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CNN Live At Daybreak

Police Accused; Good Deal?; Fight for Iraq; Oil Rig Damage; Helping Hand

Aired September 30, 2005 - 05:29   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

KELLY WALLACE, CNN ANCHOR: Turning now to the aftermath of Hurricane Katrina and Rita. We all remember the scenes of looting in New Orleans in the aftermath of Katrina. Well now an investigation is under way into possible involvement by police. Two separate investigations have been launched by the New Orleans Police Department and the Louisiana Attorney General's Office. There already have been suspensions.
(BEGIN VIDEO CLIP)

ACTING SUPT. WARREN RILEY, NEW ORLEANS POLICE: I stand before you today to inform the public that I have ordered an immediate internal investigation by the department's Public Integrity Bureau, which will focus on at least 12 police officers who are being accused of misconduct. Already I have suspended four officers in connection with the investigation and I have reassigned one officer.

(END VIDEO CLIP)

WALLACE: The suspended officers are accused of either looting actual items, such as jewelry, or failing to take action while watching looting take place.

For more on this, we are joined by CNN Radio's Ed McCarthy in New Orleans.

Ed, thanks so much for joining us. Give us a sense of how this probe got under way in the first place, were police looking at video that news organizations had of the looting that actually took place?

ED MCCARTHY, CNN RADIO: Well that's absolutely right, Kelly, that's how it did begin, news reports and of course the embarrassment following that. The Louisiana Attorney General, Charles Foti Jr., then stepped in. And now the announcement from the New Orleans Police Department that they have the investigation that is in the early stages.

Four officers now suspended, one reassigned in the department's preliminary probe. And I was told by one of the captains in the New Orleans Police Department yesterday that up to 12 police officers are under a microscope. He did tell me that he was surprised that this took place. But he said it should not take the focus of the good work that all of the other police officers did during this month following and leading up to this cleanup effort in New Orleans that all the other police officers were involved in. So it's really an embarrassment to the police force. But some residents in the community are also telling me that you know they don't fault the police department at large. They say they were basically left alone and they really were understaffed for such a catastrophe.

WALLACE: And, Ed, how important is it for the new kind of top cop there in New Orleans to try and get a handle on this and send a good message as one of the first actions he's taking on?

MCCARTHY: Well it's very important for credibility for the police department, because the police department will be the big conduit here as we try to get things organized. And there's certainly so much to do in the city.

As you drive around, you still see so much debris and trees down and the presence of business leaders and the regular folks that are coming back in now. The residents in the community trying to get back in and get their lives organized.

But it's going to be a long, long time before things are back in order again. It's still very much of a mess in many, many areas, still a lot of garbage that needs to be picked up. And you wonder about all the other garbage that will be accumulating with more people coming in.

Spoke with many business leaders yesterday, and some of them were literally in tears when they came back and saw their shops looted. And one woman said she had four businesses, two that were flooded and two that were looted, and she was very emotionally distraught.

WALLACE: And, Ed, finally, just tell us a little bit, we know there is going to be the return of more residents to other parts of New Orleans today. What can you tell us about that?

MCCARTHY: That's right, they'll be coming in. They'll also be checking their structures. They will have various colored tags on the houses. Some of them may not be able to be lived in now, so people will find that out. They'll find out exactly how much damage they have. They'll find out where they have to begin, but they are coming back in.

And it's been a long time since they've been in. Many just really have a lot of trepidation as they make that trip into the city to find out exactly what is left following Katrina and Rita, this double punch that the present city received.

WALLACE: Ed, we appreciate you getting up early to give us all your insights.

Ed McCarthy from CNN Radio reporting live from New Orleans this morning.

Turning now to FEMA, it is making a new payment to victims of Hurricane Katrina. It's offering just over $2,300 that can only be used for housing. This is intended to pay for three months of rent. The payment replaces the $2,000 checks intended for essentials. FEMA says it gave out more than $1.5 million in the initial program.

Well FEMA is footing the bill for some displaced families to live on cruise ships, but did the government get a good deal?

