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LOU DOBBS THIS WEEK

Salmonella Investigation Continues; Obama Defends His Patriotism; McCain Touts Free Trade Agenda

Aired July 5, 2008 - 19:00   ET

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


KITTY PILGRIM, HOST: Tonight: Senator Obama is fiercely defending his patriotism on this most patriotic of holidays. We'll tell you why Obama is emphasizing his commitment to traditional American values.
And: Rising anger across the nation as government bureaucrats can't find the source of a salmonella outbreak, and, they received huge bonuses. We'll have all that and much more, straight ahead, tonight.

ANNOUNCER: This is LOU DOBBS THIS WEEK: News, debate, and opinion. Here now: Kitty Pilgrim.

PILGRIM: Good evening, everybody. As we celebrate July 4th, Senator Obama is telling Americans that he's as patriotic as anybody. Obama is hitting back at political opponents who are raising questions about his commitment to this country. Obama is saying that the question of who is or who is not a patriot all too often poisons our political debate. He said he will not stand idly by if his patriotism is challenged.

Candy Crowley has our court.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): Independence, Missouri, during Fourth of July week is a pretty standard pick for politicians to show their patriotism. Barack Obama went to defend his.

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: I found for the first time, my patriotism challenged, at times as the result of my own carelessness, more often as the result of the desire by some to score political points and raise fears and doubts about who I am and what I stand for.

CROWLEY: Part of it is his unusual name and upbringing with little resemblance to "Ozzie and Harriet" and the vicious anti-Obama whisper campaign on the Internet and elsewhere. But a September picture is showing Obama listening to the "Star Spangled Banner" -- without his hand over his heart, a carelessly worded answer when asked why he wasn't wearing a flag pin...

OBAMA: Instead, I'm going to try to tell the American people what I believe will make this country great, and hopefully, that will be a testimony to my patriotism.

CROWLEY: And inflammatory criticism of the country by his former minister fueled the fire of repeatedly debunked e-mail claims that he refused to pledge allegiance to the flag, that he was un-American.

It seeped into the grassroots. In April, a young woman asked how she could convince her father-in-law to vote for Obama.

UNIDENTIFIED FEMALE: He's been influenced by some of the spin about saluting the flag, that pin, you know, all those things...

OBAMA: Right. Right.

UNIDENTIFIED FEMALE: ... that I've heard. I just wondered what you would say to him if he was to show him where your heart is.

CROWLEY: And now, he has a bigger stage to show where his heart is, where he came from.

OBAMA: I remember listening to my grandmother telling stories about her work on a bomber assembly line during World War II. I remember my grandfather handing me his dog tags from his time in Patton's army and understanding his defense of this country marked one of his greatest sources of pride. That's my idea of America.

CROWLEY: He has a biography ad about his American roots and values airing in 18 states and he has a video on his Web site to rebut the still circulating e-mails, and he is pushing back.

OBAMA: I will never question the patriotism of others in this campaign. And I will not stand idly by when I hear others question mine.

CROWLEY: But in politics, pictures are permanent and symbols seem like substance. In April when a veteran gave him a flag pin, Barack Obama put it on. And he wore one in independence, Missouri.

Candy Crowley, CNN, Washington.

(END VIDEOTAPE)

PILGRIM: Senator Obama, tonight, is also facing criticism from the powerful gun lobby. The National Rifle Association is planning to spend millions of dollars to portray Obama as a threat to gun rights. Now, this after the Supreme Court ruled that Americans do have a constitutional right to own guns for self-defense.

Brian Todd reports from Washington.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): Coming soon, a $15 million ad blitz against Barack Obama over his record on gun control.

CHRIS COX, NATIONAL RIFLE ASSOCIATION: Gun owners in this country are not only very loyal, they don't like being lied to, they're not easily fooled. And if Barack Obama thinks that he can fool them or if they -- that they have short memories, he's mistaken.

TODD: The National Rifle Association's beef with Obama? He support as ban on semiautomatic weapons, on almost all concealed weapons, and a limit on handgun purchases to one a month. Obama says he supports legitimate gun purchases.

OBAMA: I'm a strong supporter of the Second Amendment. But I do not think that that precludes local governments being able to provide some common sense gun laws that keep guns out of the hands of gang bangers or children.

TODD: Obama could soon find himself the target of NRA ads like this one from 2004 against John Kerry.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: That dog don't hunt.

(END VIDEO CLIP)

TODD: And Obama's remark that "bitter" voters turn to guns and religion could come back to haunt him. But a spokesman is unfazed.

ROBERT GIBBS, OBAMA CAMPAIGN SPOKESMAN: We think we'll get the votes of plenty of gun owners and gun owners will have a home in the Obama campaign.

TODD: Republican John McCain wins praise from the NRA for opposing bans on assault weapons, certain ammunition, and handguns in Washington, D.C.

SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: For more than two decades, I've opposed efforts to ban guns, ban ammunition bans, ban magazines and dismiss gun owners as some kind of fringe group unwelcome in modern America.

