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CNN LARRY KING LIVE

Gustav Makes Landfall; Sarah Palin's Teenage Daughter Pregnant

Aired September 1, 2008 - 23:59   ET

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


(BEGIN VIDEOTAPE)
LARRY KING, CNN ANCHOR (voice over): Tonight, he's not gone yet. Gustav hammers away, with fierce winds and ferocious rains, almost a million people are without power. Local curfews remain in effect. But the storm's impact is wide spread. All of us will feel it.

Plus, has a family secret become a public scandal? Sarah Palin's daughter unmarried, in high school, pregnant. The 17-year-old is keeping the baby.

Will the GOP ticket pay a price?

Next on LARRY KING LIVE.

(END VIDEOTAPE)

KING: Good evening. We'll get into politics in a little while.

Here are some of the latest details on Hurricane Gustav. 750,000 customers are still without power. Baton Rouge is seeing the worst damage in anyone's memory. New Orleans mayor, Ray Nagin says, "Don't come home yet." Boats are loose on the Mississippi and the industrial canal. And the Lower 9th Ward, fortunately, is seeing only six inches of water.

Let's go to Lafayette, Louisiana and John Zarrella.

What's the situation there west of New Orleans, John?

JOHN ZARRELLA, CNN CORRESPONDENT: Well, Larry, you know, a lot better now. It certainly was a little bit dicier earlier this afternoon. The storm actually moving up, pretty much along highway 90, over places like Houma, Louisiana and Morgan City and then up into New Iberia and here into Lafayette.

But the local officials here saying to us, listen, we fared pretty well. One fatality here, a tree fell on a house killing a 27- year-old man. Power out in about 40 percent of the city. But that is the extent of it. High water here behind us as the river continues to rise.

But, again, this is not expected to rise much more either. So earlier fears that there might be some flash flooding associated with the rising waters, not an issue here either -- in Lafayette -- Larry?

KING: Anderson Cooper -- would we describe this preparation as remarkable?

ANDERSON COOPER, CNN ANCHOR: It certainly -- certainly when you compare it to what happened three years ago, it was a remarkable different. I mean coordination, at the state level, at the federal level and at the local level. You know from Mayor Nagin, you have a new governor here, Bobby Jindal, who's received high marks for his response to this, and the federal government clearly knew the attention was going to be on their efforts during this storm.

So they made a big effort, pre-positioning supplies, a lot more coordination. Michael Chertoff, the head of Homeland Security, was down here several times of the days in advance of this storm.

So it is -- it is night and day literally from what happened in the wake of Hurricane Katrina. And perhaps and most -- you know a huge element in this were the citizens of New Orleans and of southeastern Louisiana who really heeded the calls to get out.

Clearly, you had state officials and local officials making much more of an effort to declare mandatory evacuations to really get the message out. They didn't do that around for Hurricane Katrina. And the citizens really listened this time. 90 to 95 percent of them got out of from southeastern Louisiana, the largest evacuation in this state's history.

So some high marks for folks all around.

Look, this is not over. I mean the most dramatic moments are probably over. But we got to look how these levees fare over the next 12 to 24 hours, and we got to look at how people are taken care of when they return back.

I mean you have 1.9 or so million people leaving this -- leaving southeastern Louisiana. They're all going to have to come back. There's going to be questions about small businesses, about getting loans, help for some of these evacuees who need financial support.

So there's a lot that remains to be seen about government response taking care of these people when some of the spotlight is off, Larry.

KING: Thanks, Anderson Cooper.

Let's check in with Chad Myers at the CNN Weather Center in Atlanta. And what about Hanna and Ike?

CHAD MYERS, CNN METEOROLOGIST: They are on their way. And they're going to category 2 hurricanes, one could hit south Florida, the first one, Hanna, will probably hit somewhere in the Carolinas.

It's going to be a crazy week. We're talking Hanna landfall, Friday, and maybe for Ike, landfall Sunday or Monday -- yes, like five, six days from now -- as big time category 2s, maybe category 3s.

This thing is winding down, Gustav about done. We will see some flooding tonight. We will see some potential force, some tornadoes tonight. That's it. Other than that, the wind is done, 35, 36 miles per hour, forget about it, this thing is all over but the noise.

The wind was big, though. Grand Isle, Louisiana, 105 miles per hour, and our Ali Velshi was in it all day long. Grand Isle was covered with about eight feet of water, Larry.

Here's Hurricane Hanna, we'll take you through the Bahamas as a category 2 and category -- maybe category 2 1/2. I don't want to go with that 3 just yet, but very close to Charleston. And Ike farther out into the Atlantic Ocean. It looks like it's going to be in the Bahamas for Friday and into Saturday.

And there you go. With those number 2s, means category 2.

KING: Chad...

MYERS: Look at that, 105, Larry.

KING: Chad, could Hanna and Ike affect each other?

MYERS: No. They're far enough apart. Sometimes storms, especially in the Pacific, can what we call fujiwara, and which means one storm can go around the other, it can go around the other, but I think they're too far apart to do that.

KING: And Gustav is now a tropical storm?

MYERS: Gustav is down to 60 miles per hour. By morning, it will probably be a tropical depression, certainly by tomorrow afternoon. You need warm water for these things to keep going and now that it drew over land it's going to die off rather quickly.

KING: We'll check back with all of our weather folk. Anderson leading that great crew there at the bottom of the hour. And when we come back, we'll get into a strange case of politics and the lady from Alaska. Don't go away.

(COMMERCIAL BREAK)

KING: Welcome back.

We devoted our show last week to having Republicans and John McCain supporters respond to the Democratic convention. We plan to do a partisan turnabout this week -- Democrats and Barack Obama supporters reacting to the GOP convention.

