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Aired January 31, 2002 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS
FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH
TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE
UPDATED. ANNOUNCER: This is LOU DOBBS MONEYLINE, for
Thursday, January 31. Here now, Lou Dobbs.
HOST: Good evening, everyone. Tonight, a new threat against
the United States. MONEYLINE has learned through a Nuclear
Regulatory Commission document that Islamic terrorists may be
planning yet another attack against America. The target: One
of the nation's nuclear power plants, or an Energy Department
Steve Young is here and has the
story for us -- Steve.
STEVE YOUNG, CNN CORRESPONDENT:
Lou, the warning went just a week ago from the Nuclear
Regulatory Commission in Washington. It was sent to the 65
licensed power plant operators which run 103 nuclear power
plants across the nation. The FBI paid a visit to at least one
of those plants, the Columbia generating station, the only
nuclear power plant in Washington state, and possibly other
plants we don't know.
But we do know that the limited
distribution not for public disclosure contained a chilling
possible scenario from FBI headquarters to all field offices.
Here's what it said, quote: "During the briefings of an al
Qaeda senior operative he stated that there will be a second
airliner attack in the U.S. The attack was already planned and
three individuals were on the ground in the States recruiting
non-Arabs to take part in the attack. The plan is to fly a
commercial aircraft into a nuclear power plant to be chosen by
a team on the ground. The plan included diverting the mission
to any tall building if a military aircraft intercepts the
plan. No specific timeline or location was given for the
The NRC document also says the FBI can't
assess the credibility of the information.
worry that security at nuclear power plants is inadequate are
disturbed, but the advisory says no additional actions are
requested at this time. That's because while the FAA has asked
commercial airliners and private planes operating on visual
flight rules to stay away from nuclear plants, it hasn't made
that an order.
Some other facilities, such as
independent fuel storage facilities, but not what would
normally be considered weapons facilities, also received the
government warning. The main thrust of the threat, if it's
real, is to those nuclear power plants. They provide 20
percent of the nation's electricity. And if any one was hit by
a fully fueled jumbo jet and the reactor fuel widely
dispersed, the result could be eventual fatalities from
radiation far worse than the terrorist attacks on the World
Trade Center in New York and the Pentagon back in September --
DOBBS: Steve, thank you very much. We're going to
be talking with two experts here in just minutes on these --
on the credibility of this threat and also on the security of
the nation's nuclear power plants, and to also assess overall
the potential harm that could be created. Steve, thank you
Well, President Bush today took more
opportunities to warn terrorist nations. The president told
them to "get their house in order" or to face the
consequences. White House correspondent Kelly Wallace joins us
from Washington with the story -- Kelly.
WALLACE, CNN WHITE HOUSE CORRESPONDENT: Hello to you, Lou.
Well, we also saw the president conveying to the
American people that the threats still exists, that there are
still threats to Americans and possibility of terrorist
attacks in the United States. You know, the president talking
about how thousands of were trained in Afghanistan, camps, and
he said today, these are thousands of ticking time bombs ready
to go off.
We saw the president, a two-day road trip
wrapping up in Atlanta, Georgia this afternoon. Part of the
president's message, encouraging Americans to volunteer, to
mentor, to teach, to do some type of community service, a call
to action, really, after the September 11 attacks, but then
the president once again sending a message to countries around
the world, to those countries he singled out Tuesday night --
Iran, Iraq, North Korea -- President Bush saying today some
people may have questioned exactly what he meant. Well, he
said he would explain just what he meant today. He said if
countries that are trying to obtain weapons of mass
destruction don't change their ways, there could be potential
(BEGIN VIDEO CLIP)
BUSH, PRESIDENT OF THE UNITED STATES: We've also sent another
message, that if you're one of these nations that develops
weapons of mass destruction and you're likely to team up with
a terrorist group, or you're now sponsoring terror, or you
don't hold the values we hold dear true to your heart, then
you too are on our watch list. People say, what does that
mean? It means they better get their house in order is what it
means. It means they better respect the rule of law. It means
they better not try to terrorize America and our friends and
allies, or the justice of this nation will be served on them
WALLACE: Now, Lou, aides continue to say the
president is not signaling that any military action is
imminent. Senior administration officials say they're not
necessarily going to take the Afghanistan example around the
world, that this is not a one-size-fits-all approach, but they
are saying the president is very serious, if these countries
believe the countries is signaling the worst, then so be it.
They say he will use every ounce of American power --
economic, diplomatic, even possibly military -- to protect the
United States from weapons of mass destruction -- Lou.
DOBBS: Kelly, thank you very much. And I understand
that German Chancellor Gerhard Schroeder is still meeting with
the president at this hour in the Oval Office? Is that
WALLACE: That is correct. We are actually
expecting the German chancellor and President Bush to come out
and talk to reporters just moments from now.
And when that occurs, we will be returning to you, Kelly, and
joining the president and the chancellor for those remarks.
Thank you very much, Kelly Wallace.
