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LOU DOBBS MONEYLINE
Dow Advances, Nasdaq Declines
Aired March 14, 2002 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Tonight, the Justice Department charges Andersen with obstruction of justice. Andersen accuses the government of abuse of power. We'll hear from Andersen.
The United States now insists that there be peace in the Middle East. International security expert, George Friedman, is my guest.
ANNOUNCER: This is LOU DOBBS MONEYLINE for Thursday, March 14th. Here now, Lou Dobbs.
DOBBS: Good evening, everyone. Less than two hours ago, criminal charges were filed against one of the country's largest accounting firms, Andersen, accused by the Department of Justice of obstructing justice for its role in the collapse of Enron. Those charges, Andersen says, are tantamount to a death sentence for the firm. Andersen now stands as the only entity to have been charged with anything in the unfolding Enron scandal. Tim O'Brien has the report from Washington.
(BEGIN VIDEOTAPE)
TIM O'BRIEN, CNN CORRESPONDENT (voice-over): In announcing the long-awaited indictment, Deputy Attorney General Larry Thompson stressed it was Andersen's partners who had ordered much of the shredding and that the dimension of the operation was massive.
LARRY THOMPSON, U.S. DEPUTY ATTORNEY GENERAL: The indictment alleges that at urgent and mandatory meetings, Andersen partners and others told employees to immediately destroy documents related to Enron. Dozens of large trunks were brought in to haul documents from Andersen's office and Enron's building to Andersen's firm office in Houston in order to destroy literally tons of documents.
O'BRIEN: Andersen has long admitted its employees had improperly shredded documents and had agreed to fire anyone involved and to accept sanctions from the Securities and Exchange commission. But lawyers for Andersen said indicting the firm itself amounted to an unprecedented exercise of prosecutorial discretion and a gross abuse of government power.
RUSTY HARDIN, ANDERSEN ATTORNEY: To indict a company like this with the disastrous effect it will have on 28,000 employees over what is going to prove to be a disagreement over their judgment and not some systemic thing going on within the company, I think it's tragic and it's wrong.
O'BRIEN: The charges carry maximum penalties of only around $500,000 and five years probation, but the practical consequences could be far greater.
JOSHUA RONEN, NYU ACCOUNTING PROFESSOR: I think Andersen is basically no longer on the map pretty much.
I think Andersen will face bankruptcy. It's no longer viable because this indictment will accelerate the defection of clients from Andersen.
O'BRIEN: A prospect that did not appear to trouble the deputy attorney general.
HARDIN: These are serious charges, and it shouldn't be a surprise to anyone that serious charges have serious consequences.
O'BRIEN: Many of the documents were destroyed shortly after the SEC had announced an inquiry into Enron's finances. The government says it will prove the company knew full well the material shredded was relevant to Enron's collapse.
(END VIDEOTAPE)
O'BRIEN: If Andersen goes south, that could wreak havoc on the companies that use that firm to certify their financial reports. The SEC says it was monitoring the situation and expects any effects of the indictment to be temporary -- Lou.
DOBBS: The effects temporary. Is there any embarrassment or statement from the Justice Department that it has indicted an accounting firm before indicting anyone or the firm of Enron in this scandal?
O'BRIEN: Well, interestingly, none of the employees who individually destroyed documents or ordered others to do so was indicted. And that could be fuel for critics who say this prosecution is not at all aimed at punishing employees who broke the law but rather bringing down the company that they work for.
DOBBS: Tim, thank you very much. Tim O'Brien reporting from Washington.
With today's indictment, Andersen says its future as a firm is in doubt, and it raises questions about the effect Andersen's demise would have on the accounting industry, corporate America, its clients, and of course, its 85,000 employees. Peter Viles reports.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT (voice-over): What happens if 2,300 public companies suddenly lose their auditor? That scenario today became a little less farfetched. Andersen is still very much in business telling its employees to keep a stiff upper lip and to remind those clients that in this country, an indictment is not a conviction. But analysts were doing the math. What happens if Andersen continues to collapse? Can the remaining big four firms pick up its clients.
LYNN TURNER, COLORADO STATE UNIVERSITY: Could the profession jump in and pick up the pieces? I think the answer is clearly yes, but it's not going to be an easy thing to do. It will be painful. It will be painful for those businesses that have to change auditors.
VILES: At stake if Andersen does collapse, the jobs of 28,000 partners NADER: employees in the United States, $4.3 billion in U.S. revenues, the auditing contracts for 2,300 public companies in the United States. Andersen strongly denied speculation it will file for bankruptcy, but some analysts see that as one strategy to make the firm fit for a merger with one of its big five rivals and potentially an orderly transition. The SEC said it is monitoring the situation to protect investors in those hundreds of companies if Andersen continues to falter.
ARTHUR BOWMAN, BOWMAN'S ACCOUNTING REPORT: You do have a problem. And as I understand, the SEC is having private discussions with the other four firms right now. And there's no telling what that kind of solution will be. But it's going to have to be something quick, because we cannot let chaos overtake the market.