But news events, Hurricane Gustav, a major reduction in the Republican convention activities have prompted us to change our editorial approach tonight.

This is hour number two of LARRY KING LIVE. With us in Fargo, North Dakota is Ed Schultz, radio talk show host, here in Los Angeles, Stephanie Miller -- she was with us earlier tonight. In Minneapolis is Susan Molinari, the former Republican member of the House of Representatives, and in Washington is Leslie Sanchez, Republican strategist., former advisor to President George W. Bush. Ed Schultz, earlier tonight, James Carville said while there's lots to complain about with regard to Senator McCain's choice, her having a daughter that's pregnant is not one of them. Do you agree?

ED SCHULTZ, TALK RADIO HOST, SUPPORTS OBAMA: Well, in a sense, I do, Larry. But I don't think the discussion should go away, because for the last 10 years, since the activities of Bill Clinton, the Republicans in this country have tried to claim themselves to be the party of family values.

Now it's been tough sledding the last two years for sure with the pastor and a senator, and a congressman getting in trouble and now this. It needs some discussion, it needs some explanation. Nobody is trying to take a 17-year-old girl through the mud.

The question is, what kind of a mother would put their child through this, knowing that she's pregnant, up on stage, and her being trained in journalism, knowing that the media is eventually going to get to this story. I can't believe she's that naive.

But the Republicans have invited this discussion over the last 10 years...

KING: All right.

SCHULTZ: ... trying to claim the moral high ground.

KING: Susan -- you got the point. Susan, how would you respond?

SUSAN MOLINARI, FORMER U.S. REPRESENTATIVE, SUPPORTS MCCAIN: Well, I find that absolutely repugnant. I mean, quite frankly, would Ed say the same thing is this was a man who had a daughter who had a daughter who was pregnant at 17. I don't think so.

I think that what we have...

SCHULTZ: Yes, I would.

MOLINARI: Governor Palin is a family that has their issues and their problems and their joys and their triumphs just like any other American family. And the fact that they have this issue that they're willing to deal with, with love and honesty and still allow her to run for vice president of the United States, I say -- I think the governor is a terrific role model for women all over this country that say, there may be problems in your life but you know what, if you think you can add something to the future of this country and to your own family, then you should do it...

KING: OK.

MOLINARI: ... and not let journalists or talk show hosts bark you down.

KING: Stephanie Miller?

STEPHANIE MILLER, TALK RADIO HOST, SUPPORTS OBAMA: But Congresswoman, I think the point is always hypocrisy. You know this is a party like Ed says...

SCHULTZ: Exactly.

MILLER: ... that it's -- that lectures other people about family values and moral values, that is represented by people like Dr. Laura on the right, that I wonder what she'll have to say about a woman with five children, including an infant with down syndrome and a teenage daughter that's pregnant...

MOLINARI: I would hope...

MILLER: ... that's want to be -- that's running for vice president.

MOLINARI: You know what, the Democrat Party right now...

MILLER: Well, I mean, we're not the party that lectures other people about how to run their lives and their families. And I just...

MOLINARI: That is so not true. That is so not true. That is -- that is an absolute falsehood.

SCHULTZ: Oh it's very true.

MOLINARI: And certainly in dealing with Governor Palin. Here's a woman who has done nothing other than be an incredible governor, a reformer, rocked the establishment in Alaska.

MILLER: For 20 months and she's under investigation...

MOLINARI: Has developed an energy policy...

You know, Larry, Larry...

MOLINARI: ... and has now decided that she wants to run for vice president.

KING: Let Leslie get a word in.

All right, Susan, don't hog it. Susan, don't hog it. Leslie?

LESLIE SANCHEZ, REPUBLICAN STRATEGIST, SUPPORTS MCCAIN: No. I agree with the congresswoman.

KING: Go ahead. You got a partner, Susan.

SANCHEZ: I would say if you're talking about hypocrisy, you're talking about hypocrisy in the media, and especially in the liberal blogs who wanted to, you know, basically, say it's OK to have protection and privacy for the children of Democratic candidates. You know, and even the Democratic candidate for president himself and to John Edwards, but it's not OK if it's a Republican.

I think if Barack Obama sets the standard in saying that families are off limits...

SCHULTZ: Now wait a minute. I think the liberals went after John Edwards in a big way.

MILLER: She's -- excuse me, Leslie, excuse me, Leslie. She has preached...

KING: One at a time.

MILLER: She has preached abstinence and no sex ed in the schools.

SANCHEZ: I'm sorry but I think that...

MILLER: You don't think that smacks up for hypocrisy a little bit.

SANCHEZ: Sarah Palin is the one that's running -- that's on this ticket, it is not her family. And with all due respect to that, she is the one that needs to be looked at in terms of her credentials, her judgment. She's seen in the public as a wife, a mother, a leader and the congresswoman is exactly right.

That is not measured by her...

SCHULTZ: Nobody's questioning that.

KING: But she's also -- but in fairness, Leslie -- in fairness, she's also someone who supports abstinence and is against sex education in public schools. That's fair thing to bring up, isn't it? You can decide that you agree with her but she is for that?

SANCHEZ: Who are you asking? If you're asking me?

KING: Leslie, right?

SANCHEZ: Absolutely. I mean you could question that...

KING: So?

SANCHEZ: ... but the distinct difference is they are directly lauding attacks against her and trying to evaluate this daughter's judgment. This is something that's a personal private family matter. And I think both candidates at the top of the ticket have established that.

KING: All right...

MILLER: No one is evaluating her daughter's judgment. We're talking about what she has...

