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American Morning

Ernesto's Threat Not Over; Visiting St. Bernard Parish One Year Later; Notorious Polygamist Arrested

Aired August 30, 2006 - 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 ANCHOR: Ernesto is not what it was, but the threat is not over in Florida -- and perhaps up the East Coast.
A prophet to his followers. The FBI now calls him perp. Now, a tug of war between two states over where polygamist Warren Jeffs will be tried.

Donald Rumsfeld -- is he really comparing foes of the Iraq war to those who tried to appease Adolph Hitler?

The New Orleans crime rate -- a rash of murders making headlines nationwide.

Is this normal for New Orleans?

And our series, "Red Tape and Rubble." If you are a homeowner, you're going to want to listen up. It doesn't matter where you live. There are some lessons to be learned from Katrina.

All this ahead on AMERICAN MORNING.

Good morning to you.

I'm Miles O'Brien in New York -- good morning, Soledad.

SOLEDAD O'BRIEN, CNN ANCHOR: Hey, Miles, good morning to you.

I'm sure you remember this area. This is Florida Street in St. Bernard Parish. Just a moment ago, a couple of months ago, the school bus roared through. It didn't come down our way, of course, because there's not many kids right here. But there are some kids who are back in the neighborhood who are being bussed to schools. The schools are open here.

What a remarkable sight, considering when we were here a year ago, the devastation was so complete that many of the people who live here just felt that this neighborhood literally would just have to be abandoned.

Well, today you see houses like this where they've cleaned up. A little bit of debris, but nothing compared to what we saw the last time and some people who are clearly working on their homes.

What you also see are those big sort of orangey red stickers that say a house has to be condemned, it's got to come down, it's up for demolition. And sometimes you see that along with gutting. And it's a pretty clear metaphor for the indecision of people.

What do you do? Do you take it down? Do you move on? Or do you gut the house, start again, or maybe even sell it?

Today, we're taking a closer look at what's happening here in St. Bernard Parish in the wake of Hurricane Katrina -- back to you, Miles.

M. O'BRIEN: All right, Soledad.

Back with you in just a little bit.

South Florida quite soggy this morning. Tropical Storm Ernesto came ashore late last night. Fortunately, the Straits of Florida are narrow, meaning the storm had little chance to gain strength after sort of falling apart over Cuba.

CNN's John Zarrella live now for us from Miami with more -- hello, John.

JOHN ZARRELLA, CNN CORRESPONDENT: Good morning, Miles.

Well, here on -- in Miami, of course, it's not a bad morning, all things considered. The folks here waking up now to what was less than anticipated from Ernesto. The storm never quite materialized as hurricane forecasters thought it would. Good news for the folks here in South Florida.

You can see out behind me here, that's Biscayne Bay. In the distance, behind that, Miami Beach. The clouds racing across the sky in that counter-clockwise circulation.

And the boats here at the marina behind me all neatly tucked into the slips and tied down because there was some concern, certainly early on yesterday, that what might happen would be that the storm surge pushed in from the offshore flow would actually put three to four inches of water here in Biscayne Bay and could have been a significant problem.

But, again, that did not materialize.

Now, what we know is two fatalities indirectly related to the storm, caused by traffic accidents. Some 7,000 customers of Florida Power & Light without power this morning out of 4.4 million.

The Florida Keys look to be in pretty good shape. Officials there saying that they hope to reopen the Florida Keys well in advance of Labor Day -- Miles.

M. O'BRIEN: John Zarrella in Miami, thank you very much.

So where is Ernesto headed?

Chad Myers is in the Severe Weather Center with more on that -- hello, Chad.

CHAD MYERS, CNN METEOROLOGIST: Hello, Miles. The 8:00 advisory is in now -- 26.0/81.0 if you're keeping score at home. But the winds are down to 40 miles per hour.

Here just reading along, north -- moving north now. North, not northwest anymore. North at eight miles per hour. So it's beginning to make that turn that we're so concerned about. And the quicker it gets into the ocean, the stronger it's going to get for the Carolinas.

But there's John right there in Miami. There are some cells down there coming. We could get interesting TV in a few hours or so, as those cells get closer to John.

Here's a live shot from WPLG up in Fort Lauderdale, looking down the beach -- the palm trees swaying, rain showers coming through. Every time a rain squall comes through there, the winds pick up, too, at 25 to 30 miles per hour. Had a gust to 40. But that's about it.

This storm really is sitting over the Everglades and the worst part of the storm is well to the west of Miami. Great news there.

Here we go back to the live pictures. This is our radar out of Miami. We're seeing the storms there. We'll zoom in for you. The center of the circulation about Tamiami Trail, westward to about Monroe Station, right about there we'll call the center.

