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LOU DOBBS TONIGHT

House Republicans Call For Change In Leadership; Israelis Pray For Ailing Ariel Sharon; Bush Says State of Economy Is Strong; Mine Survivor Making Some Progress; Sago Mine 911 Tapes Released; IBM Breaks Pension Promises; Crackdown Promised on Border Crime; Lawmakers Rush To Return Tainted Abramoff Cash; Microsoft Shuts Down Blog Critical Of Chinese Government; Florida Supreme Court Rejects School Vouchers, Debate Continues; Army Specialist Douglas Sczcepanski Severely Wounded In Iraq

Aired January 6, 2006 - 18:00   ET

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


LOU DOBBS, CNN ANCHOR: Wolf, thank you very much. Good evening, everybody.
Tonight, anxiety and despair in Israel as Ariel Sharon clings to life and the future of Israeli-Palestinian peace talks hang in the balance. We're live in Jerusalem.

And then, chilling 911 tapes from the Sago mine disaster, new developments in the condition of the sole survivor. We'll have complete coverage.

Homeland Security Secretary Michael Chertoff is promising a crackdown on violence along out southern border with Mexico. But he's failed to actually provide any details. We'll have the special report.

And one day after the Florida Supreme Court took a stand on school vouchers and the strength of public education, we'll be debating the controversial ruling, a ruling that could affect schools across the entire nation, with the two attorneys who argued the case before the Florida Supreme Court.

But we begin tonight with an extraordinary revolt by two dozen House Republicans. Those Republicans are demanding elections to permanently replace Congressman Tom DeLay as majority leader of the House. DeLay, of course, is facing money laundering charges in Texas. The House rebellion is a sign of increasing frustration among Republicans, not only with the party's leadership but also with the Jack Abramoff lobbying scandal.

Ed Henry has the report from Capitol Hill -- Ed.

ED HENRY, CNN CORRESPONDENT: Lou, that's right. In what could be a death knell for Congressman Tom DeLay's hopes of ever returning to the House leadership, a wide coalition of moderates and conservative House Republicans officially now calling for these leadership elections in early February.

The purpose would be to find a permanent replacement for DeLay as majority leader, but we're being told it could also explode into a much bigger shakeup, with everyone from Speaker Dennis Hastert on down potentially facing Republican challengers for their leadership jobs.

The effort is being led by conservative Republican Jeff Flake of Arizona and moderate Republican Charlie Bass of New Hampshire. They're circulating a petition, and internal House Republican rules require them to get 50 signatures on that petition to hold an official meeting to get the ball rolling on new leadership elections.

Sources telling CNN producer Deirdre Walls (ph) that this coalition already has at least half of the signatures they need to pressure Republican leaders to clean house. The leader of this, Congressman Flake, told me by phone a short while ago, quote, "We don't just need new leaders. We need a serious course correction or we're going to be in the minority."

Flake cited the Abramoff lobbying scandal as a major impetus to this, saying the ground has shifted dramatically in the last 48 hours. And House Republican leaders have underestimated the impact of the scandal. Quote, "It's a different ball game," he said. "We've crossed the Rubicon."

Flake added that Speaker Hastert's job could be on the line if he fails to support a real reform agenda to clean up the influence game, the lobbying game in Washington. He was referring to the fact that he believes it's a cop-out for Republican leaders to respond by saying they want to beat up on lobbyists and blame the scandal on those lobbyists by reforming -- coming up with reform legislation the Republican rank and file really believes may be window dressing.

One Republican signing onto this petition tonight, Congressman Chris Shays, put out a statement saying, quote, "Jack Abramoff's guilty plea and his close association with Tom DeLay underscore the need for a new majority leader in the Republican Party. It is time that we make it clear that ethics are an essential part of how we do business, and our leadership needs to reflect this strong ethical conduct."

DeLay's office, though, is firing back. They have a statement of their own. His spokesman, Kevin Madding, insisting DeLay is not worried. Quote, "Mr. DeLay appreciates that a majority of his colleagues recognize he's committed to fulfilling his responsibilities as majority leader, which he believes he will resume rather quickly."

Speaker Hastert's office, his spokesman, telling CNN that all of this is, quote, "consistent" with the speaker's announcement that this would only be a temporary structure and that House Republicans would revisit the issue at the beginning of this year.

So that's what they're saying.

So in another major development, we're just getting word. CNN has confirmed with two sources close to a separate case that former congressman, Randy Duke Cunningham, wore a wire in which conversations were recorded for a short time after he agreed to cooperate with the FBI and before he pled guilty to accepting bribes.

The sources say the aim of the wire was to gain information in that ongoing investigation of defense contractors. The wire was not aimed at members of Congress. But, Lou, I can tell you Republican lawmakers are very nervous about what the defense contractors may have said to that wire.

If -- that story, first reported by "TIME" magazine that Duke Cunningham wore a wire. CNN now confirming that between the Abramoff scandal, the Cunningham scandal there are Republicans on the Hill who are very nervous about where all this is headed, Lou.

DOBBS: Republicans and some Democrats, as well. And as Congressman Barney Frank said on this broadcast last night, the fact is the Bush administration here deserves credit, its Justice Department prosecuting these cases and moving forward.

But essentially, lost in much of the coverage of this remarkable and widening scandal is the fact that Jack Abramoff is only one among 14,000 lobbyists covering Washington. How wide is this concern and this scandal going to go?