SANCHEZ: Exactly, you are evaluating her daughter's judgment.

MILLER: ... stood for publicly. What she has preached publicly.

KING: Ed Schultz, were you shocked at her appointment -- selection since many think there were others in the Republican Party better suited? SCHULTZ: Well, I think it was a selection, Larry, that had to shore up the base of the social conservatives. This was a political move, it was not a move about running the country or picking the best candidate.

You look at the money, John McCain's way behind. You look at the 527s, they're way behind in funding. In fact, Karl Rove talked about this in Minneapolis yesterday with some people saying they got to load up the 527s.

Well, who's going to write those checks? The social conservatives. So he had to go to that base, he had to satisfy them. Richard Viguerie told me that this woman is perfect for the job.

Well, we'll find out. Let's go to the vetting process for the public.

KING: Susan...

SCHULTZ: I would like to pose this question to the congresswoman. Would it have been a story if Chelsea Clinton had been pregnant in the White House? Would we have talked about that? You better believe we would have. You can't have a double standard here.

MOLINARI: Would we have then said that her mother should not attempt to run for president of the United States? I don't think you would. I don't think you would say that she should never that.

SCHULTZ: Oh I think Rush Limbaugh would have said just about anything for your side to win.

MOLINARI: No, I disagree. I think that...

MILLER: The important thing, Susan -- the important...

MOLINARI: This is just ridiculous.

MILLER: The important thing, Congresswoman, is they have just sent a vetting team to Alaska now. Don't you think that would have been...

SCHULTZ: Exactly.

MILLER: ... done before he selected her?

MOLINARI: John McCain has said...

SCHULTZ: This could be Harriet Miers all over again.

MOLINARI: No.

(CROSSTALK)

SCHULTZ: This could be Harriet Miers all over again.

MOLINARI: You tell me when you stop screaming, Ed, because this is not a circus.

KING: You're right.

MOLINARI: This is somebody's personal life. This is an opportunity for the Republican Party...

KING: I want to...

MOLINARI: ... to make history with the first female vice president, a credible vice-presidential candidate who has problems in her family just like everybody else in this country.

KING: OK, we're repeating ourselves.

MOLINARI: And to make a circus out of this is just -- it's ridiculous.

KING: All right. Let's not -- we're getting redundant a little.

All right, I want to bring in Kyra Phillips, our co-anchor at the "CNN NEWSROOM." She's in Anchorage, Alaska. I want to get a couple of news reports from Kyra

What's the reaction there to all of this?

KYRA PHILLIPS, CNN ANCHOR: Well, of course, there's -- well, Larry, there's a lot of reaction. And I'm listening to all the various analysts here. And they all bring up the same points that are being brought up among folks here in Alaska, whether it was -- we had 10 minutes to grab a quick bite to eat.

And guess what everybody in the restaurant was talking about? Governor Palin and her daughter who is pregnant. I mean, the fact is, it's the talk of the town right now. First it was Trooper Gate, which I know we'll get into in a little bit. Now, it's this, it's something that people want to know about, because she has been a very -- to put it bluntly, quite a rock star here in this state, especially to women who see her as this role model, as a mom, as a leader, as a woman who hunts and fishes, and operates in a man's world, Larry.

So they are talking about. Will it affect the campaign? You know, we don't know yet.

KING: Do you have some news about that Trooper Gate story?

PHILLIPS: I do. I was able to talk to the head of the investigation. And if everybody's not up to date, Larry, on that investigation or on what's -- on Trooper Gate and what's happening right now, just in a nutshell, once again, the governor -- her decision making --- being questioned here.

Did she use her political rank to somehow try and pressure the police commissioner to fire her former brother-in-law, a state trooper here that was in the middle of an intense custody battle with the governor's sister? I had a chance to talk with the investigator. He is now saying not only does a phone call exist between Lieutenant Trooper and her office, but apparently there are a number of e-mails that have surfaced now. They are continuing to sift through more evidence, evidence coming through as they've been able to get access to this.

And there are e-mails, apparently, that exist between the governor and those there with the trooper's. Will we get access to those, will we be able to see what those e-mails have to say, not sure. But apparently, this is some new evidence coming forward that they think will be pretty powerful in this investigation.

KING: Thanks, Kyra. And we'll be checking back with you in the next half hour.

Kyra Phillips of the "CNN NEWSROOM' on the scene in Anchorage.

We'll be back with this panel right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TUCKER BOUNDS, SPOKESMAN, MCCAIN CAMPAIGN: He learned about it during the vetting process before his selection. He did not consider it a disqualifier.

Governor Palin has a long record of reforming Alaska, taking on the establishment for 13 years. She started out as a -- you know a civic activist in the PTA, went to the city council, on to be the mayor of her small town, took on big oil -- in the oil and gas commission in Alaska, then to the governor's office where she's made serious bipartisan reforms.

That's the reason she was selected. Certainly, her personal family matters never disqualified her from serving public office.

(END VIDEO CLIP)

KING: Susan Molinari, that was Tucker Bounds...

MOLINARI: Right.

KING: ... spokesman. Are you concerned about this Trooper Gate story?

MOLINARI: You know I -- I don't know. What I know is what's out there. I believe that Senator McCain and the campaign have gone through the analysis in a conversation with Governor Palin.

You know what, Larry? From what I know, Governor Palin may have acted -- if she did, or her husband or -- this is all about a brother- in-law who threatened her father and tasered her nephew, so, you know, in general, for me, just in terms of what I would do if somebody was threatening and hurting my family, it'd be a lot worse than that. So, you know, there's an investigation that's going on, and she is cooperating. And so, in general, I feel like, you know, let it play out and let's focus on other issues until it's time for us to get the reading of what this commission is saying happened.

