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American Morning

Red Cross Donation Fraud; Wildfires Rage in Texas, Oklahoma

Aired December 28, 2005 - 08:00   ET

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

MILES O'BRIEN, CNN CORRESPONDENT: Good morning.
I'm Miles O'Brien.

Dangerous conditions this morning in Texas and Oklahoma after a day of racing wildfires. Dozens of homes burned. High winds could spark more fires today. We are live in the fire zone.

CAROL COSTELLO, CNN ANCHOR: I'm Carol Costello in for Soledad today.

Snow, wind and rain on the West Coast as more powerful storms roll in from the Pacific. We'll have the full forecast for you ahead.

M. O'BRIEN: And crooks on the inside at the Red Cross. Between $300,000 and $400,000 scammed. We'll look at how these alleged thieves were caught on this AMERICAN MORNING.

COSTELLO: And good morning to you.

It's 8:00 Eastern straight up.

It's just bizarre to hear about wildfires in December.

M. O'BRIEN: Yes, but, you know, it's drought conditions, lots of wind and there you have at least two parts of the recipe. We're watching a developing and dangerous story this morning. Wildfires threatening thousands of people in Oklahoma and Texas. A severe drought, as we said, creating those tinderbox conditions. Dozens of homes were burned yesterday in towns near Oklahoma City. And a lot of wind just fueling those flames, so much that helicopters that would be used to dump water on the flames couldn't fly.

In Texas, several homes have burned. No specific numbers there yet. One death is blamed on the fires. At least a dozen firefighters treated now for heat exhaustion or for inhaling too much smoke. We will go live to Texas in just a moment.

Also watching things on the West Coast for you this morning, as well. Take a look at some of these pictures. We have a wave of snow moving across Washington State on Tuesday. Too bad we can't get that precipitation over to Oklahoma and Texas. It makes driving especially dangerous in the mountain areas due to deep snow and low visibility. More snow on the way today in the Sierras and northern Nevada. Of course, folks who like skiing and snowboarding happy to hear that. Driving is another matter.

Jacqui Jeras at the Weather Center watching all of this for us -- good morning, Jacqui.

JACQUI JERAS, CNN METEOROLOGIST: Good morning, Miles.

And good morning, everybody.

(WEATHER REPORT)

M. O'BRIEN: Let's get back to those fires.

In parts of Oklahoma and Texas, folks dealing with -- well, they don't call them wildfires for nothing. It's truly a wild situation.

Let's get to Cross Plains, Texas.

Lacie Lowry of our affiliate KTXS is there -- Lacie, what can you tell us?

LACIE LOWRY, KTXS CORRESPONDENT: Hi, there.

Good morning, Miles.

Well, just 24 hours, less than 24 hours after the small fires started burning here in Cross Plains and several blazes still burning themselves out throughout the town. I'm standing just north of downtown Cross Plains, at the intersection of Main Street and Ninth Street. Behind me, all that's left of an entire neighborhood. This particular house you're looking at still has its brick walls standing. It is probably in the best shape of all the homes that once stood here.

One death has been reported so far from this fire. The body was found in a home north of town. We're still waiting on a positive I.D.

Thirty fire departments responded to this fire in Cross Plains. Fire officials saying all the fire has been contained as of 2:45 this morning. However, firefighters staying on the screen for minor flare- ups. Also, a note. Fire officials are very concerned that the winds may pick up again today and cause even more destruction.

Yesterday's fire destroyed so much land and so many residential areas that the Texas governor, Rick Perry, is traveling to Cross Plains today to see the devastation for himself. He hopes to get funding here as quickly as possible so the rebuilding can begin. However, he says that process is going to take a very long time.

Fifty-six homes in all destroyed. That number could go up by the end of the day.

Reporting live from Cross Plains, Texas, I'm Lacie Lowry.

M. O'BRIEN: All right, thanks to you, Lacie.

And thanks to KTXS for that -- Carol.

COSTELLO: The Red Cross is trying to make sure it doesn't get scammed again. Forty-nine indictments have been handed out in that case we reported to you Tuesday of workers pocketing money meant for Katrina victims.

AMERICAN MORNING'S Bob Franken is in the CNN Washington bureau -- Bob, exactly what happened here?

