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ANDERSON COOPER 360 DEGREES

Myanmar Crackdown Caught on Tape; Family Seeks Answers Following Airport Death

Aired October 2, 2006 - 22:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Good evening.
When the whole world was watching, you saw how a dictatorship tried to crush freedom marchers. Tonight, exclusive video smuggled out of Burma shows how much more brutal things got when the troops thought the cameras weren't looking.

Also, we will hear from eyewitnesses to the airport scene that ended in a woman's death, chained and handcuffed in police custody. Did police overreact to someone who was apparently deeply disturbed?

Also tonight in this hour, how a law to keep insurance companies from nickel-and-diming you out of legitimate claims is being fought with big, big bucks by the insurance companies. We are "Keeping Them Honest."

We begin tonight with the top story, the death of freedom in a faraway land. A group of people, men and women, young and old, religious leaders and their followers, stood up for democracy and human rights this past week. And, today, we have new evidence that they have been defeated, at least for now.

The picture tells the story, bloody sandals on the streets where peaceful protesters marched for days. The government of Burma, the country they call Myanmar, responded to these protests with guns and bullets, clubs and batons.

And now, days later, the brutality is compounded, as only totalitarian governments can, by making the evidence itself vanish, the blood on the streets washed away, the streets largely cleared of people, monasteries taken over, monks imprisoned.

People have, to use that eerie term, simply disappeared. We don't know how many. For now, it seems the generals who control Burma have won.

But, tonight, we have a new view of the crackdown, new pictures smuggled out, at great risk, that show the reality of what has happened in Burma and new eyewitness reports from people who saw the bloodshed with their own eyes and are now safely out of the country and able to speak.

First, CNN's Dan Rivers now with the exclusive pictures.

(BEGIN VIDEOTAPE) DAN RIVERS, CNN CORRESPONDENT (voice-over): This is the ugly face of military repression the generals who control Myanmar have tried so hard to cover up.

The images just smuggled out by men and women who risked their lives are at least two days old, the pictures taken just before Myanmar's foreign minister claimed security personnel had exercised what he called the utmost restraint.

The soldiers corralled those they caught in the middle of the road, some prisoners already clearly injured, watched over by an officer in the now silent street.

Across the country, reports of largely empty neighborhoods and empty monasteries, after brutal crackdowns -- on the same smuggled video, pictures of a demonstration just before the police intervened, the deafening chant of a confident crowd marching peacefully through the city.

But the moment was short-lived. The demonstrators flee. Soldiers bark orders, as an injured protester is tended to by an anxious friend trying to stay out of sight -- and, in the street, the remains of the stampede.

Those who weren't fast enough are searched and loaded onto trucks by men who were not wearing uniforms, backing up protesters' claims that plainclothes intelligence officers were operating in their midst.

And they are not the only disturbing images leaking from Myanmar. These pictures, shot by dissident journalists, show a dead monk, apparently tortured, left face down in a stream not far from where the demonstrations had taken place in the capital -- smuggled evidence seeping out of this isolated country that the pro-democracy movement is being ruthlessly crushed, pictures that are likely to define Myanmar's government to the world.

Dan Rivers, CNN, Bangkok.

(END VIDEOTAPE)

COOPER: We are trying to establish contact right now with a person who just got out of Burma who saw with her own eyes what happened there. We hope to talk to her and bring you that conversation in a few moments.

Want to bring in Derek Mitchell now of the Center for Strategic and International Studies.

The last time we spoke, he warned us not to let the Burma story die. We haven't. We're glad to see him once again.

Has freedom completely been crushed there?

DEREK MITCHELL, INTERNATIONAL SECURITY PROGRAM SENIOR FELLOW, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: No, I do not believe that. Clearly, it's been a setback. Clearly, the regime, which lives on fear, lives on intimidation, is seeking to reaffirm the people's powerlessness by cracking down in a method the Chinese call killing the chicken to scare the monkey, in order to cow them into submission. That's the way they have ruled.

People have obviously returned to their homes. The momentum has been lost for the near term. But, obviously, the simmering anger and -- and fear and resentment is still there.

COOPER: But let me play devil's advocate. These people have been angry and fearful for -- for decades now, for generations.

MITCHELL: Right.

COOPER: And -- and you know have maybe as many as 4,000 monks detained somewhere, people -- I mean, these are the holiest people in the country. They have been beaten down. These people don't have guns.

We're looking at these pictures of people without any weapons just being beaten on the streets, and it seems like the demonstrations have stopped.

MITCHELL: Yes.

I mean, well, that's exactly -- I mean, that could be the case, in fact. The loss of hope is exactly what authoritarian governments, brutal dictators try to instill in the people. And, as you say, they do -- they are powerlessness sin terms of weapons.

They are not powerlessness in terms of numbers and in will. And it remains to be seen whether they have the will, whether they are reforming quietly and will go back to the streets and really challenge the regime. Even then, it's hard to be optimistic about what will happen in that case.