TODD: But the NRA disagrees with McCain over his supports for background checks at gun shows. Could the NRA's anti-Obama ad campaign make a difference?

AMY WALTER, NATIONAL JOURNAL'S HOTLINE: There's a lot of competing pressures for these voters. I mean, they're concerned about the economy; they're concerned about gas prices. So I just don't know this issue, alone, is going to have the impact it may have in the past.

TODD (on-camera): And the NRA is just one of many groups planning independent ad campaigns about Obama and McCain. But remember the 2000 presidential election, the NRA took out ads against Al Gore in Tennessee that some analysts think were a key factor in Gore's loss in his home state that prevented him from winning the presidency.

BRIAN TODD, CNN, Washington.

(END VIDEOTAPE)

PILGRIM: Senator McCain is making a new attempt to end the turmoil in his campaign. McCain's shaking up the top levels of his campaign staff, to stop what one adviser calls "unforced errors." Now this shakeup coming amid rising concern in the GOP that McCain may be unprepared to face the challenge from Senator Obama.

Dana Bash has the report.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CORRESPONDENT (voice-over): Just the fact that John McCain traveled to Colombia in South America, not a battleground or any U.S. state, is exhibit A of growing concern his campaign is off course. And now, an urgent shake-up to correct it.

Campaign manager, Rick Davis is relieved of his day-to-day duties. Senior adviser Steve Schmidt, a Bush '04 veteran, will now take operational control to, as one adviser told CNN, "stop the unforced errors of this campaign."

McCain insiders admit severe problems at headquarters have caused a series of missteps. Here are some big ones. The company McCain keeps, the candidate tarnished by some associates. The campaign hired then-fired lobbyists who worked for the military junta in Myanmar.

MCCAIN: We will vet everyone very seriously and make sure that it's not a repetition.

BASH: McCain then enacted a new, strict anti-lobbyist policy which in turn triggered a staff purge of yet more lobbyists and kept the story going.

JOHN HAGEE, PASTOR: The next president of the United States, John McCain.

BASH: More poor vetting led to endorsements by controversial figures like pastors, John Hagee and Rob Parsley, which McCain didn't reject until months of bad press.

Another problem -- mixed messages. The straight-talk candidate seemed scattered, like last month when McCain ran a TV commercial distancing himself from President Bush.

(BEGIN VIDEO CLIP)

NARRATOR: John McCain stood up to the president and sounded the alarm on global warming five years ago.

(END VIDEO CLIP)

BASH: Then he went to Houston, oil country and sided with the president on the controversial issue of oil drilling offshore, reversing his own position.

MCCAIN: A broad federal moratorium stands in the way of energy exploration and production.

BASH: Not to be left out, the problem with stage craft. While we saw soaring imagery from the Obama campaign, Team McCain seemed visually challenged. Take that now infamous green screen behind the McCain's prime time speech the night Obama clinched the Democratic nomination, not to mention an erratic schedule of news-making policy speeches delivered too late to make newscasts.

CARLY FIORINA, JOHN MCCAIN ECONOMIC ADVISOR: What I see, frankly, are pretty understandable growing pains of an organization that skinnied (ph) way down for it to fight a primary and now is building itself back up to fight a general.

BASH: But it's been four months since McCain began his general election campaign. He had the luxury of time to beef up this Democrat's battle. And many Republican strategists have told CNN for some time they wondered what were they waiting for?

(END VIDEOTAPE)

PILGRIM: Dana Bash reporting there.

Senator McCain likes to call himself the biggest free trader ever; despite evidence the so-called free trade has destroyed millions of jobs in this country. And McCain went to Colombia to promote his agenda, and this after the Democrat-led Congress blocked a free trade deal with Colombia.

McCain also went to Mexico to discuss Mexico's war against violent drug cartels; and also on McCain's agenda -- border security and the illegal immigration crisis in this country. McCain supports tougher border security but he also wants to give amnesty to the 12 million to 20 million illegal aliens in this country. We'll have much more on McCain's visit to Mexico and Colombian with three of the best political analysts. We'll have that later on the show.

And also, bungling bureaucrats still can't find the source of a nationwide salmonella outbreak. We'll have the very latest for you on that.

And, chaos in the skies. Airlines are struggling to survive, treating passengers like cattle. We'll have a special report.

(COMMERCIAL BREAK)

PILGRIM: The Food and Drug Administration, tonight, is still searching for a source of nationwide salmonella outbreak. Now, the agency, this week, activated the Federal Emergency Response Network on its efforts to find the source of this outbreak which is initially linked to contaminated tomatoes. The outbreak has spread to 36 states. In the District of Colombia, it has sickened nearly 1,000 people.

And as we first reported, two weeks ago, the FDA now is not sure that tomatoes are actually the source of this outbreak. Louise Schiavone has our report.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): The nation's $2.3 billion tomato industry is on the ropes as the Centers for Disease Control admits tomatoes are not the lone suspects in an as yet unremitting salmonella outbreak. VOICE OF DR. ROBERT TAUXE, CENTERS FOR DISEASE CONTROL: CDC has broadened its epidemiological investigation to be sure that the assessment encompasses food items that are commonly consumed with tomatoes.

