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CNN Live Saturday

Cruise Liner Attacked by Pirates; Protests in Mar del Plata against President Bush; Death Row Inmate Escapes in Houston, Texas; Operation Steel Curtain in Husayba, Iraq; Las Vegas Mayor Oscar Goodman Suggests Vandals Have Their Thumbs Cut Off; Paris Riots Continue; Housing Shortage For New Orleans Workers; Two Die In Houston Plane Crash; Black Business Need To Rebound After Katrina; Proposal To Cut Home Mortgage Deduction Is Controversial

Aired November 05, 2005 - 12:00   ET

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

FREDRICKA WHITFIELD, CNN ANCHOR: Terror on the high seas. Pirates try to overtake a cruise ship. We'll tell you what happened. It's a story you'll only see on CNN.
KEITH OPPENHEIM, CNN CORRESPONDENT: In Texas, a man twice condemned to die has escaped from the jail behind me. Are police any closer to catching this guy? I'm Keith Oppenheim in Houston and I'll talk about that in a live report coming up.

WHITFIELD: And this is the welcome some Argentineans gave President Bush yesterday. What's the reception he's getting today? A live report from South America.

Welcome to the CNN LIVE SATURDAY, I'm Fredricka Whitfield. A busy hour straight ahead, but first now in the news:

Thousand of American troops along with Iraqi forces are on the move today in western Iraq near the Syrian border. They're taking part in a new offensive against insurgents. It's called Operation Steel Curtain and it's the focus of the city of Husayba. Three- thousand U.S. troops and 550 Iraqi forces are together taking part in the operation.

Investigators are trying to determine if three alleged Jihadists arrested in Britain were planning terror attacks in Washington. An FBI official says suspicious information was found on a computer. Stay with us for a CNN live "Security Watch" report coming up within minutes.

As unrest continues in the suburbs of Paris, the U.S. embassy in the French capital, has a new warning. It's telling Americans to avoid areas where rioting has taken place. The violence has rocked several areas around Paris and it's spreading. Overnight angry demonstrators burned hundreds of vehicles in the Paris region and in Toulouse, Bordeaux, and other cities. The riots which began more than a week ago were sparked by the deaths of two youths who were electrocuted while apparently fleeing from police.

A luxury cruise turned into terror on the high seas early today as pirates attack a luxury cruise liner carrying 150 passengers off the coast of Somalia. (BEGIN VIDEOTAPE)

WHITFIELD (voice-over): The "Seabourn Spirit" was sailing from Alexandria, Egypt to Mombassa, Kenya on a routine pleasure cruise. Early Saturday, about 70 miles off the coast of Somalia, Seabourn's president said at least two small pirate boats raced toward the ship with guns blazing. A passenger explained what happened next.

UNIDENTIFIED MALE: The captain tried to run one of the boats over, but they're small boats about 25 feet long. Each one had four or five people in it and he said he was going to do anything to stop them from getting on board.

WHITFIELD: The president of the cruise line spoke about the incident with CNN.

DEBORAH NATANSOHN, PRES. SEABOURN CRUISE LINES: There was a rocket-propelled grenade and -- as well as machine guns. But our captain, who did a terrific job taking responsive action. You have to consider that those who were armed did not succeed in boarding our ship and eventually turned away.

WHITFIELD: A violent attack on a cruise liner is rare, but piracy is not. The Indian Ocean off the Africa coast is among the most dangerous. Maritime officials in London report more than two dozen pirate attacks off Somalia since March, including attacks against two ships used by the World Food Program. Just days ago the United Nations lamented that piracy had jeopardized emergency food shipments to a half million people in the region. This time, however the pirates failed. "Spirit" eventually outran the pirates and no one on board was hurt. "Spirit" is now headed to the Seychelles Islands.

(END VIDEOTAPE)

WHITFIELD: And on the phone with us now out of Great Britain the spokesperson for Seabourn Cruises, David Dingle.

David, thanks so much for being on the line with us. Well, how did the crew manage to keep these pirates from carrying out the rest of their plan?

DAVID DINGLE, SPOKESMAN, SEABOURN CRUISES: Well, the cruise ship has a very comprehensive security plan and that was enacted in this case. We are very pleased that it was enacted to 100 percent efficiency. And as a result of that, the pirates were deterred, the ship was able to shake them off and continue on its course.

WHITFIELD: And was the crew on heighten alert with this kind of plan in place knowing that the potential was very great that there would be such type of pirate attacks in the Indian Ocean, off the African coast?

DINGLE: Yes, I think we should put this in context and member that the ship was a long distance from the coast of Somalia. But even so certain parts of the world have higher security levels. And as such, ship security plans are raised to higher levels to respond. That is the situation on the ship and that is one of the contributing reasons as to why we were very well prepared to deal with this situation.

WHITFIELD: Well David, will your cruise line continue to operate off the coast here?