But, you know, being cowed is also a way of mind, as well as in spirit, as well as actual physical activity.

COOPER: And, yet, right now, the -- the government seems to have resisted any external pressure.

MITCHELL: Yes.

And that is -- that is expected as well. But, clearly, they have allowed, for instance, the U.N. envoy to come in to meet with the two senior Burmese junta leaders. He met with Aung San Suu Kyi twice. They did not allow him, in previous chances, to see -- to get into the country and see these people.

That's a bit of a concession. And I don't think that would have happened unless they felt they were under some external pressure. The key here, as suggested last time, is that, as the people go voiceless, it's not surprising that they will be -- they will be brutalized, but as they go voiceless, that the external community not be voiceless, that the international community join and start working on some of the common principles that they have spoken out on, like national reconciliation and dialogue.

COOPER: Derrick Mitchell, we appreciate your perspective.

We are joined now by an international aide worker. Her name, we cannot reveal, nor can we tell you her location. She spent several years in Burma. She's just witnessed the crackdown, is now out of the country, telling her story for the first time to us tonight. She joins me by phone.

What is the worse thing you, yourself, witnessed? What -- what have you seen in the past week that will stay with you forever?

UNIDENTIFIED FEMALE: I think that the image I will see is of a -- a car, a bus car parked at the side of the road, and a body hanging off the car, and another body laying on the street.

And it was obvious that this had happened some time ago. And there was a crowd gathered, but quite a long way away. And the image was one of making people afraid., yet another tactic to show people, look, we can do whatever we want. We can get you wherever you are, driving your cars down the street, and leave us alone and let us, you know, continue our reign of terror to you.

So, that -- that was -- really sticks me with.

COOPER: As someone who has lived in Burma for years now, explain -- I mean, what was it like for you to see peaceful demonstrators pour into the streets? And we are looking at the pictures of them now.

(CROSSTALK)

COOPER: They didn't have weapons in their hands.

UNIDENTIFIED FEMALE: Mm-hmm.

COOPER: They were doing something which, for decades, no one has been able to do there. It must be -- have been, for you, just an incredibly emotional thing to witness.

UNIDENTIFIED FEMALE: Well, on Monday, September 24, I was driving in a taxi, and I was part of a demonstration inadvertently, just pulled off to the side of the road.

The monks were in the center. The people were linking hands with them, symbolically protecting the monks. And the people were chanting and angry.

And for me to see Burmese people display any kind of anger was incredible to me. These are people who are peaceful, gentle, you know, turn-the-other-cheek people. For the kind of anger that I have seen in Burma and the kind of openness, speaking, and saying what they feel and saying how they think, that, I think, is something that it's difficult for a Westerner to grasp how significant that is, because we go in demonstrations and we do marches. But, for this, it's huge.

COOPER: We have all been but cut off. Internet service is down. These pictures have been smuggled out at great risk that we are showing our viewers tonight for the first time.

Has democracy been defeated? Has freedom been murdered in -- in Burma?

UNIDENTIFIED FEMALE: No, no, I don't think it has. And I think that the people are -- my feeling is, the people are stunned and outraged by what has been done to the monks, their holiest of people.

And that will spur the people onto larger demonstrations. But the point is that, as the person ahead of me said, the West needs to start putting some leverage on to governments. They need to expose governments, expose the hidden deals that are going on, for example, Total is in Myanmar, huge oil and gas company. Petronas from Malaysia is in Myanmar.

There are many links to the Thai government. This sort of thing needs to be -- they need to have some leverage against the -- the military dictators.

COOPER: And none -- all the protesters you saw, the thousands of people who poured into the streets, did you see any weapons among the protesters?

UNIDENTIFIED FEMALE: No, no, not at all, no. And I didn't see any protesters engaging in any sort of violent behavior. There was violence directed against them, but not from them.

COOPER: What you have witnessed is truly a remarkable thing these past few days. I hope what you say is correct, that it is not over, that they are regrouping, that there will be some progress, some leverage brought to bear.

We appreciate you -- you taking the risk to talk to us. Thank you very much.

UNIDENTIFIED FEMALE: OK. Thank you. Bye-bye.

COOPER: We will continue to follow this story, of course, no matter how long it takes.

Now picture this. You're standing in a busy airport when you see a woman screaming, then get arrested by police. Then you board your plane, not discovering until later that the woman who you saw has died, and her story is being talked about across the nation.

Tonight, meet the people who did see just that. And they are only talking to us.

(BEGIN VIDEOTAPE)

COOPER (voice-over): She was on her way to rehab. She died in a cell in handcuffs and chains.

BETSY GOTBAUM, NEW YORK CITY PUBLIC ADVOCATE: She was a wonderful mother. She was sweet and kind and loving.

COOPER: How did an airport incident turn so deadly? The case is getting national attention, and We are digging deeper.

Later, you pay your premiums. They pay your legitimate claims, right? Well, not so fast.

