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LOU DOBBS TONIGHT

Soldier Sues Over Stop-Loss Policy; Bush, Kerry Woo Veterans; California Deal for Immigrant Drivers Licenses?

Aired August 18, 2004 - 18:00   ET

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


WOLF BLITZER, HOST, "WOLF BLITZER REPORTS": Controversy over a missed doping test. Kostas Kenteris took gold in Sydney. Katerina Thanou won silver that year. Both say they're innocent.
KOSTAS KENTERIS, GREEK SPRINTER (through translator): The last four years I underwent 30 doping tests that have not caused any problems. I am withdrawing my participation from the games as a sense of responsibility.

(END VIDEO CLIP)

BLITZER: And LOU DOBBS TONIGHT starts right now.

(BEGIN VIDEOTAPE)

LOU DOBBS, HOST (voice-over): Tonight, a widening and potentially damaging political split in Washington over reform of intelligence. Congress on a collision course with the White House. Powerful Republican senators in disagreement.

SEN. JOHN WARNER (R), VIRGINIA: I'm not trying to hold onto the turf of my committee, as chairman of the armed services.

DOBBS: Tonight, the vice chairman of the Senate Select Intelligence Committee, Senator Jay Rockefeller, Democrat, joins me.

Negative campaigning and mudslinging.

UNIDENTIFIED MALE: John Kerry has not been honest.

DOBBS: Have Democratic and Republican attack ads gone too far?

UNIDENTIFIED MALE: George Bush used his father to get into the National Guard.

DOBBS: Two experts debate the propriety and the effectiveness of attack ads in our "Face Off" tonight.

New developments tonight in the growing scandal over New Jersey Governor Jim McGreevey. We'll have a live report.

In California, does state senator Gil Cedillo have a secret deal with Governor Arnold Schwarzenegger on driver's licenses for illegal aliens? Governor Schwarzenegger says no. Senator Cedillo says he will fight for illegal aliens' right to have drivers licenses until he dies. Senator Cedillo is our guest tonight. ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, August 18. Here now, for an hour of news, debate and opinion, is Lou Dobbs.

(END VIDEOTAPE)

DOBBS: Good evening.

Tonight a widening split among Senate Republicans and growing differences with the White House over the critical issue of intelligence reform.

Two leading Republicans have put forward competing proposals for an overhaul of this country's intelligence agencies.

The highly respected intelligence committee chairman, Senator Pat Roberts, may introduce legislation this week that would create a powerful national intelligence director.

But another top Republican, Senate Armed Services Committee Chairman Senator John Warner, says a national intelligence director may not be necessary at all.

National security correspondent David Ensor reports.

(BEGIN VIDEOTAPE)

DAVID ENSOR, CNN CORRESPONDENT (voice-over): It's developing into a classic Washington turf war, between two Senate committee chairmen. At issue, who should control most of the 15 intelligence agencies and which committee will have oversight over the approximately $40 billion budget?

Intelligence Chairman Pat Roberts is pushing for the change wanted by the 9/11 families and the commission, a change creating a national intelligence chief with real power over budgets and hiring throughout the intelligence community.

SEN. PAT ROBERTS (R-KS), CHAIRMAN, INTELLIGENCE COMMITTEE: Why would a national intelligence director with actual budget and line authority over these agencies be any less responsive to the needs of the Department of Defense than the secretary of defense? They both must answer to the same president.

ENSOR: But Armed Services Chairman Warner is uneasy about the Pentagon giving up control of something like 85 percent of the intelligence budget and personnel, arguing American troops might, then, not always get the intelligence they need.

WARNER: I'm not trying to hold on to the turf of my committee as chairman of the armed services. I'm willing to do whatever is in the interest of strength and intelligence and our ability to deter and deal with terrorism. But does that require us to run through everything quickly and accept it and rubber-stamp it?

ENSOR: At issue is who will have ultimate budget authority and hiring power over a group of key intelligence agencies currently under Pentagon control, including the massive National Security Agency, the nation's eavesdroppers and code crackers; the National Reconnaissance Office, which builds and launches spy satellites; and the National Geospatial Intelligence Agency, which analyzes imagery.

White House officials say the president has not made up his mind yet on how much power to give a new intelligence director.

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISOR: The devil is in the details. And we're now engaged in very intensive discussions internally about those details.

ENSOR: Get the job description wrong for national intelligence director, and you could make things worse.

DAVID KAY, FORMER CIA WEAPONS INSPECTOR: The worse thing that could happen, in my view, is to -- a reorganization that creates an NID that is feckless, that looks like the drug czar or the cancer czar or the other multitude of czars in the ashcan of Washington history.

(END VIDEOTAPE)

ENSOR: Normally, Washington punts these tough questions down the road, but this time the pressure from the 9/11 Commission and families in an election year could force the issue -- Lou.

DOBBS: David, thank you very much. David Ensor reporting from Washington.

There are also signs of widening dissension among Republicans on another important national security and political issue, that of Iraq.

Republican Congressman Doug Bereuter now says the invasion of Iraq was unjustified, and the war in Iraq has deteriorated into what he calls a dangerous, costly mess. Two years ago congressman Bereuter voted in favor of the war.