DINGLE: Clearly, it's too early to fully assess with the circumstances surrounding this incident. But we will obviously investigate that and take a decision accordingly as to whether it's appropriate to continue to operate in these particular waters.

WHITFIELD: OK. David Dingle, thanks so much, with Seabourn Cruises, thanks for being with us.

Well, U.S. and British investigators are trying to determine if three alleged Jihadists arrested in Britain might have been planning an attack in Washington. The three were arrested late last month. A senior FBI official says one of them had pictures on his computer of important sites near the U.S. capital. Gary Nurenberg is following this story and joins us now from Washington -- Gary.

GARY NURENBERG, CNN CORRESPONDENT: Hello Fredricka. Although U.S. capital police chief, Terence Gainer, says, "I don't think anyone should worry about this," investigators on both sides of the Atlantic are working to determine if there is a legitimate threat. The three men appeared in a London court yesterday accused of violating Britain's terrorism act. Court documents alleged one of the suspects had on his hard drive pictures of sites in Washington and a video slide describing how to build a car bomb.

The search of another suspect's home turned up papers that included the phrase in Arabic "Welcome to Jihad". And the phrase "hospital equals attack." One American counterterrorism official tells CNN, quote, "It's hard to know if this was terrorist bravado or a real threat." FBI assistant director, John Miller, says his agency is "working with our partners overseas on the investigation. We have shared the relevant information with local law enforcement agencies concerned." He adds, "There is no credible indication of any imminent threat."

Capital police Chief Gainer says, "We are neither frightened nor concern. We have vigorous capability to assess the threat." Gainer then adds that pictures on that computer could be described as either tourist photography or preplanning for terrorists. As the investigation continues, officials in Washington are downplaying the threat. Alert levels have not been raised. And Fredricka, that capitol police chief says he's not losing any sleep over this.

WHITFIELD: So does that mean there really isn't a next step in this investigation?

NURENBERG: The investigation continues. The next step in terms of hard information may come on November 19, in London, when the suspects are back in court. Hopefully investigators by that time will have more hard information that they'll release in public and we'll learn more. WHITFIELD: Interesting. All right, Gary Nuremberg in Washington. Thanks very much.

Well, stay tuned to CNN day and night for the most reliable news about your security.

Overshadowed by violence. The Summit of the Americas is draws to a close. President Bush and other western hemisphere leaders are having lunch after officially wrapping up their talks. The two-day summit with the focus on trade issues, has been marred by violence- street protests. CNN White House correspondent Dana Bash is with us now from Mar del Plata, Argentina, a very windy Mar del Plata -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Hi there. Well, you talked about the riots that happened yesterday. What a colleague found this morning going around Mar del Plata, particularly to that small area where the riots took place were angry locals, not angry protesters -- angry locals because of what those rioters did to their small seaside resort, what they did to the store fronts. You know, they shattered the glass of the outside of the store fronts.

We saw people surveying the damage, for example, to a burned a out bank. That is about it in terms of what is seen this morning. It's quiet, not even the peaceful demonstrators that were out yesterday are out on the streets today. Of course, what the demonstrators had been out protesting was the summit that was going on just blocks away. And that, as you mentioned Fredricka, is wrapping up this morning -- this afternoon.

There are 34 world leaders here including President Bush. And from the U.S. perspective, what their main goal is, is to talk about free trade. This whole idea of the Summit of the Americas began in 1994 under the concept of promoting free trade, one agreement that would expand from Canada all the way down to Chile and eliminate barriers.

That has really been stalled even more so over the past couple of years because of opposition from some key Latin American countries. One of the most vocal antagonists of the president and his policy ism of course, the Venezuelan leader the -- Hugo Chavez who has been very vocal about what he feels is unfair trade concept or policy. What it would do to his people and he has become the president's nemesis.

What we have been looking for, those of us on the sidelines of this summit, is to see if the two men encountered each other. Hugo Chavez has called Mr. Bush, "Mr. Danger." We did see, the cameras did get a glimpse of Hugo Chavez at the entrance to the first plenary session this morning when Mr. Bush did actually walk by him. But so far they did not encounter each other -- Fredricka.

WHITFIELD: And Dana, many people taking note of how unusual this is for Chavez to take a break from the summit and then lead a protest against Bush. Meantime, Bush being marred by not just the violence, the protests but also marred by a questions about his higher up staff members. And apparently there's a "Washington Post" report that is saying that President Bush is asking that many of his staff take ethics classes. Is there anything to that report?

BASH: Absolutely. CNN has a copy of the memo that was sent out to the senior staff last week at the White House. You know, it's interesting, Fredricka, just quickly, the president won't talk about this investigation. Reporters, here in Argentina, tried to get him to answer lots of unanswered questions and his mantra is, "This is an ongoing investigation." But the actions inside the White House are quite telling. From the White House counsel's office, every senior staff member who has clearance -- security clearance is now required to take a class and those classes will be going on next week.

