Return to Transcripts main page

CNN Live At Daybreak

Katrina Fraud?; GM Meltdown?; Pope's New Clothes

Aired November 22, 2005 - 05:29   ET

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

ANNOUNCER: From the Time Warner Center in New York, this is DAYBREAK with Carol Costello.
CAROL COSTELLO, CNN ANCHOR: And good morning to you. Thank you for waking up with us.

Coming up in the next 30 minutes, millions of dollars from FEMA and the Red Cross went to the so-called hurricane victims in Jackson, Mississippi, but it might have been a case of fraud. We'll take a look.

And General Motors making massive cuts, 30,000 workers will be out of a job. We'll bring you more on this story ahead.

But first, let's go straight to the Forecast Center and Jacqui Jeras. She has the latest on stormy weather brewing in the northeast.

Good morning.

JACQUI JERAS, CNN METEOROLOGIST: Good morning, Carol.

(WEATHER REPORT)

COSTELLO: So be careful out there if you drive anywhere.

Thank you -- Jacqui.

JERAS: Yes.

COSTELLO: "Now in the News."

Congressman Tom DeLay will be back in court this morning in Austin, Texas, this time with a new judge. DeLay's attorney is trying to get the conspiracy and money laundering charges against DeLay thrown out.

Riding it to the top. Lynne Cheney, the Vice President's wife, will place the top ornament on the National Christmas Tree this morning. She'll use a hydraulic lift to get to the top.

Ukraine marks the first anniversary of the mass demonstrations known as the Orange Revolution. The protest over a rigged election resulted in the installation of Viktor Yushchenko as President.

And our continuing coverage of the aftermath of Hurricane Katrina, indictments could be coming today in a large-scale fraud case. Investigators are looking at what -- looking at people who may have scammed the government out of emergency relief money in the wake of the hurricane.

CNN's Joe Johns has details from Jackson, Mississippi.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Jackson, Mississippi, isn't exactly shoreline. It's a three-hour drive to New Orleans, for example. So, alarm bells started going off after Hurricane Katrina when a slew of people in Jackson put in for and got millions in relief money from FEMA and the Red Cross. If you look around, it just didn't seem like there was enough hurricane damage in Jackson to justify the payout, by one estimate, more than $60 million.

Now the federal prosecutor for these parts is sifting through about 1,000 complaints of alleged fraud from those who said people were scamming the system to get money they were not entitled to. The director of the County Emergency Department claims there's a huge discrepancy between the number of people claiming they're displaced and the number of destroyed homes.

LARRY FISHER, HINDS COUNTY EMERGENCY DIR.: The figure now is closer to 6,100 or 6,200 people who claim that they have been displaced, needed immediate food and sheltering during the storm. I still can't go that high. Twenty- five to 30, I will take into consideration. There's a possibility that I did not see every home in the city of Jackson. But I still would not go but 45 or 50 homes that were considered unlivable.

JOHNS: Make no mistake, there were some Katrina-related problems here. But the storm damage that occurred was much less extensive than on the coast. Most of it the result of power blackouts.

The Red Cross isn't so sure there was as much fraud as some expect.

LAURA HOWE, RED CROSS: We know that Jackson was a hub for evacuees. So, we know that we had a lot of evacuees that came in from south Mississippi. We know we had evacuees who relocated there from Louisiana. So, it's very possible that a lot of the assistance we gave out in the Jackson area was to people who relocated there from other parts of the country because of the hurricane.

JOHNS: There has not been a firm accounting yet. But there are a lot of anecdotes, including nagging reports that some people here got relief checks and went on spending sprees, not for the necessities of life, but for things like electronics and jewelry, as first reported by "The New York Times."

The U.S. attorney's office, which has been monitoring a 1-800- fraud-complaint hotline, says there could be an announcement of some indictments as early as Tuesday. They hope vigorous investigation will serve as a deterrent. The officials we talked to said there was no mechanism in place to monitor an emergency assistance program of this magnitude.

(END VIDEOTAPE)

COSTELLO: That was CNN's Joe Johns reporting.

It looks like people displaced by Hurricane Katrina will have a little more time to find a place to live. FEMA has extended their hotel stays by two weeks. The agency originally said December 1 would be moving day for around 53,000 people still living in FEMA-funded hotel rooms. Those people who are still living in Louisiana and Mississippi have until January 7.

More money is coming for flood insurance claims. President Bush signed a bill allowing more borrowing to pay for the claims from Hurricane Katrina and other disasters. The cap jumps from $3.5 billion to $18.5 billion.

Listen up all of you Elvis fans, you can have a taste of the King this holiday season. We'll explain after the break.

But first, here's a look at what else is making news this Tuesday.