CNN's Chris Lawrence takes a look at that.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN CORRESPONDENT (voice over): You're looking at one of the most expensive cruises money can buy and you bought it. Your tax dollars fund FEMA, which paid more than $230 million to Carnival Cruise Lines. FEMA bought out three cruise ships for six months, expecting close to 10,000 evacuees to live on board. There's fewer than 2,000 people still there.

REP JAY INSLEE (D), WASHINGTON: So it actually costs the taxpayers about $3,500 a week, and you can go on a cruise for $599 a week.

LAWRENCE: Congressman Jay Inslee is one of many officials calling for a chief financial officer to oversee Katrina spending.

INSLEE: So we could actually send people on six-month cruises for half the price that we're paying to actually have people sit at the dock.

LAWRENCE: Before you blame Carnival, consider this. The price wasn't calculated on a per cabin basis. It was based on what Carnival would have earned if the ships were kept in regular service. All the money they normally get from casinos, liquor and shore excursions that are not open to evacuees.

Carnival says, "in the end, the company will make no additional money on this deal versus what we would have made by keeping these ships in service."

We left several messages for FEMA officials and finally went down to the port ourselves.

(on camera): We're doing a story on the FEMA contract. Trying to talk to some evacuees up on the ship.

UNIDENTIFIED MALE: You won't be able to do that, sir. We'll have to get some authorization from FEMA.

LAWRENCE (voice-over): We had better luck talking to this family. A New Orleans firefighter living on board with his wife and kids.

DERRICK JONES, NEW ORLEANS FIRE DEPT.: A lot of the guys, you know, been there since the storm. We hadn't seen our families, you know. We had no whereabouts where our family was.

LAWRENCE: The FEMA contract put families back together. It allowed first responders to go to work and come back to some sort of home. They have free use of the ship, 24-hour meals and activities for the kids.

JACQUELINE JONES, LIVING ON CRUISE SHIP: You know words cannot express. It really can't. I mean it is excellent. I don't know exactly what they paid, but it's worth every dollar, every dollar.

LAWRENCE: Chris Lawrence, CNN, New Orleans.

(END VIDEOTAPE)

WALLACE: And FEMA is also answering questions about a pair of Greek cruise ships. Greece offered the ships for free as part of a humanitarian aid package, but apparently they were turned down.

Well you have certainly been following the debate over the handling of Hurricane Katrina. The president's brother has now entered that debate, saying that federalizing disaster relief would be, well, a disaster.

In a "Washington Post" editorial, Florida Governor Jeb Bush writes -- quote -- "just as all politics are local, so are all disasters. The most effective response," writes Governor Bush, "is one that starts at the local level and grows with the support of surrounding communities, the state and then the federal government. The bottom-up approach yields the best and quickest results, saving lives, protecting property and getting life back to normal as soon as possible."

Well, another day of violence follows another day of violence in Iraq. An attack early today appears to target civilians. We're going live to Baghdad for the latest.

Also, storm damage to oil rigs in the Gulf is one of the reasons you are paying more at the pump, but just how bad is the damage? We'll play it by the numbers just ahead.

But first, here's a look at what else is making news this Friday morning, the last day of September.

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WALLACE: Turning now to the situation in Iraq. A federal judge orders the release of dozens more pictures of abuse at Iraq's Abu Ghraib Prison. More than 70 photos and 3 videos will now be publicly released. The judge rejected government arguments that the images would provoke violence against U.S. troops in Iraq.

Photographs or not, more violence ensues in Iraq. A car bomb kills 5 and wounds 30 others at a crowded market in Hilla, Iraq today. Police say the bombing targeted civilians.

We go now live to Baghdad to our Aneesh Raman there.

Good morning to you, Aneesh, give us the latest from there.

ANEESH RAMAN, CNN CORRESPONDENT: Kelly, good morning. The death toll now rising to seven after, as you say, a car bomb detonated near a vegetable market in central Hilla. That's about 60 miles south of the Iraqi capital. Police officials tell us that there are women and children among the dead.

And as that explosion took place, the residents, Kelly, of the town of Balad, just north of the capital, woke to an incredibly gruesome scene, 82 people now confirmed dead, 120 wounded after a trio of car bombs exploded there late last evening. It was clearly coordinated, an attack that involved mortar, as well as small-arms fire.

