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Delay of Ports Deal Gives Bush Hope; Iraq Civil Strife Grows; Reporter Recalls Town Destroyed by Katrina; Daytime Curfew Calms Baghdad; Some New Orleans Residents Frown on Mardi Gras

Aired February 24, 2006 - 13:00   ET

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

FREDRICKA WHITFIELD, HOST: From the CNN world headquarters in Atlanta, I'm Fredricka Whitfield, in for Kyra Phillips, who's on assignment. LIVE FROM begins right now.
Suicide attack in Saudi Arabia. According to a Saudi government report, at least two cars with an unknown number of people inside tried to get close to an oil refinery on the shores of the Persian Gulf today. They failed, but blew themselves up anyway. We're told security guards and the attackers exchanged fire on the refinery's perimeter, and three guards were killed. Everyone inside the cars died when they set off their explosives. Not many more details are available right now. We're following developments in Saudi Arabia closely.

Will a delay defuse the controversy over a Middle Eastern company's deal to assume the management of six U.S. seaports? That's the question in Washington today, now that Dubai Ports World has agreed to give Congress more time to consider security issues and President Bush more time to offer reassurances.

Here's CNN White House correspondent Elaine Quijano.

(BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN CORRESPONDENT: President Bush again condemned the attack on a Shia holy site in Iraq and also denounced the violence following it, which has left more than 100 people in that country dead.

The president made his remarks during a speech before the American Legion here in Washington, the president saying that despite such violence, Iraqis had made known that they do want freedom and democracy. The president noted that past elections have brought out large numbers of voters in Iraq, but he also warned the terrorists would continue what he said was their campaign of violence and destruction, and he decried the bombing of a Shia shrine in Samarra this week.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The senseless attack is an affront to people of faith throughout the world. The United States strongly condemns this cowardly act of terror and the subsequent attacks on other mosques and holy sites in Iraq.

QUIJANO: Now another issue that's front and center for this White House, that controversial ports deal involving six American ports. Now, the company involved, a state-run Dubai-based company called Dubai Ports World said overnight that it would be delaying its plans to take over the operations of those six U.S. ports, that coming amid some concerns by members of Congress that perhaps the deal could jeopardizes national security.

Well, today Bush administration officials said they welcome the delay, they welcome the additional time in order to give members of Congress briefings on this issue. Officials here at the White House believe that the more people learn, the more lawmakers understand about this deal, the more comfortable they will be with it.

Elaine Quijano, CNN, the White House.

(END VIDEOTAPE)

WHITFIELD: Another hot-button issue for the White House, Iraq. If that country descends into civil war, President Bush likely would find himself in a crisis of his own.

Here's our senior political analyst, Bill Schneider.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN POLITICAL ANALYST (voice-over): For three years, experts have been warning that the greatest threat to U.S. policy in Iraq would be civil war.

GEN. BARRY MCCAFFREY, U.S. ARMY (RET.): What we have to worry about, it seems to me, is preventing this civil war that's going on now. That's what we're looking at, is a low-grade civil war, from spinning out of control.

SCHNEIDER: The Bush administration dismisses the idea.

DONALD RUMSFELD, SECRETARY OF DEFENSE: No, the -- Iraq is not in the middle of a civil war.

SCHNEIDER: Iraq is supposed to become a showcase of democracy in the Middle East. Civil war would convey exactly the opposite message, that democracy is dangerous, which is exactly what the insurgents are trying to prove.

BUSH: Destruction of a holy site is a political act, intending to create strife.

SCHNEIDER: Administration supporters have warned about dire consequences if the U.S. were to get out of Iraq.

SEN. TRENT LOTT (R), MISSISSIPPI: As our ambassador said just this past week in one interview, if we just left, civil war would break out, again.

SCHNEIDER: But if civil war were to break out now, it would make the case administration critics have been trying to make.

REP. JOHN MURTHA (D), PENNSYLVANIA: The war against terrorism is not in Iraq. Iraq is a war, and we're caught in a civil war, and they're fighting with each other.

SCHNEIDER: George W. Bush has staked his legacy on being a uniter, and not just in the United States.

BUSH: And we will continue to work with those voices of reason to enable Iraq to continue on the path of a democracy that unites people and doesn't divide them.