We're seeing some heavier squalls around Marco-Island and actually the heaviest weather on the east coast is up here, not that far from where the shuttle is. And that's kind of what we expected, these onshore squalls getting heavy at times -- 20, 30, maybe 40 miles per hour.

Tropical Storm Ernesto, 40 miles per hour, eventually getting back into the ocean and affecting the Carolinas.

We won't get a new storm track until the 11:00 hour. But now at least we know where it is at this point and it will eventually get back into the ocean and make landfall again up there.

How big will it get?

That depends on how long it's in the water -- Miles.

M. O'BRIEN: All right, we're going to be watching it.

MYERS: Yes.

M. O'BRIEN: And folks to the north of Florida should be watching it, as well.

MYERS: That's right.

M. O'BRIEN: Thank you, Chad.

MYERS: You're welcome.

M. O'BRIEN: Warren Jeffs, a polygamist and a prophet to his followers, an accomplice to rape to the FBI, wakes up in jail this morning. He was picked up in a routine traffic stop near Las Vegas on Monday night.

Authorities say he arranged marriages between older members of his sect and underage girls. And he faces charges of accomplice -- being an accomplice to rape.

CNN's Ted Rowlands live now from Las Vegas with more on this story -- Ted.

TED ROWLANDS, CNN CORRESPONDENT: Good morning, Miles.

Warren Jeffs spent more than a year on the run-and the last four months on the FBI's top 10 most wanted list. He was picked up just north of Las Vegas Monday night after an alert state trooper pulled him over with his brother and one of his wives. And the trooper noticed that both of the men were very nervous. He held them. And eventually, after searching the car, they found in excess of $50,000 in cash, three wigs, a number of cell phones, computers. And then eventually, when they called in the FBI, Warren Jeffs admitted his true identity and he was brought here to Las Vegas, to the Clark County Detention Center. That's where he's waking up this morning.

The question is where does he go next?

He has a hearing on Thursday morning here in Las Vegas. At that point it should have been hashed out by the two states that want him -- Utah and Arizona.

In Utah, he faces more serious charges, but Arizona filed charges against Jeffs first. It will be interesting to see which state gets priority.

At that point, Jeffs can either waive extradition or fight it and then he will be on his way through the judicial system.

Of course, as you mentioned, he is facing numerous charges. He is the leader of the FLDS Church. He's the prophet. But this morning he is waking up in jail -- Miles.

M. O'BRIEN: All right, thank you very much.

Ted Rowlands in Las Vegas.

Stay tuned. In our next half hour, we'll talk to a reporter who's been trialing Jeffs' story for years. In some respects, his knowledge may rival that of the FBI.

Defense Secretary Donald Rumsfeld under fire this morning for equating critics of the Iraq war to those who appeased Hitler. Rumsfeld spoke at the American Legion convention in Salt Lake City yesterday.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: I recount that history because, once again, we face similar challenges in efforts to confront the rising threat of a new type of fascism. Today, another enemy, a different kind of enemy, has made clear its intentions, with attacks in places like New York and Washington, D.C. Bali, London, Madrid, Moscow and so many other places.

But some seem not to have learned history's lessons.

(END VIDEO CLIP)

M. O'BRIEN: Now, Democrats immediately fired back.

Senator Jack Reed says the defense secretary was indulging in a political rant to cover up his incompetence.

Another string of bombings across Iraq again today. At least 47 are dead. The targets are familiar -- an open air market, a police convoy and an army recruiting station.

But in one case, there is an unusual wrinkle. One of the suicide bombs was rigged to a bicycle.

Michael Holmes live now from Baghdad with more -- hello, Michael.

MICHAEL HOLMES, CNN CORRESPONDENT: Hello to you, Miles.

Good morning.

Yes, this comes at the end of a month that the U.S. and Iraqi militaries were saying had been a remarkably quiet month. But since Sunday alone, 200 Iraqis have been killed. Two hundred more have been wounded in various incidents.

Today, Wednesday, has been a particularly bloody day. As you said, that marketplace, it's the biggest marketplace probably in the whole country, a wholesale market -- everything from food to electronics. It was hit for the third time this month. Twenty-four people killed, 45 wounded.

The other major attack was south of here, about 60 miles south in Hillah. Twelve killed, 38 wounded when a bomb was detonated, as you said, on a bicycle, which had been placed outside an Iraqi Army recruitment center.

And it was -- they were far from the only attacks, however. In Baquba, north of here, two roadside bombs were detonated on two separate vehicles. One of them was a minivan carrying a family. Six members of that family, three of them women, were killed.

And, again here in Baghdad, two bombs went off at a gas station. More dead, more wounded.

Certainly a very bloody end to what had been shaping up as a month in which the acts of violence around Iraq had dropped markedly -- Miles.

