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Storm's Toll Climbs; Doubts About Nouri al-Maliki; Family Frustration in Mining Rescue Effort

Aired August 23, 2007 - 14:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: A summertime storm train from the central Plains to the upper Midwest. One bad storm after another dumping huge amounts of rain, doing huge amounts of damage all over the nation.
Hello, everyone. I'm Kyra Phillips at the CNN world headquarters in Atlanta.

Don Lemon is on assignment.

You're live in the CNN NEWSROOM.

Well, will it ever end? As you may well know firsthand, that rain, lightning, floods and mudslides have taken a terrible toll in America's heartland. At least 26 people are dead and hundreds more are homeless.

(BEGIN VIDEOTAPE)

PHILLIPS (voice over): "A major, major disaster." That's how the governor of Ohio described the flooding in his state.

In northwest Ohio, the Blanchard River rose seven feet above flood stage. Its highest level in nearly a century. Every downtown street was under water, and so were many neighborhoods.

UNIDENTIFIED FEMALE: The only thing that's going to be left is the stuff that's up on the walls.

UNIDENTIFIED MALE: The cushions are floating off the couch and water was approximately three to four foot deep in the apartment.

PHILLIPS: It took a flotilla of boats to rescue people from waist-deep water.

Also hard hit was the state of Wisconsin. In Kenosha, heavy rains forced city officials to dump 2.5 million gallons of raw sewage and storm water into Lake Michigan.

This is what the lightning looked like over La Crosse, Wisconsin. In the state capital, Madison, lightning hit a utility pole, causing a live power line to fall into a flooded intersection. A mother and child who were waiting for a bus at that intersection were electrocuted, along with a man who tried to help them.

Further west, they're looking over the damage in Minnesota. In Brownsville, a mudslide pushed several houses over a bluff.

SHARON PARTINGTON, LOST HOME IN MUDSLIDE: We had absolutely no warning. The water was not rising.

We're, I don't know, 50 feet above the highway and above the river here, and we -- we were in our home, and it had been raining, and we knew the rain was saturated. We've had mudslides in the past, small. I mean, nothing big, and our property has always been able to take it.

LYNN PARTINGTON, LOST HOME IN MUDSLIDE: Looking at the house, you would wonder if anybody could possibly live or survive, but they did.

(END VIDEOTAPE)

(WEATHER REPORT)

PHILLIPS: Well, measurable, but uneven progress in Iraqi security. But overall, violence still high and political stability still out of reach. Those are just some of the bullet points from a U.S. intelligence report released today.

CNN's Arwa Damon is tracking how the news is going over in Baghdad.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN CORRESPONDENT (voice over): Dira (ph) is a simple woman without much knowledge about politics. What she does know is that there was nowhere to turn and no one to turn to when her husband died and she and her four children lost their home. The family literally lives in the street now.

"No one is helping us at all," her son says. "I'm sitting here and dumped here," she says. "Where shall I go? Where shall I go?"

Whether the blame for what's happening in Iraq lies with Prime Minister Nouri al-Maliki or with his government as a whole, it's al- Maliki's leadership that's coming into question. Some in Iraq's parliament argue the structure of the country's government lends itself to sectarian struggle.

Few here believe changing prime ministers is going to be the miracle solution for peace in Iraq. The reality is, there aren't many alternatives. The names of some potential successors to al-Maliki are being discussed, but none has the political clout to unify the nation.

In the streets of Baghdad, there is talk of starting from scratch, a step America would probably find hard to swallow. For those stuck living here, it seems life isn't going to change anytime soon. Many Iraqis live in a state of shock and despair, unable to fully comprehend how their lives ended up like this.

"This is not why millions went to vote," this shop owner says. "We thought this situation would get better. Instead, we're taking steps back." He doesn't blame Prime Minister al-Maliki, but the government as a whole, too obsessed, he says, with infighting and sectarian agendas.

Out on the street, this man selling much needed ice in Baghdad's scorching temperatures agrees. "The government is divided within itself," he says. "Each group is pulling it in a different direction. Everyone wants things for their own benefits. They're not working with al-Maliki and they're not working with each other, so how will they work for a nation?"

(END VIDEOTAPE)

PHILLIPS: Arwa Damon joining us now live from Baghdad -- Arwa.