Joining me now, as
we reported to you, two of the country's foremost experts on
nuclear energy and the nuclear industry. Paul Leventhal is
with the Nuclear Control Institute; Ralph Beedle of the
Nuclear Energy Institute.
Gentlemen, let me begin
first with this memorandum from the NRC. How concerned are you
about it, Paul?
PAUL LEVENTHAL, NUCLEAR CONTROL
INSTITUTE: Well, I'm quite concerned, because nuclear power
plants today are not defended against an attack from the air.
We have proposed that ground-to-missile batteries be in place
at each nuclear power station in the United States. That's
some 63 stations, having 103 power plants. And we think this
is feasible, because we know of at least one country that's
done this, South Korea. They have a special situation. They
regard themselves in a state of war, and we think right now,
with the kind of threat that this -- that this advisory
describes, that these plants could well be vulnerable to
DOBBS: Ralph, your view?
NUCLEAR ENERGY INSTITUTE: I think that the nuclear power
plants are safe today. I thought that they were safe on
September the 10th. We have increased our level of security at
the nuclear facilities as a result of September 11. We've
increased the number of patrols, we've increased the number of
security officers, we got increased cooperation and
coordination with the local law enforcement, the FBI, the
other national sources of defense.
I think the
aircraft scenario that's described in this threat warning that
-- that the NRC issued is one in which the United States has
taken a great deal of -- a number of steps in order to
preclude something of that sort through increased protection
on our airlines, the airport security as well as airline --
aircraft security in itself. DOBBS: Yet the threat, as
represented by the NRC memorandum -- and there is, as they
point out, no complete assessment of the credibility of the
information gained by the FBI. But the idea that there would
not be ground-to-air, as Paul has suggested, ground-to-air
missiles and protection, because the potential for devastation
here is so extraordinary. You would be against that?
BEEDLE: Well, it's not a matter of being against any
sort of a defensive mechanism for these nuclear facilities. I
think we also need to take a look at the potential for
disaster for commercial aircraft in the event of something
like this. I think that we need to take a look at the seamless
security for the nation as a whole, and look at the aircraft
threat to the rest of the critical infrastructure here in the
And that's -- and that's provided by
our Defense Department. I think that's the effort that our
Homeland Defense organization is being tasked to deal with,
and one in which we need to look to the future to provide that
seamless protection for these facilities, as well as the rest
of the nation.
DOBBS: Paul, you're shaking your head?
LEVENTHAL: Well, I just think that that's not an
appropriate response at this point in time. These plants, in
fact, are vulnerable to an air attacks, if in fact a fighter
interceptor couldn't catch up with an airliner that had been
hijacked and coming in at full cruising speed. There is that
possibility, and all that we're proposing are that these
ground-air missile batteries, under strict military command
and control and rules of engagement, be a last resort measure
that could be brought into play, if in fact there was a jumbo
jet on its way for an impact on a nuclear power plant with no
possibility of it being intercepted.
And I don't see
how any reasonable person could be opposed to that defensive
measure since it's already in place at least one country,
South Korea, to protect their plants against just such an
DOBBS: Is there an implication here, Ralph,
that the Nuclear Energy Institute, the nuclear industry
doesn't believe that these threats are real?
We don't believe that this threat is real. This is not a
credible threat. It's certainly some information that was
provided through our national collection effort, and obviously
came from somebody in the al Qaeda organization. But it hasn't
been judged to be a credible threat by the FBI or the NRC.
It's an advisory. We get a lot of information, and in this
case it was another piece of information that the NRC thought
that we ought to be aware of.
DOBBS: You said this, it
says here that they had not assessed the credibility, that's
quite different from saying it's not a credible
BEEDLE: No. This says that the FBI had not
completely assessed it.
DOBBS: I want to return to
this discussion, gentlemen, because obviously, this is an
issue of paramount importance to the security of the nation
and your views are helpful to those who will make a
There is President George W. Bush,
Chancellor Gerhard Schroeder. They just completed a meeting in
the Oval Office. Let's listen in.
GEORGE W. BUSH, PRESIDENT OF THE UNITED
STATES: ... so pleased with Germany's cooperation. They've
provide troops in Afghanistan, troops that have performed
really well, according to our military, and I want to
congratulate you for that.
I also thank the chancellor
for hosting the Bonn convention, and which made a substantial
stride toward an Afghanistan that will be able to survive
after we have rid it of the Taliban. I appreciate it so very
much the chancellor's willingness to help Afghanistan help
herself, in terms of training a police force. I told him we're
in the process of setting up a plan to help Afghanistan
develop her own military. So we're linked up well in our
mutual desires to leave the world more peaceful.
so, Mr. Chancellor, I'm so honored you're here. I want to
GERHARD SCHROEDER, CHANCELLOR, GERMANY
(through translator): Well, ladies and gentlemen, I can only
absolutely confirm what his excellency the president has just
said regarding our discussions, particularly focusing,
obviously, on the fight against terrorism but also about the
fight that has happened in Afghanistan, and that the support
that has been rendered by us too.