SCHIAVONE: Sources say growers were enraged to hear from the FDA that tomatoes may not be the source of infection.

TOM NASSIF, WESTERN GROWERS ASSOCIATION: Taking an industry hostage, creating this much damage when the possibility now exists that tomatoes weren't implicated in the first place is very disturbing, and our growers and shippers are calling us and they're very angry.

SCHIAVONE: The FDA admits...

VOICE OF DAVID ACHESON, FDA: The pace of this investigation has been frustratingly slow.

SCHIAVONE: A long-stated explanation for this is that FDA funding has been insufficient for the technology, science, and field work required. But a congressional examination of FDA pay reveals that the funding shortage has not held down upper level agency salaries.

In 2007, Dr. David Acheson, the FDA food safety director, earned $221,824, paid as he has been for several years under a special exception for expert consultants. Over a year long period that ended in April, the FDA paid $35 million to top officials in incentives over and above their salaries. This as the industry they regulate is in a downward spiral.

JIM PREVOR, PERISHABLEPUNDIT.COM: We believe that the tomato supply chain has lost about a quarter of a billion dollars. They have their jobs. They get their salaries whether they're right or wrong.

SCHIAVONE: In its own defense, the FDA tells CNN, quote, "The agency employs a very knowledgeable, experienced and highly educated staff and has to compete with the private sector to attract individuals of the highest caliber to meet the growing demands on its scientist and regulatory mission both here and abroad," end quote.

House Energy and Commerce Subcommittee Chairman Bart Stupak told CNN, quote, "These bonuses are not going to the men and women in the field who FDA struggles to retain. They're going to top agency officials in Washington who presided over the agency while an unprecedented number of Americans have been sickened by contaminated food and drugs."

Officials believe, literally, that thousands of people in the United States been sickened in the outbreak that started April 10th. Scientists say the U.S. no longer sets what the FDA itself has called the "gold standard" in research and tracking.

DR. NEIL FISHMAN, DIRECTOR HEALTH CARE EPIDEMIOLOGY: I think that the European Union is ahead in tracking a lot of things that we currently are unable to track in the United States. I think it relates directly to the funding cuts that the FDA has had to deal with.

SCHIAVONE: The FDA concedes...

VOICE OF DAVID ACHESON: You've got to exam the whole traceability system. We've got to improve the process because the one that we are operating under right now is clearly not getting us an answer fast enough.

SCHIAVONE: But some growers are way ahead of the bureaucracy.

PAUL MASTRONARDI, MASTRONARDI PRODUCE: Each individual fruit, if it's sold in a bulk format has a little PLU sticker on it. And that label has certain information. We have country of origin information on that label. We also have grower code on there. So we'll know exactly which farm each piece of fruit came from if we went to a grocery shelf.

SCHIAVONE: Sun Set brand produces millions of pounds of tomatoes yearly in green houses in Canada, the U.S., and Mexico. They have their own laboratory and food safety program.

JOE DARDEN, MASTRONARDI FOODS: We do product-testing of the products as they enter our warehouses and also we do product-testings as they leave our warehouses.

SCHIAVONE: It costs money, but it also delivers customers.

They're not alone. In upstate New York, minor farms is waiting for a half million bushel apple crop to come in. When it does, they'll label every apple that goes to market.

PHIL CORSO, GEN. MANAGER, MINARD FARMS: From that bar code, they could tell what marketing agent sold it to them. And then from that marketing agent, they can go all the way back to the farm where it was harvested. And we could bring it right back into the block, what orchard it came out of.

SCHIAVONE: The farm submits to several safety audits during the growing season.

(END VIDEOTAPE)

SCHIAVONE: Kitty, growers say they are taking steps that Congress and the regulators haven't mandated for two reasons. Consumers are demanding it and the growers stand by their products.

PILGRIM: Louise, they're talking about other sources for this outbreak. What are they saying they are, potentially?

SCHIAVONE: Well, FDA and CDC don't want to talk about other sources because they feel probably that they've been burned on these tomatoes. The growers are very upset because they've taken huge losses as a result of this outbreak. But, people in the agricultural community are telling us that there are certain kinds of hot peppers that are associated with Mexican cuisine, cilantro -- those kinds of things that you would find in that sort of cuisine.

PILGRIM: All right. Thanks very much, Louise Schiavone. Coming up, airlines in crisis, it's the flying public who pays that price. We'll have a special report.

And the candidates pander to pro-amnesty special interest groups in their battle for Hispanic voters. We'll discuss that and much more with our distinguished panel of political analysts. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Crude oil prices this week hit a new record high. It's climbing closer to $150 a barrel. Now, in an effort to offset rising fuel costs the nation's airlines are raising prices, this is for the 14th time since December. Prices are already up 17 percent this year.

Bill Tucker reports on the chaos in the sky.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): U.S. airlines are busy slashing services, cutting routes, and raising the price of the ticket. The biggest single reason -- fuel prices. U.S. airlines will spend $61 billion on fuel this year, according to the Air Transports Association. That's four times the $16 billion spent in 2000. It's only expected to get worse.