(COMMERCIAL BREAK)

COSTELLO: Bob Woodward says he should have fessed up in the CIA operative probe but wanted to avoid being subpoenaed. Lewis "Scooter" Libby, Vice President Cheney's ex-Chief of Staff, was indicted last month on charges related to revealing the identity of Valerie Plame. Woodward learned her name back in June of 2003.

He talked last night with our Larry King.

(BEGIN VIDEO CLIP)

BOB WOODWARD, "WASHINGTON POST": The day of the indictment, I read the charges against Libby and looked at the press conference by the special counsel and he said the first disclosure of all of this was on June 23, 2003 by Scooter Libby, the Vice President's Chief of Staff, to "New York Times" reporter Judy Miller.

I went, whoa, because I knew I had learned about this in mid- June, a week, 10 days before. So then I say something is up. There's a piece that the special counsel does not have in all of this.

LARRY KING, CNN HOST: Did the source indicate whether Mrs. Plame was an undercover agent or a desk analyst?

WOODWARD: Good question. And specifically said that, the source did, that she was a WMD, weapons of mass destruction, analyst.

Now, I've been covering the CIA for over three decades, and analysts, except, in fact, I don't even know of a case, maybe there are cases, but they're not undercover. They are people who take other information and analyze it.

And so -- and if you were there at this moment in mid-June when this was said, there was no suggestion that it was sensitive, that it was secret. That...

KING: How did it even come up?

WOODWARD: Came up because I asked about Joe Wilson.

(END VIDEO CLIP)

COSTELLO: Woodward did not tell his editors at "The Washington Post" until after Scooter Libby was indicted.

Your news, money, weather and sports. It's 5:41 Eastern. Here's what's all new this morning.

Prosecutors say a 14-year-old Pennsylvania girl watched as her boyfriend shot her father and then she willingly fled the scene with him. According to court papers, the plan was to get away as far as possible and then get married. Eighteen-year-old David Ludwig has been charged with killing both of Kara Borden's parents. Ludwig and Borden were eventually found in Indiana.

Chicago's O'Hare International Airport is set to get $337 million in federal funds for a planned expansion. Transportation Secretary Norman Mineta pledged the money to help reduce flight delays at one of the nation's busiest airports.

In money news, gamers are all revved up. Microsoft's new Xbox 360 video game consoles debuted at midnight. Some people began camping out at noon for the games. There's a $300 model or a $400 one.

In culture, coffee lovers can brew a cup of the King this holiday season. Elvis Presley Enterprises is coming out with a four limited -- four limited edition holiday coffees. They are called Santa Baby, Blue Christmas, Love Me Tender and Silent Night, which is the decaf version.

In sports, it looks like the season is over for Philadelphia Eagles quarterback Donovan McNabb. He's having surgery for that hernia and he is expected to miss the remaining six games of the season.

Also in sports, the door to baseball's Hall of Fame will remain closed for Pete Rose. His name will not be on the baseball writers' ballot in his final year of eligibility. Rose is baseball's all-time hits leader. So he will never get into the Baseball Hall of Fame -- Jacqui.

JERAS: Well. I'm still laughing about that Silent Night decaf.

COSTELLO: I know, that was pretty good, wasn't it?

JERAS: Awesome. I love that. No decaf for me this morning. I bet a nice warm cup of coffee or something like that would taste lovely across the northeast today as it's getting windy and cool.

(WEATHER REPORT) COSTELLO: Thank you, Jacqui.

Still to come on DAYBREAK, General Motors is handing out 30,000 pink slips and closing or downsizing 12 plants. A look at what went wrong just ahead.

(COMMERCIAL BREAK)

COSTELLO: Time for a little "Business Buzz."

If Thursday is Thanksgiving, then you know what Friday is, Black Friday, one of the biggest shopping days of the year. And now Wal- Mart says it will match any price advertised by its competitors if it has the same item in stock.

And if you need help finding a Wal-Mart, we doubt you would though, but Google says it has what you need. Today it is unveiling an addition to its Froogle shopping site. The new feature will make it easier for you to find stores selling specific items in any zip code you want.

And if you want to give a gift card for the year-end holiday, how about this, it's a personalized smartOne Visa gift card from the First National Bank in Omaha. It's online at www.firstnational.com/gift. And you know let's get to the punch line here. You can actually put a picture of you on the gift card or your kid just so your loved ones know exactly who that's from.

Slumping sales and increased competition led to the drastic announcement at General Motors, 30,000 jobs will be cut. But can the planned job cuts and plant closings save the American icon?

CNN's Ali Velshi takes a look.

