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Martha Stewart Bombshell; 100,000 Workers Protest Outsourcing of U.S. Jobs

Aired May 21, 2004 - 18:00   ET


LOU DOBBS, CNN ANCHOR (voice-over): Tonight, a dramatic new twist in the Martha Stewart case. The government's expert lied on the witness stand.

DAVID KELLEY, U.S. ATTORNEY: We are quite confident that the false testimony will have no impact on the convictions of Martha Stewart and Peter Bacanovic.

U.S. troops bombard insurgent positions in three Iraqi cities. America's top general now declares the United States will succeed in Iraq.

UNIDENTIFIED MALE: There are going to be challenges that may take more troops. But, in the end, we will be successful? Yes.

DOBBS: Joseph Cirincione of the Carnegie Endowment for International Peace says the United States should withdraw from Iraq, and as soon as possible. He's our guest.

The first strike ever against the export of American jobs to cheap overseas labor markets; 100,000 telecommunications workers walk off their jobs. John Olsen, a top AFL-CIO official, joins us tonight.

And a threat to American democracy. You won't believe how much the White House is giving away under the guise of free trade and your Congress is doing nothing about it. We'll have a special report.


ANNOUNCER: This is LOU DOBBS TONIGHT for Friday, May 21. Here now for an hour of news, debate and opinion is Lou Dobbs.

DOBBS: Good evening.

Tonight, a stunning development in the Martha Stewart. Prosecutors today accused a government expert of lying on the White House stand in the trial. That trial ended with a conviction of Martha Stewart for failing to tell the truth about her sale of ImClone System's stock. In just a moment, we'll be talking about the prospects for a retrial with CNN senior legal analyst Jeffrey Toobin.

But first, we go to Mary Snow with the report.

(BEGIN VIDEOTAPE) MARY SNOW, CNN CORRESPONDENT: Less than a month before Martha Stewart is scheduled to be sentenced on charges of lying to federal investigators, federal prosecutors dropped a bombshell. U.S. attorney David Kelley announced two perjury charges against a government at the trial, ink expert Larry Stewart. Stewart works for the Secret Service and prosecutors say he lied during his testimony.

KELLEY: Today's charges are indeed troubling, very troubling because a trusted and accomplished lab examiner and public servant violated the public trust, as well as a trust that so many of his colleagues in law enforcement had in him. However, we are quite confident that the false testimony will have no impact on the convictions of Martha Stewart and Peter Bacanovic for both factual and legal reasons.

SNOW: Larry Stewart had testified about a worksheet belonging to Stewart's stockbroker, Peter Bacanovic, a sheet the defense say proved an agreement to sell ImClone stock once it hit $60 a share. Prosecutors said the notation on the worksheet was a cover-up. Stewart's attorneys released a statement saying the development showed the trial was fatally flawed and unfair. It follows allegations that a juror also lied about his background during jury selection.

Bacanovic's lawyers asked for a new trial. Some legal experts say while a new trial isn't likely, it's not completely ruled out.

ROBERT HEIM, ATTORNEY: The charges of perjury against the Secret Service agent, as well as the statements that juror made to get onto the jury that turned out to be false, cumulatively, they may be just enough to get Martha Stewart a new style.

SNOW: The U.S. attorney says the charges against Larry Stewart followed complaints from other agents at the Secret Service.


SNOW: And tonight, a person familiar with the situation says it's highly likely that the Stewart defense team will file papers perhaps as early as next week seeking a new trial -- Lou.

DOBBS: Mary, how long did it take for them to come forward after the end of that trial and to learn that one of their own witnesses had lied?

SNOW: The trial ended in early March and the U.S. attorney's office says that they found out about this complaint last week and that they moved quickly on it.

DOBBS: Mary Snow, thank you very much. Appreciate it.

Joining me now, senior legal analyst Jeffrey Toobin.

Jeffrey, this is extraordinary. Can you remember the last time that the government brought charges against one of its own witnesses?

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: Before the defendant is settled, I don't think it's ever happened that fast. I've never heard of it happening at all. It may have happened, but this is certainly extraordinary and very rare.

DOBBS: Do we know what it was that caused the government to bring these charges? Did the testimony -- what was it?

TOOBIN: Well, the specific lie that he is alleged to have told is really very simple. He said in his testimony over and over again that he did the actual tests on the document. He said he sat at the lab bench and did it. According to the government's charges, he didn't examine the document. He only reviewed the work of another lab technician.

DOBBS: Obviously, the defense team is making much of this, the prosecution saying it will have no effect on either case, Bacanovic or Stewart. What is your best assessment?

TOOBIN: Well, the government is arguing that this testimony related only to one charge, the charge against Bacanovic of falsifying the document and Bacanovic was acquitted of that charge. So the government says this is all irrelevant and immaterial. The defense will take quite a different view, saying it affected the conspiracy charges and the whole atmosphere of the case, because this was important evidence. Therefore, it has to be thrown out.

