(06/27/05) Clyde Prestowitz on Lou Dobbs Tonight
Red Storm; Selling America; High & Almighty; "The Truth About Hillary Clinton" - Part 1
Lou Dobbs Tonight
Copyright 2005 FDCH-eMedia, Inc.
June 27, 2005
Red Storm; Selling America; High & Almighty; "The Truth About Hillary Clinton" - Part 1
Show: LOU DOBBS TONIGHT
Date: June 27, 2005
Head: Red Storm; Selling America; High & Almighty; "The Truth About Hillary Clinton" - Part 1
Sect: News; International
LOU DOBBS, CNN ANCHOR: Good evening, everybody. Tonight,
while Washington sleeps, the Bush administration shows no sign of
blocking China's bid to buy a U.S. oil company, Unocal.
Administration officials won't even talk on the record about the red
storm that is hitting our shores. Tonight we'll be on record with
our special report on the Chinese communist threat to American economic
security and national security.The top general in Iraq is asking why
anyone expects him to be able to secure Iraq's borders when we can't
secure our border with Mexico. Tonight we'll report on the
failure of the White House and Congress to secure our border with
Mexico, and in the opinion of some, their failure to fulfill faithfully
their oaths of office.
And the new best-selling book The Truth About
Hillary. Has author Ed Klein written a work of
investigative journalism or indulged in the politics of personal
destruction? He's our guest and we'll find out.
Also tonight, the public confessions of a serial killer. The BTK
killer tells a court in detail how he murdered his victims in cold
And a second shark attack in three days on the Gulf Coast of Florida has left a teenager critically injured.
We begin tonight with China's unprecedented attempt to seize control of
one of this country's most important energy assets. China is
aggressively pushing forward with a bid to buy one of the country's
largest oil companies, Unocal. Unocal controls major oil and gas
fields in Alaska, the Gulf of Mexico, and, of course, Asia.
Unocal also has key technologies that could be adapted for military
use. A Chinese takeover of Unocal would follow China's purchase
of IBM's personal computer business despite U.S. national security
Critics say China's overseas expansion is nothing less than a bold
attempt to supersede the United States as the world's preeminent
military and economic power. Tonight we'll be reporting on the
many dimensions of this critically important story.
Kitty Pilgrim on the gaping holes in the government's review process
for foreign takeover deals. Christine Romans on the scope of
existing foreign ownership of our energy sector and our rising
dependency. Bill Tucker on the key global energy assets that
China seeks to control. And among my guests tonight, Richard
D'Amato, chairman of the highly influential U.S.-China Security Review
Commission on the need for the government to take action now in the
We begin with Kitty Pilgrim -- Kitty.
KITTY PILGRIM, CNN CORRESPONDENT: Lou, many in Congress are
saying this cannot be treated as a normal business deal. It would
be oil for the Chinese economy, oil for the military, and sensitive
technology that could be used for defense. And the normal review
process is not sufficient for something this important.
PILGRIM (voice-over): Congressman Donald Manzullo and 40 other
members of Congress wrote to President Bush and Treasure Secretary Snow
for a full national security review of this deal.
REP. DONALD MANZULLO (R), ILLINOIS: This is the Chinese
government itself that's buying the fifth largest energy company in the
United States. I'd say that definitely warrants further review by
the U.S. government.
UNIDENTIFIED MALE: We can't let this transaction be swept under a
rug. And we need to really be looking at it carefully and demand
that our political leaders do so as well.
PILGRIM: Secretary Snow was unwilling to take on the issue at a
hearing last week, even though the Treasury secretary chairs the
committee that handles the review. The Committee on Foreign
Investment, or CFIUS, is supposed to look at deals that endanger
national security. But that usually involves reviewing sensitive
technology, not natural resources.
The review is also very quick, usually 30 days. Even an extended investigation is only 45 days.
