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New Jersey Expecting More Flooding; Karl Rove Testifies Before Grand Jury; Iraq Prepares for Important Referendum; Property Values Increasing in New Orleans

Aired October 14, 2005 - 13:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: Torrential rain forces people from their homes. Live pictures from Lincoln Park, New Jersey, where people are asking, "When is this going to end?"
CIA leak investigation. Political strategist Karl Rove in the hot seat. In his grand jury testimony, well, is it turning into a big distraction for his boss?

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I have no doubt there are going to be individuals who will be able to walk.

(END VIDEO CLIP)

PHILLIPS: Damaged justice. Ruined evidence, killing cases in the aftermath of hurricane Katrina. The CNN center in Atlanta, I'm Kyra Phillips. CNN's LIVE FROM starts right now.

Another wet weekend after a very wet previous weekend and a wet week in between. The northeast is looking for -- make that dreading -- two to three inches more rain on top of the foot or more that some places have picked up since the remnants of Tropical Storm Tammy blew through a week ago. So far New Hampshire and New Jersey have been hardest hit by the floods. But more floods, new floods are a danger, especially in Connecticut and points north.

CNN's Chris Huntington is in New Jersey city of Lincoln Park. He's looking more like a Lincoln Pond, I guess, you could say right now -- Chris.

CHRIS HUNTINGTON, CNN CORRESPONDENT: You might as well call Lincoln Pond Lincoln River. If you look down the street here, you see a flooded neighborhood where just yesterday, they were pulling -- local rescue operations were pulling folks out. We spent the afternoon here yesterday with a bunch of folks who expressed some concern that they thought they hadn't been warned adequately. The police have a different story to tell. They say that they are, in fact, hearing complaints that they've been warning people too much.

The simple fact this year, Kyra, that this place is still absolutely saturated. We've had rain on and off all day. It would appear that it is finally clearing and maybe clearing for good. And that coincides with the big picture radar that our weather folks have been showing our viewers. But here in this neighborhood, the floodwaters are likely to stay at this level as to sometime. Why? Simple reason. Anything up river and north of here is going to flow down here for the reminder of today and into tomorrow. So it's going to be quite sometime before this area dries out -- Kyra.

PHILLIPS: All right, Chris. We'll check in with you a little later.

Joining me on the phone now from New Jersey's Harry Conover, local coordinator of the office of emergency management. Harry, can you hear me OK?

HARRY CONOVER, COORDINATOR, OFFICE OF EMERGENCY MANAGEMENT: Yes, I can, Kyra. Thank you.

PHILLIPS: You were telling us about a breach in a dam? Is it close to the area where Chris Huntington is?

CONOVER: Well, it's actually in central Monmouth County. It's the Allaire State Park area, that dam. And the pond has overflowed onto some of the road ways and, you know, flooded the park out itself.

Our problems right now are flooding in Spring Lake and Loch Harbor and some of the other areas of Monmouth County, where we have mandatory evacuations in Spring Lake and Loch Harbor. And they were the only two communities that's mandatory. Those floodwaters are rising now.

PHILLIPS: And Harry, as we look at these live pictures. This is actually the neighborhood where Chris Huntington's camera is, exactly. All the people living in this area -- I mean, we look at this and think, wow. I mean, there's no way you could travel through here, and there's no reason to be in those homes.

Have the individuals in this particular neighborhood and neighborhoods that are getting these high waters, were they all asked to evacuate, or was it sort of up to them what they wanted to do?

CONOVER: Yes. No, they were asked to evacuate. The emergency management personnel put out that broadcast this morning. The National Guard was actually summoned into Spring Lake with their four- wheel drive vehicles, and we've used buses to move those about a hundred homes away from that flooded area to a firehouse.

PHILLIPS: What else is the National Guard doing, besides helping assist those residents to get to that firehouse? They've brought in a lot of sandbags? Sandbags have been set up. You mentioned the high- water vehicles. What else?

