Return to Transcripts main page

Live From...

New Orleans' Healthcare System Still in Trouble; Tropical Storm Ernesto Churns Towards Florida; No Charges Filed Against John Mark Karr in JonBenet Murder; Interview with Thad Allen

Aired August 29, 2006 - 13:13   ET

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

KYRA PHILLIPS, CNN ANCHOR: The president of the United States speaking in New Orleans on the one-year anniversary of Hurricane Katrina.
Hello, everyone. I'm Kyra Phillips at the CNN world headquarters in Atlanta.

Also straight ahead, polygamist sect leader, fugitive in hiding, one of the FBI's most wanted, now under arrest. We've new details of Warren Jeff's capture. And tracking Ernesto, the tropical storm closes in on Florida. Both coasts at risk. The National Hurricane Center updates its forecast this hour.

Hurricane Katrina, the storm laid waste to the Gulf Coast a year ago today. Now the hope as people start to recover.

LIVE FROM starts right now.

A stronger Ernesto is expected to hit Florida by tonight and dump heavy rain across much of the state by tomorrow.

Jacqui Jeras is tracking the storm the CNN Weather Center 00 Jacqui.

Well, we apologize. We're having some technical difficulties actually all throughout the day today with our audio. Apologize for that. As soon as we get Jacqui linked up, we'll go back to her.

Meanwhile, it's been a year on the calendar, a lifetime on the Gulf Coast. You're seeing live pictures of a prayer service in New Orleans right now, marking the one-year anniversary of Hurricane Katrina.

CNN is bringing you special coverage from the Gulf Coast all day.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It's been horrible. As I left tonight, darkness, of course, had fallen, and you could hear people yelling for help.

(END VIDEO CLIP)

PHILLIPS: LIVE FROM will look back and ahead WITH some of the people most affected By Katrina. We're going to hear from storm victims rebuilding their lives, and we'll talk to some of the heroes who are still working to turn the region around. In the next three hours, I'm going to talk with Lieutenant General Russel Honore, Coast Guard Commandant Thad Allen and musician Branford Marsalis. Each one of those individuals stood out during the Katrina's wrath, and each one of them is helping that Gulf Coast recover to this day.

Bay St. Louis, a town on the Mississippi coast that also felt the full force of Katrina. It's where CNN's Kathleen Koch grew up, and where she's spending this anniversary.

Kathleen, how is your hometown doing?

KATHLEEN KOCH, CNN CORRESPONDENT: Kyra, it's come a long ways. I can honestly say that when I look around me I do see a lot of improvement. But what is so very sad is that the city has such a long ways to go.

As you can see behind me, I'm right up on Beach Boulevard in the downtown area, there's still not much recovery here, much rebuilding. And that's tough to accept, but I want to show you the cover of the local paper today. And it says, "We're Survivors," and that's really the attitude you get from the people here, because, as tough as it's been, they haven't given up, though they will admit this has been, without a doubt, the most difficult year of their lives.

(BEGIN VIDEOTAPE)

KOCH (voice-over): Twelve months of back-breaking labor, thousands of volunteers and sheer determination. It's brought parts of Bay St. Louis, Mississippi back to something close to normal. This was Monty and Daniel Strong's home after Katrina. They and their three children shared a FEMA trailer while rebuilding. With hurricane season still under way, they wonder whether they did the right thing.

DANIELLE STRONG, RESIDENT: This is scary. It's scary all around. You'd have get back to this point and then, you know, find out that you should have sold your house or you should have left.

OK, you're going to have to staple.

KOCH: They also realize they have even less protection now should another hurricane strike.

MONTE STRONG, RESIDENT: All the beachfront homes, and businesses and trees and all that stuff, all that stuff's gone, so there's nothing to stop the water now.

Most of the debris is gone, but many destroyed buildings aren't. So children go to school in portable trailers in plain sight of their gutted classrooms.

FRANCES WEILER, PRINCIPAL, NORTH BAY ELEMENTARY: It's a constant daily reminder of what we've lost. Just like driving our streets of our community is a constant daily reminder of what we've lost.

KOCH: To make matters worse, insurance rates are going up. State wind coverage went up 90 percent. David Treutel, who sells insurance, lost his home and business, and worries that many won't be able to afford the increases.