Congressional correspondent Ed Henry reports.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CORRESPONDENT (voice-over): Congressman Doug Bereuter, who's retiring this month, is dropping a bombshell on his way out. Reflecting upon his vote for the war in Iraq, the loyal Republican from Nebraska now says he regrets it.

In a pointed, four-page letter to his constituents, Bereuter says, quote, "It was a mistake to launch that military action, especially without a broad and engaged international coalition."

STU ROTHENBERG, ROTHENBERG POLITICAL REPORT: This is red meat for the Democrats and John Kerry. They're going to grab a hold of this and use this as further evidence that even in the Republican ranks there's serious division and serious criticism of the White House.

HENRY: Analysts say Bereuter's confession raises questions about whether other Republicans feel regret but are staying quiet for political reasons. They say Bereuter's comments could open the door for other Republicans to break from the president.

AMY WALTER, COOK POLITICAL REPORT: It's significant that -- that incumbents have had to go home now and listen to their constituents, many of whom, I'm sure, are very upset about the direction that the war in Iraq has taken.

HENRY: Stunned Republican colleagues express respect for Bereuter, who's been a senior member of both the intelligence and international relations committees, but they sharply disagree with his opinion.

REP. JAMES GIBBONS (R), NEVADA: Iraq was a dangerous place. It was known to have weapons of mass destruction. It was a serious threat to world security and world peace. Nothing changes from those facts.

HENRY: Bereuter takes aim at Vice President Cheney in his letter to constituents. The congressman writes that he had questions about the alleged link between Saddam Hussein and al Qaeda, despite intimations by Cheney and other administration officials.

Bereuter adds, quote, "Now, we are immersed in a dangerous, costly mess, and there is no easy and quick way to end our responsibilities in Iraq without creating bigger, future problems in the region."

(END VIDEOTAPE)

HENRY: Some Republicans are privately charging that Congressman Bereuter is bitter. He was passed over for the chairmanship of both the international relations and intelligence committees. These Republicans charge that he's just lashing out at the president because he's angry.

But I can tell you that aides to the congressman are insisting that has nothing to do with it. He just feels that his vote in favor of the war was a mistake and he wanted to get that off his chest before he leaves office -- Lou.

DOBBS: Ed Henry, we thank you, reporting from Capitol Hill.

National Security Adviser Condoleezza Rice tonight said President Bush is still considering key details of how to implement reform of our intelligence agencies. At issue is exactly how much power a national intelligence director should have.

White House correspondent Dana Bash joins us now.

Dana, what is the president's reaction to what's happening on Capitol Hill?

DANA BASH, CNN CORRESPONDENT: Well, Lou, the turf battle that David Ensor described in his report, not by accident, perhaps, reflects what is going on inside this administration. The intense debate that officials are saying is really happening, and there have been high-level frequent meetings about this issue.

Now, the secretary of defense is somebody who is reluctant to give up about 80 percent of what he controls in the intelligence budget. But other officials I've talked to say -- say that there are White House officials and members of -- top members of the president's team who believe that there is a strong argument to make the new international intelligence director somebody with real power. That means power of the purse.

So the public line, given all that internal debate right now, is a noncommittal one, saying that the president is leaving all options on the table.

(BEGIN VIDEO CLIP)

RICE: The president is -- has been absolutely clear that he believes that person has to have the authority that he needs to really integrate the intelligence budget, to integrate intelligence programs and to make sure that we have a coherent program.

(END VIDEO CLIP)

BASH: One thing they are trying to do here, Lou, is to make a decision how the president -- and make that decision before Congress comes back in order to end this and sort of move forward.

Also there's a political issue. They want to perhaps move this forward and try to take another issue off the table from John Kerry -- Lou.

DOBBS: The table is squarely before the public now. Is the White House concerned about not showing leadership on this issue, whether for a national intelligence director or against? Not having its mind made up?

These recommendations have been before the White House and members of the administration for some time.

BASH: Well, what they say is, it's not that the president isn't for or against the national intelligence director. In fact, they say the president said he is very much for it.

The issue that they say is how much power this director will have. And that means how much budget power, how much power he or she will have for hiring and firing. That is something that is being debated on Capitol Hill inside the administration.

That's the decision the president is going to have to make, moving forward with this legislation.

DOBBS: Any sense as to when the president will make such a decision?

BASH: That's a question I asked a couple of times here today, Lou. And they say that they are talking about it. That's why they're making it very public that they are having this intense discussion about it.

They are saying that they don't want to jump to any conclusions. They don't want to do anything that they will regret.

But certainly, they realize that the calendar -- there's a calendar with Congress coming back. They want to do that quickly. That's going to be after Labor Day.

But there's also a political calendar in that John Kerry has made this an issue. Because he's embraced what the 9/11 Commission has supported. So the president wants to deal with it sooner rather than later.

DOBBS: And what is the reaction there at the White House to the remarks of Congressman Bereuter of Nebraska breaking ranks, obviously, with the president on the war?

BASH: Officials both here at the White House and at the campaign essentially say if this is somebody who was much more well known, if it was more of a leading congressional voice, they would be a lot more concerned.

And they understand that what -- what Congressman Bereuter said, which is that there should have been more international help, is something that John Kerry is saying. So certainly that isn't a good political thing for the White House.