DAMON: Well, Kyra, that last question, how is this government ever going to work for a nation, really is the one that is on everyone's mind, and that intelligence report that you mentioned earlier also assesses that the Iraqi government's position is only going to become more precarious over the next six to 12 months as it continues to fracture -- Kyra.

PHILLIPS: All right. Let's talk about this piece that aired yesterday, the little burned Iraqi boy that you had profiled.

A lot of feedback came in with regard to that piece. Have you heard from any charities, any plastic surgery -- or surgeons, rather, that might want to help out?

DAMON: Kyra, the response to that piece was utterly phenomenal. The last I heard from our folks over at CNN.com was that the online story got about 2.8 million hits.

We have heard from countless viewers that want to help, from a number of charities. And we are actually narrowing it down, working with the family to try to see what is going to best serve their interests. So, we should be having it narrowed down to the organization the family is going to be working with to get their son some help.

And I have to say, I spoke with Youssif's father, who is utterly beside himself, saying that he was flying from happiness and that Youssif has been running around the house saying, "Daddy, daddy, am I really going to be getting on an airplane?"

So, it's been a good day for that family. And hopefully it's all going to turn out well.

PHILLIPS: Well, that's good news from a little boy who doesn't even want to leave the house.

Arwa Damon, thanks so much.

Well, we're learning more about yesterday's crash of a U.S. Black Hawk helicopter in Iraq, as well as the 14 troops who were killed. The military says that the chopper, like this one, was returning from a combat rescue mission. All four crew members were based at Fort Lewis, Washington. The 10 troops that they picked up were from Schofield Barracks in Hawaii.

The Associated Press reports that one of the fallen soldiers was due home in less than a month. One family lost their second son to the Iraq war. The crash is being blamed on mechanical problems, not hostile fire.

Well, five holes have been drilled into Utah's Crandall Canyon Coal Mine, and five times no signs of life have turned up. Mine co- owner Bob Murray says a sixth hole should be finished Saturday, and that will be the last.

Murray says that there's nowhere else left to drill where anyone might be found alive. He adds that it's totally unlikely that the sixth hole will yield anymore than the other five.

Well, the desperation felt by miners' family is turning into frustration with the rescue effort. The son and daughter-in-law of missing miner Don Erickson talked to CNN's Dan Simon. Dan asked them about mine owner Bob Murray and he stated -- and his stated plan to close and seal the Crandall Canyon Mine.

(BEGIN VIDEOTAPE)

CLAUDIA ERICKSON, MINER'S DAUGHTER-IN-LAW: He is a very poor communicator. He doesn't know how to come to the families.

He's not respectful. He's frustrated. And I understand. If I was a businessman in his shoes, I would be frustrated too.

But you know what? He can still be -- deliver his information with tact.

DAN SIMON, CNN CORRESPONDENT: What Bob Murray has told us is that he's the messenger and he's trying to deliver the tough news in a compassionate way, but he's got to be honest.

C. ERICKSON: You can be honest without yelling at family members into a microphone. During the family briefing, he was very frustrated. And then Mr. Stickler felt the need to stand up and apologize for his actions, for Bob Murray's actions. He had to apologize to the family members for his -- the way that he delivered his message.

SIMON: How did he delivery his message? You say that he was yelling. He wasn't yelling in an angry way?

C. ERICKSON: Yes, he was angry. He feels like -- he said that we are a team, including the family members, and as a team, we killed -- we killed three men.

SIMON: Brandon, how do you feel Bob Murray has handled this crisis?

BRANDON ERICKSON, DON ERICKSON'S SON: I don't feel that he's doing everything that he can do to get -- I mean, I feel that he's hiding something, trying to cover up something, something underground, or whatever he don't want it to be. I mean, if he's willing to seal up that mine and not recover any of his equipment, or whatever, then that's telling me that he's hiding something. And I ain't going to let him seal that mine with my dad in there.

(END VIDEOTAPE)

PHILLIPS: Well, Murray told us yesterday that he'll never mine the Crandall Canyon site again. He says it's up to the federal regulators to decide when the mine can be sealed.

