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Miers Withdraws From Supreme Court Nomination; CIA Leak Investigation Continues; Interview with Senator Grassley; Oil-for-Food Scandal Probe Indicates Thousands of Businesses

Aired October 27, 2005 - 14:00   ET


KYRA PHILLIPS, CNN ANCHOR: Who will the president nominate now that Harriet Miers has respectfully withdrawn? We're going to go over the sure things and longshots this hour.
And look out, here comes tomorrow. Another fun day for the White House on tap. We've got the latest on the CIA leak investigation.

American tourists stranded in Mexico after Hurricane Wilma. Today we'll get two stories: one a sigh of relief, and another a cry of anguish.

From the CNN Center in Atlanta, I'm Kyra Phillips. This hour of CNN's LIVE FROM starts right now.

President Bush is considering, the rest of the world is awaiting his third nomination to the highest court in the land. That would be an inviolable prospect for any president, except it's only Mr. Bush's second high court vacancy. And compounding the awkwardness that's marked this whole episode, the next nominee will be screened by the nominee who backed out this morning, White House counsel Harriet Miers.

In 24 days, Miers went from obscurity, to curiosity, to object of ridicule, especially from the far right. Her desperate brings -- or her departure, rather, brings murmurs, not shouts.


SEN. BILL FRIST (R-TN), MAJORITY LEADER: She came to this decision on her own based on what she has experienced and witnessed, and with the requests that are currently being made, and as she projected forward as to the -- the hearings. Again, in the best interest of the country.

SEN. HARRY REID (D-NV), MINSOIRTY LEADER: Apparently, Ms. Miers didn't satisfy those who want to pack the Supreme Court with rigid ideologies. The only voices heard in this process were the far right. She wasn't even give an chance to speak for herself before the Senate Judiciary Committee.

SEN. TRENT LOTT (R), MISSISSIPPI: I had problems with her in terms of her experience and qualifications. And I've said so. I was withholding final judgment until I saw -- I had a meeting with her and saw what she had to say further. But I think this is a good thing for the president and for the process. And I think he'll come up with a very strong nomination and replacement.

SEN. DICK DURBIN (D), ILLINOIS: The good reason given by the White House for the Miers' withdrawal was the document issue. The real reason, of course, was the opposition from the radical right wing of the Republican Party.

SEN. SAM BROWNBACK (R), KANSAS: The pale was getting bigger for this nominee, not smaller to pass through or pass over. But still, at the end of the day, it was about the documents.

SEN. CHARLES SCHUMER (D), NEW YORK: The White House offered a nominee who had no record except for the documents and then said, we won't give you the documents.


PHILLIPS: So, was this a fight over principle, executive privilege, separation of powers, or plain old politics, one agenda versus another? Either way, the stakes are even higher with the next nomination, if such a thing is possible.

CNN's Ed Henry sets the scene on Capitol Hill -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Kyra, that's right. I mean, rally, politics on both sides of the aisle, when you hear Senate Majority Leader Bill Frist saying that Harriet Miers did this on her own, what he's not mentioning is that it was he who placed a call last night to the White House. White House chief of staff Andy Card suggesting the votes were not there, this nomination was an uphill battle, which was stating the obvious. But the situation was getting graver and graver as one meeting on the Hill, one meeting at the White House after another piled up. And basically the White House was getting the signal that conservatives would not support this nomination.

They had -- they had grave concerns. They were worried that she was going to wind up being another David Souter, someone who was appointed to the court with the first President Bush expecting it would be a conservative, but in the end, turned out to be pretty moderate.

And I also think on the document issue, you're hearing a lot back and forth there. The bottom line is that this was not a fight between Democrats and Republicans like we normally see on these documents over nominations. In fact, the Republican senators urging the White House to turn over documents as well.

And while the president kept saying there was a red line that he would not cross, that he would not give privileged documents to the Senate, in fact senators in both parties were saying they were never asking for privileged documents. They were asking for documents that were unprivileged, non-privileged documents, and the White House would never do that -- Kyra.

PHILLIPS: Ed, can we just talk for a moment about Harriet Miers? And now she has to head up this search for the next possible nominee. And I'm just curious, would it make sense for her to come forward and talk to reporters? Do you think she would do that? Because I think a lot of people are wondering what's going on in her head, how is she feeling right now, why did she want to make this decision, and if, indeed, will it affect her relationship with the president?

HENRY: You know, it's funny you asked that, because I think she has been miscast at the beginning of somebody being put forth with such a high-profile position. Even her supporters, like Senator John Cornyn, telling me as late as yesterday that she's very uncomfortable in these public settings, that she really doesn't like talking about herself.

And I think back to the first day when she was nominated, she came down the stairs from where I am right now with Senate Majority Leader Bill Frist, and she looked like a deer in the headlights. And I don't mean that pejoratively. I just mean that with the flash bulbs going and whatnot, she had never been in a situation like this.

And that's why when so many people, her allies, kept saying, just wait until November 7 when she gets to the hearings, these one-on-one meetings with senators are not going well, but she'll do better in front of the Judiciary Committee, you had to scratch your head and say, how is she going to do better in front of 20 senators from both parties hitting her hard, even more flash bulbs going off, live televisions and all the rest?