Bob Ney of Ohio wrote a letter asking for the Committee on Foreign
Investment to expand their role and look at natural resources for the
first time as a security issue. To this end, I am
requesting that you exert the committee's ability to review and
possibly suspend or prohibit this attempted foreign acquisition of a
In a letter to members of Congress today, the chairman of CNOOC, Fu
Chengyu, clearly trying to dispel the outcry, saying they planned all
along to participate in a review, adding, We know this bid is
historic for both companies and will be closely scrutinized by everyone
involved. I know this transaction would create great interest and
PILGRIM: Now, Congress's intent, that this not be linked to other
issues like currency or general trade with China. They fear if it
is, it will slide by in the interest of not creating a sore point with
the Chinese. But this is not business as usual. And
national security is too big an issue to ignore -- Lou.
DOBBS: Kitty, thank you very much.
Astoundingly, the Bush administration appears resigned rather than
outraged by China's blatant grab for U.S. oil interests. An
unnamed adviser to President Bush tells The New York Times,
anonymously, We have so much on the plate with China, how do you
come down hard on them for this deal?
And an unnamed State Department official told us today that, overall,
the U.S. welcomes foreign investment. The official said, It
is important to work with China on the role they play and help them
manage their economic decision-making in ways that maximize the way
forward for all.
Despite the serious questions that this deal raises for U.S. national
and economic security, State Department spokesperson Steven Pike says
the Treasury Department is taking the lead on this issue in the Bush
White House. Treasury Secretary John Snow had a chance to show
his concern about the security implications of the Unocal bid at a
Senate hearing last week. And the Treasury secretary refused in
this exchange with Oregon Senator Ron Wyden.
(BEGIN VIDEO CLIP)
SEN. RON WYDEN (D), OREGON: Do you intend to review the Chinese
bid to buy Unocal? And what is your initial read of this
JOHN SNOW, TREASURY SECRETARY: Well, Senator, of course the
Exxon-Florio process provides -- provides for the national security
review that you -- that you alluded to, where a foreign company
acquires a U.S. company. It's hypothetical at this point, though,
because we don't have a transaction.
(END VIDEO CLIP)
DOBBS: And at the same Senate hearing, Fed Chairman Alan
Greenspan also declined to take on the issue, saying he sees China's
rush to compete with the United States not as a security threat, but as
a bold move toward capitalism.
(BEGIN VIDEO CLIP)
ALAN GREENSPAN, FEDERAL RESERVE CHAIRMAN: You're getting a former
communist system which is still politically a communist system,
recognizing that market capitalism is where they want to be, which is
an extraordinary change.
(END VIDEO CLIP)
DOBBS: An extraordinary change, but it is important to note that
CNOOC is -- the Chinese oil company -- 70 percent owned by the Chinese
government. Perhaps the Fed chairman did not notice that.
Meantime, some in the investment community want to blame the United
States for this deal. Billionaire investor Warren Buffet
says, If we're going to consume more than we produce, we have to
expect to give away a little part of the country.
And The Wall Street Journal said this in an editorial: We can
envision some Chinese acquisitions that might deserve to be blocked,
but the bar ought to be high and limited to serious security issues.
The assets of a publicly traded energy company don't meet that test.
The fact that a Chinese oil company wants to buy American is a sign of
progress, not concern.
We also talked with several business groups and think tanks in
Washington to find out their position on China's aggressive bid for
Unocal. The majority, by far the majority, has no official
position at all. The groups include the U.S. Chamber of Commerce,
the American Petroleum Institute, the Business Roundtable, the American
Enterprise Institute and the Brookings Institution. In fact, the
only group to take a position is The Heritage Foundation, and they are
opposed to the deal for issues of national security.
China's controversial bid to buy Unocal is also raising some
uncomfortable questions obviously at the White House. Today a
reporter asked the White House press secretary how the president felt
about the Chinese hiring a public relations firm which is partly owned
by one of the president's top campaign advisers.
The White House reiterated that the deal was being reviewed by the
Treasury Department. But he avoided the question about CNOOC's
ties to the White House.