(END VIDEOTAPE)
VILES: Now even in a best-case scenario, if Andersen can somehow survive or orchestrate a merger, analysts say thousands of jobs are likely to be lost, and a vast majority of those people never went anywhere near Enron or shredded Enron documents -- Lou.
DOBBS: We're at the beginning of what is going to be a very interesting period in terms of the Justice Department's decision making. Secondly, a lot of talk here about the disarray that will be created. But in point of fact, Andersen, even under indictment, and again, underlining what you reported, an indictment is not a conviction. They can still assign and then test audits.
VILES: They can still assign and test audits. In the statement from the SEC, the effects here expected to be temporary. You can read that as a statement to these clients. You don't need to go anywhere.
DOBBS: OK, thanks very much, Peter Viles.
Andersen has accused the Justice Department in this indictment of abuse of power, a gross abuse of power. Andersen calls the government's evidence against it flimsy, and the firm says there is no basis at all for this indictment.
Stanley Brand is the outside counsel representing Andersen and joins us now from Washington, D.C.
Stan, good to have you here.
STANLEY BRAND, OUTSIDE COUNSEL TO ANDERSEN: Lou.
DOBBS: You have been expecting, I'm sure, this indictment for some time. Now that it is here, what precisely in your judgment does it mean for Andersen?
BRAND: Well, we didn't expect it because we actually self- reported this to the department months ago. We had hoped to work out an equally effective but alternative resolution of this, which would not put this kind of a cloud over the company and its employees and clients. At this point, as the story indicated in your piece, we believe that there are not sufficient facts to indicate an institution-wide problem or the involvement of Andersen's -- Andersen as a company but rather individuals within Andersen who acted inappropriately and exercised poor judgment, some of whom we have already disciplined.
DOBBS: Disciplined and fired. How many people has Andersen fired?
BRAND: Well, we fired the lead engagement partner.
DOBBS: Dave Duncan.
BRAND: David Duncan. We took some administrative action on others. We were in the middle of determining who else should come within that disciplinary process, and unfortunately, this really throws us in our ability to do that, and we'll now have to turn our attention to defending ourselves in this case. So...
DOBBS: Stanley, as you know, the Justice Department has been pretty clear that it has not been pleased with the speed with which Andersen is responding, the documentation of responses in this inquiry. How long will this process take to determine which individuals will face further, either administrative action or firing?
BRAND: I don't know how the department could be displeased with Andersen's cooperation. We reported this to them. We've given them every document. We testified in Congress under oath, unlike Enron's management, who is almost to demand, asserted the 5th Amendment. Our cooperation has been from the beginning. I don't know how much faster we could have acted. We were trying to get these facts as quickly as we could. That process is aborted by the Draconian and I believe unwarranted exercise at their discretion to indict the entire company.
DOBBS: Two things. You said that process is aborted. What do you mean by that?
BRAND: Well, we can't very well be expected now to continue to deal with our internal situation. Right now, we've got to turn to defending ourselves and making a very strong defense in court to these charges. Remember, we will have to be proven beyond a reasonable doubt in front of a jury. We believe at the end of the day, that insufficient evidence exists to convict a company as an institution on this indictment.
DOBBS: And let's go back to the other point that you mentioned at the outset, and that is the fact that Andersen self-reported to the Justice Department. I don't know of another instance in which an indictment is followed against a firm that self-reported. Do you? BRAND: It's unprecedented, and it's obviously a terrible signal to the community at large. If you can't at least be given credit for having come in and surrendered and made a clean breast of it, and you're going to be indicted and threatened with your existence as a company, I can't imagine there will be too many more people who will want to subject themselves to the voluntary process at the department. Rather, they'll just dig in and fight. I don't think that's in the public interest. I certainly don't think it's in the interest of the industry or Wall Street or our capital markets.
DOBBS: Stan, thank you very much. Stanley Brand representing Andersen as outside counsel. Thanks for being with us here.
BRAND: Thank you, Lou.
DOBBS: President Bush is meeting with Canadian prime minister, Jean Chretien, at the White House this evening. They have been expected to discuss, amongst other issues, the war against terrorism. The two world leaders there at the White House. Let's listen in to the president.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This steadfast support and the Canadian government's steadfast support and the Canadian people's steadfast support in our war against terror. We know the Canadians have put troops on the ground in Afghanistan, and they have performed brilliantly. And for that, we are very grateful.
We also talked about our border, and we've got a great relationship on our border. We had a series of meaningful discussions of putting reforms in place. I believe our border cooperation is going to be the model for, not only our hemisphere, but also for the world.
We also talked about trade issues. Canada is a massive trading partner in the United States. And it's an important trading partner of the United States. And like any relationship that has got a lot of issues, sometimes we run into rough spots, and we have -- and one such issue itself would -- lumber. But our negotiators, as a result of the prime minister's insistence and my insistence, are working overtime to achieve an agreement by March the 21st. We are making very good progress. And we've agreed to keep working hard to achieve an agreement that is satisfactory to both parties. And I believe we can achieve that.
