidence against Martha Stewart.

She will testify tomorrow that Martha Stewart sat down at her desk as this investigation began, edited out that phone message from Peter Bacanovic about ImClone, and then had second thoughts and went back and restored the message to its original form, but a very strong piece of evidence by the government on consciousness of guilt. We'll hear that tomorrow morning.

DOBBS: And Faneuil, the star witness in this case, was the defense successful or not in any way undermining his testimony?

TOOBIN: You know, not successful, in my book, portraying him as a liar. I don't think they laid a glove on him as some sort of bad person.

The best argument the defense had, especially Robert Morvillo, is that Faneuil simply didn't know what he thought he knew. Faneuil thought he saw a cover-up in operation, but, in fact, he didn't really know about the interaction between Bacanovic and Stewart about her finances. The best argument about him is not that he's a liar, is that he just knows less than he thinks he knows.

DOBBS: Jeff Toobin, thank you very much.


DOBBS: Coming up next here, new information about the discovery of bird flu in this country, four countries now banning poultry being exported from the United States. We'll have the latest for you on that.

Also, two new shootings in Ohio linked to a string of 21 shootings over the past nine months -- that story, a great deal more still ahead.

Please stay with us.


DOBBS: Tonight, health officials are investigating an outbreak of bird flu in this country. Authorities destroyed 12,000 chickens at a Delaware farm over the weekend. Officials say the bird flu strain in Delaware, however, is different from the virus that has killed almost 20 people in Asia.

Kitty Pilgrim reports. (BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Japan, South Korea and Singapore have all banned chicken sales from the United States. The Philippines and Hong Kong and Russia banned chicken from Delaware only.

In Delaware, 12,000 chickens had to be destroyed over the weekend. But so far, no additional cases have turned up. There are several kinds of bird flu. The kind found in Delaware, the H-7 strain, is deadly to poultry, but not thought to be fatal to humans. Another kind of bird flu has been devastating poultry across Asia, now engulfing half a continent, Cambodia, China, Indonesia, Japan, South Korea, Laos, Thailand, Vietnam; 50 million chickens and ducks have had to be destroyed.

And that type of bird flu, the H-5 strain, is fatal to humans; 19 people so far have died, five in Thailand, 14 in Vietnam. There is worry it may infect other species, such as pigs, which are often kept along with chickens.

DR. MYLES DRUCKMAN, INTERNATIONAL SOS: This particular virus is kind of notorious for shifting its genes around, so that it can potentially become a new virus. We haven't had this kind of a spread from country to country in such a rapid fashion.

PILGRIM: The Centers for Disease Control has banned birds and bird products from eight Asian countries. The only way to get the disease so far is from direct contact with infected birds.


PILGRIM: Now, the good news, say world health officials, is, the disease has not mutated to allow it to pass from human to human. That was the case with another infectious disease, SARS -- Lou.

DOBBS: Kitty, thank you very much.

Coming up here next: Can any of the Democratic presidential hopefuls catch Senator Kerry in the race for their party's nomination? Our political panel of journalists coming up next.

Two more shootings on the highways of Ohio. Tonight, the police have a message for the shooter.

In Moscow, a high-profile political opponent, outspoken critic and rival of President Putin is missing just weeks before the presidential election

And in "Broken Borders" tonight, the benefits of assimilation. Author and professor Francis Fukuyama joins us.

Please stay with us.


DOBBS: Authorities in Ohio tonight say two more shootings near Columbus yesterday are linked to a string of 21 other shootings that began last May. Police have a description, at least a rough description of the suspected gunman.

Jeff Flock joins us from the Franklin County Sheriff's department in Columbus with the story -- Jeff.


Indeed, now there are 23 shootings. These are the incident reports for the latest ones just released a short time ago, these now positively linked to the freeway killer here in and around Columbus. And authorities say, these two freshest incidents hold the greatest prospect that they will eventually get their man.

And I say now the word man with some information. Authorities have now interviewed several people who give them information about a man that they saw on a freeway overpass before these shootings took place, a man they say who apparently had a handgun in his hand, is their best information yet in terms of developing who the shooter is.