Here, then, are the facts.
The Chinese oil company hired a public relations firm, Public
Strategies, Inc. It's based in Austin, Texas, which has close
ties to the White House.
Mark McKinnon, the vice chairman of that company, led President Bush's
media campaign in 2004. McKinnon also prepped the president for
his debates. CNOOC also acquired the services of Mark Palmer, the
company's managing director who formally served as the public relations
director for Enron.
Well, foreign companies already have a significant presence, of course,
in the U.S. energy industry. But a Chinese takeover of Unocal
would give communist China control of key U.S. oil and gas assets for
the first time ever.
Christine Romans reports.
CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Amoco, now
owned by British Petroleum. Shell, now Royal Dutch Shell.
In fact, foreign ownership of critical American energy assets has now
reached 13 percent of oil and gas production, 12 percent of domestic
natural gas production, and almost 30 percent of domestic refining.
Citgo is controlled by Venezuela. And the Saudis operate through
joint ventures here as well. Russia's Lukoil now operates gas
stations. But many fear China's intentions are far more
ROBIN WEST, PFC ENERGY: You have companies like BP and Shell,
then you have these government companies, such as Saudi Aramco or
Petroleos de Venezuela. They have invested billions of dollars in
refineries in the United States, but what they want to do is they want
to be assured of access for their crude oil in the U.S. market.
They were bringing oil to the U.S. This clearly benefits the United States.
ROMANS: In the U.S., China would control oil pipelines and gas
storage across North America, key assets in Alaska's Cook Inlet and
North Slope. And most concerning, technology for Alaskan oil
production and deep sea drilling that could have military
applications. Giving the communist government of China such a
strategic asset would be a mistake.
GAL LUFT, INSTITUTE FOR ANALYSIS OF GLOBAL SECURITY: We need to
decide whether we are willing to commit economic suicide in the outer
(ph) of free trade. You know, in this country, free trade has
become sacrosanct. Everybody is very averse to
protectionism. We feel that our role in the world is to
proliferate free trade, and, you know, sometimes we need to draw a
ROMANS: Still, others are relatively unconcerned.
PAVEL MOLCHANOV, RAYMOND JAMES: You know, I think that China at
this point is -- while it is governed by the communist party, indeed,
it is very much a capitalist society. It has been for over 20
ROMANS: But China takes a much longer view of what makes economic
sense. This is a country, Lou, that has an unwavering commitment
to the national Chinese agenda.
DOBBS: And the national interest in this country is not always
clearly in focus on the part of our policymakers. Christine,
thank you. Christine Romans.
In the oil market today, new concerns about the supply of oil. Oil
futures, in fact, closed at a record high in New York. The
closing price, $60.54, an all-time high.
There's also been a huge run-up in gasoline prices. The Lundberg
Survey showing average gasoline prices rising to $2.21 over the past
two weeks, an increase of 8 cents -- 8 cents short of the all-time
A successful Chinese takeover of Unocal would turn CNOOC into a major
force in the international oil business, a deal that would give China
access to critically important oil reserveness in this country, Asia,
and other parts of the world.
Bill Tucker has the report.
BILL TUCKER, CNN CORRESPONDENT (voice-over): China promises that
any American-produced oil and natural gas will stay in America.
It's an easy promise to make. Only one-third of Unocal's reserves
are in the United States and Canada. California-based Unocal's
more important reserves to China are in Brazil, the Netherlands, the
Congo, Azerbaijan, Bangladesh, Myanmar, Thailand, Indonesia and
CLYDE PRESTOWITZ, ECONOMIC STRATEGY INSTITUTE: The Chinese are
obsessed with long-term energy security, and assuring that. And
they're making investments all over the world in companies and in
oilfields. And this is part of that.
TUCKER: Almost 60 percent of Unocal's proven reserves are in
Asia, in China's back yard. And the ball is just getting rolling.