DAVID TREUTEL, INSURANCE AGENT: These aren't the wealthy people, these aren't the condominium dwellers. These are the mom and pops. These are the teachers. They just don't have the ability.

KOCH: With one quarter of the people gone, half the businesses closed, tax revenues have plummeted, Bay St. Louis is struggling to pay its workers and provide basic services.

MYR. EDDIE FAVRE, BAY ST. LOUIS: We're expecting or projecting that late September, early October, unless something happens, we'll be broke, out of money. We'll be out of money. After that, we don't know what we're going to do.

(END VIDEOTAPE)

KOCH: Now there is good news, something did happen. At the 11th hour, the state legislature here in Mississippi yesterday passed a bill, and it will give grants to small cities, like Bay St. Louis, $3 million grants this year that they will not have to pay back. It will keep them afloat for a short period of time. Who knows what will happen after that?

Kyra?

PHILLIPS: Well, Kathleen, let's talk about -- obviously you've talked about the recovery and what's happening there, but what has it been like just to go back and see family and friends? And, I mean, this is where you went to school and spent so much time, and even did a special one-our documentary for us.

KOCH: We did, Kyra. We're doing another one that's going to air at the end of September. So I've made more than a dozen trips back here over the past year.

It's been the most difficult year of my life, without a doubt. Obviously for any reporter who would cover a story of this magnitude it moves you. It changes you. It's infuriating and frustrating. But when the people who have lost everything and the people you grew up with, when the slab that you're walking on is a house where you used to live, it's -- you know, it's just hard to bear.

But you have to draw sustenance from people here, who are just so resilient and courageous, and they cheer you up. When you're here, they say, hey, we'll make it, it'll come back; it will be a different place. The Bay St. Louis we knew and loved now exists here in our collective memories, nowhere else. But it will be back. So that's what we're clinging to, the resurrection of this beautiful place we call home.

PHILLIPS: Kathleen Koch, Bay St. Louis, Mississippi. Great to talk to you.

Well, Louisiana and Mississippi felt Katrina's rage head on, but the storm sent ripples far beyond. Here's where things stand, state by state.

Alabama still is home to 21,000 Katrina evacuees. Washington gave the state $970 million right after the storm. About 10 percent of that went to the victims. And right now in Alabama, almost 4,000 people remain in temporary housing.

Mississippi is sending property grant checks to people who lost their homes, about $150,000 max per homeowner. One year later, 16 people in Mississippi are still listed as missing, but there's also progress. The Air Force's second largest medical center, Keesler Medical Center, resumes in-patient care this month.

In Texas, more than 100,000 evacuees call Houston home. With the influx also came a spike in violent crime. Storm evacuees were either suspect or victim in almost 20 percent of the violent crimes committed in Houston this year. And right now, about 35,000 families in Texas are still relying on FEMA for temporary housing.

(WEATHER REPORT)

PHILLIPS: Well, straight ahead, a wanted man no longer. Polygamist sect leader Warren Jeffs captured in a routine traffic stop in Las Vegas. What's next for a man who's been one of the FBI's top 10 fugitives?

Plus, a DNA dead end, and the Boulder D.A. drops her case. But John Mark Karr is still due for a day in court, maybe several. Details on his next legal stop, coming up on LIVE FROM.

(COMMERCIAL BREAK)

PHILLIPS: Wanted by the FBI, done in by the DMV. Top 10 fugitive, polygamist Warren Jeffs has been on the run for months. But he was nabbed last night in a routine traffic stop near Vegas. A state trooper first pulled him over for not having tags on his car, then recognized him from a mug shot, and Jeff's jig was up. He faces a number of charges, including unlawful flight to avoid prosecution in two states and sexual misconduct for alleging arranging marriages between underage girls and older men.

We're going to hear more about the arrest of Warren Jeffs shortly. The FBI field office in Las Vegas is planning a news conference at 2:00 p.m. Eastern. We're going to take you there live as soon as it happens.

Now, a case falls apart, and the fingers start pointing in the absence of a DNA match between the JonBenet Ramsey crime scene and John Mark Karr. The case against him has gone away. Prosecutors in Boulder are frustrated, and Colorado's governor is outraged. Bill Owens says D.A. Mary Lacy should be held accountable for quote, "the most extravagant and expensive DNA test in history." Lacy defends her decision to bring Karr all the way to Boulder from Bangkok, Thailand, saying it was the only way to get a clean sample.