But they also note that, because John Kerry was baited by the president, he has said he doesn't regret his vote. That is different from what Congressman Bereuter has said.

So they feel that they are on OK political ground. But if you listen, Lou, to what the president says in every single stump speech, defending and explaining his decision for war. They very much understand how precarious a political issue it is for them.

DOBBS: Thank you very much, Dana Bash from the White House.

A soldier in the U.S. Army National Guard has launched the first legal challenge to the military's controversial stop-loss policy since the start of the global war on terror.

That policy, the stop-loss policy, is designed to stop troops leaving the military until they have completed their service.

Miguel Marquez reports from San Francisco -- Miguel.

MIGUEL MARQUEZ, CNN CORRESPONDENT: Yes, Lou, this is a guy that we only know as John Doe right now. We do know that he serves in the National Guard here in California, in Dublin, California, here in the Bay Area.

His lawyers say that this is a guy who served in the active duty for the last nine years, in both the Marines and in the Army, in Iraq and in Somalia. And that he has received awards for his combat service. He has two kids, and he's currently suffering from post-traumatic stress disorder from his last tour in Iraq.

But now he's anonymously suing Secretary of Defense Donald Rumsfeld, who his lawyers claim is keeping him from getting out of the military. John Doe has filed a lawsuit asking a federal judge to allow him to leave the military when his current obligation comes up in December.

The lawsuit contends that when President Bush put stop-loss into effect shortly after 9/11, it was to assist in the war on terror, and now that Iraq has been declared a sovereign nation with only questionable ties to al Qaeda, the order should be declared invalid.

(BEGIN VIDEO CLIP)

MICHAEL SORGEN, ATTORNEY FOR JOHN DOE: He is challenging this stop-loss policy, because it's really unfair. And it's unfair, because what it does is it extends the enlistments involuntarily of people who have already done and in John Doe's case, has amply done, duty to this country.

That duty should be shared. This is kind of a back door draft.

(END VIDEO CLIP)

MARQUEZ: A spokeswoman for the Army says that they have no response yet because their lawyers haven't even seen the lawsuit. She did say that about 20,000 soldiers are now serving under the stop-loss program.

She also said that the reason for it is that they can retain skilled and trained soldiers in those units and that having unskilled soldiers there does nothing for unit cohesiveness -- Lou.

DOBBS: Thank you very much.

In Iraq today, insurgents killed an American soldier in Baghdad. Gunmen shot the soldier while he was on patrol in the eastern part of the city.

Nine hundred forty-six American troops have died in Iraq since the beginning of the war nearly a year and a half ago. Almost 6,000 troops have been wounded in combat.

Still ahead, the battle to reform our intelligence agencies is escalating. The vice chairman of the Senate Intelligence Committee, Senator Jay Rockefeller, Democrat, will be here to give us his perspective.

And in our "Face Off" tonight, attack ads and the presidential campaign. Acceptable politics, simply mud slinging, does it work? Two experts debate the issue.

And in "Broken Borders" tonight, illegal aliens demand driver's licenses. In California, Governor Arnold Schwarzenegger faces growing pressure to permit driver's licenses. Some say a secret deal has been cut with none other than California State Senator Gil Cedillo, who is our guest tonight.

(COMMERCIAL BREAK)

DOBBS: The vice chairman of the Senate Intelligence Committee, Democratic Senator Jay Rockefeller, supports Senator Roberts', the chairman of that committee, push for a rapid overhaul of our intelligence community and investing considerable power in the new post of national intelligence director.

Senator Rockefeller says a national intelligence director must control the budget of the intelligence agency.

Senator Rockefeller joins me now from Washington. Senator, good to have you with us.

SEN. JAY ROCKEFELLER (D-WV), VICE CHAIRMAN, INTELLIGENCE COMMITTEE: Thank you, Lou.

DOBBS: The White House apparently is, as Dana Bash just reported, trying to wade through a number of possibilities, choose amongst options that include a very powerful NID and one that would have something of a lesser portfolio.

I take it you support this strongest possible post being created?

ROCKEFELLER: Lou, I don't think it's -- I don't think there's any other choice. You either have a national intelligence director with full budget authority tasking, allocation of resources, all that kind of thing, or you have the present system.

I mean, there isn't -- you stay where you are or you move ahead. We've been through a trauma. We've got another 20 or 30 years of this to come. And we have this opportunity to do it right and have an NID with full -- with full powers.

And what's interesting to me, honestly, is that I think that the momentum for a national intelligence director with full budgetary authority is almost unstoppable at this point in the Congress and in the media and among those who are thinking about this.

Where I'm concerned is in the White House, where they're still talking about it. And -- and trying to put this correctly. I think that the president needs to do what is right, and that is to have a national intelligence director with full budget authority.

But I don't think that Dick Cheney, Vice President Cheney, who was defense secretary and Rumsfeld, who obviously is, support that. And I think it's a question, is, is he going to be able to, frankly, overrule them, stand up to them and overrule them and do what a president needs to do, which is exercise the leadership?

DOBBS: Well, assuming that all parties are interested in the national security of this country and come at this with legitimately valid points of view. Let's look at the views of Rumsfeld and Cheney as to -- as to the Pentagon. And that is an agency that controls 70 percent of the intelligence budgets of this country.