UNIDENTIFIED MALE: Insurance companies have figured out that they can make more money if they don't pay your claim.

COOPER: So, one state passed a law to stop them from nickel-and- diming customers until they give up in frustration. Tonight, see what big insurance is doing to bury that law and how we are "Keeping Them Honest."

(END VIDEOTAPE)

(COMMERCIAL BREAK)

COOPER: We have new developments to tell you tonight about an unsettling story that continues to unfold, a woman dying in police custody at the airport. Now, right now, we are waiting results from an official autopsy, although the family is planning to conduct their own autopsy.

They also say that the woman was, in their words, manhandled.

In just a moment, my exclusive interview with two witnesses to the initial confrontation between police and the woman who ended up dying in handcuffs.

First, let's get you up to speed on the story.

(BEGIN VIDEOTAPE)

COOPER (voice-over): Was it an accident, suicide, or something else that killed Carol Gotbaum? Here's what we know. Last Friday, the 45-year-old mother of three was at the Phoenix Airport on a short layover to Tucson. She was headed to an alcohol treatment center.

Authorities say Gotbaum was late for her plane. Witnesses say she became disruptive. Phoenix police stationed at the airport were called and arrested Gotbaum for disorderly conduct. She was handcuffed behind her back and taken to a holding cell without a surveillance camera.

Police say, after she continued to be vocally and physically disruptive in the holding room, her handcuffs were connected to a 16- inch metal chain that was attached to a bench.

About 15 minutes later, police report her screams fell silent, and, when they checked on her, they found Gotbaum unconscious, her hands and the shackle pressed against her neck. She died a short time later.

An attorney hired by the Gotbaum family questioned the arrest.

MICHAEL MANNING, ATTORNEY FOR GOTBAUM FAMILY: We have been told that the Phoenix P.D. put -- put -- took her to the ground and had weight on her back as they handcuffed her. If that's true, the woman that was 45 years old, weighed less than 110 pounds, that would very seriously complicate her ability to breathe.

COOPER: Officials deny any wrongdoing. A police spokesman said: "They are entitled to express whatever they want. They are grieving. We understand that. However, the investigation will reveal what happened."

(END VIDEOTAPE)

COOPER: Well, Mel Pittel and Paige Harmon were at the airport, and they witnessed what happened between the police and Gotbaum in the terminal. And we didn't contact them. They called us to talk about what they had seen.

I spoke to them by phone earlier from Hawaii. Here's the 360 exclusive.

(BEGIN VIDEOTAPE)

COOPER: Mel, you saw Gotbaum before her confrontation with the police. What was she doing? I mean, what was her behavior like?

MEL PITTEL, WITNESSED GOTBAUM ARREST: Well, what attracted my attention was, we were switching gates to go and catch our next flight. And I heard a scream just as I was basically coming to the end of one of the moving sidewalks.

And my -- of course, naturally, I turned my head, and I saw her laying on the carpeting in the entrance to the concourse, basically sort of just screaming and -- and -- and kicking. But there was nobody around her. It's -- it's like she either had fallen or had tripped or something was my -- was my first impression. It turned out, of course, that she was just laying there.

COOPER: And was she screaming saying something, or just yelling?

PITTEL: No, she was just -- she was just kind of yelling: Ow. Oh, no. Ow.

And then she said, stay away. Stay away.

Then she immediately stood up. And there was a kiosk maybe 15 feet away from her -- a podium, actually, where there were a couple of officers off to my right looking down the concourse. And she -- they sort of just sort of looked at her, and, what's happening? Why is this going on? First, out of confusion, and then they sort of walked towards her a little bit, did nothing, and she kept saying -- screaming. Then, all of a sudden, she said, I'm -- don't call me a terrorist. Don't call me a terrorist. I'm not a terrorist. I had nothing to do with that. I don't know anybody. I don't even know anybody who is a terrorist. I have never even met any people that are -- that are those types of people.

And it was a very strange, bizarre situation. The police made no effort whatsoever to try to calm her down, though.

COOPER: And, at some point, I understand she pulled up her shirt a little bit to -- to kind of show authorities she wasn't hiding anything? Is that right?

PITTEL: Well, yes. She was wearing a pair of jeans, a white blouse that -- best to describe it would be one -- would be like one button at the bottom was undone and she sort of flipped up the ends of that to show her bare midriff, that she had nothing underneath that, a belt or anything, or wearing anything, patted her arms down, which were sleeveless, and said, I have nothing on me, nothing on me.

And she basically was showing that she -- that she didn't even have a purse.

COOPER: So, Paige, how did you respond?

Or, actually, you were watching this -- this whole thing unfold as well. How did the police respond?

PAIGE HARMON, WITNESSED GOTBAUM ARREST: One of the officers ran towards her and grabbed her. And then the two other officers came up and they -- one threw her to the ground. And then they -- it was as if they were tackling her.