DOBBS: The defense attorney, Jeffrey, said -- Robert Morvillo said there is now good reason to believe that both a government witness and a juror perjured themselves, which undermines the integrity of the government's case. On the face of it, he seems to have a reasonable point.

TOOBIN: Well, he certainly has a reasonable point about the witness. Chappell Hartridge is the juror who is alleged to have lied. Judge Cedarbaum has already rejected that claim for a new trial, saying that it is not worth investigating reopening the case to determine if someone lied in jury selection unless you can establish that that lie was in order to get on the jury and get a conviction.

She said it was immaterial if he lied during the


DOBBS: There's a quota of lies that one can give in jury selection?

TOOBIN: The point she's making is that you don't want to reopen this every time you have a conviction to parse everything a juror said during jury selection.

DOBBS: Aside from the inconvenience to the judicial system, what is the likelihood that she will get a retrial?

TOOBIN: I think it's in the realm of 50/50. This is a lot better -- this has a lot more significance than the juror issue. And I think her sentencing, which is scheduled for June 17, will almost certainly be postponed while this issue is dealt with. DOBBS: Jeffrey Toobin, thank you very much.

Mary Snow, thank you.

Turning now to the war in Iraq, there was heavy fighting today between American troops and gunmen loyal to Muqtada al-Sadr. Most of the fighting was in the central Iraqi cities of Karbala and Najaf. In Karbala, American AC-130 gunships and tanks pounded militia positions. At least 18 gunmen were killed. In Najaf, U.S. soldiers fought with gunmen in a convoy, a convoy that may have been carrying Muqtada al- Sadr himself.

On Capitol Hill today, the House Armed Services Committee held a hearing on the progress of the war in Iraq. One of the big issues in that hearing, the Iraqi prisoner abuse scandal. Tonight, the Pentagon said it's treating the deaths of eight more prisoners in Iraq and Afghanistan now as homicides.

Senior Pentagon correspondent Jamie McIntyre has the report -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Lou, it seems these days that top Pentagon officials spend much of their time up on Capitol Hill answering questions. Today, the venue was the House Armed Services Committee.

Joint Chiefs Chairman General Richard Myers, appearing flanked on both sides by the Marine Corps commandant and the Army chief of staff. The question on the minds of many House members, how prepared is the United States turn over power. Myers telling the committee that coalition forces were making -- quote -- "steady progress" toward handing back political power to the Iraqis on June 30.


GEN. RICHARD MYERS, JOINT CHIEFS CHAIRMAN: The Iraqi people, understandably, want to know their efforts are in support of their own country and their own government. Iraqi security forces want to work under an Iraqi chain of command and put their lives on the line for their own country.


MCINTYRE: Meanwhile, photographs published today in "The Washington Post" gave a more of an insight into the kind of abuse that took place at the Abu Ghraib prison.

These pictures show some of the things that went on. Here, we see Charles Graner, the accused ringleader of some of the -- looking like he was about to strike a prisoner. We also saw prisoners shackled to railings and in other demeaning poses. Despite the impact, the devastating impact that these images have had in the region, General Myers said today, insisted that these were something that would not undermine the transition of power.

(BEGIN VIDEO CLIP) MYERS: Most Iraqis whose contact is with our service men and women who are out there throughout the land from basically north to south understand that they're only there for one reason, and that is to -- and it's a very noble cause, and that is to give the Iraqis a chance for peace and prosperity.


MCINTYRE: Now, the Pentagon today revealed that there are nine active investigations into the deaths of Iraqis or other prisoners at the hands of U.S. soldiers, including six cases in Iraq and three in Afghanistan. One of those cases, they believe, was natural causes, but the other eight are homicides and could be cases in which U.S. personnel could be subject to criminal investigation or criminal charges for causing the deaths of Iraqis.

And of those six cases in Iraq, two are said to have occurred at the Abu Ghraib prison -- Lou.

DOBBS: Jamie, thank you very much -- Jamie McIntyre, senior Pentagon correspondent.

We'll have much more on Iraq tonight. My guest, Joseph Cirincione, says the United States should withdraw from Iraq now as soon as possible.

Also, the Marine Corps honors its war heroes one year after they helped overthrow Saddam Hussein.

And a surprise tonight in the race for the White House. Senator Kerry considers an unusual tactic in his battle with President Bush. We'll have that for you.

And fighting to save American jobs from cheap foreign labor markets, 100,000 telecommunications workers go on strike to keep their jobs in this country.

Stay with us.


DOBBS: Our first guest tonight says the United States position in Iraq is simply untenable, that the United States should withdraw its troops.

Joseph Cirincione says the United States has enough military power to flatten insurgent strongholds in Iraq, but that power cannot be used without undermining U.S. foreign policy. Many Iraqis share that view, as the United States prepares to transfer power in a little over a month from now. A leading Iraqi politician today said Americans have -- quote -- "failed in ruling the country. They failed in security and they failed in having stability" -- end quote.

Joseph Cirincione joins us tonight from Washington.