And the memo that was sent out says in part, "The president has made clear his expectation that each member of his executive office of the president, EOP staff, adhere to the spirit as well as the letter of all rules governing ethical conduct for EOP staff." And then it went on to say, "If you possess a security clearance of any level, your attendance at one of these sessions is mandatory."

So clearly, though they won't go there at all when it comes to whether or not anybody, including Karl Rove, may have even inadvertently talked about the classified agent or classified official -- covert official at the CIA, they're trying to take steps internally to make sure anybody with a clearance understand they should not be talking about it.

WHITFIELD: All right, Dana Bash in Mar del Plata. Thank you so much.

To Texas now where the search goes on for an escaped death row inmate. Charles Victor Thompson walked out of Houston jail Thursday after slipping out of his prison jumpsuit and into civilian clothes. He also showed guards a fake I.D. Thompson, who is considered extremely dangerous, was sentenced to death after being convicted of killing his former girlfriend and her boyfriend in 1998.

CNN's Keith Oppenheim is keeping track of the latest developments in Houston. How is that search going?

OPPENHEIM: Well, it's ongoing right now. We're hearing some more optimistic information, Fredricka, from Harris County officials. At least they're trying to sound optimistic about what is clearly a very embarrassing and potentially dangerous escape. What we heard in the last hour or so is that there are some possible sightings, some credible leads. We'll see how all this goes today, of course. And also police are reminding us that there is a $10,000 reward for information which would lead to the capture of the man who escaped from this jail last Thursday.

(BEGIN VIDEOTAPE)

OPPENHEIM (voice-over): Charles Victor Thompson is a 35-year-old convicted killer. Prosecutors described him as a "pretty boy," someone who looked appealing but was in fact deadly. On Thursday afternoon at the Harris county jail in Houston, police say Thompson found a way to transform himself and con his way out through these doors to freedom. CHIEF DEPUTY DANNY BILLINGSLY, HARRIS CO. SHERIFF'S DEPT.: There's a series of mistakes here. It is like a lot of catastrophic events that happened.

OPPENHEIM: Investigators believe that Thompson smuggled street clothes that he wore for a court appearance back to his jail cell, and then found a way to change in a booth like this one. A booth used for meetings between attorneys and inmates.

LT. JOHN MARTIN, HARRIS CO. SHERIFF'S DEPT.: He got out of his inmate jumpsuit, the orange clothing they commonly wear, changed into civilian clothing. He was handcuffed when he was taken into the attorney booth and apparently he able to get out of the handcuffs. We don't know if he had a key or if he just slipped the cuffs off.

OPPENHEIM: It was in April of 1998 that prosecutors say that Charles Victor Thompson stormed into the apartment of his ex- girlfriend, Dennise Hayslip, shot her and her new boyfriend, Darren Keith Cain. Both victims died. Thompson was found guilty and sent to death row.

On appeal, Texas courts upheld the conviction, but ruled that during the trial Thompson's right to counsel had been violated. He was granted a new sentencing hearing, but once again received the death penalty. Officials say within 45 days he would have been transferred back to state prison and death row. Now he's a killer on the loose.

(END VIDEOTAPE)

OPPENHEIM: Fredricka, part of this story with Charles Victor Thompson is that he had, according to prosecutors, developed a hit list, a list of more potential murder victims and included in that list were relatives of his ex-girlfriend, of the murder victim. So, people in that family who lived in the Houston suburbs, they are understandably extremely nervous and some of them actually are under local police protection right now because he has escaped.

WHITFIELD: Understandably. All right, Keith Oppenheim, thanks so much, out of Houston.

Well, coming up, there's a major new offensive launched in the fight for Iraq. Live from the front lines where Operation Steel Curtain is underway.

And more than a week of violence in Paris, with no end in sight. We'll take you live to France where rioters are setting fires nightly. Find out why.

Also, the mayor of Las Vegas is getting tough with graffiti artists, that story straight ahead.

(COMMERCIAL BREAK)

WHITFIELD: Another major coalition offensive is underway in Iraq to track down insurgents near the Syrian border. U.S. Marines, soldiers and sailors are engaged in firefights with entrenched militants. And forces have uncovered score of makeshift bombs rigged to houses and cars. CNN Arwa Damon is imbedded with the U.S. troops in Husayba, Iraq, she joins us by phone now from the heart of the battle dubbed "Operation Steel Curtain."

And, Arwa, thanks for taking the time out to be with us. Not only do we have sailors and soldiers with the U.S., but they're also paired up with Iraqi soldiers. What are the challenges?

ARWA DAMON, CNN PRODUCER: Hi, Fredricka. The challenges are numerous. I mean, and the main challenge with -- when you have the Iraqi army working alongside the U.S. military is the language barrier, but they do find, interestingly, ways to communicate with one another and they do end up getting the job done.

