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CNN Live Saturday
Iranian President Calls Out US "Hypocrisy"; Mississippi Files Suit With Insurance Companies
Aired September 17, 2005 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: Signs of progress and hope in New Orleans, but there are also signs of challenges ahead.
UNIDENTIFIED MALE: And with many essential services still not restored in the city, we will tell you how business leaders and residents responded to the mayor's plea to come back to the city.
WHITFIELD: Plus property owners caught in the middle of a legal battle. How far should insurance companies go to pay for properties lost to Katrina, even if those items were not covered in homeowner policies.
And what caused a passenger trail to derail? Searching for answers for a mystery on the south side of Chicago.
Good afternoon. I'm Fredricka Whitfield at the CNN center in Atlanta. As we continue our coverage of the aftermath of Hurricane Katrina. This weekend we're focusing on the thousands of children missing since the storm. The names of some of those children are being shown on the left side of your screen along with photos where we have them. We're working with the National Center for Missing and Exploited Children to reunite these kids with their families. If you have any information call 1-800-843-5678. That's 1-800-THE-LOST. We will have a live report coming newspaper a few moments.
First, an update on the Hurricane Katrina recovery operations. The federal official in charge of recovery efforts is warning against efforts to reopen New Orleans too quickly. Vice Admiral Thad Allen is worried about unsanitary conditions and environmental hazards. A short time ago, a federal spokesman talked about those problems.
(BEGIN VIDEO CLIP)
DAVID PASSEY, FEDERAL SPOKESMAN: Risks identified by experts include limited electrical power and severely limited supplies of potable (ph) water and waste water services. The traffic management system, the 911 emergency system and critical medical care are also compromised.
(END VIDEO CLIP)
WHITFIELD: Arson is suspected in a fire that destroyed a small apartment complex in New Orleans today. New Orleans firefighters were assisted by visiting firefighters from Chicago and New York.
Today's federal warnings about moving too quickly in New Orleans are at odd with Mayor Ray Nagin's plans. Nagin hopes to move nearly 200,000 residents back into the city by end of the month. Some business owners were allowed back into the city today to begin preparations for cleanup and reopening.
CNN's Sean Callebs joins us with the latest from the Crescent City. And Sean, they are finding that the obstacles are far greater than they ever expected, right?
SEAN CALLEBS, CNN CORRESPONDENT: Oh, I think so. And indeed, we are right now in the uptown area which virtually connects to the Garden District, two of four areas the mayor wants to open by next Monday, a week from Monday. And we're finding very few business owners are coming back.
Those hurdles that you talked about, simply no drinking water per se, very spotty power in many areas, certainly having an impact on the business owners that we did speak with.
This area is really known for its little neighborhood shops, and really one of the areas that gives New Orleans its unique feel. And we talked to a toy shop owner just down the street a couple of hours ago. And she just went in to get an initial look at her business. But she says it is going to be some time before she's able to come back and open up.
(BEGIN VIDEO CLIP)
BETSY MOUK, NEW ORLEANS RESIDENT: It broke my heart to see that the windows were damaged. But I'm so lucky compared to so many other people that I have a business. Most of my merchandise is here. And We hope we can get back in time to open and have -- it's a toy store, so a successful Christmas season. We depend on that.
(END VIDEO CLIP)
CALLEBS: Yeah. They are really thinking about the long term if they could possibly get up and running in this area, which really wasn't punished by flood waters -- a lot of the damage here was wind, and of course, looters also hit a lot of these small businesses in the days after the storm blew through this area.
But the environmental concerns are huge. We know that officials are talking about the area that is under water. Once it goes down, that toxic soup is pumped back into Lake Pontchartrain. There's going to be some residue left there. And as that muck dries -- it has human waste in it, it has oil, fuel oil, gas, all kinds of things, as that dries, it can blow away and cause all kind of harmful entities to be blown into the atmosphere. So that too is a big concern, even though this area here wasn't flooded.
So, even though the mayor is urging people to come back, federal officials are being very clear, they want all residents, all business owners to think it through very carefully. Because they are not going to have any drinking water for some time to come.
The guess, Fredricka is somewhere between weeks and months before drinking water is safe again, here.
WHITFIELD: All right. Sean Callebs in the uptown section of New Orleans. Thank you.
Well, as we mentioned at the top of the hour CNN, is devoting a lot of its coverage this weekend to the families that have been separated by Hurricane Katrina. Kathleen Koch joins us from the National Center for Missing and Exploited Children in Alexandria -- Kathleen.
KATHLEEN KOCH, CNN CORRESPONDENT: Well Fredricka, this center has been in existence actually since 1984, but the magnitude, and sad to say, the difficulty of their work has simply increased leaps and bounds since Hurricane Katrina. It was roughly two weeks ago that they set up this call center now that's operating from 8:00 a.m. until midnight Eastern. Every single day, they have got 50 volunteers a day. They work two shifts.