HENRY: Well, you're certainly right, Lou, that there is -- across the board there are a lot of problems in the lobbying business that clearly lawmakers now feel pressured to finally clean up. But I think it's also important to point out that not all lobbyists are bad. Not all lobbyists are criminals like Jack Abramoff, who has now pled guilty to defrauding his own clients.

DOBBS: Should also point out not all congressmen are guilty of something, as well?

HENRY: Absolutely. And I think, you know, that's why, though, this has to be looked at carefully. And it is. And you're right. The Bush Justice Department is going after it even though it's mostly Republicans so far.

DOBBS: And we're going to continue with your good help to continue to look very hard at what is happening and report on what has become an overwhelming massive political dominance on Capitol Hill by principally corporate and social special interest lobbyists, some of which, in fact, are actually writing laws for the men and women we've elected to do so.

Ed Henry, thank you very much.

Turning now to Israel, where Prime Minister Ariel Sharon is fighting for his life tonight. Doctors have performed 13 hours of surgeries over the past two days following what they describe as a massive stroke.

Today doctors say Sharon is in critical but stable conditions, but Israelis have begun to come to terms with the near certainty that their prime minister will never return to power.

We turn now to John Vause in Jerusalem with the latest -- John.

JOHN VAUSE, CNN CORRESPONDENT: Lou, right now Ariel Sharon is in intensive care on a life support machine and in a medically induced coma hours after emergency surgery. Doctors say he will stay in the coma until Sunday at the earliest. That is when they may make the decision to slowly revive the 77-year-old prime minister.

Israelis are observing the Jewish Sabbath today, a day of prayer. And today they have been praying for Ariel Sharon.

(BEGIN VIDEOTAPE)

DR. SHLOMO MOR-YOSEF, DIRECTOR, HADASSAH HOSPITAL: Even though the result of the CAT scan are better than yesterday, the condition is still critical.

VAUSE (voice-over): Even so, few here are under any illusion he will leave this intensive care ward able to lead his country. And for some that continues to be a reason for celebration.

Six months ago a small group of Jewish mystics put a death curse on Ariel Sharon because he ordered Jewish settlers to leave Gaza and handed the land to the Palestinians. The evacuation was necessary, Sharon said, for the security of Israel.

MICHAEL BEN HORIN (through translator): Every dog has his day. Today you're against us and tomorrow it will hit you back.

VAUSE: ... says this is man who took part in the death curse.

And from Palestinian militants, hope that the end will come soon for a man they despised more than almost any other.

SHEIKH HAMED BITAWI, HAMAS LEADER (through translator): All the Zionist leaders are criminals and terrorists, but Sharon is No. 1. He has committed crimes for 50 years.

VAUSE: But in the normally fractious world of Israeli politics a rare display of national unity. The major parties have rallied around the acting prime minister, Ehud Olmert.

SHIMON PERES, FORMER ISRAELI PRIME MINISTER: I think every citizen has to support him, so do I. I wish him success. And I hope that the continuation of the peace process.

(END VIDEOTAPE)

VAUSE: There are now real concerns that, without the dominant figure of Ariel Sharon, there may be no other Israeli leader who has the determination or the support to push through a peace deal with the Palestinians -- Lou.

DOBBS: Thank you very much, John Vause.

Joining me now from Jerusalem Wolf Blitzer, the host of THE SITUATION ROOM.

Wolf, how are Israeli politicians of all parties preparing now for the near certainty that Ariel Sharon will never return to the prime minister's office? WOLF BLITZER, CNN ANCHOR: Well, the acting prime minister will become the prime minister, at least until the elections that are now scheduled for March 28. That would be Ehud Olmert. He's a close associate, a close ally of Ariel Sharon, former mayor of Jerusalem in his own right. He's going to be the leader, by almost all accounts, of this new centrist party, the Kadima Party, that Sharon had founded. He'll top that list.

On the right the Likud leader will be Benjamin Netanyahu, the former Israeli prime minister. On the left will be the Labor Party led by a union leader here in Israel named Amir Perez. Those are the three dominant parties.

A poll today in a couple of Israeli newspapers showed that even with Olmert atop the centrist party list, that party would do best in the elections if they were held today.

But I have to tell you, Lou, covering Israel for a long time, between now and the end of March it's a long time in Israeli politics. A lot can change on the ground.

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

Secretary of State Condoleezza Rice has canceled a six-day trip to Indonesia and Australia because of Ariel Sharon's illness. The secretary also spoke with Israel's acting prime minister, Ehud Olmert, to express her solidarity with Israel. Meanwhile the White House says President Bush is continuing to pray for Sharon's recovery.

President Bush also focusing on the economy today. President Bush highlighted today's employment report, which showed the nation's unemployment rate down slightly to 4.9 percent, a historical low. But the president made no mention of the desperate plight of many middle class Americans now besieged by rising living costs and declining standards of living.

Suzanne Malveaux reports from the White House.

(BEGIN VIDEOTAPE)

SUZANNE MALVEAUX, CNN CORRESPONDENT (voice-over): It was an all out blitz.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In 2005 the American economy turned in a performance that is the envy of the industrialized world.

MALVEAUX: President Bush before economists, and earlier at the Chicago Board of Trade.

The vice president, hobbling from an old minor foot injury, through several stops in Kansas, revving up the administration's message at a Harley-Davidson plant.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Our job now is to maintain the momentum of the economy, to keep confidence high. And we can start on the tax front.