CONOVER: Well, we've been moving some pumps around the sewage treatment areas, too. We had a couple of sewer plants that were underwater. One we lost. We couldn't get that back. One we're trying to desperately save right now. And that's our critical area right now that we're keying on besides these other two evacuations that are taking place. PHILLIPS: Communications an issue yet or power? Does everybody still have power? Can folks use the phone, their cell phones?

CONOVER: No. Everything seems to be OK. Our partners at Jersey Central Power and Light have been fantastic through the whole store in getting the crews. They've kept crews on. They've brought crews in extra from outside the area. Tree crews for debris clearance.

And, you know, I can't say enough for what they've done, you know, to help out the situation here. And, again, we're, you know, hoping to get through this flooded area and have this recede. We have a high tide coming about 6:30, and we're going to be watching that very closely.

PHILLIPS: All right. We'll be watching, too. Harry Conover, Monmouth County coordinator there of the office of emergency management. Thanks so much, Harry.

CONOVER: OK. Thank you.

PHILLIPS: Finally, a ray of hope. I'm going to leave that to CNN meteorologist Dave Hennen, to unveil a halfway decent forecast -- Dave.

(WEATHER REPORT)

PHILLIPS: Dave Hennen, thank you so much.

The black clouds hanging over the White House these days has a lot to do with the legal difficulties facing the president's political guru and right hand man.

Today, Karl Rove made his fourth appearance before a grand jury investigating the outing of a CIA operative while back at the west wing, the president's spokesperson was denying the long-running probe was taking its toll on the staff. "We're aware of all of those things," says press secretary Scott McLellan, "but we've got a lot of work to do and that's where we are focused."

Be that as it may, it's hard not to notice protesters, dressed like giant multicolored condoms as they complain about -- now we're not making this you up -- leaks.

CNN's Bob Franken is taking in all the sights and spectacles at the D.C. Courthouse.

Bob, I gather that Rove took pains to avoid being a spectacle.

BOB FRANKEN, CNN CORRESPONDENT: Well, first I have to ask: does a 10-person demonstration merit being called a spectacle? By the way, that was a group, Code Pink, that likes to show up at these things.

Now, as for Karl Rove, what's notable is he has been in there a real long time, over three hours now. He arrived well before 10 a.m. this morning Eastern at an entrance where he didn't think there'd be cameras. Obviously, he was not successful in avoiding the cameras, which his lawyer had said that he would dearly love to do.

Since then, he has been inside, appearing for his fourth time causing a lot of nervousness among those people who are supporters of the Bush administration. This is an investigation that has gone on a very long time, and some lawyers say this is an ominous sign for the White House, although as you pointed out, the White House is saying that it's business as usual there -- Kyra.

PHILLIPS: Can you hear me? Thanks, Bob. I didn't know if you were going to a piece of sound there or not.

Let's just talk about the daily distraction. I was talking with James Carville, Paul Begala, and we keep asking that question. You've got Karl Rove, who has to deal with Harriet Miers' nomination, with Hurricane Katrina aftermath and now he's dealing with this. I mean, can he concentrate on what he needs to do within that White House while dealing with grand jury testimony?

FRANKEN: Well, it's hard to know for sure, but there are man, and neither Carville nor Begala would be considered administration insiders, since they're both very outspoken Democrats.

PHILLIPS: But they...

FRANKEN: However -- however...

PHILLIPS: You know they've dealt with scandals, though. I mean, the reason why I asked them do you think Karl Rove, you know, can operate in the White House, in addition to dealing with this, and the reason why I brought it up with James Carville is look at President Clinton. OK? He dealt with scandals and, at the same time, he had to deal with so many ongoing policy decisions. So I'm just -- I'm curious how Karl Rove can juggle everything, and can he?

FRANKEN: Well, you know, you bring up President Clinton, and there were many people who felt that it was quite remarkable how he was able to compartmentalize, to use the term that was so many times used and deal with a variety of things, including those personal issues that he was.