M. O'BRIEN: Michael Holmes in Baghdad. Thank you very much.

Let's go to Soledad in St. Bernard Parish -- hello, Soledad.

S. O'BRIEN: Hey, Miles.

Take a look at this.

See these little kids getting ready to head off to school this morning?

How unusual is that?

We talked to that guy a couple of days ago and he said, you know what? He just had to come back home. This is his home and he wasn't willing to give it all up.

And we're hearing some of those stories. Not a lot, I've got to be honest with you, but some of those stories. So it's really frustrating for people like that, who have decided to come back and try to fix up their homes. These big giant weeds -- you can see them all over the place. I mean they're like 10 feet high in some places. And it's really frustrating. We're going to stay on the street here because there are snakes in this grass. We've seen rats running across the street.

And that's a problem. Because of debris like this, you really can't even tell if that roof belonged to the house that was here or if that's a roof from a house that was behind it.

When the debris is not cleaned up, that's obviously a breeding ground, a nesting area for all kinds of rodents. And so people who are trying to work on their homes, like this guy here, know who has actually gutted his home and has a note up -- "please don't trespass" -- they feel like these kinds of things and the debris and the mounds of dirt and the 10-foot high weeds, they're standing in the way of progress. They don't send a message.

Also, if you've got little kids like the four and five year olds who are getting ready to head off to school, do you really want them playing in this kind of debris?

It's a real problem and it's been a little controversial here in the area.

A final thought, Miles. And take a look at this. Look at -- you have here the orange sign, which is a demolition sign, right? And then on the inside, you can see he's clearly gutting the house. And then you see a "for sale" sign from the owner.

Obviously, a clear image of the indecision. What do you do now? Do you just knock it down? Do you gut it, clean it up and move back in? Or do you just sell it?

That's what's happening here and all over New Orleans today -- Miles. M. O'BRIEN: Yes, it's interesting, I think you see it time and again, and I know you have, Soledad. I saw it when I was down there. People willing to put in the sweat equity on all of this. But when it comes to actually starting to write the checks, they're holding out until they have a little better sense of where things are heading.

S. O'BRIEN: Yes. You know what's interesting, Miles, is exactly that, what people have been telling us who have dropped by to tell us why they've made the decision to stay or to go.

And, Walter, maybe we'll go down here. And this house here, where the owner is right across the way. And he said, you know, I've got to tell you, I've got four small children. I just can't bring them up in a -- in this. I can't do it. They moved off to Slidell.

But others have said you know what? We're not going to sit around and wait for something to happen. We're just going to make it happen ourselves. And I think if you're going to see rebuilding in the city, whether you're talking about St. Bernard Parish or you're talking about any of the parishes, whatever you're talking about, it's going to be the people first who say I'm not going to wait around, I'm going to go ahead and bring my city back.

Easy to say, hard to do when you're waiting on money and you're waiting on checks and you're waiting on support and you're waiting on sewage and you're waiting on all of the things that you need before you can move back in.

But we've certainly seen it here. I see a big improvement from the last time we were here, almost a year ago -- Miles.

M. O'BRIEN: All right, Soledad.

Thank you very much.

Back with you in just a little bit.

Still to come on the program, a closer look at the crime rate in New Orleans.

One year later, how safe is the city now?

We're going to also look at "Red Tape and Rubble" along the Gulf Coast. You'll meet a family that says their house leans like the Tower of Pisa thanks to Katrina.

So why are they getting the old insurance runaround?

That's ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BRIEN: Welcome back, everybody, as we come to you live from St. Bernard Parish.

You can hear the sound of -- they're putting some boats into the water here. That's the noise that's behind us.

Let me tell you a little bit about crime in New Orleans. We've certainly heard a lot about it.

Dan Lothian has been covering that angle for us on AMERICAN MORNING -- what are the stats telling you?

DAN LOTHIAN, CNN CORRESPONDENT: Well, it depends who you talk to. I mean, clearly, the Police Department is saying that the numbers really are not up when you compare it to how many people are here. But when you look at how many murders have taken place, especially multiple murders at one time, a lot of people are saying this is a major problem.

And, you know, when people are thinking about coming back to the city, one of the things that you hear from them is that is the city safe?

They're not just talking about environmental issues or sort of overall infrastructure issues. They're talking about crime. And police are saying that one of the major issues is that perhaps gangs or criminals are taking advantage of these abandoned neighborhoods.

(BEGIN VIDEO TAPE)

LOTHIAN (voice-over): It was relatively quiet in New Orleans a few weeks after Katrina. But the sound of gunfire has returned.