And so she was -- she was kind of miscast for this. And in terms of what she does moving forward, it's going to be extremely difficult, you're right, for her to be the one to be vetting the next nominee, for her to be preparing the next nominee for what she was going through. Although, on the other hand, she obviously now has a sense of how difficult, how bitter this process is, and at least she can pass that on to the next nominee -- Kyra.

PHILLIPS: Yes. Good advice. It will be interesting to see how -- if she does advise that nominee in many ways.

Ed Henry there on the Hill.

Thanks so much, Ed.

HENRY: Thanks.

PHILLIPS: Well, it was obvious from the first that Harriet Miers was not the conventional choice, even as Ed said, for the Supreme Court. So will the president push -- or will President Bush pick another longshot to replace Sandra Day O'Connor? And if so, who could it be?

Well, here are some of the possible candidates.


PHILLIPS (voice over): Larry Thompson. During the president's first term, he was number two at the Justice Department under Attorney General John Ashcroft. Prior to that, the attorney was with a high- powered Atlanta law firm specializing in antitrust litigation.

Thompson, who's 59, is now general counsel at PepsiCo. Although he has no judicial experience, Thompson is a close, personal friend of Justice Clarence Thomas.

Before the first President Bush settled on Clarence Thomas in 1991, he had considered federal appeals Judge Emilio Garza for the high court. Garza, a staunch conservative who favors overturning Roe versus Wade, currently sits on the 5th Circuit Court based in New Orleans. He's a former Marine Corps officer and a native Texan. Garza is 58.

And if the president wants a female version of Chief Justice John Roberts, he could nominate attorney Maureen Mahoney. She has extensive experience inside the Supreme Court, where she clerked for the late William Rehnquist. As a former deputy solicitor general, Mahoney also argued many cases before the high court, including her landmark victory upholding affirmative action at the University of Michigan.

She was nominated as a federal judge in 1992, but the Senate never acted on it. Mahoney is 50 years old.


PHILLIPS: Now, openings on the Supreme Court don't happen very often, but once it does happen, and once someone is nominated, having their name withdrawn before a vote in the Senate is even more rare. Now, here are some of the facts.

Since the Supreme Court was created in 1789, U.S. presidents have submitted more than 155 names for nomination. The majority, 114, were confirmed, but only a handful of nominees were withdrawn without even being considered by the Senate.

Now, before Harriet Miers, Reagan nominee Douglas Ginsburg was the most recent. His name was withdrawn just days after he was nominated in 1987. He was reportedly asked to withdraw after it came to light that he tried marijuana.

Now, in 1968, Associate Justice Abe Fortas was nominated by Lyndon Johnson to become chief justice. His confirmation vote was filibustered after a controversy over speaking fees that he accepted. He withdrew his nomination later that year and eventually resigned from the court.

And even as far back as the 1840s, President John Tyler had a difficult time finding the right person for the job. He had two seats to fill, and he offered nine nominations in a 15-month period. Tyler even nominated some candidates more than once. But only one of those was eventually confirmed.

Now, the clock is ticking for key White House aides Karl Rove and Lewis "Scooter" Libby. Both are caught in the controversy over who leaked the name of a covert CIA agent. Special prosecutor Patrick Fitzgerald expected to reveal the results of his investigation tomorrow.

And Justice Correspondent Kelli Arena is in Washington with more on the case.

Kelli, I know you have been working your sources. Where do things stand right now?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, for the most part, the special prosecutor has spent the day holed up here in his Washington office. We are told by one lawyer involved in the case, though, that yesterday when he did appear before the grand jury, he summed up the evidence that he had. He's very much in the final stages. And as you said, Kyra, we should be hearing his decision tomorrow.

PHILLIPS: Possible indictments, what do you think?

ARENA: Well, lawyers involved in the case do expect that we will see at least one indictment. One lawyer says that he's looking very hard at possible perjury by Karl Rove, and that that's one of the charges that is being considered.

All along, Kyra, our sources have said that the charges will probably not have to do with the actual revealing of a covert CIA operative's name, but more along the lines of either obstruction of justice or perjury or providing false statements. Lots of comparing of notes going on, we're told. Not only before grand jury testimony, but interview testimony, and then testimony of one versus testimony of another.

PHILLIPS: So are you pretty confident that we're going to know what his decision is tomorrow? And I'm also curious, did any of your sources say, well, the plan was this was going to come out about Harriet Miers today, so we'll save indictments and CIA leak stuff for tomorrow?

ARENA: You're so Machiavellian, Kyra.


ARENA: Not that -- I mean, I've been speaking to mostly legal sources who have really been just been honed in on what is going on and what they can glean in reading the tea leaves. The political stuff we'll leave to the other folks. But we do expect that we'll hear something tomorrow.

As you know, the grand jury does expire tomorrow on the 28th. We have no indication that Fitzgerald has asked for an extension. And unless there is something that's really unforeseen, those that are as close as we can get to this investigation do believe that tomorrow we will have some sort of conclusion.

PHILLIPS: All right. It's going to be a long day, Kelli.

ARENA: It sure will.