CHIEF DEPUTY STEVE MARTIN, FRANKLIN COUNTY SHERIFF'S DEPARTMENT: Based on numerous eyewitness accounts, we believe at this time that the shooter is most likely a white male in his 30s to 40s of age, and maybe driving a dark-colored, small or mid-sized sedan.


FLOCK: Now, Lou, this information is based on the accounts from four women in a van that was hit by a bullet yesterday, also, one man in a brown Mercedes who was also hit. No one was hurt in those shootings.

Since yesterday's shootings, 100-plus new tips have come in to the tip line. And authorities say, that gives them new hope that they will somehow get to the bottom of these baffling shootings, which just have absolutely no pattern, all sorts of different victims, all sorts of different cars, all sorts of different places, no pattern at all.

And, at this point, Lou, despite this new information, they just remain baffled here by these random shootings -- Lou.

DOBBS: Jeff, thank you very much -- Jeff flock reporting from Columbus.

Returning to our top story tonight, Senator John Kerry appears to be on the verge of two more victories in Democratic primaries tomorrow. The latest polls show him well ahead of his rivals in both Tennessee and Virginia.

Joining me now, our panel of our top political journalists, Ron Brownstein, national political correspondent for "The Los Angeles Times," Karen Tumulty, national political correspondent "TIME" magazine, Roger Simon, political editor "U.S. News & World Report," all of whom are in the nation's capital tonight. Thanks you for being with us.

Let me begin, if I may, Ron, with you.

Kerry looks to be all but unstoppable. Is the rest of this just simply theater?

RON BROWNSTEIN, CNN POLITICAL ANALYST: Well, unless something very much changes, the answer is yes, Lou.

I mean, two things are happening. First, the other candidates, I think, with the exception of Dean, who has probably lost so much credibility that not many people are really listening to him, the other candidates are failing to make a very effective case against John Kerry or an argument as to why he should not be the nominee.

And what we're learning is, if you don't give people a good reason to vote against a front-runner, guess what, most of them will. The second thing that's happening is that voters in these later states, as they come up, are taking Kerry's victories in the earlier states as proof or as persuasion that he would the strongest nominee against George Bush. It's a fascinating kind of self-referential dynamic, in which Democrats are literally saying that, because he's beating these other Democrats, they think he has the best chance to beat Bush.

And unless the other candidates can make a more effective argument to reverse that, I don't see how they stop them.

DOBBS: Karen, have, in particular, Dean, Edwards and Clark made a mistake in not attacking Kerry, instead focusing on the president?

KAREN TUMULTY, NATIONAL POLITICAL CORRESPONDENT, "TIME": Well, you know, I think that, you know, nobody's going to make up any ground against him unless they take him on.

But Dean can't afford to, because the last time he did that, all he did was destroy his own credibility. And I think there's been a signal sent out within the party that this prolonged race is not such a bad thing for the Democrats in general, because, as long as they're all ganging up on Bush, and getting a lot of free media for doing it, it's the president's numbers that we've seen slipping.

So I don't really see that there looks like there's much of an appetite anywhere to put an end to this.

DOBBS: And, Roger, the long-awaited appearance on NBC's "Meet the Press," Tim Russert, of the president, how do you think he acquitted himself?

ROGER SIMON, POLITICAL EDITOR, "U.S. NEWS & WORLD REPORT": I don't think, if the goal was to end his drop in the polls or at least staunch the flow from his wounds, that he accomplished it.

To some extent, he couldn't accomplish it, because the facts are not on his side. He can't say, yes, there are weapons of mass destruction and we're going to find them tomorrow. He knows that not to be true. What he told the American people is what he told the American people. And the facts are now at variance with that.

If, however, the White House merely wanted to show that the president was concerned and doing the best job he possibly could and is a seemingly sincere and affable person, I think they succeeded on those grounds. But I think there's a lot of -- there's a real sense of disquiet at the White House these days. There's disquiet among conservatives. There's disquiet among Republicans who don't like huge deficits.

And he no longer appears to be invulnerable figure he looked like just a few months ago.

DOBBS: Ron, this president now being attacked squarely by Senator Kerry on the issue of his service in the National Guard. What do you make of it and what do you make of the shift in position by Senator Kerry from 12 years ago?