The first car bomb detonating around 6:30 p.m. local on one of the main streets in Balad. We're told, as is often the case, the Iraqis gathered around that scene after the explosion to see what had taken place. Just minutes later, about 10 minutes, a suicide car bomb detonating at that same location, of course maximizing the casualties. And 10 minutes after that, a third car bomb on another main street in Balad. A town, Kelly, that has seen frequent insurgent attacks, a U.S. base there that is frequently mortared.

Clearly, the insurgency continues to make its presence known, continues to attack the civilian population. And as the president himself, President Bush said earlier, we can expect a spike in this violence as we head towards that critical date of October 15 when Iraqis go to the polls to vote on their constitution -- Kelly.

WALLACE: Aneesh, so much of the American audience has been focusing on Hurricane Katrina and then of course Hurricane Rita, not really focusing as much on Iraq. Give us a sense, are we seeing a recent uptick in violence or have we been seeing this sort of spike in violence for the past few weeks?

RAMAN: Well we saw just weeks ago on September 14 a string of car bombings and suicide bombings in the capital that killed over a hundred. That was done, we're told by a statement by Abu Musab al- Zarqawi, in direct response for the military joint U.S. and Iraqi operation that took place in Tal Afar in northwestern Iraq. So as is often the case, violence and progress continue to be at odds here.

The political timeline is moving forward. There is a vote set to take place on October 15.

But there are new trends as well, Kelly, in the violence. We have seen teachers now being targeted. Days ago, six of them killed. South of the capital, insurgents dressed as police went into an elementary school, took the teachers aside and opened fire.

We're also seeing on an increasingly frequent basis the discovery of bodies, 9 just two days ago, 22 the day before that. All of these bodies, their hands bound behind their back, shot in the head execution style.

So while we have seen consistently the insurgent violence, the Sunni insurgency against the majority Shi'a population, we are seeing now an increase in civil strife on a more local level. Militias, essentially, taking the law into their own hands. And that is raising huge concerns about lawlessness throughout the country -- Kelly.

WALLACE: Lots of concerns there, Aneesh. Aneesh, thanks so much. We'll check in with you at the next hour of DAYBREAK.

Aneesh Raman reporting for us live from Baghdad.

Ohio's beleaguered Lima Company begins coming home from Iraq today. Nine hundred Marines of the Ohio Marine Reserve Unit will be returning over a three-day period. The first Marines are expected to arrive at Cape Lejeune in about three hours. The 180-member unit lost 23 Marines while deployed in Iraq, including 9 on the same day.

Well, the White House dispatching its troops to shore up support for the war in Iraq. Secretary of State Condoleezza Rice today gives a speech on the war on terror at Princeton University. Princeton, as you know, has long played a major role in world politics.

Your news, money, weather and sports. It's just about 44 minutes after the hour. And here is what is all new this morning.

"New York Times" reporter Judith Miller is out of jail after 12 weeks, and she's expected to testify today before a grand jury. She had been held in contempt for refusing to identify a confidential source. Miller says she's now received permission from her source to give evidence about the leak of an undercover CIA operative's name.

Firefighters in southern California may get a break today. Winds are dropping, along with the temperature, giving crews a better chance to get control of a 17,000-acre wildfire on the northwest edge of Los Angeles. Mandatory evacuations are now in effect.

In money, just in time for Halloween, Anheuser-Busch introducing Jack's Pumpkin Spice Ale. The company called it a -- quote -- "wicked blend of ginger, nutmeg, cloves and golden delicious pumpkins."

In culture, a couple of London newspapers report super model Kate Moss is in a rehab clinic in Arizona. Moss lost millions of dollars in contracts after "The Daily Mirror," a newspaper in England, reported that she had used cocaine.

In sports, the Yankees and Red Sox go head to head in the final three games of the year in Boston. If the Red Sox win two games, it forces a one-game playoff Monday in New York to determine who goes to the playoffs.

And, Bonnie, people in New York City and Boston are going to be watching very closely and want to know what is the weather going to be like in Boston.