PHILLIPS: Manana. Yes, right. Thanks so much. Kelli Arena.

Well, straight ahead, Hurricane Wilma left them out of gas, out of supplies and out of patience. Floridians don't see much sunshine in their state. We're going to check in on the relief efforts there.

And Wilma's other victims. Thousands of Americans still stranded in Mexican tourist towns. Some in desperate straits. We're going to talk with families dealing with that crisis straight ahead on LIVE FROM.


PHILLIPS: Now, days after Hurricane Wilma passed through south Florida, a lot of people are still lining up for food, water, even gasoline. Utilities are still working to restore power across that area, especially to fuel depots and gas stations.

President Bush is touring some of the damaged areas this afternoon also with his brother, Governor Jeb Bush. The governor said yesterday that frustrated residents should blame the state, not FEMA or the feds for delays in the delivery of relief supplies.

Now, in Cancun, more waiting for stranded tourists. Thousands of people are still looking for a way home, even though more than 6,000 people were flown out of that country yesterday. Airline flights are said to be booked for days in advance at Cancun's damaged airport.

Meanwhile, the U.S. is sending a cruise ship filled with supplies to help people on the nearby island resort of Cozumel.

Now, among those stranded in Cancun since Wilma crashed into that area are Justin Johansen and his wife Danielle. Justin's mom, Alice Johansen, has been trying to help that couple get out of Mexico from her home in Utah.

Alice Johansen joins me on the phone now from Utah. And then her son Justin also joins me on the phone from Mexico.

Hopefully I've got both of you on the line.

Justin, if you can hear me all right, just describe to me what this has been like for you and your wife, and I understand a number of other family members with you, for the past week.

JUSTIN JOHANSEN, STRANDED IN CANCUN: Right. It's been terrifying, honestly. We have been basically on the run for a week trying to stay in areas with food and water and relative safety where the tension is just on the edge of violence erupting, and just trying to stay safe and sheltered with the basics like food and water. It's been crazy.

PHILLIPS: Who else is with you, Justin, besides your wife?

JOHANSEN: My wife's parents, and her brother and his wife, and her brother and younger sister. And that's actually one of the complications. She's suffering from a brain tumor, and we've been out of her medication. She started to suffer seizures yesterday. And we -- well, the day before yesterday. And we've been unable to get any emergency assistance for her.

PHILLIPS: So she is out of her medication and she's been having seizures?

JOHANSEN: That's correct.

PHILLIPS: Is there anybody there to -- any type of medic that can help treat her?

JOHANSEN: No. And I think that one would be led to believe that there is a Red Cross presence or some emergency medical assistance present, and that's just not the case.

PHILLIPS: Well, let me ask you this, Justin, because the State Department is obviously the department that is supposed to respond. And from what I understand, 23 of its officers got there after the storm hit. They did put out a warning a couple days -- or a few days before the storm hit.


PHILLIPS: But did you ever see any warning from the State Department? Was anything ever posted? Did you see anything on TV?

JOHANSEN: Everything that we've seen on television has been in Spanish. And none of us speak or read Spanish. So we have no information other than that of our loved ones at home. And thank goodness for a cell phone that works occasionally, because there is no information available to tourists other than a giant rumor mill and loved ones at home trying to translate what they're getting from television and the Internet up there.

PHILLIPS: So, the now 64 officers from the State Department that are in country, have you seen anybody from the State Department or been able to reach anybody from the State Department?


PHILLIPS: Where exactly are you?

JOHANSEN: We have bounced around from Cancun, Akumal, Tulum, (INAUDIBLE). We actually headed for the ruins up in Chitzanitza because we figured worse-case scenario we would have to hide out in the pyramids because there was no where else to go. And the problem that we keep running into is that, for example, we were in a relatively safe place yesterday in Ballo del Lid (ph), but what keeps happening is the airlines keep booking flights and telling us these are confirmed seats, move, get to this airport, get there really early, and we'll get you out.

But they have so many people that have been bumped ahead of us. And then they've sold more tickets. So, for example, this morning, we drove six and a half hours on a treacherous, treacherous road to get to Cancun International this morning to find out that our "confirmed seats" out of there had been given way to people who were there at 3:00 that morning.

PHILLIPS: So you actually paid for the tickets but you got bumped. So you're still stuck there.

JOHANSEN: We have spent thousands of dollars on multiple sets of tickets and none of them have been honored. And every time we call the airlines we're told these are confirmed seats, you have seat assignments. We get to the airport and they've given them away. This morning we got to the airport seven, eight hours prior to our flight and they had given them away several hours prior.

PHILLIPS: What airlines, Justin?

JOHANSEN: America West is the latest.

ALICE JOHANSEN, JUSTIN'S MOTHER: Actually, that's American, Justin.

J. JOHANSEN: Our original flights were with Delta, and they've done next to nothing to help us.

PHILLIPS: Alice -- now Alice, you're trying to help Justin and his wife and the rest of family get out of there. Have you been calling a number of airlines?

A. JOHANSEN: I called everybody. Yesterday I saw that it's actually American Airlines, not America West.

J. JOHANSEN: Oh, I'm sorry. Yes, American Airlines. A little tired here.

A. JOHANSEN: They told me they had a flight coming -- coming down there. So I jumped on the phone, and they made me a confirmed reservation. I talked to them three times.