And it is good to have you with us. JOE CIRINCIONE, CARNEGIE ENDOWMENT: Thank you, Lou.

DOBBS: The call for withdrawal is not going to go over well in many quarters of Washington. How quickly do you think it is reasonable to do so?

CIRINCIONE: Well, you can feel the mood in Washington rapidly shifting.

We've gone from support for the president's strategy to questions about that strategy to a realization that there is no strategy, and just in the last few weeks, senior Republicans working to try to develop a new strategy. I think that the situation in Iraq is quite desperate at this point. And unless we develop a new strategy, change the strategic objective from how do we stay in Iraq to how do we get out, we may get to the point where the position could completely collapse.

And that's why it's urgent to reorient and then we can work out the timetable for how quickly to withdraw.

DOBBS: Forgive me, Joe, but much of what you just said starts to sound a little like Washingtonese. First, if we can just go through to better understand what we're talking about here, first, what is the U.S. policy in Iraq?

CIRINCIONE: Well, that's a very good question. That's why you see the Senate hearings that start off talking about torture in Iraq quickly getting to these issues of policy. It's unclear what the president's plan is.

The idea of transitioning to an Iraqi authority has quickly collapsed. We don't know how to go forward. There is no plan for how to get out. The situation is getting worse every day. There's over 50 attacks on U.S. troops. This is what we call a quagmire.

DOBBS: The GOP led by House Majority Leader Tom DeLay demanded an apology from House Minority Leader Nancy Pelosi, because she effectively said that the president was incompetent in terms of post- Saddam strategy and execution in Iraq. What Do you think is going to be the reaction to your call for a complete withdrawal?

CIRINCIONE: Well, Ms. Pelosi might have got an little far on there. But a lot of her Republican colleagues are very close to that.

Just a few weeks ago, Senator Pat Roberts, a rock-solid conservative, gave a home speech in his home state of Kansas calling for an end to these imperial attitudes in Iraq. I think more and more Americans are asking for and are wanting a plan for, how do we get out of Iraq? If we do it right, we still have a chance of giving the Iraqi people a way to have a stable government, stable transition. But we have to start planning for it now.

DOBBS: I know you have called for a clear disavowal of any desire to have permanent bases in Iraq. You've also called for downscaling the embassy, which is planned to be the largest U.S. Embassy in the world.


DOBBS: At the same time, what does that really accomplish? This sounds like more of the same, frankly, to me, Joe. We have asked our troops not to display the U.S. flag. We have asked for them to withdraw from any confrontation, any symbolism of U.S. power. The fact is, we are the occupying power. We have the responsibility for security.

Aren't these really just simply cosmetics? And don't they really fail to go to the root of the issue, should we be there and in what form should we be there?

CIRINCIONE: Well, the great strategic mistake was going to Iraq in the first place. What everyone is now talking about is how to minimize the damage.

And, in my view, you have to do three things. One, declare clearly and convincingly that the U.S. has no intention of establishing permanent bases in Iraq. So we have to get away from the idea that this the beginning of a new campaign in the region. Two, downscale the embassies. It's now, slated, as you say, to be the largest in the world. That's creating tremendous suspicions among Iraqi's neighbors about what are our intentions there.

And, three, we have to develop a new strategy for the region. We cannot succeed in Iraq as long as we're continuing to threaten Iraq's neighbors. We have to form a tactical alliance with countries we have been treating as enemies, Syria and Iran, in order to isolate and focus on the real threat, al Qaeda.

DOBBS: Thank you very much, Joe Cirincione. We appreciate your time.

CIRINCIONE: My pleasure. Thank you.

DOBBS: Still ahead here, "Exporting America," 100,000 workers striking against outsourcing of American jobs to cheap overseas labor markets. It is the first action of its kind. We'll be talking with the head of the Connecticut AFL-CIO.

And the president may be using his so-called fast-track authority to push far more than just trade. And Congress may not be prepared to do a single thing about it.

Also, a move rarely seen in our country's political history. We'll tell you what Senator John Kerry is considering doing tonight.


DOBBS: A landmark labor dispute playing out across the country tonight; 100,000 workers, telecommunications, at SBC today, watched them walk off their jobs. This is the first strike over the outsourcing of jobs to cheap foreign labor markets.

Peter Viles reports on that issue and several others prompting the strike.


STRIKING WORKERS: SBC, shame on you! SBC, shame on you!

PETER VILES, CNN CORRESPONDENT (voice-over): A midnight walkout from coast-to-coast. This was San Antonio, SBC's hometown. This was California. And this was Connecticut.

UNIDENTIFIED MALE: We have to get the jobs of the future.

UNIDENTIFIED MALE: We take pride in what we do in our hometowns. We work for our communities. We work for our taxes. We work here. This is where the jobs should be.

VILES: Both sides were talking tough, but they were also talking face-to-face at four regional bargaining tables. A key issue, the union wants new jobs it doesn't have in new technologies and wants SBC to stop using vendors that ship some of those jobs overseas. The company says it needs to cut costs.