So, Mr. Prime Minister, thank you very much for coming.
Oh, by the way, we talked energy. And it's important for the American people to know that as a result of our trade agreements with Canada and our close relationship with Canada as a significant supplier of energy to the United States. And that's positive. Much better for us to be securing our energy from a friend and a stable friend and a partner. And so I appreciate the Canadian energy business. I appreciate the exploration that's going on. It is good for our economy. I shared with the prime minister I'm optimistic about our economy. We've still got some rough spots, but it looks like we may be improving. And if we are, that'll be good news for both of us.
So, Mr. Prime Minister, welcome back. My honor to serve you dinner again. And it's a thrill to be with you.
JEAN CHRETIEN, CANADIAN PRIME MINISTER: Thank you, Mr. President.
I cannot add to what the president said. He covered the grounds very well. I think the relations between America and Canada could not be better. We are solving problems when we have one. We are working with America in the war against terrorism. Our troops are in the fight at this moment, Afghanistan.
You know, in the snow, we're good at it, president, you know. And we...
BUSH: You're good on the ice, too.
CHRETIEN: We're good on the ice, too, and both men and women. And so, you know, we have to work on our other problems. Thank you for a statement you made on softwood lumber. I think that, you know, the defense of our values against terrorism are extremely important for Canadians, and we have worked very well together. For me, I should say a few words in French, with your permission.
BUSH: Great, great.
CHRETIEN: And you'll translate after that. (Speaking in French)
DOBBS: As the prime minister speaks French, of course, to the French Canadians, we should point out the importance, as the president said, of our good neighbors to the north, some 30 million of them. The account for about 23 percent, 23 percent of all U.S. exports. Very important part of our trade picture, and point of fact, our largest trade partner.
The prime minister made reference to the engagement of Canadian troops now in Afghanistan. It is, in fact, the largest land offensive by Canadian troops since the Korean War, an important partner for the U.S. government in the global war against terrorism. Let's return to the prime minister and the president.
CHRETIEN: And we want to establish a partnership with them that came through Genoa last June. You and my -- our colleagues asked me to take the file at that time. And I think it's a partnership. And with your contribution is developing very well. Next month, I will be traveling in Africa for visiting five or six countries to build a partnership but to reward good government, human rights, to make sure that they have real democracies and so on. And those who don't do that will asked, you know, not to be rewarded, because he will not meet what the world wants.
So thank you, again, Mr. President. And for the press, I will take questions after my dinner.
BUSH: Thank you. DOBBS: Reporters shouting questions to Prime Minister Chretien and President Bush, of course, as the two men head off for dinner.
We're going to turn now to White House correspondent Major Garrett -- Major.
MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, a couple of quick things. There's clearly no distance between the Canadians and the United States in the war on terrorism. And the Canadian troop presence in Afghanistan is full proof of that. But the trade issue is a serious one. Softwood lumber accounts for about $6 million of imports from Canada in the United States. The Commerce Department has initiated a process in which to apply duties because the Commerce Department last year concluded that that softwood lumber is subsidized by the Canadian government. It's a huge issue in Canada. The president said they're trying to work it out. If they don't reach an agreement on what duties will or will not be imposed by March 21st, then there's going to be real difficulty between the two countries. Canadians are clearly trying to avert any kind of increased duties from the United States.
The lumber industry in the United States is leaning very hard on the Bush administration to raise the duties to protect itself from what it considers to be subsidized Canadian softwood lumber imports. It is a huge issue between these two countries, and you can see the prime minister's appreciation when the president said we're working on it, we're going to try to work out an arrangement. The Canadians have been trying to pressure the Bush administration to put more of its attention to this issue. I think you can see in that brief encounter between the two leaders the president has said the United States will look at it more carefully, possibly more sympathetically to the Canadian government, although there was no commitment from the president on that. But that's a huge, huge issue -- Lou.
DOBBS: Major, thank you. Major Garrett reporting from the White House.
Coming up, no let up in the violence in the Middle East tonight. Palestinians launch another daring attack against the Israeli army, while U.S. envoy, Anthony Zinni, tries to broker peace.
Wanted for kidnapping and murder, the United States indicts the chief suspect in the murder of Daniel Pearl. Also tonight, bungling and incompetence of the Immigration and Naturalization Service. The author of "The Death of the West," Pat Buchanan, will tell us whether it's time for that agency to be broken up.
(COMMERCIAL BREAK)
DOBBS: Just hours after a U.S. special envoy arrived in the Middle East today, Israeli tanks began to pull out of the West Bank town of Ramallah. The United States had demanded a complete withdrawal of Israeli forces, and the Palestinians said without it, there could be no cease-fire. Still, intense fighting between Israelis and Palestinians claiming more lives.
We go now to our Jerusalem bureau chief, Mike Hanna, for the story -- Mike.