DR. JOE SCHWIETERMAN, DEPAUL UNIVERSITY: The price of fuel isn't coming down. Projections for the fall remain pretty bad.

TUCKER: This year alone, 100 communities have lost or will lose commercial air service. The airlines clearly need and are squeezing passengers for every dollar they can. But many familiar with the industry don't think it will be enough. The estimated losses this year for the entire airline industry range between $7 billion and $13 billion.

The skyrocketing cost had increased the calls for foreign investment, a move generally supported by the domestic industry in need of cash. Current rules limit foreign investment to 25 percent of an airline and prohibit them for having control of domestic carriers. Opponents of increased foreign investment argue fuel costs for the problem, not a lack of foreign investment.

CAPT. PAUL RICE, AIRLINE PILOTS ASSN. INT'L: It's not an investment crisis, it's the cost-side (ph) crisis.

TUCKER: Congress has been reluctant to change those rules in the past.

(END VIDEOTAPE)

TUCKER: The reason for their opposition is based on national security concerns. The airlines are integral to the movement of our troops. Congressional opponents also note that negotiators representing foreign interest refused to change their stance on allowing foreign control of their airlines, Kitty, which they flatly will not allow.

PILGRIM: Bill, what's the political split out on this? What's the read, can they get this done or not?

TUCKER: I'm very doubtful they can. Congress is very bipartisan in their opposition. The administration has tried to do an in runaround them on this before. They've had the Department of Transportation try to change it by CFIUS (ph). And Congress, each and every time has rebuffed them. So I doubt that they're going to get any rules changes to it.

PILGRIM: Thanks very much, Bill Tucker.

Well, in addition to raising fares, airlines are charging customers from everything from aisle seats to pets and most of the major carriers have a $65 fuel surcharge. Now, some airlines charge $15 for your first checked bag. And you can pay anywhere from $5 to $35 for a coach seat with more leg room or a better view. And even the family pet will cost you as much as $100 each way.

Airlines are also cutting back on the number of flights this fall because of the high fuel costs. Now, the number of flights out of some of the nation's busiest airports will be slashed by at least 10 percent this year. And that decreased number of flights will also mean massive job cuts. United, Delta, Continental -- each will slash thousands of jobs by next year.

Turning to our illegal immigration crisis. A tough new law took effect this week in Mississippi. Mississippi now requires businesses to use E-Verify to assure the legal status of new employees. Under the law, employers who do not comply could lose their business license.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Mississippi is only the second state in the nation to require private businesses check their employees to make sure they are eligible to work in the United States. The law which just took effect will be phased-in beginning with companies with 250 or more workers.

Mississippi lawmaker, Michael Watson, said the issue of illegal immigration was something he heard a lot about as he went door-to-door campaigning. Residents are worried about the burden on schools, hospitals, and social services.

MICHAEL WATSON, (R) MISSISSIPPI STATE SENATOR: You know, something that affects the state, probably much more than the nation. It's a local level, it's a local issue. It's not a just a federal issue. So, it's important for us to get a hold on this thing and do something positive to make a difference.

SYLVESTER: E-Verify is an Internet-based system run by the Department of Homeland Security that matches worker's information against Social Security records.

ROBERT DIVINE, IMMIGRATION GROUP: Without E-Verify you're stuck with just looking at the document and making your best shot on whether that's a valid document.

SYLVESTER: But critics say the program that was set up on a voluntary basis is not ready for widespread use. Arizona was the first state to mandate statewide employment checks.

REP. GABRIELLE GIFFORDS, (D) ARIZONA: Some of the businesses that have signed up have reported a variety of challenges and problems using E-Verify. They're finding it complicated, unreliable, and burdensome.

SYLVESTER: But proponents say, the system works weeding out illegal workers. According to the Department of Homeland Security, 92 percent of workers are cleared within seconds. Most of the remaining workers are found to be ineligible to work.

(on camera): There are eight other states that require most or all public employers to verify employee citizenship. All hires for the federal government or its contractors must also be E-Verified.

Lisa Sylvester, CNN, Washington.

(END VIDEOTAPE)

PILGRIM: Up next: Senators McCain and Obama race to capture the independent vote. We'll find out if either candidate is succeeding. Three of the sharpest political minds in the nation will join us next.

And, the U.S. sends $500 million to Mexico to fight surging cartel violence. We'll talk with the leading authority on Mexico.

And, President Bush signs a new G.I. Bill for our servicemen and women. It's a bill he opposed earlier. We'll have those stories and more, next.

(COMMERCIAL BREAK)

ANNOUNCER: This is LOU DOBBS THIS TONIGHT: News, debate, opinion and independent view. Here again: Kitty Pilgrim.

PILGRIM: With the primary season behind them, senators, McCain and Obama, are now courting the critically-important independent voters. And those voters could determine the outcome of the November election.

Joining me now for more on the race to the middle, three of the best politic analysts in the nation. We are joined by syndicated columnist and CNN contributor, Diana West. Here in New York, Democratic strategist, Robert Zimmerman, also a CNN contributor; and, Keith Richburg, New York bureau chief of the "Washington Post." Thanks for joining us.