In the case of Karl Rove, it's hard to know whether he is equally capable of that. There are some who are saying that the rocky road that the nomination of Harriet Miers to be Supreme Court justice may, in part, be because Rove has not been able to give this his undivided attention.

PHILLIPS: Bob Franken, we will keep our attention focused on you and the Karl Rove situation. Thank you so much.

Now, let's talk about Iraq.

Well, it's referendum even in Iraq. Mere hours before Iraqis -- or Iraqis by the millions are to expected to decide the fate of a constitution designed to help all groups and factions live in peace. And as expected, despite a curfew, a four-day holiday and stepped up security, the vote itself is sparking violence. We get the latest now from CNN's Aneesh Raman. He's in Baghdad -- Aneesh.

ANEESH RAMAN, CNN CORRESPONDENT: Kyra, good afternoon.

Above anything else tomorrow is about keeping this political process on track, and that is the only way, according to many officials, to bring stability to Iraq and to bring U.S. troops home.

(BEGIN VIDEOTAPE)

RAMAN (voice-over): In a country desperate for hope, the rare moments of inspiration.

UNIDENTIFIED MALE: I vote!

RAMAN: But for a people crippled by a brutal insurgency, struggling with basic services, the importance of politics goes well beyond a vote. It is the only way out.

UNIDENTIFIED MALE: This can be a prolonged conflict if we do not resolve the politics of it.

RAMAN (on camera): The coming three months, with a constitutional referendum and a national election for a permanent government, could determine whether Iraq descends into complete chaos or heads towards stability, whether U.S. troops can start coming home and whether Iraqis can take control of their country.

(voice-over) There is a defiant, enraged voice against such a framework. The Sunni minority, who make up the majority of Iraq's domestic insurgency and whose participation is essential to stability.

MICHAEL RUBIN, AMERICAN ENTERPRISE INSTITUTE: We've got to convince the Iraqi Sunnis, for example, that the way to political power is through the ballot box, through political debate, through coalition building and not through bombs.

RAMAN: But for this Shalih al-Mutlag, one of the few Sunnis openly in the political fray, a weak center will destroy the country.

SALIH AL-MUTLAG, IRAQI DIALOGUE COUNCIL: There would be the civil war between the Sunnis and the Shia and the Arabs and the Kurds.

RAMAN: Politics could lead to civil war, but for now politics is preventing it. It is the majority Shia who will decide if sectarian strife heightens. It is they who are bearing the brunt of insurgent attacks, and it is their restraint preventing mass bloodshed.

The reason, says government spokesman Leith Kubba, is simple.

LEITH KUBBA, IRAQI GOVERNMENT SPOKESMAN: They benefit most from a democratic state of country. They lose most in chaos. Destruction is even among their political leader.

RAMAN: Leaders like Abdel Aziz Hakim, arguably the powerful politician in Iraq.

ABDUL AZIZ HAKIM, SHIITE POLITICAL LEADER (through translator): We watch the government, its performance, its officials. And consequently, if we see they deviate from serving the Iraqi people and from abiding by law, we seek to fix the issues.

RAMAN: Issues that are multiplying on a daily basis.

RUBIN: The nature of democracy is to have a firm enough system so that even if there is an outcome that Washington doesn't like, that many in Baghdad don't like, that three years later or four years later, they have a chance to reverse it. And that's why it may be important to keep U.S. troops in Iraq for the long-term.

RAMAN: Something that is testing the patience of a growing number of Americans.

(END VIDEOTAPE)

RAMAN: Now, Kyra, two numbers that we'll be looking for tomorrow. First, of course, is turnout. We saw some 58 percent turn out in January. We've seen 15.5 million Iraqis registered to vote this time around. It will give us a gauge of how many Iraqis are still invested in this process.