Well, a grand jury in Ohio has indicted a former police officer on aggravated murder charges. Bobby Cutts Jr. is accused of killing his ex-girlfriend, Jessie Davis, and her unborn daughter. Davis was nine months pregnant when she disappeared in June. Her body was found nine days later in a park about 25 miles from her home.

Cutts is the father of Davis' 2-and-a-half-year-old son. And her family says that he was the father of her unborn child also. He could face the death penalty if convicted.

Cutts' friend, Myisha Ferrell, was also indicted today on charges of obstructing justice and helping dispose of Davis' body.

Straight ahead, call it "Survivor" for small fry. A new reality TV series put underage kids to the test in the New Mexico desert. Now state officials wonder if producers broke the law.

Also this -- before you hit the beach, you need to hit the bottle -- of sunscreen, that is. Now the feds hope to help you choose the best brands.

And paying off your mortgage may be getting harder to do. Gerri Willis has advice on avoiding foreclosure.

You're watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

PHILLIPS: 2:15 Eastern Time right now. Here's three of the stories that we're working on in the CNN NEWSROOM.

Rain keeps falling an the water keeps rising. Storms and floods in the nation's midsection are blamed for 26 deaths. About 1,000 people have been left homeless.

And a new national intelligence estimate is raising questions about Iraqi Prime Minister Nouri al-Maliki's government. It says that Iraqi leaders have been unable to govern effectively and their position will become more precarious over the next six to 12 months.

Political dignitaries and hundreds of colleagues turned out today for the funeral of New York firefighter Joseph Graffagnino. He died Saturday fighting flames that broke out as wrecking crews were dismantling a vacant 40-story skyscraper. Another story that we've been talking about is that national intelligence report that came out with bad news with regard to how Nouri al-Maliki and the government is able to take over in Iraq. Also, not good news about the security situation.

Jamie McIntyre actually went to the National Press Club today in Washington, where he caught up with some of the individual that is actually wrote that NIE report.

Who did you talk to, Jamie? What did you find out?

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, we talked to various senior intelligence officials who we can't name because the intelligence community won't let us about this national intelligence estimate. And as you said, a lot of it seems pretty negative.

Violence continues to be up. The inability of the Iraqi government to perform. Iraqi forces still not capable of operating on their own. And only some progress on the security front, but uneven progress there.

But they pointed out a couple of trends since the last big report that they wrote back in January. One of them is this major trend of Sunni groups in particular allying themselves with some of the coalition, moving against al Qaeda, a dynamic that they say has been somewhat fostered by the additional surge troops, but also by what they point out as the second big trend, and that is the perception in Iraq that the U.S. is leaving one way or another.

The U.S. may not be sure if it's going to be pulling troops out, but people in Iraq believe that the U.S. is going to be leaving either because they hear the reports that the surge can't be sustained past March or April of next year, or they just believe that the U.S. is going to lose patience. And that's creating a new dynamic as well.

It's both a positive and a negative. On some level, it's fostering the so-called bottom-up agreements, these sort of local reconciliation that seems to be ahead of the national government. But it's also laying the groundwork for potential increased violence in the future. And, you know, we're seeing a hint of that in the south, where British troops have pulled out and some of the local factions there are now at each other.

So, it's a very mixed picture. Probably the most controversial finding of the report is the idea that the intelligence community recommends no change in the mission. And you know a lot of people say the U.S. needs to get out of the civil war, so to speak, and just focus on going after al Qaeda. The intelligence community's assessment is, if they did that, it would just make things worse, because it's the combined effect of both the counterinsurgency and counterterrorism that's producing the little bit of success they can point to now -- Kyra.

PHILLIPS: Well, just hearing all this news and then waiting for Petraeus's report, come September 15th, it will be interesting to see the differences, similarities. Jamie McIntyre, outside the National Press Club.

Appreciate, it Jamie.

We have to get straight back into the newsroom now. Fredricka Whitfield with details on a developing story.

More bad news concerning the Deutsche Bank that was deserted since 9/11. Right, Fred?

FREDRICKA WHITFIELD, CNN ANCHOR: Right.

PHILLIPS: Two firefighters were killed there and now there's another problem?

WHITFIELD: Right. Over the weekend, the two firefighters were killed after a devastating fire there. And now today, we understand that there was a scaffolding accident that's taken place there.