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, what happened was is that the somewhat autonomous operation that had been set up using contract workers who were supposed to distribute, take calls and then provide for money for people who had been victims of Katrina were able to find a way that they were able to, according to the allegations, able to direct that money to themselves and friends of theirs.

And officials became suspicious when there was a large number of people cashing checks at a nearby telegram office, a Western Union office, which did not match with the number of people who were out in that part of the country.

So, the arrests have been made. The indictments have been issued. The question really has to do, Carol, with the system that the Red Cross has set up. Red Cross officials themselves would say that perhaps their local operations are too autonomous and always have been.

COSTELLO: Oh, yes, because they didn't find this out until they did an audit.

So how do you keep it from happening again if you're the Red Cross?

FRANKEN: Well, the Red Cross says that it's going to try and tighten controls. But this has been a problem traditionally for the Red Cross. There have been scandals and alleged scandals in several states -- Louisiana a few years ago Maryland, Pennsylvania, New Jersey. So this is nothing new.

And, as a matter of fact, it is something that has become so repetitive that members of Congress are saying maybe it's time to revisit the idea that the Red Cross is the nation's only Congressionally chartered charity.

COSTELLO: Interesting.

Bob Franken live in Washington this morning.

Thank you.

Headlines for you now.

There is word of a plea deal in the Enron scandal. Richard Causey, the former chief accounting officer, has apparently agreed to a plea bargain. According to the Associated Press, he'll testify against Enron's top two executives in exchange for a lighter prison sentence. Enron founder Kenneth Lay and former CEO Jeffrey Skilling are set to go on trial next month.

In Milwaukee, the mayor is pleading with the public to help police solve a vicious street attack. On Monday night, police say a man honked at a group of young people so they would get out of the street. Well, the group dragged the man from his car and brutally beat him. The victim suffered severe head wounds and he may not survive.

We are expecting to hear more details shortly about that deadly confrontation in New Orleans. We showed you this dramatic video. Thirty-eight-year-old Anthony Hayes waving a knife, shot to death by police. The New Orleans police superintendent is standing behind his force amidst criticism they used excessive force.

He spoke with Miles just a short time ago.

(BEGIN VIDEO CLIP)

SUPT. WARREN RILEY, NEW ORLEANS POLICE DEPARTMENT: Any time you're within 21 feet, tactically, street survival shows you that any person with a knife, even a three inch knife -- and this wasn't just a pocket knife, this was a hunting knife -- that within 21 feet, that you're in danger.

(END VIDEO CLIP)

COSTELLO: The officers involved in the shooting have been reassigned pending the outcome of an internal investigation.

California Governor Arnold Schwarzenegger's new chief of staff is raising some eyebrows. She's Democrat Susan P. Kennedy. No apparent relation to First Lady Maria Shriver, but not only was Kennedy a high ranking official for Schwarzenegger's predecessor, Gray Davis, she is a lesbian who supported the governor's veto of a same-sex marriage bill. Kennedy says she believes in the Republican governor's agenda.

M. O'BRIEN: Coming up, an identity theft alert. Credit card data and Social Security numbers from more than 200,000 people -- maybe us, maybe you -- are now perhaps in the hands of people you don't want them to have in the hands of.

Also, more on that huge case of fraud involving hurricane relief from the Red Cross. How did they catch on to the scam?

COSTELLO: And later, an unlikely but dangerous mission for the National Guard in Iraq. U.S. soldiers try to save the life of a very sick baby girl under the cover of darkness.

First, though, a holiday message from our troops overseas.

(BEGIN VIDEO CLIP)

SGT. 1ST CLASS JOHN NEWKIRK, KILLEEN, TEXAS: Greetings.

I'm Sergeant 1st Class Newkirk. I'm the S2NCRC for the 1st Corps Brigade here in Camp Taji, Iraq.

We've been here for about two months.

I'm wishing my wife Raina (ph) and my son Lamar a good, happy holiday. I'll see you soon, baby.

SPC. MATTHEW PEREZ, STONEWALL, TEXAS: I'm Specialist Matthew Perez from Stonewall, Texas, where with the 101st Airborne Division, 1st BCT.

I'd like to give a shout out to my family and friends back in Texas. I love you all. Take care.