How does the defense secretary, in fact, discharge his responsibilities if he turns over those budgets to someone else?

ROCKEFELLER: First of all, all of the -- they use this phrase, we've got to protect the war fighter, which I totally agree with. In fact, the intelligence community and the whole national posture is always biased towards the war fighter, as it should be; as it always has been, as it should be.

And they have technical -- the tactical intelligence and what they call the joint military intelligence program...

DOBBS: Right.

ROCKEFELLER: ... which is all of the intelligence which goes directly to the combatant commander so he can manipulate, move his troops as he needs to and get the intelligence to do that.

None of that is touched and is out of the reach. It's all out of the reach of the intelligence director. So you just start off with the fact that all that's left is national intelligence. It's not tactical. It's not war fighting intelligence. National intelligence, strategic intelligence, big difference.

DOBBS: And the agencies, the National Reconnaissance Organization, the National Security Agency, the -- all of the agencies that are involved in assessment, particularly electronic assessment, those budgets would move to the NID, correct?

ROCKEFELLER: They should. They absolutely should, including the other 12 or 13, including the Central Intelligence Agency. And that's where I don't think we should look.

I'm on the intelligence committee. I want do the right thing by the Central Intelligence Agency. But even more, I want to do the right thing by national security. So, all of these should be under the authority of the national intelligence director.

And, Lou, the way -- the way I look at it is to say, OK, we cannot do that. Then we've got the system we have now. It's not working.

DOBBS: Senator...

ROCKEFELLER: All the witnesses have agreed it's not working.

DOBBS: Senator Jay Rockefeller, thanks for being here.

ROCKEFELLER: Thank you.

DOBBS: We also invited, of course, the chairman of the Senate Intelligence Committee, Republican Senator Pat Roberts, to join us, as well as Republican Senator John Warner, chairman of the armed services committee to discuss these issues. Neither senator was available.

Coming up here next, a key voting block or a political prop? Coming up next, how important is the vote of the nation's veterans in this presidential election? Are the presidential campaigns pandering to our veterans or using them as props in their campaigns?

This has been one of the dirtiest campaigns, we're told, in recent memory. Are attack ads going too far? Way too far? We'll have a debate in tonight's "Face Off."

And prostitutes, bribery, infidelity, witness tampering in the New Jersey governor's office. Those are only the opening elements of a widening scandal. We'll have a live report coming right up.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues with more news, debate and opinion. Here now, Lou Dobbs.

DOBBS: Senator John Kerry today launched a sweeping attack against President Bush's national security policies. Senator Kerry said the president's plan to withdraw as many as 70,000 troops from Europe and Asia could jeopardize our national security.

Senator Kerry delivered his speech to the same veterans group the president addressed Monday. It underscores how important both campaigns believe the veterans' vote will be, come November.

Bill Schneider reports.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN POLITICAL ANALYST (voice-over): As a voting block, veterans seem pretty securely in the Bush camp.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Serving our veterans is one of the highest priorities of my administration.

SCHNEIDER: It's not just because most veterans are men. Most male veterans favor Bush, while men who are not veterans are split between Bush and Kerry. Women favor Kerry.

Veterans appreciate President Bush's strong, tough international policies.

BUSH: America will continue to lead the world with confidence and moral clarity.

SCHNEIDER: Including Iraq. Male veterans strongly prefer Bush's Iraq policy. Men who are not veterans are split over who would handle Iraq better. Women prefer Kerry.

When Bush made this statement to veterans, however...

BUSH: We're getting the job done.

SCHNEIDER: ... Kerry saw an opening.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: And I'm not going to come to the VFW to tell you the job is done when it isn't done.

SCHNEIDER: Veterans have interests, just like farmers and union members. Kerry made a pitch to those interests.

KERRY: I will continue to stand with you as president, leading the fight for a military family bill of rights and leading the fight for full mandatory funding for veterans' healthcare.

SCHNEIDER: Healthcare is a primary interest for veterans and their families. Male veterans do prefer Kerry over Bush on healthcare, just as non-veteran men and women do.

But Kerry is not simply appealing to veterans as a voting block. Veterans are also an important prop in the Kerry campaign. Veterans were featured last month at the Democratic convention. The Kerry campaign makes sure veterans are there to greet him at every campaign stop. Is that a play for the veterans' vote? Not necessarily.

A recent CNN poll asked voters, "Will Kerry's military service help him be an effective president?" Most male veterans, surprisingly, said no, it doesn't make any difference.

Kerry's military credentials do impress most non-veterans, however, including most women. Kerry's military experience is most impressive to voters who don't have any military experience.

(END VIDEOTAPE)

SCHNEIDER: Veterans are only 16 percent of the nation's voters. The big payoff for Kerry could come from non-veterans, for whom veterans are an important symbol -- Lou.

DOBBS: Bill, thank you very much, Bill Schneider.

The campaign battle over the veterans' vote and national security is also being fought through advertising.

This week, the liberal group Moveon.org released an ad that questions President Bush's military service during the Vietnam War. Senator Kerry condemned the ad.

It follows another ad, released two weeks ago, that accused Senator Kerry of lying about his service in Vietnam. That ad was paid for by a group called Swift Boat Veterans for Truth.

The wave of negative advertising in this campaign, not just on national security, is the topic of our "Face Off" tonight.