KING: Ed Schultz, are you guessing this woman was not vetted...

SCHULTZ: Well, Congresswoman, we're not...

KING: Let me get a question in, Ed. Are you guessing that she was not vetted fully?

SCHULTZ: Well, I think that if the McCain camp did send more people to Alaska tonight, that means they're either not sure or they want to make sure. And we should also throw out there that the governor of Alaska headed up a 527 group to protect Ted Stevens who's now under indictment. So she's not all perfect.

And Congresswoman, you certainly seem to know an awful lot about this trooper for not knowing anything about the situation.

MOLINARI: No, no, no.

SCHULTZ: It would seem to me the last thing -- the last thing the Republicans need right now is more bad news about corruption and abuse of power and cronyism going into a convention.

MOLINARI: Ed -- or maybe somebody...

SCHULTZ: I'm not sure she's going to make it through the convention.

MOLINARI: Or possibly somebody trying to protect their family. We don't know what the situation is right now so why don't we all...

(CROSSTALK)

SCHULTZ: You mean the head of the corrections agency couldn't do that?

KING: All right, one at a time.

MOLINARI: That's all...

SCHULTZ: You mean the department head couldn't do that?

(CROSSTALK)

KING: One at a time.

MOLINARI: You know what, in this country, we wait until the investigation is over.

KING: All right.

MOLINARI: I don't know if that woman is waiting or not because that's what we're supposed to do.

KING: All right. Hold it.

MILLER: Congresswoman, may I just say, I was a fan of yours, you were a great congresswoman from the state of New York even though I'm not on your side of the aisle. Are you telling me this was best judgment? This was the best candidate John McCain could have picked? He couldn't have picked someone else with zero foreign policy experience that wasn't under investigation?

MOLINARI: You know what? I've been very proud of...

MILLER: I mean was this really the best he could do?

MOLINARI: First of all, thank you for the compliment. I...

MILLER: I think you would have been a much better choice. I would have been on here tonight...

(CROSSTALK)

MOLINARI: Don't try to take the edge off me here. Thank you. I'm very proud of what Senator McCain did in terms of finding somebody like Governor Palin, who has been a leader in the state of Alaska. She has taken on corruption. She is a reformer. She is a mother. She is a wife. She gives us an opportunity to continue to make history. And I am very proud, and you know what...

MILLER: Congresswoman, she's a reformer? She's under investigation and she's only been governor for 20 months.

SCHULTZ: Congresswoman, she has zero experience on foreign relations.

MOLINARI: No, OK. You know what?

SANCHEZ: Larry, Larry...

KING: Leslie? Leslie?

SANCHEZ: I mean this is like beat up on congresswoman day.

KING: Leslie?

MOLINARI: Come on, Leslie, chip in here.

SANCHEZ: She could take care of herself, let me just say that right now. You know, I'm fan.

But let's put this experience issue to rest already. I mean I heard Barack Obama today say, he was trying to compare his operation, his campaign operation to that of her as managing -- as a mayor.

Let's be realistic, she manages, according to the Alaska Office of OMB, 18 different departments, a $16.6 billion budget, over 25,000 employees. She is a true executive in the sense she has more experience than all three candidates at the top of the ticket.

KING: So are you -- are you -- all right, just so we understand, Leslie, are you saying -- are you saying therefore that she was absolutely the best person to pick to be the next president, should something happen to Senator McCain?

SANCHEZ: I think she is a brilliant choice. And the reason...

KING: Was she the best...

SANCHEZ: No, I did...

KING: Was she the -- she was better than, say, Kay Bailey Hutchinson?

SANCHEZ: I think she is exactly the right choice. We needed somebody...

KING: Was she better than Kay Bailey Hutchinson?

SANCHEZ: I was going to answer it again. She is exactly the right choice. We needed a choice that mobilized and excited the base. We need...

KING: So, in other words, Leslie, if you had been asked -- if you had been asked, Kay Bailey Hutchinson or the governor of Alaska, you would have said, absolutely the governor of Alaska.

SANCHEZ: I think Kay Bailey Hutchinson is a great governor of Texas, so, you know, I'm thinking about other aspirations for her. But I think right now...

KING: But you wouldn't have recommended her for vice president?

MILLER: Leslie, let me ask you something.

SANCHEZ: This isn't about Senator Hutchison.

KING: OK.

MILLER: So if you think...

SANCHEZ: This is about...

MILLER: Leslie, let me ask you something. So if you think she's such a great choice and she has more experience than all the other candidates combined, then you're looking forward to seeing her debate Joe Biden on foreign policy on this?

SANCHEZ: You know, I really am. I think that's excellent because where does it put -- look at where those positions...

MILLER: Me, too. I'll buy the popcorn.

SANCHEZ: I think -- I'm happy to sit there with you because what does it do... MILLER: OK.

SANCHEZ: ... it forces him to talk about -- what is he going to talk about, foreign affairs, national security, history, that's great.

SCHULTZ: Yes.

(CROSSTALK)

SANCHEZ: (INAUDIBLE), guys. Just one second. For every strength it exposes a weakness. And the weakness is the top of their ticket, the fact that Barack Obama is so weak in the area of national security that John McCain has more experience than the both of them.

Let's take...

SCHULTZ: Well, you know what I think?

(CROSSTALK)

KING: Ed -- we haven't heard from Ed in a minute. Ed?

SCHULTZ: I don't think Governor Palin could get 40 million viewers on TV. So - she's got to raise the bar when it comes to interest. Half the country doesn't even know who she is.