BONNIE SCHNEIDER, CNN METEOROLOGIST: Kelly, you couldn't ask for better weather for tonight's game. It starts at 7:05 at Fenway Park.

(WEATHER REPORT)

WALLACE: OK, Bonnie, thanks so much. We'll talk to you in a few minutes. Still to come on this Friday edition of DAYBREAK, there is no doubt the hurricanes caused damage to oil rigs in the Gulf of Mexico, but just how bad is it? An in-depth look at the oil fallout from Katrina and Rita is next and what it all means for you.

We'll be right back.

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WALLACE: And welcome back to DAYBREAK.

Hurricanes Katrina and Rita affected not only millions of people but business interests as well. Case in point, oil rigs were wrecked or temporarily knocked out by the storms. Katrina mainly damaged or destroyed oil production platforms in the Gulf, but Rita affected exploratory oil rig activity.

For a look at what all this means for you, the consumer, let's turn to Carola Hoyos. She's a reporter for the "Financial Times" in London.

Thanks so much for joining us. In your article, you talk about how Hurricane Rita has caused more damage to oil rigs than any other storm in history. How extensive is the damage?

CAROLA HOYOS, "FINANCIAL TIMES": It is very extensive. But the bigger problem is that the market for oil rigs was so incredibly tight, it was very hard to even find an oil rig to hire before this, that it comes at a very, very critical time. It comes at a time when oil rigs were actually going to move out of the U.S. Gulf and to the Middle East to find some more oil.

And, as you know, and as our consumers know from the petrol pump prices, we are in desperate need to find more oil. This will slow it down, make it more expensive and, again, is another reason why oil prices and ultimately petrol or gasoline prices will be high for the foreseeable future.

WALLACE: And you know so many American consumers might say OK, we see there's a problem, we need more oil rigs, let's just say, here in the United States. You say obviously it's difficult to get more oil rigs. Why?

HOYOS: Well it takes a long time to build an oil rig. Companies spurred on by the high oil price have already started to order new oil rigs to be built. But if you order an oil rig to be built today, depending on the sophistication of the rig, it'll take at least until 2008 or 2009 for the companies that build these rigs to deliver them to you. So we have a lag time in which we are going to be constrained and we're not going to be able to find as much oil as we would if Rita had not hit.

WALLACE: And coming back to the consumer, what is this going to mean for all of us, especially as now we're heading into October and soon we'll have the winter months here? What is this going to mean? HOYOS: Well, usually we get a bit of a break in oil and gasoline prices at this time. We've finished our driving season, we're back from the summer holidays and we haven't really turned on our heating for which we use a lot of heating oil, which is also a derivative of oil and which refineries make.

Now the problem is that those Rita, but in particular Katrina, hit several refineries. And we were so desperate for gasoline when we were hit that not only did we have refineries down and not able to make gasoline, but other refineries turning from making heating oil to making gasoline. So this won't go away. So not only are we going to be paying more for our gasoline this summer and this, which we've seen this summer and also this fall, but more importantly, as we go into the winter, our heating bills will also increase.

WALLACE: And this is something you can explain for us, because we reported earlier on this show in futures trading crude oil down a quarter. It's now down to about $66.54 a barrel this morning. To me, that would sort of go against common sense. With the problems in the Gulf, with the increased demand, I would just expect that those future prices would continue to climb.

HOYOS: Well I think you're right in terms of the long direction. But a lot of people were thinking that Rita would hit Houston and not Port Arthur, and so they thought that the situation would be doubly as bad as it really has turned out. It's bad.

Following Katrina, we really can't afford any kind of hurricanes, let alone a big one that hits somewhere like Port Arthur. But it's not as bad as what the oil traders had expected. And so what you saw is that they locked in a high price before the storm. The storm came in less than expected, in terms of refinery damage, and so the oil price began to fall because people had expected a higher impact.

Also, the second thing to say is if you shut down a refinery, you can't use the crude oil, because a refinery uses crude oil and makes gasoline and heating oil and other products like that. And so if you shut in and shut down refineries, as we have had to do ahead of the evacuations of Rita and as there are still some refineries shut down from Katrina, we're actually using less crude oil.