(COMMERCIAL BREAK)

KITTY PILGRIM, CNN HOST: He was in Canada a few days ago. he is now going to Mexico, Colombia, free trade, free trade and why do you think that in an American election -- and Ben, you've covered every primary -- in an American election, he is spending so much time in foreign countries?

BEN SMITH, POLITICO.COM: He is unapologetic proponent of free trade, which is unpopular and you know, he is trying to sell it and he's in fact, what he's doing in Latin America is he is trying link it to security and he is saying we have to have free trade with Colombia and Mexico because we need to support our allies and the drug wars as opposed to, the other argument which is it's good for the economy, it's good for exports, because people aren't buying that one.

PILGRIM: This is the classic Bush administration defense of the free trade policy with Colombia and Mexico that they link it to the drug issues. Errol, any thoughts on this?

ERROL LOUIS, "NEW YORK DAILY NEWS": Well, I don't think there are all not that many rabid pro free trade groups of voters out there, so if you want to figure out why he is doing it from an electoral standpoint, my guess is that this is a way of trying to get some traction with Latino voters. I don't think it's a particularly smart or effective way of doing it, but that would seem to be the motive. You know, in that, that's a long time practice in New York politics, you go to the home countries of a lot of your foreign-born or foreign- descendent constituents. I think though that it's a waste of time. I think it suggests a campaign that's a little bit adrift. He's got much bigger problems than trying to make nice with Latino voters.

PILGRIM: Let me show you what the spokesman from McCain said about the trip. We have a "Senator McCain wants to demonstrate that if elected president the two key trading partners can be assured that they will have a respectful but experienced and focused leader in the White House. Sounds like he is trying to be presidential, Diana.

DIANA WEST, "THE WASHINGTON TIMES": Yes, I think that's true and I completely agree with Errol's assessment. I think this is an attempt to make inroads into the Hispanic communities and I, again, I also think it is the timing is a bit odd. He does have a lot of ducks to get in a row going into the campaign now, but again, the Hispanic vote it could very well be a swing vote in many states, and he is doing as much as he can to shore up his credentials.

PILGRIM: You know, he is also drawing a very sharp contrast with Senator Obama and McCain has said about his free trade agenda, "I am the biggest free marketer and free trader you will ever see." And Senator Obama is calling for a renegotiation of NAFTA, so is this an attempt to put a little distance between his opponent? Ben?

SMITH: I think what you will hear him say about Obama is that Obama is being irresponsible and Obama doesn't know how the world works and Obama would screw up his, this very important security arrangements and then McCain is the grownup. McCain is the one who can handle these international relations. Diana, do you think this is important to link it to the drug war? I mean, It certainly is two separate issues?

WEST: Well, it is separate, but I mean, these are sources of drugs that come into this country. I think that it is also very interesting to see what Senator Obama says, because now he has also said that some of his rhetoric on NAFTA was "overheated." So I am not really sure where this is going. It is something in progress.

PILGRIM: Are we seeing a little bit of flip-flop with Obama or some waffling?

WEST: Oh to, be sure. I mean, this is the very interesting thing that is happening as we see candidates as they always do tacking to the center, we are seeing some extraordinary straddling in Senator Obama's lineup of issues whether it is on the gun rights or whether it is on the negotiating without preconditions or whether it is on NAFTA, indeed, I mean, we are seeing a lot of these things and what is interesting is that we are not seeing the press take him to task on this.

PILGRIM: Errol?

LOUIS: Well, the system certainly favors and really calls for this kind of convergence at the center from both candidates and that is what you are certainly seeing. I think is McCain's case, his sort of attempt to put distance between them by being this free trader and traipsing around in Latin America, I think the other shoe is going to drop when as the biggest free trader you will ever see, he stands in front of displaced workers, out of work factory workers in Ohio and in Pennsylvania and in other swing states. And he's going to hear from those guys.

PILGRIM: It seems like almost about strategy in that respect. You know, let's take a look, because we have a poll of polls, and this is June 16-25, registered voters. We have Obama at 47 percent and McCain 40 percent and 13 percent unsure. So in the light of, you know, President Bush's low approval ratings and consumer confidence, you have woes in the economy and you see McCain having an already sort of party drag on his campaign so-to-speak. It seems that taking a risky tact like visiting foreign countries seems extraordinarily risky under the circumstances?

SMITH: Well, he has to do something and he has not really hit a stride going you know, going from stop to stop in the U.S. and yes, I think that you know, he is trying to portray himself as a world leader, and as a man of stature and of principle and is going to say, you know, I disagree with you on this but I'm telling you that I do not disagree and I'm not flip-flopping and trying to draw the contrast.

PILGRIM: Yes, but that's stick-to-ittiveness will not be as Errol points out will not really fly.

