[Dobbs:] Well, another threat to security at this nation's ports, the threat from communist China, the Port of Los Angeles is now testing you're going to love this. They're testing an x-ray cargo scanner made by a Chinese company that has some familial ties to the head of the communist party and communist government in China. The purchase made even though an American company just down the road from the port makes exactly the same type of equipment. But this is after all America 2008. Casey Wian has our report.
[Casey Wian, Cnn Correspondent:] China is the Port of Los Angeles' largest customer, $112 billion worth of Chinese cargo passed through here last year alone, more than every other nation combined. The port handles 8.5 million cargo containers a year, the security risk is undeniable. Now the port is testing a new mobile X-ray scanning system similar to this one purchased with U.S. taxpayer money last year from a Chinese company called NUCTECH. NUCTECH's president is Hu Haifeng, the son of the Hu Jin Tau, president of the People's Republic of China. Congressman Dana Rohrabacher's district includes the Port of Los Angeles.
[Rep. Dana Rohrabacher , California:] You can't depend on the communist Chinese to provide America the emergency equipment we need for our own defense.
[Wian:] NUCTECH submitted its bid through Duly Research, a small American company headquartered in this wealthy residential neighborhood overlooking the port. The nearly $1.9 million bid was almost a million dollars lower than two competing proposals, one from a British company with manufacturing facilities in the United States and one from Rapiscan, an American company headquartered just minutes from the port. Rapiscan alleges NUCTECH offered the X-ray scanner to the Port of LA at an usually low price to secure its first contract in the United States.
[Andrew Goldsmith, V.p., Rapiscan:] I can tell you this was way out of that ballpark in terms of what we would normally see from them. And it is very it's just very puzzling, very suspicious to us that they were able to come in with a bid so, so significantly lower than what they have done in the past and what they did relative to other competitors.
[Wian:] Duly Research did not respond to repeated requests for comment about its deal with NUCTECH. We couldn't reach NUCTECH's Hu Haifeng either. The Department of Homeland Security did not object to the port's decision to buy a scanner from NUCTECH, even though 90 percent of the money came from a federal port security grant. In August, congressional Homeland Security Committee Chairman Bennie Thompson complained in a letter to DHS Secretary Michael Chertoff about recent waivers of buy America requirements, saying "I am troubled that a department charged with assuring the safety and security of America's ports would act in a way that may bring about potential security vulnerabilities."
[Rohrabacher:] This contract should be declared null and void and we should then have the federal government do its job and set the standards so that the Port of Los Angeles or any other port will know exactly what kind of equipment they're permitted to use from a potential enemy of the United States.
[Wian:] The Port of Los Angeles would not agree to an interview for this report. It released a statement that misspelled NUCTECH's name as NuTech. The port claims the x-ray scanner will be used quote, "in scanning shore-side provisions and supplies for cruise ships at the Port." However, the port's contract approval documents says the x-ray scanner is being purchased so it can also be used to support other security operations throughout the port. It may even be loaned to the city of Los Angeles for citywide security needs. A Department of Homeland Security spokesman blames Congress for passing the law that allows port security grants to be used to buy foreign-made equipment. He also says the Chinese made x- ray scanner is still being tested here at the Port of Los Angeles and will not be used unless it passes all DHS security requirements Lou.
[Dobbs:] Well the Department of Homeland Security and the administrator of the Port of Los Angeles, they ought to be I mean they ought to be ashamed of themselves. They continually demonstrate their incompetence and their indifference to the national interest. I don't even understand why they don't just pack their bags, go home, move out of the job, unless it's of course the only job they could get. What is going on?
[Wian:] The only requirement that the Port of Los Angeles said it looked at, or the main requirement, I should say, that it looked at in this case was the fact that the Chinese-made scanner was about $1 million cheaper than the other two bids it received. It hasn't even completed testing to make sure that it meets all the requirements it's going to need to meet to actually operate the thing, so there's a lot of questions here; unfortunately, they're not answering those questions right now, Lou.
[Dobbs:] Well and because of the way the port is set up there, it doesn't have to answer to anyone except perhaps the Department of Homeland Security, which is at best indifferent to national security and port security for the past seven years. Thank you very much, Casey Casey Wian, a troubling report from the Port of Los Angeles. Well that brings us to the subject of our poll tonight. The question is: Are you outraged that the Port of Los Angeles is using your taxpayer dollars to buy sensitive security equipment from a Chinese technology company with family ties to the head of the Chinese communist government? I love this question. I don't know if we're going to like your answers, but that doesn't that isn't the point at all. It's just fascinating that the question could even be posed this way. We'd like to hear from you. Yes or no. Cast your vote at loudobbs.com. We'll have the results here later. Up next, some polls suggesting the race between Obama and McCain narrowing. We'll assess what's happening on the campaign trail. Three top political analysts join me. And scathing new evidence that the Food and Drug Administration is again utterly failing the American consumer, and fear mongers who declared our economy and markets were a disaster area, that our economy was headed for a depression, well they're being proved just plain wrong. And by the way, you heard it here first. No depression. Three of the best economic thinkers join me next.