MALVEAUX: The president's top economic advisors fanned out across the country to promote one message.

BUSH: We're strong. And I'm optimistic about the future of this economy.

MALVEAUX: Foreshadowing the State of the Union address, the president is making the case that the state of the economy is strong, with unemployment now under five percent, homeownership up and the record breaking gas prices of the summer down.

But the news out of the Labor Department today was disappointing. In December, 108,000 new jobs were created, much lower than the 305,000 new jobs created the month before.

Democrats say that's precisely the problem, that the middle class isn't feeling any economic boom. In fact, they say most average Americans are being squeezed by the high costs of heat, medical care, and college tuition.

But economic analyst Greg Valliere says the big picture looks bright.

GREG VALLIERE, STANFORD WASHINGTON RESEARCH GROUP: In terms of real income and consumer pockets the last couple of years have not been very great. On paper, I think people have done pretty well, with real estate. Maybe people will start to do much better with the stock market, which has gone up. But this is a good economy not a great economy right now.

(END VIDEOTAPE)

MALVEAUX: And, Lou, really in the rough and tumble world of Chicago politics it was Senator Dick Durbin of Illinois, the Democrat there, who was actually accompanying President Bush today in his tour of Chicago, who as soon as President Bush got on Air Force One, soon after held his own press conference talking about how he wanted to set the record straight here, how just difficult it has been for the middle class.

We also got a statement from Congressman Charlie Rangel, a scathing statement from him, saying this is really more of the president's same tired agenda. He goes on to outline some of the things they are talking about, namely the widening gap between the rich and the poor, the fact that the national poverty rate has gone up in the last four years, the fact that they say some of the wages can't keep up with inflation.

There are also economists who point to the national debt, now at $8 trillion, and the administration's effort to try to raise the debt ceiling -- Lou.

DOBBS: Suzanne Malveaux from the White House. Thank you, Suzanne.

Still ahead here, chilling 911 tapes from the Sago mine disaster. We'll be going live to the mine for the latest.

Also Homeland Security Secretary Michael Chertoff. He's talking tough about border security. But will he and the Homeland Security Department be tough? Will they deliver? We'll have a special report.

And middle class Americans facing a new attack on their standards of living. Even their pensions under assault. We'll have the story. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, as the nation grieves the loss of 12 brave coal mine workers, officials are releasing new details of their last desperate hours, and families are sharing with us the last heartbreaking notes from those miners. All of this as uncertainty deepens over the condition of the lone survivor of the Sago coal mine blast, Randal McCloy.

We have two reports tonight: from Brian Todd in Upshur County, West Virginia, the scene of the deadly disaster and from Pittsburgh, Chris Huntington, where Randal McCloy is being treated.

We begin with Chris Huntington -- Chris.

CHRIS HUNTINGTON, CNN CORRESPONDENT: Lou, Randal McCloy is doing better. That's the good news. He is still in critical condition, but here is how the lead doctor on this team here at Pittsburgh's Allegheny General Hospital put it at a press conference just a short time ago.

(BEGIN VIDEO CLIP)

DR. RICHARD SHANNON, ALLEGHENY GENERAL HOSPITAL: Randy is holding his own in the face of what are six or seven serious life threatening issues. And he's demonstrated today the ability for some of those things to get better.

(END VIDEO CLIP)

HUNTINGTON: Now particularly, McCloy has shown improvement in his cardiac ability. His heart is strong. And they feel that that is one of the best features of his recovery.

What they are most concerned about, Lou, right now is the condition of his left lung. This had been the lung that was collapsed. It's still collecting fluid.

They're also concerned about the recovery in his brain. CAT scans have shown some lesions in the rear part of his brain. The good news on that part the second of those images shows no -- no worsening of that condition. So there's for now saying that the brain injury has stabilized.

Lou, perhaps one of the most encouraging signs of Randal McCloy's progress was the look on his wife's face just a few minutes ago. We had a chance to meet with Anna McCloy. And she told us what she would say to her husband when he wakes up.

(BEGIN VIDEO CLIP)

ANNA MCCLOY, WIFE OF RANDAL MCCLOY: I thought about that a lot. I'll probably be speechless. I mean, I know I'm going to squeeze him. I'm going to squeeze him, because right now it's kind of hard to hug him like you want to hug him. And I'm going to just tell him how much I love him and how much I'm proud of him.

(END VIDEO CLIP)

HUNTINGTON: Lou, Anna McCloy and other members of the McCloy family are spending every possible moment in the room with Randy McCloy. In fact, she's sleeping in the room with him. And Lou, one final thing: she went out to buy some of his favorite music today, Metallica. She plans to play that tape for him in his room -- Lou.

DOBBS: Chris, thank you very much. Chris Huntington from Pittsburgh.

Tonight, newly released 911 audiotapes are shedding some new light on the very first minutes of that Sago mine disaster. Brian Todd joins me now from Upshur County, West Virginia, with the story -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Lou, these tapes are really chilling accounts of the first minutes after that explosion. This is really the first account, the first inkling the world gets what's gone on inside the Sago mine.

Nearly an hour and a half passed between the initial explosion at about 6:30 a.m. and the first 911 call, which came at 7:55 a.m. from someone at the mine to the 911 operator. Fifteen minutes later the first responders got on the scene. And here's what they said to the 911 operator.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: Be advised we're being informed -- we are on scene. We're being informed that there are several men trapped inside. We're going to need a lot of help.

UNIDENTIFIED MALE: Ten-four 1277 5809.