And who these people are, these are trained retired law enforcement officers, the best of the best Secret Service, FBI, DEA. And they are -- they are trained in dealing with people in crisis. And these parents and these children certainly are, because, obviously, most of them since the storm hit, they have not been able to pull their families together. And that's making the whole recovery process, putting their lives back together all the more difficult.
What we would like to do right now is share with you a couple of the children who are still missing and on the list. Let's take a look at two adorable sisters from the state of Mississippi. They are Kristi Kennedy, 7-years-old and her sister Kaitlin Hall, 2-years-old. Now the girls were last known to be with their mother, Kasey Cooper in Pearl, Mississippi.
Now, as far as identifying features, 7-year-old Casey (sic) she has brown hair, blue eyes. She is about 4' tall, weighs 70 pounds. And --Kristi I should say -- and Kristi has a scar under her left eye.
When you take a look at Kaitlin Hall. Kaitlin has a tattoo of a dalmatian on her ankle.
Now, let's go to a young man who is from Louisiana. He has been found. But he is desperately trying to get in touch with his grand parents. And that is Joe Mard. He's He's 15-years-old. And he lost track of his grandparents somewhere in New Orleans after the storm hit.
The information that the center has is that he safe. He is with his uncle in Chattanooga, Tennessee, right now. And the grandparents names he's looking for are Shirley and Joseph Dominick. Again, last seen in New Orleans.
So Fredricka they are continuing their very hard work here. Some 2,060 children still missing. But they have been able, luckily, to create some 836 reunions. So, we are hope that if people will call the number, 1-800-THE-LOST if they have any information on any of these children, we can make that number go up. WHITFIELD: And Kathleen, what are the special measures that they are taking for the children who are not able to articulate what their names are, their parents names, or any information at all, they are just too young.
KOCH: Well Fredricka, then they are putting on the Web site simply anything that they know: what the child is wearing, what they were wearing when they were found, where the child was found, any distinguishing features as with these sisters: a tattoo, a scar. Obviously they can weigh the children, they can put that on the Web site. But a lot of those other pieces of information that an older child can give you, their name, where they live, their parents name, obviously that information is not there. But they are doing the best they can.
WHITFIELD: All right. Kathleen Koch thank you very much from Alexandria.
Well, still the controversy over the government's initial response to Hurricane Katrina is peculating. And yet now another argument is starting to brew: How much should the government spend to rebuild the Gulf Coast? And where will all that money come from?
CNN White House correspondent Suzanne Malveaux joins us from the White House with more on that -- Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Fred, it's estimated that it's going to actually cost about $200 billion. The recovery effort that President Bush is talking about, although he has not officially put a price tag on it. Of course, that caused a lot of debate here in Washington. How is it going to be paid for. Whether that will mean tax increases or not. President Bush has insisted that the tax cuts will remain permanent. He is not willing to give that up. He is making his case before the American people. Did he so yesterday. He did so today in his radio address.
He talked about a number of specifics. The Gulf opportunity zones, the go zones. Those are tax credits for businesses. He also talked about the homesteading act to provide free land to low income families to help them rebuild their homes. And he talked about these recovery accounts to allow grants for education, for childcare and things like that.
The president in his radio address talked about having faith in his recovery effort and he also talked about his pledge to the nation.
(BEGIN AUDIO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The recovery of the Gulf Coast region will be one of the largest reconstruction efforts the world has ever seen. And I have made a pledge of the American people, throughout the area hit by the hurricane will help our citizens rebuild the communities and their lives.
(END AUDIO CLIP) MALVEAUX: Now, White House economic adviser Al Hubert said, in fact, it is going to cost the taxpayers money here, federal dollars. We are talking about a federal deficit that is largely going to increase. That deficit now at about $314 billion for the 2006 budget. Perhaps ballooning by $200 billion. Fiscal conservatives, Republicans, say that they want to see the president slash spending and they have specific ideas as to how.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN, (R) ARIZONA: We are going to end up with the highest deficit probably in the history of this country. So we need to find ways to efficiencies. One of the ideas that we're kicking around, is to take the $25 billion that was added in highway pork some way and help that, eliminate that -- put that towards paying off the disaster relief efforts in the Gulf states.
(END VIDEO CLIP)
MALVEAUX: Now, Fred, how all of this is going to work really up in the air here. There's going to be a lot of debate in Congress over what needs to be cut, what needs to be saved. Some really tough choices, obviously, for the administration, and for lawmakers.
Should let you know the 2006 budget that was passed earlier this year by Congress, already 12 of the 23 major government agencies have programs that have been slashed within those agencies -- Fred.
WHITFIELD: All right. Suzanne Malveaux at the White House, thank you.