You're looking at some new images right now.

We understand at least two people may have been injured. We don't know the seriousness of their injuries. But we are talking about just a few days after that devastating fire, and yet again now firefighters and other emergency crews are returning to the same location there at the Deutsche Bank there at 130 Liberty Street for yet another emergency call.

When we get any more information about how the reported two people who have been injured are doing and what may be the root of the problem as to why this scaffolding collapsed, we'll be able to bring that to you as well.

PHILLIPS: All right. We'll stay in touch on that and follow up on developments from there.

Fred, thanks so much.

Well, straight ahead, UVA, UVP, SPF, does any of it make sense? Unfortunately, what you don't know about sunscreen can hurt you. But the feds want to help save your skin.

We'll have details straight ahead.

SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: I'm Susan Lisovicz at the New York Stock Exchange.

So what does the slowdown in auto production have to do with the slowdown in housing? I'll connect the dots, next.

You're watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

PHILLIPS: Let's get straight back to Fredricka Whitfield in the newsroom. Fred, what are we learning more about this scaffolding problem at the Deutsche Bank near the World Trade Center site?

WHITFIELD: Right. More now from lower Manhattan, where we understand the scaffolding collapse now may have involved the injuries of both firefighters and some construction workers.

You're looking at live pictures right now of the response there to this scaffolding accident. We don't know the circumstances of the accident taking place there, but there had been some work taking place at the Deutsche Bank to try to remove debris still many years after 9/11, and try to contain some of the toxic material in this condemned building.

And we know that over the weekend, a very fatal fire taking place there at the same location over the weekend, claiming the lives of two firefighters. And now we've got another accident involving the scaffolding there at that same location there on Liberty Street. And you're seeing the extensive live pictures right now of the entire scene there.

It's kind of hard to make out everything you're seeing because just everything looks like it's a disaster area right there, but given reconstruction and debris removal has been under way for quite some time, now they're dealing with trying to figure out how this accident happened, the extent of the injuries, and exactly how many people may have been injured. So, loosely, we know both construction workers, as well as firefighters, may have been injured in this accident.

PHILLIPS: And you know, Fred, as this was coming forward, as we got these live pictures you've been updating us, today is actually the day that the funeral was being held for one of those firefighters that you mentioned...

WHITFIELD: Right.

PHILLIPS: ... that was killed. The news that you're talking about is coming to us just four days after that seven-alarm fire in that building...

WHITFIELD: That's right.

PHILLIPS: ... that killed this man here, this firefighter, Joseph Graffagnino, from Ladder Company 5, and also Robert Beddia of Engine Company 24.

WHITFIELD: Right.

PHILLIPS: So just a tough, tough time for firefighters.

WHITFIELD: It really is.

PHILLIPS: And, you know, and what do you do with this site? What do you do with this building? It's a constant project and worry.

WHITFIELD: Right. That's exactly the quandary that folks are dealing with.

You know, you're talking about the conflict of, you know, resuming some business to the area. At the same time, you've got the other concern of further jeopardizing the safety of many people. And if the firefighting community hasn't been hit hard enough already, now they're dealing with this as well. And as you said, just four days apart between the latest tragedy there at that same location and now reports of injuries involving a couple more of their own.

PHILLIPS: All right. We'll continue to follow up. Fred, thanks.

(BUSINESS REPORT)

PHILLIPS: Well, this just into CNN. The FDA is proposing new rules for sunscreen to help you make sure that you don't get burned.

For more now, let's go to CNN Medical Correspondent Elizabeth Cohen. She is in New York.

What are we finding out, Elizabeth?

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Well, what we're finding out, Kyra, is that sunscreen bottles are going to look a lot like movie reviews in the future. It sounds a little strange, but the FDA wants to start using a star rating for sun screens because it's really confusing when you go to buy them.

One star would mean it has a low protection against UVA rays. Two, medium. Three, high. And four, the highest. And so that way consumers can figure it out a lot more easily.

Now, you should know, you also want to worry about UVB rays. So, the FDA is also going to require that the bottles say in some way or another if they protect against both UVA and UVB.

Now, consumers should also know that these rules could take two years to go into effect. So don't look for them anytime real soon -- Kyra.