We, as you all know,
are very committed to the participation in the peace corps in
Afghanistan under the umbrella of the United Nations,
obviously, and as the president has just pointed out, we are
very interested in committing ourselves to training police
forces -- law enforcement forces within Afghanistan because we
find it crucially important that such intra-Afghanistan,
proper home-grown police forces, can be built up in the
process and in the more long-term, obviously, a military
structure will be needed here too.
I obviously wouldn't
like to forget the fact that I have congratulated the
president on the economic performance that the country has
obviously been able to show. We do see some positive signs
here. Things are being fueled again, which obviously is not
just positive and good for the American economy but also for
the global economy, too. I'm very pleased indeed that,
obviously, there are now some hopeful signs here, because,
obviously, as soon as the economy runs smoothly again here,
that is going to be good for the global economy and therefore
good for Europe, and certainly for Germany too.
Thank you, Gerhardt. DOBBS: Chancellor Gerhard Schroeder of
Germany, President Bush concluding their remarks outside the
White House after spending about 40 minutes in the Oval Office
I want to bring back, if I may, Kelly
Wallace, our White House correspondent. Kelly, the two men
have a lot to talk about, given the coalition, the important
role of Germany and also the economy of Germany, which is
every bit as challenged as that of the United States.
WALLACE: Absolutely, lots to discuss. The two men will
be having dinner here at the White House. Certainly discussing
the future of Afghanistan, the role of any peacekeeping force,
building any military force in Afghanistan, trying to pledge
money to help rebuild the country.
Likely to be some
discussion, Lou, no doubt, to President Bush's comments during
his State of the Union address, comments he's been talking
about on the road over the past couple of days, putting
countries, as we mentioned earlier, such as Iran, Iraq, North
Korea on notice. There has been some concern around the world,
some concern about what the president means, concerns about
whether the president's comments and his plans from here on
out will continue to hold the international coalition against
And, Lou, one other thing I wanted
to mention to you. We were working the phones a little bit
since we left you a short time ago, and White House officials
want to stress a little bit about what we're reporting, the
concerns of threats to nuclear power plants around the
country. Talking to a White House official just a short time
ago, he is stressing that this information is uncorroborated
and not specific to any target, not specific to any date or
time. So obviously, an ongoing concern. The president himself
talking about how diagrams of nuclear power plants and public
water facilities were found in caves in Afghanistan. So the
message is the threat is out there, but officials want to say
that the information so far, uncorroborated and nonspecific.
Lou, back to you.
DOBBS: And I think we could go
further, your colleague at the White House, John King, talking
with a nuclear energy source, suggesting that the information
was passed along even though their determination was that it
was, quote/unquote, "not credible."
But erring on the
side of prudence, just as did the FBI, we felt compelled, and
responsibly so, to tell the public about this threat and until
it can be properly assessed because the damages that could
ensue are extraordinary.
DOBBS: Kelly Wallace, thank you very much.
DOBBS: We have been talking
with Paul Leventhal of the Nuclear Control Institute and Ralph
Beedle of the Nuclear Energy Institute representing the
industry. The issue here is the public safety. It was
unthinkable what happened on September 11. Certainly, no one
could have imagined such a thing. And having experienced now
the unthinkable, is it not prudent, is it not in the interest
of the nuclear energy itself as well as public safety to take
every precaution with nuclear power plants?
think it is prudent. And I think we have increased our level
of security. We have continued to work with local law
enforcement, state and federal agencies in order to provide
the kind of security that we think is necessary for these
plants. We've increased our security in the airline industry
to preclude the kind of hijacking evolution that took place on
September 11. I think all those measures and the readiness of
our department of defense is providing the kind of security
that the nation needs for these facilities and the other
critical infrastructure within this country.
Paul, your analysis?
BEEDLE: And I would add that that
the -- that the fact that the aircraft collided into the World
Trade Center and brought that Trade Center down does not
suggest that same kind of a collision would cause a
catastrophe that some people have postulated on the part of
these nuclear plants. They're extremely robust. I'm confident
that they would survive to protect the public health and
safety even in the event of one of these collisions.
DOBBS: Are you satisfied with that?
Well, the industry continues to point to the World Trade
Center as an example of an easy target, but they always forget
to mention the Pentagon, which is a low-lying target, probably
as hard to hit as a nuclear power plant. And yet, the
devastation on the Pentagon was there for all to see.
And what concerns me most is that the industry somehow
resists the obvious remedies that are necessary. By law and
regulation, they're not required to protect against an enemy
of the United States, which means that the federal government
has to provide that protection. And yet, because the industry
is loathe to acknowledge the vulnerabilities of these plants,
the government is not being fully informed, in my view, of the
vulnerabilities in these plants, which could be essentially
eliminated or at least reduced to an acceptable level by means
of military protection. And we do not have military protection
of these plants today. We're relying upon guard forces. In
some case guards are hired at $8 an hour. A number of plants
have rent-a-cop guards hired at $8 an hour -- less than
janitors are paid -- at some of these plants.
not a uniform, elite, highly paid, paramilitary force, as the
nuclear energy is to -- often states, as we've seen in their
full- page advertisements.