A look now at other stories making news. At least 76 people were injured and at least one person died when a commuter train derailed this morning on the south side of Chicago. That passenger is quoted as saying she heard brakes squealing before the crash. But the cause of the wreck is not known. Some of the injured are listed in critical condition.
Another deadly car bombing shakes Iraq. At least 30 people were killed in a mostly Shiite neighborhood east of Baghdad. An Iraqi soldier was killed today in a suicide bombing in central Iraq.
And five years after they were stolen in Sweden, two famous works of art have been recovered and four suspects have now been arrested. The announcement was made in Los Angeles where authorities recovered Renoir's "Young Parisian." Information led authorities to Denmark where agents posing as buyers took possession of "Self-portrait" by Rembrandt. The paintings combined value is more than $50 million.
Ophelia heads north, but is New England still threatened by the powerful storm? We'll have an update coming up next.
Also, the legal fight over what insurance companies will have to pay Katrina victims. Law suits are already being filed to force the industry to cover all hurricane losses and may be successful. Both sides of that debate coming up. (COMMERCIAL BREAK)
WHITFIELD: Here is Tropical Storm Ophelia. And then there's the 17th tropical depression out there. Bonnie Schneider is keeping a close eye on all of it.
BONNIE SCHNEIDER, CNN METEOROLOGIST: That's right. We're still watching Ophelia. But luckily this storm is pushing away from the U.S. mainland. The only concern right now is Halifax in Nova Scotia where we may see some tropical storm force winds.
But Ophelia is a storm that's on the move. And it's moving pretty quickly to the northeast at about 21 miles per hour. So, I'm sure soon it will be extra tropical. The track actually takes it well out into some cooler waters as well, where it's likely to lose its strength.
Unfortunately, though, we are still watching other activity in the tropics, like two systems that really show some sign for development in the coming days.
The first is a tropical wave near Puerto Rico. And this one is actually moving towards more favorable environment for development. So, the hurricane hunter aircraft is likely to take a look inside this one tomorrow afternoon. We'll let you know whether or not this becomes tropical depression No. 18.
Now, tropical depression No. 17 has already formed. And this one is way out there near the Windward Islands. But as you can see, the National Hurricane Center in Miami projects this to become a hurricane in the early part of next week. It is moving also into a favorable environment for development. So, we'll be watching this in the coming days and letting you know how tropical depression No. 17 will emerge. Hopefully it won't become too strong, but we are watching it closely. And if it does become a tropical storm, the next name on the list is Philippe.
A quick look at high temperatures for tomorrow. We have got them about 90 degrees in Atlanta, 92 in New Orleans and 72 out on the West Coast in Los Angeles, 102 for Phoenix. Tomorrow it will be hot once again in Dallas and in Houston -- Fredricka.
WHITFIELD: All right. Bonnie, thank you so much.
Joy and pain in Afghanistan: It's supposed to be a historic weekend. But violence is leaving its mark on this election day.
Plus a CNN exclusive, Iran's new president on his country's nuclear ambitions.
(BEGIN VIDEOTAPE)
WHITFIELD: Afghans will begin going to the polls in just five hours. They will elect a parliament and 34 provincial councils. Ahead of the vote, violence. U.S. and Afghan troops say they've arrested 20 militants who tried to blow up a dam in South Central Afghanistan. Thousands of people would have been in the path of the dam's floodwaters had it crumbled.
Three Afghanistan police officers have been shot to death in an ambush by Taliban hold-outs. And even with a heightened military presence on the streets, at least a half dozen candidates for office have been killed in the run up to the vote.
Tensions over Iran's nuclear program played out on the world stage today. Iran's president spoke before the United Nations General Assembly within the last hour. CNN UN correspondent Richard Roth joins us with details on the speech and the implications for the Bush administration -- Richard.
RICHARD ROTH, CNN UN CORRESPONDENT: Fredricka, this was a speech which many people were anticipating, considering all the speeches at this so-called world summit at the UN 60th anniversary. First appearance by Iran's relatively new president. Everybody was listen, including the security guards, one of them just said tough speech. And it was.
It was a blistering attack on the United States as Iran defended its right to obtain all research and use for nuclear energy -- peaceful nuclear energy, insisted Mahmoud Ahmadinejad, Iran's president. He said his country would never possess nuclear weapons. And he criticized the United States strongly for hypocrisy as to why the United States and other nations could maintain an arsenal of nuclear weapons and determine who can get nuclear research and have a nuclear program, even if it's for purely peaceful purposes.
He proposed several initiatives. They sound like they may not be going anywhere.
Earlier, U.S. Secretary of State Condoleezza Rice was on the same stage. She said Iran is a threat to the effectiveness of global nonproliferation. She said when all diplomacy has been exhausted with the Iranians in effect, the Security Council must become involved.