Now, they're fighting a determined enemy in this city, in Husayba, right along the Syrian border, an enemy who is not afraid to actually stand up and fight and they believe that this is the last final stance for the insurgency in this area. Now, the Iraqi army battalion that is with these Marine, soldiers, and sailors is the 1st Battalion 1st Brigade of the 1st Division and they're quite experienced as far as Iraqi battalions go.

They fought in Fallujah, they fought in Ramadi, they fought in Mosul and right now they're fighting this battle right alongside U.S. soldiers. And there are about 550 Iraqi soldiers alongside the Americans. Of course, the Americans are much higher in number, but it is part of a learn prog says but they're learning from their American counterparts -- Fredricka.

WHITFIELD: And Arwa, you call them a very determined enemy. Is that in part because we're talking about a city, Husayba, who has really not seen a U.S. or coalition presence in about a year and a half? Is it the point of view that have essentially, these insurgents, there, have almost been waiting for the coalition forces, or this pairing of Iraqi and U.S. forces to come into this town to try to weed out insurgents?

DAMON: Well, the insurgents here have had the advantage of being able to set up a stronghold. They've set up what U.S. military commanders are calling a "command and control center" for operations throughout the rest of the Euphrates River Valley and even extending to the rest of the country. This is a major smuggling route.

Now, U.S. forces have not entered the city of Husayba in the past, but they've been conducting operations recently up and down the Euphrates River Valley which has pushed the insurgents further into the area, the city of Husayba.

So, not only did you have the insurgency and the foreign fighters that were operating out of this city all along, but now you've got all of the insurgence and fighters who were fleeing the fighting coming up the Euphrates River Valley and have all congregated in this area which is why U.S. forces now believe this is the last stance for the insurgency in this region. They believe that those who are fighting here are those who will fight to the death -- Fredricka. WHITFIELD: And so, Arwa, one more time, elaborate a little bit more for me, if you could, on the techniques that these insurgents are using from the booby-trapping, the car bomb, even suicide bombers, and rigging doors, as well.

DAMON: That's right. In the southeastern sector, just one sector alone, they found 30 IEDs. Most of them rigged to the roads right underneath the asphalt, rigged to the houses. There is one where the IED was rigged to the door. The Marine opened the door, the IED detonate, luckily there were no injuries. In one of the cases there were propane tanks in the house, they were IEDs rigged to it, they ended up dropping a laser guided missile on the house to destroy it.

And now, this fight is still in its first day, which has actually come to an end. It's nightfall here right now. But they're also expecting the insurgents to use tactics such as suicide vests. They've seen in recent weeks, a couple of suicide vests in this area. Say they've destroyed three car bombs. They're expecting them to use some of the techniques that we saw down in Fallujah: The spider holes, the complex attacks, the ambushes, the entrenching of the fighting. As, you know, U.S. forces push through the city, some of that may come forward and it may not -- Fredricka.

WHITFIELD: All right, CNN producer, Arwa Damon, thanks so much for joining us from Husayba. Who -- as she's reporting there, is also embedded with U.S. forces. Continue to be safe there, Arwa.

Coming up, the mayor of Las Vegas declares war on vandals and graffiti artists and proposes a wise guy solution to cleaning up their mess.

And, the U.S. embassy is warning Americans about traveling in France. We'll go live to Paris as the city sees its worst violence in years.

(COMMERCIAL BREAK)

WHITFIELD: Las Vegas Mayor Oscar Goodman says he won't apologize for suggesting vandals should have their thumbs cut off on television. He also thinks caning and whipping might discourage graffiti. Sounds like something out of a gangster flick? Well, CNN's Allan Chernoff reports it's not much of a stretch.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): Tough guys like mobster, Bugsy Siegel, brought gambling to Las Vegas, helping to make the town what it is today. So, perhaps it's only natural that Vegas Mayor Oscar Goodman, formerly a defense attorney for mobsters, wants to get tough with those who painted graffiti along highways and on a decorative tortoise.

MAYOR OSCAR GOODMAN, LAS VEGAS: These punks, they come along and they deface it. And I'm saying that maybe you put them on TV and cut off a thumb. That might be the right thing to do. CHERNOFF: No joke says the second term mayor. If found guilty at trial, take off a finger that could be used to spray painting.

GOODMAN: I'm dead serious. We take the place of a parent on occasion, and some of these people don't learn. You got to teach them a lesson.

CHERNOFF: It's a lesson Goodman may have learned from those he defended. Wise guys, like Tony Spilotro and Meyer Lanski.

GOODMAN: Whenever my clients go home with me at the end of a trial, I'm happy.

CHERNOFF: Mobsters called him "Big O." Critics called Goodman the mouthpiece of the mob. In the movie "Casino," Goodman played himself.

UNIDENTIFIED MALE: Yeah, I'd like this...

GOODMAN: Pardon me councilor, before you continue...

CHERNOFF: Mayor Goodman lives large.

GOODMAN: I told folks when I ran for office, not to get upset, not to get excited, but I drink with both fists, I gamble with both fists, I party with both fists. I mean, life is short.