I'm joined now by David Bossie. He's the president of the conservative group Citizens United. He is also the author of "The Many Faces of John Kerry," joining us tonight from Los Angeles. And joining us from Chicago, Democratic media strategist David Axelrod, who is a former media consultant to now vice presidential candidate John Edwards. We thank you for being with us.

DAVID AXELROD, DEMOCRATIC MEDIA STRATEGIST: Thanks, Lou.

DAVID BOSSIE, PRESIDENT, CITIZENS UNITED: Thank you.

DOBBS: Let me begin by this -- all of this attack ad. You do need a program to keep up with it now, as both campaigns are indulging heavily in this.

But this campaign ad basically questioning Senator Kerry's record by the swift boat veterans, David, it turns out that they're saying none of those people served with Senator Kerry.

What's your reaction?

AXELROD: Well, I mean, this ad is sponsored by a group that was hastily put together and funded by some Houston financiers called Swift Boat Veterans for Truth.

It's really an Orwellian kind of name, because there's nothing true about the ad, up to and including the fact -- the claim that these people served with John Kerry. None of them were on his swift boat.

All the guys who were on his swift boat all attest to his heroism, as did the Navy and the Pentagon in awarding him his -- his medals.

So it really is the worst of the worst in kind -- in terms of political advertising. And I think people will reject it. I think it's -- it's a gratuitous kind of attack. And...

DOBBS: David, before we -- before we give an award, let's go through a couple of others here in the next few minutes.

AXELROD: Yes. OK, that's fine.

DOBBS: David Bossie, your reaction and explanation, if you will?

BOSSIE: Well, I just think that these are Vietnam vets that want to have their side of the story heard.

And I just -- I think it's a little bit hypocritical that you have someone who's here with us, David, who's -- who's associated with an organization that has done some of the most vicious campaign ads against the president, along with Moveon.org that have been running negative ads for over a year and a half, unprecedented in American politics.

For a year and a half, tens of millions, over $100 million already spent by outside groups, against 200,000 by the Swift Boat Vets For Truth. It's actually laughable. And I just find it hypocritical. DOBBS: Well, hypocrisy seems to be, if you will, abroad in this campaign. So, let's go to the issue of the Moveon.org ad in which the president's military service was attacked, even the suggestion that the president's father was instrumental in getting President Bush into the National Guard. Is that the kind of advertising -- Senator Kerry disavowed it, condemned it, said it's the time to discuss issues and not trade insults. How is this occurring?

DAVID AXELROD, DEMOCRATIC MEDIA STRATEGIST: I think it was a mistake to include -- let me just say I think it was a mistake to include that reference to President Bush's National Guard service in that ad. I think the crux of that ad was Senator McCain's condemnation of the swift boat ad. And I think that was the most important fact in that ad. I think it stood on its own. I think they should have left it as the centerpiece without any side issues.

BOSSIE: Look, President Bush is being outspent two to one. These outside groups have spent over...

AXELROD: Oh, please.

BOSSIE: ...over $250 million...

AXELROD: Oh, please.

BOSSIE: ...to $5 million.

AXELROD: This president has raised and spent more money than anyone in history. And David, here's the thing.

BOSSIE: That's not -- look, it's OK that they do that.

AXELROD: Eighty percent of his ads have been negative ads attacking Senator Kerry.

(CROSSTALK)

AXELROD: If I were president of the United States and I had a record I was proud of, I don't think I'd spend 80 percent of my media money attacking my opponent.

DOBBS: David Bossie, and if you would, gentlemen, allow one another to be heard. David Bossie?

BOSSIE: Well, look. The bottom line is organizations like Moveon.org and the Media Fund have been comparing George Bush to Adolf Hitler and a liar for a year and a half. It is a ridiculous, it is hypocritical that they are doing it.

And let me just say this. They are spending $200 million against $200,000. I think it's a little -- when President Bush runs an ad, he puts his name on it. When senator Kerry runs an ad, they put their name on it. These outside groups, which by the way run ads as an outside group myself, I put my name on them and I stand by them. I just think it's hypocritical that you want it both ways. You want it both ways. AXELROD: I don't want it both ways. I have not done an ad comparing him to Adolf Hitler. I think that's a contemptible thing. I don't agree with that.

But David, I appreciate your newfound sense of righteousness about this. Your organization is the organization that ran the famous Willie Horton spot. You ran an ad in 1992 with Dr. Tapes against Bill Clinton.

BOSSIE: No, we didn't.

AXELROD: If your newfound sense of propriety. You were the investigator who was fired by the House, by the Republicans in the House because you doctored information that was released by that committee. So don't tell me that I don't have my facts straight. You certifiably have not had your facts straight.

DOBBS: Gentlemen, as you exchange attacks against one another on the issue of attack ads, Senator Kerry saying let's talk about the issues, not trade insults. The fact is that the attack ads are at a level that we haven't -- we've never seen in a campaign and we've seen some fairly dirty campaigns.

Meanwhile, the public isn't being served, is it? Because the public is perhaps underrepresented as it has ever been on important issues about the quality of voting in this country, the assurances of the integrity of voting machines, national immigration policy, border security. National healthcare, infrastructure, the quality of education.