Our point is is that these
plants today are vulnerable. A number of them are very close
to major cities like New York, Philadelphia, Cleveland,
Chicago, Los Angeles. And it is incumbent upon the public to
realize that these plants are not adequately protected against
an air attack, much less an assault from the ground or the
And the only way you're going to get that
protection is if the public is heard. And at this point, the
public has not been heard from.
DOBBS: Your response?
BEEDLE: My response to that is that it's unfortunate
that Mr. Leventhal is so ill-informed. I do think that he is
misrepresenting the nature of the security forces at our
facilities. These are highly qualified, well-paid officers.
LEVENTHAL: Can you say there are no rent-a-cops
at $8 an hour?
BEEDLE: They are very well paid. They
are -- we do have some contract-provided individuals. But they
are trained to our standards; we control them.
think that Mr. Leventhal is making an obvious attempt to try
and disturb the public in this matter.
Well, on the subject of misrepresentation, I might ask Mr.
Beedle if he is prepared to disavow the video of the Sandia
test of a jet crashing into a wall where the industry, when
asked about the test, says, well, it speaks for itself. And
yet that wall was not anchored in the ground; that wall was on
a cushion of air. It was a frictionless test to test the
impact of a plane, not the survivability of a wall.
Are you prepared to say that that test, as represented
by the industry, is a phony?
BEEDLE: No, that's an
actual test. It was done by Sandia National Lab. It does, in
fact, speak for itself.
LEVENTHAL: With a jet plane
that was 5 percent the weight of a jumbo jet that had water in
its fuel tanks, not gasoline, and the wall was 12 feet thick,
compared with 3 1/2 to five feet thick of the
I think the problem of misrepresentation
lies with the industry, not with the Nuclear Control
DOBBS: Could I inquire, unless you would
like to respond directly?
BEEDLE: Lou, I didn't come
here tonight to have a debate with somebody that's -- that has
a clearly anti-nuclear agenda, as does Mr. Leventhal. I'm here
to tell you that the information that you got in your advisory
was provided by the nuclear energy -- Nuclear Regulatory
Commission. It was information provided by the FBI. It was not
credible. But as they have in many cases provided information
because they thought it was necessary for the general
protection of our facilities, the fact that it's in the public
domain is a matter of record at this point.
not disputing that. We are ready and prepared to deal with the
threats that are posed by that and others in this industry.
DOBBS: I have a break that I have to do. I'd like to
come back -- if you gentlemen could stay just for a few more
moments to round out the issue and the discussion, if that's
all right with you gentlemen.
We will continue with
this discussion and, obviously, the rest of the day's news in
just a moment. Stay with us.
DOBBS: We're back with Paul Leventhal and Ralph
And I want to get to one issue because -- and
you really raised it, Ralph -- the issue of your organization
being anti-nuclear. Is it, in point of fact?
We're not am anti-nuclear organization, we're a nuclear
nonproliferation organization. Our objectives are to help
prevent the spread of nuclear weapons to additional nations or
to groups, and to protect nuclear facilities from attack and
other means of nuclear terrorism.
And I think Mr.
Beedle knows that. We're not an anti-nuclear organization.
Have no agenda to shut down the industry. But we feel that if
these plants cannot be operated as safely and as securely as
humanly possible, they should be shut down until they can be.
DOBBS: And let me ask you, if I may, Ralph: As Paul
points out, the federal government is responsible for the
security and the safety of these plants. It doesn't cost the
nuclear power industry anything to go to the most maximum
extent in terms of protecting them. Why would you not be in
favor of such a thing?
BEEDLE: We are at the maximum
protection level that we are capable of providing. If, as Mr.
Leventhal suggests, we put in anti- aircraft guns around these
plants or anti-aircraft devices of some sort, we're talking
about something that the federal government needs to do
through its military forces. It's not a matter of the
utilities providing that kind of protection.
But you would not be against that, or opposed to it?
BEEDLE: If the president and Governor Ridge decide
that the national defense, homeland defense requires a -- that
this country be loaded and equipped with anti-missile,
anti-aircraft batteries, then I suspect that that's exactly
where this nation will end up.
incumbent upon the...
BEEDLE: It's not a matter of the
utilities making that determination.
incumbent upon the utilities and the industry to make that
recommendation to the president, to acknowledge the
vulnerabilities if these plants are not adequately protected.
And that has not been forthcoming.
BEEDLE: And it
probably never will, Paul. We are not in the business of
telling the president how to deploy his military forces.
DOBBS: OK. Gentlemen, we thank you very much for
taking your time to examine this. Again, this discussion
arising out of a Nuclear Regulatory Commission memo which
Steve Young reported at the outset of the broadcast suggesting
a threat -- not assessed as credible, but certainly
sufficiently alarming -- that nuclear power plants, the
targets of al Qaeda terrorists in this country.
Turning to other news. Enron not cooperating with the
United States Senate. That charge coming from Senator Byron
Dorgan, one of the lawmakers leading a congressional
investigation into Enron.
Tim O'Brien reports from
Washington -- Tim.