CHERNOFF: Too short, Goodman says, to put up with punks who vandalize public property.

Allan Chernoff, CNN, New York.

(END VIDEOTAPE)

WHITFIELD: Coming up, a warning to American travelers as France sees its worst violence in years. We'll go there live. And one of the biggest casualties of Hurricane Katrina is black owned businesses. Coming up, why it's so important that black businesses rebuild along the devastated Gulf Coast.

(COMMERCIAL BREAK)

WHITFIELD: Checking stories now in the news, President Bush and other world leaders wrap up a two-day summit in Argentina that has also seen violent protests and riots from demonstrators. The main item on the summit's agenda -- implementing a free trade area of the Americas that would extend from Alaska to Chile. The biggest holdouts include Venezuela and Brazil.

U.S. and British investigators are still trying to determine whether three terror suspects arrested in England may have been planning an attack in America. Authorities say one of the alleged Jihadists had pictures on his computer of several important sites around Washington, D.C. but that they could have been simple tourist shots. The U.S. Capitol Police chief says quote, "there is no direct threat to the Capitol." It sounds like something from a movie but it was actually the real deal when pirates tried to attack a luxury cruise ship off the coast of Somalia. A cruise line spokeswoman says the captain eventually outran the pilots -- the pirates, rather, who were on two small boats carrying machine guns and rocket-propelled grenades. The spokesperson adds that one person suffered minor injuries.

French officials are scrambling to respond to more than a week of violent protests. Overnight, angry demonstrators were back in the streets of suburban Paris, setting fires and destroying property. And the rioting has now spread to other major French cities. CNN's Chris Burns has the latest from the French capital. He's on the phone with us now -- Chris.

CHRIS BURNS: Fredricka, we went up into the neighborhood where it all started more than a week ago and talked to some of the youths there. This is rioting that has as gone on for more than a week, and stretched from beyond the suburbs of north Paris to cities as far away as Marseilles, Bordeaux, Toulouse, Avlian-du-bois (ph) -- it's an incredibly long list that has gone more than two dozen cities.

Just last night a record 900 cars were torched, according to police, across the country. Some 250 people were arrested as the government is trying to crack down by arresting more of these youths. But it didn't seem to stop them last night.

The question is now how do you stop it and so far not just police presence is doing it. It is also efforts to talk with community groups, community leaders. And what's just what authorities are doing today. Dominique de Villepin, the prime minister, met with various leaders and also with his -- members of his cabinet and decided, according to authorities, to accelerate urban renewal. There's a huge unemployment problem in these areas, more than 50 percent among many of these youths.

WHITFIELD: And in fact, Chris, isn't that the heart of this problem? While the two young people were electrocuted as allegedly fleeing police and the rioting began, but isn't part of the underlying problem here is that lot of the young people are saying -- particularly the immigrant young people are saying that they're shut out of the employment prospects and they're not able to get anywhere ahead and that they really are between a rock and a hard place of the status quo.

BURNS: Yes, Fredricka, that's exactly what we were hearing from the youths we talked to in that neighborhood, in Clichy-sous-Bois where it all began, where those youths were electrocuted as they were trying to evade police. And there is very much that frustration.

Well, also what -- we heard another aspect is that the government has been cracking down on crime, but the interior minister, Nicolas Sarkozy, has been using some very, very tough language, saying he wanted to clean up the scum in those areas, steam clean those areas of crime. And that didn't go down well with a lot of youth we talked to. They said that was all part of that last -- it was last straw with those two youths dying, being electrocuted and that's what's caused all this violence.

WHITFIELD: And so now is the feeling, Chris, that it just might get worse before it gets better?

BURNS: Well, you know, when we talk to police, they say that in a sense don't look at the 900 cars that were torched, but think about the fact that they say that there were fewer clashes with youth. The police seem to be standing back and hoping that things will simmer down as well.

The fighting is simmering down. So they hope that this will sort of lose its wind. And also they're depending on soft power, on community leaders to persuade these youth. We talked to these youth mediators who are talking to these youths on the streets, even as the rioting is going on, a very risky business. And they say that they're having some success in doing that, Fredricka.

WHITFIELD: All right. Chris Burns in Paris. Thanks so much. And while the U.S. Embassy is discouraging Americans traveling in France to avoid the Paris suburbs, they're not necessarily saying stay away from Paris altogether.

Well, along the central Gulf coast of the United States, hurricane recovery efforts are moving ahead, but the flood ravaged city of New Orleans faces a tough situation in getting its economy going again. There are plenty of jobs available but not enough housing for workers. CNN's Jonathan Freed has that story.

(BEGIN VIDEOTAPE)

JONATHAN FREED, CNN CORRESPONDENT (voice-over): The New Orleans warehouse of Doerr Furniture is packed.

DAVID MUTTER, DOERR FURNITURE: All right. I'll take these to the truck.

FREED: Hurricane Katrina left this family-owned business safe and dry. David Mutter says the problem came later.