PHILLIPS: All right, Elizabeth. I'm know I'm supposed to ask about advice on buying a sunscreen. And I want to let you know that my two friends, Mary (ph) and Kristen (ph), who are dermatologists are in the control room right now visiting, and they are paying close attention to your answer here on advice about sunscreen.

COHEN: Well, I will be very careful and hopefully we'll get a thumbs up from the two dermatologists. What you can look for now is look on the label for a sunscreen that says that it protects against UVA and UVB. Sunscreens don't have to have them on it, but a lot of them that have both like to brag about it. And that's a good thing for consumers. Also, look for an SPF that's at least 15. You may need to go higher than that. You can talk to your dermatologist, like the two who are in the control room right now. Also, look for a sunscreen that is water resistant. Even if you are not going to be swimming, you will most certainly be sweating. And now, this last one is perhaps the most important point. Use a shot glass full of sunscreen. Yes, you heard me. A shot glass full of sunscreen. That's about an ounce. That's much more than most people need. Most people are way too stingy when it comes to putting on sunscreen. You're not going to get nearly the protection you should if you don't put on that full ounce. Kyra?

PHILLIPS: All right, Elizabeth Cohen, thanks so much. We have to step away for a second here and go back to Fredricka Whitfield in the newsroom with more on the scaffolding accident there at the World Trade Center site. Fred, what are you finding out?

FREDRICKA WHITFIELD, CNN ANCHOR: Well this collapse taking place just over 30 minutes ago and our Deborah Feyerick in New York who also covered the fire that taking place at that same location over the weekend, which claimed the lives of two firefighters and now today with the scaffolding collapse. We don't understand there to be a fire that has accompanied this accident today. She's on the line with us now, Deborah, what are you seeing from that location?

DEBORAH FEYERICK, CNN CORRESPONDENT (voice of): Well, Fredricka, we're on our way down to the scene right now, but some people in Manhattan really beginning to think that this building is cursed. This scaffolding collapse now has injured two firefighters. This is the fire department still reeling from the deaths of two others over the weekend. We are told that this scaffolding collapse has also injured two to three construction workers. But the building, which stands right at ground zero, was badly damaged during the collapse of the World Trade Center. It took years for developers and insurance companies to figure out who would pay to have the building taken down. Asbestos abatement was going on inside of that building. When the firefighters went in over the weekend, it was effectively a death trap is what we are told because it was so difficult to fight that fire. So the funerals of the firefighters taking place, but now a deflated scaffolding collapse injuring two additional firefighters. Many people just have had enough and we are trying to learn the conditions of the firefighters and the construction workers there. We should be on scene in the next couple of minutes and we can update you at that moment. Fredricka?

WHITFIELD: And so Deborah, how many stories on this building are we talking about, and do we have any idea how tall the scaffolding is? Because we're looking at live pictures right now which a moment ago we kind of saw some scaffolding that looked like, you know, a good 40 or 50 floors up with a couple workers there. Do we have any idea what kind of drop we're talking about here?

FEYERICK: Actually, the building was 41 feet, but it is now down to -- I'm sorry 41 floors. It is now 26 floors. So I'm not exactly sure exactly where the scaffolding fell from or whether it was on the floors that were damaged by the fire over the weekend. They have had inspectors in and out of that building over the last couple of days. They suspended demolition as they investigated what caused this fire. There was a report that maybe a careless cigarette is what sparked the blaze. Also, none of the sand pipes that were supposed to be working to put water on this blaze were actually working. So I'm not quite sure from which floors they fell. It would have to be from 26 on down. That's the height of the building now.

WHITFIELD: Got you, ok. And Deborah, just to recap, you said about two to maybe even three construction workers who have been injured and of the at least two firefighters you mentioned, we're understanding now from one of our sources that none of the injuries sustained by the firefighters seems to be life threatening at this point, but we're still checking on the condition of the construction workers that you mentioned. Deb Feyerick, thanks so much from New York. Kyra?

PHILLIPS: Ok Fred, thanks so much.

Straight ahead, interest is way up and spirits are way down for some homeowners. If you can't afford your mortgage, is there any way to hang on to your home? Coming up, pointers on fending off foreclosure.