BEVERLY LEVY, BBC SPOKESPERSON: Our wages are about 50 percent more than cable company wages, yet we're offering similar products and we're competing in the marketplace. If we can't price our products competitively because our wages are out of control or because our health care costs are out of control, then we won't be able to compete and there won't be the jobs that we have today.

SETH ROSEN, CWA: Well, I think a company that made $8.5 billion in profits last year can easily only afford to keep good middle-class jobs, hometown jobs throughout America. That's really all we're asking for. And we think this is a reasonable way to settle this dispute.

VILES: Backing the union, Democratic presidential candidate John Kerry, who wrote to SBC CEO Ed Whitacre -- quote -- "I am troubled that SBC has not responded more favorably to the union goals of providing job opportunities in future technologies and maintaining hometown employment."

The strike zone covers 13 states, more than 50 million phone lines. SBC says its replacement team is running the network with -- quote -- normal 99.99 percent reliability.


VILES: SBC has offered union members three years of job security, essentially a job guarantee, but has warned it will pull that offer off the table at midnight Monday -- Lou.

DOBBS: Thank you very much, Peter Viles.

We're joined now by the president of Connecticut's AFL-CIO, John Olsen.

John, they offer three-year job security. That sounds pretty good.

JOHN OLSEN, PRESIDENT, CONNECTICUT AFL-CIO: Well, the problem with a three-year guarantee of a five-year contract, what happens in year four and five? It tells you that they must have a little something up their sleeve. So that is problematic talk about three years worth of job guarantees and then not have it for the last two years of the contract.

DOBBS: In the context of a five-year contract.

OLSEN: Five-year contract.

DOBBS: The company has also said that two minutes before midnight, I believe Sunday, that they're going to pull the offer off the table and you're going to be back to square one.

OLSEN: Well, I think what you do is, you sit at the table and bargain in good faith. You know what's happening here is, there's issues that need to be dealt with. This is a company that is profitable. It made $8.5 billion. If it's doing so poorly, I don't know it gave its CEO a 93 percent increase in his wages. He's making nearly $20 million.

So what they ought to do is come to the table, bargain in good faith, deal with these jobs. We want to have an opportunity to grow this company and grow our opportunities for our members.

DOBBS: The issue of outsourcing within this, one of the issues that you're confront here. What would it take to satisfy you there?

OLSEN: Well, we want is just to make sure that we have an opportunity to have access to those jobs. They're saying, we have to compete.

Surely you can't compete with the kind of labor that's in India and in the Philippines. So what you need to do is look at that $8.5 billion in profits and say, let's sit down and be fair about finding a way for us to settle this contract.

DOBBS: SBC does not, at least to my knowledge, John, have any businesses in India or Philippines. So the only reason they would be going there presumably is for the cheap labor.


DOBBS: And what has been their response on the issue of protecting you against the outsourcing of those jobs?

OLSEN: Well, again, I think what they talk about, a three-year commitment to job guarantees. Personally, 29,000 jobs have disappeared from this company in the last three years. One of them happened to be my son. So I know firsthand what he's experiencing and what he feels and how he liked his job.

He wants to do his job. These are people that want to work for this company. We want to have an opportunity. It's a growing and changing business. It changes overnight. And to talk about giving us job security for jobs that won't be here in a couple of years really doesn't mean much.

DOBBS: We thank you very much, John Olsen, for being here.

OLSEN: Thank you, Lou.

DOBBS: Appreciate it.

Coming up next, Senator Kerry says he may not -- may not -- accept his party's nomination at the convention. We'll tell you why.

And the tricks of the trade. The next major free-trade agreement is, in the minds of many, a free trade mistake, yet another. And it could cost American workers dearly. We'll tell you why Congress apparently isn't going to do a thing about it.

Stay with us.


DOBBS: A surprising development tonight to report to you in the race for the White House. Senator John Kerry is considering waiting to accept his party's nomination until after the Democratic Convention in July.

The reason? That would allow Senator Kerry to continue spending campaign money without federal limits until President Bush accepts the Republican nomination, that in September. Right now, Senator Kerry has more than $28 million in cash on hand. And his campaign raised $117 million. President Bush raised just over $200 million and has, believe it or not, just $71 million left.

Joining me now, Ron Brownstein, national political correspondent, "Los Angeles Times," CNN political analyst Carlos Watson, and senior political analyst here, Bill Schneider, all joining us tonight from Washington, from which I guess they get the best perspective on national politics.

Let me start out with the president's approval ratings.

These are terrible, the worst of his presidency. What's going on, Bill?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, they're dropping because of Iraq. Iraq, Iraq, Iraq are the three big reasons. People are dismayed by the perception there's no plan there.

They have dropped in one poll, "Newsweek," to 42 percent. If they hit 40 percent and start going south of 40 percent, it's impossible -- even his pollster has acknowledged it's impossible for him to get reelected. That's where his father was in 1992. That's where Jimmy Carter was in 1980.

