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Joining me now on this issue and more is former CIA Director James Woolsey who joins us from our studios in Washington, D.C., Jim good to have you here.

JAMES WOOLSEY, FMR. CIA DIRECTOR: Good to be with you, Lou.

DOBBS: This is reaching what Howard Dean is really putting in stark epic proportions, saying that this is bigger than Watergate. What do you think?

WOOLSEY: Oh, I think that’s ridiculous, Lou. People need to stand back a little bit and look at the facts here. I mean, Saddam Hussein admitted after his son-in-law defected, who was the head of the biological weapons program, Saddam had said they didn’t have such a program.

After Kamal (ph) defected in ’95, they admitted to having produced 8,500 liters of anthrax. That’s about 8 1/2 tons. That’s an amount that would fit on one medium-sized truck or, if they dried it out, it would be a couple of big suitcases, 80-pound — a couple of big 80-pound suitcases. And they admitted to having a program. They admitted to having produced 500 or so shells full of mustard gas. They admitted to having produced several tons of VX.

Now, the U.N. inspectors’ numbers were bigger, and Colin Powell used some of those, like 25,000 liters of anthrax, three times as much. But there’s no real dispute. The people who say that they had no weapons of mass destruction program are being more supportive of Saddam than Saddam was.

DOBBS: Well, at this juncture how confident are you that U.S. and now U.N. inspectors will find evidence of that weapons of mass destruction program?

WOOLSEY: That’s a very different question. You can produce anthrax, for example, in something very much like a microbrewery attached to a restaurant. Material that can produce pharmaceuticals, for example, can be used to produce something like anthrax.

And if you’re talking about, you know, one truckload worth, it’s pretty easily destroyed. You can burn it up. There are at least two different reports about destruction, one in “The L.A. Times” today, an Iraqi scientist talking about destruction and secreting away the way to make more weapons of mass destruction in the late ’90s.

And then another “New York Times” story about five weeks ago, front page, by Judith Miller. A scientists saying he was ordered to destroy substantial shares of nerve gas and to secrete away some of the ways to produce it further.

So there is at least the chance that some of this in the late ’90s or even just as the war was starting was destroyed and it may be hard to find a lot of it. But there should be no question that he had a program and that he produced things like anthrax and nerve gas. He said he did.

DOBBS: And would not account for that material even under the presumption that it had been destroyed.

The two mobile laboratories, the U.S. government is continuing to cling to those as evidence of the program, yet no sign of weapons of mass destruction, chemical or biological agents, and some contest over whether or not in point of fact they are mobile laboratories for that purpose. How do you sort that particular issue out?

WOOLSEY: Well, they had some good intelligence, and I think Colin Powell used it in his statement to the Security Council, that the several Renault trucks, I think there were eight of them, had been designed to be used to produce anthrax or some other biological agent. And certain features of their design look that way, and then some experts on the outside have said other features such as their canvas sides don’t make them look that way.

But it shouldn’t be suspicious if they don’t have any anthrax in them. They may never have been used actually to produce the anthrax. They may have been their standby mobile capability. I think the absence of spores and so forth really shouldn’t prove the negative here.

DOBBS: Obviously, the White House is being accused by many, and some of them, most of them, in point of fact, with a partisan viewpoint. But the assertion is that the White House overstated what the intelligence community had delivered to it in the way of information, knowledge, and, if you will, interpretation. What’s your reaction?

WOOLSEY: Well, there was one overstatement. Someone put into the president’s speech that this uranium oxide ore from Niger in Africa was part of the program, and I think that’s been rather substantially discredited. But that was not in Colin Powell’s statement to the United Nations.

And I think the substantial majority of what the administration has said has stood up. They’ve been a little sloppy in talking about the weapons themselves as distinct from biological agent or chemical precursors or chemicals because in a lot of these cases you don’t load the shells until the last minute.

So one could quibble and say you don’t have a biological weapon until the shell is loaded up. But that’s not really substantively important. What’s important is if they produced and had the anthrax. And they did. I mean, they admitted it.

DOBBS: Also important here, Jim, is just how good is U.S. intelligence on a separate issue? It now turns out a likelihood, a possibility, rather, that “Chemical Ali,” who we were told had been killed by the best assessment in the war, is free. Osama bin Laden is free. The list goes on. The top seven people in that deck of most wanted in the Saddam Hussein regime still have not been found.

There seems to be some issues here. What is going on? Do you think there is a failure here of human intelligence at the CIA, NSA, DIA, the various agencies?

WOOLSEY: Well, obviously, we’re looking hard for these people. But I think one on this one needs to also cut the administration a little bit of slack. I mean it took seven years to find the suspect for the Olympic bombings in North Carolina and the Unabomber went I think 15 years.

It’s not easy to find people, even if you have an army in a country. And this is a country, Iraq, the size of California. I do think that it is a good idea for people to be cautious about the fog of war and not to report if you’re in the government the first indication that yes, Chemical Ali was the one who was hit. It’s best to continue to hedge until you’re sure.

But generally speaking, except for a few slip-ups like that, I think the administration has been taking something of a bum rap here from the critics, frankly. If Saddam hadn’t produced this material, it would be one thing, if there were any argument about it. But as I said, there’s not. He said he destroyed it and that he had no record of having destroyed it and he didn’t remember where or when or who did it.

Well, you know, anyone who believed that, there’s a bridge in Brooklyn they ought to buy. And it wasn’t just the Americans and British. It was the French and the U.N. inspectors and, as I said, on some occasions the Iraqis who were admitting that they had programs.

DOBBS: James Woolsey, as always, good to have you with us.

WOOLSEY: Good to be with you, Lou.