One of them pulled their arm -- her arm behind her with extreme force. I thought that they were going to -- or they had separated her shoulder. It looked very, very forceful. Anyway, and then they -- in all of this, somebody -- one of the officers leaned down and pressed on her back.

And then all of them were on her, almost they did a football tackle hold. And they got the handcuffs on her. And they got the -- they got the handcuffs on her. And then an officer came up to us and said, move it along. Move it along. This isn't anything for you to witness or for you to see.

And, so, we -- we reluctantly walked away.

COOPER: Was she resisting arrest in any way?

HARMON: Oh, yes. She was -- she was resisting this greatly.

COOPER: Mel, did you think she was a threat to anyone? I mean, did you feel threatened by her?

PITTEL: Absolutely not. Absolutely not. She was coherent. She wasn't vulgar. She said she was -- she was relatively -- very steady on her feet, actually. She wasn't weaving. She didn't appear to be drunk or anything like that. She just was very demonstrative.

COOPER: You thought the police response was, what, excessive?

PITTEL: Very excessive.

They rushed in and grabbed her and threw her down. Nobody ever said anything to her. Lady, hey, calm down. Take a breath. Can I help you? What's wrong? Anything like that.

COOPER: And, Paige, when you heard she had died, what went through your mind?

HARMON: Oh, we were absolutely shocked. We -- we -- we just -- we just couldn't believe this. And we were thinking, once again, that what happened in the airport was so excessive, that it was just -- it was just a great big shock to us.

COOPER: Well, it's such a bizarre story, and we're still trying to figure out all the details.

Paige, appreciate you -- you talking, and Mel as well.

Thanks so much.

HARMON: You bet.

(END VIDEOTAPE)

COOPER: Well, it's not our job on 360 to make judgments. Our job is to find out facts and let you make up your own mind. We have heard from the family and two eyewitnesses.

What about law enforcement? Was appropriate action taken in the arrest and detention of Carol Gotbaum, from what we know right now?

Joining us from Washington is Lou Cannon, president of the D.C. Fraternal Order of Police.

Lou, thanks for being with us.

We just heard from these two witnesses, who they said they thought the police response was excessive. From what we know about the case, do you think the police acted appropriately?

LOUIS CANNON, PRESIDENT, D.C. FRATERNAL ORDER OF POLICE: Absolutely, especially more so -- even more so now, after listening to the witness accounts.

Basically, you have someone that is -- that is there. They're screaming. They're ranting. They're carrying on. They said the police looked at her, that they were assessing the situation. They devised a plan, and then they moved in, and they -- they put her into a controlled situation.

Now, they may have perceived it to be excessive. Three officers on somebody is not necessarily excessive. They also stated that she was resisting. You would be amazed at the strength that somebody can have when their adrenaline is going and they are not in complete control of what they are thinking or their faculties.

COOPER: The -- the Gotbaum family attorney says that she should not have been handcuffed and left alone. If someone is clearly under emotional distress, is it OK to cuff them and -- and leave them unmonitored, if, in fact, that's what happened?

CANNON: Well, what they did, it's my understanding, is that they took her. She was restrained and that she was then put into a holding cell. This is all normal, standard police procedure.

There was no camera in the holding cell, and there's not going to be a camera in a holding cell, especially where you have a woman, simply because there are other issues there that could be of concern.

They did follow procedure, as I understand, and repeatedly check on her. They could hear her carrying on and screaming. When they could no longer hear her, they immediately went back and found her in an unusual position, where she had tried to work her way out of her restraints.

COOPER: Lou Cannon, we appreciate you -- your perspective as well.

And, as we have said, the autopsy is being done. We will probably get some more answers then.

Lou, appreciate it. Thank you.

CANNON: You're welcome, sir.

COOPER: Quick program note: Tomorrow on 360, we are going to be taking a hard look at Guatemala's multimillion-dollar adoption industry and troubling accusations of baby-selling, kidnapping, even coercion. Because of the charges, authorities are cracking down, leaving many American families and their children that they have been promised in a heartbreaking limbo. We have been hearing from a lot of them.

Here's a preview.

(BEGIN VIDEOTAPE)

COOPER (voice-over): What happened to Carolina (ph)? An adoption agency told a couple in America the baby girl's mother was poor and had given her up for adoption. But the baby, along with 45 others, was swept up in a police crackdown on suspicious baby trafficking in the lucrative adoption business, some mothers coerced to give up newborns, some babies stolen, and some mothers who simply produce babies for sale.

UNIDENTIFIED MALE: You're living the milestones in a baby's life that the parents should be living.

CHERYL OSBORNE, FOSTER MOTHER: That the parents should be living, absolutely. These babies should be looking at their -- their birth mother, you know, when they wake up in the morning

UNIDENTIFIED MALE: But, in this case, there's a couple up in Boston who is just as willing to do that.

OSBORNE: Yes, absolutely.

UNIDENTIFIED MALE: It's kind of a tough dilemma, isn't it?