(on camera): What's been the real challenge for you since you've opened back up after the storm?

MUTTER: The real challenge is to get our employees that were with us before the storm back into New Orleans to come to work, but they don't have a place to stay.

FREED (voice-over): Katrina put a quarter of a million people out of work in Louisiana, according to the state's Department of Labor, most from the New Orleans area. The rebuilding isn't keeping up with the need for workers. So there just isn't enough housing to go around right now. In Mutter's case, it's holding back business and stretching his patience.

MUTTER: Before the storm, we were delivering mattress. If you bought it today, you'd get it tomorrow or the next day. Now we're probably five to seven days getting them mattresses. FREED: Mutter is hiring practically anyone who can make it into New Orleans. Some are commuting from Baton Rouge more than an hour away, on a state-sponsored shuttle bus. And that means being at the stop as early as 4:00 a.m.

KELLY YOUNG, DISPLACED WORKER: I got an interview this coming Monday with another little job that I'm trying to get and all. I got to catch the 4:00 bus just to get there for 6:00 and the interview's for 8:00. So guess I got to do what I got to do.

FREED: The shuttle is just a trial program for now, but state officials realize people are already relying on it. Back at the warehouse, David Mutter reminds himself to be patient with the pace of recovery.

MUTTER: When I go run through the city at night after dark and see all the black areas, dark and blacked out areas, there's no electricity, it just really hits you with the scope of the whole thing.

FREED: For now the Mutter family is grateful to work with whoever shows up, whenever they get there. Jonathan Freed, CNN, New Orleans.

(END VIDEOTAPE)

WHITFIELD: And then there are businesses owned by African- Americans having struggles of another kind there along the Gulf coast. What is going on? It's an issue that "Black Enterprise" magazine and its editor-in-chief Alfred Edmond explored. Mr. Edmond is with us now from New York. Good to see you, Mr. Edmond.

ALFRED EDMOND, BLACK ENTERPRISE MAGAZINE: How are you doing, Fredricka?

WHITFIELD: Well, there are about 60,000 black-owned businesses in Louisiana alone that have been affected by Hurricane Katrina alone. In your investigation, what did you find about the prospects of many of those businesses being able to go back and rebuild?

EDMOND: Well, obviously there are a lot of challenges being faced by these businesses. Part of it is what you showed in your earlier segments, that there's just not enough housing and resources to support other workers being brought into the area.

The other problem is that many of these businesses complain about being locked out of the contracting process tore the billions of dollars that are being spent and will need to be spent to rebuild New Orleans.

WHITFIELD: What are they saying exactly that they're experiencing in terms of being locked out? They're applying and they're just not -- their applications are not being seen or even taken into consideration?

EDMOND: Well, you're looking at two different phenomena. One, if you're a smaller business, and many of the black-owned businesses are smaller businesses, they don't have the scale necessarily to handle some of the large contracts that are being let to help with rebuilding efforts. The second problem is the SBA, in particular.

WHITFIELD: The Small Business Administration.

EDMOND: Yes, is having a very difficult time with the loan process. Loans are being applied for and being granted, but because of a problem being cited with their computer systems, they're not actually getting the money into the hands of the entrepreneurs that need it. And so those two factors are creating major problems for small businesses in general and black businesses in particular.

WHITFIELD: In your article, you did talk to the Small Business Administration director in -- or representative in Louisiana. What is the response from the SBA?

EDMOND: Well, they recognize this is a very, very, very serious problem. They say that they're very focused on making sure that problem is addressed. They're also saying that as time goes by, you'll see a much improved performance in the way of getting help to black business owners and small business owners in general. We're just waiting to see that manifest itself.

WHITFIELD: And isn't this an experience that's not necessarily an anomaly when you talk about black business ownership, that there have been hurdles along the way in trying to get the loans from the beginning and now you've got that compounded by a natural disaster like Hurricane Katrina. it seems like many of these business owners are being hit twice, very hard.

EDMOND: Oh, absolutely. First of all, you have the initial injuries, if you will, of the hurricane itself, which obviously has disrupted many businesses and threatens to wipe out those businesses.

But then when you're talking about the need for relief, and we already saw the impact it had on individual people in the Gulf coast, that same thing is being suffered by business owners in general who are waiting for financial support, waiting for the state and the city to respond and meanwhile their businesses are going down the tubes.

WHITFIELD: And aside the this being a way of life that is being damaged or destroyed there along the Gulf coast, what does this say on a larger scale about the hope for the future of black businesses, particularly since you have a great many majority that are there along the Gulf coast of black business ownership throughout this country? If they don't make it and are not able to rebuild there, what does that say about the future on a grander scale across the country of black business ownership?

EDMOND: Well, what it says is that we have a great opportunity here. Now, we saw the initial injury of the hurricane really reveal a larger problem of economic illness in New Orleans. That's common across many urban centers of this country. So on the one hand, it seems very, very hopeless. On the other hand, we have a chance to rebuild the city and rebuild the economy in a way that I think other cities can use as a model for including and engaging black business and creating jobs for underprivileged and lower economic status African-Americans.