MIKE HANNA, CNN JERUSALEM BUREAU CHIEF: Well, Lou, within the last two hours, there have been reports of tanks and Israeli forces redeploying from the West Bank city of Ramallah. The forces had moved into that city on Tuesday, occupying most of the city, Palestinians say disrupting the essential services such as health, such as various water facilities. However, it is understood and confirmed by several Israeli military sources that a withdrawal of these Israeli forces is now underway.
Palestinians have said that while Israelis remained in that West Bank city, there could be no thought or talk of any negotiation about a cease-fire. Palestinians demanding, too, that Israeli forces also withdraw from a number of other Palestinian-controlled areas in the West Bank and in Gaza Strip that they had reoccupied in recent weeks.
Well, all of this came after the U.S. special envoy, Anthony Zinni, arrived in the region. He didn't have much time to catch his breath. Within hours of his arrival, he was meeting Israeli prime minister Ariel Sharon. That meeting have lasted now for a couple of hours waiting to hear some results out of that meeting. He is due as well within the coming day to meet Palestinian leader Yasser Arafat, as he begins a mission to implement a cease-fire on the ground. Well, this is a day in which there have been deaths once again on both sides. Israeli soldiers killed, a number of Palestinian militants killed in separate clashes with Israeli forces. And the task for Zinni remains very difficult indeed, Lou.
DOBBS: And today, a second Israeli tank destroyed by Palestinians. Any suggestion, at least as the forces -- Israeli forces are completing a staged withdrawal from Ramallah? Is there any suggestion that violence is diminishing at all?
HANNA: No, not at this stage. We have had reports of a great deal of gunfire erupting as the Israelis began their withdrawal or what appears to be a withdrawal from Ramallah itself. And that tank attack that you mentioned, Lou, well, it's another blow to Israeli military superiority. This tank was the second one to have been attacked and destroyed by Palestinians within the last few weeks. These tanks, the Macaba (ph), thought to have been indestructible by Israelis before, and now shown to be vulnerable on two separate occasions, two Palestinian attacks. It's great blow to Israeli military thinking, and certainly Israel having to do a lot of thinking about the deployment of these tanks in areas where they are vulnerable to a roadside explosion that's happened in this case, Lou.
DOBBS: Well, hopefully, there will be thinking, Mike, strong, hard thinking on both sides. Thank you very much, Mike Hanna, reporting from Jerusalem.
Vice President Dick Cheney has appealed to Arab countries to stop al Qaeda terrorists fleeing Afghanistan from hiding in their countries. The vice president talked about U.S. cooperation in routing out terrorists with leaders in Oman today. The vice president also talked about expanding the U.S.-led war against terrorism. Earlier, the vice president stopped off in Yemen. He is the highest-ranking U.S. official to visit Yemen since former President Bush in 1987.
Joining me now to discuss the U.S. role in the Mideast peace process is George Friedman, who is the chairman and founder of Stratfor.
George, good to have you here.
GEORGE FRIEDMAN, CHAIRMAN AND FOUNDER, STRAFOR.COM: Good to be here, Lou.
DOBBS: What are the prospects for Anthony Zinni this time?
FRIEDMAN: Not very good, and I don't think the administration really has a great deal of hope for it. The motive for this particular visit was as cover for Cheney's trip to the Arab world. Before that trip happened, he was getting messages that he really wasn't going to be very welcomed unless they were prepared to also talk about the Middle East question, the Palestinian question, then Zinni's trip was scheduled.
DOBBS: You talk about Zinni providing cover for Cheney, Vice President Cheney, the U.N. resolution, its importance and its potential for being helpful in the peace process.
FRIEDMAN: The problem with this peace process is very simple. The Israelis want a cessation of violence on the part of the Palestinians. Some groups somewhere among the Palestinians are going to break that agreement. There's going to be a suicide bombing, a shooting or something. The Israelis, who have a very fragmented government there barely held together, is going to have to respond. When they respond, the cycle of violence begins again. The problem is that you don't have anybody on either side that is maintaining sufficient control that a peace process can reach fruition. The Palestinians can't control their side, the Israelis ultimately can't control their responses. We keep running back to the same problem.
DOBBS: George, what is the solution?
FRIEDMAN: I really think, as I've said before, that the core solution is for the stage to be enclosed, that right this minute, the Palestinians are looking to see how they can influence the United States to pressure Sharon. Sharon is trying to figure out how he can position himself as an ally in the U.S. fight against al Qaeda. So long as their eyes are not on each other but on the United States and countries outside, there really isn't a propulsion internally to bring a peace process. For the past 50 years, we've had peace missions to the area. They haven't worked. It's time to think about other things.
DOBBS: George, let me ask you this. As we watch this unending violence in a region that is critically important not only to the United States but indeed, Europe and much of the world, as we hear about what is basically a religious conflict over specific geography, we are watching Israelis, Jews, Arabs, Muslims destroying land that is presumably holy in both their outlooks. If there is no role for the United Nations here, is there a role for the United Nations anywhere? Because you mentioned Israel doesn't have sufficient control nor do the Palestinian over each element, why in the world should not the United States, the United Nations simply say, "We're going to impose a forced settlement here"?