(BEGIN VIDEO CLIP) MARY LACY, BOULDER, CO., DISTRICT ATTORNEY: I want to make it absolutely clear up front the decisions were mine, the responsibility is mine, and I should be held accountable for all decisions in this case.

(END VIDEO CLIP)

PHILLIPS: Well, later today, Karr has another extradition hearing, this one aimed at sending him back to California to face misdemeanor child porn charges.

No DNA match, no case in Boulder. So what happens next for the man who falsely claimed a role in the 10-year-old murder? Will there ever be justice for JonBenet Ramsey? We're going to ask Nancy Grace. She joins me live, straight ahead.

Plus, Florida awaits an unwanted visitor. Tropical Storm Ernesto is heading toward the U.S. We'll have the latest on where and when. Stay with CNN, your hurricane headquarters.

(COMMERCIAL BREAK)

PHILLIPS: Katrina dealt New Orleans healthcare system a body blow and one year later it's still in critical condition. CNN's Dr. Sanjay Gupta investigates.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN SR. MEDICAL CORRESPONDENT (voice-over): Just a year ago patients died on this parking deck, waiting to be rescued. As a doctor I'd never seen anything like it.

(on camera): What's going to happen to some of these patients if you don't get them out of here?

UNIDENTIFIED MALE: Two of them have already died here on this ramp waiting to get out. In this very spot.

GUPTA: So now a year later you look back on the year. Are you pleased with how things have gone?

UNIDENTIFIED MALE: I don't think anybody's pleased with where we are right now.

GUPTA (voice-over): Dr. Fred Sarise(ph) is the state secretary of health. He's supposed to be leading the effort to resuscitate health care. But nearly a year after Katrina there still is no plan. He started working on one just last month, when he was tapped by the governor and the federal government.

(on camera): This is a complicated problem. Are you responsible?

UNIDENTIFIED MALE: There's not going to be one person that you can point to and say you're responsible for the health care system. GUPTA (voice-over): But if the state's top health official isn't responsible, who is? Sarise(ph) doesn't have an answer for us. Meantime, people are at risk, again.

(on camera): There were six shootings in New Orleans last night. There was only two operating rooms available. What's going to happen if this continues to happen as the city repopulates and, don't forget, we're back in hurricane season?

UNIDENTIFIED MALE: The city is stressed right now. There's not -- there is no surge capacity, if you will.

GUPTA (voice-over): Half the area's hospitals remain closed. Patient-filled ambulances wait hours to unload. The mentally ill have nowhere to go. Suicide rates have tripled. Every emergency room is at full capacity 24 hours a day, every day.

(on camera): This is the famed trauma center of Charity Hospital. They'd actually wheel patients right into this area and try and take care of some of the sickest and dying patients here in the city. What we have found now, though, is it's the hospital itself that is sick and dying. And that has become a metaphor in so many ways for the overall state of health care here in New Orleans.

(voice-over): The building is now deemed unsalvageable. So Charity opened an emergency clinic in, no joke, an abandoned department store, without any beds, incapable of admitting patients, strictly triage. And it opened a center for trauma only in this fertility clinic, 20 minutes from downtown. Some New Orleans doctors say rebuilding health care has not been a priority at any level of government.

UNIDENTIFIED MALE: This is crazy. I mean, it's been a year. Hotels are opening up. Businesses are opening up. We're talking about hospitals here.

GUPTA: Three quarters of its physicians have left New Orleans, but not Dr. Jim Aiken.

UNIDENTIFIED MALE: We still feel like we're kind of a stepchild in first response.

GUPTA: Sarise's (ph) committee is expected to propose a health care fix in October. Nearly 14 months after Katrina.

UNIDENTIFIED MALE: It's a complex multitude of problems. You know, can you do more? Absolutely.

GUPTA: University Hospital will be opening this fall. But it will be a long time before it's safe to get sick in New Orleans. Dr. Sanjay Gupta, CNN, New Orleans.

(END OF VIDEOTAPE)

PHILLIPS: Now some perspective. Where does New Orleans stand a year after Katrina. Tourism is the life blood of the city's economy, yet the all-important convention trade is just half of what it was before the storm. Fewer than half of the city's restaurants have reopened and only 17 percent of the city's buses and street cars are running. St. Bernard Parish is especially struggling. A study by the Brookings Institution finds none of that parish's hospitals or libraries has reopened. Only 7 percent of St. Bernard's schools have resumed classes.