SCHNEIDER (on camera): Americans will not tolerate getting involved in another country's politics. That's what happened in Vietnam and Somalia. It's threatening to happen now in Iraq.

Bill Schneider, CNN, Washington.

(END VIDEOTAPE)

WHITFIELD: Six months after Hurricane Katrina, like their neighbors in New Orleans, people in Bay St. Louis, Mississippi, are celebrating Mardi Gras as best they can.

Our Kathleen Koch is a Bay St. Louis native, and she's going to be joining us in a moment, but first a look at what she saw when she returned home days after Katrina hit.

(BEGIN VIDEOTAPE)

KATHLEEN KOCH, CNN CORRESPONDENT (voice-over): Ninety-five percent of the homes and businesses were heavily damaged or destroyed. Katrina's 34-foot storm surge and 125-mile-an-hour winds had been merciless.

Three days after the storm I looked back to a town I barely recognized.

(on camera) This can't be. There were houses here. There were beautiful, big houses. A war zone, Saigon, maybe. How can this be the place I used to live?

(voice-over) I searched for missing neighbors.

(on camera) Have you all seen any Vanshults (ph), Ogdens (ph), Gasagans (ph)? No? OK.

(voice-over) And found old high school friends.

(on camera) How are you? Oh, my God.

UNIDENTIFIED FEMALE: Our homes are destroyed, but we're OK. We're alive.

KOCH (voice-over): They congregated at the two-mile-long Bay Bridge, now reduced to pilings. It was the only place cell phones worked.

UNIDENTIFIED FEMALE: My son's alive.

UNIDENTIFIED MALE: I told you, I told you. I told you.

UNIDENTIFIED FEMALE: I didn't know if he was alive. The last time I talked to him, he was taking on water.

UNIDENTIFIED MALE: I told you.

KOCH: But most felt like I did: helpless and overwhelmed.

(on camera) And our ice cream parlor was over here. Let's see if I can get to it. It's hard to tell where anything -- what was what anymore.

(voice-over) Downtown I'm so disoriented, I walk right over the rubble of the ice cream parlor my family ran years ago.

Beautiful historic beachfront homes that had made this town so unique, erased. Nothing left but empty foundations.

Like the brick home on South Beach Boulevard where I grew up, another hurricane-proof house.

(on camera) And these phone poles, these are the poles that were supposed to keep this house together.

(voice-over) My family had owned it for 30 years. Though my parents had sold it and moved away, its loss will break their hearts.

(on camera) I don't know how I'm going to call my mom, my dad, my brother, my sisters, tell them that the place we grew up in, where we had so many wonderful years, is gone. All gone.

(voice-over) Destruction, loss, death everywhere. It's hard to see a way back for Bay St. Louis.

(END VIDEOTAPE)

WHITFIELD: Well, there hasn't been a whole lot to smile about in Bay St. Louis since Katrina hit, but that is about to change. Up next, the Mardi Gras parade is just about to get started. And our Kathleen Koch is in the middle of all of it. She has a story to roll. We'll bring that to you momentarily.

It is a huge gamble, an extraordinary curfew in Iraq, aimed at ending a wave of sectarian violence that's killed scores of people. Will it work? Or will Iraq continue to tumble towards civil war?

CNN's Aneesh Raman is in Baghdad with the latest -- Aneesh.

ANEESH RAMAN, CNN CORRESPONDENT: Fredricka, good morning.

A welcome pause in the violence that we've seen in Iraq, the sectarian strife erupting after Wednesday morning's attack on the Shia mosque. At least 130 people have been killed.

But today, no major incidents to report, in large part, if not in whole, because of an extraordinary daytime curfew that was put in place by the Iraqi government in Baghdad and two neighboring provinces. The streets of the capital were virtually empty today, reminiscent of what we've seen before elections last year.

Now that said, in the Sadr City are of Baghdad, followers of radical Shia cleric Muqtada al-Sadr took to the streets, violated the curfew. They were clad in black. They had guns in hand. They set up patrols as well as checkpoints.

And that is a major issue here. The Shia militia, through their leaders, Muqtada al-Sadr and the Shia spiritual leader, the Grand Ayatollah Ali al-Sistani have said if the Iraqi security forces cannot protect the Shia sites, cannot protect the Shia people, they will do it themselves. That will only add further strife to an already existing tension that is here.