And, Larry, I want to announce tonight that most liberals think that we have absolutely the best vice-presidential pick in Joe Biden. Experience does count. And the fact is, look, it's unfortunate that there is maybe an unwanted pregnancy of a teenager.

That's not the issue. The issue is the Republicans have made themselves out to be the party of values and have talked down to Democrats saying that we're Godless, that we have no values.

They put both value signs up in yards in South Dakota to defeat Tom Daschle. This is their signature issue. And now, when this comes along and it doesn't really fit too well, oh we can't talk about it anymore. Come on.

SANCHEZ: That's not...

SCHULTZ: The facts are this. What kind of mother is she? Is she prepared to be the vice president? Is she going to be totally focused on the issues.

MOLINARI: Wow. You got to be...

SANCHEZ: Whoa, whoa, whoa.

SCHULTZ: There are questions.

MOLINARI: I bet you don't have a lot of women listeners there, do you? If you do, you're not going to have them tomorrow after...

SCHULTZ: Actually, today on my show, I took only phone calls... MOLINARI: Oh my gosh.

SANCHEZ: Wow.

SCHULTZ: from women and they are not happy with them.

MOLINARI: So every -- so every person out there who has an unwanted pregnancy in their family is a result of bad mothering? Wow. That's really bold to say that.

SCHULTZ: Don't tell me she's a role model.

MOLINARI: Come on...

SCHULTZ: You know, most professional gardeners have a really nice yard, you know what I mean?

SANCHEZ: You know what, she's...

SCHULTZ: Most professional gardeners cut their own lawn.

SANCHEZ: No, I'm thinking in all of our families...

SCHULTZ: It seems to me they have trouble in their backyard.

MOLINARI: And you know what, I don't know that they even look at it that way. This is a young daughter who made a mistake, who's going to marry the boy who got her pregnant. They're going to raise this child in a loving family and deal with it just like every family that we would want to think would be able to have that support network.

Things happen...

KING: OK. We're going to bring up...

MOLINARI: ... and we all make the best of a situation and Governor Palin has been a perfect example as to how to do that.

KING: We're going to get an update -- OK. Hold on. We're going to get an update on Gustav and then get back. And our panel will be joining us with more on this debate.

And Kyra Phillips will return, too. Maybe she knows who the father is. Don't go away.

(COMMERCIAL BREAK)

KING: Our political panel will be returning shortly.

Let's check in on Gustav and go to Ali Velshi, who is everywhere today. He was swamped, he was drowned, it looked like.

You were near the eye of the storm, too, weren't you, Ali?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes, very close actually, just before the -- what would have been the eye pass over us. It sort of started to get disorganized, disintegrate, but we got some of the heaviest winds coming over us just before landfall.

Landfall was about 30 miles from here. I'm on Grand Isle, Louisiana. It's a barrier island, a mile wide with the Barataria Bay over there on my right, Gulf of Mexico, about a quarter of mile to my left. And boy, did we get hit all day. It's been about 24 hours since it started, and honestly, Larry, this is the first time that we've not had major winds or rain.

Unfortunately, there's still some people getting it. This island was devastated. When the sun came up this morning, we felt like we were on an island on this house in the Gulf of Mexico. Heavy waves and nothing -- no ground to be seen around us.

We stayed here, Larry -- you know, I'm a business reporter. I was here to do the story of the oil that was shut in around here. We ended up staying in this house. This is a man who owns a shrimp processing factory behind us. And his factory, you can see it right behind us. He wanted to stay here to what happened, to see the damage. He couldn't bear to be away. He hunkered down in this house. He built this specifically to withstand a category 5 hurricane. We stayed with him overnight. I won't know for some time whether that was a smart thing to do or a stupid thing to do. But we did it. And this house kept us alive.

Unfortunately, people are coming back to this island and many places in southern and southeastern Louisiana and they come back to lots of devastation, Larry. We have gotten our first look at it today. There are houses destroyed.

Even if we got away without the worst of it, there are people who will come back and have to rebuild again less than three years or just about three years after Hurricane Katrina did this to them once before. It's tough to watch but it's good to watch the human spirit and how it's played out here, Larry.

KING: Larry, you -- and what can you tell us?

DREW GRIFFIN, CNN NEWS INVESTIGATIVE UNIT CORRESPONDENT: Larry, I'm down in the French Quarter right now. We've been watching the levee system all day, which you know was so devastated during Katrina that led to all the flooding.

Really, I don't think Gustav tested the new improvements on these levees all that much. While all the levees hold, I don't think they really got the test they needed to say, yes, these are going to hold and will work. What it did was give us a chance to see what did work, what didn't work and also gives the Army Corps more time to bring those levees even stronger. It's two years away, three years away until all the improvements are in place. When these hurricanes come through, they're crossing their fingers, hoping they will hold.

There was a little snafu down in Plaquemines Parish, which I just came running in from tonight. That was toppling over a levee that actually they were able to sandbag and stop the seepage and overtopping there.

KING: Thanks, Drew. Drew Griffin.

We'll check in with Chad Myers at the CNN Weather Center.

Did Gustav do what you expected?

CHAD MYERS, CNN METEOROLOGIST: It did. It went south of New Orleans. This was well forecasted. Almost five days ago, Larry, we knew it would be on the Louisiana coast. The cone was all the way from Pensacola, almost to Houston. The cone got smaller and smaller as the days got closer. And this is where it was supposed to be, Morgan City, from New Iberia. This is exactly where it was supposed to make landfall.

The same storm and the same levee that Drew was just talking about, I want to show you the water level near Shell Beach at Plaquemines Parish. This is the zero line. The water in that levee went up to 11 feet. And this evening, it has dropped six feet from there -- kind of a raw-looking graph -- but you get the idea that the pressure is off the levee, the one and only levee that had a potential of failing. At least for now, that potential is over.