(BEGIN VIDEOTAPE)

ALI VELSHI, CNN CORRESPONDENT (voice-over): General Motors has been the world's biggest carmaker since 1931. In 1955, it became the first American company to make over $1 billion a year and it was all built on relentless demand for cars. Cars for the masses were first built in America about 100 years ago and Americans haven't stopped buying them since.

The thing is, they just don't buy as many from GM any more or from Ford. And GM and Ford's losses seem to be Toyota's gain. In fact, once the restructuring is done, GM will build a million fewer cars a year, allowing Toyota to take the lead and become the world's biggest carmaker.

MICHAEL QUINCY, CONSUMER REPORTS: There is less of that stigma about I don't want to buy foreign, I only want to buy American. I think Toyota had the right cars at the right time. Since even the 1970's when fuel prices were high and the oil embargo, they built small, fuel-efficient cars that people flocked to buy.

VELSHI: U.S. carmakers got into a price war five years ago to overcome the sagging sales. Then they introduced lower than bank interest financing, then zero interest financing. Now they tell you they'll sell you a car for the same price that employees pay. None of it worked. GM and Ford now have the smallest share of the U.S. car market ever. Meanwhile, Toyota, Honda and others swooped in and won American drivers over with their quality, value and their styling.

But for GM, it's more than just sales, it's costs. GM's biggest parts supplier, Delphi, recently filed for bankruptcy. GM used to own Delphi and may have to cover some of Delphi's health care expenses. That could cost GM billions. GM's own health care costs will amount to $5.8 billion this year. GM has already lost $4 billion this year. Some people on Wall Street think the carmaker itself could go bankrupt.

Now it's not all bad, American pickup truck sales have been solid. You might say "like a rock." GM's Chevy Silverado is the second best selling vehicle in the United States. The best selling vehicle is Ford's F-Series pickup. But, the best selling car in the United States, the Toyota Camry.

Toyota knows that as early as next year it could earn the title of world's biggest carmaker. And they are worried that in the world's biggest car market that may trigger a backlash, especially given how many American autoworkers have been laid off. So Toyota has embarked on an ad campaign touting the 190,000 U.S. auto jobs that it's created.

Ali Velshi, CNN, New York.

(END VIDEOTAPE)

COSTELLO: GM's cuts will hit many communities pretty hard. Auto assembly plants in Oklahoma City; Lansing, Michigan and Doraville, Georgia will be shuttered altogether. Parts facilities in some other cities will begin shutting down in 2007.

Well, let's talk about the holiday season, although it's very hard after that story. In the next hour of DAYBREAK, we'll bring you some tips on keeping your shape all the way through the New Year celebrations. You know, as in shape.

Stay tuned.

(COMMERCIAL BREAK)

COSTELLO: You know everybody is packing up for Thanksgiving and they're really busy and stressed, so it is time to laugh.

JERAS: Sounds good.

COSTELLO: Sounds good.

Jay Leno, he's going to make us laugh. He talks about the most wanted man in Iraq, Thanksgiving and that incident with Nike's corporate jet, and he puts them altogether. Listen.

(BEGIN VIDEO CLIP)

JAY LENO, "THE TONIGHT SHOW": Bad news for the terrorist Abu Musab al-Zarqawi. I said his name right, actually. Did you hear about this? His family has disowned him. They said they have severed all ties with him. And his other family members said if they ever see him, they will kill him. Well that will put a damper on this week's Thanksgiving dinner, huh?

A Nike jet carrying the CEO of the company had a bit of a scare when they couldn't get one of the wheels down. This was all over cable TV about two hours. Eventually, they got it fixed and the plane landed safely. Nike blamed the problem on an 8-year-old Filipino boy named Pongo (ph) who did the maintenance on the plane.

(LAUGHTER)

(END VIDEO CLIP)

JERAS: Yikes.

COSTELLO: That's how he put it all together, much more clever than I.

JERAS: Yes.

COSTELLO: Let's move along now, shall we, to our DAYBREAK "Eye Opener."

Sweden fittingly played host to this year's annual Santa Games. Santas from all over took part in reindeer races, in chimney climbing competitions. They even bellied up for a porridge eating contest.

JERAS: I didn't realize Santa trained.

COSTELLO: Well, I didn't either, but now you know.

JERAS: All right.

COSTELLO: The Kris Kringle from Estonia, by the way, was crowned as the all-around Santa champ. Congrats.

The reigning king of eating kept his own crown at the Hamburger Championship. Takeru Kobayashi downed 67 little square burgers at the Krystal's World Championship. Along with a case of heartburn, Kobayashi walked away with $10,000.

JERAS: There's not a lot that grosses me out, but eating contests, yes.

COSTELLO: Yes, me too.

China is looking for a perfect pair of paramours. Did I mention that the paramours are pandas? China is letting 11 pandas get to know each other, you know get to know each other, in the hopes that two of them will find the other irresistible. The happy couple will then be whisked off for a permanent honeymoon in Taiwan. That's a sexy pose. JERAS: Yes. They're just so cute.