So the government is trying to secure everything it can on its own. Iraqi security force personnel have been sent to mosques in the capital.

Meantime, the demonstrations continue, as well, in the southern Iraqi city of Basra. Thousands poured onto the streets, again, in the aftermath of Wednesday's attack, but there, as well, there were calls for unity as we started hearing from Shia leaders, saying that the country can and should not be dragged into a civil war.

But the anger remains out on the Shia street. The pain remains out among the Sunnis, and tomorrow with no daytime curfew set to take place, the question is, essentially, will the demos return, will the violence return or will this respite that we've seen today continue tomorrow -- Fredricka?

WHITFIELD: And overall, Aneesh, does it seem as thought the curfew is tougher to enforce in Baghdad than anywhere else where it's being imposed?

RAMAN: Well, we didn't have any major incidents between Iraqi security personnel and residents of Baghdad, who were trying to get out of their homes, out of their neighborhoods.

The security forces went through Sadr City, in the video that we saw, but they didn't stop and question the Medhi militia that were out with guns patrolling the streets. So the security forces they essentially -- they know where they can push their battle. They know where they can force people to stay in the areas. They know where they cannot.

And so without that curfew tomorrow, though, without any of that security force presence on the streets in the numbers that we saw today, that is a question, what's going to happen -- Fredricka?

WHITFIELD: Aneesh Raman in Baghdad. Thank you very much.

Well, the news keeps coming. And we'll bring it to you as it happens. More of LIVE FROM next.

(COMMERCIAL BREAK) WHITFIELD: Along the Gulf Coast and in New Orleans, Mardi Gras is usually pretty big business. This year the celebrations are scaled down a bit, but the partying continues.

The parades are heading into full swing this weekend, culminating with Mardi Gras, or fat Tuesday. This is a view from Bourbon Street. You're looking at it right now. People there.

Three major parades are scheduled to roll through the city today. On Tuesday, 11 parades in all are scheduled in the city and nearby.

So big question is: how is the weather shaping up? I have a feeling, though, Jacqui, people don't really care at this point, especially if they're there. The party rolls on, whether it's good weather or not.

(WEATHER REPORT)

WHITFIELD: A serious wake-up call. Thanks for much, Jacqui.

Well, as New Orleans heads towards Mardi Gras celebrations, some there still have pretty mixed emotions. They realize the events bring in big money, especially to Bourbon Street, but not everyone is in the partying mood.

Here's CNN's Dan Lothian.

(BEGIN VIDEOTAPE)

DAN LOTHIAN, CNN CORRESPONDENT (voice-over): The two faces of New Orleans: suffering and celebrating.

KARLIN DUKES (NEW ORLEANS RESIDENT): I think it's disgraceful that they're celebrating Mardi Gras.

LOTHIAN: In the Upper Ninth Ward, lifelong resident Karlin Dukes is trying to salvage pieces of the home he built with his wife, Yvonne (ph). Mardi Gras is good, he says, but not now.

DUKES: There's nothing to really celebrate about, as far as I'm concerned. With so many people that's having hard times right now. Some people don't even have a house to go to, because the house is totally destroyed.

LOTHIAN: Katrina may have hit six months ago, but for some it feels like yesterday.

(on camera) Many residents still look like this. And residents are struggling to figure out when or if they'll ever be able to rebuild.

RICK BLOUNT, OWNER, ANTOINE'S: This is what we would consider our main dining room.

LOTHIAN (voice-over): The owner of Antoine's, a landmark French Quarter restaurant, knows the meaning of the word "loss." BLOUNT: All this was gone. All this wall fell.

LOTHIAN: Rick Blount's business was damaged by wind and water. Revenue dried up when the city shut down. And the homes of several close relatives were destroyed. But he sees Mardi Gras not as a slap in the face, but as a lifeline.

BLOUNT: If the rest of the country does not do business with New Orleans now, they will not be a New Orleans to do business with.

LOTHIAN: The show must go on he says, despite the pain.

BLOUNT: If this was Christmas, would you not have Christmas because you lost your home? I don't think so.