Ahead, we're going to talk to some of the heroes who are still working to turn the region around. I'm going to talk with Lieutenant General Russel Honore, Coast Guard Commandant Thad Allen, and musician Branford Marsalis. They're going to all join me live.

Well it's still a tropical storm, but Ernesto is expected to pick up steam as it chugs toward Florida. Monroe county, home of the Keys has already declared a state of emergency. CNN's Rusty Dornin is there with the latest on all the preparations for Ernesto. Hey Rusty.

RUSTY DORNIN, CNN CORRESPONDENT: Well Kyra you know they declared it an emergency two days ago and told the tourists to leave. Most of the tourists did leave Key West, although some people have stayed. It just started raining about 15 minutes ago. And you know, most places people batten down for a storm like this.

And you can see just some of the stores have put their shutters on. But you look down Duval Street, the historic section and you can see the Creper Cafe is open and right next to it another store here has got their storm shutters down. And of course throughout Key West you have the bars and restaurants that traditionally stay open during the storms. People come often and party no matter how bad the storm is. And here to talk to us a little bit about why that phenomenon happens is Lou Gamble, he is the manager here at Jimmy Buffet's Margaritaville. Are people cavalier here when it comes to hurricanes? I mean what is this tradition?

UNIDENTIFIED MALE: Well, it's not our first go-around. We deal with hurricanes all the time. We get ready for them, batten down the hatches. This time last year we had Katrina and this is a little rain and a little wind. We're open for business, and it's things as normal.

DORNIN: How long are you going to stay open? I mean the worst of it is supposed to hit tonight, are you, how long are you going to remain open?

UNIDENTIFIED MALE: Well we're playing it hour by hour. If it gets worse, we'll put the windows in and turn up the music.

DORNIN: And I can see also you put your employees to work here as well?

UNIDENTIFIED MALE: Oh, yeah. Since the customers are not here as they would normally be, we're trying to make the place prettier so when they get back in a couple of days for the weekend we're ready to go again.

DORNIN: All right, well good luck throughout the storm. UNIDENTIFIED MALE: Thank you.

DORNIN: Here in the Keys there are about four shelters that are open in case people do have problems because, of course, the keys are very low lying, very vulnerable to storm surge. People are still just watching and waiting basically to see what happens. Kyra?

PHILLIPS: All right Rusty Dornin, we'll keep checking in. Thanks so much.

Well it's one year after hurricane Katrina, but many New Orleans businesses still have closed signs hanging in the windows. Susan Lisovicz live from the New York Stock Exchange with a look at the uneven pace of recovery. It really is up and down isn't it Susan?

SUSAN LISOVICZ, CNN CORRESPONDENT: Right Kyra. The key word there is uneven. Louisiana officials say 90 percent of businesses in the region damaged by hurricane Katrina have reopened. The federal official in charge of the recovery says cargo handling at the port of New Orleans has returned to pre-storm levels, the oil and gas industry in the region has recovered, and the third important part of New Orleans and Louisiana's industry, the tourist trade, is steadily improving.

But many sections of New Orleans, especially small businesses, remain shut. 95 percent of the city's 22,000 businesses employed fewer than 100 people. 60 percent of those businesses have not reopened yet. And that's leading to a jump in unemployment. The jobless rate is higher than it was before Katrina and much higher than the national average. If we break it down by industry, we see the uneven character of the recovery even better. 85 percent of hotels in New Orleans have reopened. But only half of the city's hospitals, one third of its restaurants, and just 29 percent of its schools. And many national retail chains, including grocery stores and fast food restaurants, remain closed. Kyra?

PHILLIPS: So President Bush promised $110 billion to rebuild the gulf coast. So where is all that money going?

LISOVICZ: Well less than half of that money has been spent Kyra. Of the $44 billion that has been spent, 17 billion was paid out in flood insurance claims, and a big part of the rest was spent on immediate needs, those included paying FEMA workers, establishing temporary housing for storm victims, and providing local governments with operating cash. In short, things that will have no direct effect on the long-term recovery for the region. So far the city of New Orleans has received just 125 million of the billions it needs in direct federal aid. Very little money has gone to repairing infrastructures such as water works and electrical grids. As a result, many city businesses are still without reliable electricity and utility services one year later. Kyra?