JOHN BRYSON, DEPUTY SUPERINTENDENT, NEW ORLEANS POLICE DEPARTMENT: We're not denying that there is a crime problem. But contrary to popular belief, crime is not out of control.

LOTHIAN: But a rash of murders, like the shootings of five teens in June, has a lot of people concerned. Military police and state troopers were deployed to the city after the mass shooting.

Attorney General Alberto Gonzales recently came to town to support the crime fighting effort.

ALBERTO GONZALES, U.S. ATTORNEY GENERAL: We have an opportunity to make a difference here.

PETER SCHARF, CRIMINOLOGIST: This is the hard (UNINTELLIGIBLE)...

LOTHIAN: criminologist Peter Scharf, from the University of New Orleans, says displaced gang members have returned with an attitude, ready to do battle with new groups over turf and drugs.

SCHARF: In fact, the competition among these drug groups for a finite number of customers becomes, you know, more obvious and more lethal.

LOTHIAN: Police say they've had to adjust.

CHIEF WARREN RILEY, NEW ORLEANS POLICE DEPARTMENT: We had to create a new criminal intelligence bureau to focus on the influx of criminals.

LOTHIAN: Investigators say for now, the violence seems to be confined to the drug trade.

BRYSON: It's almost always in the high drug trafficking areas. It's almost always someone either using drugs, buying drugs or selling drugs.

LOTHIAN: In neighboring St. Bernard Parish, the violence hasn't arrived, but hard core drugs have. Sheriff Jack Stephens says the problem used to be prescription drugs.

Not anymore.

SHERIFF JACK STEPHENS, ST. BERNARD PARISH, LOUISIANA: The majority of the arrests we are making for drugs is associated with the possession and distribution of heroin and cocaine.

LOTHIAN: It's still a concern, but what was feared most has not materialized -- an invasion by the dangerous Latin gang, MS-13. Shortly after Katrina, three heavily tattooed suspected members were arrested in St. Bernard Parish. The FBI warned regional law enforcement officers to be on alert. Sheriff Stephens says other factors may have prevented MS-13 from getting a foothold.

STEPHENS: Not only did they meet resistance from law enforcement agencies here, but apparently they met a high degree of resistance from the local criminals than they expected.

LOTHIAN: Government officials insist that getting a firm grip on crime is necessary in order to fully recover from Katrina, one more signal to displaced residents that it's safe to come home.

(END VIDEO TAPE)

LOTHIAN: There is a crime summit set for New Orleans next month, a chance for law enforcement officials, city officials -- and not just law enforcement from this region, but also from out of state -- to sit down, Soledad, take a closer look at this problem and try to figure out how they can fix it.

S. O'BRIEN: Well, what do they do about things like the justice system, which certainly isn't fixable quickly?

LOTHIAN: It's a huge problem and, you know, they don't have a lot of prosecutors here, so they can't try the cases. And that's where the Justice Department is coming in, sending in additional prosecutors and also some federal agents to help out.

S. O'BRIEN: All right, Dan Lothian, thanks for that.

A little bit later, a man who was in your spot, the sheriff here, Sheriff Jack Stephens, is going to be our guest.

We'll do a little walk and talk, see how things have improved a year and a day after Hurricane Katrina. We're back in a moment.

(COMMERCIAL BREAK)

M. O'BRIEN: Well, if you're a homeowner, I would be willing to bet you, you haven't taken the time to read your insurance policy. It could be a cure for insomnia some night. But you might want to slog through the fine print.

Here's AMERICAN MORNING'S Ali Velshi with another installment of "Red Tape and Rubble."

(BEGIN VIDEO TAPE)

ALI VELSHI, CNN CORRESPONDENT (voice-over): The New Orleans house that Therese Fitzpatrick shares with her husband and two kids is clearly leaning.

MICHAEL HOMAN, KATRINA VICTIM: Every nine inches you go up this way. We're off four inches this way.

THERESE FITZPATRICK, KATRINA VICTIM: You can drop a marble and away it goes.

VELSHI: The question is, how long has it been leaning?

HOMAN: They just say that it was leaning before we had the policy. They said it's been leaning, I guess, all five years that we've owned the house.

VELSHI (on camera): And has it?

HOMAN: Oh, no. Of course not.

VELSHI (voice-over): Allstate says it won't comment on specific cases, but it did deny Michael and Therese's claim, relying on an engineering report which said the wind from Katrina couldn't have shifted the house. Now the report lists the correct address, but it contains photos of the wrong house and it refers to the house as the Wilson house. Michael's last name is Homan. Therese's is Fitzpatrick. They have no idea who the Wilson's are.

HOMAN: Yes, that was confusing.