DOBBS: And Carlos, Kerry's ratings are not skyrocketing. And this new consideration to defer accepting the nomination until after the convention, is that just a bit, let me say, unorthodox?

CARLOS WATSON, CNN POLITICAL ANALYST: Unorthodox, but Kerry would say he's been unorthodox a couple of other times in his campaign and it's helped. He'd say that moved his whole organization from New Hampshire to Iowa. Ultimately, that helped him break through.

He said, at a time when some people didn't think it the best idea he skipped any limits on his spending in the primary, that ultimately worked out for him. And he said once again I'm going take a chance.

The White House, though, is already again making fun of it. Once again, saying John Kerry wants to have it both ways, he wants to have a nominating convention, but not accept the nomination. Ron probably has more to add on this as well.

RON BROWNSTEIN, LOS ANGELES TIMES: Lou, can I just jump in real quick on that?

DOBBS: Well, Carlos just said that you had more to add.

BROWNSTEIN: I think it's an odd solution to a real problem. The real problem is that John Kerry has to make his general election money last over three months, August, September, October. The president by excepting the nomination in September only has to spend that 75 million over two months.

The risk is that the benefits greatly exceed the costs. If the cost of this is less attention to the Democratic Convention, which is the moment that the nominee really has to get the country's attention, that would be an extraordinary price to pay for spending more money for television in August when both campaigns assume very few people will be watching anyway, because of the Olympics.

DOBBS: Let's talk about what's going here in terms of the issues just for a minute. Bill -- I would like each of you to address this, and Bill, if you would first. One, we saw Senator Kerry weigh in on the SBC strike. I can't recall the last time I heard or witnessed a president or presidential candidate weighing in on a labor action. Can you, Bill?

SCHNEIDER: No, I can't. You know what? And you know what, nobody was listening. No one's paying any attention.

DOBBS: Every one of our viewers is. Every one of our viewers is, Bill. We reported it right here on CNN. Now, try again. Now, try again.

SCHNEIDER: I will try again. The people out there aren't paying a lot of attention to John Kerry right now. It's one of the reasons he's not soaring in the polls above George Bush, even though Bush is in trouble.

The fact is that Kerry -- look, right now in the campaign, it's all about Bush. Bush is in trouble and that should be reassuring to Kerry because he has plenty of time. BROWNSTEIN: Lou, in fact, last fall, both Gephardt and John Kerry, if I recall correctly, marched on the picket line on the Food and Commercial Worker's strike in L.A. the long grocery worker's strike out there.

What's happened is that there has been a movement that hasn't gotten enough attention, that the Democratic Party in this campaign has moved closer -- moved back into closer embrace with organized labor than they did under Bill Clinton who, in the sort of the spirit of triangulation, largely kept his distance.

John Kerry like Dick Gephardt and Howard Dean all have endorsed rather far reaching proposals that would make it much easier for labor to organize. And this sort of general movement of both sides emphasizing the base, Democrats are much closer and much more willing to embrace the cause of organized labor than they were in the 1990s.

DOBBS: You're say going organized labor there, Ron. Let me turn to you, Carlos. Is it about organized labor, certainly that's part of it, or is it about the American worker? It's clear the Republican Party are embracing the multinationals, corporate America, and the average working person in this country is looking desperately for representation.

WATSON: Three quick thoughts on that, Lou. In terms of organized labor, John Kerry is looking to embrace organized labor for two reasons. One, because the money they can spend independently to turn out voters, including their own voters. And that's critical in helping John Kerry close that gap. You showed that the president still has $71 million whereas Kerry only has $28 million on hand.

Two, don't forget the Reagan Democrats that we used to talk a lot about in the '80s, a number of those folks were members of union households who had voted for Democrats and begun to stray. And so there's some of that interest as well.

And last but not least, there are a series of issues that John Kerry as a Senator over the 19 years championed, that actually agree with labor. And so there is part of that playing into it as well. There are a number of reasons for this movement.

DOBBS: OK Carlos, Bill, Ron, thank you very much, gentlemen.

WATSON: Have a good one.

DOBBS: Tonight's thought is on politics, "politics, it seems to me, for years, or all too long, has been concerned with right or left instead of right or wrong." Those are the words of American poet Richard Armour.

Now, let's look at your thoughts. Many of you wrote in about Congresswoman Nancy Pelosi's comments on the Bush administrations lack of, what she called, competency in Iraq.

Joel Atchison in Maplesville, Alabama, "I think Representative Nancy Pelosi owes General Myers and every U.S. soldier a profound public apology for what she said yesterday."

Maria of Middlesex, New Jersey, "Hurrah! Three cheers to Representative Nancy Pelosi for having the courage to say what Congress knows is the truth."

And from Ray Sarber in Philadelphia, Pennsylvania on the issue of outsourcing of American jobs, "my MBA training says go with the lowest price, my heart says go get em, Lou."