LOUIS: It's not going to be welcomes in Ohio, it will be welcome -

SMITH: Political strategists will be scratching their heads as they come in the fall wondering why he wasn't spending every minute not out in Latin America, but going to the conservative republican base and trying to get them behind him. He has not nailed that down. He needs to be talk into evangelicals. He needs to be in small towns. He needs to be as Diana put it, getting his ducks in a row. SMITH: Well, who knows, I mean, his strength is that he is not capturing the conservative republican base the way, you know, the way Obama now has to move as the way Senator McCain does not as much because he had the whole primary -

PILGRIM: But Ben, he is captive to the republican party line on this issue though.

SMITH: On trade, yes. To part of the republican party, certainly.

PILGRAM: OK. We're going to take a quick break. We'll have much more from our panel. We'll talk about the campaign going forward. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: We are back with Errol Louis, Ben Smith and Diana West. Let's go to the unity rally of Obama and Clinton trying to mend fences and put up a united front. It is very interesting. What do you make of this sort of appeasement between the two campaigns?

SMITH: Well, I mean, it is something that they both absolutely have to do and partly because everybody is really suspicious of their relationship and has a sense that they're this odd couple and great drama and Obama is going to take advantage of it as much as he can if he ever needs to get a message out, he gets Hillary up on their on stage, and people are going to pay attention. Clinton meanwhile has no choice. I mean she has to stay in there for a political future to stay, in campaigning as hard as she can for Obama, and that is what she is going to do.

PILGRIM: How much of this is connected to Clinton's campaign debts and Obama himself made a personal contribution $2,300, the maximum. How much of this is about the money or is this about ?

LOUIS: Well, you know how it goes. Whenever people say it's not the principle, it's not the money, it's the principle. That means, it's the money. Right. So there is a $20 plus million debt to be retired and Obama with a flurry dramatic gesture of writing a check for $2,300 for himself and $2,300 for his wife, which you know, is a meaningless amount in and of itself is signaling, I don't want to get blamed for leaving her in the lurch.

In her case, though, it's going to take a lot more than that. She - that is a "titanic" amount of money. That is an awful lot of money and an awful lot of money. And there are lots and lots of small vendors. We shouldn't lose sight of the catering halls and all kinds of people providing all kinds of campaign services. They are the ones who are really being hurt. So you know, I don't think that it is helpful to just think of it as one candidate versus another, but there is a whole sort of a campaign apparatus in many, many states.

PILGRIM: Grass root suppliers basically.

LOUIS: Absolutely. PILGRIM: Diana, do you think that there is still some animosity among voters with the campaigns, and that is a real question mark as to whether or not that can be bridged.

WEST: Well, that is what is very interesting, because particularly, Mrs. Clinton continues to work the poor-me, sexism, with the end of my campaign. She's been working this theme for the past several weeks, even going so far as to talk to the "Washington Post" about it. And you are seeing an eruption of web sites by feminists putting out their notions that unity smunity really in terms of what will happen in the election in the fall campaign. So is she putting up a good face or is she working to sabotage? And we just don't know with the Clintons. Once again, this is --

PILGRIM: There is so much reading of the tea leaves. Go ahead.

SMITH: Zero evidence of that. The massive movement turned out 20 people outside an event the other day which is basically kind of the sum of the organized dead end, you know, Clinton movement.

WEST: But isn't there some talk of a million woman march at the convention? I mean, I'm not sure -

SMITH: And I will believe it when I see it. I haven't heard it.

WEST: Well, perhaps, but she is still talking along these lines.

LOUIS: Well, the history - and this comes up often in closely contested primary seasons. The history though is that over the last four election cycles I think you got a grand total of something in the range of 10 percent to 12 percent of the democrats defecting to the republicans, and you know, my sense is that there will probably be those die-hard Clinton supporters are probably in deeply blue states, so it is not as if they could really swing the election one way or another and I don't know if it becomes a factor.

SMITH: Well, certainly there are suburban women and that is the group that the Obama campaign and McCain campaigns are working hard, who voted for Hillary in the primary or who sympathize with her and are looking at the general election. And you know, Obama is out there talking both to the abortion rights and it's actually more of sort of the republican economic policies that, you know, he says he will reverse discrimination in the workplace, that stuff. But you know, at the moment, Obama pulls much better than democrats than John McCain does with republicans, like the person with the problem with the base is McCain.

PILGRIM: Diana, something to add?

WEST: No, that is good thought.

PILGRIM: OK. Let's move on to the electoral map which I am finding pretty interesting these days and we will put it up for our viewers. If you look at important CNN projections. They now have Obama leading 231 to McCain's - let's see if I can read this - 194 states. Nine states still toss up including Michigan, we are talking about this earlier, Michigan, Ohio and Florida, Ben what is this saying to you? Having been in every one of those states, practically during --

SMITH: Well, I mean, the electoral map, when you look at these polls, it looks like Obama has the edge. It looks like they're the states that you would not expect him to be playing in necessarily from Colorado to Iowa and places that Bush won where, you know, where he looked strong. If he can keep places like Alaska, Georgia on the table, he is incredibly strong, but if that map shrinks that down. You know, people who voted for Bush come around to voting for McCain and what McCain hopes is that it turns back into a battle for Ohio basically.