(END AUDIO CLIP)

TODD: Now we know of no known calls between Monday morning, when that call went out, until late Tuesday night, when the 911 operators in Upshur County got calls from first responders at the mines that -- these were the erroneous reports that the miners were alive.

Shortly after that, about a minute after that, you hear this call from an emergency responder on the scene trying to get vehicles up to transport patients. Listen to this.

(BEGIN AUDIO CLIP) UNIDENTIFIED FEMALE: OK. I need 10 medic units. I need you to notify health nets. Get me any available aircraft that can fly.

I need you to call Webster County, find out how far the critical care truck is out.

(END AUDIO CLIP)

TODD: Shortly after that, they got yet another call from a sheriff's deputy saying that the miners were still alive.

The 911 supervisor in Upshur County tells CNN they got no official call that the miners were dead. She says they found that out by watching the news -- Lou.

DOBBS: Brian, thank you very much. Brian Todd.

Still ahead here, new outrage over IBM's broken promise to its middle class workers. We'll have that story.

And then fallout from the Jack Abramoff scandal. We'll tell you who's giving back campaign contributions and tainted money, and who's refusing to part with that Abramoff cash.

And why Bill Gates, one of "TIME" magazine's Persons of the Year, is now helping suppress freedom of speech, freedom of the press. We'll have that story, next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: IBM is one of the largest, most profitable corporations in the world, recording almost $100 billion in revenue last year. But this company still says it needs to cut costs by ripping up a key financial contract with its middle class work force. This is just the latest firm to go back on its pension promises.

Christine Romans has the report.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): IBM, ending its long-time practice of giving solid, dependable pensions to its loyal workers. The pensions that help build the American middle class.

KAREN FRIEDMAN, PENSION RIGHTS CENTER: There will be thousands of workers who are going to lose thousands and thousands of dollars of benefits.

ROMANS: The company says it's following, quote, "a global strategy to move toward defined contribution retirement plans for both existing employees and new hires." That means freezing pensions and pushing employees into more unpredictable 401(k)s.

FRIEDMAN: IBM is saying we are forgoing our pension obligations to our workers, and instead we're basically going to tell people that they have to save for themselves.

ROMANS: An IBM employee group that advocates unionizing denounced the benefit cuts. Quote, "The next generation of workers will be in worse shape financially than this one. It is obvious that corporations of today do not value the work employees do."

Indeed, IBM is the latest to jettison its pension plan. Nearly half of traditional pension plans have disappeared in the last decade. At IBM 125,000 current retirees will not be affected; 117,000 current employees will.

Among the complaints from some IBM workers on a Web blog, "Thanks, IBM. What are the executives sacrificing for the benefit of competitiveness?"

"That pension was the carrot that kept us from looking outside of IBM for opportunities. IBM, over the next five years, will see a healthy level of voluntary attrition of experienced and skilled professionals."

Pension experts say defined benefits, good for employees, are giving way to defined contributions, good for companies.

JACK VANDERHEI, EMPLOYEE BENEFIT RESEARCH INSTITUTE: There are going to be those employees who do better under the defined contribution plan and those that don't do as well.

ROMANS: He says IBM's new 401(k) program appears generous, but the burden is now shifting to the American worker.

(END VIDEOTAPE)

ROMANS: What's worrying so many is this is no bankrupt airline or a failing industrial company. This is a highly successful, profitable company freezing its pension.

IBM has one of the largest nation pension plans and is a leader in benefits. It's widely expected that many other healthy companies will now feel free to follow suit -- Lou.

DOBBS: Thank you very much, Christine Romans.

Still ahead here. Some members of Congress are handing back that tainted cash from lobbyist Jack Abramoff and his clients. Some aren't. We'll have the latest for you.

And how Microsoft and communist China have hooked up, joined forces to suppress free speech. Our special report is coming up.

And the nationwide fight over school vouchers after the state Supreme Court of Florida took a stand. I'll be talking with the attorneys representing both sides of this case here next. Stay with us.

(COMMERCIAL BREAK) DOBBS: Still ahead I'll be talking with three of country's top political minds about what has turned out to be a Republican revolt in the Abramoff scandal, of course, which has prompted the revolt and what kind of week this has been for President Bush.

But first, let's take a look at the hour's top stories.

Israeli Prime Minister Ariel Sharon clings to life after his latest emergency surgery in Jerusalem today. Doctors say that his condition is stable. Sharon -- Sharon remains in very serious condition, suffering a massive stroke Wednesday.

In Turkey today health officials say another person has died from the deadliest form of the bird flu. The third person to die of the bird flu in Turkey this week.

A new arrest tonight in the United Nations oil-for-food scandal. A South Korean lobbyist has been arrested for his role in the affair and for allegedly received $2 million from the Saddam Hussein regime. He is one of nine people now charged in the oil-for-food scandal.

Tonight the Homeland Security Department has finally taken notice of an alarming wave of violence by illegal aliens and drug smugglers along our southern border with Mexico. Homeland Security Secretary Michael Chertoff, in fact, announced a crackdown on the violence. And amazingly, the federal government finally appears ready to work with local law enforcement in the fight to secure our borders.

Casey Wian has the story.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Assaults against border patrol agents have nearly doubled in the past year, the price of smuggling an illegal alien is rising, and border jumpers are resorting to more desperate measures.