BROWNSTEIN: Well, I think that -- first of all, I that George Bush as president -- and he is going to be judged by people primarily on his performance as president. I think this is going to be a secondary issue in the overall scheme of things.

I do think, where it becomes a question for Bush is credibility. The president, you know -- the view in the White House has been that the trump card for this president is -- are his personal qualities, that even people who may disagree with him on issues or have mixed opinions about his performance view him as a strong leader, and someone who's honest and has integrity.

That is what is becoming, you know, getting eroded a little bit by the questions of weapons of mass destruction, by some of the debates about the budget and certainly these questions about his National Guard service could play into that. All in all, though, I think it's going to be a secondary concern. The war, the economy, how he's managed the big issues facing the country, that's what this is about.

DOBBS: Karen?

TUMULTY: You know, in a time when, you know, we have hundreds of thousands of National Guardsmen overseas serving, putting their lives in harm's way, I think this is an attack that the Democrats have to be very, very careful with. Not only with the message, because it's a much trickier thing to raise these charges against the commander in chief than it was to raise them against the governor of Texas, and into the 2000 election. But they've also got to be really careful with the messenger in this. For instance, I don't think it was probably particularly helpful to have the party chairman, Terry McAuliffe, whose job is to be political, raising these essentially, you know, questioning the president's service.

SIMON: I think it's interesting, however, Lou, that this issue seems to have more traction this time around than when it was when it was raised against George Bush in 2000. The "Boston Globe " did a series of stories raising this issue and saying they couldn't find records to prove that Bush had done all his military service. As I recall, the story went no place. It didn't have a very long life. And it didn't seem to affect the president -- didn't affect then Governor Bush.

Now, however, we're hearing more about it. And it's lasting day after day. And I think the reason Terry McAuliffe raised it was to show that the Democrats intend to be different this time. They're not going to be patsy liberals saying, just waiting for Carl Rove to hit them over the head with negative research. They're going to do their own negative research even if it means resurrecting ghosts from the past.

DOBBS: Roger, thank you very much. Karen and Ron, appreciate it. We'll talk to you soon.

This brings us to the subject of tonight's poll. "Do you believe the race for the Democratic presidential nomination is effectively over? Yes or no." Cast your vote at We'll have the results later here in the show.

There is a presidential election in Russia next month and one of President Putin's challengers has simply disappeared. The politician's family says he may have been murdered. President Putin is saying nothing about the case. Jill Dougherty reports from Moscow.


JILL DOUGHERTY, CNN MOSCOW BUREAU CHIEF (voice-over): Ivan Rybkin is a candidate for president, and he is also a former parliamentary speaker, a national security adviser to former President Boris Yeltsin, and a very vocal and strong critic of President Vladimir Putin. Just last week he printed in a well-known newspaper an attack letter on Mr. Putin saying that he is Russia's biggest oligarch, and has no right to power in Russia.

The Kremlin made no answer to that letter. Also, Mr. Rybkin is in connected to Boris Berezovsky. He is one of the so-called oligarchs, he is in exile in London, and he has been funding the campaign, and also the party that Ivan Rybkin belongs to. In an interview with CNN, Mr. Berezovsky said he is not going to speculate on what might have happened, but he is pointing the finger at the Kremlin.

BORIS BEREZOVSKY, FMR. KREMLIN ADVISER: (UNINTELLIGIBLE) He is a very brave man, and he understood well to fight for presidential election in Russia against Putin it's really very dangerous. Because you know that he's a member of the Liberal party, and two of the leaders of party were killed and it's a lot of pressure to people who create a position against Putin. He felt he's in danger.

DOUGHERTY: It should be noted that Boris Berezovsky is an avowed enemy of Mr. Putin, and those murders that he's referring to took place in the last 18 months. They are not believed to be connected with this presidential race. To illustrate the depths of confusion about this story, the prosecutors this morning opened, they said, a murder case, and then within a few minutes, they closed it, saying that there is not enough evidence to do that, to open that type of case. And in another confusing element later a member of parliament said that he had word that Mr. Rybkin had actually been found in a resort outside of Moscow. That has not been confirmed.

Jill Dougherty, CNN, Moscow.