FADEL GHEIT, OPPENHEIMER: China became an importer of oil only in
the last three years from being an exporter of oil. And its
energy and oil demand continues to increase very rapidly. And
they definitely want to secure energy supply for their future economic
TUCKER: This acquisition is also part of a greater strategy for
China's rise as a global power. China wants the energy to run its
factories, fuel its economy and finance its military.
AMB. JAMES LILLEY, AMERICAN ENTERPRISE INSTITUTE: Their oil
policy is part of an overall policy of military buildup, acquisition of
influence in the world, extending Chinese power.
TUCKER: Also a potential interest, Unocal's Molycorp division.
It's a rare earth mineral mining company which provides essential
minerals needed to make cell phones, computers and missile guidance
TUCKER: This is not likely to be China's last attempt at any
energy acquisition. Years of record trade deficits have made the
Chinese flush with U.S. dollars, as we've been talking about on this
program for a while, Lou. And they have plenty to finance any
deals they would like to make.
DOBBS: Yes, they do. In point of fact, one way to look at
this deal is that the United States would have paid for this
acquisition with one-tenth of our trade deficit with China from last
Bill, thank you very much. Bill Tucker.
That brings us to the subject of our poll tonight. Do you believe
the sale of Unocal to China threatens U.S. national security, yes or
no? Cast your vote at LouDobbs.com. We'll have the results
Still ahead, a series of critically important rulings today by the U.S.
Supreme Court -- one of them on religious monuments on public
buildings. I'll be joined by our senior legal analyst, and we'll
find out what the Ten Commandments have to do with government.
Chilling testimony in the BTK court case. The serial killer describes how he murdered his victims in cold blood.
And a new shark attack on a teenager in the Gulf of Mexico. The
second in three days. That report, a great deal more still ahead.
DOBBS: The Supreme Court today closed its term with a number of
major decisions. Two of them addressing whether the Ten
Commandments can be displayed on government property.
The court ruled 5-4 that posting the Ten Commandments in courthouses in
Kentucky violates the separation of church and state. But the high
court ruled in a separate 5-4 decision that a monument to the Ten
Commandments at the state capitol in Texas does not violate the
The Supreme Court also refused to hear the appeals of New York
Times reporter Judith Miller and TIME magazine's
Matthew Cooper. A federal appellate court ruled those reporters
should go to jail for refusing to name their confidential sources in
the Valeria Plame CIA case.
Chief Justice William Rehnquist adjourned the court without any
mentioning of whether he or any other justice plans to retire.
The White House has been actively planning for a vacancy on the court.
Any announcement could come between now and when the court reopens in
Joining me now, CNN Senior Legal Analyst Jeffrey Toobin, to tell us
what the difference is between Kentucky and Texas in the court's view
JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: One vote. That's really about it.
DOBBS: In both cases.
TOOBIN: I mean, both decisions were 5-4. The only justice
in the majority in both cases was Stephen Breyer, who is not usually
the swing vote. But basically the gist seems to be, to the extent
that these decisions can be reconciled, is that the Texas monument had
been there for a long time. It had apparently both a secular and
a religious interpretation.
The Kentucky Ten Commandments was very clearly religious in its
intent. So the purpose and the context seems to be what the court
is looking for. But what these decisions guarantee is that
there'll be lots more courts dealing with lots more Ten Commandments
issues, because the rules are pretty murky at this point.
DOBBS: Murky language in those decisions, murky outcome, 5-4
decisions. In fact, so tortured was the reasoning in those cases
that Moses was referred to as also an attorney. What do you make
TOOBIN: Well, it was really interesting. I had never seen
the Supreme Court building referred to in an opinion. But as
Justice Souter was reading his opinion in the Kentucky case, he sort of
pointed to the ceiling of the Supreme Court, and he said, Well,
we have Moses up there, but he's in a law-giving context.
If you look at the (INAUDIBLE) in the Supreme Court, Moses and the Ten
Commandments is perceived as a law giver, not a religious figure.