TIM O'BRIEN, CNN CORRESPONDENT: Lou,
it may be a sign of things to come: Not only have presumably
important records been destroyed, but determining who now
possess the relevant records that remain and getting them each
to the appropriate congressional committees could be a
logistical nightmare, even in the best of circumstances.
Enron had an estimated 3,000 partnerships, some of
them with names out of Star Wars, like Jedi.
today, as you said, Senator Byron Dorgan, the chairman of a
Senate commerce subcommittee on consumer affairs, said Enron
officials, quote, "just simply have not
(BEGIN VIDEO CLIP)
DORGAN (D), NORTH DAKOTA: These off-the-books partnerships
with strange sounding names are very important in terms of us
understanding what has happened. We have not, at this point,
received cooperation from the corporation in getting this
information. We, again, renew our request.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: This
corporation resorted to a variety of legal, regulatory and
accounting contortions to keep investors and the American
public in the dark. It is now high time for the Congress to
flip on the light and get to the bottom of the situation.
(END VIDEO CLIP)
O'BRIEN: Enron's Washington
lawyer, Bob Bennett, says the company doesn't have the
documents sought. Bennett says the company has been fully
cooperating with the committee. He suggested that the
documents may be with some of the partnerships. If so,
locating them could be problematic, to say the least.
Unraveling all of this is clearly going to take some
time. You may recall one of the top auditors on the Enron
account, David Duncan, last week refused testify, invoking his
Fifth Amendment right against self-incrimination.
apparently will not happen next Monday when Ken Lay, a star
witness, if not the star witness, is scheduled to testify
before Dorgan's subcommittee. Dorgan says Lay, the former CEO
of Enron, has agreed to testify fully, and will not be seeking
any immunity deal.
And Lou, many of the executives who
ran Enron will also be testifying before various committees
here next week, including another former CEO, Jeff Skilling,
who resigned unexpected only six months after assuming the top
DOBBS: And whose departure seems to be the
incipient point of the unraveling of Enron.
you very much; Tim O'Brien.
Well, new evidence shows
landmark structures in Washington State could be prime targets
for terrorists as well. This information coming to light as
drawings and photographs are now being uncovered in searches
of al Qaeda caves and safehouses in Afghanistan.
photo of the Space Needle in Seattle was found. The Pentagon
says al Qaeda operatives have scoured the United States
looking for targets. Other documents found recently, mainly
pictures or maps will circled locations. No indication of the
timing of any potential terrorist attack.
prime minister Ariel Sharon says Prime Minister Yasser Arafat
should have been killed 20 years ago. In an interview today
published in a Jerusalem newspaper, Sharon said he is sorry
the Palestinian leader was not killed when Israel invaded
Lebanon in 1982. Sharon's remarks were condemned by
Palestinian officials. However Sharon said Arafat can still be
a partner for peace if he cracks on Palestinian militants.
The group which claims to have kidnapped "Wall Street
Journal" reporter Daniel Pearl is extending the deadline to
kill him by one day. Officials in the Bush Administration say
the latest e-mail is authentic. The group again warns that
this kidnapping is only the beginning. This afternoon the
"Wall Street Journal" again pleaded for Pearl's release,
saying killing him will not achieve any political goals. The
State Department says it's doing everything it can to locate
and free the journalist.
COLIN POWELL, SECRETARY OF STATE: I have spoken
to President Musharraf in Pakistan about the situation and I
know that he's doing everything he can. The demands that the
kidnappers have placed are not demand that we can meet or deal
with or get into a negotiation about.
Daniel Pearl disappeared last Wednesday.
We will continue here in a moment. Stay with us.
DOBBS: Finding money to
produce television shows is becoming increasingly difficult.
It is forcing networks to look for other ways to finance
production and one alternative is to allow major corporations
to develop TV programs that advertise their products. Critics
however wonder if viewers will watch these marketing
Casey Wian with the story.
CASEY WIAN, CNN CORRESPONDENT (voice-over):
NBC's December program "Lost" wasn't just another reality
adventure show. It was also a prime-time example of how
advertisers are getting involved in TV program content like
never before. During one ten-second stretch, the show included
product placements from five separate companies.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Each
contest was given $100 from VISA to purchase an item for the
(END VIDEO CLIP)
WIAN: Advertisers helped
pay for the program's production cost.
UNIDENTIFIED MALE: Winning team members get new
(END VIDEO CLIP)
It's part of a growing trend designed to help networks cover
rising programming costs. And for advertisers to counter
technology allowing viewers to tune out traditional
Talent agencies are now brokering deals
between advertisers and networks, such as a recent episode of
UPN's "The Hughleys." The story had the family visiting the
mountains. Two advertisers paid to have their products written
MARK STROMAN, ENDEAVOR TALENT AGENCY: It turns out
when they get to the mountains driving their new GMC Yukon,
they had a slight problem because a big black bear ends up
jumping in the back of the car, so who are you going to call?
State Farm Insurance.
WIAN: Ford has gone a step
further, actually taking an ownership interest in an upcoming
show on the WB, which is owned by the same company as CNN.