But also, those Sunni provinces. How many Sunnis turn out to vote, and do they have enough numbers to reject this constitution -- Kyra.

PHILLIPS: Aneesh, talk to me a moment about security. I've seen pictures of U.S. soldiers barricading schools and other areas where, you know, residents are going to go and vote. How much of a distraction do you think this could be? Or do you think security is so tight things should go well?

RAMAN: Well, that's the hope, certainly. Security is incredibly tight. The borders have been closed. Provincial borders, travel within the country closed as well.

The biggest threat, we're told, because cars are being kept off the streets, tomorrow is going to be suicide bombers. Iraqis are being told when they're waiting in line at the polls to distance themselves from one another, not to make themselves more of a target.

But we saw in January, despite at that point, a surge in violence leading up to the election, millions of Iraqis still going to the polls.

PHILLIPS: All right.

RAMAN: That is expected to happen again.

PHILLIPS: Aneesh Raman, live from Baghdad, thank you so much.

Well, tune in Sunday for two specials on the war in Iraq and the fallout. Seven p.m. Eastern, "CNN PRESENTS" takes an in-depth look at what's working and what's not in the battle for stability over the chaos. And after that, CNN's John King learns firsthand why on the home front the war seems more decisive than ever. "VOICES FROM THE HOME FRONT" airs at 8 p.m. Eastern, 5 Pacific Sunday, right here on CNN.

(BEGIN VIDEO CLIP)

PHILLIPS (voice-over): Next on LIVE FROM, bird flu, it's now in Europe. Will it spread to the United States? What you need to know to safeguard your health. We'll arm you with the facts about the flu.

New views of a New Orleans attack. New video released of a violent arrest. What does it reveal about what happened that night on Bourbon Street?

Ballet, without tutus. The careful choreography to keep the cars on the track. CNN's Dr. Sanjay Gupta puts us through the paces in the pits.

DR. SANJAY GUPTA, CNN CORRESPONDENT: Three point two seconds.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

PHILLIPS: All right. This tape just in. Karl Rove, Bush's top political adviser, leaving the courthouse. As you know, he went before a federal grand jury for a fourth time today as prosecutors neared a decision on whether to bring charges over leaking a covert CIA operative's name. As you know, Rove, the most powerful and controversial political strategist in Washington right now, has been the center of attention, of course.

Bob Franken there on the steps of the courthouse.

Bob, obviously, no comment?

FRANKEN: Obviously, no comment. We were told he would have no comment. We have been told he would dearly love it if we didn't even know when he was going and out of the building. Well, of course, we do know that.

We also know that he spent a pretty good period of time before the grand jury, well over three hours. And remember, this is his fourth appearance. So there seemed to be an awful lot to talk about. We do know that questions had come up after "TIME" magazine Matthew Cooper had described conversations that he had had with Rove, that some of that material included testimony that the grand jury had not heard before, about conversations that the grand jury had not heard about from Rove. So we know that that was at least part of it.

What we don't know, and neither does his lawyer, is whether Rove is somebody who is targeted to be a possible indictment here. The two names that have come up so prominently in this investigation include Rove, who is the president's chief political adviser, and Lewis "Scooter" Libby, who is the vice president's chief of staff. Both of them had been mentioned repeatedly as among the sources that reporters had when all of this began with the identification of Valerie Plame -- Kyra.

PHILLIPS: Bob Franken. On that note, we're going to take you straight to the White House now, Scott McClellan talking about Karl Rove. Let's listen in.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: ... focused on that work. We are working to spread freedom abroad. We're working to spread opportunity at home. The Iraqi people are moving forward on a constitutional referendum tomorrow. We're doing all we can to support them as they show, by their courage and determination, that they're going to defy the terrorists.

We are working to get much need assistance to the people in the Gulf Coast region, who are recovering from the two hurricanes that hit there. We're helping people get back up on their feet and rebuild their lives and rebuild their communities.