(COMMERCIAL BREAK)

PHILLIPS: The daily drum beat of news, and it's a grim reality for a growing number of homeowners right now. Home foreclosures on the rise all over the country, but there are ways to protect yourself. Personal finance editor Gerri Willis now joins me from New York with some tips. Hey Gerri.

GERRI WILLIS CNN PERSONAL FINANCE EDITOR: Hey Kyra, good to see you. You know, if you're behind paying your mortgage, the very first thing you want to do is contact your lender. Now, that may be the last thing on your mind, but many of them have programs that can help. Remember, they don't want to own your home. Pick up the phone, ask for the loss mitigation department. Now these are the folks who can negotiate a repayment plan. Kyra?

PHILLIPS: All right, now what about -- what kind of repayment plans can banks offer you?

WILLIS: Well, when you negotiate, you can ask for something called forbearance. This is a plea to suspend your payments for a small amount of time or to temporarily reduce those payments for a while. You can also ask to modify your mortgage. This allows you to change the terms of your loan so you may be able to make lower payments for a while. Now, they increase -- to increase your negotiating power with your lending, bring any documents that proves you've been proactive, and this would include e-mails, faxes, phone conversations you've had with people at the bank. You may even want to bring in a recent pay stub or if you're starting a new job, a letter of intent from an employer or future boss. Now, the more you can prove how diligent you are with this process, the better it will reflect on you. You can also seek counseling. Call the Department of Housing and Urban Development at 1-800-569-42 87. This is free advice. They can hook you up with a professional in your area who can provide advice about your situation. Another place to go if you're already in foreclosure, the Home Ownership Preservation Foundation. That number 1-888-995-hope. So there's lots of stuff out there for folks who are having problems. Kyra?

PHILLIPS: What if you can't avoid the foreclosure?

WILLIS: Well, you know, the nightmare doesn't end after you've lost your home. Amazing, look, having a foreclosure on your credit record can destroy your ability to get credit in the future. It can stay on your record for seven years and your credit score could potentially drop hundreds of points. By the way, I spoke to one expert to who said that even just one missed mortgage payment can cause your score to drop 100 points. Kyra?

PHILLIPS: This week that we heard of a story where people got hit with a tax bill on their home years after they had lost that home to foreclosure. How does that even happen?

WILLIS: Well, ok, what many people don't realize is that when a lender takes a home through foreclosure, even what's called a short sale, if the lender doesn't sell that house for as much as its worth, the consumer, the homeowner can actually be liable for taxes on the amount of what they call unearned income that happens when the sale occurs. That means you got some debt forgiven. Now you have to pay tax on it. Kyra?

PHILLIPS: All right, Gerri Willis, thank you so much for the tips.

WILLIS: You're welcome.

PHILLIPS: Meanwhile, we want to take you back to New York City right now as we follow up on that developing story about the scaffolding collapse in New York City. Live pictures via our affiliate WABC out of New York City. What we can tell you right now is that two people have sustained injuries at this collapse, at the Deutsche Bank Tower, right there in lower Manhattan. They're not reported to be serious at this time. We're still trying to follow up. Those victims were taken to a nearby hospital. But you can see that this has been a big concern for firefighters. A large number of rescue workers showed up there on the scene and ambulances showed up at the scene because this news that is coming out of this area today is just four days after that seven alarm fire that happened at the same abandoned building, the Deutsche Bank, right next to ground zero where the World Trade Center once stood. A blaze that claimed the lives of two firefighters, and actually one of the funerals was being held today for Joseph Graffagnino from Ladder Company 5. He was one of the two firefighters killed here in this bank fire. And now a scaffolding collapse has injured two more individuals. We'll bring you more information as we get it.

Now, straight ahead, democracy, how is it working in Iraq?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The Democratic institutions is not necessarily the way ahead in the long-term future.

(END OF VIDEO CLIP)

PHILLIPS: What U.S. generals think can save Iraq's government. Straight ahead from the CNN NEWSROOM.

(COMMERCIAL BREAK)

PHILLIPS: President Bush calls him a good guy and says he supports him but overall confidence in Iraqi Prime Minister Nouri Al- Maliki is not high across the board. That shows in a new U.S. intelligence report that was released today. According to an administration official, the report singles out Al Maliki as lacking the capacity to push forward reforms to improve security or political stability. It's the first U.S. National Intelligence Estimate since January, and parts of it are classified. The authors applaud what they call measurable but uneven improvements in security but say that Iraq's political leaders are unable to effectively govern.