Homeland Security Secretary Michael Chertoff says these are all signs his department is doing a better job controlling the border. Now he vows to crack down even harder with a series of federal border task forces that will use resources from state and local law enforcement.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: We're not going to signal in advance necessarily where we're going to be, because we want to keep the enemy guessing. But we are going to use this as part of one element of a comprehensive program, including more personnel, more infrastructure and more technology to get the control of the border that the American people have a right to expect.

These criminals, smuggling organizations don't care whether they are risking the lives of our border inspectors. And they don't care if they're risking the lives of the people who are stuck in the gas tanks or the dashboards. They simply want to make money at the expense of human misery. WIAN: Chertoff's talk at the border crossing near San Diego was tough, though short on specifics. Border state lawmakers are pressing for answers.

REP. DUNCAN HUNTER (R), CALIFORNIA: I asked him to look at this amendment that we just passed in the House. It calls for 700 miles of fencing across the southern border this year, a lot of it before the hot season when people start coming across and dying. He agreed to look at that closely. And my recommendation to him is that he work with the Senate. We've got to get it past the senate. His endorsement would go a long way.

WIAN: Another concern, U.S. attorneys along the border often refuse to prosecute all but the most egregious human smuggling cases. While Chertoff met with San Diego's U.S. attorney, he didn't say how that will change.

(END VIDEOTAPE)

WIAN: Chertoff did praise the Mexican government for prosecuting some human smugglers that don't meet U.S. prosecution guidelines. He says there have been 15 cases of smugglers prosecuted in Mexico since the program began in August. This is, of course, Lou, the same Mexican government that has been so critical of recent U.S. border security efforts -- Lou.

DOBBS: Casey, thank you very much. Casey Wian.

More than 70 of our lawmakers, both Republicans and Democrats, are rushing to return tainted campaign cash from lobbyist Jack Abramoff and his clients. Lawmakers have so far coughed up more than $700,000 of donations out of an estimated 4.5 million handed out by Abramoff and his clients the last five years.

But other Congressman, many of them Democrats, flatly refuse to give that money back. Those include Congressman Patrick Kennedy, who received some $42,000 in Abramoff client donations, Senator Debbie Stabenow, who received 4,000, Senator Carl Levin, $2,000, Congressman John Dingell, Congressman John Doolittle and Senator Patty Murray also refusing to give that money back.

And, as previously reported here, the leading Democrat in the Senate, Minority Leader Senator Harry Reid refuses to give back $61,000 in donations from Abramoff's clients. Other Congressman on the fence, Senator Arlen Specter for one says he can't decide whether to give back $6,000 in net cash.

And some Congressman are giving back only part of their money. We haven't quite figured out the formula they are using. Democratic Congressman Charlie Rangel is giving back $2,000 of Abramoff donations. He's keeping some $47,000 from other Abramoff clients.

Joining me now to help sort all of this out, parsing, if you will, ethics and campaign cash, Joe Klein, "Time Magazine" columnist, former White House political director Ed Rollins, "Wall Street Journal" columnist John Fund. Gentlemen, good to have you here.

I have got to ask you, Ed. These folks not returning money, that's pretty fancy ratios that they have come up with.

ED ROLLINS, FMR. W. HOUSE POLITICAL DIRECTOR: Well, the bottom line is some of them think they are election proof, but I promise every single one of them will pay a lot more defending themselves than the money they should have given back.

DOBBS: I love the way that we're all in this media, the national media, covering the stories. If Abramoff is one lobbyist in Washington, D.C., and there are only $4.5 million being pushed around the table for our lovely elected officials. Should we be concerned beyond this?

JOE KLEIN, TIME MAGAZINE: Well, you know, it's what happens, and what academics call mature democracies. The special interests become more and more powerful. Their ways and means more and more ornate. And every once in a while you've got to clean out the stables. I think we're reaching that point now.

DOBBS: Are the Democrats going to be able to use this scandal to hammer the Republicans, take away the majority and assert themselves into power in 2006?

JOHN FUND, COLUMNIST, WALL STREET JOURNAL: Well, the last big congressional scandal was the House bank scandal. It affected members of both parties. But the party it hurt was the party in power.

DOBBS: Sure.

FUND: And that's what is going to happen here. I think the Republicans have to go back to first principles. They forgot that they were elected by voters to limit government. A lot of them came to Washington drained the swamp and decided it made a great hot tub.

DOBBS: Well, hot tub or swamp, it sure smells like a swamp if it's not.

ROLLINS: Historically when a party gets wiped out it's because their own voters get irritated. And if Republicans feel these guys haven't cut the budget, they are not living up to the ethical promises they made, and they are just like a bunch of Democrats, why should we even bother to vote. And at the end of the day if they don't turn out and vote, then there will be some changes.

KLEIN: But never under estimate the ability of Democrats to blow a promising situation. I mean, we don't know how this thing is going to--how this is going to look by next fall.

And I suspect that between now and then you're going to have Tom DeLay run out of town on a rail. You're going to have a reform movement. The Republicans are going to begin to own some of the lobbying reforms that the Democrats like Barney Frank have proposed.

FUND: Well, the real lobbying reform...

DOBBS: Which, by the way, I think we need to say. The reforms that are 14 points. I think most of them in point of fact make great sense. Unfortunately, for Barney Frank and those of us who would like to see reform, he's a Democrat, and the House is run by Republicans.

ROLLINS: There's a Democrat, I mean a Republican who is going to play a very prominent role, that's John McCain. John McCain is going to step front and center on the issue. A lot of Republicans aren't going to like what he is going to say. But the public out there is going to like it.