VELSHI (on camera): The insurance industry says that some in the media, and CNN in particular, haven't given them a fair shake since Katrina. So I invited the CEO of State Farm to sit down for an interview. He declined. As for Allstate, neither their president nor their CEO were able to accommodate our requests for an interview either.

DR. JOHN OAKES, KATRINA VICTIM, OCEAN SPRINGS, MISSISSIPPI: I had about probably 10 pines that were broken, 30 or 40 feet in the air.

VELSHI (voice-over): John Oakes says his first adjuster told him State Farm would pay him out quickly for his damage. But instead of cutting him a check, Oakes says another adjuster came to his place and accused him of lying.

OAKES: I really got mad when he told me, he said, "Well how do I know you didn't cut these trees?" And I really -- and I was real calm, but I really got mad.

And he goes, "If you're going to act like this, Mr. Oakes, we're going to leave. We're not even going to work with you."

And I thought you bastard, you know? What you're trying to do is bait me.

VELSHI: John Oakes' attorney, Earl Denham represents, about 50 Katrina victims who are suing roughly 10 insurance companies. Denham says he's seen the revolving adjuster phenomenon before, especially when the first adjuster seemed sympathetic.

EARL DENHAM, ATTORNEY FOR KATRINA VICTIMS: The next thing you know that adjuster is gone. You don't hear from that adjuster again. Some new adjuster comes out. Or there's a re-inspection by a special team that comes out. People keep inspecting, keep inspecting, keep inspecting.

VELSHI: State farm told CNN it had more than 5,000 adjusters go to the Gulf, working in extremely stressful conditions. The company says it rotated adjusters through the region to keep them fresh. If customers have complaints about the way they have been dealt with by adjusters, or anyone else, State Farm says they should call and be persistent.

We offered to put State Farm in touch with John Oakes. They didn't take us up on it.

Ali Velshi, CNN, the Gulf Coast.

(END VIDEO TAPE)

M. O'BRIEN: Tomorrow in Ali's series, a look at the domino effect from Katrina on policyholders a long way from the Gulf. Insurance companies trying to cut their losses. That could mean you will be paying higher rates.

Still to come on the program, new information on that plane crash in Kentucky that killed 49. The FAA violated its own rules and that might have made the difference between life and death. We will explain.

And America's most notorious accused polygamist behind bars this morning.

Why is Warren Jeffs' arrest so important?

We'll take you inside the polygamy filled cult of Warren Jeffs, 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.

AMERICAN MORNING returns in 60 seconds.

Stay with us.

(COMMERCIAL BREAK)

M. O'BRIEN: Welcome back to the program.

We'll get back to Soledad in St. Bernard Parish in just a moment.

But first, let's go to Carol with some other headlines -- Carol Costello, good morning.

(NEWSBREAK)

(WEATHER REPORT)

M. O'BRIEN: NASA had an unprecedented u-turn -- well, it really wasn't a u-turn, they just went from forward to reverse or whatever, turned it around, for this space shuttle yesterday. Let's take you down with the Google map and just tell you what happened as the Space Shuttle Atlantis, on its way to the hangar because of concerns about Ernesto -- the forecast changed things in a way that has never happened before.

First of all, here's the launchpad. That's Launchpad 39B. That's where the Space Shuttle Atlantis was ready to go. This is the VAB -- that's Vehicle Assembly Building. It's that huge structure that was designed to house no less than four Saturn 5 rockets, but now is kind of the hangar for the shuttle.

The idea yesterday was to take the shuttle -- and it's a long, slow process. It's four miles and change all the way to the VAB. They had to go around to the back door because of some problems with one of the doors. Four miles, but it takes 10 to 11 hours to do that. What happened was, midway through that journey, kind of at the halfway point, they got another forecast. And they said, folks, let's go the other way.

They went right back to the pad, and that will give them probably, maybe, as many as two opportunities to launch the International Space Station next week.

Daniel Sieberg has been down in the Cape, watching all this unfold, watching delay after delay. This was one for the record books, Daniel.

DANIEL SIEBERG, CNN TECHNOLOGY CORRESPONDENT: Yes, it certainly is, Miles. We're in Cocoa Beach, which people might remember from "I Dream of Genie." About 15 miles to the north, to my right here as the crow flies, is the Kennedy Space Center. You pointed out that the shuttle is within its rotating service structure. That's designed to protect it from thunderstorms and that kind of thing. They figure that's enough to get through Tropical Storm Ernesto.

Let's talk about this decision to reverse. They really waited until the 11th hour. They were crawling along at less than one mile per hour yesterday. They started about 10:00 in the morning. Then about 2:40 in the afternoon, the announcement came through and they decided to back out to the launchpad. About 8:00 last night, they sealed off that rotating service structure. Now they're going it ride it out. They've closed the site. There are some folks there who will ride it out. And they will, of course, have to hope that nothing serious happens to the shuttle when it's out there.