FRIEDMAN: Because the imposition of that settlement would require massive forces if either the Israelis or the Palestinians or both resisted. The United Nations has had a policy of...
DOBBS: Well, wait a minute, George. George, excuse me. Forgive me for interrupting. Let's be clear. Let's talk about the economics here. Israel is absolutely dependent upon the world for its survival, dependent on capital from the United States and Europe for its survival. The Palestinians as well. The political thinking here tends to ignore the economics. And it seems to me -- and I would love to hear your thinking -- that if the nations of the world impose their will and backed it with sound principles of capital constraint, there would be significant, I would think, openness to the idea on the part of Israelis and Palestinians.
FRIEDMAN: Oh, absolutely. I mean, that's the kind of enclosure that I'm talking about, that if we essentially said, "Look, we're not going to deal with either of you until both of you come to some sort of settlement," and we actually impose that on a global basis, there might be some possibilities. Then what would happen, I suspect, is that the Israelis would start finding informal paths to capital. The Palestinians would be supported by the Arabs. How can you enclose an embargo in an area like this when you really weren't able to do it very effectively even against Iraq?
DOBBS: Well, in point of fact, the United Nations has been reasonably successful. As you would put it, there has leakage, but the world body of the United Nations can be -- if it has indeed the will of the states sufficiently behind it -- immensely effective.
FRIEDMAN: Well, imagine the coalition that you'd have to build for that. You'd have to have nations from the United States, from France, China, Saudi Arabia, all of which are trading partners of Israel, all of which have economic relations with the Palestinians, to agree to some sort of enclosure.
DOBBS: And all of which combined in the war against terror had been supportive, so presumably, there is some common level of interest here.
FRIEDMAN: Well, there's the question. Are they supportive? One of the things that Dick Cheney's is out there is trying to find out how much support there is in the coalition for the follow-on war. For example, the very simple thing that follows logically, the fact that Iraq has been almost universally opposed. So he's been to Jordan. He's heard the Jordanians tell him no. He's going to be visiting the Saudis. He's been visiting the Turks. There is the illusion of a coalition. Whether this coalition exists as more than paper is what Dick Cheney is going to find out. If you extend it now to the Palestinians and the Israelis, that coalition is going to become even more strained. But I do agree with you on this, and I think, Lou, you're absolutely right, if we can find levers to enclose them, to make them share the pain together, to make them fear peace less than they fear the current situation, more than they fear the current situation, that would be a major solution.
DOBBS: OK. George, as always, it is great to have you here, and we'll talk with you soon. George Friedman, thank you.
The Attorney General today took action to stop the chief suspect in the murder of Wall Street Journal reporter Daniel Pearl from escaping U.S. justice.
(BEGIN VIDEO CLIP)
JOHN ASHCROFT, ATTORNEY GENERAL: Today, I'm announcing a Grand Jury's indictment of Ahmed Omar Saeed Sheikh, a British citizen currently in custody of Pakistani authorities for acts of terrorism against two United States citizens. Saeed is charged with the kidnapping and murder of Daniel Pearl, and the 1994 kidnapping of a United States citizen in India.
(END VIDEO CLIP)
DOBBS: The Attorney General said it was important for the United States to file charges against Saeed Sheikh. In the event that he is released from prison in Pakistan, U.S. officials have said they would try Saeed Sheikh in this country. So far, Pakistan has resisted, saying they plan to try him for Daniel Pearl's murder in Pakistan.
About 24 North Koreans rushed the Spanish Embassy in China today. They're pleading to be allowed to go to South Korea. The North Koreans threatened to commit suicide if they were forced to return to Chinese territory. They said they feared persecution and possibly death. China must now decide whether to force them to return to North Korea as its treaty with Phyang Yeng (ph) requires, or whether to take a more lenient stand in line with Beijing's desire for better relations with the international community.
Still ahead here, dozens sign up for a chance to be a tourist in space. We'll tell you who's paying what to go where. And, television executive still scratching their heads after the "West Wing" was trounced in last night's ratings battle.
We'll tell you about the surprise entry in the winner's circle, that story coming up. And Madison Avenue simply can't get enough of the Oscars even though the ceremony is still a week and a half away. We'll tell you why, next.
(COMMERCIAL BREAK)
DOBBS: The Senate Judiciary Committee just moments ago rejected Judge Charles Pickering's nomination for a seat on the Federal Appellate Court. The vote on that nomination went along party lines, 10-9, Pickering nominated, of course, by President Bush. Democrats on the Judiciary Committee said Pickering did not have the temperament for the appeals court. Republicans said that Pickering was a victim of a smear campaign.
So far, 40 of the 92 Bush judicial nominations have been confirmed. Seven of the President's 29 Appeals Court nominees have been approved, but this is sure to create consternation at the White House, and set the stage for a lively political contention between the White House and the Senate over further judicial nominees, and particularly in the case of nominees to the Supreme Court.