And yet we're hearing more attack ads from both candidates representing the wishes, aspirations, 300 million Americans. What in the world are you people doing? David Axelrod first.

AXELROD: Yes. I can only speak for the ads that I have done. My ads have been about healthcare, they've been about prescription drugs, they've been about the issue of outsourcing that you've done such a good job on on this program.

And I quite agree with you. I think that people have a very low tolerance for gratuitous and personal attacks from either side. And I think that they do a disservice to the public.

On the other hand, there are real differences between these candidates and those differences deserve to be aired and discussed. And I think you have to divide the two. David's organization ran an ad attacking John Kerry for the hair cuts that he has. I mean, that's quite different than discussing the issue of healthcare, prescription drugs.

DOBBS: David Bossie, please. You're going to have the last word here.

BOSSIE: Look, it's nice that Senator Kerry said he that doesn't like this. I wish he had said it a year and a half ago. Calling President Bush a liar and comparing him to Adolf Hitler, which these groups are doing doesn't help move those issues that you were just discussing, Lou, forward. They don't help America with their healthcare.

And I've got to tell you, David's scare tactic ads are part of that problem, not part of the solution.

DOBBS: David Bossie, David Axelrod, we thank you both for being here. We hope you'll come back as we discuss this important issue.

AXELROD: Thank you.

BOSSIE: Thank you.

DOBBS: That brings to us the subject of our poll tonight. And that is, "Whether or not you approve of negative political ads, do you believe they work?" Yes or no. Cast your vote a cnn.com/lou. We'll have the results for you later here in the broadcast.

Taking a look now at some of your thoughts on the clash between the federal government and several states that are moving to allow the import of prescription drugs.

Marjorie Vidlund of Marquette, Michigan, "Lou, isn't it ironic that we should be grateful for the low prices that globalization provides on clothing and other goods, but chastised when we want to buy less expensive prescription drugs from other countries."

Joseph Branon of Oro Valley, Arizona, "The FDA is responsible for food as well as drugs. Why are they allowing the importation of a great amount of food, but not prescription drugs?"

Laura in Youngstown, Ohio, "We outsource products and jobs from this country so that big business can maintain their profits and are not allowed to insource drugs from other countries so that big business can maintain their profits."

Please send us your thoughts at loudobbs@cnn.com.

Coming up next here, the New Jersey governor's office has been rocked by one scandal after another. And tonight, yet another major development. We'll have a live report.

And then, illegal aliens want the right and privileges of citizenship without responsibility. California State Senator Gil Cedilla says they deserve those right, specifically the right of a driver's license in their possession in the state of California. He's our guest tonight.

And the leading think tanks in this country want to do your thinking for you. They certainly want do the thinking of your representatives in Washington. They're worth hundreds of millions of dollars. Who's funding the research? Just how much influence do those donors really have? Our special report on thought leaders coming right up.

(COMMERCIAL BREAK) DOBBS: New developments tonight in the growing political sex scandal in the New Jersey governor's office. Senator Jon Corzine has just released a statement saying he will not run for the office of governor once embattled Governor Jim McGreevey steps down. Deborah Feyerick joins me now live with the latest for us. Deborah, this does not get any better.

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, it doesn't get any better. But this is a big announcement, because it really sets the stage for politics in New Jersey for the next three months.

The senator saying today he met with Mr. McGreevey, and that the governor made clear in our conversation, his absolute intent to serve until November 15, 2004.

Senator Jon Corzine saying: I accept the final decision -- or, I'm sorry, "I accept that decision as final." He says: "In light of the governor's position, I want to make clear that my priority is to serve the people of New Jersey in the United States Senate.

Now, the New Jersey governor really just can't seem to shake the scandal. His biggest campaign contributor today, a man who has donated millions to McGreevey campaigns, and also to his committees in federal court, billionaire real estate magnate Charles Kushner, cutting a deal with prosecutors, pleading guilty to 16 counts of tax fraud, one count of retaliating against a witness and one count of making false statements to the Federal Elections Commission.

Kushner admits he tried to hide $1 million worth of campaign contributions by listing them as business expenses. He also donated money using his employees names without ever telling them that he was doing so.

Kushner also admits retaliating against his sister and brother- in-law, both of whom were cooperating with prosecutors against him. Kushner hiring a prostitute to have sex with his brother-in-law, filming it, sending the tape to the family.

His lawyer made it clear that this particular scandal has nothing to do with the scandal that is bringing down New Jersey's governor. The lawyer setting the record straight that even though Kushner sponsored the governor's alleged paramour when he first came from Israel, that was five years ago.

(BEGIN VIDEO CLIP)

BENJAMIN BRAFMAN, KUSHNER'S ATTORNEY: He has absolutely nothing to do with the controversy surrounding Governor McGreevey. And regardless of how often I say that, people continue tow rite it. It is a baseless, false rumor with no factual premise to it whatsoever.

(END VIDEO CLIP)

FEYERICK: Now the man making the sexual harassment claims against the governor, Golan Cipel, is in hiding essentially in Israel. He says the relationship was far from consensual, as the governor claims. McGreevey, as you heard, holding tight. He's not going anywhere.

And Senator Jon Corzine backing that up, saying basically that he will not seek the position of governor even if McGreevey were to step down, which he has no intention of doing -- Lou.