DOBBS: Coming up next here, "Broken Borders." We'll be talking with author Francis Fukuyama about the future of America's melting pot. And we'll be talking about the No. 1 issue in Europe. Immigration. And the importance of assimilation there and here. And later, stopping the export of American jobs overseas, I'll be talking with Congressman Barney Frank. He has a plan and he joins us next. Stay with us.


DOBBS: For more than a year now, we've been reporting extensively here on the 12 million illegal aliens living in this country, their impact on our economy, our society and our broken immigration policies and laws. My next guest has one of the greatest challenges facing this country and other leading democracies, is how to assimilate culturally distinct immigrants. Francis Fukuyama is author, professor at Johns Hopkins School of Advanced International Studies and joins us tonight from Washington. Good to have you with us.


DOBBS: I think most people could be forgiven if they did not know that one of the hottest political topics in Europe, politically, is immigration. And it focuses, in your opinion, does it not, on the difficulties in Europe of assimilation of minorities?

FUKUYAMA: Well, it's the hot topic. Because in a country like France, well over 10 percent of the population is Muslim. And I think that one of the things that September 11 revealed is that even the second and third generation North Africans that were born in France are assimilating very, very poorly. That a lot of them have a primary identification, first, as Muslims, and then only secondarily as French citizens. And we've seen, you know, the explosion of opposition to the head scarf ban in the last couple of weeks, since the French government announced the intention of doing that. So it's a tremendous problem for them.

DOBBS: As you know, tomorrow the French national assembly will vote on that head scarf ban. It extends not simply to the teachers, but to the students themselves. What is your basic thought? Do you think it will go forward? Should it go forward?

FUKUYAMA: Well, there's two separate issues. I mean, one is a tactical issue about whether it's going to achieve the goals that the French government wants. It's a kind of forced assimilation. And I think a lot of people worry that it's going to create such a big backlash or it's going to force the religious students into separate Muslim schools, that it's not going to have the intended effect. But the intention, I think, is a reasonable one, that they want really for people's primary identification to be as French citizens. I think in a way it's comparable to our ban on bilingual education in California.

DOBBS: Before we turn to California, this country, also in Germany, a decision there as to whether or not teachers will be prescribed from wearing the headbands, and the population, the Muslim population in this instance, in Germany, is Turkish. And in Turkey, there's a commitment to secularism that bans head scarves. And yet the issue is alive and well in Germany. That is, at the very least, ironic. The second, perplexing.

FUKUYAMA: Well, you have to remember, the organizers of the September 11 attacks were actually all radicalized in Germany, or in other parts of western Europe. So there's obviously something about the situation of being a Muslim in those European societies that is tremendously alienating. I think that's really the core of their problem that they've just not been doing a good job in the second and third generations persuading these people that they're fellow citizens.

DOBBS: You, along with a number of others, have come out in support of the president's immigration plan. There is no question this country needs desperately a new immigration policy, new laws. But at the same time, you attach some conditions, primarily the condition of assimilation to any amnesty that would be granted. How in the world could you possibly achieve that assimilation?


DOBBS: That guarantee.

FUKUYAMA: Sure. Well, we can't guarantee anything in social policy. But the United States has really been an assimilation powerhouse for most of its national existence.

DOBBS: Absolutely.

FUKUYAMA: And I think it's really only since the identity politics of the 1970s that we've had the rise of bilingualism and multiculturalism and other things that tends to separate us. But there's also been a fairly powerful backlash movement to that. So that California a few years back passed Proposition 227, which at a stroke eliminated bilingualism from the public school system. And that policy has been a tremendous success, especially among Hispanic parents that actually want their children to learn English, and therefore to integrate into the mainstream of American society. So I think there really is a lot of support for assimilation, as there is to openness to others coming to our country to share in what we have here.

DOBBS: Absolutely. As is pointed out throughout our history, we are a nation of immigrants to begin with. But we are a melting pot. And while our pot is full, and looks as though it's going to get fuller unless we do something about it, we are not melting. That lack of assimilation, how troubling is that to you at this time?