KING: One more report from Gary Tuchman.

Where are you and what have you seen today?

GARY TUCHMAN, CNN NEWS CORRESPONDENT: Larry, right in the middle of Bourbon Street, where if it was typical Labor Day night, it would be jam-packed with revelers. But that has been the most eerie thing, Larry, that the last two days, almost completely empty. We haven't seen any tourists or residents, just emergency people, military officials, police and journalists. I spent the day going all throughout New Orleans, spending time in the French Quarter where there is significant damage, lampposts, power lines, signs, windows.

And I went to the Lower Ninth Ward, which everyone will remember was the most devastated neighborhood here in New Orleans. Many parts of the Lower Ninth Ward are still damaged and devastated from three years ago. We did see some flooding in the Lower Ninth Ward. We saw a flood wall with water gushing through the bottom, gushing through the middle, coming over the top. But it wasn't destroyed There was some limited flooding but nothing like Hurricane Katrina.

KING: Thanks, Gary.

We were in the Ninth Ward with Brad Pitt about a year ago. Amazing place.

The Palin debate rages on when "LARRY KING LIVE" returns.

(COMMERCIAL BREAK)

KING: We're back with our panel. We'll start again with Kyra Phillips, the co-anchor from the "NEWSROOM," who is in Anchorage.

KING: If the investigation, Kyra, were to conclude that the governor did abuse her power, what would happen to her? KRYA PHILLIPS, CNN NEWS CORERSPONDENT: That's the big question right now. If indeed it's proven true somehow the governor used her power to try and influence the commissioner to fire her former brother-in-law, I mean, it could be -- it could have just a wave of effect on her credibility, on whether John McCain's going to want to keep her as his vice-presidential running mate. It will say a lot about her decision making, her ethics.

This is a woman who stands tall with regard to family values, to challenging her own party. She's been very vocal about holding corrupt lawmakers accountable. It could add to a lot of questions about her character.

As you know, John McCain, his camp, said they were aware what was happening with regard to trooper-gate. And she still came out as his vice-presidential running mate.

Was she hiding more? Is there more to the story? Is there more to this investigation? I had a chance to talk to the lead investigator on this and he said, you know what, we're coming across new evidence as of today. I'm now just getting through more electronic evidence. Apparently, there are e-mails that surfaced between one of her aides and this lieutenant at the department where the troopers are.

KING: You keep on doing what you're doing, Kyra. You're doing a great job. Kyra Phillips in Anchorage.

Leslie Sanchez, it's fair to ask this, are you at all a bit concerned about this?

LESLIE SANCHEZ, GOP STRATEGISTS: No. I think I am taking the McCain camp in the word in the sense that they vetted her. They understand this process. Anybody who will be vetted for a vice- presidential role will be screened thoroughly. They felt comfortable with the information they had to move forward. Everything is conjecture until you know what comes of this. You don't know if it was rogue individual acting independently. There's so many things we don't know. Until that investigation is complete, it's conjecture at this point.

KING: Ed Schultz...

ED SHULTZ, TALK RADIO HOST: Why in the world...

KING: Where does all this -- does McCain have a prop? I mean, where does all this go? You know the media now. they're all over Anchorage, right? "National Enquirer" has a base there.

SCHULTZT: Well, Larry, this could be a big problem for John McCain. If they select her, which they have, then obviously they didn't vet very well because the investigation is still going on and there's new evidence out there according to your reporter, Kyra Phillips. I'm not sure she will make the cut because John McCain has to present, not problems, but solutions to the country. If there is any ethical behavior that comes under question, it will not look good. I don't want to take anything away from Governor Palin. You don't become governor unless you do some things. Give the woman some credit professionally. But is she experienced enough to be vice president of the United States? I personally don't think so. I think a lot of Americans will render judgment on her unethical behavior, if it comes out in the investigation, her experience, how she does in the debate.

Let me tell you something. This is not good for John McCain if this investigation continues on because that means we're going to be talking about it tomorrow.

KING: Susan, are you concerned? Concerned is the word?

SUSAN MOLINARI, FORMER U.S. REPRESENTATIVE: Of course, we're always concerned. This is a woman who has built her reputation, who gave up jobs in Alaska because of her insistence of doing the right thing, in being the reformer and challenging the Republican Party. She has been a hair shirt to a lot of Republicans in Alaska because of the type of ethics she insists in proceeding. Of course there's an investigation, but are we concerned? Do think that, based on everything I know about her, how she has built her reputation -- I agree with Leslie, it looks like right now, Senator McCain probably did the right vetting. I'm excited about having a woman leader lead our ticket.

KING: Susan -- Susan, wasn't Governor Spitzer of New York famous for busting up big companies and taking on big government. Isn't he?

MOLINARI: You know what? I mean, look, that's...

KING: So it can happen to -- anyone can be hit by anything, correct?

MOLINARI: Of course, Larry, but, you know what? Right now...

KING: That's why I would ask are you concerned? That's the only reason I asked are you concerned.

MOLINARI: Yes, I'm concerned. Anybody has an investigation, you're going to be concerned. At the same time, if it looks like everything in your persona and your personality points to the fact that you want to do the right thing -- again, I am very excited to sit here right now with Senator McCain nominating a very credible candidate, female to be vice president of the United states, who has done amazing things on energy exploration. And is...

(CROSSTALK)

SCHULTZ: What difference does it make if she's a female? It's experience.