DOBBS: And Deborah, this statement by Corzine is interesting. The senator saying that McGreevey absolutely intends to stay in office until November 15th, and Senator Corzine saying he supports that.

Yet at the beginning of that statement Senator Corzine said he was most concerned about the people in New Jersey. This effectively denies him a voice in who will be filling that governor's mansion.

At least on a state level, absolutely. Jon Corzine has such a big role right now in Democratic politics on a national level.

DOBBS: How in the world did he get such a big role?

FEYERICK: It's stunning. He came out of nowhere a couple of years running for Senate. He was head of Goldman Sachs, as you know. And all of a sudden he decides he's going to invest $63 million of his own cash, run for senator, and he has become a big player in Washington.

DOBBS: And now he's a big deal in scandal-ridden New Jersey. What are the Republicans going to do here because it seems the Democrats are vulnerable to every kind of attack on this issue, corruption throughout Trenton, New Jersey, the governor's office, the relationship of these scandals, chronological, if not extant now?

FEYERICK: Absolutely. And it absolutely would have been better for the Republicans had McGreevey decided to step down. Because this way they could have possibly gotten one of their own into that statehouse. They cannot do that now. McGreevey holding tight, basically saying, if I have got to step down, you had better believe the next 90 days are mine to own.

And that's what he's doing. He's really trying to get as much done as he can in 90 days. So you've got to give him a little credit on that front.

DOBBS: And why would that be? The man has just admitted committing, really, fraud against the state of New Jersey by bringing this person into office without qualification, by acts that are unbelievable. His lead campaign fund-raiser just admitting to fraud. I mean, I'm not particularly impressed with his concerns for the people in New Jersey. How about you?

FEYERICK: It's a very good point.

(LAUGHTER)

DOBBS: OK. Deborah Feyerick, we'll see what the people in Jersey say, Democrats and Republicans alike. Thank you.

Turning to our continuing report,"Broken Borders." My next guest is the author of a bill that would grant drivers licenses to more than 2 million illegal aliens in the state of California. State Senator Gil Cedillo has been pushing this bill for some six years. The state senator says he is prepared to fight for it until the day he dies.

Opponents of the bill say granting drivers licenses to millions of illegal aliens in this country poses a threat to our national security. California State Senator Gil Cedillo joins me tonight from the state capital of Sacramento.

Senator, good to have you with us.

GIL CEDILLO (D), CALIFORNIA STATE SENATOR: Lou, always good to be on your show.

DOBBS: Let's clear something up right at the outset. A lot of reports and rumors that you and Governor Schwarzenegger have already worked out a deal even though the governor repealed Senate Bill 60 that Gray Davis had signed that would have given illegal aliens drivers licenses. Is there any truth to those rumors and reports?

CEDILLO: Correct. Absolutely true. We, in November, agreed that we were going to be committed highways are safe by making sure every motorist was required to be licensed, tested (ph) and insured. We also agreed that we wanted to do so in a nondiscriminatory manner which meant that we were going to give everyone the same license on its face because, as the governor indicated, being an immigrant himself, knowing the immigrant experience, that he understood that placing a mark on a license would invite discrimination and that he was opposed to that.

He understood that life experience and he brought that experience to his position and his leadership in resolving this issue. So, there is an agreement that we have. It serves as the framework for us to move forward. We have an obligation to make sure, Lou, that America is safe and we have to do all that we can. And in so doing, we have come forward with the Immigrant Responsibility and Security Act.

What does that do? It strengthens national security. It strengthens highway and community safety. And we're promoting citizenship and civic responsibility amongst immigrants in our state of California.

DOBBS: California Governor Schwarzenegger says, hold on a minute, that he has not in point of fact reached an agreement with you. That in point of fact he wants and maintains heightened concerns about national security. That he wants a separate mark on any drivers license that would be issued. Is that what he's communicating to you?

CEDILLO: We've addressed all the concerns that the governor has. This license will be the safest document in America. In fact, our "Los Angeles Daily News," a very conservative newspaper opined that this was now the time for us to resolve this with our bill.

We've referred to the 9/11 Commission report. It indicates and articulates an urgency and a need for us to know who's living in our country, to make sure that we have certainty about who our residents are. This bill does that with the strictest background checks through our Department of Justice, through the FBI, through our Homeland Security. We make sure that we have fingerprints, that we have a photo, that we're certain of an address.

So this bill will set a model for the nation, in terms of knowing who lives here, which is why it's supported by Los Angeles Police Chief Bill Bratton, former police chief of Boston, former police chief of New York, now the police chief of Los Angeles. Why, the president of the California Police Chiefs Association, Cam Sanchez, endorses this bill.

So there's strong support from the leadership, the law enforcement community and from the rank and file police officer who doesn't feel that there's a need or that he's served any benefit by having a license with a mark. He wants to be able to identify people in the field and not have the burden of proving that he did so without looking at the mark.

DOBBS: Looking at the mark, you believe that this could be done, should be done, with no distinction whatsoever from a regular driver's license for a resident, citizen of California, legal resident whatsoever?

CEDILLO: Right. And the reason we do that is because there's not a good cause reason to have the mark. If there was some purpose that the mark served, we would look at that. But so far what we know is that it won't prevent anyone from boarding an airplane that TSA tells us and all the airlines tell us. Anyone can board an airplane if they have a consular ID card. We know it won't prevent them from opening a bank account...