FUKUYAMA: Oh, no, that's -- I mean, I think that, really, the condition for open -- for relatively open policies on immigration is that we really try to make people Americans. It's a basic deal. We don't care what your color -- your skin color, or your religion, or ethnic origins are, if you accept the basic political terms of being an American citizen, in terms of loyalty to our institutions. And that's a deal that's worked pretty well. There are a lot of things in the culture that operate the other way. But I think that our civilization is really very attractive, and a lot of people would like to accept that deal. So...

DOBBS: Yeah, that's really the problem, professor. We've got plenty of people accepting the deal. It's determining our national -- our destiny, if you will.

FUKUYAMA: Oh, but that would be the assimilation part of it.

DOBBS: Well, professor, I hope you'll come back. We want to discuss this very important issue, immigration, obviously, as we have been here. We hope you'll participate in that dialogue further.

FUKUYAMA: Thank you.

DOBBS: Professor Fukuyama, thank you.

Coming up next, some companies are bucking the trend of outsourcing American jobs to those cheap overseas labor markets, and we're going to tell you about them. We begin, in fact, this week a series of special reports on those companies proudly bearing the label, "made in America." Tonight in "Exporting America," we'll be talking with Congressman Barney Frank of Massachusetts who says the United States must promote stronger labor and environmental laws overseas in order for the American worker to be protected. And provide a competitive environment. Stay with us.


DOBBS: You may not believe it, but there are still things manufactured, made in this country, and we have a series of special reports we're beginning this week called "Made in America." Some American companies are fighting the trend to export American jobs to cheap foreign labor markets. And they're finding it's good for business. Casey Wian reports tonight from Los Angeles on one clothing line that is still proudly made in America.


CASEY WIAN, CNN CORRESPONDENT (voice-over): From this giant factory in downtown Los Angeles, American Apparel is out to prove its garment industry competitors wrong. Most have fled overseas for cheap labor, as shown by these photographs on American Apparel's showroom floor. But all of American Apparel's T-shirts and undergarments are made here by a workforce reflective of high-energy founder Dov Charney.


WIAN: Thirteen hundred workers here earn $12.50 an hour on average.

CHARNEY: A lot of people misunderstand it and think it was a moral decision. I think there is some morality to it. I mean, it is more fun to pay people well than pay people poorly. But it's also an economic one.

WIAN: Charney says combining all the company's operations, from design to production to distribution under one roof is more cost- effective and efficient. American Apparel is profitable, with revenue doubling for three straight years.

Sawers here work in small teams, with each member paid the same, based on hourly production. Every hour the team wage for that period is posted for all to see. It's hard work, but with perks, like health insurance, subsidized lunches, even massages.

CHARNEY: This is my former cleaning lady. Now she works in the POP department.

WIAN: The company has more than 1,000 applicants waiting for jobs. Marty Bailey joined American Apparel two years ago after 15 years at Fruit of the Loom, where he helped move thousands of North Carolina jobs overseas.

MARTY BAILEY, OPERATIONS VP, AMERICAN APPAREL: Everybody's offshore chasing pennies. And I've always believed that domestically you can be successful. It's very difficult to be successful if you're supporting the mass market, but if you have a targeted market, it narrows the field.

WIAN: American Apparel sells mostly to trend-conscious young adults, and to other companies who customize shirts with their own logos or artwork.

(on camera): American Apparel is planning to expand overseas, first with retail stores, then factories to support its local markets. The company says all of its foreign workers will be paid at least the U.S. minimum wage.

Casey Wian, CNN, Los Angeles.


DOBBS: My guest tonight says unfair trade agreements give foreign countries a competitive edge in the labor market, and they result in the loss of American jobs. He also says the United States must promote stronger labor and environmental laws to protect the human rights of foreign workers as well as the jobs of Americans. Joining me now, Congressman Barney Frank of Massachusetts, the ranking Democrat on the House Financial Services Committee. Good to have you with us. REP. BARNEY FRANK (D), MASSACHUSETTS: Thank you, Lou.

DOBBS: The issues of trade are now percolating into this presidential nomination process and ultimately the campaign itself. Do you think we're going to see anything substantive result from this election year on trade?

FRANK: I hope so. I hope that the financial community, the business community will understand, they've pushed people about to the limit. I think there is in the country an increasing perception that all of the benefits, not -- almost all of the benefits of increased productivity, of all these things which are good, are unfortunately getting monopolized by the owners of capital. Now, obviously, capital has to be rewarded, or system doesn't work.