FUND: And his centerpiece is pork. A lot of the problems that Abramoff created was because he was able to get small bits of pork buried in the budget with no accountability. That's what the real problem is. The problem the Democrats have is they like the pork, too.

KLEIN: That's right. And also, the lobbyists have always been with us. Mark Twain wrote a wonderful book called "The Gilded Age" in the 19th century and things haven't changed all that much.

DOBBS: And it's nice to know there's been so much progress.

(CROSSTALK)

FUND: And they used to pay cash on the barrel head.

DOBBS: One other area where we're going to see bipartisan combination and principal ethic concern for the national interest will be in the Judge Sam Alito hearings. I'm sure that everyone will come together, assess carefully his capacity, his character, and his talent and make a judgment irrespective of political party allegiance, aren't you, Ed?

ROLLINS: Yes, they could actually vote tomorrow because the vote is going to stay the same. I mean, this is an extremely qualified man. But the bottom line is those that are partisan and against his issues are going to vote against him no matter what he does in the course of the hearings.

KLEIN: Well, the interesting thing here is that the Democrats have moved away from the abortion issue or seem to be toward Alito's own ethics and also his feelings on executive power, which are particularly relevant now that this NSA business is very much in the public.

FUND: The Democrats are in a difficult position. They have to oppose Alito but not so much to mount a filibuster, which will make them look as if they are obstructionist, but they have to oppose him enough to satisfy moveon.org and the Howard Dean constituency. So they have to walk a fine line.

KLEIN: So they are doing Mickey Mouse things like delaying the vote for a week. I mean, that doesn't serve them very well.

DOBBS: As you say, it doesn't serve them well.

And the other part of this that is becoming so clear, so obvious to the American people whether it be the Abramoff scandal, it's all about the cash that our elected officials are chasing for their re- election.

In the case of Judge Alito, it's all about the cash from both sides of the political spectrum. But these interest groups are sitting there chasing cash. They are trying to raise money.

FUND: But why is the cash there? Because the government has become so big and so all powerful. Because the Supreme Court has taken on to itself so many powers that used to be held by legislatures.

If you have that much power--you know what Jack Abramoff once said before he went bad? He said government money in the water is just food for sharks. He became a shark. You have a government this powerful, you are going to have this many lobbyists. You are going to have this many people turning the Supreme Court nomination process into a circus.

DOBBS: You said before Jack Abramoff went bad. Did you mean before Jack Abramoff was caught?

FUND: No, I think Jack Abramoff was corrupted by Washington. That's the tragedy.

ROLLINS: Poor Jack.

KLEIN: I think he was born a shark.

ROLLINS: I think so, too.

DOBBS: Before we get into the relevance of genetics versus environment on the issue of corruption and principle, I want to say thank you all and appreciate your being here.

Coming up at the end of this broadcast, I'm going to have a few strong words about that corrupt swamp that we call Washington and for those tender members of Congress who seem to have rather flexible principles.

Do you really want to do business with this man? Bill Gates. He's now helping communist China sensor its own people. Microsoft has shut down a popular Chinese blog solely because it was critical of the Chinese government. Microsoft has now joined Cisco Systems and Yahoo! in censoring the Chinese people all in the name of doing business with communist China.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): An estimated 100 million Internet users in China, but one less today because the communist Chinese government requested it and Microsoft obeyed, shutting down the Web page of one Chinese blogger that discusses politically sensitive issues.

Microsoft saying today in a written statement, "Officials of the Chinese government notified MSN China that this blog had violated their local laws and requested its removal. Based on this explicit government notification MSN blocked the MSN space in order to comply with local laws."

What about free speech, American values and good corporate citizenship? The Global Citizenship at Microsoft Web page reads, "As a successful global corporation, we have a responsibility to use our resources and influence to make a positive impact on the world and its people."

But the statement today takes a cautionary tone, "While this is a complex and difficult issue we remain convinced it is better for Microsoft and other multinational companies to be in these markets with our services and communications tools as opposed to not being there."

Chinese media reports say Microsoft is investing even more in China. Another $13 million partnering with a Chinese software firm. Reporters Without Borders, an international organization that monitors free speech in China says it's a case of business at any price.

LUCIE MORILLON, REPORTERS WITHOUT BORDERS: Some of these companies are ready to do whatever it takes just to be able to get the slice of this huge Internet Chinese market, which is second Internet market after the U.S.

PILGRIM: Reporters Without Borders charges you cannot enter search strings such as democracy or human rights in China or capitalism, as they are automatically rejected by the system. They also blame Yahoo! and Google for similar restrictions in China.

Kitty Pilgrim, CNN.

(END VIDEOTAPE)

DOBBS: And that brings us to the subject of our poll tonight. The question, do you believe that American companies like Microsoft are compromising American Democratic values in order to profit from business in Communist China? Cast your vote, please, at loudobbs.com. We'll have the results coming up.

Still ahead here, God bless the Florida Supreme Court. It's handed an important victory to our nation's public schools. We'll debate this closely watched rulings with the attorneys who argued both sides of the case.

And in "Heroes" tonight, our weekly salute to our men and women in uniform. The story of a soldier who survived a brutal attack during a mission in Iraq. Those stories and a great deal more still ahead here. Stay with us.