LOUIS: And we should keep in mind in the chess game, big states like Florida, Obama ma has not given up on Florida by any means. I mean, he has been doing a wave of appearances. I was interviewing Bob Wexler, a congressman from southern Florida and he ticked off. I was shocked. He ticked off about ten appearances that Obama has done just in the last couple of few weeks. So all of the attention is going to the unexpected states. You know, the Virginias, the Iowas, and the Colorados that he may be trying to flip, but they have by no means written off the usual suspects Pennsylvania, Ohio and Florida.

SMITH: And he can afford do both which is an advantage.

PILGRIM: Diana, thoughts on this?

WEST: Well, I thought it was very interesting actually. Ben's politico.com comment a really interesting story about the way the old Elian Gonzalez story may play into this campaign, given that Senator Obama has to two advisors, Greg Craig and Eric Holder who are identified with the repatriation of Elian Gonzales against the will of the Cuban-American community there. Will that be a factor in Florida, could be?

PILGRIM: She's quoting you, Ben. Any rebuttal?

SMITH: It is my colleague's story but absolutely, that's certainly something the McCain's campaign is raising and could wind up hurting him again. At the moment, McCain is at the moment kind of underperforming with Hispanic voters in Florida in the polls. And actually this year for the first time, there are more Hispanic democrats than Hispanic republicans in Florida and that is sort of a landmark. But you know, but absolutely, that is something that McCain is going to be contesting really hard.

PILGRIM: Really interesting, it's getting a lot better too. Errol Louis, Ben Smith, Diana West, always a pleasure. Thanks.

SMITH: OK.

PILGRIM: Coming up, are former generals and admirals helping defense contractors build weapons that won't work? We will have a special report.

Also the fight to stop outsourcing of our defense and national security. A lawmaker at the center of that fight is among our guest. So stay with us. (COMMERCIAL BREAK)

PILGRIM: A new government report found cost overruns on more than 70 new weapons systems for the Pentagon costing taxpayers billions of dollars. Now critics say that one reason could be the large number of former military officials who are working for defense contractors. Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT: A government accountability report found that in 2006 alone more than 2,400 senior D.O.D. officials including generals and admirals left the government to work for private defense contractors and of those more than 400 D.O.D. officials had new jobs that could have been work involving defense contract awarded by their former offices. The project on government oversight says it creates an appearance of a conflict of interest.

SCOTT AMEY, PROJECT ON GOVERNMENT OVERSIGHT: When you have issues of the revolving door or contracts that have been handed out or steered to a specific contractor because of who they knew in the government rather than what they know, that makes the public question the integrity of our government.

SYLVESTER: Senator Bernie Sanders blames the revolving door as one reason that the taxpayers paid $300 billion in cost overruns for military weapons systems.

SEN. BERNIE SANDERS (I) VERMONT: We want to make sure that the taxpayers get the value for what they are spending. And I think that the time is long overdue for the Congress to take a very, very hard look at the waste and fraud that is taking place within the Department of Defense.

SYLVESTER: A D.O.D. official told CNN that Pentagon officials are not prohibited from working for defense contractors and that just working for a contractor does not mean there is an automatic conflict of interest, but in one high profile case, Air Force official Darlene Drewin went to jail for accepting jobs at Boeing for herself and family members while she was working on a $20 billion deal with the company.

(END VIDEOTAPE)

SYLVESTER: By law, top Pentagon officials who work for the private defense sector cannot lobby their old their old offices for one to two years depending on their government position. Senator Bernie Sanders has offered legislation to make the revolving door more transparent. Right now, former D.O.D. officials are supposed to report their employment, the GAO found several problems with compliance. Lisa Sylvester, CNN, Washington.

PILGRIM: The Government Accountability Office recommended the Air Force reopen the bidding for the $35 billion tanker aircraft contract. The Pentagon originally awarded a contract to the European consortium that builds Airbus and Northrup Grumman, over a competing bid from Boeing. Now the GAO decision however is not binding, but Congressman Todd Tiahrt of Kansas introduced a bill to require the Air Force to rebid that contract and Lou asked the congressman how the rebidding would work?

(BEGIN VIDEOTAPE)

REP. TODD TIAHRT (R), KANSAS: Well, let's tighten it up so that you have a level playing field for American workers and let's rebid this contract. That is basically what it does. The Air Force really has three options, they can ignore what the GAO said, they could rebid it or they could award it to the Boeing company, but we think that right now it looks like they're moving towards a recompetition.

LOU DOBBS, CNN HOST: Well, a recompetition, what about the idea of American defense contractors, for example, including Northrup Grumman working with Boeing to build this contract rather than putting them in competition with one another and bringing in Airbus or any other foreign firm to allow the United States government to outsource national security? It makes no sense.

TIAHRT: No, it doesn't make any sense, and this GAO report was scathing and it said that the Air Force violated their own rules, they misled the Boeing company and miscalculated the cost and the Boeing company was actually the lowest, and so it is really difficult for us to understand why they would bend over backwards to outsource our national security to the French.