(COMMERCIAL BREAK)

M. O'BRIEN: We expect to see another round of indictments in that Red Cross scam that put money earmarked for Katrina and Rita and Wilma victims into the hands of some temp workers hired by the Red Cross. Forty-nine were indicted yesterday. Many of them worked at a call center in Bakersfield, California set up to funnel some cash to hurricane refugees fast.

Now, hundreds of thousands were stolen in this scam.

Jack McGuire is the interim president and CEO of the Red Cross.

Mr. McGuire, good to have you with us.

Clearly, these call centers were swamped. Maybe not the best term given that we're talking about hurricanes, but overwhelmed by calls.

JACK MCGUIRE, INTERIM PRESIDENT & CEO, AMERICAN RED CROSS: Right.

M. O'BRIEN: And so you really had a problem of a lot of money was received by the Red Cross and getting it in a timely way to people and still vetting not only the people who are receiving it, but the people who were giving it out, the temp workers, must have been very difficult.

MCGUIRE: Yes, you know, in fact, the entire system that we put together did not exist prior to hurricane Katrina. This was put together to respond to the huge size of that effort. But when we designed it, we did look at fraud, we did look at how to build protection into that, both in terms of how to screen people to make sure they were worthy, but then to be able to look back afterward and ensure that the money was properly given out.

You know, the system worked. It was the Red Cross that found those situations about two months ago. We reported that to the FBI, who followed it up.

M. O'BRIEN: Now, you're -- the amount of money you took in was a staggering amount. It's approach $2 billion, isn't it?

MCGUIRE: Yes, it is.

M. O'BRIEN: Close to it. So the fact that a couple of hundred thousand dollars was misdirected, as a percentage, is not a big deal. But to that extent that this reflects on some organizational issues at the Red Cross, you admit you didn't have this infrastructure set up.

Shouldn't the Red Cross have thought of something like this? If there was a major disaster, what would we do?

MCGUIRE: Well, I think that's a fair question. You know, last year in the hurricanes in Florida that we had, we had the largest season ever. We helped 73,000 families with financial aid. For Katrina and Rita, we helped 1.4 million. That scale of 20 times, we did not anticipate. And we needed to scramble to be able to put into place what we did.

I think the good news is that we did well in achieving this.

Now, we need to go back and look at the systems, see how they worked, look at where we need to improve them, where we need to make them more robust so that as we approach the next season, which will be July, we're in that much better shape.

M. O'BRIEN: You, as we just mentioned, interim head of the Red Cross, succeeding Marty Evans, who, in the midst of all this, resigned after squabbling with, what some would suggest is an unwieldy board of directors, 50 people, no less, on that board of directors.

Does the Red Cross need to be revamped, reorganized, in order to be able to better respond?

MCGUIRE: Well, the board of directors is under charter from the Congress. The Red Cross cannot change that. That takes Congress to change it. But these are 50 people who are very dedicated. They volunteer their time. They are very involved. And the board actually operates through committees. So the operating mechanism is much similar.

I have worked with the committee in the flood side of the business for the past two years and we've established good relationships and good mechanisms to be able to get the job done that we need to get done. And I look forward to doing the same thing with the rest of the committees.

M. O'BRIEN: Do you think -- I mean the Red Cross is a special charity, Congressionally chartered, performs, you know, kind of a first responder role. People rely on the Red Cross in ways that they don't rely on other charities.

Are we asking too much of one organization? Should -- would you like some help?

MCGUIRE: Well, in any event where we've got a major disaster -- and it doesn't matter whether it's a disaster the size of Katrina or it's a smaller one -- it's important that we cooperate with other charities, whether they be faith-based or other organizations that are social support, so that we don't duplicate efforts, so that we don't have gaps.

Now, Katrina was so large, it showed the gaps and the stretch that was required. But we will continue to look to develop better relationships and better coordinations with those entities so that it is seamless between us.

M. O'BRIEN: There is a certain sense of darned if you do and you're darned if you don't here. You receive a tremendous amount of money and there is real pressure to disperse that money quickly -- media pressure, people on the Internet checking out what you're giving, how you're graded and so forth.

Is that fair? I mean do you think that, as you -- going back to what we just started off with, the scale of this event -- did the Red Cross do the best job it could do?