DOBBS: Right.

FRANK: But by a series of policies, anti-union policies, trade policies, tax policies, workers just don't see that they're getting anything, and we're at stalemate. I think they're going to see this. Virtually all the policies that the business community would want to see happen to promote their view of global economics have been stalled now. And I thought the most significant thing was that George Bush in the State of the Union used the phrase "free and fair trade." That's the first time I think he ever said that.

DOBBS: There's been a bit of a migration there. Commerce Secretary Don Evans doing the same thing. Meanwhile, we are mired in agreements, free trade agreements that go back to NAFTA. You voted against NAFTA.


DOBBS: Prescient in that vote, as it turns out.

FRANK: I've got to tell you, we need to have an investigation of how NAFTA passed. Because everybody I talked to says they voted against it. So there must have been a group of impostors who took over the House and somehow voted for this, because nobody left seems to say they did.

DOBBS: And I've even heard a few Republicans talking about it, this was President Clinton's bill...


DOBBS: ... conveniently forgetting that the previous administration was pushing very hard for it.

FRANK: And again, nobody is against -- or not -- I'm not against the globalization, but it has to be done with some concern for equity. And if it isn't, then they're going to lose the consensus.

DOBBS: We've got a half a trillion-dollar trade deficit. We have agreements that are not working in the case of NAFTA, at least, over the course of our most recent history, the first 10 years. Mexico is losing as a result. We're losing as a result. A huge trade deficit. And now, we're exporting U.S. jobs...


DOBBS: ... to cheap foreign labor markets.

FRANK: Not only are we exporting the jobs, the outsourcing, which you have done such a good job of talking about, those are the jobs 10 years ago we were told we could retrain people for. When we said -- I represent an area that had a lot of garment and textile, southeastern Massachusetts. (UNINTELLIGIBLE) Berkshire Hathaway was there. We were told, oh, don't worry about this. We'll retrain these people for technology jobs. I was a little dubious at some of these 50-year-olds without a college education, whether they could be retrained. But point is the outsourcing is sending out of the country precisely the jobs we were told the people could be trained for.

DOBBS: Does your blood boil when you hear the panacea to all of these very difficult and complex issues in trade, and the exporting of American jobs is retrain, and no one says to what?

FRANK: Exactly. Because the outsourcing, 10 years ago, I wish people would go back, look specificly at the jobs that people were being retrained for, those are the ones now being outsourced. Look trade can be a good thing. Increased productivity is a good thing. But if it's shared in a very unfair fashion, there's going to be resentment. And this notion of retraining people -- by the way, one of the problems we have, very serious one, as we've been losing some of these jobs, manufacturing and others, people are going in some cases getting new jobs, but going to jobs that had health benefits to jobs that don't. The lack of health benefits is, even for people who are employed is now reaching crisis stage.

DOBBS: Health benefits as well as pensions being reduced.


DOBBS: The pressure right now on the middle class, the hard- working men and women in this country. I don't think it's been tougher certainly in my lifetime.

FRANK: And, you know, in macroeconomic terms, what it means is, a good thing, increased productivity is being made into a problem. Because all of the benefits from it are being held by a very few.

DOBBS: We talked about business community is having its way, corporate America, the multinationals. There used to be a countervailing influence. Some would say that also a source of many of the problems, the organized labor itself. Organized labor is no longer the countervailing influence against the multinationals. Where in the world are we going to find it, because obviously Congress obviously doesn't have an appetite to take on trade agreements or to protect the American workers.

FRANK: You're exactly right. And of course, organized labor has been weakened by two factors. One, the mobility of capital internationally and they been put on competitive disadvantage. And also by conscious public policies that have cut back at labor's ability to do their job. I think what's going to happen is there's going to be a two-stage process. I wish we could skip one stage. But the first stage is going to be deadlock. I believe you're seeing a resentment against the unfairness that we've been talking about, so that the business community and others are going to say no to trade pacts. They're not going to get that Central American free trade agreement through. And then we're going to have to go, after we've had deadlock, into a new consensus.