OSBORNE: Absolutely, absolutely, to know, because there's corruption in the system, which birth mothers were really in dire straits and really needed to -- they really couldn't care for their child.

(END VIDEOTAPE)

COOPER: It's a heartbreaking dilemma for so many families. It's a part of our 360 investigation, Guatemala's big business in babies. That's tomorrow. Hope you join us.

Up next tonight, though, some raw and slightly raunchy politics. Was Whoopi Goldberg hitting on Nancy Pelosi's husband on "The View"?

Also ahead, a big loss for New York Knicks coach Isiah Thomas, and this one has nothing to do with basketball. What it means for a lot of working folks -- when 360 continues.

(COMMERCIAL BREAK)

COOPER: In the race for president, the candidates are on the campaign trail and the money train. Today, Hillary Clinton reported a $27 million third quarter.

Now, as we mentioned last night, her chief Democratic rival, Barack Obama, pulled in about $20 million. While she is packing the largest war chest, he is making the biggest news.

Tonight, CNN's Tom Foreman has that and more in "Raw Politics."

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: The Democrats have a new front- runner. Really? Well, no, not really. But this is looking like a very good week for Barack Obama.

(voice-over): It is the transformation of Obamatus Prime. Five years ago, running for the U.S. Senate, he gave an impassioned speech opposing for the Iraq war, as he likes to point out, back when Hillary Clinton was voting for the war. Now he's marking another successful quarter of fund-raising and a rise in the Iowa polls by heaving pies at her.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Senator Clinton has been effective in trying to blur the distinctions. It really ends up speaking to how we are going to make decisions in the future.

FOREMAN: The Hill? Well, she's fighting back indirectly with her own headlines, saying this land fund-raising period was her most lucrative, with lots of new donors.

Dr. "Law & Order" battles the ghost of Saddam Hussein. The Iraqi dictator is dead and gone, but Republican Fred Thompson says he's still the issue, says the war was badly planned, but, if Saddam were still around, he would likely have those elusive weapons of mass destruction by now.

(on camera): The "Raw" read: This is a reach-out to hawks, who are not too happy about all of this anti-war sentiment in the country, which, by the way, a new polls shows is not getting any better.

(voice-over): And, when Speaker of the House Nancy Pelosi went on "The View," she did not expect this proposal. Whoopi Goldberg said she would like to join Ms. Pelosi and her husband in the bedroom.

(BEGIN VIDEO CLIP, "THE VIEW")

WHOOPI GOLDBERG, CO-HOST: We should wait on that, because you're still in office. I don't want to cause a problem.

(END VIDEO CLIP)

FOREMAN (on camera): No, certainly would not want to cause any problems -- Anderson.

(END VIDEOTAPE)

(LAUGHTER)

COOPER: Tom, not at all.

We are following several other stories tonight. Gary Tuchman joins us with a 360 bulletin -- Gary.

TUCHMAN: Anderson, hello to you on Capitol Hill. Blackwater USA comes under scrutiny. The security firm's CEO testified before a House committee saying he believes his staff acted appropriately in Iraq and Afghanistan. But Democratic Congressman Henry Waxman said private contractors may be hurting U.S. military efforts overseas due to several deadly shootings.

Meanwhile, at a Senate hearing today, lawmakers discovered that information about structural problems in a Utah mine was never shared between two federal agencies. One senator compared it to the CIA not getting information from the FBI about terrorists. The panel is looking into the Crandall Canyon Mine disaster last month when nine people were killed in two cave-ins.

In Portugal, one of the investigators in the case of missing British girl Madeleine McCann has been taken off the case. The move came hours after a newspaper published comments by the cop who criticized British police for allegedly favoring Madeleine's parents. Kate and Gerry McCann have been named suspects in the case by Portuguese police.

And New York Knickerbockers coach Isaiah Thomas vows to appeal a jury's decision today that he and the team's owner sexually harassed a former team executive. The team owners, Madison Square Garden, and the chairman, James Dolan, have been ordered to pay Anucha Browne Sanders $11.6 million.

Anderson, the Knicks have not won a championship since 1973, but right now I think that is the least of their problems.

COOPER: And the money not coming from his bosses, not from Isaiah Thomas.

TUCHMAN: Not from Isaiah Thomas, his bosses.

So now we move on to our segment, Anderson, "What Were They Thinking?". We take you to a business near Reno, Nevada, flying the Mexican flag above the American flag, which is illegal under U.S. law. An American war vet took action. Look at this, he used what he said a U.S. Army knife to take down both flags. He said he was not going to see this happen in his own country and stormed off with the Stars and Stripes, leaving the Mexican flag on the sidewalk.

The owner of business is an American and told our affiliate KRNV he didn't know what he was doing was wrong. He said, he was just trying to support his mainly Mexican customers. But I will tell you, Anderson, one place I know you can do that legally is in Mexico.