I paid for the flights. I had confirmation numbers. Justin had a paper copy of his reservation. They assured me he would be safe and get out of the country.

I have his two little children who are missing their parents desperately. Apparently, when they got there they would not let them on the flight. My -- my situation is this, I feel like the government has absolutely abandoned its U.S. citizens.

PHILLIPS: When you say the government, you mean the U.S. government, Alice?

A. JOHANSEN: Yes. I think it was...

PHILLIPS: Who did you contact?

A. JOHANSEN: Pardon me?

PHILLIPS: Did you call the State Department? Who did you call within the U.S. government? A. JOHANSEN: I have called the embassy, I have called the consulate, I have called every airline there is to call. You cannot get a hold of the Cancun airport, you can't get a hold of Merida. The lines are all busy.

I don't understand why the American government is not sending several either cruise ships or Air Force planes down to get our people. If it were another country, we would be sending more help. I think we need to help our own citizens for once.

J. JOHANSEN: And let me -- let me just tag on to that if I can.

PHILLIPS: Go ahead, Justin.

J. JOHANSEN: Because I don't think they understand the problem. And the problem is people down here have a very, very limited amount of food, water, cash, because there's no credit cards, there's no power, there's no running water in a lot of areas. So you have a very limited ability to move. Most people down here don't have rental cars. And so, you use up the very limited resources you have to go to these places that the airlines tell you to go, and you get there and they have nothing to help you.

And so, every day keeps getting worse.

This morning we saw families with little kids who had come to these rally points three, four days in a row, had consumed all of their food and money reserves, and were still sent home despite the fact that they had in their hands confirmed seats.

PHILLIPS: So what are you going to do now, Justin?

J. JOHANSEN: Well, we just took off from Cancun because at one point armed soldiers had to intervene in the crowd. And it was on the edge of violence. So we just escaped.

We're going to try and get the rather fragile vehicles we have left to Merida on the other side of the peninsula, hoping -- hoping to find some refuge there, because the situation in Cancun is just not viable.

PHILLIPS: Now, Justin, I'm not comparing this to, say, New Orleans, but I'm curious. With regard to the elderly or those that are sick, did you see issues? Have you seen issues regarding those type of people? I mean, are there people that are, do you think, will not make it? Is it that dire?

J. JOHANSEN: I honestly think that people's lives are in danger here. We've got our instance here with our little sister and sister- in-law, Brandy (ph). I mean, the girl's having seizures and we're telling airlines we need help, and we can't get help.

I saw several elderly in the lines today and in the heat with no food or water. And the cry was, "We've spent all our money, we don't have the ability to get another cab to come back tomorrow or to get back to our hotel. Where do we go, what do we do?" And there's just -- there's just no information and no help.

PHILLIPS: Now, Brandy (ph) is the one with the brain tumor?


PHILLIPS: So right now -- Alice, is there any way, or Justin, is there any way that Alice can get medication for her brain tumor and somehow overnight it or get it to you? I mean, can you even get to a place that can receive mail right now?

J. JOHANSEN: We originally have been trying to work with several local pharmacies. We had doctors in the states send prescriptions. And we were promised that the medications would come into local pharmacies. But they've been unable to fill the orders, they just can't get the medications.

And right now we're just facing a delay of getting the medications through Customs, which takes a couple of days. And we don't know where we're going to be. I mean, we're literally on the run just trying to get somewhere safe, because when the soldiers pull out the machine guns to calm the crowd down, it gets a little tense.

PHILLIPS: Well, I can say that we have made a number of calls to the State Department. We were not given an interview.

If you go on the Web site, it does say that on October 20, the State Department issued a public announcement asking Americans in the Yucatan to consider departing until the storm has passed while commercial flights are still available.

Did you by chance get that warning, Justin, before the storm hit? And did you consider leaving?

J. JOHANSEN: We didn't get the warning from the State Department. We got the warning from the locals, who so many have stepped up and shared what they have. And we did try to leave, and Delta Airlines did not have the capacity to get us out.

PHILLIPS: Is that because so many people were leaving?

J. JOHANSEN: Right. So we headed for high ground. We -- as soon as we heard the warning, we headed for high ground.

First, we tried to get out. We were unable to get out. So we headed for high ground and the weathered the storm, better than most.

We drove through hotel strip in Cancun today, and several of the high-rise buildings, you can actually see through the hotel, as in look from the one side and see sunshine on the other. So we escaped the worst of it by heeding the warning and getting out of the way.


PHILLIPS: Well, Justin, I've got to tell you, I wish that we could -- because as we've been listening to your story, we've been trying to get some type of response out of the -- out of the State Department to find out how you, individuals like you, especially with someone who's got a brain tumor and who's having seizures, and Brandy (ph) doesn't have her medication, I'm told there are 64 officers there from the State Department in that region. I wish I could give you more information on how to -- how to find one of those individuals.

Hopefully we'll get some type of response and I'll be able to give you better advice as we're here at CNN. But I want you to stay with me for a moment, if you don't mind.

Alice, stay with us.