This crawler transporter vehicle, as you pointed out, Miles, is amazing in and of itself. It does goes very slow, it takes about 11 people to operate. And, of course, the shuttle weighs about 4.5 million pounds. It's also got this 17-ton payload in it. So it's a lot to move around. It was the decision that they were waiting until the last possible minute to make, because, as you point out, they really want to make this launch window, which opens up September 6th.

There have been storms come through this area and through Kennedy Space Center previously. You mentioned the Vehicle Assembly Building, where they would -- they were considering putting the shuttle into. It suffered some damage back in 2004 with Hurricane Francis, just to name one occasion. But in this case, they're going to bunker down, they're going to hope that it holds the way is. And according to numbers, Miles, NASA thinks they're OK.

M. O'BRIEN: All right. Let's hope for the best. And the way Ernesto has kind of petered out, maybe they -- the decision appears to have been a good one. Daniel Sieberg in Cocoa Beach, "I Dream of Genie" land.

Let's go to Soledad, who's in St. Bernard Parish. Hello, Soledad.

S. O'BRIEN: Hey. Very much "I Dream of Genie" land.

But I got to tell you, as the sun's come up, you start seeing a little activity. Some of the contractors have started to arrive. We actually saw a school bus not too long ago, picking up the few children who are here, going off to school.

Want to introduce to the Grosch family. We've got Jackie Grosch, we've got Misty, we've got little Zoe (ph), who's four years old. We've got Gerald Grosch. Nice to have you.

This is their house right behind us. We spent a lot of time doing live shots in front of your house the last time we here, because it was a wreck. When you look around the neighborhood -- Gerald, let's start with you -- how does it seem?

GERALD GROSCH, ST. BERNARD PARISH RESIDENT: It's coming back slowly, but it's still a mess. S. O'BRIEN: Misty, with a 4-year-old daughter here, did you worry? I mean, we've heard reports of snakes and we've seen the big -- we've seen the very big rats. Did you have second thoughts about bringing a little girl here?

MISTY GROSCH, ST. BERNARD PARISH RESIDENT: No. I didn't bring her back until about nine months after the storm, but I let it get cleaned up a little bit. But she's always wanted to come home from day one.

S. O'BRIEN: And it's cleaned up a lot, I got to tell you. Jackie, I want you to give me a little bit of tour, if you will. We want to show you first what this place looked like when we did our last live shot here. Take a look at what I said.

(BEGIN VIDEO CLIP)

S. O'BRIEN: While people come in and try to grab whatever they can, there are other questions about just how much of their house is worth saving. You look at something like this and you have to think, well, maybe not very much.

(END VIDEO CLIP)

S. O'BRIEN: Well, boy, was I ever happy to be wrong, because I said, nothing here, not very much to save. What did you think when you first saw the damage, Jackie?

JACKIE GROSCH, ST. BERNARD PARISH: Oh, I cried for probably a few days. But we knew right away we were coming back. This is home.

S. O'BRIEN: This was missing?

J. GROSCH: This whole wall was missing. All of this side of the wall wag missing.

S. O'BRIEN: You could kind of see through your house, actually, right out to the...

J. GROSCH: Oh, yes. You could see all -- every way. All of this was missing. Garage, all the whole garage, there was nothing but a slab there. These -- all of this was tore out.

S. O'BRIEN: I do remember the spiral staircase. I mean, it was actually -- I came in with a hurricane expert and we were sort of looking, because this stood actually very well.

J. GROSCH: It stood. We were very surprised. I was happy to see that. I love my staircase, so...

S. O'BRIEN: But not much else stood.

J. GROSCH: No.

S. O'BRIEN: I can see the sheet rock's up now? J. GROSCH: Yes, sheet rock is up. So we're happy. That is a big plus for us, because I didn't know that that would ever happen. It's been a long road, and we're just working. We come and work as hard as we can to get everything back.

S. O'BRIEN: You have said that you expect to move back in. Your trailers, I should mention, we passed as we kind of did this little part of the tour. When do you think, realistically, you could move back in?

J. GROSCH: We're hoping for Christmas. Well, we're hoping to move in officially for Christmas, but we're hoping to have Thanksgiving dinner here, because that would be our anniversary of when we first moved into this house, which was only two years prior to the storm. It was a pretty new house.

S. O'BRIEN: Was there a point when you came in, though, and you looked at -- I mean, this, I remember -- this was gone.

J. GROSCH: All of that, yes, this whole front wall was gone also.

S. O'BRIEN: And I guess an upside of that was you didn't have a lot of the mold problems other people had.

J. GROSCH: Right. No, I did not. I did not. We say we got the rinse cycle, because the water just took everything out of here. So there was not much left. Just a thin layer of mud was left on the floor. As a matter of fact, I'm keeping my floors, because they're shiny and new under here. That's why I have them all covered.