COSTELLO: I know. They are. It's like panda...

JERAS: We've had a lot of panda action on this show lately.

COSTELLO: I know, because you can't go wrong with a panda story, Jacqui, it's a rule of news.

JERAS: You really can't.

COSTELLO: Now for a quick follow up on a story we told you about yesterday. Tickets to see the National Zoo's panda cub went back (ph). Yes, another panda story, Jacqui. Get this, though, 13,000 tickets were given away for free, 13,000 of them free.

JERAS: Wow that's a lot.

COSTELLO: I know. But now they're showing up on eBay for 500 bucks.

JERAS: Really?

COSTELLO: Five hundred bucks for a free ticket.

JERAS: Well, yes.

COSTELLO: And I bet some people will pay.

JERAS: It'll make you smile.

COSTELLO: I bet some people will pay, though. That's just pathetic.

JERAS: Probably.

COSTELLO: OK, let's go from pandas to Prada, you know, shoes.

JERAS: OK.

COSTELLO: The designer shoes are a must-have for the well heeled and a favorite of celebrities. But now one celeb in particular is causing a stir over his slip-ons.

CNN's Jeanne Moos has more.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Never has papal footwear had this kind of scrutiny.

UNIDENTIFIED FEMALE: They look fairly pricey and upscale.

MOOS: If, according to a recent best seller, "The Devil Wears Prada," why not the pope?

(on camera): The pope wears Prada.

UNIDENTIFIED FEMALE: Let me see that.

UNIDENTIFIED FEMALE: The pope wears Prada. I don't wear Prada.

UNIDENTIFIED FEMALE: Oh my!

MOOS (voice-over): And it's not just the shoes.

(on camera): These are supposed to be Gucci.

(voice-over): Gucci sunglasses?

UNIDENTIFIED FEMALE: Holy mackerel!

MOOS (voice-over): The operative word is "holy." But some who report on religion don't buy it.

DELIA GALLAGHER, CNN FAITH & VALUES CORRESPONDENT: What I'm saying is if he does wear Prada, he doesn't know he's wearing Prada. He doesn't know what sort of glasses he's got on. He can barely find his glasses, probably.

MOOS: CNN's faith and values correspondent says Pope Benedict is a 78-year-old intellectual. He's reading scholarly books, not Italian vogue. Nevertheless, from European newspapers to a Catholic publication to "Newsweek," Pope Benedict's fashion sense is under the microscope. We haven't seen this much interest in red shoes since Dorothy tapped hers together.

JUDY GARLAND, ACTRESS, "WIZARD OF OZ": There's no place like home.

MOOS: And there are no shoes like Prada.

UNIDENTIFIED MALE: You know what they say about those?

MOOS (on camera): What?

UNIDENTIFIED MALE: Angles don't wear red shoes.

MOOS (voice-over): Well, actually, it's...

UNIDENTIFIED MALE: You know that angels want to wear my red shoes.

MOOS: We couldn't quite nail down whether Pope Benedict's shoes are absolutely, positively Prada. The company couldn't confirm it.

Other Vatican fashion rumors, likewise unconfirmed, have it that the pope is neglecting the tailor shop that's made papal garments for over 200 years in favor of his own personal tailor. There were stories of a fashion faux pas when the new pope made his debut.

GALLAGHER: His cassock was about that high, you know,...

MOOS (on camera): The hemline of his frock.

GALLAGHER: ... his hemline of the cassock was that high from his ankles.

MOOS (voice-over): Normally it's down here instead of up there. There's also talk about the pope's handsome personal assistant wearing pricey shoes from Tod's.

UNIDENTIFIED FEMALE: And you call him the pope's George Clooney.

MOOS: Next thing you know they'll say that's Fendi fur the pope used as windscreens on his microphones. We're pretty sure the souls the pope wants to save aren't on the bottom of Prada shoes.

(on camera): They say he's a real intellectual and the last thing on his mind would be designers, except for maybe intelligent design.

UNIDENTIFIED FEMALE: Yes.

(LAUGHTER)

MOOS (voice-over): Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

COSTELLO: Oh my.

The next hour of DAYBREAK begins in 60 seconds.

(COMMERCIAL BREAK)

COSTELLO: It is Tuesday, November 22.

A former Marine puts the war in Iraq in the same sentence with Vietnam. This morning, we step away from the professional politicians and hear from some of the men who have served and paid a big price.

Plus, thousands of families will soon be looking for a new source of income. What will General Motors' job cuts mean for middle America?

And she lost her job because she's expecting. The question is, should she have expected that pink slip, too?

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com