PHILLIPS: Some tourists are managing to get out. We've been reporting that. And around this time yesterday we spoke with Shirley Chugden. Her daughter, Kelli Michel, was stranded in Cancun with her husband and four children. You may remember this picture from yesterday.

We talked with Shirley about the family. And last night Kelli and her family made it home to Colorado.

Kelli now joins me by phone.

Kelli, it's great to know that you are home. How did you finally do it? I don't know if you've been able to hear what Justin is saying and how his mom is trying to help from Utah, but how did you finally get out of there?

KELLI MICHEL, RESCUED TOURIST: Yes, I did hear what he had to say, and we -- the most frustrating part of all of this is what Justin has been saying, it's just the lack of information and the spotty communication that all the tourists have been given.

We had a representative from our hotel tell us that there was a university in downtown Cancun where they were issuing boarding passes for people who had confirmed flights. So yesterday I went down with a group of people from our shelter at 6:45 in the morning to stand in line, and at that point American Airlines was the only representative there. And they said, "You have to be ready to go. We will be taking you from the university straight to the airport."

So that's how we got out.

PHILLIPS: So that's -- now, how long did it take for you finally to get that opportunity? I mean, had you been -- how long had you been trying to get out?

MICHEL: Gosh, we were supposed to go home Friday the 21st, and we had confirmed flights on Tuesday, then again on Wednesday. And then it was bumped all the way to Friday.

So my family has been trying nonstop to get us out from their end. And so it's just been kind of a rally of people on my side that have just been working the airlines over. PHILLIPS: So Kelli, before the storm hit, did you know of the State Department's warning to consider getting out of there before the storm hit? Had anyone told you about that warning? Did you hear about the State Department's warning?

MICHEL: No, we did not. And when we were at the hotel, you could sense the energy level rising. And people were really worried.

And they kept saying, "You have to remain calm, and you must not listen to rumors. You will be taken care of. We weathered Emily, we can do this. You just need to stay calm and listen to our instructions."

And at that point, my family had called and said, "We need you out of there." But at that point, it was Wednesday afternoon and there was no way to get out.

PHILLIPS: I've got to tell you, you've got beautiful children. Your four kids are just precious.

I can just imagine how this has affected them. Are they OK? How did it -- I mean, your mom was saying that you were struggling trying to keep them calm and that they were having a hard time sleeping, and they were very nervous, too.

MICHEL: They were very nervous, but children in our shelter amazed all of us. You know, it broke our hearts to see so many babies there that needed help, but on the other hand, they're resilient.

But I do have to say that two of my four children are facing stomach issues right now. And I've developed a chest cough. And my other child has also developed a chest cough. So we're at the doctors. We're going to go to the doctor today and just make sure everybody's OK because we're concerned about possible disease from being in such close quarters with so many people for so long in unsanitary conditions.

PHILLIPS: Oh, Kelli. All right, stay with me just for a moment. My producer just came into my ear and said that we just got a phone call from Senator Orrin Hatch's office and he wants to help Justin and his family get out of Mexico. Mike, do have the senator or someone from the office on the phone?

OK, all right. So Justin -- and Alice, I know you're still with us, too. Justin, stay with us on the phone. Alice, stay with us on the phone. Because Justin, we're going to connect you with Senator Orrin Hatch -- either someone in his office or with him directly. You're going to get out of there.

A. JOHANSEN: Thank you.

PHILLIPS: Are you on a cell phone or a hard line, Justin?

J. JOHANSEN: I'm on a cell phone.

PHILLIPS: OK, you have enough juice in that cell phone? J. JOHANSEN: I hope so. I think we'll be OK.

PHILLIPS: OK, good. All right, then stay on the line because I don't want to waste any more time. I want to get you connected with the senator. Will you let us know when you're home, Justin?

J. JOHANSEN: You know, I will let you home. And I thank you so much. I just am really glad that somebody's telling this story, because there are a lot of people down here who really need help.

PHILLIPS: It's obvious, and I think we all learned a lesson as journalists when we watched what happened on the Gulf Coast, Justin. And you just got to do what you can. And, luckily, we have the power to connect via interview and try to orchestrate some type of help for you. So, I'm going to let you go, let you connect with them. And also your mom, Alice. Alice, thank you for calling in.

A. JOHANSEN: Thank you.

PHILLIPS: Also, Kelli, thank you so much for calling in. I'm so glad you're home. I hope you'll keep us updated on you and your husband and your four kids. Your mom was just terrific. I know that she was having a hard time getting help to you and she was frustrated. I hope you have a good night's sleep tonight and let us know how the family is doing, OK?

MICHEL: I appreciate it, thank you so much.

J. JOHANSEN: May I add one more thing?

PHILLIPS: Yes, go ahead. Is that Justin?


PHILLIPS: Go ahead, Justin.

J. JOHANSEN: We just want to tell our two little kids at home how much we miss them and that we're trying to come home.

PHILLIPS: Alice, are the kids listening?

A. JOHANSEN: The kids are not listening, but they are with me and I will tell them.

PHILLIPS: Justin, the word will get through to your kids. Are you all right, Justin?