SANCHEZ: All due respect, Susan, Larry, here's what I think. I think that we may actually be in a "Saturday Night Live" sketch. I think there's a reason the governor looks like Tina Fey. We keep having these weekend update breaking reports from Kyra Phillips. I think she may step out before the end of the show, is what I'm thinking. If there is any more evidence compiled, I think we're talking Susan Molinari for vice president. That's what I think.

KING: By the way, Barack Obama reacted to the news today. He's what he had to say.

BVC

SEN. BARACK OBAMA, (D), PRESIDENTIAL CANDIDATE: I have said before and I will repeat again, I think people's families are off- limits and people's children are especially off-limits. This shouldn't be part of our politics. It has no relevance to Governor Palin's performance as a governor or her potential performance as a vice president. And so I would strongly urge people to back off these kinds of stories. You know, my mother had me when she was 18. How family deals with issues and teenage children, that shouldn't be the topic of our politics. I hope that anybody who's supporting me understands that's off-limits.

EVC

KING: Ed Schultz, why don't you listen to what your standard bearer has to say?

SCHULTZ: Larry, I don't agree with Barack on everything. I do agree with the fact that he's taken the political high ground. That's safe territory for him on this. He has been consistent to keep his campaign on the high ground. We talked about that numerous times. But the Republicans continue to try to signature themselves as the party of the moral high ground and the party of values. Quite honestly, as a Democrat, I'm getting sick of the Ted Haggard story. I'm getting sick of the Mark Foley story. I'm getting sick of the Senator Vitter hitting on hookers down in New Orleans.

You know, Republicans are just like Democrats. We're all this big family. Nobody has a lock on the market of family values. So Republicans, just stop it!

STEPHANIE MILLER, TALK RADIO HOST: See, Larry, that's the thing. Barack Obama is for the high road and radio hosts, like Ed and I, work for the low road. I'm the one that should say...

(CROSSTALK)

MILLER: I'm the one that should say, Susan, it's a good thing she's in the NRA because it's going to be a shotgun wedding. I'm the one to do that.

KING: We'll come back with Susan and Leslie and Stephanie and Ed and more of our happy little group right after this.

(COMMERCIAL BREAK)

KING: Susan, a senior producer has a good question. Susan Molinari, how does Senator McCain deal with this in his speech on Thursday? MOLINARI: That's a good question. I think he just talks about how proud he is to be making history for the Republican Party and for this nation. You know what, I'm really proud of the fact that Senator McCain knew this issue was going to come up and he chose to continue to suggest Governor Palin should be his running mate. I think this says a lot about this man.

KING: He should refer it to in your opinion?

MOLINARI: I don't know. I don't know if he refers to it or if she does. I don't know that -- you know what, if we all agree, as Barack Obama said so well, that we should leave these family issues off the table, I think enough said. I think she stands -- there's enough great things to say about her and what she has done and what she will bring to this country as his running mate and as vice president and with regard to making history, that I don't know that it's necessary. We all obviously know it's out there. It's a story we're going to talk about and we're going to follow. I think there's so many other great things Senator McCain can say that this woman brings to the national stage.

KING: Ed Schultz, what do you think?

SCHULTZ: Well, I think Senator McCain will have to try to turn this into a positive. I don't think, after ten years of talking about family values, that the Republicans, at this particular convention, are going to be able to run from it. They will have to reconstruct their position and they will have to probably hit this head on.

Look, if he's going to pick this lady to be the vice president, he can't have a bad convention. He's behind in the polls. He's behind in money. The social conservatives undoubtedly have not been behind John McCain and now they say they are. September is going to be a huge month for John McCain when it comes to raising money or he's not going to win this thing. So half the country doesn't even know who this governor is. There's a lot of things to find out in the next 60 days. I think he ought to talk about it.

KING: Leslie, what do you think?

SANCHEZ: I think a couple of things. I love hearing Ed talk about the conservatives and what they think. I think, with due respect, look at the fact that evangelicals came out in strong force in support of Bristol, that's the daughter's decision to keep this child. They see that as a pro-life effort. They see that as a good decision from a good family and they want to support this family to the extent this is an issue. I do not think it's something that needs to be raised in their speeches.

People are concerned about where this ticket and where this administration is going to take the country. More than anything, they see -- a lot of women and a lot of middle class folks see a lot of themselves in Sarah Palin. And with the respect to that, they want to see is she authentic? Is she real? Does she have common sense? Can she be a good leader? And is she truly a reformer and not somebody who pretends to be. With respect to all of those, it's a strong positive.

KING: Stephanie?

MILLER: Leslie, I still think when you and I watch the Palin- Biden debate, it will be a drinking game and you're going to need a lot of booze.

MOLINARI: I'm from Texas.

MILLER: All I want to say is about the daughter issue, Larry, is what Ed said earlier. This is a party that preached moral values and family values. It's the hypocrisy. It's always the hypocrisy, for somebody who has preached abstinence and no sex ed in schools and gay people can't get married. Let me just say one thing about gay people. They're not having kids out of wedlock.

KING: Good point. Do you think...

SCHULTZ: You know, I think Senator Obama...

KING: Hold on, Ed.

You think he should mention it in his speech?

MILLER: I think he has to take it head on. Talk about ignoring the elephant in the room, literally -- literally, the Republican elephant in this room.

KING: What were you going to say, Ed?

SCHULTZ: I think Senator Obama is helping John McCain and the Republican Party get rid of this issue. How much more of an olive branch do you put out there? He's been very consistent on that. Let's see if it works.

But this investigation, Larry, if there's e-mails out there, there's a track record, and any sign of intimidation or abuse of power or cronyism -- we haven't talked about tonight how she put her former high school buddy, the police chief of the Kenai Police Department in that position that she vacated by firing the guy. This is right out of Karl Rove's playbook. What's the difference between that and the eight prosecutors that were fired?