We're working with Congress on a number of important priorities. Congress is moving forward on a budget. We're working to make sure that budget meets our priorities but that it exercises spending restraint elsewhere so that we're cutting unnecessary spending.

We're working to keep our economy growing strong. It has been growing strong, and that's important, particularly with some of the devastation that hit a part of our country.

We're working to move forward on the Patriot Act renewal. The Patriot Act is providing important tools to our law enforcement officers to help disrupt attacks happening here at home, and it's important that we get that renewed. And Congress is working on that.

We're working to move forward to move on a national preparedness plan for avian flu. There are a lot of important priorities we've got going on right now, and there is a great White House staff that is focused on those priorities and doing their work.

UNIDENTIFIED FEMALE: Of course, there are many people who work here beyond Mr. Rove.

MCCLELLAN: That is correct.

UNIDENTIFIED FEMALE: But you have already suggested that he is enormously important to this White House and that the president has more confidence in him. And clearly, Karl Rove would have to spend some time working with his counsel on this matter, and he'll spend some time away from the White House, and so he would not be available to give the president advice in those moments. Has there been any impact?

MCCLELLAN: The president has a great team and the president is the one who is leading our efforts to address these important priorities, and that's where we are focused. And that's what we will continue to do, is carry out the work of the American people because that's what they expect. And while there are other things going on, the White House doesn't have time to let those things distract from the important work at hand, and that's why we remain focused on what the American people want us to do.

That's why we remain focused on keeping our economy growing. That's why we remain focused on addressing high energy prices. That's why we remain focused on winning the war on terrorism and helping the Iraqi people build a strong and lasting democracy so that our troops can come home. And that's why we remain focused on addressing other important priorities.

PHILLIPS: Scott McClellan focused on the focus of Karl Rove being focused at the White House. Even though he's going before a grand jury for the fourth time, we'll stay on top of that. As you know, Rove the most powerful and controversial political strategists in Washington. Right now, of course, President Bush's top political adviser. We'll follow the case.

Just moments ago, he left that courthouse as prosecutors neared a decision on whether to bring charges over leaking a covert CIA operative's name. We'll keep you posted on what happens there.

Meanwhile, New Orleans, a city in trouble that just doesn't need any more headaches, but it's got another one, a big one, in the caught on tape rough police handling of a man on Bourbon Street.

You've probably seen an edited version of the arrest and the beating of Robert Davis, but the A.P. just released the five-minute raw footage yesterday. Still wondering why it took awhile to release that raw footage. But mostly, it's more of the struggle after Davis was brought to the ground by three officers.

The lawyers for Davis and the police both say the additional video supports their case.

Now, keep it on LIVE FROM, because we're going to hear from both of those attorneys later in the show. They actually look at that videotape, that raw videotape and talk about it in a more in-depth way.

Now recovery is coming in small starts for that devastated city. Here's one reason for optimism. Bridge traffic on I-10 just across Lake Pontchartrain resumes today. That's the main highway, as you know. And work on one of the wrecked bridges wrapped up ahead of schedule.

But here's the real sign that the heart of New Orleans is beating the odds: beigniers and chicory coffee at Cafe du Monde. The landmark French Quarter eatery is set to reopen next week.

Well, something else dotting the Big Easy cityscape these days: for sale signs. They're all over the place in New Orleans. Are residents giving up and bugging out?

Susan Roesgen from our affiliate station, WGNO in New Orleans, joins me now with more on that.

Hi, Susie.

SUSAN ROESGEN, WGNO ANCHOR: Hey, Kyra.

How is this for a room with a view? I know you've seen this house in the background of some of our CNN live shots so I decided to climb on up and give you the bird's eye view. This house, before Katrina, was an apartment building. It's about a hundred years old and there were four tenants living here. Now, some of the tenants are starting to come back, not the one in this unit. That's why I camped out here today.