Democracy is often held as a shining achievement of the war in Iraq. But there, too, the reality is often more complicated. CNN's Michael Ware reports.

(BEGIN VIDEOTAPE)

MICHAEL WARE, CNN CORRESPONDENT (voice-over): Two years after the euphoria of historic elections, America's plan to bring democracy to Iraq is in crisis. For the first time, exasperated front line U.S. generals talk openly of non democratic alternatives.

BRIG. GEN. MICK BEDNAREK, U.S. ARMY: The democratic institutions is not necessarily the way ahead in the long-term future.

WARE: Iraq's institutions are simply not working. It's hard to dispute that Iraq is a failing state. 17 of the 37 Iraqi cabinet ministers either boycott the government or don't attend cabinet meetings. The government is unable to supply regular electricity, and at times not even providing running water in the capital. The health care system is run by one Iranian-backed militia, the police, dominated by another. Death squads terrorize Sunni neighborhoods. Sectarian cleansing pushes people into segregated enclaves protected by Shia or U.S.-backed Sunni militias. And thousands of innocents are dying every month. The government failures are forcing the Bush administration to curb its vision for a democratic model for the region. The cornerstone of its rationale for the war. U.S. ambassador Ryan Crocker and commanding general David Petraeus declined to be interviewed but issued a joint statement to CNN. In it they reiterate Iraq's fundamental democratic framework is in place and development of democratic institutions is being encouraged. But Crocker and Petraeus concede they are now engaged in pursuing less lofty and ambitious goals than was the case at the outset. And now in the war's fifth year, democracy no longer features in some U.S. commanders' definition of American victory.

MAJ. GEN. BENJAMIN MIXON, U.S. ARMY: I would describe it as leaving an effective government behind that can provide services to its people and security. It needs to be a functioning and effective government that is really a partner with the United States of America and the rest of the world in these fight against these terrorists.

WARE: This two star general is not perturbed if those goals are reached without democracy.

MIXON: We see that all over the Middle East.

WARE: Democracy, he says, is an option. The Iraqis free to choose it or reject it.

MIXON: That is the $50,000 question is what will this government look like. Will it be a democracy? Will it not?

WARE: Security, he says, is what the U.S. soldiers are fighting for.

MIXON: The core of my mission is security for Iraq's people, to establish a functioning government, and to enhance their security forces and to defeat this enemy.

WARE: A functioning government, not necessarily a democratic one. But Iraqi government officials say the democratic government could work better if it was actually allowed to run things.

HADI AL-AMRI, IRAQI DEFENSE & SECURITY CMTE.: We don't have sovereignty over our troops. We don't have sovereignty over our provinces. We admit it, says the head of the Iraqi parliament's military oversight committee. We don't say we have full sovereignty.

WARE: For example, while the Iraqi government commands these army troops, it cannot even send them into battle without U.S. agreement. And these Iraqi special forces troops do not answer to the Iraqi government at all. Only to U.S. officers. And because of the very real prospect of Iranian infiltration, the Iraqi government doesn't fund or control its own intelligence service. Instead, it's paid for and run by the CIA.

ABDUL QARIM AL-ENZI, DIR., PARLIAMENTARY ETHICS CMTE: So is it reasonable for a country given sovereignty by the international community to have a chief of intelligence appointed by another country, asks the head of Iraq's parliamentary watchdog committee. We think sovereignty means the ability of a government to be elected and make its own decisions.

WARE: He may not be wrong, but a senior U.S. official in Baghdad told CNN any country with 160,000 foreigners fighting for it sacrifices some sovereignty. The U.S. has long cautioned a fully functioning democracy would be slow to emerge, but with U.S. senators calling for Prime Minister Nouri Al Maliki's ouster, some senior U.S. officers suggest the entire Iraqi government must be removed by constitutional or non-constitutional means, and they're not sure a democracy need replace it. Michael Ware, CNN, Baghdad.