Turning to Wall Street today, blue chips finished slightly higher after yesterday's severe sell-off, while technology issues extended losses. Some good news on the economy today, the latest numbers on jobless claims and business inventory show the economy continuing to recover, but at a moderate pace.
The Dow today gained 15 points, up four of the past five sessions in fact, the NASDAQ lower for the third straight day but losing only eight points. The S&P 500 dropped a point today. Looking at some of the most widely held issues, Lucent Technologies weighed on blue chips. It touched an all-time low today. Caterpillar gained more than $1.00 a share, after an upgrade from AG Edwards. GE gained fractionally. It's finance arm sold $11 billion of global bonds. That's the second largest bond sale ever. Oracle shares slipping ahead are reporting a 13 percent decline in net income.
Taking a look at some other movers on Wall Street today, Lands End shares plunging nearly $8.00. The catalogue and Internet retailer posted a 44 percent jump in last quarter's earnings, but the results missed estimates. Lands End also warned on results for the year.
Toys "R" Us down nearly $1.50 a share. The largest toy store operator reported a 37 percent decline in earnings. The company is closing unprofitable stores to compete with Wal-Mart, whose toy sales now exceed those of Toys "R" Us. Moody's and Fitch agencies also downgrading the company's debt.
Shares of Dow component, Eastman Kodak, gained more than $1.00 today. Kodak reaffirmed its first quarter and year-end outlook for the second time in the last three weeks.
Delta Airlines is eliminating most commissions for travel agents, as part of its plan to cut costs. The number three carrier will no longer pay standard commission to travel agents for tickets sold in the United States and Canada. Even before the terrorist attacks, airlines had begun slashing agent commissions. Instead, many airlines offered customers incentives to buy their tickets online.
Another vote of support today for Hewlett Packard; Putnam Investments, the fourth largest fund group in the country says it will vote in favor of Hewlett Packard's plan to buy Compaq. Putnam is the largest single shareholder of Compaq. It is the eighth largest shareholder of Hewlett Packard. The $22 billion merger comes up for vote next week. Should it pass, this would be the largest computer industry merger ever. Still ahead here a crucial test for the missile defense plan this week. We'll tell you what the Pentagon is planning. Space tourism takes a step closer to reality. Why travelers are rushing to make down payments on a trip to space that is still years away. And the Oscar's already a goldmine for ABC, even thought the ceremony is more than a week away, that story, a lot more still ahead.
(COMMERCIAL BREAK)
DOBBS: There will be another test tomorrow, another missile test, as part of the Pentagon's efforts to build a national defense shield. A missile fired from an island in the Pacific Ocean will attempt to intercept a fake warhead that will be launched from California. This is the sixth test of its kind. Previous attempts had mixed results, the most recent successful.
The Bush Administration has brushed aside criticism from Russia, China and a few other countries that say a shield would violate arms control agreements. The White House has made it clear it is proceeding, says it's necessary to protect against rogue nations.
The man in line to fill NASA's number two spot won't be getting the job. The White House withdrew the nomination of former astronaut and Marine Major General Charles Melvin (ph) to become NASA's Deputy Administrator. The Bush Administration now says the demands of the War against Terror are too great to allow the general to take the civilian post.
The price of civilian space travel could soon decline, if a Russian company pulls off its plan to build the world's first tourist shuttle. The sub-orbital spacecraft is designed to take two passengers to the edge of space, where they would experience weightlessness for at least a few minutes.
At $100,000 per person, a trip obviously isn't for everyone, but it certainly beats the $20 million that Dennis Tito paid Russia to visit the International Space Station last year. The company says 100 people have already bought their tickets to space.
Still ahead here, why the Oscars are a smash hit for ABC a week and a half before the ceremony. We'll tell you what that means in dollars and cents, and a lot more still ahead. Stay with us.
(COMMERCIAL BREAK)
DOBBS: The makers of the new animated film "Ice Age" are hoping for a blockbuster, but one New Yorker says she's entitled to a multi- million dollar cut of the proceeds. Jeanne Moos reports on the fight over a hybrid rodent and a prehistoric mammal.
(BEGIN VIDEOTAPE)
JEANNE MOOS, CNN CORRESPONDENT (voice over): What do you get when you cross a squirrel with a rat? A Sqrat fight.
IVY SUPERSONIC, PROMOTER: The first mistake was then they stole my Sqrat.
MOOS: With its animated movie "Ice Age," 20th Century Fox is about to make this character a star. Only this character says Sqrat is hers.
SUPERSONIC: Millions of people associate Ivy Supersonic as the creator of Sqrat. Do they think they can get away with this?
MOOS: Ivy Supersonic is a New York hat designer and promoter. Three years ago, she says she spied a squirrel that looked kind of like a rat, thus was born her Sqrat.
SUPERSONIC: This is going to be $100 million. I got the next Mickey Mouse.
MOOS: Ivy admits she's no wallflower when it comes to promotion, particularly self-promotion. Over the years, Ivy churned out Sqrat banners, tee shirts, stickers, even a Sqrat mouse pad and a puzzle. She pitched her character to entertainment executives from coast to coast, and then what to her wondering eyes should appear, Sqrat, the movie star.