But the owner, who's 83 years old, Kyra, says he wouldn't think of building anyplace else. And he's digging around in the debris, trying to fix it up himself. And that's sort of the general sentiment that we're seeing right here in New Orleans.

After this disaster, you might expect some people to just say, "That's it. It's a hurricane zone. I'm getting out. I'm selling my house, what's left of it, and move." But you might be surprised by how many people now are trying to buy houses in New Orleans and by what they're willing to pay.

(BEGIN VIDEOTAPE)

ROESGEN (voice-over): Before Katrina, the real estate housing market in New Orleans was one of the hottest in the country. Just about everybody wanted to live the genteel life in an old Victorian home. And guess what? They still do.

SUZANNE WHANN, REALTOR: I get up at 5 in the morning. I've been working very, very hard. And I'm on the computer at night making flyers and that kind of thing. I have not stopped for one minute.

UNIDENTIFIED FEMALE: Come on, Margaret. Let's go.

ROESGEN: Real estate agent Suzanne Whann is busier than ever, showing a dozen houses a day to people like this young couple. Their home got five feet of water in another part of town, but they wouldn't dream of living anywhere but New Orleans.

CRAIG EHRENSING, BUYER: There's no logic to it, that's for sure, at this point. But, again, this is where we grew up. This is where everybody is, family. This is where we grew up. And we'll be back.

ROESGEN: The "for sale" signs on these homes in uptown New Orleans were up before the hurricane, with an average price near $200 a square foot. And the price has not gone down. In fact, this house was going on the market for $299,000 before Katrina. Now, the asking price is $324,000.

ELIZABETH FUSELIER, SELLER: The fact that it had no flood damage, no roof damage, only lost my backyard fence. It's in a beautiful neighborhood. I figured it might be prime opportunity to go ahead and raise the price and see what happens. You know? It's all a game at this point.

ROESGEN: The other hot properties are apartments and condos. One bedroom, one bath condos are selling for $250,000, nearly double the going price before Katrina.

And these days, while many people are happy just to have a FEMA trailer, those who can afford it, are moving back home.

(END VIDEOTAPE)

ROESGEN: Now the insides of some of those homes are just beautiful, but the front yards could use some work. You cannot drive a block in this city without seeing a white blob or two or three. It's all the refrigerators that people have hauled out of their homes. Apparently they couldn't get the smell out so now they're just leaving them there.

And Kyra, you don't want to walk around those refrigerators, because the flies are so big now they've got their own ZIP codes. First the flooding, then the mold, then the flies. I think it's the plagues of Egypt down here, Kyra. But we're making the best of it.

PHILLIPS: Well, I know I shouldn't laugh but, you know, you always put things so eloquently.

Let me ask you -- I can't even say "eloquent." Admiral Thad Allen was saying that debris has been a big issue for him, and they're trying so hard to get all those piles and piles of trash out of there. What's going to happen to the refrigerators? I mean, is anybody going to come get them? How long is it going to take?

ROESGEN: Well, nobody knows for sure. The EPA says you can call the EPA, and they'll come get them. But basically, there is no garbage pickup in the Orleans Parish except for the French Quarter. So some of us who live here are thinking about sneaking down -- don't tell anybody, Kyra -- sneaking down to Royal Street in the middle of the night with all our garbage and with our refrigerators and just leaving it there because we know it will be picked up.

PHILLIPS: Yes, you're right. Nobody will know that you did that after we just talked about it on CNN.

Susie Roesgen, great live shot. Great perspective, as always. Thanks so much for your time today.

ROESGEN: You're welcome, Kyra.

PHILLIPS: Well, straight ahead, bird flu. You've heard a lot about it lately, of course. We've been talking about it. But what can you do about it? Will it affect America's food supply? We're going to talk with the man in charge of protecting America's poultry from that very disease.

And a blond Bond makes a big splash. What do you think? I didn't know James Bond wore a life vest but, you know, he's a little more wimpy. He leaps into action. We'll tell you all about it later on LIVE FROM.

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