(COMMERCIAL BREAK)

DOBBS: We reported here last night a major victory for the nation's public schools. The Florida Supreme Court overwhelming rejected that state's controversial school voucher program. The court said school vouchers undermine public schools by funding their competitors, private schools.

I'm joined now by the two attorneys who argued this case before the court. Ron Meyer, representing the coalition challenging the voucher program joining us from Gainesville. Barry Richard arguing on behalf of the state tonight in Tallahassee, appropriately enough. Thank you, gentlemen, for both being here.

Ron Meyer, if I can begin with you, what do you think is the primary reason that you won this case?

RON MEYER, ATTY. FOR GROUP CHALLENGING VOUCHERS: Well, the Constitution is pretty unambiguous in Florida. When the National Education Association and the Florida Education Association decided to underwrite this litigation on behalf of the coalition of interest groups that care about public education, trying to stop the diversion of public monies to private schools that have no criteria to follow, we felt that the constitution in Florida was very clear.

Indeed, six months into the litigation, Judge Smith in Tallahassee ruled essentially what the Supreme Court found yesterday, that it's unconstitutional to deprive the public schools of money to run unregulated private schools. So what we have ...

DOBBS: Barry did you ...

MEYER: ... is a good decision.

DOBBS: A good decision -- I'm not certain that Barry Richard would agree. Do you, Barry?

BARRY RICHARD, ATTY. REPRESENTING FLORIDA: Well, it's certainly not the decision that I argued for. It depends, really, upon how broadly the court interprets this is decision.

This act was a good faith effort by Governor Bush and the legislature to find a creative solution to the intractable problem of failing schools. The court spoke about the necessity under the Constitution for uniformity in education and this was directed at a different type of uniformity in the sense that it doesn't matter what the Supreme Court says about the necessity for public education if you've got a child who is in a failing school and whose parents don't have the financial wherewithal to take that child out and put him in a private school as many wealthier parents do.

That child is stuck. And this was a good faith effort to find an interim solution for that child, also to bring some creative correction to the school system.

DOBBS: Will there be an appeal of this decision, Barry? RICHARD: That's not a -- well, my client and I are currently studying that. And I'm not sure whether or not there's an appellate opportunity.

DOBBS: How many students were involved in the voucher program in Florida, Ron?

MEYER: There are approximately 750 involved in the Opportunity Scholarship Program. However, there are two other voucher programs, one known as the McKay Scholarship with about 16,000 children, and another known as the Corporate Tax Credit Scholarship with about 14,000.

So we're spending tens of millions -- indeed hundreds of millions of dollars to fund private schools that have no accountability, that have no standards to meet. That's just wrong and inconsistent with what the people say.

DOBBS: Well, there are those -- Ron, you realize there are those who would say that our public schools have no accountability, either because what the state of public education is in this country is dismal by any standard.

MEYER: Well, I'm not sure I agree with that.

DOBBS: So, I mean we can argue this case on the merits certainly but not by the bang-up jobs that public educators are doing either.

Can I ask you both to sort of step back from your roles as counsel and representatives in this case and talk about public education, because it seems straightforwardly, to me at least, that public education is in crisis.

And yet we are doing something the British call too clever by half. We are coming up with vouchers and charter and magnet schools instead of taking control of the schools whose responsibility it is to teach our young people.

Is there -- in the Florida State Supreme Court decision here a message that it's time for communities to take control and responsibility for public education in their communities -- Ron.

MEYER: Well, certainly the Supreme Court recognized that the people of Florida in 2000 amended the Constitution to make a high quality system of free public schools the paramount duty of the state. And, frankly, the state has failed in meeting that paramount obligation. It's not put the kind of resources into public schools that are required to bring them up to snuff.

But let me also address something that Barry said. No child was trapped in a failing public school. A child who was in a school that was identified as having performance problems had the absolute right to transfer to a high performing public school. What we need to be doing is fixing the public schools, Lou. We don't need to be draining dollars away. There aren't enough dollars now.

DOBBS: Barry Richard, you get the last word here tonight.

RICHARD: Well, we share the same goal. Ron and I and the governor and the legislature and the teachers all have the same goal. None of us want to scrap the public school system. But we've been trying to decades in this state and throughout the country to find a way to fix it without success.

And this was an effort, among other things, to bring some of the -- you understand, Lou, which is free market competition into the school system and just see if that works. I don't know if that's the answer, but we haven't found another answer.

DOBBS: The shame is that in this country and not only in your state, gentlemen, but throughout the country, public education is in crisis. We're all trying to come up with solutions but instead of solutions we're in constant battle as between school districts, the teachers unions, both national and local and political officials, elected officials who seemingly are completely lacking in a commitment to excellence in our public school system which is the backbone of this country's success and certainly for its middle class, and all who aspire to it.

Barry Richard, Ron Meyer, we thank you both for being here. We appreciate you joining us to put some illumination into this issue. Thank you.

RICHARD: Thank you.

MEYER: Thank you for your interest.

DOBBS: Coming up at the top of the hour here on CNN, Wolf Blitzer is in Jerusalem. "THE SITUATION ROOM" with Wolf begins at the top of the hour. Reporting from Jerusalem, Wolf?

WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou. A good discussion back in New York.

Coming up at the top of the hour, the Israeli Prime Minister Ariel Sharon still in critical condition. Find out how he went from being a warrior to a peace maker and why the sudden turn in his health is now threatening, at least potentially, to destabilize the region.

Plus, miner, 911 calls. Hear firsthand what really happened just moments after the explosion in West Virginia.