COOPER: There you go. All right. We will talk to you a little bit later on. Here's John Roberts right now with what's coming up tomorrow on "AMERICAN MORNING."

JOHN ROBERTS, CNN ANCHOR: Thanks, Anderson. Tomorrow we bring you the most news in the morning including new weapons in the mortgage meltdown. How do you know which lenders have been accused of shady deals? Some say the answer may be in a special technique used by the FBI. A special look at solutions to the home loan crisis tomorrow on "AMERICAN MORNING," beginning at 6:00 a.m. Eastern -- Anderson.

COOPER: And tonight, insurance companies trying to stop a law to stop them from taking advantage of you. You pay your premiums, they pay your legitimate claims, right? Well, not so fast.

(BEGIN VIDEO CLIP)

REP. STEVE KIRBY (D), WASHINGTON STATE HOUSE: The insurance companies have figured out that they can make more money if they don't pay your claim.

(END VIDEO CLIP)

COOPER: So one state passed a law to stop them from nickel and diming customers until they give up in frustration. Tonight, see what big insurance is doing to bury that law and how we're "Keeping Them Honest."

Also tonight, journeying to China, where a billion people are literally gobbling up a "Planet in Peril."

(BEGIN VIDEO CLIP)

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: We're in this one back store here and these are all turtles. You're just looking at thousands of turtles.

COOPER: Eating species to extinction. Only on 360 tonight.

(COMMERCIAL BREAK)

COOPER: Tonight we're digging deeper into a story that CNN's investigative team uncovered earlier this year. The report, which first aired on 360, exposed how insurance companies make billions of dollars by deliberately delaying, denying and disputing legitimate claims. Now it happens all the over the country. And now one state is trying to crack down on hardball insurance companies. Not surprisingly, the insurance industry is fighting back and it's not pulling any punches.

CNN's Drew Griffin tonight is "Keeping Them Honest."

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN CORRESPONDENT (voice-over): Michelle Tribble was actually working for an insurance company when she got rear-ended on the freeway. Ten weeks later she got hit again. The two accidents combined to injure disks in her back. She started treatment, went to a chiropractor and submitted her bills to Allstate and Safeco, the company that covered the other driver. It was about $18,000.

(on camera): Were you out to gouge the insurance companies?

MICHELLE TRIBBLE, ACCIDENT VICTIM: No, I just wanted the medical bills paid.

GRIFFIN (voice-over): Safeco paid Tribble's medical bills, but Allstate fought her, digging up information about her past.

TRIBBLE: So I had to give them every doctor I had ever visited that I could remember. They pulled out a stack of medical records and they dug through everything to see if, you know, I was at all deceptive.

GRIFFIN: And arbitrators sided with Tribble. But Allstate went to court, a jury sided with her too, but Allstate appealed again. Finally after four years of fighting, an appeals court judge made Allstate pay.

VALARIE GRANINGER, ACCIDENT VICTIM: Well, there's the Zuzu (ph) Rodeo that hit me.

GRIFFIN (on camera): So this is your case? GRANINGER: That's some of my case, yes.

GRIFFIN: Valarie Graninger also talks about a drawn-out ordeal with Allstate. After an uninsured motorist hit her, she was treated for neck and shoulder pain, her bills totals less than $10,000. But instead of paying, Allstate hired a private eye, she said, to spy on her.

GRANINGER: To follow me around, making sure I was actually injured.

GRIFFIN: Allstate lost again, but not before the company spent several years dragging Graninger through the courts. Allstate would not comment on the two cases, except to say that they proved that the current judicial system is working. Washington State Representative Steve Kirby says he hears stories like these all the time, especially with when people find out he chaired a state house committee on insurance.

KIRBY: The insurance companies have figured out that they can make more money if they don't pay your claims.

GRIFFIN: Earlier this year CNN exposed a controversial insurance industry strategy that we reported began in the mid-1990s. Former insiders say insurance companies began limiting or denying legitimate claims in minor injury cases and reaped billions in profits as a result.

JIM MATHIS, FMR. INSURANCE INDUSTRY INSIDER: It really came down to three basic elements. A position of delay, a position of denying a claim, and then ultimately, of course, defending that claim that you denied.

GRIFFIN (on camera): The three Ds?

MATHIS: Exactly.

GRIFFIN: Robert Hartwig with the insurance industry-backed Insurance Institute said the strategy was not intended to deny valid claims, but to attack fraud, which he claimed earlier this year was rampant in minor accident cases.

ROBERT HARTWIG, PRESIDENT, INSURANCE INFORMATION INST.: What insurers are trying to do is monitor costs, and every insurer is under the same pressure to do it.

GRIFFIN: But Steve Kirby and his fellow Washington State lawmakers heard so many complaints from policyholders, they wrote a law to force insurance companies to pay rightful claims. Did the insurance companies follow that law? Hardly.

Next, you won't believe what the insurance companies are doing to stop it.

UNIDENTIFIED MALE: I'll sue for you.