That's a -- whether you're persuaded or not, I don't know. But that's
what Justice Souter said.
DOBBS: I'm neither persuaded nor satisfied with that kind of
reasoning from any corridor, but especially the Supreme Court, that's
voting 5-4, Jeffrey. As I suspect in your more candid moments,
you would also agree.
There is no word on Supreme Court Justice Rehnquist. An expectation that he will retire. Any insight?
TOOBIN: Well, I've watched him for a long time, and I've watched
him over the course of the spring since he's returned from his sick
leave. Lou, he really looked terrible.
He was very hard to understand. His voice is amplified because he
has a trach tube. He looked even more drawn, even more exhausted.
He's obviously a very sick man. But he's a tough guy. He's
80 years old. He doesn't appear -- he certainly didn't leave
today, and he may be trying to hang on there. But I have to say,
I was really shocked by how poorly he looked in court today.
DOBBS: No shock in the court's action, or lack of action, if you
will, on the case of Matthew Cooper of TIME magazine,
Judith Miller of The New York Times ?
TOOBIN: No. They are -- they are in deep and serious trouble.
The lower court ruling found them in contempt of court today. The
Supreme Court said they would not review that ruling. So unless
some deal can be worked out with the prosecutor, Patrick Fitzgerald, it
really looks like that reporter for TIME magazine and the
other for The New York Times are going to be going to
DOBBS: And it is critically important what happens to the
national press over the course of the next 30 to 60 days. And
those discussions end negotiations. Jeffrey Toobin, thank you
TOOBIN: OK, Lou.
DOBBS: Still ahead, I'll be joined by the attorney general of the
state of Texas. He argued the Ten Commandments case before the
Supreme Court and he won today.
In Kansas today, chilling testimony from the man who now admits that he
is the serial killer who terrorized Wichita for more than two
decades. Dennis Rader, a former church president and Boy Scout
leader, pleaded guilty to 10 counts to first-degree murder. The
pleas come as his trial was just about to begin.
The married father of two told the judge in a calm and matter-of- fact
voice how he stalked and then killed his victims. We want to warn
you that the testimony he is about to give is deeply disturbing. You
may wish to turn away.
(BEGIN VIDEO CLIP)
DENNIS RADER, BTK KILLER: I proceeded to tie her up. She
got sick, threw up. I got her a glass of water, comforted her a
little bit, and then went ahead and tied her up, and then put a bag
over her head and strangled her.
First of all, Mr. Otero was strangled -- or a bag put over his head and
strangled. Then I thought he was going down. Then I went
over and strangled Mrs. Otero. I thought she was down.
Then I strangled Josephine, and she was down. And then I went over to junior and put the bag on his head.
After that, Mrs. Otero woke back up, and, you know, she was pretty
upset. What's going on? So I came back, and at
that point in time strangled her for the death strangle at that time.
JUDGE GREGORY WALLER: With your hands or what?
RADER: No, with a cord. With a rope.
(END VIDEO CLIP)
DOBBS: Rader will be sentenced in August.
Coming up next here, are U.S. officials meeting with insurgents and
terrorists who have killed more than 1,700 American troops in
Iraq? The Pentagon is now trying to clarify comments by the
secretary of defense. Our special report is next.
And then China moving to buy vital energy resources of this
country. And so far, our government has done nothing to stop it.
One official who says the United States must take action to protect our national security joins us here next.
Stay with us.
DOBBS: A grand jury in New York has indicted two U.S. citizens
for conspiring to provide material support for al Qaeda. The
indictment names the two as a physician, Rafiq Sabir, and a jazz
musician, Tarik Shah. They allegedly engaged in meetings and
conversations with a confidential source and an undercover FBI agent
acting as an al Qaeda recruiter. The two men are scheduled to be
In Iraq today, a U.S. Army Apache helicopter crashed north of Baghdad. Its two crew members were killed.