Also, Pat Robertson himself rebuked now. Yesterday he blamed Ariel Sharon's stroke on God's wrath. Today President Bush has some harsh words for Pat Robertson. We'll have that story.

And Osama bin Laden's number two man, Ayman al-Zawahiri -- he's resurfaced and is personally taunting President Bush. We have the tapes. All that coming up right at the top of the hour -- Lou.

DOBBS: Wolf, thank you very much, and continue the excellent job of reporting out of Jerusalem. Wolf Blitzer in "THE SITUATION ROOM" coming up at the top of the hour, in just about 10 minutes. Up next here, I'll have some strong words for members of Congress, and a few words about the Abramoff scandal.

Also tonight, "Heroes," a young Army specialist making a remarkable recovery after he was wounded in an attack on his convoy in Iraq. His story, a great deal more still ahead. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Our weekly tribute to our nation's "Heroes," the men and women serving this nation in uniform around the world. Tonight, Army Specialist Douglas Sczcepanski severely wounded leading a dangerous convoy mission in Iraq. Lisa Sylvester has his story.

(BEGIN VIDEOTAPE)

DOUGLAS SCZCEPANSKI JR., MICHIGAN NATIONAL GUARD: Shrapnel in my brain. Then I lost sight in my left eye. My jaw was shattered, has two titanium plates in it. The burns on my face and head, all over my head, were second and third degree.

LISA SYLVESTER, CNN CORRESPONDENT: Army Specialist Douglas Sczcepanski is 22 years old. In Iraq, he rode at the head of security convoys to search for threats. He wanted to be a police officer like his dad, but joined the military instead.

The day of the 9/11 attacks, he was supposed to leave for basic training. January 2005, he went to Iraq.

SCZCEPANSKI JR.: The biggest thing that got me through it was I prayed all the time. I mean, my faith was a huge thing. That's -- I prayed all the time before I went on a mission.

SYLVESTER: September 15th, 2005. Sczcepanski remembers it was a beautiful sunny day. He was looking forward to going to Taco Bell on base when his shift was over. During his escort mission, he saw a suspicious vehicle and looked into the driver's eyes.

SCZCEPANSKI JR.: The only way I can describe it is -- is like possessive, like demonic. I mean, he just looked right at me. And then, this is as I was pulling in, and it just exploded.

My hand was pulsating. My face was pulsating. That one moment I thought I was going to die, because I was like, well, you know, I don't think I'm going to make it.

DOUGLAS SCZCEPANSKI SR., FATHER: When you're looking at your kid that looks like that...

SYLVESTER: You...

SCZCEPANSKI SR.: You don't care anymore. It's all stripped away. And you just go back to what you've been trained to do. And we've been trained to attack things with prayers.

Lord, we thank you for this food, we ask you to bless (INAUDIBLE) in Jesus name we pray. Amen.

SYLVESTER: Miraculously, Sczcepanski made it out of Iraq alive, winning several medals for his actions that day, including a Purple Heart. And he also has his family and faith, two forces that are helping him heal.

Lisa Sylvester, CNN, Bay City, Michigan.

(END VIDEOTAPE)

DOBBS: Specialist Sczcepanski hopes to finish his education. Also, thinking about becoming a physician's assistant, and of course we wish him all the very best.

Still ahead, I'll share some of my thoughts on the Abramoff scandal, and I'll have a few words for some members of the U.S. Congress. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Now the results of our poll tonight: 92 percent of you saying American companies like Microsoft are compromising American democratic values in order to profit from business in communist China.

And finally tonight, federal prosecutors are turning up the heat in the Jack Abramoff influence-peddling case, which promises to be the biggest Washington scandal in a generation. We have been reporting here on this broadcast on the overwhelming role of corporate cash on public policy for years, usually under the title of the best government money can buy.

And what has been the reaction of our elected officials and representatives? President Bush and scores of our congressmen and senators, Republicans and Democrats alike, are now returning Abramoff- related money as quick as scalded cats. And what have most of them said publicly about the scandal? Not much.

Here's what they haven't said, though. We know the system is corrupt, and we're sorry for our conduct. We'll fix it. We know that we followed the instructions of our all-powerful corporate masters and special interests lobbies, and sold out the people who elected us, and we're sorry.

We know that we shouldn't let lobbyists actually write the laws and regulations that they have bought and paid for with corporate and special interest money, and we're sorry. We know we've ignored the national interest, and scoffed indifferently at the middle class and our working men and women who no longer have any representation in our government. We're sorry.

But here's what one congressman actually did say. Republican Ralph Regula of Ohio. "I wish it hadn't happened, because it's not going to help us keep our majority." Straightforward talk, raw political talk. Congressman Regula at least gets credit for not doing what many of his colleagues have been doing: Feigning some slight concern for the plight of the average American in the face of politically dominant corporate interests and unchecked social special interest lobbies.

Working men and women no longer have a say in the best government money can buy, while facing stagnant wages, job insecurity, declining test scores for their kids. So here's my wish, Congressman. I wish that Jack Abramoff had been the only lobbyist in Washington, but he wasn't. There are 14,000 lobbyists swarming over government officials in Washington. Now, I hope we find out exactly what that other $2 billion a year in lobbying money has bought. And who, exactly who it's bought.

Thanks for being with us tonight. Have a great weekend. For all of us here, good night from New York. "THE SITUATION ROOM" with Wolf Blitzer begins right now -- Wolf.

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