The negotiations, though, are still going to be continuing. The U.S. doesn't appear at this point, Fredricka, to have the votes on the Security Council to impose sanctions, at least at this point.
The U.S. chairs, actually, in the General Assembly Hall were mostly empty in a boycott of the Iranian's remarks -- Fredricka.
WHITFIELD: And how was Condoleezza Rice received? This was her first time before the General Assembly.
ROTH: Well, somewhat modest applause on a Saturday morning. The Iranian got a lot of applause. There's been a lot of attacks on the United States inside the General Assembly Hall, especially in the wake of the Iraq war.
WHITFIELD: Richard Roth at the U.N., thank you so much.
Well, before he spoke to world leaders at the United Nations, Iran's president sat down with CNN's chief international correspondent, Christiane Amanpour. He lashed out against what he called a nuclear apartheid and defended Iran's actions against suspicions the country is pursuing nuclear weapons. Here's a portion of that exclusive interview.
(BEGIN VIDEOTAPE)
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Do you accept at all that the United States, Europe -- they are deeply suspicious about your intentions. They just think that you want to build a bomb. Do you understand that? And why do you want to have this crisis?
PRES. MAHMOUD AHMADINEJAD, IRAN (through translator): Yes. You see, we understand, we know that their intentions are bad intentions, their intentions towards us are bad. When have they ever shown or have had clean, clear pure intentions towards us? We don't have expectations for anything else coming from them.
What rights do they have? What do they want to talk about such issues to us, they need to proceed according to international laws. They cannot say that we don't like the intentions. What we think are the intentions, therefore, we want to prevent you.
AMANPOUR: If you are referred to the Security Council, and if sanctions are imposed on Iran, will you take countermeasures? Already some of your officials have threatened to provoke a rise in oil prices, have potentially threatened to pull out of the NPT. What will you do if sanctions are imposed?
AHMADINEJAD (through translator): I think any intelligent, healthy, smart human being should use every resource in order to maintain his or her freedom and independence.
AMANPOUR: So you could see interfering with oil prices.
AHMADINEJAD (through translator): I doubt that the leaders of the United States and Europe are that far removed from reality. I think they are smarter than denying us this legal right. It is natural -- of course, they will use whatever they have in their hand which is the UN Security Council. And our nation has the means to defend and obtain its own rights. Do not doubt that our people will not lose.
AMANPOUR: It sounds very aggressive what you're saying. It sounds like we're headed for real confrontation.
AHMADINEJAD (through translator): No, it is -- no, we have no such intention. All we're saying is that we will go according to all of the provisions, there are cameras set up here. You are the ones who are saying do not proceed according to what law is being imposed on us. You have come, and you are putting -- you are interfering in our internal affairs against international laws. Who is at fault? Who is being aggressive?
(END VIDEOTAPE)
WHITFIELD: Coming up next, taking insurance companies to court. Can homeowner policies that don't cover flood damage still be forced to pay up?
And so far, there are no major outbreaks of disease, but what potential health problems are lurking in those flood waters? Find out when CNN LIVE SATURDAY continues.
(COMMERCIAL BREAK)
WHITFIELD: Welcome back. I'm Fredricka Whitfield at the CNN center in Atlanta. As we continue our coverage of the aftermath of Hurricane Katrina, this weekend we're focusing on the thousands of children missing since the storm.
The names of some of those children are being shown on the left side of the screen along with photographs where we have them. We are working with the National Center for Missing and Exploited Children to reunite these kids with their families. If you have any information please call 1-800-843-5678. That's 1-800-THE-LOST.
Well, this arrangement is helping to facilitate a lot of reunions. Our Kathleen Koch is at the headquarters in Alexandria, Virginia of the Center for Missing and Exploited Children -- Kathleen?
KOCH: Fredricka, we are so excited to bring you one success story. It's our second one today. Where a CNN viewer recognized some faces, some children, a mother. And with us is the case manager, Phyllis O'Brien, who investigated a case. Phyllis, tell us how it came together.
PHYLLIS O'BRIEN, CENTER FOR MISSING AND EXPLOITED CHILDREN: Well, it was a really good story, Kathleen. The children were reported to us by their aunt. And she had lost contact with her sister and the two children during the hurricane.
KOCH: During the evacuation from New Orleans?
O'BRIEN: Yes. And a family friend saw one of the children's pictures aired on CNN, immediately contacted the family said I know where they are.
KOCH: And so where were they? What happened to them?
O'BRIEN: They were all the way in California. They were evacuated first to a hospital in New Orleans, then to a shelter in Baton Rouge and finally ended up being evacuated to Los Angeles. And so you can understand why the family lost touch with them.
And they were so excited. We did the conference call between the families. And they were -- you know, lots of tears and screams of joy. So it's a really good story. And it shows how important it is to have these photos of the missing children.