WHITFIELD: Alfred Edmond of "Black Enterprise" magazine, editor- in-chief. Thanks so much for joining us from New York. It's a very interesting read.

EDMOND: Thank you, Fredricka.

WHITFIELD: All right, this breaking story we're following out of Houston at Hobby Airport. Reportedly a private jet has crashed there. Two people reportedly have been killed.

The accident happened just before 10:00 a.m. this morning local time there in Houston. This 737 was coming in for a landing with some sort of difficulty, which is what our sources are telling us. Air traffic controllers told the pilot of the smaller plane to move off the runway to make way for this 737.

The pilot took off in the jet circling back around, tried to land again and then crashed. We're told that this Citation aircraft skidded a great distance through a grassy area, and then ended up on the runway where it then caught on fire.

Both people on board are reportedly -- have reportedly been killed in that accident. The 737 was diverted apparently to Bush Intercontinental Airport which is a good 30 to 40 minutes away from Hobby Airport. That story still developing there out of Hobby Airport there in Houston. When we get more, we'll be bringing that to you.

Coming up, surviving another large scale natural disaster and struggling to survive the aftermath. We'll take a closer look at the situation in Kashmir where earthquake survivors are intense and living hand to mouth.

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WHITFIELD: Big changes could be in the works for the way Americans pay their taxes if President Bush and Congress follow the recommendations of a tax advisory board. The panel, set up by the president, was charged with coming up with simpler and more fair tax laws.

It is recommending trimming the home mortgage deduction Americans know and love a whole lot. The plan would eliminate state and local tax deductions and it would bury the alternative minimum tax. Vahan Janjigian is the editor of "Forbes Growth Investor." He joins us now from New York with the look at what the proposals could mean for all of us. Good to see you.

VAHAN JANJIGIAN, EDITOR, FORBES GROWTH INVESTOR: Thank you very much.

WHITFIELD: All right, we're going to try and keep this really simple because a lot of times you talk taxes and people just kind of glaze over. First off, the president established this advisory panel on tax reform. Why and what's the real objective here?

JANJIGIAN: Well, the major objective is to make a tax system that's fairer and simpler. And a lot of people have been complaining over the years about the alternative minimum tax, which was initiated in order to make sure wealthy taxpayers don't take advantage of too many loopholes and do pay their taxes. However, the problem is that over the years, more and more middle income people are getting caught by the AMT.

WHITFIELD: OK, so the idea is to make it more fair and simple, but it seems like that's subjective, too. Because this is a president who has always tried to encourage home ownership, but now when a home owner hears that perhaps their deductions on their mortgage interest might be reduced significantly, who is this fair and who is this making it more simple for?

JANJIGIAN: Well, I mean, clearly I think the best thing to have done would be to eliminate the AMT altogether but they couldn't do that because they needed to have a tax system that was revenue neutral. The government has become so dependent on the AMT. So, yes, one thing they're proposing is that they're going to eliminate the home mortgage interest deduction.

However, they're going to replace that with a tax credit. So, for example, if you have a $300,000 mortgage, and you live in a certain part of the country where that would qualify ...

WHITFIELD: OK.

JANJIGIAN: ... then at a six percent interest rate, you'd be paying $18,000 in the first year in interest. Under the current system that entire $18,000 would be tax deductible. And if your tax rate is approximately 30 percent, you would get a tax benefit of about $5,400. Under the proposed system, this would be replaced. So instead of deducting that $18,000, you would get a tax credit that would be equal to 15 percent of that $18,000 or $2,700.

WHITFIELD: OK, and hold that thought because I really do want to get into that much more in depth for you. But we've got some breaking news we want to follow up on. So don't go away.

Right now a little bit more on this plane crash taking place at Hobby Airport in Houston, Texas. Laura Whitley of KTRK is on the line with us. And Laura, make some sense of this. We're talking about a smaller plane that was somehow trying to divert a collision with a 737? Explain what happened.

LAURA WHITLEY, KTRK REPORTER: Yes, according to the Houston Fire Department spokesperson, the pilot of the plane that crashed was told to move off the runway, that he was on it. That 737 was supposed to be coming in with some problems on that runway. The Houston Fire Department says that the pilot lifted, circled back around and tried to land again and crashed. Now, Fredricka, I have just spoken with officials and they're telling me that there are at least two confirmed deaths in this accident. They also -- this is unconfirmed. It is a Citation jet. That means it has at least a couple of engines, jet engines, and it's made by Cessna.

WHITFIELD: OK, and the two people on board that plane then made by Cessna, you're saying, both of them died in this accident, right?

WHITLEY: Exactly. That's what I'm being told. I do not know if there were two or three people aboard the plane. But I'm told that there are at least two deaths involved so far with this accident that they can confirm for me.