PHILLIPS: All right, how are things looking on Wall Street?

LISOVICZ: They're looking, well, better than what we went through a year ago, certainly, for sure, but we're seeing a sell-off today. Despite another big drop in oil prices, oil down a dollar to under $70 a barrel, but offsetting that is a key reading of consumer confidence. We got that this morning. It sank to its lowest level in nine months, amid worries about job growth and a slowing economy. The decline of course was the sharpest since right after hurricane Katrina hit, just to put it in perspective. Right now the Dow Industrial's down 33 points or about a third of a percent. The NASDAQ composite dropping nearly 11 or about half a percent. That is a wrap from Wall Street. Coming up next hour, a new census bureau report offers some relatively good news on poverty. Stay tuned. LIVE FROM will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH: I have returned to make it clear to people that I understand we're marking the first anniversary of the storm, but this anniversary is not an end. And so I come back to say that we will stand with the people of southern Louisiana and southern Mississippi until the job is done.

(END OF VIDEO CLIP)

PHILLIPS: All the heavy hitters are in New Orleans at the one- year anniversary of hurricane Katrina. The president speaking just minutes ago. And by the way, we apologize for an issue we had with our mics. There was a crossover. We didn't realize there was a problem. We've looked into it, we think we have it solved. So we apologize for a little bit of an interruption there during the president.

Meanwhile, Mayor Ray Nagin, he's speaking at a prayer service right now. It's actually a pretty amazing lineup of special people. You see Russel Honore there, General Honore in front getting ready to speak as well. But we're going to listen in to the mayor. Of course, if you want to watch this live ongoing, you can go to cnn.com/pipeline. But we just want to take a few seconds to listen to the mayor as he addresses the nation and those of New Orleans and the rest of the gulf coast.

MAYOR RAY NAGIN, NEW ORLEANS: -- that rivals pre-Katrina collections. That is you saying again loud and clear, I love my home. I love my city, and I will return. 90-something percent of street lights are fixed. Over 10 million cubic yards of debris have been removed. Drains are being cleaned. City workers of the great city of New Orleans, you have been asked to do much more with so much less, and I want to publicly thank each and every one of you. You are the greatest miracles.

You know, I've been looking everywhere for some example, some playbook, something to guide me and to guide all of us. I've been to the library. I've been to Barnes & Noble. I've been searching. And you know, the Lord led me to the Old Testament. Yes, he did. And I think I've shared this in a couple of occasions, but I want to share it one more time because it's instructive. The bible is not just something that happened in the past. It is a living document. And if you trust it and you go there, it will teach you something.

So the Lord led me to the book of Nehemiah. In the book of Nehemiah the walls of Jerusalem had fell. They were devastated. They were surrounded. They were pillaged. And they didn't know where to turn to. And after being disoriented after Katrina, Nehemiah who was close to the king went to the king and said, king, we need to do something here. We must do something for the people. So Nehemiah took the...

PHILLIPS: It's amazing to think that it's already been one year since hurricane Katrina hit and hurricane Rita. The mayor of New Orleans Ray Nagin now speaking at a special prayer service. A lot of special dignitaries and residents going to be speaking at that prayer service. We'll be dipping in and out of that special time in New Orleans throughout this newscast.

Meanwhile, we're also talking about JonBenet Ramsey's father. Warned against a rush to judgment on John Mark Karr, now DNA rules Karr out. So what happens next in JonBenet's unsolved murder and what happens to the man whose admissions sparked a legal and media firestorm? We'll pretty sure Nancy Grace has a few things to say. She joins us between her gigs on "COURT TV" and "CNN HEADLINE NEWS." Nancy, why do so many people feel this case has just been jinxed since the very beginning.

NANCY GRACE, COURT TV: It has been, and it's not just a feeling it's a legal practicality. Now, you will hear defense attorneys sing to the moon that, yes, the prosecution can go forward when they find the right killer. That is totally bogus. Of course, under the law, if you read a law book in a law library, of course you can go forward. But practically speaking Kyra, let's have a reality check here. You really think a prosecutor can stand in front of a jury and say, yes, we thought it was the parents, yes, we thought it was Santa Claus, yes, we thought it was Hell Garth.