Sqrat squeaks softly, but carries big shtick. There's the Whack at Sqrat game at the movie's Web site. There are posters, tie-ins to Burger King, books.
SUPERSONIC: I've been jacked, Jeannie.
MOOS: As in hijacked, robbed. Ivy's going to court, seeking $10 million. That's an eight figure Sqrat, but the folks at 20th Century Fox say their Sqrat was created by an award-winning animator, inspired by a prehistoric mammal known at a leptictitium (ph) and that Ivy's Sqrat is based on copyrighted art of a beaver.
In her court papers, Ivy notes both Sqrats have round beady eyes, an elongated snout, a bulbous nose, not to mention the bushy tail that's nowhere to be seen on the leptictitium. Ivy spelled Sqrat with a Q. The moviemakers used a C.
SUPERSONIC: No matter how you're going to spell the Sqrat, SC, SK, SQ, it all spells Sqrat.
MOOS: To the moviemakers, Ivy is poison.
SUPERSONIC: I'm just a multimillionaire just waiting to get paid.
MOOS: To which 20th Century Fox says, "she has no case and we're not giving her a dime." It looks like everyone's trying to hoard their nuts.
Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
DOBBS: Jeannie Moos. Well as we reported to you respected judge Charles Pickering has been rejected by the Senate Judiciary Committee along party lines, a 10-9 vote. We're going to turn now to Jonathan Karl who is on Capitol Hill. Jonathan, this looks like the beginning of a very tough fight. What happened?
JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well absolutely, and in fact, it was also - the Senate also rejected the committee by a 10-9 party line vote. The effort by Republicans to say, "OK, the committee rejected the nomination, but let the full Senate vote on it." That's what Republicans wanted because they knew full well there were Democrats in the full Senate that would support this nomination.
But the committee also rejected that move and what we have now is a statement, a very strong statement coming from the White House immediately after that vote from the President, and I'll read you part of it, Lou, and just part of it.
The President says in this statement: "The action of the Senate Judiciary Committee to refuse Judge Pickering a vote by the full Senate, leaves another empty seat in the federal judiciary at a time when we face a vacancy crisis."
The statement goes on, "It was unfortunate for democracy and unfortunate for America." The statement goes on to say that Judge Pickering is a distinguished judge and deserved a chance to serve his country in the role of a circuit judge.
What's interesting, Lou, is we also have a statement coming out from one of the Democrats. It was on record. One of the Democrats not in the Judiciary Committee but in the Senate, who would have voted for him, Zell Miller of Georgia, put out a very strong statement, as is his style. After the vote, immediately after the vote saying, "a good and brave man has been hurt, and that is what is most tragic here. He should have been approved on his merits alone."
But Zell Miller goes on to say that he thinks that this will hurt the Democratic Party in the south, because Judge Pickering is somebody who has strong support among Democrats in the south. But, there is a much bigger war here. It's the war over judicial nominations.
The President has a number of nominations pending here in the Senate, and the Republicans are saying that they would like to see quicker action. A lot of those nominations that were made almost a year ago have not had a hearing yet, and Republicans are threatening to do everything they can even to hold up the further deliberations in the Senate on other issues to force action on other judicial nominations. This may be the first step in a larger battle here, Lou.
DOBBS: The first step in a larger battle. It is also, is it not, a bit of - forgive me for not being able to find a better expression than tit-for-tat, but response to what Democrats saw as obstructionism by Republicans during the Clinton Administration.
KARL: Oh, there was a lot of tit-for-tat going on in much of the hearing today and it went on for about four hours, was this kind of back and forth, you know, Democrats saying "hey we're actually doing better on nominations than you guys did when President Clinton was in the White House," and they even went back and forth on nominations made by the first President Bush.
And several Democrats made the point that they didn't think that Republicans should be rewarded for all that they did to obstruct the nominations for President Clinton, rewarded for all those vacancies created because President Clinton's nominees had a hard time getting through that same Judiciary Committee when it was controlled by Republicans. So yes, it's a lot of tit-for-tat and it will probably continue this year.
DOBBS: Any possibility, any indication that the President would use a recess appointment, it's about two weeks away the next recess, on behalf of Judge Pickering?
KARL: We've been told that the President does not plan to do a recess appointment on this case.
DOBBS: Jonathan Karl reporting from Capitol Hill, thank you.
KARL: Sure.
DOBBS: "WOLF BLITZER REPORTS" begins in just a few minutes. Let's go to Jeanne Meserve, who's filling for Wolf tonight in Washington -- Jeanne.
JEANNE MESERVE, CNN CORRESPONDENT: Thanks, Lou. The U.S. military has been calling Operation Anaconda a success, but just how many al Qaeda forces have escaped to fight another day? We'll discuss that, the prospects of a U.S. attack on Iraq, and late developments in the Israeli-Palestinian conflict, all just ahead on the War Room. Lou.