J. JOHANSEN: Yes, I'm all right.

PHILLIPS: All right. You're going to get out of there. Don't worry. And the best part is, the kids are safe, you'll be home soon.

J. JOHANSEN: OK. Thank you for your help.

PHILLIPS: Oh, it's our...

A. JOHANSEN: Thank you so much.

PHILLIPS: It's our pleasure. Justin Johansen, Alice Johansen. Also, we heard from Kelli Michel. She and her family there we stranded. They are finally home.

Well, Republican senator Charles Grassley of Iowa, he joins us now from Capitol Hill. Senator, I wanted to talk about Miers, but if you don't mind, wow, that was pretty riveting to hear what happened there in Mexico. I'm also getting word we're getting fresh video of the president. So I'm going to refer to that in just a moment, too, once we get that.

But first of all, what do we do about these Americans stranded in Mexico? And where is the State Department?

SEN. CHARLES GRASSLEY (R-IA), JUDICIARY COMMITTEE: Well, there's a considerable limit to what we can do. And I hope that Senator Hatch and his staff can help the people you just had on. I'm not sure I'd want to go quite as far and promise that in a certain period of time I could get you out.

I would promise my constituents I'd do my darndest to help them. I got at a call at the farm, for instance, on Saturday, for instance, from the Miller family, of La Porte City, Iowa.

PHILLIPS: Senator, hold that thought. Forgive me. Just want to listen to the president quickly in Pompano Beach. Stay with me, sir.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's an amazing spirit after a disaster. And that spirit is the spirit of people willing to give up their time. I've also come to make sure the federal response dovetails in with the state efforts. And people here -- what I've heard is that people concerned about gasoline.

A lot of the gasoline lines that people are standing in will be alleviated by new ships coming in that'll be able to offload the gasoline and make sure the stations have got fuel.

But a lot of the gasoline issues relate to the fact that the electricity's not up and running.

I know people are frustrated because they don't have power on yet, but I've been told by Jeb and others that there are at least 6,000 people from out of state working with their power people here in-state to get people's lines up as quick as possible.

In other words, it's a priority. People are working hard to get your electricity back on.

The mayor wanted me to make sure that I told the citizens here that water and ice are moving quite rapidly and that one of her concerns is generators. And Jeb and I spoke to her about the generators that are being moved from a central location to parts of Florida that need the generating capacity to get their life up and running. Things don't happen instantly but things are happening. Right here on this site, people are getting fed. Soon, more and more houses will have their electricity back on and life will get back to normal.

In the meantime, the federal government, working with the state and local governments, are responding as best as we possibly can.

Again, I'm impressed by the deep compassion and care of our fellow citizens. Out of these disasters often times comes some good. And one of the good that comes out of a disaster is it gives people a chance to love a neighbor, to help somebody in need.

I thank you all for giving me a chance to come by.

PHILLIPS: All right, president of the United States there with his brother, Governor Jeb Bush, in Pompano Beach, Florida, traveling through right now as hundreds, thousands of people still without power, without water, without ice.

Senator Charles Grassley with me on the Hill. We were going to talk about Miers. We might get to that in a minute. But you know what, Senator, I've got to ask you something. I thought we learned a lot of lessons from Katrina. DOD had to step in and help out. Things got done. Now we're seeing problems here in Florida. We're seeing problems with Americans stuck in Mexico.

Let's start with Florida for a minute. Do we need DOD? Do we need to call in DOD and get military help here? Because there are people that don't have water, don't have power, don't have ice, and they're getting frustrated.

GRASSLEY: There is a major discussion on Capitol Hill and even in the executive branch of government, the extent to which we ought to repeal some laws going back to reconstruction that limit what the military can do domestically and have them be a lead agency in the natural disaster instances. And right now, you know, there's -- that's just being discussed. And I'd say never before would we thought about discussing that, except now seeing the shortcomings of FEMA.

PHILLIPS: I know, Senator, why is it just being discussed, though? We're bringing live shots day in and day out of these people desperate for water and...

GRASSLEY: Let me tell you why it's discussed. Because during the reconstruction the military was abusing Americans' rights. And it's -- we're going to move very carefully before we change the -- what they call the posse comitatus law.

PHILLIPS: Oh, but, sir, sir, we saw General Honore come in there to Canal Street and bring food and water and tell people to put down their guns. And finally we saw people off the streets and they stopped dying on the sidewalks in New Orleans. Now, you know, how long do we have to wait in disgust until we start seeing people dying in Florida? All due respect, sir.

GRASSLEY: With all due respect, that was under the National Guard and not under the U.S. military.

PHILLIPS: Well, let's talk about the National Guard.

GRASSLEY: Well, there's no problem then. They can do anything the governor wants them to do and the...

PHILLIPS: So the governor needs to say, let's bring in the National Guard, we've got here?

GRASSLEY: Well, that's one of the major shortcomings of why things didn't happen sooner in Louisiana, because the governor of Louisiana didn't let the command of the National Guard go to other people to make it move.

PHILLIPS: Sir, I don't know if you can see these live pictures -- not the live pictures right now, but these are -- this is videotape from throughout the day today and yesterday and the day -- I mean, long lines for gasoline, people waiting in line for water, waiting in line for ice. People arguing, shouting.