Yes, we brought John Mark Karr all the way from Thailand. Well we were wrong. But now we're pretty sure it's this guy. It's not going to work. And I don't care how nice the district attorney Mary Lacy comes across in a press conference. I'll give you that. She's a nice lady. But this is a colossal blunder of biblical proportions. There's no way they can, with a straight face, go forward with a new suspect. And what was Pete McGuire talking about in the press conference today? Saying that they had an airtight case other than the DNA not matching? Hello! The guy was not in Boulder, he wasn't even in Colorado. No DNA, no fingerprint, nothing but the musings of a madman, x-rated e-mails? What are they thinking about?

PHILLIPS: Speaking of that news conference, let's take a listen to Mary Lacy.

(BEGIN VIDEO CLIP)

MARY LACY, BOULDER CO. DISTRICT ATTORNEY: On a separate occasion, they obtained a cup that he used to drink from and a tissue or wipe that he used to wipe his hands. The bottom line is that, after we did that, our expert -- and we put a great deal of respect in our expert from the Denver lab -- said that the sample in the underwear of the victim was a mixed sample and that we do not want to compare a mixed sample with a mixed sample. We need a pristine sample. That means a buckle swab. A buckle swab can only be taken by consent or by court proceeding or court order.

(END OF VIDEO CLIP)

PHILLIPS: Oh, boy. Just make it all confusing. Mixed, pristine, buckle? Help me out here. Please explain who messed up and what should have been done over seas and should he have even been taken here?

GRACE: Absolutely not. Based on e-mails that he was writing to a professor, a journalist? Come on, as much as we don't like it, and if you go into some of these chat rooms on the internet, anybody can do it, you get musings about child pedophilia all the time. That's what this amounted to. And what I really resent, having been a long- time victims' rights advocate, is for the district attorney to hide behind the skirts of the safety of children. People, wake up. This guy has been subjected to children, been teaching in schools, had a daycare, for Pete's sake, out of his home, six months after JonBenet was murdered. He's been around children for years, but suddenly they have to bungle the case to protect children? That is so bogus.

Let's talk about DNA. When you go out to a bicycle that's been outside and you try to lift DNA, imagine Kyra, for instance, you work out on a treadmill or on a (INAUDIBLE) and you grab it. Of course there's going to be other DNA on that equipment, on that bicycle. Ridiculous! Don't tell me in Bangkok, Thailand, the child sex capital of the world you can't get this guy's DNA. And let me remind you, as sad as I am too, this guy offered on the third request to give authorities DNA. But guess what? The Boulder authorities didn't have their DNA kit with them. It's one thing after the next. Snake bit is a mild way to put it.

PHILLIPS: Nancy, final question, is he going to be back on the streets? Is he going to be allowed to teach in schools? Is he going to be around children? Is he going to walk free?

GRACE: He will not be allowed to teach children in this country, but he can go overseas and probably get a position there in a private school. He is looking at extradition back to California. That is a misdemeanor child pornography charge, carrying only six months per charge. He'll probably do about half that time and be back out on the street.

PHILLIPS: Nancy Grace, you don't want to miss her on "HEADLINE NEWS" or "Court TV."

GRACE: Goodbye friend.

PHILLIPS: Great to see you. Straight ahead, when Katrina brought catastrophe to the gulf coast, the Coast Guard was there. We talked to the top man a year ago. We're going to talk to him again straight ahead on LIVE FROM.

(COMMERCIAL BREAK)

PHILLIPS: One of the first to respond and the last to leave, Coast Guard Commandant Thad Allen. His crew saved thousands of lives in the aftermath of Katrina and he's still caught up in the storm today. It's been a long year for Admiral Thad Allen, he joins me now once again live from New Orleans. We're not together, I wish we were so we could reminisce. But I tell you what, I can't believe it's been one year, Admirable.

ADM. THAD ALLEN, COMMANDANT, U.S. COAST GUARD: Nor can I Kyra.

PHILLIPS: When you touched ground, what was going through your mind, your heart? What was the first thing you thought about?

ALLEN: Well, when we arrived yesterday, we flew in with the president from the Mississippi gulf coast by helicopter. We took a sweep around the city. There's still immense devastation, especially in the lower ninth ward. And I think that's what's really on everybody's mind. But as we flew around up by lakefront and we saw the increased construction around the new pumping stations and the new dams at the lake front, you can see that there's a lot of progress here.

PHILLIPS: So you actually saw from the air with the president -- you could point out and say, all right, that looks better, that looks better. But mainly the pumping stations around the levees?