UNIDENTIFIED MALE: What do you think?

(END VIDEOTAPE)

COOPER: So just ahead, Washington's new law supposed to make insurance companies play fair, but will it survive the insurance industry's efforts to wipe it off the books? Part two of Drew's report when we come back.

(COMMERCIAL BREAK)

COOPER: Before the break we told you about the hardball tactics a lot of insurance companies use to deny legitimate claims to their policyholders, claims that are worth billions of dollars. But now lawmakers in Washington State are cracking down with a new law to force insurers to pay rightful claims. The insurance industry, to no one's surprise, is fighting back and the gloves are off.

Once again, here's CNN's Drew Griffin, "Keeping Them Honest."

(BEGIN VIDEOTAPE)

GRIFFIN (voice-over): Under the new Washington State law, if an insurance company refuses to pay an honest claim and loses in court, it could be forced to pay three times the value of the claim, plus attorney's fees.

(on camera): It was a simple bill, the Fair Conduct Act, acquiring insurance companies to just treat their customers fairly. It got a full hearing here in Olympia, passed the house, passed the senate, and was signed by the governor. But before the ink was even dry, the very next day, insurance companies made sure they filed a referendum trying to get it off the books.

DANA CHILDERS, EXEC. DIR., LIABILITY REFORM COALITION: In November, the voters will get to decide. Consumers will get to side what they want to do.

GRIFFIN: Dana Childers with the Liability Reform Coalition, a group backed by big insurance, gathered enough signatures to get Referendum 67 on the ballot. Its aim, overturn the Fair Conduct Act by having the public vote no before it ever comes a law.

CHILDERS: Well, there was never the case made for why it ought to be law.

GRIFFIN: : the state house, the state senate, the governor, there were hearings. The elected officials of this state decided this law was necessary and the insurance companies stepped in and said no, Washington State, you're not going to have this law.

CHILDERS: The insurance companies stepped in and said, consumers, you have got to decide if you want to do this.

GRIFFIN: And to encourage consumers to vote no on Referendum 67, insurance companies like Allstate, State Farm, Farmers and others have raised more than $8 million, dwarfing the $886,000 raised by Washington State trial lawyers and others who are trying to get the public to vote yes.

UNIDENTIFIED MALE: Our lobbyists got a law passed letting us file more lawsuits and threaten triple damages.

UNIDENTIFIED MALE: Oh, like that California law that forced insurance rates to spike.

UNIDENTIFIED MALE: So rates spiked, we got our share of the money.

GRIFFIN: Reject 67 commercials are already on television featuring greedy lawyers in conference rooms, plotting to sue insurance companies and warning consumers that frivolous lawsuits will lead to higher insurance rates.

And, Dana Childers told us, Washington State's own insurance commissioner sees no need for the Fair Conduct Act.

CHILDERS: His own information that he provided to the legislature and to the public says that this law simply isn't necessary.

GRIFFIN: But wait a minute. Mike Criedler (ph) is the insurance commissioner and he told us he supports the law that makes insurers play fair.

UNIDENTIFIED MALE: If companies act in good faith, it's not going to have a problem. It's not going to cost any more money. It's not going to be any legal action. There's going to be no treble damages, because if companies deal with their customers in good faith, there's no penalty.

GRIFFIN (on camera): So what are they so afraid of?

UNIDENTIFIED MALE: I think the insurance companies like the game where they can have it to their advantage.

GRIFFIN: Remember Michelle Tribble, the woman who spent four years fighting Allstate just to get medical bills paid? She's not surprised at all that insurance companies are pouring money into fighting the Fair Conduct Act.

TRIBBLE: They poured a lot of money into defeating me.

GRIFFIN: She just wishes it were on the books when she was hit. Then, as she says, hit again by her insurer.

Drew Griffin, CNN, Seattle.

(END VIDEOTAPE)

COOPER: Unbelievable. The amount of money going to insurance companies is simply staggering. Check out the "Raw Data." The Los Angeles Times says in 2005, homeowners and auto insurance companies made a record $44.8 billion in profit. That is the same year as Hurricane Katrina. The Times said that is an increase of 19 percent from 2004. Insurance companies also had a surplus in 2005 of nearly $427 billion.

Well, if you think that's a lot of money, wait until you hear how many millions of dollars federal employees are wasting on airline tickets.

Also, had our trip halfway around the world to a place with an appetite for exotic wildlife is putting our "Planet in Peril."

(COMMERCIAL BREAK)

COOPER: Well, there is less than a year ago until Beijing hosts the Olympic Summer Games, 310 days to be exact. During the event, you will likely hear plenty of stories about China's contributions to the world through its culture and rich history. But you might not hear how much China takes away, especially from the environment. We are going to give you the inside story later this month in our four-hour "Planet in Peril" documentary, filmed in high definition.

Tonight CNN's Sanjay Gupta takes us to Beijing and inside marketplaces that may be cooking endangered species.