DOBBS: Well, if they can do that in this country, if they can board a plane with that matricular consular (ph), which is often fraudulent, as you know, then the TSA needs to have its head examined and we need a congressional investigation of them, don't you agree?

CEDILLO: Well, that's why we're not relying on the matricular consular card. We've told the governor that what we want to use is the standards we use today for citizenship. If somebody can meet the standard of identity that we require for citizenship, then clearly in California we want to know who they are and we want them to have the responsibility of being licensed, tested and insured.

Senator, it's good of you to be here, we're out of time. I look forward to talking with you again on this issue.

CEDILLO: Lou, it's always a pleasure to be on your show.

DOBBS: Thank you.

Still ahead, the high level influence of this country's think tanks coming at a price. We'll have a special report on who is paying for America's -- well, what some people call "best thinking." Thought leaders and their influence and who they're influencing, next.

(COMMERCIAL BREAK) DOBBS: This week, we're focusing on America's so-called thought leaders, the think tanks. We've reported on their extraordinary influence on our lawmakers and public policy.

Tonight we examine their funding. Many think tanks claim to be not-for-profit, but their assets can total hundreds of millions of dollars, nonetheless. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): Thought isn't cheap. It takes a lot of money to run a think tank. The Carnegie Endowment is the oldest think tank in Washington, D.C., with assets of $221 million. That makes it number three on a list of the top five. Number one is the RAND Corporation with the Brookings Institution in at number two.

The money comes from a variety of donors, foundations, corporations, individuals, as well as government contracts. They all contribute with a single goal: to influence what gets talked about in public debate.

MEREDITH MCGEHEE, ALLIANCE FOR BETTER CAMPAIGNS: The policies that we're talking about, the choices that we have, those choices are largely influenced by those foundations that decide to fund different projects. And without that funding, those choices don't exist.

TUCKER: Officials at think tanks are very prickly about the notion that funding influences the outcome of research.

RON NESSEN, BROOKINGS INSTITUTION: We have 80 scholars here, most of them are PH.D.s., and what they do is real academic research. And I think they'd be outraged, frankly, if any funder tried to influence their research.

TUCKER: The way it works, they say, is that money seeks its own. There is no denying that corporations seek out think tanks which are sympathetic to their causes, giving them not only a voice, but the patina of credibility.

ANDREW RICH, CITY COLLEGE OF NEW YORK: Think tanks have about a century-long history in the United States of being research organizations, rigorous research organizations. And that means that if you want your ideas to be taken seriously, it's helpful if a think tank is espousing those ideas.

TUCKER: But it doesn't always work that way.

(END VIDEOTAPE)

(on camera): Example, sources at the Heritage Foundation say they almost lost a great deal of funding from the pharmaceutical industry after it was critical of Bush's Medicare reform plan. Pharmaceuticals didn't like the position of Heritage, but, Lou, in the end, they left their funding in place.

DOBBS: All right. Thank you, Bill.

Still ahead here, new poll numbers tonight in the battleground state of Ohio. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Paula Zahn is hosting a special town hall meeting at 8:00 Eastern tonight from Canton, Ohio. Paula Zahn joins me now with a preview.

Paula, how close is the election in Ohio?

PAULA ZAHN, HOST, "PAULA ZAHN NOW": Well, it's tight. And we have some polling statistics we're going share with our audience a little bit later that some people might find surprising. I'll give you a sneak preview, Lou, because I like you.

The poll found John Kerry leading President Bush 52 percent to 42 percent among registered voters in Ohio. Now, this next number is equally important, because it takes a look at which voters would be likely to vote if the election were held today. And that number is different. That shows John Kerry with a 2 percent margin of victory over the president, 48 percent to 46 percent.

So, no matter how you cut it, the race is very tight. And what we're going to try to do here tonight with an audience pretty evenly split -- I hope you all agree with me -- between Republicans, Democrats, and undecided, is to give them a chance to pose questions to both representatives of the Bush and the Kerry campaigns.

The economy, a huge issue. This is an issue, I know, Lou, you cover a lot on your show. Since the year 2000, some 2,000 manufacturing jobs lost in the state. And particularly hard hit, the Canton area -- in and around here, some 12,000 jobs.

DOBBS: And Paula, as you know, we cover lots of issues: the economy, Iraq -- a host of issues that are critically important. We look forward to what you find out tonight.

Thanks, Paula Zahn, tonight 8:00. Special town hall meeting here on CNN. And I'd like to invite any of you here in New York City to join me for the signing of my new book tonight, "Exporting America" right after this broadcast. I'm heading over to Barnes & Noble on the west side of Manhattan at 82nd and Broadway. Hope you're there tonight; we begin at 7:30.

Sill ahead, the results of tonight's poll, a preview of what's ahead tomorrow. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of our poll tonight: 51 percent of you say negative political ads do work; 49 percent of you say they do not.

Thanks for being with us. Please join us tomorrow here. The swift boat controversy and Senator John Kerry's military service. We'll have a debate -- two starkly different views.

We hope you'll be with us. Thanks for being with us tonight. For all of us here, good night from New York.

"ANDERSON COOPER 360" coming up next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


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