We'll have more of your thoughts later in the broadcast. Send us your e-mail at

Well, the Constitution gives Congress authority over trade matters. But a week from today, President Bush is expected to sign the Central American Free-Trade Agreement, CAFTA, with little if any input from Congress. It is the latest example of the incredible power granted to the White House, a power known as fast track trade authority. Lisa Sylvester reports from Washington.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The CAFTA trade agreement would reduce tariffs between the United States and five Central American countries. The deal was put together with lightning speed, because the U.S. trade representative Robert Zellick negotiated the deal with limited input from Congress.

After the agreement is signed by the president, congressional lawmakers have only two choices, vote it up or down. Critics say when Congress passed the fast track trade promotion authority in 2002, it ceded too much control to the White House.

REP. SHERROD BROWN (D) OHIO; I think trade agreements are unique in American government. In that there are no real checks and balances. They are pretty much negotiated in secret.

SYLVESTER: Congressman Sherrod Brown has introduced a bill that would set labor, environmental and other standards for negotiating future trade deals. Modern trade agreements include far more than simple tariffs. They include thousands of rules impacting food suspicion, the use of pesticides in produce, who can own the domestic drinking water system, when patents expire on drugs, even subsidies states give to local businesses.

LORI WALLACH, PUBLIC CITIZEN: Basically, these so-called trade agreements become like a Trojan Horse. And every agenda item that otherwise couldn't get through the light of sunshine in the Congress gets attached to it under the good name trade.

SYLVESTER: Supporters say logistically it would be difficult to get a trade agreement if U.S. negotiaters had to constantly consult with 535 members of Congress.

BILL MORLEY, U.S. CHAMBER OF COMMERCE: Our competitors from Europe, Japan and elsewhere around the world were able to get into markets we were kept out of, because these countries would not sit down at the table if they couldn't be assured that once the agreement was concluded and negotiated, that it would pass Congress.

SYLVESTER: But some lawmakers, disappointed by years under NAFTA, are skeptical about the CAFTA agreement and who really benefits.

REP. PETER DEFAZIO, (D) OREGON: It was never about people overseas buying our products. It's always been about accessing cheaper labor.


SYLVESTER: Fast track authority, which is now called trade promotion authority, is up for review in June 2005. And either the House or the Senate can decide by majority vote to revoke fast track authority at that time -- Lou.

DOBBS: Thank you very much, Lisa Sylvester. And that brings us to the topic of our poll tonight, "is the free-trade agenda of both political parties putting the interest of big business ahead of the American worker? Yes or no." Cast your vote at We'll have the results later in the broadcast.

Still ahead here, more on the stunning developments in the Martha Stewart case. Why the Republicans can't pass a budget. What happened to the market. The newsmakers are coming up next.

And "Made in America." A company that makes 100 million pounds of candy a year right here in the United States of America.


DOBBS: Joining me now, our newsmakers tonight led by Steve Shepard the editor-in-chief of "Businessweek Magazine," Rick Kirkland, who is the managing editor of "Fortune" magazine. Gentlemen, good to have you here. Let's start with the first issue and that's skyrocketing energy prices, oil prices, how big a deal is it for the economy? How much pressure is it going to keep on the American consumer, Steve?

STEVE SHEPARD, "BUSINESSWEEK": It is a big deal. Gas prices are very high. Saudi effort to increase production by 8 percent will help some but that's not enough.

DOBBS: Roughly two million barrels a day.

SHEPARD: There's a risk premium of probably $10 a barrel built into oil prices. There's a refinery shortage in the United States. We can't even -- if crude were available at lower prices -- we can't produce more gasoline.

RIK KIRKLAND, "FORTUNE": Here's a tip off Lee Scott (ph) who runs that little retailer in (UNINTELLIGIBLE), Arkansas, Wal-Mart, was worrying last week about his customers being able to buy stuff because every dollar -- every penny the gas goes up takes about a billion bucks out of the economy. DOBBS: It does. At the same time, the president is standing fast on not pulling Strategic Petroleum Reserves. John Kerry is saying don't pull any from the Strategic Petroleum Reserves but don't add any either.

SHEPARD: I happen to agree with the president on this one. Strategic Petroleum Reserve is there for emergencies, it's not there to manipulate the price of gasoline by a couple of pennies. I think John Kerry is trying to have it both ways. He's saying, well, we just won't add it to. We should add it to because there will be an emergency one of these days and we're going to need it.

DOBBS: Absolutely. The same senators who are calling for us to draw it down would be blaming us for not building it up if somebody blew something up in Saudi Arabia in the next few months so that doesn't make sense.

DOBBS: Speaking of the Middle East and blame, 42 percent, the latest "Newsweek" poll on the president's approval rating. How much trouble is the president in?

KIRKLAND: He is in trouble. It's really early to say things like if it goes below 40 he can't win because it could go back up again. Right now, he's definitely at the low point so far. People are really concerned about the sense that there's no exit strategy in Iraq.

SHEPARD: What you're seeing is a referendum on the president right now. What we don't see is Kerry. The voters will have to make a decision, they're unhappy but is this guy going to be better and that part of the campaign hasn't unfolded.