(END OF VIDEOTAPE)

PHILLIPS: Well, ratings at what price? Did CBS put children at risk in hopes of a blockbuster hit? We're going to have that story straight ahead in the CNN NEWSROOM.

(COMMERCIAL BREAK) PHILLIPS: Kids and a TV reality series. CBS is facing growing scrutiny amid claims that children as young as 8 years old were overworked, even injured during filming of the series "Kid Nation." In response, CBS released this statement quote, "These kids were in good hands and under good care with procedures and safety structures that arguably rival or surpass any school or camp in the country." Concerns began when the network first announced the concept of stranding 40 children in a desert ghost town for the series. Allegations then surfaced that producers had skirted child labor laws and in one instance several of the cast members reportedly required treatment after mistakenly drinking bleach. Joining us now from Albuquerque, Carlos Castaneda, he's the spokesman for the New Mexico's labor department. The series was shot just outside Santa Fe. Carlos, glad to have you with us.

CARLOS CASTANEDA, NEW MEXICO DEPARTMENT OF LABOR: Thank you for having me.

PHILLIPS: Let me just ask you, first of all, were any laws broken when it came to child labor laws in your state?

CASTANEDA: Oh, absolutely. If you classify the production as an actual production and not a summer camp, several New Mexico child labor laws were violated.

PHILLIPS: So what exactly was violated?

CASTANEDA: Well, you know, we have several concerns. First of all, no work permits were issued to the youths working on the set. Something that is commonly done to a child worker or anyone under a certain age in New Mexico. There is also compliance requirements of the times that these individuals can be working, can be filmed. Unfortunately, our compliance officers were not able to visit the set or visit with the children to verify any of this information. So we're not sure if the appropriate measures were taken by the production company to assure the safety of the children.

PHILLIPS: Ok, so let me get this straight. CBS went to your state. They shot this show, but they did not get the proper permits and did not follow the proper rules, is that right?

CASTANEDA: That's correct, to an extent. Now CBS is claiming that it's a summer camp, and even if we take the classification that it's not a working production and classify it as a summer camp, there's still some permits that state agencies need to issue to the production company for compliance, and one of them from our agency, for example, is to exempt them from some of the child labor law requirements.

PHILLIPS: Ok, interesting. So whether it's a summer camp or it's the shooting of a show where they're working seven days a week around the clock with no parents there, they have broken the law either way.

CASTANEDA: Well, you know, you could say they did break the law in a sense, but, you know, we typically like to partner up with productions that come into the state to assist them in compliance. In this case the production company did fail to get some permits as they are classifying themselves as a summer camp. If it is -- it's probably a little too late to do this, we can determine if they were an actual working production. If that were the case, there would have been several laws that were broken.

PHILLIPS: Ok, so I have a couple questions to follow up on that then. Can you hold CBS accountable for not following the proper procedures? Like what are you going to do now?

CASTANEDA: Well, I think it's moot. The production has come and gone into New Mexico. Unfortunately, we were not given the opportunity by the production company to work with them and partner up with them in this particular case. There's not much we can do. There isn't much recourse. An attorney general opinion has indicated that any future productions like this that they would request that they coordinate with our office, our agency, and our compliance officers to make sure --

PHILLIPS: For the future.

CASTANEDA: To make sure no laws are broken.

PHILLIPS: One final question, parents are claiming that conditions were abusive, that children were harmed during the shooting. CBS says the course of action now being undertaken by one parent is distorting the true picture of the "Kid Nation" experience, about which the overwhelming majority of kids are highly enthusiastic and happy. A sentiment shared by their parents, too. So ok, CBS is saying, no, everything was fine. Parents are saying hey, it was abusive. Kids were hurt. Is that true? Were they hurt, and do the parents have a leg to stand on to sue?

CASTANEDA: Well, I understand that there was quite a lengthy documentation that was signed by the parents when they let their children participate in this particular summer camp. Unfortunately, we don't know because one of our inspection procedures is to inspect the environment that the children are going to be working in. So in order to avoid cases like the ones that are being brought up right now and concerns by parents.

PHILLIPS: Carlos Castaneda, spokesperson for New Mexico's Labor Department. We appreciate your time Carlos.

CASTANEDA: Thank you.

PHILLIPS: We're going to take a break. More from the CNN NEWSROOM, straight ahead.

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