DOBBS: Jeanne, thank you very much. Coming up next here, you'll never guess who beat "The West Wing" in prime time last night. Well, you might guess but we're going to tell you anyway right after the break. Also, "In Their Words" our new segment on what newsmakers had to say today. Stay with us.
(COMMERCIAL BREAK)
DOBBS: If you sat down shortly after MONEYLINE last night and tuned into FOX's "Celebrity Boxing," you weren't alone. An astounding 15.5 million viewers caught the Wednesday night fights that paired, among others, Tonya Harding, Paula Jones, in a three-round contest.
CBS's "Survivor" won the top spot, but it was a tough battle, and it was a huge victory for FOX. "Celebrity Boxing" beat NBC's "The West Wing" although it was a rerun. Last week, FOX didn't have a show in the top five most watched programs on Wednesday night.
There's a new box office record in Los Angeles, and it has nothing to do with what's on the screen. It's the cost of getting in the door. Pacific Theater Art Light Multiplex (ph) charging $14 a ticket for its deluxe reserved seating. According to the National Association of Theater Owners, the average cost of a movie ticket across the country last year was $5.65, total box office gross $8.4 billion, and if they keep raising it to $14, it's going to go a lot higher.
ABC is set to profit from hit movies when it carries the Academy Awards. They're expected to push ABC to the top of the ratings and that has advertisers lining up. It also gives the network an opportunity to do some advertising of its own. Susan Lisovicz with the story.
(BEGIN VIDEOTAPE)
SUSAN LISOVICZ, CNN CORRESPONDENT (voice over): Hollywood veterans say it's a horse race for this year's Oscar for Best Picture. The suspense, just one reason why host broadcaster ABC is already thanking the Academy.
Advertisers like MasterCard sprinted to get commercial time. Buys from McDonald's, Apple and UPS helped ABC sell out a month ago, while FOX went down to the wire with Super Bowl. JC Penney, which is buying three minutes says Oscar is the Super Bowl for women.
PATRICK CONROY, JC PENNEY: It's really a forum where fashion and culture and personal style converge. It's a great place for women who are aspiring to a better quality of life and better fashion can look to their heroes and heroines of the Silver Screen and see what they're wearing. I think we look at it a little bit too as a runway for middle America.
LISOVICZ: Last year's Academy Awards program won a 26 rating. This year's hottest sitcom, "Friends," averages a 17. The Grammy's recently drew a 12.
PAT DERMODY, DDB CHICAGO: The television audiences have fragmented over time, and people have more choices. You are more attuned to those events where you can capture greater audiences.
LISOVICZ: ABC is saving some commercial time for itself to promote mid-season replacements, such as "The Court."
MIKE SHAW, ABC TELEVISION NETWORK: It's out ability to reach those 45 million viewers with a new program that is going to be launched two, three days later, following the Academy Awards. In this case, I think ensures that we're going to have great sampling.
LISOVICZ: Which is desperately needed at a network that is faltering in prime time.
THOMAS DeCABIA, PHD: That is the battle, the launch of a new show and to get sampling to that show and be able to watch it, and since ABC's had hard times this year with their ratings, this is a great opportunity for them.
LISOVICZ (on camera): ABC did drop prices by five percent, but a 30-second spot will still cost $1.25 million. ABC expects to reap $80 million on Oscar night; more important, the opportunity to resuscitate the prime time ratings. Susan Lisovicz, CNN Financial News, New York. DOBBS: Coming up next here, some of the newsmakers of the day in their own words. Stay with us.
(COMMERCIAL BREAK)
DOBBS: In the first public statements about their role in the collapse of Enron, six of Enron's attorneys today testified on Capitol Hill. We wanted to share an exchange between Representative Cliff Stearns and Enron Attorney Joseph Dilg in their words.
(BEGIN VIDEOTAPE)
REP. CLIFF STEARNS (R), FLORIDA: I think every law firm in American is trying to advise their clients what's legal to do, and you're saying that you, as the counsel for Enron, never saw anything egregious about anything they did during the entire relationship you had with Enron. That's what you're telling us today.
JOSEPH DILG, VINSON & ELKINS: Yes, sir.
STEARNS: Now, when Mr. Skilling came here, he gave pretty much the same tact you have done. You know, I used the term with him "plausible deniability." I don't know if that term fits you, but the approach you're taking here is total unrepentance, a feeling that you did nothing wrong, and that you and your entire legal firm, with all these high-powered lawyers, never saw a red flag during the whole process, and you never thought about separating your relationship with Enron until the meltdown, until the bankruptcy. That's what you're telling us today.
DILG: I believe the earlier question was whether we ever say anything illegal. That's what we're qualified to determine. Red flag is a term that, I'm not sure that I feel comfortable with. But again, to my knowledge, we never say anything at Enron that we considered illegal.
(END VIDEOTAPE)
DOBBS: That's MONEYLINE for tonight. Thanks for being with us. Good night from New York. "WOLF BLITZER REPORTS" begins right now.
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