DOBBS: It hasn't unfolded but the things that are. The economy is picking up. The White House is sending out its surrogates, if you will, treasury secretary and president's Council of Economic Advisers, Gregory Mankiw, ballyhooing the pickup in employment in many states around the country. Do you buy it?

KIRKLAND: The last two numbers have been pretty strong. I mean, clearly, employment, which we spent many many months on your show wondering where it was, is coming back now. But are we going to see the same kind of robust numbers we saw in the last few months in the second half? It depends. If the oil prices stay high, if the fed starts raising interest rates...

DOBBS: Did you say it depends?

KIRKLAND: It depends. I think -- I think the president -- the worst is behind him. I don't know if happy days are here again.

SHEPARD: What's interesting is the gap between the perception and reality. There's no sense, judging from polls and other indicators that people feel much better about the economy even though the numbers are objectively better so perception is lagging the reality. That could be a problem. DOBBS: One of the striking things about this, to me, is that 35 states still, over the past three years, net loss of jobs, even though we've seen a pickup here in the past year, they're still net losers in jobs. That's got to have a lot of people worried at the White House.

KIRKLAND: I think you have to look at it state by state. This election will be fought state by state. And some of those states like Ohio and other places are still places that are really in a hole.

DOBBS: Michigan, West Virginia, swing states, where they, by the way, are amongst the few to have lost jobs over the course of the past year.

Let's turn to, if we may, the strike, the SBC. 100,000 workers. Four-day strike now underway. One of the issues, outsourcing of jobs, a contract of a company made $8.5 billion. Is the issue right now, building in this country and this election year, the dominance of corporate America out of all proportion to historical levels and the middle class just getting hammered?

SHEPARD: You mean the outsourcing issue in particular or just...

DOBBS: No. I mean the domination of corporate America in our national life, our political life, to the extent that it has brought in both parties, there is a gap here for representation of the American worker?

SHEPARD: I think it's a fair statement that there's more emphasis on companies and corporate power now than have been in previous elections probably because of the scandals that aren't over yet. Every day, there's still some new disclosure, plus the outsourcing and poor performance of job market up until now, and people tend to blame companies. It is a political factor.

KIRKLAND: I think it's interesting the way Kerry's going to play it. He doesn't want -- he doesn't want to come off as totally anti- business and anti-company. What he wants to say is, I'm the guy that cares for the worker and I'm going to give you -- I mean, this issue as you can see is very much about the high cost of healthcare. Listen this is going to be a wedge issue for some years to come. Companies under pressure to deliver profits are going to start cutting back on the generous benefits they provided workers in the past. We got away from that in this country. The government got away from having to fill that gap because companies did it. They're not. We're going to have to fix these problems. That's what a lot of our political debate needs to be about.

DOBBS: And the dominance of corporate political power?

KIRKLAND: And the fact that one of the salient things is that company -- corporate taxes are at their lowest level in 50 years. I think that's an issue you will hear about. Burden sharing.

SHEPARD: The other part of it is that Kerry's tax plan to restore Clinton era rates to people earning over 200,000, that revenue will go to help out on the healthcare side. He can play it that way as well.


DOBBS: And, of course, there are few other things on the list that need to be paid for so far with the Kerry proposals, but all of it, as you gentlemen pointed out, it's early. We'll have some (UNINTELLIGIBLE) and hopefully some resolution of these important issues. Thank you very much. Let's a look now at some more of your thoughts.

Faith Cagne of South Yarmouth, Massachusetts wrote in to say, "Bravo, bravo to the SBC employees who are walking off the job because of outsourcing. At last, a light at the end of a very dark tunnel."

Bob in Dallas, Texas. "Lou, all of us who have downsized, processed, reengineered, and outsourced should make a sign and go join the SBC CWA strikers."

Orlie Shaw, Marion, Indiana. "Lou, I've been wondering when all the little voting people of this country are going to say enough about all these jobs that are being outsourced and say no more like the SBC workers have started to do. We need to open the eyes of government. They were elected to work for the little people and not the corporations."

DOBBS: Well, got the little people, how about just all of us. We appreciate your thoughts. Send us your thoughts at

Made in America, our series of special reports on companies proudly displaying the "Made in the USA" label. Tonight, we take a look at Russell Stover Candies, yes, the largest seller of box chocolates in the country is made in the USA. Kitty Pilgrim has the story.


KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Workers in Abilene, Kansas hand dip these chocolates, cherries and fillings. 25 million pieces of candy are hand dipped each year.

BELINDA ALEXANDER, CHERRY DIPPING SUPERVISOR, RUSSELL STOVER CANDIES: You have to have good hand and eye coordination. You have to be able to move fast because the quota on the chocolate-dipped cherries is 171 trays per day, 72 cherries per tray.

PILGRIM: Russell Stover started in the early 1920s in Denver. These days it's modern references Forrest Gump whose box of Russell Stovers inspired him to quote his mother.