MILLER: There you go, Ed, cronyism and abuse of power. That will be something totally different than the Bush administration.

KING: Thank you all. We have not heard the last of this. We'll be doing -- every night the rest of this week in this hour, the Democrats responding to the Republican convention.

We thank Ed Schultz, Stephanie Miller, Susan Molinari and Leslie Sanchez.

Next, a storm update, live reports from our correspondents in the field.

(COMMERCIAL BREAK)

BVC

UNIDENTIFIED CORRESPONDENT: What they're telling us is the water is overtopping that levee there and seeping under the levee as well.

UNIDENTIFIED CORRESPONDENT: In the last ten minutes, they went out, boom, boom, boom, little spots in it. We could see transformers crackling in the distance like fireworks.

EVC

KING: Welcome back to the remaining moments of "LARRY KING LIVE" of this special second edition.

Let's go back to Lafayette, Louisiana, and John Zarrella for a wrap-up.

What's the situation there as we head towards the end of night?

JOHN ZARRELLA, CNN NEWS CORERSPONDENT: It's still raining here, drizzling. It ahs been for hour after hour but the winds have died down. Power coming back on, power back here to the hotel. Overall, in south central Louisiana, officials are very pleased. Only minor damage reported at this point. One reported death in Lafayette, a young man who had a tree fall on his house.

Again, Larry, considering what this was shaping up to be just yesterday as a powerful category 3 hurricane coming ashore, the fact that it lost a lot of its punch right before landfall -- everybody we talked to here, people staying in the hotels, city officials saying, boy, we knew we could handle a 1 or 2 but we were really, really worried had this come ashore as a 3. We might be seeing a whole different story unfold in southern Louisiana, Larry, if that had happened.

KING: Thanks, John, outstanding reporting. John Zarrella.

In New Orleans is Dr. Sanjay Gupta.

How well tonight did the hospitals, ambulances, medical services, how well did they equip themselves?

DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT: As compared to three years ago, it's really night and day. Talk about lessons learned from Katrina, we got to see those lessons in action.

First of all, one of the biggest concerns last time, Larry, was late evacuation, waiting to long to evacuate patients who needed to be evacuated. A charity hospital for example, the largest trauma center in this part of the country, they waited too long by everyone's admission. This time, several hospitals, they were taking no chances? Sick patients that needed to be evacuated were evacuated. They had personnel waiting, standing by, lots of supplies.

And simple things as well, Larry. For example, the generators of some hospitals used to be in the basement. Bad idea. As soon as the flooding starts, generators go out. You don't have power. Big problem. Now, they're in watertight rooms. It's totally different. They reinforced the buildings with steel. Instead of ambulances, they have seven-ton trucks to do rescue operations. So there were a lot of changes. I give them a very good grade today, Larry.

KING: You also mentioned that big hospital of three years ago is still not open, right?

GUPTA: That's right. Charity hospital is still closed. My understanding is, talking to some people there, because of all the water damage, that building can never be opened again as a hospital. It's been condemned from a hospital standpoint. It's a beautiful art deco building, and very recognizable for people who live in this part of the country. It may get opened as something else. Architects are looking into it. A real loss. It served so many indigent people in this part of the country. It took care of so much trauma. So many doctors around the world today, Larry, were trained there. A huge loss.

KING: Thanks, Sanjay.

With us on the phone is Aspen, a CNN associate producer. She is in St. James Parish, about 45 miles southwest of New Orleans.

What were you doing there, Aspen?

CALLER: Hi there, Larry. I was on vacation, believe it or not. I had a few days off and bought a ticket a few days before I realized the storm was coming. I came home to visit my family who lives here. I tell you, they sat in this home through Hurricane Katrina and Andrew. They say this is the worst they've gotten with the winds. They're OK. We lost our power and then we lost our cable and Internet and the lights went. That's when we started to panic a little bit because the winds completely surrounded the home. Once the winds went away, we went out and took a ride around to survey the area. There are blown transformers in the road, gas stations completely destroyed, the local courthouse completely destroyed. Severe damage to the post office down the street. There were homes crushed by trees uprooted. Trees were laying on top of cars. We really felt lucky we made it with minor damage.

KING: Why didn't they leave?

CALLER: My family sat in this home through Katrina and Rita and in the 1960s, six of the people in the home lived through Betsy as well. They didn't leave for that. My dad's younger brother flew away in the wind in Betsy and they had to grab him and bring him back down. They still didn't leave. In California, you don't leave for every earthquake and every major snowstorm and down here we don't leave for every major hurricane.

KING: What's the power situation there now?

CALLER: There is no power, no lights or cable or landlines. No amenity. Can you imagine being here in the summer in Louisiana with no air-conditioning, it's not fun.

KING: When do you head back? Do you go to Atlanta?

CALLER: I'm going back to New York. I have a flight booked tomorrow evening if they're flying out. If not, I will catch a flight some kind of way to get back up there.

KING: thanks, Aspen, good job.

CALLER: Thanks, Larry.

CALLER: Aspen Steed (ph), CNN associate producer in Louisiana.

KING: Should the Republicans have altered the convention because of the hurricane? That's our "Quick Vote" question of the night. Go to CNN.com/larryking right now and give us your answer.

We'll be back tomorrow at midnight eastern, 9:00 pacific. Jesse Ventura will be here along with Democrats who will weigh in on the Republican convention. Looks like they will be up and running in St. Paul.

Stay tuned to CNN for all the latest on the political and hurricane news. For all of our crew, good night.