ALLEN: Well, you can see that the over 300 miles of levee system has had substantial repairs by the Corps of Engineers, and the drainage canals that were a problem with the 17th Street London Avenue canal failures now have pumping stations that are up on Lake Pontchartrain, that will substantially mitigate risk.

PHILLIPS: Now admiral, when I was able to link up with you there in New Orleans, I mean it was an absolute political nightmare. FEMA head Mike Brown had failed. You were told, admirable, you're in charge. Actually you were vice admirable at that point, you've since been promoted. You also told me, look, I'm going to stay out of the politics. I'm not going to deal with that, I'm just going to get the job done. How did you cut the red tape? How did you fight the system? And what do you think the biggest challenge was?

ALLEN: Well, Kyra one of the problems was, under a traditional hurricane response, we would fly resources in so the local responders would have additional assets to use in their work. And we did that. There were urban search and rescue teams in the city, everybody was working hard. But we basically had a loss of continuity of government in and around New Orleans where you didn't have the command and control structure that could take those resources and actually apply them to what we would call mission effect.

And so what I drew out as my first line of responsibility was to take those resources and do something with them. That vastly exceeds what federal coordinating officials in FEMA traditionally do. And quite frankly maybe it's not even a traditional role for a principal federal officials, but it was what we needed to do, and we did it. PHILLIPS: And I'm looking. This is inside your -- well just a moment ago we were looking at video inside your trailer. And you were with the new head of FEMA at that time right here, David Paulison, Russel Honore, Mark Chertoff, the head of DHS. I remember sitting and listening to all of you. And you said, I've got an idea. This is what we're going to do. We're going to go zip code by zip code and work from neighborhood to neighborhood. Explain to our viewers this idea and how you made it effective.

ALLEN: Well, one of the tremendous challenges we had, much of the search and rescue had been done by the time I arrived on the scene, which was about a week later. We still were doing search and rescue, but we had two significant challenges remaining before us. One of them was what I would call a block by block sweep of the city to make sure there weren't any more people in trouble.

And then the most probably difficult challenge we had was to find remains and recover them with dignity. To do that, we had to have a plan that combined the local law enforcement force which had the primary responsibility with the non-defense forces we had there as in the search and rescue folks from FEMA, along with Russ Honore's DOD forces. And that required us to do joint planning and actually we had to fuse Russ Honore's operation with mine together with the state and local government to effectively go block by block in New Orleans.

PHILLIPS: And you did handle the dead with dignity. I remember how precious of a project that was. And you actually did something that was never heard of before. You had to build a morgue and deal with looking at DNA. Tell us how you did that and how you look at that as one of the most successful things you were able to implement.

ALLEN: Well Kyra, it's instructive to understand that this event was off the scale or scope that anybody had been used to dealing with. And quite frankly, we encountered problems that even FEMA had not dealt with before. One of them was the fact that we were looking at a potential large loss of life and an inability for the local infrastructure to be able to handle that.

So in a very short period of time, in a matter of days, we built a morgue in an old grade school near St. Gabriel, Louisiana. And ultimately over the course of the response, I built a family services center where folks could come in and provide evidence and even DNA samples and would allow us to reunite homes and families together and reunite their loved ones, at least let them know that the remains were found and they were identified. And because that had never been done before, just things like ordering a contract for DNA testing and things like that were terrifically hard to do and very, very emotionally painful for everybody.

PHILLIPS: No doubt. And safety. You told me one of your biggest concerns was safety. We've seen what has happened there during the looting, now the criminal justice system. How are you involved with trying to fight the crime right now, admirable?

ALLEN: Well, as you know, I'm not involved right now, but back in November I was approached by the Louisiana state court and the Attorney General Fodi (ph) about the potential for having a breakdown in the criminal justice system in New Orleans, having to do with the loss of evidence lockers, a breakdown at clerk of the court systems and so forth.

And again, something that probably wasn't very visible was a task force that we put together with subcommittees to take a look at policing, evidentiary handling, and when we go to rebuild New Orleans how we might take all of the public assistance that's available and build a better New Orleans as far as a criminal justice system goes.

PHILLIPS: Admiral Thad Allen, now the head of the U.S. Coast Guard, great to see you again. Thanks so much for your time, sir.

ALLEN: Thank you, Kyra.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com