It's called "No Boundaries" after Ford's own ad slogan and it
will feature Ford SUV's. ROB DONNELL, J. WALTER THOMPSON: We
have been trying to find different ways to engage consumers in
our brand and break through the clutter of what's normal
advertising and we came up with this as an option to get back
WIAN: In TV's early days advertisers
were intimately involved in programming. That changed after
the quiz show scandals prompted tighter government
(on camera): But in recent years federal
regulators and others have eased restrictions on television
commercials, from allowing public TV stations to sell ads to
accepting commercials for hard liquor.
MONTGOMERY, PRES. CENTER FOR MEDIA EDU.: I think we're looking
at new era where we could see those kinds of abuses reemerge
and it is also an era where news and entertainment and fiction
and nonfiction and advertising and editorial are all kind of
mixed in there together. I think for the public, it creates a
media culture where you don't know who to trust.
Advertisers say they're being careful not to alienate viewers
by turning programs into virtual informercials, but when we
asked this agent if there was anywhere he wouldn't put an
STROMAN: That remains to be seen. I was
wondering if anybody was maybe thirsty. Casey Wian, CNN,
Financial News, Los Angeles.
DOBBS: Well, it's not only television
networks looking for cost- effective programming. Movie
studios moving production out of Los Angeles and New York
trying to save money. A lot of that going to Canada as a
matter of fact. For more on the entertainment industry Peter
Bart, the editor-in-chief of "Variety."
Good to see
PETER BART, EDITOR-IN-CHIEF, "VARIETY": Good to
DOBBS: Runaway productions, what do you think
the future is? I know Governor Gray Davis in California is
very exercised about it.
BART: Yes and the Screen
Actors' Guild put a very abstruse proposal before Congress,
proposing tariffs, in effect. We're all very conscious of this
now because suddenly there is a tremendous uptick in
production in Hollywood. Everyone suddenly realizes -- where's
They are in Toronto, they are in
Australia, they are in Eastern Europe. Even Chicago is
shooting in Toronto. And "Terminator 3," which is probably the
most expensive picture that will be made in Hollywood this
year, is shooting in Vancouver. So everybody is saying,
DOBBS: Bye-bye and tariffs, and that sort of
talk. The Canadians, are our friends out brothers and sisters
to the north, is it really that big a deal?
Well, it is. In the sense that it probably means a couple of
billion dollars a year in jobs and other support for New York
and Los Angeles as well. Canada, of course is happy. Their
piece of the pie keeps growing. The reasons are very obvious.
There's currency, the weak Canadian dollar. There's subsidies.
And you know something? There's the cost of labor. All unions
in the country, they may complain a lot, Lou, but they're not
really bending to help meet this problem.
the markets are a self-correcting mechanism, unless that
abstruse legislation in Washington should become
Peter, let's turn to this remarkable rumor that is
running around about Viacom being interested in buying Disney.
Anything to it?
BART: This was a week of many rumors.
First of course, there was -- the king of Viacom, Senator
Redstone was going to fire his No. 2., Mel Carmis (ph). That
was terrific rumor, just happened not to be true. Sumner, even
if he wanted to, doesn't have the votes on the board. Then
there was the rumor that Sony and MGM were somehow coming
together, which again was a fascinating rumor. There was deal
that was discussed and was shot down in Tokyo. So
DOBBS: I kind of like that deal, though,
because Sony has a tradition of being a buyer of everything.
BART: That's right.
DOBBS: To not particularly
great result. MGM and Kerkorian has a reputation of selling
everything over and over and over. So maybe there is
BART: Kirk sort of runs a swap meet.
Every five or six years he sells the Leo the lion yet again.
The one rumor that is still up in the air of course, is that
Disney may be the subject of a hostile takeover by Comcast.
And that of course is moving the markets. Who knows where that
will end up.
DOBBS: Well, Peter Bart, I know you'll be
among the very first to find out. Hope you share that with us.
Good to have you here.
Still ahead, a new commitment
from the Red Cross regarding the money raised for victims of
September 11. Former Senator George Mitchell will be here to
talk about how that money is being moved to the families of
the victims, next.
American Red Cross today promised 90 percent of the money
raised for victims of September 11 will be given out by the
first anniversary of those attacks. Senator George Mitchell
was appointed to oversee the distribution of those funds after
the Red Cross came under intense, heavy criticism. The Red
Cross initially said it might spend some of the money for
purposes other than those related directly to the attacks.
Senator Mitchell joins me now. Senator, thanks for being here.
GEORGE MITCHELL, LIBERTY DISASTER FUND: Thanks for
having me, Lou.
DOBBS: This is great news for, first,
the families of the victims, and secondly, for those who
donated so much money and felt that they had not been dealt
with forthrightly. How soon? How much money?