DOBBS: I guess what we should say at this point is, Godspeed.

Barney frank, Congressman Barney Frank from Massachusetts. Good to have you with us.

FRANK: Godspeed is against the Senate rules.

DOBBS: Well, we're not in the Senate right now.


DOBBS: Thanks a lot.

FRANK: On Wall Street, stocks edge lower, the Dow lost 14 points, the Nasdaq dropped three, the S&P almost down three. New questions tonight about the accuracy of those Wall Street analysts.

We haven't even answered the old questions.

There new questions, Christine?

CHRISTINE ROMANS, CNN CORRESPONDENT: They're still getting it wrong. The Wall Street analyst are, Lou.

DOBBS: Let me write that down.

ROMANS: They're getting it very wrong by the highest margin ever. They underestimated earnings growth by 6 percentage points last year. That's the worst they've ever done. Talk about getting it wrong. Only one in five consensus estimates is correct according to Thompson First Call data. And another study shows a third of Wall Street analysts' estimates are off by at least 10 percent. That's bad news, if you're one of those investors buying stocks when a company beats the street selling it when it misses. Consider Cisco just last week, earnings a couple of cents better than the consensus forecast, but the stock fell about 5 percent, because, you know, investors already thought that...

DOBBS: Which way do they miss?

Do they miss high or low?

Are they overly eager?

ROMANS: Well, they've been underestimating recently. They have been underestimating the strength of Wall Street.

DOBBS: So, they're missing on both sides.

ROMANS: They're a little bit gun-shy, apparently.

DOBBS: Good lord, if you're only right 20 percent of the time, you've got a right to be gun-shy.

ROMANS: But they're not having the private meetings they used to have with the CEOS, where the CEO's told them, you know, I guess exactly how much they were going to be beat by.

DOBBS: The people who call themselves investors are still looking at what Wall Street expects or doesn't expects as some sort of guide posts to investing, deserve a little professional help.

ROMANS: Yes. It's hard to feel sorry for people who are buying or selling stocks based on what the analysts are telling you to do.

DOBBS: Well, I always feel sorry for people who are losing money, irrespective of...

ROMANS: True. True.

DOBBS: And one of the reasons people still lose money is they're betting on companies that haven't cleaned up their corporate behavior.

ROMANS: Absolutely. And GovernaceMetrics, Lou, 675 companies still have what they're calling red flags for failed corporate governance standard. Gavin Anderson at that firm told me that Rite- Aid, Cablevision are among the worst. Rite-Aid, Lou, lost more than 1 hundred million last year, yet the executives got their bonuses nonetheless. Also, noted for poor performance Bristol-Myers, Symbol Technology, and Halliburton, among those.

DOBBS: Halliburton.

ROMANS: Failure to control, I guess, some of this bad PR it's had.

DOBBS: I would say they've been certainly guilty of failing to control their PR.

Christine, thanks. Christine Romans.

DOBBS: Coming up next here, the United States repays a loan from China, but money is no part of this deal. We'll have this story for you.

But first, we want to update a list of companies that we've confirmed to exporting American. Companies either sending jobs overseas to those cheap labor markets. Tonight's additions include Countrywide Financial, LightBridge, neoIT, and Tropical Sportswear, the complete list, please log onto

We'll be right back, stay with us.

(COMMERCIAL BREAK) DOBBS: The race for the Democratic presidential nomination. Fifty-two percent of you say that it is over, 48 percent stubbornly say, no way. Therefore we'll have those primaries.

Finally tonight, the first American born panda to survive more than year, moving back to her ancestral homeland of China. The 4- year-old giant panda named Hua Me has been one of the most popular animals at the San Diego Zoo. Her return part of the 12 year loan agreement that brought her parent to the United States in '96. That agreement that says any offspring that survives more than three years be returned to China.

That's our show for tonight. We thank you for being with us.

Tomorrow, southern exposure. We'll take a look at the race for the Democratic nomination. I'll be talking with the party chairman of Tennessee Randy Button.

And "Exporting American," the U.S. Chamber of Commerce says it's good news. Chamber president, Tom Donahue will join me to debate with you. Please join us.

For all of us here, good night from New York. "ANDERSON COOPER" is next.


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