KOCH: So, this is wonderful. So, now little Lloyd Smith and Unastasia Smith (ph) and their mother. They are safe in California. Their family knows they are alive. So one more really wonderful success story thanks to the National Center for Missing and Exploited Children. And Fredricka, what more can you say? They are just doing amazing work here.
WHITFIELD: It's good to see that these great efforts from so many people in that office there are certainly bringing about the reunifications that so many people have been hoping and playing for. Thanks so much, Kathleen.
KOCH: You bet.
WHITFIELD: Hurricane victims are busy this weekend filing claims for property damages as well. But many are out of luck. FEMA estimates that 60 percent of homeowners in hurricane zones did not carry flood insurance. And that raises this question, is damage from winds or water? CNN's Allan Chernoff reports from the Mississippi coast now.
(BEGIN VIDEOTAPE)
ALLAN CHERNOFF, CNN FINANCIAL CORRESPONDENT (voice over): Marion Williams insurance adjustor looked at his home's damage and said, it's the result of a flood, not a hurricane.
MARION WILLIAMS, BILOXI RESIDENT: It was driven by the wind. The hurricane is wind, you know, strong winds that blow, it pushed the water in here.
CHERNOFF: Williams has no flood insurance, neither does his neighbor, 82-year-old Bill Veerling, still waiting for his insurance adjuster, Veerling fears he'll also hear the damage came from a flood.
BILL VEERLING, BILOXI RESIDENT: Boloney.
All the way through here, from the beach all the way through diagonally across here, there's evidence, right on down the line, of some low pressure sucking things up. Flood didn't do that.
CHERNOFF: In a lawsuit filed Thursday, Mississippi's attorney general charges insurance companies with illegally trying to get out of paying compensation to Katrina's victims.
UNIDENTIFIED MALE: If we don't get this stopped, what insurance companies are trying to do, it's going to bankrupt the Gulf Coast of Mississippi, Louisiana and parts of Alabama as well.
CHERNOFF (on camera): The insurance companies in their standard policies exclude damage resulting from water, even if that water is driven by wind. The companies say homeowners need to buy separate flood insurance offered by FEMA. But relatively few people in this area bought such insurance because this is not a designated flood zone.
(voice over): Named in the lawsuit are State Farm, Nationwide, All State and other insurers. State Farm said, "The attorney general's actions threatens to undermine the insurance industry's financial stability." Nationwide said it was "deeply disappointed with the attorney general's charges."
All State said, "It's unfortunate that a lawsuit has been filed so early in the recovery process."
The industry's trade groups says the policies are clear.
JEANNE SALVATORE, INSURANCE INFORMATION INSTITUTE: The insurance industry is did not charge premium for flooding, and flooding is not covered under standard homeowner's policy.
CHERNOFF: The Red Cross estimates Katrina damaged more than one- third of the homes along Mississippi's Gulf Coast. Residents like Bill Veerling hope the state's lawsuit will get insurance companies to soften their stance. He said his only other hope is a bailout from the federal government.
Allan Chernoff, CNN, Biloxi, Mississippi.
(END VIDEOTAPE)
WHITFIELD: Well, joining us now to talk about the insurance debacle, industry representative Bob Hartwig. He's chief economist for the Insurance Information Institute. Good to see you. And from Oscar, Mississippi, we have plaintiff's attorney Dick Scruggs. Good to see you, as well.
Well, Mr. Scruggs, well -- hear you, rather, because you're on the phone with us -- Mr. Scruggs, let me begin with you. You know, what is the opening here to try to pursue these insurors who are saying we're not going to cover you because you didn't have flood insurance? Why pursue the flood clause? Or lack therof.
RICHARD SCRUGGS, PLAINTIFF'S ATTORNEY: Here's why. This was not flood Katrina. This was Hurricane Katrina. All of the men and women who have bought these homeowner policies, while they have on one part of the policy an exclusion from water damage, charged an additional premium to the homeowner for hurricane insurance. And what is called a hurricane endorsement.
And every one knows, certainly the insurance industry knows that storm surge, as opposed to a flood, is the principal peril from a hurricane. Everybody who has been watching the Weather Channel for the last 15 years knows that storm surge is the danger here, and that only thing causes storm surge is hurricane.
WHITFIELD: Isn't the argument, as well, if you are living in a place that's vulnerable to flooding, then the onus is on you as a homeowner to have flood insurance, separate flood insurance because it is certainly offered out there?
SCRUGGS: Well, actually it's not offered to anyone above the flood line, because it's federally guaranteed, insurance industry won't take the risk without federal backup.
WHITFIELD: All right. Let me bring in Mr. Hartwig. Is that true, that it's not offered to people who are not within a flood zone?
ROBERT HARTWIG, INSURANCE INFORMATION INSTITUTE: Flood coverage is offered by FEMA, just about to anyone around the country, whether they are in the mountain or a desert. And, in fact, many of these areas are where you see many of the floods that do occur.
