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(06/27/05) Clyde Prestowitz on Lou Dobbs Tonight

(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



Date: June 27, 2005

Time: 18:00

Tran: 062701CN.V19

Type: Show

Head: Red Storm; Selling America; High & Almighty; "The Truth About Hillary Clinton" - Part 1

Sect: News; International

Time: 18:00

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 blood.

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 concerns.

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 national interest.

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 U.S. corporation.

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 debate.


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.


SEN. RON WYDEN (D), OREGON:  Do you intend to review the Chinese bid to buy Unocal?  And what is your initial read of this particular bid?

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.


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.


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.


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 threatening.

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 line.

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 years now.


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 record.

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 Vietnam.

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 growth.

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 systems.


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 year alone.

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 here later.

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 Constitution.

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 October.

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 -- Jeff.

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 of that?   

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 prison.

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 very much.


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.


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.


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 arraigned tomorrow.

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 the future.

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 attacks.

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 doing.   

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 United States.

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 tonight.

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.

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