S. O'BRIEN: When you look down the street here, do you feel that your home is going to inspire your neighbors to come back, or do you think that it's just going to be a slow process and people will come back, depending?

J. GROSCH: It's going to about slow process, but I am hoping that it's going to inspire everyone. Because I think it's like a chain reaction. Everyone is waiting to see what somebody else is going to do. And so I'm hoping it's going to inspire everyone. And everybody stops. When we're down here on the weekend, we have more visitors than we ever had. Everybody stops and says, oh, your house is looking so good. Are you all coming back? They're kind of waiting until the hurricane season gets over to see what's going to happen.

S. O'BRIEN: We showed your neighbor's house. He's got a sign up. But actually, a couple people in this neighborhood do. What they have -- the orange sign that says -- you know, the notification for demolition. Then they've also gutted, and then they also have a "For Sale" sign in the front yard, which seems to me to really indicate just how difficult and how much indecision there is.

J. GROSCH: Right.

S. O'BRIEN: Were you like that at one point? J. GROSCH: Never. I knew from the next day, when the storm passed over, I was ready to come and see what happened, and I was ready to get back home again.

S. O'BRIEN: Talk about the money. How much has it cost to renovate? And did your insurance kick in? Do you feel good about the money you're getting from the government?

J. GROSCH: I feel a little -- somewhat good, not as well as I would hope to on homeowners, because again, my house was new. I didn't have a lot of equity in it. So, of course, the flood paid off my house. But the homeowners, they want to bicker over everything. So it's costing me probably more than it cost me to build the first time, just to renovate what was missing, which is kind of sad. But it's home. Money is no object when you're coming home.

S. O'BRIEN: Everybody who's here is such an optimist. Jackie Grosch and your family as well, thank you for talking with us.

J. GROSCH: Thank you. Thank you so much.

S. O'BRIEN: It's so great to be back, when we were literally standing between this door and window for our live shot, to see how much it's improved. It gives a lot of hope, I think.

J. GROSCH: Thank you so much for not forgetting about us, because we still need all the coverage we can get. We have a long road home, but we're coming home.

S. O'BRIEN: We promise we will not forget.

J. GROSCH: Thank you so much.

S. O'BRIEN: Miles?

M. O'BRIEN: You know what, she should bottle that attitude and sell it. Unbelievable.

S. O'BRIEN: I got to tell you, Miles, that attitude we have seen in virtually, anybody who's made the decision to stay has that attitude. It's so interesting. People, we're told, who had left are really frustrated and angry and upset, and they're some people here. But the people who are literally sheet rocking and building, without exception. Everyone we spoke to, and it's not a lot of people, but everyone we spoke to, has sort of moved on, has said, OK, this is the new reality, and they seem actually very content in a way, and they're looking forward. I think psychologically that's kind of helped them.

M. O'BRIEN: Yes. All right, Soledad. Thank you very much. Thanks for introducing us to that family.

Coming up, the country's most notorious polygamist caught during a traffic stop. Why was Warren Jeffs among the 10 most wanted? We'll ask a reporter who knows an awful lot about this story.

And have you ever thought about who decides when a movie gets a PG-13 or an R rating? Well, no one is supposed to know. We'll take you inside Hollywood's star chamber, ahead on AMERICAN MORNING.

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M. O'BRIEN: Warren Jeffs is no longer on the run. The man who heads a cult that preaches multiple marriages to young girls, behind bars after a routine traffic stop near Las Vegas. He now faces several charges. Among them, accomplice to rape. Reporter Mike Watkiss of TV station KTVK in Phoenix has followed this story for years. He joins us from Las Vegas, where Mr. Jeffs is being held at the moment.

Mike, good to have you with us. Help us understand...

MIKE WATKISS, KTVK REPORTER: Thank you, Miles.

M. O'BRIEN: ... take us into this world. I don't think people really understand the world that Warren Jeffs has created.

WATKISS: Yes, I've often said you could drop somebody into the streets of New Delhi or on to the streets of Colorado City and the culture shock would be about the same. This is another world, Miles. But it's a world that has been in existence for better than 100 years. These people have been hiding, as you folks say, in plain sight for many, many generations.

And Warren Jeffs has been leading this community with a rather tyrannical hand for about the last decade, ever since he assumed power from his father, Rulon Jeffs, died some years ago, but Warren has really been the de facto leader and the leader of this community, ruling with an iron hand for a decade now.

M. O'BRIEN: Yes, I notice the traditional garb, the polygamy we've talked about, the young wives. They're also not discouraged -- discouraged from really contact with the outside world.