WHITFIELD: And do we know why it erupted in fire? I mean, it skidded off the runway into that grassy area and somehow this combustion took place?

WHITLEY: Not exactly sure why the fire started, but we do know it skidded probably about 150 to 200 feet through the grass and ended up on a runway. And that plane that we're telling you about, the 747, was actually diverted to the international airport here in Houston.

I spoke with a witness who actually sort of saw the aftermath. He did not see much fire. He saw them foaming down the runway, but he wasn't sure either exactly why the fire started. He said it all happened very quickly.

WHITFIELD: Now, the 737 that was diverted to Bush Intercontinental Airport, which is -- depending on what time of day can be about a 40-minute drive away, do we know anything more about what kind of problems it was experiencing and what happened to it?

WHITLEY: We don't know right now. But I'm -- we're actually at a press conference that's just about to start with aviation officials. Let me see if I can get Roger Smith from the -- I'm on the phone with CNN. OK. They can't speak right now exactly about it to give us any more information about what's going on.

WHITFIELD: But, Laura, your understanding is that 737 did land safely, however, at Bush Intercontinental, right?

WHITLEY: That is correct.

WHITFIELD: And what about the people on board, have they already deplaned? Do you know anything about that?

WHITLEY: As I said, we're still waiting for some information from airport officials about that. And they just said that they couldn't give it out quite yet. So, you know, as soon as we find that out we can let you know.

WHITFIELD: OK. And so in the meantime, Laura, does that mean that Hobby Airport is closed or at least most of the runways are closed right now until this investigation ... WHITLEY: Actually, Hobby is already back open. It looks like the runway where the accident occurred is closed. But about 30 minutes ago we started seeing planes take off. A Southwest Airlines plane took off first. General aviation and commercial as well.

WHITFIELD: All right. Laura Whitley of KTRK, thank so much, joining us there out of Houston with that breaking story of the crash of a small plane there at Hobby Airport. The other plane that was to have tried to do an emergency landing or at least had been experiencing some problems and to land there at Hobby has been diverted to Bush Intercontinental Airport. But everyone seems to be fine in the case of the 737. More on this when we come back. And when we come back, we're going to continue our conversation about taxes.

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WHITFIELD: All right. We want to continue our conversation on the president's advisory panel on tax reform and Vahan Janjigian with the "Forbes Growth Investor" decided to stick around with us. Thanks so much. OK, just before that breaking news, we were talking a little bit more about the example you gave, if you had the $300,000 mortgage the kinds of savings that you would ordinarily be enjoying. But under this proposed plan, it would nearly cut it in half. And you say all of these reform ideas are to try to make it more fair and more simple. But then after you see that you're savings is cut in half, you wonder, fair and simple for whom?

JANJIGIAN: Well, that's a good question. Basically, the situation is this -- if you are a home owner and you have a reasonable size mortgage and you currently live in a state that has low taxes or no taxes and your property taxes are fairly low and for some reason you don't itemize your taxes, you will be better off with this new proposal because you will get that tax credit.

You will not have to itemize. However, if you are another individual who lives in a high tax state and you have a substantial mortgage and you have very high property taxes, and you do itemize currently, you will be worse off because you can no longer take that state and local income tax deduction, and you will not get the full benefit of the tax deduction on the interest on your mortgage.

WHITFIELD: OK. And then, to simplify the income tax, the proposal also talks about eliminating state and local tax deductions. What's that all about?

JANJIGIAN: Yes, this is the situation where people in high tax states will get burned. They can currently deduct the income tax at the state level as well as their property taxes. They won't be able to do this under the new plan. However, let me point out that many people who currently deduct these taxes can't get the benefit anyway because of the alternative minimum tax.

WHITFIELD: All right. Let's talk a little bit more about that, because while it was supposed to mean that the wealthier folks would be paying more, it also ends up hitting middle class people as well. So there's a proposal to change that or eliminate it altogether?

JANJIGIAN: That's right. That's right. The panel currently estimates that in 2006, if we don't change the tax laws, approximately 21 million taxpayers will get hit with the AMT. And a lot of people who consider themselves middle class have found over the past few years that they're getting hit by the AMT. And this is very painful because basically what it means is you can't take full advantage of your deductions anyway.

WHITFIELD: All right. Again, these are all recommendations. Congress will have the last word on all this. Vahan Janjigian, editor of "Forbes Growth Investor," thanks so much. Have a great Saturday.

JANJIGIAN: Thank you, Fredricka. Thank you.

WHITFIELD: So much more ahead on CNN LIVE SATURDAY. In a few moments, "IN THE MONEY."

At 2:00 Eastern we'll have much more on the pirate attack on a cruise ship off the African coast. Is modern-day piracy a bigger problem than you might think?

At 3:00, it's "CNN PRESENTS." Can crime labs be trusted? We look at the lack of standards, quality controls and training at many of the nation's forensic laboratories.

Up next a check of the day's headlines.

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