Everyone is urged along the Gulf Coast, the Atlantic Coast, the northeast to buy flood coverage whether you live along the coast or in an area that is subject to tidal surge. This is the only way you can have coverage for your homes.
WHITFIELD: Well, Mr. Hartwig since it looks like the federal government is saying about 60 percent of these homeowners whose homes are devastated along the Gulf Coast, no matter which of the states you're talking about, did not have flood insurance, is the insurance industry at this juncture really splitting hairs? That perhaps they should be covering the majority, if not all of these people? And the reason why they are not is because we're looking at such a huge price tag, a $200 billion price tag of damages overall?
HARTWIG: No, absolutely not. What Mr. Scruggs is proposing to do along with the attorney general Hood's suit is basically ignore long standing contract provision which have been approved by the regulators of all the Gulf states. Consequently were they to be successful, and I don't think the case has any merit. But were they to be successful we are looking at enormous increases across the country, not just in Mississippi, but across the country because insurers today collect not one red cent in flood claims.
WHITFIELD: Well, isn't that what is going to happen anyway? After you have a natural disaster like this people experience their insurance rate goss up across the board, because everyone ends up paying for the damage.
HARTWIG: In fact, insurance rates look prospectively. We cannot recoup historical losses through premiums. If the probability of events like Katrina is growing over time, rates can react to that.
WHITFIELD: OK. Mr. Scruggs, we're hearing from Mr. Hartwig. He says there is no merit to the case that you're pursuing. However you are very confident, why?
SCRUGGS: Well, for a number of reasons. The courts in the south, the Gulf states including Florida just last year, the courts of appeals have said -- sided with the homeowners in this very same dispute where the hurricanes devastated Florida.
Now, secondly, let me respond to this. The insurance industry should not be allowed to shift this burden to the taxpayers. They have already diversified long ago this risk into the European markets and around the world. They have very little exposure for American insurance companies to honoring their obligations under their contracts to provide hurricane coverage.
WHITFIELD: All right. HARTWIG: I might comment on that. I don't think Mr. Scruggs is an expert on any insurance industry financial statements. And in fact, we correct collect not a dime in premium related -- for floods. And so in fact, while we do buy reinsurance and these losses are distributed around the world. We're talking about paying $30 to $60 billion to help rebuild and recover in the Gulf states. And as soon as we start cutting checks down here, Mr. Scruggs greets us with a lawsuit. I find that to be a tragedy.
WHITFIELD: And Mr. Scruggs, the lawsuit has been filed. What is the timetable now for the first bit of action?
SCRUGGS: Yeah. It's really unfortunate that lawsuits are necessary here. This is the very last thing that I wanted to do not withstanding the fact that my own home was devastated by this storm.
The fact is, that good neighbors don't split hairs over contracts and don't have hairs with their -- or contracts with their neighbors. When their neighbors get in trouble, they come out, come and help out. And what the insurance companies are offering these people is chump change. I mean essentially $1,000 or $2,000 if they -- in living expenses if they will sign an acknowledgement that what they had was flood.
WHITFIELD: OK. We're running out of time. Dick Scruggs a plaintiff's attorney out of Oxford, Mississippi, with that state then persuing the insurers. And Bob Hartwig, chief economist for the Insurance Information Institute. Thank you for joining us as well.
SCRUGGS: Thank you.
WHTIFIELD: Well as bizarre as it sounds, some investors think it's a good time to pick up a deal on New Orleans property. Here's CNN's Lisa Sylvester.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): At first glance, it's hard to imagine why this would be a buyer's paradise. But it is.
Within hours after Katrina hit, investors started looking for properties to buy on Craig's List, an online classified ad site. Buyers are looking to scoop up land and homes at bargain basement prices from residents who have had enough.
Lucy D'Angelo, a New Orleans realtor, says investors have been calling and e-mailing, looking for opportunities.
LUCY D'ANGELO, KELLER-WILLIAMS REALITY: They're wanting to build high rises or apartment complexes or condos. And they believe that they would have the land now because we will have to tear down houses in order to rebuild as long as they can be zoned in that -- in that way.
SYLVESTER: Even before Katrina hit, 53 percent of the city was renter occupied, 47 percent owner occupied. The federal government is making it even more appealing for investors to move in with talk of spending $200 billion to rebuild.
But critics are speaking out. On Craig's List, warnings like this one. "Greedy, nasty people will be trying to snatch up your land."
Experts say poor and middle class families are vulnerable because they need quick cash, or may not have had flood insurance or simply don't know how much their property is worth.
JOHN MCILWAIN, URBAN LAND INSTITUTE: Somebody comes along and says you know that home, that worthless home you've got in New Orleans? I'll give you $2,000. Here, sign this quitclaim deed.