TOM HANKS, "FORREST GUMP": My mama always said life was like a box of chocolates. You never know what you're going to get.

PILGRIM: But these days, you do. Russell Stover now makes specialty boxes. You can get just nuts, just cherry cordials or a full box of truffles. They sell in more than 70,000 retail stores around the country.

TOM WARD, PRESIDENT, RUSSELL STOVER CANDIES: Our biggest strength is that we are quick to market and we can react to change. When you operate outside the United States that tends to slow down that process.

PILGRIM: Russell Stover has six factories across the country, more than 5,000 employees. Smack in the middle of Kansas, the factory has employed people in this community for nearly a decade. The company has provided stable work for generations.

WARD: We have people that have been with us for 30, 40, 50 years. That's not something that you can replace overnight.

PILGRIM: This American icon has a lot of competition. Major candy companies like Mars and Hershey are now making boxed chocolate. Many candy companies are producing their products overseas because of cheaper labor, utility and factory costs. Russell Stover is expanding in the United States.

Kitty Pilgrim, CNN.


DOBBS: When we continue, "Heroes." Three U.S. Marines honored for bravery and their heroism in Iraq. We'll have their story next.


DOBBS: Not much movement today on Wall Street. The Dow up 29 points, the Nasdaq up 15. The S&P rose 4 whole points.

We have some new figures on the labor market, at least according to the White House, looking pretty good -- Christine Romans.

CHRISTINE ROMANS, CNN CORRESPONDENT: If you listen to the White House, they are looking pretty good. Statewide labor statistics showing...

DOBBS: I'll listen to everybody.

ROMANS: ... dropping jobless rates in half the states in this country, Lou, and Greg Mankiw, the president's chief economic adviser, says the president's policies are working and this is evidence.

But not so fast says the Economic Policy Institute. Most states are struggling. Thirty-five states still have fewer jobs than when the recession began. Michigan, still down 206,000 jobs. Washington, down 21,000. Arkansas, Maine, job losses still.

Lou, even since the recession ended, in 46 states jobs haven't kept up with the growth in the working population. Greg Mankiw says the labor numbers are going in the right direction, though.

DOBBS: Well, they've certainly improved, there is no question about that, just a question of whether they've improved enough. ROMANS: Absolutely.

DOBBS: Christine, thanks. Christine Romans.

The special feature that we're honored to do here each week, "Heroes." This week, three Marines recognized for extraordinary courage on the field of battle. Each Marine serves proudly in the 1st Marine Expeditionary Force based in Camp Pendleton, California. And Bill Tucker has their story.


BILL TUCKER, CNN CORRESPONDENT (voice-over): A year after they surged across the Iraqi desert to Baghdad, three Camp Pendleton Marines are honored for bravery and heroism in combat.

UNIDENTIFIED MALE: The president of the United States takes pleasure in presenting the Navy Cross to Sergeant Marco A. Martinez.

TUCKER: Martinez took charge during a fierce firefight in the battle of At Tarmiya, north of Baghdad on April 12, 2003. He single- handedly stormed a building, killing four Saddam Fedayeen fighters.

Fighting in the same battle, Staff Sergeant Adam Sikes.

UNIDENTIFIED MALE: With the squads in position, Staff Sergeant Sikes charged alone across 70 meters of fire-swept ground to close on the first enemy strong point.

TUCKER: Sikes then went on to save fellow Marines while enemy fire rained down. For his heroism, the Secretary of the Navy Gordon England presented the Silver Star.

Also receiving a Silver Star, Corporal Timothy Tardif.

UNIDENTIFIED MALE: Corporal Tardif charged across a road under intense small arms and rocket-propelled grenade fire, inspiring his Marines to follow his example.

TUCKER: Corporal Tardif was injured, taking shrapnel from an enemy grenade.

UNIDENTIFIED MALE: Refusing to be evacuated and disregarding his wounds, Corporal Tardif gallantly led his squad in an assault on an enemy-held compound.

TUCKER: It's not the first time these Marines have been honored. In November, the 1st Marine Expeditionary Force received the military's highest group award for heroism.

Since then, many have trained and been deployed again. And many will never come home. More than 75 Camp Pendleton Marines have sacrificed their lives in Operation Iraqi Freedom. The memory of their fallen comrades tempers the mood on this day of celebration.


DOBBS: Still ahead, we'll have the results of tonight's poll. And we want to remind you to check our Web site for the complete list of companies that we've now confirmed to be exporting America. The list is now more than 700. Stay with us.


DOBBS: Now the results of tonight's poll. It's overwhelming, 94 percent of you say both political parties are putting the interests of big business ahead of American workers when it comes to free trade. Six percent of you, obviously, say not.

We thank you for being with us tonight. Please join us Monday. Congressman Charlie Rangel of New York joins us. He says CAFTA will be unfair to American workers and business.

For all of us here, we wish you a very pleasant weekend. Good night from New York. "ANDERSON COOPER 360" is next.


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