MCGUIRE: I think, Miles, in the circumstances we've had, the Red Cross did a very fine job. You know, the real pressure here comes not from media or not from the governments, it comes from the people who need help. You know, that's where the pressure comes from.

M. O'BRIEN: Well, it comes from the people who write the checks, too. They want to make sure their money is getting into the hands of people who need it, right?

MCGUIRE: Right. Absolutely true. Absolutely true.

But the pressure to disperse is a pressure based upon the help that's needed and the immediacy of that need. And that's what drives the system. All of the checks and balances that are there are to make sure that it's done properly, it's done well, and, in any case like we've had, which fortunately represents just a very small percentage, that we've got the ability to find the fraud and then go do something about it. And we will aggressively look for that.

M. O'BRIEN: Jack McGuire is the interim president and CEO of the Red Cross.

Thanks for coming in.

MCGUIRE: Thank you.

M. O'BRIEN: OK.

Next hour, we'll talk to the U.S. attorney who released those indictments and find out what's next in the case -- Carol.

COSTELLO: Coming up, want to slim down in the new year? Our series, 5 Diets That Work is coming up next.

Today, we've got easy ways to figure out healthy portion sizes.

So stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO TAPE)

SOLEDAD O'BRIEN, CNN ANCHOR: No better time to take a look at what you're eating -- the good, the bad, the fattening, too. All this week, in fact, we're take a look at diets that work. Lisa Young wrote the book called "The Portion Teller" and it gives advice on how you can judge a serving size and how to count calories. And it's not just for people who are looking to lose weight.

Heidi Skolnik is a nutritionist, also a columnist for "Men's Health" magazine, joining us this morning.

Nice to see you.

I think the best thing that Lisa Young does in this book is reveal just how big portion sizes have gotten over the years.

HEIDI SKOLNIK, NUTRITIONIST, "MEN'S HEALTH" MAGAZINE: They have over doubled. And I think that this book is really fun to read. There are so many statistics and examples that just bring it right home.

S. O'BRIEN: Oh, it's amazing.

Do you, as a nutritionist, really, at the end of the day, say it's about portions, it's about what you're taking in and what you're working out?

SKOLNIK: Always. I mean for weight loss. There's the quality of the food you take in, as well, and that has to do with health and well-being. But in terms of weight loss, it's always going to come down to portions.

S. O'BRIEN: Let's take a look at some of the examples from this book, "The Portion Teller." She says, you know, back in the day, a Coca-Cola bottle size was 6.5 ounces. And, you know, we've all seen those little antiques now. Now, 20 ounce bottles is standard in the vending machines.

SKOLNIK: And she points out, which I think is remarkable, you go to the movies, a child sized portion is 16 ounces. You can't even get that smaller, which is really remarkable.

S. O'BRIEN: Yes, that's always the standard.

SKOLNIK: And it's obscene. It really is.

S. O'BRIEN: Potato chips -- bags used to be one ounce. I don't remember the day when potato chip bags used to be one ounce.

Now, they're what?

SKOLNIK: Now they're two-and-a-half. Double.

S. O'BRIEN: Yes, or even up to four ounces sometimes, as well. That's a giant jump.

A pasta entree -- I think this is so amazing how you go into a restaurant, pasta used to be like, you know, the normal size of a plate. Now, you know, a family of four could eat the pasta. SKOLNIK: And that goes back to sort of the French diet that we were talking about with we're a culture of over consumption. It's like a greater value if it's more versus saying OK, a little bit, I could get the taste of it, the mouth feel of it, the satisfaction of it, and I don't have to have so much.

S. O'BRIEN: Yes, but the problem is nobody really knows what's a normal portion anymore. I mean you've got some guides. Let's throw these up on the screen here. Three ounces of protein. You know, I don't really know what that looks like.

SKOLNIK: A deck of cards. Three ounces of protein is like a deck of cards. And that's what this book does, it takes you through what a standard portion is. Now, it's really not saying, though, that you only have to eat that amount, but to understand that if it's magnified, you are understanding how much more you're getting. A portion is really not just what's served to you -- to be a little bit more mindful of is this a mega portion versus what's really more appropriate. And that's going to change. So if I'm working with an athlete, three cups of pasta might be appropriate. But if I'm working with a sedentary female, a half a cup to a cup may be more appropriate.