It's the same kind of thing that happens after a car accident, when the insurance adjuster comes and says, "I'll settle the claim for $500." And a lot of people are going to take that.
SYLVESTER: Families still reeling from the shock of Hurricane Katrina should be cautious not to sell their homes for pennies on the dollar.
SYLVESTER: The speculation is only fueling the seller's market for homes untouched by Katrina. Those owners have seen a considerable increase in their property values in just the last two weeks. Lisa Sylvester, CNN, Washington.
(END VIDEOTAPE)
WHITFIELD: So many dilemmas, so many obstacles existing now. And looking ahead, Carol Lin with us now.
20 minutes from now, we're going to continue our continuing coverage of the aftermath of Katrina. What's on tap?
CAROL LIN, CNN ANCHOR: Yep. We added an extra hour today. We're going to be talking about this admiral who is in charge of the recovery effort who is saying, listen, I don't care what the mayor is says, you are not going back to New Orleans. We have nothing to offer you folks in terms of power and water.
Thad Allen, who is he? Our Kyra Phillips has an exclusive behind the scenes look at this man.
And also coming up, we're going to be talking about the military effort. Would the military have made a difference even if they had gotten their sooner? Our Barbara Starr examines their role, and what might have or might not have happened. All coming up in the next couple of hours.
WHITFIELD: We'll look forward to that. Thanks a lot, Carol.
Well protecting the public's health in the wake of Katrina's destruction. Up next, why the region still has to be worried about possible outbreaks of disease. What are the biggest concerns now? I'll ask our Dr. Bill Lloyd.
And still to come, they are cute and on the loose in the Gulf of Mexico. We'll have an update on one Katrina rescue that has been taking days.
(COMMERCIAL BREAK)
WHITFIELD: Health officials were worried about a wave of contagious diseases in the wake of Hurricane Katrina. And they are relieved many of those fears were not realized, but the dangers are not over. Dr. Bill Lloyd is a surgeon and professor at the University of California Davis Medical Center. He joins us from Chicago. Good to see you.
While the majority of the folks have left, particularly the New Orleans area, where they were worried about a lot of the contagions, the bacteria, et cetera, a lot of that bacteria is still there. And as we're hearing the city encourage people to come back, do you have great worries about what kind of infectious diseases, contaminants might be lurking and put people's health in jeopardy?
DR. BILL LLOYD, UC DAVIS: Well, here in this third week, it seems Fredricka, our reports are getting a little more hopeful every week, don't thiey. Our big concern is people staying in that polluted water, and as the level of the water drops, the risks of infection drop with it as well.
There have been a few problems, though, that the CDC has informed us about. And one involves a variety of skin infections and blood born infections by people with open wounds that have gotten into the contaminated water. So, we're going to have to wait and see what happens when that water drops.
But one big reason why we didn't get that second wave that they talk about, the first wave is the disaster, the second wave were all those infections that follow, is in order to have that second wave you have got to have the germs and you have to have a captive population. Because of the evacuation of so many people, and right now there's over 60,000 evacuated to over 350 different evacuation centers, that risk of that second wave pretty much has been wiped out.
WHITFIELD: Really. But how about when folks do start to come back in great numbers? If they are coming back to assess the damage of their properties, et cetera. And still a lot of that muck is there while the standing water isn't there. The muck still contains a lot of that bacteria doesn't it?
LLOYD: I've got some good news about the muck, Fredricka.
WHITFIELD: Yeah?
LLOYD: We live among dirt since the day we're born. And we have been taught that if we stay out of the dirt, and if we wash our hands and we're careful with our contacts with others, and we stay in small groups, family units for example, classroom sized groups, our chances of exchanging diseases are far less. Now, take the evacuees who are at evacuation centers in somewhat cramped corners right now, they have the chance to exchange diseases, respiratory diseases of course, E. Coli from dirty hands, Hepatitis A. I think the risk of getting a serious contagious disease actually will drop when they leave those close quarters, head back to New Orleans.
Now, you're absolutely right. We're going to have to clean up the community. And health experts know how to do that.
Did you know, Fredricka, the largest group of health exspers that made it to New Orleans in the first 72 hours was not physicians or nurses, but were public health specialists, people who survey diseases, who survey water and notify the health community of the problems. The great work done in surveillance helped cut down the number of those infections and was instrumental in expediting the evacuation of people out of New Orleans.
WHITFIELD: That's good to know.
But then, still it seems there's a risk involved when you have a lot of folks who are returning, whether it's to rebuild the city et cetera, and you don't have a lot of hospitals. I think in the case of New Orleans right now, you only have one facility that is really up and running and able to accommodate any kind of emergency care. You have got folks walking on broken glass. Nails, all the things that you see post hurricanes or post natural disasters which really could put a lot of folks' health at risk. How concerned are you about that?