This just -- you would think we would learn so many lessons from Katrina, and it seems like we're seeing this all over again. Obviously, or, I don't know, maybe the scale is like what we've seen in some ways in Louisiana. But it's happening. It's happening before our eyes and these people need help.

GRASSLEY: Well, it's quite obvious that money is not standing in the way, because we put up $62 billion of money of which only about $20 billion has been spent thus far. So, we've got the resources.

PHILLIPS: We've got the resources, so what do we need to do?

GRASSLEY: What we need to do is action.

PHILLIPS: How do we -- how do we put that action forward? How do we take action?

GRASSLEY: I'm going to stop this, because there's no sense of my having a confrontation with you. You're a friend and I appreciate what you're doing and I'm not going to give an on-the-spot answer because these things...

PHILLIPS: I don't want to argue with you, sir. I know.

GRASSLEY: These things take some thought.

PHILLIPS: Absolutely.

GRASSLEY: And I'm not going to make public policy on television.

PHILLIPS: Well, could I ask you a question?


PHILLIPS: Is there anything, sir, that you could do right now, as a senator, as someone who does have a very good reputation -- and, you're right, you and I have a great reputation. I don't want to argue with you, I want to make that straight.

I'm just asking, is there anything you can do, any kind of influence? Can you use your abilities as a senator to -- whether it's getting the National Guard activated, talking with Governor Bush, getting DOD assets? Any way you get involved in helping these people in Florida or influencing others to do so?

GRASSLEY: I started to tell you how I was trying to help an Iowa family in Cancun. And we called the International Red Cross, the State Department and tried to get things moving. And before we were able to help them, of which there was only about two or three hours passed, their -- that family did make contact with the people back home in Iowa, and they were able to get out on a commercial flight, one of the first ones out. But I can tell from your program that, obviously, down in Cancun, there are people that are still in tremendous trouble.

PHILLIPS: Yes, sir. OK, let's talk about that for a minute. Florida, obviously an issue. Definitely an issue in Mexico right now. The State Department. You know, there were 20,000 Americans, according to the numbers out of the State Department. Twenty-three officials there from the State Department that came in after that storm hit. Now, I'm told there are 64 officers in the region. But, still, there are people that are desperate and they need help.

We talked to Justin, you heard that interview. His sister-in-law out of her medication. She's got a brain tumor, she's having seizures. Sir, is there anything you can do, in your position, and the influence that you have, to get more help from the State Department in Mexico right now?

GRASSLEY: No. I'm limited to this, but I can do this. I can call the State Department, yes.

PHILLIPS: Do you think that they -- is there anything else that they can do? Do they have the resources? Do they have the ability to get into the country and get those Americans out?

GRASSLEY: You know, operating within the United States, our federal government can do almost everything. In a foreign country, you're there as a guest of the foreign country. So, obviously, you just could not willy-nilly do things with at least our military people without violating international law.

PHILLIPS: Senator Charles Grassley, I think this was a very healthy conversation. I hope you're not upset with me. We are good friends. I appreciate your time, sir. But, you know, there are so many people that just want answers and we want to see things get done. Americans should not suffer like this, sir.

GRASSLEY: But I hope you appreciate the fact that when it comes to making public policy, I would be cautious that I don't make it on television. I want to make it in the debate of Congress.

PHILLIPS: I understand, sir, with all respect. Senator Charles Grassley, thank you for your time today. GRASSLEY: Thank you.

PHILLIPS: And we continue to follow videotape that we've been getting in by the minute of -- this is videotape via the pool camera. The president of the United States. You saw him come to the camera, side by side with his brother, Governor Jeb Bush there in Pompano Beach, Florida.

The president in the region, talking with people, assessing what the problems are. And as we follow the president's trip through the region, also, we continue to bring you videotape and live shots of a lot of desperate people in that region, not getting water and ice and resources. A lot of people having a tough time carrying on in Florida.

The question remains, will the governor -- and Senator Grassley brought this up -- Governor Jeb Bush can ask for more help. Does the state of Florida need the National Guard? Does DOD need to step in? Is military help necessary? We saw what happened during Katrina and after Katrina there in New Orleans and parts of Mississippi and Alabama, where the military came in and got things done. Is that something that needs to happen in this area? That's a question that remains.

We're going to take a quick break as we continue to monitor the new video coming in of the governor there, Jeb Bush, and his brother coming through Florida. We're monitoring all the Hurricane Wilma damage and the reports. We'll have fresh video, I'm being told, right after a quick break.


PHILLIPS: And this just into CNN. We're getting word that a number of rocket blasts have killed an Islamic Jihad commander, an aide in Gaza. I'm being told another 14 others wounded.

Just getting this information in now, as we are looking at these pictures that we just got fed in. Evidently, an Islamic Jihad commander and his assistant were killed when Israeli aircraft fired a rocket that hit their car just north of Gaza City. That's according to Palestinian security sources. Fourteen other people were wounded by that blast.

An Israeli defense force official also came forth, confirmed there was an air strike on that Islamic Jihad leader who, they are saying, was responsible for planning a number of murderous attacks. The Palestinian security source says that that commander -- that Islamic Jihad commander's name was Shaadi Muhanna and his aide. They were riding in a Subaru when struck by that missile.