The total will be about $850 million; $490 million has been
distributed; 360 will be distributed out of the development of
this plan. And about 90 percent of it will have been
distributed by September 11 of this year. That is the first
DOBBS: And what percentage of that money
will go directly to the families and of the victims and the
victims of the September 11 tragedies.
the overwhelming majority. Much of it in direct cash
assistance, direct grants, and others in reimbursement based
on need for living expenses. So the vast majority
The part that's been held back is about $80
million, which will be combined with funding by other
charities to provide long-term, particularly mental health
needs and other unmet health care needs. The experience of
Oklahoma City demonstrated that mental health concerns
sometimes arise at some point in the future. And that's what
this is being held back for.
DOBBS: Senator, the Red
Cross addressing the issue, fixing the problem, turning to you
for obviously your stature, your integrity and your ability to
solve problems. At the same time, this is a massive amount of
money. What will the average family of victims receive in
this? Have you worked that out?
MITCHELL: Yes. First,
you have to understand there are several categories of people.
In all, about 55,000 people were directly affected. There are
about 3,000 who lost loved ones or seriously injured. Those
families on average will receive about $109,000 in direct
financial assistance. Then you have a much larger number of
people who've lost their homes, displaced residents. Still a
very much larger number of people who lost their jobs or some
income. Those will be based on need.
Senator, I know the Red Cross is extraordinarily grateful to
you for dealing with the problem, solving it and I know those
victims and the families of the victims who died on September
11 are very grateful. And we thank you for taking your
MITCHELL: Well, thank you very much, Lou. It's
been a pleasure to be with you.
DOBBS: Senator George
Just ahead, we will have some good news for
you. We will be telling you about another powerful rally on
Wall Street. We'll tell you what drove the Dow today, what
drove the Nasdaq and what just might drive it in which
direction tomorrow. Stay with us.
DOBBS: On Wall Street today, stock prices moving
higher, second day in a row for a rally. The Dow, back-to-back
triple-digit gains, despite economic signs showing some signs
of weakness. A solid profit report from Procter & Gamble,
however, sent the Dow up 157. The Nasdaq gained 20 points. The
S&P 500 rose 16. And Christine Romans, who covers the
markets, is here to tell us what is going on.
CHRISTINE ROMANS, CNN FINANCIAL NEWS CORRESPONDENT:
And after the bell, Disney came out and beat the Street's
expectations. It is trading higher as well. So maybe that will
help the Dow tomorrow, like Procter & Gamble helped it
today. Procter & Gamble shares up four percent, almost a
two-year high for P&G.
And also, you had United
Technologies and the defense stocks rallying sharply. Donald
Rumsfeld out there saying major military spending upgrades are
going to be needed. PNC Financial Services also up, erasing
some of its recent losses earlier this week. That company said
it was restating some financial results and it rallied two
points today after losing some ground before. Now Tyco also,
the most actively traded stock again here today, up about 30
cents. Talks that Honeywell may be interested in Tyco's assets
But Elan Pharmaceuticals, at the bottom
of your screen there, very choppy behavior today. It closed
down about a point after see- sawing. Its investors still
questioning how it books its licensing fees as revenue.
Now, they say on Wall Street, as goes January, so goes
the rest of the year. January was down, Lou, down about one
percent for the Dow; worse for the S&P 500. We've got to
wait another 11 months to find that out.
since we didn't get the January effect, how about February?
ROMANS: Well, the last three Februarys, Lou, have been
down. And they have been painfully down, a couple of those.
So, we'll have to see if we can break that streak,
DOBBS: OK. Well, we get to start the process
Christine, thank you very much.
Coming up next, I'll
be talking with Joe McAlinden of Morgan Stanley Investment
Management about the direction of this market. Stay with
(COMMERCIAL BREAK) DOBBS: Turning now to Joseph
McAlinden of Morgan Stanley investment management to talk
about these markets and where we're headed. Joe, good to have
JOSEPH MCALINDEN, MORGAN STANLEY: Good to be
DOBBS: We began this week with a crisis of
confidence, now we got two triple-digit rallies. What's going
MCALINDEN: Well, every day is a new day, as you
know. I think that this crisis of confidence in the accounting
system and the quality of the earnings is a real thing, but
it's not something that is going to stop the tremendous
momentum of what I think is a new bull market that began in
that low we hit in the first week of trading after September
DOBBS: You just startled me. You used the word
"momentum." And I get very skittish when I hear someone,
including someone I respect and like as much as you, say
momentum at this market, especially with these valuations.
MCALINDEN: Valuations are not cheap by historic
standards, but you have cyclical forces in play here that are
going to, in my opinion, push the market up for another year,
year and a half, notwithstanding high valuations.
principle force is the Fed. You have a huge monetary easing,
money supplies exploding. Historically, the market always goes
up, whether it's overvalued to begin with or not, when you
have those conditions.
DOBBS: Absolutely. But we have
some slightly different conditions in terms of this economy,
the reasons for its slowdown, and perhaps the structure, the
architecture of its recovery, i.e. business investment, the
consumer is still here, those lower interest rates -- how
strong and how potent can they be, given the nature of this
MCALINDEN: The linkage, I think, Lou, is
that the lower interest rates are not going to make consumer
spending soar from here, because consumer spending never
really went down in this recession. This recession, as you
point out, was driven by lower business investment, initially
lower inventories, and then a collapse in capital spending.