LLOYD: Now the real big concern. And you hit the nail right on the head. And many people of going to be hitting nails and banging thumbs and they're going to need some basic first aid.
Our experience with the last ten major national hurricanes that have struck our country have shown us that the deaths that follow these disasters are not necessarily from the storm itself. Yes there, were many flood deaths, but in the weeks to come we're going to hear about people that are electrocuted that got near the wrong wire, or people that got trauma from a fall, for example, or people -- get this one now -- from carbon monoxide poisoning who are using those portable generaters, or perhaps a portable barbecue where they shouldn't, inhaling carbon dioxide. There were far more deaths after last year's hurricanes from carbon monoxide poisonings than there were actually from drowning deaths.
WHITFIELD: Wow. That's all fascinating.
All right, Dr. Bill Lloyd, thanks so much.
LLOYD: We'll talk again soon.
WHITFIELD: OK. Look forward to it.
Rounding up stray animals is hard enough on land, but try doing it on the open waters of the Gulf of Mexico. Up next, the latest on the fate of eight captive dolphins that Hurricane Katrina swept out to sea. (COMMERCIAL BREAK)
WHITFIELD: A group of trained dolphins is on the loose in the Gulf of Mexico. Freedom, as nice as it sounds, could prove deadly. National Gary Tuchman is with rescuers off the Mississippi coast.
(BEGIN VIDEOTAPE)
GARY TUCHMAN, CNN NATIONAL CORRESPONDENT (voice-over): From this destroyed aquarium in Gulfport, Mississippi, eight dolphins were swept to sea in the middle of Hurricane Katrina. They have all been spotted alive and together. Five minutes after motoring out into the Gulf of Mexico...
UNIDENTIFIED MALE: Dolphins are right there!
TUCHMAN: ... we see the six female and two male bottlenose dolphins, that only know how to survive in captivity, not being used to the wild. Now, after a few days of getting food and medicine, the hard part, rescuing them. A mat, attached to a buoy, is in shallow enough water to pull the dolphins on top, and it works.
UNIDENTIFIED MALE: You got it.
TUCHMAN: Twenty-five-year-old Jackie is rescued, the sickest of the dolphins, skinny, with lacerations and abrasions from the hurricane, but now in the care of people she knows. She's put on a stretcher and loaded on the boat. Next, another dolphin brought to safety.
UNIDENTIFIED MALE: Is that Tony?
TUCHMAN: This is Jackie's offspring, Tony. She's 15, and like her mother, might have only lived for a few more days in the sea.
(on camera): How do you feel?
DR. MOBY SOLANGI, DIR., MARINE LIFE OCEANARIUM: Speechless. It's unbelievable. Let's keep our fingers crossed for the rest of them.
TUCHMAN: The water started getting choppy, so the rescue effort had to be suspended. They'll try again on Friday to capture the other six dolphins. They'll go out with high hopes, but knowing there are no guarantees.
(voice-over): The 350-pound dolphins are put in a specially- equipped dolphin mobile. And then, a police escort through the streets of Gulfport, to bring them to their temporary home, a swimming pool at the Holiday Inn, where they'll stay for now as plans are put into place to send them to other aquariums around the country.
The dolphins' trainers are also their rescuers. (on camera): Are these like your children?
SHANNON HEYSER, DOLPHINS' TRAINER: Yes. Yes. Yes, they're our babies.
TUCHMAN (voice-over): These two dolphins have been diagnosed as anemic.
(on camera): So what's their prognosis?
DR. CONNIE CHEBIS, DOLPHINS' VETERINARIAN: We get food in them and keep them stable for the next 7 to 10 days, I think we'll do pretty good. So it's kind of critical for these next few days.
TUCHMAN (voice-over): The experts and the trainers are amazed all eight dolphins, who were not even together in the aquarium, have stayed together in the Gulf. They hope they'll all be together again very soon.
(on camera): It's late at night and these dolphins are still quite active. We asked the trainer -- nice toss. I'm all soaking wet. We asked the trainer if these dolphins, Jackie and Tony -- nice throw -- might want to catch a few winks tonight. And she told me something very interesting, that the experts -- nice throw -- aren't even sure if dolphins do sleep.
So these dolphins will continue to do their thing while the rescuers continue to do theirs. One more throw. And the hope is -- wow, this is really amazing. The hope is that they get all eight of the dolphins by Monday at the latest.
(END VIDEOTAPE)
WHITFIELD: So great. Gary Tuchman reporting there.
Well, coming up, the owners of Gulfport, Mississippi's Palace Restaurant are trying to rebuild. Find out why their insurance company says they are on their own.
And a behind the scenes look at one of the toughest jobs around. Meet the man who is directing the federal government's relief efforts along the Gulf coast. That's all ahead on CNN.
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