That's good news on the crude oil market in terms of prices, but we don't buy crude oil. We, you and I, buy gasoline and heating oil. And those are in deficit because the refineries are down, they are not only not using crude oil, they are also not producing heating oil and gasoline. And so as we know from Economics 101, if your supply goes down and your demand either stays the same or increases, as we will see with heating oil in the winter, the price will go up.

WALLACE: A lot there. We appreciate you making sense of all of it for us. Carola Hoyos with the "Financial Times" out of London, thanks for joining us today, we appreciate it.

HOYOS: Thank you.

Coming up next here on DAYBREAK, she is free but now has to appear before the grand jury. We'll talk about all of it with "Newsweek's" Senior Editor Michael Isikoff. He's joining us at 6:30 a.m. Eastern.

This is DAYBREAK for a Friday. We'll be right back.

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WALLACE: Welcome back to DAYBREAK.

So often we double over laughing at actor/comedian Chris Rock. Well now he's doing something that makes us sit up and take notice. Rock and his wife are adopting a shelter for Hurricane Katrina evacuees, and what a difference it has made.

CNN's Anderson Cooper has this exclusive report.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: How you doing -- Chris?

CHRIS ROCK, COMEDIAN: All right. How are you?

ANDERSON COOPER, CNN CORRESPONDENT (voice-over): On this, his second visit to Houston's Bonita House, Rock is king.

UNIDENTIFIED MALE: Chris came the first time and he was helping us with the boxes. I was cracking jokes with him. I'm glad he came back.

UNIDENTIFIED FEMALE: Yes, we want to say hi to everybody.

COOPER: He came back just three weeks later, and this time brought his wife, Malaak.

C. ROCK: Now I'm here at the Bonita Street House of Home.

COOPER: His first trip to the family shelter was for an Oprah hurricane relief show. He says the experience and the people he met changed him.

C. ROCK: You know I thought I was going to go all over Houston and go to, you know, so many places and make so many stops. But right here at the first stop there was just so many people with so many stories that just wanted to be heard.

COOPER: Bonita House had been overwhelmed by the influx of evacuees, according to its president.

TYRONE EVANS, PRESIDENT, BONITA HOUSE: When Katrina struck, we were going to sell this place. And the same day Katrina struck, the next day we were full.

C. ROCK: Tyrone seemed to know what he was doing and, you know, just a lot of nice, cool people.

UNIDENTIFIED FEMALE: How old did you say you were? UNIDENTIFIED FEMALE: I was 21.

COOPER: More than a hundred Louisiana residents moved in here in Katrina's wake, putting a financial burden on the charity.

EVANS: Chris Rock was add on the Oprah show when Oprah was in town. And people all over the world saw what was going on and we began to get calls from everywhere. People were calling us and saying what can we do to help?

COOPER: Meanwhile, Rock enlisted Malaak in the effort.

MALAAK COMPTON ROCK, CHRIS' WIFE: And when he came back and gave me Tyrone Evans' card and said call this man, he's doing great work.

COOPER: The two of them have adopted the shelter.

M. ROCK: Chris and I literally got on the phone and cold called Bed, Bath & Beyond and Crayton Barrel (ph) and some of the others and just said this is what we're doing, can you help us?

Cheyenne (ph), I'm Malaak, nice to meet you.

I live by a motto that service is the rent you pay for living. When you give you get it right back.

C. ROCK: I didn't get, you know, where I'm at without some help.

EVANS: It's been one good thing after another since I met Chris and Malaak.

COOPER: The goal is to eventually move all the residents into permanent housing, and the Rocks have been asking their friends to sponsor families.

M. ROCK: You have to be in it really, really for the long haul. That's a really important message to get out.

C. ROCK: You can have a lot. You're not having that hat. Reggie Jackson autographed that hat.

UNIDENTIFIED MALE: Reggie Jackson.

C. ROCK: Yes, Reggie Jackson and Joe Torre.

(END VIDEOTAPE)

WALLACE: And that was CNN's Anderson Cooper, an up close and personal look at what Chris Rock and his wife are doing in Houston.

The next hour of DAYBREAK begins in just one minute. We'll be right back.

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