S. O'BRIEN: Well, a half a cup of pasta or rice, as you say, I mean you say that's the size of a half a baseball?

SKOLNIK: A half a baseball.

S. O'BRIEN: That's it?

SKOLNIK: That's it. But that's not saying that's all you have to eat at one time.

S. O'BRIEN: It seems very small.

And salad dressing. I always think this one's tricky because, you know, you say two tablespoons of salad dressing and then you kind of pour it on and pour it on.

SKOLNIK: And you're thinking you're making this choice for a salad...

S. O'BRIEN: Yes, healthy.

SKOLNIK: ... and you're going to be healthy and then you're adding so many calories.

S. O'BRIEN: Why am I not losing the weight, right?

SKOLNIK: You're sabotaging yourself.

S. O'BRIEN: How much is a...

SKOLNIK: So, a shot glass is what two tablespoons of salad dressing looks like.

S. O'BRIEN: Why do you think that this is a better way of going about trying to lose weight?

SKOLNIK: Because I think it's very accessible to everybody. You don't have to weigh and balance. You're not going to bring a scale with you all of the time. So this is a way that everybody can have the tools to begin to tune in to portion size, be mindful -- which is a theme here -- it's always being mindful about what you're doing, not being rigid, but understanding that when you're at a restaurant and they give you three cups of pasta, that's too much. And what is more appropriate?

S. O'BRIEN: Did you like this book?

SKOLNIK: I liked this book. I thought it was really fun. And I think everybody could gain something from it.

S. O'BRIEN: Metaphorically gain.

SKOLNIK: Oops!

S. O'BRIEN: And lose.

SKOLNIK: Oops!

S. O'BRIEN: And lose something from it, too, right?

SKOLNIK: (UNINTELLIGIBLE).

S. O'BRIEN: Heidi Solnik, thanks, as always.

(END VIDEO TAPE)

M. O'BRIEN: All right, and diet number -- tomorrow it will be four, right?

COSTELLO: Um-hmm.

M. O'BRIEN: Diet number four? The no-diet diet. It's called intuitive eating -- how you can lose weight by eating what you want.

COSTELLO: Ooh, I like that!

M. O'BRIEN: Hmmm. If it sounds too good to be true, don't eat it.

Anyway, that's here on AMERICAN MORNING tomorrow.

COSTELLO: And still to come this morning, a new development in the latest David Letterman legal saga. It's so bizarre. A New Mexico woman says Letterman sent her secret messages on TV to harass her.

M. O'BRIEN: Careful what you say now.

COSTELLO: I know, because Oprah was a code word.

M. O'BRIEN: Oops, you said it.

COSTELLO: How could this woman get a judge to agree? We'll tell you.

That's ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: Get the latest news every morning in your e-mail. Sign up for AMERICAN MORNING Quick News at cnn.com/am.

COSTELLO: And still to come on AMERICAN MORNING, a great story out of Iraq. In fact, Lieutenant Jeff Morgan runs across a baby in the slums of Abu Ghraib. The baby is very sick and he wants to make the baby better. The incredible effort he went to, next on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: Well, it's a nice day for flying there over Central Park in Manhattan.

COSTELLO: It's a nice day to run through Central Park. But in other part of the country not so nice.

M. O'BRIEN: Not so nice.

COSTELLO: Yes.

M. O'BRIEN: And for some folks on a plane last night...

COSTELLO: Ooh, not so nice at all.

M. O'BRIEN: Not so nice.

COSTELLO: Let's get right to the headlines now to tell you about that story.

M. O'BRIEN: Yes.

COSTELLO: Two Alaskan Airlines pilots earning their paycheck after safely bringing down a passenger jet with a hole in its side. Apparently a baggage cart dented the aircraft before takeoff and then about 20 minutes into the flight, the dent blew out into a foot-and-a- half long hole.

The pictures you're going to see -- these were taken from inside the plane. A passenger was using his cell phone camera.

Passengers reported hearing a thunderous blast and then the cabin lost pressure. In the end, no one was hurt. The Federal Aviation Association, the FAA, is now investigating.

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