But inventories we're running out of in the pipeline,
and so just a steady level of consumption will now begin to
pull up production, because inventories are just too low. And
that effect will then spill over into the stock market, as I
think we're beginning to see.
DOBBS: That aggressive
easing of last year by the Fed at least will lighten the
burden of that heavy debt for both consumers and business, as
you say. But what sector, what areas should we look to for the
strength that you're talking about? Where are we going to see
MCALINDEN: Well, partly because of the
valuation issue, which is most extreme among growth stocks. I
tilt at this point toward the value side of the market,
particularly the areas that would benefit from what we just
talked about, which is a big inventory rebuilding cycle. And
that gets you to the really boring basic industries -- the
paper stocks, the metal stocks, aluminums, chemicals, that
type of thing.
But with one exception that may
surprise you. I think technology now has proven itself to not
really be -- it is a long-term growth industry. But in the
short run, it's as cyclical as you get. And I think technology
is going to benefit. So it sounds a little eclectic, I guess,
if not contradictory, but I like the value side of the market
and technology. I'd stay away from the rest of what we
typically consider growth stocks.
DOBBS: And over what
period of time should we expect what kind of performance in
MCALINDEN: I think, Lou, I think we're
going to get a massive earnings recovery that's not fully
anticipated yet. Maybe close to 20 percent this year, and 20
to 25 percent next year. With that, I think that the market
could go up, even with some P/E compression, roughly 20
percent by this time next year, 12,000 on the Dow.
DOBBS: That's -- now that is a bullish forecast, Joe.
Good for you, and I appreciate you sharing it with all of us.
Joe McAlinden, as always, thanks.
for having me.
DOBBS: "WOLF BLITZER REPORTS" begins in
just a few minutes. Let's go to Wolf now in Washington --
WOLF BLITZER, HOST, "WOLF BLITZER REPORTS":
Thank you very much, Lou. We'll have a special report. CNN has
obtained the never before released Al Jazeera interview with
Osama bin Laden. That interview took place late last October.
We'll have excerpts and get analysis.
And we'll have
details of the latest terror threats involving planes and this
time nuclear power plants.
Also, we'll go live to
Karachi for the latest on the kidnapped American journalist.
It's all at the top of the hour -- Lou.
forward to it, Wolf, thanks.
MONEYLINE will continue
in just a moment. Stay with us.
DOBBS: Just days after record warmth, the
Midwest has been hit by its first major storm of the season. A
wintry mix of snow, sleet, ice causing cancellation and delays
at airports throughout the region. Lisa Leiter with the story
(BEGIN VIDEOTAPE) LISA LEITER, CNN
FINANCIAL NEWS CORRESPONDENT (voice-over): The first big
winter blast dumped a foot of snow on Chicago, interrupting
one of the warmest and driest winters on record.
SKILLING, CHIEF METEOROLOGIST, WGN NEWS: Virtually the entire
area east of the Rockies has had, except for the northern
plains like the Dakotas, has had what can be described as an
unusually mild winter. And snowfall has been a fraction of
what's been normal in many of those areas.
Kansas City, heavy ice weighed on tree branches, snapping
power lines and leaving 100,000 people without electricity.
One official said it's the worst storm the city has ever seen.
The snow even took Detroit by surprise, causing dozens
of car accidents there. And the snow frustrated thousands of
air travelers. United Airlines canceled more than a third of
its flight out of O'Hare Airport, and delayed most others an
hour or two.
(on camera): It's not so unusual that a
foot of snow would blanket Chicago at the end of January.
What's strange is that just four days ago it was a near record
61 degrees, and people were in this park in short sleeves.
(voice-over): So exactly what's behind this weird
JOSEPH D'ALEO, CHIEF METEOROLOGIST,
INTELLICAST.COM: The Sun is one of the key factors so far this
winter. The Sun has resurged to a new peak in this current
11-year solar cycle, and at these high levels of solar
activity, the Sun is a little brighter, a little warmer, and
the result is, of course, much of the country's temperatures
are above normal.
LEITER: For farmers, warm winter are
more productive ones. They can work in the fields, and the
livestock can stay outdoors.
But they may be inside
before too long. Meteorologists are not ruling a frigid and
snowy end to this mild winter.
Lisa Leiter, CNN
Financial News, Chicago.
Well, tomorrow the employment report for January will be
released. Economists expect the unemployment rate to hold
steady at 5.9 percent. The estimate is that 50,000 jobs were
lost in the month.
United Airlines will report its
quarterly earnings results, and President Bush meets with
Prince Abdullah Abdullah of Jordan at the White House.
That's MONEYLINE for this Thursday evening. Thanks for
being with us. I'm Lou Dobbs. Good night from New York. "WOLF
BLITZER REPORTS" begins right now.
on LOU DOBBS MONEYLINE, Super Bowl ad revenues intercepted.
Advertisers hoping to score with high-priced spots during the
most watched event of the year have more than a slumping ad
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