DOBBS: Well, this is point blank and I want everybody to see this if they could from the General Accountability Office, who put up this full screen that says to sustain that protest, "The United States Air Force conducted misleading an unequal discussions with Boeing." I mean, that is outrageous. Now I know that part of Boeing is in your home district there in Wichita, but I mean, this is crazy stuff.

TIAHRT: Well, they also said that the French tanker was noncompliant. That means it's ineligible from the beginning and the Air Force overlooked that.

DOBBS: And no mention of the fact that Airbus is subsidized. That EADS is in the business of subsidies, but again, this idea, I want everybody in this country to have a job. I am sorry, that is just me. I'd like the folks down in Alabama to have their jobs in this. I'd like the folks in Kansas and in Washington all around the country working for Boeing and Northrup Grumman to be working on this project together. Is that a possibility here?

TIAHRT: Well, not under the current ground rules.

DOBBS: Well, let's fix it. Let's fix the ground rules. You are the boss. You're in Congress?

TIAHRT: Well, that is why I put this RFP together that lays out a level playing field for American workers. It would allow a Northrup Grumman and a Boeing to team together in this situation.

DOBBS: All right. TIAHRT: But right now we want American workers to be employed and that is how I designed the request for proposal in this new legislation so that we an have an equal level playing field, because I believe we win. We work harder and we are more productive.

DOBBS: I don't. Congressman, I have to be honest with you. I want an equal playing field for our workers without question, but I don't want national security and I don't think most Americans don't want national security ever outsourced ever again.

TIAHRT: You are absolutely right.

DOBBS: I just want to compliment you and congratulate you on this legislation, sensible in the national interest - wow, what are you thinking about Congressman?

TIAHRT: Well, I'm thinking that we got a good chance here to make it right for the American workers who work hard everyday and feed the families and pay taxes and the people we need to continue a strong economy in a safe nation.

DOBBS: Congressman Todd Tiahrt, we thank you for being here. Appreciate it.

TIAHRT: Thank you.

PILGRIM: Still ahead, a challenge for the presidential candidates, Lou's conversation with the author of the important book "The government ill executed" Paul Light will join us.

(COMMERCIAL BREAK)

PILGRIM: Professor Paul Light is the author of an important new book "A government ill executed." When Professor Light was here last on this broadcast, he spoke with Lou about the role of lobbyists preventing the effective functioning at the federal government. Presidential candidates resolved to take action and on the issue of lobbying, at least within the executive branch, here was Professor Light has to say.

(BEGIN VIDEOTAPE)

PROF. PAUL LIGHT: Get Obama and McCain to join hands right now and introduce an amendment to the 1978 Ethics Act and get it done before the convention. Make it law. Why not reach across the --

DOBBS: They can show some leadership, couldn't they?

LIGHT: Yes, absolutely could.

DOBBS: All right. Paul Light is joining me in this challenge, senators, let's do it, how about it?

(END VIDEOTAPE)

PILGRIM: Well, Lou asked Professor Light about what kind of a response he has received from the candidates.

(BEGIN VIDEO CLIP)

LIGHT: Well, they are not saying much of anything. They've got so many promises to make, that they really don't want to talk about how to deliver I am afraid.

DOBBS: They don't want to talk about it. These guys are, you know, John McCain wants to present himself as a man, a legislator of reform. Senator Obama wants to talk about all of this blabber about being an agent of change. Neither one of them has the guts to come out and talk about a single change in the role of lobbyists in their administrations, how sick to your stomach does that make you?

LIGHT: Well, you know they are both sitting U.S. senators.

DOBBS: There is one problem.

LIGHT: Well, but they are the first two senators to run against each other in dozens of presidential elections, and they could do something right now. And the fact that they are not doing anything is outrageous.

DOBBS: Why is it that the national media, the press corps, and these political parties, they are really branding organizations, fund- raising organizations more than political parties, but nonetheless, the republicans and the democrats, why is there no drive within them to change the way Washington works? The way that administrations work? Or the way that Congress works?

LIGHT: Well, you know, if you take away all of the special interests people who are going to work for McCain or Obama, you would have an empty administration. Washington thrives on this kind of activity.

DOBBS: So you are saying that the revolving door between government and lobbyists spending almost $3 billion last year in Washington crowding out the American people, the people, that they simply could not function, because no one has such a high and lofty ambition as to serve the nation without thinking about the revolving door and being paid off on the other end of that journey in a lobbying firm?

LIGHT: I'll bet you right now that two thirds of every appointee in the next admin administration will have a zip code inside the beltway. That is just the way it is.

DOBBS: Paul, come back soon. We will be talking.

LIGHT: We will keep pushing.

DOBBS: You got it. "Government ill executed" indeed, if they could get to that level of progress. Thank you very much, Paul.

LIGHT: You are welcome.

(END VIDEOTAPE) PILGRIM: Thank you for joining us. Please join us tomorrow, and please join Lou on the radio, Monday through Friday for the "Lou Dobbs Show." Go to loudobbsradio.com to find local listings for the "Lou Dobbs Show" on the radio. For all of us, thanks for watching. Good night from New York.

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