In New Orleans, Mardi Gras is what's normal. Mardi Gras is what we should do.

LOTHIAN: It's always been that way. In 1966, about six months after Hurricane Betsy flooded New Orleans, the carnivale celebration continued. In fact, natural disasters have never shut it down.

While some argue money for Mardi Gras could be better spent. McHenry Littleton, whose home was heavily damaged by Katrina, says rebuilding and celebrating should not be mutually exclusive.

MCHENRY LITTLETON, NEW ORLEANS RESIDENT: Our money should be spent to help rebuild New Orleans. That is one factor, but Mardi Gras is a part of our culture.

LOTHIAN: But back on Karlin Dukes' front steps, there is no celebration. He and his wife are focusing on rebuilding their lives.

DUKES: Too old anyway to try to go somewhere else.

LOTHIAN: In the city they've always called home.

Dan Lothian, CNN, New Orleans.

(END VIDEOTAPE)

WHITFIELD: So the question remains, is New Orleans ready for a party? CNN is there as the Crescent City celebrates its first Mardi Gras since Katrina. "AMERICAN MORNING" and "ANDERSON COOPER 360" will be live from New Orleans beginning Monday at 6 a.m. Eastern.

You can also watch the festivities on CNN's Pipeline. We'll have a live web cam on Bourbon Street. And you can see it for free on Fat Tuesday. Tuesday, that is.

A Mardi Gras to remember, only on CNN.

And among those making the trip all the way to Bourbon Street, oh, that man none other than the naked cowboy, all the way from New York City, now in the Big Easy. OK. Can't see enough of him? All right. Coming up on LIVE FROM, more sweaty palms for BlackBerry users. The wait for a ruling by the federal judge isn't over just yet.

(COMMERCIAL BREAK)

WHITFIELD: A developing story out of Richmond, Virginia. Within the past few minutes, a federal judge concluded a hearing in the patent infringement case involving the BlackBerry hand held e-mail device. Let's go quickly now to CNN's Daniel Sieberg, who's there.

Hi, Dan.

DANIEL SIEBERG, CNN CORRESPONDENT: Fred, that's right. This is what we're talking about, the BlackBerry device, which are everywhere these days. You see people from government workers to the average person. They're often the people who are bumping into things as they're trying to type out a message.

What's at issue here is a long-running court dispute that's between RIM, the maker of BlackBerry devices, or Research In Motion, and NTP, a small patent holdings company that actually doesn't make devices. They've been arguing about this patent for a number of years.

This case was actually decided by a jury back in 2003. They awarded NTP some damages and they basically decided in NTP's favor.

This case has gone up to the Supreme Court. It was tossed back here to the U.S. district court, and today Judge James Spencer listened to arguments from both sides in this case, NTP and RIM, NTP saying that the injunction should be put in place, that they've waited too long for this to happen and arguing for more monetary damages. RIM saying that an injunction would be unwieldy and not necessary, and they're trying to work this out in another way. And the damage is going to argue on the side (ph).

Judge James Spencer listened to all this, and he basically said, "I'm going to take this under advisement and issue my ruling in the coming days at a reasonable time."

So we don't what exactly is going to happen in this particular case, but it's going to take a little while to find it all out. There are some nuances to this case, a lot of tedious protracted legal stuff that I won't get into.

The key to all of this, though, is if this judge decides on an injunction, that would begin to shut down the BlackBerry service. Even NTP knows how essentially these devices are, and they've said that government workers could be exempt.

But where does that stop, says RIM. How big is this so-called white list, the included people who would be exempt from an injunction? That's what's going to have to be decided by this judge when he comes out with his ruling, if he does decide in favor of an injunction. And he may not. So a lot of questions left open here but safe to say that probably about six million thumbs were quivering today. Fred, that's the three million or so BlackBerry users in the United States.

WHITFIELD: A lot of folks have become quite addicted to the BlackBerry. All right. Thanks so much. We'll all be watching and waiting.

An ironic twist for a well known tax preparer. H&R Block is owning up to making a few mistakes on its own taxes. Susan Lisovicz has the story, live from the New York Stock Exchange.

They're not supposed to be able to make mistakes.

(STOCK REPORT)

(COMMERCIAL BREAK)

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