(BEGIN VIDEOTAPE)

GUPTA (voice-over): It's one of the oldest civilizations in the world. Traditions cultivated over thousands of years, some out in the open, others hidden from view. The Chinese like their exotic wildlife. It's used in traditional medicine. And it is served as a delicacy. Some of the animals are extremely rare and endangered. Others are more common, in either case the appetite is enormous. A population of 1.3 billion people has made China a vacuum for the world's wildlife.

(on camera): I really wanted to get a sense of just what the demand was here, just how much consumption. Take a look. We're in this one back store here and these are all turtles. You're just looking at thousands of turtles. And this is again just one small store, gives you the sense of the demand for this type of wildlife here in China.

(END VIDEOTAPE)

COOPER: Sanjay goes inside the underground trade in "Planet in Peril," the documentary airs October 23rd and 24th, just three weeks from today. You can also watch a preview of it on our podcast, just head to our Web site, cnn.com/360, or download it from iTunes.

The "Shot of the Day" is coming up. Where is the shot? A little preview, look at the little guys wolfing down food. This is no ordinary eating contest, it's the first of its kind. We'll tell you what they're wolfing down just ahead. But first, Gary Tuchman joins us with a 360 news and business bulletin -- Gary.

TUCHMAN: Looks very appetizing, Anderson.

Here's the news. An historic handshake in Pyongyang, North Korea. Today South Korean leader Roh Moo-hyun met his North Korean counterpart, Kim Jong-il, face to face. The hand shake marks the beginning of just the second ever summit between leaders of the two nations. It coincides with six-party talks in China over North Korea's nuclear weapons program.

Here in the States, federal employees apparently have been wasting your tax dollars on business and first class airline tickets, to the tune of at least $146 million in a single year. A draft report from the Government Accountability Office says many cases involved high-ranging senior officials, some of whom simply felt they were entitled to the ritzier tickets.

A mixed day on Wall Street. Weak hunting and auto sales trimmed the Dow from its record high. It closed at 14,047. The Nasdaq, meanwhile, rose 6 points. And the S&P 5000 stayed just about even, losing about a fraction of a point.

And O.J. Simpson facing another court order. Superior court judge said Simpson must turn over any of the disputed memorabilia seized during his arrest last month in Las Vegas for alleged burglary if any of the items turn out to be legally his. He must also surrender a Rolex watch identified in a photograph. The order is meant to satisfy a 1997 civil judgment that found Simpson liable for the deaths of Nicole Brown Simpson and Ron Goldman. Ten years later, Anderson, and we are talking about the civil suit.

COOPER: It goes on and on. So, Gary, do you like grits?

TUCHMAN: I love grits. I live in Atlanta, so I have to love grits.

COOPER: Well, all right. Well, you're going to love then the "Shot of the Day." It comes to us from Bossier City, Louisiana, home of the first ever World Grits-Eating Championship, which happened this past weekend. The winner happens to be a Chicago chef, gulped down 21 pounds of grits in 10 minutes. And for that he won a cool 4,000 bucks. Yes, yummy.

Now, Gary, I know you like the grits, but I think birthday cake is better. And we know that it's your birthday. It's Gary Tuchman's 25th birthday, everyone. So we got you a little cake. I don't know if through the magic of TV I can pass it to you where you are.

TUCHMAN: Aha! Thank you, Anderson. That was amazing! That was amazing. I'm now old enough to go clubbing in New York City, Anderson. So really, thank you for the cake. That was amazing I handled that cake.

COOPER: I know. You are several floors below me. All right. Enjoy. Happy birthday, Gary.

TUCHMAN: Thank you.

COOPER: We still want your shot ideas. Send us your suggestions any time, or your own videos, cnn.com/360.

Up next, a CNN exclusive, video smuggled from inside Burma showing what really happened when troops thought they were not being recorded. Pictures you won't see anywhere else, next on 360.

(COMMERCIAL BREAK)

COOPER: Good evening, when the whole world was watching, you saw how a dictatorship tried to crush freedom marchers. Tonight, exclusive video smuggled out of Burma, shows how much more brutal things got when the troops though the cameras weren't looking.

Also we will hear from eyewitnesses to the airport scene that ended in a women's death, chained and handcuffed in police custody, did police overreact to someone who was apparently deeply disturbed?

Also tonight in this hour, how a law to keep insurance companies from nickel and diming you out of legitimate claims is being fought with big, big bucks by the insurance companies. We're "Keeping Them Honest."

We begin tonight with the top story. The death of freedom in a faraway land. A group of people, men and women, young and old, religious leaders and their followers stood up for democracy and human rights this past week. And today we have new evidence that they have been defeated, at least for now.

The picture tells the story. Bloody sandals on the streets where peaceful demonstrators marched for days. The government of Burma, the country they call Myanmar, responded to these peaceful protests with guns and bullets, clubs and batons. And now days later, the brutality is compounded as only totalitarian governments can, by making the evidence itself vanish.

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