A witness told The Associated Press the helicopter was hit by a rocket. The Pentagon says it is investigating.
In Baghdad, a U.S. soldier killed today in small arms fire, and a car
bombing near a crowded market killed four Iraqis, wounding 29 others.
Iraq's prime minister today said securing Iraq should take no longer
than two years. Ibrahim al-Jaafari met with British Prime
Minister Tony Blair in London. Just yesterday, Defense Secretary
Donald Rumsfeld said securing Iraq could take as long as 12 years.
Secretary Rumsfeld also acknowledged that U.S. officials have met with
insurgent leaders in Iraq. Today the defense secretary stepped
back from his comments and said the talks did not involve insurgents
who are killing American troops and Iraqis every day. But
Secretary Rumsfeld did not rule out the possibility of such talks in
Jamie McIntyre reports from the Pentagon.
JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice-over): Despite
weekend comments that seem to confirm the U.S. military had held
face-to-face talks with insurgent leaders in Iraq, Defense Secretary
Rumsfeld now says the characterization of the meetings is overblown.
DONALD RUMSFELD, DEFENSE SECRETARY: There are meetings going on
all the time between people in Iraq and other people in Iraq,
attempting to get them to be supportive of the government, which is
obviously the logical thing one does in a political process.
QUESTION: Point of clarification?
RUMSFELD: No. And certainly not with people like
Zarqawi. I mean, that's just someone's imagination running wild.
MCINTYRE: The top U.S. commander in Iraq insists most meetings
are low-level affairs between U.S. officers and local Iraqi or tribal
leaders. But some are with senior Sunni leaders, who, while not
sympathetic to the U.S., are not believed to be directly behind
GEN. GEORGE CASEY, COMMANDER, MULTINATIONAL FORCE, IRAQ: There
are discussions. And they're discussions primarily aimed at
bringing the Sunni leaders and the people they represent into the
political process. But to characterize them as negotiations with
insurgents about stopping the insurgency, we're not quite there yet.
MCINTYRE: But neither Rumsfeld nor Casey would rule out dealing
directly with insurgent leaders in the future. And a Marine
officer who's written a book on insurgencies thinks it's worth
COL. T.X. HAMMES, AUTHOR, THE SLING THE STONE :
If we can separate out the support elements from these people by
talking to them, it's a positive thing. Keep in mind it's a
political struggle, not a military struggle. So use your
political skills to get there.
MCINTYRE: Today Defense Secretary Rumsfeld also clarified his
statement over the weekend that it could take up to 12 years to defeat
the insurgent in Iraq, saying that he could envision Iraq's government
and economy flourishing, even as they deal with a low-level insurgency
over several years -- Lou.
DOBBS: A lot of clarification for one day from the Pentagon. Jamie McIntyre, thank you very much.
Our quote of the day tonight comes from General George Casey, the
commander of the multinational forces in Iraq. In response to a
question about using U.S. troops to secure Iraq's border with Syria,
General Casey today said, Let's be clear. You talk about
sealing borders. We can't even seal our own border here in the
When we come back, why China's bid for Unocal should be setting off
alarm bells at this White House. I'll be talking with a China
expert who says the United States should stop this bid and soon.
Also: He fought to display the Ten Commandments all the way to
the supreme court and he won the case -- I'll be talking with the
attorney general of the state of Texas, who is savoring a sweet victory
A polarizing new book on a polarizing politician: I'll be talking
with author Ed Klein about his controversial look into the life of
Senator Hillary Clinton.
Stay with us.
DOBBS: Tonight: The second shark attack in the Gulf of
Mexico in three days. Authorities say a teenager, tonight, is in
stable condition, after being attacked off Cape San Blas on the Florida
panhandle. The teenager was apparently fishing in waist-deep
water, when the shark attacked, biting his right thigh. The
attack comes just two days after a 14-year-old girl was killed by a
shark at a nearby beach in the panhandle. An autopsy shows she
was attacked by a 6-foot bull shark.