WATKISS: Well, they have been isolated, and they moved to that remote corner, that area along the Utah-Arizona border, many, many years ago, because, again, I think the practice of polygamy from its very origins in the early Mormon church really hasn't stood up well to the light of day, and they've recognized that. There have been problems in the past, nothing on the scale that we're seeing now.

But the bottom line is they understand that the glare of the camera, the eyeball of the larger public doesn't really help them very much, because it is a very cruel society, certainly within the world of Warren Jeffs. There's a lot of polygamist communities. America sort of coming to understand that it's not just Warren Jeffs, there's a whole gradation of polygamy.

But the bottom line, inside that community, Warren Jeffs has taken a detour, and it's really metastasized into a cancer that's very cruel to the young women, to the young boys that are cast aside. Warren Jeffs under his leadership has just excommunicated dozens of men. That means they're literally kicked out of their home, kicked out of their communities, kicked away from everything they know. Their families are given to other men, and suddenly their children and their wives are living in another man's house.

M. O'BRIEN: Wow. I mean, what you describe sounds like a tyrant. What I'm curious about...

WATKISS: Absolutely.

M. O'BRIEN: ... is his ability to lead these people. What is the magnetism which draws them to Jeffs?

WATKISS: Well, I think you have hit the nail on the head, and I don't think most of us modern day urbanites understand that, but these people are raised in that isolation, and they have a very literal sense of heaven and hell. This man, Warren Jeffs, is their sect only ticket to salvation. Men have to have three wives, but they can only get three wives if Warren Jeffs gives them three wives.

The young women are told from the moment of their births, their only value is to be an obedient, plural wife. You obey your father, and as soon as the prophet at the age of 14, 15, 16 tells you to marry some older man who already has eight wives, you do it, and they believe that, and this is -- the cruelty, and I've heard pundits talking about this, about the daggers and the violence. This is not a community which has had violent interactions with the outside world. I would argue that the violence is focussed internally on their own people.

Why do they follow this guy? I don't understand that, but they do. And let me assure you, as soon as he's -- if he's put in jail or punished for this, another prophet will step in his place, and a lot of these people will continue to follow.

M. O'BRIEN: So the sect is likely to continue. How do they fund this entire operation?

WATKISS: This guy sits on a multimillion dollar trust. In many ways, they've been raping the government and looting all sorts of tax dollars for many years, and so he's assembled a huge trust. I mean, the bottom line he has pocket change of $50,000 in that vehicle that he was pulled over in. Another brother was busted in Colorado transporting money to Warren several months ago. He was carrying $142,000.

Many of his followers are very industrious workers, they have businesses, and they funnel all of that money to him. They own all of the land in Colorado City, until very recently when a court in Utah took it away from Warren Jeffs. That was a great sort of extortion tool. Because literally, if a man displeased him, he'd say, you're out of here. And because he owned the land, Warren Jeffs owned, controlled the land, he could throw them off the property and take away their families.

The cruelty focussed internally. Why these people follow this guy, I mean, that's for greater minds than mine to try to figure out.

M. O'BRIEN: Wow, it's very interesting. Mike Watkiss, fascinating. Thank you for those details. Reporter Mike Watkiss of station KTVK in Phoenix.

Up next, Andy, "Minding Your Business."

Andy, what do you got?

ANDY SERWER, "FORTUNE" COLUMNIST: Miles, the opera wants good publicity, Barbra Streisand has bad tickets, and Jessica Simpson has an ugly case of laryngitis. That's divas, the good, bad and the ugly. Coming up next.

M. O'BRIEN: That makes me want to watch. What good work, Andy Serwer.

Excuse me. Also ahead, one of Hollywood's biggest secrets: who decides movie ratings? We'll meet a guy who hired a private eye, tracked down some members, some motion picture raters. And it's a pretty harsh indictment of the old system. We'll tell you about it, ahead.

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M. O'BRIEN: Live pictures now, coming to us via our affiliate, KTLA. This is San Bernadino County, California. You're looking at the Emerald Fire. Firefighters hoping to get ahold of it today, but conditions are not good so for that. The humidity is still very low there. It's burned about 2,000 acres. Only about 15 percent encircled so far. Cause of it is unknown. One house has already been destroyed, some out-buildings as well.

It's about a mile from a tiny community called Mountain Home Village, which has about 60 homes. Not in any immediate danger, but they are ordering evacuations, mandatory evacuation of Mountain Home Village. Once again, this fire, the Emerald Fire, continues to rage in San Bernardino County, southern California. Thanks to KTLA. We'll keep you posted on the progress fighting that one.

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M. O'BRIEN: More ahead. Stay with us.

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