Israeli military sources confirming that the army had been operating in Jenin, carrying out a number of arrests. Islamic Jihad claimed responsibility for that bombing yesterday in a crowded marketplace, as you'll remember.

So, as Islamic Jihad claimed responsibility for that bombing that killed a number of innocent people yesterday, Israeli military picked up their operations in Jenin, carrying out a number of arrests and that's when intel told them they had an eye on this Islamic Jihad commander, who they believe was behind that bombing among other numerous attacks that had been planned. We'll continue to update you on that information out of Gaza.

Now, another major story that we're following today. The international probe into a billion dollar rip off involving the U.N. program destined to sustain Iraq during economic sanctions. In a report that was released today, Paul Volcker, a former chairman of the U.S. Federal Reserve, charged that hundreds of businesses in 66 countries got in on the action through kickbacks.

Now, with more on that story, our senior U.N. correspondent Richard Roth joins us live. And Richard, are we able to talk about specific companies and the names and the type of kickbacks they received?

RICHARD ROTH, CNN SENIOR U.N. CORRESPONDENT: Yes. We can. Some of these companies, the majority of them, nobody really is that familiar with. It's a huge volume that was handed out today, when the commission led by Paul Volcker, delivered its final report. This commission was approved by the United Nations to look into the oil- for-food program, the mother of all programs handled by the U.N., according to Paul Volcker today.

First Volcker gave the number of companies he said was involved in illegal business with Iraq.


PAUL VOLCKER, U.N. INVESTIGATOR: There are about 2,250 companies that we have some evidence, in terms of paying kickbacks or surcharges. And the table's identified where we can whether and if it's known how much was paid to the government of Iraq, with respect to particular program contracts.


ROTH: More than 2,000 of the companies involved were manipulating the program through humanitarian kickbacks when various goods were shipped into to Iraq. Trucks, spare parts, medical equipment -- 139 involving oil surcharges and kickbacks.

Now, Paul Volcker didn't mention publicly, but it is in the report. One prominent name mentioned is Oscar Wyatt, Jr., who had the misfortune of also being arraigned today in federal court in Manhattan on many charges, including the profiting by millions of dollars to illegal payoffs to Saddam's government.

Wyatt is an old friend of Saddam Hussein, he's been doing business for over 25 years in Iraq. He has personally traveled there several times and campaigned against sanctions. He pleaded not guilty and was freed on bail of more than $2 million. Oscar Wyatt is just one of the people mentioned in this report. Along them, thee former French ambassador to the U.N., Jean-Bernard Merimee, who admitted accepting an oil allocation, and George Galloway, the flamboyant British parliamentarian.

Other companies, there's a unit of Daimler-Chrysler, where one member of the firm was charged with accepting more than $7,000. The firm says it can't comment because various bodies such as the SEC, the Justice Department are investigating the matter.

There's a company in Scotland, the Weir Corporation, one of the investigators said this is one of the more serious allegations against this company. We're going through the volumes now.

There are several oil companies that are named, some of them not on the grand scale and many of these firms are not in the clear just because Volcker does not have judicial power, Kyra -- now, we're going to have the U.S. attorney's office and others who are going to be probing.

PHILLIPS: All right, Richard Roth, we'll stay on top of it. Want to hear more about what happens and who is held accountable. Rich Roth, thank you so much.



PHILLIPS: Your dream retirement. Have the recent hurricanes derailed your dreams of one day living on the coast?

Our personal finance editor, Gerri Willis, weighed in earlier on "AMERICAN MORNING.".


GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: A lot of people are asking, should I move to the these areas? Couldn't I get a great deal now that the storms have moved through? I've got to tell you, the surprising answer is no.

Guess what? Prices are already moving higher. Along the Gulf Coast, we're starting to see a boom in real estate because speculators out there figure they can get a great bargain and they're trading these properties already.

So, another lesson here, I have to tell you, even if you wait a year later in Florida after the hurricanes that hit last year, prices are up 45 percent. The sixth fastest growth in the country.

Even if you back to Andrew. Look back to Andrew before the boom in housing. Prices fell after Andrew in a couple towns there. Miami, a couple other cities, two percent, three percent in the quarters after. But, they rebounded after.

The long-term story is, people love these coastal communities. (END VIDEO CLIP)


PHILLIPS: Well, the president checks out Wilma's damage in South Florida this afternoon. People who once called New Orleans Ninth Ward home are taking their own damage tour. The Ninth Ward, of course, took the worst hit when Katrina hit.

The levees failed and much of that city was submerged under water. Well, today, some lower Ninth Ward natives boarded buses to see the damage first hand for the first time.

For safety reasons, officials said that no one is being allowed off those buses, so police, pastors, counselors -- they're all joining the residents for that tour.

We'll keep you updated on what happens to that area.

A lot of questions on whether it will be rebuilt or not. That wraps up this Thursday's edition of LIVE FROM, I'm Kyra Phillips with the CNN Center in Atlanta. Now, my man, Wolf Blitzer, live in "THE SITUATION ROOM."